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2008-12-17 Agenda Packet - Board (18)
Agenda Item # 5 Action To: Board of Directors From: Mary Chapman, Secretary/Treasurer of TDPUD Financing Corporation Date: December 17, 2008 Subject: Annual Reports and Financial Statements 1. WHY THIS MATTER IS BEFORE THE BOARD The Truckee Donner Public Utility District Financing Corporation is required to hold an annual meeting. Review of Annual Reports and Annual Financial Statements are solely within the purview of The Finance Corporation Board. 2. HISTORY The Financing Corporation Board reviews and approves the annual reports. Also provided is a copy of the most recent audited financial statements of the Truckee Donner Public Utility District. The annual reports are prepared according to the requirements of each bond's continuing disclosure statement. District staff prepares the annual reports for the 2003 A/B Certificates of Participation and the 2006 Certificates of Participation. Wilidan Financial Services(previously MuniFinancial) prepares the annual reports for the Community Facility Districts. 3. NEW INFORMATION: Attached are the following annual reports: • Certificates of Participation Series 2003A and 2003B report as of December 31, 2007 • Certificates of Participation (Water System Improvements) Series 2006, Dec. 31, 2007 • Assessment District: Donner Lake Water - Fiscal year 2008/09 • Community Facilities Districts: Old Greenwood and Grays Crossing—Fiscal year 2008/09 • Truckee Donner Public Utility District annual audited financial statements for FY07 4. FISCAL IMPACT There is no fiscal impact associated with this action. 5. RECOMMENDATION: Approve the attached reports. Mary ChApAAJ Michael D. Holley, PE Administrative Services Manager General Manager TRUCKEE DONNER PUBLIC UTILITY DISTRICT REFUNDING CERTIFICATES OF PARTICIPATION SERIERS 2003A AND 2003B ANNUAL REPORT 12/31/2007 TRUCKEE DONNER PUBLIC UTILITY DISTRICT History of Electric Service Charges January January March March March January 2003 2004 2005 2006 2007 2008 no change Domestic Electric Rates: Permanent Residents Customer Charge: per month $4.50 $5.00 $5.84 $6.13 $6.13 $6.56 Energy Charge per kilowatt-hour $0.10869 $0.11400 $0.11400 $0.12000 $0.12000 $0.12800 Domestic Electric Rates: Non-Permanent Residents Customer Charge: per month $4.50 $5.00 $5.84 $6.13 0.1$3700 $0.1$4700 Energy Charge per kilowatt-hour $0.12381 $0.13000 $0.13000 $0.13700 $ Small Commercial Rates: Commercial Customers with monthly demand less than 50 kilowatts Customer Charge: per month $8.73 $9.70 $11.32 $ 0.14400 $0.15400 Energy Charge per kilowatt-hour $0.13062 $0.13700 $0.13700 $0.14400 $ Medium Commercial Rates: Commercial Customers with monthly demand less than 50kW and less than 200kW Customer Charge: per month $87.25 $96.85 $113.04 $1 820 $0 08520 $0 09100 Energy Charge per kilowatt-hour $0.07729 $0.08110 $0$08111 $0$151 67 $11 67 $12.49 Demand Charge per kilowatt of demand $10.58 $1 1. 1 Large Commercial Rates: Commercial Customers with monthly demand greater than 200kW Customer Charge: per month $382.00 $425.00 $495.83 $520 62 0 7 0 087 0 $0 09400 Energy Charge per kilowatt-hour $0.07954 $0.08350 $0.08350 $0.08 $ Demand Charge per kilowatt of demand $10.11 $10.62 $10.62 $11.15 $11.15 $11.93 TRUCKEE DONNER PUBLIC UTILITY DISTRICT Electric System Connection Charges and Facilities Fees For 200 amp Service as of March 1, 2007 Connection Facilities Size and Type of Service Charge Fees Three Wire Overhead -Temporary Actual Cost - Permanent connection to structure $1,212 $1,260 -Temporary connection to pole and transfer to structure $1,489 Three Wire Underground(overhead transformer) $1,212 $1,260 - Permanent connection to structure -Temporary connection to pole and transfer to structure $1,489 Three Wire Underground(padmount transformer) - Permanent connection to structure $1,212 $1,260 -Temporary connection to pole and transfer to structure $1,489 TRUCKEE DONNER PUBLIC UTILITY DISTRICT Electric System Customers, Sales, Revenues and Demand 2003 2004 2005 2006 2007 Number of Customers: 10,691 10,726 11,082 11,342 11,483 Residential Commercial and Other' 1,392 1,696 1,514 1,485 1,602 Total Customers 12,083 12,211 12,684 13,038 12,997 Kilowatt-Hour(kWh) Sales: Residential 66,271,709 69,818,294 70,072,056 72,400,532 74,009,589 Commercial and Other 60,307,969 65,434,701 66,266,816 71,868,598 73,081,212 Total kWh Sales 126,579,678 135,252,995 136,338,872 144,269,130 147,090,801 Revenues from Sale of Energy: Residential $8,119,198 $9,004,185 $9,171,600 $9,914,315 $10,264,846 7,163,712 8,171,764 8,369,493 9,352,463 9,655,434 Commercial and Other Total Revenues from Sale of Energy $15,282,910 $17,175,949 $17,541,093 $19,266,778 $19,920,280 Peak Demand (kW) 32,291 32,235 32,179 35,928 36,047 1) Removed inactive accounts from the 2007 customer counts. i i i TRUCKEE DONNER PUBLIC UTILITY DISTRICT Electric System Largest Electric Customers-2007 12 Months Customer Type of Business KWh Sold Electrical Billings District Water Department (1)(2) Water Utility 11,726,595 $1,511,916 Tahoe Truckee Sanitation Agency(2) Sewer Plant 7,872,565 858,770 Tahoe Forest Hospital (2) Hospital 5,278,053 608,229 Tahoe Truckee Unified School District(2) Education 3,158,132 413,931 Teichert&Son Private/Commercial 2,526,300 394,987 (1) Represents pumping charges incurred by District water system (2) Denotes customers with multiple meters and service locations. The kWh sold and electrical billings are a sum of all customer's meter locations F e TRUCKEE DONNER PUBLIC UTILITY DISTRICT Electric System-Summary of Historical Net Revenues and Selected Balance Sheet Information 2003 2004 2005 2006 2007 Revenues(l) $1 to Cu4,256,511 $15,689,878 $16,317,909 $18,287,011 $18,396,992 Sales to Customers Sales Sales(2) 1,566,049 1,412,884 1,329,356 1,369,321 1,489,756 IntStandby Charges 22,827 24,420 22,540 23,930 23,310 Facilities Fees(s) 509,347 282,829 481,723 454,891 513,901 206,664 466,841 426,454 462,140 1,190,186 Other(4) 266,750 615,988 734,430 Income from Investments 75,373 70,471 Total Revenues $16,636,771 $17,947,323 $18,844,732 $21,213,281 $22,348,575 Rate Stabilization Fund Transfer(5) (1 1) 0 0 0 0 0 Total Adjusted Revenues (��) $16,636,771 $17,947,323 $18,844,732 $21,213,281 $22,348,575 Operations and Maintenance Costs(6) Power Purchases $7,497,730 (12) $8,269,483 $8,279,662 $8,328,528 $9,403,712 2,231,024 2,636,335 3,156,772 Operations and Maintenance 1,624,574 1,906,348 937,050 2,038,521 2,136,294 Administrative and General 1,540,878 1,693,424 1, Consumer Services(7) 503,452 586,803 548,978 552,257 716, Interest Expense(s) 36,791 49,065 56,674 51,013 36,924 24 Total Operation and Maintenance Costs $11,203,425 $12,505,123 $13,053,388 $13,606,654 $15,450,447 Adjusted Net Revenues/Funds Available for Debt Service $5,433,346 $5,442,200 $5,791,344 $7,606,626 $6,898,129 1,107,682 2,853,354 3,443,550 3,432,013 3,425,875 Debt Service(g) Debt Service Coverage(1o) 4.91 1.91 1.68 2.22 2.01 Selected Balance Sheet Information Fund Balances(December 31): General Fund $3,706,328 $5,387,507 $6,615,006 $7,852,077 $7,073,595 434,013 440870 452,512 753,020 1,148,106 , Rate Stabilization Fund Balance 605,097 $8,221,701 Total Fund Balances $4,140,341 $5,828,377 $7,067,518 $8, Net Plant in Service $15,726,184 $14,923,885 $18,099,649 $22,395,013 $27,371,225 3,555,097 4,933,875 2,714,371 5,760,806 5,650,055 Construction Work in Progress Net Electric Utility Plant $19,281,281 $19,857,760 $20,814,020 $28,155,819 $33,021,280 TRUCKEE DONNER PUBLIC UTILITY DISTRICT Electric System-Summary of Historical Net Revenues and Selected Balance Sheet Information (1) Excludes Connection Charges. See"Rates and Charges"above. (2) Represents pumping charges to District water system and interdepartmental rent charged to the water department for use of the District Administrative Building which was financed by the Electric System. (3) Facilities Fees are charged to applicants for new service to cover the costs of infrastructure needed to meet the additional system demand. See"Rates and Charges"above. (4) Represents service transfer charges, late payment fees, building room rentals and miscellaneous receipts. (5) The Rate Stabilization Fund is used to mitigate rate increases. Pursuant to the Installment Purchase Agreement,Adjusted Revenues for coverage purposes include the amounts the District has authorized to be deposited in the Revenue Fund from the Rate Stabilization Fund pay Operation and Maintenance Costsand/or Debt Service. See"SECURITY AND SOURCES OF PAYMENT FOR THE 2003 CERTIFICATES--Defined Terms, "--Rate--Rate Covenant herein. (6) Excludes depreciation and amortization. (7) Includes all customer service, billing activity and customer information expenses. (8) Excludes interest on the 2003A/B Certificates which are shown in the debt service below. (9) Represents Debt Service on the District's 2003 A/B Electric Certificates of Participation for the Purchased Power Contract buy-out with IDACORP Energy L.P. (10) Adjusted Net Revenues divided by Debt Service. (11) The District funded a portion of its Electric System expenses from the Rate Stabilization Fund in 2002. Additional rate increases have been implemented for 2003 and 2004. See Rates and Charges above. (12) Exclusive of$26million Settlement Obligation which is a one-time expense relating to the termination of the Prior Agreements(see"THE TRANSACTION"herein)which was accrued as of December 31, 2002 but will be funded from proceeds of the 2003 Certificates in the Fiscal Year ended December 31, 2003. i 0 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CERTIFICATES OF PARTICIPATION (WATER SYSTEM IMPROVEMENT PROJECTS) SERIES 2006 ANNUAL REPORT 12/31/2007 CONTINUING DISCLOSURE CERTIFICATE: 4. Content of Annual Reports (a)The audited financial statement were electronically forwarded to Bank of New York on (b)The principal amount of the Certificates outstanding was $25,955,000 as of December 31, 2007. (c) The balance in the Reserve Fund as of December 31, 2007 was $1,964,704.50. The Reserve Requirement from the Installment Purchase Agreement is: "The term "Reserve Requirement" means initially, $1,901,088.76, and thereafter the lesser of(i) $1,901,088.76 or(ii) the maximum principal of and interest with respect to the Certificates due in the then current or any future Fiscal Year." The maximum payment due in any year is $1,901,088.76. (d) Updated tables from "THE WATER SYSTEM OF THE DISTRICT" IN THE Official Statement are attached: (i) "TRUCKEE DONNER PUBLIC UTILITY DISTRICT - Historic Water Production and Accounts" on page 19 of the Official statement. (ii) "TRUCKEE DONNER PUBLIC UTILITY DISTRICT - Historic Sales Revenue" on page 19 of the Official statement. (iii) "TRUCKEE DONNER PUBLIC UTILITY DISTRICT - Largest Customers" on page 20 of the Official statement. (iv) "TRUCKEE DONNER PUBLIC UTILITY DISTRICT - Historic Operating Results of Debt Service Coverage" on page 26 of the Official statement. TRUCKEE DONNER PUBLIC UTILITY DISTRICT Historic Water Production and Accounts Total Production (Million % Increase/ Commercial % Increase/ Residential % Increase/ Year Gallons) (Decrease) Accounts (Decrease) Accounts (Decrease) 2001 1,736 481 8,130 2002 2,198 26.61% 548 13.93% 10,268 26.30% 2003 2,208 0.45% 563 2.74% 10,491 2.17% 2004 2,424 9.78% 582 3.37% 10,739 2.36% 2005 2,206 -8.99% 605 3.95% 11,146 3.79% 2006 2,371 7.48% 646 6.78% 11,436 2.60% 2007 2,433 2.61% 641 -0.77% 11,801 3.19% TRUCKEE DONNER PUBLIC UTILTIY DISTRICT Historic Sales Revenues % Increase/ %Increase/ Year Residential (Decrease) Commercial (Decrease) 2001 $3,944,222 $476,195 2002 5,013,242 27.10% 647,822 36.04% 2003 5,768,092 15.06% 678,423 4.72% 2004 6,254,756 8.44% 825,109 21.62% 2005 6,609,311 5.67% 8441)812 2.39% 2006 7,160,485 8.34% 991,941 17.42% 2007 7,875,829 9.99% 17165,511 17.50% TRUCKEE DONNER PUBLIC UTILTIY DISTRICT Largest Customers-Fiscal Year 2007 Customer Water Usage (1) Annual Payments Tahoe Mountain Club Company 112,055,860 $54,865 Coyote Moon Golf course 89,422,120 54,677 Tahoe Club Company LLC 80,299,960 47,134 Tahoe Donner Association 49,931,983 144,216 Truckee Tahoe Unified School District 21,730,300 39,316 Bob Gales/Coachland(mobile home park) 17,420,000 35,575 East West Partners 16,291,580 13,095 Tahoe Forest Hospital 13,829,300 31,318 Truckee Donner Recreation 13,642,120 27,324 Donner Creek Mobile Home Park 12,615,000 17,676 TOP TEN TOTAL 427,238,223 $465,196 TOTAL SYSTEM 2,433,000,000 $9,042,900 17.56% 5.14% Gallons TRUCKEE DONNER PUBLIC UTILITY DISTRICT Historic Operating Results&Debt Service Coverage Fiscal Year Ending December 31 Revenues 2003 2004 2005 2006 2007 Sales to Customers $6,508,637 $7,089,121 $7.563,132 $8.247.123 $9,042,900 Standby Fees 148,860 196.080 183,119 63.040 154,320 Investment Income(1) 185,530 150.349 258,352 451,305 606.805 Facilites Fees(2) 834,233 843,363 1,308,200 1,133,360 1,309,385 Connection Fees 12)(3) 235,109 343,581 405,987 314,528 369,978 Other(4) 392,098 402,932 417,541 469,642 573.659 Total Revenues $8,304,467 $9,025,426 $10,136,331 $10,678,998 $12,057,046 Operating&Maintenance Expenses Operations and Maintenance $3,871,361 $4.157,384 $4,229,691 $4,289,245 $4,741,889 Administration and General 1,166,604 1,413.250 1,525,485 1,558,078 1,520,582 Customer Services 255,477 290,500 297,517 322,608 389,410 Total Operations&Maintenance Expenses $5,293,442 $5,861,134 $6,052,693 $6,169.931 $6,651,881 Net Revenues $3,011,025 $3,164,292 $4,083,638 $4,509,067 $5,405,165 Parity Debt Service 15) 2006 Installment Purchase Agreement $0 $0 $0 $173,904 $1,898,460 1996 Installment Purchase Agreement 802,886 802,038 800,402 677,440 0 DWR Proposition 55 Loan 306,422 306,423 306,422 306.422 306,481 Interest on Parity Debt Service Reserve Funds (20,349) (26,202) (56,547) 8( 5,081) Total Parity Debt Service $1,088,959 $1,082,259 $1.074,462 $1,101,219 $2,119,860 Parity Debt Service Coverage 2.77 2.92 3.80 4.09 2.55 Net Revenues Remaining for Subordinate Debt $1,922,066 $2,082,033 $3,009,176 $3,407,848 $3,285,305 Service Subordinate Debt Service`5)(6) $390,1 14 $427,105 $435,280 $409,044 $400,909 Parity and Subordinate Debt Service Coverage(7) 2.04 2.10 2.70 2.99 2.14 Balance Available for Capital Projects or Other $1,531,952 $1,654,928 $2,573,896 $2,998,804 $2.884,396 Purposes NOTES (1) Excludes interest component of Donner Lake Assessment and interest on parity debt service reserve funds. (2) Appears as contributed capital in the Financial Statement of the District. (3) Historically,connection fees were recognized in the year in which the connection to the Water System was effected rather than the year in which the connection fee was allocated. (4) Includes interdepartmental sales. (5) Debt service presented on an accrual basis. (6) Represents payments on Capital Leases. The DWR Loan,which is secured by,and has historically been paid entirely from,the Donner Lake Assessments, is excluded form subordinate debt service. (7) Subordinate Debt Service,Parity and Subordinate Debt Service Coverage,and Balance Available for Capital Projects have been amended for 2006. TRUCKEE DONNER PUD 1915 ACT DISTRICT FISCAL YEAR 2008/09 ANNUNL,,. RE-,r0RJ' NOVEMBER2008 WILLDAN Financial Services 27368 Via lndusfria Lancaster, CA Phoenix, AZ Suite 110 Oakland, CA Orlando, FL Temecula, CA 92590 Sacramento, CA Seattle, WA Tel: (951)587-3500 Memphis, TN Tel: (800)755-6864 Fax:(951)587-3510 www.wilidan.com VVWILLDAN Financial Services Truckee Donner PUD Donner Lake Water Assessment District 00-1 4 ,.;, »= „_ � S Wl- i. � 4.. sa _ y ''�`r .' •. ,xtie, t }"" sue.._ ry Mary Chapman Administrative Services Manager/Treasurer Truckee Donner Public Utility District P.O. Box 309 Truckee, CA 96160 Phone(530)582-3906 Fax(530)587-5056 4y t m; ^� � .y x a � as ! It _ a Glary-s jo Medir'ta Senior Pro)ect Manager Willdon Financial Services 27368 Via Indus#ria, Suite 110 Temecula, CA 92590 Phone(951)587-3500 Fax(951)587.3510 gmedina@wilidan.com www.wilidan.corn ;r Gnny Grudzinski Analyst 11 W lldan Financial 27368 Via Industria, Suite 110 Temecula. CA 92590 Phone(951)587-3532 Fax(951)587-3510 ggrudzinski@wilidan,corn www.wilJdan.com ' yl �,Lowe ;Terence ssocia#es152 Eureka Road Suite 100 Roseville, CA 95661 Phone (916)786-0685 1;1�'MAf tMINI- u, r a Hugh Black BNY Western Trust 700 South Flower Las Angeles. CA Phone(21:3)630-6243 AD 00-1 Fiscal Year 2008/09 Annual Report Page 1 of 1 VVWILLDAN 'i Financial Services I Truckee Donner PUD Donner Lake Water Assessment District 00-1 z--n'-, 0 r", L V, FISCAL YEAR 2008/09 LEVY AMOUNTS NEVADA COUNTY ISM- z' A `5 11540 $753,491.68 .1. 7 $3,388.84 $756,880,52 PLACER COUNTY 1 51 152 $74,453.80 0 1 10-00 $74,453. TOTAL NEVADA AND PLACER COUNTIES mer I;692 $827.94 .48 7 $3,388,84 �$8311334.32 DELINQUENCY SUMMARY NEVADA COUNTY 4. 33,074.27 4.35 48.729.70 0.01 PLACER COUNTY V- 3,380-17 A-54 7,025.23 1.86 For a more comprehensive summary, please see the Delinquency Management tab of this report. AD 00-1 Fiscal Year 2008/09 Annual Report Page 1 of 1 4% WILLDAN N/Financial Services Truckee Donner PUD Donner Lake Water Assessment District 00-1 T?d'v SUMMARY The following table shows formation proceeding information and applicable bond issue information for the District: P, 711V NO Resolution of Formation of the District 2001-04. Date of Resolution of Formation of the District Februa 12, 2001 County Fund Number- Nevada 035 County Fund Number - Placer 873011 SYNTHESIS OF PROCEEDINGS The Municipal Improvement Act of 1913 (Streets and Highways Code Section 10000 et seq., the "1913 Act") contains provision for establishing Assessment Districts. Upon formation of the Assessment District, the 1915 Act (Streets and Highways Code Section 8500 et seq., the "1915 Act") governs the issuance of the bonds and the ongoing administration of the district. Proceeds of the sale of assessment bonds may be used to finance a broad range of local public improvements, mostly related to public infrastructure facilities. An Assessment District is not a separate legal entity; it has no separate governing board and no authority to act independently of the local agency that established it. FINANCED FACILITIES The project involves the Truckee Donner Public Utility District acquiring, operating and maintaining the Donner Lake water system, which is currently being operated by the Donner Lake Water Company. The project also involves rehabilitating the water system to provide reliable and safe water for domestic use and fire protection. The purpose of the project is to improve service to Donner Lake water system customers. AD 00-1 Fiscal Year 2008/09 Annual Report Page 1 of 1 " WI LLDAN Financial Services Truckee-Donner Public Utility District Donner Lake Water Assessment District 00-1 A SESSMENT METHODOLOGY Every developable parcel of land within the assessment district benefits from the new water system. Even though every parcel benefits from the new water system, not all parcels benefit to the same degree. In order to determine the benefit relationship between the parcels a "Dwelling Unit Equivalent" (DUE) factor was also assigned to every parcel. For calculation purposes the residential dwelling unit was considered as the basic unit of measure and the other land uses were compared to it through the use of the DUE factor. The DUE factor for a residential dwelling unit is 1.0. The table below shows the DUE factors for the land use types found within the assessment district boundary. Residential Unit 1.00 Commercial Acre 4.28 Miscellaneous Parcel 1.00 Vacant, Buildable Parcel 1.00 Vacant, Non-Buildable Parcel 0.00 The DUE totals are then used to calculate how much of the project cost is assigned to each parcel. In this district, there are two different DUE totals; one for all the construction components excluding the 8" distribution piping, and one solely for the 8" distribution piping component. The DUE total for all the construction components is 2,014 and the DUE for the 8" distribution piping component is 1,890. All parcels will pay their fair share for all the construction components except for the 125 parcels that have existing water infrastructure. These 125 parcels will not pay for the 8" distribution piping. Therefore, the remaining construction costs, excluding the 8" distribution piping, is $8,386,683. District-wide there are 2,014 DUEs that benefit from these items. The assessment per DUE equals $4,164.38. The 8" distribution piping component cost is $5,218,317, the construction cost plus it's share of the engineering plus contingency. There are 1,890 DUEs that benefit from this construction item. Therefore, the assessment amount per DUE for the distribution piping is $2,761.15. AD 00-1 Fiscal Year 2008/09Annual Report Page 1 of 1 Truckee Donner PUD Donner Lake Water Assessment District 00-1 -Nevada ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 6/19/2001 First Coupon: 7/2/2002 First Maturity: 7/2/2002 ;3`�e'rt# �' _."Kza�a�;'+k^z 7 - -�; +5 ';i��" t '�'t°�$4 xt .ax'•� � "5`.:�� � '=?, -�;� �"�`'r"''`',,•��`�-�fY r;. a�� .,, �'" - E�� �'+k.�`, ��� `, °.s °,� ,�,�.,.,,b, „-,�,n .'�. 'y �•`� ��•'� ,s,.�i.t � - . r"`S��'.d�.�r..=az&..,.�,-:'.-�;r�,ar� _ 't��,".'3',:;� .. -".. 7/2/2002 3.50000% $385,927.75 $395,780.95 $781,708.70 $781,708.70 1/2/2003 184,239.75 184,239.75 7/2/2003 3.50000% 399,435.22 184,239.75 583,674.97 767,914.72 1/2/2004 177,249.64 177,249.64 7/2/2004 3.50000% 413,415.46 177,249.64 590,665.10 767,914.74 1/2/2005 170,014.87 170,014.87 7l2/2005 3.50000% 427,885.00 170,014.87 597,899.87 767,914.74 1/2/2006 162,526.88 162,526.88 7/2/2006 3.50000% 442,860.67 162,526.88 605,387.55 767,914.43 1/2/2007 154,776.82 154,776.82 7/2/2007 10.81827% 458,361.10 154,776.82 613,137.92 767,914.74 1/2/2008 129,983.44 129,983.44 7/2/2008 3.10000% 487,487.16 129,983.44 617,470.60 747,454.04 1/2/2009 122,427.39 122,427.39 7/2/2009 3.10000% 502,599.26 122,427.39 625,026.65 747,454.04 1/2/2010 114,637.10 114,637.10 7/2/2010 3.10000% 518,179.84 114,637.10 632,816.94 747,454.04 1/2/2011 106,605.31 106,605.31 7/2/2011 3.10000% 534,243.41 106,605.31 640,848.72 747,454.03 1/2/2012 98,324.54 98,324.54 7/2/2012 3.10000% 550,804.96 98,324.54 649,129.50 747,454.04 1/2/2013 89,787.06 89,787.06 7/2/2013 3.10000% 567,879.91 89,787.06 657,666.97 747,454.03 1/2/2014 80,984.93 80,984.93 7/2/2014 3.10000% 585,484.19 80,984.93 666,469.12 747,454.05 1/2/2015 71,909.92 71,909.92 7/2/2015 3.10000% 603,634.20 71,909.92 675,544.12 747,454.04 1/2/2016 62,553.59 62,553.59 7/2/2016 3.10000% 622,346.86 62,553.59 684,900.45 747,454.04 1/2/2017 52,907.21 52,907.21 7/2/2017 3.10000% 641,639.61 52,907.21 694,546.82 747,454.03 1/2/2018 42,961.80 42,961.80 7/2/2018 3.10000% 661,530.44 42,961.80 704,492.24 747,454.04 1/2/2019 32,708.08 32,708.08 7/2/2019 3.10000% 682,037.88 32,708.08 714,745.96 747,454.04 1/2/2020 22,136.49 22,136.49 7/2/2020 3.10000% 703,181.06 22,136.49 725,317.55 747,454.04 1/2/2021 11,237 18 11,237 18 7/2/2021 3.10000% 724,979 67 11,237 18 736,216 85 747,454 03 r F tstaPdiin Princi al $7,898,541.29ee Princi al 3,015,372.71rnci al 0.00 tulda Bond Issue $10,913,914.00 Willdan Financial Services Fiscal Year 2008/09 Annual Report Page 1 of 1 Truckee Donner PUD Donner Lake Water Assessment District 00-1 - Placer ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 6/19/2001 First Coupon: 7/2/2002 First Maturity: 7/2/2002 aY`�'Y •�."t s .���` . ,�E3�N 3"'",' ` d��.,.("a`Y� s' r .} ,._,���'�,' ''4. ��� `." � _ a`"T'a'"'�"#��-�1 rr'� ` � "�`s: �,,..�'.,..m,y.,. 2-.;.. s.A :.{� "`�`' -r.. „" �..'s,,,:,.f..a'z _¢���:� �uw-: "'.�.+« �_ ' �,...�.,. a ..,.xu�.. �+f�,t��.�"'W 5.. ` a€ ,:�r•3,_ 7/2/2002 3.50000% $37 428.9$ $38,384.59 $75,813.57 $75,813.57 1/2/2003 17,868.39 17,868.39 7/2/2003 3.50000% 38,738.99 17,868.39 56,607.38 74,475.77 1/2/2004 17,190.45 17,190.45 7/2/2004 3.50000% 40,094.86 17,190.45 57,285.31 74,475.76 1/2/2005 16,488.79 16,488.79 7/2/2005 3.50000% 41,498.18 16,488.79 57,986.97 74,475.76 1/2/2006 15,762.58 15,762.58 7/2/2006 3.50000% 42,950.62 15,762.58 58,713.20 74,475.78 1/2/2007 15,010.94 15,010.94 7/2/2007 10.81827% 44,453.89 15,010.94 59,464.83 74,475.77 1/2/2008 12,606.37 12,606.37 7/2/2008 3.10000% 47,278.66 12,606.37 59,885.03 72,491.40 1/2/2009 11,873.55 11,873.55 7/2/2009 3.10000% 48,744.30 11,873.55 60,617.85 72,491.40 1/2/2010 11,118.01 11,118.01 7/2/2010 3.10000% 50,255.37 11,118.01 61,373.38 72,491.39 1/2/2011 10,339.06 10,339.06 7/2/2011 3.10000% 51,813.29 10,339.06 62,152.35 72,491.41 1/2/2012 9,535.95 9,535.95 7/2/2012 3.10000% 53,419.50 9,535.95 62,955.45 72,491.40 1/2/2013 8,707.95 8,707.95 7/2/2013 3.10000% 55,075.51 8,707.95 63,783.46 72,491.41 1/2/2014 7,854.28 7,854.28 7/2/2014 3.10000% 56,782.85 7,854.28 64,637.13 72,491.41 1/2/2015 6,974.14 6,974.14 7/2/2015 3.10000% 58,543.12 6,974.14 65,517.26 72,491.40 1/2/2016 6,066.72 6,066.72 7/2/2016 3.10000% 60,357.95 6,066.72 66,424.67 72,491.39 1/2/2017 5,131.18 5,131.18 7/2/2017 3.10000% 62,229.05 5,131.18 67,360.23 72,491.41 1/2/2018 4,166.63 4,166.63 7/2/2018 3.10000% 64,158.15 4,166.63 68,324.78 72,491.41 1/2/2019 3,172.17 3,172.17 7/2/2019 3.10000% 66,147.05 3,172.17 69,319.22 72,491.39 1/2/2020 2,146.89 2,146.89 7/2/2020 3.10000% 68,197.61 2,146.89 70,344.50 72,491.39 1/2/2021 1,089 83 1,089 83 7/2/2021 3.10000% 70,311.74 1,089 83 71,401 57 72,491.40 IL F utstanP Princi al $766,035.49 aturedrinci al 292,444.11 Plledci al 0.00Btand Issue $1,058,479.60 Willdan Financial Services Fiscal Year 2008/09 Annual Report Page 1 of 1 rWILLDAN Financial Services Truckee Donner PUD Donner Lake Water Assessment District 00-1 Debt Variance Analysis compares what will be levied for a District each year until maturity of the District, to future interest and principal payments due to bondholders for the remaining life of the bonds. The amount to be levied for a District is the sum of the Revised District Amortization Schedules for each of the remaining active parcels in the District. The future debt service payments due to bondholders are determined by the revised debt service schedule for the bonds (net of bond calls). The Annual Levy vs. Debt Service Projections report included in this report illustrates this analysis. There are three basic variance patterns that emerge over the life of the typical assessment district. These variances are caused primarily by two factors. The first type of variance is an over-levy, and occurs when future scheduled levy amounts exceed future debt service requirements creating a positive variance. This situation arises because surplus funds of some type are used to reduce the outstanding debt for the District by calling bonds early. The reduction in outstanding debt reduces future debt service payments. However, the number of parcels being levied and their associated liens remain the same; so future scheduled annual assessments do not change. The result is an annual levy that exceeds the amount required for debt service, and is a normal occurrence following this type of bond call. In order to offset this type of variance, credits can be applied annually to the levy. This will reduce annual assessments for property owners in the district and equalize projected levies with scheduled debt service payments. The second type of variance is an under-levy, or negative variance. This variance arises because future scheduled levies of principal and interest will not be sufficient to meet future debt service requirements. This situation occurs when assessment liens for parcels in a district are prepaid in full, and a corresponding bond call is not performed. Ordinarily, a bond call should be performed as soon as possible following a prepayment, using the monies received by the Agency. This bond call will correct the negative variance. In some cases however, this bond call may be delayed for various reasons and the variance will persist. Until the bond call can be executed, annual debt service payments for the bonds will remain the same. However, the parcels that prepaid can no longer be levied, so the amount that can be collected to pay debt service is reduced. In this situation, it is critical that bonds be called as soon as possible in order to correct the variance. Prepayment funds will remain in the redemption fund and be used to offset the annual variance until bonds are called. Between the receipt of the prepayment and the bond call (January/March 2 or July/September 2) it is AD 00-1 Fiscal Year 2008/09 Annual Report Page 1 of 2 N/WILLDAN Financial Services 1 imperative that these funds be set aside for a bond call, and not erroneously applied as a surplus credit to the annual levy. The third type of variance is one in which there will be over levies in some of the remaining years and under levies in others. This variance may result from the execution of a bond call following the receipt of prepayments. When a bond call is performed using prepayment funds, a variance will almost always result. This is because in order to retire outstanding debt, bonds must be called in even increments (in most cases $1,000 or $5,000), yet prepayments are typically received in odd amounts. As a result, it is usually not possible to retire an amount of principal that exactly matches the amount of the prepayments that were received. Nor is it possible to select bonds for redemption from various maturities in such a way that the spread of principal in the revised debt service schedule corresponds exactly to the original debt service schedule. As a result, from the time of the first prepayment, there will always be a variance between future levies and scheduled debt service. Again, this is a normal occurrence and will not affect the District's ability to meet its debt service commitments. Generally, surplus funds collected during years where positive variances exist, along with interest earnings on Redemption Funds, will provide sufficient funds to offset reduced collections during years where under levies occur. AD 00-1 Fiscal Year 2008/09 Annual Report Page 2 of 2 Truckee Donner PUD Donner Lake Water Assessment District 00-1 - Nevada ANNUAL LEVY vs. DEBT SERVICE PROJECTIONS 2008/09 $496,742.20 $242,001.33 $738,743.53 $502,599.26 $244,854.78 $747,454.04 2009/10 $512,141.22 $226,602.31 $738,743.53 $518,179.84 $229,274.20 $747,454.04 2010/11 $528,017.62 $210,725.90 $738,743.53 $534,243.41 $213,210.62 $747,454.03 2011/12 $544,386.21 $194,357.46 $738,743.67 $550,804.96 $196,649.08 $747,454.04 2012/13 $561,262.10 $177,481.43 $738,743.53 $567,879.91 $179,574.12 $747,454.03 2013/14 $578,661.30 $160,082.24 $738,743.54 $585,484.19 $161,969.86 $747,454.05 2014/15 $596,599.73 $142,143.79 $738,743.53 $603,634.20 $143,819.84 $747,454.04 2015/16 $615,094.35 $123,649.17 $738,743.53 $622,346.86 $125,107.18 $747,454.04 2016/17 $634,162.30 $104,581.22 $738,743.53 $641,639.61 $105,814.42 $747,454.03 2017/18 $653,821.34 $84,922.20 $738,743.54 $661,530.44 $85,923.60 $747,454.04 2018/19 $674,089.83 $64,653.70 $738,743.52 $682,037.88 $65,416.16 $747,454.04 2019/20 $694,986.63 $43,757.03 $738,743.66 $703,181.06 $44,272.98 $747,454.04 2020/21 $716,533.09 $22,212.45 $738,745.54 $724,979.67 $22,474.36 $747,454.03 n act. Willdan Financial Services Fiscal Year 2008/09 Annual Report Page 1 of 1 Truckee Donner PUD Donner Lake Water Assessment District 00-1 - Placer ANNUAL LEVY vs. DEBT SERVICE PROJECTIONS �- ' L •i ..EMn(.�.. .�'.�-;: "S#, t #• -: ,� "` r*..`� - .c. _ahr, E "^x', � �`,^rt'�.. _ "`gar-3c�x e�,�.: �+�'� 2sY,,� ..n - 2008/09 $48,106.40 $23,436.33 $71,542.73 $48,744.30 $23,747.10 $72,491.40 2009/10 $49,597.70 $21,945.03 $71,542.73 $50,255.37 $22,236.02 $72,491.39 2010/11 $51,135.23 $20,407.51 $71,542.75 $51,813.29 $20,678.12 $72,491.41 2011/12 $52,720.43 $18,822,32 $71,542.75 $53,419.50 $19,071.90 $72,491.40 2012/13 $54,354.77 $17,187.98 $71,542.75 $55,075.51 $17,415.90 $72,491.41 2013/14 $56,039.76 $15,502.99 $71,542.75 $56,782.85 $15,708.56 $72,491.41 2014/15 $57,777.00 $13,765.75 $71,542.75 $58,543.12 $13,948.28 $72,491.40 2015/16 $59,568.08 $11,974.66 $71,542.73 $60,357.95 $12,133.44 $72,491.39 2016/17 $61,414.69 $10,128.06 $71,542.75 $62,229.05 $10,262.36 $72,491.41 2017118 $63,318.54 $8,224.20 $71,542.75 $64,158.15 $8,333.26 $72,491.41 2018/19 $65,281.42 $6,261.31 $71,542.73 $66,147.05 $6,344.34 $72,491.39 2019/20 $67,305.15 $4,237.58 $71,542.73 $68,197.61 $4,293.78 $72,491.39 2020/21 $69,391.73 $2,151.12 $71,542.85 $70,311.74 $2,179.66 $72,491.40 �i E i M' . Willdan Financial Services Fiscal Year 2008/09 Annual Report Page 1 of 1 WILLDAN Financial Services Truckee Donner PUD Donner Lake Water Assessment District 00-1 - Nevada DELINQUENCY MANAGEMENT SUMMARY Willdan Financial Services has performed the following Delinquency Monitoring Actions since July 1, 2007: P. Reminder Letter February 14, 2008 74 Demand Letter June 5, 2008 47 Reminder Letter June 5, 2008 39 N CT EE S� REMINDER LETTER Reminds property owner that the special assessment has not been paid, and should be redeemed with the County. DEMAND LETTER Allows property owner to redeem the delinquent amount with the County. However, this letter informs the property owner that the Agency will be stripping the delinquent amount from the County Secured Property Tax Roll, and will pursue Foreclosure actions, if the amount is not paid. HANDBILL INVOICE Reminds property owner that the special assessment has not been paid, and should be redeemed with the Agency. PAYMENT PLAN Repayment schedule negotiated by Willdan Financial Services on behalf of the Agency to cure the delinquency and avoid initiation of judicial foreclosure on installments removed from the Tax Roll. SB 1471 Represents a document recorded at the County Recorder's Office which provides constructive notice to interested parties that a delinquency may exist in a specific Agency's District for-specific parcel(s), in specific tax year(s), that the Agency AD 00-1 Nevada Fiscal Year 2008/09 Annual Report Page 1 of 2 WILLDAN Financial Services j intends to remove from the Tax Roll for collection by the Agency, or by one of its agents; either by direct billing, or through the judicial foreclosure process. STRIP REQUEST The delinquent amount requested to be removed from the County Secured Property Tax Roll. STRIP CONFIRMATION The delinquent amount is confirmed removed from the County Secured Property Tax Roll. FORECLOSURE COMPLETE Foreclosure satisfied and subsequent foreclosure fee invoiced to agency. FORECLOSURE LETTER Informs the property owner that if the delinquent amount is not paid directly to the Agency within 21 days of receipt of the letter, Foreclosure Actions will be pursued. FORECLOSURE REQUEST All remaining delinquent parcels are forwarded to a Foreclosure Attorney. Please note that Delinquency Actions are performed on an installment basis and not on a per parcel basis. AD 00-1 Nevada Fiscal Year 2008/09 Annual Report Page 2 of 2 &/WILLDAN Financial Services Truckee Donner PUD Donner Lake Water Assessment District 00-1 - Placer DELINQUENCY MANAGEMENT SUMMARY Willdan Financial Services has performed the following Delinquency Monitoring Actions since July 1, 2007: n ' r r Reminder Letter Februa 14, 2008 8 .Demand Letter June 5, 2008 4 Reminder Letter June 5, 200$ f g E S', REMINDER LETTER Reminds property owner that the special assessment has not been paid, and should be redeemed with the County. DEMAND LETTER Allows property owner to redeem the delinquent amount with the County. However, this letter informs the property owner that the Agency will be stripping the delinquent amount from the County Secured Property Tax Roll, and will pursue Foreclosure actions, if the amount is not paid. HANDBILL INVOICE Reminds property owner that the special assessment has not been paid, and should be redeemed with the Agency. PAYMENT PLAN Repayment schedule negotiated by Willdan Financial Services on behalf of the Agency to cure the delinquency and avoid initiation of judicial foreclosure on installments removed from the Tax Roll. SB 1471 Represents a document recorded at the County Recorder's Office which provides constructive notice to interested parties that a delinquency may exist in a specific Agency's District for specific parcel(s), in specific tax year(s), that the Agency AD 00-1 Placer Fiscal Year 2008/09 Annual Report Page 1 of 2 , (WILLDAN Financial Services intends to remove from the Tax Roll for collection by the Agency, or by one of its agents; either by direct billing, or through the judicial foreclosure process. STRIP REQUEST The delinquent amount requested to be removed from the County Secured Property Tax Roll. STRIP CONFIRMATION The delinquent amount is confirmed removed from the County Secured Property Tax Roll. FORECLOSURE COMPLETE Foreclosure satisfied and subsequent foreclosure fee invoiced to agency. FORECLOSURE. LETTER Informs the property owner that if the delinquent amount is not paid directly to the Agency within 21 days of receipt of the letter, Foreclosure Actions will be pursued. FORECLOSURE REQUEST All remaining delinquent parcels are forwarded to a Foreclosure Attorney. Please note that Delinquency Actions are performed on an installment basis and not on a per parcel basis. AD 00-1 Placer Fiscal Year 2008/09 Annual Report Page 2 of 2 Lek § s-y 14 2008/09 Budget Worksheet Donner Lake Water Assessment District 00-1 -Nevada Fund Number 35 Principal $483,662.26 $496,742.20 Interest 257,927.09 242,001.33 TOTAL $741,589.35 $738,743.53 ADMINISTRATION COSTS Agency Administration $6,331.76 $3,666.59 Agency Auditor Fees 1,366.28 1,366.28 County Auditor and Assessor Fees 659.80 659.80 Registrar/Transfer/Paying Agent Fees 0.00 1,703.49 Consulting Services 6,286.54 7,349.79 Total Fixed Admin Charge 0.00 0.00 Miscellaneous/Other Fees 0.00 0.00 Delinquency Management Allowance 0.00 0.00 Admin Sub Total 14,644.38 14,745.95 Delinquency Management Allowance 0.00 3,099.91 Escaped Levies(prior delinquencies) 3,555.00 350.87 TOTAL ADMIN $18,199.38 $18,196.73 Total Principal, Interest and Admin Costs $759,788.73 $756,940.25 Fixed Admin Charge per Parcel $0.00 $0.00 CREDITS APPLIED TO LEVY Construction Fund Credit $0.00 $0.00 Reserve Fund Credit 0.00 0.00 Redemption Fund Credit 0.00 0.00 Miscellaneous/Adjustment Credit 0.00 0.00 TOTAL $0.00 $0.00 TOTAL CHARGE Total Charge $759,788.73 $756,940.25 Applied Charge $759,783.54 $756,880.52 Difference(due to rounding) -$5.19 -$59.73 ADDITIONAL INFORMATION Number of Parcels in District 1569 1570 Number of Parcels Charged 1,553 1,547 Statutory Collection Fee $24,463.67 $24,371.81 Admin Costs as a percent of Annual Levy 1.97% 2.00% 2008/09 Budget Worksheet Donner Lake Water Assessment District 00-1 -Placer Fund Number 87301 MAW 3¢x PRINCIPAL AND INTEREST � ,. _ Principal $46,659.95 $48,106.40 Interest 24,882.78 23,436.33 TOTAL $71,542.73 $71,542.73 ADMINISTRATION COSTS Agency Administration $618.92 $358.41 Agency Auditor Fees 133.72 133.72 County Auditor and Assessor Fees 750.00 750.00 Reg istrar/Transfer/Paying Agent Fees 0.00 166.51 Consulting Services 614.50 718.43 Total Fixed Admin Charge 0.00 0.00 Miscellaneous/Other Fees 0.00 0.00 Remaining Statutory Collection Fee 446.02 446.02 Admin Sub Total 2,563.16 2,573.09 Delinquency Management Allowance 0.00 281.54 Escaped Levies(Prior Delinquencies) 360.00 61.71 TOTAL ADMIN $2,923.16 $2,916.34 Total Principal, Interest and Admin Costs $74,465.89 $74,459.07 Fixed Admin Charge per Parcel $0.00 CREDITS APPLIED TO LEVY Construction Fund Credit $0.00 $0.00 Reserve Fund Credit 0.00 0.00 Redemption Fund Credit 0.00 0.00 Miscellaneous/Adjustment Credit 0.00 0.00 TOTAL $0.00 $0.00 TOTAL Total Charge $74,465.89 $74,459.07 Applied Charge $74,464.44 $74,453.80 Difference(due to rounding) -$1.45 -$5.27 1 , • 1 • - • Number of Parcels in District 154 152 Number of Parcels Charged 152 152 Statutory Collection Fee $2,429.44 $2,429.% Admin Costs as a ercent of Annual Le 3.58% 3.60% TRUCKEE DONNER PUD COMMUNITY FACILITIES DISTRICTS FISCAL YEAR 2008/09 ANNUAL REPORT NOVEMBER2008 WILLDAN Financial Services 27368 Via tndustria Lancaster, CA Phoenix, AZ Suite 110 takland,CA Orlando,f L Temecula, CA 92590 Sacramento,CA Seattle,WA Tel (951)587-3500 Memphis, TN Tel: (800)755-6864 Fax:(951)587-3510 www.wilidan.com A(WILLDAN 'l Financial Servirc Truckee Donner PUD Community Facilities District No. 03.1 (Old Greenwood) DISTRICTRJ P T a Mary Chapman Admi,n istrafive Services manager/Treasurer -Truckee Donner Public utility District -P'0'Boer 09 "True!\e+s,CA 96160 Phone(530)582-390 fax(83Q)587-5058 5tdling rrlscn lau#1 8O # v part C rater Drive, t . 1800 ew ott Beach;. A 92660 ar1e 949)T25-�9013 fex J949)`125.4101 tadys Wt ina, Seri Proms Manager lilldah inan�lerrs 7811ia fndustria,,Suite 1{3 l"+ r ei C A 92.591 Phone { ) 7 0 Faxa8 -3510 www.w,II an c r°n . G inny,1-mit nski l+tilidan Financial'Services 2 3.8 Via Indirstri ;Sul 110 �t'emecula,CA 92590 Ph ne(95.11)5$7-3532 F a (951)587-3510 ggrudzinski@w0ldon,c+r m vvw,willdlan room Jacqueline M.Nowak The Bank of New York Trust Company N°:A 700 S dower Street, Suite 500 "Los Angeles,GA 90017 MENNEN=-, Phone(213)630-6408 Fax(213)630-6211 CFD 03-1 (Old Greenwood) Fiscal Year 2008/09 Annual Report Page 1 of 1 W I LLDAN Financial Services Truckee Donner PUD Community Facilities District No. 04.1 (Gray's Crossing) i "R ` MaryChapman Administrative Services lVlanager[Treasurer Truckee Donner Pudic Utility District P.fl,B©x 349 Truckee,CA 96160 Phone,(530)582-3906 N 530)587=5056 Stradting, %C ; rlson FtaUth 8 t} art r er rig e,Ste �#fi00. lewpert$earh,`,CA 92 ifi0 Phone (949)725-4000 l ax;(949)7,25-4100 Mww:s rX m Mad Jicr `� ' Manger ;'Iilldan 1=irlanciletllitS r: f 73188 pia IndustrialSuite 11Q _ eme�li,+ A'9259fl Phone(9541),58 7-3500 '3510 grnedinawilldan.com w�rw�wlldan;a finny Grudzinski Analyst 11 illdan Financial Seryce.S 273fi8 yia lrld Istria:Suite 11t1 Temecula,CA 92590 Phone (951)581-3532 Fax(951)587-351a ggru zinski wilidan.corr� www.willdart corn rAn SEEM Jacqueline M.Nowak 'he Bank of New York Trust Company NI A 700 S,Plower Street,Suite 500 Los Angeles,CA,90017 Phone(213)630-6408 Fax(213)630-6211 CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 1 of 1 40 W I LLDAN Financial Services Truckee Donner PUD Community Facilities District No. 03.1 (Old Greenwood) &I_ I � ._ E VV FISCAL YEAR 2008/09 LEVY AMOUNTS 18 $C)11�,583. ILl V WOO $f3UV,583.. 0 ACCOUNT SUMMARY Adrriinistrati re EPnpnse Fund 013252 18,568.80 Ma 31, 2 8 Interest'Account9013284 420,85.83 Ma 31, 2008 S + cial'1'ac`Fund01 55 $25,26.12 Way 31, 2008 ---------------- s. Balar� $1�287,3'8.4{{'�� 31 i u ref r t 1" 44,�00,�13 Abbve Pelow Requirement $42,835t4 BOND CALL SUMMARY There were no bond calls performed during Fiscal Year 2007/08. The outstanding bond amount as of September 3, 2008 is $12,240,000.00. DELINQUENCY SUMMARY 8,219.16 1.08 8,219,16 1.08 For a more comprehensive summary, please see the Delinquency Management tab of this report. CFD 03-1 (Old Grenwood) Fiscal Year 2008/09 Annual Report Page 1 of 1 WI LLDAN 'j Financial Services Truckee Donner PUD Community Facilities District No. 04-1 (Gray's Crossing) FISCAL YEAR 2008/09 LEvY AMOUNTS 388 $_2,026,119.78 $0.00 $2,026,119.76 ACCOUNT SUMMARY Admtn strat ve Ex e SAS Fc nc 9113262: $ 8,211 6 Ma 31, Q08 Interest Fund91132fi4 $1,093,fi02,37 IUIa 31, 2008 S ec al Tax Fund 91'132 $341234.29 -May,31, 2008 Ei B lanc $3 234,775 75 lie wire ent ,241,809.87 Above Be c rnr Re u rerr nt $7,0 .' BOND CALL. SUMMARY There were no bond calls performed during Fiscal Year 2007/08. The outstanding bond amount as of September 3, 2008 is $34,325,000.00. Series 2004-1 $15,325;x00Q.00 Series 2005-1 19,000,000.00 Tr�tal utsta rding IBond $34,325,000.00 CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 1 of 2 WILLDAN Financial Services y DELINQUENCY SUMMARY $42,471.68 , 25,071.02 For a more comprehensive summary, please see the Delinquency Management tab of this report. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 2 of 2 /WILLDAN I Financial Services i Truckee Donner PUD Community Facilities District No. 03-1 (Old Greenwood) F RA MilE WORK SUMMARY The following table shows formation proceeding information and applicable bond issue information for the District: Resolution of intention to Establish August 6, 2003 Date of Resolution of intention to Establish, 2003-46 Resolution/Ordinance of Formation of the District October 14,2003 mate of Resolution of Formation of the district Decerhbir-22, 03 bate o Bond Issue (Dated Date December 221 2003 Final l atur September 1, 2033 Authorized Debt Amount Amount of Bond Issue 12,445,000.100 interest.Rate Rene 2.25-6: Flo Bond Call Notice 3Ci da Redemption Rremiurn O-3°l Reserve Fund Re uiremet 1,24 ,500 ,00 Count Fund Number 508 SYNTHESIS OF PROCEEDINGS The Mello-Roos Community Facilities Act ("Act") of 1982 came about as a response to the lack of adequate financing for public capital facilities and services in the post-Proposition 13 era. State Legislators Mello and Roos sponsored this Bill, which was enacted into law by the California Legislature and is now Sections 53311 through 53363 of the California Government Code. The Act authorizes a local governmental agency, such as a school district or city, to form a Community Facilities District ("CFD") within a defined set of boundaries for the purposes of providing public facilities and services. A CFD is formed for financing purposes only, and is governed by the agency that formed it. BOUNDARIES The District consists of approximately 616.2 gross acres located south of Interstate 80 in the eastern portion of the Town of Truckee, California. The District has an irregular shape with mostly level topography. Please see the District Diagram tab for the specific boundaries of the district. CFD 03-1 (Old Greenwood) Fiscal Year 2008/09 Annual Report Page 1 of 4 AVVW1LLDAN Financial Services THE BONDS The Bonds are subject to Mandatory Redemption prior to their stated maturities on any Interest Payment Date from the proceeds of prepayments of Special Taxes, in whole or in part (in integral multiples of $5,000), at a redemption price set forth below, together with accrued interest thereon to the date fixed for redemption. March , 204 through Maroh 1, 2011 'i 03°ln Se tember,1, 2�11, and 'larch 1, 2012 102% Se to b 1, 2012 and March 1 2013 101% Se tember 1, 2013{ and thereafter 100% The bonds are subject to Optional Redemption from sources of funds other than prepayments of the Special Tax prior to their stated maturity as a whole, or in part (in integral multiples of $5,000), in order of maturity selected by the District and by lot within a maturity on any Interest Payment date, at the redemption price as set forth below. G 9 Mares 1 2 thra�a` h 'larh 1, 20' 1, 103 e to 1, 20121 t�2`°� S tert '1 1 d March 1 t 201 '1,0 ° 2t1 ', act thft 1l0°1� The Bonds maturing on September 1, 2022 are subject to mandatory sinking payment redemption in part on September 1, 2021, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments as follows: 2021 $41 t,000 2022*. $5551000 * Final Maturity The Bonds maturing on September 1, 2028 are subject to mandatory sinking payments redemption in part on September 1, 2023, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments a follows. CFD 03-1 (Old Greenwood) Fiscal Year 2008/09 Annual Report Page 2 of 4 WI LLDAN Financial Services :2023 $505,000 2024 $555,000 2025 $610,004 2026 $665,000 2027 $7.30,000 2028 .$795,000 *Final Maturity The Bonds maturing on September 1, 2033 are subject to mandatory sinking payments redemption in part on September 1, 2029, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments a follows. =1 R ii 111 i�!�I i 11:i • a - a 2029 $365;000 2030 $95,000 2031 $1,025, 10Ct 2033 $1,205,000 * Final Maturity The amounts in the foregoing table shall be reduced pro rata by the principal amount of all Term Bonds which are redeemed as a result of any prior partial redemption of Term Bonds. COVENANT FOR JUDICIAL FORECLOSURE The District has covenanted to commence judicial foreclosure proceedings against all parcels where the aggregate delinquent Special Taxes on such parcels is greater than $7,500 by the October 1 following the close of each Fiscal year in which such Special Taxes were due. The District will commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied for such Fiscal year. The District will diligently pursue such foreclosure proceedings until the delinquent special taxes are paid. The District may elect to defer foreclosure proceedings on any parcel which is owned by a delinquent property owner whose property is not, in the aggregate, delinquent in the payment for a period of three years or more or in an amount in excess of$12,000 so long as the amount in the Reserve Account of the Special Tax Fund is at lest equal to the Reserve CFD 03-1 (Old Greenwood) Fiscal Year 2008/09 Annual Report Page 3 of 4 k/WILLDAN Financial Services Requirement, and the District is not in default in the payment of the principal of or interest on the Bonds. FINANCED FACILITIES The Facilities authorized to be acquired by the District with the proceeds of the Bonds consist of various public improvements including water facilities, electrical facilities, fiber which includes fiber optic cables and conduits, roadways, and storm drain facilities. The facilities include certain real or other tangible property to serve the area located within the CFD, including all furnishings, equipment and appurtenances related thereto. Financed facilities include acquisition or construction of the following public improvements: water supply and distribution and fire suppression; electrical supply and distribution facilities; public roadways including but not limited to medians, curbs, gutters, sidewalks, traffic signals, street signage, street lighting, pavement striping and any associated landscaping and erosion control; public access parks and trails; storm drains and flood control facilities; telephone and telecommunications facilities; any other public improvements identified in accordance with the Development Agreement between the Truckee Donner Public Utility District and Old Greenwood, LLC pertaining to the Old Greenwood development project. As well as any soft cost associated with the design and construction of the above described improvements including but not limited to engineering, environmental review, inspection, surveying and staking, and environmental mitigation. CFD 03-1 (Old Greenwood) Fiscal Year 2008/09 Annual Report Page 4 of 4 ' WILLDAN FinancialServices Truckee Donner PUD Community Facilities District No. 04-1 (Gray's Crossing) FRAMEWORK SUMMARY The following table shows formation proceeding information and applicable bond issue information for the District: ReSolu Lion'of Ir�tention a Establish 2004=02 I esotution/Ort nance of Form ation of the District �tlt -30 C a#e t f R sc{c or of F rr ton of the District _July:2'�, 004 eyes 4t A.Bond Date'of Band Issue Gated Date) tember 142t44 Find aturit 5e tember 1, 2035 Amount of t�ond Issue ' ;3503(3. 0 Interi t date Ra .2 - . 3° Bonet MI Notice.- �_ c Red en ticn Prrr�iur Reserve_ ur�d a uirer ent tntnd IS Um . er O �3+�nd date of Bond Issue' Dated date �l 3 . 0�►5 Final Iaturit Se tember ; 20 Amo+ nt o issue" : 9 55,0f 3 Interest date Rah Bond< all Ic(ice0 da s' Re ien fib I�'r6mlum Reserve I'ur I Re u IMe r ent 1,�49 0 8,9�' Count Fund Nufber 61 7' SYNTHESIS OF PROCEEDINGS The Mello-Roos Community Facilities Act ("Act") of 1982 came about as a response to the lack of adequate financing for public capital facilities and services in the post-Proposition 13 era. State Legislators Mello and Roos sponsored this Bill, which was enacted into law by the California Legislature and is now Sections 53311 through 53363 of the California Government Code. The Act authorizes a local governmental agency, such as a school district or city, to form a Community Facilities District ("CFD") within a defined set of boundaries for the purposes of providing public facilities and services. A CFD is formed for financing purposes only, and is governed by the agency that formed it. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 1 of 5 V1/ILLDAN ' Financial Services BOUNDARIES The District consists of approximately 757.2 gross acres located south of Interstate 80 in the eastern portion of the Town of Truckee, California on both the east and west sides of State Highway 89. The District has an irregular shape with mostly level topography with some gently sloping and undulating areas. Please see the District Diagram tab for the specific boundaries of the district. THE BONDS SERIES 2004 BOND The Bonds are subject to Redemption prior to their stated maturities on any Interest Payment Date from the proceeds of prepayments of Special Taxes, in whole or in part (in integral multiples of $5,000), at a redemption price set forth below, together with accrued interest thereon to the date fixed for redemption. March , 2004 throu h March 412 103° e tember 1, 2Q1.2, and :March 1, 2f�13 102% Se ten-i 1, 2013, and l air h , 2014 101% ternber l 2014;and thereafter 10t °lo * The bonds are subject to Optional Redemption from sources of funds other than prepayments of the Special Tax prior to their stated maturity as a whole, or in part (in integral multiples of $5,000), in order of maturity selected by the District and by lot within a maturity on any Interest Payment date, at the redemption price as set forth below. II Mill 7Maf.-, 20 4 through !larch 1,2012 l ar 11 2012, and March 1, 2013 102% Se temper 1, 2013, and'Mar'ch 1, 201 101°Yo September,1, 2a14, and thereafter 10Q°1Q The Bonds maturing on September 1, 2029 are subject to mandatory sinking payments redemption in part on September 1, 2023, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments a follows. z -: _ ,. a 3 ,x. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 2 of 5 I (W I LLDAN Financial Services 2023 $515,000 2024 $570,000 2025 $625000 2026 $690,000 2027 $755,000 2028 $825,000 2029' $895000 *Final Maturity The Bonds maturing on September 1, 2033 are subject to mandatory sinking payments redemption in part on September 1, 2029, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments a follows. -2 30 $975,000 2031., % $1;060,00 2032 $1,150,000 2033 1- 245,000 r 2034 $1,345,000 2035* $1,455,000 * Final Maturity The amounts in the foregoing table shall be reduced pro rata by the principal amount of all Term Bonds which are redeemed as a result of any prior partial redemption of Term Bonds. SERIES 2005 BOND The Bonds are subject to Redemption prior to their stated maturities on any Interest Payment Date from the proceeds of prepayments of Special Taxes, in whole or in part (in integral multiples of $5,000), at a redemption price set forth below, together with accrued interest thereon to the date fixed for redemption. 7et 1, 2004 through March,1, 2013 103% nbec 1, 2013 and March 14 2014 102°l0 .September ber 1, 2014, and March 1, 2015 101% September 1, 2015, and thereafter 100° The bonds are subject to Optional Redemption from sources of funds other than prepayments of the Special Tax prior to their stated maturity as a whole, or in part (in integral multiples of $5,000), in order of maturity selected by the District and by lot within a maturity on any Interest Payment date, at the redemption price as set forth below. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 3 of 5 IA(WILLDAN Financial Services P 4 A 1. March 1, 2004 throu h March 1, 2013 1011/4 September 1, 2013, and March 1, 2014 102°l� Se tember 1, 2014 and March , 2015 101% September 1, 2015, and thereafter 100% The Bonds maturing on September 1, 2025 are subject to mandatory sinking payments redemption in part on September 1, 2021, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments a follows. 2- 2 2022 $5 ,000 2023 $650000 2024 $715000; 2025* $780,000 *Final Maturity The Bonds maturing on September 1, 2030 are subject to mandatory sinking payments redemption in part on September 1, 2026, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments a follows. 20 $850000 20?7 025,00 2028 2029 000 * Final Maturity The Bonds maturing on September 1, 2035 are subject to mandatory sinking payments redemption in part on September 1, 2031, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium, from sinking fund payments a follows. NEW- 2031 $1;275,0�0 2032 $1,375,000 2033 $1,480 000 2034 $1,6001000 2035' $1,715,000 * Final Maturity CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 4 of 5 1&/WILLDAN Financial Services The amounts in the foregoing table shall be reduced pro rata by the principal amount of all Term Bonds which are redeemed as a result of any prior partial redemption of Term Bonds. COVENANT FOR JUDICIAL FORECLOSURE The District has covenanted to commence judicial foreclosure proceedings against all parcels where the aggregate delinquent Special Taxes on such parcels is greater than $7,500 by the October 1 following the close of each Fiscal year in which such Special Taxes were due. The District will commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied for such Fiscal year. The District will diligently pursue such foreclosure proceedings until the delinquent special taxes are paid. The District may elect to defer foreclosure proceedings on any parcel which is owned by a delinquent property owner whose property is not, in the aggregate, delinquent in the payment for a period of three years or more or in an amount in excess of $12,000 so long as the amount in the Reserve Account of the Special Tax Fund is at lest equal to the Reserve Requirement, and the District is not in default in the payment of the principal of or interest on the Bonds. FINANCED FACILITIES The Facilities authorized to be acquired by the District with the proceeds of the Bonds consist of various public improvements including water facilities, electrical facilities, sewer, roads, storm drains, natural gas facilities, power line relocation, highway improvements and fiber infrastructure which includes fiber optic cables and conduits. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 5 of 5 *DWI LLDAN Financial Services TRUCKEE DONNER PUBLIC UTILITY DISTRICT COMMUNITY FACILITIES DISTRICT NO. 03-1 (OLD GREENWOOD) RATE AND M; k HOP, OF APPORTiONMENT MAXIMUM SPECIAL TAX Single Family Detached Property The Maximum Special Tax for Single Family Detached Property in Zone 1 for Fiscal Year 2004-05 is $3,000 per SFD Lot. The Maximum Special Tax for Single Family Detached Property in Zone 2 for Fiscal Year 2004-05 is $3,400 per SFD Lot. On July 1, 2005 and on each July 1 thereafter, these Maximum Special Tax rates shall be increased by an amount equal to two percent (2%) of the amount in effect for the prior Fiscal Year. Single Family Attached Property The Maximum Special Tax for Single Family Attached Property in Zone 1 for Fiscal Year 2004-05 is $3,000 per Unit. The Maximum Special Tax for Single Family Attached Property in Zone 2 for Fiscal Year 2004-05 is $3,400 per Unit. On July 1, 2005 and on each July 1 thereafter, these Maximum Special Tax rates shall be increased by an amount equal to two percent (2%) of the amount in effect for the prior Fiscal Year. Taxable Other Property The Maximum Special Tax for Taxable Other Property shall be the amount needed on a per-acre basis to maintain the Maximum Special Tax that was assigned to the Parcel prior to the Parcel becoming Taxable Other Property. After the Maximum Special Tax has been determined for a Parcel of Taxable Other Property, the Maximum Special Tax shall be increased each Fiscal Year thereafter by an amount equal to two percent (2%) of the amount in effect the prior Fiscal Year. Undeveloped Property The Maximum Special Tax for Undeveloped Property for Fiscal Year 2004-05 is $11,325 per Acre. On July 1, 2005 and on each July 1 thereafter, this Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the prior Fiscal Year. Pursuant to Section 53321(d)of the Act,the Special Tax levied against a Parcel used for private residential purposes shall under no circumstances increase more than ten percent(10%)as a consequence of delinquency or default by the owner of any other Parcel or Parcels and shall,in no event,exceed the Maximum Special Tax in effect for the Fiscal Year in which the Special Tax is being levied. CFD 03-1 (Old Greenwood) Fiscal Year 2008/09Annual Report Page 1 of 4 &/WILLDAN Financial Services BACK-UP FORMULA The Maximum Special Taxes set forth above were calculated based on the Expected Land Uses at CFD Formation. The Administrator shall review Tentative Map revisions and other changes to the land uses proposed within the CFD and compare the revised land uses to the Expected Land Uses to evaluate the impact on the Expected Maximum Special Tax Revenues. In addition, the Administrator shall review Final Maps to ensure they reflect the number of residential lots that was anticipated in the Tentative Map. If, prior to the Final Bond Sale, a change to the Expected Land Uses is proposed that will result in a reduction in the Expected Maximum Special Tax Revenues, no action will be needed as long as the reduction in Expected Maximum Special Tax Revenues does not reduce debt service coverage on outstanding Bonds below the amount committed to in the Bond documents. If a Land Use/Entitlement Change is proposed after the Final Bond Sale, the following steps shall be applied: Step 1: By reference to Attachment 1, the Administrator shall identify the Expected Maximum Special Tax Revenues for CFD No. 03-1; Step 2: The Administrator shall calculate the Maximum Special Tax revenues that could be collected from property in the CFD if Land Use/Entitlement Change is approved; Step 3: If the amount determined in Step 2 is higher than that calculated in Step 1, the Land Use/Entitlement Change may be approved without further action. If the revenues calculated in Step 2 are less than those calculated in Step 1, and if: (a) The landowner does not withdraw the request for the Land Use/Entitlement Change that was submitted to the Town; or (b) Before approval of the Land Use/Entitlement Change, the landowner requesting the Land Use/Entitlement Change does not prepay a portion of the Special Tax for the CFD in an amount that corresponds to the lost Maximum Special Tax revenue, as determined by applying the steps set forth in Section H below; or (c) The Land Use/Entitlement Change proposes that a Parcel of Single Family Detached Property or Single Family Attached Property be developed as another land use (other than Public Property), and the landowner requesting the Change fails to submit a written request to the TDPUD to designate the Parcel as Taxable Other Property, thereby maintaining the Expected Maximum Special Tax Revenues for the Parcel;then, the amount of the prepayment determined in Step 3.b shall be allocated on a per-acre basis and CFD 03-1 (Old Greenwood) Fiscal Year 2008/09Annual Report Page 2 of 4 WI LLDAN Financial Services included on the next property tax bill for all Assessor's Parcels within the property affected by the Land Use/Entitlement Change. The amount allocated to each Assessor's Parcel shall be added to and, until paid, shall be a part of, the Maximum Special Tax for the Assessor's Parcel. If multiple Land Use/Entitlement Changes are proposed at one time (which may include approval of multiple Final Maps at one time), the Administrator may consider the combined effect of all the Changes to determine if there is a reduction in Expected Maximum Special Tax Revenues that necessitates implementation of Step 3.b or 3.c. If, based on this analysis, the Administrator determines that there is a reduction in Expected Maximum Special Tax Revenue, and all of the Land Use/Entitlement Changes are being proposed by the same land owner, the Administrator shall determine the required prepayment (pursuant to Step 3.b) by analyzing the combined impact of all of the proposed Land Use/Entitlement Changes. If the Administrator analyzes the combined impact, and the Town subsequently does not approve one or more of the Land Use/Entitlement Changes that was proposed, the Administrator shall once again apply the three steps set forth above to determine the combined impact of those Land Use/Entitlement Changes that were approved simultaneously by the Town. If, based on the comprehensive analysis, the Administrator determines that there is a reduction in Expected Maximum Special Tax Revenue, and the Land Use/Entitlement Changes are not all being proposed by the same land owner, the Administrator shall consider the proposed Land Use/Entitlement Changes individually to determine the required prepayment from each owner. METHOD OF LEVY OF THE SPECIAL.TAX Each Fiscal Year, the Administrator shall determine the Special Tax Requirement to be collected in that Fiscal Year, and the Special Tax shall be levied according to the steps outlined below. Step 1: The Special Tax shall be levied Proportionately on each Parcel of Developed Property within the CFD up to 100% of the Maximum Special Tax for each Parcel for such Fiscal Year until the amount levied on Developed Property is equal to the Special Tax Requirement prior to applying any Capitalized Interest that is available in the CFD accounts. Step 2: If additional revenue is needed after Step 1, and after applying Capitalized Interest to the Special Tax Requirement, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property within the CFD, up to 100% of the Maximum Special Tax for Undeveloped Property for such Fiscal Year determined pursuant to Section C; CFD 03-1 (Old Greenwood) Fiscal Year 2008/09Annual Report Page 3 of 4 WILLDAN Financial Services Step 3: If additional revenue is needed after applying the first two steps, the Special Tax shall be levied Proportionately on each Parcel of Association Property within the CFD, up to 100% of the Maximum Special Tax for Undeveloped Property for such Fiscal Year determined pursuant to Section C; Step 4: If additional revenue is needed after applying the first three steps, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Excess Public Property, exclusive of property exempt from the Special Tax pursuant to Section G below, up to 100% of the Maximum Special Tax for Undeveloped Property for such Fiscal Year determined pursuant to Section C. CFD 03-1 (Old Greenwood) Fiscal Year 2008/09Annual Report Page 4 of 4 WI LLDAN Financial Services TRUCKEE DONNER PUBLIC UTILITY DISTRICT COMMUNITY FACILITIES DISTRICT NO. 04-1 (GRAYS CROSSING) MAXIMUM SPECIAL TAX Single Family Detached Property The Maximum Special Tax for Single Family Detached Property in Zone 1 for Fiscal Year 2004-05 is shown in the table below. f Greater then 22,00fl S Ft $3,300 $4, 25 20,001 t02,000 S Ft $3, 00 $4,000 18,00 f 2000 S Ft 3, 00 $3,875 16,001 tc '�S,000 S Ft $3'0 $3,750 1 , 0 t .'0,000 Ft . 2,g0f3 " $3,6 121001 to 14,000 S Ft 2,300 #o-12,000 S Ft $2 700 $3,375 .ass than 8,000 S Ft $1,800 $1,800 * On July 9, 2005 and on each July 1 thereafter, the Maximum Special Taxes shown in the table above shall be increased by an amount equal to 2%of the amount in effect for the prior fiscal Year. The square footage of SFD Lots shall be determined by reference to County Assessor's Parcel Maps or, to the extent such Maps do not reflect square footage of the SFD Lots, by reference to the lot size summary provided by the engineering firm that produced the Final Map. Single Family Attached Property The Maximum Special Tax for Single Family Attached Property in Zone 1 for Fiscal Year 2004-05 is $1,200 per Unit. The Maximum Special Tax for Single Family Attached Property in Zone 2 for Fiscal Year 2004-05 is $3,400 per Unit. On July 1, 2005 and on each July 1 thereafter, these Maximum Special Tax rates shall be increased by an amount equal to two percent (2%) of the amount in effect for the prior Fiscal Year. Loft Units The Maximum Special Tax for Loft Units for Fiscal Year 2004-05 is $1,200 per Unit. On July 1, 2005 and on each July 1 thereafter, this Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the prior Fiscal Year. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 1 of 4 WI LLDAN *'O'Financial Services Non-Residential Property The Maximum Special Tax for Non- Residential Property for Fiscal Year 2004-05 is $2.50 per square foot of Building Square Footage. On July 1, 2005 and on each July 1 thereafter, this Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the prior Fiscal Year. Undeveloped Property The Maximum Special Tax for Undeveloped Property for Fiscal Year 2004-05 is $17,500 per acre. On July 1, 2005 and on each July 1 thereafter, this Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the prior Fiscal Year. BACK-UP FORMULA The Maximum Special Taxes set forth in Section C above were calculated based on the Expected Land Uses at CFD Formation. The Administrator shall review Tentative Map revisions and other changes to the land uses proposed within the CFD and compare the revised land uses to the Expected Land Uses to evaluate the impact on the Expected Maximum Special Tax Revenues. In addition, the Administrator shall review Final Maps to ensure they reflect the number of residential lots that was anticipated in the Tentative Map. If, prior to the Final Bond Sale, a change to the Expected Land Uses (a "Land Use/Entitlement Change") is proposed that will result in a reduction in the Expected Maximum Special Tax Revenues, no action will be needed pursuant to this Section D as long as the reduction in Expected Maximum Special Tax Revenues does not reduce debt service coverage on outstanding Bonds below the amount committed to in the Bond documents. Upon approval of the Land Use/Entitlement Change, the Administrator shall update Attachment 1 to show the reduced Expected Maximum Special Tax Revenues, and the reduced Expected Maximum Special Tax Revenues shall be the amount used to determine the amount of the Final Bond Sale. If a Land Use/Entitlement Change is proposed after the Final Bond Sale, the following steps shall be applied: Step 1: By reference to Attachment 1 (which will be updated by the Administrator each time a Land Use/Entitlement Change has been processed according to this Section D), the Administrator shall identify the Expected Maximum Special Tax Revenues for CFD No. 04-1. Step 2: The Administrator shall calculate the Maximum Special Tax revenues that could be collected from property in the CFD if the Land Use/Entitlement Change is approved. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 2 of 4 W1LLDAN ' Financial Services Step 3: If the amount determined in Step 2 is higher than that calculated in Step 1, the Land Use/Entitlement Change may be approved without further action. If the revenues calculated in Step 2 are less than those calculated in Step 1, and if: (a) The landowner does not withdraw the request for the Land Use/Entitlement Change that was submitted to the Town; or (b) Before approval of the Land Use/Entitlement Change, the landowner requesting the Land Use/Entitlement Change does not prepay a portion of the Special Tax for the CFD in an amount that corresponds to the lost Maximum Special Tax revenue, as determined by applying the steps set forth in Section H below; or The Land Use/Entitlement Change proposes that a Parcel of Single Family Detached Property or Single Family Attached Property be developed as another land use (other than Public Property), and the landowner requesting the Land Use/Entitlement Change fails to submit a written request to the TDPUD to designate the Parcel as Taxable Other Property, thereby maintaining the Expected Maximum Special Tax Revenues for the Parcel; then, the amount of the prepayment determined in Step 3.b shall be allocated on a per-acre basis and included on the next property tax bill for all Assessor's Parcels within the property affected by the Land Use/Entitlement Change. The amount allocated to each Assessor's Parcel shall be added to and, until paid, shall be a part of, the Maximum Special Tax for the Assessor's Parcel. If multiple Land Use/Entitlement Changes are proposed at one time (which may include approval of multiple Final Maps), the Administrator may consider the combined effect of all the Land Use/Entitlement Changes to determine if there is a reduction in Expected Maximum Special Tax Revenues that necessitates implementation of Step 3.b or 3.c. If, based on this analysis, the Administrator determines that there is a reduction in Expected Maximum Special Tax Revenue, and all of the Land Use/Entitlement Changes are being proposed by the same land owner, the Administrator shall determine the required prepayment (pursuant to Step 3.b) by analyzing the combined impact of all of the proposed Land Use/Entitlement Changes. Notwithstanding the foregoing, if the Administrator analyzes the combined impacts of multiple Land Use/Entitlement Changes, and the Town subsequently does not approve one or more of the Land Use/Entitlement Changes that was proposed, the Administrator shall once again apply the three steps set forth above to determine the combined impact of those Land Use/Entitlement Changes that were approved simultaneously by the Town. If, based on the comprehensive analysis, the Administrator determines that there is a reduction in Expected Maximum Special Tax Revenue, and the Land Use/Entitlement Changes are not all being proposed by the same land owner, the Administrator shall consider the proposed Land Use/Entitlement Changes individually to determine the required prepayment from each owner. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 3 of 4 , 111/1 LLDAN Financial Services METHOD OF LEVY OF THE SPECIAL. TAX Each Fiscal Year, the Administrator shall determine the Special Tax Requirement to be collected in that Fiscal Year, and the Special Tax shall be levied according to the steps outlined below. Step 1: The Special Tax shall be levied Proportionately on each Parcel of developed Property within the CFD that is Single Family Detached Property, Single Family Attached Property, or a Loft Unit up to 100% of the Maximum Special Tax for each Parcel for such Fiscal Year until the amount levied on such Developed Property is equal to the Special Tax Requirement prior to applying any Capitalized Interest that is available in the CFD accounts. Step 2: If additional revenue is needed after Step 1, and after applying Capitalized Interest to the Special Tax Requirement, the Special Tax shall be levied Proportionately on each Parcel of Developed Property within the CFD that is Non-Residential Property up to 100% of the Maximum Special Tax for such Developed Property for such Fiscal Year determined pursuant to Section C. Step 3: If additional revenue is needed after Step 2, the Special Tax.shall be levied Proportionately on each Parcel of Developed Property within the CFD that is Golf Course Property up to 100% of the Maximum Special Tax for such Developed Property for such Fiscal Year determined pursuant to Section C. Step 4: If additional revenue is needed after Step 3, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property within the CFD, up to 100% of the Maximum Special Tax for Undeveloped Property for such Fiscal Year determined pursuant to Section C. Step 5: If additional revenue is needed after Step 4, the Special Tax shall be levied Proportionately on each Parcel of Association Property within the CFD, up to 100% of the Maximum Special Tax for Undeveloped Property for such Fiscal Year determined pursuant to Section C. Step 6: If additional revenue is needed after Step 5, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Excess Public Property, exclusive of property exempt from the Special Tax pursuant to Section G below, up to 100% of the Maximum Special Tax for Undeveloped Property for such Fiscal Year determined pursuant to Section C. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 4 of 4 Truckee Donner PUD Community Facilities District No. 03-1 (Old Greenwood) ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 12/22/2003 First Coupon: 3/1/2004 First Maturity: 9/1/2005 3/1/2004 $0.00 $0.00 9/1/2004 2.25000% 0.00 0.00 0.00 0.00 3/1/2005 0.00 0.00 9/1/2005 2.25000% 10,000.00 0.00 10,000.00 10,000.00 3/1/2006 0.00 0.00 9/1/2006 2.50000% 25,000.00 0.00 25,000.00 25,000.00 3/1/2007 360,233.75 360,233.75 9/1/2007 2.80000% 40,000.00 360,233.75 400,233.75 760,467.50 3/1/2008 359,673.75 359,673.75 9/1/2008 3.10000% 55,000.00 359,673.75 414,673.75 774,347.50 3/1/2009 358,821.25 358,821.25 9/1/2009 3.45000% 70,000.00 358,821.25 428,821.25 787,642.50 3/1/2010 357,613.75 357,613.75 9/1/2010 3.80000% 90,000.00 357,613.75 447,613.75 805,227.50 3/1/2011 355,903.75 355,903.75 9/1/2011 4.15000% 110,000.00 355,903.75 465,903.75 821,807.50 3/1/2012 353,621.25 353,621.25 9/1/2012 4.50000% 130,000.00 353,621.25 483,621.25 837,242.50 3/1/2013 350,696.25 350,696.25 9/1/2013 4.80000% 155,000.00 350,696.25 505,696.25 856,392.50 3/1/2014 346,976.25 346,976.25 9/1/2014 5.00000% 180,000.00 346,976.25 526,976.25 873,952.50 3/1/2015 342,476.25 342,476.25 9/1/2015 5.10000% 205,000.00 342,476.25 547,476.25 889,952.50 3/1/2016 337,248.75 337,248.75 9/1/2016 5.20000% 235,000.00 337,248.75 572,248.75 909,497.50 3/1/2017 331,138.75 331,138.75 9/1/2017 5.30000% 265,000.00 331,138.75 596,138.75 927,277.50 3/1/2018 324,116.25 324,116.25 9/1/2018 5.45000% 295,000.00 324,116.25 619,116.25 943,232.50 3/1/2019 316,077.50 316,077.50 9/1/2019 5.60000% 330,000.00 316,077.50 646,077.50 962,155.00 3/1/2020 306,837.50 306,837.50 9/1/2020 5.70000% 5,000.00 365,000.00 306,837.50 671,837.50 978,675.00 3/1/2021 296,435.00 296,435.00 9/1/2021 5.90000% 5,000.00 405,000.00 296,435.00 701,435.00 997,870.00 3/1/2022 284,487.50 284,487.50 9/1/2022 5.90000% 5,000.00 450,000.00 284,487.50 734,487.50 1,018,975.00 3/1/2023 271,212.50 271,212.50 9/1/2023 6.00000% 5,000.00 500,000.00 271,212.50 771,212.50 1,042,425.00 3/1/2024 256,212.50 256,212.50 9/1/2024 6.00000% 5,000.00 550,000.00 256,212.50 806,212.50 1,062,425.00 3/1/2025 239,712.50 239,712.50 9/1/2025 6.00000% 5,000.00 605,000.00 .239,712.50 844,712.50 1,084,425.00 3/1/2026 221,562.50 221,562.50 9/1/2026 6.00000% 5,000.00 660,000.00 221,562.50 881,562.50 1,103,125.00 3/1/2027 201,762.50 201,762.50 9/1/2027 6.00000% 5,000.00 725,000.00 201,762.50 926,762.50 1,128,525.00 3/1/2028 180,012.50 180,012.50 9/1/2028 6.00000% 5,000.00 790,000.00 180,012.50 970,012.50 1,150,025.00 3/1/2029 156,312.50 156,312.50 9/1/2029 6.10000% 5,000.00 860,000.00 156,312.50 1,016,312.50 1,172,625.00 3/1/2030 130,082.50 130,082.50 9/1/2030 6.10000% 5,000.00 940,000.00 130,082.50 1,070,082.50 1,200,165.00 3/1/2031 101,412.50 101,412.50 9/1/2031 6.10000% 5,000.00 1,020,000.00 101,412.50 1,121,412.50 1,222,825.00 Willdan Financial Services Fiscal Year 2008109 Annual Report Page 1 of 2 Truckee Donner PUD Community Facilities District No. 03-1 (Old Greenwood) ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 12/22/2003 First Coupon: 3/1/2004 First Maturity: 9/1/2005 -�. 3/1/2032 70,302.50 70,302.50 9/1/2032 6.10000% 5,000.00 1,110,000.00 70,302.50 1,180,302.50 1,250,605.00 3/1/2033 36,447.50 36,447.50 9/1/2033 6.10000% 10,000.00 1,195,000.00 36,447.50 1,231,447.50 1,267,895.00 Outstanding Principal $12,240,000.00 Matured Principal 130,000.00 Called Principal 75,000.00 Total Bond Issue $12,445,000.00 Willdan Financial Services Fiscal Year 2008/09 Annual Report Page 2 of 2 Truckee Donner PUD Community Facilities District No. 04-1 (Gray's Crossing) ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 9/14/2004 First Coupon: 3/1/2005 First Maturity: 9/1/2007 3/1/2005 $403,724.82 $403,724.82 9/1/2005 3.25000% 0.00 435,152.50 435,152.50 838,877.32 3/1/2006 435,152.50 435,152.50 9/1/2006 3.25000% 0.00 435,152.50 435,152.50 870,305.00 3/1/2007 435,152.50 435,152.50 9/1/2007 3.25000% 15,000.00 435,152.50 450,152.50 885,305.00 3/1/2008 434,908.75 434,908.75 9/1/2008 3.50000% 35,000.00 434,908.75 469,908.75 904,817.50 3/1/2009 434,296.25 434,296.25 9/1/2009 3.90000% 50,000.00 434,296.25 484,296.25 918,592.50 3/1/2010 433,321.25 433,321.25 9/1/2010 4.15000% 70,000.00 433,321.25 503,321.25 936,642.50 3/1/2011 431,868.75 431,868.75 9/1/2011 4.35000% 95,000.00 431,868.75 526,868.75 958,737.50 3/1/2012 429,802.50 429,802.50 9/1/2012 4.65000% 115,000.00 429,802.50 544,802.50 974,605.00 3/1/2013 427,128.75 427,128.75 9/1/2013 4.75000% 140,000.00 427,128.75 567,128.75 994,257.50 3/1/2014 423,803.75 423,803.75 9/1/2014 4.90000% 170,000.00 423,803.75 593,803.75 1,017,607.50 3/1/2015 419,638.75 419,638.75 9/1/2015 5.00000% 200,000.00 419,638.75 619,638.75 1,039,277.50 3/1/2016 414,638.75 414,638.75 9/1/2016 5.10000% 230,000.00 414,638.75 644,638.75 1,059,277.50 3/1/2017 408,773.75 408,773.75 9/1/2017 5.20000% 260,000.00 408,773.75 668,773.75 1,077,547.50 3/1/2018 402,013.75 402,013.75 9/1/2018 5.30000% 295,000.00 402,013.75 697,013.75 1,099,027.50 3/1/2019 394,196.25 394,196.25 9/1/2019 5.40000% 335,000.00 394,196.25 729,196.25 1,123,392.50 3/1/2020 385,151.25 385,151.25 9/1/2020 5.50000% 375,000.00 385,151.25 760,151.25 1,145,302.50 3/1/2021 374,838.75 374,838.75 9/1/2021 5.60000% 420,000.00 374,838.75 794,838.75 1,169,677.50 3/1/2022 363,078.75 363,078.75 9/1/2022 5.70000% 465,000.00 363,078.75 828,078.75 1,191,157.50 3/1/2023 349,826.25 349,826.25 9/1/2023 5.75000% 515,000.00 349,826.25 864,826.25 1,214,652.50 3/1/2024 335,020.00 335,020.00 9/1/2024 5.75000% 570,000.00 335,020.00 905,020.00 1,240,040.00 3/1/2025 318,632.50 318,632.50 9/1/2025 5.75000% 625,000.00 318,632.50 943,632.50 1,262,265.00 3/1/2026 300,663.75 300,663.75 9/1/2026 5.75000% 690,000.00 300,663.75 990,663.75 1,291,327.50 3/1/2027 280,826.25 280,826.25 9/1/2027 5.75000% 755,000.00 280,826.25 1,035,826.25 1,316,652.50 3/1/2028 259,120.00 259,120.00 9/1/2028 5.75000% 825,000.00 259,120.00 1,084,120.00 1,343,240.00 3/1/2029 235,401.25 235,401.25 9/1/2029 5.75000% 895,000.00 235,401.25 1,130,401.25 1,365,802.50 3/1/2030 209,670.00 209,670.00 9/1/2030 5.80000% 975,000.00 209,670.00 1,184,670.00 1,394,340.00 3/1/2031 181,395.00 181,395.00 9/1/2031 5.80000% 1,060,000.00 181,395.00 1,241,395.00 1,422,790.00 3/1/2032 150,655.00 150,655.00 9/1/2032 5.80000% 1,150,000.00 150,655.00 1,300,655.00 1,451,310.00 Willdan Financial Services Fiscal Year 2008/09 Annual Report Page 1 of 2 Truckee Donner PUD Community Facilities District No. 04-1 (Gray's Crossing) ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 9/14/2004 First Coupon: 3/1/2005 First Maturity: 9/1/2007 Ilk - 5 fr. 3/1/2033 117,305.00 117,305.00 9/1/2033 5.80000% 1,245,000.00 117,305.00 1,362,305.00 1,479,610.00 3/1/2034 81,200.00 81,200.00 9/1/2034 5.80000% 1,345,000.00 81,200.00 1,426,200.00 1,507,400.00 3/1/2035 42,195.00 42,195.00 9/1/2035 5.80000% 1,455,000.00 42,195.00 1,497,195.00 1,539,390.00 k• - Outstanding Principal $15,325,000.00 Matured Principal 50,000.00 Called Principal 0.00 Total Bond Issue $15,375,000.00 Willdan Financial Services Fiscal Year 2008/09 Annual Report Page 2 of 2 Truck ee Donner PUD t CFD 04-1 (Gray's Crossing) ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 09/14/04 First Coupon: 03/01/05 First Maturity: 09/01/07 SEMI-ANNUAL IOTALANNUAL PAYMENT INTEREST :PRINOPAL DUE RATE DUE DUE PAYMENT 03/01/05 $403,724.82 $403,724.82 09/01/05 3.25000% $0.00 435,152.50 435,152.50 $838,877.32 03/01/06 435,152.50 435,152.50 1 09/01/06 3.25000% 0.00 435,152.50 435,152.50 870,305.00 03/01/07 435,152.50 435,152.50 09/01/07 3.25000% 15,000.00 435,152.50 450,152.50 885,305.00 03/01/08 434,908.75 434,908.75 09/01/08 3.50000% 35,000.00 434,908.75 469,908.75 904,817.50 03/01/09 434,296.25 ' 434,296.25 09/01/09 3.90000% 50,000.00 434,296.25 484,296.25 918,592.50 03/01/10 433,321.25 433,321.25 09/01/10 4.15000% 70,000.00 1 433,321.25 503,321.25 936,642.50 03/01/11 431,868.75 431,868.75 09/01/11 s 4.35000% 95,000.00 431,868.75 526,868.75 i 958,737.50 03/01/12 429,802.50 429,802.50 09/01/12 4.65000% 115,000.00 429,802.50 544,802.50 974,605.00 03/01/13 427,128.75 427,128.75 09/01/13 4.75000% 140,000.00 427,128.75 567,128.75 994,257.50 03/01/14 423,803.75 423,803.75 09/01/14 4.90000% 170,000.00 423,803.75 593,803.75 1,017,607.50 03/01/15 419,638.75 419,638.75 09/01/15 5.00000% 200,000.00 419,638.75 619,638.75 1,039,277.50 03/01/16 414,638.75 1 414,638.75 09/01/16 5.10000% 230,000.00 414,638.75 644,638.75 1,059,277.50 03/01/17 408,773.75 408,773.75 09/01/17 5.20000% 260,000.00 408,773.75 668,773.75 1,077,547.50 03/01/18 402,013.75 402,013.75 09/01/18 5.30000% 295,000.00 402,013.75 697,013.75 1,099,027.50 03/01/19 394,196.25 394,196.25 09/01/19 5.40000% 335,000.00 394,196.25 729,196.25 1,123,392.50 03/01/20 385,151.25 385,151.25 09/01/20 5.50000% 375,000.00 1 385,151.25 760,151.25 j 1,145,302.50 03/01/21 9 374,838.75 374,838.75 ° ' 74 .75 794 838.75 1,169,677.50 09101/21 5.60000/o � 420,000.00 3 ,838 03/01/22 363,078.75 363,078.75 09/01/22 5.70000% 465,000.00 363,078.75 828,078.75 1,191,157.50 03/01/23 349,826.25 349,826.25 09/01/23 5.75000% 515,000.00 349,826.25 864,826.25 i 1,214,652.50 03/01/24 335,020.00 335,020.00 09/01/24 5.75000% 570,000.00 335,020.00 905,020.00 1,240,040.00 03/01/25 318,632.50 ( 318,632.50 09/01/25 5.75000% 625,000.00 318,632.50 1 943,632.50 1,262,265.00 03/01/26 300,663.75 300,663.75 09/01/26 5.75000% 1 690,000.00 300,663.75 ( 990,663.75 1 1,291,327.50 03/01/27 280,826.25 280,826.25 09/01/27 5.75000% 755,000.00 280,826.25 q 1,035,826.25 1 1,316,652.50 Printed on:September 17,2008 at 8:38 Page 1 of 2 Truckee Donner PUD CFD 04-1 (Gray's Crossing) ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 09/14/04 First Coupon: 03/01/05 First Maturity: 09/01/07 TIOTAL ANNUAL DUE RATErWE PAYMENT PAYMENT 03/01/28 $259,120.00 $259,120.00 09/01/28 5.75000% , 825,000.00 i 259,120.00 1,084,120.00 1,343,240.00 03/01/29 235,401.25 235,401.25 09/01/29 5.75000% 895,000.00 235,401.25 1,130,401.25 1,365,802.50 03/01/30 209,670.00 209,670.00 09/01/30 5.80000% 975,000.00 209,670.00 1,184,670.00 1,394,340.00 03/01/31 f 181,395.00 i 181,395.00 09/01/31 5.80000% 1,060,000.00 181,395.00 1,241,395.00 1,422,790.00 03/01/32 150,655.00 150,655.00 09/01/32 5.80000% 1,150,000.00 150,655.00 1,300,655.00 1,451,310.00 03/01/33 117,305.00 117,305.00 09/01/33 5.80000% 1,245,000.00 117,305.00 1,362,305.00 1,479,610.00 03/01/34 81,200.00 j 81,200.00 09/01/34 5.80000% ( 1,345,000.00 81,200.00 6 1,426,200.00 1,507,400.00 03/01/35 I 42,195.00 42,195.00 09/01/35 5.80000% 1,455,000.00 42,195.00 1,497,195.00 1,539,390.00 Totals: Ott 00 S20,0842732 $36,033,227.32 Printed on:September 17,2008 at 8:38 Page 2 of 2 Truckee Donner PUD CFD 05-1(Gray's Crossing) REVISED DEBT SERVICE SCHEDULE Dated Date: 07/13/05 First Coupon: 09/01/05 First Maturity: 09/01/07 Matured Debt I 09/01/05 3.50000% $0.00 $131,191.33 ! $131,191.33 1 $131,191.33 03/01/06 491,967.50 491,967.50 09/01/06 3.50000% 0.00 491,967.50 491,967.50 983,935.00 03/01/07 491,967.50 491,967.50 09/01/07 3.50000% 50,000.00 491,967.50 541,967.50 ! 1,033,935.00 03/01/08 491,092.50 491,092.50 09/01/08 3.62500% 70,000.00 491,092.50 561,092.50 1,052,185.00 Outstanding Debt 03/01/09 489,823.75 489,823.75 525,873.75 j Bond Call j 35,000.00 Prem. 3.000% 1,050.00 3.75000% 100,000.00 488,898.75 588,898.75 1,114,772.50 09/01/09 03/01/10 487,023.75 487,023.75 09/01/10 4.00000% 125,000.00 487,023.75 612,023.75 1,099,047.50 03/01/11 484,523.75 484,523.75 09/01/11 4.00000% 150,000.00 484,523.75 634,523.75 1,119,047.50 03/01/12 j 481,523.75 481,523.75 09/01/12 4.12500% 180,000.00 481,523.75 661,523.75 1,143,047.50 03/01/13 j ! 477,811.25 477,811.25 09/01/13 4.25000% 210,000.00 477,811.25 j 687,811.25 1,165,622.50 03/01/14 473,348.75 473,348.75 09/01/14 4.37500% 240,000.00 ; 473,348.75 713,348.75 1,186,697.50 03/01/15 468,098.75 468,098.75 09/01/15 4.50000% 275,000.00 468,098.75 743,098.75 1,211,197.50 03/01/16 461,911.25 461,911.25 09/01/16 4.62500% 310,000.00 461,911.25 771,911.25 ! 1,233,822.50 03/01/17 454,742.50 454,742.50 09/01/17 4.75000% 355,000.00 454,742.50 809,742.50 1,264,485.00 03/01/18 446,311.25 446,311.25 09/01/18 4.75000% 395,000.00 446,311.25 841,311.25 1,287,622.50 03/01/19 436,930.00 436,930.00 09/01/19 4.87500% 440,000.00 436,930.00 876,930.00 1,313,860.00 03/01/20 j 426,205.00 426,205.00 09/01/20 j 5.00000% 485,000.00 426,205.00 911,205.00 1,337,410.00 03/01/21 j 414,080.00 414,080.00 09/01/21 5.20000% 535,000.00 414,080.00 949,080.00 1,363,160.00 03/01/22 400,170.00 400,170.00 09/01/22 5.20000% 595,000.00 400,170.00 995,170.00 1,395,340.00 03/01/23 384,700.00 384,700.00 09/01/23 5.20000% 650,000.00 384,700.00 1,034,700.00 1,419,400.00 03/01/24 j 367,800.00 367,800.00 09/01/24 5.20000% 715,000.00 367,800.00 1,082,800.00 1,450,600.00 03/01/25 349,210.00 349,210.00 09/01/25 5.20000% 780,000.00 349,210.00 1,129,210.00 1,478,420.00 Printed on:September 17,2008 at 8:40 Page 1 of 2 Truckee Donner PUD CFD 05-1(Gray's Crossing) REVISED DEBT SERVICE SCHEDULE Dated Date: 07/13/05 First Coupon: 09/01/05 First Maturity: 09/01/07 eTOTAL PRINCIPALDUE RATE VUE 03/01/26 7 $328,930.00 $328,930.00 09/01/26 1 5.25000% j 850,000.00 328,930.00 1,178,930.00 1,507,860.00 03/01/27 306,617.50 306,617.50 09/01/27 1 5.25000% 925,000.00 ! 306,617.50 1,231,617.50 1,538,235.00 03/01/28 282,336.25 282,336.25 09/01/28 j 5.25000% 1,005,000.00 282,336.25 1,287,336.25 1,569,672.50 03/01/29 255,955.00 255,955.00 09/01/29 5.25000% $5,000.00 1,085,000.00 255,955.00 1,340,955.00 1,596,910.00 03/01/30 227,473.75 227,473.75 09/01/30 1 5.25000% 5,000.00 1,175,000.00 227,473.75 1,402,473.75 1,629,947.50 03/01/31 ! 196,630.00 196,630.00 09101/31 5.30000% 5,000.00 1,270,000.00 196,630.00 1,466,630.00 1,663,260.00 03/01/32 ! 162,975.00 162,975.00 09/01/32 j 5.30000% 5,000.00 1,370,000.00 162,975.00 1,532,975.010 1,695,950.00 03/01/33 126,670.00 126,670.00 09/01/33 5.30000% 5,000.00 1,475,000.00 126,670.00 1,601,670.00 1,728,340.00 03/01/34 87,582.50 87,582.50 09/01/34 5,30000% ! 5,000.00 ! 1,595,000.00 87,582.50 1,682,582.50 1,770,165.00 03/01/35 45,315.00 45,315.00 i 09/01/35 5.30000% 5,000.00 1,710,000.00 45,315.00 1,755,315.00 1,800,630.00 Total • $35,000X0 !B l B f t 1 E $19,048,472.50 B: B Outstanding !• • Outstanding Principal $19,000,000.00 Matured Principal $120,000.00 Called Principal $35,000.00 Total Bond Issue $19,155,000.00 Page 2 of 2 Printed on:September 17,2008 at 8:40 `N/WILLDAN Financial Services tR t '4 6 $ �, s b spit 161 a 0,sb •rexc _ N 4 LLi�M s �e+se � assr� 7 u Fels +e.uw.w s t N A X ��2-- N �< CFD 03-1 (Old Greenwood) Fiscal Year 2008109 Annual Report Page 1 of 1 MENTIFICATION OF TAX ZONES FOR PROPOSEb Ct)#IAMUNIM FACtl,.tT7- I)T,2 RTCT NO,04 1 {FRAYS CRO55IN6) TR aFF NIt"R PUBLIC UTTLr,,Y bI"STRTC T CP,)VNTY OF WVAOA ' STATE 4F CALVOR A t �r a VECTWTV MAID 2 ek `% 4 F LEGEND: V (' c c-u t cr) ai US o"n't cv s ZONE tar r" �i6t�'sF++�vAtt'r q4"F.4 I"AS thy' 40 ItT7M'IMW SGITT SAM CRAB%AUS'?.ek 0...994a W I LLDAN Financial Services Truckee Donner PUD Community Facilities District No. 03-1 (Old Greenwood) DELINQUENCY MANAGEMENT SUMMARY Willdan Financial Services has performed the following Delinquency Monitoring Actions since July 1, 2007: SB17 J�.II 2007 fie nest Rent vaal from C> n 'Tax Roll July 31 2007 4 S - trip CoOrrptifton A ugust 17,2007 Fer to sure Letter -:Aug'st 20- 2{07 Reminder Lester.. Februa 1 , 2008 ` 1 Demand Letter June 5 2008 � RerinlnderLetter ' June 5 2008 7 , F REMINDER LETTER Reminds property owner that the special assessment has not been paid, and should be redeemed with the County. DEMAND LETTER Allows property owner to redeem the delinquent amount with the County. However, this letter informs the property owner that the Agency will be stripping the delinquent amount from the County Secured Property Tax Roll, and will pursue Foreclosure actions, if the amount is not paid. HANDBILL INVOICE Reminds property owner that the special assessment has not been paid, and should be redeemed with the Agency. PAYMENT PLAN Repayment schedule negotiated by Willdan Financial Services on behalf of the Agency to cure the delinquency and avoid initiation of judicial foreclosure on installments removed from the Tax Roll. CFD 03-1 (Old Greenwood) Fiscal Year 2008/09 Annual Report Page 1 of 2 W 1 LLDAN � Financial Services SIB 1471 Represents a document recorded at the County Recorder's Office which provides constructive notice to interested parties that a delinquency may exist in a specific Agency's District for specific parcel(s), in specific tax year(s), that the Agency intends to remove from the Tax Roll for collection by the Agency, or by one of its agents; either by direct billing, or through the judicial foreclosure process. STRIP REQUEST The delinquent amount requested to be removed from the County Secured Property Tax Roll. STRIP CONFIRMATION The delinquent amount is confirmed removed from the County Secured Property Tax Roll. FORECLOSURE COMPLETE Foreclosure satisfied and subsequent foreclosure fee invoiced to agency. FORECLOSURE LETTER Informs the property owner that if the delinquent amount is not paid directly to the Agency within 21 days of receipt of the letter, Foreclosure Actions will be pursued. FORECLOSURE REQUEST All remaining delinquent parcels are forwarded to a Foreclosure Attorney. Please note that Delinquency Actions are performed on an installment basis and not on a per parcel basis. CFD 03-1 (Old Greenwood) Fiscal Year 2008/09 Annual Report Page 2 of 2 MWILLDAN '°_ _ financial Services Truckee Donner PUD Community Facilities District No. 04-1 (Gray's Crossing) DELINQUENCY MANAGEMENT SUMMARY Willdan Financial Services has performed the following Delinquency Monitoring Actions since July 1, 2007: 581411 Jul 31, 2007 17 Re guest Removal from Cc ut ity Take Roll Jul 31, 2007 IT Stri Confirmation Au ust 17,407 15 i rrecl€Burr ' efter ,August k,2007 1 R mir der Letter Februa 14, 2008 � 19 Delin uenc Re ern Lion Letter vdl 16,;2408 1 Demarnri Letter . Jun6 8, 2008 14 Pe in6er Letter June 5, 408 28 N 0 T E IS REMINDER LETTER Reminds property owner that the special assessment has not been paid, and should be redeemed with the County. DEMAND LETTER Allows property owner to redeem the delinquent amount with the County. However, this letter informs the property owner that the Agency will be stripping the delinquent amount from the County Secured Property Tax Roll, and will pursue Foreclosure actions, if the amount is not paid. DELINQUENCY REDEMPTION LETTER Allows property owner to redeem the delinquent amount with the County just prior to stripping the delinquent amount from the County Secured Property Tax Roll. Agency will pursue Foreclosure actions if the amount is not paid. HANDBILL INVOICE Reminds property owner that the special assessment has not been paid, and should be redeemed with the Agency. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 1 of 2 , "`WILLQAN ° Financial Services PAYMENT PLAN Repayment schedule negotiated by Willdan Financial Services on behalf of the Agency to cure the delinquency and avoid initiation of judicial foreclosure on installments removed from the Tax Roll. SIB 1471 Represents a document recorded at the County Recorder's Office which provides constructive notice to interested parties that a delinquency may exist in a specific Agency's District for specific parcel(s), in specific tax year(s), that the Agency intends to remove from the Tax Roll for collection by the Agency, or by one of its agents; either by direct billing, or through the judicial foreclosure process. STRIP REQUEST The delinquent amount requested to be removed from the County Secured Property Tax Roll. STRIP CONFIRMATION The delinquent amount is confirmed removed from the County Secured Property Tax Roll. FORECLOSURE COMPLETE Foreclosure satisfied and subsequent foreclosure fee invoiced to agency. FORECLOSURE LETTER Informs the property owner that if the delinquent amount is not paid directly to the Agency within 21 days of receipt of the letter, Foreclosure Actions will be pursued. FORECLOSURE REQUEST All remaining delinquent parcels are forwarded to a Foreclosure Attorney. Please note that Delinquency Actions are performed on an installment basis and not on a per parcel basis. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 2 of 2 DN/WILLDAN Financial Services Truckee Donner PUD Community Facilities District No. 03-1 (Old Greenwood) SPECIAL IAL A - TES SPECIAL TAX SPREAD The following table summarizes the number of parcels in each land use category according to its' square footage as well as the applied special tax rate for each category. Sin ie Family.detached -Zn+ 1 'I Q2 3327.30 $3 1;224.60 Sln le Family detached Zoh,6 7'S $3,580.2+6 360,6 5.8{} 1,. ndeuelt ed $5,369.19 aCre 7F592.70 Total arcels& Units combined 181 0 9,583,1{ * 14 parcels in Zone 2 contain a total of 39 units MAXIMt1M AND APPLIED SPECIAL TAX RATES The following table summarizes the percent of the Applied Special Tax Rate to the Maximum Special Tax Rate. e a - "Sin le Famil `"o adb -. ohe ;30 312 Single dam" detached =Zane 2 38o,2f 3;F80.28 00� 0° Undeveloped Data Per Acre 2,258. 5,389.19 43.80% APPLIED SPECIAL TAX PROGRESSION The following table summarizes the percent change of Fiscal Year 2008/09 Applied Special Tax Rate as compared to Fiscal Year 2007/08 Applied Special Tax Rate. s s Sin: le Family detached -Zone 1" $3,247.30 $3,183.62 2-00% Single Family detached -Zone 2 $3,680.26 $31608.11 Undeveloped Rate per Acre $5,369.19 $57667.91 -5.27% CFD 03-1 (Old Greenwood) Fiscal Year 2008/09 Annual Report Page 1 of 1 ft/W1 LLDAN Financial Services Truckee Donner PUD Community Facilities District No. 04-1 (Gray's Crossing) SPECIA1.6- TAx RATES SPECIAL TAX SPREAD The following table summarizes the number of parcels in each land use category according to its' square footage as well as the applied special tax rate for each category. ii 1: 11 @ 1 1 1 upilloili �!11 axioile 1:: -Less than 8,000 SF .0 .00 10 $0.00 8,001-112,000,,SF 0 "$10.00 0.00 1-27001-14'M S�F J, ,'$380 21 03 0- . -1, 5M 4 3 B3 1 9 68 3139 14-0 00,,SF, $2 ' $3" _2 47,3D 3-60 32 103 91 '001- SF 16 '46,977." 4 SF ,20,001��22 000 10391 Greater than-22,000 3 $3,512.021 110,716.06 ...Zone' I Total, 101 , $125o053.84 Tax Zone 2: --$ Less than-8, 0,SF 9,741 92 1 653.201 "S, 653.4v q 12,22 1.1-4 6 3i 18$942 A. 114-1001 -SF -:88 , $3,9�3-82 61000 , 915 0 SP 9.12 -300374.88 716,"00 118 00 74,- '05 1810012,0,000 SF 40 14,1944.4 -167 6., 2- 77 80 2. '0011-22 000. -SF , 26 $41329.72 : 112,572-72 Greater than22,000 42 $4,465.02 : .,,,--187,530.84 Zone 2 Total 278 $1,145,889.00 Undeveloped Undeveloped pe 6(Rote r Acre 9 11, 92.41 $555,179)J26. Total 388 $2,026,119.76 One parcel was partially developed. Per EWP 20.12 acres charged as undeveloped. CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 1 of 3 WI LLDAN Financial Services MAxIMUM AND APPLIED SPECIAL TAX RATES The following table summarizes the percent of the Applied Special Tax Rate to the Maximum Special Tax Rate. IN Tax ,tone. thin B4Ofl(3 SF $0.00 $4.(}0 NA' 8,001- 2, 00 SF C#.Qfl $0.00 NA 12�00.1 114 SF `i3; .$D $ 30 t , 3fl ' flg,{ % 14, 0t1-6 0 fl SF $3;11 39,04, $3,139JM 100 00% $3,247,30 $3,247.30 100.{3Q% , ► - g, ttJ SF $3� 55, 4 $3, 55.5430.Q °I -= F $3, 63. '8 $3463180, 0° ' Greater khan n,000 = $3 f 2.42 1 � . 100.1 Tax bane less:than 8, a0- F A 1-2,00 `14; 0 Sit $3,788.SO $ ,�`8&50 100.00% 14, 1= 6,Q S1= $3192 .82 . $ ,92182 100 ,16,001.16 S 12_ 059.12 1 0% 2g,�3►01-=-22,81= $4'329.72 , , f .Df ' titer hari 2-000 �,48 _ 2 �,4f .�� flfl, }�',�� Ztne Tagil Undevelc ed Undevelo ed Rate per.Acre 181 7,1,14 $1,692.41 9.11% CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 2 of 3 jk/ WI LLQAN r Financial Services APPLIED SPECIAL TAx PROGRESSION The following table summarizes the percent change of Fiscal Year 2008/09 Applied Special Tax Rate as compared to Fiscal Year 2007/08 Applied Special Tax Rate. s Tax 1an8 1 Less than.8,009 SF .00 0.00 NA 8,00 -12,000 SF 0.00 $0,W NA 2; t3't-' 4,000 SF 3;'03 .80 1.38 2.00°�� 14,001-1,61000 SF 3,139,N 3,0-7.50 2. 0% 18340O1-18,000 SF $3�247 30 3,183.82 2K 00/0 18,001-205006 SIB $3,355.547 3,289.7 201001=-22,000 SF $3,463.78 $3,395.86 greater than 22, 00 3,572.02 3,5(}1.98 2.00an ins- 1 Total #DiV10! -Tax Zone 2 Less than 8 0005F WNA 8,0t}' - ,300 SI^ 3. t C►,8fi3 CIA 'I2 001- 4,000 S - 3,788;50 :74.2 2.0(?° , 14, 0118, + SF = $3#'923-82 . 3846M 2: 1Me -18, 91- 8 €QO SF $4 08 .12 3 2,00"1 180010SF 4194.42 , 21 Great 1 an 22 00 $4,46 .02too, t $4,377:48 / Zane 2 Totat velopOd Undeveloped ' 1,692.41 $2,525.11< -32.99% CFD 04-1 (Gray's Crossing) Fiscal Year 2008/09 Annual Report Page 3 of 3 wm- 4 EllnF tVIA-f- 2008/09 Budget Worksheet Community Facilities District No. 03-1 (Old Greenwood) Fund Number 608 il 77— w�" PRINCIPAL AND INTEREST Principal $55,000.00 $70,000.00 Interest 719,347.50 717,642.50 TOTAL $774,347.50 $787,642.50 ADMINISTRATION COSTS Agency Administration $0.00 $3,000.00 Agency Auditor Fees 1,500.00 1,500.00 Attorney Fees 0.00 0.00 Office Expenses, Paid by Agency 30.00 30.00 Total Agency Staff and Expenses $4,530.00 $4,530.00 County Auditor and Assessor Fees 175.18 175.18 Registrar/Transfer/Paying Agent Fees 3,000.00 3,000.00 Consulting Services 10,546.95 10,921.53 Delinquency Management Fees 0.00 710.39 Delinquency Management Fees 375.00 $595.50 TOTAL $18,627.13 $19,932.60 Total Principal, Interest and Admin Costs $792,974.63 $807,575.10 ADJUSTMENTS APPLIED TO LEVY Reserve Fund Credit $0.00 $0.00 Special Tax Fund Credit 0.00 0.00 Replenish ment/(Credit) 0.00 0.00 Reserve For Future DQs 40,128.00 40,398.00 Capitalized Interest Credit 0.00 0.00 Miscellaneous/Adjustment Credit (30,538.71) (38,390.00) TOTAL $9,589.29 $2,008.00 TOTAL CHARGE Total Charge $802,563.92 $809,583.10 Applied Charge $802,563.90 $809,583.10 Difference (due to rounding) $0.02 $0.00 ADDITIONAL INFORMATION Number of Active Parcels 181 181 Number of Parcels Levied 181 181 Admin Costs as a percent of Annual Levy 2.32% 2.46% 2008/09 Budget Worksheet Community Facilities District No. 04-1 (Gray's Crossing) Fund Number 617 ,., F. a _.. t s k PRINCIPAL Principal-Series 2004 $35,000.00 $50,000.00 Interest-Series 2004 869,817.50 868,592.50 Principal-Series 2005 70,000.00 100,000.00 Interest-Series 2005 982,185.00 979,647.50 TOTAL $1,957,002.50 $1,998,240.00 ADMINISTRATION COSTS Agency Administration $0.00 $0.00 Finance Manager 0.00 0.00 Accounting Staff 3,000.00 3,000.00 Agency Auditor Fees 1,500.00 1,500.00 Attorney Fees 0.00 0.00 Office Expenses, Paid by Agency 30.00 30.00 Other Expenses, Paid by Agency 0.00 0.00 Total Agency Staff and Expenses $4,530.00 $4,530.00 County Auditor and Assessor Fees 228.10 228.10 Registrar/Transfer/Paying Agent Fees 4,500.00 4,500.00 Consulting Services 10,546.95 13,837.67 Delinquency Management Allowance 0.00 2,404.61 Delinquency Management Allowance 1,110.00 1,069.32 TOTAL $20,915.05 $26,569.70 Total Principal, Interest and Admin Costs $1,977,917.55 $2,024,809.70 ADJUSTMENTSi LEVY Reserve Fund Credit $0.00 $0.00 Special Tax Fund Credit 0.00 0.00 Reserve for future delinquencies 103,430.00 101,310.00 Capitalized Interest Credit 0.00 (100,000.00) Miscellaneous/Adjustment Credit (12,732.43) 0.00 TOTAL $90,697.57 $1,310.00 TOTALCHARGE Total Charge $2,068,615.12 $2,026,119.70 Applied Charge $2,068,614.76 $2,026,119.76 Difference(due to rounding) $0.36 -$0.06 ADDITIONAL INFORMATION Number of Active Parcels 0 0 Number of Parcels Levied 304 388 Admin Costs as a percent of Annual Levy 1.01% 1.31% TRUCKEE DONNER PUBLIC UTILITY DISTRICT FINANCIAL STATEMENTS December 31, 2007 and 2006 TRUCKEE DONNER PUBLIC UTILITY DISTRICT TABLE OF CONTENTS December 31, 2007 and 2006 Independent Auditors' Report 1 Management's Discussion and Analysis 2 - 7 Consolidated Balance Sheets 8 - 9 Consolidated Statements of Revenues, Expenses, and Changes in Net Assets 10 Consolidated Statements of Cash Flows 11 — 12 Notes to Financial Statements 13 — 44 Supplemental Information Consolidating Balance Sheets — 2007 45 — 46 Consolidating Statements of Revenues, Expenses, and Changes in Net Assets 47 Consolidating Statements of Cash Flows 48 — 49 Vi company INDEPENDENT AUDITORS' REPORT The Board of Directors Truckee Donner Public Utility District Truckee, California We have audited the accompanying balance sheets of the Truckee Donner Public Utility District as of December 31, 2007 and 2006, and the related statements of revenues, expenses, and changes in net assets and cash flows for the year then ended, as noted in the table of contents. These financial statements are the responsibility of the Truckee Donner Public Utility District's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Truckee Donner Public Utility District at December 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 9, the Truckee Donner Public Utility District adopted the provisions of GASB Statement No. 45 — Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (OPEB) effective January 1, 2007. The management's discussion and analysis on pages 2 through 7 is not a required part of the basic financial statements, but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The consolidating statements as identified in the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements. The consolidating statements have been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the financial statements taken as a whole. 4 Madison, Wisconsin June 4, 2008 Page 1 Virchow, Krause & Company, LLP Certified Public Accountants&Consultants«An independent Member of Baker Tilly International TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2007 and 2006 As financial management of the Truckee Donner Public Utility District, we offer readers of these financial statements this narrative overview and analysis of the financial activities of the District for the years ended December 31, 2007 and 2006. This discussion and analysis is designed to assist the reader in focusing on the significant financial issues, provide an overview of the District's financial activity and identify changes in the District's financial position. We encourage readers to consider the information presented here in conjunction with that presented within the basic financial statements. The reader should take time to read and evaluate all sections of this report, including the footnotes and other supplementary information that is provided, in addition to this MD&A. FINANCIAL HIGHLIGHTS • The District's net capital assets increased $10.6 million (or 12%) from $85.6 million at December 31, 2006 to $96.2 million at December 31, 2007, primarily due to an approximate $4 million of electrical underground conduit and devices, and an approximate $6 million of water transmission & distribution lines. • The District's total net assets increased by $15.9 million (or 85%) from $18.7 million at December 31, 2006 to $34.6 million at December 31, 2007. The increase is primarily due to an approximate increase of $10 million in capital assets, $2 million in restricted assets, and $4 million in unrestricted assets. • Operating revenues increased $1.8 million (or 7%) from $27.3 million for the year ended December 31, 2006 to $29.1 million for the year ended December 31, 2007, primarily due to electric and water rate increases and customer growth. • Operating expenses of the District increased by $3.1 million (or 15%) from $21.0 million during 2006 to $24.1 million during 2007, due primarily to increased operation and administration costs. • Net non-operating revenues, less non operating expenses, decreased $1.2 million. Non- operating revenues increased $0.4 million from 2006, primarily from increased income from investments and additional tax revenues from the Gray's Crossing Community Facilities District. Non-operating expenses increased $1.6 million primarily due to $1.9 million of increased interest expense for the Gray's Crossing debt. • In 2004 the District issued $15.4 million, in Mello Roos bonds to finance infrastructure for a new development within the Truckee Donner Public Utility District's service area (Gray's Crossing). During 2005, the District issued another $19.2 million in Mello Roos bonds to finance the second phase of the Gray's Crossing Project. The Mello Roos bonds represent a land secured financing and are not payable from or secured by any District assets. The Mello Roos bond proceeds are used to finance public agency infrastructure, to fund reserve and prepaid interest funds and to pay closing costs. In 2006 the District issued $26.6 million in Certificates of Participation (COP's) to refund the 1996 COP's, finance the upgrading of its water system infrastructure and complete the financing of the Donner Lake water system upgrade. No new debt was issued in 2007. Page 2 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2007 and 2006 OVERVIEW OF THE FINANCIAL STATEMENTS This report includes Management's Discussion and Analysis, the Independent Auditors' Report, the Basic Financial Statements, (which includes the notes to the financial statements), and Supplementary Information. REQUIRED FINANCIAL STATEMENTS The financial statements of the District are designed to provide readers with a broad overview of the District's finances similar to a private-sector business. They have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (GAAP). Under this basis of accounting, revenues are recognized in the period in which they are earned and expenses are recognized in the period in which they are incurred, regardless of the timing of related cash flows. These statements offer short- and long- term financial information about the District's activities. The reporting entity consists of the primary government, which has two departments (electric operations and water operations), and the blended component units. Further details about the component units are provided in note 1. The Balance Sheet presents information on all of the District's assets and liabilities and provides information about the nature and amounts of investments in resources (assets) and the obligations to District creditors (liabilities). It also provides the basis for computing rate of return, evaluating the capital structure of the District and assessing the liquidity and financial flexibility of the District. All of the current year's revenues and expenses are accounted for in the Statement of Revenues, Expenses, and Changes in Net Assets. This statement provides a measurement of the District's operations over the past year and can be used to determine whether the District has successfully recovered all its costs through its rates and other charges and to also analyze profitability and credit worthiness. The Statement of Cash Flows provides relevant information about the District's cash receipts and cash payments during the reporting period. This statement reports cash receipts and cash payments resulting from operating, non-capital financing, capital and related financing and investing activities. When used with related disclosures and information in the other financial statements, the statement of cash flows should provide insight into (a) the District's ability to generate future net cash flows, (b) the District's ability to meet its obligations as they come due, (c) the District's needs for external financing, (d) the reasons for differences between operating income and associated cash receipts and payments and (e) the effects on the District's financial position of both its cash and its noncash investing, capital and financing transactions during the period. The changes in cash balances are an important indicator of the District's liquidity and financial condition. Page 3 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2007 and 2006 REQUIRED FINANCIAL STATEMENTS (cont.) 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. DISTRICT HIGHLIGHTS The condensed financial statements are presented below. Condensed Balance Sheet Increase (Decrease) ASSETS 2007 2006 2005 2007-2006 Current assets $ 32,781,065 $ 34,436,049 $ 16,392,557 $ (1,654,984) Non-current assets: Capital assets, net 96,185.152 85,576,981 70,649,606 10,608,171 Restricted assets 17,722,779 16,053,287 28,604,486 1,669,492 Other long-term assets 11,826,457 12,587,013 12,928,415 (760,556) TOTAL ASSETS $ 158,515,453 $ 148,653,330 $ 128.575,064 $ 9,862,123 LIABILITIES AND NET ASSETS Current liabilities $ 8,977,267 $ 8,686,297 $ 7,604,771 $ 290.970 Non-current Liabilities Long-term debt, net of current portion 103,823,708 108,481,325 93,346,770 (4,657,617) Deferred revenue 11,080,054 12,758,132 7,103,767 (1,678,078) Total Liabilities 123,881,029 129,925,754 108,055.308 (6,044,725) Net Assets Invested in capital assets, net of related debt 16,526,277 6,646,999 14,486,509 9,879,278 Restricted for debt service 19,318,592 17,665,753 14,808,782 1,652,839 Unrestricted (1,210,445) (5,585,176) (8,775,535) 4,374,731 Total Net Assets 34,634,424 18,727,576 20,519,756 15,906,848 TOTAL LIABILITIES AND NET ASSETS $ 158,515,453 $ 148,653,330 $ 128,575,064 $ 9,862,123 In 2007, the District's net capital assets increased $10.6, primarily due to an approximate $4 million of electrical underground conduit and devices, and an approximate $6 million of water transmission & distribution lines. Non-current restricted assets increased $1.7 million due to a $1.1 million increase in facilities fees and other miscellaneous increases in the District's restricted reserves. The District's total net assets increased by $15.9 million primarily due to an approximate increase of $10 million in capital assets, $2 million in restricted assets, and $4 million in unrestricted assets. Page 4 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2007 and 2006 DISTRICT HIGHLIGHTS (cont.) Net assets invested in capital assets, net of related debt, consist of capital assets, net of accumulated depreciation, reduced by the amount of outstanding indebtedness attributable to the acquisition, construction or improvement of those assets. When there are significant unspent bond proceeds, the portion of related debt is not to be included in the calculation of this item. Instead, that portion of the debt is included in the net assets restricted for capital projects component as an offset to the related unspent bond proceeds. Net assets restricted for debt service represents amounts restricted for payments related to outstanding revenue bonds. The District had income before capital contributions of $4.9, $7.3, and $3.9 million for the years ended December 31, 2007, 2006 and 2005, respectively. Changes in the District's net assets can be determined by reviewing the following Condensed Revenues, Expenses, and Changes in Net Assets for the year. Condensed Revenues,Expenses,and Changes in Net Assets Increase (Decrease) 2007 2006 2005 2007-2006 Sales to consumers $ 27,439,892 $ 26,534,134 $ 23,881,041 $ 905,758 Other operating revenues 1,676,574 737,500 805,544 939,074 Total Operating Revenues 29,116,466 27,271,634 24,686,585 1,844,832 Operating expenses 24,118,158 21,027,149 20,121,360 3,091,009 Operating Income(Loss) 4,998,308 6,244,485 4,565,225 (1,246,177) Non-operating revenues(expenses) (77,568) 1,090,776 (676,877) (1,168,344) Income(loss)before capital contributions 4,920,740 7,335,261 3,888,348 (2,414,521) Capital contributions,net 10,986,108 (9,127,441) (2,790,931) 20,113,549 Change in net assets 15,906,848 (1,792,180) 1,097,417 17,699,028 NET ASSETS,Beginning of Year 18,727,576 20,519,756 19,422,339 (1,792,180) NET ASSETS,END OF YEAR $ 34,634,424 $ 18,727,576 $ 20,519,756 $ 15,906,848 Sales to consumers were $27.4 million in 2007, $26.5 million in 2006 and $23.9 million in 2005. The overall increases of $0.9 million (or 3.4%) in 2007 and $2.6 million (10.8%) in 2006 are primarily due to electric and water rate increases to pay for increased operating costs, revenue generated for Board designated purposes and growth in customers. Total operating expenses were $24.1 million in 2007, $21.0 million in 2006 and $20.1 million in 2005. The overall increases of $3.1 million (10.2%) in 2007 and $0.9 million (4.4%) in 2006 in operating expenses are due primarily to increased payroll and benefit costs as well as increases in depreciation, automotive fuel and other related costs. Page 5 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2007 and 2006 DISTRICT HIGHLIGHTS (cont.) Net non-operating revenues, less non-operating expenses, decreased $1.2 million. Non- operating revenues increased $0.4 million from 2006, primarily from increased income from investments and additional tax revenues from the Gray's Crossing Community Facilities District. Non-operating expenses increased $1.6 million primarily due to $1.9 million of increased interest expense for the Gray's Crossing debt. Capital contributions increased to a net inflow of $11.0 million in 2007 from a net outflow of $9.1 million in 2006. The resulting favorable variance of $20.1 million is primarily due to the $17.1 million of infrastructure costs (outflow) to complete the second phase of the Gray's Crossing Project in 2006, as compared to no contributed capital from Gray's Crossing in 2007. CAPITAL ASSETS As of December 31, 2007, 2006 and 2005, the District had $96.2, $85.6, and $70.6 million, respectively, invested in a variety of capital assets, net of accumulated depreciation. A summary of capital assets is reflected in the following schedule. Capital Assets 2007 2006 2005 Electric distribution $ 31,540,474 $ 25,821,475 $ 20,884,302 Water distribution 71,356,454 62,451,777 57,086,129 General plant 9,451,122 10,198,604 9,969,072 Sub-totals 112,348,050 98,471,856 87,939,503 Less: Accumulated depreciation (27,491,932) (25,170,480) (22,702,610) 84,856,118 73,301,376 65,236,893 Construction work in progress 10,898,934 11,845,505 4,982,613 Land held for future use 430,100 430,100 430,100 TOTALS $ 96,185,152 $ 85,576,981 $ 70,649,606 Page 6 TRUCKEE DONNER PUBLIC UTILITY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS December 31, 2007 and 2006 CAPITAL ASSETS (cont.) Net capital assets (additions, less retirements and depreciation) at December 31, 2007 increased $10.6 million (or 12.4%) from December 31, 2006 and net capital assets at December 31, 2006 increased $14.9 million (or 21.1%) from December 31, 2005. The increases in both years have been due primarily to the electric and water plant additions for new development within the District's service area as well as contributed assets received from the Community Facilities Districts. LONG-TERM DEBT Long-term debt includes revenue bonds and notes payable. At December 31, 2007, 2006 and 2005, the District had $108.5 million, $112.8 million, and $97.0 million, respectively, in long-term debt outstanding, including current maturities. In October, 2006 the District issued $26.6 million in certificates of participation to refund the 1996 COP's, for the funding of water system infrastructure improvements and the completion of the financing of the Donner Lake water system replacement. In July 2005, the Gray's Crossing Community Facilities District issued the second in a series of two bond issues for $19.2 million in special tax bonds, of which the proceeds were used to acquire certain infrastructure assets within a new development within the District's service area. 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: Accounting & Finance Department, P.O. Box 309, Truckee, CA 96160. Page 7 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED BALANCE SHEETS December 31, 2007 and 2006 ASSETS 2007 2006 CURRENT ASSETS Funds Operating $ 6,930,699 $ 8,389,081 Designated 6,421,189 4,384,969 Restricted 10,832,301 13,555,082 Total Funds 24,184,189 26,329,132 Accounts receivable, net 5,000,285 4,456,298 Unbilled revenues 2,209,655 2,193,604 Accrued interest receivable 363,896 463,000 Materials and supplies 696,169 800,533 Prepaid expenses 295,211 174,126 Other 31,660 19,356 Total Current Assets 32,781,065 34,436,049 NON-CURRENT ASSETS Other Non-Current Assets Restricted funds 17,722,779 16,053,287 Special assessments receivable 9,117,247 9,613,754 Deferred charges Unamortized debt expense 1,780,914 1,965,863 Other 928,296 1,007,396 Total Other Non-Current Assets 29,549,236 28,640,300 CAPITAL ASSETS Utility plant 112,348,050 98,471,856 Accumulated depreciation (27,491,932) (25,170,480) Construction work in progress 10,898,934 11,845,505 Land held for future use 430,100 430,100 Total Utility Plant 96,185,152 85,576,981 TOTAL ASSETS $ 158,515,453 $ 148,653,330 Page 8 LIABILITIES AND NET ASSETS 2007 2006 CURRENT LIABILITIES Other Liabilities Accounts payable $ 1,767,735 $ 1,894,599 Customer deposits 247,980 204,849 Other 812,280 543,191 Total Other Liabilities 2,827,995 2,642,639 Current Liabilities Payable From Restricted Assets Current portion of long-term debt 4,637,985 4,361,945 Accrued interest payable 1,511,287 1,681,713 Total Current Liabilities Payable from Restricted Assets 6,149,272 6,043,658 Total Current Liabilities 8,977,267 8,686,297 NON-CURRENT LIABILITIES Long-term debt, net of discounts, premiums and losses 101,042,614 105,254,663 Installment loans 2,781,094 3,226,662 Deferred revenues 11,080,054 12,758,132 Total Other Non-Current Liabilities 114,903,762 121,239,457 Total Liabilities 123,881,029 129,925,754 NET ASSETS Invested in capital assets, net of related debt 16,526,277 6,646,999 Restricted for debt service 19,318,592 17,665,753 Unrestricted (deficit) (1,210,445) (5,585,176) Total Net Assets 34,634,424 18,727,576 TOTAL LIABILITIES AND NET ASSETS $ 158,515,453 $ 148,653,330 See accompanying notes to financial statements. Page 9 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS December 31, 2007 and 2006 2007 2006 OPERATING REVENUES Sales to customers $ 27,439,892 $ 26,534,134 Standby fees 177,630 86,970 Other 1,498,944 650,530 Total Operating Revenues 29,116,466 27,271,634 OPERATING EXPENSES Purchased power 9,403,712 8,328,528 Operations and maintenance 6,407,561 5,556,257 Consumer services 1,10fi,155 874,865 Administration and general 3,393,320 3,314,404 Depreciation 3,807,410 2,953,095 Total Operating Expenses 24,118,158 21,027,149 Operating Income 4,998,308 6,244,485 NON-OPERATING REVENUE (EXPENSES) Special tax revenue 2,739,396 2,172,981 Investment income 2,489,855 2,059,047 Interest expense (5,219,429) (3,550,082) Amortization (122,553) (154,082) Gain on disposition of assets 35,163 562,912 Total Non-Operating Expenses (77,568} 1,090,776 Income Before Contributions 4,920,740 7,335,261 CAPITAL CONTRIBUTIONS 10,986,108 (9,127,441) CHANGE IN NET ASSETS 15,906,848 (1,792,180) NET ASSETS—Beginning of Year 18,727,576 20,519,756 NET ASSETS—END OF YEAR $ 34,634,424 $ 18,727,576 See accompanying notes to financial statements. Page 10 TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2007 and 2006 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES Received from customers $ 28,907,065 $ 26,810,167 Paid to suppliers for goods and services (15,767,810) (13,180,847) Paid to employees for services (4,431,094) (4,192,107) Net Cash Flows From Operating Activities 8,708,161 9,437,213 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Principal payments on long-term debt (2,470,000) (2,385,000) Interest payments on long-term debt (955,875) (1,047,012) Net Cash Flows From Noncapital Financing Activities (3,425,875) (3,432,012 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital expenditures for utility plant (8,021,650) (13,770,481) Cost of disposal of property net of salvage - 121,377 Proceeds from sale of land - 440,408 Capital contributions, connection and facility fees 23936,519 8,521,835 Special assessments receipts 496,507 548,476 Capital contributed to developers - (15,789,394) Special tax receipts 2,597,823 1,647,075 Debt issuance costs and premiums received, net (12,034) 217,579 Loss on advance refunding - (142,995) Proceeds from issuance of new debt - 27,479,521 Principal payments on long-term debt (1,906,230) (9,728,350) Interest payments on long-term debt _ 4,433,980 (3,622,786) Net Cash Flows From Capital and Related Financing Activities (8,343,045) (4,077,735 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments (1,698,880) (1,895,996) Marketable securities sold - 808,470 Interest received 2,585,308 1,817,356 Cash Flows From Investing Activities 886,428 729,830 Net Change in Cash and Cash Equivalents (2,174,331) 2,657,296 CASH AND CASH EQUIVALENTS—Beginning of Year 40,486,423 37,829,127 CASH AND CASH EQUIVALENTS—END OF YEAR $ 38,312,092 $ 40,486,423 NONCASH INVESTING ACTIVITIES Developer and customer added capital assets $ 6,523,819 $ 4,551,144 Page 11 2007 2006 RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating income $ 4,998,308 $ 6,244,485 Noncash items included in operating income Depreciation and amortization 3,807,410 2,953,095 Amortization of deferred expenses 79,100 79,100 Depreciation charged to other accounts 182,506 259,137 Offsets to capital activity - (940) Changes in assets and liabilities Accounts receivable and unbilled revenues (300,776) (466,066) Materials and supplies 104,363 (7,270) Prepaid expenses and other current assets (127,653) 18,093 Accounts payable (266,502) 354,229 Customer deposits 91,375 14,516 Accrued payroll 140,030 (11,166) NET CASH FLOWS FROM OPERATING ACTIVITIES $ 8,708,161 $ 9,437,213 RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE BALANCE SHEET Operating $ 6,930,699 $ 8,389,081 Designated 6,421,189 4,384,969 Restricted bond funds-current 10,832,301 13,555,082 Restricted bond funds-non-current 17,722,779 16,053,287 Total Cash and Investments 41,906,968 42,382,419 Less: Long-Term Investments (3,594,876} (1,895,996) TOTAL CASH AND CASH EQUIVALENTS $ 38,312,092 $ 40,486,423 See accompanying notes to financial statements. Page 12 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 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: legal entity 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): 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): 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 Truckee Donner Public Utility District (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 resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Page 13 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 1 —ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) B. ACCOUNTING POLICIES (cont.) The district follows all pronouncements of the Governmental Accounting Standards Board, and has elected not to follow Financial Accounting Standards Board pronouncements issued after November 30, 1989. C. USE OF ESTIMATES Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. D. DESIGNATED ASSETS The board has designated certain resources for future capital projects, replacements and operational needs. E. RESTRICTED ASSETS Restricted assets are assets restricted by the covenants of long-term financial arrangements or other third party legal restrictions. Restricted assets are used in accordance with their requirements and where both restricted and unrestricted resources are available for use, restricted resources are used first and then unrestricted as they are needed. F. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are recorded at the invoiced amount and are reported net of allowances of $30,364 and $32,743 for 2007 and 2006, respectively. G. MATERIALS AND SUPPLIES Materials and supplies are recorded at average cost. H. UNAMORTIZED FINANCING COSTS Certain costs related to borrowing funds are amortized over the term of the related borrowings using the effective interest method. 1. SPECIAL ASSESSMENT RECEIVABLE Special assessments represent amounts due from property owners within the Donner Lake Assessment District for improvements made by the District pursuant to an agreement with the property owners to improve their water quality as discussed in note 8. Page 14 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 1 —ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) J. DEFERRED CHARGES In 2003, the District entered into a broadband dark fiber maintenance agreement with Sierra Pacific Communications (SPC), which is included in other deferred charges on the accompanying balance sheets. SPC has 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. K. CAPITAL ASSETS Capital assets are generally defined by the District as assets with an initial, individual cost of more than $2,500 and an estimated useful life in excess of one year. Capital assets of the District are stated at the lower of cost or the fair market value at the time of contribution to the District. Major outlays for plant are capitalized as projects are constructed. Depreciation on capital assets is calculated using the straight-line method over the estimated useful lives of the assets, which are as follows: Distribution Plant Water 20-40 years Electric 23-35 years Computer software and hardware 4-5 years Buildings and improvements 20-33 years Equipment and furniture 10 years It is the District's policy to capitalize interest paid on debt incurred for significant construction projects while those projects are under construction, less any interest earned on related unspent debt proceeds. In 2006, interest was capitalized in connection with the Gray's Crossing District project which was completed in December 2006. No interest was capitalized in 2007. L. COMPENSATED ABSENCES Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. Vested vacation and sick leave pay is accrued when earned in the financial statements. The liability is liquidated from general operating revenues of the utility. M. REVENUE RECOGNITION Revenues are recorded as meters are read on a cycle basis throughout each month for electric and commercial water. Unbilled revenues, representing estimated consumer usage for the period between the last billing date and the end of the period, are accrued in the period of consumption. Other water customers are billed on a flat-rate basis, and revenues are recorded as billed. Also, the District records estimated revenues earned, but not billed to customers, as of the end of the year. Revenues from connection fees are recognized upon completion of the connection. Income that the District has earned through investing its excess cash is reflected within income from investments when earned. Page 15 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 1 —ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) N. REVENUE AND EXPENSE CLASSIFICATION The District distinguishes operating revenues and expenses from non-operating items in the preparation of its financial statements. Operating revenues and expenses generally result from providing water and electric 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 water and electric services. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses, or capital contributions. O. POWER PURCHASES AND TRANSMISSION In 1999, the District entered into an agreement with Sierra Pacific Power Company (SPPC), whereby SPPC will provide transmission services to the District through December 31, 2027. In addition, the District purchases scheduling and dispatch services from Northern California Power Agency. These purchases of services represented 10.0% and 11.7% of total purchased power costs in 2007 and 2006, respectively. On March 7, 2003, the District entered into a power purchase agreement with Constellation Power Source, Inc. (CPS), under which CPS supplied the District's power needs through 2007. This power supply replaced the interim power provided to the District by 1DACORP Energy L.P. under the terms of the related settlement agreement. The agreement with CPS provided for a block purchase of power at $49.95 per megawatt hour designed to cover the District's projected monthly power requirements. In addition, the agreement contained call and put options to provide the District with the flexibility to buy additional power or sell excess power, depending upon the District's actual monthly load requirements. Beginning January 1, 2005, the District entered into a membership agreement with the Western Area Power Administration (WAPA). In accordance with this agreement, the District is entitled to an allocation of power generated by the WAPA system. Because delivery of this power to the District is difficult, the District has assigned this power to its third party power scheduler. The scheduler then uses the value of this "banked" power to offset period peak power purchases above the CPS allotment. In December of 2005, the District entered into an agreement with the Utah Associated Municipal Power System (UAMPS) under which UAMPS will supply the District with a fixed amount of power capacity and energy each month for the period January 1, 2008 through March 24, 2009 to replace energy contracts expiring with CPS. P. INCOME TAXES As a government agency, the District is exempt from payment of federal and state income taxes. Page 16 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 1 —ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (font.) Q. TAX REVENUES Beginning in 2004, the District levied ad valorem property tax on all the taxable property within the Old Greenwood District in an amount sufficient to pay the yearly principal and interest on the Special Assessment District Tax Bonds (see note 5). The District had revenues of $772,768 in 2007 and $830,024 in 2006. 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 note 5). The District had revenues of $1,966,628 in 2007 and $1,342,957 in 2006. Taxes are assessed based on the county tax year ending June 30, resulting in deferred revenue for each of the community facility districts. R. CONTRIBUTED CAPITAL ASSETS A portion of the District's capital assets have been obtained through amounts charged to developers for plant constructed by the District; direct contributions of capital assets from developers and other parties; as well as assessments of local property owners. These items are recognized within capital assets as construction is completed for plant constructed by the District based on the cost of the items, when received for contributed capital assets based on the actual or estimated fair value of the contributed items, or upon completion of the related project for development agreements. The District records amounts received within capital contributions when a legally enforceable claim is established. Until the District meets the criteria to record the amounts described above as capital contributions, any amounts received are recorded within deferred revenue on the balance sheet. During 2006, the Gray's Crossing District contributed $17,069,751 to the District and other government entities. There were no contributions in 2007. The contribution out from Gray's Crossing District was netted with capital contributions on the accompanying statement of revenues, expenses, and changes in net assets. During 2006 and 2007, the Old Greenwood District did not make any contributions to the District or other government entities. S. RECENT ACCOUNTING PRONOUNCEMENTS In July 2004, the GASB issued Statement No. 45, Accounting and Financial Reporting by Employers for Postemp/oyment Benefits Other Than Pensions. Statement No. 45 establishes standards for the measurement, recognition, and display of other postemployment benefits (OPEB) expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information (RSI) in the financial reports of state and local governmental employers. OPEB includes postemployment healthcare, as well as other forms of postemployment benefits (for example, life insurance) when provided separately from a pension plan. The adoption of Statement No. 45 is effective for the District beginning fiscal year 2007. See note 9. Page 17 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 2—CASH AND INVESTMENTS Cash 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 designated accounts may be used to fund capital projects. Such accounts have been designated by the board of directors for the following purposes: Building Fund In compliance with Board rules, the District maintains a building fund to help pay for the interest and principal of any borrowed funds used for the District office complex or to pay for capital improvements to the building. Storm Damage Fund The District maintains a designated fund to provide for storm damages that may occur in the future. Electric Rate Reserve In compliance with Board rules, the District has created an electric rate stabilization fund in anticipation of future costs. During both 2007 and 2006, there was no utilization of these funds to offset increased power costs in lieu of raising electric rates. Reserve for Future Meters Prior to 1992, connection fees charged to applicants for water service included an amount, which was maintained in a designated fund, to offset the cost of future metering. As meters are installed, these funds are used to pay for related costs. Water Capital Replacement Starting in 2006, the Board has set aside a portion of water revenues designated for future water infrastructure replacement. Prepaid Connection Fees In compliance with Board rules, the District has set aside prepaid connection fees to cover installation costs of water services. Land Sale Trust Fund The District's Board has set aside certain funds from the sale of surplus properties to pay for future capital improvement projects. Page 18 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 2 —CASH AND INVESTMENTS (cont.) Other Postemployment Benefits (OPEB) Fund Starting in 2007, the Board has set aside funds for other postemployment benefits, such as health care. See note 9. Debt Service Coverage Fund Effective 2007, the Board has set aside a portion of the water rates to improve the cash-to- debt-service ratio. Donner Lake Assessment District Surcharge Fund The District established a monthly billing surcharge in the amount of $6.65 applicable to customers in the Donner Lake area to provide revenue to pay the remainder of the cost of reconstruction effective October 2006. As of December 31, board designated accounts consisted of the following: 2007 2006 Building fund $ 238,095 $ 268,656 Storm damage fund 275,548 261,882 Electric rate reserve 1,148,106 753,020 Reserve for future meters 375,665 280,310 Water capital replacement fund 294,508 127,004 Prepaid connection fees 77,400 74,734 Land sale trust fund 3,552,291 2,619,363 Other post employment benefits 201,630 - Debt service coverage fund 252,481 - Donner Lake Assessment District surcharge fund 5,465 - Totals $ 6,421,189 $ 4,384,969 Certain assets have been restricted by certificates of participation covenants or third party contractual agreements for the following purposes: Certificates of Participation: Electric The terms of the Electric Division's Certificates of Participation require a reserve fund as security for each principal and interest payment as they come due. A reserve fund is set aside for the highest annual principal and interest payment over the life of the borrowed amount. All of these reserve funds are held by Bank of New York Western Trust Company. Page 19 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 2 —CASH AND INVESTMENTS(cont.) Certificates of Participation: Water The terms of the Water Division's Certificates of Participation require a restricted fund to provide for payment of principal and interest as they come due. A reserve fund is set aside as prescribed in the loan documents. The Water Division's Certificates of Participation debt funds are held by Bank of New York Western 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 are required for each of the first ten years beginning April 1, 1996. The total reserve fund equals two semi-annual payments and was fully funded during 2006. These funds will be set aside for the life of the borrowed amount. All of the reserve funds are invested in the State of California Local Agency Investment Fund. Glenshire Escrow Accounts The District received cash as part of its acquisition of the Glenshire water system and from a monthly surcharge paid by residents. The terms of the acquisition agreement specify that the cash be utilized for the construction of improvements to the Glenshire water system. The funds are being used to pay the debt service costs related to improvements. Donner Lake Special Assessment District Improvement Fund The District established the Donner Lake Special Assessment District (DLAD) Improvement Fund to account for all funds received from the Special Assessment Receivable, which will be used to pay the debt service costs related to the Donner Lake Water System project. The DLAD also has a reserve fund as required by the SRF funding. This fund is required to set aside $40,043 semi-annually for ten years beginning in 2006. Old Greenwood Construction Fund During 2003, the Old Greenwood Community Facilities District issued $12,445,000 of Special Tax bonds to finance various property improvements within Old Greenwood. The District established the Old Greenwood Construction Fund to account for the unspent bond proceeds. The District is allowed to draw upon such funds as valid construction costs are incurred. Page 20 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 2—CASH AND INVESTMENTS (cont.) Gray's Crossing Project Fund During 2004, the Gray's Crossing Community Facilities District issued $15,375,000 of Special Tax bonds to finance various property improvements within Gray's Crossing. The District established the Gray's Crossing Project Fund to account for the unspent bond proceeds. The District is allowed to draw upon such funds as valid construction costs are incurred. 2006 COP Water System Project Fund During 2006, the District issued $26.6 million in water COP's (see note 5), the proceeds of which are to be used in part for future water system replacement. The District established the Water System Project Fund to account for the unspent bond proceeds. The District is allowed to draw upon such funds as valid construction costs are incurred. Equipment Loans Escrow Accounts During 2005, the District obtained loans to purchase various capital equipment. As the District received loan funds, the proceeds were held in escrow until qualified purchases were made. In 2007, the District used the remaining funds for purchases of capital equipment. Other (Area Improvement Funds) The District receives funds from the County of Nevada, which are to be used only for improvements to specific areas within the District's boundaries in Nevada County. These areas include various Nevada County assessment districts. When both restricted and unrestricted resources are available for use, it is the district's policy to use restricted resources first, then unrestricted resources as they are needed. Page 21 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 2—CASH AND INVESTMENTS (cont.) As of December 31, restricted cash and cash equivalents and investments consisted of the following: 2007 2006 Certificates of participation $ 11,540,400 $ 11,027,592 Facilities fees 6,828,586 5,737,065 DW R-Prop 55 reserve fund 310,184 321,923 Glenshire escrow accounts 145,346 119,501 Donner Lake Special Assessment District Improvement Fund 2,119,389 1,908,861 Donner Lake Special Assessment District reserve fund 160,172 40,043 Old Greenwood Construction fund 1,331 1,295 Gray's Crossing Project fund 1,024 985 2006 COP Water System Project fund 7,275,910 10,260,903 Equipment loans escrow accounts - 19,712 Other(area improvement funds) 172,738 170,489 Total Restricted Cash and Cash Equivalents and Investments $ 28,555,080 $ 29,608,369 Cash and investments are comprised of the following cash and cash equivalents and investments as of December 31: 2007 2006 Cash and cash equivalents $ 38,312,092 $ 40,486,423 Investments—government bonds 3,594,876 1,895,996 Totals $ 41,906,968 $ 42,382,419 Cash and cash equivalents of $38,312,092 and $40,486,423 at December 31, 2007 and 2006, respectively, consist primarily of investments in the state pooled fund, money market funds and a guaranteed investment contract. For purposes of the statements of cash flows, the District considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. The District follows GASB No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. This statement establishes fair value standards for recording investments. The recorded amount for the District's investments approximated their fair values as of December 31, 2007 and 2006. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Market values may have changed significantly after year end. Page 22 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 2—CASH AND INVESTMENTS (cont.) INVESTMENTS AUTHORIZED BY THE DISTRICT'S INVESTMENT POLICY During 2006, the District's investment policy only authorized investment in the local government investment pool administered by the State of California ("LAIF"). The District adopted a new investment policy in 2006 which allowed for investments in instruments allowed by the California Government Code and/or the investments allowed 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. At December 31, 2007 and 2006 the District's deposits and investments were held as follows: 2007 2006 Cash on hand $ 900 $ 900 Deposits 675,331 449,187 LAIF 23,117,571 30,573,641 Money Market Funds 7,242,380 9,462,695 Guaranteed Investment Contract 7,275,910 - Government Bonds 3,594,876 1,895,996 Totals $ 41,906,968 $ 42,382,419 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 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 2007 and 2006: Investment Maturity LAIF 12 months or less Federated U.S.Treasury Cash Reserve 12 months or less Fidelity Institutional Prime 12 months or less Fidelity Money Market 12 months or less FSA Capital Management- Investment Contract 12 months or less Federal Home Loan Mortgage 9/15/2011 Federal Farm Credit Banks 3/2/2021 Page 23 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 2—CASH AND INVESTMENTS (cunt.) DISCLOSURES RELATING TO CREDIT RISK Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. LAIF does not have a rating provided by a nationally recognized statistical rating organization. The Fidelity Money Market is also not rated. The Fidelity Institutional Prime and the Federated U.S. Treasury Cash Reserve are rated AAAm by S&P and Aaa by Moody's. The Federal Home Loan Mortgage is implicitly backed by the U.S. government. FSA Capital Management and Federated Farm Credit Banks are rated AAA by S&P and Aaa by Moody's. 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 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 deposits, other than the following for deposits: 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, 2007 and 2006 all deposits were fully insured or collateralized. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker/dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the District's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government's indirect investment in securities through the use of mutual funds or governmental investment pools (such as LAIF). INVESTMENT IN STATE INVESTMENT POOL The District is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. 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 24 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 3—CAPITAL AssETs Capital assets consist of the following at December 31, 2007 and 2006: January 1, December 31, 2007 Additions Reductions 2007 Electric distribution facilities $ 25,821,475 $ 6,009,855 $ (290,856) $ 31,540,474 Water distribution facilities 62,451,778 8,971,842 (67,166) 71,356,454 General plant 10,198,603 506,197 (1,253,678) 9,451,122 98,471,856 15,487,894 (1,611,700) 112,348,050 Less: Accumulated depreciation (25,170,480) (3,933,152) 1,611,700 (27,491,932) Construction work in progress 11,845,505 9,477,317 (10,423,888) 10,898,934 Land held for future use 430,100 - - 430,100 Totals $ 85,576,981 $ 21,032,059 $ (10,423,888) $ 96,185,152 January 1, December 31, 2006 Additions Reductions 2006 Electric distribution facilities $ 20,884,302 $ 5,167,154 $ (229,981) $ 25,821,475 Water distribution facilities 56,986,916 5,745,909 (281,047) 62,451,778 General plant 9,969,072 398,334 (168,803) 10,198,603 87,840,290 11,311,397 (679,831) 98,471,856 Less:Accumulated depreciation (22,702,610) (3,212,232) 744,362 (25,170,480) Construction work in progress 5,081,826 15,726,423 (8,962,744) 11,845,505 Land held for future use 430,100 - - 430,100 Totals $ 70,649,606 $ 23,825,588 $ (8,898,213) $ 85,576,981 As of December 31, 2007 and 2006, the plant in service included $1,925,482 of land which is not being depreciated. A portion of the plant has been contributed to the District. When replacement is needed, the District replaces the contributed plant with District-financed plant. During 2006, the service utility of one of the transformers at the Tahoe Donner Substation became impaired as a result of damage from an animal entering the substation. The financial statements for the electric department include an impairment gain of $119,987. The gain is reported inclusive of $127,967 of insurance recoveries. During 2006, the District capitalized $1,279,938 of interest in connection with the Gray's Crossing District. No interest was capitalized in 2007 since the project was completed and in service at the end of 2006. Page 25 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 4—TELECOMMUNICATION SERVICES In 1999, the District initiated a project to expand their basic service offerings to include internet access, cable television and voice delivered over fiber optic networks (the broadband project). The District has completed the broadband design project and obtained the necessary regulatory approvals and franchises needed to construct and launch the broadband project. Expenses incurred by the District to date on the broadband project total $2,802,103 of which $553,534 is included in capital assets on the accompanying balance sheet. During 2006 expenditures for this project, mainly related to legal, financing, and charges for District labor and overhead was $168,011, none of which were capitalized. There were no additional expenditures during 2007. A local cable television service provider filed an objection in September 2004 with the 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. The District's Board may still consider moving forward with financing and construction of the project or leasing the assets to a broadband provider. Page 26 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 5—LONG-TERM DEBT Long-term debt consisted of the following at December 31, 2007 and 2006: January 1, December 31, Due within 2007 Additions Reductions 2007 one year Certificates of Participation— Electric,2.5%to 5.75%, due serially to 2013(net of unamortized premiums of $209,878). $ 20,149,354 $ - $ (2,544,476) $ 17,604,878 $ 2,570,000 State Revolving Fund Loan— Water,2.34%,due semi-annually beginning in 2006 to 2026. 12,227,122 - (517,749) 11,709,373 529,935 Special Tax Bonds—Mello Roos,2.25%to 5.7%,due serially to 2013(net of unamortized discounts of $129,534). 12,198,576 - (33,110) 12,165,466 55,000 Special Tax Bonds—Mello Roos,3.25%to 5.7%, due serially to 2035(net of unamortized discounts of $310,493). 15,049,319 - 188 15,049,507 35,000 Special Tax Bonds—Mello Roos,3.50%to 5.50%,due due serially to 2035(net of unamortized discounts of $211,761). 18,932,692 - (39,453) 18,893,239 70,000 Certificates of Participation— Water,4.00%to 5.00%, due serially to 2036(net of unamortized discounts of $132,047 and premiums of $591,558) 27,062,084 - (578,493) 26,483,591 745,000 Department of Water Resources, 3.18%,due semiannually to 2021,secured by real and personal property. 3,538,845 - (195,582) 3,343,263 201,765 Installment loans,5.4%to 6.23%, various payment terms and due dates,secured by equipment. 3,685,278 - (472,902) 3,212,376 431,285 Totals $ 112,843,270 $ - $ (4,381,577) $ 108,461,693 $ 4,637,985 Page 27 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 5— LONG-TERM DEBT(cont.) January 1, December 31, Due within 2006 Additions Reductions 2006 one year Certificates of Participation— Electric,2.5%to 5.75%, due serially to 2013(net of unamortized premiums of $284,354). $22,616,962 $ - $ (2,467,608) $ 20,149,354 $ 2,470,000 State Revolving Fund Loan— Water,2.34%,due semi-annually beginning in 2006 to 2026. 11,823,444 909,521 (505,843) 12,227,122 517,749 Special Tax Bonds—Mello Roos,2.25%to 5.7%,due serially to 2013(net of unamortized discounts of $136,424). 12,289,379 - (90,803) 12,198,576 40,000 Special Tax Bonds—Mello Roos,3.25%to 5.7%, due serially to 2035(net of unamortized discounts of $325,681). 15,034,128 - 15,191 15,049,319 15,000 Special Tax Bonds—Mello Roos,3.50%to 5.50%,due due serially to 2035(net of unamortized discounts of $222,308). 18,917,803 - 14,889 18,932,692 50,000 Certificates of Participation— Water,4.00%to 5.00%, due serially to 2036(net of unamortized discounts of $141.408 and premiums of $633,492) - 27,062,084 - 27,062,084 615,000 Certificates of Participation— Water,5.25%to 5.4%, due serially to 2021 (net of unamortized discounts of $30,172). 8,434,829 - (8,434,829) - - Department of Water Resources, 3.18%,due semiannually to 2021,secured by real and personal property. 3,728,336 - (189,491) 3,538,845 195,582 Installment loans,5.4%to 6.23%, various payment terms and due dates,secured by equipment. 4,153,289 - (468,011) 3,685,278 458,614 Totals $96,998,170 $27,971,605 $(12,126,505) $ 112,843,270 $ 4,361,945 On October 12, 2006, Truckee Donner Public Utility District Financing Corporation issued $26,570,000 of Certificates of Participation to refund 100% of the outstanding balance of the Certificates issued in 1996, complete the funding of the Donner Lake Assessment District water system, and fund water system capital improvements. 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. Page 28 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 5— LONG-TERM DEBT(cont.) On April3, 2003, the District issued $26,265,000 of Certificates of Participation, the net proceeds of which were utilized to pay the amounts due to IDACORP for the purchase power contract settlement fees, as well as to cover the associated costs of issuance. The terms of the new Certificates call for debt service payments to be made only from the net revenues of the Electric Division. These revenues are required to be at least equal to 120% of the debt service for each year. During April 2004, the District obtained financing in the form of a State Revolving Fund Loan, the proceeds of which are to be utilized in the replacement of the Donner Lake water system. The District submitted expenditures to the State for reimbursement of $12,732,965. The semi-annual principal and interest payments are $400,426 and commenced in 2006. The District is also required to fund a reserve account by making semi-annual reserve payments in the amount of $40,043 for a 10-year period beginning in 2006. In 2004, the remaining balance of $12,227,122 was used to pay off the temporary lines of credit obtained in 2001 and 2002 to fund the Donner Lake project. See note 8 for additional information. During December 2003, the Old Greenwood Community Facilities District issued $12,445,000 of Special Tax Bonds, the net proceeds of which were utilized to finance various public improvements for property within Old Greenwood. The terms of the Special Tax Bonds call for debt service payments to be provided solely by taxes levied on and collected from the owners of the taxable land within Old Greenwood. The bonds are secured by land located within Old Greenwood. During 2005 and 2004 respectively, the Gray's Crossing Community Facilities District issued $15,375,000 and $19,155,000 of Special Tax Bonds, the net proceeds of which were utilized to finance various public improvements for property within Gray's Crossing (see note 7). The terms of the Special Tax Bonds call for debt service payments to be provided solely by taxes levied on and collected from the owners of the taxable land within Gray's Crossing. The bonds are secured by land located within Gray's Crossing. During 1996, Truckee Donner Public Utility District Financing Corporation issued $10,905,000 of Certificates of Participation to refund 100% of the outstanding balance of Certificates issued in 1991. The 1991 Certificates were used to finance the repair and construction of various water system improvements for the District. The terms of the new 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 110% of the debt service for each year. On October 12, 2006 Certificates of Participation in the amount of $26,570,000 described above were issued, a portion of which were used to refund $8,465,000 of the above-mentioned 1996 Certificates of Participation. The refunding portion of the 2006 COP's 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. Page 29 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 5—LONG-TERM DEBT(cont.) 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. 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 2007. Scheduled payments on debt are: Principal Interest Total 2008 $ 4,637,985 $ 5,113,925 $ 9,751,910 2009 4,782,147 4,922,260 9,704,407 2010 4,988,470 4,719,771 9,708,241 2011 5,196,144 4,488,735 9,684,879 2012 5,511,978 4,231,220 9,743,198 2013-2017 17,480,221 18,376,369 35,856,590 2018-2022 16,040,905 15,212,589 31,253,494 2023-2027 15,757,163 11,633,554 27,390,717 2028-2032 19,780,000 7,176,015 26,956,015 2033-2037 14,200,000 1,553,820 15,753,820 108,375,013 $ 77,428,258 $ 185,803,271 Plus: Unamortized premiums 870,516 Less: Unamortized discounts (783,836) Total Payments on Debt $ 108,461,693 Page 30 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 6—DEFERRED REVENUE For transactions that have not yet met revenue recognition requirements, revenues are deferred and reflected in the accompanying balance sheets. As of December 31, 2007 and 2006, deferred revenues consist of unearned special assessment revenues, development agreement deposits, connection fees and other deposits. Deferred revenue consisted of the following at December 31, 2007 and 2006: January 1, December 31, 2007 Additions Reductions 2007 Unearned tax revenues $ 1,317,902 $ 1,435,589 $ (1,317,902) $ 1,435,589 Development agreement deposits 8,892,325 1,853,378 (3,114,577) 7,631,126 Connection fees and other deposits 2,547,905 1,869,303 (2,403,869) 2,013,339 Totals $ 12,758,132 $ 5,158,270 $ (6,836,348) $ 11,080,054 January 1, December 31, 2006 Additions Reductions 2006 Unearned tax revenues $ 794,206 $ 1,317,902 $ (794,206) $ 1,317,902 Development agreement deposits 3,944,461 6,369,502 (1,421,638) 8,892,325 Connection fees and other deposits 2,365,100 2,606,510 (2,423,705) 2,547,905 Totals $ 7,103,767 $ 10,293,914 $ (4,639,549) $ 12,758,132 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 are completed, the infrastructure is donated, in the form of a capital contribution to the Town of Truckee, the Truckee Sanitary District, Southwest Gas and the District. Page 31 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 7 — COMMUNITY FACILITIES DISTRICTS(coat.) 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 2006, Gray's Crossing contributed infrastructure valued at $17,069,751, of which $3,880,015 was donated to the District. There was no contributed infrastructure in 2007. During 2007 and 2006, taxes of$2,068,615 and $1,872,720 respectively were levied by Gray's Crossing. Of this amount, $1,034,307 and $936,360 relate to 2007 and 2006 and accordingly, are included in tax revenues in the accompanying statement of revenues, expenses and changes in net assets. The remaining amount will be recognized in 2008 and 2007 and is included in deferred revenue on the accompanying balance sheets. In December 2003, the Community Facilities District No. 03-1 (Old Greenwood) was formed and issued $12,445,000 in Special Tax Bonds (the 03-1 Bonds). During 2007 and 2006 respectively, taxes of $802,564 and $763,085 were levied by Old Greenwood. Of these amounts, $401,282 and $381,543 relate to 2007 and 2006 and accordingly, are included in tax revenues in the accompanying statement of revenues, expenses and changes in net assets. The remaining amount will be recognized in 2008 and 2007 and are included in deferred revenue on the accompanying balance sheets. NOTE 8—DONNER LAKE WATER COMPANY PURCHASE In 2001, the District took ownership of Donner Lake Water Company by initiating an eminent domain lawsuit. As a part of the takeover, the District agreed to replace the entire water system, which was estimated to cost approximately $15,600,000 and was completed in 2006. The District agreed to initially finance the replacement through obtaining third party financing and the Donner Lake property owners agreed to reimburse the District for the full costs of the replacement. Therefore, an assessment has been placed on each Donner Lake homeowner's property for a pro-rats share of the $13,000,000 payable immediately, or, for those not paying the assessment in full, over 20 years at approximately a 3.5% interest rate. One twentieth of the assessment, plus interest, is added to each property owner's annual property tax bill, if they have not previously paid the assessment in full, and is collected by Nevada and Placer Counties on behalf of the District. The Donner Lake homeowner's property values secure the $13,000,000 assessment. Project costs incurred in excess of the assessment are being collected through surcharges to each property owner's bill until all costs are recovered. As of December 31, 2007 and 2006, the amount outstanding from the property owners was $9,117,247 and $9,613,754 respectively, of which $557,542 and $523,728 is due in the next year. These amounts are shown as Special Assessments Receivable in the Balance Sheet. Per Board resolution, all funds received from property owners are set aside in the Donner Lake Special Assessment District Improvement Fund until such time as the funds will be used to fund the debt service on the District's initial third party debt. Page 32 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 8—DONNER LAKE WATER COMPANY PURCHASE(coat) During 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 semi-annual principal and interest payments are $400,426. The District is also required to fund a reserve account by making semi-annual reserve payments in the amount of $40,043 for a 10-year period. Prior to obtaining the State Revolving Fund Loan, the District had third party bridge financing in the form of two lines of credit totaling $10,000,000. Both lines of credit were extinguished with funds received through the State Revolving Fund Loan. NOTE 9— EMPLOYEE BENEFIT PLANS A. CALPERS PLAN The District and bargaining unit employees elected to participate in the Public Agency portion of CalPERS, effective August 21, 2004. The CalPERS plan is an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the state of California. State statutes within the Public Employees' Retirement Law establish a menu of benefit provisions, as well as other requirements. The District selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance or resolution. The CalPERS plan also provides for death and disability benefits. CalPERS issues a separate comprehensive annual financial report. Copies of the CalPERS' annual financial report may be obtained from the CalPERS Executive Office — 400 P Street— Sacramento, California, 95814. Active plan participants are required to contribute 7% of their annual covered salary, of which the District on the participants' behalf pays 4%. The District is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its participants. The required employer contribution rate for fiscal years ending June 30, 2007 and 2006 is 18.006% of eligible participant payroll. The contribution requirements of the plan participants are established by State statute and the employer contributions rate is established and may be amended by CaIPERS. The District's annual pension cost for the years ended December 31, 2007, 2006, and 2005 respectively, was $1,056,022, $974,467 and $907,711 and was equal to the District's required and actual contributions as determined by the June 30, 2006 actuarial valuation using the entry age normal actuarial cost method with the contributions determined as a percent of payroll. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. Significant actuarial assumptions include: Actuarial Cost Method Entry Age Normal Cost Method Inflation Rate 3.00%compounded annually Investment Return 7.75%compounded annually Salary Increases 3.25% Page 33 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 9— EMPLOYEE BENEFIT PLANS (cont.) A. CALPERS PLAN(cont.) Schedule of Funding Progress (Unaudited, Required Supplementary Information) The plan's unfunded actuarial accrued liability is being amortized as a level percentage of projected payrolls on a closed basis. The remaining amortization period ends in 2017 for prior service. Retirement plans like the District's with less than 100 active members were required to participate in a risk pool. Therefore, the funding progress for the District for the June 30, 2006 valuation date is for the entire pool, not just the District employees. The following is a funding schedule for the CalPERS Plan: Actuarial Unfunded Actuarial Accrued Annual AAL as a Actuarial value liability Unfunded Funded covered percentage valuation date of assets (AAL) AAL ratio payroll of payroll May 31,2004 $1,945,846 $6,453,157 $4,507,311 30% $ 3,615,996 125% June 30,2005 $484,351,523 $459,996,995 $24,354,528 95% $174,127,476 14% June 30,2006 $478,918,141 $478,122,215 $ (795,926) 100% $170,458,082 0% As of July 1, 2007, the District contribution rate changed to 16.12%. B. DEFERRED COMPENSATION PLAN The District maintains two deferred compensation plans (the Plans) for certain employees. The District has no liability for losses under the Plans, but does have the duty of due care that would be required of an ordinary prudent investor. The District has not reflected the Plan's assets and corresponding liabilities (if any) on the accompanying balance sheets. C. OTHER POSTEMPLOYMENT BENEFITS(OPEB) The District began providing postemployment health care on January 1, 2000 to all employees, and their qualified dependents that retire from the District on or after attaining age 60 with service of at least 20 years. The board of directors of the District retains full authority to set the provisions and contribution obligations related to this benefit. For years worked which are less than 20, the benefit is reduced by 5% for each year. For retirement prior to age 60, the benefit is reduced by 2% for each year. Currently eight retired employees meet those eligibility requirements. The District pays insurance premiums for medical, dental, and prescription drugs. Expenditures for postemployment health care benefits are recognized when premiums are paid. The postemployment health care premiums were $72,804, $57,232, and 47,508 for 2007, 2006, and 2005 respectively. Page 34 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 9— EMPLOYEE BENEFIT PLANS (cont.) C. OTHER POSTEMPLOYMENT BENEFITS(OPEB) (cont.) During 2006, the District received an OPEB actuarial report prepared by its medical benefits provider, National Rural Electric Cooperative Association (NRECA). In addition to the above postemployment health care premiums, the District began to contribute to an internally designated OPEB account in 2007 for the purpose of contributing to the California Employers' Retiree Benefit Trust Program (CERBT) in 2008. See note 15. The District administers a single-employer defined benefit healthcare plan ("The Retiree Health Plan"). The plan provides health insurance contributions for eligible retirees and their spouses through the District's group health insurance plan, which covers both active and retired members. Benefit provisions are established through collective bargaining agreements and state that eligible retirees and their spouses receive lifetime healthcare insurance at established contribution rates. The Retiree Health Plan does not issue a publicly available financial report. Contribution requirements are established through collective bargaining agreements and may be amended only through negotiations between the District and the union. The District makes the same monthly health insurance contribution on behalf of the retiree as it makes on behalf of all other active employees during that year. The District contributes 100% of the current year premiums for a family and a single plan for eligible retired plan members and their spouses. For fiscal year 2007, the District contributed $54,100 to the plan. Plan members receiving benefits contribute 0% of their premium costs for a family plan and a single plan. For fiscal year 2007, total member contributions were $0. The CERBT administrative costs of the plan are financed through investment earnings. The District's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the District's annual OPEB cost for the year, the amount actually contributed to plan, and changes in the District's net OPEB obligation to the Retiree Health Plan: Annual required contribution $ 252,900 Interest on net OPEB obligation - Adjustment to annual required contribution - Annual OPEB cost 252,900 Contributions made 54,100 Increase in net OPEB obligation(asset) 198,800 Net OPEB Obligation(Asset)-Beginning of Year - Net OPEB Obligation(Asset)-End of Year $ 198,800 Page 35 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 9— EMPLOYEE BENEFIT PLANS (coat.) C. OTHER POSTEMPLOYMENT BENEFITS(OPEB) (cont.) The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2007 was as follows: Percentage of Fiscal Year Annual OPEB Annual OPEB Net OPEB Ended Cost Cost Contributed Obligation December 31, 2007 $ 252,900 21% $ 198,800 The funded status of the plan as of January 1, 2006, the most recent actuarial valuation date, was as follows: Actuarial accrued liability(AAL) $ 2,328,500 Actuarial value of plan assets - Unfunded Actuarial Accrued Liability(UAAL) $ 2,328,500 Funded ratio(actuarial value of plan assets/AAL) - Covered payroll(active plan members) $ 5,542,800 UAAL as a percentage of covered payroll 42% Actuarial valuations of an ongoing plan involve estimates for the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan is understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point. The methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The required supplemental information relating to historical data has not been included in this report as this is the first year of implementation. Page 36 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 10—SELF FUNDED INSURANCE The District has a self-funded vision insurance program. Prior to 2007, the District also had a very small amount of self insurance with respect to the supplemental cost of certain mail order prescriptions that was not covered by the commercial health insurance. For both, 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. NOTE 11 —SEGMENT DISCLOSURE The District has issued revenue bonds to finance water and electric distribution facilities. During 2005 and 2004, the District also issued special tax bonds secured by tax revenues. Each project has an external requirement to be accounted for separately, and investors in the revenue and special tax bonds rely solely on the revenue generated by the individual projects for repayment. Summary financial information as of and for the years ending December 31, 2007 and 2006 for each project is presented below. Page 37 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 11 —SEGMENT DISCLOSURE (cont.) Balance Sheets 2007 Gary's Old ASSETS Electric Water Crossing Greenwood Current assets $ 14,301,438 $ 15,127,928 $ 2,390,585 $ 961,114 Noncurrent Assets Capital assets,net 33,021,280 63,163,872 - - Restricted assets 3,538,930 9,664,439 3,259,089 1,260,321 Other assets 1,218,931 9,938,080 452,677 216,769 Total Noncurrent Assets 37,779,141 82,766,391 3,711,766 1,477,090 Total Assets $ 52,080,579 $ 97,894,319 $ 6,102,351 $ 2,438,204 LIABILITIES AND NET ASSETS(DEFICIT) Current liabilities $ 5,333,454 $ 2,626,696 $ 722,334 $ 294,783 Noncurrent Liabilities Long-term debt, net of current portion 15,034,878 40,059,525 33,837,746 12,110,465 Other liabilities 8,206,070 4,219,489 1,034,307 401,282 Total Liabilities 28,574,402 46,905,710 35,594,387 12,806,530 Net Assets(Deficit) Invested in capital assets,net of related debt 32,924,664 29,040,378 (33,490,069) (11,948,696) Restricted for debt service 6,080,894 9,601,451 2,625,349 1,010,898 Unrestricted (15,499,381) 12,346,780 1,372,684 569,472 Total Net Assets(Deficit) 23,506,177 50,988,609 (29,492,036) (10,368,326) Total Liabilities and Net Assets $ 52,080,579 $ 97,894,319 $ 6,102,351 $ 2,438,204 Page 38 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 11 —SEGMENT DISCLOSURE(cunt.) Balance Sheets(cont.) 2006 Gary's Old ASSETS Electric Water Crossing Greenwood Current assets $ 14,698,254 $ 16,805,565 $ 2,093,312 $ 838,918 Noncurrent Assets Capital assets,net 28,155,819 57,421,162 - - Restricted assets 2,872,982 8,687,212 3,219,933 1,273,160 Other assets 1,401,178 10,481,076 476,460 228,299 Total Noncurrent Assets 32,429,979 76,589,450 3,696,393 1,501,459 Total Assets $ 47,128,233 $ 93,395,015 $ 5,789,705 $ 2,340,377 LIABILITIES AND NET ASSETS(DEFICIT) Current liabilities $ 4,953,135 $ 2,769,926 $ 683,080 $ 280,156 Noncurrent Liabilities Long-term debt,net of current portion 18,348,816 44,056,920 33,917,012 12,158,577 Other liabilities 9,006,899 2,433,331 936,360 381,542 Total Liabilities 32,308,850 49,260,177 35,536,452 12,820,275 Net Assets(Deficit) Invested in capital assets,net of related debt 28,060,462 24,062,367 (33,505,552) (11,970,278) Restricted for debt service 5,448,187 8,582,709 2,601,853 1,033,004 Unrestricted (18,689,266) 11,489,762 1,156,952 457,376 Total Net Assets(Deficit) 14,819,383 44,134,838 (29,746,747) (10,479,898) Total Liabilities and Net Assets $ 47,128,233 $ 93,395,015 $ 5,789,705 $ 2,340,377 Page 39 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 11 —SEGMENT DISCLOSURE (cont.) Statements of Revenues, Expenses, and Changes in Net Assets 2007 Gray's Old Electric Water Crossing Greenwood OPERATING REVENUES Sales to customers $ 18,396,992 $ 9,042,900 $ - $ - Other operating revenues 2,703,252 727,978 - - Operating expenses (15,413,523) (6,651,881) - - Depreciation (1,472,853) (2,334,557) - - Nonoperating revenues(expenses) (203,981) (239,870) 254,711 111,572 Income(loss)before capital contributions 4,009,887 544,570 254,711 111,572 Capital contributions 4,676,907 6,309,201 - - Change in net assets 8,686,794 6,853,771 254,711 111,572 TOTAL NET ASSETS (DEFICIT)—Beginning of Year 14,819,383 44,134,838 (29,746,747) (10,479,898) TOTAL NET ASSETS (DEFICIT)—END OF YEAR $ 23,506,177 $ 50,988,609 $ (29,492,036) $ (10,368,326) Page 40 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 11 —SEGMENT DISCLOSURE(cont.) Statements of Revenues, Expenses, and Changes in Net Assets(cont.) 2006 Gray's Old Electric Water Crossing Greenwood OPERATING REVENUES Sales to customers $ 18,287,011 $ 8,247,123 $ - $ - Other operating revenues 1,855,391 532,682 175 765 Operating expenses (13,555,636) (6,169,931) - - Depreciation (1,026,111) (1,926,984) - - Nonoperating revenues(expenses) (349,583) 17,449 1,286,578 136,332 Income(loss)before capital contributions 5,211,072 700,339 1,286,753 137,097 Capital contributions 3,543,877 4,398,433 (17,069,751) - Change in net assets 8,754,949 5,098,772 (15,782,998) 137,097 TOTAL NET ASSETS (DEFICIT)—Beginning of Year 6,064,434 39,036,066 (13,963,749) (10,616,995) TOTAL NET ASSETS (DEFICIT)—END OF YEAR $ 14,819,383 $ 44,134,838 $ (29,746,747) $ (10,479,898) Page 41 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 11 —SEGMENT DISCLOSURE (cont.) Statements of Cash Flows 2007 Gray's Old Electric Water Crossing Greenwood NET CASH PROVIDED BY(USED IN) Operating activities $ 5,807,012 $ 2,901,149 $ - $ Noncapital financing activities (3,425,875) - - - Capital and related financing activities (3,089,198) (5,171,961) (72,347) (9,539) Investing activities 810,349 (192,331) 191,093 77,317 Net increase(decrease) in cash and cash equivalents 102,288 (2,463,143) 118,746 67,778 Beginning Cash and Cash equivalents 13,811,329 21,893,225 3,438,995 1,342,874 ENDING CASH AND CASH EQUIVALENTS $ 13,913,617 $ 19,430,082 $ 3,557,741 $ 1,410,652 Statements of Cash Flows 2006 Old Gray's Electric Water Greenwood Crossing NET CASH PROVIDED BY(USED IN) Operating activities $ 6,483,449 $ 2,953,764 $ - $ - Noncapital financing activities (3,432,012) - - - Capital and related financing activities (1,082,510) 13,826,918 (16,831,793) 9,650 Investing activities 493,310 (391,391) 574,301 53,610 Net increase(decrease) in cash and cash equivalents 2,462,237 16,389,291 (16,257,492) 63,260 Beginning cash and cash equivalents 11,349,092 5,503,934 19,696,487 1,279,614 ENDING CASH AND CASH EQUIVALENTS $ 13,811,329 $ 21,893,225 $ 3,438,995 $ 1,342,874 Page 42 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 12 —CONTINGENCIES The District is one of a group of approximately 50 utilities involved in a matter relating to the disposal of PCB wastes at two sites. The clean up of the two sites falls under the federal EPA Superfund Program. The District believes it has resolved this matter with the EPA, with the District funding its portion of the cleanup expenses, as long as expenses do not exceed $60,000,000. If cleanup expenses exceed $60,000,000, the District will be liable for their portion (.163%) of the additional cost. The District's management believes that it will not incur any additional liability. NOTE 13—CLAIMS AND JUDGMENTS From time to time, the utility is party to various pending claims and legal proceedings. Although the outcome of such matters cannot be forecasted with certainty, it is the opinion of management and the utility's legal counsel that the likelihood is remote that any such claims or proceedings will have a material adverse effect on the utility's financial position or results of operations NOTE 14— RISK MANAGEMENT The utility is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors and omissions; workers compensation; and health care of its employees. These risks are covered through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded the commercial liability in any of the past three years. There were no significant reductions in coverage compared to the prior year. NOTE 15—SUBSEQUENT EVENTS A. POSTRETIREMENT BENEFITS In October 2007, the Governor signed Assembly Bill 554 (AB 554) into law. AB 554 allows California public employers to join the CERBT to prefund their OPEB obligations after January 1, 2008. On November 7, 2007, the Board approved a participation agreement with CalPERS to be the plan administrator for the District's OPEB trust. The participation agreement was submitted to CalPERS on November 8, 2007, and became effective on January 15, 2008. On February 4, 2008, the District contributed $203,935 to the CalPERS CERBT fund. Plan Description: The plan is CERBT Fund, which is an IRC Section 115 Trust established for the purpose of receiving employer contributions to prefund health and other postemployment benefits for retirees and their beneficiaries. The plan is an agent multiple employer plan and will be administered by CaIPERS. It wil► provide medical and dental insurance premium payments for retirees and their beneficiaries. Any changes to these benefits would be approved by the District's Board and union contracts. To obtain a CERBT report, please contact CalPERS at 888- CALPERS. Page 43 TRUCKEE DONNER PUBLIC UTILITY DISTRICT NOTES TO FINANCIAL STATEMENTS December 31, 2007 and 2006 NOTE 15—SUBSEQUENT EVENTS (cont.) B. RATE CHANGE On November 19, 2007, the Board of Directors approved an increase in electric rates effective on January 1, 2008. On July 13, 2006, the Board of Directors approved a multi-step water increase effective on January 1, 2007 and January 1, 2008. C. BOND RATING As a result of the fluctuations in the securities industry, during January 2008, Standard and Poor's downgraded the bond rating of ACA, the insurer of the 2003 Certificates of Participation, from an A rating to a CCC rating and withdrew its rating on the 2003 Certificates of Participation. There is no direct monetary impact as a result of this change, however, the District's ability to issue future bonds may be affected until the securities industry recovers. Refer to Note 5 for more information on the bond issue. Page 44 SUPPLEMENTAL INFORMATION TRUCKEE DONNER PUBLIC UTILITY DISTRICT CONSOLIDATING BALANCE SHEETS December 31,2007 Component Units Electric Water Operations Operations Gray's Cross Old Greenwood Eliminations Totals ASSETS CURRENT ASSETS Funds Operating $ 5,411,846 $ 1,069,870 $ 298,652 $ 150,331 $ - $ 6,930,699 Designated 1,863,379 4,557,810 - - - 6,421,189 Restricted 3,099,462 7,732,839 - - - 10,832,301 Total Funds 10,374,687 13,360,519 298,652 150,331 - 24,184,189 Accounts receivable,net 1,433,453 664,116 2,091,933 810,783 - 5,000,285 Unbilled revenues 1,608,643 601,012 - - - 2,209,655 Accrued interest receivable 113,132 250,764 - - - 363,896 Materials and supplies 540,175 155,994 - - - 696,169 Prepaid expenses 213,670 81,541 - - = 295,211 Other 17,678 13,982 - - 31,660 Total Current Assets 14,301,438 15,127,928 2,390,585 961,114 - 32,781,065 NON-CURRENT ASSETS Other Non-Current Assets Restricted funds 3,538,930 9,664,439 3,259,089 1,260,321 - 17,722,779 9,117,247 Special assessments receivable - 9,117,247 - - - Deferred charges Unamortized debt issue costs 290,635 820,833 452,677 216,769 - 1,780,914 Other 928,296 - - - - 928,296 Total Other Non-Current Assets 4,757,861 19,602,519 3,711,766 1,477,090 - 29,549,236 CAPITAL ASSETS 38,785,714 73,562,336 - - � 112,348,050 Utility plant Accumulated depreciation 11,414,489) (16,077,443) - - (27,491,932) Construction work in progress 5,650,055 5,248,879 - - - 10,898,934 Land held for future use - 430,100 - - - 430,100 Total Utility Plant 33,021,280 63,163,872 - - - 96,185,152 TOTAL ASSETS $ 52,080,579 $ 97,894,319 $ 6,102,351 $ 2,438,204 $ - $ 158,515,453 Page 45 Component Units Electric Water Operations Operations Gray's Cross Old Greenwood Eliminations Totals LIABILITIES AND NET ASSETS CURRENT LIABILITIES Other liabilities Accounts payable $ 1,354,058 $ 413,677 $ - $ - $ - $ 1,767,735 Customer deposits 202,120 45,860 - - - 247,980 Other 568,326 243,954 - - - 812,280 Total other liabilities 2,124,504 703,491 - - - 2,827,995 Current liabilities payable from restricted assets: Current portion of long-term debt 2,747,373 1,730,612 105,000 55,000 - 4,637,985 Accrued interest payable 461,577 192,593 617,334 239,783 - 1,511,287 Total Current Liabilities Payable from Restricted Assets 3,208,950 1,923,205 722,334 294,783 - 6,149,272 Total Current Liabilities 5,333,454 2,626,696 722,334 294,783 - 8,977,267 NON-CURRENT LIABILITIES Long-term debt,net of discounts,premiums and losses 15,034,878 40,059,525 33,837,746 12,110,465 - 101,042,614 Installment loans 480,178 2,300,916 - - - 2,781,094 Deferred revenues 7,725,892 1,918,573 1,034,307 401,282 - 11,080,054 Total non-current liabilities 23,240,948 44,279,014 34,872,053 12,511,747 - 114,903,762 Total Liabilities 28,574,402 46,905,710 35,594,387 12,806,530 - 123,881,029 NET ASSETS Invested in capital assets, net of related debt 32,924,664 29,040,378 (33,490,069) (11,948,696) - 16,526,277 Restricted for debt service 6,080,894 9,601,451 2,625,349 1,010,898 - 19,318,592 Unrestricted (15,499,381} 12,346,780 1,372,684 569,472 - (1,210,445) Total Net Assets 23,506,177 50,988,609 (29,492,036) (10,368,326) - 34,634,424 TOTAL LIABILITIES AND NET ASSETS $ 52,080,579 $ 97,894,319 $ 6,102,351 $ 2,438,204 $ - $ 158,515,453 Page 46 TRUCKEE DONNER PUBLIC UTILITY DISTRICT STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS Year Ended December 31,2007 Component Units Electric Water Operations Operations Gray's Cross Old Greenwood Eliminations Totals OPERATING REVENUES Sales to customers $ 18,396,992 $ 9,042,900 $ - $ - $ - $ 27,439,892 Interdepartmental sales 1,489,756 1,344 - - (1,491,100) - Standby fees 23,310 154,320 - - - 177,630 Other 1,190,186 572,314 - - (263,556) 1,498,944 Total Operating Revenues 21,100,244 9,770,878 - - (1,754,656) 29,116,466 OPERATING EXPENSES Purchased power 9,403,712 - - - - 9,403,712 Operations and maintenance 3,156,772 4,741,889 - - (1,491,100) 6,407,561 Consumer services 716,745 389,410 - - - 1,106,155 Administration and general 2,136,294 1,520,582 - - (263,556) 3,393,320 Depreciation 1,472,853 2,334,557 - - - 3,807,410 Total Operating Expenses 16,886,376 8,986,438 - - (1,754,656) 24,118,158 Operating Income 4,213,868 784,440 - - - 4,998,308 NON-OPERATING REVENUE(EXPENSES) Special tax revenue - - 1,966,628 772,768 - 2,739,396 Investment income 734,430 1,487,016 191,092 77,317 - 2,489,855 Interest expense (943,398) (1,702,443) (1,853,494) (720,094) - (5,219,429) Amortization (28,671) (25,948) (49,515) (18,419) - (122,553) Gain on disposition of assets 33,658 1,505 - - - 35,163 Total Non-Operating Expenses (203,981) (239,870) 254,711 111,572 - (77,568) Income Before Contributions 4,009,887 544,570 254,711 111,572 - 4,920,740 CAPITAL CONTRIBUTIONS,net 4,676,907 6,309,201 - - - 10,986,108 CHANGE IN NET ASSETS 8,686,794 6,853,771 254,711 111,572 - 15,906,848 NET ASSETS(Deficit)-Beginning of Year 14,819,383 44,134,838 (29,746,747) (10,479,898) - 18,727,576 NET ASSETS(Deficit)-END OF YEAR $ 23,506,177 $ 50,988,609 $ (29,492,036} $ {10,368,326) $ - $ 34,634,424 Page 47 k i i I 1 i TRUCKEE DONNER PUBLIC UTILITY DISTRICT STATEMENTS OF CASH FLOWS Year Ended December 31,2007 Component Units Electric Water Old Operations Operations Gray's Cross Greenwood Eliminations Total CASH FLOWS FROM OPERATING ACTIVITIES i Received from customers $ 20,907,512 $ 9,754,209 $ - $ - $ (1,754,656) $ 28,907,065 Paid to suppliers for goods and services (12,720,873) (4,801,593) - - 1,754,656 (15,767,810) Paid to employees for services (2,379,627) (2,051,467) - - - (4,431,094) Net Cash Flows from Operating Activities 5,807,012 2,901,149 - - - 8,708,161 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Principal payments on long-term debt (2,470,000) - - - - (2,470,000) Interest payments on long-term debt (955,875) - - - - (955,875) j Net Cash Flows from Noncapital Financing Activities (3,425,875) - - - - (3,425,875) CASH FLOWS FROM CAPITAL AND RELATED F FINANCING ACTIVITIES i i Capital expenditures for utility plant (3,234,927) (4,786,723) - - - (8,021,650) Capital contributions,connection and facility fees 399,435 2,537,084 - - - 2,936,519 Special assessments receipts - 496,507 - - - 496,507 Special tax receipts - - 1,846,893 750,930 - 2,597,823 Debt issuance costs and premiums received,net - (12,034) - - - (12,034) Principal payments on long-term debt (216,696) (1,584,534) (65,000) (40,000) - (1,906,230) Interest payments on long-term debt (37,010) (1,822,261} (1,854,240) (720,469) - (4,433,980) Cash Flows From Capital and Related Financing Activities (3,089,198} (5,171,961) (72,347} (9,539) - (8,343,045) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investments - (1,698,880) - - - (1,698,880) Interest received 810,349 1,506,549 191,093 77,317 - 2,585,308 Cash Flows from Investing Activities 810,349 (192,331) 191,093 77,317 - 886,428 Net Change in Cash and Cash Equivalents 102,288 (2,463,143) 118,746 67,778 - (2,174,331) CASH AND CASH EQUIVALENTS—Beginning of Year 13,811,329 21,893,225 3,438,995 1,342,874 - 40,486,423 CASH AND CASH EQUIVALENTS—END OF YEAR $ 13,913,617 $19,430,082 $ 3,557,741 $ 1,410,652 $ - $ 38,312,092 NONCASH INVESTING ACTIVITIES During 2007$2,995,383 and$3,258,436 of capital assets were contributed to the water and electric utilities,respectively,by customers and developers. Page 48 Component Units Electric Water Old Operations Operations Gray's Cross Greenwood Eliminations Total RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES $ 4,213,868 $ 784,440 $ 4,998,308 Operating income - $ - $ - Noncash Items Included in Operating Income - 3,807,410 Depreciation and amortization 1,47 , 2,334,557 - = 79,100 100 - - 79,100 Amortization of deferred expenses - 182,506 Depreciation charged to other accounts 86,225 96,281 - _ Changes in assets and liabilities (300,776) (8 Accounts receivable and unbilled revenues (233,041} ( ,7 113,071 (8,708) ) - - - 104,363 Materials and supplies - E ,790 4,863 (127,653) 122 E. Prepaid expenses and other current assets ( ) ( ) _ _ (266,502) € Accounts payable 115,081 (381,583) - 40,309 51,066 - - - 91,375 Customer deposits _ 140,030 Other current liabilities 42,336 97,694 - NET CASH FLOWS FROM OPERATING ACTIVITIES $ 5,807,012 $ 2,901,149 $ - $$ -- $ - $ 8,708,161 RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE BALANCE SHEET 6,930,699 $ 5,411,846 $ 1,069,870 $ 298,652 $ 150,331 $ - $ Operating 6,421,189 1,863,379 4,557,810 _ - - 10,832,301 Designated 3,099,462 7,732,839 - - _ Restricted bond funds-current - 17,722,779 Restricted bond funds-non-current 3,538,930 9,664,439 3,259,089 1,260,321 13,913,617 23,024,958 3,557,741 1,410,652 - 41,906,968 Total Cash and Investments - 876_ _ (3,594, ) z Less: Long-Term Investments - (3,594,876) TOTAL CASH AND CASH EQUIVALENTS $ 13,913,617 $ 19,430,082 $ 3,557,741 $ 1,410,652 $ - $ 38,312,092 t Page 49