HomeMy WebLinkAbout#5 Annual Reports Financial Statements Agenda Item # 5
Public Utility District
.
FINANCE BUSINESS ITEM
To: Board of Directors
From: Mary Chapman
Date: December 02, 2009
Subject: Consideration of Accepting the Annual Reports and Financial
Statements
1. WHY THIS MATTER IS BEFORE THE BOARD
The Truckee Donner Public Utility Financing Corporation is required to hold an annual
meeting. Review of Annual Reports and Annual Financial Statements are solely within
the purview of the Financing 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. They include the annual reports for the 2003 A/B
Certificates of Participation and the 2006 Certificates of Participation.
3. NEW INFORMATION
Attached are the following annual reports:
• Certificates of Participation Series 2003A and 2003B reports as of December
31, 2008 (Attachment 1)
• Certificates of Participation (Water System Improvements) Series 2006 as of
December 31, 2008 (Attachment 2)
• Truckee Donner Public Utility District annual audited financial statements
(Attachment 3)
4. FISCAL IMPACT
There is no fiscal impact associated with this action.
5. RECOMMENDATION
Approve the annual reports and financial statements.
_b
Mary Chapman Michael D. Holley
Administrative Services Manager General Manager
Attachment 1
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
REFUNDING CERTIFICATES OF PARTICIPATION SERIERS 2003A AND 2003B
ANNUAL REPORT 12/31/2008
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
History of Electric Service Charges
January March March March January January
2004 2005 2006 2007 2008 2009
Domestic Electric Rates: no change
Permanent Residents
Customer Charge: per month $5.00 $5.84 $6.13 $6.13 $6.56 $6.76
Energy Charge per kilowatt-hour $0.11400 $0.11400 $0.12000 $0.12000 $0.12800 $0.13200
Domestic Electric Rates:
Non-Permanent Residents
Customer Charge: per month $5.00 $5.84 $6.13 $6.13 $6.56 $6.76
Energy Charge per kilowatt-hour $0.13000 $0.13000 $0.13700 $0.13700 $0.14700 $0,15100
Small Commercial Rates:
Commercial Customers with monthly
demand less than 50 kilowatts
Customer Charge: per month $9.70 $11.32 $11.89 $11.89 $12.72 $13.10
Energy Charge per kilowatt-hour $0.13700 $0.13700 $0.14400 $0.14400 $0.15400 $0.15900
Medium Commercial Rates:
Commercial Customers with monthly
demand less than 50kW and less than
200kW
Customer Charge: per month $96.85 $113.04 $118.69 $118.69 $127.00 $130.81
Energy Charge per kilowatt-hour $0.08110 $0.08110 $0.08520 $0.08520 $0.09100 $0.09400
Demand Charge per kilowatt of demand $11.11 $11.11 $11.67 $11.67 $12.49 $12.86
Large Commercial Rates:
Commercial Customers with monthly
demand greater than 200kW
Customer Charge: per month $425.00 $495.83 $520.62 $520.62 $557.06 $573.78
Energy Charge per kilowatt-hour $0.08350 $0.08350 $0.08770 $0.08770 $0.09400 $0.09700
Demand Charge per kilowatt of demand $10.62 $10.62 $11.15 $11.15 $11.93 $12.29
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TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Electric System Connection Charges and Facilities Fees
For 200 amp Service as of April 7, 2008
Unchanged as of May 31, 2009
Connection Facilities
Size and Type of Service Charge Fees
Three Wire Overhead
-Temporary Actual Cost
-Permanent connection to structure $1,248 $1,298
-Temporary connection to pole and transfer to structure $1,534
Three Wire Underground (overhead transformer)
-Permanent connection to structure $1,248 $1,298
-Temporary connection to pole and transfer to structure $1,534
Three Wire Underground (padmount transformer)
-Permanent connection to structure $1,248 $1,298
-Temporary connection to pole and transfer to structure $1,534
TRUCKEE DONNER,PUBLIC UTILITY DISTRICT
Electric System Customers, Sales, Revenues and Demand
2004 2005 2006 2007 2008
Number of Customers:
f
Residential 10,726 11,082 11,342 11,483 11,627
Commercial and Other 1 1,485 1,602 1,696 1,514 1,528
Total Customers 12,211 12,684 13,038 12,997 13,155
Kilowatt-Hour(kWh)Sales:
Residential 69,818,294 70,072,056 72,400,532 74,009,589 75,203,263
Commercial and Other 65,434,701 66,266,816 71,868,598 73,081,212 73,101,332
Total kWh Sales 135,252,995 136,338,872 144,269,130 147,090,801 148,304,595
Revenues from Sale of Energy:
Residential $9,004,185 $9,171,600 $9,914,315 $10,264,846 $11,183,675
Commercial and Other 8,171,764 8,369,493 9,352,463 9,655,434 10,413,720
Total Revenues from Sale of Energy $17,175,949 $17,541,093 $19,266,778 $19,920,280 $21,597,395
Peak Demand (kW) 32,235 32,179 35,928 36,047 35,099
1) Removed inactive accounts from the 2007 customer counts.
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TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Electric System Largest Electric Customers-2008
12 Months
Customer Type of Business KWh Sold Electrical Billings
District Water Department(1)(2) Water Utility 10,536,252 $1,499,238
Tahoe Truckee Sanitation Agency(2) Sewer Plant 7,897,131 927,115
Tahoe Forest Hospital (2) Hospital 5,478,771 680,122
i Tahoe Truckee Unified School District(2) Education 3,202,349 445,358
Teichert&Son Private/Commercial 2,146,500 347,849
(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
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Electric System-Summary of Historical Net Revenues and Selected Balance Sheet Information
2004 2005 2006 2007 2008
Revenues(1)
Sales to Customers $15,689,878 $16,317,909 $18,287,011 $18,396,992 $20,104,157
Inlerdivisional Sales(2) 1,412,884 1,329,356 1,369,321 1,489.756 1,500,671
Standby Charges 24,420 22,540 23,930 23,310 20,860
Facilities Fees(3) 282,829 481,723 454,891 513,901 287,370
Other(4) 466,841 426,454 462,140 1,190,186 1,225,541
Income from Investments 70,471 266,750 615,988 734,430 358,637
Total Revenues $17,947,323 $P8,844,732 $21,213,281 $22,348.575 $23,497,236
E Rate Stabilization Fund Transfer Is) (») 0 0 0 0 0
Total Adjusted Revenues (») $17,947,323 $18,844,732 $21,213,281 $22,348,575 $23,497,236
Operations and Maintenance Costs(6)
Power Purchases $8,269,483 $8,279,662 $8,328,528 $9,403,712 $10,627,405
Operations and Maintenance 1,906,348 2.231,024 2,636,335 3,156,772 3.260,176
Administrative and General 1,693,424 1,937,050 2,038,521 2,136,294 2,626,971
Consumer Services(7) 586,803 548,978 552,257 716,745 1,256,241
Interest Expense(a) 49,065 56,674 51,013 36,924 24,338
Total Operation and Maintenance Costs $12,505,123 $13,053,388 $13,606.654 $15,450,447 $17,795,132
Adjusted Net Revenues/Funds Available for
Debt Service $5,442,200 $5,791,344 $7,606,626 $6,898,129 $5,702.103
Debt Service(g) 2,853,354 3,443,550 3,432,013 3,425,875 3,418,650
Debt Service Coverage(io) 1.91 1.68 2.22 2.01 1.67
Selected Balance Sheet Information
Fund Balances(December 31):
General Fund $5,387,507 $6.615,006 $7,852,077 $7,073,595 $6,374,547
Rate Stabilization Fund Balance 440,870 452,512 753,020 1,148,106 1,550,631
Total Fund Balances $5,828,377 $7,067,518 $8,605,097 $8,221,701 $7,925,178
Net Plant in Service $14,923,885 $18,099,649 $22,395,013 $27,371,225 $33,444,016
Construction Work in Progress 4,933,875 2,714,371 5,760,806 5,650,055 3,309,758
Net Electric Utility Plant $19,857,760 $20,814,020 $28,155,819 $33,021,280 $36,753,774
(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 Costs and/or Debt Service. See"SECURITY AND SOURCES OF PAYMENT FOR THE 2003
CERTIFICATES--Defined Terms"and"--Rate Covenant'herein.
(6) Excludes depreciation and amortization.
(7) Includes all customer service,billing activity and customer information expenses.
(8) Excludes interest on the 2003AIB Certificates which are shown in the debt service below.
(9) Represents Debt Service on the Districts 2003 A/B Electric Certificates of Participation for the Purchased Power Contract buy-out with IDACORP
Energy L.P.
j (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$26 million 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
II
Fiscal Year ended December 31,2003.
t
Attachment 2
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CERTIFICATES OF PARTICIPATION
(WATER SYSTEM IMPROVEMENT PROJECTS)
SERIES 2006
ANNUAL REPORT 12/31/2008
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 $25,210,000
as of December 31, 2008.
(c) The balance in the Reserve Fund as of December 31, 2008 was
$1,983,516.
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.
(M) "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%
2008 2,304 -5.32% 656 2.34% 11,843 0.36%
TRUCKEE DONNER PUBLIC UTILTIY DISTRICT
Historic Water 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% 844,812 2.39%
2006 7,160,485 8.34% 991,941 17.42%
2007 7,875,829 9.99% 1,165,511 17.50%
2008 8,459,823 7.42% 1,179,157 1.17%
TRUCKEE DONNER PUBLIC UTILTIY DISTRICT
Largest Water Customers-Fiscal Year 2008
Customer Water Usage (1) Annual Payments
Tahoe Mountain Club Company 112,479,910 $56,799
Coyote Moon Golf course 89,898,170 55,189
Tahoe Club Company LLC 80,335,310 52,976
Tahoe Donner Association 48,985,420 152,144
Truckee Tahoe Unified School District 22,244,830 42,175
Truckee Donner Recreation 15,397,390 31,.897
Tahoe Forest Hospital 14,841,300 35,388
Bob Gales/Coachland (mobile home park) 14,130,000 30,806
Donner Creek Mobile Home Park 11,673,000 17,370
Town of Truckee 6,205,230 18,564
TOP TEN TOTAL 416,190,560 $493,307
TOTAL SYSTEM 2,303,633,958 $9,658,482
18.07% 5.11%
��� Gallons
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Historic Water Operating Results&Debt Service Coverage
Fiscal Year Ending December 31
Revenues 2004 2005 2006 2007 2008
Sales to Customers $7,089,121 $7,563,132 $8,247,123 $9,042,900 $9,658,482
Standby Fees 196,080 183,119 63,040 154,320 162,400
Investment Income�'� 150,349 258,352 451,305 606,805 372,799
Facilites Fees(2) 843,363 1,308,200 1,133,360 1,309,385 560,485
Connection Fees(2)(3) 343,581 405,987 314,528 369,978 266,474
Other(4) 402,932 417,541 469,642 573,659 611,206
Total Revenues $9,025,426 $10,136,331 $10,678,999 $12,057,046 $11,631,847
Operating&Maintenance Expenses
Operations and Maintenance $4,157,384 $4,229,691 $4,289,245 $4,741,889 $4,369,205
Administration and General 1,413,250 1,525,485 1,558,078 1,520,582 1,581,950
Customer Services 290,500 297,517 322,608 389,410 428,740
Total Operations&Maintenance Expenses $5,861,134 $6,052,693 $6,169,931 $6,651,881 $6,379,895
Net Revenues $3,164,292 $4,083,638 $4,509,067 $5,405,165 $5,251,952
Parity Debt Service(5)
2006 Installment Purchase Agreement $0 $0 $173,904 $1,898,460 $1,896,089
1996 Installment Purchase Agreement 802,038 800,402 677,440 0 0
DWR Proposition 55 Loan 306,423 306,422 306,422 306,481 306,491
Interest on Parity Debt Service Reserve Funds (26,202) (32,362) (56,547) (85,081) (80,289)
Total Parity Debt Service $1,082,259 $1,074,462 $1,101,219 $2,119,860 $2,122,281
Parity Debt Service Coverage 2.92 3.80 4.09 2.55 2.47
Net Revenues Remaining for Subordinate Debt $2,082,033 $3,009,176 $3,407,848 $3,285,305 $3.,129,671
Service
Subordinate Debt Service(5)(6) $427,105 $435,280 . $409,044 $400,909 $396,516
Parity and Subordinate Debt Service Coverage(7) 2.10 2.70 2.99 2.14 2.09
Balance Available for Capital Projects or Other $1,654,928 $2,573,896 $2,998,804 $2,884,396 $2,743,155
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.
Attachment 3
TRUCKEE DONNER PUBLIC
UTILITY DISTRICT
FINANCIAL STATEMENTS
December 31, 2008 and 2007
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Truckee Donner Public Utility District
Truckee, California
We have audited the accompanying balance sheet of the Truckee Donner Public Utility District as of
December 31, 2008 and 2007, 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 audit.
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, 2008 and 2007, 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.
Madison, Wisconsin
May 7, 2009
Page 1
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2008 and 2007
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 l(A).
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 reported 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 non-cash 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, 2008 and 2007
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 $4.7 million, $4.9 million, and $7.3 million
for the years ended December 31, 2008, 2007 and 2006, 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)
2008 2007 2006 2008-2007
Sales to consumers $ 29,762,640 $ 27,439,892 $ 26,534,134 $ 2,322,748
Other operating revenues 1,744,700 1,676,574 737,500 68,126
Total Operating Revenues 31,507,340 29,116,466 27,271,634 2,390,874
Operating expenses 26,575,244 24,118,158 21,027,149 2,457,086
Operating Income(Loss) 4,932,096 4,998,308 6,244,485 (66,212)
Non-operating revenues(expenses) (222,234) (77,568) 1,090,776 (144,666)
Income(loss)before
capital contributions 4,709,862 4,920,740 7,335,261 (210,878)
Capital contributions, net 11,604,402 10,986,108 (9,127,441) 618,294
Change in net assets 16,314,264 15,906,848 (1,792,180) 407,416
NET ASSETS, Beginning of Year 34,634,424 18,727,576 20,519,756 15,906,848
NET ASSETS, END OF YEAR $ 50,948,688 $ 34,634,424 $ 18,727,576 $ 16,314,264
Sales to consumers were $29.8 million in 2008, $27.4 million in 2007 and $26.5 million in 2006.
The overall increases of $2.3 million (8%) in 2008 and $0.9 million (3%) in 2007 were primarily
due to electric and water rate increases to pay for increased operating costs, revenue generated
for Board designated purposes and growth in customers.
Page 5
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2008 and 2007
CAPITAL ASSETS (CONT.)
Net capital assets (additions, less retirements and depreciation) at December 31, 2008 increased
$11.8 million (12%) from December 31, 2007 and net capital assets at December 31, 2007
increased $10.6 million (12%) from December 31, 2006 because of increased electric and water
distribution assets.
LONG-TERM DEBT
Long-term debt includes revenue bonds and notes payable. At December 31, 2008, 2007 and
2006, the District had $103.8 million, $108.5 million, and $112.8 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, to fund water system infrastructure improvements, and to complete the financing of
the Donner Lake water system replacement.
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
LIABILITIES AND NET ASSETS
2008 2007
CURRENT LIABILITIES
Other Liabilities
Accounts payable $ 3,088,260 $ 1,767,735
Customer deposits 256,863 247,980
Other 774,807 812,280
Total Other Liabilities 4,119,930 2,827,995
Current Liabilities Payable From Restricted Assets
Current portion of long-term debt 4,782,147 4,637,985
Accrued interest payable 1,437,813 1,511,287
Total Current Liabilities Payable from Restricted Assets 6,219,960 6,149,272
Total Current Liabilities 10,339,890 8,977,267
NON-CURRENT LIABILITIES
Long-term debt, net of discounts, premiums and losses 96,604,153 101,042,614
Installment loans 2,429,524 2,781,094
Deferred revenues 6,300,993 11,080,054
Total Non-Current Liabilities 105,334,670 114,903,762
Total Liabilities 115,674,560 123,881,029
NET ASSETS
Invested in capital assets, net of related debt 27,386,977 16,526,277
Restricted for debt service 18,306,875 19,318,592
Unrestricted (deficit) 5,254,836 (1,210,445)
Total Net Assets 50,948,688 34,634,424
TOTAL LIABILITIES AND NET ASSETS $ 166,623,248 $ 158,515,453
See accompanying notes to financial statements.
Page 9
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2008 and 2007
2008 2007
CASH FLOWS FROM OPERATING ACTIVITIES
Received from customers $ 31,690,883 $ 28,907,065
Paid to suppliers for goods and services (17,285,915) (15,767,810)
Paid to employees for services (4,629,355) (4,431,094)
Net Cash Flows from Operating Activities 9,775,613 8,708,161
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Principal payments on long-term debt (2,570,000) (2,470,000)
Interest payments on long-term debt (848,650) (955,875)
Net Cash Flows from Noncapital Financing Activities (3,418,650) (3,425,875)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital expenditures for utility plant (8,326,171) (8,021,650)
Proceeds from sale of land 79,638 -
Capital contributions,connection and facility fees 73,779 2,936,519
Special assessments receipts 539,609 496,507
Special tax receipts 2,751,980 2,597,823
Debt issuance costs and premiums received, net - (12,034)
Principal payments on long-term debt (2,068,192) (1,906,230)
Interest payments on long-term debt (4,197,798) (4,433,980)
Cash Flows From Capital and Related Financing Activities (11,147,155) (8,343,045)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments - (1,698,880)
Interest income received 1,604,084 2,585,308
Cash Flows from Investing Activities 1,604,084 886,428
Net Change in Cash and Cash Equivalents (3,186,108) (2,174,331)
CASH AND CASH EQUIVALENTS—Beginning of Year 38,312,092 40,486,423
CASH AND CASH EQUIVALENTS—END OF YEAR $ 35,125,984 $ 38,312,092
NONCASH INVESTING ACTIVITIES
Developer and customer added capital asstets $ 6,769,297 $ 6,523,819
Recognition of deferred revenues $ 6,301,567 $ 5,518,446
Page 11
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
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, 2008 and 2007
NOTE 1 —ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (font.)
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 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. No new debt was issued in 2007 and 2008; no interest was capitalized in 2007 or
in 2008.
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, 2008 and 2007
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cunt.)
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 $782,555 in
2008 and $772,768 in 2007.
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 $2,014,877 in
2008 and $1,966,628 in 2007.
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.
S. RECENT ACCOUNTING PRONOUNCEMENTS IMPLEMENTED BY THE DISTRICT
In June 2004, the GASB issued Statement No. 45, Accounting and Financial Reporting by
Employers for Postemployment Benefits Other Than Pensions. Statement No. 45 establishes
standards for the measurement, recognition, and display of other postemployment benefits,
(OPEB) expenditures and related liabilities or assets, 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 was effective for the District beginning fiscal year 2007.
See note 9.
Page 17
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 1 —ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
T. ACCOUNTING PRONOUNCEMENTS NOT YET IMPLEMENTED(CONT.)
In June of 2008, GASB issued Statement No. 53, Accounting and Financial Reporting for
Derivative Instruments. This Statement addresses the recognition, measurement, and disclosure
of information regarding derivative instruments entered into by state and local governments.
Derivative instruments are often complex financial arrangements used by governments to
manage specific risks or to make investments. Common types of derivative instruments used by
governments include interest rate and commodity swaps, interest rate locks, options (caps,
floors, and collars), swaptions, forward contracts, and futures contracts. Governments enter into
derivative instruments as investments; as hedges of identified financial risks associated with
assets or liabilities, or expected transactions (that is, hedgeable items); or to lower the costs for
borrowings. Governments often enter into derivative instruments with the intention of effectively
fixing cash flows or synthetically fixing prices. Governments also enter into derivative
instruments to offset the changes in fair value of hedgeable items. A key provision in this
Statement is that derivative instruments covered in its scope, with the exception of synthetic
guaranteed investment contracts (SGICs) that are fully benefit-responsive, are reported at fair
value. The objectives, terms, and risks of hedging derivative instruments are required
disclosures. Disclosures also include a summary of derivative instrument activity that provides an
indication of the location of fair value amounts reported on the financial statements. The
disclosures for investment derivative instruments are similar to the disclosures of other
investments. The requirements of this Statement are effective for financial statements for periods
beginning after June 15, 2009. The District has elected not to early implement GASB No. 53 and
has not determined its effect on the District's financial statements.
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.
Page 19
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 2 —CASH AND INVESTMENTS (cont.)
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:
2008 2007
Building fund $ 234,117 $ 238,095
Storm damage fund 286,116 275,548
Electric rate reserve 1,550,631 1,148,106
Reserve for future meters 594,173 375,665
Water capital replacement fund 459,485 294,508
Prepaid connection fees 80,382 77,400
Land sale trust fund 4,102,925 3,552,291
Other postemployement benefits - 201,630
Debt service coverage fund 790,515 252,481
Donner Lake Assessment District surcharge fund 14,018 5,465
Totals $ 8,112,362 $ 6,421,189
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 as prescribed in the loan documents. These reserve funds are held by Bank of New
York Mellon Trust Company.
Certificates of Participation: Water
The terms of the Water 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 as prescribed in the loan documents. These reserve funds are held by Bank of New
York Mellon Trust Company.
Facilities Fees
The District charges facilities fees to applicants for new service to cover the costs of
infrastructure needed to meet their systems demand. The use of such funds is restricted by
California state law.
Page 21
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 2—CASH AND INVESTMENTS (cunt.)
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.
Solar Initiative Fund
The California Solar Initiative Senate Bill 1 (SB-1) was enacted in 2006, mandating that all
publicly-owned electric utilities within the State of California, prepare, adopt and implement a
solar rebate program by January 2008 to encourage its customers to install solar energy
systems.
In 2007, the Board adopted a rebate program effective January 2008, targeting $177,400
annually over ten years to be used as rebates for the installation of solar electricity systems
and to raise these funds through a customer surcharge.
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 23
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 2—CASH AND INVESTMENTS (cont.)
INVESTMENTS AUTHORIZED BY THE DISTRICT'S INVESTMENT POLICY
The District adopted an investment policy in 2006 which allowed for investments in instruments
permitted by the California Government Code and/or the investments permitted by the trust
agreements on District financing, including investments in the local government investment pool
administered by the State of California ("LAIF"). 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, 2008 and 2007 the District's deposits and
investments were held as follows:
2008 2007
Cash on hand $ 1,200 $ 900
Deposits 270,616 675,331
LAW 22,456,467 23,117,571
Money Market Funds 8,093,117 7,242,380
Guaranteed Investment Contract 4,806,711 7,275,910
Government Bonds 3,594,876 3,594,876
Totals $ 39,222,987 $ 41,906,968
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 2008 and 2007:
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 25
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 3—CAPITAL ASSETS
Capital assets consist of the following at December 31, 2008 and 2007:
January 1, December 31,
2008 Additions Reductions 2008
Electric distribution facilities $ 31,540,474 $ 7,051,918 $ (143,019) $ 38,449,373
Water distribution facilities 71,356,454 8,616,430 (896,496) $ 79,076,388
General plant 9,451,122 1,132,065 (325,789) $ 10,257,398
112,348,050 16,800,413 (1,365,304) 127,783,159
Less: Accumulated depreciation (27,491,932) (4,331,480) 1,365,304 (30,458,108)
Construction work in progress 10,898,934 10,964,738 (11,638,683) 10,224,989
Land held for future use 430,100 - - 430,100
Totals $ 96,185,152 $ 23,433,671 $ (11,638,683) $ 107,980,140
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
As of December 31, 2008 and 2007, the plant in service included land, $1,940,523 and
$1,925,482 respectively, 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.
At the end of 2008, there were three open pipeline replacement contracts with one contractor
totaling $3 million. All completed work was paid or accrued, and recorded in construction work in
progress.
Page 27
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 5— LONG-TERM DEBT
Long-term debt consisted of the following at December 31, 2008 and 2007:
January 1, December 31, Due within
2008 Additions Reductions 2008 one year
Certificates of Participation—
Electric,2.5%to 5.75%,
due serially to 2013(net of
unamortized premiums of
$144,898). $ 17,604,878 $ $ (2,634,980) $ 14,969,898 $ 2,685,000
State Revolving Fund Loan—
Water,2.34%,due semi-annually
beginning in 2006 to 2026. 11,709,373 (529,935) 11,179,438 542,408
Special Tax Bonds—Mello
Roos,2.25%to 5.7%,due
serially to 2013(net of
unamortized discounts of
$122,655). 12,165,466 - (48,121) 12,117,345 70,000
Special Tax Bonds—Mello
Roos,3.25%to 5.7%,
due serially to 2035(net of
unamortized discounts of
$295,318). 15,049,507 - (19,825) 15,029,682 50,000
Special Tax Bonds—Mello
Roos,3.50%to 5.50%,due
due serially to 2035(net of
unamortized discounts of
$201,237). 18,893,239 (59,476) 18,833,763 100,000
Certificates of Participation—
Water,4.00%to 5.00%,
due serially to 2036(net of
unamortized discounts of
$123,542 and premiums of
$553,457) 26,483,591 (720,276) 25,763,315 775,000
Department of Water Resources,
3.18%,due semiannually to
2021,secured by real
and personal property. 3,343,263 (201,765) 3,141,498 208,378
Installment loans,5.4%to 6.23%,
various payment terms and
due dates,secured by
equipment. 3,212,377 - (431,491) 2,780,886 351,361
Totals $ 108,461,694 $ $ (4,645,869) $ 103,815,825 $ 4,782,147
Page 29
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
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 were utilized in the replacement of the Donner Lake water system. The
District submitted expenditures to the State for reimbursement of $12,732,965. The semi-annual
principal and interest payments 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, 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 refunding portion of the 2006 COP's,
totaling $8,465,000, has an average interest rate of 4.10%. The refunded 1996 COP's had an
average interest rate of 5.41%. The net proceeds of $7,500,557 (after payment of $63,733 in
underwriting fees, insurance and other issuance costs) plus an additional $1,315,194 of reserve
fund monies were used to prepay the outstanding debt service requirements on the 1996 COP's.
The terms of the Certificates call for payments to be made only from the net revenues of the
Water Division and the debt is secured by this revenue. These revenues are required to be at
least equal to 125% of the debt service for each year.
Page 31
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
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, 2008 and 2007, 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, 2008 and 2007:
January 1, December 31,
2008 Additions Reductions 2008
Unearned tax revenues $ 1,435,589 $ 1,417,851 $ (1,435,589) $ 1,417,851
Development agreement deposits 7,631,126 903,291 (5,016,865) 3,517,552
Connection fees and other deposits 2,013,339 636,953 (1,284,702) 1,365,590
Totals $ 11,080,054 $ 2,958,095 $ (7,737,156) $ 6,300,993
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
NOTE 7—COMMUNITY FACILITIES DISTRICTS
In order to finance various public improvements needed to develop property within the Town of
Truckee, California, the District formed Community Facilities Districts (CFD), which issued
Special Tax Bonds pursuant to the Mello-Roos Community Facilities Act of 1982, as amended.
Accordingly, the Bonds are special obligations of the respective Community Facilities Districts
and are payable solely from revenues derived from taxes levied on and collected from the
owners of the taxable land within the respective Community Facilities Districts. These Special
Tax Bonds are not general or special obligations of the District. The Board of Directors of the
District is the legislative body of the Communities Facilities Districts and as such they approve
the rates and method of apportionment of the special taxes. As improvements were completed,
the infrastructure was donated, in the form of a capital contribution to the Town of Truckee, the
Truckee Sanitary District, Southwest Gas and the District.
Page 33
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 8—DONNER LAKE WATER COMPANY PURCHASE(cont.)
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 MISCELLANEOUS 2%AT 60 RISK POOL PENSION PLAN
The District and bargaining unit employees elected to participate in the Public Agency portion of
CaIPERS, effective August 21, 2004. The "CaIPERS Miscellaneous 2% at 60 Risk Pool" is a
cost-sharing multi-employer defined benefit plan administered by CaIPERS, 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 CaIPERS and adopts those benefits through local
ordinance or resolution. The CaIPERS plan also provides for death and disability benefits.
CaIPERS issues a separate comprehensive annual financial report. Copies of the CaIPERS'
annual financial report may be obtained from the CaIPERS 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 pays 4% on behalf of the participants. 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, 2008 and 2007 was 16.120% and
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.
At the time of joining the CaIPERS Miscellaneous 2% at 60 Risk Pool, an employer side fund was
created to account for the difference between the funded status of the pool and the funded status
of the District's plan. The side fund is credited, on an annual basis, with the actuarial assumption
of a 7.75% investment return and the side fund balance is amortized on a closed basis, ending in
2017.
Page 35
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 9— EMPLOYEE BENEFIT PLANS (cont.)
C. OTHER POST EMPLOYMENT BENEFITS (OPEB)
The District administers a single-employer defined benefit healthcare plan (The Retiree Health
Plan). Contribution requirements and benefit provisions are established through collective
bargaining agreements and may be amended only through negotiations between the District and
the Union. 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. Health insurance includes medical insurance, dental insurance, and prescriptions. The
Retiree Health Plan does not issue a publicly available financial report.
The District began providing post employment health care on January 1, 2000 to all employees,
and qualified dependents, that retire from the District on or after attaining age 60 with service of
at least 20 years. As of December 31, 2008, there were eight active plan participants. The
monthly amount paid by the District is capped at $475 for each participant or $375 for each
participant eligible for Medicare. For participants with less than 20 years of service, the benefit is
reduced by 5% for each year. For participants who retired prior to age 60, the benefit is reduced
by 2% for each year. Expenditures for post employment health care benefits are recognized
when premiums are paid.
During 2006, the District received an other post employment benefit (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 in anticipation of contributing to the
California Employers' Retiree Benefit Trust Program (CERBT) in 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. At that time,
accumulated deposits, plus accrued interest, were transferred to CERBT.
The funds of the Retiree Health Plan are invested in CERBT, which is a tax qualified trust
organized under Internal Revenue Code (IRC) Section 115. Participation in the trust is limited to
those agencies who qualify as "government" entities under that IRC section. The CERBT is an
irrevocable trust established for the purpose of receiving employer contributions to prefund
health and other postemployment benefits for retirees and their beneficiaries. The CERBT
administrative costs are financed through investment earnings. To obtain a CERBT report,
please contact CalPERS at 888-225-7377.
Page 37
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 9— EMPLOYEE BENEFIT PLANS (cont.)
C. OTHER POST EMPLOYMENT BENEFITS (OPEB) (cont.)
Schedule of Funding Progress (Unaudited, Required Supplementary Information)
The funded status of the plan as of January 1, 2007, which is the first year of the plan and the
most recent actuarial valuation date, was as follows:
Unfunded Funded Annual UL as a
Valuation Accrued Actuarial Value Liabilities Ratio Covered % of
Date Liabilities (AL) of Assets (AVA) (UL) (AVA/AL) Payroll Payroll
01/01/2006 $ 2,328,500 $ - $ 2,328,500 0.0% $ 5,542,800 42.0%
01/01/2007 $ 1,369,600 $ 198,800 $ 1,170,800 14.5% $ 4,925,600 23.8%
Significant actuarial assumptions include:
Actuarial Cost Method Entry Age Normal Cost Method
Discount Rate 7.75%
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 as understood by the employer and plan members) and include the types of benefits
provided at the time of each valuation and 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 calculations.
NOTE 10—SELF FUNDED INSURANCE
The District has a self-funded vision insurance program and claims were processed by and on
behalf of the District. The District did not maintain a claim liability, rather claims were expensed
as paid. The amount of claims paid for each of the past three years have not been material.
Page 39
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 11 —SEGMENT DISCLOSURE (cont.)
Balance Sheets(cont.)
2007
Gray'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 15,515,056 42,360,441 33,837,746 12,110,465
Other liabilities 7,725,892 1,918,573 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 41
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 11 —SEGMENT DISCLOSURE (cunt.)
Statements of Revenues, Expenses,and Changes in Net Assets(cont.)
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 43
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008 and 2007
NOTE 12— RESOLVED CONTINGENCY
The District was 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 fell under the federal EPA
Superfund Program. In 2002, the District resolved this matter with the EPA, by the District
funding its portion of the cleanup expenses, as long as expenses did not exceed $60,000,000. If
cleanup expenses exceeded $60,000,000, the District would have been liable for its portion
(.163%) of the additional cost. Both sites were restored by April 2007 with no land restrictions by
the EPA, and with no additional cost to the District.
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
RATE CHANGE
On November 19, 2007, the Board of Directors approved an increase in electric rates effective
on January 1, 2009.
On December 3, 2008 the Board adopted an ordinance, establishing a $5.00 monthly surcharge
for all treated water accounts, effective January 2, 2009 through December 31, 2013.
Page 45
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
CONSOLIDATING BALANCE SHEETS
December 31, 2008
Component Units
Electric Water Gray's
Operations Operations Crossing Old Greenwood Eliminations Totals
ASSETS
CURRENT ASSETS
Funds
4
Operating $ 4,330,502 $ 995,836 $ 423,509 $ 179,319 $ $ 5,929,166
Designated 2,070,864 6,041,498 - - - 8,112,362
Restricted 3,139,946 5,388,393 - - - 8,528,339
Total Funds 9,541,312 12,425,727 423,509 179,319 - 22,569,867
Accounts receivable, net 1,048,523 661,804 2,097,876 832,553 - 4,640,756
Unbilled revenues 1,799,708 617,414 - - - 2,417,122
Accrued interest receivable 54,261 220,242 10,870 8,133 - 293,506
Materials and supplies 533,662 146,109 - _ - 679,771
Prepaid expenses 168,316 89,037 257,353
Other 14,744 14,225 - - - 28,969
Total Current Assets 13,160,526 14,174,558 2,532,255 1,020,005 - 30,887,344
i
NON-CURRENT ASSETS
Other Non-Current Assets
Restricted funds 3,600,730 8,512,994 3,265,105 1,274,291 - 16,653,120
Special assessments receivable - 8,577,638 - - - 8,577,638
Deferred charges
i
Unamortized debt issue costs 200,647 756,692 428,929 205,258 _ 1,591,526
Other 933,480 - - - - 933,480
Total Other Non-Current Assets 4,734,857 17,847,324 3,694,034 1,479,549 - 27,755,764
CAPITAL ASSETS
Utility plant 46,144,911 81,638,248 - - - 127,783,159
Accumulated depreciation (12,700,894) (17,757,214) - - - (30,458,108)
Construction work in progress 3,309,758 6,915,231 - - - 10,224,989
Land held for future use - 430,100 - - - 430,100
Total Utility Plant 36,753,775 71,226,365 - - 107,980,140
TOTAL ASSETS $ 54,649,158 $ 103,248,247 $ 6,226,289 $ 2,499,554 $ - $ 166,623,248
Page 46
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
Year Ended December 31, 2008
Component Units
Electric Water Gray's
Operations Operations Crossing Old Greenwood Eliminations Totals
OPERATING REVENUES
Sales to customers $ 20,104,157 $ 9,658,483 $ - $ - $ - $ 29,762,640
Interdepartmental sales 1,500,671 1,424 - - (1,502,095) -
Standby fees 21,030 162,400 - - - 183,430
Other 1,225,541 609,782 - - (274,053) 1,561,270
Total Operating Revenues 22,851,399 10,432,089 - - (1,776,148) 31,507,340
OPERATING EXPENSES
Purchased power 10,627,405 - - 10,627,405
Operations and maintenance 3,260,176 4,369,205 - - (1,502,095) 6,127,286
Consumer services 1,256,241 428,740 - - - 1,684,981
Administration and general 2,626,971 1,581,950 - - (274,053) 3,934,868
Depreciation 1,643,965 2,556,739 - - - 4,200,704
Total Operating Expenses 19,414,758 8,936,634 - - (1,776,148) 26,575,244
I
E Operating Income 3,436,641 1,495,455 - - - 4,932,096
NON-OPERATING REVENUE (EXPENSES)
Special tax revenue - - 2,014,877 782,555 - 2,797,432
Investment income 358,637 1,510,939 111,059 61,144 - 2,041,779
Interest expense (815,164) (1,649,864) (1,850,748) (718,780) - (5,034,556)
Amortization (25,008) (27,284) (49,447) (18,390) - (120,129)
Gain on disposition of assets 13,602 79,638 - - - 93,240
Total Non-Operating Expenses (467,933) (86,571) 225,741 106,529 - (222,234)
Income Before Contributions 2,968,708 1,408,884 225,741 106,529 - 4,709,862
CAPITAL CONTRIBUTIONS, net 6,405,794 5,198,608 - - - 11,604,402
CHANGE IN NET ASSETS 9,374,502 6,607,492 225,741 106,529 - 16,314,264
NET ASSETS (Deficit)- Beginning of Year 23,506,177 50,988,609 (29,492,036) (10,368,326) - 34,634,424
NET ASSETS (Deficit)- END OF YEAR $ 32,880,679 $ 57,596,101 $ (29,266,295) $ (10,261,797) $ - $ 50,948,688
Page 48
Component Units
Electric Water Gray's Old
Operations Operations Crossing Greenwood Eliminations Total
RECONCILIATION OF OPERATING INCOME TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
Operating income $ 3,436,641 $ 1,495,455 $ - $ - $ - $ 4,932,096
Noncash items included in operating income
Depreciation and amortization 1,643,965 2,556,739 - - - 4,200,704
Amortization of deferred expenses (5,184) - - - - (5,184)
r
Depreciation charged to other accounts 64,689 89,450 - - - 154,139
Changes in assets and liabilities
Accounts receivable and unbilled revenues 193,865 (14,090) - - - 179,775
Materials and supplies 6,514 9,885 - - - 16,399
Prepaid expenses and other current assets 51,922 (5,416) - - - 46,506
Accounts payable 98,740 (15,047) - - - 83,693
Customer deposits 4,686 (918) - - - 3,768
Other current liabilities 70,986 92,731 - - - 163,717
E
NET CASH FLOWS FROM OPERATING ACTIVITIES $ 5,566,824 $ 4,208,789 $ - $ - $ - $ 9,775,613
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE BALANCE SHEET
s Operating $ 4,330,502 $ 995,836 $ 423,509 $ 179,319 $ - $ 5,929,166
` Designated 2,070,864 6,041,498 - - - 8,112,362
Restricted bond funds-current 3,139,946 5,388,393 - - - 8,528,339
Restricted bond funds-non-current 3,600,730 8,512,994 3,265,105 1,274,291 - 16,653,120
Total Cash and Investments 13,142,042 20,938,721 3,688,614 1,453,610 - 39,222,987
Less: Long-term investments - (3,594,876) - - - (3,594,876)
Mark to market valuation (57,934) (444,193) - - - (502,127)
TOTAL CASH AND CASH EQUIVALENTS $ 13,084,108 $ 16,899,652 $ 3,688,614 $ 1,453,610 $ - $ 35,125,984
Page 50