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HomeMy WebLinkAboutFinancial Statements James Maass State Water Resources Control Board Post Office Box 423 Post Office Box 100 Truckee, .California 95734 Sacramento, California 95801 Calif. Dept. of Planning & Research Roberta Huber . 1400 loth Street Post Office Box 592 Sacramento, California 95814 Truckee, California 95734 State Water Quality Control Board Karl Kuttel Lahontan Region , ,.-. Post Office Box 22 Post Office Box 14367 Truckee, California 95734 So. Lake Tahoe, California 95705 i Pat Sutton Board of Supervisors Post Office Box 1123 County of Nevada Courthouse Truckee, California 95734 Nevada City, California 95959 Steven E. Grumer, Esq. TRUCKEE SANITARY DISTRICT Post Office Drawer BT Post Office Box 847 Incline Village, Nevada 69450 Truckee, California 95734 Dan J. Cook, Civil Engineer Ludvik Limberg COOK ASSOCIATES 3255 Kerner Blvd. 2060 Park Avenue San Rafael, California 94901 Oroville, California 95965 Mira Shea Don Strand KTRT Radio Station DART INDUSTRIES Post Office Box 1400 Post Office Box 2347 Truckee, California 95734 Truckee, I:alifornia 95734 P. Scott Browne Sierra Sun Bonanza SHINE, BROWNE & THOMPSON Post Office Box 248 434 Colfax Avenue Truckee, California 95734 Grass Valley, California 95945 (FHK Shopping Center) Tahoe World Post Office Box 138 Fred M. Katz, Partner Tahoe City, California 95730 FHK INVESTMENT COMPANY 3436 American River Drive Joe Evans Sacramento, California 95825 SACRAMENTO BEE (FHK shopping Center) Post Office Box 15770 Sacramento, California 95813 Larry R. Willbur GALLAGHER DEVELOPMENTS UNLTD. L. Martin Duffy Post Office Box 5715 Post Office Box 1450 Tahoe City, California 95730 Truckee, California 95734 (River Street West) TTHS - Attn. Jim Maass Arthur Andersen & Co. Post Office Box 458 Spear Street Tower Truckee, California95734 One Market Street Plaza San Francisco, California 94105 David Rossi 4197 Jane Street Redding, California 96001 Chris Jensen K102 RADIO STATION Post Office Box 88 Kings Beach, California 95719 Bill Nork The June 12, 1980, special meeting 950 E. Gregg Street agenda was sent to the above noted parties on June 5, 1980. Sparks, Nevada 89431 Don Levit The June 12, 1980 corrected meeting Post Office Box 2642 agenda was sent the above noted par- Olympic Valley, California 95730 ties on June 5, 1980 ARTHUR AiqnEIRsIF-1-1 & CO- SPEAR STREET TOWER, SUITE 3500 ONE MARKET PEAZA COPIES TO: ��A -_Ek S F-IRANCISCO, CALIFOR- 94105 (415) 546-6200 El District Engr. Ut P.U.D. Q Supt. Forc.,"n June 6 , 1980 Mr. A. Milt-on Seymour General Manager Truckee-Donner Public Utility District Post Office Box 309 Truckee, California 95734 Dear 14ilt: Enclosed are tentative and preliminary copies of the audited December 31, 1979 financial statements for use at the Board of Directors' work- shop on June 12, 1980 . 1 thought it would be helpful if the Board, Mary, Kay and yourself had an opportunity to review them in advance. I will be at the District in the morning of the 12th, and if you are available I would like to have lunch with you, Mary, and Kay. Best regards. Very truly yours, ARTHUR ANDERSEN & CO. y Richard J. Blumenfeld JH Enclosure TRUCKEE-DONNER PUBLIC UTILITY DISTRICT FINANCIAL STATEMENTS AS OF DECEMBER 3_1, 1979 AND 1978 TOGETHER WITH AUDITORS ' REPORT aaTentative & pre11i inary" r or Discussion purposes Only To the Board of Directors of Truckee-Donner Public Utility District : We have examined the balance sheets of Truckee-Donner Public Utility District ( a political subdivision of the State of California) as of December 31, 1979 and 1978, and the related statements of net revenue and funds provided for additions to utility plant for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly , included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances . As discussed in Note 6 to the accompanying financial statements , the District is a party in a legal action which seeks damages in excess of $100 million from various defendants , including the District . The ultimate outcome of this legal action and the effect upon the District , if any, cannot be determined at this time . As discussed in Note 4 to the accompanying financial statements , the District is required to meet certain covenants which result from the issuance of a promissory note payable to the United States of America, Farmers ' Home Administration . During 1979 and 1978, it was uncertain whether the District met and fulfilled the requirements of these covenants . "Tentat(V8 M# Prelirninary" For Discusslon Purposes Only -2- In our opinion , subject to the effect of any adjustments that might have been required had the outcome of the matters discussed above been known , the financial statements referred to above present fairly the financial position of Truckee-Donner Public Utility District as of December 31, 1979 and 1978, and the results of its operations and funds provided for additions to its utility plant for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis . Our examinations have been made primarily for the purpose of forming the opinion stated in the preceding paragraph . The combined statement of departmental operations , although not considered necessary for a fair presentation of financial position , results of operations and changes in financial position , is presented as supplementary information and has been subjected to the audit procedures applied in the examinations of the basic financial statements . In our opinion, subject to the effect of any adjustments that might have been required had the outcome of the matters discussed above been known, these data are fairly stated in all material respects in relation to the basic financial statements , taken as a whole . March 28, 1980 ""Tent,atjVe + t Pr'Cjirriinary" For Discusalon Purposes Only TRUCKEE-DONNER PUBLIC UTILITY DISTRICT BALANCE SHEETS -- DECEMBER 31, 1979 AND 1978 ASSETS CONSUMERS' EQUITY AND LIABILITIES 1979 1918 1979 1978 UTILITY PLANT, at cost (Note 1): CAPITALIZATION: Plant in service- Consumers' equity employed in the business- Electric $2.236,721 $2,213,932 Balance, beginning of year f2,335,40 f1,328, 6 16 Water 951,018 880,498 Net revenue for the year - 0 ------ General 609,390 465,721 '"" ------ -�-- Total consumers' equity $2,557,531 $2,222,131 $3.697,129 $3,560,151 ---------- ----- Less - Accumulated depreciation 2,026,836 1,896,686 Long-term debt (Note 4)- f 310,574 f 329,574 Net plant in service $1,670,293 $1,663,465 REA bonds Note payable to Sierra Pacific Power Construction work in progress 610,740 227.201 Company 26,457 43,064 Electric acquisition adjustments 2,537 3,301 Promissory note - United States of America, ---------- Farmers' Home Administration 249,591 249,591 Net utility plant $2,283,570 $1,893,967 Sewer assessments payable 12,746 14,041 ---------- Equipment notes payable 671 8,889 f 673,605 f 496,124 "-""-"---- ---------- RESTRICTED FUNDS (Note 3) ---------- Total long-term debt f 600,039 f 645,159 CURRENT ASSETS: Total capitalization $3,157.570 $2.867,290 Cash f 900,971 f 728,130 Accounts receivable - consumer, less CURRENT Ls payable (Note 4): f 762,747 f 484,270 bad debt reserves of $61.600 in 1979 Accounts payable and $47,100 in 1978 271,410 258,412 Deferred income - standby fees 55,423 33,1 43 053 02 705 Account receivable - purchased power Consumer deposits , 7,67 49 265 35 refund (Note 2) 6,054 102,415 Accrued interest 10, , Accounts receivable - standby fees and other, Accrued liabilities , ,948 48 less bad debt reserves of $13,600 in 1979 Current maturities of long-term debt _ 47,327 46,938 and 1978 164,742 138,307 Inventory, at average cost 161,944 168.878 f 968,520 f 658,986 Interest receivable, prepaid insurance and other 43,403 34,438 CONTINGENCIES (Note 5) $1,548,524 $1,430,640 C4"uMk AttaM FJV CONSTRUCTION (Note 3) f 379,609 f 294,455 $4,505,699 f3,820,731 $4,505,699 $3,820,131 The accompanying notes are an integral part of these balance sheets. "Tontntivo & Rrelln,1111ary„ For Discussion purposes Only � TRUCKEE-DONNER PUBLIC UTILITY DISTRICT STATEMENTS OF NET REVENUE FOR THE YEARS ENDED DECEMBER 31, 1979 AND 1978 1979 1978 OPERATING REVENUES : Electric $2, 630, 562 $2, 299 , 267 Water 364 ,609 298 ,065 $2 ,995 ,171 $2 ,597 ,332 ---------- ---------- OPERATING EXPENSES : Purchased power (Note 2) $1, 959 , 601 $1, 469,942 Transmission 68 ,177 59 ,593 Distribution 159, 572 165, 397 Consumer accounts 153 ,499 131 ,863 Administrative and general (Note 6 ) 283, 094 342, 894 Depreciation 128 ,116 119 ,703 $2 ,752 ,059 $2,289 ,392 ---------- --------- - Net operating revenue $ 243 ,112 $ 307 ,940 OTHER INCOME : 817 Interest income 117, 390 (4, 783 Other, net 17 ,390 (4,783 ) Net revenue before interest expense $ 390, 126 $ 363, 974 INTEREST EXPENSE 54, 726 35 ,808 ---------- ---------- Net revenue for the year $ 335 ,400 $ 328 ,166 The accompanying notes are an integral part of these statements . A&Tantative+ & Prelimii»ry" for Discussion Purposes only TRUCKEE-DONNER PUBLIC UTILITY DISTRICT STATEMENTS OF FUNDS PROVIDED FOR ADDITIONS TO UTILITY PLANT FOR THE YEARS ENDED DECEMBER 31 , 1979 AND 1978 1979 1978 FUNDS PROVIDED INTERNALLY : Operations - Net revenue $ 335 , 400 $ 328, 166 Depreciation expense -not requiring 9703 a current use of funds 1 14, 1 11 , Other 14,710 16 ,22 5 --------- --------- Funds provided by operations $ 478 ,226 $ 464 , 121 Add (deduct) - Reductions in long-term debt (44, 732) ( 90, 347 ) Additions to restricted funds (177 ,481 ) (127 ,654) --------- --------- Net funds provided internally $ 256 ,013 $ 246 , 120 --------- --------- FUNDS PROVIDED FROM EXTERNAL SOURCES : Construction and maintenance funds contributed to the District $ - $ 47 ,600 advances utilized for construction 85- 51 , 174 Increase in long-term debt 251 ,801 --------- --------- $ 85 ,154 $ 350 ,575 --------- --------- FUNDS PROVIDED (USED) FROM NET CHANGE IN WORKING CAPITAL $ 191, 650 $ ( 216, 235 ) --------- --------- Funds provided for additions to utility plant $ 532, 817 $ 380, 460 The accompanying notes are an integral part of these statements . "i entative & prelirrtiitiary" For Discuselon Purposes Only ,2- TRUCKEE-DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1979 AND 1978 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 County described as Truckee and Donner Lake . The District is exempt from payment of federal and state income taxes . Depreciation -- The District provides for depreciation on the historical cost of utility properties on a straight -line basis at rates in accordance with the Rural Electrification Administration Bulletin 181- 1 . The average annual composite rates were 3 . 95% and 3. 54% in 1979 and 1978, respectively . Retirements of utility plant and the related costs of removal and salvage are charged to accumulated depreciation . The costs of replacement of property units are charged to plant . Repair and maintenance costs are charged to expense . Revenues -- Revenues consist of billings to consumers as meters are read on a cycle basis throughout each month . Services provided to municipal entities without charge are not reflected in operating revenues . "'Tentative & Pr°e$irninary" �=or Discussion Ptirposes Only -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, and contributions for 1979 and 1978 amounted to $27 ,312 and $21, 741, respectively. At December 31 , 1979 , the value of the plan ' s assets exceeded the actuarially computed present value of vested benefits . 2 . Purchased Power Refund On January 4, 1979, the District received a cash refund in the amount of $102 ,415 , including interest , from its wholesale electrical power supplier. This resulted from refunds , ordered by the Federal Energy Regulatory Commission (formerly the Federal Power Commission) , which the supplier had received from its suppliers and from audits of its fuel clause billings . The refund to the District covered purchases during the period 1971-1978. The 1978 financial statements have reflected the refund ( $102, 415) in the balance sheet as an account receivable - purchased power refund and in the statement of net revenue as a reduction to purchased power expense . 3 . Restricted Funds The District has collected and restrictively deposited funds for future uses as follows : "Tentative Preilr inary„ For Discussion Purposes Only a a� -3- Restricted Advances for Funds Construction Dart Industries Water Agreement - the District has collected $40 per lot for future water source and storage facilities in the developers ' project $196 ,300 $196 ,300 �. REA loan proceeds - placed in trust to be used for future electric construction projects 40, 675 - Dart Industries water services settlement - the District has collected funds for anticipated future repairs of water lines constructed by Dart Industries 86 ,410 86 ,361 Facilities fees collected -from customers for future procurement of source and storage 49 , 120 50, 202 Portion of connection fees collected from customers for the future purchase of water meters 46 ,375 46 ,746 $418 ,880 $379 ,609 Other restricted funds- Loan principal and interest fund - in accordance with loan agree- ments , principal and interest payments are to be placed on deposit until payment is due REA 38 ,769 - Sierra Pacific Power Company 34, 067 - Promissory note proceeds - placed in trust to be used for specific water construction projects 25 ,656 - Purchased power refund proceeds restricted by the District to be used for future construction projects 112 ,704 - Consumer deposits 43 , 529 - $673 ,605 $379 ,609 or Discu,951on PUIpposes Only -4- 4. Long-Term Debt REA bonds , secured by pledge of all assets , are as follows : 1979 1978 First series 2% bonds , payable in annual amounts varying from $13 , 000 to $14 ,000, in accordance with sinking fund requirements , balance due July, 1994 $198 ,000 $211 ,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 88,000 91,000 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 43, 574 46 , 574 Less - Current maturities (19 ,000) (19 ,000) $310 ,574 $329 ,574 The note payable to Sierra Pacific Power Company is �- due in semiannual installments of $9 , 213 , including interest , at a rate of 4 .68% , with final payment due in March , 1983 . The net revenues ( as defined) of the Donner Lake Electric System are pledged as security . 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 revenues ( as defined ) of the District ' s water system are pledged as security. The Indenture, "Tentative & Pceilnlillaryr„ For Discus--!on Ptirposes On,* e-- which secures the promissiory note , requires 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 , it requires the District to establish `� separate special accounting funds . During 1979 and 1978, it was uncertain whether the District met the requirements of the Indenture as outlined above . As a result of this uncertainty, the District may not have fulfilled the covenants of the Indenture. In the event of a default , the holder of not less than 66- 2/3% of the aggregate principal amount may declare the principal of all the notes ( $251, 800) due and payable immediately . The sewer assessments are payable over a 20-year period, plus interest at 7%, to Nevada County, California . Final payment is due in 1990. The equipment notes payable to banks are secured by computer equipment and a truck . They are due in monthly installments , including interest at 7%, of $830 through September, 1980, and $356 thereafter through March , 1981 . 5 . 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 —1 elltative `- pl-eill-t1irtary" For Discussion ©nry yz -6- 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 r from using Donner Lake as a water source . Since this action claims no monetary damages , the District has no liability resulting from this action . Subsequent to the acceptance of the water system, a citizens ' group has filed suit to have Dart resume operation and maintenance of the water system. This action also claims no monetary damages to the District . In a -99& e action a homeowners ' group filed suit against Dart , claiming amounts in excess of $100 million , and Dart has , in turn, filed suit against the District and others , seeking indemnity for all such claims . The outcome and potential impact on the District cannot presently be determined. 6 . Legal Fees The District recorded $118 , 117 for legal fees during 1978 . This amount was included in administrative and general expenses in the statements of net revenue . 7 . Changes in Net Working Capital The changes in accounts classified as current assets and current liabilities are as follows : "Tentative a Frei irni.tary" For Discussion iPttr j"'oses Only -7- Year Ended December 31 ---------------------- 1979 1978 Working capital increase (decrease) in- Cash $ 172,841 $ 78, 431 Receivables ( 56 ,988) 218 ,642 Inventory (6 , 934) (22, 123) Other current assets 8 ,965 22 ,850 �-- Accounts payable (278, 477 ) ( 143, 499 ) Deferred income (4 ,267 ) ( 3 ,294) Consumer deposits (10, 051) (4, 390) Other current liabilities 16 ,739 ) 69 ,618 --------- --------- $ (191 ,650) $ 216 ,235 8. Reclassifications Certain amounts in the December 31 , 1978 financial statements have been reclassified to conform with the presentation used in the December 31, 1979 financial statements . or Discussion l TRUCKEE-DONNER PUBLIC UTILITY DISTRICT COMBINED STATEMENT OF DEPARTMENTAL OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1979 Electric Water ----------------------- ------------------- Donner Tahoe Total Eliminations Truckee Lake Truckee Donner OPERATING REVENUE $2,995,171 $ 89,354 $2,142,895 $577,021 $236,486 $128,123 OPERATING EXPENSES: . Purchased power $1,959,601 S - $1,649,852 $309,749 $ $ Transmission 68,177 (718,633 76,002 70,808 Distribution 159,572 (1,273) 107,010 56,378 4,588 (7,131) Consumer accounts 153,499 - 89,202 41,414 15,797 7,086 Administrative and general 283,094 (1,803) 127,168 62,691 62,511 32,467 Depreciation 128,116 -7,645) 780,613 15,652 31,265 586 Other - ( 645 - - - $2,752,059 $(89,354) $2,061_490 $485,884 $190,223 $103,816 Net operating revenue $ 243,112 $ - f 81,405 S 91,137 $ 46,263 E 24,307 ---.:.33--- ----353.3 3...3-•---• L.-.33-- ---- -• -------- clitfii'ive & PreHminary" For Discussion Purposes Only