Foresthill PUD 2006 Audit Report[1]PDF
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FORESTHILL PUBLIC UTILITY DISTRICT _________________________ FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT for the year ended June 30, 2006 ROBERT W. JOHNSON Certified Public Accountant TABLE OF CONTENTS Pages Independent Auditor's Report 1-2 Management’s Discussion and Analysis 3-5 Financial Statements: Combined Balance Sheet 6 Statement of Revenues, Expenses and Changes in Net Assets 7-8 Statement of Cash Flows 9-10 Notes to Financial Statements 11-20 Supplemental Information: Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 22-23 Principal Officials 24 Statement of Revenues, Expenses and Changes in Net Assets – Budget and Actual 25 Operating Expenses 26-27 ROBERT W. JOHNSON An Accountancy Corporation Certified Public Accountant 6234 BIRDCAGE STREET • CITRUS HEIGHTS, CA 95610-5949 • (916) 723-2555 INDEPENDENT AUDITOR’S REPORT To the Board of Directors Foresthill Public Utility District Foresthill, California We have audited the accompanying financial statements of Foresthill Public Utility District (the “District”) as of and for the year ended June 30, 2006, as listed in the table of contents. These financial statements are the responsibility of the ...
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FORESTHILL PUBLIC UTILITY DISTRICT _________________________
FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT for the year ended June 30, 2006
ROBERT W. JOHNSON Certified Public Accountant
TABLE OF CONTENTS
Independent Auditor's Report Management’s Discussion and Analysis Financial Statements: Combined Balance Sheet Statement of Revenues, Expenses and Changes in Net Assets Statement of Cash Flows Notes to Financial Statements Supplemental Information: Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance withGovernment Auditing Standards Principal Officials Statement of Revenues, Expenses and Changes in Net Assets Budget and Actual Operating Expenses
Pages 1-2 3-5
6 7-8 9-10 11-20
22-23 24 25 26-27
6234 BIRDCAGE STREET•CITRUS HEIGHTS, CA 95610-5949•(916) 723-2555
INDEPENDENT AUDITOR’S REPORT
ROBERT W. JOHNSON An Accountancy Corporation Certified Public Accountant To the Board of Directors Foresthill Public Utility District Foresthill, California We have audited the accompanying financial statements of Foresthill Public Utility District (the “District) as of and for the year ended June30, 2006, as listed in the table of contents. These financial statements are the responsibility of the District’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit 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 audit provides 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 Foresthill Public Utility District as of June 30, 2006 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance withGovernment Auditing Standards, we have also issued our report dated August 16, 2006 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants.
The Management’s Discussion and Analysis is not a required part of the financial statements but is supplemental information required by the Government Auditing Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplemental information. However, we did not audit the information and express no opinion on it. The supplemental information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements of Foresthill Public Utility District. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
Citrus Heights, California August 16, 2006
FORESTHILL PUBLIC UTILITY DISTRICT .dupllih mocwwrestw.fo BOARD OF DIRECTORS Brett C. Grant Kurt W. Reed, General Manager George S. Shaw Paul Chamberlain, District Counsel Gregory L. Wells Duane L. Frink William L. Sadler, Jr. Management’s Discussion and Analysis For Fiscal Year July 1, 2005 - June 30, 2006 The following discussion and analysis of the Foresthill Public Utility District (the “District) and its financial performance provides an overview of the District’s financial activities, prepared by its management for the year ended June 30, 2006. This discussion and analysis should be read in conjunction with the District’s financial statements and accompanying notes, which follow this section. Background The District was formed in 1950 pursuant to the provisions of Section 15501 et. seq. California Public Utilities Code for the purpose of operating a water system. The District’s service area comprises the unincorporated community of Foresthill, California, located in Placer County approximately 60 miles Northeast of Sacramento. The District is governed by a five member Board of Directors, and currently employs 8 full-time employees. The District currently incorporates an area of approximately 13,000 acres and contains primarily residential development. The District has a population of approximately 5,900, and as of June 30, 2006 provided 1,923 water service connections. Rates and Charges The District places a high priority on rate stability while providing exceptional service to its customers. To control rate increases the District implements a conservative, long-term planning approach that controls spending and focuses expenditures on the highest priorities. The District’s water rates increased 12.82% in September 2001, the first increase since 1993. This brought the rate for basic residential service for 0-10,000 gallons from $19.50 to $22.00 per month. The District is proposing a rate increase of 13.64% for Fiscal Year 2006-2007. Financial Reporting Management’s discussion and analysis of the Foresthill Public Utility District’s financial performance provides an overview of the District’s activities, as well as, its financial condition for the year ended June 30, 2006. For this report, the District has implemented Governmental Accounting Standards Board (GASB) Statement No. 34 that establishes financial reporting standards for state and local governments, including enterprise districts such as Foresthill PUD. P.O. Box 266 24540 Main Street Foresthill, California 95631-0266 (530) 367-2511 Fax (530) 367-4385
The District’s finances span three separate funds: 1. Itthis is the operating fund ofthe District.Enterprise Fund is used to account for the day-to-day operations, which is financed and operated in a manner similar to private business enterprises. This allows the District to determine that the costs (expenses, including depreciation) of providing drinking water on a continuing basis are financed or recovered primarily through user charges. Also accounted for within the Enterprise Fund: 2003 Certificate of Participation Sugar Pine Project Acquisition Issuance of Certificate(s) of Participation through California Special District Finance Corporation pledging revenues of District to repay twenty-five (25) year debt. November 2003 the District acquired the Sugar Pine Dam & Reservoir Project from U.S. Bureau of Reclamation. A $6.50 Sugar Pine Surcharge is collected each month from each active water customer to provide sufficient revenues for retirement of debt service. 2. Districtcreated the existing treatment plant byImprovement Bond Fund in 1982 the assessing all parcels within District boundaries. This assessment will continue for 40 years or until which time the assets equal the liabilities and the debt can be extinguished. 3. nt District No. 2 ni1 99 7ht eessAemss motsyetnos edargpu tcirtsiDtiburistdis itd improve fire flow and pressures in the system. The improvements were funded by assessing each parcel within 500 feet of an existing main water line. This assessment also will continue for 40 years or until which time the assets equal the liabilities and the debt can be extinguished. Financial Highlights • Fiscal Year 2005-2006 General Fund revenues were up 1.01% over Fiscal Year 2004-2005 revenues ($1,092,527 vs. $1,081,496). Expenses were up 3.01% for the same period ($1,050,177 vs. $1,019,480). • End of Fiscal Year 2005-2006 District General Reserve Fund was off 8.78% compared to the previous year ($490,330 vs. $537,525). • This is the total dollar value ofContributed Revenue for Fiscal Year 2005-2006 was $473,057. constructed and installed water system infrastructure, equipment and studies of same, paid for by new development and others formally accepted by District Board of Directors for Operations and Maintenance. 1. Whitehawk Ridge Estates - infrastructure $122,124 2. Curtis Smith Bean Camp Area Project - infrastructure $ 15,000 3. Yankee Jim’s Water Supply Study PCWA Grant $ 3,438 4. Monte Verde Phase II - infrastructure $298,935 5. Monte Verde Phase II Vacuum Unit - equipment $ 33,560
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Requests for Information Interested persons may direct their inquiries regarding the information contained in this Annual Financial Report to: Kurt W. Reed, General Managerkreed@foresthillpud.com (530) 367-2511 Patricia L. Pappas, Business Managerppappas@foresthillpud.com (530) 367-2511 PO Box 266 24540 Main Street Foresthill, CA 95631
5--
11,887,213 11,310,595 3,734,612 3,411,158 8,152,601 7,899,437 - 3,438 8,152,601 7,902,875 175,961 183,781
FORESTHILL PUBLIC UTILITY DISTRICT COMBINED BALANCE SHEET June 30, 2006 (with comparative totals for fiscal year ended June 30, 2005) ASSETS Totals (Memorandum Enterprise Improvement Assessment only) Fund Bond Fund District No. 2 2006 2005 Current assets: Cash in checking $ 3,894 $ $ $ 3,894 $ 13,737 Temporary investments 490,330 490,330 537,526 Accounts receivable 94,604 94,604 86,781 Prepaid expenses - - 28,982 Inventory - materials and supplies 41,001 41,001 14,030 Total current assets 629,829 629,829 681,056 Capital assets, at cost (Note 4) 11,887,213 Less, accumulated depreciation 3,734,612 8,152,601 Construction in progress - 8,152,601 Debt issuance costs, net 175,961 Restricted assets: Temporary investment reserves 663,138 Certif. of Partic. reserve fund 269,379 932,517 Improvement Bond Fund: Future assessments receivable Temporary investments Assessment District No. 2: Temporary investments 408,618 408,618 384,628 Future assessments receivable 2,415,072 2,415,072 2,520,311 $ 9,890,908 $ 664,644 $ 2,823,690 $13,379,242 $13,213,094 See notes to financial statements -6-
411,684 252,960
663,138 593,648 269,379 265,202 932,517 858,850
411,684 392,848 252,960 288,745
LIABILITIES AND NET ASSETS Totals (Memorandum Enterprise Improvement Assessment only) Fund Bond Fund District No. 2 2006 2005
Current liabilities: Current portion of long-term debt (Note 6) $ 100,000 Current portion of capital lease (Note 12) 24,719 Accounts payable 8,147 Compensated absences payable 38,744 Customer deposits 27,213 Total current liabilities 198,823 Long-term debt, net of current portion (Note 6) 2,895,000 Add, bond premium, net of amortization 30,476 2,925,476 Capital lease (Note 12) 38,684 2,964,160 Net assets: Invested in capital assets, net of related debt 5,063,722 Restricted (Note 11) 932,517 Unrestricted 731,686 6,727,925 Improvement Bond Fund: Bonds payable (Note 5) Fund equity Assessment District No. 2: Bonds payable (Note 9) Fund deficit $9,890,908
$ $ $ 100,000 $ 100,000 24,719 23,338 8,147 39,715 38,744 33,709 27,213 28,920 198,823 225,682
515,000 149,644
2,895,000 2,995,000 30,476 32,809 2,925,476 3,027,809 38,684 63,403 2,964,160 3,091,212
5,063,722 4,688,325 932,517 858,850 731,686 762,493 6,727,925 6,309,668
515,000 535,000 149,644 146,593
3,125,700 3,125,700 3,167,800 ( 302,010) ( 302,010) ( 262,861) $ 664,644 $2,823,690 $13,379,242 $13,213,094
FORESTHILL PUBLIC UTILITY DISTRICT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS for the year ended June 30, 2006 (with comparative totals for fiscal year ended June 30, 2005) 006 2 Operating revenues: Sales - residential $ 644,933 - business 194,780 industrial 285 -Service connections 26,875 Will serve 173,000 Sugar Pine surcharge 173,514 Other 43,781 Total operating revenues 1,257,168 Operating expenses: Source of supply 79,545 Pumping 6,985 Water treatment 120,343 Transmission and distribution 124,369 Customer accounts 19,586 Administrative and general 467,564 Depreciation 323,454 Total operating expenses 1,141,846 Operating income (loss) 115,322 Non-operating income and (expense): Interest income 47,326 Property taxes 24,631 Interest expense ( 142,079) Assistance - Assessment District #2 ( 100,000) ( 170,122) Income before contributions ( 54,800) Capital contributions 473,057 Changes in net assets (carried forward) 418,257 See notes to financial statements 7--
2005 $ 638,988 191,742 270 28,125 215,025 169,617 80,358 1,324,125 60,109 6,931 112,608 152,929 16,003 447,557 299,416 1,095,553 228,572 24,022 15,825 ( 139,148) ( 100,000) ( 199,301) 29,271 94,795 124,066
006 2 $ 418,257
6,309,668 $6,727,925
2005 $ 124,066
6,185,602 $6,309,668
FORESTHILL PUBLIC UTILITY DISTRICT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS, continued for the year ended June 30, 2006 (with comparative totals for fiscal year ended June 30, 2005) Change in net assets (brought forward) Total net assets: Beginning Ending
See notes to financial statements -8 -
