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HomeMy WebLinkAbout11 Attachment 2 TDPUD 2021 ACFR FinalTRUCKEE DONNER PUBLIC UTILITY DISTRICT TRUCKEE, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEA- ENDED DECEMBER 31, 1 and 2020 At �1 r� 1� TM _ 'Y R, 5 �• .art _ _ - Y','' r x: '� '''' ` 4, r f F Tr F r � �, .� a.. r.' r Yti�•" �- � I �- - 7z 1' {� ', r� 1 f f�At' - � `•, Y tit af. J, , v h At ftdo" r , PREPARED BY THE'::;: ACCOUNTING"AND ' FINANCE DEPARTMENT �,�,+�� •�� •� "� � 'TRUCKEE DONNER ' •. ;:3r. •{,.. Public Utility District ,►, ,� Truckee Donner Public Utility District's VAL U Safety — Safety is our way Safety is our first priority. We are committed to the health and safety of our employees, customers, and community through the continuous practice of prevention, education, and awareness. Communication — Send and receive Foster positive engagemi includes; active listening, information, with empathy, feedback. A Integrity — Honevt and ethica Highest quality service to the base principles. ntability — Own it A str erforming team wi s aintaining a se ourclon by creating a strong communicative environment that mcy, clear, concise, and timely transmission of This also includes providing and receiving honest blic and employees, utilizing honesty and ethics as our e obligation and willingness to accept responsibility for of humility and inclusiveness. Timel es "tMeet our goalsid commitments A hig lye ctive agency and spons ve organ izatio meting goals and expectations in a tim ly.manner. ti ± Mission and Values of District, as adopted by Board of Directors May 19, 2021 Table of Contents Introductory Section Letter of Transmittal..............................................................................................5 Organization Chart, Board of Directors and Appointed Officials....................................10 GFOA Certificate of Achievement for Excellence in Financial Reporting .........................11 Financial Section Report of Independent Auditors.............................................................................14 Management's Discussion and Analysis..................................................................17 Financial Statements...........................................................................................22 Consolidated Statements of Net Position......................................................23 Consolidated Statements of Revenues, Expenses and Changes in Net Position ... 26 Consolidated Statements of Cash Flows.......................................................27 Notes to Financial Statements...............................................................................29 Required Supplementary Information......................................................................68 Cost Sharing Defined Benefit Pension Plans..................................................69 Schedule of Changes in Net OPEB Liability and Related Ratios .........................71 Supplementary Information....................................................................................75 Consolidating Statement of Net Position........................................................76 Consolidating Statement of Revenues, Expenses and Changes in Net Position.....78 Consolidating Statement of Cash Flows.......................................................80 Statistical Section Statistical Section Objectives and Index...................................................................83 Financial Trends Consolidated Statements of Revenues, Expenses, and Changes in Net Position .... 84 Net Position by Component and Segment........................................................85 Revenue Capacity Historical Customer Mix and Rates.................................................................86 Average Residential Bill Comparison...............................................................87 Ten Largest Customers and Sales Mix...........................................................88 Debt Capacity DebtCoverage.......................................................................................89 Total Long -Term Debt per Customer and Ratios..............................................90 Demographic and Economic Information Population, Income, Labor Force and Unemployment.........................................91 Principal employers......................................................................................92 Operating Information Number of employees, customers, demand volumes, and capital assets ................93 Capital Assets by Function...........................................................................94 Page 13 INTRODUCTORY SECTION �tltr. ...-+-acmes. _, �_ w ` _- � _ - ..�--r. - __ _ � ►— . 1 TRUCKEE DONNER- PUBLIC UTILITY DISTRICT Rr y►(::, , t ; Photo by Tim Erskine ©Erskine Creative Photography'` A. . __.�._ _. _.. .....ten...... . .. ..2. Page 14 ,6!e-TRUCKEE DONNER Public Utility District General Manager Brian C. Wright Executive May 10, 2022 Leadership Team Dear Board of Directors and Customers of the District, Joe Horvath Electric Utility Director) The staff of Truckee Donner Public Utility District (District) is pleased to submit to you the Annual AGM Comprehensive Financial Report (Report) for the year ended December 31, 2021. The Report Chad J. Reed provides an assessment of the District's financial condition, informs readers about the District's Water Utility Director services, gives details of infrastructure replacement projects, discusses current issues and Shanna Kuhlemier provides financial and demographic trend information. This is the second Report produced for District Clerk the District. We are proud to announce the 2020 Report, the first for the District, was awarded a Certificate of Achievement of Excellence in Financial Reporting by the Government Finance Scott crow Officers Association (GFOA). We deem the Report an excellent example of financial Chief information Officer transparency for the District and will be submitting the 2021 Report for award evaluation. Steven Poncelet The Report consists of management's representations of the finances and other information of PIO & Strategic Affairs and for the District. Consequently, management assumes full responsibility for the Director completeness and reliability of all the information presented in this report. To provide a Michael Salmon reasonable basis for making these representations, management has established internal Chief Financial Officer controls that are designed to protect the District's assets from loss, theft or misuse and to compile sufficient reliable information to prepare the District's financial statements in conformity Director Jtor Steward with Generally Accepted Accounting Principles (GAAP). The cost of internal controls should not Resources Humanrces and outweigh their benefits. Therefore the District's comprehensive framework of internal controls Risk Management has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that to the best Board of Directors of our knowledge and belief, this financial report is complete and reliable in all material aspects. Joseph Aguera Jeff Bender The District's financial statements have been audited by Moss Adams LLP, an independent firm Christa Finn of licensed certified public accountants. The goal of the audit is to provide reasonable assurance Kim Harris that the financial statements of the District for the year ended December 31, 2021 are free of Tony Laliotis material misstatement. The independent auditor concluded based upon the audit that there was a reasonable basis for rendering an unmodified or clean opinion that the District's financial statements are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this Report. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of the Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The District's MD&A can be found in the finance section immediately following the report of the independent auditors. District Overview In 1927, the District was formed by and continues to operate under the State of California Public Utility District Act. The District provides electric and water utility services with a service territory of 45.5 square miles, beginning four miles from the northern border just beyond Alder Creek Road, south to Placer County, and 11 miles from just beyond the western shore of Donner Lake eastward to the rim of Boca Dam and the Hirschdale community. As of December 31, 2021 the District served 14,552 electric utility customer accounts and 13,477 water utility customer accounts. Page 15 PUBLIC SPECIAL DISTRICT 11570 Donner Pass Road, Truckee, CA 96161 1 (530) 587-3896 1 tdpud.org PGpE'=�R °L LEADERSHIP FOUNDATION The District's service territory is predominately within the town borders of the Town the Truckee (Truckee). Truckee's historical downtown flourished as a railroad station town and gateway to Lake Tahoe. Truckee is generally considered a resort town or bed base for resort and outdoor recreation activities. Truckee's stated population of 16,213 (2021) varies widely throughout the seasons of the year due to tourism and seasonal residence. Winter months are busy with alpine skiing and other winter activities vacationers, summer is robust with hiking, biking, boating and other summer activities, while the shoulder seasons are less busy with primary residents predominately. While Truckee's downtown base elevation is 5,817 feet (1,773 meters), the District's service territory elevations range from 5,745 feet (1,751 meters) to 7,370 (2,246 meters). This wide range of elevation creates utility service challenges, explained in detail later in this letter. The District is governed by five elected at -large, Board members. Each elected Board member serves four- year staggered terms. The five member Board of Directors serve as the governing body with respect to policy and fiduciary responsibility. The General Manager reports to the Board of Directors and all other District employees report up through or directly to the General Manager. An organization chart is provided after this letter to provide additional insights. The District's electric utility (Electric) sold 163 MWh of energy to customers in 2021, a record high MWh. Electric's system is a transmission -dependent, non -energy producing, distribution electric utility. Electric services the over 14,000 accounts across 233 miles of distribution lines; 135 miles of overhead pole lines and 98 miles of underground lines. For energy sources, Electric has aggressively pursued renewable power sources and currently has approximately 60% renewable power procurement. The winter months can be harsh, with extreme cold and an average snowfall of over 400 inches. The summer months consist of high daytime heat, cool night time temperatures, low humidity, nominal precipitation and high winds; creating extreme fire danger. Despite these challenging conditions, Electric has a long history of reliable power and in March 2021 was awarded RP3 Diamond Level (highest level) by American Public Power Association's Reliable Public Power Provider program which recognizes utilities that demonstrate high proficiency in reliability, safety, workforce development, and system improvement. The District's water utility (Water) sold 1,318 million (that's 1.3 billion) gallons of water to customers in 2021. Water's system is a 100% wells sourced water system and potable water production capacity is 10,250 gallons per minute or 14.8 million gallons per day. Water services the over 13,400 accounts by a system of 13 active water wells, 32 active storage tanks (9.4mg), 25 pumping stations, 47 pressure zones, and 220 miles of pipeline. The harsh conditions discussed in the previous paragraph, as well as, the 1,625 feet (495 meters) elevation variance across the service territory present water service challenges. Water reliability of supply and quality are paramount to any potable water utility system. The Water system wells access an aquifer which has been extensively studied and tested; determining the aquifer adequate for current and forecasted demand, and further, is not meaningfully impacted by drought cycles. The Water system quality is routinely tested (over 700 tests performed annually) and is consistently below federal and state regulated maximum contaminant levels (MCL) for all regulated contaminants. The District consistently advises and educates customers on matters affecting their water supply and water quality. The District prepares an annual Consumer Confidence Report (CCR) that explains critical drinking water information. Current and prior CCRs are available on the District's website, www.tdpud.org. In addition to core Electric and Water utilities, the District's blended component units include two Community Facilities Districts (CFD), Old Greenwood and Grey's Crossing. 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. Page 16 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. Local Economic Conditions Truckee and the greater regional area known as Lake Tahoe, is a very popular summer and winter vacation destination, due in part to the relatively close proximity to the Bay Area region of Northern California. Truckee's location near Lake Tahoe causes Truckee to be a gateway bedbase for the tourism economy, but also has a small town local economy with its population of over 16,000 residents. The District's Electric customers are categorized between primary residential of 40% and secondary (second home) residential of 60%. With the start of pandemic impacts in March 2020, while the tourism business essentially stopped, Truckee saw a mass influx of second homes utilization, a combination of both the owner of the second homes and short-term rentals of the second homes. In the continued pandemic during 2021 the District realized a 2.7% increase in electricity usage over 2020 and water gallons billed was down 0.7% compared to 2020. Truckee residential and commercial real estate development has been robust, as has the real estate market, though the sales volume pace is down from 2020 levels. Truckee real estate as of February 2022 indicates a Median Sale Price of $1,237,000, up 24% year -over -year, with number of homes sold of 40, down 29% year -over -year (source Redfin). The February 2022 Zillow Home Value Index for Truckee region of $1,090,325 is up 27% year -over -year. As California and the nation continue to drive toward net zero carbon emissions and the resulting electrification of the state and country, the District is well positioned for the short-term to meet these service needs and has included these impacts in the District's long-term planning. District in 2021 Financial Information and Policies The Total Net Position of the District was $114.8 million as of December 31, 2021, increasing $8.2 million or 7.7% compared to December 31, 2020. Operating income of $0.9 million accounts for 11 % of the Total Net Position increase. The FY 2021 operating income of $0.9 million represents a margin of 2.1 % of operating revenues, which compares to a FY 2020 margin of 6.9%. For 2021 compared to 2020, operating revenues increased 4.2% and operating expenses increased 9.6%, with notable expense increases in purchased power (up $2.3 million or 20%) and storm damage costs (up $1.5 million or 985%). Total non - operating revenue and expenses net to revenue of $0.9 million and contributed assets of $6.4 million account for the remainder of the Total Net Position increase. Total Cash, Cash Equivalents, and Investments was $40.1 million as of December 31, 2021, decreasing $0.7 million or 1.7% compared to December 31, 2020. The decrease was primarily driven by the storm damage of $1.7 million and the early extinguishment of debt of $3.4 million. Refer to Financial Section's Consolidated Statements of Cash Flows and Note 2 of Notes to Financial Statements for additional information regarding components of cash, cash equivalents, and investments. The Management's Discussion and Analysis in the Financial Section provides additional information on the FY 2021 financial results and financial condition of the District. The District reviewed numerous new GAAP accounting pronouncements and there were no financial impacts in 2021 as a result of these new standards. Refer to Financial Section, Note 1 of Notes to Financial Statements for additional information regarding all the key financial policies of the District and details on new accounting pronouncements. Page 17 Budgetary Controls As a public agency, the Board and District embrace the fiduciary responsibility and stewardship of the District's financial resources. District staff works with the Board of Directors in workshop meetings and public hearing meetings to develop a biennial budget before Board adoption. The budget serves as a management tool to set appropriate service rates, allocate available resources, and includes a ten-year financial master plan. The legal level of budgetary control is maintained at the fund, department, and object account level. Key budgetary control is provided in District Code Title 3 Finance and Accounting, which includes extensive financial, budget, accounting, purchasing, reserves, investments, and other internal control policies. Board level budgetary controls include approval thresholds for expenditures and personnel additions, as well as, Board semi-annual review of financial statements and monthly review of disbursements and reserve fund balances. Management budgetary controls include monthly financial statement and budget report review, as well as, financial policies and procedures in accordance with aforementioned District Code. Long Term Financial Planning, Public Outreach and Initiatives 2021 was predominantly a planning year for the District's adopted Water and Electric 10-year Capital Improvement Plans. These plans provide valuable short and long term information to assist with resource planning in the FY 2022 and FY 2023 biennial budget cycle, which includes a 10-year Financial Master Plan and was approved in fall of 2021. A comprehensive cost of service analysis report and resulting revenue requirements and customer rate changes was completed in 2020 for Water and in 2021 for Electric. The review of these analyses is held in open/noticed Board meetings, as well as, noticed Public Hearings. In May 2021, the District completed an extensive strategic planning process, which included significant community outreach. Community participation exceeded the District's expectations and provided valuable feedback for not only the strategic plan, but also perceptions and insights into the District as a whole as part of our community. The District sincerely thanks the community for their valued engagement with the district. The Board adopted 2021-2024 Strategic Plan includes the following four key initiatives: • Community Broadband • Utility Undergrounding • 100% Clean Renewable Energy • Local Clean Generation More information on the strategic plan can be found on the District website (tdpud.org). The District conducts regular Board meetings, generally on the first and second Wednesdays of each month, which are noticed and open to the public. The dates of upcoming meetings and an archive of past meetings can be found on the District's website (tdpud.org). Closing Comments We would like to thank the many staff involved in preparing this Report, a true team effort. And lastly, with the pandemic finally waning, we would like to thank all ourvalued employees for their service and dedication to the District and the community during these unique and challenging times. Respectfully submitted, Brian C. Wright Michael R. Salmon General Manager Chief Financial Officer Page 19 Truckee Donner Public Utility District Organization Chart for 2021 Customers/ Community Electric (14,600 customers) Water (13,500 customers) Board of Directors Elected Officials (5) ..................................,.................................. --------------- Auditors Legal Counsel General Manager Employee Full Time Equivalents (FTE) 73.0 Total FTE for 2021 Budget Electric Operations (including Engineering) 26 FTE Water Operations (including Engineering) 16 FTE 1 FTE Di stri ct Information Clerk's Office Technology (incld. Contracts & Executive support) (including SCADA and GIS) 4 FTE k 6 FTE Administrative Services Legislative and Regulatory (Finance, Human Resources, J L Affairs, and Public Conservation, and Customer Service) Information Officer 19.0 FTE 1 FTE List of Elected and Appointed Officials Elected Officials FY'2021 (Term) FY'2022 (Term) Board President Christa Finn (2018-2022) Christa Finn (2018-2022) Board Vice President Tony Laliotis (2018-2022) Jeff Bender (2020-2024) Board of Director Jeff Bender (2020-2024) Tony Laliotis (2018-2022) Board of Director Joe Aguera (2020-2024) Joe Aguera (2020-2024) Board of Director Kim Harris (2020-2024) Kim Harris (2020-2024) Terms for directors run December of starting year through December of even years, four year terms. Appointed Officials -for both 2021 and 2022 Treasurer Michael R. Salmon District Clerk Shanna Kuhlemier General Manager Brian Wright Page 110 GFOA Certificate of Achievement for Excellence in Financial Reporting The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Truckee Donner Public Utility District for its annual comprehensive financial report (ACFR) for the fiscal year ended December 31, 2020. This was the first year that the District has achieved this prestigious award. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive financial report, whose contents conform to program standards. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that this ACFR continues to meet the Certificate of Achievement Program's requirements and are submitting it to GFOA to determine its eligibility for certificate award. Goveranent Finance Officers Association Certificate of Achieveinent for Excellence in Financial Reporting Presented to Truckee Donner Public Utility- District C alifornia For its Annual Comprehensive Financial Report For the Fiscal Year Euded December31,2020 P, . cc Esa-ufive Dirwbr/CEO Page 111 FINANCIAL SECTION -_r- :�►/��- 0-- The American Public Power Association's Reliable Public Power Provider program recognizes utilities that demonstrate high proficiency in reliability, safety, workforce development, and system improvement. Truckee Donner Public Utility District received the highest level RP3 award designation in March 2021 for three years. RELIABLE RUBIIC pa a R' DIAMOND AWARD RECIPIENT MARCH 2O21 .,r irK :ZPR071'9)ER American PubticiR wrerAssociation Page 112 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED FINANCIAL STATEMENTS Including Report of Independent Auditors December 31, 2021 and 2020 TABLE OF CONTENTS Report of Independent Auditors..............................................................................................14 Management's Discussion and Analysis....................................................................................17 FinancialStatements.............................................................................................................22 Consolidated Statements of Net Position........................................................................23 Consolidated Statements of Revenues, Expenses and Changes in Net Position.....................26 Consolidated Statements of Cash Flows.........................................................................27 Notes to Financial Statements.................................................................................................29 Required Supplementary Information........................................................................................68 Cost Sharing Defined Benefit Pension Plans...................................................................69 Schedule of Changes in Net OPEB Liability and Related Ratios..........................................71 Supplementary Information.....................................................................................................75 Consolidating Statement of Net Position.........................................................................76 Consolidating Statement of Revenues, Expenses and Changes in Net Position .......................78 Consolidating Statement of Cash Flows...........................................................................80 Page 113 (�/n) MOSSADAMS Report of Independent Auditors The Board of Directors Truckee Donner Public Utility District Report on the Audit of the Financial Statements Opinion We have audited the consolidated financial statements of Truckee Donner Public Utility District (the "District"), which comprise the consolidated statements of net position as of December 31, 2021 and 2020, and the related consolidated statements of revenues, expenses and changes in net position and cash flows for the years then ended, and the related notes to the consolidated financial statements. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the District as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GARS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District's ability to continue as a going concern within one year after the date that the financial statements are issued. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements. In performing an audit in accordance with GARS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control —related matters that we identified during the audit. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the accompanying management's discussion and analysis, the schedules of proportionate share of net pension liability, schedules of employer contributions, schedules of the District's change in the net OPEB liability and related ratios, schedule of the District's OPEB contributions, and the schedule of investment returns be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements that collectively comprise the District's consolidated financial statements. The accompanying consolidating statements of net position, and the related consolidating statements of revenues, expenses and changes in net position and cash flows as of and for the year ended December 31, 2021 are presented for purposes of additional analysis and are not a required part of the consolidated financial statements (collectively, the supplementary information). The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America.. In our opinion, the supplementary information, as described above, is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements that collectively comprise the District's financial statements. The introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the consolidated financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Portland, Oregon May 10, 2022 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2021 and 2020 As financial management of the Truckee Donner Public Utility District (the District), we offer readers of these financial statements this narrative overview and analysis of the financial activities of the District for the years ended December 31, 2021 and 2020, with additional comparative data for 2019. This discussion and analysis is designed to assist the reader in focusing on the significant financial topics, provide an overview of the District's financial activity and identify changes in the District's financial position. We encourage readers to consider the information presented here in conjunction with that presented within the basic financial statements. The reader should take time to read and evaluate all sections of this report, including the footnotes and other supplementary information that is provided, in addition to this management discussion and analysis. OVERVIEW OF THE FINANCIAL STATEMENTS The financial statements of the District are designed to provide readers with a broad overview of the District's finances similar to a private -sector business. They have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (GAAP). Under this basis of accounting, revenues are recognized in the period in which they are earned and expenses are recognized in the period in which they are incurred, regardless of the timing of related cash flows. These statements offer short-term and long-term financial information about the District's activities. The reporting entity consists of the primary government, which provides two utilities (electric utility and water utility), and the blended component units of two Community Facilities Districts. Further details about the component units are provided in note 1(A) to the financial statements. The basic financial statements, presented on a comparative format for the years ended December 31, 2021 and 2020, consist of: • Consolidated Statement of Net Position: This statement presents information on all of the District's assets, deferred outflows of resources and liabilities, and deferred inflows of resources and provides information about the nature and amounts of investments in resources (assets) and the obligations to District creditors (liabilities). It also provides the basis for computing rate of return, evaluating the capital structure of the District, and assessing the liquidity and financial flexibility of the District. This amounts are as of a point in time, the Districts year ending December 31. • Consolidated Statements of Revenues, Expenses, and Changes in Net Position: This statement provides the revenues and expenses for each of the presented years. The statement provides a measurement of the District's operations over the presented years and can be used to determine whether the District has successfully recovered all its costs through its rates and other charges. • Consolidated Statement of Cash Flows: This statement 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 is an important indicator of the District's liquidity and financial condition. • Notes to the Financial Statements: The notes 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. The financial statements report also contains other supplementary information, the independent auditor's opinion letter, and this Management Discussion and Analysis. Page 117 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2021 and 2020 CONDENSED COMPARATIVE FINANCIAL INFORMATION Provided below is select condensed financial statements for December 31, 2021, 2020, and 2019. CONSOLIDATED STATEMENT OF NET POSITION ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets Noncurrent assets: Capital assets, net Operating investments Designated investments Restricted investments Other long-term assets Total Assets Deferred outflows of resources TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Current liabilities Noncurrent Liabilities Long-term debt, net of current portion Net pension liability OPEB liability Unearned revenues Total Liabilities Deferred inflows of resources NET POSITION Net investment in capital assets Restricted Unrestricted Total Net Position TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION Sales to consumers Other operating revenues Total Operating Revenues Operating expenses Operating Income Non -operating special tax revenues Non -operating interest expense Non -operating other revenues Non -operating other expenses Income before capital contributions Capital contributions, net Change in net position Net Position, Beginning of Year NET POSITION, END OF YEAR Increase (Decrease) 2021 2020 2019 2021 -2020 $ 45,896,504 $ 54,424,068 $ 50,107,675 $ (8,527,564) 132,882,996 132,031,519 133,812,252 851,477 3,966,836 - - 3,966,836 5,848,933 - - 5,848,933 - 1,674,293 1,730,450 (1,674,293) 124,461 186,693 248,925 (62,232) 188,719,730 188,316,573 185,899,302 403,157 5,655,327 6,255,727 3,529,595 (600,400) $ 194,375,057 $ 194,572,300 $ 189,428,897 $ (197,243) $ 8,931,512 $ 9,822,138 $ 9,852,426 $ (890,626) 44,261,709 50,401,520 54,997,965 (6,139,811) 7,683,937 14,023,172 12,872,646 (6,339,235) 5,273,457 5,975,587 4,328,352 (702,130) 5,583,404 6,845,107 6,252,705 (1,261,703) 71,734,019 87,067,524 88,304,094 (15,333,505) 7,827,416 868,870 849,728 6,958,546 86,889,607 79,111,738 77,373,032 7,777,869 7,248,976 11,439,913 11,052,666 (4,190,937) 20,675,039 16,084,255 11,849,377 4,590,784 114,813,622 106,635,906 100,275,075 8,177,716 $ 194,375,057 $ 194,572,300 $ 189,428,897 $ (197,243) Increase (Decrease) 2021 2020 2019 2021 -2020 $ 41,835,534 $ 38,988,024 $ 37,029,653 $ 2,847,510 1,664,933 2,754,003 2,303,918 (1,089,070) 43,500,467 41,742,027 39,333,571 1,758,440 42,565,285 38,847,181 36,383,962 3,718,104 935,182 2,894,846 2,949,609 (1,959,664) 3,431,174 3,375,327 3,352,289 55,847 (2,369,633) (2,530,616) (2,647,817) 160,983 131,863 854,319 1,100,426 (722,456) (302,544) (276,840) (76,410) (25,704) 1,826,042 4,317,036 4,678,097 (2,490,994) 6,351,674 2,043,795 4,683,099 4,307,879 8,177,716 6,360,831 9,361,196 1,816,885 106,635,906 100,275,075 90,913,879 6,360,831 $ 114,813,622 $ 106,635,906 $ 100,275,075 $ 8,177,716 Page 118 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2021 and 2020 ANALYSIS OF OVERALL FINANCIAL POSITION AND RESULTS OF OPERATIONS 2021 as compared to 2020: The District's overall financial position improved in 2021 by $8.2 million or 7.7% as measured by total net position. In 2021, the total net position increased $0.9 million from operating activities, $0.9 million from non -operating activities, and $6.4 million from capital, debt and monetary contribution activities. Operating income in 2021 of $0.9 million decreased $2.0 million or 68% compared to $2.9 million in 2020. The components of operating income summarize as follows. Total operating revenues in 2021 of $43.5 million were $1.7 million or 4.2% greater than 2020, driven primarily by electric and water average rate increases for 2021 of 2.8% and 8.9%, respectively. Total operating expenses in 2021 of $42.6 million were $3.7 million or 9.6% greater than 2020, with the increase primarily driven by purchased power costs increase of $2.3 million (demand and cost factors) and electric infrastructure storm damage and related power restoration increase of $1.5 million (severe storm in December 2021). Non -operating revenues and expenses, net revenues in 2021 of $0.9 million were $0.5 million or 37% below 2020 due primarily to the decline in investment income. Capital and other contributions of $6.3 million was up 211 % compared to 2020, driven by construction activity and related projects contributions to the District. The resulting change in Total Net Position in 2021 of $8.2 million was $1.8 million or 29% higher than the change in 2020. Year-end 2021 current assets of $30.3 million decreased $8.8 million or 23% primarily due to $10.0 million of cash funds invested in non -current investments. Year-end 2021 total assets increased 0.2%. Year-end 2021 total liabilities of $71.7 million decreased $15.3 million or 18% primarily driven by a $6.1 million decrease in long-term debt (discussed further below) and a $6.3 million decrease in net pension liability (driven by plan assets return on investments; deferred inflows increased $6.6 million). 2020 as compared to 2019: The District's overall financial position improved in 2020 by $6.4 million or 6.3% as measured by total net position. In 2020, the total net position increased $2.9 million from operating activities, $1.4 million from non -operating activities, and $2.1 million from capital, debt and monetary contribution activities. Operating income in 2020 of $2.9 million decreased $0.1 million or 2% compared to $3.0 million in 2019. The components of operating income summarize as follows. Total operating revenues in 2020 of $41.7 million were $2.4 million or 6.1 % greater than 2019, driven primarily by electric and water average rate increases for 2021 of 3% and 9%, respectively. Total operating expenses in 2020 of $38.8 million were $2.5 million or 6.8% greater than 2019, with the increase primarily driven by increased wildfire mitigation efforts cost of $0.8 million, purchased power costs increase of $0.5 million, and an increase in labor costs charged to operations not capital of $0.7 million. Non -operating revenues and expenses, net revenues in 2020 of $1.4 million were $0.3 million or 18% below 2019 due primarily to the decline in investment income. Capital and other contributions in 2020 of $2.0 million were down 56% to 2019, driven by construction activity and related projects contributions to the District. The resulting Change in Net Position in 2020 of $6.4 million was $3.0 million or 32% lower than the change in 2019. Page 119 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2021 and 2020 ANALYSIS OF ELECTRIC UTILITY Electric total net position as of December 31, 2021 was $76.2 million and increased $4.1 million or 6% compared to December 31, 2020. Electric's total net position decreased $0.2 million from operating activities, decreased $0.2 million from non -operating activities, and increased $4.5 million from capital, debt and monetary contribution. Key components of this $4.1 million change in total net position are as follows. Electric operating income of ($0.2) million decreased $3.7 million or 106% compared to $3.5 million in 2020. The components of operating income summarize as follows. Electric operating revenues of $29.9 million increased $0.4 million or 1.4% in 2021 compared to 2020. Electric's sales to customers increased 5.6% to 2020; comprised of a 2.9% average rate increase, 1.7% customer growth, and 1.0% demand growth. Other Electric operating revenues were down 25% due primarily to decline in cap and trade prices. Electric operating expenses of $30.1 million compared to 2020 reflect an increase of $4.1 million or 15.7% driven primarily by increased purchased power costs of $2.3m or 9% and electric infrastructure storm damage and related power system restoration of $1.5m or 6%. Electric non -operating revenues (expenses) net of ($0.2) million decreased $0.5 million or 152% compared to $0.3 million in 2020. The decrease is driven principally by investment income decrease of $0.5 million due to market investment interest rate declines in 2021 compared to 2020. Electric contributions of $4.5 million increased $3.4 million or 316% compared to $1.1 million in 2020. The increase is driven by construction activity and related project's contributions to the District. Electric has no significant restrictions, commitments, or other limitations that would affect the availability of resources for future use; other than the $1.1 million restricted for debt service. ANALYSIS OF WATER UTILITY Water total net position as of December 31, 2021 was $65.9 million and increased $2.5 million or 4% compared to December 31, 2020. Water's total net position increased $1.1 million from operating activities, decreased $0.5 million from non -operating activities, and increased $1.9 million from capital, debt and monetary contributions. Key components of this $2.5 million change in total net position are as follows. Water operating income of $1.1 million increased $1.7 million or 306% compared to ($0.6) million in 2020. The components of operating income summarize as follows. Water operating revenues in 2021 of $15.4 million increased $1.4 million or 10% compared to 2020. Water's sales to customers increased 10% to 2020; comprised of an 8.9% average rate increase and 1.1 % customer growth. Water gallons billed in 2021 decreased 0.7% compared to 2020, with nominal impact on revenues. Other water operating revenues were flat year to year. Water operating expenses in 2021 of $14.3 million decreased of $0.3 million or 2% driven primarily by personnel position vacancies. Water non -operating revenues (expenses) net of ($0.5) million decreased $0.3 million or 225% compared to ($0.2) million in 2020. The change is comprised of a decrease in investment income of $0.2 million due to market investment interest rate declines, asset disposal gains decrease of $0.2 million, and a $0.1 million decrease in interest expense. Water contributions of $1.9 million increased $0.9 million or 95% compared to $1.0 million in 2020. The increase is driven principally by investment income decrease of $0.5 million due to market investment interest rate declines in 2021 compared to 2020. Water has no significant restrictions, commitments, or other limitations that would affect the availability of resources for future use; other than $3.4 million restricted for debt service. Page 120 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2021 and 2020 CAPITAL ASSETS As of December 31, 2021, 2020, and 2019, the District had $132.9 million, $132.0 million, and $133.8 million, respectively, invested in a variety of capital assets, net of accumulated depreciation. The District's capital assets, net of accumulated depreciation, increased $0.9 million or 0.6% in 2021. In 2021, depreciation expense of $7.9 million outpaced capital expenditures of $6.4 million, with the year more heavily focused on capital planning for major projects in 2022 and thereafter, in accordance with the approved 10-year capital improvement plans for both electric and water utilities. In 2020, depreciation expense of $8.0 million outpaced capital expenditures of $6.3 million, with the year more heavily focused on pandemic operations and capital planning. Electric utility capital expenditures in 2021 of $3.7 million included $1.1 million for Truckee substation modernization rebuild, $0.7 million in pole replacements, $0.7 million in vehicle replacements, $0.7 million in distribution system modernization replacements, and $0.5 million in various other projects. Electric utility capital expenditures in 2020 of $3.8 million included distribution system modernization replacements, Truckee substation modernization rebuild, and various other projects. Electric depreciation expense in 2021 of $3.4 million increased $0.4 million or 12% compared to 2020. Water utility capital expenditures in 2021 of $2.6 million included $1.2 million of pipeline replacement, $0.7 million in wells, tanks and pump station improvements, $0.6 million in SCADA upgrades, and $0.1 million in various other projects. Water utility capital expenditures in 2020 of $2.5 million include pipeline replacement, wells, tanks and pump station improvements, SCADA upgrades, and various other projects. Water depreciation expense in 2021 of $4.5 million decreased $0.4 million or 8% compared to 2020. See Note 4 to the Financial Statements for further information regarding capital assets. LONG-TERM DEBT Long-term debt includes revenue bonds and installment loans. At December 31, 2021, 2020, and 2019, the District had $47.0 million, $55.0 million, and $59.5 million, respectively, in long-term debt outstanding. In 2021, the District retired early $3.4 million in water debt, saving the District $0.2 million in future interest costs. See Note 8 to the Financial Statements for further information regarding this transaction. No new debt was issued in 2021, 2020 or 2019. See Note 5 to the Financial Statements for further information regarding long-term debt. ECONOMIC FACTORS AND NEXT YEARS BUDGETS AND RATES The District operates on a biennial budget cycle. The FY22 & FY23 Board approved budget includes an assumption for customer growth 0.5% per year, conservatively below recent 1 % average for the District. Revenue projections for fiscal year 2022 and 2023 include average rate increases for Electric of 8.5% and 6.5% respectively and for Water 9% and 8% respectively. For 2021, approved average rate increases are consistent with budget. Rates by rate class can be found on the District's website at www.tdi)ud.org. Expenditures for Electric and Water excluding debt service, for Budget year 2022 increased over Budget year 2021 by 12% and 14%, respectively; in part due to estimated inflation impacts. Overall, the pandemic's impact financially on the District has not been material, with certain cost increases and an increase in unpaid billings, more than offset by an increase in energy demands due to increased occupancies. CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT The financial report is designed to provide readers with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact: Truckee Donner Public Utility District, Attn: Treasurer 11570 Donner Pass Road, Truckee, CA 96161 Page 121 FINANCIAL STATEMENTS TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED STATEMENTS OF NET POSITION December 31, 2021 and 2020 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES 2021 2020 CURRENT ASSETS Cash and cash equivalents Operating $ 7,557,344 $ 14,989,131 Designated 15, 943, 781 14, 498,107 Restricted 6,808,321 9,659,770 Total cash and cash equivalents 30,309,446 39,147,008 Accounts receivable, net 2,311,007 2,269,108 Unbilled revenues 3,471,176 3,111,640 Special assessments receivable 7,742,235 8,130,250 Accrued interest receivable 29,064 60,620 Materials and supplies 1,005,433 906,547 Prepaid expenses 892,054 671,824 Other 136,089 127,071 Total Current Assets 45,896,504 54,424,068 NON -CURRENT ASSETS Operating investments 3,966,836 -0- Designated investments 5,848,933 -0- Restricted investment fund -0- 1,674,293 Broadband maintenance prepaid 124,461 186,693 Capital Assets Utility plant 219,900,995 212,694,105 Accumulated depreciation (92,750,899) (85,247,297) Construction work in progress 5,732,900 4,584,711 Total Capital Assets 132,882,996 132,031,519 Total Non -Current Assets 142,823,226 133,892,505 TOTAL ASSETS 188, 719, 730 188, 316, 573 DEFERRED OUTFLOWS OF RESOURCES Pension 2,699,378 2,914,246 OPEB 2,496,749 2,822,218 Unamortized loss on refunding 445,570 478,372 Unamortized redemption premium on refunding 13,630 40,891 Total Deferred Outflows of Resources 5,655,327 6,255,727 TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES $ 194,375,057 $ 194,572,300 The accompanying notes are an integral part of these consolidated financial statements. Page 123 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED STATEMENTS OF NET POSITION December 31, 2021 and 2020 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION (Continued) 2021 2020 CURRENT LIABILITIES Other Liabilities Accounts payable $ 3,659,615 $ 2,880,841 Customer deposits 318,905 440,865 Other 1,570,523 1,183,100 Total Other Liabilities 5,549,043 4,504,806 Current Liabilities Payable From Restricted Assets Current portion of long-term debt 2,716,250 4,574,633 Accrued interest payable 666,219 742,699 Total Current Liabilities Payable from Restricted Assets 3,382,469 5,317,332 Total Current Liabilities 8,931,512 9,822,138 NON -CURRENT LIABILITIES Long-term debt, net of discounts and premiums 44,261,709 50,401,520 Net pension liability 7,683,937 14,023,172 Net OPEB liability 5,273,457 5,975,587 Unearned revenues 5,583,404 6,845,107 Total Non -Current Liabilities 62,802,507 77,245,386 Total Liabilities 71,734,019 87,067,524 DEFERRED INFLOWS OF RESOURCES Pension 7,196,801 537,295 OPEB 630,615 331,575 Total Deferred Inflows of Resources 7,827,416 868,870 NET POSITION Net investment in capital assets 86,889,607 79,111,738 Restricted 7,248,976 11, 439, 913 Unrestricted 20, 675, 039 16, 084, 255 Total Net Position 114,813,622 106,635,906 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION $ 194,375,057 $ 194,572,300 The accompanying notes are an integral part of these consolidated financial statements. Page 124 THIS PAGE IS INTENTIONALLY LEFT BLANK TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION December 31, 2021 and 2020 2021 2020 OPERATING REVENUES Sales to customers $ 41,835,534 $ 38,988,024 Standby fees 124,130 133,470 Cap and trade proceeds 847,185 1,444,498 Other 693,618 1,176, 035 Total Operating Revenues 43,500,467 41,742,027 OPERATING EXPENSES Purchased power 13,560,417 11,285,537 Operations and maintenance 12,464,186 11,340,451 Consumer services 2,255,853 2,080,714 Administration and general 6,366,879 6,165,611 Depreciation 7,917,950 7,974,868 Total Operating Expenses 42,565,285 38,847,181 Operating Income 935,182 2,894,846 NON -OPERATING REVENUE (EXPENSES) Special tax revenue 3,431,174 3,375,327 Iniestment income (loss) (185,269) 573,668 Interest expense (2,369,633) (2,530,616) Amortization (38,250) (38,250) Other non -operating revenues 83,524 41,766 Other non -operating expenses (79,025) (238,590) Gain on disposition of assets 48,339 238,885 Total Non -Operating Revenue (Expenses) 890,860 1,422,190 Income Before Contributions 1,826,042 4,317,036 CAPITAL & OTHER CONTRIBUTIONS 6,351,674 2,043,795 CHANGE IN NET POSITION 8,177,716 6,360,831 Net Position - Beginning of Year 106,635,906 100,275,075 NET POSITION - END OF YEAR $ 114,813,622 $106,635,906 The accompanying notes are an integral part of these consolidated financial statements. Page 126 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED STATEMENTS OF CASH FLOWS December 31, 2021 and 2020 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Received from customers $ 42,977,071 $ 41,002,317 Paid to suppliers for goods and services (24,523,068) (22,164,412) Paid to employees for services (8,391,748) (8,367,200) Net Cash Flows from Operating Activities 10,062,255 10,470,705 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Principal payments on long-term debt (1,051,191) (1,000,803) Interest payments on long-term debt (32,555) (57,094) Net Cash Flows from Noncapital Financing Activities (1,083,746) (1,057,897) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital expenditures for utility plant (6,367,297) (6,308,208) Cost of disposal of property net of salvage (176,588) 48,537 Capital contributions, connection and facility fees 2,158,390 2,480,190 Special assessments receipts 773,116 778,982 Special tax receipts 3,139,260 3,117,313 Restricted Grant Funds Received 300,000 - Principal payments on long-term debt (6,952,207) (3,534,645) Interest payments on long-term debt (2,386,538) (2,485,807) Cash Flows From Capital and Related Financing Activities (9,511,864) (5,903,638) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments (10,014,679) - Proceeds from maturity of investments 1,698,882 - Interest income received 215,119 565,848 Cash Flows from Investing Activities (8,100,678) 565,848 Net Change in Cash and Cash Equivalents (8,634,033) 4,075,018 CASH AND CASH EQUIVALENTS — Beginning of Year 38,983,488 34,908,470 CASH AND CASH EQUIVALENTS — END OF YEAR $ 30,349,455 $ 38,983,488 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES Developer and customer added capital assets $ 2,610,655 $ 150,874 Recognition of prior period unearned revenues $ 6,081,722 $ 3,447,723 The accompanying notes are an integral part of these consolidated financial statements. Page 127 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED STATEMENTS OF CASH FLOWS December 31, 2021 and 2020 (continued) RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income Noncash items included in operating income Depreciation and amortization Depreciation charged to other accounts Changes in assets and liabilities Accounts receivable and unbilled revenues Materials and supplies Prepaid expenses Accounts payable Customer deposits Deferred Pension Contributions - GASB 68 Other current liabilites NET CASH FLOWS FROM OPERATING ACTIVITES RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE BALANCE SHEET Operating cash funds - current Designated cash funds - current Restricted cash funds - current Operating investments - non -current Designated investments - non -current Restricted investment fund - non -current Total Cash and Investments Less: Long-term investments Mark to market adjustments TOTAL CASH AND CASH EQUIVALENTS 2021 2020 $ 935,182 $ 2,894,846 7,917,950 7,974,868 433,451 455,294 (401,434) (725,616) (98,885) (170,003) (220,230) (28,585) 711,009 (196,892) (121,961) (14,094) 457,518 30,709 449,655 250,178 $ 10, 062, 255 $ 10,470, 705 $ 7,557,344 15, 943, 781 6,808,321 3,966,836 5,848,933 40,125, 215 (10, 014, 679) 238,919 $ 14,989,131 14,498,107 9,659,770 0 0 1,674,293 40,821,301 (1,698,880) (138, 933) $ 30,349,455 $ 38,983,488 The accompanying notes are an integral part of these consolidated financial statements. Page 128 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. ORGANIZATION The Truckee Donner Public Utility District (the District) was formed and operates under the State of California Public Utility District Act. The District is governed by a board of directors which consists of five elected members. The District provides electric and water service to portions of Nevada and Placer Counties described as Truckee. The electric and water service operations are separately maintained and operated. These financial statements reflect the combined electric and water operations of the District. All significant transactions between electric and water operations have been eliminated. These eliminations include power purchases and rent for shared facilities. The District's blended component units consist of organizations whose respective governing boards are comprised entirely of the members of the District's Board of Directors. These organizations are reported as if they are a part of the District's operations. The entities are legally separate, however, in the case of the Truckee Donner Public Utility District Financing Corporation, financial support has been pledged and financial and operational policies may be significantly influenced by the District. The following is a description of the District's blended component units: Truckee Donner Public Utility District Financing Corporation is a legal entity that was created to issue and administer Certificates of Participation on behalf of the District. (See note 5). Truckee Donner Public Utility District Community Facilities District No. 03-1 (Old Greenwood) is a legal entity created to issue special tax bonds to finance various public improvements needed to develop property located within Old Greenwood. (See note 7). Truckee Donner Public Utility District Community Facilities District No. 04-1 (Gray's Crossing) is a legal entity created to issue special tax bonds to finance various public improvements needed to develop property located within Gray's Crossing. (See note 7). Separate standalone financial statements are not available for the blended component units described above. Unless noted, disclosures relating to the component units are the same as for the District. B. ACCOUNTING POLICIES The financial statements of the District have been prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets and liabilities, that are a result of exchange and exchange like transactions, are recognized when the exchange takes place. Page 129 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. USE OF ESTIMATES Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. D. CASH AND CASH EQUIVALENTS For the purpose of the accompanying statement of cash flows, the District considers all highly liquid instruments with original maturities of three months or less when purchased to be cash equivalents. E. INVESTMENTS The District pools cash and investments. The District's investment policy allows for investments in instruments permitted by the California Government Code and/or the investments permitted by the trust agreements on District financing. The District's investment policy contains provisions intended to limit the District's exposure to interest rate risk, credit risk, and concentration of credit risk. Investment income from pooled investments is allocated to all funds in the pool. Interest is allocated on the basis of month end cash amounts for each fund as a percentage of the total balance. The District categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an assets fairvalue: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The District does not have any investments that are measured using Level 3 inputs. Changes in fair value that occur during a fiscal year are recognized as investment income (loss) reported for that fiscal year. Investment Income (loss) includes interest earnings, changes in fair value, and any realized gains or losses upon the sale of investments. F. DESIGNATED ASSETS The board has designated certain resources for future capital projects, replacements, and operational needs. G. RESTRICTED ASSETS Restricted assets are assets restricted by the covenants of long-term financial arrangements or other third party legal restrictions. Restricted assets are used in accordance with their requirements and where both restricted and unrestricted resources are available for use, restricted resources are used first and then unrestricted as they are needed. H. ACCOUNTS RECEIVABLEAND ALLOWANCES FOR DOUBTFUL ACCOUNTS Accounts receivable are recorded at the invoiced amount and are reported net of allowances for doubtful accounts of $67,800 and $41,200 for 2021 and 2020, respectively. Receivables are considered past due after 30 days and routine collection efforts begin, while remaining consistent with regulatory mandates. District Code allows for the Treasurer to write off delinquent account balances up to 0.17% of the amounts billed. This write off process occurs semi-annually. Page 130 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I. MATERIALS AND SUPPLIES Materials and supplies are recorded at average cost. J. DEBT PREMIUM, BOND ISSUANCE COSTS, AND DISCOUNTS Original issue and reacquired bond premiums and discounts relating to revenue bonds are amortized over the terms of the respective bond issues using the effective interest method. Debt issuance costs are expensed in the period incurred. K. SPECIAL ASSESSMENT RECEIVABLE Special assessment receivable represents special tax receivables related to community facilities districts (see notes 1T and note 7) and amounts due from property owners within the Donner Lake Assessment District for improvements made by the District pursuant to an agreement with the property owners to improve their water quality as discussed in note 8. L. AMORTIZED EXPENSES In 2003, the District entered into a broadband dark fiber maintenance agreement with Sierra Pacific Communications (SPC) which is included in the line item "Broadband Maintenance Prepaid" in the accompanying Statement of Net Position. SPC subsequently assigned the agreement to AT&T. The agreement is expected to provide benefit to the District over the estimated 20-year life of the agreement. (See note 3). M. CAPITAL ASSETS Capital assets are generally defined by the District as assets with an initial, individual cost of more than $10,000 and an estimated useful life of at least two years. Capital assets of the District are stated at the lower of cost or the acquisition value at the time of contribution to the District. Major outlays for plant are capitalized as projects are constructed. Depreciation on capital assets is calculated using the straight-line method over the estimated useful lives of the assets, which are as follows: Distribution Plant Electric 23 — 35 years Water 15 — 40 years Computer software and hardware 3 — 7 years Building and improvements 20 — 33 years Equipment and furniture 4 — 10 years N. COMPENSATED ABSENCES Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. Vested vacation and sick leave pay is accrued when earned in the financial statements. The liability is liquidated from general operating revenues of the utility. Page 131 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) O. REVENUE RECOGNITION Unbilled revenues, representing estimated consumer usage for the period between the last meter reading and the end of the period, are accrued in the period of consumption. Water customers without meters are billed on a flat -rate basis, and revenues are recorded as billed. Revenues from connection fees are recognized upon completion of the connection. Income that the District has earned through investing its excess cash is reflected within income from investments when earned. P. REVENUE AND EXPENSE CLASSIFICATION The District distinguishes operating revenues and expenses from non -operating items in the preparation of its financial statements. Operating revenues and expenses generally result from providing electric and water services in connection with the District's principal ongoing operations. The principal operating revenues are sales to customers. The District's operating expenses include power purchases, labor, materials, services, and other expenses related to the delivery of electric and water services. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses, or capital contributions and other. Q. POWER PURCHASES AND TRANSMISSION In 1999, the District entered into an agreement with Sierra Pacific Power Company dba NV Energy (SPPC), whereby SPPC will provide transmission services to the District through December 31, 2027. The District uses this transmission service to import energy over SPPC's transmission system to serve District load. In addition, the District purchases scheduling services from Utah Municipal Power Systems (UAMPS) and the scheduling services are included in the monthly power billings from UAMPS. The purchase of transmission services from SPPC represented 9.0% and 8.7% of total purchased power costs in 2021 and 2020, respectively. In December of 2005, the District entered into an agreement with UAMPS. Subsequently, the District entered into several pooling appendices for power capacity and energy that relate to various time periods from January 2008 through March 2028. Also in 2009, the District signed an agreement with UAMPS for approximately 5 MW of the Nebo natural gas generation plant capacity. In August 2012, the Horse Butte Wind project began commercial operation and the District owns approximately 15 MW of nameplate capacity that generates about 5 MW on average. The District has also invested in the Veyo Heat Recovery project that came on line in mid-2016. The District receives about 1.7 MW of carbon -free generation from this resource. In September 2019 the District entered into 25-year Purchase Power Agreement with UAMPS for a 6MW share of the Red Mesa Solar Project. The Project is being developed by UAMPS and the Navajo Tribal Utility Authority for use by UAMPS members. It is scheduled to be online by June 1, 2022. The Red Mesa Solar Project price for energy is among the lowest wholesale price paid by the District for any resource. It is estimated that a 6MW share equates to about 10 percent of total annual District energy requirements. In August of 2007, the District entered into an agreement with Western Area Power Administration (WAPA) for the delivery of Stampede Dam Hydroelectric generation. In accordance with this agreement, the District is entitled to a portion of the power generated by Stampede Dam. This generation is dependent upon the amount of water that is made available to the generator. This agreement is effective through 2024. In 2021 and 2020, the UAMPS contract, along with its appendices, and the WAPA contract for Stampede Dam Hydroelectric generation comprised the majority of a diversified power portfolio that balanced risk and costs for the District. Page 132 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) R. CAP AND TRADE PROGRAM PROCEEDS California Assembly Bill 32 (AB32) is an effort by the State of California to set a 2020 greenhouse gas (GHG) emissions reduction goal into law. AB32 requires California to lower greenhouse gas emissions to 1990 levels by 2020. Central to this initiative is the implementation of a cap and trade program, which covers major sources of GHG emissions in the State including power plants. The California Cap and Trade Program is designed to achieve cost-effective emissions reductions across the capped sectors. The program sets maximum statewide GHG emissions for all covered sectors each year ("cap"), and allows covered entities to sell off allowances ("trade"). An allowance is a tradable permit that allows the emission of one metric ton of CO2. The California carbon price is driven by allowance trading. The District is subject to AB32 and has excess allowances due to reducing carbon -based generation in its power portfolio. In 2021 and 2020, the District sold its excess allowances in the program auctions and the proceeds were recorded as $847,185 and $1,444,498 operating revenue for the respective years. The auction proceeds are held in a restricted fund and are used to purchase qualified renewable power. (See note 2) S. INCOME TAXES As a government agency, the District is exempt from payment of federal and state income taxes. T. TAX REVENUES Beginning in 2004, the District levied ad valorem property tax on all the taxable property within the Old Greenwood District in an amount sufficient to pay the yearly principal and interest on the Special Assessment District Tax Bonds. (See notes 5 and 7). The District had revenues of $800,595 in 2021 and $782,954 in 2020. On January 28, 2014, refunding bonds were sold to a private investment firm and the proceeds were used to call the 2003 Old Greenwood bonds on March 1, 2014. The 2014 refunding bonds have the same rate and method of apportionment conditions on the Old Greenwood properties as the original 2003 bonds. Beginning in 2005, the District levied ad valorem property tax on all taxable property within the Gray's Crossing District in an amount sufficient to pay the yearly principal and interest on the Special Assessment District Tax Bonds. (See notes 5 and 7). The District had revenues of $2,630,579 in 2021 and $2,592,373 in 2020. Taxes are assessed based on the county tax year ending June 30, resulting in unearned revenues for each of the community facility districts. (See note 6). U. CONTRIBUTED CAPITAL ASSETS A portion of the District's capital assets have been obtained through amounts charged to developers for plant constructed by the District; direct contributions of capital assets from developers and other parties; as well as assessments of local property owners. These items are recognized within capital assets as construction is completed for plant constructed by the District based on the cost of the items, when received for contributed capital assets based on the actual or estimated fair value of the contributed items, or upon completion of the related project for development agreements. The District records amounts received within capital contributions when a legally enforceable claim is established. Until the District meets the criteria to record the amounts described above as capital contributions, any amounts received are recorded within unearned revenues on the Statement of Net Position. Page 133 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) V. OTHER— PENSION SIDEFUND As a result of implementing GASB Statement No. 68, the pension side -fund payoff that occurred in 2011 and which had been reported in the financial statements as an asset was written off due to the District's participation in CaIPERS cost -sharing multi -employer retirement benefit plan. However, the liability for the payoff remains until paid in full through 2022. The intercompany fund transfers for the principal portion of the debt service between the electric and water utility is included as "other." W. PENSION For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District's California Public Employee's Retirement System (CaIPERS) plans (Plans) and the additions to/deductions from the Plans' fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. X. DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES Deferred Outflows of Resources: This separate financial statement element represents consumption of net position or fund balance that applies to future period(s) and so will not be recognized until that time. Deferred Inflows of Resources: This separate financial statement element represents an acquisition of net position or fund balance that applies to future period(s) and so will not be recognized as an inflow of resources until that time. Y. UNAMORTIZED LOSS ON BOND REFUNDING For current and advanced refunding results in defeasance of debt, the difference between the reacquisition price and the net carrying amount of the old debt (Gain or loss) is deferred and amortized as a component of interest expense over the remaining life of the old debt or the new debt, whichever is shorter. These amounts are reported as deferred outflow on the statements of net position. Z. COMPARATIVE INFORMATION Comparative data for the prior year has been presented in certain sections of the accompanying financial statements in order to provide an understanding of changes in the District's financial position and operations. Certain amounts presented in the prior year have been reclassified in order to be consistent with the current year's presentation. AA. RECENT ACCOUNTING PRONOUNCEMENTS IMPLEMENTED BY THE DISTRICT GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, addresses interest costs incurred before the end of a construction period to be recorded as an expenditure in the applicable period. As a result, interest costs incurred before the end of a construction period will not be included in the historical cost of a capital asset reported. Application of this statement is effective for the District's fiscal year ending December 31, 2021. The District has determined that this pronouncement has no changes in financial reporting of the District. Page 134 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) BB. ACCOUNTING PRONOUNCEMENTS TO BE IMPLEMENTED IN UPCOMING YEARS These statements are not effective until January 1, 2022 or later and may be applicable for the District. The District has not determined what impact, if any, this pronouncement will have on the financial statements. GASB Statement No. 87, Leases, addresses accounting and financial reporting for leases by governments. This Statement increases the usefulness of financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases by establishing a single model of lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and intangible right -to -use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about leasing activities. This statement is effective for the District fiscal year ending December 31, 2022. GASB Statement No.91, "Conduit Debt Obligations." The objective of this statement is to better meet the information needs of the financial statement users by enhancing the comparability and consistency of the conduit debt obligation reporting and reporting of related transactions and other events by state and local government issuers. This Statement also is intended to improve the relevance, reliability, and understandability of information about conduit debt obligations, as well as related transactions and events. The requirements of this Statement will take effect for financial statements with the fiscal year that ends on or after December 31, 2022. GASB Statement No.92, "Omnibus 2020." The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. The requirements of this Statement will take effect for financial statements with the fiscal year that ends on or after June 30, 2022. GASB Statement No.93, "Replacement of Interbank Offered Rates." The objective of this Statement is to address those and other accounting and financial reporting implications that result from the replacement of an IBOR. The removal of LIBOR as an appropriate benchmark interest rate is effective for reporting periods ending after December 31, 2021. All other requirements of this Statement are effective for reporting periods beginning after June 30, 2022. GASB Statement No.94, "Public -Private and Public -Public Partnerships and Availability Payment Arrangements." The primary objective of this Statement is to improve financial reporting by addressing issues related to public -private and public -public partnership arrangements (PPPs). The requirements of this Statement are effective for fiscal years beginning after June 30, 2023, and all reporting periods thereafter. GASB Statement No.96, "Subscription -Based Information Technology Arrangements." The purpose of this Statement is to provide guidance on the accounting and financial reporting for subscription -based information technology arrangements (SBITAs) for government end users (governments). The requirements of this Statement are effective for fiscal years beginning after June 30, 2023, and all reporting periods thereafter. Page 135 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS Cash, cash equivalents and investments are recorded in accounts as either restricted or unrestricted as required by the District's certificates of participation indentures or other third -party legal restrictions. Restricted assets represent funds that are restricted by certificates of participation covenants or third party contractual agreements. Assets that are allocated by resolution of the Board of Directors are considered to be Board designated assets. Board designated assets are a component of unrestricted assets as their use may be redirected at any time by approval of the Board. Upon Board approval, assets from board designated accounts may be used to pay for selected capital projects. Such accounts have been designated by the Board for the following purposes: Electric Capital Replacement Starting in 2009, the Board set aside funds designated for future electric infrastructure replacement. Electric Vehicle Reserve Beginning in 2009, the Board set aside funds designated for future electric utility vehicle replacements. Electric Rate Reserve In compliance with Board rules, the District created an electric rate stabilization fund in anticipation of future costs. During both 2021 and 2020, there was no utilization of these funds to offset increased power costs in lieu of raising electric rates. Water Vehicle Reserve Beginning in 2009, the Board set aside funds designated for future water utility vehicle replacements. Water Capital Replacement Starting in 2021, the Board set aside funds designated for future water infrastructure replacement. 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 and Operating Reserve Fund Starting in 2021, the Board combined this operating reserve designation into the operating classification, consistent with Board rules. Donner Lake Assessment District Surcharge Fund The District established a monthly billing surcharge in the amount of $6.65 applicable to customers in the Donner Lake area to provide revenue to pay the remainder of the cost of reconstruction effective October 2006. Deferred Liabilities Reserve Starting in 2017, the Board established a reserve to protect the District from volatility in pension, other post -employment benefits, and worker's compensation premiums. As of December 31, Board designated accounts at fair value consisted of the following: Electric capital replacement fund Electric vehicle reserve Electric rate reserve Electric deferred liabilites reserve Water vehicle reserve Water capital replacement Prepaid connection fees Debt service & operating reserve fund Donner Lake Assessment District surcharge fund Water deferred liabilites reserve Totals 2021 2020 $ 11,181,652 $ 3,649,736 259,508 626,347 6,409,163 5,973,501 2,094,398 2,085,918 484,446 197,987 1,015,747 - 78,093 77,788 - 1,632,667 163,065 147,937 106,642 106,226 $ 21,792,714 $ 14,498,107 Page 136 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued) Certain assets have been restricted by bond covenants or third party contractual agreements for the following purposes: Certificates of Participation Prepayments to the Trustee from the District for upcoming debt payments. Special Tax Bonds: Gray's Crossing The terms of the special tax bonds issued for the Mello -Roos Community Facilities Districts (CFD) require reserve funds as security for each principal and interest payment as they come due. Reserve funds are set aside as prescribed in the loan documents. These reserve funds are held by Bank of New York Mellon Trust Company. Facilities Fees The District charges facilities fees to applicants for new service to cover the costs of infrastructure needed to meet their systems demand. The use of such funds is restricted by California state law. Department of Water Resources (DWR) Prop 55 Reserve Fund Regulations relating to the Department of Water Resources loan require the accumulation of a reserve fund as security for each principal and interest payment as they come due. Annual payments into the fund were required for each of the first ten years beginning April 1, 1996. The total reserve fund equals two semi-annual payments and was fully funded during 2006. These funds are set aside for the life of the borrowed amount. All of the reserve funds are invested in the State of California Local Agency Investment Fund. Donner Lake Special Assessment District Improvement and Reserve Fund The District established the Donner Lake Special Assessment District (DLAD) Improvement Fund to account for all funds received from the Special Assessment Receivable, which will be used to pay the debt service costs related to the Donner Lake Water System project. The DLAD Improvement Fund also has a reserve fund as required by the California — Safe Drinking Water — State Revolving Fund (SRF). This fund is required to set aside $40,043 semi-annually for ten years beginning in 2006. The reserve fund was fully funded as of December 31, 2016. Grant Funds The District water utility received a $300,000 grant for capital improvement project in 2021, with $47,071 expended in 2021. The remaining cash funds balance of $252,929 is projected to be expended in 2022. AB32 Cap and Trade Auction Fund The District electric utility is identified as an "Electric Distribution Utility" under the Cap and Trade regulations and is therefore eligible to receive a direct allocation of allowances that can be sold in an auction. The proceeds from quarterly allowance auctions are held in this restricted fund and are used to purchase qualified renewable power. These funds are intended to mitigate the burden on the consumer without impacting a carbon price signal. Other (Area Improvement Funds) The District received funds from the County of Nevada, which are to be used only for improvements to specific areas within the District's boundaries in Nevada County. These areas include various Nevada County assessment districts. Page 137 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued) As of December 31, restricted cash and cash equivalents and investments at fair value consisted of the following: Certificates of Participation Special tax bonds Facilities fees DWR-Prop 55 reserve fund Donner Lake Special Assessment District improvement Donner Lake Special Assessment District reserve fund Grant Funds AB 32 Cap and Trade Auction fund Other (area improvement funds) Total Restricted Cash and Cash Equivalents and Investments 2021 2020 $ 137,917 $ 571,993 2,326,530 2,539,730 2,282,930 2,587,322 - 340,762 691,416 2,804,343 - 826,526 252,929 - 1,059,951 1,606,959 56,648 56,428 $ 6.808.321 $ 11.334.063 Cash and investments are comprised of the following cash and cash equivalents and investments as of December 31: Cash and cash equivalents Investments — government bonds Totals 9rol $ 30,309,446 9,815,769 $ 40,125, 215 2020 $ 39,147, 008 1,674,293 $ 40,821,301 Cash and cash equivalents and investments were $40,125,215 and $40,821,301 at December 31, 2021 and 2020, respectively. Cash equivalents substantially consist of deposits in the state pooled fund, Placer County pooled fund, money market funds and investments. Adjustments necessary to record investments at fair market value are recorded in the operating statement as increases or decreases in investment income. Market values may have changed significantly after year end. FAIR VALUE MEASUREMENT The District applies the provisions of Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application, which requires governmental entities, to report certain investments at fair value on the Statements of Net Position. Investments are valued at fair value at December 31. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The District categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices for identical instruments in active markets. Level 2 inputs are quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs are observable. Level 3 inputs are valuations derived from valuation techniques in which significant inputs are unobservable. Page 138 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued) FAIR VALUE MEASUREMENT (Continued) The District classifies its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The District has the following fair value measurements as of December 31, 2021: US Government bonds and agency securities are valued using observable inputs (Level 2 inputs). INVESTMENTS AUTHORIZED BY THE DISTRICT'S INVESTMENT POLICY The District adopted an investment policy in 2006 which allowed for investments in instruments permitted by the California Government Code and/or the investments permitted by the trust agreements on District financing, including investments in the local government investment fund pool administered by the State of California (LAIF), Placer County Treasurer's Investment Portfolio (PCTIP) pooled investment and Utah Public Treasurers' Investment Fund (UPTIF). The District's investment policy contains provisions intended to limit the District's exposure to interest rate risk, credit risk, and concentration of credit risk. At December 31, 2021 and 2020 the District's deposits and investments at fair value were held as follows: 2021 2020 Cash on hand $ 2,400 $ 2,400 Deposits 2,975,548 3,073,483 LAIF 11,092,822 17,525,627 PCTIP 6,398,125 8,459,694 UPTIF 8,834,171 8,866,958 Bank Certificates of Deposit 1,492,177 - Money Market Funds 1,006,381 1,218,846 U.S. Government Agency Securities 7,376,745 - U.S. Government Bonds 946,846 1,674,293 Totals 40,125,215 40,821,301 DISCLOSURES RELATING TO INTEREST RATE RISK 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 2021 and 2020: Investments and Deposits LAIF PCTIP UPTIF Federated U.S. Treasury Cash Reserve Morgan Stanley Treasury Fidelity Money Market Govemment Portfolio 57 Dreyfus Treasury Securities Federal Farm Credit Banks Federal U.S Treasury Bonds Federal Agencies Bonds Bank Certificates of Deposit (FDIC Insured) Maturity as of December 31, 2021 2020 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 3 months or less 2.5 to 4.5 years 2.5 to 4.5 years 2.5 to 4.5 years Page 139 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued) DISCLOSURES RELATING TO CREDIT RISK Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. LAIF, PCTIF and UPTIF do not have a rating provided by a nationally recognized statistical rating organization. The Morgan Stanley Treasury is rated AAAm by S&P and Aaa-mf by Moody's. The Federated U.S. Treasury Cash Reserve is rated AAAm by S&P and Aaa-mf by Moody's. Federal Farm Credit Banks is rated AA+ by S&P and Aaa by Moody's. The Dreyfus Treasury Securities is rated Aaa-mf by Moody's and AAAm by S&P. The Fidelity Money Market is rated AAA-mf by Moody's and AAAm by S&P. CUSTODIAL CREDIT RISK Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The District's investment policy does not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits. However, the California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless waived by the government unit). The market value of pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. As of December 31, 2021 and 2020 bank deposits exceeded FDIC insurance coverage by $2,817,038 and $2,524,887, respectively. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker/dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the District's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or governmental investment pools (such as LAIF). DEPOSIT IN STATE INVESTMENT POOL The District is a voluntary participant in the Local Agency Investment Fund (LAIF). This investment fund has an equity interest in the State of California's (State's) Pooled Money Investment Account (PMIA). PMIA funds are on deposit with the State's Centralized Treasury System and are managed in compliance with the California Government Code according to a statement of investment policy which sets forth permitted investment vehicles, liquidity parameters, and maximum maturity of investments. The fair value of the District's investment in this pool is reported in the accompanying financial statements at amounts based upon the District's pro-rata share of the fair value provided by the LAIF for the entire LAIF portfolio (in relation to the amortized cost of the portfolio). The balance available for withdrawal is based on the accounting records maintained by the LAIF, which are recorded on an amortized cost basis. Page 140 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 2 — CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued) DEPOSIT IN PLACER COUNTY TREASURER INVESTMENT POOL The District is a voluntary participant in the Placer County Investment Portfolio (PCTIP). The District is eligible to participate in PCTIP because a portion of the District's service area is in Placer County. Investments are on deposit with the Placer County Treasurer and are managed in compliance with the California Government Code according to a statement of investment policy which sets forth permitted investment vehicles, liquidity parameters, and maximum maturity of investments. The fair value of the District's investment in this pool is reported in the accompanying financial statements at amounts based upon the District's pro-rata share of the fair value provided by Placer County Treasurer for the entire PCTIP (in relation to the amortized cost of the portfolio). The balance available for withdrawal is based on the accounting records maintained by the Placer County Treasurer, which are recorded on an amortized cost basis. DEPOSIT IN UTAH PUBLIC TREASURERS' INVESTMENT FUND The District is a voluntary participant in the Utah Public Treasurers' Investment Fund (UPTIF). The District is eligible to participate in (UPTIF) through its membership with Utah Associated Municipal Power Systems (UAMPS). Investments are on deposit with State of Utah public treasury and investments are restricted to those authorized by the Utah Money Management Act and rules of the Money Management Council of Utah. The fair value of the District's investments in this pool is reported in the accompanying financial statements at amounts based upon the District's pro-rata share of the fair value provided by UPTIF through UAMPS Member Retention Fund. NOTE 3—TELECOMMUNICATION SERVICES In 1999, the District initiated a project to expand its basic service offerings to include internet access, cable television and voice delivered over fiber optic networks (the broadband project). The District completed the broadband design project and obtained the necessary regulatory approvals and franchises needed to construct and launch the broadband project. A local cable television service provider filed an objection in September 2004 with the Nevada County Local Agency Formation Commission (LAFCO), the entity responsible for providing regulatory approval for the broadband project. After denying the cable television provider's request for a reconsideration of their approval of the District's project, the cable television provider filed a lawsuit against LAFCO. The District was not named in the lawsuit. A ruling on the lawsuit was received in January 2006. LAFCO prevailed on all portions of the cable television provider's claim. The cable television provider filed an appeal; however, in June of 2007, the Court ruled in favor of LAFCO, upholding the initial ruling. Since 2009, the District has been exploring options to sell or lease the existing infrastructure to provide a return on investment in the project. Expenses incurred by the District to date on the broadband project total $2,834,079. In 2021 and 2020 there were no material expenditures for this project. In 2018, The District signed a Memorandum of Understanding with Plumas Sierra Telecommunications to offer services utilizing these four fibers from Reno to Sacramento in future years. Page 141 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 4 — CAPITAL ASSETS Capital assets consist of the following at December 31, 2021 and 2020: January 1, December 31, Plant Balances 2021 Additions Reductions 2021 Electric distribution $ 71,894,379 $ 4,518,836 $ (391,972) $ 76,021,243 Water distribution 121,483,082 2,584,186 (14,819) 124,052,449 General plant 19,316,644 726,741 (216,082) 19,827,303 Total 212,694,105 7,829,763 (622,873) 219,900,995 Accumulated Depreciation Electric distribution (21,385,441) (2,943,724) 932,565 (23,396,600) Water distribution (52,339,068) (4,323,187) 8,061 (56,654,194) General plant (11,522,788) (1,379,630) 202,313 (12,700,105) Total (85,247,297) (8,646,541) 1,142,939 (92,750,899) Plant Sub -Total Electric distribution 50,508,938 1,575,112 540,593 52,624,643 Water distribution 69,144,014 (1,739,001) (6,758) 67,398,255 General plant 7,793,856 (652,889) (13,769) 7,127,198 Total 127,446,808 (816,778) 520,066 127,150,096 Construction work in progress 4,584,711 6,427,636 (5,279,447) 5,732,900 Totals $ 132,031,519 $ 5,610,858 $ (4,759,381) $ 132,882,996 January 1, December 31, Plant Balances 2020 Additions Reductions 2020 Electric distribution $ 67,692,719 $ 4,429,790 $ (228,130) $ 71,894,379 Water distribution 120,131,130 2,161,608 (809,656) 121,483,082 General plant 18,450,143 1,397,052 (530,551) 19,316,644 Total 206,273,992 7,988,450 (1,568,337) 212,694,105 Accumulated Depreciation Electric distribution (19,454,296) (2,350,811) 419,666 (21,385,441) Water distribution (48,269,854) (4,879,104) 809,890 (52,339,068) General plant (10,851,669) (1,156,262) 485,143 (11,522,788) Total (78,575,819) (8,386,177) 1,714,699 (85,247,297) Plant Sub -Total Electric distribution 48,238,423 2,078,979 191,536 50,508,938 Water distribution 71,861,276 (2,717,496) 234 69,144,014 General plant 7,598,474 240,790 (45,408) 7,793,856 Total 127,698,173 (397,727) 146,362 127,446,808 Construction work in progress 6,114,079 6,853,869 (8,383,237) 4,584,711 Totals $ 133,812,252 $ 6,456,142 $ (8,236,875) $ 132,031,519 In accordance with FERC guidelines for utility accounting, additional activity is reflected in the accumulated depreciation accounts for retirement costs related to upgrading capital investment projects and replacing electric distribution, metering and general assets. Accordingly, the retirement costs are reported as part of the change in accumulated depreciation. As of December 31, 2021 and 2020, the plant in service included land and land rights of $3,318,346 which are not being depreciated. A portion of the plant has been contributed to the District. When replacement is needed, the District replaces the contributed plant with District -financed plant. Page 142 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 5 — LONG-TERM DEBT Long-term debt consisted of the following at December 31, 2021: January 1, December 31, Due within 2021 Additions Reductions 2021 one year Pension Obligation Bonds Electric, 2.47% due semi-annually Refinanced in2016 $ 1,578,000 $ $ (1,039,000) $ 539,000 $ 539,000 State Revolving Fund Loan — Water, 2.34%, due semi-annually beginning in 2006 to 2026. 4,110,535 (4,110,535) - - Special Tax Bonds — Mello Roos, CFD Old Greenwood, 4.18%, due seriallyto 2032 8,385,100 (444,800) 7,940,300 484,500 Special Tax Bonds — Mello Roos, CFD Grays Crossing, 3.25% to, 5.7%, due seriallyto 2035 (net of unamortized discounts of $64,006) 12,801,307 (415,313) 12,385,994 465,000 Special Tax Bonds — Mello Roos, CFD Grays Crossing, 3.50% to 5.50%, due seriallyto 2035 (net of unamortized discounts of $7,072) 15,607,410 (529,482) 15,077,928 585,000 Certificates of Participation — Water, 1.54% due seriallyto 2021 refinanced in 2016 664,000 (664,000) Certificates of Participation — Water, 2.00% to 4.00%, due seriallyto 2035 (net premiums of $366,987) 11,654,005 (632,018) 11,021,987 630,000 Department of Water Resources, 3.18%, due semiannuallyto 2021, secured by real and personal property. 150,854 (150,854) - - Installment loan, 4.58% due seriallyto 2022 24,942 (12,191) 12,751 12,750 Totals $ 54,976,153 $ $ (7,998,194) $ 46,977,959 $ 2,716,250 Page 143 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 5 — LONG-TERM DEBT (Continued) Long-term debt consisted of the following at December 31, 2020: January 1, December 31, Due within 2020 Additions Reductions 2020 one year Pension Obligation Bonds Electric, 2.47% due semi-annually refinanced in 2016 $ 2,556,000 $ - $ (978,000) $ 1,578,000 $ 1,039,000 State Revolving Fund Loan — Water, 2.34%, due semi-annually beginning in 2006 to 2026. Special Tax Bonds — Mello Roos, CFD Old Greenwood, 4.18%, due seriallyto 2032 Special Tax Bonds — Mello Roos, CFD Grays Crossing, 3.25% to, 5.7%, due seriallyto 2035 (net of unamortized discounts of $68,693) Special Tax Bonds — Mello Roos, CFD Grays Crossing, 3.50% to 5.50%, due seriallyto 2035 (net of unamortized discounts of $7,590) Certificates of Participation — Water, 1.54% due seriallyto 2021 refinanced in 2016 Certificates of Participation — Water, 2.00% to 4.00%, due seriallyto 2035 (net premiums of $394,005) Department of Water Resources, 3.18%, due semiannuallyto 2021, secured by real and personal property. Installment loan, 4.58% due seriallyto 2022 Totals 4,803,024 (692,489) 4,110,535 8,793,600 (408,500) 8,385,100 13,171,620 (370,313) 12,801,307 16,091,892 1,331,000 12, 266, 023 445,491 47,745 $ 59,506,395 $ (484,482) 15,607,410 (667,000) 664,000 (612,018) 11,654,005 708,788 444,800 420,000 530,000 605,000 664,000 (294,637) 150,854 150,854 (22,802) 24,943 12,191 $ (4,530,242) $ 54,976,153 $ 4,574,633 Page 144 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 5 — LONG-TERM DEBT (Continued) During April 2004, the District obtained financing in the form of a State Revolving Fund Loan, the proceeds of which were utilized in the replacement of the Donner Lake water system. The District submitted expenditures to the State for reimbursement of $12,732,965. The semi-annual principal and interest payments were $400,426 and commenced in 2006. In 2004, the remaining balance of $12,227,122 was used to pay off the temporary lines of credit obtained in 2001 and 2002 to fund the Donner Lake project. In July 2021, the District paid -off in full the State Revolving Fund Loan balance of $3,401,747, post -scheduled debt service payment paid July 1, 2021, saving $202,088 in future interest costs. (See note 8). During December 2003, the Old Greenwood Community Facilities District issued $12,445,000 of Special Tax Bonds, the net proceeds of which were utilized to finance various public improvements for property within Old Greenwood. (See note 7). The terms of the Special Tax Bonds call for debt service payments to be provided solely by taxes levied on and collected from the owners of the taxable land within Old Greenwood. The bonds are secured by land located within Old Greenwood. In January 2014, the original 2003 bonds issued for the Old Greenwood Community Facilities District were refunded (refinanced) by issuing 2014 bonds to a private investment firm at a lower rate, saving the property owners in Old Greenwood over $3 million over the term of the bonds. The 2014 bonds did not require a reserve fund. Therefore the reserve fund of the 2003 bonds was utilized to reduce the principal. The 2014 bonds have similar terms and have the same rate and method of apportionment for the Old Greenwood parcel owners as the original 2003 bonds. During 2005 and 2004 respectively, the Gray's Crossing Community Facilities District issued $15,375,000 and $19,155,000 of Special Tax Bonds, the net proceeds of which were utilized to finance various public improvements for property within Gray's Crossing. (See note 7). The terms of the Special Tax Bonds call for debt service payments to be provided solely by taxes levied on and collected from the owners of the taxable land within Gray's Crossing. The bonds are secured by land located within Gray's Crossing. On October 12, 2006, through the Truckee Donner Public Utility District Financing Corporation on behalf of the District issued $26,570,000 of Certificates of Participation to refund 100% of the outstanding balance of Certificates issued in 1996, complete the funding of the Donner Lake Assessment District water system, and fund water system capital improvements. The refunding portion of the 2006 COP's, totaling $8,465,000, has an average interest rate of 4.10%. The refunded 1996 COP's had an average interest rate of 5.41 %. The net proceeds of $7,500,557 (after payment of $63,733 in underwriting fees, insurance and other issuance costs) plus an additional $1,315,194 of reserve fund monies were used to prepay the outstanding debt service requirements on the 1996 COP's. The terms of the Certificates call for payments to be made only from the net revenues of the Water Division and the debt is secured by this revenue. These revenues are required to be at least equal to 125% of the debt service for each year. In 2015, a portion of the 2006 COP was refunded. Since a portion of the 2006 COP was used for advance refunding of previous COP, that portion could not be advance refunded at the time of the refunding. The new 2015 refunding did not require a reserve fund. The reserve fund was liquidated and applied towards reducing the debt principal. The estimated net present value savings were $1,600,000 or 10% over the remaining life of issuance. In 2016, the remaining portion of the 2006 COP was refunded. Due to the refunding an estimated net present value savings of $222,000 was achieved. Page 145 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 5 — LONG-TERM DEBT (Continued) Under the Safe Drinking Water Bond Law of 1986, the Department of Water Resources provided a $5,000,000 loan to the District in 1993. The loan was to finance capital improvements to the public water supply and to reduce water quality hazards. The terms of the loan call for payments to be made only from the net revenues of the Water Division, which are required to be sufficient to pay the debt service for each year. In June 2011, the District refunded (refinanced) an existing $7.8 million pension side fund obligation for its participation in CalPERS. Prior to 2011, the annual side fund payments were expensed and described in the Notes to Financial Statements. The pension side fund liability was amortized through June 2022 with a 7.75% rate. This liability was not required to be reported on the District's Statement of Net Position, but the future pension expense was included in budget and rate calculations. The new refunding rate of 5% reduced the District's annual pension costs by almost $100,000 through 2022. In 2016, the District refunded the pension side fund again earning the District annual savings of $30,000 or $164,000 in total. As a normal part of its operations, the District finances the acquisition of certain assets through the use of installment loans. These loans have been used to finance the purchase of vehicles, equipment, and certain water system improvements. There were no additional installment loans in 2021 or 2020. Scheduled payments on debt are: Principal Interest Total 2022 $ 2,716,250 $ 2,256,600 $ 4,972,850 2023 2,333,200 2,146,982 4,480,182 2024 2,520,300 2,036,126 4,556,426 2025 2,716,100 1,915,968 4,632,068 2026 2,915,600 1,786,074 4,701,674 2027-2031 18, 081, 900 6,628,662 24, 710, 562 2032-2036 15, 398, 700 1,929,891 17, 328, 591 $ 46, 682, 050 $ 18, 700, 303 $ 65, 382, 353 Plus: Unamortized premiums 366,987 Less: Unamortized discounts (71,078) $ 46,977,959 Scheduled debt service payments by division are: CFD Gray's CFD Old Consolidated Electric Water Crossing Greenwood Total 2022 $ 558,991 1,033,937 2,563,518 816,405 $ 4,972,850 2023 $ 1,033,738 2,606,593 839,852 $ 4,480,182 2024 $ 1,032,538 2,664,015 859,874 $ 4,556,426 2025 $ 1,035,338 2,719,895 876,835 $ 4,632,068 2026 $ 1,031,938 2,773,945 895,791 $ 4,701,674 2027-2031 $ 5,160, 625 14, 712, 693 4,837,244 $ 24, 710, 562 2032-2036 $ 3,405,175 12, 882, 970 1,040,446 $ 17, 328, 591 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 6 — UNEARNED REVENUES Transactions that have not yet met revenue recognition requirements are recorded as a non -current liability and reflected in the accompanying Statement of Net Position. As of December 31, 2021 and 2020, 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, 2021 and 2020: January 1, December 31, 2021 Additions Reductions 2021 Unearned tax revenues $ 1,697,903 $ 1,733,270 $ (1,697,904) $ 1,733,269 Development agreement deposits 3,884,919 1,163,064 (2,728,751) 2,319,232 Connection fees and other deposits 1,262,285 1,923,685 (1,655,067) 1,530,903 Totals $ 6,845,107 $ 4,820,019 $ (6,081,722) $ 5,583,404 January 1, December 31, 2020 Additions Reductions 2020 Unearned tax revenues $ 1,677,418 $ 1,727,290 $ (1,706,805) $ 1,697,903 Development agreement deposits 3,210,661 907,627 (233,369) 3,884,919 Connection fees and other deposits 1,364,626 1,405,210 (1,507,551) 1,262,285 Totals $ 6,252,705 $ 4,040,127 $ (3,447,725) $ 6,845,107 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). In January 2014, the original 2003 bonds were refunded (refinanced) by issuing 2014 bonds to a private investment firm at a lower rate, saving the property owners in Old Greenwood over $3 million over the term of the bonds. The 2014 bonds have similar terms and have the same rate and method of apportionment for the Old Greenwood parcel owners as the original 2003 bonds. During 2021 and 2020 respectively, taxes of $810,794 and $790,384 were levied by Old Greenwood. Of these amounts, $405,397 and $395,192 relate to 2021 and 2020 respectively, and accordingly are included in tax revenues in the accompanying Statement of Revenues, Expenses, and Changes in Net Position. The remaining amount will be recognized in future periods and are included in unearned revenues on the accompanying Statement of Net Position. Page 147 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 7 — COMMUNITY FACILITIES DISTRICTS (Continued) In September 2004, the Community Facilities District No. 04-1 (Gray's Crossing) was formed and issued $15,375,000 in Special Tax Bonds (the 04-1 Bonds). In 2005, an additional $19,155,000 (2005 Series) in Special Tax Bonds was issued for the Gray's Crossing CFD. During the county tax roll for 2021 and 2020, taxes of $2,655,730 and $2,605,427 respectively were levied by Gray's Crossing. Of this amount, $1,327,865 and $1,302,714 relate to 2021 and 2020 respectively, and accordingly, are included in tax revenues. The remaining levied amount through the county tax roll will be recognized in future periods and is included in unearned revenues on the accompanying Statement of Net Position. Due to consistently high tax levy payment delinquencies, the Gray's Crossing made unscheduled reserve fund draws to fund debt payments of $214,815 and $132,640, for 2021 and 2020 respectively. Gray's Crossing Reserve Fund balance as of year-end December 31 was $2,322,811 and $2,536,011, for 2021 and 2020 respectively. The official statements and continuing disclosures may be viewed on the web site of Electronic Municipal Market Access (EMMA) of the Municipal Securities Rulemaking Board (MSRB), http://emma.msrb.org/. The Committee on Uniform Securities Identification Procedures number (CUSIP) for these special tax bonds is CUSIP 897817. NOTE 8 — DONNER LAKE WATER COMPANY ACQUISITION In 2001, the District acquired the Donner Lake Water Company by initiating an eminent domain lawsuit. As a part of the takeover, the District replaced the entire water system, which cost approximately $15.6 million and was completed in 2006. The District initially estimated the replacement cost to be $13 million. The Donner Lake property owners agreed to reimburse the District for the full costs of the replacement. Therefore, an assessment was placed on each Donner Lake homeowner's property for a pro- rata share of the $13 million payable immediately or with an option to pay over 20 years. The assessment is collected by Nevada County and Placer County on behalf of the District and is secured by the Donner Lake property owners. A monthly $6.65 water system upgrade surcharge is paid by the Donner Lake customers to reimburse the District for the $2.6 million cost incurred in excess of the assessment. In April 2004, the District obtained financing in the form of a State Revolving Fund Loan for $12,732,965 at a rate of 2.34%. The District is required to fund a reserve account by making semi-annual reserve payments in the amount of $40,043 for a 10-year period. The reserve fund was fully funded as of December 31, 2016. As of December 31, 2021 and 2020, the assessment receivable from the property owners was $10,605 and $783,721, respectively. These amounts are shown as Special Assessments Receivable in the Statement of Net Position. The proceeds of the assessment and surcharge are placed in the Donner Lake Special Assessment District Improvement Fund and used to pay the debt service for the water system improvements. In July 2021, the District paid -off in full the State Revolving Fund Loan balance of $3,401,747, post - scheduled debt service payment paid July 1, 2021, saving $202,088 in future interest costs. Donner Lake Assessment District long-term invested funds which matured in 2021 were utilized to make the payment. The previously invested funds utilized were intended for scheduled debt service through 2026, as the 20- year special tax assessment ended with the 2021/2022 property tax year. TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS A. PENSION PLANS Plan Description — All qualified permanent and probationary employees are eligible to participate in the District's Miscellaneous Employee Pension Plans, cost -sharing multiple employer defined benefit pension plans administered by the California Public Employees' Retirement System (CaIPERS). Benefit provisions under the Plans are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Benefits Provided — CalPERS provides service retirement and disability benefits, annual costs of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefits is Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. The 2.7% at 55 Miscellaneous Plan is closed to new entrants. The plans' provisions and benefits in effect at December 31, 2021 are summarized as follows: Miscellaneous Prior to On or after Hire Date January 1, 2013 January 1, 2013 Benefit Formula 2.7% @ 55 2% @ 62 Benefit Vesting Schedule Benefit Payments Retirement Age Monthly Benefits, as a %of eligible compensation Required Employee Contributions Rates Required Employer Contributions Rates 5 years service 5 years service monthly for life monthly for life 50 and Up 52 and Up 2.0% - 2.7% 1.0% to 2.5% 8% 6.75% 13.515% 7.732% Contributions — Section 208149(c) of the California Public Employee's Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Contributions shown below are for the fiscal year ending June 30, 2021 and 2020, respectively. Miscellaneous Hire Date Prior to On or after January 1, 2013 January 1, 2013 Combined Total Benefit Formula 2.7% @ 55 2% @ 62 2021 Employer Contributions $ 279,138 $ 135,682 $ 414,820 2020 Employer Contributions 1,209,423 125,969 1,335,392 Fiscal Year End 6/30/2021 Total 1,488,561 261,651 1,750,212 2020 Employer Contributions 311,731 97,434 409,165 2019 Employer Contributions 1,073,626 93,939 1,167, 565 Fiscal Year End 6/30/2020 Total $ 1,385,357 $ 191,373 $ 1,576,730 Page 149 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF RESOURCES RELATED TO PENSIONS As of December 31, 2021, the District reported net pension liabilities for its proportionate shares of the net pension liability as follows: Proportionate Share of Net Pension Liability Fiscal Year Ending June 30, 2021 $7,683,937 June 30, 2020 $14, 023,172 The District's net pension liability is measured as a proportionate share of the net pension liability. The net pension liability is measured as of June 30, 2021, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The District's proportion of the net pension liability was based on a projection of the District's long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The District's proportionate share of the net pension liability for the Plan for the measurement date of June 30, 2021 and June 30, 2020 is as follows: Measurement Date Percentage Share of Risk Pool June 30, 2021 June 30, 2020 Change Percentage of Plan NPL 0.40467% 0.33245% 0.07222% At December 31, 2021 and 2020 the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 2021 Deferred Outflows of Deferred Inflows of Resources Resources Differences between expected and actual experience $ 861,671 - Differences between projected and actual in\festment earnings - $ 6,707,671 Differences between employer's contributions and - 489,130 proportionate share of contributions Change in employer's proportion 403,396 - Pension contributions made subsequent to the measurement 1,434,311 - date Total $ 2,699,378 $ 7,196, 801 Page 150 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF RESOURCES RELATED TO PENSIONS (Continued) Changes of assumptions Differences between expected and actual experience Differences between projected and actual investment earnings Differences between employer's contributions and proportionate share of contributions Change in employer's proportion Pension contributions made subsequent to the measurement date Total 2020 Deferred Outflows of Deferred Inflows of Resources Resources - $ 100,019 $ 722,656 - 416, 581 - - 437,276 470,436 - 1,304,573 - $ 2,914,246 $ 537,295 For the as of December 31, 2021 balances of deferred outflows and inflows of resources, $1,434,311 is reported as deferred outflows of resources related to contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability in the year ended December 31, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense net credits as follows: Year Ended (Credit) 2022 $ (1,229,110) 2023 (1,337,715) 2024 (1,511,255) 2025 (1,853,654) $ (5,931,734) Page 151 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF RESOURCES RELATED TO PENSIONS (Continued) Actuarial Assumptions — The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Salary Increase Investment Rate of Return Miscellaneous 2021 June 30, 2020 June 30, 2021 Entry -Age Normal Cost Method 7.15% 2.50% Varies by Entry Age and Service Expenses; includes Inflation Mortality (1) Derived using CalPERS membership data for all funds (1) The mortality table used was developed based on CalPERS' specific data. The Table includes 15 years of mortality improvements using 90 percent of Scale MP 2016 published by the Society of Actuaries. For more details on this table, please refer to the 2017 experience study report. All underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2020 valuation were based on results of a December 2017 CalPERS Experience Study and Review of Actuarial Assumptions. Further details of the Experience Study can be found on the CalPERS website. Discount Rate - The discount rate used to measure the total pension liability as of June 30, 2021 was 7.15%. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.15% discount rate used is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.15% will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best -estimate ranges of expected future real rate of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds' asset classes, expected compound returns were calculated over the short-term Page 152 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) B. PENSION LIABILITIES, PENSION EXPENSES AND DEFERRED OUTFLOWS/INFLOWS OF RESOURCES RELATED TO PENSIONS (Continued) (first 10 years) and the long term (11 + years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The target allocation shown below is based on a plan adopted by CaIPERS' Board effective on July 1, 2018. Assumed Asset Real Return Real Return Asset Class Allocation Years 1-10 Years 11+ Public Equity 50.0% 4.80% 5.98% Fixed Income 28.0% 1.00% 2.62% Inflation Assets 0.0% 0.77% 1.81 % Private Equity 8.0% 6.30% 7.23% Real Assets 13.0% 3.75% 4.93% Liquidity 1.0% 0.00% -0.92% Total 100.0% Sensitivitv of the Pr000rtionate Share of the Net Pension Liabilitv to Chanaes in the Discount Rate - The following presents the District's proportionate share of the net pension liability for each Plan, calculated using the discount rate for each Plan, as well as what the District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 % point lower or 1 % point higher than the current rate: Miscellaneous Measurement Date June 30, 2021 1 % Decrease 6.15% Net Pension Liability $15,760,204 Current Discount Rate 7.15% Net Pension Liability $7,683,937 1% Increase 8.15% Net Pension Liability $1,007,403 Pension Plan Fiduciary Net Position — Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS financial reports. Page 153 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) C. PAYABLE TO THE PENSION PLAN At December 31, 2021 and 2020 respectively the District did not report a payable for outstanding required contributions to the pension plan D. DEFERRED COMPENSATION PLAN The District maintains two deferred compensation plans: a 401(a) and a 457 plan, (the Plans) for certain qualified employees. The District matches 6.78% of eligible employee contributions. In 2021 the total match was $233,369 compared to $195,156 in 2020. The District has no liability for losses under the Plans, but does have the duty of due care that would be required of an ordinary prudent investor. The District has not reflected the Plans' assets and corresponding liabilities (if any) on the accompanying Statement of Net Position. E. OTHER POST EMPLOYMENT BENEFITS (OPEB) General Information - As discussed in Note 1, beginning with the year ended December 31, 2018, the District adopted the provisions of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The District administers a single -employer defined -benefit post -employment healthcare plan and dependents are eligible to enroll. The District's retiree Benefits Plan (the Plan) recognizes benefit payments when due and payable in accordance with the benefit terms. The Plan's fiduciary net position has been determined on the same basis as is reported by the Plan in calculating the fiduciary net position (Net OPEB Liability), deferred outflows of resources and deferred inflows of resource and associated OPEB expense. Benefits Provided — Retirees are eligible for a District contribution towards premiums for the retiree health plans(s) if they have 10+ years of District service. The maximum District contribution is based on years of service. The Retiree is eligible for 50% of the following maximums, with a minimum of 10 years of service, plus 5% for each year of service over 10 years: $475 per person enrolled in the plan, if not eligible for Medicare, and $375 per person enrolled, if eligible for Medicare. Employees Covered — At December 31, 2020 (the valuation date), the benefit terms covered the following employees: Category Count Active Employees 64 Inactive Empoloyes, spouses, or beneficiaries currently receiving payments(s) 65 Inactive employees entitled to but not yet receiving benefit payment(s) - Total 129 Contributions — The District pays benefits as they come due and contributes additionally to the Trust annually. The District's annual contribution to the Trust as of December 31, 2021 and 2020 was $113,300 and $110,006, respectively. Page 154 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued) Net OPEB Liability — The District's net OPEB liability was measured as of December 31, 2020, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of December 31, 2019. Actuarial Assumptions The total OPEB Liability in the December 31, 2020 measurement was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Inflation: 2.50% Salary Increases: Base salary increases in year one: 2.750%. Additional merit -based increases based on CalPERS. Investment Rate of Return: 7.61 % Healthcare cost trend rates: 6.50% in the first year, trending down to 4.04% over 56 years Mortality Rates: Based on CalPERS tables The discount rate used to measure the total OPEB liability was 7.61%. The projection of cash flows used to determine the discount rate assumed that the District contribution will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position was projected to cover all future OPEB payments. Therefore, the discount rate was set equal to the long-term expected rate of return. Page 155 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued) Changes in the Net OPEB Liability — The changes in the net OPEB liability for the Plan are as follows: Increases (Decreases) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a) (b) (c) = (a) -(b) Balance as of Report Date December 31, 2020 Changes for the year: Service Cost Interest Differences between Expected and Actual Experience Changes of Assumptions Contributions Employer - District's Contribution Employer - Implicit Subsidy Net In\,estment Income Benefit Payments Implicity Rate Subsidy Credit Administrative Expenses Net Changes Balance as of Report Date December 31, 2021 $ 8,693,052 $ 2,717,465 $ 5,975,587 206,271 - 206,271 621,983 - 621,983 (28, 016) - (28, 016) (187, 044) (187, 044) - 391,334 (391, 334) - 546,439 (546,439) - 378,904 (378, 904) (281, 328) (281, 328) - (546,439) (546,439) - - (1,353) 1,353 (214, 573) 487,557 (702,130) $ 8,478,479 $ 3,205,022 $ 5,273,457 Page 156 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued) Increases (Decreases) Balance as of Report Date December 31, 2019 Changes for the year: Service Cost Interest Differences between Expected and Actual Experience Changes of Assumptions Contributions Employer - District's Contribution Employer - Implicit Subsidy Net Investment Income Benefit Payments Implicity Rate Subsidy Credit Administrative Expenses Net Changes Balance as of Report Date December 31, 2020 Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability Z� 0,410,000 Z� L,145,0,54 Z� 4,JZ0,J0Z 168,811 - 168,811 476,373 - 476,373 1,814,336 - 1,814,336 306,886 306,886 - 376,674 (376,674) 270,562 (270,562) 473,144 (473,144) (276,678) (276,678) - (270,562) (270,562) - (1,209) 1,209 2,219,166 571,931 1,647,235 Sensitivity of the net OPEB liability to changes in the discount rate - The net OPEB liability of the District, as well as what the District's net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (6.61%) or one percentage point higher (8.61%) is as follows: 1%Decrease Current Rate 1%Increase 6.61 % 7.61 % 8.61 % Net OPEB Liability $ 5,975,192 $ 5,273,457 $ 4,659,021 Sensitivitv of the net OPEB liabilitv to chanaes in the healthcare cost trend rates - The net OPEB liability of the District, as well as what the District's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (5.50%) or one percentage point higher (7.50%) than current healthcare cost trend rates is as follows: 1%Decrease Current Rate 1%Increase 5.50% Decreasing to 3.04% 6.50% Decreasing to 4.04% 7.50% Decreasing to 5.04% Net OPEB Liability $ 4,817,193 $ 5,273,457 $ 5,793,897 Page 157 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued) OPEB Plan Fiduciary Net Position — CERBT issues a publicly available financial report for the overall OPEB plan's fiduciary net position which may be obtained from CalPERS at PO Box 942709, Sacramento, Ca. 94229-2709. OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB — For the year ended December 31, 2021, the District recognized an OPEB expense of $866,039. At December 31, 2021 and 2020, the District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the follow sources: Differences between expected and actual experience Changes of assumptions Net Difference between Projected and Actual Earnings on OPEB Plan Investments District contributions made subsequent to the measurement date Total 2021 Deferred Outflows Deferred Inflows of Resources of Resources $ 1,337,811 $ 40,876 215,278 345,322 - 244,417 943,660 - $ 2,496,749 $ 630,615 2020 Deferred Outflows of Resources Differences between expected and actual experience $ 1,622,453 Changes of assumptions 261,082 Net Difference between Projected and Actual Earnings on OPEB Plan Investments - District contributions made subsequent to the measurement date 938,683 Total $ 2,822,218 Deferred Inflows of Resources $ 21,304 232,745 77,526 $ 331,575 Page 158 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 9 — EMPLOYEE BENEFIT PLANS (Continued) E. OTHER POST EMPLOYMENT BENEFITS (OPEB) (Continued) The $943,660 reported as deferred outflows of resources related to contributions subsequent to the December 31, 2020 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending December 31, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended December 31 Amount 2022 $ 196,686 2023 200,449 2024 144,601 2025 203,993 2026 199,205 thereafter (22,460) $ 922,474 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 159 THIS PAGE IS INTENTIONALLY LEFT BLANK TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 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, 2021 and 2020. STATEMENT OF NET POSITION ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets Noncurrent assets: Investments Broadband maintenance prepaid Capital assets, net Total Noncurrent Assets Total Assets Deferred outflows of resources Pension OPEB Unamortized loss on refunding Unamortized redemption premium on refunding Total Deferred Outflows of Resources TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Current liabilities Noncurrent Liabilities Long-term debt, net of current portion Net pension liability OPEB liability Unearned revenues Total Noncurrent Liabilities Total Liabilities Deferred inflows of resources December 31, 2021 Gray's Old Electric Water Crossing Greenwood Eliminations Grand Total 5,848,933 3,966,836 - - - 9,815,769 124,461 - - - - 124,461 61,493,134 71,389,862 - - - 132,882,996 67,466,528 75,356,698 - - - 142,823,226 93,762,721 84,443,344 9,410,145 1,103,520 - 188,719,730 1,619,627 1,079,751 - - - 2,699,378 1,498,049 998,700 - - - 2,496,749 - 445,570 - - - 445,570 13,630 - - - - 13,630 3,131,306 2,524,021 - - - 5,655,327 $ 96,894,027 $ 86,967,365 $ 9,410,145 $ 1,103,520 $ - $ 194,375,057 $ 5,534,813 $ 1,247,059 $ 1,554,505 $ 595,135 $ - $ 8,931,512 - 10,391,987 26,413,922 7,455,800 - 44,261,709 4,610,362 3,073,575 - - - 7,683,937 3,164,074 2,109,383 - - - 5,273,457 2,688,132 1,162,002 1,327,865 405,405 - 5,583,404 10,462,568 16,736,947 27,741,787 7,861,205 - 62,802,507 Pension 4,318,081 2,878,720 - - - 7,196,801 OPEB 378,369 252,246 - - - 630,615 Total Deferred Inflows of Resources 4,696,450 3,130,966 - - - 7,827,416 Net Position Net investment in capital assets 61,480,384 60,813,445 (27,463,922) (7,940,300) - 86,889,607 Restricted 1,068,491 3,351,806 2,828,679 - - 7,248,976 Unrestricted 13,651,321 1,687,142 4,749,096 587,480 - 20,675,039 Total Net Position 76,200,196 65,852,393 (19,886,147) (7,352,820) - 114,813,622 TOTAL LIABILITIES, DEFERRED INFLOWS $ 96,894,027 $ 86,967,365 $ 9,410,145 $ 1,103,520 $ - $ 194,375,057 OF RESOURCES AND NET POSITION Page 161 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 11 — SEGMENT DISCLOSURE (Continued) ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current assets Non -current assets: Capital assets, net Restricted investment fund Broadband maintenance prepaid Total Noncurrent Assets Total Assets Deferred outflows of resources Pension OPEB Unamortized loss on refunding Unamortized redemption premium on refunding Total Deferred outflows of resources TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Current liabilities Noncurrent Liabilities Long-term debt, net of current portion Net pension liability OPEB liability Unearned revenues Total Noncurrent Liabilities Total Liabilities Deferred inflows of resources December 31, 2020 Gray's Old Electric Water Crossing Greenwood Eliminations Grand Total $ 31,018,878 $ 13,067,679 $ 9,270,967 $ 1,119,867 $ (53,323) $ 54,424,068 59,492,672 72,538,847 - - - 132,031,519 - 1,674,293 - - - 1,674,293 186,693 - - - - 186,693 59,679,365 74,213,140 - - - 133,892,505 90,698,243 87,280,819 9,270,967 1,119,867 (53,323) 188,316,573 1,748,548 1,165,698 - - - 2,914,246 1,693,331 1,128,887 - - - 2,822,218 - 478,372 - - - 478,372 $ 94,181,013 $ 90,053,776 $ 9,270,967 $ 1,119,867 $ (53,323) $ 194,572,300 $ 4,995,944 $ 2,793,029 $ 1,471,533 $ 614,955 $ (53,323) $ 9,822,138 551,751 14,450,752 27,458,717 7,940,300 - 50,401,520 8,413,903 5,609,269 - - - 14,023,172 3,585,352 2,390,235 - - - 5,975,587 3,996,087 1,151,117 1,302,713 395,190 - 6,845,107 21,543,037 26,394,402 30,232,963 8,950,445 (53,323) 87,067,524 Pension 322,377 214,918 - - - 537,295 OPEB 198,945 132,630 - - - 331,575 Total Deferred Inflows of Resources 521,322 347,548 - - - 868,870 Net Position Net investment in capital assets 59,467,730 56,437,825 (28,408,717) (8,385,100) - 79,111,738 Restricted 2,354,515 6,273,747 2,811,651 - - 11,439,913 Unrestricted 10,294,409 600,254 4,635,070 554,522 - 16,084,255 Total Net Position 72,116,654 63,311,826 (20,961,996) (7,830,578) - 106,635,906 TOTAL LIABILITIES, DEFERRED INFLOWS $ 94,181,013 $ 90,053,776 $ 9,270,967 $ 1,119,867 $ (53,323) $ 194,572,300 OF RESOURCES AND NET POSITION Page 162 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 11 — SEGMENT DISCLOSURE (Continued) STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET POSITION Operating Re%enues Sales to consumers Other operating reeenues Operating expenses Depreciation Non -operating re%enues (expenses) Income (loss) before capital & other contributions Capital contributions, net CHANGE IN NET POSITION Net Position, Beginning NET POSITION, ENDING Operating Re%enues Sales to consumers Other operating re%enues Operating expenses Depreciation Non -operating re%enues (expenses) Income (loss) before capital & other contributions Capital contributions, net CHANGE IN NET POSITION Net Position, Beginning NET POSITION, ENDING Year ended December 31, 2021 Gray's Old Electric Water Crossing Greenwood Eliminations Grand Total $ 26,884,635 $ 14,950,899 $ - $ - $ - $ 41,835,534 3,005,500 468,511 - - (1,809,078) 1,664,933 (26,719,932) (9,736,481) - - 1,809,078 (34,647,335) (3,377,198) (4,540,752) - - - (7,917,950) (163,835) (498,912) 1,075,849 477,758 - 890,860 (370,830) 643,265 1,075,849 477,758 - 1,826,042 4,454,372 1,897,302 - - - 6,351,674 4,083,542 2,540,567 1,075,849 477,758 - 8,177,716 72,116,654 63,311,826 (20,961,996) (7,830,578) - 106,635,906 $ 76,200,196 $ 65,852,393 $ (19,886,147) $ (7,352,820) $ - $ 114,813,622 Year ended December 31, 2020 Gray's Old Electric Water Crossing Greenwood Eliminations Grand Total $ 25,451,966 $ 13,536,058 $ - $ - $ - $ 38,998,024 4,019,447 470,799 - - (1,736,243) 2,754,003 (23,009,999) (9,598,557) - - 1,736,243 (30,872,313) (3,012,752) (4,962,116) - - - (7,974,868) 312,226 (153,625) 836,435 427,154 - 1,422,190 3,760,888 (707,441) 836,435 427,154 - 4,317,036 1,069,413 974,382 - - - 2,043,795 4,830,301 266,941 836,435 427,154 - 6,360,831 67,286,353 63,044,885 (21,798,431) (8,257,732) - 100,275,075 $ 72,116,654 $ 63,311,826 $ (20,961,996) $ (7,830,578) $ - $ 106,635,906 Page 163 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 11 — SEGMENT DISCLOSURE (Continued) STATEMENTS OF CASH FLOWS Year ended December 31, 2021 Gray's Old Electric Water Crossing Greenwood Eliminations Grand Total NET CASH PROVIDED BY (USED IN) Operating actiAties $ 4,785,383 $ 5,330,195 $ - $ (53,323) $ - $ 10,062,255 Noncapital financing actNities (1,083,746) - - - - (1,083,746) Capital and related financing actNities (2,794,077) (6,547,152) (196,628) 25,993 - (9,511,864) InvestingactNities (5,910,410) (2,209,332) 15,233 3,831 - (8,100,678) Net increase (decrease)in cash and cash equivalents (5,002,850) (3,426,289) (181,395) (23,499) - (8,634,033) Cash and Cash Equivalents, Beginning 26,036,265 9,965,051 2,670,277 311,895 - 38,983,488 CASH AND CASH EQUIVALENTS, ENDING $ 21,033,415 $ 6,538,762 $ 2,488,882 $ 288,396 $ - $ 30,349,455 Year ended December 31, 2020 Gray's Old Electric Water Crossing Greenwood Eliminations Grand Total NET CASH PROVIDED BY (USED IN) Operating actNities $ 6,300,565 $ 4,120,639 $ (3,821) $ 53,322 $ - $ 10,470,705 Noncapital financing actNities (1,057,897) - - - - (1,057,897) Capital and related financing activities (2,694,747) (3,080,659) (131,911) 3,679 - (5,903,638) Investing actNities 312,748 212,708 33,708 6,684 - 565,848 Net increase (decrease)in cash and cash equivalents 2,860,669 1,252,688 (102,024) 63,685 - 4,075,018 Cash and Cash Equivalents, Beginning 23,175,596 8,712,363 2,772,301 248,210 - 34,908,470 CASH AND CASH EQUIVALENTS, ENDING $ 26,036,265 $ 9,965,051 $ 2,670,277 $ 311,895 $ - $ 38,983,488 Page 164 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 NOTE 12 — MARTIS VALLEY GROUNDWATER MANAGEMENT EFFORTS The Martis Valley aquifer underlies about 35,000 acres in both Placer and Nevada counties, near the Town of Truckee. It is the main groundwater 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 with jurisdiction in the Martis Valley Groundwater Basin (MVGB). Together, the TDPUD, NCSD and PCWA (Partnership Agencies) partnered to submit a Groundwater Management Plan and to help develop a groundwater model for the Martis Valley basin. The Martis Valley Groundwater Management Plan (GMP) was prepared in 2013 to reflect current water resources planning in the region and to incorporate the latest information and understanding of the underlying groundwater basin. This collaborative effort provided the guidance necessary to align groundwater policy. In addition to the GMP, a computer model of the groundwater basin was developed by the Desert Research Institute, which incorporated available data and enhanced understanding of the groundwater basin. A climate change modeling component out to the end of the century was part of the overall Federal study effort. Partner agencies each adopted the GMP in February 2012 and the model and associated report was completed in 2015. The total cost of the project was approximately $1,000,000, which includes federal funding of approximately $500,000 from the U.S. Bureau of Reclamation and $250,000 from the Lawrence Livermore National Laboratory; and contributions of $150,000 from TDPUD and $100,000 from the other members of the Partnership Agencies. In mid-2016, the California Sustainable Groundwater Management Act of 2014 (SGMA) took effect for which the District was the submitting agency of a SGMA Alternate Submittal in December, 2016 on behalf of the Town of Truckee, Placer County, Nevada County, PCWA, and Northstar CSD (Local SGMA Agencies). The SGMA Alternative Submittal was intended to comply with the new regulations. There was an adopted MOA amongst the six local agencies for this compliance project which covers the time period for preparation of the SGMA Alternative Submittal, possible conditional acceptance of the plan by DWR, and submittal of a first -year annual report. DWR had two years by statute to review the SGMA Alternative Submittal. In 2018, DWR was required to undergo groundwater basin prioritization which is the basis for compliance obligation for SGMA. The MVGB had previously been prioritized as medium priority. DWR's final Determination was to re -prioritize MVGB to low priority. This was a significant act that resulted in a direct reduction in regulatory burden and future regulatory costs that would be required for groundwater management. To ensure continued stewardship and management of the MVGB, the District and its local partners have agreed to return to the 2013 GMP framework which was never fully implemented due to SGMA. There was a kick-off meeting for the GMP in 2019 and the three local water agencies have hired a hydrogeologic consultant to prepare the first annual report as required by the GMP. The consultant's report was presented to the GMP Stakeholder Working Group at the annual meeting in the summer of 2020. 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. Page 165 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2021 and 2020 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. THIS PAGE IS INTENTIONALLY LEFT BLANK Water Crew repairing water main Page 167 REQUIRED SUPPLEMENTARY INFORMATION TRUCKEE DONNER PUBLIC UTILITY DISTRICT REQUIRED SUPPLEMENTARY INFORMATION December 31, 2021 and 2020 COST SHARING DEFINED BENEFIT PENSION PLANS Schedule of the District's Proportionate Share of the Net Pension Liability Cost Sharing Defined Benefit Plans As of June 30 Last Ten Years* 2021 2020 2019 2018 2017 2016 2015 2014 Portion of Net Pension Liability 0.40467% 0.33245% 0.32145% 0.31157% 0.30379% 0.29837% 0.29209% 0.09982% Proportionate Share of The Net Pension Liability $ 7,683,937 $ 14,023,172 $ 12,872,646 $ 11,742,137 $ 11,975,655 $ 10,250,329 $ 8,013,400 $ 6,210,985 Covered Payroll $ 7,762,131 $ 7,619,022 $ 7,602,120 $ 7,375,933 $ 7,108,563 $ 6,670,248 $ 6,162,431 $ 6,278,545 Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll 98.99% 184.05% 169.33% 159.20% 168.47% 153.67% 130.04% 98.92% Proportionate Share of Plan's Fidicuiary Net Position $ 53,485,582 $ 43,589,560 $ 40,367,745 $ 29,308,590 $ 27,244,095 $ 30,950,578 $ 30,725,516 $ 30,386,101 Plan Fiduciary Net Position as a percentage ofthe Total Pension Liability 87.44% 75.66% 75.82% 75.26% 73.31% 75.12% 79.31% 89.17% * Fiscal year 2014 was the 1st year of implementation, therefore only eight years are shown Page 169 TRUCKEE DONNER PUBLIC UTILITY DISTRICT REQUIRED SUPPLEMENTARY INFORMATION December 31, 2021 and 2020 COST SHARING DEFINED BENEFIT PENSION PLANS - CONTINUED Schedule of Contributions Cost Sharing Defined Benefit Plans December 31 Last Ten Years* 2021 2020 2019 2018 2017 2016 2015 2014 Contractually Required Contribution (Actuarially Determined) $ 1,844,808 $ 1,746,709 $ 1,872,297 $ 1,890,102 $ 1,670,256 $ 1,478,700 $ 1,312,540 $ 938,637 Contributions in Relation to the Actuarially Determined Contributions 1,844,808 1,746,709 1,872,297 1,890,102 1,670,256 1,478,700 1,312,540 938,637 Contribution deficiency (excess) - - - - - - - - Covered Payroll $ 7,704,033 $ 7,889,154 $ 7,494,347 $ 7,358,842 $ 6,940,748 $ 6,663,230 $ 6,074,329 $ 5,907,091 Contributions as a percentage of covered -employee payroll 24% 22% 25% 26% 24% 22% 22% * Fiscal year 2014 was the 1st year of implementation, therefore only eight years are shown 16% Page 170 TRUCKEE DONNER PUBLIC UTILITY DISTRICT REQUIRED SUPPLEMENTARY INFORMATION December 31, 2021 and 2020 Schedule of Changes in The District's Net OPEB Liability and Related Ratios Measurement Date: Report Date: Total OPEB Liability Service Cost Interest Changes in Benefit Terms Differences Between Expected and Actual Experience Changes of Assumptions Benefit Payments Implicit Rate Subsidy Credit Net Change in Total OPEB Liability Total OPEB Liability - Beginning of Year Total OPEB Liability - End of Year (a) December 31, 2020 December 31, 2021 Plan Fiduciary Net Position Net Investment Income Contributions Employer- District's Contribution Employer- Implicity Subsidy Benefit Payments, Including Refunds of Employee Contributions Implicit Rate Subsidy Fulfilled Administrative Expense Net Change in Plan Fiduciary Net Position Plan Fiduciary Net Position - Beginning of Year Plan Fiduciary Net Position - End of Year (b) District's Net OPEB liability - End of Year = (a) -(b) Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability Covered Employee Payroll District's Net OPEB Liability as a Percentage of Covered -Employee Payroll $ 206,271 621,983 0 (28, 016) (187,044) (281,328) (546,439) $ (214,573) 8,693,052 $ 8,478,479 $ 378,904 391,334 546,439 (281,328) (546,439) (1,353) $ 487,557 '7 717 Arr y 3,LUo,ULL $ 5,273,457 37.8% $ 7,149,490 73.76% Notes to Schedule: The District adopted GASB 75 for the fiscal Year Ending December 31,2018 2019 2020 $ 168,811 476,373 0 1,814,336 306,886 (276, 678) (270, 562) $ 2,219,166 6,473,886 $ 8,693,052 $ 473,144 376,674 270,562 (276, 678) (270, 562) (1,209) $ 571,931 '7 1Ar rqA y L,/I/,400 $ 5,975,587 31.3% $ 7,604,103 78.58% 2018 2019 $ 178,856 457,563 0 (29, 828) (233, 084) (244,700) (270,061) $ (141,254) 6,615,140 $ 6,473,886 $ (110,318) 294,698 270,061 (244,700) (270,061) (557) $ (60,877) 9 ')Or d11 y L,140,034 $ 4,328,352 33.1 % $ 7,400,587 58.49% 2017 2018 $ 170,473 448,374 0 0 0 (214,280) (254, 930) $ 149,637 6,465,503 $ 6,615,140 $ 167,459 256,280 254,930 (214,280) (254, 930) (519) $ 208,940 1 007 A71 y L,LU0,411 $ 4,408,729 33.4% $ 7,202,518 61.21 % Page 171 TRUCKEE DONNER PUBLIC UTILITY DISTRICT REQUIRED SUPPLEMENTARY INFORMATION December 31, 2021 and 2020 Other Post Employment Benefits - Schedule of Investment Returns Measurement Date: December 31, 2020 2019 2018 2017 Report Date: December 31, 2021 2020 2019 2018 Annual Money -Weighted Rate of Return, Net of Investment Expense 13.67% 21.56% -4.94% 8.30% The annual money -weighted rate of return, net of investment expenses, is the net investment income for the year divided by the average net positon for the year (less investment expenses). Notes to Schedule: The District adopted GASB 75 for the fiscal Year Ending December 31, 2018 Other Post Employment Benefits - Schedule of Contributions Measurement Date: December 31, 2020 2019 2018 Report Date: December 31, 2021 2020 2019 Actuarially Determined Contribution $ 827,767 $ 532,225 $ 614,761 Less: Actual Contributions 937,773 647,236 564,759 Contribution Deficiency (Excess) $ (110,006) $ (115,011) $ 50,002 Covered - Employee Payroll $ 7,149,490 $ 7,604,103 $ 7,400,587 Contributions as a Percentage of Covered -Employee Payroll 13.12% 8.51% 7.63% Notes to Schedule: The District adopted GASB 75 for the fiscal Year Ending December 31, 2018 2017 2018 $ 569,210 $ 7,202,518 7.10% Page 172 TRUCKEE DONNER PUBLIC UTILITY DISTRICT REQUIRED SUPPLEMENTARY INFORMATION December 31, 2021 and 2020 Other Post Employment Benefits - Actuarial Assumptions Actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2021 were from the December 21, 2020 valuation. Methods and assumptions used to determine contributions: Assumptions and Methods Actuarial Cost Method Amortization Method Amortization Period Inflation Assumed Payroll Growth Year 1 Healthcare Trend Rates Rate of Return on Assets Discount Rate used to measure total OPEB liability Mortality Rate Retirement Rates Entry age normal, level percent of pay Closed period, level percent of pay 20 years 2.50% 2.750% 6.50%, trending down to 4.04% over 55 years 7.61 % 7.61 % CalPERS Rates utilizing the decrement table Mort and Disb Rates —PA Misc from the CalPERS OPEB assumption model revised May 14, 2018. CalPERS Rates based on CalPERS assumption model revised May 14, 2018 for the periods 1997 through 2017. Page 173 '.'kit, ... 34 .., N . r' r f h s _ '+All W. SUPPLEMENTARY INFORMATION TRUCKEE DONNER PUBLIC UTILITY DISTRICT SUPPLEMENTARY INFORMATION December 31, 2021 CONSOLIDATING STATEMENT OF NET POSITION — PAGE 1 OF 2 As of December 31, 2021 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES CURRENT ASSETS Cash and cash equivalents Operating Designated Restricted Total cash and cash equivalents Accounts receivable, net Unbilled revenues Special assessments receivable Accrued interest receivable Materials and supplies Repaid expenses Other Total Current Assets NOWCURRENT ASSETS Operating investments Designated investments Broadband maintenance prepaid Capital Assets Utility plant Accumulated depreciation Construction work in progress Total capital assets Total Non -Current Assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES Pension OPEB Unarnortized loss on refunding Unarnortized redemption premium on refunding Total deferred outflows of resources TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Component Units Dectric Operations Water Operations Gray's Crossing Old Greenwood Siminations Totals $ 5,836,009 $ 1,270,587 $ 162,352 $ 288,396 $ $ 7,557,344 14,095,788 1,847,993 - - 15,943,781 1,069,081 3,412,710 2,326,530 6,808,321 21,000,878 6,531,290 2,488,882 288,396 30,309,446 1,509,454 801,553 - - 2,311,007 2,458,663 1,012, 513 - - 3,471,176 - 10,605 6,916,819 814,811 7,742,235 15,526 8,781 4,444 313 29,064 780,434 224,999 - - 1,005,433 465,391 426,663 892,054 65,847 70,242 136,089 26,296,193 9,086,646 9,410,145 1,103,520 45,896,504 - 3,966,836 3,966,836 5,848,933 - 5,848,933 124,461 124,461 91,251,171 128,649,824 219,900,995 (33,394,798) (59,356,101) (92,750,899) 3,636,761 2,096,139 5,732,900 61,493,134 71,389,862 132,882,996 67,466,528 75,356,698 142,823,226 93,762,721 84,443,344 9,410,145 1,103,520 188,719,730 1,619,627 1,079, 751 - 2,699, 378 1,498,049 998,700 2,496,749 445,570 445,570 13,630 13,630 3,131,306 2,524,021 - 5,655,327 $ 96,894,027 $ 86,967,365 $ 9,410,145 $ 1,103,520 $ $ 194,375,057 Page 176 TRUCKEE DONNER PUBLIC UTILITY DISTRICT SUPPLEMENTARY INFORMATION December 31, 2021 CONSOLIDATING STATEMENT OF NET POSITION - PAGE 2 OF 2 As of December 31, 2021 NET POSITION AND LIABILITIES CURRENT LIABILITIES Other liabilities Accounts payable Customer deposits Other Total other liabilities Current liabilities payable from restricted assets: Current portion of long-term debt Accrued interest payable Total Current Liabilities Payable from Restricted Assets Total Current Liabilities NON -CURRENT LIABILITIES Long-term debt, net of discounts and premiums Net pension liability OPEB liability Unearned revenues Total non -current liabilities Total Liabilities Component Units Electric Operations Water Operations Gray's Crossing Old Greenwood Eliminations Totals $ 3,505,314 $ 154,301 $ $ $ $ 3,659,615 256,876 62,029 318,905 1,220,286 350,237 1,570,523 4,982,476 566,567 5,549,043 551,750 630,000 1,050,000 484,500 2,716,250 587 50,492 504,505 110,635 666,219 552,337 680,492 1,554,505 595,135 3,382,469 5,534,813 1,247,059 1,554,505 595,135 8,931,512 - 10,391,987 26,413,922 7,455,800 44,261,709 4,610,362 3,073,575 7,683,937 3,164,074 2,109,383 5,273,457 2,688,132 1,162,002 1,327,865 405,405 5,583,404 10,462,568 16,736,947 27,741,787 7,861,205 62,802,507 15,997,381 17,984,006 29,296,292 8,456,340 71,734,019 DEFERRED INFLOWS OF RESOURCES Pension 4,318,081 2,878,720 7,196,801 OPEB 378,369 252,246 630,615 Total deferred inflow s of resources 4,696,450 3,130,966 7,827,416 NET POSITION Net investment in capital assets 61,480,384 60,813,445 (27,463,922) (7,940,300) 86,889,607 Restricted 1,068,491 3,351,806 2,828,679 - 7,248,976 Unrestricted 13,651,321 1,687,142 4,749,096 587,480 20,675,039 Total Net Position 76,200,196 65,852,393 (19,886,147) (7,352,820) 114,813,622 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION $ 96,894,027 $ 86,967,365 $ 9,410,145 $ 1,103,520 $ $ 194,375,057 Page 177 TRUCKEE DONNER PUBLIC UTILITY DISTRICT SUPPLEMENTARY INFORMATION December 31, 2021 CONSOLIDATING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION For the Year Ended December 31, 2021 Component Units OPERATING REVENUES Sales to customers Interdepartmental sales Standby fees Cap and trade proceeds Other Total Operating Revenues OPERATING EXPENSES Purchased power Operations and maintenance Consumer services Administration and general Depreciation Total Operating Expenses Operating Income NON -OPERATING REVENUE (EXPENSES) Special tax revenue Investment income (loss) Interest expense Amortization Other non -operating revenues Other non -operating expenses Gain (loss) on disposition of assets Total Non -Operating Revenue (Expenses) Income Before Contributions CAPITAL & OTHER CONTRIBUTIONS, net Capital Contributions Intercompany Debt Service - Pension Sidefund Total Capital and Other Contributions, net CHANGE IN NET POSITION NET POSTION - Beginning of Year NET POSITION - END OF YEAR Electric Operations Water Operations Gray's Grossing Old Greenwood Eliminations Totals $ 26,884,635 14,950,899 $ $ $ $ 41,835,534 1,269,772 2,774 (1,272,546) - 17,450 106,680 124,130 847,185 - 847,185 871,093 359,057 (536,532) 693,618 29,890,135 15,419,410 (1,809,078) 43,500,467 13,560,417 13,560,417 7,947,145 5,789,587 (1,272,546) 12,464,186 1,454,859 800,994 2,255,853 3,757,511 3,145,900 (536,532) 6,366,879 3,377,198 4,540,752 7,917,950 30,097,130 14,277,233 (1,809,078) 42,565,285 (206,995) 1,142,177 935,182 2,630,579 800,595 3,431,174 (188,631) (11,648) 14,957 53 (185,269) (1,158) (476,604) (1,547,571) (344,300) (2,369,633) (27,261) (5,784) (5,205) (38,250) 62,114 21,410 83,524 - (79,025) (79,025) 53,215 (4,876) 48,339 (163,835) (498,912) 1,075,849 477,758 890,860 (370,830) 643,265 1,075,849 477,758 1,826,042 4,069,942 2,281,732 - 6,351,674 384,430 (384,430) - 4,454,372 1,897,302 6,351,674 4,083,542 2,540,567 1,075,849 477,758 8,177,716 72,116,654 63,311,826 (20,961,996) (7,830,578) 106,635,906 $ 76,200,196 $ 65,852,393 $ (19,886,147) $ (7,352,820) $ $ 114,813,622 Page 178 THIS PAGE IS INTENTIONALLY LEFT BLANK TRUCKEE DONNER PUBLIC UTILITY DISTRICT SUPPLEMENTARY INFORMATION December 31, 2021 CONSOLIDATING STATEMENT OF CASH FLOWS - PAGE 1 OF 2 For the Year Ended December 31, 2021 CASH FLOWS FROM OPERATING ACTIVITIES Received from customers Paid to suppliers for goods and services Paid to employees for services Net Cash Flows from Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Principal payments on long-term debt Interest payments on long-term debt Net Cash Flows from Noncapital Financing Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital expenditures for utility plant Cost of disposal of property net of salvage Capital contributions, connection and facility fees Special assessments receipts Special tax receipts Restricted grant funds received Principal payments on long-term debt Interest payments on long-term debt Cash Flows From Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments Proceeds from maturity of investments Interest income received Cash Flows from Investing Activities Net Change in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS — Beginning of Year CASH AND CASH EQUIVALENTS — END OF YEAR Component Units Electric Operations Water Operations Gray's Crossing Old Greenwood Biminations Total $ 29,937,764 $ 14,848,385 $ $ - $ (1,809,078) $ 42,977,071 (19,536,785) (6,742,038) (53,323) 1,809,078 (24,523,068) (5,615,596) (2,776,152) - (8,391,748) 4,785,383 5,330,195 (53,323) 10,062,255 (1,051,191) - (1,051,191) (32,555) (32,555) (1,083,746) (1,083,746) (3,712,667) (2,654,630) (6,367,297) (171,597) (4,991) (176,588) 1,058,774 1,099,616 2,158,390 - 773,116 - 773,116 - 2,317,970 821,290 3,139,260 300,000 - - 300,000 - (5,557,407) (950,000) (444,800) (6,952,207) 31,413 (502,856) (1,564,598) (350,497) (2,386,538) (2,794,077) (6,547,152) (196,628) 25,993 (9,511,864) (6,008,061) (4,006,618) - (10,014,679) - 1,698,882 - - 1,698,882 97,651 98,404 15,233 3,831 215,119 (5,910,410) (2,209,332) 15,233 3,831 (8,100,678) (5,002,850) (3,426,289) (181,395) (23,499) (8,634,033) 26,036,265 9,965,051 2,670,277 311,895 38,983,488 $ 21,033,415 $ 6,538,762 $ 2,488,882 $ 288,396 $ $ 30,349,455 TRUCKEE DONNER PUBLIC UTILITY DISTRICT SUPPLEMENTARY INFORMATION December 31, 2021 CONSOLIDATING STATEMENT OF CASH FLOWS - PAGE 2 OF 2 For the Year Ended December 31, 2021 component Units RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income Noncash items included in operating income Depreciation and amortization Depreciation charged to other accounts Intercompany Transfer Accounts receivable Materials and supplies Repaid expenses Accounts payable Customer deposits Deferred Pension contributions - GASB 68 Other current liabilities NEr CASH FLOWS FROM OPERATING ACTIVITIES RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE BALANCE SHEET Operating cash funds - current Designated cash funds - current Restricted cash funds - current Operating investments - non -current Designated investments - non -current Total Cash and Investments Less: Long-term investments Mark to market adjustment TOTAL CASH AND CASH EQUIVALENTS Bectric Operations Water Operations Gray's Grossing Old Greenwood Siminations Total $ (206,995) $ 1,142,177 $ $ $ $ 935,182 3,377,198 4,540,752 7,917,950 263,031 170,420 433,451 384,430 (384,430) - (240,972) (160,462) (401,434) (66,868) (32,017) (98,885) (99,479) (120,751) (220,230) 711,415 52,917 (53,323) 711,009 (95,829) (26,132) (121,961) 274,512 183,006 457,518 484,940 (35,285) 449,655 $ 4,785,383 $ 5,330,195 $ $ (53,323) $ $ 10,062,255 5,836,009 1,270,587 162,352 288,396 $ $ 7,557,344 14,095, 788 1,847, 993 - - 15, 943, 781 1,069,081 3,412,710 2,326,530 6,808,321 - 3,966,836 - 3,966,836 5,848,933 - - - 5,848,933 26,849,811 10,498,126 2,488,882 288,396 40,125,215 (6,008,061) (4,006,618) - - (10,014,679) 191,665 47,254 - 238,919 $ 21,033,415 $ 6,538,762 $ 2,488,882 $ 288,396 $ $ 30,349,455 Page 181 STATISTICAL SECTION Water Team at Donner Lake - September 2021 STATISTICAL SECTION INTRODUCTION AND CONTENTS INDEX This part of the District's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the District's overall financial health. Contents Page Range Financial Trends 84 - 85 Information trends to help the reader understand how the District's financial performance and condition have changed over time. Revenue Capacity 86 - 88 Information trends to help the reader understand the District's revenue sources. Debt Capacity 89 - 90 Current and past trends regarding the level of debt existing and the Debt capacity of the District. Demographic and Economic Information 91 - 92 These schedules help the reader understand the environment within which the District's financial activities occur. Operating Information 93 - 94 Service and infrastructure information to help the reader understand the District's customers and operational impacts on financial information. Page 183 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION 10-Years Ended December 31, 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 OPERATING REVENUES Sales to customers $ 41,835,534 $ 38,988,024 $ 37,029,653 $ 35,486,412 $ 34,462,146 $ 33,026,587 $ 30,818,856 $ 30,331,953 $ 30,810,370 $ 30,383,363 Water meter surcharge (1) - - - - - - - 703,982 741,209 Standby fees 124,130 133,470 137,580 143,320 154,970 160,670 169,010 174,250 182,580 191,625 Cap and trade proceeds 847,185 1,444,498 1,503,495 1,186,320 1,140,372 1,172,306 965,402 836,193 620,403 - Other 693,618 1,176,035 662,843 868,965 2,577,865 1,244,146 1,023,729 1,286,200 1,345,476 1,444,528 Total Operating Revenues 43,500,467 41,742,027 39,333,571 37,685,017 38,335,353 35,603,709 32,976,997 32,628,596 33,662,811 32,760,725 OPERATING EXPENSES Purchased power 13,560,417 11,285,537 10,754,898 11,001,858 11,327,300 11,511,308 11,348,241 11,414,498 12,306,311 10,571,359 Operations and maintenance 12,464,186 11,340,451 9,768,460 9,056,263 10,241,955 6,951,273 6,804,271 6,762,174 7,190,676 6,953,992 Consumer services 2,255,853 2,080,714 2,667,957 2,152,817 2,593,005 2,130,422 2,159,522 2,318,900 2,563,012 2,543,376 Administration and general 6,366,879 6,165,611 5,772,396 5,002,288 5,008,231 4,331,827 4,054,439 3,976,027 3,798,842 3,603,644 Pension expense (2) 1,220,591 565,373 806,399 OPEB expense (2) 719,218 Depreciation 7,917,950 7,974,868 7,420,251 6,878,860 6,531,640 6,237,033 5,960,520 5,601,301 5,427,377 5,073,871 Total Operating Expenses 42,565,285 38,847,181 36,383,962 34,092,086 35,702,131 33,101,672 30,892,366 30,879,299 31,286,218 28,746,242 Operating Income 935,182 2,894,846 2,949,609 3,592,931 2,633,222 2,502,037 2,084,631 1,749,297 2,376,593 4,014,483 NON -OPERATING REVENUE (EXPENSES) Special tax revenue 3,431,174 3,375,327 3,352,289 3,268,849 3,342,077 3,290,186 3,306,080 3,356,052 3,407,806 3,310,837 Investment income (185,269) 573,668 1,038,582 694,432 420,490 390,310 393,002 510,962 110,423 463,893 Interest expense (2,369,633) (2,530,616) (2,647,817) (2,753,906) (2,868,084) (3,060,079) (3,141,758) (3,568,730) (3,834,332) (4,116,599) Amortization (38,250) (38,250) (38,250) (38,250) (38,250) (17,804) 10,150 26,297 25,092 20,230 Other non -operating revenues 83,524 41,766 48,096 21,332 42,057 63,008 34,126 60,066 58,063 61,502 Other non -operating expenses (79,025) (238,590) (38,160) (31,691) (26,377) (150,000) (251,753) (344,353) (75,062) (121,466) Gain (loss) on disposition of assets 48,339 238,885 13,748 1,284 7,538 (1,514) 30,990 (93,925) 4,892 (353,176) Total Non -Operating Revenue (Expenses) 890,860 1,422,190 1,728,488 1,162,050 879,451 514,107 380,837 (53,631) (303,118) (734,781) Income Before Contributions 1,826,042 4,317,036 4,678,097 4,754,981 3,512,673 3,016,144 2,465,468 1,695,666 2,073,475 3,279,703 CAPITAL & OTHER CONTRIBUTIONS 6,351,674 2,043,795 4,683,099 4,652,720 2,096,828 1,699,110 1,430,510 994,056 824,714 391,325 CHANGE IN NET POSITION 8,177,716 6,360,831 9,361,196 9,407,701 5,609,501 4,715,254 3,895,978 2,689,722 2,898,189 3,671,028 Net Position - Beginning of Year, before adjustment 106,635,906 100,275,075 90,913,879 84,857,643 79,248,142 74,532,888 70,636,910 82,235,941 79,337,752 77,285,121 Less: Restatement for change in (3,351,465) (14,288,753) (1,618,397) accounting principal (3) (4) (5) Net Position - Beginning of Year, as adjusted 106,635,906 100,275,075 90,913,879 81,506,178 79,248,142 74,532,888 70,636,910 67,947,188 79,337,752 75,666,724 NET POSITION - END OF YEAR $ 114,813,622 $ 106,635, 006 $ 100,275, 775 $ 90,913,879 $ 84,857,643 $ 79,248,142 $ 74,532,888 $ 70,636,910 $ 82,235,941 $ 79,337,752 (1) District implemented a water meter surcharge of $5 per month per customer, effective 2009 through 2013, to fund cost of regulatory California Assemply Bill 2572 mandate which required all water meters be replaced. (2) Pension and OPEB costs separately stated in 2015 and 2016. For all other years, these costs are included Operations and maintenance, Consumer services, and Administration and general categories, as applicable. (3) In 2018, the District adopted GASB Statement No 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions. The beginning of year net position was adjusted for this change. (4) In 2014, the District adopted GASB Statement No 68, Accounting and Financial Reporting for Pensions. The beginning of year net position was adjusted for this change. (5) In 2012, the District adopted GASB Statement No 65, Items Previously Reported as Assets and Liabilites, which impacted debt issuances cost accounting. The beginning of year net position was adjusted for this change. NET POSITION by COMPONENT, as of December 31, Net investment in capital assets Restricted Unrestricted Net Position, Total CHANGE IN NET POSITION to PRIOR YEAR, Amount Net investment in capital assets Restricted Unrestricted Total Change in Net Position from Prior Year TRUCKEE DONNER PUBLIC UTILITY DISTRICT NET POSITION BY COMPONENT AND SEGMENT 10-Years as of December 31, 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 $ 86,889,607 $ 79,111,738 $ 74,841,974 $ 66,843,642 $ 55,267,086 $ 52,052,148 $ 47,043,317 $ 39,661,738 $ 42,944,031 $ 40,485,105 7,248,976 11,439,913 11,052,666 9,742,741 9,288,950 8,773,009 8,569,701 10,521,661 11,096,122 14,667,929 $ 7,777,869 $ 4,269,764 $ 7,998,332 $ 11,576,556 $ 3,214,938 $ 5,008,831 $ 7,381,579 $ (3,282,293) $ 2,458,926 $ (1,675,761) (4,190,937) 387,247 1,309,925 453,791 515,941 203,308 (1,951,960) (574,461) (3,571,807) (1,519,078) 4,590,784 1,703,820 52,939 (5,974,111) 1,878,622 (496,885) (1,533,641) (7,742,277) 4,011,070 5,247,470 $ 8,177,716 $ 6,360,831 $ 9,361,196 $ 6,056,236 $ 5,609,501 $ 4,715,254 $ 3,895,978 $(11,599,031) $ 2,898,189 $ 2,052,631 CHANGE IN NET POSITION to PRIOR YEAR, Percentage Net investment in capital assets 9.8 % 5.7 % 12.0 % 20.9 % 6.2 % 10.6 % 18.6 % Restricted 36.6% 3.5% 13.4% 4.9% 5.9% 2.4% -18.6% Unrestricted 28.5% 11.8% 0.4% -29.4% 10.2% -2.6% -7.5% Total Change in Net Position from Prior Year 7.7% 6.3% 10.3% 7.1 % 7.1 % 6.3% 5.5% For more information on the change in Net Position; refer to next page for 10 Years of CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION 1 NET POSITION, BY COMPONENT, BY SEGMENT, as of December 31 Net investment in capital assets Electric Operations Water Operations Gray's Crossing CFD Old Greenwood CFD Net investment in capital assets, total Restricted Electric Operations Water Operations Gray's Crossing CFD Old Greenwood CFD Restricted, total Unresticted Electric Operations Water Operations Gray's Crossing CFD Old Greenwood CFD Unresticted, total -7.6% 6.1% -4.0% 5.2% -24.4% -9.4% -27.5% 16.6% 27.7% -14.1% 3.7% 2.7% 1 $ 61,480,384 $ 59,467,730 $ 56,177,123 $ 50,048,040 $ 43,501,844 $ 42,500,995 $ 41,484,835 $ 37,197,945 $ 42,526,857 $ 41,375,462 60,813,445 56,437,825 56,721,963 56,123,709 52,216,044 50,920,550 47,786,674 45,415,680 45,039,457 44,229,305 (27,463,922) (28,408,717) (29,263,512) (30,163,307) (30,948,102) (31,557,897) (32,137,692) (32,607,487) (33,012,283) (33,354,662) (7,940,300) (8,385,100) (8,793,600) (9,164,800) (9,502,700) (9,811,500) (10,090,500) (10,344,400) (11,610,000) (11,765,000) $ 86,889,607 $ 79,111,738 $ 74,841,974 $ 66,843,642 $ 55,267,086 $ 52,052,148 $ 47,043,317 $ 39,661,738 $ 42,944,031 S 40,485,105 $ 1,068,491 $ 2,354,515 $ 2,455,342 $ 1,777,693 $ 1,842,553 $ 1,316,355 $ 944,929 $ 1,109,740 $ 1,161,905 $ 4,441,721 3,351,806 6,273,747 5,803,021 5,114,785 4,576,780 4,695,114 4,817,195 6,659,078 6,172,282 6,461,573 2,828,679 2,811,651 2,794,303 2,850,263 2,869,617 2,761,540 2,807,577 2,752,843 2,746,567 2,747,811 $ 13,651,321 $ 10,294,409 $ 8,653,888 $ 8,594,312 $ 10,762,466 $ 7,920,940 $ 5,912,854 $ 6,528,260 $ 9,954,448 $ 5,434,118 1,687,142 600,254 519,901 734,026 4,682,775 5,875,984 8,770,727 10,054,081 14,481,503 15,392,902 4,749,096 4,635,070 4,670,778 4,442,898 4,256,091 3,976,683 3,561,565 3,193,320 2,827,987 2,459,789 587,480 554,522 535,868 556,260 600,275 649,378 674,724 677,850 931,850 897,909 S 20,675,039 $ 16,084,255 $ 14,380,435 $ 14,327,496 $ 20,301,607 S 18,422,985 S 18,919,870 $ 20,453,511 $ 28,195,7W $ 24,184,718 Page 85 Truckee Donner Public Utility District Electric and Water - Customer Mix and Rates Last 11 Years Average Number of Customers Residential Residential Non - Year Primary Secondary Residential Total (1) (1) (2) 2021 4,971 7,789 1,656 14,416 2020 4,898 7,659 1,619 14,176 2019 4,810 7,565 1,585 13,960 2018 4,798 7,462 1,558 13,818 2017 4,784 7,389 1,535 13,708 2016 4,738 7,303 1,527 13,568 2015 4,642 7,235 1,512 13,389 2014 4,646 7,157 1,517 13,320 2013 4,611 7,116 1,517 13,244 2012 4,611 7,060 1,520 13,191 2011 4,656 6,983 1,526 13,165 (A): 5yrCAGR 1.0% 1.3% 1.6% 1.2% 10yrCAGR 0.7% 1.1% 0.8% 0.9% Average Number of Customers column Non - Year Residential not used Residential Total (6) (2) 2021 12,635 765 13,400 2020 12,505 748 13,253 2019 12,261 865 13,126 2018 12,317 709 13,026 2017 12,218 706 12,924 2016 12,121 706 12,827 2015 12,012 704 12,716 2014 11,915 699 12,614 2013 11,809 706 12,515 2012 11,753 706 12,459 2011 11,763 657 12,420 (A): 5yrCAGR 0.8% 1.6% 0.9% 10yrCAGR 0.7% 1.5% 0.8% Source: Truckee Donner Public Utility District records Notes: Electric Utility Typical Residential Average Monthly Bill Average Rate Residential I Primary Secondary Primary Secondary Increase Non -Residential @ 500 KwH @ 500 KwH @ 785 KwH @ 420 KwH Prim. I Secon. Mix (3) (3) (4) $122.41 (4) $82.10 (5) 2.0 % 1 3.0 89 % 1 11 % $84.70 $94.20 89 % 1 11 % $82.33 $91.83 $120.04 $79.73 1.8 % 1 2.7 89 % 1 11 % $80.25 $89.75 $117.96 $77.65 2.4 % 1 3.7 89 % 1 11 % $77.50 $87.00 $115.20 $74.89 1.9 % 1 3.0 89 % 1 11 % $75.35 $84.85 $113.05 $72.74 1.7 % 1 2.6 89 % 1 11 % $73.51 $83.01 $111.21 $70.90 0.0 % 1 0.0 89 % 1 11 % $73.51 $83.01 $111.21 $70.90 0.0 % 1 0.0 89 % 1 11 % $73.51 $83.01 $111.21 $70.90 0.0 % 1 0.0 89 % 1 11 % $73.51 $83.01 $111.21 $70.90 0.0 % 1 0.0 88 % 1 12 % $73.51 $83.01 $111.21 $70.90 0.0 % 1 0.0 88 % 1 12 % $73.51 $83.01 $111.21 $70.90 0.0 % 1 0.0 N/A 2.9% 2.6% 1.9% 3.0% N/A N/A 1.4% 1.3% 1.0% 1.5% N/A Water Utility Typical Residential Average Monthly Bill - 5000 Gallons of Use Excluding Including column column Annual Residential I PumpZone PumpZone not used not used Increase Non -Residential Charge Charge (PZC) Including Mix (7) (7) PZC 94 % 1 6 % $80.69 $86.97 10.7 94 % 1 6 % $73.56 $78.58 3.3 93 % 1 7 % $71.44 $76.05 3.5 95 % 1 5 % $69.32 $73.51 3.4 95 % 1 5 % $67.30 $71.07 5.3 94 % 1 6 % $64.12 $67.47 5.8 94 % 1 6 % $60.78 $63.75 4.8 94 % 1 6 % $58.40 $60.84 3.0 94 % 1 6 % $56.95 $59.04 0.0 94 % 1 6 % $56.95 $59.04 0.0 95 % 1 5 % $56.95 $59.04 1.8 N/A 4.7% 5.2% N/A N/A 3.5% 3.9% N/A (1) Two main residential rate categories; Primary(P) and Secondary(S); with mix currently 39% P and 61 % S from 10 years ago 40% P and 60% S. Also see (6). (2) Non -Residential customer type includes commerical businesses and govermental agencies. Commercial average monthly bills are not presented, as commerical customers monthly bills vary widely by customer based on meter size and usage. (3) Average for Primary and Secondary residential, at same KwH usage. Amounts for (3) and (4) include Public Benefit and Solar California mandates. (4) Average for Primary and Secondary residential, at 3 year average KwH usage for the customer type P and S. Also see 2nd half of note (3). (5) Average annual rate increase for P I S based on (4) usage averages. (6) The average number of customers is annual average for the year, the number of customers each month varies. (7) Residential average includes Monthly Serice Fee, Usage Fee based on Volume, and Pump Zone charge based on elevation zone. Pump Zone 1 charge is zero. Customers are in 1 of 7 pump zones of Distict, based on elevation. The Including Pump Zone average is weighted average based on number of customers per zone. Page 186 (A) Compounded Annual Growth Rate (CAGR) metrics for 2021 compared to respective number of years(yr) prior SDG&E* PG&E* SCE* Pasadena* LADW P* SMUD* Plumas-Sierra Modesto ID* Liberty TDPUD Secondary (2) Redding Lodi* Anaheim TDPUD Blended(3) Riverside* TDPUD Primary(1) Turlock ID* Palo Alto Lompoc Azusa* Imperial ID* Roseville Merced ID* Santa Clara Truckee Donner Public Utility District (TDPUD) Electric and Water Utilities - FY 2021 Regional Average Monthly Residential Bill Comparison Electric -Typical Monthly Bill * $118.8, $117.25 $108.73 $103.04 $96.93 495.82 $ 4.20 $92.55 $91.92 $91.10 $90. 0 $90. 2 $84.70 $82.53 $82.39 $81.66 $81.25 779.68 $76.97 i $72.46 $64.53 $0 $20 Water -Typical Monthly Bill $136.88 $183.69 Olympic Valley PSD $114.52 L27.97 Tahoe City PUD $99.82 Northstar CSD $94.04 Alpine Springs CWD $87.60 TDPUD Inc Pump (5) $86.97 Donner Summit PUD $86.25 TDPUD Exc Pump (4) $80.69 San Francisco PUC $80.10 Sacramento SWD $79.60 North Tahoe PUD $78.17 Nevada Irrigation District $61.36 South Tahoe PUD $60.13 $40 $60 $80 $100 $120 $140 $160 $180 $200 $0 $20 $40 $60 $80 $100 $120 $140 TDPUD compiled this information from a review of each respective District's website for applicable ordinances/rates information. Monthly bills assume a typical customer consumption of 500 kWh per month in electricity and 5,000 gallons per month in water (1) Primary residence accounts 39% (4) Excluding Pump Zone charge (2) Second home residence accounts 61% (5) Including Pump Zone charge, the weighted average (3) Weighted average of (1) and (2) of the 7 pump zones. Note - Second homes average KwH usage is historically 54% of Primary homes KwH average usage Pump zone charges are based on water elevation zones of * Weighted average for utilities with Summer and Winter rates service territory. Page 187 Truckee Donner Public Utility District Ten Largest Customers and Sales Mix Current Year and Nine Years Ago Electric Utility 2021 2012 Customer % of Total Customer % of Total Customer (1) (2) Revenue Rank Revenue Revenue Rank Revenue Tahoe Forest Hospital $ 1,022,716 1 3.8% $ 853,485 2 4.1% Tahoe Truckee Sanitation Agency 869,573 2 3.2% 952,160 1 4.6% Tahoe Truckee Unified School District 468,265 3 1.7% 368,407 3 1.8% Private Company, A 366,689 4 1.4% 0.0% Private Company, B 353,072 5 1.3% 308,825 4 1.5% Private Company, C 312,319 6 1.2% 238,663 7 1.2% Private Company, D 299,414 7 1.1% 291,794 5 1.4% Town of Truckee 251,434 8 0.9% 169,138 10 0.8% Truckee Donner Recreation and Park District 226,003 9 0.8% 0.0% Private Company, E 212,236 10 0.8% 264,665 6 1.3% Private Company, F 197,240 8 Private Company, G 184,333 9 Total, Top 10 Customers $ 4,381,721 16.3% $ 3,828,710 18.6% Total Sales to Customers $ 26,884,635 100.0% $ 20,589,369 100.0% Residential $ 15,781,905 58.7% $ 11,743,809 57.0% Sales Mix Commercial $ 7,574,494 28.2% $ 5,765,849 28.0% Public Authorities $ 3,528,236 13.1% $ 3,079,711 15.0% Water Utility 2021 2012 Customer % of Total Customer % of Total Customer (1) Revenue Rank Revenue Revenue Rank Revenue Private Company, D $ 186,321 1 1.2% $ 163,935 1 1.7% Private Company, C 134,302 2 0.9% 127,333 2 1.3% Private Company, H 64,058 3 0.4% 52,519 4 0.5% Truckee Donner Recreaton and Park District 60,172 4 0.4% 60,159 3 0.6% Tahoe Forest Hospital 53,612 5 0.4% 41,184 6 0.4% Tahoe Truckee Unified School District 46,304 6 0.3% 42,127 5 0.4% Private Company, 1 42,704 7 0.3% 29,060 10 0.3% Town of Truckee 39,172 8 0.3% 30,197 9 0.3% Private Company, J 37,160 9 0.2% 30,702 8 0.3% Private Company, K 32,421 10 0.2% 0.0% Private Company, L 34,372 7 Total, Top 10 Customers $ 696,226 4.7% $ 611,588 6.2% Total Sales to Customers $ 14,950,899 100.0% $ 9,793,994 100.0% Residential Potable $ 13,274,680 88.8% $ 8,417,582 85.9% Sales Mix Non -Residential Potable $ 1,460,208 9.8% $ 1,191,087 12.2% Nonpotable $ 216,011 1.4% $ 185,325 1.9% (1) To preserve confidentiality, private company customer names are not disclosed. (2) Electric Utility table excludes internal customer, Water Utility, with Revenue of $1.2 million in both years presented. Pa@ $$ The Electric Utility revenue from Water Utility is eliminated on a Consolidated Financial Statement basis. g Source: Truckee Donner Public Utility District Customer Service Department Truckee Donner Public Utility District Debt Coverage Last 10 Years Dollars in Thousands except for Coverage Ratio Electric Utility A B A-B=C D CID Total Total Net Revenues Debt Year Revenues Expenses Available For Service Coverage (1) (2) Debt Service Requirement (3) Ratio 2021 30,917 26,720 4,198 1,108 3.79 2020 30,409 23,010 7,399 1,058 6.99 2019 29,258 21,093 8,165 1,000 8.16 2018 27,782 20,237 7,545 1,429 5.28 2017 28,337 22,108 6,228 468 13.32 2016 25,628 20,223 5,405 1,000 5.40 2015 24,322 18,944 5,378 895 6.01 2014 23,611 19,495 4,116 863 4.77 2013 23,859 20,107 3,753 4,118 0.91 2012 23,151 18,011 5,140 3,986 1.29 Water Utility A B A-B=C D CID Total Total Net Revenues Debt Year Revenues Expenses Available For Service Coverage (1) (2) Debt Service Requirement (3) Ratio 2021 16,982 9,736 7,245 2,046 3.54 2020 15,106 9,599 5,508 2,024 2.72 2019 14,419 9,552 4,867 2,018 2.41 2018 13,770 8,662 5,107 2,016 2.53 2017 12,909 8,775 4,134 2,341 1.77 2016 12,909 8,171 4,737 2,389 1.98 2015 11,401 7,461 3,940 2,431 1.62 2014 11,329 7,437 3,891 2,517 1.55 2013 11,426 7,363 4,063 2,512 1.62 2012 11,339 7,290 4,049 2,510 1.61 (1) Includes interest income, facilities fees, and connection fees; Water excludes Donner Lake Assessment District special tax (assessment) revenues (2) Excludes depreciation, interest and amortization expense (3) Includes principal and interest of bond (certficates of participation, and other types) debt, parity and subordinate; Water excludes Donner Lake Assessment District SRF loan debt; includes credit offset for interest on parity debt reserve funds; exlcudes refunding activities Truckee Donner Public Utility District Total Long -Term Debt per Customer and Ratios Last 10 Years as of year ended December31, 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Electric Utility Total Debt ($000s) (1) $ 552 $ 1, 603 $ 2, 604 $ 3, 524 $ 4, 803 $ 5, 218 $ 5, 662 $ 6, 265 $ 6, 808 $ 10, 630 Number of Customers 14,416 14,176 13,960 13,818 13,708 13,568 13,389 13,320 13,244 13,191 Debt per Customer $ 38 $ 113 $ 187 $ 255 $ 350 $ 385 $ 423 $ 470 $ 514 $ 806 Debt to Total Revenue 2% 5% 9% 13% 17% 20% 23% 27% 29% 46% Debt to Net Capital 1 % 3% 4% 7% 10% 11 % 12% 14% 16% 26% Assets Water Utility Total Debt ($000s) (2) $ 11,022 $ 16,579 $ 18,846 $ 21,059 $ 23,217 $ 25,631 $ 27,857 $ 31,118 $ 33,208 $ 35,125 Number of Customers 13,400 13,253 13,126 13,026 12,924 12,827 12,716 12,614 12,515 12,459 Debt per Customer $ 823 $ 1,251 $ 1,436 $ 1,617 $ 1,796 $ 1,998 $ 2,191 $ 2,467 $ 2,653 $ 2,819 Debt to Total Revenue (2) 62% 104% 124% 145% 169% 187% 228% 257% 272% 289% Debt to Net Capital 15% 23% 25% 27 /° ° 31 /° ° 34 /° 37 /° ° 41 /° ° 43 /° ° 45 /° Assets Grey's Crosssing CFD Total Debt ($000s) (3) $ 27,464 $ 28,409 $ 29,264 $ 30,163 $ 30,948 $ 31,558 $ 32,138 $ 32,607 $ 33,012 $ 33,080 Number of Parcels (5) 407 407 408 413 413 415 415 416 416 416 Debt per Parcel $ 67,479 $ 69,800 $ 71,724 $ 73,035 $ 74,935 $ 76,043 $ 77,440 $ 78,383 $ 79,356 $ 79,520 Old Greenwood CFD Total Debt ($000s) (4) $ 7, 940 $ 8, 385 $ 8, 794 $ 9,165 $ 9, 503 $ 9, 812 $ 10, 091 $ 10, 344 $ 11, 610 $ 11, 670 Number of Parcels (5) 1,254 1,254 1,238 1,238 1,231 1,231 1,231 1,231 1,231 1,231 Debt per Parcel $ 6,332 $ 6,687 $ 7,103 $ 7,403 $ 7,719 $ 7,970 $ 8,197 $ 8,403 $ 9,431 $ 9,480 ($000s) Total Utility Debt $ 11,574 $ 18,182 $ 21,449 $ 24,582 $ 28,021 $ 30,849 $ 33,520 $ 37,383 $ 40,016 $ 45,755 Total CFD Debt $ 35,404 $ 36,794 $ 38,057 $ 39,328 $ 40,451 $ 41,369 $ 42,228 $ 42,952 $ 44,622 $ 44,750 Total Debt, Consolidated LAE 778 La 776 59 506 63 910 La8 472 LZ2 218 75 748 80 334 LLL4 338 L9LQ 505 (1) Electric Total Debt includes Pension Obligation Bonds, Installment Loan, and Certificates of Participation debt. (2) Water Total Debt includes Certificates of Participation debt, CA Dept. of Water Resources loan, Installment loans, and Donner Lake Assessment District (DLAD) related State Revolving Fund (SRF) loan. Total Revenue for this report's Water Debt to Total Revenue includes DLAD tax assessment proceeds which applies the DLAD's SRF loan debt service of $800,852 for each year presented. (3) Grey's Crossing Community Facilities District (CFD) Debt is Special Tax Bonds - Mello Roos. (4) Old Greenwood Community Facilities District (CFD) Debt is Special Tax Bonds - Mello Roos. (5) Number of parcels subject to CFD Special Tax Mello Roos Bonds varies by year due to full pre -payments and parcel splits, and represents special tax assessment parcels. Old Greenwood number of parcels for 2011-2014 has been estimated. Page 190 Truckee Donner Public Utility District Demographic and Economic Information Last 11 Years Town of Truckee (1) Per Capita TTUSD Labor Personal Personal School Year Force Unemployment Population Income Income Enrollment (2) (2) (3) (4) (5) (6) 2021 9,270 4.0% 16,213 $51,955 $842,346,415 4,159 2020 9,190 3.2% 16,735 $46,295 $774,746,825 4,193 2019 9,860 1.3% 16,434 $46,280 $760,565,520 4,168 2018 10,370 2.6% 16,309 $45,706 $745,419,154 4,133 2017 10,490 3.0% 16,277 $43,898 $714,527,746 4,153 2016 10,110 3.9% 16,231 $42,439 $688,827,409 4,010 2015 10,700 5.3% 16,184 $40,414 $654,060,176 3,978 2014 10,010 6.4% 16,191 $37,117 $600,961,347 3,950 2013 10,040 7.9% 16,132 $37,058 $597,819,656 3,917 2012 10,060 9.6% 16,100 $35,891 $577,845,100 3,838 2011 10,180 10.9% 16,009 $32,526 $520,708,734 3,909 (A) : 5yr CAGR -1.7% 0.5% 0.0% 4.1 % 4.1 % 0.7% 10yr CAGR -0.9% -9.5% 0.1 % 4.8% 4.9% 0.6% Sources and Legend: (1) The Town of Truckee boundaries comprise approximately 95% of the District's service territory. (2) California Employment Development Department (3) Town of Truckee 2019 to 2021 Comprehensive Annual Financial Reports (cited source California Department of Finance Projections and Town of Truckee) (4) Town of Truckee 2019 to 2021 Comprehensive Annual Financial Reports (cited source United States Census Data adjusted for inflation and Town of Truckee) (5) Personal Income calculated as Population (3) multiplied by Per Capital Income (4) (6) California Ed -Data Partnership; Tahoe -Truckee Unified School District (TTUSD), Census Day Enrollment for school district's fiscal year (A) Compounded Annual Growth Rate (CAGR) metrics for 2021 compared to respective number of years(yr) prior Page 191 Truckee Donner Public Utility District Principal Employers Current Year and Two Years Ago Employer Name Tahoe Forest Hospital District Tahoe -Truckee Unified School District Safeway Tahoe Donner Association Northstar Lodge (Welk Resorts) Town of Truckee Paradigm8/ Tahoe Mountain Club Mountain Hardware & Truckee Rents New Moon Natural Foods Truckee Donner Public Utility District Mark Tanner Construction Truckee -Donner Recreation & Park District Save Mart Bar of America Top 10 Employers, total Labor Force 2021 Percent Number of of Total Employees Employment 1,002 10.8% 309 3.3% 154 1.7% 144 1.6% 2019 Percent Number of of Total Employees Employment 577 5.9% 238 2.4% 150 1.5% 180 1.8% 130 1.4% 128 1.3% 125 1.3% 91 1.0% 82 0.9% 74 0.8% 70 0.7% 65 0.7% 51 0.6% 31 0.3% 42 0.4% 22 0.2% 2,162 23.3% 1,503 15.2% 9,270 100.0% 9,860 100.0% Sources and Comments: Source of Top 10 employers is Town of Truckee's 2021 and 2019 Comprehensive Annual Financial Reports, and 2019 was the first year information provided and is based on direct inquiries to employers. Other than above from Town of Truckee, specific employer information is not publicly available to the District. Labor Force is from prior page. Page 192 Truckee Donner Public Utility District Operating Information Last 11 Years Electric Utility IRS Number of KwH Capital Year W-2s FTEs Customers Billed Assets, Net (1) (2) (Average) (000s) ($000s) (3) 2021 90 70 14,416 163,176 $61,493 2020 82 68 14,176 159,134 $59, 493 2019 89 73 13,960 156,714 $58, 756 2018 86 72 13,818 151,944 $53, 535 2017 77 74 13,708 156,562 $48, 258 2016 78 72 13,568 151,527 $47, 660 2015 83 73 13,389 140,819 $47, 079 2014 78 71 13,320 142,584 $43, 384 2013 75 69 13,244 147,389 $42, 536 2012 78 66 13,191 146,014 $41, 434 2011 79 65 13,165 149,978 $41, 036 (A) : 5yr CAGR 2.9% -0.5% 1.2% 1.5% 5.2% 10yr CAGR 1.3% 0.6% 0.9% 0.8% 4.1 % Sources and Legend: Water Utility Water Number of Production Capital Customers in Millions Assets, Net (Average) of Gallons ($000s) (3) 13,400 1,715 $71,390 13,253 1,713 $72,539 13,126 1,503 $75, 056 13,026 1,579 $76, 638 12,924 1,487 $74,857 12,827 1,460 $75,942 12,716 1,381 $75, 338 12,614 1,682 $75, 938 12,515 1,846 $77,378 12,459 1,857 $78,317 12,420 1,727 $80, 883 0.9% 3.3% -1.2% 0.8% -0.1 % -1.2% (1) Number of Internal Revenue Service payroll W-2 forms issued for calendar/tax year (2) Full Time Equivalents (FTEs) calculated as payroll paid hours (work regular and overtime, vacation, sick, other) for year divided by 2080 (3) Capital Assets, Net as of year end is comprised of Gross Fixed Assets, less Accumulated Depreciation, plus Construction Work in Progress, presented as dollars in thousands ($000s) (A) Compounded Annual Growth Rate (CAGR) metrics for 2021 compared to respective number of years(yr) prior Page 193 Truckee Donner Public Utility District Capital Assets by Function Last 10 Years Balance as of December 31, 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Plant Balances Electric distribution Water distribution General plant $ 76,021,243 $ 124,052,449 19,827,303 71,894,379 $ 121, 483, 082 19,316,644 67,692,719 $ 120,131,130 18,450,143 64,204,691 $ 116,378,593 16,513,295 60,416,920 112, 596, 747 15,782,620 $ 58,345,690 $ 108, 860, 825 15,062,278 54,721,615 $ 107,005,578 13,887,881 51,524,863 $ 103, 049,122 12,816,635 49,307,043 $ 101, 559, 249 12,613,090 48,284,640 101, 010, 796 11,962,706 Total 219,900,995 212,694,105 206,273,992 197,096,579 188,796,288 182,268,793 175,615,074 167,390,620 163,479,382 161,258,142 Accumulated Depreciation Electric distribution (23,396,600) (21,385,441) (19,454,296) (19,488,505) (18,789,114) (17,045,716) (15,975,929) (14,842,504) (13,605,356) (12,897,455) Water distribution (56,654,194) (52,339,068) (48,269,854) (44,232,073) (40,260,086) (37,643,873) (34,248,569) (32,462,147) (29,301,292) (26,259,778) General plant (12,700,105) (11,522,788) (10,851,669) (10,372,265) (9,514,034) (8,683,151) (7,817,950) (7,171,096) (7,108,863) (6,944,771) Total (92,750,899) (85,247,297) (78,575,819) (74,092,843) (68,563,235) (63,372,739) (58,042,448) (54,475,747) (50,015,511) (46,102,004) Plant Sub -Total Electric distribution 52,624,643 50,508,938 48,238,423 44,716,186 41,627,806 41,299,974 38,745,686 36,682,359 35,701,687 35,387,185 Water distribution 67,398,255 69,144,014 71,861,276 72,146,520 72,336,661 71,216,952 72,757,009 70,586,975 72,257,957 74,751,018 General plant 7,127,198 7,793,856 7,598,474 6,141,030 6,268,586 6,379,127 6,069,931 5,645,539 5,504,227 5,017,935 Total 127,150,096 127, 446, 808 127,698,173 123,003,736 120, 233, 053 118, 896, 054 117,572,626 112, 914, 873 113, 463, 871 115,156,138 Construction work in progress 5,732,900 4,584,711 6,114,079 7,169,814 2,881,021 4,706,276 4,844,042 6,407,589 6,449,688 4,594,466 TOTALS $ 132,882,996 $ 132,031,519 $ 133,812,252 $ 130,173,550 $ 123,114,074 $ 123,602,330 $ 122,416,668 $ 119,322,462 $ 119,913,559 $ 119,750,604 Change to Prior Year = * 0 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 Change in Plant Electric distribution $ 4,126,864 $ 7,689,688 $ 7,275,799 $ 3,787,771 $ 2,071,230 $ 3,624,075 $ 3,196,752 $ 2,217,820 $ 1,022,403 $ 1,388,647 Water distribution 2,569,367 5,104,489 7,534,383 3,781,846 3,735,922 1,855,247 3,956,456 1,489,873 548,453 (1,174,005) General plant 510,659 2,803,349 2,667,523 730,675 720,342 1,174,397 1,071,246 203,545 650,384 252,839 Total 7,206,890 15,597,526 17,477,704 8,300,291 6,527,495 6,653,719 8,224,454 3,911,238 2,221,240 467,481 Change in Accumulated Depreciation Electric distribution (2,011,159) (1,896,936) (665,182) (699,391) (1,743,399) (1,069,787) (1,133,424) (1,237,149) (707,901) (1,099,017) Water distribution (4,315,126) (8,106,995) (8,009,768) (3,971,987) (2,616,213) (3,395,304) (1,786,422) (3,160,855) (3,041,514) (1,852,478) General plant (1,177,317) (1,150,523) (1,337,635) (858,231) (830,884) (865,200) (646,854) (62,233) (164,092) (450,530) Total (7,503,602) (11,154,454) (10,012,584) (5,529,608) (5,190,496) (5,330,291) (3,566,701) (4,460,236) (3,913,507) (3,402,025) Change in Plant Sub -Total Electric distribution 2,115,705 5,792,752 6,610,617 3,088,380 327,831 2,554,288 2,063,328 980,671 314,502 289,630 Water distribution (1,745,759) (3,002,506) (475,385) (190,141) 1,119,709 (1,540,057) 2,170,034 (1,670,982) (2,493,061) (3,026,483) General plant (666,658) 1,652,826 1,329,888 (127,556) (110,542) 309,197 424,392 141,312 486,292 (197,691) Total (296,712) 4,443,072 7,465,120 2,770,683 1,336,999 1,323,428 4,657,753 (548,998) (1,692,267) (2,934,544) Change in Construction work in progress 1,148,189 (2,585,103) 3,233,058 4,288,793 (1,825,255) (137,766) (1,563,547) (42,099) 1,855,222 766,755 Change in Total Capital Assets $ 851,477 $ 1,857,969 $ 10,698,178 $ 7,059,475 $ (488,256) $ 1,185,662 $ 3,094,206 $ (591,097) $ 162,955 $ (2,167,789) Page 194 END OF REPORT THANK YOU FOR READING Truckee Donner Public Utility District 11570 Donner Pass Road Truckee, CA 96161 Phone (530) 587-3896 Website TDPUD.ORG Steve Roden - 2021 Retirement Party Page 195 I I ;TRUCKEE DONNER w Public Utility District 0