HomeMy WebLinkAboutAgenda Truckee Donner Public Utility District
Post Office Box 309 • 11570 Donner Pass Road •Truckee, California 95734
(916) 587-3896
SPECIAL MEETING
Tuesday, July 31, 1984
3:00 P.M. - TDPUD Board Room
A G E N D A
1. Call to order
2. Roll call
3. Workshop session with Arthur Andersen & Company to review the 1983
financial statements and audit - possible direction
4. Adjournment
C E R T I F I C A T I O N
I hereby certify that the foregoing agenda has been posted in the District
Office and Government Center, provided to the U. S. Post Office and County
Library for posting, and mailed to the Directors and interested parties on
Friday, July 20, 1984.
Susan M. Craig, Deputy District Clerk
1.2 a-
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1983
TOGETHER WITH AUDITORS ' REPORT
30 JLL EA 11: 4S
"Tentative & Preliminary"
For Discussion Purposes Only
1,2 4
To the Board of Directors of
Truckee-Donner Public Utility District:
We have examined the balance sheet of the ELECTRIC
OPERATIONS OF TRUCKEE-DONNER PUBLIC UTILITY DISTRICT ( a political
subdivision of the State of California) as of December 31 , 1983 , and
the related statements of net revenue and funds provided for
additions to utility plant for the year then ended . Our examination
was made in accordance with generally accepted auditing standards
and, accordingly, included such tests of the accounting records and
such other auditing procedures as we considered necessary in the
circumstances .
In our opinion , the financial statements referred to above
present fairly the financial position of the Electric Operations of
Truckee-Donner Public Utility District as of December 31 , 1983 , and
the results of its operations , and funds provided for additions to
its utility plant for the year then ended, in conformity with
generally accepted accounting principles applied on a basis
consistent with that of the preceding year.
San Francisco, California,
April 6, 1984 .
"Tentative & Preliminary"
For Discussion Purposes Only
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
BALANCE SHEET -- DECEMBER 31, 1983
I
ASSETS CAPITALIZATION AND LIABILITIES
UTILITY PLANT, at cost: CAPITALIZATION:
Plant in service $ 5,047,250 Consumers' equity employed in the business- $3,801,257
Less - Accumulated depreciation (1,293,471) Balance, beginning of year
801----------- Net revenue for the year
Net plant in service $ 3,753,779 $4,388,167
Total consumers' equity
Construction work in progress 591,713
Long-term debt (Note 4)- S 234,574
Net utility plant S 4,345,492 REA bonds 166,282
----------- Installment notes payable
Note payable - Department of Energy 22,500
Total long-term debt $ 423,356
RESTRICTED FUNDS (Note 3) S 867,370
----------- Total capitalization $4,811,523
CURRENT LIABILITIES: $ 813,982
Purchased power payable
CURRENT ASSETS: Accounts payable 309,326
34050
Cash $ 599,781 Deferred income - standby fees 11,
212327
Accounts receivable - consumer, less Consumer deposits ,565
bad debt reserves of $59,647 473,330 Accrued interest 2,450
Accounts receivable - standby fees and other, Accrued liabilities 44, 19
O h less bad debt reserves of $3,822 67,890 Current maturities of long-term debt ----------
O y Inventory, at average cost 126,309 $1,458,119
Interest receivable, prepaid insurance and other - - 31,760 _---------
0 $-1,299,070 CONSTRUCTION ADVANCES (Note 3) S -------
H ` S36,511,932 $6=511=932
a
The accompanying notes are an integral part of these financial statements.
fD
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TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
STATEMENT OF NET REVENUE
FOR THE YEAR ENDED DECEMBER 31 , 1983
OPERATING REVENUES $5 ,411 ,129
OPERATING EXPENSES :
Purchased power (Note 7 ) $3 ,753 ,441
Distribution 386 ,714
Consumer accounts 226 ,730
Administrative and general 366 ,850
Depreciation 142 ,719
Other 13 ,824
$4 , 890 ,278
�- Net operating revenue $ 520 ,851
OTHER INCOME :
Interest income 110 ,601
Other , net (311 )
Net revenue before interest expense $ 631 , 141
INTEREST EXPENSE 44 ,231
Net revenue $ 586 ,910
The accompanying notes are an integral
part of these financial statements .
"Tentative & Preliminary"
For Discussion Purposes Only
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
^ ELECTRIC OPERATIONS
STATEMENT OF FUNDS PROVIDED FOR ADDITIONS TO UTILITY PLANT
FOR THE YEAR ENDED DECEMBER 31 1983
FUNDS PROVIDED INTERNALLY :
Operations-
Net revenue $ 586, 910
Depreciation expense not requiring
a current use of funds 142, 719
Other 17 , 946
Funds provided by operations $ 747, 575
Deduct-
Reduct-ions in long-term debt 45 109
Additions to restricted funds (417, 230)
Net funds provided internally $ 285, 236
FUNDS PROVIDED FROM EXTERNAL SOURCES :
Advances utilized for construction $ 200, 671
Installment note 89,047
Note payable - Department of Energy 11 , 250
$ 300, 968
FUNDS PROVIDED FROM NET CHANGE IN
WORKING CAPITAL (Note 5) $ 206, 176
Funds provided for additions
to electric utility plant $ 792, 380
The accompanying notes are an integral
part of these financial statements .
"Tentative & Preliminary"
For Discussion Purposes Only
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31 , 1983
(1 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :
Organization-
The Truckee-Donner Public Utility District (the District )
was formed and operates under the State of California Public Utility
District Act to provide electric and water service to a portion of
Nevada and Placer Counties described as Truckee and Donner Lake .
The electric and water service operations are maintained and
operated separately. These financial statements reflect the
electric operations of the District .
To the extent possible, assets, liabilities , equity,
revenues and expenses have been specifically identified as electric
or water operations . All amounts not specifically identified have
been allocated 85% electric and 15% water reflecting the District ' s
most recent study on the allocated use of shared or common
facilities or functions .
Depreciation-
The District provides for depreciation on the historical
cost of electric utility plant on a straight-line basis at rates in
accordance with the Rural Electrification Administration Bulletin
181-1 . The average annual composite rate was 3. 2% in 1983.
Retirements of electric utility plant and the related
costs of removal and salvage are charged to accumulated
depreciation . The costs of replacement of property units are
charged to plant. Repair and maintenance costs are charged to
expense .
Revenues-
Revenues consist of billings to consumers as meters are
read on a cycle basis throughout each month . Services provided to
municipal entities without charge are not reflected in operating
revenues .
"Tentative & Preliminary"
'^ For Discussion Purposes Only
-2-
Income Taxes-
The District is exempt from payment of federal and state
income taxes .
^ Pension Plan-
The District maintains a noncontributory defined benefit
pension plan covering substantially all employees who have at least
one year of service . It is the District ' s policy to fund pension
costs as accrued , and contributions for 1983 amounted to $44, 949 for
the electric operations . The present value of accumulated plan
benefits and net assets available for these benefits , last
determined as of December 31 , 1983, is not maintained by individual
operations of the District . The weighted average assumed rate of
return used in determining the present value of accumulated plan
benefits for the District was 7%. The accumulated plan benefits and
assets for all employees of the District are as follows :
Actuarial present value of accumulated
plan benefits:
Vested $118,788
Nonvested 14,659
$133,447
Net assets available for benefits $313,684
^
(2 ) RELATED PARTY TRANSACTIONS :
During 1983, a director of the District was also a
stockholder and organizer of a bank with which the District conducts
business . The District ' s transactions with the bank include
maintaining a general checking account, short-term investments and
two installment notes payable. All transactions are at current
market rates and conditions . Interest earned during the year was
$7,441 . The installment notes payable are described in Note 4 . The
above-mentioned director was not reelected to the District ' s Board
in November 1983 .
^ "Tentative & Preliminary"
For Discussion Purposes Only
i3(o
-3-
( 3) RESTRICTED FUNDS :
The District has collected and restrictively invested
funds for future uses as of the year ended December 31, 1983 as
follows :
Restricted Construction
Funds Advances
Facilities fees collected from
customers for future procurement
of electricity $172,688 $242,290
Loan principal and interest fund -
in accordance with loan agreements,
principal and interest payments are
to be placed on deposit until final
payment is due REA 26,722 -
Martis Valley Substation, restricted
by the District to be used for
completion of construction 205,489 -
Reserve for future storm damage costs 52,102 -
Sierra Pacific Power Refund to be used
to offset future construction costs 103,105 -
Consumer deposits and other 307,264 -
-------- --------
$867,370 $242,290
-------- --------
-------- --------
(4) LONG-TERM DEBT :
,..+ REA bonds , secured by pledge of all assets , are as follows :
First series 2% bonds, payable in annual
amounts varying from $13,000 to $14,000,
in accordance with sinking fund requirements,
balance of $14,000 due July 1994 $146,000
Second series 2% bonds, payable in annual
amounts varying from $3,000 to $5,000,
in accordance with sinking fund requirements,
balance of $6,000 due May 2002 76,000
Third series 2% bonds, net of undrawn funds
of $65,426, payable in annual amounts
varying from $3,000 to $6,000, in accordance
with sinking fund requirements, balance of
$8,000 due May 2004 31,574
Less - Current maturities (19,000)
Total REA bonds $234,574
The District renewed an installment note payable relating
to its computer on December 1 , 1982 . Terms of the note provide for
monthly installments of principal and interest of $2, 570. The
interest rate is 10%, to be adjusted annually on December 1 based
upon the bank ' s current municipal rate. On December 1 , 1988, the
"Tentative & Preliminary"
For Discussion Purposes Only
43 F
-4-
entire balance of principal and interest will become due and
payable. These financials reflect the electric operations ' portion
of the note.
Another installment note payable relating to a line truck
r^ is due in monthly interest-only installments, with principal due at
maturity. This note was issued on June 17, 1983 and matures on
April 1, 1984. Interest is payable at the prime rate. On April 1,
1984, this note was refinanced . The terms require monthly payments
of principal and interest of $1 ,959 beginning May 1, 1984 . The
interest rate is at prime. The note matures on April 1, 1989 , with
any unpaid principal and interest due and payable. Consequently, all
but the current maturity of the new note has been classified as long-
term debt .
The note payable to the United States Department of Energy
is payable over a 10-year period at a rate of 7-3/8%. The first
annual payment , including interest, is due November 1985 . If certain
conditions are met by the District, the principal and/or interest may
be forgiven at the discretion of the Department of Energy.
( 5 ) CHANGES IN NET WORKING CAPITAL :
The changes in accounts classified as current assets and
current liabilities are as follows :
Working capital increase (decrease) in-
Cash $ 201,888
Receivables (64,269)
Inventory 22,346
Other current assets 4,265
Accounts payable (272,555)
Deferred income (1,156)
Consumer deposits (80,248)
Accrued interest 387
Accrued liabilities (6,611)
Current maturities of long-term debt (10,223)
$(206,176)
(6 ) INTERDEPARTMENTAL SALES :
The electric operations of the District sells electricity
to the water operations for use in the pumping stations for
transmission of water. Sales of electricity of $177, 532 are at
commercial rates and are included in operating revenues .
(7) POTENTIAL REFUND OF ENERGY CHARGES :
The District has been purchasing power at rates in effect
subject to refund. Final rates are subject to the outcome of various
rate cases and administrative matters before the Federal Energy
Regulatory Commission. Amounts paid have been reflected as purchased
power expense. The amount of refund , if any, is not determinable at
this time . "Tentative & Preliminary"
For Discussion Purposes Only
ARTHUR ANDERSEN tic CO. W, t �J 1964
SPEAR STREET Tow ER, SUITE 3500
ONE MARKET PLAZA
SAv FRA.v CIS CO. CALIFORNIA 94105
(415) 546-8200
July 25, 1984
Ms. Mary Chapman COPIES TO:
Office Manager BOARD:
Truckee-Donner Public Utility District
P.O. Box 309
Truckee, California 95734 s
Dear Mary: V`
I've enclosed a revised draft of the District's 1983 financial statements. i
While most of the changes have come in the wording of the footnotes to the financial
statements, we did have a significant change in the balance sheet for the water
operations. In our final review we had noted that the bond payable to the United
States of America Farmers Home Administration had been recorded twice. We
therefore eliminated the current liability of the bond payable and a corrosponding
amount in plant. This change also impacted our statement of funds provided for
additions to utility plant as it changed the net working capital number. Please review
these statements one final time and let me know of any comments or questions you
may have. I plan to finalize these statements at the end of the week for delivery
at our presentation on the 31st.
I have also enclosed our final billing for the December 31, 1983 audit of
Truckee-Don Public Utility District. This final bill brings the fees up to the
previously art�anged level of $27,000. While we have not quite finished our work,
actual fees incurred to date are several thousand dollars more than this level. The
difficulties and hard work you encountered this past has also had its affect on the
audit fees. However, we wish to demonstrate our commitment to the District by
maintaining our fees at the prearranged level.
One further thought, in arranging our flight plans, Rick and myself have
scheduled a flight which should put us into Truckee around noon. if convenient, we
would like to arrange a lunch with yourself and Peter Holzmeister to discuss the past
year and the current events of the District. From the way it sounds it appears you
have gotten the District through some very rough times and are now in a good position
for the future. Congratulations.
Very truly yours,
ARTHUR ANDERSEN & CO.
By
Keith Fukui
do
Enclosures
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1983
TOGETHER WITH AUDITORS• REPORT
1
"Tentative 8 Preliminary"
For Discussion Purposes Only
To the Board of Directors of
Truckee-Donner Public Utility District:
We have examined the balance sheet of the ELECTRIC
OPERATIONS OF TRUCKEE-DONNER PUBLIC UTILITY DISTRICT ( a political
subdivision of the State of California) as of December 31 , 1983, and
the related statements of net revenue and funds provided for
additions to utility plant for the year then ended. Our examination
was made in accordance with generally accepted auditing standards
and, accordingly, included such tests of the accounting records and
such other auditing procedures as we considered necessary in the
circumstances .
In our opinion, the financial statements referred to above
present fairly the financial position of the Electric Operations of
Truckee-Donner Public Utility District as of December 31 , 1983, and
the results of its operations, and funds provided for additions to
its utility plant for the year then ended, in conformity with j
generally accepted accounting principles applied on a basis
consistent with that of the preceding year.
San Francisco, California,
April 6, 1984 .
"Tentative & Preliminary"
For Discussion Purposes Only
a
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
BALANCE SHEET— DECENSER 31, 1983
ASSETS CAPITALIZATION AND LIABILITIES
UTILITY PLANT, at cost: r CAPITALIZATION:
Plant in service Z 5,041,250 Consumers' equity employed in the business- 13.801.257
Less - Accumulated depreciation (1,293,471) Balance, beginning of year 586,910
Net revenue for the year
Net plant in service f 3,163,179 Total consumers' equity $4.388,167
Construction wort in progress 591.113+ long-term debt (Note 4)-
Net utility plant 14,346,492 REA bonds 1 234,511
........... Installment notes payable 166,282
Note payable - Department of Energy 22,S00
total long-term debt 1 423,756
RESTRICTED FUNDS (Note 3) 1 667,370 $4,811,523
Total capitalization
CURRENT LIABILITIES: $1,123.308
CURRENT ASSETS: Accounts payable 34.050
Cash f 699,781 Deferred income - standby fees 211,327
Accounts receivable - consumer, less Consumer deposits 2.565
bad debt reserves of $59.647 473.330 Accrued interest 42.450
Accounts receivable - standby fees and other. Accrued liabilities //,/l9
less bad debt reserves of $3.822 67,890 Current maturities of long-term debt
Inventory, at average cost 126.309 11.458,119
Interest receivable, prepaid insurance and other 31,760
1.1,299,070 CONSTRUCTION ADVANCES (Note 3) 1-_242,290
1 6,511,971 ..... 932
.....
...........
0
a
0 y The accompanying notes are an integral part of these financial statements.
M �
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TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
STATEMENT OF NET REVENUE
FOR THE YEAR ENDED DECEMBER 31 , 1983
i
OPERATING REVENUES $5 ,411 .129
OPERATING EXPENSES:
Purchased power (Note 7 ) $3 .753 ,441
Distribution 386 ,714
Consumer accounts 226 ,730
Administrative and general 366 .850
Depreciation 142 .719
Other 13 ,824
$4,890.278
----------
, Net operating revenue $ 520,851
OTHER INCbME :
Interest income 110 ,601
Other, net (311 )
Net revenue before interest expense $ 631 ,141
INTEREST EXPENSE 44 ,231
Net revenue $ 586 ,910
I
The accompanying notes are an integral
part of these financial statements .
f
"Tentative & Preliminary-
For Discussion Purposes Only
isa
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
i
STATEMENT OF FUNDS PROVIDED FOR ADDITIONS TO UTILITY PLANT
i
FOR THE YEAR ENDED DECEMBER 31 , 1983
i
FUNDS PROVIDED INTERNALLY : i
Operations-
Net revenue S 586,910
Depreciation expense not requiring '
a current use of funds 142,719
Other 17,946
Funds provided by operations S 747,575 E
i
Deduct- i
Reductions in long-term debt (60,305)
Additions to restricted funds -(417_230
Net funds provided internally S 270,040
FUNDS PROQVIDED FROM EXTERNAL SOURCES:
Advances utilized for construction S 200,671
Install6ent note 89,047
Note payable - Department of Energy 11,250
S 300, 968
FUNDS PROVIDED FROM NET CHANGE IN ---------
WORKING CAPITAL (Note 5) S 221 , 372
Funds provided for additions
to electric utility plant S 792, 380
The accompanying notes are an integral
part of these financial statements .
"Tentative & Preliminary"
For Discussion Purposes Only
ism
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
ELECTRIC OPERATIONS
NOTES TO FINANCIAL STATEMENTS
i
DECEMBER 31 , 1983
1
i
( 1 ) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :
Organization-
The Truckee-Donner Public Utility District (the District)
was formed and operates under the State of California Public Utility
District Act to provide electric and water service to a portion of
Nevada and Placer Counties described as Truckee and Donner Lake. 1
The electric and water service operations are maintained and
operated separately. These financial statements reflect the
electric operations of the District.
To the extent possible, assets , liabilities, equity,
revenues and expenses have been specifically identified as electric
or water operations. All amounts not specifically identified have
been allocated 85% electric and 15% water reflecting the District ' s
most recent study on the allocated use of shared or common
facilities or functions.
Depreciation-
The District provides for depreciation on the historical
cost of electric utility plant on a straight-line basis at rates in
accordance with the Rural Electrification Administration Bulletin
181-1 . The average annual composite rate was 3. 2% in 1983.
Retirements of electric utility plant and the related
costs of emoval and salvage are charged to accumulated
depreciation. The costs of replacement of property units are
charged to plant. Repair and maintenance costs are charged to
expense.
Revenues-
Revenues consist of billings to consumers as meters are
read on a cycle basis throughout each month . Services provided to
municipal entities without charge are not reflected in operating
revenues .
i
t
i
"Tentative & Preliminary"
For Discussion Purposes Only
is y
-2-
Income Taxes-
The District is exempt from payment of federal and state
income taxes .
Pension Plan-
The District maintains a noncontributory defined benefit
pension plan covering substantially all employees who have at least
one year of service . It is the District ' s policy to fund pension j
costs as accrued , and contributions for 1983 amounted to $44 ,949 for J
the electric operations . The present value of accumulated plan
benefits and net assets available for these benefits , last
determined as of December 31 , 1983, is not maintained by individual
operations of the District . The weighted average assumed rate of
return used in determining the present value of accumulated plan
benefits for the District was 7%. The accumulated plan benefits and
assets for all employees of the District are as follows :
Actuarial present value of accumulated
plan benefits:
Vested $118,788
Nonvested 14,659
$133,447
Net assets available for benefits $313,684
( 2) RELATED PARTY TRANSACTIONS:
During 1983, a director of the District was also a
stockholder and organizer of a bank with which the District conducts
business . The District' s transactions with the bank include
maintaining a general checking account , short-term investments and
two installment notes payable. All transactions are at current
market rates and conditions . Interest earned during the year was
$7 ,441. The installment notes payable are described in Note 4. The
above-mentioned director was not reelected to the District ' s Board
in November 1983.
"Tentative & Preliminary"
For Discussion Purposes Only
SSG
I
-3-
(3 ) RESTRICTED FUNDS :
The District has collected and restrictively invested
funds for future uses as of the year ended December 31, 1983 as
follows :
Restricted Construction
Funds Advances
Facilities fees collected from
customers for future procurement i
of electricity $172,688 $242,290
Loan principal and interest fund -
in accordance with loan agreements,
principal and interest payments are j
to be placed on deposit until final I
payment is due REA 26,722 -
Martis Valley Substation, restricted j
by the District to be used for j
completion of construction 205,489
Reserve for future storm damage costs 52,102
Sierra Pacific Power Refund to be used
to offset future construction costs 1039105 -
Consumer deposits and other 307.264 -
-------- --------
$867,370 $242,290
(4) LONG-TERM DEBT:
.-� , REA bonds, secured by plbdge of all assets, are as follows :
Flirst series 2% bonds, payable in annual
amounts varying from $13,000 to $14,000,
in accordance with sinking fund requirements,
balance of $14,000 due July 1994 $146,000
Second series 2% bonds, payable in annual
amounts varying from $3,000 to $5,000,
in accordance with sinking fund requirements,
balance of $6,000 due May 2002 76,000
Third series 2% bonds, net of undrawn funds
of $65,426, payable in annual amounts
varying from $3,000 to $6.000, in accordance i
with sinking fund requirements, balance of
$8,000 due May 2004 319574
Less - Current maturities -(19_000)
Total REA bonds $234,574 i
The District renewed an installment note payable relating
to its computer on December 1, 1982. Terms of the note provide for
monthly installments of principal and interest of $2, 570. The
interest rate is 10%. to be adjusted annually on December 1 based
"Tentative & Preliminary"
For Discussion Purposes Only
-4-
upon the banks current municipal rate. On December 1, 1988, the j
entire balance of principal and interest will become due and
payable. These financials reflect the electric operations • portion
of the note.
Arother installment note payable is due in monthly
interest-only installments, with principal due at maturity. This
note was issued on June 17 , 1983 and matures on April 1, 1984.
Interest is payable at the prime rate. On April 1, 1984, this note
was refinanced. The terms require monthly payments of principal and
interest of $1 ,959 beginning May 1, 1984. The interest rate is at
prime. The note matures on April 1 , 1989, with any unpaid principal
and interest due and payable. Consequently, all but the current
maturity of the new note has been classified as long-term debt.
The note payable to the United States Department of Energy
is payable over a 10-year period at a rate of 7-3/8%. The first
annual payment, including interest, is due November 1985. If certain
conditions are met by the District, the principal and/or interest may
be forgiven at the discretion of the Department of Energy.
(5) CHANGES IN NET WORKING CAPITAL :
The changes in accounts classified as current assets and
current liabilities are as follows :
Working capital increase (decrease) in-
Cash S 201.888
Receivables (64,269)
, Inventory 22,346
Other current assets 4,265
lAccounts payable (272,555)
Deferred income (1,156)
Consumer deposits (80,248)
Accrued interest 387
Accrued liabilities (6,611)
Current maturities of long-term debt (25,419)
$(221,372)
(6) INTERDEPARTMENTAL SALES :
The electric operations of the District sells electricity
to the water operations for use in the pumping stations for
transmission of water. Sales of electricity of $177,532 are at
commercial rates and are included in operating revenues.
(7 ) POTENTIAL REFUND OF ENERGY CHARGES :
The District has been purchasing power at rates in effect
subject to refund . Final rates are subject to the outcome of various
rate cases and administrative matters before the Federal Energy
Regulatory Commission. Amounts paid have been reflected as purchased
power expense. The amount of refund, if any, is not determinable at
this time.
"Tentative & Preliminary"
For Discussion Purposes Only
/bb
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
WATER OPERATIONS
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1983
TOGETHER WITH AUDITORS' REPORT
1
Ji
1
i
"Tentative & Preliminary"
For Discussion Purposes Only
To the Board of Directors of
Truckee-Donner Public Utility District:
i
We have examined the balance sheet of the WATER OPERATIONS
i
OF TRUCKEE-DONNER PUBLIC UTILITY DISTRICT (a political subdivision of
the State of California) as of December 31 , 1983, and the related i
statements of net revenue and funds provided for additions to utility
plant for the year then ended. Our examination was made in accor-
dance with generally accepted auditing standards and, accordingly,
included such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
In our opinion, the financial statements referred to above
present fairly the financial position of the Water Operations of
Truckee-Donner Public Utility District as of December 31 , 1983, and
the results of its operations, and funds provided for additions to
its utility plant for the year then ended, in conformity with
generally accepted accounting principles applied on a basis
consistent with that of the preceding year.
San Francisco, California,
April 6, 1984 .
i
I
"Tentative & Preliminary"
For Discussion Purposes Only
1 )
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
PATER OPERATIONS
BALANCE SHEET -• DECEMBER 31, 1983
ASSETS CAPITALIZATION AND LIABILITIES
UTILITY PLANT, At cost: CAPITALIZATION:
Plant in service $2,020,463 Consumers' equity employed to the business-
less - Accumulated depreciation 1,142,962 Balance, beginning of year i 567,458
•--•---•-- Net revenue for the year 112.211
Net plant In service >) 941,606 ..........
Total consumers' equity i 680,13S
Construction work io progress 33,427 ..........
-• Long-terse debt (Note 4)-
Net utility plant { 980,933 Installment note payable i 16,454
-----•-•-- Sever assessments payable S.321
- -
Total long-ten debt i20,115
--
RESTRICTED FUNDS (Note 3) $1,367,786 Total capitalization i100.910
.......... ----------
CURRENT LIABILITIES:
Accounts payable 1 MOOS
Deferred income - standby fees 14.337
CURRENT ASSETS: Consumer deposits 32,240
Cash $ 66,669 Accrued interest 9.695
Accounts receivable - consumer, less Accrued liabilities 98,520
bad debt reserves of $14.875 46,360 Current maturities of long-term debt (Note 5) 561.438
Accounts receivable - standby fees and other, ------...-
less bad debt reserves of $1.303 41,043 i 741.235
Inventory, at average cost 21,265 ..........
Interest receivable, prepaid insurance and other 6,9D4 CONTINGENCIES (Note 6)
1••168,131 CONSTRUCTION ADVANCES (Note 3) 11.094.105
C $2,634,860 $2, 36,850
, f2�536,850
1 ....,..... .. .......
4 �
a
4 The accompanying notes are an integral part of these financial statements.
4A
C
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L
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
WATER OPERATIONS
STATEMENT OF NET REVENUE
FOR THE YEAR ENDED DECEMBER 31 , 1983
OPERATING REVENUES $737_459 1
OPERATING EXPENSES:
Distribution $367,522
Consumer accounts 28,730
Administrative and general 132,984
Depreciation 72,702
Other 1,699
$603.637
Net operating revenue $133,822
INTEREST (INCOME 120,097
Net revenue before a
interest expense $253,919 ;
INTEREST EXPENSE 141 .642
Net revenue $112,277
The accompanying notes are an integral
part of these financial statements .
"Tentative & Preliminary"
For Discussion Purposes Only
I
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TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
i
{
WATER OPERATIONS
STATEMENT OF FUNDS PROVIDED FOR ADDITIONS TO UTILITY PLANT
FOR THE YEAR ENDED DECEMBER 31 , 1983
FUNDS PROVIDED INTERNALLY:
Operations-
Net revenue $ 112,277
Depreciation expense not requiring a current
use of funds 72,702 +
Other 7,483
Funds provided by operations S 192,462
Deduct-
Reductions in long-term debt (3,5311
Additions to restricted funds (137,882
Net funds provided internally $ 51,049
FUNDS PROVIDED FROM EXTERNAL SOURCES - Advances
utilized for construction 289,915
FUNDS USED FROM NET CHANGE IN WORKING CAPITAL
(Note 7 ) ( 14,909) i
Funds provided for additions
to utility plant S 326,055 j
i
The accompanying notes are an integral +
part of these financial statements .
i
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"Tenrarive & Preliminary"
For Discussion Purposes Only
/77to
1
TRUCKEE-DONNER PUBLIC UTILITY DISTRICT
WATER OPERATIONS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31 , 1983 {
( 1 ) SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES :
f
Organization-
The Truckee-Donner Public Utility District (the District) ?
was formed and operates under the State of California Public Utility
District Act to provide electric and water service to a portion of
Nevada and Placer counties described as Truckee and Donner Lake.
These financial statements reflect the water operations of the
i
District.
To the extent possible, assets, liabilities, equity,
revenues and expenses have been specifically identified as electric 3
or water operations . All amounts not specifically identified have
been allocated 85% electric and 15% water, reflecting the District ' s
most recent study on the allocated use of shared or common facili-
ties or functions.
Depreciation- s
—T
The District provides for depreciation on the historical
cost of water utility plant on a straight-line basis . The average
annual composite rate was 4. 9% in 1983. ;
Retirements of water utility plant and the related costs
of removal and salvage are charged to accumulated depreciation. The I
costs of replacement of property units are charged to plant. Repair
and maintenance costs are charged to expense .
Revenues-
Revenues consist of billings to consumers as meters are
read on a cycle basis throughout each month .
Income Taxes-
The District is exempt from payment of federal and state
income taxes .
I
"Tentative & Preliminary"
For Discussion Purposes Only
/ VIP-
-2-
Pension Plan-
The District maintains a noncontributory defined benefit
pension plan covering substantially all employees who have at least
�. one year of service . It is the District ' s policy to fund pension '
costs as accrued . Contributions for 1983 amounted to $7,932 for the
water operations . The present value of accumulated plan benefits
and net assets available for these benefits, last determined as of
December 31 , 1983, is not maintained by individual operations of the
District . The weighted average assumed rate of return used in
determining the present value of accumulated plan benefits for the
District was 7%. The accumulated plan benefits and assets for all
employees of the District are as follows :
Actuarial present value of accumulated
plan benefits : j
Vested $118,788
Nonvested 14,659
$133,447
=�aaxxxx
Net assets available for benefits $313,684
sss�x=3c
(2) RELATED PARTY TRANSACTIONS:
During 1983, a director of the District was also a stock-
holder and organizer of a bank with which the District conducts
business., The District' s transactions with the bank include main-
taining a general checking account and two installment notes
payable. 1 All transactions are at current market rates and con-
ditions . The installment notes payable are described in Note 4.
The above-mentioned director was not reelected to the District ' s
Board in November 1983.
"Tentative & Preliminary"
For Discussion Purposes Only
-3-
(3) RESTRICTED FUNDS :
The District has collected and restrictively invested
funds for future uses as follows :
December 31, 1983
------------------------
Restricted Construction
Funds Advances
Dart Industries Water Agreement - the District
has collected $40 per lot for future water
source and storage facilities in the
developers' project $ 319,730 $ 319,730
Dart Industries Water Services Settlement the District has collected funds for
anticipated future repairs of water lines
constructed by Dart Industries 223.012 292.578
Facilities fees collected from customers
for future procurement of source and storage 260.908 297,403
Portion of connection fees collected from customers
for the future purchase of water meters 183.946 184,994
---------- ----------
$ 987.596 $1,094,705
Other restricted funds-
FMHA Revenue, Note and Reserve Funds - water
operating margins plus depreciation held in
reserve in accordance with the loan agreement 317,147 -
Consumer deposits and other 63,043 -
------ ----------
$1,367,786 $1,094,705
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(4) LONG-TERM DEBT:
The District renewed an installment note payable relating
to its computer on December 1, 1982. Terms of the note provide for
monthly installments of principal and interest of $2,570. The
interest rate is 10%, to be adjusted annually on December 1 based
upon the bank ' s current municipal rate. On December 1, 1988, the
entire balance of principal and interest will become due and
payable. These financials reflect the water operations ' portion of
the note.
The sewer assessments are payable to Nevada County,
California, over a 20-year period, with interest at 7%. Final
payment is due in 1990.
"Tentative & Preliminary"
For Discussion Purposes Only
-4-
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(5 ) OBLIGATIONS RECLASSIFIED AS CURRENT_:
. I
The promissory note payable to the United States of
America, Farmers ' Home Administration is due in 39 annual
installments of principal and interest of $14 ,800. The interest
rate is 5% per annum. The net revenues ( as defined) of the i
District ' s water system are pledged as security.
The bonds payable to the United States of America,
Farmers' Home Administration are due each October 1 as follows :
Years Amount
1984 through 2003 $ 5,000
2004 through 2013 10,000
2014 through 2018 15,000
2019 and 2020 20,000
The interest rate is 5% per annum, payable semiannually.
The net revenues ( as defined ) of the District ' s water system are
pledged as security.
The Indentures , which secure the promissory note and
bonds, require the District to establish and maintain rates and
charges to produce net revenues ( as defined) equal to not less than
1.2 times the aggregate amount of the principal and interest due
within the next 12 months. In addition, they require the District
to establish separate special accounting funds. Since the
promissory note and bonds were issued, the District has not met and
fulfilled the requirements of certain Indenture covenants. In the
event of a default, the holder of not less than 66-2/3% of the
aggregate! principal amount shall be entitled, upon notice in writing
to the District, to declare the principal ($557,883) due and payable
immediately.
As a result of the District' s failure to meet certain of
the Indenture covenants, the total amount of these obligations has
been classified as a current liability in the financial statements .
(6) CONTINGENCIES - DART INDUSTRIES WATER
AGREEMENT AND RELATED LAWSUITS :
In 1970, an agreement was signed between the District and
Dart Industries for the purpose of providing water service to a Dart
subdivision. The agreement required Dart to construct water source
and storage facilities at Donner Lake. In December 1975, subsequent
to completion of the facilities, ownership was transferred to the
District for future maintenance and operation. The Attorney General
of the State of California has filed suit against the District and
Dart to restrain them from using Donner Lake as a water source.
Since this action claims no monetary damages , the District has no
liability resulting from this action.
"Tentative & P"11minary"
For Discussion Purposes Only
-5-
i
In a separate action related to the Dart subdivision, a
homeowners ' group filed suit against Dart, claiming amounts in
excess of $100 million , and Dart , in turn , filed suit against the
District and others, seeking indemnity for all such claims . In
April 1984, Dart was absolved of any responsibility to the plain-
tiffs. In the opinion of legal counsel , the District has been
effectively relieved of any responsibility to respond to Dart.
( 7) CHANGES IN NET WORKING CAPITAL :
The changes in accounts classified as current assets and
current liabilities are as follows :
Working capital increase (decrease) in-
Cash S 66.569
Receivables (4,480)
Inventory (509
Other current assets (23.420)
Accounts payable ( 14.654)
Bonds 44,441
Accrued interest 411
Deferred income 1 778
Consumer deposits ( 17: 787)
Accrued liabilities (37.440)
S 14,909
(8) INTERDEPARTMENTAL PURCHASES:
The water operations of the District use electricity in
the pumpiing stations to transmit the water. Purchases of electric-
ity from the electric operations of $177,532 are at commercial rates
and are primarily included in distribution expense.
"Tentative & Preliminary"
For Discussion Purposes Only