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Summary of Proposed Code Changes - Truckee Donner Public

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               Truckee Donner Public Utility District
                                                                                                        Directors
                                       REGULAR MEETING
                                                                                                         Joseph R. Aguera
                             6:00 PM , Wednesday, June 06, 2012                                          Jeff Bender
                                                                                                         Laura Clauson Ferree
                                        TDPUD Board Room
                                                                                                         J. Ron Hemig
                                           AGENDA                                                        Tony Laliotis

                                                                                                        General Manager
                                                                                                         Michael D. Holley


1. Call to order
2. Roll call
3. Pledge of Allegiance
4. Changes to the agenda
5. Public Input - This is time set aside for the public to address the Board on any matter not
  on the agenda. Testimony related to any agendized matter should be addressed at the
  time that item is considered.
  (The public may comment on any subject that is not on the agenda. Each speaker will be
  limited to three (3) minutes, but speaker time may be reduced at the discretion of the
  Board President if there are a large number of speakers on any give subject.)

DIRECTOR UPDATE
6. This item provides time for Directors to comment on any item within the purview of the District.
   (Each Director will be limited to three (3) minutes.)

PUBLIC HEARING
7. At 6:00 PM , or soon thereafter as possible, a public hearing will be held for receiving
   written and/or oral comments from members of the public regarding:
   Water and Electric Standby Charges
8. At 6:00 PM , or soon thereafter as possible, a public hearing will be held for receiving
   written and/or oral comments from members of the public regarding:
   CEQA Initial Study for 2012 Water Master Plan Update

CONSENT CALENDAR             (Items may be acted on as a group or pulled from the consent
calendar at the request of a Board member, staff member or member of the public; and
subsequently acted upon separately.)
9 . Consideration of Annual Resolutions for Special Tax: Old Greenwood and Gray's Crossing
    Communities Facilities Districts
       This item concerns requesting Nevada County to collect the special assessments for the Old
       Greenwood and Gray's Crossing Community Facilities Districts on the Nevada County tax rolls.




                   11570 Donner Pass Road - Truckee, CA 96161 - Phone: (530) 587-3896 - www.tdpud.org

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10 . Consideration of Annual Resolutions for the Donner Lake Assessment District
        This item relates to the resolutions setting the assessment amount under the terms of the Donner
        Lake Assessment District Number 00-1 and authorizing Nevada and Placer Counties to collect
        the assessments on the County tax rolls.
11 . Consideration of Resolutions Continuing Water and Electric Standby Charges
        This item involves placing water and electric standby charges on Nevada and Placer County tax
        rolls.
12 . Consideration of a Resolution Approving Amendments to the District Code and Bylaws
        This item involves approval of resolutions to adopt amendments to the District Code and Bylaws.
13 . Consideration of Awarding a Contract to Design a New District Web Site
        This item involves awarding a contract for design of a new District web site.
14 . Consideration of a Process to Fill a Position on the Board
        This item involves the process to fill a Board vacancy.
15 . Consideration of State Mandated Resolutions for the General Election on November 6, 2012
        This involves adoption of resolutions to request election services from Nevada and Placer
        Counties.
16 . Consideration of the Award of a Contract for Phase 2 of the Electric SCADA Reliability
     Improvement Project
        This item concerns the possible award of a Contract for the second phase of the SCADA
        Reliability Improvement Project.
 SPECIAL BUSINESS
17 . Consideration of Appointing a Vice President of the Board
        This item involves appointing a new Vice President to replace Director Ferree.

  ACTION ITEMS ( Action item discussions will utilize the following format: (a) staff
  report, (b) public input, and (c) Board discussion and action)
18 . Consideration of Adopting a Resolution to Commend Director Ferree
        This item involves the recognition of Director Laura Clauson Ferree.
19 . Consideration of the Draft Audited Financial Report for 2011
        The Board will consider accepting the drafted audited financial reports for 2011.
20 . Consideration of a Resolution Accepting Final Completion and a Closeout Change Order for
     the SCADA Reliability Improvement Project - 2011
        Completion of construction and project closeout
21 . Consideration of a Response to the Grand Jury Report dated May 25, 2012
        This item concerns response to the Nevada County Grand Jury report, dated May 25, 2012.

 ROUTINE BUSINESS
22 . May 31, 2012
     a) Approval of the Treasurer's report of fund balances
      as of April 30, 2012
     b) Approval of the disbursements for May 2012
                    11570 Donner Pass Road - Truckee, CA 96161 - Phone: (530) 587-3896 - www.tdpud.org

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  23 . Approval of Minutes for May 2, 2012
   CLOSED SESSION
  24 . Public Employee Performance Evaluation - Government Code Section 54957 (e): General
       Manager Performance Plan Review
  25 . Closed Session Pursuant to Government Code Section 54956.9, Subdivision (b), Potential
       Litigation, One Case
    RETURN TO OPEN SESSION
    Report from Closed Session
    ADJOURNMENT
     Note regarding agenda topics likely to come before the Board during the next two months:
        -   Discussion of Revisions to the Backflow Chapter of the District Code
        -   Old Greenwood and Gray's Crossing Community Facilities Districts - Foreclosure Update
        -   Review of District Financial Goals, Reserves and Debt
        -   Update on the Martis Valley Groundwater Management Plan
        -   Water Meter Project Progress Report & Water Usage Trends
                                 The agenda is available for review at the
                     TDPUD office and the Truckee branch of the Nevada County Library
Posted and mailed on Friday, June 01, 2012




Barbara Cahill, Deputy District Clerk
A copy of the agenda packet is available for public review at the district administrative office: 11570 Donner Pass Road. Public participation
is encouraged. The meeting location is accessible to people with disabilities. Every reasonable effort will be made to accommodate
participation of the disabled in all of the District's public meetings. If particular accommodations for the disabled are needed (i.e. disability-
related aids, or other services), please contact the Clerk of the Board at (530) 582-3909 or BarbaraCahill@tdpud.org, at least 24 hours in
advance of the meeting.




                                11570 Donner Pass Road - Truckee, CA 96161 - Phone: (530) 587-3896 - www.tdpud.org

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                      Speak Your Peace
                The Nine Tools of Civility
                      1. Pay Attention
                          2. Listen
                       3. Be Inclusive
                       4. Not Gossip
                     5. Show Respect
                      6. Be Agreeable
                        7. Apologize
              8. Give Constructive Criticism
                  9. Take Responsibility


Sponsored by the Truckee Tahoe Community Foundation




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                                                Agenda Item #                     7



PUBLIC HEARING
To:         Board of Directors
From:       Robert Mescher
Date:       June 06, 2012
Subject:    Water and Electric Standby Charges

1. WHY THIS MATTER IS BEFORE THE BOARD
The Board set a public hearing date of June 6, 2012 to receive written and oral
comments from the public regarding the adoption of resolutions establishing and
collecting Water and Electric Standby Charges for 2012-13.


2. HISTORY
The current Water Standby Charge applies to vacant parcels with a District water
distribution line not less than two inches in diameter installed within 100 feet of the
nearest exterior boundary line of any such parcel. The current Water Standby Charge
is $80.00 per parcel per year.

The current Electric Standby Charge applies to vacant parcels with a District electric
distribution line installed along an easement or along a public road or right of way
within 200 feet of the nearest exterior boundary line of any such parcel. The Electric
Standby Charge is $20.00 per year for each parcel 1 acre or larger, or $10.00 per year
for each parcel less than 1 acre.


3. NEW INFORMATION
A public hearing has been advertised in the Sierra Sun for two successive weeks on
May 23 and May 30, 2012.

4. FISCAL IMPACT
The estimated revenue for this action is:

Nevada County Standby Charges for 2012-2013 will be:
Water $155,920
Electric $ 24,840
Total Parcels: 2,332




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Placer County Standby Charges for 2012-2013 will be:
Water $4,320
Electric $ 500
Total Parcels: 84


5. RECOMMENDATION
Conduct a public hearing to accept comments on the proposed action.




Robert Mescher                                                    Michael D. Holley
Administrative Services Manager                                   General Manager




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                                                Agenda Item #                  8



PUBLIC HEARING
To:          Board of Directors
From:        Neil Kaufman
Date:        June 06, 2012
Subject:     CEQA Initial Study for 2012 Water Master Plan Update

1. WHY THIS MATTER IS BEFORE THE BOARD
A public hearing is a required component of the CEQA review process.


2. HISTORY
A draft of the 2012 Water Master Plan Update was presented to the Board on March 7,
2012. A public hearing regarding the Master Plan Update was held on April 4, 2012.

On May 2, 2012, the CEQA Initial Study for the 2012 Water Master Plan Update was
approved by the Board. A Negative Declaration is proposed. A public hearing for the
CEQA review was scheduled for June 6, 2012.


3. NEW INFORMATION
To date the District has not received any comments on either the draft 2012 Water
Master Plan Update or the CEQA Initial Study.

The current project schedule is given below:

   •    June 6, 2012 - CEQA Public Hearing (tonight)
   •    July 18, 2012 - Adoption of Master Plan
   •    August 1, 2012 - Public Hearing on Ordinance to Adjust Facility Fees
   •    September 5, 2012 - Adoption of Ordinance to Adjust Facility Fees

4. FISCAL IMPACT
There is no direct cost associated with this CEQA public hearing.


5. RECOMMENDATION
Conduct the public hearing on the CEQA Initial Study and proposed Negative
Declaration.




Michael D. Holley
General Manager / Water Utility Manager
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                                             Agenda Item #                         9



CONSENT
To:         Board of Directors
From:       Robert Mescher
Date:       June 06, 2012
Subject:    Consideration of Annual Resolutions for Special Tax: Old
            Greenwood and Gray's Crossing Communities Facilities Districts

1. WHY THIS MATTER IS BEFORE THE BOARD
This item concerns requesting Nevada County to collect special taxes in the Old
Greenwood No. 03-1 and Gray's Crossing No. 04-1 Communities Facilities Districts by
the adoption of standard resolutions. Only the Board can adopt these resolutions.


2. HISTORY
Resolution No. 9723 adopted on November 5, 1997 authorized the execution of a
standard form tax collection services contract on behalf of the District with the County
of Nevada. The contract states that the District must adopt an annual resolution
requesting placement of special taxes, special assessments and/or parcel charges on
the County of Nevada tax rolls. The lists are currently in preliminary form only and are
available in the Administrative Services Department. Final lists will be on record with
Nevada County and the District's Administrative Services Department.

On October 14, 2003, the District adopted Ordinance No. 2003-04, authorizing the levy
of a special tax within the Old Greenwood Community Facilities District No. 03-1.

On July 21, 2004, the District adopted Ordinance No. 2004-02, authorizing the levy of
a special tax within the Gray's Crossing Community Facilities District No. 04-1.

3. NEW INFORMATION
This matter comes before the Board each year. We rely on Nevada County to collect
special taxes as line items on the annual property tax bills.

• Attachment 1 is Resolution 2012-AA for Old Greenwood Community Facilities District
  No. 03-1 authorizing Nevada County to collect the special tax for the fiscal year
  2012-2013.

• Attachment 2 is Resolution 2012-BB for Gray's Crossing Community Facilities
 District No. 04-1 authorizing Nevada County to collect the special tax for the fiscal
 year 2012-2013.




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4. FISCAL IMPACT
The special tax dollars collected are deposited into the Old Greenwood and Gray's
Crossing Communities Facilities District funds on deposit with the Trustee Bank of
New York Mellon. These funds are used to pay principal and interest payments on the
related bonds sold. The estimated assessments for the 2012-2013 assessment period
are $910,000 for Old Greenwood and $2,460,000 for Gray's Crossing.


5. RECOMMENDATION
a) Adopt Resolution 2012-AA requesting Nevada County to collect the special taxes
   for the Old Greenwood 03-1 Communities Facilities District; and

b) Adopt Resolution 2012-BB requesting Nevada County to collect the special taxes
   for the Gray's Crossing 04-1 Communities Facilities District.




Robert Mescher                                                    Michael D. Holley
Administrative Services Manager                                   General Manager




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Resolution No. 2012 - AA

Fixing and Placing a Special Tax Levy on Community
     Facilities District No. 03-1 (Old Greenwood)
       for Collection by the County of Nevada
_____________________________________________________________________

WHEREAS, on October 14, 2003, the Board of Directors of the Truckee Donner Public
Utility District duly adopted Ordinance No. 2003-04, authorizing the levy of a special tax
within said Community Facilities District No. 03-1 (Old Greenwood) and providing a means
for collection thereof; and

WHEREAS, by Resolution No. 9723 adopted November 5, 1997, the Board of Directors of
the Truckee Donner Public Utility District approved execution of a continuous Standard
Form Tax Collection Services Contract with the County Of Nevada; and

WHEREAS, the District has now determined the lands affected thereby and the charges to
be assessed, levied and collected on the lands and parcels; and

WHEREAS, the taxes on each parcel shall be billed on the secured tax roll bills for the
fiscal year 2012-2013.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee Donner
Public Utility District as follows:

1. That the Board of Supervisors of the County of Nevada, State of California, levy a
   special tax against the parcels and owners of record listed on the computer
   itemization of parcels kept and maintained in the Administrative Services
   Department of the District and made a part hereof by reference, and that the
   County Auditor and Tax Collector be instructed to levy and collect said charges in
   the same manner as County taxes as by law and in said ordinance provided.
   Upon completion and correction of the current list through June 30, 2012, a copy
   will be forwarded to the Auditor Controller of the County.

2. The District warrants and represents that charges imposed by the District and
   being requested to be collected by Nevada County comply with all requirements
   of state law, including but not limited to Articles XIIIC and XIIID of the California
   Constitution (Proposition 218).




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3. That a certified copy of this resolution be forwarded to the County Auditor of the
   County of Nevada.

PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility
District at a meeting held within said District on June 3, 2012 by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT


By____________________________________
Tony Laliotis, President

ATTEST:

_____________________________________
Michael D. Holley, District Clerk




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Resolution No. 2012 - BB

Fixing and Placing a Special Tax Levy on Community
     Facilities District No. 04-1 (Gray’s Crossing)
       for Collection by the County of Nevada
_____________________________________________________________________

WHEREAS, on July 21, 2004, the Board of Directors of the Truckee Donner Public Utility
District duly adopted Ordinance No. 2004-02, authorizing the levy of a special tax within
said Community Facilities District No. 04-1 (Grays Crossing) and providing a means for
collection thereof; and

WHEREAS, by Resolution No. 9723 adopted November 5, 1997, the Board of Directors of
the Truckee Donner Public Utility District approved execution of a continuous Standard
Form Tax Collection Services Contract with the County of Nevada; and

WHEREAS, the District has now determined the lands affected thereby and the charges to
be assessed, levied and collected on the lands and parcels; and

WHEREAS, the taxes on each parcel shall be billed on the secured tax roll bills for the
fiscal year 2012-2013.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee Donner
Public Utility District as follows:

1. That the Board of Supervisors of the County of Nevada, State of California, levy a
   special tax against the parcels and owners of record listed on the computer
   itemization of parcels kept and maintained in the Administrative Services
   Department of the District and made a part hereof by reference, and that the
   County Auditor and Tax Collector be instructed to levy and collect said charges in
   the same manner as County taxes as by law and in said ordinance provide. Upon
   completion and correction of the current list through June 30, 2012, a copy will be
   forwarded to the Auditor Controller of the County.

2. The District warrants and represents that charges imposed by the District and
   being requested to be collected by Nevada County comply with all requirements
   of state law, including but not limited to Articles XIIIC and XIIID of the California
   Constitution (Proposition 218).




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3. That a certified copy of this resolution be forwarded to the County Auditor of the
   County of Nevada.


PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility
District at a meeting held within said District on June 6, 2012 by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT


By____________________________________
Tony Laliotis, President

ATTEST:

_____________________________________
Michael D. Holley, District Clerk




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                                             Agenda Item #                       10



CONSENT
To:         Board of Directors
From:       Robert Mescher
Date:       June 06, 2012
Subject:    Consideration of Annual Resolutions for the Donner Lake
            Assessment District

1. WHY THIS MATTER IS BEFORE THE BOARD
This item concerns collecting Donner Lake Assessment District No. 00-1 assessment
charges in Nevada and Placer Counties by the adoption of standard resolutions. Only
the Board can adopt resolutions.


2. HISTORY
Resolution No. 9723 adopted on November 5, 1997 authorized the execution of a
standard form tax collection services contract on behalf of the District with the County
of Nevada. The contract states that the District must adopt an annual resolution
requesting placement of special taxes, special assessments and/or parcel charges on
the County of Nevada tax rolls. The lists are currently in preliminary form only and are
available in the Accounting Department. Final lists will be on record with Nevada and
Placer Counties and in the Administrative Services Department.

On May 2, 2001, the District adopted Resolution No. 2001-09 making determinations,
confirming assessments and proceedings, ordering the acquisition and construction of
improvements and taking certain other actions relating to Donner Lake Water
Assessment District No. 00-1.


3. NEW INFORMATION
This matter comes before the Board each year. We rely on Nevada and Placer
Counties to collect assessments and special taxes as line items on the annual
property tax bills.

• Attachment 1 is Resolution 2012-AA for the Donner Lake Assessment District No.
  00-1 to collect the annual assessments for the fiscal year 2012-2013 with Nevada
  County.

• Attachment 2 is Resolution 2012-BB for the Donner Lake Assessment District No.
   00-1 to collect the annual assessments for the fiscal year 2012-2013 with Placer
   County.


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4. FISCAL IMPACT
The assessment district dollars collected are deposited into the Donner Lake checking
account and are used to pay principal and interest payments on the Department of
Water Resources State Revolving Fund loan and other assessment district expenses.
The estimated assessments for the 2012-2013 assessment period are $755,000 for
Nevada County and $74,000 for Placer County.


5. RECOMMENDATION
a) Adopt Resolution 2011-AA requesting Nevada County to collect the Donner Lake
   Assessment District No. 00-1 annual assessments for tax year 2011-2012.

b) Adopt Resolution 2011-BB requesting Placer County to collect the Donner Lake
   Assessment District No. 00-1 annual assessments for tax year 2011-2012.




Robert Mescher                                                      Michael D. Holley
Administrative Services Manager                                     General Manager




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Resolution No. 2012 - AA

Fixing and Placing Donner Lake Assessment District
       Annual Charges on District Tax Roll for
         Collection by the County of Nevada
_____________________________________________________________________

WHEREAS, the Truckee Donner Public Utility District on May 2, 2001 adopted Resolution
No. 2001-09 making determinations, confirming assessments and proceedings, ordering
the acquisition and construction of improvements and taking certain other actions relating
to Donner Lake Water Assessment District No. 00-1; and

WHEREAS, by Resolution No. 9723 adopted November 5, 1997, the Board of Directors of
the Truckee Donner Public Utility District approved execution of a continuous Standard
Form Tax Collection Services Contract with the County of Nevada; and

WHEREAS, the District has now determined the lands affected thereby and the charges to
be assessed, levied and collected on the lands and parcels; and

WHEREAS, the assessments on each parcel shall be billed on the secured tax roll bills for
the fiscal year 2012-2013.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee Donner
Public Utility District as follows:

      1.     That the Board of Supervisors of the County of Nevada, State of
             California, levy the Donner Lake Assessment District charges against the
             parcels and owners of record listed on the computer itemization of
             parcels kept and maintained in the Administrative Services Department
             of the District and made a part hereof by reference, and that the County
             Auditor and Tax Collector be instructed to levy and collect said charges
             in the same manner as County taxes as by law and in said ordinance
             provided. Upon completion and correction of the current list through
             June 30, 2012, a copy will be forwarded to the Auditor Controller of the
             County.

      2.     The District warrants and represents that charges imposed by the District
             and being requested to be collected by Nevada County comply with all
             requirements of state law, including but not limited to Articles XIIIC and
             XIIID of the California Constitution (Proposition 218).




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        3.    That a certified copy of this resolution be forwarded to the County
              Auditor of the County of Nevada.


PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility
District at a meeting held within said District on June 6, 2012 by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT


By____________________________________
Tony Laliotis, President

ATTEST:

_____________________________________
Michael D. Holley, District Clerk




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Resolution No. 2012 - BB

   Requesting Collection of Donner Lake Assessment
   District Annual charges on Placer County Tax Roll
_____________________________________________________________________

WHEREAS, the Truckee Donner Public Utility District on May 2, 2001 adopted Resolution No.
2001-09 making determinations, confirming assessments and proceedings, ordering the
acquisition and construction of improvements and taking certain other actions relating to
Donner Lake Water Assessment District No. 00-1; and

WHEREAS, the Truckee Donner Public Utility District requests the County of Placer collect on
the County tax rolls certain charges which have been imposed by the District for the fiscal tax
year 2012-2013; and

WHEREAS, the County has required as a condition of the collection of said charges that the
District warrant the legality of said charges and defend and indemnify the County from any
challenge to the legality thereof.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee Donner
Public Utility District as follows:

   1. The Auditor-Controller of Placer County is requested to attach for collection on the
      County tax rolls those assessments attached hereto.

   2. The District warrants and represents that the assessments imposed by the District
      and being requested to be collected by Placer County comply with all requirements of
      state law, including but not limited to Articles XIIIC and XIIID of the California
      Constitution (Proposition 218).

   3. The District releases and discharges County, and its officers, agents and employees
      from any and all claims, demands, liabilities, costs and expenses, damages, causes
      of action, and judgments, in any manner arising out of the collection by county of any
      assessments on behalf of District.

   4. The District agrees to and shall defend, indemnify and hold harmless the county, its
      officers, agents and employees (the “Indemnified Parties”) from any and all claims,
      demands, liabilities, costs and expenses, damages, causes of action, and judgments,
      in any manner arising out of the collection by County of any of District’s said



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        assessments requested to be collected by County for district, or in any manner arising
        out of District’s establishment and imposition of assessments. District agrees that, in
        the event a judgment is entered in a court of law against any of the Indemnified
        Parties as a result of the collection of one of District’s assessments the County may
        offset the amount of the judgment from any other monies collected by County on
        behalf of District, including property taxes.

   5. The District agrees that its officers, agents and employees will cooperate with the
      County in answering questions referred to District by County from any person
      concerning the District’s assessments and that District will not refer such persons to
      County officers and employees for response.

   6. The District agrees to pay such reasonable and ordinary charges as the County may
      prescribe to recoup its costs in placing on the tax rolls and collecting the assessments
      as provided by Government Code section 29304 and 51800.

PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility
District at a meeting held within said District on June 6, 2012 by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT


By____________________________________
Tony Laliotis, President


ATTEST:

_____________________________________
Michael D. Holley, District Clerk




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                                            Agenda Item #                      11



CONSENT
To:         Board of Directors
From:       Robert Mescher
Date:       June 06, 2012
Subject:    Consideration of Resolutions Continuing Water and Electric
            Standby Charges

1. WHY THIS MATTER IS BEFORE THE BOARD
This item concerns continuing water and electric standby charges in Nevada and
Placer Counties through the District resolutions. Only the Board can adopt these
resolutions.


2. HISTORY
The District levies standby charges on vacant parcels for water and electric service.
The purpose of the standby charge is to collect revenues to help pay operating and
maintenance expenses. The idea is that vacant lots benefit by being in close proximity
to water and electric lines, and should, therefore, contribute to operation and
maintenance of those lines.

Each year the Board is required to adopt resolutions establishing water and electric
standby charges and requesting Nevada and Placer Counties to collect the charges on
the annual property tax bills.


3. NEW INFORMATION
The District has not changed the standby rates in many years, and no changes to the
charges are being proposed at this time. The parcel lists are currently in preliminary
form only. Final lists will be on record with the Counties and the Administrative
Services Department.

Attachment 1 contains four resolutions required to continue assessing standby
charges and place them on Nevada and Placer County tax rolls. Resolution 2012-AA
is for continuing the water standby charge for 2012-2013 . Resolution 2012-BB is for
continuing the electric standby charge for 2012-2013. Resolutions 2012-CC and
2012-DD request Nevada and Placer Counties to collect the charges.

The water standby charge does not apply to vacant parcels in the Donner Lake service
area nor in the Glenshire service area.




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4. FISCAL IMPACT
The estimated revenue for this action is:

Nevada County Standby Charges for 2012-2013 will be approximately:
Water $155,920
Electric $ 24,840
Total Parcels: 2,332

Placer County Standby Charges for 2012-2013 will be approximately:
Water $4,320
Electric $ 500
Total Parcels: 84


5. RECOMMENDATION
Adopt the following four resolutions:

   a) Resolution No. 2012-AA - Continuing and Fixing Water Standby Charges for
      Fiscal Year 2012-2013

   b) Resolution No. 2012-BB - Continuing and Fixing Electric Standby Charges for
      Fiscal Year 2012-2013

   c) Resolution No. 2012-CC - Fixing and Placing Water and Electric Standby
      Charges on County of Nevada Tax Roll for Collection

   d) Resolution No. 2012-DD - Requesting Collection of Water and Electric Standby
      Charges on Placer County Tax Roll




Robert Mescher                                                       Michael D. Holley
Administrative Services Manager                                      General Manager




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Resolution No. 2012 - AA
            Continuing and Fixing Water Standby Charges
                    for the Fiscal Year 2012 - 2013
_____________________________________________________________________
WHEREAS, on February 18, 1975, the Board of Directors of the Truckee Donner Public Utility District duly
adopted Ordinance No. 7501 fixing Water Standby Charges on lands within the District boundaries and
providing a means for collection thereof; and
WHEREAS, on August 16, 1982, the Board of Directors adopted Resolution No. 8240 amending Ordinance
7501 to include Placer as well as Nevada County; and
WHEREAS, on March 18, 1991, the Board of Directors adopted Ordinance No. 9103 amending Ordinance
No. 7501 and Resolution No. 8240 to the extent that such ordinance and resolution concern the fixing of
Water Standby Charges in the County of Nevada; and
WHEREAS, on April 8, 1991, the Board of Directors adopted Ordinance No. 9105 amending Ordinance No.
7501 and Resolution No. 8240 to the extent that such ordinance and resolution concern the fixing of water
standby charges in the County of Placer; and
WHEREAS, Ordinance No. 7501 prescribes that implementation of the actual charges shall be made by
resolution of the Board for each fiscal year; and
WHEREAS, fees authorized by this resolution shall not be charged, assessed, levied and collected in the
District’s Donner Lake or Glenshire Service areas.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee Donner Public Utility
District as follows:
1. The Water Standby Charge for the fiscal year 2012-2013 shall be the sum of $80 for all parcels regardless
of size.
2. The District shall determine the lands to be affected thereby for the current fiscal year, which shall not
include lands in Donner Lake or Glenshire Service areas, and the charges to be assessed, levied and
collected on the lands and parcels, and upon the completion thereof a subsequent resolution shall be
approved fixing and placing the Water Standby Charges on the District tax roll for collection by Placer and
Nevada Counties.
3. Certified copies of this resolution be forwarded to the County Auditor of the County of Placer and the
County Auditor of the County of Nevada.
PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District at a meeting
held within the District on June 6, 2012 by the following roll call vote:
AYES:
NOES:
ABSTAIN:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT
By__________________________________
Tony Laliotis, President

ATTEST:
____________________________________
                                                     22
Michael D. Holley, District Clerk
                                                                       Attachment 1- BB
                                                   23




Resolution No. 2012 - BB
           Continuing and Fixing Electric Standby Charges
                    For The Fiscal Year 2012-2013
_________________________________________________________________________

WHEREAS, on February 18, 1975, the Board of Directors of the Truckee Donner Public Utility District duly
adopted Ordinance No. 7501 fixing Electric Standby Charges on lands within the District boundaries and
providing a means for collection thereof; and

WHEREAS, on August 16, 1982, the Board of Directors adopted Resolution No. 8240 amending
Ordinance 7501 to include Placer as well as Nevada County; and

WHEREAS, Ordinance No. 7501 prescribes that implementation of the actual charges shall be made by
resolution of the Board for each fiscal year.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee Donner Public Utility
District as follows:

1. The Electric Standby Charge for the fiscal year 2012-2013 shall be the sum of $20 for any parcel
    consisting of one acre or more, and the sum of $10 for any parcel of less than one acre.

2. The District shall determine the lands to be affected thereby for the current fiscal year and the
    charges to be assessed, levied and collected on the lands and parcels, and upon the completion
    thereof a subsequent resolution shall be approved fixing and placing the electrical standby charges
    on the District tax roll for collection by Placer and Nevada Counties.

3. Certified copies of this resolution are to be forwarded along with the direct charges to the County
    Auditor of the County of Placer and the County Auditor of the County of Nevada.

PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility District at a
meeting held within the District on June 6, 2012 by the following roll call vote:

AYES:
NOES:
ABSTAIN:
ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT

By____________________________________
Tony Laliotis, President

ATTEST:
_____________________________________
Michael D. Holley, District Clerk

                                                   23
                                            24




Resolution No. 2012 - CC

  Fixing and Placing Electric and Water Standby
Charges on County of Nevada Tax Roll for Collection
_____________________________________________________________________

WHEREAS, on February 18, 1975, the Board of Directors of the Truckee Donner Public
Utility District duly adopted Ordinance No. 7501 fixing Electric and Water Standby Charges
on lands within the District boundaries and providing a means for collection thereof; and

WHEREAS, on August 16, 1982, the Board adopted Resolution No. 8240 amending
Ordinance 7501 to include Placer as well as Nevada County; and

WHEREAS, on March 18,1991, the Board of Directors adopted Ordinance No. 9103
amending Ordinance No. 7501 and Resolution No. 8240 to the extent that such ordinance
and resolution concern the fixing of water standby charges in the County of Nevada; and

WHEREAS, on June 6, 2012 the Board adopted Resolution No. 2012-AA and 2012-BB
continuing and fixing water and electric standby charges pursuant to Ordinances 7501,
9103 and 9105 for the fiscal year 2012-13; and

WHEREAS, the District has now determined the lands affected thereby and the charges to
be assessed, levied and collected on the lands and parcels; and

WHEREAS, by Resolution No. 9723 adopted November 5, 1997, the Board of Directors of
the Truckee Donner Public Utility District approved execution of a continuous Standard
Form Tax Collection Services Contract with the County Of Nevada.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee Donner
Public Utility District as follows:

1. That the Board of Supervisors of the County of Nevada, State of California, levy
   the standby charges against the parcel numbers (APN) of record listed on the
   computer itemization of unimproved parcels kept and maintained in the
   Administrative Services Department of the District and made a part hereof by
   reference, and that the County Auditor and Tax Collector be instructed to levy and
   collect said charges in the same manner as County taxes as by law and in said
   ordinance provided. Upon completion and correction of the current list through
   June 30, 2012, a copy will be forwarded to the Auditor Controller of the County.




                                            24
                                               25




2. The District warrants and represents that charges imposed by the District and
   being requested to be collected by Nevada County comply with all requirements
   of state law, including but not limited to Articles XIIIC and XIIID of the California
   Constitution (Proposition 218).

3. That a certified copy of this resolution be forwarded to the County Auditor of the
   County of Nevada.

PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility
District at a meeting held within said District on June 6, 2012 by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT


By____________________________________
Tony Laliotis, President

ATTEST:

_____________________________________
Michael D. Holley, District Clerk




                                               25
                                            26




Resolution No. 2012 - DD

Requesting Collection of Electric and Water Standby
        Charges on Placer County Tax Roll
_________________________ ___________________________________________

WHEREAS, the Truckee Donner Public Utility District requests the County of Placer collect
on the County tax rolls certain charges which have been imposed by the District pursuant
to Resolution No. 2012-AA and 2012-BB attached hereto, and

WHEREAS, the County has required as a condition of the collection of said charges that
the District warrant the legality of said charges and defend and indemnify the County from
any challenge to the legality thereof.

NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Truckee Donner
Public Utility District as follows:

   1. The Auditor-Controller of Placer County is requested to attach for collection on
      the County tax rolls those taxes, assessments, fees and/or charges, attached
      hereto.

   2. The District warrants and represents that the taxes, assessments, fees and/or
      charges imposed by the District and being requested to be collected by Placer
      County comply with all requirements of state law, including but not limited to
      Articles XIIIC and XIIID of the California Constitution (Proposition 218).

   3. The District releases and discharges County, and its officers, agents and
      employees from any and all claims, demands, liabilities, costs and expenses,
      damages, causes of action, and judgments, in any manner arising out of the
      collection by county of any taxes, assessments, fees and/or charges on behalf of
      District.

   4. In consideration for the County’s collection of the charge through the County’s
      property tax roll, the District agrees to and shall defend, indemnify and hold
      harmless the County, its officers, agents and employees (the “Indemnified
      Parties”) from any and all claims, demands, liabilities, costs and expenses,
      damages, causes of action, and judgments, in any manner arising out of the
      collection by County of any of District’s said taxes, assessments, fees and/or
      charges requested to be collected by County for District, or in any manner



                                            26
                                               27




        arising out of District’s establishment and imposition of said taxes, assessments,
        fees and/or charges. District agrees that, in the event a judgment is entered in a
        court of law against any of the Indemnified Parties as a result of the collection of
        one of District’s taxes, assessments, fees and/or charges, the County may offset
        the amount of the judgment from any other monies collected by County on
        behalf of District, including property taxes.

   5. The District agrees that its officers, agents and employees will cooperate with
        the County in answering questions referred to District by County from any
        person concerning the District’s taxes, assessments, fees and/or charges, and
        that District will not refer such persons to County officers and employees for
        response.

   6. The District agrees to pay the County for the reasonable and ordinary charges to
        recoup its costs of placement and collection on the tax rolls at the agreed upon
        rate of 1% of the taxes, assessments, fees and/or charges, as provided by
        Government Code section 29304 and 51800.

PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public
Utility District at a meeting held within said District on June 6, 2012 by the following roll
call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT


By____________________________________
Tony Laliotis, President


ATTEST:

_____________________________________
Michael D. Holley, District Clerk




                                               27
                                                28




                                               Agenda Item #                       12



CONSENT
To:          Board of Directors
From:        Rosana Matlock
Date:        June 06, 2012
Subject:     Consideration of a Resolution Approving Amendments to the
             District Code and Bylaws

1. WHY THIS MATTER IS BEFORE THE BOARD
The Board periodically reviews and updates the District Code to include new or
changed Board policies, new applicable laws, regulations and District procedures.

Modification of the District Code is solely within the purview of the Board.


2. HISTORY
The District Code was completely revised in 2010 and has been updated annually
since then. Prior to 2008, the Codes had not been reviewed and revised extensively
for many years.

The Bylaws were last revised in 2007 to reflect the change in the start time of the
Board meetings.

On May 2, 2012, staff presented a workshop discussing revisions to District Code and
Bylaws.

The Board directed staff to draft a resolution to revise the District Code and Bylaws as
presented in the workshop.


3. NEW INFORMATION
Staff has updated the Code and Bylaws to incorporate Board comments.

None of the changes today are related to this week's Agenda Item #22. At the
discretion of the Board, changes may be implemented at a later date.

Attachment 1 is a summary of the proposed changes to the District Code and Bylaws.

Attachment 2 is the final draft of the District Code and Attachment 3 is the final draft of
the District Bylaws.




                                                28
                                                29




4. FISCAL IMPACT
There is no direct fiscal impact associated with this item.


5. RECOMMENDATION
Approve the resolutions adopting amendments to the District Code and Bylaws
(Attachments 4 and 5).




Robert Mescher                                                Michael D. Holley
Administrative Services Manager                               General Manager




                                                29
                                          30




                Summary of Proposed Code Changes

Chapter   Description
2.30      Delete planning department notices
3.04      Update publication of annual audit
3.06      Update electric supply procurement
3.10      Modify capitalization policy to establish a minimum capitalization limit of
          $10,000 for all assets except land and land rights
3.16      3.16.030.7 Update treasurer’s reporting requirements to allow flexibility when
          regular meetings are canceled
4.02      Update human resource position title from Administrator to Manager
4.04      Update human resource position title from Administrator to Manager
4.07      Update medical and dental insurance plan descriptions
4.09      Update human resource position title from Administrator to Manager
5.01      Clarify definition of a “Co-Signer”
5.02      Delete home owner deposit waiver; add deposit waiver for customers utilizing
          electronic funds transfer; and add deposit for temporary reconnection
5.04      Tighten credit policy; move bankruptcy clause to billing chapter
5.08      Clarify action and fees for returned payments; insert bankruptcy clause;
          clarify responsibilities of meter installation accuracy
5.09      Clarify the responsibilities of home owners and renters
5.12      Clarify 5.12.010.4 payment arrangements; consequences of non-compliance
          with payment arrangement or other notices
          Add 5.12.040.2(F) to clarify consequences of non-compliance
          Consolidate Electric and Water sections 5.12.055 and 5.12.050
          Add 5.12.050.2(A) payments for reconnection of electric and/or water service
          after a disconnection for non-payment must be resolved by 4 PM to be
          restored the same day
          Add 5.12.050.3 to allow temporary reconnections of electric and/or water
          service for inspections
          Add a provision in 5.12.050.5 (6) for General Manager to credit connection
          fees for existing and operational electric and/or water service connections
6.52      Update the background of residential water meter installations
7.16      Update access to meters in locked areas
7.48      Add a new section 7.48.040 to address optical cable
7.56      Modify underground conduit to be 3”
7.83      Update Renewable Portfolio Standard




                                          30
                                            31




           Detail Description of Proposed Code Changes
Delete Section 2.30.010 regarding Planning Department Notices because that
department no longer exists.

Modify Section 3.04 to require the posting of the audited financial statements on the
District’s website only.

Modify Section 3.06(A) to align the definition of renewable resources to Public Utilities
Code.

Delete Section 3.06(B) as redundant. The Renewable Portfolio Standard (RPS) Target
is also described in Section 7.83.040.

Update Section 3.06 (C) to focus on procuring renewable resources from WAPA,
NCPA and UAMPS.

Modify Section 3.10.020 to establish a minimum capitalization limit of $10,000 for all
assets, except land and land rights to conform to industry standards.

Update Section 3.16.030.7 describing the Treasurer’s reporting requirements, to allow
flexibility when regular Board meetings are canceled.

Modify Section 4.02.020.4 to align the definition of forms of prohibited harassment with
federal, state, and local regulations.

Update Chapter 4.07 to describe the District’s current medical, dental, vision and
post-retirement benefits.

Modify Section 5.01.005 to add that a Co-Signer must be a current customer for at
least 24 months with good credit. The current Code does not specify the length of time.

Delete Section 5.02.010.1(A) regarding the use of letters from other utilities to establish
credit because the District now uses a national credit service.

Delete Section 5.02.010.1(B) allowing homeowners an automatic waiver of deposit.
With the downturn of the economy, the District has experienced a significant increase in
delinquent homeowner utility bills.

Add Section 5.02.010.1 (B) to allow a waiver of deposit for customers utilizing
Electronic Funds Transfer payments.

Add Section 5.02.010.6 to require customers to pay a deposit for reconnecting services
temporarily for inspections.




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                                          32




Add Section 5.04.020.3 to tighten the District’s credit policy. Customers who receive
two 48-hour notices within a trailing 12-month period would be required to establish a
deposit.

Relocate Section 5.04.020.6 regarding customers who declare bankruptcy, to the billing
Section 5.08.010.9(C).

Modify Section 5.08.010.6 to clarify consequences of rejected payments and to tighten
the District’s credit policy by placing customers on a cash-only basis if more than two
payments are rejected in 12 months.

Modify Section 5.08.010.11 to clarify that District will install meters based on the
provided plans. Discrepancies shall be the responsibility of the owner.

Add Section 5.09.010.1(A) to describe reason for denying service.

Add Section 5.09.010.2 to clarify that customers are responsible for referencing the
correct account on their payments. This is needed because customers occasionally
reference a former account.

Add Section 5.09.010.6 (A) to require customers to request disconnects in writing.

Add Section 5.09.010.7 to clarify that the customer is responsible for keeping their
contact information current.

Add Section 5.09.010.8 to clarify that the customer is responsible for notifying the
District of residency status changes.

Add Section 5.12.010.4(C)(2) to clarify the payment plan options for customers and the
consequences of non-compliance.

Combine Sections 5.12.010.4(D) and 5.12.010.4(D)(1) to eliminate redundancy.

Add a condition to Section 5.12.010.4(H) to tighten the District’s credit policy. If a
customer’s payment to reconnect service is rejected a deposit will be required.

Combine Sections 5.12.020 and 5.12.030 to eliminate redundancy.

Add Section 5.12.040.2(F) to clarify consequences of non-compliance. The District may
disconnect or refuse service.

Combine Sections 5.12.050 and 5.12.055 to eliminate redundancy.

Add Section 5.12.050(A) requiring payments to be received by 4:00 PM to reconnect
service on the same day. This allows the District adequate time to process the
reconnection without incurring after-hour costs.



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                                           33




Add Section 5.12.050.3 to allow temporary reconnection of service for inspections.

Add a provision in Section 5.12.050.5 to allow the General Manager to credit
connection fees for existing and operational service connections when customers
reconnect services abandoned for more than 5 years.

Update Sections 5.16.030.2 and 5.16.030.3 describing the appeals process, to allow
flexibility when regular Board meetings are canceled.

Update Section 6.52.010 regarding the background of residential water meter
installations.

Update Section 7.16.040.1(C) to provide District independent access to meters in
locked areas. The new provision offers a double-lock arrangement or a lock box.

Add Section 7.48.040 to align District’s Code to National Safety Electric Code regarding
overhead optical cable installation and construction.

Modify Section 7.56.020.3(B) to require a 3” underground conduit for a single phase
panel.

Update Chapter 7.83 to align the District’s Renewable Portfolio Standards to recent
California legislation, as approved by the District’s Board.




                                           33
                                           34




               Summary of Proposed Bylaws Changes

Section Description
2       Update clauses to describe that the Treasurer, Assistant Treasurer and
        Accountant shall be appointed by the Board
6       Amend clause to list e-mail as an additional method of giving notice of special
        meetings
7       Amend clause to list e-mail and District website as additional methods of
        providing written notice of all meetings
        Add a clause to include a statement on agenda packets advising that the
        related material is publically available at the District office and website
        Add a clause to describe Directors’ rights to request items to be placed on the
        agenda
        Add a clause to clarify that consultant, staff, and Board shall be kept informed
        of major projects in advance of agenda items
9       Updated the order of business
13 & 14 Updated clause to record meeting minutes on electronic medium
16      Updated the dates to present the budget calendar and to approve the budget;
        delete Budget Committee




                                           34
                                         35



                                                                         Attachment 2A
                                                                               6/6/2012

                                      TITLE 2

                                 ADMINISTRATION

CHAPTERS:
    2.01           Bylaws
    2.02           Board of Directors and Officers
    2.03           Ordinances
    2.04           Board Meetings
    2.08           Board Meeting Minutes
    2.10           Public Hearings
    2.12           Committees
    2.16           Annual Budget
    2.20           Board Vacancies
    2.24           Parliamentary Procedure
    2.28           Amendment of Bylaws
    2.30           Notices
    2.32           Relationships Among Officials
    2.36           Payment of Expenses
    2.40           Delegations from the Board of Directors to the General
                   Manager
      2.44         Conditions of Employment for the General Manager
      2.48         Performance Evaluation and Salary Adjustment for General
                   Manager
      2.50         Retention and/or Destruction of Records
      2.52         Conflict of Interest
      2.56         Code of Conduct
      2.58         Board Travel and Expense Policy


                                  CHAPTER 2.01

                                     BYLAWS

Sections:

         2.01.010 Bylaws

2.01.010 Bylaws - Sections 2.02 through 2.28 below comprise the District’s Bylaws.




                                         35
                                              36




                                       CHAPTER 2.02

                        BOARD OF DIRECTORS AND OFFICERS

Sections:

       2.02.010       Quorum
       2.02.020       Duties of Officers

2.02.010 Quorum Three members of the Board shall constitute a quorum. No business
shall regularly be entered upon until a quorum is present, nor shall business regularly be
proceeded with when the members are reduced below a quorum.

2.02.020 Duties of Officers In addition to the duties specified by applicable law and other
provisions of these rules, as well as resolutions and ordinances of the District, the officers of
the District shall have the following duties:

2.02.020.1 The President shall, when present, preside at all meetings of the District. The
President should cause an agenda to be prepared and distributed by the Clerk/Ex-officio
Secretary in advance of the meeting, which shall list each item of business or
correspondence to come before the meeting insofar as is known. The President shall act as
official spokesman of the Board at the discretion of the Board, execute contracts and other
documents on behalf of the District when authorized by the Board of Directors, and shall
perform such other duties as are assigned from time to time.

2.02.020.2 The Vice President shall perform the duties of the President in the absence or
disability of the President.

2.02.020.3 The District Manager shall function as the Clerk/Ex-officio Secretary of the Board
as well as performing all other acts and duties imposed by the Board.

In addition to those other acts and duties imposed by the Board, the Clerk/Ex-officio
Secretary of the Board shall be entitled to:

       a)     Schedule and call a special meeting of the Board of Directors if he determines
              that it is necessary to do so and if he is unable to contact the President of the
              Board regarding the need to call such a meeting.
       b)     Cancel any regular or special meeting if he determines that a quorum of the
              Board of Directors will not be present.
       c)     Schedule, reschedule and cancel public hearings (except hearings on the
              adoption of a rate increase ordinance) if he determines that it is necessary to
              do so.

2.02.020.4 The Treasurer of the District shall be appointed by the Board by name and shall
have such duties as assigned by the Board pursuant to Resolution 2008-21.

2.02.020.5 The Assistant Treasurer shall be appointed by the Board by name and shall have
such duties as assigned by the Board pursuant to Resolution 2008-21.

                                              36
                                            37




2.02.020.6 The Accountant shall be appointed by the Board by name and shall have such
duties as assigned by the Board pursuant to Resolution 2008-23.

2.02.020.7 The District Counsel shall be the Parliamentarian of the District, shall advise it
with respect to the applicable laws, interpret rules, bylaws and policies, coordinate actions
with the other consultants, and shall perform such other acts as requested by the Board of
Directors.

2.02.020.8 The officers of the District shall be elected at the first meeting in December of
each year for a one year term. It shall be the policy of the Board to attempt to give each
Director the opportunity to serve as President and Vice President for one year during their
four-year term. Notwithstanding the foregoing, an incumbent President or Vice President
may be re-elected to that office. The officers serve at the pleasure of the Board and may be
removed from office prior to the expiration of their one-year term.


                                     CHAPTER 2.03

                                     ORDINANCES

Sections:

       2.03.010             Publication of Ordinances

2.03.010 Publication of Ordinances - All ordinances of the Board will be placed for
publication once in the public notice section of a local newspaper of general circulation
within 30 days after adoption.


                                     CHAPTER 2.04

                                   BOARD MEETINGS

Sections:

       2.04.010      Place of Meeting
       2.04.020      Time of Meeting
       2.04.030      Adjourned Meetings
       2.04.040      Special Meetings
       2.04.050      Written Notice of all Meetings
       2.04.055      Availability of Agenda Packet
       2.04.060      Agenda, discussion and debate - Regular and
                     Special Meetings
       2.04.070      Order of Business
       2.04.080      Voting
       2.04.090      Statements for Visitors
       2.04.100      Recording of Meetings

                                            37
                                              38



2.04.010 Place of Meeting Until changed by further resolution amending these rules, the
place of meeting of the Board of Directors shall be the Board Room of the Truckee Donner
Public Utility District, in Truckee, California. When appropriate notice has been given, any
meeting may be scheduled at another location within the District. The Board of Directors
may, upon showing of special circumstances, hold Board meetings outside the District. All
legislative meetings of said Board shall be open to the public and shall be held at said office
and place of meeting; provided, however, that meetings duly opened at said office may be
adjourned to such other place or places within the confines of said District as may be found
convenient or necessary by the Board, and provided further that this rule shall not preclude
the Board from holding executive sessions when permitted by law.

2.04.020 Time of Meeting The time for regular meetings of the Board is the first and third
Wednesday of each month at 6:00 P.M. If and when said Wednesday falls on a legal
holiday, then said regular meeting shall be held at 6:00 P.M. on the next business day
following the legal holiday or other day agreed to by the Board.

2.04.030 Adjourned Meetings If the business coming before the Board at any regular or
adjourned meeting is not finished on the day fixed for such meeting, or if for any reason
such adjournment is deemed proper, the Board may adjourn to such time and place as may
be specified in the Order of Adjournment. When the Order of Adjournment fails to state the
hour to which the adjourned meeting is to be held, it shall be held at the hour specified for
regular meetings. In the event that an adjourned meeting is not called, and a special
meeting does not take place prior to the next regular meeting, then the unfinished items shall
be placed on the agenda for the next regular meeting.

2.04.040 Special Meetings A special meeting may be called at any time by the President
or by a majority of the members of the Board, by delivering personally, by e-mail or by mail
written notice to each member of the Board and to each local newspaper of general
circulation, radio or television station requesting notice in writing. Such notice must be
delivered personally, by e-mail or by mail at least 24 hours before the time of such meeting
as specified in the notice. The call and notice shall specify the time and place of the special
meeting and the business to be transacted. No other business shall be considered at such
meetings by the Board. Such written notice may be dispensed with as to any member who
at or prior to the time the meeting convenes files with the Clerk/Ex-officio Secretary a written
waiver of notice. Such waiver may be given in writing in person, by US mail or by e-mail.
Such written notice may also be dispensed with as to any member who is actually present at
the meeting at the time it convenes.

2.04.050 Written Notice of all Meetings Advance written notice shall be given for all
meetings in the following manner:

2.04.050.1 A written notice of all meetings (agenda) shall be mailed or e-mailed to each
Director as far in advance of the meeting as possible, but, in any event, either mailed, e-
mailed or expressly hand-delivered so as to be received 72 hours in advance of the meeting.
Notwithstanding the foregoing, and in accordance with Section 2.04.040 herein, notice for all
special meetings shall be made at least 24 hours in advance of said meeting. Any Director
may, at his discretion, file a signed waiver of such notice with the District.



                                              38
                                              39



2.04.050.2 Written notice of all meetings (agenda) shall be delivered or mailed as far in
advance as possible, but, in any event, to be received 72 hours prior to the meeting, to all
newspapers, radio stations, individuals and entities which have filed a request of such notice
with the District and to all parties with business pending on that particular agenda of the
meeting.

2.04.050.3 Written notice of all meetings (agenda) shall be posted at the District office,
Town hall, the Truckee Branch of the Nevada County Library, and such other locations as
may from time to time be determined by the Board of Directors.

2.04.055 Availability of agenda packet On all Board or committee meeting agendas a
statement will be made advising that the complete packet of related material is available for
public review at the District office and on the District’s website.

2.04.060 Agenda, discussion and debate - Regular and Special Meetings The
Clerk/Ex-officio Secretary of the District shall cause a Notice of Meeting (agenda) to be
prepared which will state the matter to be heard in a manner that is easy to comprehend.

2.04.060.1 The Clerk/Ex-officio Secretary of the District and the President of the Board shall
be jointly responsible for compiling the agenda for all regular meetings. In the case of special
meetings, the Clerk/Ex-officio Secretary and those parties calling such meetings shall be
responsible for the preparation of the agenda.

2.04.060.2 Each Director will have the right to request items to be placed on the agenda for
any specific meeting, either: 1) Verbally requesting it if this request is supported by at least
one additional Board member during a Board meeting, or 2) verbally or in writing to the
President with the President’s support. Such requests must be made in a timely manner and
shall comply with the deadlines established for the preparation of the Notice of Meeting
(agenda).

2.04.060.3 No item will be placed on the agenda until the following conditions have been
met. Items on an agenda not meeting the conditions will be either struck from the agenda or
will be tabled to the next meeting without discussion.

2.04.060.3(A) Information regarding the topic must be in the hands of the Board members
prior to the Monday evening before the regular meeting and not less than three days prior to
any special meeting with some exceptions in the case of an emergency meeting.

2.04.060.3(B) The item as it appears on the agenda will have adequate staff and consultant
preparation prior to the presentation to the Board for discussion and review. Without this,
such items will be referred to staff by the Chair.

2.04.060.3(C) The consultants and staff and Board will be kept informed by memo and
regular correspondence of all major projects and proposals well in advance of it being
placed on the agenda for Board review.

2.04.060.3(D) Debate and/or discussion on each agenda topic is limited to five minutes for
each Director. The Board, by majority vote, may waive this provision for any agenda topic.


                                              39
                                             40



2.04.070 Order of Business The order of business in conducting the meeting of the Board
shall be as follows:

       1.     Call to order
       2.     Roll call
       3.     Pledge of Allegiance
       4.     Changes to the agenda
       5.     Public input
       6.     Director’s update
       7.     Special business/public hearings
       8.     Consent agenda
       9.     Action items
       10.    Workshop items
       11.    Routine business (such as approval of minutes and Treasurer's report)
       12.    Closed session
       13.    Return to public session
       14.    Adjournment

2.04.080 Voting Every action of the Board shall be taken by ordinance, resolution, motion,
or unanimous consent. In the case of every action except one taken by simple motion or
unanimous consent, the roll of Directors shall be called, and their individual votes recorded
in the formal minutes. All official Board actions will require the affirmative vote of at least
three Directors.

2.04.090 Statements from Visitors All members of the public attending Board meetings
and having an interest in any agenda item shall have the right to address the Board before
a vote is taken on such item. They shall be encouraged to ask questions directly related to
reports made to the Board by members of the District's staff or consultants immediately after
such reports are made and prior to Board action.

2.04.100 Recording of the Meetings The Clerk/Ex-officio Secretary shall arrange to have
recordings made of the meetings of the Board, except when the Board goes into closed
session, for use in preparation of the minutes. The Clerk/Ex-officio Secretary shall make
duplicates of the recordings available to anyone for review upon arrangement.


                                      CHAPTER 2.08

                              BOARD MEETING MINUTES

Sections:

       2.08.010      Board Meeting Minutes

2.08.010 Board Meeting Minutes


2.08.010.1 The District’s Board meeting minutes shall be action only minutes listing the title
of the topic, a brief description of the topic, action taken or direction given, and any

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appropriate roll call votes. Resolutions and ordinances shall be attached as part of the action
minutes. These minutes shall be a permanent record of the District.

2.08.010.2 All Board meeting minutes will be officially recorded on electronic medium. The
original recordings shall be preserved perpetually by the District Clerk or his/her designee.

2.08.010.3 Within 48 hours of a meeting, a copy of the action minutes shall be prepared in
draft form.

2.08.010.4 Appropriate recording and play-back equipment shall be provided by the District.
The equipment, recordings and copies of the action minutes shall be kept in library format.
The equipment, duplicate recordings and copies of the action minutes shall be made
available to the general public for review and inspection upon appointment during regular
business hours of the District.

2.08.010.5 Copies of the action minutes and of the Board meeting recordings shall be made
available to any interested party upon their request and payment of the duplication costs
pursuant to the Miscellaneous Fee Schedule.


                                      CHAPTER 2.10

                                   PUBLIC HEARINGS

Sections:

       2.10.010             Notices of Public Hearings

2.10.010 Notices of Public Hearings All public hearings will be advertised by the
Secretary in a local newspaper of general circulation in small display ad form.


                                       CHAPTER 2.12

                                       COMMITTEES

Sections:

       2.12.010      Committees

2.12.010 Committees Standing and select committees for the performance of such duties
as may appear necessary and proper shall from time to time be appointed by the President.
 In the absence of any members of any committee, the presiding officer may appoint a
substitute who shall serve during such absence.




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                                      CHAPTER 2.16

                                        BUDGETS

Sections:

       2.16.010      Budgets

2.16.010 Budgets The General Manager shall prepare a budget calendar for Board review
at the first regular meeting in August prior to the budget cycle (annually or bi-annually). The
General Manager shall present a proposed draft budget for the ensuing calendar year(s) to
the Board in the last quarter of the budget cycle period for the next budget cycle. The Board
shall adopt such budget with any changes ordered by it, not later than the second regular
meeting in December. The Manager, or individual Board members may recommend
changes in the budget from time to time; and the Board may adopt such changes. A public
hearing shall be held prior to adoption of the budget.


                                      CHAPTER 2.20

                                   BOARD VACANCIES

Sections:

       2.20.010      Board Vacancies

2.20.010 Board Vacancies All vacancies occurring on the Board of Directors, for whatever
reason, shall be filled according to the rules contained in the California Government Code.


                                      CHAPTER 2.24

                            PARLIAMENTARY PROCEDURE

Sections:

       2.24.010      Parliamentary Procedure

2.24.010 Parliamentary Procedure As to all matters not hereinabove provided for, the
conducting of the business of the Board and its parliamentary procedure shall conform to the
RULES OF ORDER REVISED by H. M. Robert, which RULES OF ORDER are by reference
made a part of these bylaws.




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                                      CHAPTER 2.28

                               AMENDMENT OF BYLAWS

Sections:

       2.28.010      Amendment of Bylaws

2.28.010 Amendment of Bylaws Any proposed amendment to the Bylaws must be
submitted in writing to the Clerk/Ex-officio Secretary of the District. The Clerk shall cause a
copy to be distributed to each Director and shall cause the same to be placed on the agenda
for the next regular meeting of the Board of Directors. In order to become effective, the
amendment, or any modification thereof, shall require a vote of the majority of the Board.



                                      CHAPTER 2.32

                         RELATIONSHIPS AMONG OFFICIALS

Sections:

       2.32.010      Financial Relationships Among Officials
       2.32.020      Director/Manager Relationship

2.32.010 Financial Relationships Among Officials

2.32.010.1 District officials, including but not limited to engineering, financial and/or legal
consultants shall not enter into agreements with, or otherwise represent, individual Board
members or other third parties where such an arrangement may potentially conflict with the
interests of the District.

2.32.010.2 Members of the Board of Directors shall not enter into contractual arrangements
with, or otherwise utilize, engineering, financial and/or legal consultants who perform work or
services for the District on any material matters which may affect the District.

2.32.010.3 The General Manager shall not engage in any private enterprise within the
District.

2.32.020 Director/General Manager Relationship The District recognizes, establishes
and maintains the following guidelines in its relationship with the General Manager.

2.32.020.1 It is recognized that good management is the most important factor in the
success of the District. In exercising such management, the Board of Directors reserves its
responsibility to establish policy, approve plans and programs and delegate authority to its
General Manager.



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2.32.020.2 The Board of Directors recognizes its responsibility and its need to establish
policies, approve plans and programs, and delegate authority to the General Manager to
execute and carry out its plans, programs and policies. The General Manager shall, among
other things, have authority to hire capable personnel within the approved wage and salary
plan and policy, train, supervise and replace them if necessary.

2.32.020.3 All policies of the Board of Directors shall be promulgated to regular and special
meetings, acting collectively as a Board. The General Manager is delegated the
responsibility of carrying out such policies.

2.32.020.4 It shall be the policy of the Board of Directors to refrain, as individuals, from
discussing management problems with the personnel of the District. At the request of the
General Manager, the Board of Directors may confer with personnel at regular or special
meetings of the Board.

2.32.020.5 This in no way precludes any Board member from talking with any District
employee or requesting information from any District employee. However, if such requests
for information are of a time-consuming nature, in consideration of the employees' work
schedules, Directors shall coordinate such requests through the General Manager.

2.32.020.6 It shall be distinctly understood that the "flow" of authority for the management of
the District shall be through the General Manager, and the General Manager shall be the
connecting link between the Board of Directors and the personnel. The Board of Directors
shall require full and complete information from the General Manager concerning all matters
in connection with the management of the District as set forth in Board policies.

2.32.020.7 Primarily, the purpose of this policy is to define the relationship that shall exist
between the Board of Directors, who are the elected representatives of the District, and the
General Manager, who is employed by the Board of Directors. The Board of Directors
recognizes that effective management of the District can exist only through mutual
understanding and complete cooperation between the Board of Directors and the General
Manager. The General Manager is expected to produce results and give an account to the
Board for his stewardship. His performance cannot be of the best unless he is given latitude
to exercise independent judgment in executing policies of the Board of Directors. The Board
acknowledges that obligation and gives the General Manager that latitude of judgment and
discretion, and expects faithful performance in carrying out all of the policies of the Board of
Directors.

2.32.020.8 The Board of Directors recognizes its responsibility for the employment of the
General Manager and further, the additional responsibility for a systematic appraisal of the
General Manager's performance in order that growth, development and effective
improvements are encouraged.

2.32.020.9 The President of the Board of Directors shall be responsible for inviting the
attention of the Board members to non-adherence to this policy.

2.32.020.10 Combined with section 2.48



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                                      CHAPTER 2.36

                     PAYMENT OF EXPENSES – See Chapter 2.58


                                      CHAPTER 2.40

                                      DELEGATIONS

Sections:

       2.40.010      Delegations from the Board of Directors to the
                     General Manager

2.40.010 Delegations from the Board of Directors to the General Manager - In order to
properly carry out the policy making responsibilities of the Board of Directors, the Board
wishes to clarify its priorities and delegations of authority to the General Manager. By
clarifying the Board's priorities and delegations, the Manager will have the authority to
properly direct the operations of the District, and the Board will be better able to review the
District's performance.

As set forth in Section 16114 of the Public Utilities Code, the General Manager is delegated
full charge and control of the construction of the works of the District and of their
maintenance and operation.

Subject to policy formulation and direction by the Board of Directors, the General Manager
shall plan, direct, coordinate, and review the activities of the District's operations and work
forces.

The General Manager is hereby delegated the following specific authority and responsibility,
and may further delegate authority and responsibility to District staff. In carrying out these
duties, the General Manager will adhere to policy determinations of the Board of Directors.

2.40.010.1 Plan

2.40.010.1(A) Direct and participate in the development and implementation of goals,
objectives, management policies.

2.40.010.1(B) Advise the Board on matters of administrative practices, recommend
legislation and policies required in the public interest.

2.40.010.1(C) Formulate with his staff long and short term plans for recommendation to the
Board of Directors.

2.40.010.2 Organize

2.40.010.2(A) Review the District's activities and recommend to the Board the best type of
organizational structure.


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2.40.010.2(B) Review all District operations to establish work standards and improve
methods.

2.40.010.3 Staff

2.40.010.3(A) Determine, with advice from staff, the need to change positions, provided
they are within the limitations of the budget.

2.40.010.3(B) Determine qualifications and standards for use in recruiting, hiring, promoting
and assigning the District's personnel.

2.40.010.3(C) Select, appoint, promote, reassign or release District employees.

2.40.010.3(D) Formulate an effective method of instilling and motivating a team effort by all
employees.

2.40.010.3(E) Develop a procedure whereby employees may advance within the District if
they are capable and desire to do so.

2.40.010.3(F) Implement, maintain and enforce the District's personnel policies as
prescribed by the Board.

2.40.010.3(G) Act as the Board's agent in meeting and conferring with employees and
employee organizations.

2.40.010.3(H) Implement job training and safety programs to the benefit of the District.

2.40.010.3(I) Establish performance appraisal programs for all District personnel.

2.40.010.3(J) Maintain up-to-date chart of all District positions and their respective class
specifications.

2.40.010.3(K) Recommend to the Board for approval the employment of outside
consultants and negotiate terms of contracts for services.

2.40.010.4 Direct

2.40.010.4(A) Enforce and administer the provisions of the laws and ordinances of the
District.

2.40.010.4(B) Direct all District personnel.

2.40.010.4(C) Respond to citizens' complaints and requests for information.

2.40.010.4(D) Conduct continuous research into administrative practices to produce greater
efficiency and economy in District operations.

2.40.010.4(E) Direct the day-to-day activities of the District except as specified otherwise by
the Bylaws of the Board. Delegate appropriate responsibility and authority to staff.

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2.40.010.5 Finance

2.40.010.5(A) Prepare a long term capital improvements program for Board consideration.

2.40.010.5(B) Direct the preparation and administration of the District budget.

2.40.010.5(C) Direct the investment of District funds in accordance with Board policy.

2.40.010.5(D) Establish accounting systems, procedures, statistics and types of reports
necessary for sound financial management of the District.

2.40.010.5(E) Purchase all materials, supplies and equipment within the limits of the budget
and in accordance with Board policy.

2.40.010.5(F) Review rate structure to determine where adjustments are needed to insure
adequate cash flow and to provide revenue to meet expenses and establish reasonable
reserves and replacement of assets.

2.40.010.5(G) Develop and maintain inventory records. Conduct periodic inventories.
Dispose of surplus materials in accordance with Board policy.

2.40.010.5(H) Assist the Board in arranging for an annual audit. Review the audit with staff.

2.40.010.6 Report

2.40.010.6(A) Submit periodic reports to the Board on revenues and expenses compared to
the budget.

2.40.010.6(B) Develop and submit to the Board such operational summaries as will enable
the Board to review the overall performance of the District.

2.40.010.6(C) Keep the Board informed of customer complaints.

2.40.010.6(D) Inform the Board of significant problems that arise so that the Board can
provide necessary direction to staff.

2.40.010.6(E) Items will be reported to the Board by the Manager as appropriate under
Manager's Report during regular Board meetings.

2.40.010.7 Public and customer relations

2.40.010.7(A) Represent the Board in the community and at professional meetings as
required and as directed by the Board.

2.40.010.7(B) Investigate and authorize membership in service clubs and associations
which would be beneficial to the District, and authorize the payment of dues for such
memberships by the District management staff.


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2.40.010.7(C) Develop a program for maintaining favorable relations with District customers.

2.40.010.8 Manager to delegate - In performing the responsibilities set forth herein, the
Manager is expected to develop a highly competent and motivated staff and should delegate
authority and responsibility to the staff to insure the proper functioning of the District.


                                      CHAPTER 2.44

                            CONDITIONS OF EMPLOYMENT

Sections:

       2.44.010      Conditions of Employment for the General Manager

2.44.010 Conditions of Employment for the General Manager Prior to employment by
the District, the prospective General Manager shall be required to satisfy the Board of
Directors that his general physical condition is such that he will be able to function property
in the position.

                                      CHAPTER 2.48

            PERFORMANCE EVALUATIONS AND SALARY ADJUSTMENTS

Sections:

       2.48.010      Performance     Evaluations   and   Salary
                     Adjustments for the General Manager

2.48.010 Performance Evaluations and Salary Adjustments for the General Manager
The General Manager shall be employed by the Board of Directors at a salary established
by the Board. The Board shall work with the General Manager to set performance goals and
objectives. At least annually, the Board will appraise the General Manager’s performance as
described in the General Manager’s Employment Agreement with the District. Consideration
of an increase in compensation within the District’s approved wage and salary plan will be
given at that time.


                                      CHAPTER 2.50

                  RETENTION AND/OR DESTRUCTION OF RECORDS

Sections:

       2.50.010      Destruction of District records; excepted records
       2.50.020      Retention of District records
       2.50.030      Destruction of District records; conditions
       2.50.040      Duplicate records less than five years old; destruction
       2.50.050      Authority of Treasurer or fiscal agents
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2.50.010 Destruction of District records; excepted records Unless otherwise provided
by law, the District Clerk may destroy any District record, document, instrument, book or
paper under his or her charge, without making a copy thereof, after the same is no longer
required.

2.50.020 Retention of District records This Section does not authorize the destruction of
records required to be kept by statute. (See Appendix A for District Record Retention
Schedule.)

2.50.030 Destruction of District records; conditions Notwithstanding the provisions of
Section 2.50.010, the District Clerk who is the custodian of District records, documents,
instruments, books and papers, may cause to be destroyed any or all such records,
documents, instruments, books and papers, if all of the following conditions are complied
with:
       a)     The record, paper or document is photographed, micro-photographed,
              reproduced by electronically recorded video images on magnetic surfaces,
              recorded in the electronic data-processing system, recorded on optical disk,
              reproduced on film or any other medium which does not permit additions,
              deletions, or changes to the original document in compliance with the
              minimum standards or guidelines, or both, as recommended by the American
              National Standards Institute or the Association for Information and Image
              Management for recording of permanent records or non-permanent records,
              whichever applies.
       b)     The device used to reproduce such record, paper or document on film, optical
              disk, or any other medium is one which accurately reproduces the original
              thereof in all details and which does not permit additions, deletions, or
              changes to the original document images.
       c)     The photographs, microphotographs, or other reproductions on film, optical
              disk or any other medium are placed in conveniently accessible files and
              provision is made for preserving, examining, and using the files.

Every reproduction complying with the above process shall be deemed to be an original
record and a transcript, exemplification, or certified copy of any reproduction shall be
deemed to be a transcript, exemplification, or certified copy, as the case may be, of the
original.

2.50.040 Duplicate records less than five years old; destruction Notwithstanding the
provisions of Section 2.50.010, the District Clerk may prescribe a procedure under which
duplicates of District records less than five years old may be destroyed if they are no longer
required.

2.50.050 Authority of Treasurer Under such conditions as the Treasurer fixes, he/she, or
other duly authorized agents, may destroy or cremate any or all bonds and any or all
coupons pertaining thereto which have been previously paid or canceled.

(Based on Government Code Sections 34090, 34090.7, 53921 and 60203)


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                          CHAPTER 2.52 (2/18/09, Res 2009-09)

                                 CONFLICT OF INTEREST

Sections:

       2.52.005       Financial Interests of Employees
       2.52.010       District's Conflict of Interest Code
       2.52.015       Officials Who Manage Public Investments
       2.52.020       Disclosure Categories and Designated Positions

2.52.005 Financial Interests of Employees It is the policy of the Board that no employee
of the District shall have any financial interest in any activity outside the District which does
business for profit with the District.

2.52.010 District's Conflict of Interest Code The Political Reform Act (Government Code
Section 81000, et seq.) requires state and local government agencies to adopt and
promulgate conflict-of-interest codes. The Fair Political Practices Commission has adopted
a regulation (2 Cal. Code of Regs. 18730) that contains the terms of a standard conflict-of-
interest code, which can be incorporated by reference in an agency’s code. After public
notice and hearing, the standard code may be amended by the Fair Political Practices
Commission to conform to amendments in the Political Reform Act. Therefore, the terms of
2 California Code of Regulations Section 18730 and any amendments to it duly adopted by
the Fair Political Practices Commission are hereby adopted and incorporated by reference.
This regulation and Sections 2.52.015 – 2.52.020 designating officials and positions and
establishing disclosure requirements shall constitute the conflict-of-interest code for the
Truckee Donner Public Utility District (District).

2.52.010.1 Place of Filing Individuals holding designated positions shall file their
statements with the District, which will make the statements available for public inspection
and reproduction (Gov. Code §81008). Statements for all designated positions will be
retained by the District.

2.52.015 Officials Who Manage Public Investments The following positions are not
covered by this conflict-of-interest code because those individuals holding these positions
must file under Government Code Section 87200. These positions are listed for
informational purposes only:
    • Members of the Board of Directors
    • General Manager
    • District Treasurer
    • Assistant Treasurer
    • Consultants (Those that invest public funds.)

An individual holding one of the above-listed positions may contact the Fair Political
Practices Commission for assistance or written advice regarding their filing obligations if they
believe that their position has been categorized incorrectly. The Fair Political Practices
Commission makes the final determination whether a position is covered by Government
Code Section 87200.
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2.52.020 Designated Positions and Disclosure Categories

A. Designated Positions
The following positions are in Disclosure Category I:
Administrative Services Manager
Assistant General Manager
Attorney
Electric Utility Manager/Power Supply Engineer/GIS
Public Information and Conservation Manager
Water Utility Manager
Consultants*
The following positions are in Disclosure Category II:
Buyer/Clerk
Contract Administrator
Customer Services Manager
Finance and Accounting Manager
Geographic Information System Coordinator
Senior Accountant Analyst
Technical Program Administrator
The following positions are in Disclosure Category III:
Conservation Program Administrator
Electric Engineer
Electric Superintendent
Electric System Engineer
Water Engineer
Water Superintendent
Water System Engineer

*Consultants shall be included in the list of designated employees and shall disclose
pursuant to the Disclosure Requirements in the Code, subject to the following limitations.
The General Manager may determine, in writing that a particular consultant, although a
“designated position,” is hired to perform a range of duties that is limited in scope and thus is
not required to fully comply with the disclosure requirements described in this section. Such
written determination shall include a description of the consultant’s duties, and based upon
that description, a statement of the extent of disclosure requirements. The General
Manager’s determination is a public record and shall be retained for public inspection in the
same manner and location as the conflict-of-interest code.

B. Disclosure Category I
Individuals holding designated positions in Disclosure Category I must report their interests
in real property located within the jurisdiction or within two miles of the boundaries of the
jurisdiction or within two miles of any land owned or used by the agency; and investments
and business positions in business entities, and income, including loans, gifts, and travel
payment, from all sources.

C. Disclosure Category II
Individuals holding designated positions in Disclosure Category II must report their interests

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in real property located within the jurisdiction or within two miles of the boundaries of the
jurisdiction or within two miles of any land owned or used by the agency; investments and
business positions in business entities, and income, including loans, gifts, and travel
payment, from sources, that:

       a) provide supplies, materials, machinery, equipment, or vehicles of the type utilized
          by the District, including, but not limited to: motor and specialty vehicles and parts,
          petroleum products, construction and building materials (e.g. transformers, poles,
          wire, cable, pipes), and solar and renewable energy products;
       b) are contractors providing services utilized by the District, including, but limited to:
          educational and medical services, information technology, insurance, engineering,
          energy pricing, legal, and billing and collection;
       c) are persons with a permit pending before the District;
       d) are utility companies or sources that supply power to the agency, including solar
          and renewable power;
       e) engage in the business of brokering, acquiring, leasing, marketing, disposing, or
          owning real property; or
       f) provide engineering, energy, or environmental assessment reports including those
          relating to pricing and demand.
       g) provide consulting services, including, but not limited to: legal, financial, public
          relations, labor relations, and energy.

D. Disclosure Category III
Individuals holding designated positions in Disclosure Category III must report their
investments and business positions in business entities, and income, including loans, gifts,
and travel payments, from sources, that provide services, supplies, materials, machinery,
equipment, or vehicles of the type utilized by the Department to which the filer has been
assigned.


                                        CHAPTER 2.56

                               BOARD CODE OF CONDUCT

Sections:

       2.56.010       Introduction
       2.56.020       General
       2.56.030       Directors Conduct with One Another
       2.56.040       Rules Regarding Public Input
       2.56.050       Procedural Considerations
       2.56.060       Debate Forum

2.56.010 Introduction The Truckee Community has established the Truckee Donner Public
Utility District (District) to provide essential services needed to support the prosperity and
general wellbeing of the community. The District’s powers and responsibilities are set forth
in the California Public Utility District Act that requires the election of a Board of Directors to
govern the District by meeting in accordance with the California law known as the Brown
Act. The Board of Directors is required to consider complex facts and make many important

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decisions that impact the prosperity and general wellbeing of the Truckee Community. The
voters of the District have elected a Board of Directors to govern the District, and that Board
states that it recognizes the importance of making sound reasoned decisions in a timely and
efficient manner. The Board recognizes the importance of deliberating and making
decisions using a process that is orderly, efficient, civil, fact based and proceeds in a timely
basis.

2.56.020 General The Board of Directors shall perform its duties in accordance with the
processes and rules set forth in this Code governing the deliberation of public policy issues,
meaningful involvement of the public, and implementation of policy decisions of the Board by
District staff.

2.56.020.1 The Board shall make its decisions based on the merits and substance of the
matter at hand, rather than on unrelated considerations.

2.56.020.2 The Board shall conduct its business in a manner that supports the maintenance
of a positive and constructive work place environment for District staff, private citizens and
businesses dealing with the District.

2.56.020.3 Directors shall prepare in advance of Board meetings and be familiar with issues
on the agenda.

2.56.020.4 Directors shall fully participate in Board meetings while demonstrating respect,
consideration and courtesy to others.

2.56.020.5 Directors shall become familiar with Rules of Procedure and this Board Code of
Conduct.

2.56.020.6 Directors shall be responsible for the highest standards of respect, civility and
honesty.

2.56.030 Directors Conduct with One Another The Board of Directors is composed of
individuals with a wide variety of opinions and all have freely chosen to serve in public office.
 It should be recognized that disagreements will develop and need to be accommodated in a
courteous manner.

In public meetings the Directors shall:

2.56.030.1 Practice civility and decorum in discussions and debate;

2.56.030.2 Honor the role of the Board President in maintaining order and equity. Respect
the Board President’s efforts to focus discussion on current agenda items. Objections to the
President’s actions should be voiced politely and with reason;

2.56.030.3 It shall be the duty and responsibility of the Board President to ensure that the
rules of operation and decorum contained in the Board Code of Conduct are observed;

2.56.030.4 The Board President shall maintain control of communication between Directors
and between the Directors and staff and public;
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2.56.030.5 Directors should request and be recognized by the Board President before
speaking. When one Director has the floor and is speaking other Directors shall not interrupt
or otherwise disturb the speaker;

2.56.030.6 Be respectful of other people’s time. Stay focused and act efficiently during
public meetings. The work at hand is important and decisions must me made;

2.56.030.7 Staff members assist the General Manager in presenting information to the
Board of Directors and shall be a resource to the Directors to answer questions arising
during discussion. These discussions shall remain focused on the agenda topic in
accordance with the Brown Act;

2.56.030.8 District General Counsel shall act as Parliamentarian to assist the Board
President in matters regarding procedure, enforcement of this Board Code of Conduct and
compliance with the Brown Act so that the Board actions remain orderly and proper;

2.56.030.9 The Board President may limit the time any Director or other speaker has to
address the Board so that the business of the Board appearing on the agenda can be dealt
with efficiently.

2.56.040 Rules Regarding Public Input It is recognized that an important element of
governing the District within the traditions of democracy require and benefit by citizen input.
It is also recognized that the Brown Act requires that the Board’s meeting agenda provide for
the opportunity for public input. It is also recognized that the Board of Directors of the
District shall accept public input and consider it seriously.

In public meetings the Directors shall:

2.56.040.1 Listen to public input in a respectful and civil manner;

2.56.040.2 Directors shall not engage presenter of public input in dialogue, but shall, at the
conclusion of public input, discuss and decide the appropriate response to the input;

2.56.040.3 Public input shall be limited to three minutes per presenter, or as deemed
appropriate from the Board President, to provide time for the Board of Directors to efficiently
conduct other business on its agenda;

2.56.040.4 Equally, public presenters shall be respectful of the Board of Directors and others
participating in the meetings.

2.56.050 Procedural Considerations The Board of Directors shall commit to annually
review important procedural materials. At the beginning of each year the Board of Directors
will review Board Code of Conduct, the Brown Act and other matters related to Board
procedures.

2.56.060 Debate Forum The discussion and deliberations at Board meetings are to secure
the mature and reasoned decision of the Board on matters appearing on the agenda.


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All discussions must be relevant to the motion before the Board. A Director is given the floor
only for the purpose of discussing the pending question; discussion which departs from the
agenda matter is out of order.

Protocol for agenda items:

   1. Board President reads the agenda item
   2. General Manager or staff representative introduces the question before the Board
   3. Report from staff/presenter
   4. Public input
   5. Director questions and discussion
   6. Motion and second
         • Motion to approve
         • Motion to amend
         • Motion to table
         • Motion to call the question
   7. Action

2.56.070 Ethics Training As required by California AB 1234, beginning in January, 2006
each director will attend ethics training. Thereafter, recertification of having attended ethics
training is required every two years.

Resolution 2008-30 (Oct. 1, 2008)


                                       CHAPTER 2.58

                       BOARD TRAVEL AND EXPENSE POLICY

Sections:

        2.58.010     Objective
        2.58.020     Policy Content
        2.58.030     Allowable Expenses
        2.58.040     Authorization for Travel or Training
        2.58.050     Cost Control
        2.58.060     Lodging
        2.58.070     Meals
        2.58.080     Telephone/Fax/Cellular
        2.58.090     Internet
        2.58.100     Airport Parking
        2.58.110     Cash Advance Policy
        2.58-120     Credit Card Use Policy
        2.58.130     Submitting Travel Expense Reports
        2.58.140     Reports to the Governing Board
        2.58.150     Compliance with Laws
        2.58.160     Violation of This Policy


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2.58.010 Objective To establish a policy governing the reimbursement to members of the
Board of Directors (“Directors”) for expenses incurred while involved in official District
business or while attending authorized meetings or training.

2.58.020 Policy Content
   1. It is District policy to use public funds for travel and training only when there is a
      substantial benefit to the District.
   2. This policy provides guidance to elected and appointed officials on the use and
      expenditure of District resources, as well as the standards directing those
      expenditures.
   3. It is District policy to satisfy the requirements of Government Code sections 53232.2
      and 53233.3 and AB 1234.
   4. It is District policy to reimburse Directors for authorized travel, meals, lodging, and
      other actual and necessary expenses that are reasonably incurred in the conduct of
      District business and detailed in an expense report with receipts attached.

2.58.030 Allowable Expenses Directors shall only use District funds, equipment, supplies,
and staff time for authorized District business.

Directors shall use good judgment when incurring business expenses, and are expected to
use a reasonably economic means of lodging, meals and transportation that will meet the
traveler’s requirements with due consideration to safety and comfort.

Expenses reasonably incurred in connection with the following types of Director activities
generally constitute allowable expenses, as long as the other requirements of this Policy are
met:

   1. Meetings and communicating with representatives of regional, state and national
      government on adopted policy positions;
   2. Attending approved educational seminars designed to improve Directors’ skill and
      information level;
   3. Participating in regional, state and national organization meetings or trainings, such
      as NCPA, UAMPS, AWWA or CSDA; and
   4. All other reasonable expenditures previously approved by the District’s governing
      body in a public meeting before the expenditures were incurred.

        Examples of expenses that the District will not reimburse include, without limitation:
   1.   The personal portion of any District-related trip;
   2.   Political or charitable contributions or events;
   3.   Family expenses, including partner’s expenses when accompanying a Director on
        District-related business, as well as children- or pet-related expenses;
   4.   Entertainment expenses, including theater, movies (either in-room or at the theater),
        sporting events (including gym, massage and/or golf related expenses), or other
        cultural events;
   5.   Mileage to and from District facilities or to attend meetings of the Board of Directors;
   6.   Non-mileage personal automobile expenses, including repairs, traffic citations,
        insurance or gasoline; and
   7.   Personal losses incurred while on District business.

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2.58.040 Authorization for Travel or Training Any expenses that do not fall within this
Policy or the Internal Revenue Service (“IRS”) rates must be approved by the District’s
governing body in a public meeting before the expenditures were incurred; otherwise, the
expenses are not reimbursable.

Board members shall request authorization to attend meetings or training during the
“Director Update” section of a regular Board of Directors meeting. If there is no Board
opposition, the request will be considered authorized by this policy. The Board President or
any Director can request the travel and/or training request be placed on the agenda of the
next regularly scheduled Board meeting for action.

2.58.050 Cost Control To conserve District resources and keep expenses within community
standards for public officials, Director expenditures shall strictly adhere to the following
guidelines. The District shall only pay or reimburse those expenses that meet these
guidelines. Any expenses incurred in excess of these guidelines are the Director’s personal
responsibility.

Except as otherwise specified in this Policy, the District shall use the current IRS rates
established in Publication 463 (and any future amendments) as its reasonable
reimbursement rates.

A. Transportation
The most economical mode and class of transportation reasonably consistent with
scheduling needs shall be utilized, using the most direct and time-efficient route available.
Pursuant to AB 1234, Directors shall use government and group rates for all transportation
when available.

   a. Airfare
   Air travel shall be by coach or standard class. The most cost-effective route shall be
   used.

   Alternate routes or additional stops for the Director’s personal benefit shall be at the
   Director’s expense, prorated to the most cost-effective, direct route to the District-related
   destination.

   b. Automobile
   Rental vehicle expense may be reimbursed when a Director, or other District official, is
   attending an out-of-town conference, and it is determined that a rental vehicle is the most
   economical transportation available. In making this determination, the rental costs,
   parking and gasoline expenses shall be compared to the combined costs of other
   available transportation.

   Automobile mileage for personally owned automobiles shall be reimbursed at the IRS
   rate currently in effect (see www.irs.gov). The rates are designed to compensate the
   driver for gasoline, insurance, maintenance and other expenses associated with
   operating the vehicle. Reasonable parking and toll expenses shall also be reimbursed,
   but not fines and penalties for the violation of traffic, parking or other laws.


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   Directors must have a valid driver’s license and adequate liability insurance on their
   vehicle. Proof of both shall be on record at the District office.

   c. Taxis/Shuttles
   Reasonable taxi or shuttle fares may be reimbursed, including a fifteen percent (15%)
   gratuity per fare, when the cost of such fares is equal to or less than the cost of vehicle
   rentals, gasoline and parking combined, or when such transportation is reasonably
   necessary for time-efficiency. Fare reimbursements require valid receipts.

2.58.060 Lodging The District shall reimburse the actual cost of reasonable lodging
required for overnight travel. Directors incurring overnight lodging costs while on District
business shall seek appropriate, economical accommodations. Directors shall use
government and group rates for lodging when available.

Pursuant to AB 1234, if the Director’s lodging is in connection with a conference or other
seminar (e.g. mandatory ethics training), the lodging costs cannot exceed the group rate
published by the event sponsor. If the group rate is not available at the time of booking, the
Director is to use comparable lodging that does not exceed the District’s Policy or IRS rates,
whichever is lower.

The District’s reimbursable lodging rate is the reasonable base room rate charged, plus
lodging taxes. Lodging reimbursements require valid, itemized receipts.

2.58.070 Meals Directors must use good judgment as to the reasonableness of meal
expenses. Reasonable meal costs shall be based upon the per diem rate tables listed in IRS
Publication 1542. Directors shall use reasonable efforts to avoid particular areas of high-cost
meals and travel.

 Meal gratuities should not exceed acceptable and customary practices. Directors are
encouraged to take advantage of meals included in the price of a seminar, conference,
and/or their hotel room. Meal reimbursements require valid, itemized receipts.

2.58.080 Telephone/Fax/Cellular Directors shall be reimbursed for reasonable telephone,
cellular, and fax expenses when traveling for District business. When on overnight travel,
one telephone call per day to the Directors family may be submitted for reimbursement.
Telephone bills submitted for reimbursement shall identify all calls made for District
business. For cellular calls based on a Director’s specified minute plan, the Director shall
identify the percentage of calls made for District business for reimbursement. The District
shall not reimburse cellular charges for multimedia or text messaging services, unless
permissible under Section 2.58.090, below.

2.58.090 Internet Directors shall be reimbursed for Internet access and/or usage fees while
out of town if Internet access is reasonably necessary for District-related business. Internet-
related expenses shall not exceed fifteen dollar ($15) per day.

2.58.100 Airport Parking Long-term parking shall be used for travel exceeding 24 hours.
Directors shall use good judgment in selecting the most cost-effective parking
accommodations available.


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2.58.110 Cash Advance Policy From time to time, it may be necessary for a Director to
request a reasonable cash advance for anticipated expenses while conducting District
business. All cash advance requests shall be submitted to the District’s General Manager
five (5) business days prior to the need for the cash advance. The written requests shall
include the:

   1. Purpose of the expenditure(s);
   2. Benefits of the expenditure(s) to the District;
   3. Estimated amount of the expenditure(s) (e.g., lodging, meal, and transportation
      expenses); and
   4. Dates of the expenditure(s).

Any unused advance shall be returned to the District within five (5) business days after either
the expenditure date or the Director returns from out-of-town. The Director shall also provide
valid itemized receipts and a detailed expense report explaining how the cash advance was
used in compliance with this Policy.

If the District’s General Manager is uncertain as to whether a request complies with this
Policy, then the requesting Director shall seek approval from the District’s Board at the next
regularly scheduled Board meeting.

2.58.120 Credit Card Use Policy District credit cards have been issued to each Director
and shall only be used for authorized District-related expenses. Absolutely no personal
charges may be placed on the District’s credit card at any time.

The Director shall provide valid receipts within thirty (30) business days of the credit card
use. All submitted credit card expenses shall include the proprietary itemized receipt and the
credit card receipt. The Director shall also include a detailed expense report stating the:

   1.   Dates of the expenditure(s);
   2.   Purpose of the expenditure(s);
   3.   Benefits of the expenditure(s) to the District; and
   4.   Any additional information.

2.58.130 Submitting Travel Expense Reports All cash advance expenditures, credit card
expenses and other expense reimbursement requests shall be submitted on the District
provided expense report form. This form shall include the following advisory:

         All expenses reported on this form shall comply with the District’s policies
         relating to expenses and use of public resources. The information submitted
         on this form is a public record. Penalties for misusing public resources and
         violating the District’s policies include loss of reimbursement privileges,
         restitution to the District, civil and criminal penalties as well as additional
         income tax liability.

It is the Director’s responsibility to provide a complete, detailed and factual accounting of
expenses on every expense report. Expense reports shall also indicate that the documented
expenses comply with this Policy.


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Except for cash advances, which must be submitted in accordance with Section 2.58.110
above, Directors shall submit their expense reports within thirty (30) days of incurring an
expense
.
Expense reports shall include valid, itemized receipts for each documented expense. All
credit card expense reports shall include the proprietary itemized receipt and the credit card
receipt. Inability to provide this required documentation may preclude reimbursement and
the Director will be personally responsible for the expenses.

The District’s General Manager shall verify that the submitted expense report complies with
this Policy and approve the expense report for payment or reimbursement.

2.58.140 Reports to the Governing Board Directors shall provide brief reports on
meetings, seminars, conferences, and other events that they have attended at the District’s
expense during the next regular Board meeting. If multiple Directors attended the same
event, then a joint report may be provided to the Board.

2.58.150 Compliance with Laws Directors shall keep in mind that some expenditures may
be subject to additional reporting requirements under the Political Reform Act and other
applicable laws. All District expenditures are public records subject to disclosure under the
California Public Records Act.

2.58.160 Violation of This Policy Use of public resources or falsifying expense reports in
violation of this Policy may result in the following penalties, without limitation: 1) loss of
reimbursement privileges; 2) a restitution to the District; 3) additional state and federal
income tax liability for the Director; 4) civil penalties for misuse of public resources (up to
$1,000 per day plus three times the value of the unlawful use; and 5) prosecution for misuse
of public resources (2, 3, or 4 years in state prison and disqualification from holding public
office in California).

Resol 2009-03 (1/7/09); Res. 2010-09 (6/2/10)




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                                                                        Attachment 2B
                                                                              6/6/2012

                                      TITLE 3

                           FINANCE AND ACCOUNTING


CHAPTERS

      3.01         Financial Goals
      3.02         Budget Control
      3.04         Auditing
      3.05         Governmental Accounting Standards Board (GASB)
      3.06         Electric Supply Procurement
      3.08         Purchasing
      3.10         Capitalization Policy
      3.12         Accounts Receivable
      3.16         Accounts Payable
      3.20         Investments
      3.24         Restricted Funds
      3.32         Standby Charges and Assessment Districts


                                  CHAPTER 3.01

                                FINANCIAL GOALS

Section:

      3.01.01      Financial Goals

3.01.01.1 The following goals are established to promote and maintain the financial
          strength of the District:

3.01.01.01 Planning Goals
   • Review Water and Electric Master Plans at least every five years
   • Review ten year Finance Master Plan each year
   • Prepare two-year operating budget with semi-annual reviews
   • Prepare ten-year Capital Improvement Plan; update annually
   • Review rate structure and levels at least once every three years
   • Review Financial Goals every year

3.01.01.02 Revenue Goals
   • Set operating revenues to capture entire cost to provide service plus build and
      maintain reserves and satisfy debt coverage ratios
   • Review connection charges each year and set them to recover all costs

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   •   Review facilities fees every budget cycle and after the completion of a master plan

3.01.01.03 Debt Goals
   • Separate debt that is serving development (facilities fees), debt serving current
      customers (rates), debt serving a special assessment district (assessments) and
      debt financed by billing surcharges. These categories of debt should be separately
      identified in the budget.
   • One-half the debt service for all long-term debt in the aggregate is due in the first
      ten years
   • No more than one half the projected annual facilities fee revenue committed to debt
      service
   • No more than twenty-five percent of general fund revenues committed to debt
      service
   • No debt more than 25 year maturity
   • No debt longer than useful life of the project

3.01.01.04 Cash Reserve Goals - Operations
   • Water general fund should have a cash reserve equal to twice the highest month
      budgeted expenditure (this will probably be the month in which principal and interest
      on debt is due)
   • Electric general fund should have a cash reserve equal to twice the highest month
      budgeted expenditure (This will be the month in which the highest wholesale electric
      bill is due plus the highest debt service payment)
   • Electric rate stabilization fund (aka Electric Rate Reserve) should maintain a
      balance of $3,000,000

3.01.01.05 Capital Reserve Goals
   • There should be a revolving water capital reserve fund in the amount of $4,000,000
      to permit projects to be initiated and funded prior to arrangement of long-term debt
      or other financing.
   • There should be an electric capital reserve fund in the amount of $1,000,000
      minimum.

3.01.01.06 Debt Reserve Goals
   • There should be a reserve fund for each debt instrument in an amount required by
      each lender.
   • A reserve fund should be established and maintained to pay for vehicle and
      equipment purchases as needed. Long term financing should be used when
      necessary and the life of the asset purchased is greater than 15 years.


                                        CHAPTER 3.02

                                    BUDGET CONTROL

Section:

       3.02.010     Budget Control

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3.02.010.1 In 2008, for budget year 2009, and each two budget year periods thereafter, the
General Manager shall submit to the Board of Directors a draft budget in the format
approved by the Board of Directors and following generally accepted accounting standards
for utility budgets.

3.02.010.2 Budget performance will be reviewed at a Board workshop each six months
after the close of the June and December accounting periods during each fiscal year.

3.02.010.3 The General Manager shall cause to be prepared a memorandum
accompanying the semi-annual budget performance review which describes any significant
variance from planned expenditures and any projects or needs that have occurred since
adoption of the budget that were not anticipated at the time the budget was prepared and
adopted.

3.02.010.4 With respect to the capital budget, the General Manager is authorized to make
line item transfers within any one department, provided the total capital budget for that
department is not exceeded. If the General Manager determines that a capital expenditure
is necessary which will exceed that department's capital budget, he/she shall submit a
recommendation to the Board of Directors for a budget amendment.

3.02.010.5 When Department Heads request the Board to approve projects (operating or
capital), they will indicate in the description and presentation how much has been budgeted
for the project and if the costs are expected to exceed their budget, recommend where the
excess costs will be obtained.


                                       CHAPTER 3.04

                                          AUDITING

Section:

       3.04.010       Auditing

3.04.010.1 Hiring of Auditors Periodically, the Board of Directors will issue a request for
proposal for the purpose of hiring an audit firm to perform the District’s annual audit.
Auditors will be requested to provide an engagement letter describing services they will
perform and a three year financial proposal. At the end of the three year period, the Board
will issue a new request for proposal, or if the Board decides to continue the services of the
current auditors, it will ask the then current auditors for a proposal to extend their services.

3.04.010.2 Audit Performance The auditors will audit the District’s records according to
generally accepted auditing standards for publicly owned utilities.

3.04.010.3 Audit Presentation The audit firm will present the results of the annual audit
to the Board of Directors at a Board meeting in draft form. The Board may adopt the audit
as presented or schedule the adoption of the annual audit at a future meeting.


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3.04.010.4 Publication of Annual Audit The annual audit shall be posted on the
District’s website within 30 days after completion of the audit and approval by the Board.
The complete audit will be sent to the District’s lenders and to any person or organization
that requests a copy. Duplication fees may apply.


                                        CHAPTER 3.05

              GOVERNMENT ACCOUNTING STANDARDS BOARD (GASB)

Periodically, the Government Accounting Standards Board (GASB) issues new accounting
rules for recording financial transactions that must be implemented by government
agencies. Each year, during the audit presentation process, any known new GASB
accounting standards that are required to be implemented during the current or future
years will be discussed with the Board of Directors. In the absence of GASB accounting
rules, the District is required to follow Financial Accounting Standards Board (FASB)
accounting rules to record accounting transactions.


                                        CHAPTER 3.06

                          ELECTRIC SUPPLY PROCUREMENT

Sections:

       3.06.000       General
       3.06.010       Procurement Objectives
       3.06.020       Commodity Pricing Policy
       3.06.030       Counterparty Credit Policy
       3.06.040       Transacting Policy
       3.06.050       Authorized Transacting Products
       3.06.060       Transacting Authority
       3.06.070       Conflict of Interest

3.06.000 General It is the objective of the District to:

   1. Provide reliable and high quality electric supply and distribution system to meet
      current and future needs.
   2. Assure that no activities related to energy supply purchase and sales will expose the
      District to the possibility of large financial losses in relation to the size of the electric
      supply reserve funds.
   3. Maintain and implement a long-term energy and load forecast.
   4. Maintain and implement an Electric System Master Plan, including the required
      facilities to meet the current and future demand and reliable supply.
   5. Procure and contract for low cost electric power supplies to reliably meet current
      and future loads, consistent with the Renewable Portfolio Standards.
   6. Seek power supply from a resource mix that satisfies District Renewable Portfolio
      Standard (RPS), Code Section 7.83.

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3.06.000(A) RPS Supply Objectives:
   1. Maintain reliable overall energy supply portfolio
   2. Minimize adverse impact of acquiring new energy resources on customer electric
      rates.
   3. Renewable resources are defined as non-fossil fueled electric generating resources,
      as defined pursuant to Public Utilities Code Section 399.3(i).

3.06.000(B) RPS Supply Strategies
   1. Utilize Public Benefit funds to implement projects and to supplement appropriate
      capital expense projects.
   2. Strive to acquire small hydro and geothermal electric supply from WAPA, NCPA, or
      UAMPS that are located within or can be transmitted to the Sierra Pacific control
      area.

3.06.010 Procurement Objectives
   1. Balance the need to purchase sufficient, reliable electric energy within District RPS
      target (See Section 7.83.040) and the tolerance for risk established by the Board of
      Directors.
   2. Provide stable electric rates to customers.
   3. Preserve a supply cost advantage.
   4. Provide procurement control procedures that are sufficient to identify, evaluate and
      manage risk.

3.06.020 Commodity Pricing Policy
   1. The General Manager is responsible for implementing the Electric Supply
      Procurement policy by overseeing the process of all rate schedule development and
      ensuring that all procedures are followed consistently and that all transactions and
      calculations are appropriately documented.
   2. Commodity Pricing is composed of two principles:
      a) Direct Cost Recovery
         All direct costs of providing service will be recovered in rates.
      b) Risk Management
         To the extent practicable, contract terms must protect the District from major
         negative contingencies.

3.06.030 Counterparty Credit Policy
The objective of the Counterparty Credit Policy is to minimize the potential adverse
financial impacts on the District in the event of a defaulting counterparty. The District will
strive to use Joint Power Agencies (NCPA or UAMPS) to check Counterparty Credit and
meet the objective of this policy.

The policy is to minimize the District’s credit exposure and potential adverse financial

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impacts by:

   1. Establishing credit risk management governance and oversight.
   2. Providing a procedure to enable the District to qualify energy suppliers and transact
      with approved counterparties in a uniform and equitable manner.
   3. Providing counterparty transaction parameters (limits) to control and measure the
      District’s exposure to any one supplier, and
   4. Implementing a mechanism to monitor and report on supply portfolio related
      counterparty credit exposure.

This policy applies to market-based commodity transactions as well as to physical asset-
based transactions, such as transmission capacity and generation ownership.

3.06.040 Transacting Policy

3.06.040(A) Anti-Speculation
Speculative buying and selling of energy products is prohibited. Speculation is defined as
buying energy not needed for meeting forecasted load or selling energy that is not owned.
In no event shall transactions be entered into to speculate on market conditions.

3.06.040(B) Maximum Supply Transaction Term
The maximum term of any supply transaction, either purchase or sale, shall be ten years
exclusive of options to extend, unless specifically approved by the District Board of
Directors, to meet long-term portfolio planning objectives.

3.06.040(C) Portfolio Performance and Value Reporting
The Electric Utility Manager shall prepare performance reports containing analysis of
physical and financial positions of all electric contracts. Reports shall be annually, unless
the ratio of the market value of a contract falls outside the risk limits prescribed by the
District Board of Directors, then the General Manager shall inform the Board of this fact
and recommend actions.

3.06.040(D) Competitive Process
Whenever possible, the Electric Utility Manager with the assistance from NCPA or UAMPS
or other entities approved by the Board shall obtain three or more quotations when making
a purchase or sale transaction and select the best price from a responsible qualified
bidder.

3.06.040(E) Oversight
The Electric Utility Manager shall provide an oversight role along with the Administrative
Services Manager both reporting to the General Manager:

   1. The Electric Utility Manager shall perform review of portfolio exposure, credit
      exposure, transaction compliance and monitor risk limit compliance.
   2. The Electric Utility Manager shall make recommendations to the General Manager
      to temporarily or permanently halt transactions with one or more counterparties,

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      exceptions to rules and procedures, or other operational exceptions that represent
      unacceptable risk exposure.
   3. The Administrative Services Manager shall review all transactions, exceptions, and
      settlement payment accuracy, reporting findings to the General Manager.

3.06.050 Authorized Transacting Products
Products allowed for electric transactions include energy, capacity, transmission and
ancillary service. Only physical transacting products are approved by the Board. Financial
products are explicitly prohibited.

Only the Electric Utility Manager, with General Manager’s counter signature, is authorized
to perform a District energy transaction:

   1. All transactions must be committed by authorized transaction personnel.
   2. All transactions must be with approved counterparties with executed and Board
      approved contracts.
   3. All transactions must be with approved counterparties with adequate available
      credit.
   4. All transactions must be committed over recorded phone lines or via electronic mail.
   5. All transactions must be for allowed transaction products.
   6. All transactions must be consistent with Electric Supply Procurement policy.

Failure to observe and comply with this Policy when executing energy transactions is a
violation of District Code and is subject to disciplinary action.

3.06.060 Transacting Authority The General Manager has the authority to purchase and
sell energy products for terms of up to two years under open purchase contracts. Authority
to enter into transactions must be based on District Board of Directors approved contracts
such as master agreements, purchase agreements or other contractual forms. In all cases
the District Code provides the final authorization rules and regulations for energy
purchases.

3.06.070 Conflict of Interest Personnel involved in transacting and oversight of the
District energy supply resource acquisition products may not engage in financial conflicts of
interest, unless the District Board of Directors are duly informed and it elects to waive such
conflicts. All personnel in procuring or selecting counterparties for contracting or
transacting are required to complete, on an annual basis, the Form 700 Disclosure forms
and submit these forms to the District Clerk. The General Manager is responsible for
routinely reviewing the Form 700 of each personnel engaged in the supply resource
decision-making process for the purpose of identifying potential conflicts of interest. District
Counsel will assist the General Manager in reviewing these forms and providing legal
advice in connection with such reviews.




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                            CHAPTER 3.08      (3/4/09, Res 2009-10)


                                      PURCHASING

Sections:

       3.08.000      Notification to Board of Directors
       3.08.005      Local Preference Procurement Policy
       3.08.010      Bid Procedure for Purchase of Commodities or
                     Equipment Over $15,000
       3.08.020      Procedure for Purchase of Commodities or
                     Equipment Under $15,000
       3.08.030      Bid Procedure for Issuance of Service Contracts
                     Over $15,000
       3.08.040      Procedure of Issuance of Service Contracts Under
                     $15,000
       3.08.050      Procedure for Entering into an Agreement for
                     Special Services
       3.08.060      Joint Purchasing with the State and Other Public
                     Agencies
       3.08.070      Process and Procedure for Retention of Consulting
                     Services
       3.08.080      Change Orders
       3.08.090      Contractor Insurance Requirements
       3.08.100      Procurement Authorization During an Emergency

3.08.000 Notification to Board Prior to or concurrent with going to bid or issuing an RFP,
staff will notify the Board of Directors.

3.08.005 Local Preference Procurement Policy It shall be the policy of the District to
encourage local businesses to provide goods and services to the District in order to
maintain a healthy local economy, to increase local competition, and to lower core costs of
goods and services. To facilitate this policy, the District shall make purchases in
accordance with the following guidelines:

3.08.005.1 Local preference for the purchases of eligible goods and services may be
allowed by providing a 5% local preference where the purchases or contracts with a
respective local vendor or business during any fiscal year do not exceed $100,000.

3.08.005.2 Proposals for services, by their nature, are evaluated based upon qualifications.
A 5% local preference shall be applied towards the fee component when scoring the
proposal.

3.08.005.3 In order to qualify for the above local preference, a vendor or business must
either 1) be a District rate payer in good standing for the past six months, or 2) receive

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District power or water at their business location for the past six months; paid by a third
party.

3.08.005.4 Eligible procurements are:
   • Commodities or equipment up to $10,000;
   • Public works contracts up to $15,000;
   • Other service contracts up to $100,000;
   • Special services up to $100,000; and
   • Consulting services up to $100,000.

3.08.005.5 This policy shall be reviewed annually to ensure consistency with the overall
policy objectives.

3.08.010 Bid Procedure for Purchase of Commodities or Equipment Over $15,000
Prior to issuing a purchase order for the purchase of any commodity or equipment, the
dollar value of which is fifteen thousand dollars ($15,000) or greater, the provisions of the
Public Contract Code shall be followed, as more fully described in the following sections.

3.08.010.1 When a Department Manager or the authorized Buyer/Clerk determines that
there is a need to issue a purchase order, the amount of which is fifteen thousand dollars
($15,000) or greater, he/she shall notify the General Manager by memorandum which
states the purpose of the purchase, the budget or work order account number to be
charged and the specification of the item or items to be purchased.

3.08.010.2 The General Manager shall review the memorandum and, if he/she approves
the request, shall cause a public notice to be published in a local newspaper of general
circulation requesting interested parties to submit sealed bids. The bids shall be publicly
opened and read at the date and time and in the place specified in the public notice. The
notice will also be posted on the District’s website.

3.08.010.3 After the bids have been opened, the General Manager shall submit the matter
to the Board of Directors with a recommendation regarding award of the purchase contract.

3.08.010.4 When calling for bids on equipment available locally, the public notice shall be a
small display ad in a local newspaper of general circulation. The notice will also be posted
on the District’s website.

3.08.010.5 The General Manager shall establish procedures to properly manage the
process of notifying bidders of the results of the purchase and to implement the decision of
the Board.

3.08.010.6 Market Basket Purchase Approach For vendors from whom multiple items are
most likely to be bought, a “market basket” approach may be used to select the most
competitive vendor. This approach compares the aggregate cost for anticipated quantities
of items among vendors; the basis for selection is the lowest market basket cost. Should
the total anticipated purchases exceed $15,000, approval will be obtained by the Board.

3.08.010.7 Sole Source Vendors Certain vendors provide goods and equipment that are

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proprietary in nature such as certain utilities. For purchases that exceed $15,000, approval
will be obtained by the Board.

3.08.020 Procedure for Purchase of Commodities or Equipment Under $15,000 Prior
to issuing a purchase order for the purchase of any commodity or equipment, with a value
which exceeds ten thousand dollars ($10,000), but is less than fifteen thousand dollars
($15,000), the following procedures shall be followed:

3.08.020.1 The General Manager, a Department Manager or the authorized Buyer/Clerk is
authorized to issue a purchase order as defined in Section 3.08.020 after having first
secured three informal telephone quotes recorded in writing. In securing the quotes, the
vendors must be asked to state any price discount and any payment discount terms that
the vendor will offer the District. In the event that three quotes cannot be obtained, the
purchaser shall provide the General Manager with a written explanation and receive the
General Manager’s approval prior to issuing the purchase order.

3.08.020.2 The purchase order shall be issued to the lowest responsive vendor taking into
consideration price and payment discount terms and delivery schedule.

3.08.020.3 Purchase orders for the purchase of commodities or equipment, with a value of
ten thousand dollars ($10,000) or less, may be issued by the General Manager, any
Department Head or the authorized Buyer/Clerk from any approved vendor after
considering price, terms and delivery schedule.

3.08.020.4 Should overruns or change orders expect to exceed authority of the party
issuing the purchase order, the next higher level of authority shall be notified for their
approval to continue.

3.08.030 Bid Procedure for Issuance of Service Contracts Over $15,000 Prior to
entering into a contract for services, with a value exceeding fifteen thousand dollars
($15,000), the following procedures shall be followed:

3.08.030.1 The term “services” includes, but is not limited to, construction, maintenance or
repair of District facilities, but does not include professional services such as legal,
engineering, architectural, landscape architecture, land surveying, construction project
management, accounting, financial, economic, energy advisory, information technology,
environmental, payroll services and administrative services as included within California
Government Code Sections 4525, 4526 and 53060.

3.08.030.2 When a Department Manager or the authorized Buyer/Clerk determines that
there is a need to issue a contract for a service to be performed the dollar amount of which
is fifteen thousand dollars ($15,000) or greater, he/she shall notify the General Manager by
memorandum which states the purpose of the service, the budget or work order account
number to be charged and the plan and/or specification of the service to be performed.

3.08.030.3 The General Manager shall review the memorandum and, subject to the
provisions of Section 3.08.030.4, if he/she approves of the service, shall cause a public
notice to be published in a local newspaper of general circulation requesting interested
parties to submit sealed bids. The bids shall be publicly opened and read at the date, time

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and location specified in the public notice. The notice will also be posted on the District’s
website.

3.08.030.4 If the service is such that plans and/or specifications need to be prepared by a
consultant and the cost of the consulting service is fifteen thousand dollars ($15,000) or
greater, the General Manager shall submit the matter to the Board of Directors for approval
before authorizing the consultant to proceed.

3.08.030.5 If the service to be contracted is of a nature that will likely attract bids from local
service providers, the public notice shall be in small display ad form in a local newspaper of
general circulation. In addition, advertisements or notices may be made in appropriate trade
journals and depending on the scope of the project, copies of bid documents will be sent to
local plan room libraries. If the project is not likely to attract local bidders, the ad is to be
placed only in the public notice section of the newspaper and in appropriate trade journals.
In either case, the notice will be posted on the District’s website.

3.08.030.6 After the bids have been opened, the General Manager shall submit the matter to
the Board of Directors for approval with a recommendation regarding award of the service
contract. This recommendation will include the bid award amount and a not to exceed
amount for change orders to be authorized by the General Manager.

3.08.030.7 The General Manager shall establish procedures to properly manage the process
of notifying bidders of the results of the award and to implement the decision of the Board.

3.08.030.8 Sole Source Vendors Certain vendors provide services that are proprietary in
nature such as utilities. For purchases that exceed $15,000, approval will be obtained by
the Board.

3.08.040 Procedure for Issuance of Service Contracts Under $15,000 Prior to issuance
of a contract for a service with a value less than fifteen thousand dollars ($15,000), the
following steps shall be followed:

3.08.040.1 The General Manager shall cause plans and/or specifications to be prepared.

3.08.040.2 Three informal telephone quotes shall be secured in writing. In securing quotes,
the contractor shall be asked to state any price or payment discounts and a completion date.

3.08.040.3 The contract shall be awarded by the General Manager to the lowest responsive
service provider taking into consideration price and completion date.

3.08.040.4 The General Manager may renegotiate and/or renew contracts upon their
expiration.

3.08.040.5 Should overruns or change orders expect to cause the service contract to
become $15,000 or greater, the General Manager shall notify the Board of Directors for its
approval to continue.

3.08.050 Procedure for Entering into an Agreement for Special Services Prior to
entering into an agreement for special services, the following procedures shall be followed:

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3.08.050.1 The term “special services” includes, but is not limited to professional services,
such as legal, engineering, architectural, landscape architecture, land surveying,
construction project management, accounting, financial, economic, energy advisory,
information technology, environmental, payroll services and administrative services, as
included within California Government Code Sections 4525, 4526 and 53060.

3.08.050.2 When a Department Manager determines that there is a need to issue an
agreement for special services to be performed, he/she shall notify the General Manager by
memorandum which states the purpose of the special services, the budget or work order
account number to be charged and the plan of the special services to be performed.

3.08.050.3 The General Manager shall review the memorandum and if he/she approves the
special services, shall determine whether to enter into the agreement for special services
with or without seeking proposals from potential special service providers.

3.08.050.4 If the General Manager determines that no proposals are necessary, then he/she
may enter into an agreement for the special services up to his/her Board authorized
spending limit. Should the amount exceed the General Manager’s spending limit, approval
to enter into an agreement will be brought to the Board of Directors for their consideration.

3.08.050.5 If the General Manager determines that proposals are necessary, then he/she
shall follow the procedures set forth in 3.08.070.3 through 3.08.070.13 for preparing and
issuing a Request for Proposals (RFP) and reviewing proposals.

3.08.060 Joint Purchasing with the State of California and Other Public Agencies The
District may purchase materials, equipment, supplies, information technology products and
services through the State of California procurement program and jointly with other public
agencies in accordance with the following procedures.

3.08.060.1 Notwithstanding any other provision of this Chapter, the District may purchase
materials, equipment or supplies, other than printed material, from the State of California
through its procurement program under Public Contract Code Section 10324 and jointly with
other public agencies, provided that:

3.08.060.1(A) The District approves specifications for any purchase of materials, equipment
or supplies, information technology products and services;

3.08.060.1(B) The cost of such items is fifteen thousand dollars ($15,000) or more and the
purchase is approved by the Board of Directors;

3.08.060.1(C) The State or public agency has solicited or advertised for bids in a manner
which complies with the competitive bidding requirements applicable to the District; and

3.08.060.1(D) The State or public agency purchases such items at a price reasonably
expected to be lower than the District can obtain through its purchasing procedures.

3.08.060.2 The District shall reimburse the State or other public agency for any charge made
to the District for purchasing services.

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3.08.060.3 Notwithstanding any other provisions of this Chapter, the District may purchase
materials, equipment, supplies, information technology products, programs and services
other than printed material, from the State of California through its procurement program,
or jointly with other public agencies, when the cost of such items is less than fifteen
thousand dollars ($15,000) when the District determines that it is in its best interests to do
so.

3.08.070 Process and Procedure for Retention of Consulting Services

3.08.070.1 Department Manager determines need for outside consulting services.

3.08.070.2 Department Manager discusses need for consultant with the General Manager.

3.08.070.3 Upon the General Manager approval, the Department Manager and
departmental staff create a draft Request for Proposals (RFP) for review by the General
Manager. The draft RFP shall include a proposed scope of work and general description of
evaluation criteria to be used in reviewing the proposals. The weighting of the specific
evaluation criteria shall be included in the RFP. The RFP shall require a separate
Technical Proposal and a Cost Proposal sealed in separate envelopes.

3.08.070.4 The Contracts Administrative Clerk (CAC) shall begin advertising the RFP. A
notice of the RFP shall be mailed to consultants known to perform the required services
and when appropriate to the A/E Consultants Information Network. A notice of the RFP
shall also be published in a local newspaper of general circulation and shall be posted on
the District’s website.

3.08.070.5 A staff committee shall be created to review the proposals. The committee
shall include staff from at least two separate Departments (Electric, Water, Administrative
Services). The exact makeup of the committee shall be determined by the General
Manager and Department Manager seeking the consulting services.

3.08.070.6 The General Manager and Department Manager shall finalize the proposal
evaluation criteria and the weighting to be given to each component.

3.08.070.7 After receiving proposals, they shall be held in the custody of the CAC. The
CAC shall distribute copies of all Technical Proposals to the staff committee members for
individual review.

3.08.070.8 The staff committee shall then hold a meeting to discuss the various proposals
and to rank the consultants based upon demonstrated competence, professional
qualifications and technical merit using the approved evaluation criteria.

3.08.070.9 At the same meeting, after completion of the technical rankings, the Cost
Proposals shall be opened and reviewed by the staff committee members. This review
shall ensure that the man hours, hourly rates, services and indirect costs given in the Cost
Proposal correspond to the level of effort described in the Technical Proposal and to the
level of effort expected by the District to perform the anticipated work.


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3.08.070.10 The staff committee shall meet to discuss both the Technical and Cost
Proposals and determine a short list of consultants to be interviewed by the staff
committee.

3.08.070.11 After final review of the proposals, the staff committee may determine that a
given consultant is clearly superior to the other consultants and may recommend to the
General Manager that interviews are not necessary. The staff committee may also
determine that the proposed scope of work or the expected cost is such that conducting
interviews will not yield significant information for the staff committee to consider and
similarly recommend to the General Manager that interviews are not necessary.

3.08.070.12 When interviews are to be conducted, the CAC shall contact the short-listed
consultants and schedule interviews. The date, time and duration of the interviews shall be
determined by the Department Manager in conjunction with the staff committee. The staff
committee shall also create a proposed outline and list of any questions to be posed to the
short listed consultants.

3.08.070.13 After completion of the interviews, the staff committee shall determine a
recommended consultant for presentation to the Board of Directors. This recommendation
shall be based upon the individual consultant’s weighted scoring and their overall proposed
cost.

3.08.070.14 The Department Manager shall prepare a memorandum and appropriate
documentation for presentation to the Board. The memorandum shall summarize the
following:
•   Work to be performed by the Consultant.
•   Number of proposals received.
•   Ranking of consultants on a technical basis.
•   Recommended Consultant and expected cost thereof.
•   If the recommended consultant is not the Number 1 ranked firm on technical merit, the
     memorandum shall describe the rationale used to develop the recommendation.

3.08.080 Change Orders The District cannot afford to maintain a large enough
construction crew or all types of service related skills to be able to undertake all projects
and services in-house. Therefore, it relies on contractors and service providers to perform
work. These contractors and service providers perform work in accordance with plans and
specifications and based on a fixed price contract.

There are occasionally circumstances encountered after a contractor or service provider
has begun work that requires a change in the plans and specifications or scope of work
and result in a change in the contract price. These changes are generally matters that
could not be anticipated nor planned during the design and specification phase of the
project.

The contract change order is the procedure whereby plans and specifications or scope of
work and contract price can be changed after the contract is executed and work has
commenced. The Board of Directors authorizes the execution of contract change orders
when the total cost of the change orders will be $15,000 or greater.

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Most contract change orders are such that their consideration by the Board can wait for a
regular Board meeting. However, under certain circumstances it is to the District's benefit
to permit the General Manager to authorize the Department Head to proceed with change
order work or to request a special board meeting to consider the matter.

Work can proceed on a contract change order prior to being reviewed by the Board of
Directors under the following circumstances:

3.08.080.1 When a delay in making the decision to change the contract would impose an
unreasonable financial burden on the District.

3.08.080.2 When the need for the change is so compelling that to proceed with the project
as originally planned is impossible or would be financially burdensome on the District.

3.08.080.3 When the amount of the change order price is less than 5% of the original
approved contract price.

3.08.080.4 At the time of award of a contract, the Board may pre-approve change order
contingencies up to a defined percentage of the contract or a defined dollar amount.
Change order contingency authority which has been approved by the Board, will be
administered by the General Manager up to the pre-approved limit.

3.08.080.5 The exercise of this prerogative should be done with discretion and in the
following manner:

3.08.080.5(A) A memorandum should be prepared setting forth the precise circumstances
justifying the change in plans and specifications or scope of work and should justify the
change in contract price.

3.08.080.5(B) The memorandum should be signed by the Department Head and General
Manager and forwarded within 48 hours to each Director.

3.08.080.5(C) A contract change order should be prepared for consideration by the Board
of Directors at its next regular meeting or at a special meeting if one is called.

3.08.090 Contractor Insurance Requirements It is the policy of the District to require
contractors and service providers performing work for the District to maintain appropriate
insurance naming the District as an additional insured.
3.08.090.1 The form of insurance shall be broad form comprehensive general liability
which includes coverage for bodily injury, property damage, and products-completed
operations; automobile liability where applicable; workers compensation. Additionally,
service providers may be required to include errors and omissions coverage.
3.08.090.2 The minimum amount of insurance shall be $2,000,000 per occurrence and
$4,000,000 in the aggregate. The General Manager shall consult with the insurance broker
of record and/or an independent risk manager for advice on the insurance requirements for
contracts that exceed $10,000, or that pose risk that, in the judgment of the General
Manager, warrant more than the minimum insurance.

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3.08.090.3 The General Manager shall, after consulting with the insurance broker of record
and/or an independent risk manager, specify insurance requirements in contracts he/she is
authorized to let; or, in the case of contracts that must be let by Board action, the General
Manager shall, after consulting with the insurance broker of record and/or an independent
risk manager, recommend insurance requirements to the Board of Directors.
3.08.100 Procurement Authorization During an Emergency
3.08.100.1 An “emergency” is a situation which poses an immediate risk to health, life,
property or environment. Most emergencies require urgent intervention to prevent
worsening of the situation. It is the General Manager’s responsibility to take immediate
action to protect employees, customers and District property during an emergency.

3.08.100.2 During an emergency, the General Manager is authorized to repair or replace a
public facility, take any directly related and immediate action required by that emergency,
and procure the necessary equipment, services, and supplies for those purposes, without
immediate Board approval and without giving notice for bids to let contracts.

3.08.100.3 The General Manager will report to the Board of Directors within 48 hours any
and all actions taken to deal with the emergency.

3.08.100.4 If the General Manager takes any action to manage the emergency that would
otherwise require competitive bidding, the Board shall initially review the emergency action
taken not later than seven days after the action or, at its next regularly scheduled meeting if
that meeting will occur not later than 14 days after the action, and at least at every regularly
scheduled meeting thereafter until the action is terminated, to determine, by a four-fifths
vote, that there is a need to continue the action, unless the General Manager has
terminated that action prior to the Board reviewing the status of the emergency.

3.08.100.5 It is the District’s intent to comply with all sections of the Public Contract Code
Section 22050 in managing emergency situations.


                                       CHAPTER 3.10

                                CAPITALIZATION POLICY

Sections:

       3.10.010       Procedures
       3.10.020       Capitalization requirements

3.10.010 Procedures shall be followed in determining which purchases should be
capitalized or expensed in the year purchased in accordance with generally accepted
accounting practices.

3.10.020 The following criteria shall be used to determine the capitalization of an asset:

   1. The normal useful life of the item is at least two years from date of purchase.

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   2. The item has an acquisition cost (including freight and installation) of at least the
      $10,000.
   3. The item will not be substantially reduced in value by immediate use.
   4. In case of repair, the outlay will substantially prolong the life of an existing fixed
      asset or increase its productivity significantly, rather than merely returning the asset
      to a functioning unit or making repairs of a routine nature.
   5. Land purchases and land rights must always be capitalized regardless of cost.


                                        CHAPTER 3.12

                                  ACCOUNTS RECEIVABLE

Sections:

       3.12.010        Miscellaneous Account Billings
       3.12.020        Delinquent Accounts Receivable

3.12.010 Miscellaneous Account Billings A miscellaneous account is a bill rendered by
the District to a party to whom the District has rendered a service or provided a good for
which the District charges a fee but shall not be any service or good which is billed to a
customer of the District through the normal monthly utility billing system.

It is the policy of the District to protect the assets of the District by promptly issuing bills for
goods or services rendered, and by following well established follow-up procedures to
insure that bills are paid in a timely manner.

3.12.010.1 This policy shall apply to the billing and collection of miscellaneous accounts.

3.12.010.2 When any Department of the District notifies the Administrative Services
Department that a billable service or good has been provided, the Administrative Services
Department shall promptly render a bill to the appropriate party. The miscellaneous
account bill is due and payable 30 days after the billing date.

3.12.010.3 If the bill remains unpaid after 30 days, the bill shall be considered delinquent
and shall be assessed a late charge in accordance with current District policy, and a
second request for payment shall be promptly mailed.

3.12.010.4 If the bill remains unpaid after 60 days, the General Manager shall cause
collection proceedings to commence, which may include initiation of action at Small Claims
Court.

3.12.010.5 The General Manager is authorized to act within his/her discretion to alter the
time periods set forth in this policy when a miscellaneous account customer is cooperating
with the District in resolving an unpaid bill.

3.12.020 Delinquent Accounts Receivable At the end of June and December of each
year, the District Treasurer will have identified all delinquent accounts receivable on closed
accounts that are considered uncollectible that exist on the District's records for six months
or more. Any customer who is making payments on his/her delinquent account will not be

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added to the delinquent account list until the customer stops making agreed upon
payments.

3.12.020.1 The District Treasurer is authorized to write off delinquent accounts up to 1/6%
of the annual amounts billed from the District's accounts receivable balance.

3.12.020.2 The District Treasurer will include in the monthly Treasurer's Report the details
of the accounts written off including the customer names and the dollar amounts being
written off.

3.12.020.3 Should delinquent accounts exceed the authorized limit (1/6% of the annual
amounts billed from the District's accounts receivable balance), the request for approval to
write off such accounts shall come before the Board of Directors for consideration.


                                     CHAPTER 3.16

                                 ACCOUNTS PAYABLE

Sections:

       3.16.010      Pre-authorized Disbursements
       3.16.020      Bills for Board Approval
       3.16.030      Accounts Payable

3.16.010 Pre-authorized Disbursements
3.16.010.1 The District Treasurer shall be empowered to issue checks, with authorization
from the approving authority, without prior Board approval for the following items:
3.16.010.1(A) Consumer deposits - deposit refunds with interest; reduction of deposits.

3.16.010.1(B) Refunds - credit balances, overpayments, refund of connection, facilities
fees and tap fees where the customer has decided not to build and the District staff has not
incurred any expense and line extension refunds.

3.16.010.1(C) Contracts - maintenance contracts on District equipment; payments on
leased equipment and land; payments on contracts for software support services;
payments for contracts issued pursuant to Section 3.08.040 of this policy including
contracts for consulting and construction services.

3.16.010.1(D) District Board of Directors - monthly compensation.

3.16.010.1(E) District credit card payments. In the event a dispute occurs, the settlement
will be handled by the parties involved.

3.16.010.1(F) Employee benefits previously approved by the Board including: deferred
compensation deposit; pension payments (401a, 457 and CalPERS); vision
reimbursements and any other payment or reimbursement pursuant to the District’s

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agreement with the International Brotherhood of Electrical Workers, Local 1245 and
employee benefits authorized in the District’s Code 4 Personnel for management/exempt
employees.

3.16.010.1(G) Expense checks - advances for meetings, seminars, conferences, etc., for
staff, General Manager and Board of Directors. Reimbursement for mileage and approved
out of pocket expenses in accordance with the Districts Title 4 expense reimbursement
policy.

3.16.010.1(H) Insurance - life, health, disability and dental premiums.

3.16.010.1(I) Payroll - employee checks, payroll transfers, meals, union dues, employee
savings deductions, workers compensation insurance, payroll tax withholding, employer
taxes and any other employer payroll obligations.

3.16.010.1(K) Postage - Postage including stamps, trust fund, postage meter and bulk
mailing permit deposits.

3.16.010.1(L) Repayment of internal loans approved by the Board (journal entry only; no
actual check).

3.16.010.1(M) Loans - Repayment of loans that have been approved by the Board of
Directors. Where practicable, the payment will be sent by ACH or wire transfer to the
lending institution on or before the payment due date.

3.16.010.1(N) State Board of Equalization - sales tax, use tax and energy surcharges
collected.

3.16.010.1(O) Wholesale power expenses including, but not limited to, the Northern
California Power Agency, the District’s current Board approved wholesale power supplier
and Sierra Pacific Power Company. Payments may be by ACH or wire transfer to the bank
account number provided by the vendor.

3.16.010.1(P) Bid items - where the Board has authorized a bid purchase and the invoice
excluding sales tax and shipping charges is less than or equal to the authorized contract.
Amounts billed above the bid amount must be approved by the General Manager or the
Board.

3.16.010.1(Q) Monthly and annual building utility expenses for telephone, garbage,
heating, sewer collection and treatment (TTSA and TSD), cable, Internet and utility bills
paid to other agencies such as electric utility bills for pump stations and wells.

3.16.010.1(R) Items approved by the Board: Any items that have been approved by the
Board at a scheduled board meeting (e.g. property and liability insurance renewal).

3.16.010.1(S) The General Manager may approve payments required in an unpredicted
emergency situation with subsequent notification to the Board.

3.16.010.2 Upon direction of the General Manager and receipt of an appropriate, signed

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authorization in accordance with Section 3.08.010 of this policy, the District Treasurer shall
be empowered to issue checks up to $15,000 and, in instances where the Board of
Directors has issued authorization for an expenditure of $15,000 or greater.

3.16.010.3 All checks issued in any of the above categories will appear in the accounts
payable check register provided in the monthly Treasurer’s Report to the Board of Directors
for approval. Supporting documents will also be available for Board review in the
Administrative Services Department.

3.16.020 Bills for Board Approval Bills which may be controversial should be listed as a
special agenda item accompanied with the General Manager recommendation.

3.16.030 Accounts Payable

3.16.030.1 Upon presentation of invoices for goods and services and other financial
obligations of the District in the format prescribed in Title 3, Chapter 3.08, Purchasing, to
the Administrative Service Department, the Treasurer shall be authorized to issue payment
for such invoices

3.16.030.2 All payments for District financial obligations shall be processed through the
District's computerized accounts payable program. Prior to issuing checks, the District's
Accounts Payable Clerk will verify the entries for accuracy including verifying that the
correct vendor has been keyed into the system; that the amount of charges are correct and
that the total of the invoice is correct; that the sales and use tax has been calculated
correctly; that the appropriate authorization appears on the invoice; that the correct work
order number and account number or account number and activity code have been
assigned to the charges; and that the correct supporting documents are attached to the
invoice. The Accounts Payable Clerk will also verify that invoices greater than $10,000
have been approved by the General Manager and that invoices $15,000 and greater have
a Board authorized Minute Order attached showing the amount of the approved
expenditure or prior Board authorization for regular District expenditures as listed in Title 3,
Chapter 3.16.010, Pre-authorized Disbursements.

3.16.030.3 After verifying that the above items are in order, the Accounts Payable Clerk will
run the checks for payment and print a check register listing the number of each check
issued, the vendor paid, the amount of the charges and the amount of the total check. In
order for the Accounts Payable Clerk to print checks, the Treasurer will also have to log
onto the District’s computerized check printing and banking software and key in his/her
confidential password.

3.16.030.4 Before any payments, ACH transfers or wire transfers are released, the
Treasurer will then verify that the accounts payable check register and the individual
invoices match, that the invoices have been properly processed and that the expenditures
have been made in accordance with the District's purchasing procedures. The Treasurer
then authorizes the payment, ACH or wire transfer of funds using a secure program linked
to the District’s bank account.

3.16.030.6 In the event that a manual check needs to be issued outside of the automated
check run process, the check will require two signatures. The two signatures can be any

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two Board authorized checking account signatures.

3.16.030.7 The Treasurer shall provide reports to the Board.

3.16.030.7(A) At the first regular meeting after the end of each month held by the Board of
Directors, the Board will be presented with

3.16.030.7(A)(1) An accounts payable check register showing all of the checks issued for
the accounting period being presented; an investment report showing the status of the
District restricted funds; and a fund status report showing the location of all District funds
and the amount on deposit at each financial institution or organization.

3.16.030.7(B) The details of all checks issued and invoices paid shall be available for
review by any Director in the Administrative Services Department. The Board shall officially
authorize payment of all disbursements that have been made by the Treasurer and
presented on the accounts payable check register at a board meeting, monthly.

3.16.030.7(C) The Treasurer shall list on the agenda any invoice for purchases that have
not been made in accordance with the District's purchasing policies as set forth in Title 3,
Chapter 3.08 Purchasing.

3.16.030.7(D) Statement of the general fund showing the beginning checking account
balance, the categories of cash received by the District during the month, a summary list of
the cash disbursements made during the month, any authorized transfers in or out of the
general fund and the ending balance at the end of the month.

3.16.030.7(E) Semi-annual budget reports showing the status of budgeted expenditures
compared to actual expenditures will be presented at a board workshop after the close of
the June and December financial records.

3.16.030.7(F) Semi-annual financial statements showing the status of all revenues and
expenditures in the format of financial statements using generally accepted accounting
principles for utilities after the close of the June and December financial records.


                                      CHAPTER 3.20

                                      INVESTMENTS

Sections:

       3.20.005      Local Agency Investment Fund Investments
       3.20.008      Fund Transfers
       3.20.010      Investment of Surplus Funds
       3.20.012      Investment Policy

3.20.005 Local Agency Investment Fund Investments



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3.20.005.1 Authorization has been given for the deposit and withdrawal of monies in the
Local Agency Investment Fund (LAIF) in the State Treasury in accordance with the
provisions of Section 16429.1 of the Government Code for the purpose of investment as
stated therein.

3.20.005.2 Any two of the following officers or employees of the District, the President of
the Board, the General Manager or the Treasurer, may execute documents to add or
delete District accounts and authorized persons to make transfers to and from those
accounts with the LAIF.

3.20.008 Fund Transfers

3.20.008.1 The Board approved commercial bank (Bank) is requested to honor, execute
and process the District's telephonic, electronic, written or oral requests for the transfer of
funds between the accounts of the District at Bank and the Local Agency Investment Fund,
subject to such terms and conditions as may from time to time be agreed upon by the
District.

3.20.008.2 Any one of the following listed officers or employees of the District, the
President of the Board, the General Manager or the Treasurer are hereby authorized,
directed and empowered for and on behalf of and in the name of the District as follows:

3.20.008.2(A) To execute agreements with the Bank providing for such funds transfers
and to make and verify requests for such transfers, and the Bank shall be entitled to honor
and charge this District for all such requests, when given (or purported to be given) by any
one of the above.

3.20.008.2(B) To make, execute and deliver such other agreements as may be required
by the Bank; and

3.20.008.2(C) To perform or cause to be performed all further acts and execute and
deliver all further instruments which Bank may deem necessary to carry out the purposes
of this policy.

3.20.008.3 The District hereby ratifies and confirms the acts of its officers, agents or
employees in heretofore requesting transfers of funds from this District's accounts with the
Bank by wire or comparable transfer together with any acts performed in relation hereto.
3.20.008.4 That the Clerk of the District is hereby authorized and directed to execute,
acknowledge and deliver a certified copy of the Resolution related hereto to the Bank and
any other person or agency which may require copies, and that the certification of the
(Secretary) Clerk as to the signatures of the above named officers will be binding on this
District.
3.20.008.5 That the Bank is authorized to act upon this policy until written notice of the
revocation thereof by a resolution duly adopted by the Board of Directors of this District is
delivered to the Bank, such revocation is in no way to affect the obligations of this District
to the Bank incurred pursuant to the terms of this policy prior to receipt by the Bank of such
notice or revocation.


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3.20.010 Investment of Surplus Funds The District Treasurer shall invest surplus funds,
both restricted and general, pursuant to the District’s Investment Policy (District Code
3.20.12). A regular accounting of all fund activities shall be presented to the Board of
Directors in the monthly Treasurer’s Report.

3.20.012 Investment Policy

3.20.012.1 Investment Authority In accordance with Section 53600 et seq. of the
Government Code of the State of California, the authority to invest public funds is expressly
delegated to the Board of Directors for subsequent delegation to the Treasurer. The
Treasurer of the District receives direction and authority to invest any and all District funds
from the Board of Directors of the District.

3.20.012.2 Statement of Objectives Per section 53600.5 of the California Government
Code, the primary objective of the Treasurer shall be to safeguard the principal of the funds
under his/her control when investing public funds. The secondary objective shall be to
meet all liquidity requirements and the third objective shall be to achieve an acceptable
return on the funds under his/her control.

In order of priority, three fundamental criteria shall be followed in the investment program:

   1. Safety - Safety of principal is the foremost objective of the investment program.
      Investments shall be undertaken in a manner that seeks to ensure the preservation
      of capital in the overall portfolio. The objective will be to mitigate credit risk and
      interest rate risk.

       a) Credit Risk: The District will minimize credit risk, the risk of loss due to the failure
          of the security issuer or backer, by:

             i. Limiting investments to the safest types of securities.

            ii. Pre-qualifying the financial institutions, broker/dealers, intermediaries and
                advisers with which the District will do business (custodial risk).

            iii. Diversifying the investment portfolio so that potential losses on individual
                 securities will be minimized (concentration of risk).

       b) Interest Rate Risk: The District will minimize the risk that the market value of
          securities in the portfolio will fall due to changes in general interest rates, by:

             i. Structuring the investment portfolio so that securities mature to meet cash
                requirements for ongoing operations, thereby avoiding the need to sell
                securities on the open market prior to maturity.

            ii. Investing operating funds primarily in shorter-term securities, money market
                mutual funds, or similar investment pools.

   2. Liquidity – In an effort to ensure that the District’s portfolio will be sufficiently liquid to
      meet current and anticipated operating requirements, periodic cash flow analysis will

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       be performed. Investments shall be made so that the maturity date is compatible
       with cash flow needs and safety of principal.

   3. Yield – Investments shall be undertaken to produce an acceptable rate of return
      after first considering safety of principal and liquidity and the prudent investor
      standard.

       Investment Strategy – The portfolio will be managed to meet the District’s
       cash flow needs. The maximum maturity of any security will not exceed 5
       years except as specifically noted below. All investment activity shall be
       consistent with prudent investor standard and in accordance with the
       authorized investments included under District Code 3.20.012.5.

3.20.012.3 Prudent Investor Standard As applicable to the District, the prudent investor
standard is a standard of conduct whereby any person authorized to make investment
decisions on behalf of the District acts with care, skill, prudence and diligence under the
circumstances then prevailing, including but not limited to, the general economic conditions
and the anticipated needs of the District, that a prudent person acting in like capacity and
familiarity with those matters would use in the conduct of funds of a like character and with
like aims, to safeguard the principal and meet the liquidity needs of the District.

3.20.012.4 Portfolio Any reference to the portfolio shall mean the total of the District’s cash
and securities under management by the Treasurer.

       Except for cash in certain Board designated, restricted and special funds, the
       District will consolidate cash and reserve balances from all funds to maximize
       investment earnings and to increase efficiencies with regard to investment
       pricing, safekeeping, and administration. Investment income will be allocated
       to the various funds or accounts based on their respective participation and
       in accordance with generally accepted accounting principles.

The Treasurer may invest in any security authorized for investment under the California
Government Code, subject to the limitations described herein:

   1. Maturity Limitations –
      a) The aggregate maturity of the total portfolio must not exceed five (5) years for
         the general operating funds of the District.
      b) Funds which represent debt service reserve funds may be invested up to a term
         of ten years, as long as the period invested does not exceed the term of the debt
         repayment.
      c) Investments of restricted funds held for the Donner Lake Assessment District
         that are not expected to be needed to pay debt service on the SRF loan may be
         invested up to the term of the SRF loan.
      d) Construction funds may be invested to mature on or before the date funds are
         expected to be needed for construction purposes.

   2. Investment Transactions – the purchase of any investment other than those
      purchased directly from the issuer shall be, to the extent possible, from a firm
      designated as a Primary Dealer by the Federal Reserve of New York.


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   3. Sale of Securities – Securities may be sold to provide needed liquidity, to
      restructure the portfolio to reduce risk or to increase the expected return of the
      portfolio. In no instance shall a sale of securities be used for speculative purposes.
       All sales are to be reported to the Board on a monthly basis.

   4. Prohibited Investments – Prohibited investments include inverse floaters, range
      notes, interest only strips derived from a pool of mortgages (Collateralized Mortgage
      Obligations), and any security that could result in zero interest accrual if held to
      maturity. (Zero interest accrual means the security has the potential to realize zero
      earnings depending upon the structure of the security. Zero coupon bonds and
      similar investments that start below the face value are legal because their value
      does increase.)

   5. Safekeeping
      a) All securities transactions entered into by the District shall be conducted on a
         delivery versus payment (DVP) basis.
      b) Securities shall be held by an independent custodian designated by the
         Treasurer and held in safekeeping pursuant to a safekeeping agreement.
      c) All financial institutions which provide safekeeping services for the District shall
         be required to provide reports or safekeeping receipts directly to the Treasurer to
         verify securities taken into their possession.

3.20.012.5 Authorized Investments

   1. The District’s authorized commercial bank in an interest bearing checking or savings
      account. The Treasurer is authorized to make daily deposits and withdrawals for
      purposes of the safekeeping of District monies and payments of District financial
      obligations.

   2. Local Agency Investment Fund (LAIF) Deposits for the purpose of investment in
      the Local Agency Investment Fund of the State of California Treasury may be made
      up to the maximum amount permitted by State Treasury policy. Any LAIF
      investments made by the District shall be considered to be short-term in nature
      even if the LAIF has invested in individual longer-term securities. The Treasurer is
      authorized to make regular transfers to and from LAIF up to the limit of transactions
      established by the LAIF investment policy for purposes of meeting the District’s daily
      cash flow needs and earning interest on surplus funds.

   3. Any other investments authorized and listed in the Government Code Sections
      53600-53609. The Treasurer will consult with the Board of Directors when
      recommending any of the investments within these sections other than subsections
      1 and 2 above. From time to time, the Board may also consult with an investment
      professional pursuant to Title 3.20.012.2 Section 1 a) ii. Each investment will be
      specifically authorized by the Board of Directors.

   4. Bond proceeds and reserve funds will be invested only in permitted investments or
      authorized investments defined in the Trust Agreement for each particular financing
      which has previously been approved by the Board of Directors (Government Code

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       Section 53601 l). The Treasurer will consult with the Financial Advisor or Trustee on
       the financing for investment recommendations to submit to the Board of Directors
       for approval. The Treasurer is authorized to invest funds in a money market fund or
       LAIF with the Trustee pending investment of those funds in a longer-term
       investment, which will be approved by the Board of Directors.

3.20.012.6 Reporting In accordance with Section 53646 of the California Government
Code, the Treasurer shall submit a quarterly report to the Board of Directors within 30 days
following the end of the quarter covered by the report. The report shall include investment
activity, including yield and earnings, and the status of cash by depository.

3.20.012.7 Internal Controls Annually, the District will have an independent audit by an
external auditor. This audit will provide internal control by assuring compliance with
policies and procedures.

3.20.012.9 Annual Review of Investment Policy The Investment Policy shall be submitted
at least annually to the Board of Directors for adoption. The policy shall be reviewed
annually to ensure its consistency with the overall objectives of preservation of principal,
liquidity, yield and its relevance to current law and financial and economic trends. The
review will also include the review of the diversification of the investments in the portfolio
and the custodial risk of the portfolio. Any modifications made thereto must be approved
by the Board of Directors.



                                      CHAPTER 3.24

                                  RESTRICTED FUNDS

Sections:

       3.24.010      Restricted Funds

3.24.010.1 The Board of Directors will direct staff when monies collected by the District are
to be considered as restricted funds.

3.24.010.1 (A) Board Designated Restricted Funds are those funds restricted by Board
action and which the Board can change the purpose of the designation at any time.

3.24.010.1 (B) Restricted Funds are those funds that are restricted by contract or
agreement with the District such as a loan reserve fund.

3.24.010.2 Restricted funds will be invested pursuant to the District’s investment policy as
described in Chapter 3.20, Investments.

3.24.010.3 All interest earned upon said restricted funds shall adopt a character of and
become part of the specific restricted account unless otherwise directed by the Board of
Directors. In the case of loan reserve funds whose balances are greater than the reserve
requirement, the surplus funds may be used to offset the principal and interest payments

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on the loan.


3.24.010.4 Expenditures from restricted funds shall be authorized by the Board of
Directors. From time to time, the Board may pre-approve transfers from restricted funds in
advance that pertain to specific projects or activities.

3.24.010.5 The District’s Treasurer will include a monthly report on the activity of the
restricted funds accounts along with the monthly Treasurer’s Report.


                                       CHAPTER 3.32

                  STANDBY CHARGES AND ASSESSMENT DISTRICTS

Sections:

       3.32.010       Collection of Delinquent Assessments
       3.32.020       Standby Charges

3.32.010 Collections of Delinquent Assessments The following procedure is to be used
by the District staff in connection with the collection of delinquent assessments.

Assessments are due on November first and February first of each year, and are
delinquent after December tenth and April tenth, respectively.
Following is the procedure the District has adopted for collecting delinquent assessment
payments:

3.32.010.1 By January thirty-first and May thirty-first of each year or as soon as the county
records are available, the District Treasurer will contact the County Tax Collector's Office
and determine whether any assessments are delinquent and, if so, the amount of any such
delinquency. The District Treasurer will then immediately send a collection letter,
requesting payment within fifteen days.

3.32.010.2 If not paid within fifteen days of the collection letter, the District Treasurer will
send, by certified mail, a demand letter. This letter will demand payment within ten days,
and will indicate that, if not paid, the matter will be referred to District Foreclosure Counsel
for initiation of foreclosure proceedings against the delinquent parcel. A list of delinquent
parcels will be presented to the Board for authorization to proceed with the foreclosure
process.

3.32.010.3 The Board may authorize a third party company who specializes in performing
services listed in section 3.32.010.1 and 3.32.010.2 to work with the District staff to bill and
collect assessment monies due.

3.32.010.4 The Board may authorize the use of foreclosure counsel to proceed with the
foreclosure process pursuant to California State law and the requirements of any debt
instruments where the debt is secured by assessment payments. Staff will keep the Board
informed throughout the foreclosure process.

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3.32.010.5 The County requires the District to remove delinquent Communities Facilities
                                                              th
District parcels from the County tax roll on or about June 30 of each County fiscal year.
The District Treasurer will authorize the County to remove the delinquent parcels from the
County tax roll before referring delinquent parcels to foreclosure counsel. Removal of a
delinquent parcel from the County tax roll does not release property owners from their
payment obligations.

3.32.010.5 All delinquent assessment payments will be required to include any late fees,
legal fees and/or administrative charges allowed to be collected under California State law.

3.32.010.6 In cases where assessments are collected on the Nevada or Placer County tax
bills and where the Counties reimburse the District for 100% of the amount assessed,
District staff may send collection and demand letters on delinquent assessments but will
not proceed to the foreclosure process. The foreclosure process will be processed by
Nevada and Placer Counties pursuant to County and California State law.

3.32.020.1 Standby Charges Annually, the Board of Directors will authorize by resolution
the continuance of and the amount of charges for electric and water standby charges.
Thereafter, the General Manager shall direct staff to prepare an updated list of unimproved
parcels to be assessed electric and water standby charges. The records shall be prepared
in a format acceptable to both Nevada and Placer Counties and shall be submitted to them
before their scheduled deadline. The assessments will then appear on the annual property
tax bills sent out by Nevada and Placer Counties. Nevada and Placer Counties will then act
as the collection agents for the assessments and will forward payment to the District
pursuant to county policy.

Res. 2010-09 (6/2/10), Res. 2011-02 (4/6/11)




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                                           TITLE 4                          Attachment 2C
                                                                                       6/6/12
                                       PERSONNEL

CHAPTERS:
    4.01             General Administration
    4.02             Employment Non-Discrimination
    4.03             Job Descriptions
    4.04             Recruitment and Examinations
    4.05             Appointments and Probationary Period
    4.06             Compensation
    4.07             Employment Benefits, Holidays, and Leaves
    4.08             Performance Appraisal
    4.09             Employee Activities
    4.10             Disciplinary Actions
    4.11             Grievances
    4.12             Employee Safety and Health


                                      CHAPTER 4.01

                              GENERAL ADMINISTRATION
Sections:

       4.01.010      Introduction
       4.01.020      Personnel Administration and Delegation
       4.01.030      Personnel Records
       4.01.040      Medical Records
       4.01.050      Coordination with Memorandum of Understanding
       4.01.060      Release of Employee Information

4.01.010 Introduction It is the intent of the District to establish and maintain an equitable
and uniform system for dealing with personnel matters. It is also the intent of the District
to comply with applicable laws relating to the fair and equitable administration of a
comprehensive personnel system. The rules and polices contained in this Title of the
District Code reflect the principles and standards of the District’s system of employment.
The provisions of the personnel policies included in this Title do not constitute a
contractual right to District employment. Each employee is responsible for knowledge of
and compliance with these rules.

The District reserves the right to change or modify the terms and conditions set forth in
this Title.

4.01.020 Personnel Administration and Delegation The Board of Directors authorizes
the General Manager to administer, interpret, and implement the District personnel
policies. The General Manager may delegate any of the personnel administration
authority to other designees.



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4.01.030 Personnel Records The District shall maintain a personnel file for each District
employee, the contents of which meet the customary standards of good personnel
practices and which fairly represent the employee's work history with the District. Such
records shall only be accessible to the General Manager, Human Resources, the
employee and such other persons as the District deems have a “need to know”.
Department heads and supervisors shall have access to performance evaluation records
of subordinate employees in their department, as well as such other personnel records
about which they have a “need to know”.

Upon the employee’s request, the District shall, at reasonable times and intervals, permit
that employee to inspect his or her file. The review will be conducted in the presence of a
Human Resources representative.

4.01.040 Medical Records Human Resources shall maintain all employee medical
information in separate, confidential files. The District will not disclose employee medical
information, except to District management personnel with a legitimate personnel need
for access, without prior written authorization from the employee, or except as required
by law, subpoena, or Court order.

4.01.050 Coordination with Memorandum of Understanding Where an employee is
within the bargaining unit covered by a Memorandum of Understanding (MOU) in effect
between the District and the Union, and the matter is specifically addressed in the MOU,
the terms of the MOU shall govern. In all other cases, the policies included herein shall
apply.

4.01.060 Release of Employee Information It is the policy of the District that all
inquiries regarding current or former employees of the District should be referred to the
Human Resources Department for response.

   a) Human Resources staff will release only the facts of current or former
      employment, the position held, and dates of employment, unless the employee or
      former employee has signed a written waiver authorizing the release of additional
      information,
   b) Human Resources staff will provide additional information concerning quality of
      work only with the prior written consent of the employee or former employee and a
      signed Release of Information Authorization form is on file in the HR Department.
   c) The Human Resources staff may authorize individual supervisors to respond to
      requests for detailed information when a signed release is on file in the HR
      Department.
   d) Home addresses or telephone numbers shall not be released except in the case of
      an emergency.




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                                      CHAPTER 4.02

                         EMPLOYMENT NON-DISCRIMINATION

Sections:

       4.02.010      Equal Employment Opportunity Policy
       4.02.020      Discrimination, Harassment and Retaliation Policy

4.02.010 Equal Employment Opportunity Policy It is the policy of the District to
provide equal employment opportunity in all aspects of the employer-employee
relationship, including recruiting, hiring, upgrading and promoting, training, education
assistance, social and recreational programs, compensation, benefits, transfers,
discipline, layoff, recall and all privileges and conditions of employment. The District will
not unlawfully discriminate because of race, color, religion, national origin, ancestry,
citizenship, sex, age, marital status, registered domestic partner status, physical or
mental disability, medical condition, sexual orientation, veteran status or on any other
protected basis as designated by applicable federal, state or local law, ordinance or
regulation (referred to as the “Protected Bases”).

The District provides employment-related reasonable accommodations to qualified
individuals with disabilities within the meaning of the California Fair Employment and
Housing Act and the Americans with Disabilities Act.

4.02.020 Discrimination, Harassment, and Retaliation Policy The District wishes to
provide a business environment that is free of unlawful discrimination and harassment
and has zero tolerance for this type of behavior. Individuals who engage in such behavior
will be subject to disciplinary action up to and including termination.

Therefore, this policy is established by which persons who believe they have been
subjected to discrimination or harassing behavior may have their concerns reviewed,
addressed and corrected as appropriate.

Res. 2009-13 (5-6-09)

4.02.020.1 Discrimination prohibited: It is the express policy of the District to conduct its
business such that no employee, applicant for employment, customer, supplier,
contractor or any other person who does business with the District or interacts with the
District in any manner is subjected to discrimination on any legally protected basis.

4.02.020.2 Harassment defined: Harassment is a form of misconduct which undermines
the integrity of the employment relationship or the relationship with the public.
Harassment is behavior which is unwelcome, which is offensive to a reasonable person,
or lowers morale or interferes with work.




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4.02.020.3 Sexual harassment defined: Sexual harassment is defined as unwelcome
sexual advances, requests for sexual favors, and other verbal or physical conduct of a
sexual nature, when:
   a) Submission to the conduct is made either explicitly or implicitly a condition of
      employment;
   b) Submission to or rejection of the conduct by an individual is used as the basis for
      an employment decision affecting such individual;
   c) Such conduct has the purpose or effect of substantially interfering with the
      individual’s work performance or creates an intimidating, hostile or offensive work
      environment.

4.02.020.4 Other forms of prohibited harassment: Harassment because of any of the
Protected Bases is expressly prohibited. Harassment includes any verbal, written, or
physical act in which any of the Protected Bases is referred to or implied in a manner that
would make another person uncomfortable in the work environment or that would
interfere with another person’s ability to perform his or her job. Examples of harassment
include inappropriate comments or jokes; the display or use of offensive objects or
pictures; use of offensive language; or any other inappropriate behavior which has the
purpose or effect of discriminating on any of the Protected Bases as designated by
applicable federal, state, or local law, ordinance or regulation.
    a) How to report instances of harassment or retaliation: The District cannot resolve
        matters that are not brought to its attention. Any employee, regardless of position,
        who has a complaint of or who believes he or she has witnessed harassment,
        discrimination or retaliation at work by anyone, including supervisors, managers,
        employees or even non-employees, has a responsibility to immediately bring the
        matter to the District’s attention. If the complaint or observation involves someone
        in the employee’s direct line of command, or if the employee is uncomfortable
        discussing the matter with his or her direct supervisor, the employee is urged to go
        to the General Manager or the Human Resources Manager.
    b) How the District will investigate complaints: The District will thoroughly and
        promptly investigate all concerns or complaints under this policy.              If an
        investigation confirms that misconduct has occurred, the District will take
        corrective action as appropriate, up to and including immediate termination of
        employment.

Complaints under this policy will be kept as confidential as possible. Information will be
released only on a “need to know” basis, and no employee will be subject to retaliation by
the District because he or she has made a report or complaint under this policy.

4.02.020.5 No retaliation: It is strictly against District policy to retaliate against anyone
who reports or assists in making a complaint of prohibited harassment, or who
participates in the investigative process under this policy. Prohibited retaliation may
include, but is not limited to, withholding pay increases, negative evaluations, onerous
work assignments, withdrawing friendly courtesies, demotion, discipline, or dismissal.
The District does not tolerate retaliation, and violation of this Policy will result in discipline
up to and including termination. Anyone who feels that he or she has been subjected to
retaliation should bring this to the General Manager’s attention.



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                                      CHAPTER 4.03

                                   JOB DESCRIPTIONS

Section:

       4.03.010      Job Descriptions

4.03.010 Job Descriptions The General Manager shall ensure that for each employment
position at the District, the District maintains a written job description summarizing the
duties, responsibilities, and employment standards of the position. Each job description
shall generally outline the main characteristics and qualification requirements of positions
and give examples of duties which employees holding such positions are typically
required to perform. Each job description shall contain minimum requirements for
positions, including training, experience, knowledge, licenses, skills, and abilities. All job
descriptions are subject to approval and signatures by the General Manager.


                                      CHAPTER 4.04

                          RECRUITMENT AND EXAMINATIONS

Sections:

       4.04.010      Recruitment of Department Heads
       4.04.020      Recruitment of Management Employees
       4.04.030      Bargaining Unit Employees
       4.04.040      Application Forms
       4.04.050      Examinations

4.04.010 Recruitment of Department Heads When a vacancy occurs in a department
head position, the General Manager shall review the job description to determine its
continuing applicability and shall recommend a salary range to the Board of Directors.

The Board of Directors shall adopt a salary range for the position. The position will be
publicized by such methods deemed appropriate by the General Manager or the Human
Resources Manager.

The Human Resources Manager shall appoint an interview committee. The committee
shall consist of the General Manager, one member of the Board of Directors, and three
additional persons. The three appointed persons should include a department head of the
District, an employee of the District who would be subordinate to the new department
head, and a peer professional of the new department head from outside the District
organization.




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The initial screening of applicants will be performed by the interview committee. The
committee may utilize various testing methods that they deem appropriate in screening
applicants.

The District shall reimburse the candidates for reasonable costs to attend the interview.

The committee shall recommend the appointment of a successful candidate to the
General Manager or, in the alternative, may recommend that no candidate be hired and
that others be interviewed, or the process be initiated again. The committee shall set forth
its recommendations in writing.

The General Manager shall appoint a person to fill the vacancy. In making the
appointment, the General Manager shall give due consideration to the recommendation
of the interview committee. The General Manager is not bound by the decision of the
interview committee.

The General Manager shall report his decision to the Board of Directors.

4.04.020 Recruitment of Management Employees Selection and placement of all
management level employees will be through a competitive and open process to select
the most qualified candidate for the position. The process shall include:

      a) The hiring manager and Human Resources shall review the current job
         description to ensure that it is current and meets the needs of the District. The
         approval of the General Manager must first be obtained before any changes
         may be made to the job description.
      b) Advertise the open position for both internal and external candidates.
      c) Invite top candidates to an initial panel interview. The panel shall consist of one
         outside member and two District staff members in addition to the hiring
         manager. A uniform set of questions shall be used for all candidates.
      d) A second interview shall be conducted by the hiring manager.
      e) Selection of the successful candidate shall be made by the hiring
         manager/supervisor, subject to background and reference checks and physical
         screening. Approval of the General Manager is required before an offer of
         employment is made.
      f) Any deviations from this process must be approved in advance by the General
         Manager.

4.04.030 Bargaining Unit Employees Bargaining Unit positions will be filled in
accordance with the provisions of the MOU.

If the position is not filled by a current employee, the District shall follow the same
procedure as recruiting for management employees, except the panel interview will not
include an outside member.

Any deviations from this process must be approved in advance by the General Manager.




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4.04.040 Application Forms All applications for employment shall be made on forms
provided by the District. Application forms shall require information covering training,
experience, and other pertinent information. All applications must be signed and dated by
the person applying.

4.04.050 Examinations The selection techniques used in the examination process shall
be impartial, of a practical nature, and shall relate to those subjects that fairly measure
the capability of applicants to perform duties assigned to the position for which they seek
appointment.

                                     CHAPTER 4.05

                   APPOINTMENTS AND PROBATIONARY PERIOD
Sections:

      4.05.010      Pre-employment Physical Examinations
      4.05.020      Pre-employment Background Investigations
      4.05.030      Nepotism/Fraternization
      4.05.040      Probationary Period

4.05.010 Pre-employment Physical Examinations A physical examination, including
appropriate drug testing, will be required for all prospective employees after a contingent
offer of employment is made and prior to starting work. The District will select the health-
care provider and the examination will be at District expense.

4.05.020 Pre-employment Background Investigations An applicant who has received
a conditional offer of employment shall be required to authorize the District to conduct a
background check specifically related to the position offered.

4.05.030 Nepotism/Fraternization It is in the District’s best interest to avoid conflicts of
interest, favoritism or the appearance of favoritism, and to decrease the potential for
inappropriate or illegal conduct in the workplace, including, but not limited to, sexual
harassment.

Accordingly, no person will be considered for employment with the District who is closely
related to a member of the District’s Board or is closely related to an existing employee in
positions that would create a conflict of interest. For purposes of this policy, a close
relative is defined as spouse or domestic partner, children (stepchildren), parents
(stepparents), siblings (step-siblings), grandparents or grandchildren, or in-laws of the
Board member or employee. Persons who cohabitate, but are not married, are
considered close relatives for purposes of this policy and therefore subject to all
restrictions and limitations.

In the event employees create a close relationship as described above after they are
hired by the District, the following provisions apply:

   a) The related employees cannot have a supervisory or reporting relationship with
      each other;


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   b) Neither employee can work in a position in which District information is privileged
      or confidential and would present a conflict of interest on the part of either
      employee.

If the relationship of two employees is determined to create a conflict of interest, whether
actual or potential, one of the employees will be required to terminate employment. If the
affected employees cannot decide which of them shall resign, the employee with the
shortest tenure with the District shall be terminated.

4.05.040 Probationary Period The probationary period shall be regarded as a part of the
selection process. During the probationary period, the employee shall be considered in-
training, and under careful observation and evaluation by supervisory personnel. This
period will be used to train and evaluate the employee’s effective adjustment to work
tasks, conduct, observance of rules, attendance, and job responsibilities. Any
probationary employee whose performance does not meet required standards of job
progress or adaptation may be released from District employment.

All original and promotional appointments shall be subject to a probationary period of not
less than six (6) months. The probationary period may be extended in circumstances
where further evaluation of the employee is deemed necessary by the District.

At the conclusion of the employee’s probationary period and if the employee’s
performance has been deemed satisfactory by the District, the employee shall be
reclassified as a regular employee.

Probationary employees may be discharged at any time during the probationary period
with or without cause and without the right of appeal.


                                      CHAPTER 4.06

                                    COMPENSATION

Sections:

       4.06.010      Compensation Plan
       4.06.020      Payment of Salary

4.06.010 Compensation Plan The General Manager shall maintain a compensation plan
for all classes of positions. The plan shall establish a salary range or rate of pay, showing
minimum and maximum rates for each class. The General Manager shall submit the
compensation plan to the Board of Directors for approval.

4.06.020 Payment of Salary The calendar work week begins at 00:00 a.m. on Saturday
and ends at 24:00 p.m. Friday. The pay period for all employees shall be based on a bi-
weekly period and will be paid not later than seven (7) days following the end of the pay
period.


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                                    CHAPTER 4.07

                 EMPLOYMENT BENEFITS, HOLIDAYS, AND LEAVES

Sections:

      4.07.010      General
      4.07.020      Insurance Plans
      4.07.030      Retirement Plan
      4.07.040      Supplemental Income Plans
      4.07.050      Post-Retirement Benefits
      4.07.060      Longevity
      4.07.070      Holidays
      4.07.080      Vacation Leave
      4.07.090      Administrative Leave
      4.07.010      Sick Leave
      4.07.011      Family and Medical Leave
      4.07.012      Pregnancy Leave
      4.07.013      Unpaid Personal Leave
      4.07.014      Military Leave
      4.07.015      Jury Duty
      4.07.016      Bereavement Leave
      4.07.017      Industrial Disability Leave
      4.07.018      Limitations
      4.07.019      Return-to-work Physicals
      4.07.020      Donation of Accrued Vacation Leave

4.07.010 General The policies in Chapter 7 shall apply to all regular employees of the
District who are not covered by a Union Memorandum of Understanding.

4.07.020 Insurance Plans

4.07.020.1 Group Medical Insurance Plan: The District shall provide and pay the full
premium for coverage of employees and their dependents. Part-time employees will
receive a pro-rated contribution based on their percentage of full-time equivalency.
Employees have a choice between two plans:

(a) The NRECA Preferred Provider           Organization   (PPO)    plan   with   a   $400
    individual/$1200 family deductible.

(b) The NRECA High-Deductible Health Plan with a $1200 individual/$2400 family
deductible. The District will make a contribution to the employee’s Health Savings
Account if this lower cost plan is selected.

4.07.020.2 Group Dental Plan: The District will furnish the NRECA Enhanced Dental
Plan.



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4.07.020.3 Vision Plan: The District is self-insured and will provide an annual benefit up
to $400 per covered employee or dependent. The benefit will be to cover the expenses of
examination, lenses, frames or contact lenses, Lasik or other vision improvement related
procedures, when recommended by a physician or optometrist.

Any unused portion of the annual benefit or incurred cost (not exceeding $400) may be
carried over to the next subsequent year.

Res. 2009-36 (12-2-09)

4.07.020.4 Group Life Insurance Plan: The District will furnish "term insurance" equal to
three (3) times the annual salary for each employee.

4.07.020.5 Long-term Disability Plan: The District will furnish long-term disability
coverage of a monthly benefit equal to 66 2/3% of the employee's monthly base
earnings, with a maximum monthly benefit of $15,000 after the 13 week elimination
period.

4.07.030 Retirement Plan The District will provide and maintain membership in the
California Public Employees Retirement System (CalPERS) 2.7% @ 55 Plan, with all the
optional benefits adopted on 8/24/2004.




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4.07.050 Post-Retirement Health Benefits To be eligible to receive post-retirement
health benefits, an employee must have at least ten (10) years of service with the District.
Years of service is defined as cumulative years of service with the District, which may or
may not be consecutive years. Employees, who retire from the District and meet the
service requirement stated above, will receive a District contribution towards their post-
retirement health benefits premium with the insurance company that is contracted for
retiree benefits with the District at the time of the employee’s retirement, as follows:

                  Total Years of            Percent District
                     Service                 Contribution

                        10                         50%
                        11                         55%
                        12                         60%
                        13                         65%
                        14                         70%
                        15                         75%
                        16                         80%
                        17                         85%
                        18                         90%
                        19                         95%
                        20                        100%


The maximum monthly contribution paid by the District is listed below:

                                                  Maximum Monthly Contribution
                   Retiree Only <65 years                   $475
                   of ageSpouse only <65                    $475
                        years of age                        $475
                       Child(ren) only                      $725
                   Spouse & child(ren)only                  $375
                    Medicare 65+ years of
                            age


The post-retirement medical plan is the same as the active employees' medical plan
except for a $500 deductible per person compared to a $400 deductible per person for
employees. Retirees may choose the High Deductible Health Plan as a lower cost
alternative to the PPO Plan.
A retiree cannot leave the plan and then come back. Once time is broken on the plan, the
employee or retiree cannot come back on the medical plan.

If the retiree is paying for part of the medical coverage it will be collected through an
electronic fund transfer from the retiree's bank account on a monthly basis.

When the retiree is eligible for Medicare, it is mandatory that the retiree enroll for Part B
coverage.


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Should the District change insurance plans or coverage, those changes will also apply to
retirees.

The vision benefit will remain the same without any monthly caps.

Board members are not eligible for this benefit.

4.07.060 Longevity In recognition of an employee's years of service, employees will
receive a bonus of $250 after completion of five (5) years of service. Continuing years of
service shall qualify for a $20 per year addition to this figure for the entire term of
employment.

Longevity payments will be made as soon as possible after the first pay period of the
calendar year, but not later than the last day of January of the calendar year for those
employees who are eligible.

The date from which the employee was employed full time (regular and continuous
employment) shall be the governing date for purposes of this Policy.

4.07.070 Holidays Following are the recognized paid holidays for all regular
management employees:
             New Years Day                                             January 1
             Presidents Day                             third Monday in February
             Memorial Day                                     last Monday in May
             Independence Day                                              July 4
             Labor Day                                first Monday in September
             Veterans Day                                           November 11
             Thanksgiving Day                      fourth Thursday in November
             Day after Thanksgiving                   fourth Friday in November
             Christmas Eve                                          December 24
             Christmas Day                                          December 25

The Christmas Eve holiday shall be observed on the work day immediately prior to the
date of observing the Christmas Day holiday.

Res. 2009-36 (12-2-09)




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4.07.080 Vacation Leave Full-time regular employees will accrue vacation leave from
the date of hire. Regular employees who work less than full time shall accrue vacation
on a pro-rated basis.

Eligible employees shall earn vacation leave as follows:

       Rates of Accrual                              Number of Days per year
For the first five years of continuous service             10
After completing: 5 years of continuous service               15
                 10 years of continuous service               20
                 21 years of continuous service               21
                 22 years of continuous service               22
                 23 years of continuous service               23
                 24 years of continuous service               24
                 25 years of continuous service               25
                 30 years of continuous service               30

New employees will be given forty (40) hours of vacation leave at the start of
employment, in addition to regular vacation leave accrual.

Employees who terminate their employment with the District for any reason will be paid
for all accrued but unused vacation at their current rate of pay.

Vacation leave must be scheduled by mutual agreement between the Department Head
or his/her designee and the employee.

Employees may accumulate up to a maximum of 360 hours of vacation leave, at which
point the employee will not accrue additional vacation leave.

The District, at the employee’s option, will compensate employees for accumulated
unused vacation leave hours equal to the number of vacation hours actually taken during
that calendar year. Vacation leave compensation will be paid at the employee’s current
rate of pay.

4.07.090 Administrative Leave Management employees shall be granted 8 days of
administrative leave per calendar year. Administrative leave must be used by the end of
the calendar year or it is forfeited without compensation. No Administrative leave shall be
carried over the next calendar year, nor shall unused Administrative Leave be converted
to compensation.

Employees are to schedule administrative leave in the same manner as vacation leave.




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Employees appointed to an exempt position after the first of the year may be granted
leave on a prorated basis. Administrative Leave balances shall be adjusted when
employees separate employment prior to the end of the calendar year

4.07.010 Sick Leave The District provides paid sick leave to all regular employees for
periods of temporary absence due to injuries or illnesses. Regular eligible employees will
accrue unlimited sick leave benefits from the date of hire at the rate of one day per month
for each month the employee remains in a pay status (12 days per year maximum).
When an employee is no longer being compensated during the major portion of any
month by regular pay, paid vacation, or any other form of paid leave the employee will no
longer accrue sick leave.

Eligible employees may request to use paid sick leave for absence due to:

   a) The inability of an employee to be present or perform duties because of personal
      illness, off-duty injury, or medical treatments.
   b) The need for the employee to care for an illness or injury of an immediate family
      member (child, spouse, domestic partner, or parent). Employees may use their
      accrued sick leave, up to a maximum of six (6) days in a calendar year for this
      purpose. Employees can accumulate unused family sick leave not to exceed six
      days.

If an employee is absent for three or more consecutive days due to illness or injury, a
physician’s statement may, at the supervisor’s discretion, be required verifying the
employee’s medical need to be off work, the beginning and expected ending dates of the
absence, and confirming the date that the employee may safely return to work.

4.07.010.1 Sick Leave Incentive Plan Employees with low sick leave use who have
worked a minimum of one full payroll year can exchange sick leave for its cash equivalent
annually according to the following schedule:

      Sick Leave Usage                           Sick Leave Conversion Credit
      Zero (0) days                                    Two (2) days

      One (1) day                                      One (1) day, four (4) hours

      Two (2) days or less                             One (1) day

      Three (3) days or less                           Four (4) hour

4.07.011 Family and Medical Leave Any eligible employee may be granted a family
and/or medical leave subject to the provisions of the California Family Rights Act and the
Family Medical Leave Act in effect at the time the leave is granted. A family and/or
medical leave may be granted for any of the following reasons:

   a) Birth of a child; to care for a newborn child;
   b) For placement of a child for adoption or foster care;



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   c) To care for a child, parent, spouse or registered domestic partner with a serious
      health condition;
   d) The employee’s own serious health condition that renders the employee unable to
      perform one or more of the essential functions of his or her job;
   e) If a family member is called to or is on active duty in the military, or;
   f) If a family member or next of kin is injured in the course of military service.

An eligible employee shall be entitled to family and medical leave up to a total of 12
workweeks during the 12 month period that begins on the first day of the qualifying leave.
Health benefits will be continued under the same terms as prior to the leave.

To be eligible to request family and medical leave, an employee must have been
employed with the District for at least 12 months, and have worked at least 1,250 hours in
the 12 months preceding the leave.

If possible, employees requesting leave must provide 30 days’ advance notice. For
events that unforeseeable, employees must notify their supervisor and HR as soon as
they learn of the need for leave. Employees who return to work following an approved
family and medical leave will be reinstated to their same position, or a comparable
position, to the extent required by law.

4.07.012 Pregnancy Leave Eligible employees who are disabled by pregnancy,
childbirth, or related medical conditions are entitled to request a pregnancy disability
leave of up to four months, depending on the period of medically-certified disability.

4.07.013 Unpaid Personal Leave An unpaid leave of absence may be granted to a
regular employee for urgent substantial personal reasons provided that adequate
arrangements can be made to perform the employee’s duties without undue interference
with the normal routine of work.

All applications for a personal leave of absence shall be made in writing to the
employee’s Department Head and include reasonable justification for approval of the
request. The Department Head and the General Manager will evaluate the request.
Employees on a personal leave of absence will become responsible for the full costs of
District provided benefits beginning on the first day of unpaid leave. All District paid
benefits will be suspended during the leave and will resume upon return to active
employment.

4.07.014 Military Leave The District will provide military leaves of absence to
employees who serve in the uniformed services as required by the Uniformed Services
Employment and Reemployment Rights Act of 1994 (USERRA) and applicable state
laws.

4.07.015 Jury Duty A regular employee will be paid his or her regular rate of
compensation when summoned to jury duty or by a subpoena to appear as a witness,
unless the employee’s testimony is against the District’s interest. The employee shall
submit to the District any payment received for jury duty, except mileage reimbursement.



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4.07.016 Bereavement Leave Regular employees will be granted three days
bereavement leave with pay in the event of a death in their immediate families or of a
member of the employee's immediate household at the time of death. For purposes of
this policy, immediate family consists of an employee's spouse or registered domestic
partner, or the parent, foster parent, sibling, child, step-child, half-sibling, or grandparent
of either. In addition, such leave may be extended to cover the employee's step-parent,
foster child, or grandchild.

4.07.017 Industrial Injury Leave The District will grant workers’ compensation disability
leave to employees with occupational injuries or illnesses in accordance with state law.

   a) Notice Requirement
      Employees must report all on-duty accidents, injuries and illnesses, no matter how
      small, to their immediate supervisor as soon as possible.
   b) Compensation During Leave
      If the employee is deemed eligible, Workers’ Compensation benefits will begin with
      the first day of absence following the day of the work-related injury/illness. The
      combined amount of industrial disability and Workers’ Compensation benefits paid
      by the insurance carrier shall not exceed 85% of each employee’s daily basic
      wage.
   c) Modified Duty
      Temporary light duties may be assigned to industrially-injured employees when
      the District determines that the work is available and such work in within the
      employee’s ability to perform. The duration of any such period of temporary work
      shall be determined by the District, but in any event, modified duty will last no
      longer than six months.

4.07.018 Limitations At no time shall the total combination of leave benefits, including
payments from Workers Compensation, State Disability Insurance, Social Security
Disability, or any other benefit to which the District contributes, exceed 100% of the
normal straight-time earnings for any employee.

4.07.019 Return to Work Physical Prior to permitting an employee to return to work
following any medical absence in excess of three days, the District may, at its discretion,
require a physician’s release stating that the employee is physically able to perform the
duties of his or her job. At the District’s discretion, it may require a medical release to
return following a medical leave of shorter duration.

4.07.020 Donation of Accrued Vacation Leave An employee may, upon approval of the
General Manager, transfer all or any portion of his or her accrued vacation leave hours to
another employee of the District. Transfer of vacation leave from one employee to
another shall be permitted only in unusual situations involving serious injury or illness of
an employee or employee’s family member.




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                                     CHAPTER 4.08

                             PERFORMANCE APPRAISALS

Sections:

      4.08.010      Employee Performance Evaluations
      4.08.020      Professional Development for Management Personnel

4.08.010 Employee Performance Evaluations Performance evaluations are an inherent
part of the ongoing supervision process by which employees are informed of the
performance expectations of them, and periodically informed of their progress and any
performance deficiencies.

The performance of every employee shall be formally evaluated in writing at the end of
the first three months and the first six months in a classification, and then annually
thereafter. An employee’s performance may also be formally evaluated at other than the
scheduled times for specific reasons.

The formal evaluation process should include adequate time for discussion before the
evaluation is finalized and the employee shall have an opportunity to respond to the
supervisor’s evaluation after it is finalized.

The employee’s signature on the evaluation form indicates that the employee has seen
the form and had the opportunity to discuss it with his/her supervisor, not necessarily that
the employee is in agreement with its contents. The employee shall be given a copy of
the evaluation, with the original being placed in the employee’s personnel file.

An employee who is given a rating of less than satisfactory shall be given a written
Performance Improvement Plan (PIP) by their supervisor. The employee will have five (5)
working days to review the PIP, and will subsequently meet with the supervisor to provide
his or her comments. The employee may provide an attached statement regarding the
PIP. The PIP shall then be signed by the supervisor and the employee.
Failure to comply with the PIP will lead to disciplinary action.

4.08.020 Professional Development for Management Staff Each member of the
management staff is encouraged to prepare a plan of professional development aimed at
establishing and maintaining professional competence. The General Manager shall
review said plan with the relevant staff person and approve a plan of professional
development. The approved professional development plan may be eligible for
reimbursement by the District for up to 50% of the costs of tuition, fees and books.




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                                      CHAPTER 4.09

                                 EMPLOYEE ACTIVITIES

Sections:

       4.09.010      Code of Business Conduct
       4.09.020      Electronic Data
       4.09.030      Personal Communication Devices
       4.09.040      Travel and Expense Reimbursement
       4.09.050      Moving Expense Reimbursement
       4.09.060      District Vehicle Use

4.09.010 Code of Business Conduct The District expects its employees to behave in a
fair, honest and ethical manner in all activities conducted on behalf of the District. This
Code of Business Conduct is intended to be a constant reminder of that expectation and
a statement of how we will conduct ourselves on a daily basis. All employees are
expected to know and understand the standards and expectations set forth herein.

The District believes that ethical standards are achieved not just through the publication
and dissemination of this document, but through open and ongoing discussion about
ethical issues related to the business and activities of this District. This District operates
in an open-door climate where employees understand that they can openly raise
questions and concerns without fear of retaliation. Further, this Code of Business
Conduct is not exhaustive but designed only to provide summary guidance to employees
in how they are expected to carry out their duties. When in doubt, employees are
expected to use good judgment and to raise questions with their managers.

4.09.010.1 Standards of Conduct Employees are expected to uphold the values of the
District and are required to report any situation where the individual reasonably suspects
any activity that may be in violation of the law, board policies, the Memorandum of
Understanding (MOU), or this Code. Standards of conduct include:

Employees are required to deal honestly and fairly with customers, co-workers, suppliers,
public and others having dealings with the District.

Employees are required to conduct themselves in a professional, business-like manner
while performing their jobs or representing the District in any manner.

Employees are prohibited from offering or accepting bribes, kickbacks or other forms of
improper payment from anyone. They are prohibited from receiving gifts, paid trips or
favors of more than nominal value from customers or suppliers. If in doubt, the employee
is required to ask the General Manager if the proposed gift or favor is of more than
“nominal value.”

Employees are required to limit their reimbursable expenses to those that are necessary,
prudent and business-related.



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Employees are prohibited from taking unfair advantage of customers, suppliers or other
third parties through manipulation, concealment, abuse of privileged information, or any
other unfair-dealing practice.

4.09.010.2 Conflicts of Interest A conflict of interest exists when an employee is called
upon to make or is involved in any decision that creates or appears to create a conflict
between their personal interests, including the interests of their family members, and the
business interests of the District.

Employees must not seek any personal or family member benefit through any
arrangement with vendors, suppliers or other parties that have a business relationship
with the District.

In any situation where it may reasonably be perceived that there is a conflict of interest,
the employee is required to report that potential or actual conflict of interest to their
supervisor or the General Manager.

In addition to these general standards on conflicts of interests, employees shall abide by
the Conflict of Interest policy adopted by the Board of Directors, District Code Title 2.

4.09.010.3 Confidentiality of Information Employees are frequently entrusted with
confidential information. This may include technical or financial information, personnel
information, medical information, customer lists and records, and other information that, if
disclosed, might be a violation of personal privacy, HIPAA laws, or could be potentially
harmful to suppliers, customers, Board members, employees or otherwise to the
operations or interests of the District. This information is the property of the District.

Employees shall not discuss District confidential information with or in the presence of
unauthorized persons, including family members and friends.

Employees shall use District confidential information only for the District’s legitimate
business purposes and not for personal gain.

Employees shall not disclose District confidential information to third parties without
authorization.

Employees shall not use District information or other property or resources for any
personal gain or for the gain of any family member.

4.09.010.4 Customer Communications In communicating with our customers, the District
is committed that it shall:

      Provide all information to which customers have a legitimate right.

      Provide information that is accurate and understandable.




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4.09.010.5 Financial Reporting and Recordkeeping The District shall:

Follow generally accepted accounting principles and other prescribed rules and
regulations of other applicable regulatory bodies having jurisdiction.

Maintain a system of internal accounting controls that will provide reasonable assurances
that all transactions are properly recorded and that material information is available to
management when required.

Maintain books and records that accurately and fairly reflect the District’s financial health.

Maintain a record retention system that ensures the District’s records and documents are
properly retained and secured.

Conduct an annual financial audit to provide an independent, objective review of financial
reports, and to identify any risks associated with the system of internal controls.

4.09.010.6 Legal and Regulatory Compliance The District will comply with all local, state
and federal laws, rules and regulations applicable to the activities of the District. It will
maintain a safe and healthy work environment free from harassment or discrimination per
the District’s policy.

4.09.010.7 Reporting of Violations Every employee is responsible for ensuring that
violations of laws, rules and regulations, the MOU or this Code are reported promptly.
Reports of suspected violations may be made in person or in writing, confidentially or
anonymously, to the General Manager or Human Resources Manager. All such reports
will be promptly investigated and appropriate corrective action will be taken. Any
employee who makes a report in good faith and on reasonable belief may do so without
fear of retaliation or retribution.

4.09.010.8 Employee Education All employees will receive a copy of the Code of
Business Conduct and will be required to sign a form indicating that he/she has received
a copy of the Code of Business Conduct, read its contents, and understands his/her
obligations under the Code.

4.09.010.9 Monitoring and Enforcement Every employee is responsible for monitoring
compliance with the Code by reporting suspected violations in a timely manner (as
discussed above) and cooperating with investigations of suspected violations.
Employees that violate any laws, rules and regulations, the MOU or this Code may face
appropriate, case-specific disciplinary action. Additionally, on a periodic basis, this Code
of Business Conduct policy will be reviewed for effectiveness and appropriate
modifications and/or enhancements will be recommended as deemed necessary.

4.09.020 Electronic Data It is the policy of the District that all electronic office data
storage systems including, but not limited to, voice mail, computers, electronic mail, and
facsimiles are the property of the District and are provided to employees for their use in
conducting District business. The systems belong to the District and are accessible at all
times by District management for any business purpose. Accordingly, employees should


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not have any expectation of privacy in any information they create or receive on the
District’s systems.

Specific rules and procedures are detailed in the District’s “Computer & Information
Technology Standards of Practice.

4.09.030 Personal Communication Devices Personal communication devices may be
issued to employees to enhance the efficiency and effectiveness of District
communications. Department Heads shall be responsible for determining the employee’s
need for a District provided device based on the business needs of the District.
Employees who are issued such devices are responsible for adhering to the following
standards:

   a) Personal communication devices shall be used for appropriate business purposes.
   b) Personal usage should be kept to a minimum; employees shall reimburse the
      District for all personal usage that result in a charge to the District.
   c) District personal communication devices may not be used for commercial profit or
      secondary employment.

4.09.030.1 Use of Personal Communication Devices while operating a vehicle
California State laws prohibit the use of personal communication devices while driving
unless using a hands-free device. Employees shall adhere to these laws.

4.09.040 Policy for Travel and Expenses It is the District’s objective to establish a
policy governing employee travel and the payment of travel and out-of-pocket expenses
incurred by employees while involved in official District business or while in attendance at
authorized meetings or training.

Policy Content:

   a)   It is the policy of the District to enable employees who are away from home on
        District business to travel comfortably and safely, in an efficient and economical
        manner;
   b)   Employees must obtain pre-approval from the department manager for travel and
        expected business expenses before the expenses are incurred; and
   c)   The District will reimburse employees for actual authorized travel expenses that
        are reasonable and necessary in the conduct of District business and upon the
        submission of an expense report with receipts attached, and upon approval of
        the appropriate supervisor. Employees should use good judgment when incurring
        business expenses. The employee is expected to use a reasonably economic
        means of lodging, meals and transportation that will meet the traveler’s
        requirements with due consideration to safety and comfort.

4.09.040.1 Personal Automobile Use Employees shall utilize District owned vehicles for
business travel whenever possible. If a District owned vehicle is not available, employees
must have prior approval from the General Manager before using their personal
automobile. Drivers must have a valid driver’s license and adequate liability insurance.
Motorcycles will not be authorized for business travel.


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Personal automobiles used on District business must be covered by liability insurance. It
is the employee’s responsibility to have adequate automobile insurance. A copy of the
current Proof of Insurance must be furnished to the District by the employee indicating
coverage before using a personal vehicle for District business. The District will not be
responsible for any damage incurred to or by the employee’s automobile in the course of
conducting District business.

Employees will be reimbursed at a rate per mile equal to the current IRS standard
mileage allowance. Such reimbursement cannot exceed the cost of air coach by the most
direct route if plane service is available and practical.

Employees will be reimbursed for all business-related parking and tolls, but not for fines
and penalties imposed for the violation of traffic and other laws.

4.09.040.2 Out of Town Travel When deciding on a mode of transportation, District staff
should utilize the most cost effective means of transportation, while considering the travel
time associated with the trip. Air travel must be by coach or standard class. Alternate
routes or additional stops for the employee’s benefit will be at the employee’s expense,
prorated to the most cost effective direct route.

Hotels selected should be those that are recognized as reputable, reasonable in price for
the area, and conveniently located in relation to the employee’s work assignment.

Rooms should be at the government rate (where available) for a single, standard room.

The District will not reimburse for alcoholic beverages or any expense considered
personal entertainment, including in-room movies. While employees are traveling, the
District will consider a telephone call to the employee’s immediate family (spouse,
registered domestic partner, children, and parents) to be a business expense. These
calls are expected to be of reasonable length. Employees should use a cell phone or
phone card, with the standard hotel long distance service as the last resort.

Employees must use good judgment as to the reasonableness of costs for meals.
Gratuities should not exceed acceptable and customary practices. Employees are
encouraged to take advantage of meals included in the price of a business seminar or
conference, or in the cost of their hotel room. Meal reimbursements must include a
detailed/itemized receipt.

4.09.040.3 Submitting Travel Expense Reports It is the responsibility of each employee
to provide a complete and factual accounting of funds through the travel expense report
or District credit card monthly statement. All reports must be submitted within 30 days to
the immediate supervisor and approved by the Department Manager.

Actual receipts showing itemized charges must be attached for all expenses, including
lodging, transportation, tolls, and meals.




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4.09.040.4 District Issued Credit Cards District credit cards have been issued to
designated employees. The use of District credit cards is only for District business
expenses. No personal charges are to be placed on the District’s credit card.

Itemized receipts must be attached to an employee’s monthly credit card statement. The
monthly statement must be signed by the employee and approved by the Department
Manager and General Manager.

4.09.050 Moving Expense Reimbursement New employees who have been recruited
by the District and are required to move their place of residence (more than 50 miles) as
a result of accepting employment with the District may be reimbursed for qualified moving
related expenses.

Eligible expenses shall be limited to documented costs to move furniture and household
items and transportation for the employee and members of his/her immediate family
based upon the current IRS mileage rate. Costs associated with the sale or purchase of
a home, lodging, meals, temporary storage of personal items, or costs that are not
directly necessitated by the move will not be included in the costs subjected to
reimbursement.

The amount of reimbursement shall not exceed the amount equal to one-half of the
employee’s monthly salary and must be properly documented by receipts. The General
Manager will make final decisions regarding the appropriateness of expenses for the
reimbursement.

4.09.060 Vehicle Use Policy District owned vehicles are provided for official use only
and are not to be used for private transportation or personal business. Vehicles will be
parked at the District site when not in use and will be available to all personnel for any
valid business-related purpose.

District employees who are required to drive as a part of their job responsibilities must
possess a valid driver’s license. All such employees are required immediately to advise
District management of any driving violations, citations, or accidents resulting in a
suspension or revocation of their driver’s license.

If possible, the District will provide a vehicle for transportation to and from business
meetings, conferences, or other events that employees attend located away from the
office. If an employee drives his or her own personal vehicle, the District will pay the
current rate for mileage as set by the Internal Revenue Service.

Smoking is prohibited in District owned vehicles.

Seat belts shall be worn while driving or riding in all vehicles used for District business.
Employees that are subject to being called outside of normal work hours for emergencies
or other District business will be assigned vehicles to be driven to and from their place of
residence. These employees are:




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   a)   General Manager
   b)   Assistant General Manager
   c)   Electric Superintendent
   d)   On-Call Lineman
   e)   Electric Engineer
   f)   Water Utility Manager
   g)   Water Superintendent
   h)   Water Engineer
   i)   On-Call Water Technician

The General Manager can authorize any District employee, on occasion, to keep a pool
vehicle at their residence overnight when the situation arises that requires the employee
to conduct District business before or after regular work hours.

No employee shall be allowed to use an assigned vehicle for personal purposes other
than commuting and de minimis personal use, such as a stop for a personal errand on
the way home. Once at the employee’s residence, District vehicles shall only be used for
official District business or the return commute to place of business.

District vehicles shall be operated only by an authorized District employee. Employees
may occasionally have passengers that are a necessary part of the District's operations.

The District will comply with Internal Revenue Service statues in regards to reporting
employee vehicle use as a taxable fringe benefit.

The general manager is authorized to rule on any unforeseen situation that might arise
that is not covered in this policy.

Staff shall report to the Board annually of vehicle use and IRS compliance.


                                       CHAPTER 4.10

                                 DISCIPLINARY ACTIONS

Section:

        4.10.010 Disciplinary Procedures

4.10.010 Disciplinary Procedures The principal objectives of this policy are to promote
orderly job conduct and the longer range development of a goal-oriented and productive
personnel team, help ensure compliance with state and federal laws, and to establish the
procedural means of protecting employment rights of employees.

The effect of this policy should be:

   a) The reduction of involuntary terminations.
   b) The avoidance or minimizing of misunderstandings between supervisory and non-


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      supervisory personnel.
   c) Ensuring that personnel are provided with notice of unacceptable conduct in
      sufficient time to permit self-correction and improvements.
   d) Ensuring that documentation is maintained and available to support
      management's position in the event of discriminatory charges.

It is recognized that this policy applies to all employees represented by IBEW Local
Union 1245 (bargaining unit employees) as well as management employees (non-
bargaining unit employees). The coverage of non-bargaining unit employees by this
policy shall in no manner create any legal or other obligation of IBEW Local Union 1245
toward non-bargaining unit employees. IBEW Local 1245 shall have no obligation
whatsoever to provide a defense, provide advice, or otherwise represent non-bargaining
unit employees.

4.10.010.1 Definition The term discipline will be understood as meaning "a state of
orderliness" such as in a "disciplined team" or in a "disciplined performance." Therefore,
disciplinary action is action taken to maintain an orderly way of imposing sanctions to
remedy unacceptable employee performance.

4.10.010.2 Causes for Disciplinary Action The following are examples of conduct for
which discipline may be imposed. This list is merely a summary. It is not exhaustive and
discipline may be imposed for misconduct not set forth below:

      a) Improper or unauthorized use or abuse of sick leave;
      b) Excessive absenteeism;
      c) Being absent without authorization; repeated tardiness or leaving without
         authorization;
      d) Violation of District policies, rules or procedures;
      e) Insubordination, disobedience, or failure to carry out any reasonable order;
      f) Acceptance of gifts or gratuities in connection with or relating to the employee’s
         duties;
      g) Any conduct which is harmful to the orderly conduct of business, the safety of
         employees or equipment, or which adversely affects the employee’s ability to
         perform his/her job;
      h) Falsifying information related to employment application, payroll or any other
         work related record or report;
      i) Discourteous or inappropriate treatment of the public or District employees;
      j) Violation or neglect of safety rules or common safety practices;
      k) Theft, dishonesty, or fraud;
      l) Physical altercations or acts of aggression;
      m) Engaging in discriminatory or harassing behavior in violation of state/federal
         laws and/or District policy;
      n) Substandard or inadequate job performance, including failure to perform
         assigned tasks or training, or failure to discharge duties in a prompt,
         competent, and reasonable manner;
      o) Violation of the District’s policies regarding drugs, alcohol, and/or tobacco use;




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      p) Careless, negligent, or improper use of District property, equipment or funds,
         including unauthorized removal, or use for private purpose, or use involving
         damage or unreasonable risk of damage to property.

4.10.010.3 Progressive Discipline Procedures - The actions identified below reflect a
logical progression from the least serious to the most serious. In general, a supervisor's
approach to matters requiring disciplinary action will follow this progressive approach.
The first steps of the disciplinary procedure are to be regarded as corrective measures
and are to be combined with appropriate instruction which, if followed, would make
further steps unnecessary. The seriousness of the offense shall be taken into account by
the supervisor, and the supervisor need not necessarily proceed to the next level of
disciplinary action upon the repetition of the offense. In order for a supervisor to proceed
to the next level of disciplinary action, the offense need not be a repetition of a prior
offense.
A Skelly meeting (as defined below) will generally precede disciplinary action involving a
loss of pay. However, suspensions of five days or less may be immediately implemented
providing that the Skelly procedure (as defined below) is then promptly followed. Under
certain conditions more severe disciplinary action may immediately occur.

4.10.010.4 Forms of Disciplinary Action:

4.10.010.4(A) Verbal Reprimand – The verbal reprimand is considered informal discipline
and notifies the employee that his/her performance or behavior must be improved. This
warning defines the areas in which improvement is required, sets up goals leading to this
improvement and informs the employee that failure to improve will result in more serious
disciplinary action.

This is the first official step of disciplinary action. It shall be used to deal with minor
infractions of rules and practices. It is, in effect, a statement to the employee that he/she
has (1) violated a District rule or work practice that he/she should have been aware of, (2)
that he/she will be expected to abide by all such rules in the future.
The manager will summarize this action with written documentation concerning the
conversation. This document is placed in the employee’s personnel file and a copy is given
to the employee. The employee shall be permitted to file a written response, the original
being directed to the department head and a copy filed in the employee’s personnel file.

4.10.010.4(B) Written Reprimand – The written reprimand is a written record of discipline,
that is usually, but not always, issued after a previous verbal reprimand. The employee is
advised that his/her behavior is below standard and that continuation or repetition of that
behavior shall result in more serious disciplinary action. The written reprimand shall
specifically cite the substandard conduct and, where appropriate, reference the particular
Code or Policy that has been violated.
A copy of the written reprimand shall be provided to the employee and a copy placed in the
employee’s personnel file. The employee shall be permitted to file a written response, the
original being directed to the department head and a copy filed in the employee’s
personnel file.


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4.10.010.4(C) Suspension – The suspension is a District ordered absence from duty
without pay for a specified period of time, and generally, but not always, follows a previous
verbal and written warning.

4.10.010.4(D). Reduction in Pay – Reduction in pay is a temporary reduction in salary to a
lower salary step for a specified maximum period of time. The employee does not have
sudden stoppage of income and may be able to have the reduction lifted by good
performance. The department does not lose the services of the employee. An individual
should have been warned or reprimanded prior to taking this action to advise him or her
that his or her performance is not acceptable.

4.10.010.4(E). Demotion – A demotion is a permanent change in classification of an
employee to a position of lower responsibility and pay for unsatisfactory performance or
disciplinary reasons. No employee shall be demoted to a position for which he or she does
not possess the minimum qualifications; the employee’s new duties must be consistent
with those described in the job description.

4.10.010.4(F). Last Chance Agreement – At the discretion of the General Manager, a last
chance agreement may be entered into with the employee, the bargaining unit if
appropriate, and the District. This agreement is a possible alternative to termination. The
agreement, signed by all parties, will state the steps or conditions that the employee is
required to follow or meet to continue his or her employment with the District.

4.10.010.4(G) Termination/Discharge - Termination is the most severe form of
disciplinary action. This course of action may result, for example, from an employee’s
violation of the District’s “Causes for Disciplinary Actions,” or due to an accumulation of
various violations. This action is normally one of last resort, and shall only be taken when
management is thoroughly satisfied that the employee has been given every reasonable
opportunity to meet performance or behavior standards and clearly failed to do so.

4.10.010.5 Pre-Disciplinary Proceedings A public employee has certain procedural
protections called “Skelly” rights before serious discipline (i.e., a reduction in pay or
suspension of more than five (5) working days) may be imposed. Before such discipline
is imposed, the employee has the option to request an administrative meeting with the
District whereby the employee (with or without his/her representative) may respond to the
charges with facts and/or other information which he/she wishes the District to consider in
deciding whether or not to proceed with the proposed discipline.

The requirements of the Skelly procedure are satisfied as follows:

   a) The employee receives advance notice of the proposed disciplinary action.
   b) The notice states the reasons for the proposed action.
   c) The notice contains the charges upon which the proposed action is based.
   d) The employee is allowed access to any materials upon which the proposed action
      is based.
   e) The employee is afforded the right, either orally or in writing, or both, to respond to
      the proposed charge(s) and the proposed disciplinary decision.


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4.10.010.5(A) Skelly Notice - The notice requirements of Skelly are as follows:

   a) The Skelly notice shall be in writing.
   b) The letter shall set a date, time and place for the employee to respond to the
      charges if he/she elects to do so. In order to allow the employee time to seek
      advice and to prepare any oral or written response he/she may wish to make, the
      date set for his/her response should be at least five working days from the date the
      letter is sent. The letter shall contain a request that the employee give notice if
      he/she elects to waive his/her right to respond orally.
   c) The letter shall contain the notice of the proposed disciplinary action intended to
      be taken.
   d) The reasons for the proposed action must be set out. The part of the Skelly letter
      setting out the misconduct with which the employee is charged must be factual so
      that any person reading the letter will be able to determine the exact misconduct
      charged.
   e) The factual allegations of misconduct must specifically cite the District’s particular
      policy and/or “Causes for Disciplinary Actions” that the employee is charged with
      violating.
   f) The notice must advise the employee of his/her right to respond to the charges,
      either orally or in writing.
   g) The notice must advise the employee of his/her right to representation if he/she
      elects to respond.
   h) The notice will advise the employee that discipline may be imposed whether or not
      he/she responds to the charges.

4.10.010.5(B) Skelly Meeting - The Skelly meeting, if the employee elects to have a
meeting, shall be conducted as follows:

   a) The General Manager (hereafter “Skelly Officer”) shall chair the meeting.
   b) The Skelly Officer shall establish that the employee has received the Skelly notice
      and understands the charges set forth therein.
   c) The Skelly Officer shall make available any documents which were considered in
      determining the charges and proposed disciplinary action.
   d) The employee or his/her representative shall be given the opportunity to respond
      to the charges and proposed action.
   e) The employee or his/her representative shall be given the opportunity to make
      final comments regarding the proposed action.
   f) The Skelly Officer shall close the meeting by indicating that he/she will consider all
      statements and/or documents, which may have been presented prior to
      determining the final action.

The General Manager will determine whether the charges have been sufficiently
established and the appropriateness of the level of the proposed disciplinary action.

4.10.010.5(C) Action Letter - Following the Skelly meeting, the Skelly Officer will promptly
prepare a letter containing all of the following:



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   a) Factual Findings. Repeat the charges as set out in the Skelly notice letter,
      provided the Skelly Officer concludes they have been established. If a charge has
      not been established or if facts excusing or mitigating of the misconduct have been
      disclosed, the letter should so state.
   b) The specific District policy and/or particular portion of the “Causes for Disciplinary
      Action” which were violated should be cited.
   c) The discipline imposed may not exceed the maximum stated in the Skelly letter.
   d) A statement that the employee may appeal the action to arbitration consistent with
      the provisions of the Union contract or other District procedures, if applicable.

4.10.010.5(D) Appeal Process - The following process applies to management positions
(i.e., non-bargaining unit positions) only. The grievance/appeal process for bargaining
unit members is set forth in the MOU.

If an employee wishes to appeal a disciplinary action, they may move the matter to
arbitration by filing a request for arbitration in writing with the General Manager. To be
timely, the request for arbitration must be received within fourteen calendar days of the
date of the Skelly Officer’s decision.

As soon as reasonably possible after the matter has been referred to arbitration, the
parties or their designated representatives shall confer regarding the selection of the
arbitrator. If agreement cannot be reached, the parties shall request a panel of seven
arbitrators from the California State Mediation and Conciliation Service (“SMCS”). The
parties or their representatives shall alternatively strike from the SMCS list until one name
remains and that person shall serve as the Arbitrator.

At the Arbitration hearing, both sides shall be represented by the person of their choice
and shall be solely responsible for the costs associated with the presentation of their
case including but not necessarily limited to the costs associated with their representative
and any witnesses. The costs and fees associated with the Arbitrator and court reporter
shall be divided evenly between the parties.

The decision of the Arbitrator shall be final and binding, however, the Arbitrator shall have
no authority to add to, modify or delete any provisions of the District’s codes or policies.


                                      CHAPTER 4.11

                                      GRIEVANCES

Section:

       4.11.010 Grievance Procedure

4.11.010 Grievance Procedure The District will recognize the grievance procedure as
outlined in Title 14 of the Memorandum of Understanding. In connection with all
grievances filed, it shall be the policy of the District that:



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   a) Prompt attention be given to all grievances;
   b) That there will be freedom from reprisal against those filing a grievance;
   c) Those reasonable efforts will be made to resolve the grievance at the lowest
      possible level within the District.


                                      CHAPTER 4.12

                          EMPLOYEE SAFETY AND HEALTH

Sections:

      4.12.010      Safety and Loss Control
      4.12.020      Injury and Illness Prevention Program
      4.12.030      Wellness Program
      4.12.040      Safety and Loss Committee
      4.12.050      Tobacco-Free Workplace
      4.12.060      Workplace Violence
      4.12.070      Driver’s License Policy
      4.12.080      Drug and Alcohol Free Workplace
      4.12.090      DOT Testing Policy

4.12.010 Safety and Loss Control The purpose of this policy is to:

   a) Protect human life from injury and preserve property of the District and the general
      public.
   b) To instill an awareness of the importance of safe work and loss control practices in
      the operation of District facilities, and to establish the desire and expectation in all
      employees to work safely.
   c) To educate and train District employees in proper job practices and procedures
      through a continuing on-the-job training program.
   d) To comply with applicable federal, state and local regulations.

A comprehensive set of basic operating and safety rules and safe work practices that
address all aspects of District operation shall be developed, adopted and distributed to all
employees of the District. Each employee shall sign a receipt of acceptance indicating
they will follow and abide by the safety rules and work practices.

4.12.020 Injury and Illness Prevention Program The District will maintain a
comprehensive and continuous occupational Injury and Illness Prevention Program (IIPP)
for all employees. The health and safety of the individual, whether in the field or office,
takes precedence over all other concerns. The District's goal is to prevent accidents and
to eliminate personal injury and occupational illness and comply with all safety and health
rules and standards.

4.12.030 Wellness Program To promote the wellness of its employees, the District will
maintain an Employee Wellness Program. The program shall include Health Risk



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Appraisals and a variety of health and fitness related activities. Participation by
employees in this program is voluntary.

4.12.040 Safety and Loss Committee A Safety and Loss Control Committee shall be
established that will include District management and union employees and will meet at
least monthly. The Committee will annually update the Safety and Loss Control program.

A program of regularly scheduled safety and job training meetings shall be held to
educate District employees and maintain an awareness of job safety.

Supervisors shall be held accountable for implementation and enforcement of the safety
and loss control program.

The General Manager shall submit to the Board of Directors an annual report
summarizing the safety activities for the past year.

4.12.050 Tobacco-Free Workplace Policy The District’s objective is to provide a
healthful, comfortable and productive work environment for all District employees,
directors, vendors and customers.

Accordingly, and in compliance with California law, it is the policy of the District to prohibit
smoking or use of tobacco products of any kind within all District controlled and operated
facilities, as well as District vehicles and worksites.

Smoking is prohibited within twenty (20) feet from entrances, exits, air intake vents,
stairwells, breezeways, garage doors or operable windows. Littering of matches,
cigarettes, cigars, chewing tobacco or any other substance is not permitted. Proper
containers must be used for disposal of these items.

Signs acknowledging “Smoke-Free Building” shall be posted on entrance doors of the
building and other locations as deemed appropriate.

All employees share in the responsibility for adhering to and enforcing to this policy.

4.12.060 Workplace Threats/Violence The District is committed to providing a safe and
secure workplace for employees, customers, contractors and visitors. Threats,
threatening behavior, or acts of violence against any individual on District property, at
District controlled worksites or involved in the conduct of District business will not be
tolerated.

4.12.060.1 Definition of Workplace Threats/Violence Workplace Threats/Violence may be
conduct that causes an individual to fear for his or her personal safety or the safety of his
or her family, friends and/or property, such that employment conditions are altered and/or
a hostile abusive or intimidating work environment is created.


Specific examples of conduct prohibited by this policy include, but are not limited to:



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   a) Threats or threatening behavior directed toward an individual or his/her family,
      friends, associates, or property;
   b) Harassing or threatening phone calls, written messages, videos, photographs or
      E-mails;
   c) Surveillance by any means;
   d) Stalking;
   e) Fighting or other physical violence or threat of physical violence;
   f) Threats of aggression or violence made “in-jest”.

It is the responsibility of all District employees to immediately report any threatening or
violent behavior they have witnessed or have knowledge of, occurring on District
property, worksites or connected to District employment, to their supervisor or
department head.

The incident will be investigated and documented by the appropriate management
employee, with all necessary steps taken to intervene in and/or remedy any potentially
hostile or dangerous situations.

4.12.070 Employee Driver’s License Policy The purpose of this policy is to maximize
the safety of the District employees and minimize potential liability exposures and District
property damage potential connected with the operation of vehicles used in the course of
District business. Another purpose of this policy is to assure that all employees operating
vehicles while on District business meet all licensing and driving qualifications.

It is a requirement for continued employment for every position with driving duties that the
employee maintains a valid driver’s license. In addition, the District’s policy is to verify, at
least annually, the DMV motor vehicle record (MVR) for employees who drive for the
District. This policy applies both to drivers of District owned vehicles as well as
employees using personal vehicles in the course of District business.

The General Manager or his or her designee shall administer this policy. The following
are minimum requirements:

   a) All employee positions that include operation of a motor vehicle as part of their
      duties for the District shall possess a valid state issued drivers’ license;
   b) An employee shall not operate a District vehicle or a personal vehicle for District
      business if that employee’s license is not valid for any reason; and,

All employees who drive for the District shall:

   a) Maintain the necessary license required by their job description;
   b) Authorize the District to obtain a MVR from the Department of Motor Vehicles from
      the state of the employee’s drivers’ license;
   c) Immediately report to the General Manager or his or her designee any suspension
      of driving privileges or other restriction on the employee’s driver’s license that
      affects the employee’s ability to perform his/her job.




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For employees who drive for the District, inability to operate a District because of an
invalid drivers’ license impairs an employee’s ability to satisfactorily perform their job.
Such circumstances are subject to review by the General Manager and corrective
actions, including termination may occur as a result.

4.12.080 Drug and Alcohol-Free Workplace The District is committed to establishing
and maintaining a high-quality, safe environment for employees and the public, and
supports a drug and alcohol-free workplace. The unlawful use, possession, sale,
distribution, dispensation, or manufacture of a controlled substance in the workplace or in
a work-related situation, by District employees is prohibited, and will not be tolerated.
Further, employees are prohibited from using or being under the influence of drugs or
alcohol in the workplace. The normal use of over-the-counter medications and the legal
use of prescription drugs as ordered by a physician are not prohibited by this policy, as
long as the drugs do not interfere with the employee’s ability to safely perform his or her
job.

District employees who violate the District’s policy will be subject to disciplinary action
consistent with the District’s Disciplinary Procedures.

The District will conduct periodic training for employees and supervisors on substance
abuse prevention and education.

The District shall continue to offer a confidential Employee Assistance Program to aid
employees with substance abuse problems.

Pre-employment Testing: All applicants, after receiving a conditional offer of employment,
will be subject to a controlled substance screening test as part of a pre-employment
physical examination.

Reasonable Suspicion Testing of Current Employees: Any current employee may be
subject to drug or alcohol testing under certain circumstances. When an employee’s
observed behavior, involvement in an on-the-job accident or other circumstances raise
reasonable suspicion that this Policy is being violated, the District may require the
employee to undergo a test for controlled substances or alcohol when such testing is job-
related and consistent with business necessity.

Reasonable suspicion under this Policy shall be based on specific, personal and
observations concerning the appearance, behavior, actions, and speech or body odors of
the employee.

4.12.090 Drug and Alcohol Testing Policy Applicable to Commercial Motor Vehicle
Drivers (CDL) Only

4.12.090.1 Purpose It is the goal of the District to provide a healthy, satisfying work
environment that promotes personal opportunities for growth. In meeting these goals, it
is the District's policy to do the following:




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   a) Assure that employees are not impaired by alcohol or prohibited drugs in their
      ability to perform assigned duties in a safe and productive manner.
   b) Create a workplace environment free from the adverse effects of alcohol and
      substance abuse or misuse.
   c) Encourage employees to seek professional assistance any time personal
      problems, including alcohol or drug dependency, adversely affect their ability to
      perform their assigned duties.

4.12.090.2 Included Persons This alcohol and drug testing policy applies to all District
employees holding a commercial driver’s license (CDL) and who operate a commercial
motor vehicle (CMV) as defined below.

This policy applies to full time, regularly employed drivers; casual, intermittent or
occasional drivers; leased drivers and independent, owner-operator contractors who are
either directly employed by or under lease to the District or who operate a CMV at the
direction of or with the consent of the District. For the purposes of pre-employment/pre-
duty testing only, the term driver includes a person applying to the District for a position
that entails the driving of a CMV for the District.

4.12.90.3 Prohibited conduct Alcohol - No driver shall:

   a) Report for duty or remain on duty requiring the performance of safety-sensitive
      functions while under the influence of alcohol (e.g., having an alcohol
      concentration of 0.04 or greater).
   b) Be on duty or operate a CMV while he or she possesses alcohol.
   c) Use alcohol while performing safety-sensitive functions.
   d) Perform safety-sensitive functions within 4 hours after using alcohol.
   e) After being required to take a post-accident alcohol test, the driver may not use
      alcohol for 8 hours following the accident, or until he/she undergoes a post-
      accident alcohol test, whichever occurs first.

Drugs: no driver shall report for duty or remain on duty requiring the performance of
safety-sensitive functions when the driver uses any drug, except when the use is
pursuant to the instructions of a physician who has advised the driver that the substance
does not adversely affect the driver’s ability to safely operate a CMV.

The following drugs or other substances are prohibited under this policy: Any drug or
other substance identified in this chapter (Effects of Drugs and Alcohol); an amphetamine
or any formulation thereof; a narcotic drug or any derivative thereof; or any other
substance which may or does render the driver incapable of safely operating a CMV.

A driver must inform the District of any therapeutic drug use, including on-duty use and
off-duty use which may affect on-duty performance.

No driver shall report for duty, remain on duty or perform a safety-sensitive function, if the
driver tests positive for controlled substances.




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The Federal Department of Transportation (DOT) requires that the District implement an
alcohol and drug testing program which complies with the applicable DOT rules under 49
Code of Federal Regulations Part 40.

Consent to alcohol and-or drug test: no CMV driver shall refuse to submit to a post-
accident test, a random test, a reasonable suspicion test, return-to-duty test or a follow-
up test as required by DOT regulations.

4.12.090.4 Definitions

4.12.090.4(A) Accident is an incident involving a commercial motor vehicle if the incident
involved the loss of human life; or the driver receives a citation arising from the incident
and an individual suffers a bodily injury and immediately receives medical treatment away
from the scene (e.g. taken to the hospital by ambulance), or a vehicle is required to be
towed from the scene.

4.12.090.4(B) Alcohol is the intoxicating agent in beverage alcohol, ethyl alcohol or other
low molecular weight alcohol’s including methyl and isopropyl alcohol.

4.12.090.4(C) Alcohol use is the consumption of any beverage, mixture, or preparation,
including any medication (prescribed or over-the-counter, intentional or unintentional),
containing alcohol.

4.12.090.4(D) Breath alcohol technician (BAT) is an individual who instructs and assists
individuals in the alcohol testing process and operates an evidential breath testing device
(EBT).

4.12.090.4(E) Commercial motor vehicle is a motor vehicle or combination of motor
vehicles used in commerce to transport passengers or property if the motor vehicle:
   a) Has a gross combined weight of 26,001 or more pounds inclusive of a towed unit
       with a gross vehicle weight rating of more than 10,000 pounds.
   b) Has a gross vehicle weight rating of 26,001 or more pounds.
   c) Is designed to transport 16 or more passengers, including the driver; or
   d) Is of any size and is used in the transportation of hazardous materials requiring
       placards.

4.12.090.4(F) Confirmation test, for alcohol testing, is a second test that provides
quantitative data of alcohol concentration following a screening test with a result of 0.02
grams or greater of alcohol per 210 liters of breath. For controlled substances testing, it
is a second analytical procedure to identify the presence of a specific drug or metabolite
which is independent of the screen test and which uses a different technique and
chemical principal from that of the screen test in order to ensure reliability and accuracy.

4.12.090.4(G) Controlled Substance, for the purpose of this policy is marijuana, cocaine,
amphetamines, opiates, or phencyclidine (PCP).

4.12.090.4(H) Covered employee is an employee subject to the requirements of
applicable Federal law, and this policy.


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4.12.090.4(I) Driver is any person who operates a commercial motor vehicle, This
includes, but is not limited to: full time, regularly employed drivers; casual, intermittent or
occasional drivers; leased drivers and independent, owner-operator contractors who are
either directly employed by or under lease to the District or who operate a CMV at the
direction of or with the consent of the District. For the purposes of pre-employment
testing, the term driver includes a person applying to drive a CMV for the District.

4.12.090.4(J) Employer is the District.

4.12.090.4(K) Evidential breath testing device (EBT) is a device approved by the National
Highway Traffic Safety Administration (NHTSA) for the evidential testing of breath and
placed on NHTSA's "Conforming Products List of Evidential Breath Measurement
Devices" (CPL).

4.12.090.4(L) Medical review officer (MRO) is a licensed physician (medical doctor or
doctor of osteopathy) responsible for receiving laboratory results generated by an
employer's drug testing program and who has knowledge of substance abuse disorders
and has appropriate medical training to interpret and evaluate an individual's confirmed
positive test result together with his or her medical history and any other relevant
biomedical information.

4.12.090.4(M) On-duty time, as that phrase is defined by Federal regulations and this
policy, means all of the time beginning at the point a covered employee begins to work,
and/or is required to be in readiness to work, until the time he or she is relieved from work
and all responsibility for performing work.

4.12.090.4(N) Performing (a safety-sensitive function) is any period in which the driver is
actually performing, ready to perform, or immediately able to perform any safety-sensitive
functions.

4.12.090.4(O) Refusal to submit (to an alcohol or controlled substance test) is when a
driver:

   a) Fails to provide adequate breath for alcohol testing, without a valid medical
      explanation, after he or she has received notice of the requirement for breath
      testing in accordance with this policy;
   b) Fails to provide adequate urine sample for controlled substances testing, without a
      genuine inability to provide a specimen (as determined by a medical evaluation),
      after he or she has received notice of the requirement for urine testing in
      accordance with the provisions of this policy; or
   c) Engages in conduct that clearly obstructs the testing process.

4.12.090.4(P) Safety-sensitive function, for purposes of this policy, shall mean any of the
functions defined in Title 49 of the Code of Federal Regulations. More specifically,
safety-sensitive functions include all functions performed by a covered employee during
on-duty time and include:



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   a) All time at the District or work site, unless the driver has been relieved from duty
      by the District.
   b) All time inspecting equipment or otherwise servicing or conditioning any CMV at
      any time.
   c) All driving time.
   d) All time, other than driving time, in or upon any CMV.
   e) All time loading or unloading a CMV, supervising or assisting in the loading or
      unloading, attending a CMV being loaded or unloaded, remaining in readiness to
      operate the CMV, or in giving or receiving receipts for shipments loaded or
      unloaded.
   f) All time repairing, obtaining assistance, or remaining in attendance upon a
      disabled CMV.

4.12.090.4(Q) Screening test (a.k.a. initial test) in alcohol testing is an analytical
procedure to determine whether a driver may have a prohibited concentration of alcohol
in his or her system. In controlled substance testing, it is an immunoassay screen to
eliminate negative urine specimens from further consideration.

4.12.090.4(R) Substance abuse professional is a licensed physician (medical doctor or
doctor of osteopathy), or a licensed or certified psychologist, social worker, employee
assistance professional, or addiction counselor (certified by the National Association of
Alcoholism and Drug Abuse Counselors Certification Commission) with clinical
experience in the diagnosis and treatment of alcohol and controlled substances-related
disorders.

4.12.090.5 Violation of the Policy Immediate Consequences of Violating this Policy

A driver who violates this policy shall not perform, and will not be permitted to perform, a
safety-sensitive function for the District. A driver removed from performing safety-
sensitive functions because of a rule violation occurring in a 26,001 pound or greater
vehicle in interstate or intrastate commerce, also is prohibited from driving a 10,001
pound or greater vehicle in interstate commerce.

The driver violating this policy must be advised by the District of the resources available
in evaluating and resolving the problem. This must include the names, addresses, and
telephone numbers of substance abuse professionals and counseling and treatment
programs. The District is not required to provide referral, evaluation, and treatment for
applicants who refuse to submit to or fail a pre-employment test.

The driver violating this policy must be evaluated by a substance abuse professional
(SAP) who shall determine what assistance, if any, the employee needs in resolving
problems associated with alcohol misuse and drug use. The SAP who determines that a
driver needs assistance shall not refer the driver to his/her private practice or any
organization in which the SAP has a financial interest for assistance.

The driver may be subject to disciplinary action under the terms of the District's
disciplinary procedure. An employee who tests positive for alcohol or drugs for the first
time must comply with the administrative requirements of rehabilitation, but will not be


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disciplined solely on the basis of the positive test result. Absent extenuating
circumstances, a second positive result within a five-year period will be grounds for
disciplinary action, up to and including termination.

4.12.090.6 Out of Service Order Any driver who is found to be in violation of this policy
shall be placed out-of-service immediately for a period of at least 24 hours.

Out-of-service means that the employee shall not perform, and not be permitted to
perform, a safety-sensitive function.

The out-of-service period will commence upon issuance of an out-of-service order.

No driver shall violate the terms of an out-of-service order issued under this section.

Condition of Returning to Work after a Violation of this Policy - Before returning to duty,
the driver must undergo a Return-To-Duty Test as set forth in this policy.

4.12.090.7 Testing Circumstances

4.12.090.7(A) Pre-Employment/Pre-Duty Testing - This type of testing applies to:

   a) All applicants for a District position requiring a CDL driver’s license to operate a
      CMV, who have not been part of a drug program that complies with the Federal
      Highway Administration (FHWA) regulations for the previous 30 days; and
   b) District employees who usually drive vehicles for which a CDL is not required to
      operate, but then is required to obtain a CDL and drive CMVs for the District.

4.12.090.7(B) Exceptions - A pre-employment drug test is not required if the following
conditions are met:

   a) The driver participated in a drug testing program meeting the requirements of the
      FHWA within the previous 30 days;
   b) While participating in the program, the driver either was tested for controlled
      substances in the previous 6 months, or participated in a random drug testing
      program for the previous 12 months; and
   c) No prior employer of the driver has a record of violations of any DOT controlled
      substance use rule for the driver in the previous 6 months.

In cases of exceptions, the District must contact the testing program prior to using the
driver and obtain the following information:

   a) The name and address of the program, which is generally the driver’s prior and/or
      current employer.
   b) Verification that the driver participates or participated in the program.
   c) Verification that the program conforms to the required procedures.
   d) Verification that the driver is qualified, including that the driver has not refused to
      submit to an alcohol or drug test.
   e) The date the driver was last tested for alcohol and drugs.


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   f) The results of any drug or alcohol test administered in the previous 6 months, and
      any violations of the alcohol misuse or drug rules.

If the District uses a driver more than once a year, but does not employ the driver, it must
assure at least once every 6 months that the driver does participate, or has participated,
in a drug testing program that meets the requirements of these regulations.

4.12.090.7(C) Post-Accident

Testing is required as soon as practicable following an accident involving a CMV of each
surviving driver when either:

   a) The accident involved a fatality; or
   b) The driver receives a citation under state or local law for a moving traffic violation
      arising from the accident and an individual suffers a bodily injury and immediately
      receives medical treatment away from the scene; or
   c) The driver receives a citation under state or local law for a moving traffic violation
      and the CMV is required to be towed from the scene of the accident.

Nothing in the regulations should be construed as to require the delay of necessary
medical attention for injured people following an accident. Also, the driver is not
prohibited from leaving the scene of an accident for a period necessary to obtain
assistance in responding to the accident, or to obtain necessary emergency medical
care.

In lieu of administering a post-accident test, the District may substitute a test
administered by on-site police or public safety officials under separate authority. The
District may substitute a blood or breath alcohol test and a urine drug test performed by
such local officials, using procedures required by their jurisdictions. The District may
obtain a copy of the test results pursuant to an employee signing a preauthorized consent
form.

4.12.090.7(D) Random Testing

Alcohol Testing Rate: random alcohol testing shall be administered at a minimum annual
rate of 25 percent of the average number of driver positions, or as changed by the FHWA
and published in the Federal Register.

Drug Testing Rate: random drug testing shall be administered at a minimum annual rate
of 50 percent of the average number of driver positions, or as changed by the FHWA and
published in the Federal Register.

Appropriate time for random testing:

   a) Alcohol testing: A driver shall only be tested while the driver is performing safety-
      sensitive functions, immediately prior to performing or immediately after
      performing safety-sensitive functions.



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   b) Drug testing: Drug testing may be performed at any time while the driver is at work
      for the District, regardless of whether such duties are safety-sensitive or not.

4.12.090.7(E) Selection and Notification:

Selection of drivers shall be made by a scientifically valid method such as a random
number table or a computer-based random number generator that is matched with an
identification number assigned to each driver. Under the selection process, each driver
shall have an equal chance of being tested each time selections are made.

The random tests shall be announced and spread reasonably throughout the year. There
will not be a period of time during which random testing will be “done for the year.”

The District shall ensure that drivers selected for random tests proceed immediately to
the testing site upon notification of being selected.

For purposes of employee name selection for drug and alcohol testing, the District shall
use the services of the Sierra DOT Consortium administered by Sinnett Consulting
Services. By participating with the Sierra DOT Consortium, the District will meet the
minimum selection requirements established by the Federal Department of
Transportation.

In the event a driver, who is selected for a random test, is on vacation, lay-off, or an
extended medical absence, the District will select another driver for testing. The District
shall document that the driver was ill, injured, laid off, or on vacation and that the driver
was in the random selection pool for that cycle.

4.12.090.7(F) Reasonable Suspicion

Drivers must submit to an alcohol or drug test when the District has reasonable suspicion
to believe that the driver has violated the prohibited conduct as outlined in this policy. A
trained supervisor or the General Manager are required to make the observations
necessary to substantiate a reasonable suspicion and the observations must be further
substantiated by the observations of a second trained supervisor unless extenuating
circumstances apply.

Reasonable suspicion:

   a) The District’s reasonable suspicion shall be based on specific, contemporaneous,
      articulable observations concerning the appearance, behavior, speech, or body
      odors of the driver.
   b) The reasonable suspicion determination shall be made by a trained supervisor or
      the General Manager and substantiated by an opinion from a second trained
      supervisor.
   c) The mere possession of alcohol does not constitute a need for reasonable
      suspicion testing, which must be based on observations concerning the driver’s
      appearance, behavior, speech, or body odor.



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Reasonable suspicion must be determined during, just before, or just after the driver
performs safety-sensitive functions.

Alcohol Test: If reasonable suspicion is observed but a reasonable suspicion test has not
yet been administered, a driver shall not perform safety-sensitive functions until an
alcohol test is administered and the driver’s alcohol concentration measures less than
0.02, or 24 hours have elapsed following the determination of reasonable suspicion.

Drug Test: the documentation of the driver’s conduct must be prepared and signed by the
witness within 24 hours of the observed behavior, or before the results of the drug test
are released, whichever is earlier.

4.12.090.7(G) Return-To-Duty Testing

Alcohol Test: after engaging in prohibited conduct regarding alcohol misuse, the driver
shall undergo a return-to-duty alcohol test before performing a safety-sensitive function.
The test result must indicate a breath alcohol concentration of less than 0.02.

Drug Test: after engaging in prohibited conduct regarding drug use, the driver shall
undergo a return-to-duty drug test before performing a safety-sensitive function. The test
result must indicate a verified negative result for drug use.

In the event that a return-to-duty test is required, the driver must also be evaluated by a
SAP and participate in any assistance program prescribed and be subject to
unannounced follow-up alcohol and drug tests administered by the District following the
driver's return to duty.

The number and frequency of the tests are to be determined by the SAP, but must
consist of at least six tests in the first 12 months following the driver’s return to duty.
Follow-up testing may be done for up to 60 months.

If the SAP determines that a driver needs assistance with a poly-substance abuse
problem, the SAP may require an alcohol test to be performed along with the required
drug tests after the driver has violated the drug testing prohibition.

The cost of return-to-duty alcohol and drug tests shall be paid directly by the employee
and/or his or her insurance provider.

The cost of the services of the SAP for the initial evaluation and a return-to-duty
evaluation shall be paid by the District.

An employee will be allowed to take accumulated vacation leave and/or personal leave
time while participating in the prescribed treatment, rehabilitation services or assistance
program.




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4.12.090.7(H) Follow-up Testing

If a SAP determines that a driver needs assistance resolving problems associated with
alcohol or drug use, the District shall ensure that the driver is subject to unannounced
follow-up testing following the driver’s return to duty.

The number and frequency of the tests are to be determined by the SAP, but must
consist of at least six tests during the first 12 months following the driver’s return to duty.
Follow-up testing may be done for up to 60 months. The SAP can terminate the
requirement for the follow-up testing in excess of the minimum at any time, if the SAP
determines that the testing is no longer necessary.

Follow-up tests need not be confined to the substance involved in the violation. If the
SAP determines that a driver needs assistance with a poly-substance abuse problem, the
SAP may require, for example, alcohol tests to be performed along with the required drug
tests after the driver has violated the drug testing prohibition.

Follow-up testing for alcohol shall only be performed when the driver is performing safety-
sensitive functions, or immediately prior to performing or immediately after performing
safety-sensitive functions.

4.12.090.7(I) Alcohol Testing Procedure

Preparation for Testing

   a) The employee is required to show positive identification when arriving at the test
      site.
   b) The employee may also request the Breath Alcohol Technician (BAT) to show
      positive identification.
   c) The BAT shall then explain the testing procedure to the employee.
   d) The BAT must supervise only one employee’s use of the Evidential Breath Testing
      device (EBT) at a time.
   e) The BAT is not to leave the testing site while the test is in progress.

Administration of the Initial Test

Steps 1 and 2 of the Breath Alcohol Testing Form are to be completed. A refusal by an
employee to sign the certification in Step 2 of the form shall be regarded as a refusal to
take the test.

   a) Non-evidential screening devices may be used for the alcohol screening test,
      provided they are approved by the National Highway Traffic Safety Administration
      (NHTSA).
   b) Devices approved by the NHTSA are placed on the “Conforming Products List of
      Alcohol Screening Devices.”
   c) Confirmation tests must be done using an evidential breath testing device.




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Depending on whether the result is less than 0.02, or 0.02 or greater, the following shall
be done:

   a) If the result is less than 0.02, the BAT shall date the form and sign the certification
      in Step 3 of the form. The employee shall sign the certification and fill in the date in
      Step 4 of the form.
   b) If the result is 0.02 or greater, a confirmation test must be performed. If the
      confirmation test will be performed by a different BAT, the BAT who conducted the
      screening test shall complete and sign the form and log book entry. The BAT is to
      give the employee Copy 2 of the form. If the confirmation test will be conducted at
      a different site, the employee must not drive there and must be observed by
      District personnel en route.

Administration of the Confirmatory Test

Waiting Period:

   a) The BAT shall instruct the employee not to eat, drink, put any object or substance
      in his or her mouth, and, to the extent possible, not belch during a waiting period
      before the confirmation test.
   b) This waiting time period begins with the completion of the screening test, and shall
      not be less than 15 minutes.

The confirmation test shall be conducted within 30 minutes of the completion of the
screening test.

In the event that the screening and confirmation test results are not identical, the
confirmation test result is deemed to be the final result upon which any action under
operating administration rules shall be based.

Following the completion of the test, the BAT shall date the form and sign the certification
in Step 3 of the form. The employee shall sign the certification and fill in the date in Step
4 of the form.

The BAT shall transmit all results to the District in a confidential manner.

4.12.090.7(J) Drug Test Procedures

i. Urine Specimen Collection

The test shall be conducted at an independent medical facility which complies with the
DOT Guidelines.

The laboratory must be certified by the Department of Health and Human Services

Chain of Custody - The appropriate drug testing form shall be utilized from time of
collection to receipt by the laboratory and that, upon receipt by the laboratory, an



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appropriate laboratory chain of custody form(s) account(s) for the sample or sample
aliquot within the laboratory.

ii. Preparation for Testing

Use of a clean, single use specimen bottle that is securely wrapped until filled with the
specimen.

Use of a tamper proof seal system designed in a manner that the specimen bottle top can
be sealed against undetected opening and the bottle allowing for identification of the test
subject, either by number or by some other confidential mechanism.

Use of shipping container in which one or more specimens and associated paperwork
may be transferred, and which can be sealed and initialed to prevent undetected
tampering.

Written procedures and instructions for collection site person.

Initial Screen - Every specimen is required to undergo an initial screen followed by
confirmation of all positive screen results. The initial screen process must use
immunoassay.

Confirmatory Tests - All specimens identified on the initial screen must be confirmed by
gas chromatography/mass spectrometry (GC/MS) at the cut-off levels shown in the next
table. All confirmations must be quantitative in their analysis, which means that the
specific, scientific level of drug contained in the collected specimen must be known.

iii. Reporting of Test Results

Both positive and negative test results must be reported directly to the District’s Medical
Review Officer (MRO) within an average of 5 working days.

    a) The MRO must be a licensed physician and possess knowledge of drug abuse
       disorders. The MRO, who may be an employee of the District or one contracted to
       provide the services required, principally services as an arbiter between the
       laboratory and the District.
    b) It is the primary responsibility of the MRO to review and interpret positive results
       obtained from the laboratory.

The report, as certified by the responsible laboratory individual, shall indicate the drug-
metabolites tested for, whether the results are positive or negative, the specimen number
assigned by the District and the drug testing laboratory identification number.

    a) The MRO may require that the laboratory provide quantitation of test results.
    b) The laboratory must report as negative all specimens which are negative on the
       initial test or confirmed negative by the GC/MS.
    c) Only specimens confirmed by GC/MS as positive are reported as positive.



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The laboratory may transmit the test results to the MRO by various electronic means
such as facsimile or computer, so long as those methods are designed to maintain
confidentiality.

The MRO must assess and determine whether alternate medical explanations could
account for the positive test results.
   a) To accomplish this task, the MRO may conduct medical interviews of the
      individual, review the individual’s medical history and review any other relevant
      bio-medical factors.
   b) Additionally, the MRO must examine all medical records and data made available
      by the tested individual, such as evidence of prescribed medications.
   c) The MRO must not consider any specimen results that arise from collection or
      analysis which do not comport with the FHWA regulations.

The MRO must give the individual testing positive an opportunity to discuss the test
results prior to making a final decision.

After a final decision is made, the MRO shall notify the District.

If, during the course of an interview with an employee who has tested positive, the MRO
learns of a medical condition which could, in the MRO’s reasonable medical judgment,
pose a risk to safety, the MRO may, in his or her professional judgment, report that
information to the DOT or to the District.

iv. Positive Test Result

The MRO shall notify each employee who has a confirmed positive test that the
employee has 72 hours in which to request a test of the split specimen.

If the employee makes such a request, the MRO shall direct, in writing, the laboratory to
provide the split specimen to another certified laboratory for analysis.

If the analysis of the split specimen fails to reconfirm the presence of the drug(s) or drug
metabolite(s) found in the primary specimen, or if the split specimen is unavailable,
inadequate for testing or un-testable, the MRO shall cancel the test and report
cancellation and the reasons for it to the DOT, the District, and the employee. A
canceled report is neither a negative nor a positive test. A sample that has been rejected
for testing by a laboratory is treated the same as a canceled test.

v. Notification of Test Results

If an MRO, after making and documenting all reasonable efforts, is unable to contact a
tested person, the MRO shall contact a designated management official of the District to
arrange for the individual to contact the MRO prior to going on duty. The MRO may verify
a positive test without having communicated with the driver about the results of the test if:

   a) The driver expressly declines the opportunity to discuss the results of the test, or



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        b) Within 5 days after a documented contact by a designated management official of
           the District instructing the driver to contact the MRO, the driver has not done so.

     The MRO must report the results to the District using any communication device, which
     maintains confidentiality, but in all instances, a signed, written notification must be
     forwarded within three business days of completion of the review.

     4.12.090.7(K) Confidentiality and Record Keeping

i.      Record keeping

     The District must maintain records of its alcohol and drug programs.

     Records must be kept in a secure location with controlled access. The records may be
     included in personnel records that have controlled and secure access only by authorized
     personnel.

     All records, except those requiring a signature, may be maintained through the use of
     computer technology. The District must be able to produce a computer printout of the
     required data on demand by the appropriate agency or the employee himself or herself.
     The records may be maintained anywhere, but the District must make them available at
     the District’s principal place of business within two days of a FHWA, or other authorized
     agency, request.

     The following records must be kept:

        a) Records related to the collection process: collection logbooks (if used); documents
           related to the random selection process; calibration documentation for EBTs;
           documentation of BAT training; documentation of reasoning for reasonable
           suspicion testing; documentation of reasoning for post-accident testing,
           documents verifying a medical explanation for the inability to provide adequate
           breath or urine for testing; and, a consolidated annual calendar year summary.
        b) Records related to the driver’s test results: District’s copy of the alcohol test form,
           including results; District’s copy of the drug test chain of custody and control form;
           documents sent to the District by the MRO; documentation of any driver’s refusal
           to submit to a required alcohol or drug test; and, documents provided by a driver to
           dispute the test results.
        c) Records including documentation of any other violations of drug use or alcohol
           misuse rules.
        d) Records related to evaluations: records pertaining to the SAP’s determination of a
           driver’s need for assistance and records concerning a driver’s compliance with
           SAP’s recommendation.
        e) Records related to education and training: materials on drug and alcohol
           awareness, including a copy of the District’s policy on drug use and alcohol
           misuse; documentation of compliance with requirement to provide drivers with
           educational material, including driver’s signed receipt of materials; documentation
           of supervisor training; and, certification that training conducted complies with all
           DOT requirements.


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          f) Records related to drug testing: agreements with collection site facilities,
             laboratories, MROs, and consortia; names and positions of officials and their role
             in the District’s alcohol and controlled substance testing program; monthly
             statistical summaries of urinalysis from certified laboratories; the Memorandum of
             Understanding with any unions representing District employees; and the District’s
             drug testing policy and procedures.

ii.       Retention Period:

          a) Five years: alcohol test results indicating a breath alcohol concentration of 0.02 or
             greater; verified positive drug test results; refusals to submit to required alcohol or
             drug tests; required calibration of EBTs, SAP’s evaluation and referrals; and,
             annual calendar year summary.
          b) Two years: records related to the collection process and training.
          c) One year: negative and canceled drug test results; and alcohol test results
             indicating a breath alcohol concentration less than 0.02.

iii.      Confidentiality and Access to Records

       Generally, the District shall maintain records under this policy with as much confidentiality
       as possible, and not release any driver drug and/or alcohol program information, except
       as required by law or authorized by the District policies.

       An employee is entitled, upon written request, to any records pertaining to his/her drug or
       alcohol tests or other related matters. The records shall be provided promptly.

       The District is required to permit access to facilities and records upon request of a DOT
       or other regulatory official with proper authority.

       The District may disclose driver information to the decision-maker in a lawsuit, grievance,
       or other proceeding initiated by or on behalf of the individual resulting from an action
       taken under these regulations. This includes worker’s compensation and unemployment
       compensation proceedings.

       Records must also be made available in the following instances:

       To a subsequent employer upon receipt of a written request from the driver, and then in
       accordance with the terms of the request.

       To an identified person as directed by a specific, written consent of the driver.

       The release of employee information is allowed in the following instances:

          a) An employee shall have access to any of his/her alcohol testing records upon
             written request.
          b) The District must allow any DOT-authorized agency access to facilities and
             records in connection with the District’s alcohol misuse prevention program.



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         c) When requested, the District shall disclose post-accident testing information to the
            National Transportation Safety Board as part of an accident investigation.
         d) The District shall make records available to a subsequent employer upon receipt
            of a written request from the employee.
         e) The District may disclose information to the employee or to the decision-maker in
            a lawsuit, grievance, or other proceeding initiated by or on behalf of the individual.
            This may include worker’s compensation, unemployment compensation, or other
            proceeding relating to a benefit sought by the employee.
         f) The District shall release information regarding a covered employee’s records as
            directed by the specific, written consent of the employee authorizing release of the
            information to an identified person.

iv.      MRO Record Retention

      The MRO shall maintain all dated records and notification for verified positive drug test
      results for five years.

      The MRO shall maintain all dated records and notifications for negative and canceled
      drug test results for one year.

      The MRO shall not release the individual drug test results of any driver to any person,
      without a specific, written authorization from the tested driver. This does not prohibit the
      MRO from releasing the results listed above to the District or regulatory officials with the
      proper authority.

      Annual Calendar Year Summary - Only if notified by FHWA, or upon request of an official
      with proper authority, is the District required to prepare and maintain an annual calendar
      year summary of its alcohol and drug testing program.

      Retention of Records - This section explains how long controlled substance and alcohol
      test records must be maintained, which records must be maintained, and where.
      Required Period of Retention

      Documents to Be Maintained

      Five Years:

         Alcohol test results indicating a breath alcohol concentration of 0.02 or greater

         Verified positive controlled substance test results

         Refusals to submit to required alcohol or controlled substance tests

         Required calibration of Evidential Breath Testing Devices (EBT's)

         Substance Abuse Professional's (SAP's) evaluations and referrals

         Annual calendar year summary


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Two Years:

   Records related to the collection process (except calibration) and required training
   One Year:

   Negative and canceled controlled substance test results

   Alcohol test results indicating a breath alcohol concentration less than 0.02

Types of Records required to be maintained:

Records related to the collection process:

   a) Collection logbooks (if used)
   b) Documents related to the random selection process
   c) Calibration documentation for EBT's
   d) Documentation of Breath Alcohol Technician (BAT) training
   e) Documentation of reasoning for reasonable suspicion testing
   f) Documentation of reasoning for post-accident testing
   g) Documents verifying a medical explanation for the inability to provide adequate
      breath or urine for testing
   h) Consolidated annual calendar year summaries

Records related to the driver's test results:

   a) The District's copy of the alcohol test form, including results
   b) The District's copy of the drug test chain of custody and control form
   c) Documents sent to the District by the Medical Review Officer
   d) Documentation of any driver's refusal to submit to a required alcohol or controlled
      substance test
   e) Documents provided by a driver to dispute results of test

Documentation of any other violation of controlled substance use or alcohol misuse rules.

Records related to evaluations and training:

   a) Records pertaining to substance abuse professional's (SAP's) determination of
      driver's need for assistance
   b) Records concerning a driver's compliance with SAP's recommendations

Records related to education and training:

   a) Materials on drug and alcohol awareness, including a copy of the District's policy
      on drug use and alcohol misuse
   b) Documentation of compliance with requirement to provide drivers with educational
      material, including driver's signed receipt of materials
   c) Documentation of supervisor training


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         d) Certification that training conducted under this rule complies with all requirements
            of the rule

      Records related to drug testing:

         a) Agreements with collection site facilities, laboratories, MROs, and consortia
         b) Names and positions of officials and their role in the District's alcohol and
            controlled substance testing program
         c) Monthly statistical summaries of urinalysis
         d) The District's drug testing policy and procedures

v.       Location of Records

      All required records shall be maintained in a secure location with limited access as
      selected by the District. Records shall be made available for inspection at the District's
      principal place of business within two business days after a request has been made by
      an authorized representative of the Federal Highway Administration or other authorized
      agency.

      For example: Specific records may be maintained on computer or at a regional or
      terminal office, provided the records can be made available upon request from FHWA
      within two working days.

vi.      Effects of Drugs and Alcohol

      Marijuana - Marijuana is the common term used to describe the cannabis plant. Marijua-
      na (also called pot, grass or dope) is usually smoked. Marijuana is both a narcotic and a
      hallucinogen. It produces increased heart rates, blood pressure, blood shot eyes, dilated
      pupils and dry mouth. Marijuana impairs the short term memory and the sense of time. It
      can reduce motor skills, coordination, reaction time and concentration.

      Cocaine: Cocaine is a stimulant and can be taken through the nose in powder form,
      injected as a liquid or smoked. Cocaine is also found in a crystal form known as crack
      cocaine. Both cocaine and crack cocaine are addictive narcotics which can also produce
      hallucinogenic effects with long-term use. It causes increased heart rates, blood
      pressure, respiration, dilation of the pupils, and result in anxiety, restlessness, irritability
      and sleeplessness.

      Opiates: - Opiates include narcotics such as opium, heroin, morphine and codeine. They
      appear as solids, pastes, powders, liquids, and can be smoked, ingested, or injected.
      Opiates are depressants and relaxants. Opiate users can become lethargic, becoming
      drowsy or going to sleep. Opiates are highly addictive and dangerous drugs. Some
      physical signs can be runny eyes and noses, nausea, and fainting.

      Phencyclidine - Often called PCP or "angel dust" is a hallucinogenic. It is synthetically
      made and comes as a powder, tablet or capsule that can be ingested or smoked. The
      effects of the use of PCP include increased heart rates, blood pressure, dizziness,



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numbness, and disorientation, slows reflex and body movements, and can impair vision
and speech.

Amphetamines - Also known as methamphetamines are stimulants which can be
ingested as tablets or capsules. They are also found in powder form that can be sniffed
or injected as a mixed liquid. Some signs are elevated heart rates, blood pressure,
respiratory rates, dilated pupils, sweating (with pungent odor), sleeplessness, mood
swings, talkativeness and anxiety.

Metabolites from drug use can be found in urine for varying lengths of time after being
used. Generally speaking, except for marijuana, which collects in fatty tissues, the above
drugs stay in the body up to approximately one week.

Alcohol - Alcohol is a central nervous system depressant. Taken in large quantities it
causes not only the euphoria associated with "being drunk" but also adversely affects the
employee’s judgment, his or her ability to think, and his or her motor functions.

Long term overuse of alcohol can cause liver damage, heart problems, sexual
dysfunction, and other serious medical problems. In some cases, alcohol use can lead to
physical and psychological dependence on alcohol. Alcoholism is a serious chronic
disease. Left untreated it will inevitably get worse.


Resolution 2008 – 04, Adopting Amendments to the District Code Title 4, approved on
May 7, 2008, replaces all contents of existing Title 4, and supersedes the following:
Resolutions: 77-21, 82-22, 83-42, 88-10, 90-14, 91-14, 93-15, 94-36, 04-15, 05-27,
07-10, and 07-23.
Minute Orders: 88-187, 88-199, 89-45, 91-35, 93-31, 94-74, 96-10, 97-119, 06-100,
07-04, 07-106, 07-147, and 07-148.
Ordinance: 02-05.

Revisions:
Res 2009-13 (5/06/09)
Res 2009-36 (12/02/09)
Res 2008-04, (5/7/08)
Res. 2010-09 (6/2/10)




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                                                                                      Attachment 2D
                                                                                                  6/6/12


                                           TITLE 5

                                 CUSTOMER RELATIONS

CHAPTERS:

       5.01          Application for Service
       5.02          Deposits
       5.04          Credit
       5.08          Billing
       5.09          Owner/Renter Responsibilities – Service
                     Application
       5.12          Disconnection and Reconnection of Service
       5.16          Disputes
       5.20          Electric Fees and Charges
       5.24          Electric Rates
       5.26          Electric and Water Facilities Fees
       5.28          Water Fees and Charges
       5.32          Water Rates
       5.36          Information Available to the Public
       5.37          Public Outreach Policy
       5.38          Public Information Program
       5.39          Public Benefits Program
       5.40          Complaint Procedure
       5.44          Notices
       5.48          Paybacks
       5.53          Annexation of Property to District
       5.55          Conservation Programs


                                   CHAPTER 5.01

                           APPLICATION FOR SERVICE

Sections:

       5.01.005      Definitions
       5.01.010      Requirements

5.01.005 Definitions The following definitions will apply to all other chapters of the District
Code where the terms are used whether capitalized or not:

   •   “Agent” is the person(s) or entity authorized by the property owner to manage his/her
       property.


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   •   “Applicant” is a person(s) or entity in whose name service is rendered for a particular
       account as evidenced by the authorized signature on the application for service.

   •   “Co-Signer” is a person who enters into a contract agreeing to be equally and severally
       responsible for full payment of the applicant’s bill in lieu of the applicant paying a deposit.
       The co-signer must be a current customer with at least 24 consecutive months of service
       who is in good credit standing with the District.

   •   “Customer” is the person(s) or entity in whose name service is rendered for a particular
       account as evidenced by the authorized signature(s) on the application for service.

   •   “Property Owner(s)” is that person or entity who legally owns a property served by the
       District or has applied for service from the District and may or may not be the customer.

   •   “Renter/Tenant” is the person(s) or entity who is authorized by a property owner to occupy
       their property.

5.01.010 Requirements

5.01.010.1 General Each applicant for electric and/or water service from the District shall
complete the necessary application for service and meet the requirements established by the
District.

5.01.010.2 Property Owner(s) Applicants who are property owners who wish to become
customers of the District are required to provide documentation showing ownership of the
property. Required documentation must be provided prior to service being rendered.

5.01.010.3 Renter(s)/Tenant(s) An applicant(s) who wishes to become a customer(s) of the
District is required to provide documentation showing authorization to occupy the property where
service is to be provided. Required documentation must be provided prior to service being
rendered.

5.01.010.4 All applicants for service must agree to pay the applicable rates, fees and charges and
abide by the resolutions, ordinances, rules and regulations of the District or other governing
agencies as a condition of receiving service.

5.01.010.5 An applicant for service who owes any amounts for previous utility service(s) provided
by the District, either directly or indirectly, under their name or any other name must make
arrangements for payment prior to utility service being rendered.

5.01.010.6 Applicants for service will be billed service transfer fees as established in the
Miscellaneous Fee Schedule.

5.01.010.7 Applicants who have met the District’s requirements for service will be billed for electric
and/or water service in accordance with Sections 5.24 Electric Rates and 5.32 Water Rates.
Determination of the applicable rate is at the sole discretion of the District.


                                          CHAPTER 5.02


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                                             DEPOSITS

Sections:

       5.02.005       Definitions
       5.02.010       Residential Customer Deposits
       5.02.020       Commercial Deposits
       5.02.025       Project Review and Inspection
       5.02.027       Project Documentation Deposit (As-built Drawings)
       5.02.030       Employee Utility Deposits

5.02.005 Definitions The following definitions will apply to all other chapters of the District Code
where the terms are used whether capitalized or not:

   •   “Establishing credit” is defined as at least two years of service with the District or a prior
       utility with a history of paying promptly (see definition below).

   •   “Good credit” is defined as no more than two late notices in the past 24-month period, no
       returned checks and no prior disconnects for non-payment in the last 24 months. Final
       bills must be paid within 30 days of the final billing date in order to maintain good credit.

   •   “Promptly/prompt” is defined as no more than two late notices in the past 24 month period,
       no returned checks and no prior disconnects for non-payment in the last 24 months.

   •   “Qualifying credit record” is derived from the applicant’s overall payment history, which
       includes unpaid balances to other utilities, as determined through a credit reporting agency.

5.02.010 Residential Customer Deposits

5.02.010.1 A deposit, equal to two times the highest monthly bill within the last 24 months, will be
required of all customers before electric and/or water service is supplied. In cases where no
billing history has been established, customers will be required to pay a minimum deposit (electric
and/or water) as defined in the Miscellaneous Fee Schedule.

Waiver of deposits shall be determined by the District and may be based on multiple factors
including, but not limited to the following:

5.02.010.1(A) Customers who maintain a qualifying credit record based on information from a
credit reporting agency, will not be required to pay a deposit, unless they have failed to maintain
good credit in the past or fail to maintain good credit in the future according to District’s credit and
collection policies.


5.02.010.1(B) Customers who utilize the Electronic Funds Transfer (EFT) will be eligible for
deposit waiver. If a non-sufficient funds event occurs, a deposit will be required and will be
automatically added to the customer’s bill.

5.02.010.1(C) Customers may have another party sign on their account as a co-signer in order to

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have their deposit waived. Co-signers are equally and severally responsible for the balance owing
on an account including a closing balance even if the co-signer was not aware of the unpaid
balance. A co-signer must be a current customer in good credit standing with the District.

5.02.010.2 A deposit will be required of all new construction customers before electric and/or
water service connections are scheduled. The minimum deposit will be that amount
established by the District as set forth in the Miscellaneous Fees Schedule. New
construction customers who have met the credit requirements in Section 5.02.010.4 below
will not be required to pay a deposit.

5.02.010.3 Customers moving from one residence to another within the District who have
met the credit requirements in Section 5.02.010.4 below will not be required to pay a
deposit.

5.02.010.4 Credit may be established by a customer if he/she has had service in their name
for at least 24 months, has paid their bills promptly and has maintained good credit for the
last 24 months of this period.

5.02.010.5 Former customers of the District may use prior payment history with the District
to establish credit provided the lapse in service was not greater than 24 months.

5.02.010.6 Customers or their agents who request to have services reconnected for
inspections (See Chapter 5.12.050.3) shall be required to pay a minimum deposit. Refer to
the Miscellaneous Fees Schedule for current minimum deposit charges. Customers with
balances owing shall also be required to pay the entire balance owing prior to reconnect.

5.02.010.7 Deposits will be retained for a minimum period of 24 months. If the customer has
established good credit with the District, he/she will be refunded their deposit with interest.
The deposit and interest credit will be applied to the customer’s account.
5.02.010.8 Interest paid on deposits will be the average rate paid by local banking
institutions on regular savings accounts and will be adjusted quarterly.
5.02.010.9 Upon termination of service, any retained deposit and accrued interest will be
applied against unpaid bills of the customer and, if any balance remains after such
application, said balance shall be refunded to the customer of record.
5.02.020 Commercial Deposits
5.02.020.1 A deposit or suitable guarantee equal to two times the highest monthly bill within
the last 24 months will be required of any customer before electric and/or water service is
supplied.

5.02.020.2 For a new commercial service or a new business, the customer will be required
to pay a deposit equal to an estimated amount based on the load requirements of the
service or a comparable commercial business use.

5.02.020.3 Customers moving their business (under the same name and ownership) from
one location to another within the District, who have met the credit requirements in
5.02.020.4 below, will not be required to pay a deposit.

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5.02.020.4 Commercial credit may be established by a customer if he/she has had the
commercial service in their name for at least 24 months, has paid their bills promptly and
has maintained good credit for the last 24 months of this period. Any new business type,
even though opened under an established name, will require a new deposit.

5.02.020.5 Deposits will be retained for a minimum period of 24 months. If the customer has
established good credit with the District, he/she will be refunded his/her deposit with interest.
The deposit and interest credit will be applied to the customer’s account.

5.02.020.6 Interest paid on deposits will be the average rate paid by local banking
institutions on regular savings accounts and will be adjusted quarterly.

5.02.020.7 Upon termination of service, any retained deposit and accrued interest will be
applied against unpaid bills of the customer and, if any balance remains after such
application, said balance shall be refunded to the customer of record.

5.02.025 Project Review and Inspection

5.02.025.1 Project application review deposit - A deposit of $1,000 per utility (depending on
the size of the project) will be required of a project proponent to defray the cost of review by
the District staff, legal consultant and engineering consultant.

5.02.025.2 Project inspection fees - Projects shall be subject to a deposit to cover the actual
costs of construction inspection. The amount of the inspection deposit will be based on the
characteristics of the project such as the number of services to be installed, the length of the
pipeline to be installed and any other overhead or underground facilities to be installed.
Such deposits shall be made prior to the beginning of construction.

5.02.025.3 Only actual costs will be levied against the deposits. If the costs incurred are
less than the deposit, a refund (less administrative costs) will be issued.

5.02.025.4 If costs incurred are in excess of the deposit, a billing for the amount over the
deposit will be rendered.

5.02.025.5 All charges must be paid prior to the District's acceptance of project systems.




5.02.027 Project Documentation Deposit (As-Built Drawings)

5.02.027.1 At the time that a developer signs the Development Agreement, the District shall
impose a Project Documentation Deposit equal to five (5) percent of the construction cost of
water and/or electric facilities to serve the project. The minimum deposit shall be $1,000.
This deposit shall be held by the District and refunded to the developer upon successful
completion of the as-built drawings. The developer shall not be due any interest on monies
held by the District.


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See District Policy Regarding As-Built Drawings in Appendix B.

5.02.030 Employee Utility Deposits Any full time, regular employee of the District who
has not established credit with the District, whose full time residence lies within the District,
who is served water and/or electric power by the District shall not be required to make a
deposit unless he/she fails to maintain good credit. If the employee fails to maintain good
credit, he/she will be required to pay the full deposit in order to continue receiving service
from the District.

5.02.030.1 If an employee's employment with the District is terminated prior to establishing
credit, he/she shall be required to pay the full deposit in order to continue receiving service
from the District.


                                       CHAPTER 5.04

                                           CREDIT
Sections:

       5.04.010       Establishment of Credit
       5.04.020       Re-establishment of Credit

5.04.010 Establishment of Credit Each applicant for service will be required to establish
appropriate credit by advancing the deposit prescribed in Chapter 5.02.

5.04.020 Re-establishment of Credit

5.04.020.1 An applicant who has at any time had service disconnected for non-payment of
bills, made arrangements to amortize the amount due, asked for an extension to pay a past
due amount, voluntarily disconnected service with unsatisfactory credit or who has not paid a
final bill within 30 days of the final billing date, shall pay any unpaid balances due the
District prior to restoration of service and re-establish credit by making the deposit
prescribed in Chapter 5.02.

5.04.020.2 A customer whose service has been disconnected for non-payment of bills, shall
pay any unpaid balance due the District prior to restoration of service and may be required
to pay a reconnection charge as prescribed in the Miscellaneous Fee Schedule. Such
customer shall re-establish credit by making the deposit prescribed in Chapter 5.02.

5.04.020.3 Customers who receive greater than two Final Notices of Termination (48 Hour
Notice) in a trailing twelve month period shall be required to re-establish credit by paying a
deposit or upgrading their deposit as prescribed in Chapter 5.02. The customer will be
notified by mail of the deposit requirement and the deposit will be automatically added to the
customer’s bill.

5.04.020.4 Payments on final and auto transfer billings must be made within 30 days of the
final billing date in order to maintain good credit with the District. Failure to pay within 30
days may require a new deposit.


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5.04.020.5 If there is a history of disconnects for non-payment and/or unpaid bills resulting
in write-off for specific rental properties, the District may require that the service be placed in
the name of the property owner and may require a deposit as prescribed in Chapter 5.02.

5.04.020.6 In the event a residential or commercial customer declares bankruptcy and
requests to continue service, the District will close the customer’s existing account(s) as of
the bankruptcy filing date. The District will continue service to the customer under a new
account number provided the customer re-establishes the account by completing a new
application for service and re-establishes credit with the District by paying a new deposit.
Any deposit held on the previous account will be applied to the final bill upon closing.

Moved to 5.08.010.9(C)

                                       CHAPTER 5.08

                                           BILLING
Sections:

       5.08.010       Billing Procedure
       5.08.020       Billing Procedure - Local, State or Federal Agencies

5.08.010 Billing Procedure

5.08.010.1 Bills will be rendered monthly and shall be paid at the District office, by other
payment options offered by the District, or at other locations designated by the District.
5.08.010.2 Failure to receive bills will not release customers from their payment obligation.
5.08.010.3 The due date for payment of bills will be 19 days after the day bills are mailed to
the customers.
5.08.010.4 Should the due date of bills fall on a Saturday, Sunday or District recognized
holiday, the bills will be due the following business day.

5.08.010.5 If at the time of billing, a customer has a previous balance, a late payment fee
will be charged at the rate established by the most recently adopted Miscellaneous Fee
Schedule
5.08.010.6 A fee will be charged to customers for each payment transaction returned for
reasons such as, but not limited to, non-sufficient funds, closed bank account, incorrect bank
account number or incorrect bank routing number. In the event a Notice to Comply is
delivered due to a returned item, a trip charge will be added to the customer’s account.
Upon receipt of a second returned item in a trailing 12 month period, the account shall be
placed on a cash only basis. Refer to the Miscellaneous Fee Schedule for current charges
on returned items and trip charges.

5.08.010.7 For customers with a hardship or other special extenuating circumstances,
special financial counseling is available. When requested by a customer, the District may
arrange for a customer to pay the bill in installments.

5.08.010.8 In some instances, the District may install a power limiting device.

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5.08.010.9 Monthly water billings for any existing water service, once activated, are to
continue in an owner’s name or a qualified renter or tenant’s name. Except for a disconnect
qualifying under Section 5.12.040.1(E), billing will not be discontinued for a customer
requested disconnection, disconnections for non-payment or for repair of customer lines.

5.080.010.9(A) Monthly water billings for homes in foreclosure shall remain in the name of
the owner of record based on county records until such time as a bank, mortgage company
or new owner files a change in title or the customer provides evidence that they are no
longer the legal owner of the property. Once new ownership of the property is established,
the water account will be transferred into the name listed on the county record as of the
property sale or transfer date.

5.080.010.9(B) Monthly electric and/or water billings for properties in the foreclosure process
or on a “short sale” may be transferred into the name of a realtor or property manager
provided the realtor/property manager completes a service application for said property and
meets the deposit and credit requirements established in Chapters 5.02 and 5.04. The
realtor/property manager will be required to put all services (electric and water) into their
name. Transfer/connection fees as established by the most recently adopted Miscellaneous
Fees Schedule shall apply.

5.08.010.9(C) In the event a residential or commercial customer declares bankruptcy and
vacates the property, a new account will be opened as of the bankruptcy declaration date
and water billings will continue in that customer’s name until a new property owner or
customer can be established. (Moved from 5.04.020.6)

5.08.010.10 In the event of fire or other catastrophic event which makes a residence or
business uninhabitable, water billings will be waived for a maximum of 1 year from the date
the building becomes uninhabitable. Should the building become habitable prior to 1 year,
water billings will begin as of the date, determined by the District, that the building became
habitable. The District may begin billing for water within one year for any of the following
reasons:
               Usage recorded by the water meter
               Certificate of Occupancy issued
               Sale/transfer to new customer
               Mailing address change to residence
               Information from customer/District personnel indicating occupancy
               Electric usage indicates occupancy

5.080.010.10(A) Where a residence or business has been demolished specifically for
purpose of rebuild or remodel (not due to fire or other catastrophic event) water charges will
continue to be billed on a monthly basis.

5.08.010.11 Water billings for new construction of residential dwellings and commercial
properties shall begin on the day the water meter is installed. Meters will be installed based
on plans submitted by the owner, builder or developer. The District holds no responsibility
for the accuracy of these plans and cannot guarantee that the meters actually serve the
units described in these plans. Discrepancies shall be the responsibility of the owner,


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5.08.020 Billing Procedure - Local, State or Federal Agencies Due to the cumbersome
procedures that are required of local, state and federal agencies to process their accounts
payable and the fact that their bills are paid monthly and the fact that the District has never
had a write-off for a local, state or federal agency, the following procedure will be followed:

5.08.020.1 All local, state and federal agencies will be exempt from late charges.

5.08.020.2 Collection notices will be mailed in a timely manner and collection procedures will
be followed as usual.

5.08.020.3 Should a local, state or federal agency reach the disconnect for non-payment
step in the collection procedure, the account will be referred to the Customer Services
Manager for special handling.

                                       CHAPTER 5.09

           OWNER/RENTER RESPONSIBILITIES - SERVICE TRANSFERS

Section:

       5.09.010      Owner/Renter Responsibilities

5.09.010 Owner/Renter Responsibilities

5.09.010.1 Each person who signs the District's service application, and is accepted by the
District, becomes the District's customer and is individually responsible for all charges
regarding water and electric service provided to the requested service address.

5.09.010.1(A) Services may be denied for the following reasons:
   • Failure to provide qualifying photo ID or valid social security information for validation
   • The District believes an account transfer is made to fraudulently avoid payment of a
      prior balance
   • The applicant or other persons who are listed on the lease have failed to pay
      balances on prior accounts

5.09.010.2 Customers are responsible for making payments to the correct account number.
 Failure to utilize the correct account number could result in late payment penalties and/or
collection activities on the unpaid account.

5.09.010.3 In the event a customer desires to transfer service into another person's name,
such that the transferee is to become the District's customer, the transferee must make a
separate service application and post the appropriate deposit with the District. Written or
verbal notice by a customer that he or she desires to transfer service into another person's
name will not be recognized by the District, and that customer shall continue to be
individually responsible for all utility charges until such time as a new service application is
completed and accepted, and the appropriate deposit received.

5.09.010.4 In the event a customer desires to terminate their responsibility for payment of
utility charges, they must personally request that the utility service be disconnected.

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5.09.010.5 A property owner or his/her agent may authorize that service to their property be
continued (automatic transfer) in the event that the current customer requests service be
taken out of their name or be disconnected. The property owner or his/her agent shall
remain responsible for all utility service charges whether or not the tenant has vacated the
premises. Auto transfer customers must maintain good credit with the District in order to be
able to continue with this service.

5.09.010.6 The District assumes no responsibility for enforcing or interpreting any agency or
rental agreement between its customers and their tenants or agents.

5.09.010.6 (A) Owners wishing to have service disconnected must make their request in
writing.

5.09.010.7 It is the customer’s responsibility to keep mailing and phone number information
up-to date. Failure to receive a bill or notices due to incorrect mail information does not
eliminate the customer’s responsibility for payment.

5.09.010.8 It is the customer’s responsibility to notify the District when their residential
status changes.




                                       CHAPTER 5.12

                DISCONNECTION AND RECONNECTION OF SERVICE

Sections:

       5.12.010      Termination for Non-payment – Electric and/or Water Service
       5.12.020      Customer’s Request for Disconnection of Service – Electric
                     and/or Water
       5.12.040      Disconnection of Electric and/or Water Service by District
       5.12.050      Reconnection of Electric and/or Water Service
       5.12.060      Customer's Responsibility when Electric and/or Water Service
                     is Disconnected

5.12.010 Termination for Non-payment – Electric and/or Water Service

5.12.010.1 A notice that service is subject to termination for non-payment will be by written
notification from the District. This notice will be printed and mailed after a bill is generated
that shows a previous balance on the account.

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5.12.010.2 Written notice of termination (Late Payment Reminder Notice) shall be mailed by
first class mail to customer at least 15 calendar days prior to the scheduled date of
termination. This notice will also be mailed to a third party or a co-signer.

5.12.010.3 The Late Payment Reminder Notice will include:

5.12.010.3(A) The name and address of the customer whose account is delinquent.

5.12.010.3(B) The amount of the delinquency.

5.12.010.3(C) The date by which payment or arrangements for payment is required in order
to avoid termination.

5.12.010.3(D) The procedure by which the customer may initiate a complaint or request an
investigation concerning service or charges, except that, if the bill for service contains a
description of that procedure, the notice pursuant to Section 5.12.010.2 is not required to
contain that information.

5.12.010.3(E) The procedure by which the customer may request amortization of the unpaid
charges.

5.12.010.3(F) The procedure for the customer to obtain information on the availability of
financial assistance, including private, local, state, or federal sources, if applicable.

5.12.010.3(G) The telephone number of a representative of the District who can provide
additional information or institute arrangements for payment.
5.12.010.4 The Final Notice of Termination of Service will include:

5.12.010.4(A) The District shall mail a 48-hour Final Notice of Termination of Service to the
customer prior to disconnect. Additionally, the District shall make a reasonable, good faith
effort to contact an adult person residing at the premises of the customer by telephone or
personal contact. When telephone or personal contact cannot be accomplished, the District
shall post in a conspicuous location at the premises, a notice of termination of service, at
least 48 hours prior to termination. A trip charge to deliver the 48-hour Final Notice of
Termination of Service shall be added to the customer’s account. Refer to the Miscellaneous
Fee Schedule for current charges. Every notice of termination of service shall include items
of information as listed in Sections 5.12.010.3 (A), (B), (C), (F) and (G) above. The 48-hour
Final Notice of Termination of Service will also be mailed to third parties and co-signers.

5.12.010.4(B) The District shall make available to all its residential customers a third party
notification service whereby the District will attempt, to notify a person designated by the
customer to receive notification when the customer’s account is past due and subject to
termination. The notification shall include information on what is required to prevent
termination of service. The residential customer shall make a request for third party
notification on a form provided by the District and shall include the written consent of the
designated third party. Such notification does not obligate the third party to pay the overdue
charges, nor shall it prevent or delay termination of service.


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5.12.010.4(C) If the customer does not make a payment, notify the District of a dispute of a
bill, or make other arrangements acceptable to the District by the last day for the payment,
the District will proceed on schedule with the termination.

5.12.010.4(C)(1) Customers will not be allowed to make more than two (2) written payment
agreements within a calendar year.

5.12.010.4(C)(2) Customers unable to make payment by the due date of their Final Notice
shall be allowed to review their account with a supervisor. Such review shall include
consideration of whether the customer should be permitted to amortize the unpaid balance
of his account over a reasonable period of time not to exceed 24 months. No termination of
service shall be effected for any customer complying with an amortization agreement, if the
customer also keeps the account current as charges accrue in each subsequent billing
period.

If the customer does not comply with the amortization agreement, it will be considered non-
payment and the District will immediately mail a Final Notice of Termination to the customer
and proceed with termination according to Section 5.12.010.4.

5.12.010.4(D) Payments made with uncollectible funds (i.e., non-sufficient funds, closed
account, etc.) to avoid disconnection or in order to have service reconnected, will be
considered non-payment and the service shall be subject to immediate termination without
further notice. Customers who make payments with uncollectible funds to avoid
disconnection or in order to have service reconnected will be placed on a cash only basis for
a period of 12 months.
5.12.010.4(E) The employee carrying out the termination procedure will attempt to contact
the customer at the service address prior to disconnecting service. A trip charge to
disconnect electric and/or water service(s) shall be added to the customer’s account
regardless of whether or not the disconnect is actually performed. Refer to the
Miscellaneous Fee Schedule for current charges.

5.12.010.4 (E)(1) No payment arrangements will be made in the field. All payments must be
made through the District office either by phone or in person. Once a District employee is
sent to terminate a service, the service will be disconnected until such time as the customer
has made acceptable payment arrangements through the office.

5.12.010.4(F) Termination will not be made on any Saturday, Sunday, legal holiday or any
time during which the business office of the District is not open.

5.12.010.4(G) In case of tenants whose electric and/or water service is in the landlord's
name, the District shall make every good faith effort to inform the occupants by means of a
notice, when the account is in arrears, that service will be terminated in 10 days. In any
such delinquent situation, the District will comply with California Public Utilities Code 16481
in implementing this termination of service procedure.

5.12.010.4(H) Customers who have been disconnected for non-payment, made payments
against uncollectible funds (i.e. non-sufficient funds, closed account, incorrect bank
information etc.) to avoid disconnection or to have service reconnected, have made
arrangements to amortize the amount due or have asked for an extension to pay a past due

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amount, will be required to re-establish credit by paying the deposit required by Chapter
5.02.

5.12.010.4 (I) A customer who transfers service from one account to another and fails to
pay his/her final bill within 30 days of the final billing date on the old account will be subject
to the disconnect procedure at his/her new account.

5.12.020 Customer’s Request for Disconnection of Service – Electric and/or Water

5.12.020.1 The District shall permit a physical disconnection from the electric system when
necessary (1) to permit the customer to perform repairs, modifications or service upgrades
on the customer premises or (2) when the customer wishes power to remain off for an
extended period.

5.12.020.2 The District shall permit a physical water disconnection (shut off at the water
box) on a temporary basis when necessary (1) to permit the customer to perform repairs,
modifications or service upgrades on the customer premises or (2) when the customer
premises is not equipped with an appropriate shut-off valve and physical disconnection is
necessary to avoid frozen water pipes. A physical disconnect shall not be permitted for any
other reason.

Customers may arrange for disconnection of service by giving advance notice to the District.
Customers will not be billed for electric service while disconnected.
5.12.020.3 Disconnect and/or reconnect fees will be charged based on the Miscellaneous
Fee Schedule for services performed under Section 5.12.050 Restoration of Electric and/or
Water Service.

5.12.040 Disconnection of Electric and/or Water Service by the District

5.12.040.1 With Notice The District may disconnect electric or water service for any one or
more of the reasons contained in this rule. Except as otherwise specifically provided here,
Public Utilities Code Sections 16481, 16482 and 16483 and any subsequent amendments,
shall apply regarding any disconnect of service. Except for a disconnect qualifying under
Section 5.12.040.1(E), water billings will continue.

5.12.040.1(A) Non-payment of bills - the District may disconnect or refuse service if a
customer has not paid his/her bill for electric or water service rendered, reconnection
charges, and/or cash deposit as required by the District. Refer to Section 5.12.010.4
Termination for Non-Payment.

5.12.040.1(A)(1) Default on amortization or payment agreements – the District may
disconnect electric or water service if a customer has failed to meet the terms of said
agreement.

5.12.040.1(B) Negligent or wasteful use of water, as determined by the District.

5.12.040.1(C) Where a customer receives electric and/or water service at more than one
location and the bill or charges for service at any one location is not paid prior to
delinquency, electric and/or water service at all locations may be disconnected.

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5.12.040.1(D) Failure to provide documents or payment as requested by a Notice to Comply.
 Requested items may include, but are not limited to, service applications, signed payment
agreement and payment by cash or money order for an item returned by the bank.

5.12.040.2 Without Notice A customer's electric or water service may be disconnected by
the District without notice where:

5.12.040.2(A) Unsafe/hazardous condition or illegal apparatus - the District may disconnect
electric and/or water service without notice or refuse service if any part of customer's wiring,
piping or equipment or use thereof is either unsafe or in violation of law, until such apparatus
is placed in a safe condition or the violation remedied. Water billings will continue
regardless of the reason for disconnect.

5.12.040.2(B) Service detrimental or dangerous - the District may disconnect without notice
or refuse service if in the District's judgment, the operation of the customer's equipment is or
will be detrimental or dangerous to his/her own service or service of other customers.

5.12.040.2(C) Fraud - the District may disconnect service without notice or refuse service, if
the customer's actions or the condition of his/her premises is such as to indicate intent to
defraud the District.

5.12.040.2(D) Cross Connection - the District finds a dangerous unprotected cross-
connection between the District's water supply and any unapproved source of water.

5.12.040.2(E) Inactive and foreclosed accounts – So long as all three of the conditions
stated in 5.12.040.1(E)(1) through 5.12.040.1(E)(3) exist for a customer account, service
may be disconnected and all future billings, including water, may discontinue. The District
may discontinue billing upon becoming aware of those three conditions, however, it is the
customer’s responsibility to notify the District and provide sufficient evidence. Bills will not be
adjusted retroactively and no refunds will be issued. A reconnect fee equivalent to time and
materials may be charged at the time of reconnection.

5.12.040.2(E)(1) The customer’s service location is in the process of foreclosure, as
evidenced by county records of a notice of default or notice of a trustee’s sale.

5.12.040.2(E)(2) The service location is vacant and unoccupied.

5.12.040.2(E)(3) No electric and water use was recorded during the most recent billing
period.

5.12.040.2(F) Failure to comply with the District's rules - the District may disconnect or
refuse service if the customer does not comply with the District rules, regulations, and/or
codes for receiving electric and/or water service.

5.12.040.2(G) Abandoned building or residence - the District may disconnect or refuse
service to any building with the appearance of being abandoned (i.e., a look of being
deserted, windows broken, doors in disrepair, or the general appearance of not being lived
in, etc). Such disconnect will remain in effect until all conditions are met and fees are paid

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regarding a new service, and the service is inspected and approved by the proper building
authorities.

5.12.040.2(H) Condemned building or residence - the District may disconnect or refuse
service to any building that has been condemned by the proper state, county or
governmental authorities. Such disconnection will remain in effect until all conditions are
met and fees are paid regarding a new service, and the service is inspected and approved
by the proper building authorities.

5.12.040.3 In those instances where the District disconnects electric or water service to any
customer without notice, the District shall notify the customer of the reasons for the
disconnection of service and the corrective action to be taken by customer before service
can be reconnected.

5.12.050 Reconnection of Electric and/or Water Service

5.12.050.1 In those instances where the service to a customer has been disconnected, with
or without notice, service shall not be reconnected until such time as the customer has taken
any necessary corrective action, as determined by the District, and paid all bills and charges
due the District, in addition to reconnection charges as established in the current
Miscellaneous Fee Schedule.

5.12.050.1(A) Accounts that have been disconnected for non-payment of past due balances,
failure to meet the terms of a payment agreement or failure to meet the terms of a Notice to
Comply will not be eligible for reconnect on weekends, holidays or after 4:00 p.m. on regular
business days. Arrangements to reconnect must be made through the business office
during regular business hours. Reconnection for accounts paid after 4:00 p.m. will be
processed on the next business day.

5.12.050.1(B) Upon reconnect of the electric meter, the main breaker will be left in the off
position to prevent possible damage to appliances. It is the customer’s responsibility to
move the main breaker to the on position.

5.12.050.2 Customers or their agents may request reconnection of electric and/or water
services for a maximum 48 hour period in order to conduct inspections on a
residence/business for sale. This temporary reconnection shall require a minimum deposit
as prescribed in Chapter 5.02. Reconnect fees as established in the Miscellaneous Fees
Schedule shall also apply. Customers with balances owing shall also be required to pay the
entire balance owing prior to reconnect.

5.12.050.3 Within five years, same size service: If service of the same size is re-established
within five years of the date of disconnect, the customer shall make normal application for
service as per Title 6.04 and/or Title 7.12 and pay reconnect fees based on the
Miscellaneous Fee Schedule provided the service has not been damaged. If the service has
been damaged, the customer will be billed the actual cost to reconnect service.

5.12.050.4 Within five years, upgrade of service: If service is re-established within five years
of the date of disconnect and the customer requests an upgrade of the service, the customer
shall make normal application for service as per Title 6.04 and/or Title 7.12. Customer shall

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pay reconnect fees based on the Miscellaneous Fee Schedule provided the service has not
been damaged. If the service has been damaged, the customer will be billed the actual cost
to reconnect service. Additional connection fees may apply. Facilities fees shall be charged
for an increase in size of the new service when compared to the previous service.

5.12.050.5 After five years: If service is re-established after five years from the date of
disconnect, the customer shall make normal application for service as per Chapter 6.04
and/or Title 7.12. Customer shall be responsible for payment of current connection and
facilities fees. No credit will be given for previous facilities fees paid. The General Manager
is authorized to credit connection fees for existing and operational facilities.


5.12.050.6 If conditions require the use of a backhoe or other equipment to effect the
disconnect and/or reconnect, the customer shall be required to pay the actual charges,
including labor, material, equipment and applicable overheads in lieu of the customary fee
set forth in the Miscellaneous Fee Schedule.

5.12.050.7 Should a customer decide to abandon the water service to a vacant parcel or to a
parcel where the residence/building has been demolished, the customer shall sign a
statement indicating their decision and agreeing that, should they or a new owner/developer
decide to reinstate the water service, they will be subject to paying any and all connection
and facilities fees in place at the time of reinstatement. These accounts will be treated as
new construction with no credits toward their prior fees. Where the water service has been
abandoned, the parcel will be assessed a water standby charge until a new service is
established with the District.

5.12.060 Customer's Responsibility when Electric and/or Water Service is
Disconnected In the event a customer's electric and/or water service is disconnected as a
result of voluntary termination, termination for failure to pay bills or any other reasons stated
in Sections 5.12.040.1 or 5.12.040.2, it shall be the customer's responsibility to take
necessary precautions against any and all damage to the customer's pipes, fixtures and
appliances which could result from such termination. The District shall not be liable for any
such damage.

                                       CHAPTER 5.16

                                         DISPUTES

Sections:

       5.16.010       Disputed Bills – Electric or Water
       5.16.030       Appeal

5.16.010 Disputed Bills – Electric or Water

5.16.010.1 A customer may request an investigation of their bill or request an extension of
the payment period of a bill asserted to be beyond the means of the customer to pay in full
during the normal period for payment. The request shall be reviewed by a manager of the
District.

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5.16.010.2 After notification that a dispute exists, the District shall make an appropriate
investigation and shall report the result to the customer within 10 working days. The review
shall include consideration of whether the customer should be permitted to amortize the
unpaid balance of his account over a reasonable period of time not to exceed 24 months. No
termination of service shall be effected for any customer complying with an amortization
agreement, if the customer also keeps the account current as charges accrue in each
subsequent billing period.

If the customer does not comply with the amortization agreement, it will be considered non-
payment and the District will immediately mail a Final Notice to the customer and proceed
with termination according to Section 5.12.010.4(A) through (I) above.

No termination of service shall occur as a result of non-payment during a pending
investigation of a customer dispute or complaint.

5.16.030 Appeals

5.16.030.1 Any applicant or customer who is dissatisfied with any determination made
under these rules, may at any time within 30 days after such determination is made, appeal
to the Board of Directors of the District by giving written notice to the Clerk of the District
setting forth the matter upon which appeal is sought.

5.16.030.2 The General Manager shall then conduct an investigation and develop a staff
report on the disputed matter.

5.16.030.3 At the next regular Board meeting, the General Manager shall agendize an action
item concerning this appeal and the results of the investigation. The Board shall make a
determination of the appeal during the Board meeting, and its determination shall be final
and conclusive.

5.16.030.4 Pending a decision pursuant to an appeal under this rule, regarding any dispute
concerning amounts for charges, the customer taking such appeal shall pay the full amount
of the charges which shall be deemed paid under protest. Any charge or amount previously
paid under protest will be refunded if the Board of Directors determines that the charge was
wrongfully made.

5.16.030.5 A copy of the above investigation and appeal procedures is available at the
Customer Services counter or on the District’s website.


                                      CHAPTER 5.20

                            ELECTRIC FEES AND CHARGES

Sections:

     5.20.010        Connection Fees - Temporary Service
     5.20.020        Connection Fees - Permanent Service

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     5.20.030        Connection Fees - Permanent Service, Multiple (Single and
                     Three Phase)
     5.20.040        Facilities Fees – Moved to Section 5.26
     5.20.050        Miscellaneous Service Fees
     5.20.060        Expiration of Fees

5.20.010 Connection Fees - Temporary Service The District will provide two types of
temporary service; one which will be removed and not become permanent, and one which
will become a permanent service.

5.20.010.1 Temporary service The actual cost of temporary service installation (which will
not result in a permanent electric service) and subsequent removal will include the material,
labor, equipment, overhead, administrative costs and account set-up fees. The charge to be
paid is a flat charge and is included in the most recent ordinance approved by the Board of
Directors entitled “Electric Connection and Facilities Fees Charges”. The applicant will be
required to pay the fee prior to the provision of service.

5.20.010.2 Temporary service for construction purposes The connection fee for temporary
service (which will result in a permanent electric service) is a charge determined by the
District to establish service to a temporary power pole for construction purposes which will
later be converted to a permanent service. The connection fee for this temporary to
permanent connection is a flat charge and is included in the most recent ordinance
approved by the Board of Directors entitled ”Amending the Electric Connection Charges”.
This fee includes, but is not limited to, the cost of material, labor, equipment, overhead,
meter, transformer, overhead conductor, permanent overhead/underground connection
transfer, administrative costs and account set-up fees. See Chapter 7.20.010 for further
detail.

5.20.020 Connection Fees - Permanent Service The connection fee is a charge
determined by the District to establish a new service. It includes, but is not limited to, the
costs of material, labor, equipment, overhead, administrative costs and account set-up fees
to provide the service conductor and cable, metering, a proportionate share of the
transformer costs, and the account set-up costs. The charge to be paid is included in the
most recent ordinance approved by the Board of Directors entitled “Electric Connection and
Facilities Fees Charges”.

5.20.030 Connection Fees - Permanent Service, Multiple (Single and Three Phase) In
the event that a service requires multiple metering, the original service will be governed by
the connection fees for a permanent service. Subsequent connections made from the same
service drop will be subject to the metering and account set-up costs in addition to the
facilities fees if applicable.

5.20.050 Mis c e lla n e o u s Service Fees Any customer requesting work for their sole
convenience that is to be performed by the District, will be charged the actual cost of the
service performed including material, labor, equipment, overhead, administrative costs and
any appropriate facilities fees unless a flat fee has been established to provide the service
(see Miscellaneous Fee Schedule – Electric ).

5.20.060 Expiration of Fees Electric connection fees paid shall be effective for a period of

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two years from the date of application. Applicant shall be subject to payment of increased
connection fees if the connection has not been made within two years of the date of
application.




                                     CHAPTER 5.24

                                   ELECTRIC RATES

Sections:

       5.24.010      Domestic Electric Rate Schedules - Permanent
                     (P10) and Non-Permanent Residents (S10)
       5.24.020      Commercial Electric Rate Schedule - Small (15)
       5.24.030      Commercial Electric Rate Schedules - Medium (20)
                     and Large (25)
       5.24.040      Miscellaneous Services

Electric Rates Determination of the applicable rate is at the sole discretion of the District
and is based on the following sections in this chapter.

5.24.010 Domestic Electric Rate Schedules - Permanent (P10) and Non-Permanent
Residents (S10)

5.24.010.1 Electric rates as shown in Electric Retail Rates – Permanent (P10) and Non-
Permanent (S10) shall be charged to all domestic (residential) customers.

5.24.010.2 An energy surcharge shall continue to be added to each bill as required by
California law.

5.24.010.3 Permanent (P10) Rate - The permanent resident rate is currently billed to those
customers who occupy their homes on a full-time basis.

5.24.010.4 Non-Permanent (S10) Rate - The non-permanent resident rate is billed to those
customers who occupy their homes on a part time basis for vacations, weekends, ski leases,
etc.

5.24.010.5 Determination of the applicable rate is at the sole discretion of the District.
Customers requesting the permanent resident rate will be required to provide sufficient
evidence documenting that they are a full-time resident of the District.

5.24.010.6 It is the customer’s responsibility to notify the District and provide sufficient
evidence documenting that they are a permanent resident per Section 5.24.010.3. The

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effective date of the change in rate from non-permanent to permanent will be the date the
customer provides sufficient evidence that they are a permanent resident. No refunds will
be issued.

5.24.010.7 In the event an error has been made by the District resulting in an account being
billed on an incorrect rate, the District will refund to the customer the overcharge back to the
date such error occurred.


5.24.020 Commercial Electric Rate Schedule Small (15)

5.24.020.1 Electric rates as shown in “Electric Retail Rates - Small Commercial Rates (15)”
shall be charged to all commercial customers with a monthly demand of less than 50
kilowatts.

5.24.020.2 An energy surcharge shall continue to be added to each bill as required by
California law.

5.24.030 Commercial Electric Rate Schedules Medium (20) and Large (25)

5.24.030.1 This policy shall be applicable to commercial service requirements within the
District including power and lighting taken at one point of delivery with 50 kilowatts or more
of demand. Medium commercial service is that service with monthly demand of 50 kilowatts
or more and less than 200 kilowatts. Large commercial service is that service with monthly
demand of 200 kilowatts or more.

5.24.030.2 Character of service - sixty-hertz alternating current. The District reserves the
right to specify the voltage and phase of service supplied under this schedule.

5.24.030.3 Monthly rates shall be as set forth in “Electric Retail Rates - Medium Commercial
Rates (20) and Large Commercial Rates (25)”.

5.24.030.4 Measured demand - the maximum measured 15 minutes average kilowatt load
during the billing period. If, at the discretion of the District, the customer's usage is
intermittent or highly fluctuating, then a shorter time interval may be used.

5.24.030.5 Billing demand shall be the current period’s measured demand.

5.24.030.6 An energy surcharge shall continue to be added to each bill as required by
California law.

The above rates are set by ordinance approved by the Board of Directors and can be found
in Appendix A – Electric Rates Residential and Commercial.

5.24.030.7 Terms of service Service under this schedule is subject to the District's rules,
regulations and codes for receiving electric service.

5.24.040 Miscellaneous Services Fees and charges for miscellaneous services performed
by the District are defined in the most recent Miscellaneous Fee Schedule.


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                                           CHAPTER 5.26

                       ELECTRIC AND WATER FACILITIES FEES

Sections:

       5.26.010 Facilities Fees
       5.26.020 Exp ira tio n o f Fe e s

5.26.010 Facilities Fees

5.26.010.1 Legislative Findings

5.26.010.1(A) The District must expand its water and electric facilities in order to maintain
current standards of public health if new development is to be accommodated without
decreasing current standards of public health.

5.26.010.1(B) The imposition of facilities fees is one of the preferred methods of ensuring
that development bears a proportionate share of the cost of water and electric facilities
necessary to accommodate such development. This must be done in order to promote and
protect the public health, safety and welfare.

5.26.010.1(C) Connecting to the District water and/or electric system will create a need for
the construction, equipping or expansion of water and electric facilities.

5.26.010.1(D) The fees established by Section 5.26.010.7 are derived from, are based upon
and do not exceed the costs of providing additional water and electric facilities necessitated
by the connection to the District's water and electric systems.

5.26.010.1(E) The report entitled “Water System Master Plan” sets forth a reasonable
method and analysis for the determination of the impact of new development on the need for
and costs for additional water facilities within the District.

5.26.010.1(F) The report entitled “Electric System Master Plan” sets forth a reasonable
method and analysis for the determination of the impact of new development on the need for
and costs for additional electric facilities within the District.

5.26.010.2 Short Title, Authority and Applicability

5.26.010.2(A) The adopting ordinance (No. 8903) shall be known and may be cited as the
"Truckee Donner Public Utility District Water and Electric Facilities Fee Ordinance."

5.26.010.2(B) The Board of Directors of the District adopted the ordinance pursuant to the
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Public Utility District Act within the Public Utilities Code of the State of California.


5.26.010.2(C) The rules included herein which were adopted by ordinance shall apply within
the boundaries of the District to parcels served by the District water and/or electric systems.

5.26.010.3 Intents and Purposes

5.26.010.3(A) These rules are intended to assist in the implementation of the District Master
Plans.

5.26.010.3(B) The purpose of these rules is to assure that new development bears a
proportionate share of the cost of capital expenditures necessary to provide water and
electric facilities within the District service area.

5.026.010.4 Rules of Construction

5.26.010.4(A) These provisions shall be liberally construed so as to effectively carry out their
purpose in the interest of the public health, safety and welfare.

5.26.010.4(B) For the purposes of administration and enforcement of this code, unless
otherwise stated in this code, the following rules of construction shall apply to the text of this
code:

•   In case of any difference of meaning or implication between the text of this code and any
    caption, illustration, summary table or illustrative table, the text shall control.

•   The word “shall” is always mandatory and not discretionary; the word “may” is
    permissive.

•   Words used in the present tense shall include the future; and words used in the singular
    number shall include the plural and the plural the singular, unless the context clearly
    indicates the contrary.

•   The phrase “used for” includes “arranged for”, “designed for”, “maintained for”, or
    “occupied for”.

•   The word “person” includes an individual, a corporation, a partnership, an incorporated
    association or any other similar entity.

•   Unless the context clearly indicates the contrary, where a regulation involves two (2) or
    more items, conditions, provisions, or events connected by the conjunction “and”, “or” or
    “either…or”, the conjunction shall be interpreted as follows:

•   “And” indicates that all the connected terms, conditions, provisions or events shall apply.

•   “Or” indicates that the connected items, conditions, provisions or events may apply singly
    or in any combination.


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•   “Either…or” indicates that the connected items, conditions, provisions or events shall
    apply singly but not in combination.

•   The word “includes” shall not limit a term to the specific example but is intended to
    extend its meaning to all other instances or circumstances of like kind or character.

•   “General Manager” means the General Manager of the District or the District
    representative that he/she may designate to carry out the administration of this code.

5.26.010.5 Definitions

•   “Capital Equipment” is equipment with an expected use life of two years or more.

•   “Connection to the Water and/or Electric System” is the physical connect of a building,
    structure or use of land to the District’s water and/or electric lines, no matter if such
    connection is made through or by intermediate lines.

•   “Electric Facilities” are defined as the individual distinct components within the electric
    system such as transformers, poles, cable and conductor.

•   “Electric System” is defined as the integrated network that distributes electricity
    throughout the District to its customers.

•   “Applicant” is a person applying for connection to the District’s water and/or electric
    system.

•   “Water Facilities” are defined as the individual distinct components within the system
    such as a source, storage tank, disinfection equipment, booster pump station or pipeline.

•   “Water System” is defined as the integrated network that supplies, disinfects, transmits,
    stores and distributes water throughout the District to its customers.

5.26.010.6 Imposition of Water and Electric Facilities Fees

5.26.010.6(A) When computing a fee pursuant to this code, the District shall prepare and
retain a written memorandum containing the following information:

•   Identify the purpose of the fee.

•   Identify the use of the fee. If the use is financing public facilities, the facilities shall be
    identified. The identification may, but need not, be made by reference to a capital
    improvement plan, may be made in applicable general or specific plan requirements, or
    may be made in other public documents that identify the public facilities for which the fee
    is charged.


•   Determine how there is a reasonable relationship between the fee’s use and the type of

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    development project on which the fee is imposed.

•   Determine how there is a reasonable relationship between the need for the public facility
    and the type of development project on which the fee is imposed.

•   Determine how there is a reasonable relationship between the amount of the fee and the
    cost of the public facility or portion of the public facility attributable to the development on
    which the fee is imposed.

5.26.010.6(B) Any person who, after the effective date of this code seeks to connect to the
District water system is hereby required to pay a water facilities fee in the manner and
amount set forth in this code.

5.26.010.6(C) Any person who, after the effective date of this code seeks to connect to the
District electric system is hereby required to pay an electric facilities fee in the manner and
amount set forth in this code.

5.26.010.7 Computation of the Amount of Water and Electric Facilities Fees

5.26.010.7(A) When computing a fee pursuant to this code, the District shall prepare and
retain a written memorandum containing the following information:

•   Identify the purpose of the fee.

•   Identify the use of the fee. If the use is financing public facilities, the facilities shall be
    identified. The identification may, but need not, be made by reference to a capital
    improvement plan, may be made in applicable general or specific plan requirements, or
    may be made in other public documents that identify the public facilities for which the fee
    is charged.

•   Determine how there is a reasonable relationship between the fee’s use and the type of
    development project on which the fee is imposed.

•   Determine how there is a reasonable relationship between the need for the public facility
    and the type of development project on which the fee is imposed.

•   Determine how there is a reasonable relationship between the amount of the fee and the
    cost of the public facility or portion of the public facility attributable to the development on
    which the fee is imposed.

5.26.010.7(B) At the option of the applicant, the amount of the water and/or electric facilities
fee may be determined by the District’s facilities fee schedules in effect at the time of
application.

5.26.010.7(C) In the case of change of use, redevelopment or expansion or modification of
an existing use which requires a new, replacement, or additional connection to the District’s
water system, the facilities fee shall be based upon the net increase in the size of the meter
for the new connection over the size of the meter for the previous connection.


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5.26.010.7(D) In the case of change of use, redevelopment, or expansion or modification of
an existing use which requires a new, replacement or additional connection to the District’s
electric system, the facilities fee shall be based upon the net increase in the amperage and
voltage of the electrical panel for the new connection over the amperage and voltage of the
previous electrical panel.

5.26.010.8 Payment of Fee

5.26.010.8(A) The applicant shall pay the water and electric facilities fee required by this
code to the General Manager or his designee at the time of application to the District’s water
and/or electric system.

5.26.010.8(B) All funds collected shall be properly identified by and promptly transferred for
deposit in the appropriate Water and Electric Facilities Fee Restricted Fund to be held in
separate accounts as determined in Section 5.26.010.10 of this code and used solely for the
purposes specified in this code.

5.26.010.9 Water and Electric Facilities Fees Restricted Funds Established

5.26.010.9(A) There are hereby established two (2) separate Facilities Fee Restricted
Funds: (1) the Water Facilities Fee Restricted Fund and (2) the Electric Facilities Fee
Restricted Fund.

5.26.010.9(B) Funds withdrawn from these accounts must be used in accordance with the
provisions of Section 5.26.010.10 of this code.

5.26.010.10 Use of Funds

5.26.010.10(A) Funds collected from water and electric facilities fees shall be used solely for
the purpose of acquiring, equipping and/or making capital improvements to water and
electric facilities under the jurisdiction of the District and shall not be used for maintenance
or operations.

5.26.010.10(B) Funds from the Water Facilities Fee Restricted Fund may only be used for
water facilities purposes and funds from the Electric Facilities Fee Restricted Fund may only
be used for electric facilities purposes. Funds shall be expended in the order in which they
are collected.

5.26.010.10(C) In the event that bonds or similar debt instruments are issued for advanced
provision of capital facilities for which water and electric facilities fees may be expended,
facilities fees may be used to pay debt service on such bonds or similar debt instruments to
the extent that the facilities provided are of the type described in Sections 5.26.010.10 A and
B above.)

5.26.010.10(D) At least once every two years, the General Manager shall present to the
Board of Directors a proposed capital improvement program for water and electric facilities,
assigning funds, including any accrued interest, from the Water and Electric Facilities Fee
Restricted Funds to specific water and electric facilities improvement projects and related
expenses. Monies, including any accrued interest, not assigned in any fiscal period shall be

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retained in the same Water and Electric Facilities Fee Restricted Funds until the next fiscal
period except as provided by the refund provisions of this code.

5.26.010.10(E) Funds may be used to provide refunds as described in Section 5.26.010.11.

5.26.010.10(F) Funds may be used to rebate developer costs for providing water and/or
electric capital facilities in excess of the capacity required to the individual developer making
the provision. Any rebates must be pursuant to a refunding agreement between the
developer and the District after the effective date of this code. Prior refunding agreements
may be re-negotiated in order to bring such agreements into accord with the provisions of
this code.

5.26.010.11 Refund or Encumbrance of Fees Paid

5.26.010.11(A) Any funds not expended or encumbered by the end of the calendar quarter
immediately following five (5) years from the date the water and/or electric facilities fee was
paid shall, upon application of the then current landowner, be returned to such landowner,
provided that the landowner submits an application for a refund to the General Manager of
the District within one hundred eighty (180) days of the expiration of the five (5) year period.

5.26.010.11(B) The District may, however, encumber funds prior to the end of the calendar
quarter immediately following five (5) years from the date the water and/or electric facilities
fee was paid. The District may make determinations that, in the interest of proper system
expansion, and in order not to replicate facilities, funds may be held in excess of five (5)
years. Once said determinations are made, the District shall thereafter review said
determinations on an annual basis.

5.26.010.12 Exemptions and Credits

5.26.010.12(A) The following shall be exempted from payment of the facilities fee:

•   Alterations or expansion of an existing building where no additional or larger water
    connections are requested and where the use is not changed.

•   Alterations or expansion of an existing building where no additional or greater capacity
    electrical panels are requested and where the use is not changed.

•   The replacement of a building or structure with a new building or structure of the same
    size and use where no additional or larger water connections are requested and where
    the use is not changed.



•   The replacement of a building or structure with a new building or structure of the same
    size and use where no additional or greater capacity electrical panels are requested and
    where the use is not changed.

Any claim of exemption must be made no later than the time of application for connection to
the District’s water and/or electric system. While it is inherently the applicant’s responsibility
to claim an exemption, the District will make every effort to notify the applicant if he is

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subject to an exemption.

5.26.010.13 Review

5.26.010.13(A) The fees contained in Section 5.26.010.7 shall be reviewed by the Board of
Directors every budget cycle and after the completion of a master plan (ref 3.01.01.1).

5.26.010.14 Enforcement Provision

5.26.010.14(A) The District shall have the power to sue in civil court to enforce the
provisions of this code.

5.26.010.15 Severability

5.26.010.15(A) If any section, phrase, sentence or portion of this code is for any reason held
invalid or unconstitutional by any court of competent jurisdiction, such portion shall be
deemed a separate, distinct and independent provision and such holding shall not affect the
validity of the remaining portions thereof.

5.26.010.16 Conflict

5.26.010.16(A) In the event of any conflict between this code and state law, including
Government Code Sections 66000-66009, state law shall control.

5.26.010.17 Effective Date

5.26.010.17(A) This code became effective on December 6, 1989.

5.26.020 Exp ira tio n o f Fe e s Facilities Fees paid will be effective for a period of five years
from the date of application. Applicant may be subject to payment of increased fees if the
connection has not been made within the specified time period.

                                       CHAPTER 5.28

                               WATER FEES AND CHARGES

Sections:

       5.28.010        Connection, Tapping and Facilities Fees
       5.28.020        Miscellaneous Service Fees
       5.28.030        Expiration of Fees

5.28.010 Connection, Tapping and Facilities Fees All applicants for water service are
subject to three charges when applicable: a connection fee, tapping fee, and a facilities fee,
in accordance with the current Water Connection and Facilities Fee ordinances as
established by the Board of Directors.

5.28.010.1 Connection Fee The connection fee is a charge made by the District to
establish a new service. It includes, but is not limited to, the costs of material, labor,
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equipment, overhead, administrative costs and account set-up fees.

5.28.010.2 Tapping Fee The tapping fee is a charge made by the District based upon the
actual costs including material, labor, equipment, overhead and administrative costs to
provide an applicant's service lateral pipe and connect it to the District's water mains.

5.28.010.3 Facilities Fee The facilities fee is a charge made by the District to cover the
applicant's pro rata share of the cost of the existing supply facilities and any expansions or
additions thereof which are required to serve the applicant. The cost of future source and
storage facilities shall be included in the facilities fee in order to maintain an equitable
distribution of benefits received between present and future service connections.

5.28.020 Miscellaneous Service Fees Any customer requesting work for their sole
convenience to be performed by the District, will be charged the actual cost of the service
performed, including material, labor, equipment, overhead, administrative costs and any
appropriate facilities fees unless a flat fee has been established to provide the service (see
Miscellaneous Fees Schedule-Water).

5.28.030 Expiration of Fees Water Connection Fees paid will be effective for a period of
two years from the date of application. Applicant may be subject to payment of increased
fees if the connection has not been made within the specified time period.

                                     CHAPTER 5.32

                                     WATER RATES

Sections:

       5.32.010      District Goal
       5.32.011      Residential Water Rates
       5.32.020      Commercial Water Rates
       5.32.030      Terms of Service
       5.32.040      Miscellaneous Services

5.32.010 District Goal It is the District’s goal that all customers are equipped with a water
meter and billed volumetrically based upon their usage. It is the District’s intent to install
water meters on all water services and to transition to metered rates by January 1, 2013.

5.32.011 Water Rates Determination of the applicable rate is at the sole discretion of the
District and is based on the following sections in this chapter.

5.32.011.01 Residential Water Rates

5.32.011.01(A) Metered Water Rates The Domestic Water Rates for single family
properties, individual condominium units and townhouse units equipped with a meter shall
consist of three components, a base charge, a commodity charge and a pump zone charge.

5.32.011.01(B) Unmetered Water Rates - The Domestic Water Rate for single family
properties, individual condominium units and townhouse units not equipped with a meter
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shall consist of a fixed monthly rate and the appropriate zonal pumping costs.

5.32.020 Commercial Water Rates Commercial Water Rates for all other multiple dwelling
units, trailer parks, public use, dedicated irrigation, single family properties with meters
greater than 1” in size and other commercial establishments shall consist of three
components, a base charge, a commodity charge and a pump zone charge.

These water rates are set by ordinance approved by the Board of Directors and can be
found in Appendix A – Water Rates.

5.32.030 Terms of Service Service under this schedule is subject to the District's rules,
regulations and codes for receiving water service.

5.32.040 Miscellaneous Services Fees and charges for miscellaneous services
performed by the District are defined in the most recent Miscellaneous Fee Schedule.


                                     CHAPTER 5.36

                     INFORMATION AVAILABLE TO THE PUBLIC

Sections:

      5.36.010      General Information
      5.36.020      Electric Rate Information

5.36.010 General Information

5.36.010.1 General information It is the intent of the District to follow State and Federal
regulations regarding public information. The District maintains at its offices, pertinent
information regarding electric and/or water service including:

5.36.010.1(A) Characteristics of electric and/or water source and service;

5.36.010.1(B) Policies - Copies of these policies, service area maps, and forms of contracts
and applications relative to electric and/or water service;

5.36.010.1(C) Rates - Copies of the rates and fees for electric and/or water service.

5.36.010.2 Upon request, a customer will receive a statement of such customer's monthly
kWh consumption or gallons of water consumed if the service is metered for the prior twelve
month period. There is no charge for this service.

5.36.010.3 Requests for information may be made in person at the District office, by phone,
fax, e-mail or by mail.

5.36.020 Rate Information Upon request, the District will inform each applicant for service
of the applicable rate schedules. Rate change information will also be advertised in a


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newspaper of general circulation and will be posted on the District’s website.


                                       CHAPTER 5.37

                               PUBLIC OUTREACH POLICY
Sections:

       5.37.010       Policy Statement
       5.37.020       Definition of Important Issues
       5.37.030       Method of Public Communication

5.37.010 Policy Statement It is the policy of the District to promote open communication
with the customers of the District on issues of importance appearing on the agenda of the
Board of Directors. To further this policy, there is hereby established a process by which the
District shall initiate contact, informing the community of important issues that are appearing
before the Board of Directors. This outreach shall occur early enough to permit thorough
discussion of the issue prior to the Board taking formal action.

5.37.020 Definition of Important Issues Important issues are those that involve changes
in monthly water and electric user charges, changes in the Miscellaneous Fees Schedule,
changes in connection fees, changes in facilities fees, and changes in regulations covering
new and retrofit residential and commercial construction. Changes in monthly water and
electric user charges, changes in the Miscellaneous Fees Schedule or changes in
connection fees shall normally occur as part of the Board budget discussion prior to adoption
of the annual or semi-annual budget. Changes in facility fees shall normally occur as part of
the five year Water/Electric Master Plan review or when the local General Plans are revised.
Facility fee increases due to inflation, not resulting from District Master Plan or local General
Plan review, shall be discussed as part of the Board budget sessions prior to adoption of the
annual or semi-annual budget. Other issues will arise from time to time that are difficult to
enumerate in this policy statement. Such issues shall be considered as important issues
falling under the purview of this policy based on a review by the General Manager of the
circumstances involved and the persons who may be impacted by adoption of the proposed
action. Additionally, the Board of Directors may, by action at a board meeting, determine
that an issue coming before it is an important issue falling under the purview of this policy.

5.37.030 Method of Public Communication The method of initial communication to the
public will vary based on the kind of issue being discussed.

5.37.030.1 With respect to the consideration of changes of the monthly water and electric
user charges or changes in the Miscellaneous Fees Schedule, a notice shall be printed on
the utility bill going to customers of the District and a display ad notice shall be placed in a
newspaper of general circulation in the District. These changes are generally associated
with preparation and adoption of the District’s annual or semi-annual budget.

5.37.030.2 With respect to the consideration of changes in water and electric connection
charges or facilities fees (usually associated with adoption of the District’s annual or semi-
annual budget) or changes in regulations covering new and retrofit residential and
commercial construction, a notice shall be sent by mail, fax or e-mail to the District

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stakeholders.

5.37.030.3 With respect to other important issues so designated by the General Manager or
the Board of Directors, the method of initial communication shall be determined on a case by
case basis.


                                     CHAPTER 5.38

                          PUBLIC INFORMATION PROGRAM

Sections:

      5.38.010      General Information
      5.38.020      Items Covered by Program
      5.38.030      Program Funding
      5.38.040      Review and Approval of Program
      5.38.050      Status of Program

5.38.010 General Information

5.38.010.1 The Public Information and Conservation Manager is the primary spokesperson
for the District regarding public information.

5.38.010.2 The Public Information and Conservation Manager will develop, monitor and
review an annual public information program with input from the General Manager and
Board.

5.38.020 Items Covered by Program

5.38.020.1 The public information program developed by the Public Information and
Conservation Manager will cover such matters as:

5.38.020.1(A) The District's mission, goals, services, activities, achievements, costs and
plans.

5.38.020.1(B) Informing the community about major issues involving the water and electric
industries which may impact the customers of the District.

5.38.020.1(C) Strategies for dealing effectively with the public's need to be informed about
specific and timely issues as they arise.

5.38.030 Program Funding The annual or semi-annual District budget will reflect funding
for the public information program.

5.38.040 Review and Approval of Program The annual public information program will be
submitted to the Board for review and approval.



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5.38.050 Status of Program The Public Information and Conservation Manager will report
to the Board periodically regarding the status of the program.

                                       CHAPTER 5.39

                              PUBLIC BENEFITS PROGRAM

Sections:
       5.39.010      Development of Annual Public Benefits Program
       5.39.020      Criteria for Annual Public Benefits Program
5.39.010 Development of Annual Public Benefits Program It is the policy of the District
that a public benefits program be developed each year as part of the annual operating
budget and that it be submitted to the Board for review, revision and adoption and be
agendized as a separate item for discussion.
5.39.020 Criteria for Annual Public Benefits Program The General Manager or his
designee shall annually prepare a draft public benefits program meeting the following
criteria:

5.39.020.1 Each specific element of the program shall promote one or more of the following
benefits: conservation of energy; the use of renewable energy resources; research,
development or demonstration of a new electric energy technology; assistance to low-
income persons.

5.39.020.2 Additionally, the program shall be designed to benefit the maximum number of
persons, give a high priority to energy conservation, assistance to low-income persons.

5.39.020.3 The program shall be simple to administer and shall promote direct contact
between the District and its customers.

                                      CHAPTER 5.40

                               COMPLAINT PROCEDURE
Section:

       5.40.010      Customer Complaint Procedure

5.40.010 Customer Complaint Procedure

5.40.010.1 Complaints will be logged by the Customer Services Department.

5.40.010.2 Appropriate documents, pertaining to the complaint shall be given to the
Customer Services Manager and the Customer Services Manager will distribute the
complaints to the appropriate department heads for resolution.

5.40.010.3 When the necessary work has been completed or the necessary action has been
taken in order to satisfy the complaint, the log will be marked with the date of resolution and

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the steps taken for resolution of the complaint.

5.40.010.4 At least annually, the complaint log with a summary will be distributed to the
General Manager for review. This list will contain complaint, the date of the complaint, the
resolution, and the date it was resolved.

5.40.010.5 The following items will be treated as service requests requiring immediate
attention to be resolved and are not considered to be complaints unless the customer has
repeatedly reported the problem with no resolution:

5.40.010.6(A) Water Department - water leaks, water outages, bad water, major changes in
water pressure, broken water boxes in traffic flow (foot or vehicle).

5.40.010.6(B) Electric Department - outages, downed wires or poles, sparking wires,
extremely low voltage, trees across lines.

5.40.010.6(C) Any situation that could be a potential threat to public safety.

                                      CHAPTER 5.44

                                         NOTICES

Sections:

       5.44.010      Notice to Customers
       5.44.020      Notice from Customers

5.44.010 Notice to Customers

5.44.010.1 Notice to customers

5.44.010.1(A) Written - Notice to a customer will normally be in writing and will be delivered
or mailed to the customer's last known address, or to the address listed on the application.

5.44.010.1(B) Unwritten - In emergencies, or after appropriate circumstances, the District
shall attempt to promptly notify the customers affected, and may make such notification by
any means reasonably calculated to reach the customer.

5.44.020 Notice from Customers Notice from a customer to the District may be given
personally by the customer or his authorized representative, either orally or in writing at the
District's operating office or to an agent of the District duly authorized to receive notices or
complaints.


                                      CHAPTER 5.48

                                        PAYBACKS
Section:


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       5.48.010        Line Extension Paybacks

5.48.010 Line Extension Paybacks

5.48.010.1 Any payback in the amount of $10,000 or less is to be handled routinely by staff
upon review and approval by the department head.

5.48.010.2 Payback amounts above $10,000 are to be handled by staff upon review and
approval by the department head and the General Manager.




                                         CHAPTER 5.53

                     ANNEXATION OF PROPERTY TO THE DISTRICT

Section:

       5.53.010 Electric and/or Water Service

5.53.010 Electric and/or Water Service

5.53.010.1. It is the intent of the District to serve water to all properties within its territory and
within its approved Sphere of Influence.

5.53.010.2. No service shall be provided without prior annexation approval from the
appropriate LAFCo.

5.53.010.3. Exception:
   a) Single family home;
       i) Not part of a larger sub-division;
       ii) May be served with an Out of Area Service Agreement granted by the appropriate
           LAFCo;
      iii) All associated costs will be borne by the property owner/developer;
      iv) Must be contiguous with the District’s service territory or infrastructure.

5.53.010.4. An applicant for electric and/or water service whose property is not located in the
District’s official territory will be served by the District only under the following conditions:
   a) The property must be located within the District’s approved Sphere of Influence;
   b) The property owner/developer shall agree to being annexed into the District’s
        territory and pay all costs to process the application through the appropriate Local
        Agency Formation Commission (LAFCo);
   c) The District must evaluate and find that there is sufficient capacity within the electric
        and/or water systems to provide service;
         The annexation shall be part of the development agreement:
   d) If the District finds that there is not sufficient capacity in the existing systems to
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      provide service, the applicant must agree to construct or pay for construction of the
      necessary facilities as determined by the District to provide service;
   e) The property owner shall follow all rules, procedures and policies of the District in
      construction of any facilities to establish electric and/or water service.

5.53.010.5 Any application for annexation initiated under the terms of this policy shall be
approved by the Board of Directors. District staff shall provide a report to the Board
containing the following:
   a) Identification of the parcel or parcels to be annexed;
   b) Stating whether said parcel or parcels are within the District’s Sphere of Influence;
   c) Stating whether sufficient capacity exists in the District system to provide service, or
       demonstrating that the applicant has agreed to pay for construction of the necessary
       facilities;
   d) An executed agreement committing the applicant to pay the costs of processing the
       application through LAFCo.


                                           CHAPTER 5.55

                                 CONSERVATION PROGRAMS

Section:

       5.55.010 Water and Electric Conservation Programs

5.55.010 Water and Electric Conservation Programs The District shall create and
maintain cost-effective conservation programs that may include rebates, direct-install and/or
technical assistance. The programs will be reviewed and approved by the General Manager
and the Board.




Resolution 2008-25 (8/6/08), Res. 2010-09 (6/2/10), Res. 2011-16 & 17 (8/3/11)




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                                        TITLE 6                              Attachment 2E
                                                                                         6/6/12
                                    WATER SERVICE

CHAPTERS

       6.00          General
       6.01          District Responsibilities
       6.02          Groundwater Management Plan
       6.03          Reports & Planning Documents
       6.04          Application for Service-New Construction & Upgrades
       6.08          Continuity of Service
       6.12          Temporary Service
       6.16          Policy for Commitment to Provide Water Service
       6.18          Water Main Extensions
       6.20          Refusal to Serve
       6.28          Future Water Service Demands
       6.36          Unauthorized Use of Water
       6.40          Resale of Water
       6.44          Fire Protection
       6.48          Service Lateral Connections and Customer Facilities
       6.50          Hazardous Materials
       6.52          Metering
       6.54          Protection of District-Owned Facilities
       6.56          Backflow and Cross-Connections
       6.60          Repairs and Maintenance


                                       CHAPTER 6.00

                                         GENERAL

Sections:

       6.00.010      GENERAL

6.00.010 General

6.00.010.1 These Water Service Policies have been adopted by the District in the interest of
efficiency, economy, reliability and safety in regulating and administering the distribution of
water to its customers. They are subject to revision by the Board of Directors of the District
from time to time in order to meet these objectives.

6.00.010.2 The District shall furnish services under its current rate schedules and these
policies as approved from time to time by the Board of Directors of the District and shall
govern all service except as specifically modified by the terms and conditions of the rate
schedules or by written contracts.

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6.00.010.3 Any dispute arising between an applicant and the District regarding interpretation
and administration of these rules will be referred to the Board of Directors for final decision.

6.00.010.4 If at any time during the Development Agreement process issues arise that need
resolution, the developer should submit a written request to the Project Administrator
responsible for the project in question. Such request shall state all of the items of concern.
The developer can expect a response within 10 business days from receipt of request. If no
resolution is reached, the developer can request a meeting with the District's General
Manager. If still no resolution is reached, the developer can request a meeting before the
Board to resolve the issue. Staff shall agendize the item before the Board for the next
scheduled regular Board meeting. Scheduling shall be consistent with the Brown Act and
must occur with at least 72 hours prior notice. Only after this process is exhausted without
resolution of the dispute may the parties proceed to litigation. If either party commences a
court action against the other based on a dispute or claim to which this paragraph applies
without first complying with the provisions of this paragraph, the party commencing the court
action shall not be entitled to recover attorney's fees, even if they would otherwise be
available in such court action.


                                       CHAPTER 6.01

                              DISTRICT RESPONSIBILITIES

Section:

       6.01.010       Service

6.01.010 Service Water service is an interruptible service.

6.01.010.1 To the best of its ability and in consideration of existing sources, the District will
supply water at each customer's service connection dependably and safely, in adequate
quantities to meet the reasonable needs and requirements of the customer, in accordance
with these rules and regulations.

6.01.010.2 The District will provide potable water that meets the standards of the United
States Environmental Protection Agency and the California State Department of Public
Health.


                                       CHAPTER 6.02

                         GROUNDWATER MANAGEMENT PLAN

Sections:

       6.02.010       Statement of Purpose
       6.02.020       Groundwater Monitoring Plan


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6.02.010 Statement of Purpose The purpose of the Martis Valley Groundwater
Management Plan is to protect the chemical quality of the groundwater resource and assure
continued supply of high quality groundwater to the population within and adjacent to Martis
Valley by developing and implementing a monitoring program to guide appropriation and use
of groundwater.

The authority to establish a groundwater management plan was granted by Assembly Bill
3030, dated September 26, 1992, in accordance with the California Water Code, Division 6,
Part 2.75 Sections 10750 to 10755. AB 3030 authorizes adoption and implementation of a
groundwater management plan to manage groundwater within a groundwater basin
identified in the California Department of Water Resources Bulletin 118. DWR Bulletin 118
identifies the Martis Valley Groundwater Basin as being within the North Lahontan
Hydrologic Study Area and designates the basin as Basin No. 6-67.

6.02.020 Groundwater Monitoring Plan The Groundwater Monitoring Plan will monitor
groundwater levels to enable comparison with historic water levels; track static water levels
over time to evaluate changes due to recharge variations (drought conditions) and
groundwater pumping; and maintain a database of groundwater usage to assure a continued
supply of high quality water for the residents of the Truckee area.

6.02.020.1 Data Collection Data collection activities shall include on-going data collection
of District sources.


                                      CHAPTER 6.03

                         REPORTS & PLANNING DOCUMENTS

Sections:

       6.03.010      Consumer Confidence Report
       6.03.020      Urban Water Management Plan
       6.03.030      Water System Master Plan

6.03.010 Consumer Confidence Report The District shall prepare an annual Consumer
Confidence Report (CCR) in accordance with the requirements of the California Department
of Public Health. A copy of the CCR shall be mailed to all active water system customers. A
copy of the CCR shall be made available to any other interested party upon request.

6.03.020 Urban Water Management Plan The District shall prepare an Urban Water
Management Plan (UWMP) every five years in accordance with the requirements of the
California Department of Water Resources. Copies of UWMP shall be made available for
public review at the District offices.

6.03.030 Water System Master Plan The District shall periodically update its Water
System Master Plan. The interval between updates shall be at most ten years. Copies of
the Water System Master Plan shall be made available for public review at the District
offices.


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                                       CHAPTER 6.04

       APPLICATION FOR SERVICE – NEW CONSTRUCTION & UPGRADES

Sections:

       6.04.010      General
       6.04.020      Change in Customer's Equipment or Operations
       6.04.030      New Construction and Upgrades
       6.04.040      As-built Drawing Procedures

6.04.010     General Each applicant for water service shall complete the necessary
application and shall pay to the District the current fees as determined by the District.

6.04.010.1 Each applicant will be required to show identification when he or she signs the
District's application.

6.04.010.2 The application for service is a written request for service and does not bind the
applicant to accept service nor does the application require that the District actually provide
water service. It does, however, bind the applicant to be governed by all rules and
regulations of the District in case service is rendered.

6.04.010.3 The District shall render service when it has determined that the applicant has
complied with the following provisions:

6.04.010.3(A) The applicant has received a valid building permit from the Town of Truckee
or from the appropriate agency governing where the property is located.

6.040.010.3(B) All written agreements between the applicant and the District have been
evaluated by staff, fully executed by the parties and if applicable, approved by the Board of
Directors. Please refer to the District’s Development Agreement Guidelines for new
developments.

6.040.010.3(C) The applicant has demonstrated that they have acceptable credit and paid
all appropriate fees and charges.

6.040.010.3(D) The applicant has installed the necessary service facilities.

6.04.020 Change in Customer's Equipment or Operations - In the event a customer
desires to make a material change in the amount of consumption or in the size, character, or
extent of the equipment and facilities providing water service to them, they shall immediately
file with the District an amendment of the application for service, pay all charges required
thereby and obtain approval of the District prior to accepting such service.




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6.04.030 New Construction and Upgrades

6.04.030.1 Applications for new construction and upgrades shall be processed as outlined
below.
Line Extension or Facility Administrative Action Required             Type of Agreement
         Upgrade                                                            Required
                                General              Board of
                                Manager              Directors
Under $400,000                     X                                Development Agreement
Over $400,000                                            X          Development Agreement
Note: The dollar amounts refer to the total value of on-site improvements being installed by
       the applicant to be conveyed to the District for ownership operation and maintenance.
       This does not apply to meter size upgrades.

6.04.030.2 The applicant shall be responsible for all District costs incurred in the course of
providing service to a water project, as may be outlined in individual development
agreements.

6.04.030.3 The General Manager shall develop operational methods for staff use to
implement the intent of this policy.

6.04.040 As-Built Drawing Procedure See Section 5.01.027 regarding project
documentation deposit and Appendix B for District Policy Regarding As-built Drawings.


                                      CHAPTER 6.08

                               CONTINUITY OF SERVICE

Sections:

       6.08.010      General
       6.08.020      Emergency Interruptions
       6.08.030      Scheduled Interruptions
       6.08.040      Apportionment of Supply

6.08.010 General

6.08.010.1 The District will exercise reasonable diligence and care to deliver to its customers
a continuous and sufficient supply of safe and potable water at a proper pressure and to
avoid, so far as reasonably possible, any interruption in delivery. When such interruptions
occur, the District will endeavor to re-establish service as soon as is reasonably and
practicably possible, consistent with its considerations for safety of its customers and the
general public.

6.08.010.2 The District acknowledges that certain areas have relatively low pressure and
that continued measures are being taken to increase pressure.



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6.08.010.3 The District will not be liable for interruptions, shortages, or insufficiency of
supply or any loss or damage of any kind or character occasioned thereby.

6.08.020 Emergency Interruptions

6.08.020.1 Should an emergency interruption, shortage, or insufficiency of supply occur
which affects the service to any public or private fire protection device, the District will
promptly notify the Fire Marshall or other official responsible for fire protection within District
boundaries.

6.08.020.2 Under disaster conditions, the District will cooperate to the fullest extent with all
governmental agencies having authority within District boundaries.

6.08.030 Scheduled Interruptions

6.08.030.1 Whenever the District determines that an interruption in service is necessary for
any purpose, it will attempt to notify all customers to be affected by the interruption of the
approximate time and duration of the interruption, if reasonably possible.

6.08.030.2 In the event public or private fire protection should be affected by an interruption
in service, the District will promptly notify the Fire Marshall or other official responsible for fire
protection within District boundaries of the approximate time and duration of the interruption.

6.08.040 Apportionment of Supply

6.08.040.1 During periods of water shortage, the District shall apportion its available supply
among its customers as required by existing State and Federal laws. Otherwise, it will
apportion its supply in the manner that appears most equitable under the circumstances
then prevailing, with due regard to public health and safety.


                                         CHAPTER 6.12

                                    TEMPORARY SERVICE

Sections:

       6.12.010        Establishment of Temporary Service
       6.12.020        Change to Permanent Status

6.12.010 Establishment of Temporary Service The District will furnish temporary water
service to customers under the following conditions:

6.12.010.1 All Temporary Service shall be metered and billed monthly.

6.12.010.2 The applicant will be required to pay to the District in advance, a deposit of the
estimated cost as determined by the District of installing and removing the facilities required
to furnish temporary service.



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6.12.010.3 Where the temporary service is to be less than one month, the applicant shall
deposit a sum of money equal to the estimated bill for service. The deposit shall be
refunded subject to adjustment in accordance with the actual bill due upon termination of
service.

6.12.010.4 Where the temporary service shall be in excess of one month, the applicant shall
establish his credit in the manner prescribed for permanent service, as set forth in Chapter
5.01.

6.12.020 Change to Permanent Status Temporary services existing for longer than one
year must be transferred to permanent service. Customer will be required to pay any
applicable fees at the time the service becomes permanent.

6.12.030 Abandonment of Temporary Service Should removal/abandonment charges
exceed the amount of the deposit collected (Section 6.12.010.2), the customer shall be
billed for those excess charges.


                                      CHAPTER 6.16

            POLICY FOR COMMITMENT TO PROVIDE WATER SERVICE

Section:

       6.16.010      Policy for Commitment to Provide Water Service

6.16.010 Policy for Commitment to Provide Water Service

6.16.010.1 The District will provide a “Will Serve Letter” to a property owner upon written
request and under the following conditions:

6.16.010.1(A) A sufficient capacity to deliver water exists;

6.16.010.1(B) The property is within the District’s service area.

6.16.010.2 Once the District’s conditions have been met, water service will be provided.


                                      CHAPTER 6.18

                              WATER MAIN EXTENSIONS

Sections:

       6.18.010      Water Main Extensions

6.18.010 Water Main Extensions



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6.18.010.1 Each applicant for service requiring an extension or modification of the water
distribution facilities shall furnish at his expense such extension or modification.

6.18.010.2 The District at its option may require such applicant to install water distribution
facilities with more capacity, of greater length, or of a different route than would be required
for the service requested (hereafter "excess facilities"). In such event, the District may
reimburse the applicant for the costs of such excess facilities if such excess facilities are
required solely to benefit, improve or upgrade service to existing District customers. If,
however, such excess facilities are deemed necessary by the District for the orderly
development of an integrated water distribution system, the District shall:

   1. Reimburse the applicant for the costs of such excess facilities, or

   2. Require the applicant to install and pay the cost of such excess facilities, and the
      applicant may be entitled to reimbursement pursuant to Subsection 6.18.010.2(A)

6.18.010.2(A) At the District's option, it may enter into an agreement with the applicant
whereby adjacent properties connecting to the main extension, installed by the applicant, will
be required to reimburse the applicant, through the District, for a prorated share of the main
extension cost. Such reimbursement shall be as outlined below:

   1. The reimbursement clause of the Development Agreement shall remain in effect for a
      period of ten years from the date the facilities are accepted by the District.

   2. The amount eligible for reimbursement shall be dependant upon the number of
      parcels in existence and the number of equivalent dwelling units as determined from
      the appropriate General Plan Land Use Map at the time the Development Agreement
      is signed. If parcels are later subdivided, rezoned or change in usage, the applicant
      shall not be eligible for reimbursement amounts above that outlined in the
      Development Agreement. A map outlining the parcels potentially subject for
      reimbursement shall be included in the Development Agreement.

   3. The District shall notify the owners of the parcels encompassed in the reimbursement
      clause that reimbursement will be required before water service can be provided to
      those parcels. Such notification shall be by USPS Certified Mail.

   4. For projects where the total amount eligible for reimbursement is less than $5,000, no
      reimbursement agreement will be executed.

   5. The total amount eligible for reimbursement shall be calculated as the sum of the
      following items:

          •   The share of engineering effort directly related to water system facilities. Any
              costs related to telephone, cable television, natural gas, roadways or other
              utilities and improvements shall not be eligible for reimbursement through the
              District.

          •   Actual costs charged to the Developer by the District for the inspection and
              testing of the water system facilities.

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           •   In the case of an underground trench containing only water facilities, the entire
               construction cost of the installed facilities shall be eligible. In the case of a
               joint trench containing other utilities (electric, gas, telephone, cable TV, etc.),
               an allowance per linear foot of trench shall be used.

   6. The applicant shall provide invoices, receipts, itemized bills or similar documentation
      to the District as proof of the actual cost of the facilities installed. Pre-construction
      bids from contractors shall not fulfill this requirement.

   7. The District shall review the cost documentation submitted by the applicant. If, in the
      opinion of the District, the costs are higher than those considered reasonable and
      customary for the type of work performed, the District may reduce the amount eligible
      for reimbursement to that considered reasonable and customary. Decisions made by
      the applicant to fast-track construction, pay overtime and/or perform construction at
      the end of the construction season shall not obligate the District to include any such
      additional costs incurred by the applicant in the total eligible for reimbursement.

   8. Upon completion of the construction and review of the cost documentation submitted
      by the applicant, the District shall provide final documentation to the applicant of the
      total amount eligible for reimbursement.

   9. No adjustments to the amount eligible for reimbursement shall be made for the
      effects of inflation (or deflation).

   10. When subsequent parties that owe money through reimbursement, request service
       from the District, the amount owed shall be paid to the District. The District shall then
       pay the appropriate amount to the individuals who are the owners of record of the
       project APN on the date that the subsequent parties are connected. Each
       subsequent party shall be subject to an administrative charge to cover administrative
       duties associated with the reimbursement.

6.18.010.3 All water distribution facilities installed hereunder shall be and remain the
property of the District.

6.18.010.4 Size and location of facilities installed shall be specified by the District. Type and
quality of material shall be that specified by the District.

6.18.010.5 The installation of main extension does not alleviate the applicant from the
payment of Facilities Fees or Connection Fees.

6.18.010.6 Properties to be connected to the water system must be adjoining a distribution
main. Extension of water distribution facilities shall be required for service to parcels not
adjoining an existing distribution main. Distribution system extensions or modifications may
be required to meet current system design and capacity criteria. The District may determine
that it would not be in the best interest of the District to allow a system extension or
modification.



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6.18.010.7 If, by reason of a lot line adjustment or lot split, water service to a parcel no
longer satisfies the requirement of Section 6.18.010.6, water service to the nonconforming
parcel may be terminated until such time as it is brought into compliance with District
regulations. At such time that the District becomes aware of a nonconforming parcel, the
District will notify the property owner and initiate the process of bringing the water service
into compliance with District requirements. The District will require the property owner to
bring the water service into compliance within 30 days from notification. During the Lahontan
Regional Water Quality Control Board (LRWQCB) no soil disturbance period between
October 15th and April 30th, the property owner will be given 30 days beginning May 1st to
complete the required modifications.

6.18.010.8 An applicant for water service or existing customer may apply for a variance from
the service requirements of the District. The variance shall be submitted in the form of a
letter stating the requested variance, the reasons for the request and shall include a non-
refundable fee as described in the Miscellaneous Fees Schedule. The request shall be
reviewed by the Water System Engineer and General Manager of the District. If both agree
to grant the variance, the variance is granted. If either or both deny the variance, the
variance is denied. If the variance is denied, the applicant may appeal to the Board of
Directors.

6.18.010.9 In granting a variance to District requirements, conditions may be imposed to
mitigate any adverse impacts to the District water system caused by the nonconforming
facilities.


                                        CHAPTER 6.20

                                    REFUSAL TO SERVE

Sections:

       6.20.010       Conditions
       6.20.020       Notification

6.20.010 Conditions The District may refuse to provide water service under the following
conditions:

6.20.010.1 If the applicant, customer, or owner of serviced premises fails to comply with any
of the District's rules and regulations.

6.20.010.2 If the intended use of the service is of such a nature that it will be detrimental or
injurious to the District's water distribution system, its customers, or the general public.

6.20.010.3 If, in the judgment of the District, the applicant's installation of pipes for utilizing
the service is unsafe, hazardous, subject to freezing, or of such nature that satisfactory
service cannot be rendered.

6.20.010.4 Where service has previously been disconnected to such applicant for fraudulent
use.

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6.20.010.5 If the service sought to be provided would result in a sub-standard supply of
water volume or pressure, as determined by the District Engineer.

6.20.020 Notification When an applicant has been refused service under the provisions of
this rule, the District shall notify such applicant promptly of the reasons for the refusal to
serve and the corrective action to be taken by such applicant before service will be provided.


                                        CHAPTER 6.28

                          FUTURE WATER SERVICE DEMANDS

Section:

       6.28.010       Future Water Service Demands

6.28.010 Future Water Service Demands

6.28.010.1 The Board of Directors has determined that future water demand exceeds
current supply capacity.

6.28.010.2 It is the policy of the District to pursue additional production wells in order to meet
the demand for future water service, and to connect such wells to the existing water
distribution system so as to create an integrated water distribution system. The District
intends to structure its requirements for additional production wells so as to maintain a
reliable supply of water in excess of the peak day demands, plus a necessary amount for fire
protection safety.


                                        CHAPTER 6.36

                            UNAUTHORIZED USE OF WATER

Section:

       6.36.010       Unauthorized Use of Water

6.36.010 Unauthorized Use of Water

6.36.010.1 When the General Manager determines that a customer or other person or entity
has received unauthorized water service, or when the General Manager determines that a
customer or other person or entity has caused water service to be improperly or inaccurately
metered, the District shall render bills for such service, including administrative costs, based
upon its reasonable estimate of the service actually furnished for the full period during which
the service was unauthorized.



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6.36.010.2 The customer will be held liable for District’s facilities located on their property
which are tampered with regardless of who did the tampering.

6.36.010.3 The District may disconnect service without notice or refuse service, if the
customer’s actions or the condition of his/her premises is such as to indicate an intent to
defraud the District.

6.36.010.4 In the event water service is disconnected due to unauthorized use of water, all
costs associated with restoring water service to a property will be the responsibility of the
customer or the party requesting to have the water service restored.

6.36.010.5 The customer is responsible to restore their service to its original state pursuant
to the District’s Policies and Water System Construction Standards prior to the District
reconnecting service. The District will perform an inspection to verify the diversion has been
corrected.

6.36.010.6 When the General Manager determines that a violation of California Penal and/or
Civil Codes governing the unauthorized use of water with the intent to defraud, may have
occurred, the General Manager shall contact the appropriate County District Attorney's
Office, and inquire concerning the feasibility of filing criminal charges against the person or
entity suspected of violating such Penal and/or Civil Code sections. If, after such inquiry, the
General Manager determines that it is in the best interest of the District to file such criminal
charges, and that there is a reasonable possibility of successful prosecution of any such
person or entity, then the General Manager shall, on behalf of the District, file criminal
charges with the appropriate District Attorney's Office.


                                       CHAPTER 6.40

                                   RESALE OF WATER

Section:

       6.40.010      Resale of Water

6.40.010 Resale of Water

6.40.010.1 Customers shall not resell any of the water received from the District.

6.40.010.2 Customers shall not deliver water to premises other than those specified in the
customer's application for service, unless written permission of the District is obtained in
advance.




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                                       CHAPTER 6.44

                                    FIRE PROTECTION

Sections:

       6.44.010       General
       6.44.020       Water Supply for Fire Suppression
       6.44.030       Fire Sprinkler Service

6.44.010 General

6.44.010 The District is a purveyor of water and is not responsible in any manner for the
provision of water supply or facilities for fire suppression or fire protection services. Such
services are provided by the Truckee Fire Protection District.

6.44.010.1 Upon request, fire hydrants will be installed by the District or its designee at the
expense of the owner or applicant requesting the hydrant.

6.44.010.2 No person or persons other than those designated and authorized by the
Truckee Fire Protection District, or by the District, shall open any fire hydrant valve, or
tamper with the hydrant in any manner.

6.44.020 Water Supply for Fire Suppression To the extent that the District is able to
provide water for fire suppression to the Truckee Fire Protection District, it shall provide such
water at no charge. Water provided to Truckee Fire Protection District properties for
domestic and irrigation purposes shall be subject to the District’s standard rates and
charges.

6.44.030 Fire Sprinkler Service

6.44.030(A) The supply of water to individual customers through a combination domestic -
fire sprinkler service is included within the customer’s monthly bill for domestic water service.

6.44.030(B) Properties that are provided with a separate fire sprinkler service may be
subject to a charge.

6.44.030(C) Customers shall make application to the District for the installation of fire
sprinkler services. Such services shall be subject to District review and regulation. The
installation of backflow prevention equipment and detector check meters is required for all
fire sprinkler services.




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                                      CHAPTER 6.48

         SERVICE LATERAL CONNECTIONS AND CUSTOMER FACILITIES

Sections:

       6.48.010      Installation of Service Laterals
       6.48.020      Ownership of District Service Laterals
       6.48.030      Number and Sizing of Service Laterals
       6.48.040      Control Valves
       6.48.050      Customer’s Facilities
       6.48.060      Water Leaks on Customer-Owned Facilities
       6.48.070      Right of Access
       6.48.080      Damage to District's Facilities

6.48.010 Installation of Service Laterals

6.48.010.1 The District shall at the request and expense of any applicant, furnish and install
service laterals of suitable capacity from a water main to a point to be determined by the
District, between the existing or proposed curb line and the property line of the premises
abutting upon a street or other thoroughfare, or along District's right-of-way or easement.
The service lateral, the meter, meter accessories and meter box are the property of the
District and shall be maintained by the District and may be removed upon disconnection of
service.

6.48.010.2 Only duly authorized employees or agents of the District are permitted to install
service pipes from the District's main to the customer's point of service.

6.48.020 Ownership of District Service Laterals Depending upon the service type, a
defined point of service will be determined by the District. The District is responsible for all
service laterals up to this defined point of service.

6.48.030 Number and Sizing of Service Laterals Sizing of service laterals feeding a
given location shall be determined by the District. The quantity of service laterals feeding a
given location shall be determined by the District.

6.48.040 Control Valves The District shall install a suitable valve as close to the meter
location as practical, the operation of which will control the entire supply from the service.

6.48.050 Customer’s Facilities From the defined point of service, the customer shall, at
his own risk and expense, furnish and install all equipment that may be required to receive,
control, apply and utilize water service and shall be responsible for maintenance and repair
of all piping.

6.48.060 Water Leaks on Customer-Owned Facilities The customer shall be responsible
for the cost of all water lost due to leakage.

6.48.070 Right of Access The District or its duly authorized agents shall have at all
reasonable times the right of ingress to and egress from the customer’s premises for any
purpose properly connected with water service.
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6.48.080 Damage to District's Facilities The customer shall be liable for any damage to
meters, meter boxes or other facilities owned by the District caused by an act of the
customer or his tenants, employees, agents, contractors, licensees, or permittees including
damage caused by freezing, steam, hot water, chemicals, or other factors outside the control
of the District.


                                      CHAPTER 6.50

                               HAZARDOUS MATERIALS

Section:

       6.50.010      Handling Hazardous Materials

6.50.010 Please refer to the District Safety Manual for procedures for handling
Hazardous Materials.

                                      CHAPTER 6.52

                                       METERING

Sections:

       6.52.010      Residential Meters
       6.52.020      Ownership of Meters and Meter Boxes
       6.52.030      Access to Meters
       6.52.040      Meters are Required
       6.52.045      Submetering of Water for Resale
       6.52.050      Standard of Accuracy
       6.52.060      Tests
       6.52.070      Meter Errors
       6.52.080      Non-registering Meters
       6.52.090      Meter Sizing

6.52.010 Residential Meters - The District began installation of water meters in 2009 to
enable volumetric billing of customers.

For billing purposes, all meters located on the customer's premises will be billed separately
and the readings thereof shall not be combined unless the District determines that a
combined reading will result in operating convenience.

6.52.020 Ownership of Meters and Meter Boxes

6.52.020.1 All meters, meter boxes and related equipment installed by the District shall
remain the property of the District, regardless of whether it is located on the customer's
premises or not.

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6.52.020.2 Customers shall exercise reasonable care to prevent such meters, meter boxes
and other equipment from being damaged or destroyed and shall not tamper with such
facilities. If any defect or failure of equipment is discovered by the customer, they shall
promptly notify the District.

6.52.020.3 Customers shall not install facilities inside District-owned meter boxes except for
a piping connection downstream of the meter. Any other customer-owned facilities such as
shut-off valves, stop and drain valves, backflow devices, taps for irrigation piping or yard
hydrants shall be located outside of District-owned boxes. Should the District become aware
of inappropriate customer-owned facilities located within a District-owned box, the District
shall notify the customer in writing and shall allow 30 calendar days for the customer to take
corrective action to relocate the customer-owned facilities. If corrective action has not
occurred within 30 days, the District reserves the right to perform any corrective action
deemed appropriate by the District and to invoice the customer for the costs thereof.

6.52.020.4 Piping within District-owned meter boxes is often electrically isolated from the
customer-owned service lateral. Customers shall not connect electric-resistance type
thawing equipment to piping within a meter box to thaw a frozen customer-owned service
lateral.

6.52.020.5 Damage to District’s Facilities The customer shall be liable for any damage to
meters, meter boxes or other facilities owned by the District caused by an act of the
customer or his tenants, employees, agents, contractors, licensees, or permittees including
damage caused by freezing, steam, hot water, chemicals or other factors outside the control
of the District.
6.52.030 Access to Meters Meters and related equipment may be installed by the District
upon the customer's premises, in a location approved by the District. Such locations shall at
all times be made accessible to District personnel, for meter reading, inspection and testing.
6.52.040 Meters are Required All new construction that is provided with water service for
any purpose shall be equipped with a water meter. Installation of a detector check meter is
acceptable for fire sprinkler services.
6.52.040.1 Number of Meters – Residential
For single-family residential housing, one meter per parcel is required. If there exists an
outbuilding such as a garage, the property owner may install a second meter at his option.
The second meter shall be subject to all appropriate Facility Fees and Connection Fees in
effect at the time that the meter is installed. The existence of a small rental unit (mother-in-
law quarters) that is approved and permitted by the governing land use agency (Nevada
County, Placer County or Town of Truckee) shall not mandate the installation of a second
meter. Installation of appropriate backflow equipment will be required.

For multi-family residential housing, one meter per parcel is required. For condominium
units within a single structure, each individually owned unit shall have a separate meter. For
apartments under the ownership of a single entity, a master meter serving all units, or
separate meters serving individual units may be installed, at the option of the owner.

Multi-family residential housing is subject to the requirements of AB 1881.

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6.52.040.2 Number of Meters – Non-Residential
For non-residential development that consists of units under single ownership that are
rented to more than one party, a master meter serving all units, or separate meters serving
individual units may be installed, at the option of the owner.

For non-residential condominiums within a single structure, the entire structure may be
served with a single meter or separate meters serving individual units may be installed.

Non-residential development is subject to the requirements of AB 1881.

6.52.040.3 Number of Meters – Mixed-Use
For mixed-use development that consists of both residential and non-residential units, the
residential units must be metered separately from the non-residential units.

For mixed-use development where all units are under single ownership and are rented to
more than one party, a minimum of one master meter serving all residential units and a
second master meter serving all non-residential units is required. Separate meters serving
each individual unit may be installed at the option of the owner.

For mixed-use development consisting of both residential and non-residential condominium
units, a separate meter is required for each residential unit. The non-residential units may
be served by either a master meter serving all non-residential units, or separate meters
serving individual units may be installed.

Mixed-use development is subject to the requirements of AB 1881.

6.52.040.4 Number of Meters – Irrigation
AB 1881 requires that a separate irrigation meter be installed for all new developments with
more than 5,000 square feet of irrigated landscaping. The project developer shall be
required to complete a certification form identifying the amount of irrigated landscape within
a project for the determination of whether a separate irrigation landscape meter is required.
Separate irrigation meters are not required for detached single-family housing.

For multi-family residential, non-residential and mixed-use development under single
ownership equipped with a master meter and with less than 5,000 square feet of irrigated
landscaping, a separate landscape irrigation meter may be installed, or the irrigation system
may be connected to the master meter at the owner’s option.

For multi-family residential, non-residential and mixed-use development under single
ownership equipped with individual meters and with less than 5,000 square feet of irrigated
landscaping, a separate landscape irrigation meter may be installed, or the irrigation system
may be connected to the master meter at the owner’s option. If the irrigation system is
connected to an individual unit, documentation of this fact shall be denoted in the lease
and/or rental agreement governing the unit and shall be clearly understandable to the
current renter and any potential renter of the property.

For multi-family residential, non-residential and mixed-use condominiums and with less than
5,000 square feet of irrigated landscaping, a separate landscape irrigation meter may be
installed, or the irrigation system may be connected to a meter serving one of the individual

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units at the owner’s option. If the irrigation system is connected to an individual unit,
documentation of this fact shall be filed with the Nevada County Recorder’s office such that
it appears upon a title report and is clearly understandable to the current owner and any
potential purchasers of the property.

6.52.040.5 Number of Meters – Use Conversions
In the event that a property owner requests a change in the type of use at a given location,
the owner shall submit documentation to the District describing the proposed changes and
any anticipated increase or decrease in water usage. The District may require that the owner
install a different size meter based upon the information submitted. The District may also
require the installation of additional backflow protection equipment.

In cases where a larger meter is required, the property owner shall be subject to the District's
current Facility Fee and Connection Fee schedule for the new meter. The property owner
shall be given a credit for the current Facility Fee value of the old meter that will be removed.

In cases where a smaller meter is required, the property owner shall be subject to the
District's current Connection Fee schedule for the new meter. The property owner shall not
be subject to a Facility Fee. The property owner shall be given credit equal to the difference
in the current Facility Fee value of the old meter that will be removed and the new meter that
will be installed. That credit is non-refundable and is usable only towards future development
or change in usage that occurs on the same property. The credit is not transferable to
another site but may be transferred to a future owner of the same property.

6.52.040.6 Number of Meters – Condominium Conversions
In the event that a property owner requests a change in the type of ownership at a given
location, the owner shall submit documentation to the District describing the proposed
changes. The District will require that the property comply with all current requirements
regarding account ownership and the number of meters serving a given location, including
the payment of Facility Fees and Connection Fees. The property owner shall be given credit
for the current Facility Fee value of the old meter that will be removed. The District may also
require the installation of additional backflow protection equipment.

6.52.045 Sub-metering of Water for Resale Sub-metering for the purpose of allocating a
combined water bill among individual units is not allowed.
6.52.050 Standard of Accuracy - Every meter shall be tested prior to its installation and no
meter will be installed which has an error of more than 2 percent fast or slow. Factory
testing performed by the meter manufacturer shall be acceptable for compliance with this
requirement.
6.52.060 Tests Any customer may request that the District test the meter serving his
premises. The customer shall deposit an amount sufficient to cover the reasonable cost of
the test pursuant to the Miscellaneous Fee Schedule.

The customer shall be notified not less than five calendar days in advance of the time and
place of the test, which shall thereafter be performed by a qualified meter testing facility. In
the event that the meter is found to be more than 2 percent fast, the deposit will be
refunded.


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A written report giving the results of the test will be furnished the customer within ten
calendar days of completion of the test.

6.52.070 Meter Errors

6.52.070.1 Where, in the opinion of the District, appropriate tests reveal that a meter is
registering more than 2 percent fast, the District will refund to the customer the amount of
the overcharge based on corrected meter readings for the period the meter was in use, not
exceeding six months.

6.52.070.2 Where, in the opinion of the District, appropriate tests reveal that a meter is
registering more than 5 percent slow, the District will bill the customer for the amount of the
undercharge based on corrected meter readings for the period the meter was in use, not
exceeding six months.

6.52.080 Non-registering Meters Where the District determines that a meter is not properly
measuring or has stopped measuring water consumption due to improper functioning of the
meter or meter accessories, it may charge such customer for the period the meter was not
functioning, provided, however, that such period shall not exceed six (6) months. Such
charge shall be computed upon a comparison of prior consumption during a similar service
period.

6.52.080.1 Where the District determines that a meter is not properly measuring water
consumption due to any unauthorized person's actions, whether qualified or not, the service
may be disconnected by the District. In accordance with California Penal and/or Civil Codes,
the customer may be charged for the period the meter was not functioning. Such charge
shall be computed upon an estimate of consumption based upon the customer's prior
consumption during the same season in previous years or an estimate may be based on
previous customer's consumption at the same location, during the same season of the year.
 Administrative costs shall also be charged to the customer by the District.

6.52.080.2 In the event water service is disconnected due to unauthorized use of water, all
costs associated with restoring water service to a property will be the responsibility of the
customer or the party requesting to have the water service restored.

6.52.080.3 Upon determination by the General Manager that a violation of California Penal
and/or Civil Code sections having to do with unauthorized use of water with intent to defraud,
tampering with water meter with intent to defraud, malicious interference or connection with
the water line, and/or malicious interference or obstruction with the water line, refer to
Chapter 6.36.

6.52.090 Meter Sizing For new construction, the developer shall submit to the District
sufficient information regarding anticipated water demands such that the District can
calculate the appropriate meter size. Sizing of meters shall be based on AWWA Standards.




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                                       CHAPTER 6.54

                    PROTECTION OF DISTRICT-OWNED FACILITIES

Sections:

       6.54.010       General
       6.54.020       Protection of Meter Boxes from Traffic Loading
       6.54.030       Protection of Service Laterals and Mains from Freezing
       6.54.040       Excessive Cover

6.54.010 General Any party that damages existing District-owned water facilities shall be
responsible for the replacement or repair of the damaged facilities to the District’s
satisfaction.

Any party that undertakes actions that have a likelihood of causing damage to existing
District-owned water facilities shall mitigate the potential for damage to the District’s
satisfaction.

6.54.020 Protection of Meter Boxes from Traffic Loading At the time of initial installation,
the District shall make a determination whether traffic-rated meter boxes are required based
upon the proposed improvements and the anticipated snow removal practices at the site.

Should any party make modifications such that non-traffic rated meter boxes are subjected
to vehicular loading during normal conditions or snow removal, that party shall be
responsible to replace the non-traffic rated meter boxes with traffic rated boxes. As
alternative, bollards or similar protective measures may be installed to prevent vehicular
loading on non-traffic rated meter boxes.

In such cases, the District shall notify the responsible party in writing and allow 30 calendar
days for completion of the required modifications. If the responsible party fails to complete
the required modifications within 30 days, the District may perform the required
improvements and invoice the responsible party for the costs thereof.

6.54.030 Protection of Service Laterals and Mains from Freezing District water system
facilities are constructed to a minimum depth to provide sufficient insulation and protection
from freezing. No party shall perform grading or undertake improvements such that the soil
cover or freeze protection of existing facilities is reduced.

Should the District determine that subsequent improvements have impacted the freeze
protection of existing facilities, the District shall notify the responsible party in writing and
require modifications such as restoration of the original grade or reconstruction/relocation of
the existing facilities to sufficient depth. The District shall allow 30 calendar days for the
responsible party to complete the required modifications. During the LRWQCB no soil
disturbance period between October 15th and April 30th, the property owner will be given 30
days beginning May 1st to complete the required modifications. If the responsible party fails
to complete the required modifications within 30 days, the District may perform the required
improvements and invoice the property owner for the costs thereof.


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6.54.040 Excessive Cover District water system facilities are constructed to a maximum
depth to provide reasonable access during maintenance activities. No party shall perform
grading or undertake improvements such that additional soil cover is added to existing
District facilities without prior approval by the District.

Should the District determine that subsequent improvements have added additional soil
cover and/or impacted the ability of the District to maintain its facilities, the District shall
notify the responsible party in writing and require that modifications such as restoration of
the original grade or reconstruction/relocation of the existing facilities to an acceptable
depth. The District shall allow 30 calendar days for the responsible party to complete the
required modifications. If the property owner fails to complete the required modifications
within 30 days, the District may perform the required improvements and invoice the
responsible party for the costs thereof.


                                       CHAPTER 6.56

                       BACKFLOW AND CROSS-CONNECTIONS

Sections:

       6.56.010      Purpose
       6.56.020      District Responsibilities
       6.56.030      Customer Responsibilities
       6.56.040      Protective Devices Required
       6.56.050      Testing and Maintenance
       6.56.060      Fees and Charges

6.56.010 Purpose The purpose of this policy is to:

       1. Protect the District’s potable water supply from the possibility of contamination or
          pollution by isolating within the customer's internal distribution system(s) or the
          customer's private water system(s) any contaminants or pollutants which could
          backflow into the public water systems.

       2. Promote the elimination or control of existing cross-connections, actual or potential,
          between the customer's in-plant potable water system and non-potable water
          system, plumbing fixtures and industrial piping systems.

       3. Provide for the maintenance of a continuing program of cross-connection control
          which will systematically and effectively prevent the contamination or pollution of all
          potable water systems.

       4. The District shall have a backflow prevention and cross-connection control
         program which meets or exceeds all State and Federal rules and regulations.

6.56.020 District Responsibilities The District shall be responsible for the protection of
the public potable water distribution system from contamination or pollution due to the
backflow of contaminants or pollutants through the water service connection. It is the

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responsibility of the District to evaluate the hazards beyond the service connection in a
customer's water system to determine whether pollutants or contaminants are, or may be,
handled on the customer's premises in such a manner as to possibly permit contamination
of the public water system. The District has the right to disconnect service to any customer
whose water system may potentially harm the public water system.

When a hazard or potential hazard to the public water system is found or suspected, the
customer shall be required to install an approved backflow prevention assembly at each
public water service connection to the premises in accordance with District rules and
regulations. The District shall not be responsible for any loss or damage directly or indirectly
resulting from or caused by the proper, improper or negligent installation, operations, use,
repair or maintenance of, or interfering with, any protective device by any customer or any
other person.

6.56.030 Customer Responsibilities

6.56.030.1 The customer shall be required to furnish and install, in a manner approved by
the District, and keep in good working order and safe condition, any and all backflow
prevention assemblies. All backflow prevention assemblies shall be owned and maintained
by the customer.

6.56.030.2 All backflow prevention assemblies shall be tested at the time of installation and
annually thereafter. In the event of high hazard installations, the District may require more
frequent testing. Backflow prevention assemblies shall be tested by a certified backflow
prevention assembly tester and test reports shall be submitted to the District.

6.56.030.3 In the event that a backflow prevention assembly is found to be damaged,
defective or operating improperly, it shall be repaired or replaced by the customer.

6.56.030.4 The customer shall not bypass or render inoperative any backflow prevention
assembly. If a backflow prevention assembly is temporarily removed for repair or other
reason, the customer shall provide an approved backflow prevention assembly, tested by a
certified backflow prevention assembly tester at the time of installation.

6.56.030.5 The customer is to maintain an adequate heat source to any backflow prevention
assembly housings in order to prevent cold weather from affecting the operation of the
assembly.

6.56.030.6 Once notified of the need to install a backflow prevention assembly, the customer
shall immediately install such approved assembly at the customer's own expense. Failure,
refusal or inability on the part of the customer to install, have tested and maintain said
assembly shall constitute sufficient grounds for disconnection of water service to the
premises until such requirements have been satisfactorily met.

6.56.040 Protective Devices Required The protection required to prevent backflow into
the public water system shall be commensurate with the degree of hazard that exists on the
customer's premises. The District shall determine the type of backflow prevention assembly.

6.56.050 Testing and Maintenance All backflow prevention assemblies shall be tested
annually to assure proper operation. In instances where a hazard is deemed great enough,
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testing may be required at more frequent intervals. Such intervals shall be determined by
the District. The customer shall bear all costs of device testing. The cost of any maintenance
required as a result of inspections or testing is the responsibility of the customer.
Maintenance work shall be performed by private contract. Records of inspections, testing or
repairs shall be kept by the District and made available to the appropriate regulatory
agencies.

The District shall notify the customer when tests are required and supply the necessary test
forms and instructions. These forms will be completed by the certified backflow-prevention
tester and returned to the District by the date indicated.

If a device is found to be in non-compliance by inspection and/or testing, the customer shall
be notified in writing. The customer shall correct any deficiency within 15 calendar days of
notification, at which time the inspection shall be repeated. The District shall disconnect
water service if a backflow prevention device has failed to be tested properly or properly
maintained or installed. Notification of intent to terminate water service shall be
commensurate with the hazard to public health and may be delivered to the tenant, owner,
or both as the situation requires.

6.56.060 Fees and Charges Backflow prevention devices shall be subject to fees and
charges to allow the District to recover the costs of administering the backflow prevention
program. Such fees and charges shall be posted in a schedule approved by the District’s
Board of Director’s.


                                      CHAPTER 6.60

                             REPAIRS AND MAINTENANCE

Section:

       6.60.010      Current and Ordinary Repairs and Maintenance

6.60.010 Current and Ordinary Repairs and Maintenance The District hereby construes
the terms "all current and ordinary repairs" and "current and ordinary upkeep or
maintenance," as contained in Public Contract Code Section 20205.2, to include the repair,
upkeep and maintenance of the entire District water system, to allow for routine extension
and expansion of District water facilities to meet the increased demand placed on the
system by the growing needs of District customers, and to include minor and routine work
which District staff is capable of performing. Such work shall include, but shall not be limited
to, the following:

6.60.010.1 The installation of water taps and related work.

6.60.010.2 The installation of water street crossings.

6.60.010.3 The installation of equipment such as valves, pressure reducing devices, back
flow prevention devices, and similar equipment.


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6.60.010.4 Minor water line extensions such as that needed to complete a water loop
system having a length of 500 feet or less.

The list set forth herein is not exclusive, and the District may determine that other similar
types of work are included within the terms "current and ordinary repairs" and "current and
ordinary upkeep or maintenance" as contained in Public Contract Code Section 20205.2.

Res. 2009-01 (1/7/09), Res 2010-09 (6/2/10)




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                                      TITLE 7                              Attachment 2F
                                                                                     6/6/12
                                 ELECTRIC SERVICE

CHAPTERS:

      7.01          General
      7.04          District Responsibilities
      7.05          Customer Responsibilities
      7.06          System     Disturbances Resulting From        Customer
                    Equipment
      7.08          Continuity of Service
      7.12          Application for Service-New Construction & Upgrades
      7.16          Ownership of Facilities and Right of Access
      7.20          Temporary Service
      7.28          Refusal to Serve
      7.32          Customer Generation
      7.40          Resale of Electricity
      7.44          Power Poles
      7.45          Electric System Master Plan
      7.46          Electric System Line Extensions
      7.48          Electric System Construction Standards
      7.52          Street and Security Light Service
      7.56          Service Connections
      7.60          Hazardous Materials
      7.64          Net Metering
      7.68          Illegal Use or Diversion of Electricity
      7.72          Metering
      7.80          Repairs and Maintenance
      7.83          Renewable Portfolio Standard


                                     CHAPTER 7.01

                                       GENERAL

Section:

      7.01.010      General

7.01.010 General

7.01.010.1 These Electric Service Policies have been adopted by the District in the
interest of efficiency, economy, reliability and safety in regulating and administering the
distribution of electricity to its Customers. They are subject to revision by the Board of
Directors of the District from time to time in order to meet these objectives.




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7.01.010.2 The District shall furnish services under its current rate schedules and these
policies as approved from time to time by the Board of Directors of the District and shall
govern all service except as specifically modified by the terms and conditions of the rate
schedules or by written contracts.

7.01.010.3 Any dispute arising between an applicant and the District regarding
interpretation and administration of these rules will be referred to the Board of Directors
for final decision.

7.01.010.4 If at any time during the Development Agreement process issues arise that
need resolution, the developer should submit a written request to the Project
Administrator responsible for the project in question. Such request shall state all of the
items of concern. The developer can expect a response within 10 business days from
receipt of request. If no resolution is reached, the developer can request a meeting with
the District's General Manager. If still no resolution is reached, the developer can request
a meeting before the Board to resolve the issue. Staff shall agendize the item before the
Board for the next scheduled regular Board meeting. Scheduling shall be consistent with
the Brown Act and must occur with at least 72 hours prior notice. Only after this process
is exhausted without resolution of the dispute may the parties proceed to litigation. If
either party commences a court action against the other based on a dispute or claim to
which this paragraph applies without first complying with the provisions of this paragraph,
the party commencing the court action shall not be entitled to recover attorney's fees,
even if they would otherwise be available in such court action.



                                     CHAPTER 7.04

                            DISTRICT RESPONSIBILITIES

Sections:

      7.04.010      General Information
      7.04.020      Delivery - Voltage and Phase
      7.04.030      Voltage Regulation, District Substation

7.04.010 General Information To the best of its ability and in consideration of the
existing source, the District will supply electricity at each customer's service connection
dependably and safely, in adequate quantities to meet the reasonable needs and
requirements of the customer, in accordance with these policies.

7.04.020 Delivery - Voltage and Phase All service shall be alternating current - 60
hertz. Nominal secondary delivery voltages supplied by the District are:
a) Overhead and underground secondary services from an overhead primary system will
   be at 120/240 volt - single phase.
b) Underground secondary service from an underground primary system:
   1. 120/240 volt - single phase
   2. 120/208 volt - single/three phase wye (network metering)


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   3. 120/208 volt - three phase wye
   4. 277/480 volt - three phase wye

Service at primary voltage is also available. Contact the District for detailed requirements.

7.04.030 Voltage Regulation, District Substation To the best of its ability and in
consideration of the existing source, the District will regulate its voltage at each of its
substations so as to ultimately supply its customers their nominal secondary voltage plus
or minus 5%.


                                      CHAPTER 7.05

                           CUSTOMER RESPONSIBILITIES

Sections:

       7.05.010      Increased Load
       7.05.020      Balancing of Load
       7.05.030      Power Factor Correction
       7.05.040      Surge Protection
       7.05.050      Voltage Regulation
       7.05.060      Motors
       7.05.070      District Not Responsible for Damage

7.05.010 Increased Load In the event the Customer desires to increase their load
materially, such as additional electric heat, increased motor loads, etc., they shall give
the District sufficient advance notice, so that the District may provide added facilities, if
necessary, at Customer expense. If the Customer fails to notify the District and the
District's equipment is damaged as a result of such increase in load, the Customer shall
reimburse and make payment to the District for all such damages.

7.05.020 Balancing of Load For three phase services, the Customer shall keep the load
current, under normal operating conditions, balanced within plus or minus 10 percent of
the average load current.

7.05.030 Power Factor Correction If the District determines that the power factor of a
Customer's load is less than 95 percent lagging, the Customer shall install proper
equipment at their expense to prevent the power factor from falling below 95 percent. If
such equipment is required to be installed on the District’s system, the Customer shall
reimburse and make payment to the District for all labor and materials required to provide
power factor correction.

7.05.040 Surge Protection The Customer shall be responsible to provide surge
protection for all voltage sensitive equipment such as electronic appliances or devices.

7.05.050 Voltage Regulation The Customer should consider installing an Uninterruptible
Power Supply (UPS) or other voltage regulating equipment where momentary or


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extended outages or voltage fluctuations would cause inconvenience, loss of electronic
memory, or trip alarms, etc.

7.05.060 Motors

7.05.060.1 Starting Limitations Customers shall install no motors whose starting shall
cause a voltage drop greater than 3% at the service meter point or greater than 2% at a
neighboring point of service. Single phase motors, up to and including 5 HP may be
served by single phase at 240 volts. Applications requiring more than 5 HP must use
three phase motors. Three phase motor applications, up to and including 25 HP are
generally permitted to be started across the line subject to the requirements of this policy.
Motors over 25 HP require reduced voltage starting facilities which are subject to
approval by the District.

7.05.060.2 Undervoltage Protection All motors and special apparatus should be equipped
with suitable undervoltage relays or time delay tripping devices to protect against
sustained undervoltage or service interruption and to prevent automatic disconnection of
equipment upon momentary voltage disturbance.

7.05.060.3 Single Phase Protection Three-phase motors should be equipped with
suitable protective relays or other devices to prevent single-phase operation, improper
direction of rotation and excessive heating due to over current.

7.05.070 District Not Responsible for Damage The District shall not be responsible for
damage to Customer equipment due to failure of Customer to provide adequate
protection.


                                      CHAPTER 7.06

      SYSTEM DISTURBANCES RESULTING FROM CUSTOMER EQUIPMENT

Sections:

       7.06.010      General
       7.06.020      Power Quality
       7.06.030      Total Harmonic Distortion (THD)

7.06.010 General The customer’s use of the District’s electrical facilities shall not result
in any interference, disturbance, voltage fluctuations or other quality of service issue to
the District’s electric distribution system or to other customers. The customer shall
provide, at their own expense, equipment to mitigate quality of service issues. In the case
of devices in which large blocks of load are recurrently switched on and off, such as
electric boilers, welders, heaters, motors, non-linear loads, or where the customer desires
voltage control within unusually close limits, the District may require the customer to
provide, at their own expense, special or additional equipment.




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7.06.020 Power Quality To minimize all interference with the quality of their service or
that of other customers, the District requires customer electrical facilities to meet the
power quality standards presented in the latest version of IEEE Standard 519,
Recommended Practices and Requirements for Harmonic Control in Electrical Power
Systems, Section 10 - Recommended Practices for Individual Customers, in addition to
other District requirements or standards.

7.06.030 Total Harmonic Distortion (THD)

7.06.030.1 The application of any nonlinear load by the Customer (e.g., static power
converters, arc furnaces, adjustable speed drive systems, etc.) shall not cause voltage
and/or current Total Harmonic Distortion (THD) levels greater than the levels as
recommended by IEEE Standard 519, or subsequent revision, on the District's electric
system at the point of power delivery to the Customer's facility. The District will determine
the appropriate SCR (short circuit ratio) at the customer’s facility for the purpose of
applying IEEE Standard 519.

7.06.030.2 The Customer shall disclose to the District all nonlinear loads prior to
connection. The District may test the Customer's load to determine the THD levels.

7.06.030.3 It shall be the responsibility of the Customer to assure that the THD
requirements are met, including the purchase of necessary filtering equipment. Any load
found not in compliance with this policy shall be corrected immediately by the Customer
at the Customer's expense. If not corrected, the District may terminate service to the
Customer's facility.

7.06.030.4 The Customer shall be liable for all damages, losses, claims, costs, expenses
and liabilities of any kind or nature arising out of, caused by, or in any way connected
with the application by the Customer of any nonlinear load operating with maximum THD
levels in excess of the values stated in Paragraph 1. The Customer shall hold harmless
and indemnify the District from and against any claims, losses, costs of investigation,
expenses, reasonable attorneys' fees, damages and liabilities of any kind or nature
arising out of, caused by, or in any way connected with the application by the Customer
of any nonlinear load operating with maximum THD levels in excess of the values stated
in Paragraph 1.


                                     CHAPTER 7.08

                               CONTINUITY OF SERVICE

Sections:

       7.08.010      General
       7.08.020      Emergency Interruptions
       7.08.030      Scheduled Interruptions
       7.08.040      Apportionment of Supply



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7.08.010 General

7.08.010.1 The District will exercise reasonable diligence and care to deliver to its
customers a continuous and sufficient supply of electricity at a proper voltage and to
avoid, so far as reasonably possible, any interruption in delivery. When such
interruptions occur, the District will endeavor to re-establish service as soon as is
reasonably and practicably possible, taking into consideration the safety of its employees,
customers and general public.

7.08.010.2 Electric Service is inherently subject to interruption, suspension, curtailment
and fluctuation. In no event, however, shall the District be liable to its Customers or any
other persons for any damages to person or property arising out of, or related to, any
interruption, suspension, curtailment or fluctuation in service if such interruption,
suspension, curtailment or fluctuation results in whole or part from any of the following:

7.08.010.2(A) Causes beyond the District’s reasonable control include, but are not limited
to, accident or casualty, fire, flood, drought, wind, acts of the elements, court orders,
insurrections or riots, generation failures, lack of sufficient generating capacity,
breakdowns of or damage to equipment/facilities of District or of third parties, acts of God
or public enemy, strikes or other labor disputes, civil, military or governmental authority,
electrical disturbances originating on or transmitted through electrical systems with which
District’s system is interconnected and acts or omissions of third parties.

7.08.010.2(B) Repair, maintenance, improvement, renewal or replacement work on
District’s electrical system which work, in the sole judgment of District, is necessary or
prudent.

7.08.010.2(C) Automatic or manual actions taken by District, which in its sole judgment
are necessary or prudent to protect the performance, integrity, reliability or stability of
District’s electrical system or any electrical system with which it is interconnected. Such
actions shall include, but shall not be limited to, the operation of automatic or manual
protection equipment installed in the District’s electrical system, including, without
limitation, such equipment as automatic relays, circuit breakers, switches or other
controls. Automatic equipment is preset to operate under certain prescribed conditions,
which in the sole judgment of District, threaten system performance, integrity, reliability
and stability.

7.08.010.2(D) Actions taken to conserve energy and actions taken by the District with
respect to any plan or course of action to conserve energy at times of anticipated
deficiency of resources, including, but not limited to, non-voluntary curtailment or
suspension of electric service.

7.08.020 Emergency Interruptions
7.08.020.1 Under disaster conditions, the District will cooperate to the fullest extent
possible with all governmental agencies having authority within District boundaries.
7.08.020.2 Under disaster conditions, the District will restore power in the following order
if feasible:


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7.08.020.2(A) Hospitals and defined critical customers

7.08.020.2(B) Governmental agencies, including law enforcement, fire departments and
other first responders

7.08.020.2(C) Disaster shelters

7.08.020.2(D) Main line feeders, tap circuits, and other areas where large groups of
customers can be put back into service at the same time

7.08.020.2(E) Individual services

7.08.030 Scheduled Interruptions The District may suspend the delivery of electric
service for the purpose of making repairs or improvements to its system. The District will
attempt to provide reasonable advance notice of such suspension to affected customers.
Repairs or improvements that can be scheduled will be scheduled, when feasible, at such
time as to minimize impact to District Customers. The District will have final determination
on the timing of planned outages. In making repairs and improvements to the District’s
electrical system, the District will do so with diligence and complete them as soon as
reasonably practicable in accordance with prudent utility practice.

7.08.040 Apportionment of Supply During periods of electrical shortage, the District
shall apportion its available supply among its customers as required by existing state and
federal laws. Otherwise, it will apportion its supply in the manner that appears most
equitable under the circumstances then prevailing, with due regard to public health and
safety.


                                     CHAPTER 7.12

       APPLICATION FOR SERVICE – NEW CONSTRUCTION & UPGRADES

Sections:

      7.12.010      General
      7.12.020      Change in Customer's Equipment or Operations
      7.12.030      New Construction and Upgrades
      7.12.040      As-built Drawing Procedure

7.12.010 General Each applicant for electric service shall complete the necessary
application and shall pay to the District the required fees as determined by the District.

7.12.010.1 Each applicant will be required to show identification when he or she signs the
District's application.

7.12.010.2 The application for service is a written request for service and does not bind
the applicant to accept service, nor does the application require that the District actually


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provide electric service. It does, however, bind the applicant to be governed by all rules
and regulations of the District in case service is rendered.

7.12.010.3 The District shall render service when it has determined that the applicant has
complied with the following provisions:

7.12.010.3(A) The applicant has received a valid building permit from the Town of
Truckee or the appropriate agency governing where the property is located.

7.12.010.3(B) All written agreements between the applicant and the District have been
evaluated by staff, fully executed by the parties and if applicable, approved by the Board
of Directors. Please refer to the District’s Development Agreement Guidelines for new
developments.

7.12.010.3(C) The applicant has demonstrated that they have acceptable credit and paid
all appropriate fees and charges.

7.12.010.3(D) The applicant has installed the necessary service facilities.

7.12.020 Change in Customer's Equipment or Operations In the event a customer
desires to make a material change in the amount of consumption or in the size,
character, or extent of the equipment and facilities providing electric service to them, they
shall immediately file with the District an amendment of the application for service, pay all
charges required thereby and obtain approval of the District prior to accepting such
service. Customer may also be required to obtain approval of service changes from the
Town of Truckee Building Department or the State of California.

7.12.030 New Construction and Upgrades

7.12.030.1 Applications for new construction and upgrades shall be processed as
outlined below:

Line Extension or Facility Administrative Action Required          Type of Agreement
        Upgrade                                                         Required
                              General            Board of
                             Manager             Directors
Under $400,000                    X                              Development Agreement
Over $400,000                                        X           Development Agreement
Note: The dollar amounts refer to the total value of on-site improvements being installed
      by the developer to be conveyed to the District for ownership operation and
      maintenance. This does not apply to existing panel upgrades.

7.12.030.2 The applicant shall be responsible for the costs of trenching, backfilling,
conduit and other costs as may be outlined in individual development agreements in
order to provide electric service for an electrical project.

7.12.030.3 The General Manager shall develop operational methods for staff use to
implement the intent of this policy.


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7.12.040 As-built Drawing Procedure See also Section 5.01.027 regarding project
documentation deposit and Appendix B for District Policy Regarding As-built Drawings.


                                       CHAPTER 7.16

                OWNERSHIP OF FACILITIES AND RIGHT OF ACCESS

Sections:

       7.16.010       General
       7.16.020       Customer Responsibility for District Facilities
       7.16.030       Customer Responsibility for Customer Facilities
       7.16.040       Rights of Way, Rights of Access, Easements
       7.16.050       Tree Trimming and Removal

7.16.010 General All electric facilities installed on a customer's premises, including but
not limited to conductors, transformers, poles, meters, etc., which are furnished by the
District in order to render electric service, shall remain the sole property of the District.
The customer shall record appropriate utility easements as required. The District shall
have the right of access to the customer's premises without payment of any charge or
rent, therefore at all reasonable hours for any purpose related to the furnishing of electric
service, including but not limited to meter reading, testing, inspection, construction,
maintenance, and repair of facilities. In the event a recorded easement does not exist,
easements by prescription, also called prescriptive easements, still exist, and under
California Law give the District the same rights as recorded easements for access to
District Owned Property. Upon termination of access to the customer's premises, the
District shall remove its facilities installed thereon.

7.16.020 Customer Responsibility for District Facilities The customer shall exercise
reasonable care to prevent District facilities installed on their premises from being
damaged or destroyed and shall refrain from tampering with such facilities. If any defect
is discovered by the customer, they shall promptly notify the District.

7.16.030 Customer Responsibility for Customer Facilities The customer shall, at their
sole risk and expense, furnish, install, inspect and keep in good and safe condition all
electrical facilities required for receiving electric energy from the District, regardless of the
location of the transformers, meters, or other equipment of the District. The customer
shall be solely responsible for the transmission and delivery of all electrical energy over
or through customer's wires and equipment, and for utilizing such energy, including all
necessary protective devices, and the District shall not be responsible for any loss or
damage occasioned thereby. All service switches and similar devices required in
connection with a service and meter installation on customer's premises shall be
furnished, installed and maintained by the customer in accordance with District
specifications.




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7.16.040 Rights of Way, Rights of Access, Easements The District shall be granted,
at no cost, all rights-of-way, rights of access, and easements necessary to serve the
customer for the installation, maintenance, repair, replacement, removal or use of any or
all equipment or materials used to supply and deliver electric services including tree
trimming and removal to the customer. The customer shall provide, at their expense, the
appropriate legal easements to the District as required.

7.16.040.1 In addition, the following shall apply:

7.16.040.1(A) No structures of any kind shall be constructed or permitted to be
constructed, including landscaping features which could impede District access, within,
over, or upon the easement area without written approval of the General Manager of the
District.

7.16.040.1(B) The District shall have the right to enter a customer’s property during
reasonable hours to perform necessary functions such as meter reading, inspection,
maintenance, repairs, testing, installation, or removal of the District’s property. The
customer shall be required to provide safe and timely access to the District.

7.16.040.1(C) When meters are located inside a building or “meter room”, the room shall
have a doorway that opens to the outside of the building. Meter rooms without direct
access to the outside of a building are unacceptable. Meter rooms may be locked so long
as the customer provides the District with independent access to the room.
Consequently, the meter room shall be locked in one of the following ways:
   • Using a double-lock arrangement, provided by the customer, with one lock for the
      customer and one lock for the District.
   • Using a lock box, provided and installed by the District, to hold the customer’s key.
      Customer shall be charged for the lock box.)

7.16.040.1(D) When access to any of the District’s facilities is impaired by the customer's
actions, animals, trees, shrubs, changes of grades, fences, locked doors or other
obstructions, the District will notify the customer and/or property owner of the impairment
to access. The customer is responsible for safely resolving the impairment or eliminating
the interference preventing timely access to the District's facilities.

7.16.050 Tree Trimming and Removal The District shall be granted all necessary rights-
of-way and rights of access to perform removal and trimming of trees, shrubs, vines or
other vegetation it deems prudent to maintain proper clearances and accessibility for the
maintenance and operation of all electric utility services, or as may be required by
standard safe utility practices. The decision to trim or clear around District facilities shall
be the exclusive right of the District. Refer to Tree Trimming Operating Procedures for
detailed procedures.




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                                     CHAPTER 7.20

                                TEMPORARY SERVICE

Section:

      7.20.010      Conditions

7.20.010 Conditions

7.20.010.1 The District will supply temporary service to customers under the following
conditions:

7.20.010.1(A) Where temporary service is not intended to transfer to that of a permanent
status, the applicant will be required to pay to the District in advance, the estimated cost
of installing and removing the facilities required, as determined by the District.
The applicant shall be required to place a deposit in accordance with the District's rules
and regulations.

7.20.010.1(B) Where temporary service is for the purpose of construction and the service
will ultimately transfer to permanent single phase, the customer shall be required to pay
applicable connection and facilities fees for permanent service.

7.20.010.1(C) Where temporary service is for the purpose of construction and the service
will ultimately transfer to permanent three phase, the customer shall be required to pay
applicable connection and facilities fees for temporary service. In order to establish
permanent service, the customer will be required to pay the actual cost for the permanent
service connection and facilities fees as established by the District.

7.20.010.2 Temporary services existing for longer than one year will be required to pay
applicable facilities fees. At a later date, if the temporary service becomes permanent,
those facilities fees will be considered paid. Additional fees will be charged if the panel
size increases.

7.20.010.3 Temporary services existing for longer than five years must be transferred to
permanent service.

7.20.010.4 Temporary services that are requested to remain once the permanent service
has been installed will require an additional account. There shall be a new account set
up fee billed and additional material and labor costs may be charged pursuant to the
Miscellaneous Fee Schedule.


CHAPTER 7.24 - Moved to Section 5.09




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                                      CHAPTER 7.28

                                  REFUSAL TO SERVE

Sections:

       7.28.010      Conditions
       7.28.020      Notification

7.28.010 Conditions The District may refuse to provide electric service under the
following conditions:

7.28.010.1 If the applicant, customer, or owner of serviced premises fails to comply with
any of the District's rules and regulations.

7.28.010.2 If the intended use of the service is of such a nature that it will be detrimental
or injurious to the District's electric distribution system, its customers, or the general
public.

7.28.010.3 If, in the judgment of the District, the applicant's installation of wiring for
utilizing the service is unsafe, hazardous, or of such nature that satisfactory service
cannot be rendered.

7.28.010.4 Where service has previously been disconnected to such applicant for
fraudulent use.

7.28.010.5 If the service sought to be provided would result in a sub-standard supply of
electricity or voltage, as determined by the District.

7.28.020 Notification When an applicant has been refused service under the provisions
of this rule, the District shall notify such applicant promptly of the reasons for the refusal
to serve and the corrective action to be taken by such applicant before service will be
provided.


                                      CHAPTER 7.32

                               CUSTOMER GENERATION

Sections:

       7.32.010      General
       7.32.020      Standby Generation (Non-Parallel Operation)
       7.32.030      Net Metering (Parallel Operation)
       7.32.040      Cogeneration (Parallel Operation)

7.32.010   General The following requirements apply to customer generation facilities
designed to operate isolated from the District’s system (non-parallel operation) and


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directly connected to the District’s electrical system (parallel operation). Detailed
requirements and specifications for various types and sizes of customer facilities shall be
obtained from the District prior to installation.

7.32.020 Standby Generation (Non-Parallel Operation) The Customer may install a
standby generator to supply all or part of their load in the event of a service interruption.
The customer’s wiring shall be arranged so as to prohibit the parallel connection of the
customer’s alternate source of supply with the District’s system. This shall require the
installation of a double-throw switch or its equivalent which prevents interconnection to
the District’s system. The customer must notify the District and provide electrical details
of generator installation and isolation from the District’s system prior to construction and
installation work. The District shall inspect customer facilities prior to use by the
customer. The installation of a closed transition switch will require prior approval by the
District.

7.32.030 Net Metering (Parallel Operation) Prior to the installation of any auxiliary
generation facilities (e.g. wind turbine, solar panel, etc.) for net-metering, the customer
shall notify the District to obtain approval. The customer shall be required to enter into an
agreement for net metering. Additional information and requirements can be found in the
District’s “Ordinance No. 2008 – 06 Adopting Schedule NM, - Net Metering” and
“Interconnection Agreement for Net Energy Metering” documents.

7.32.040 Cogeneration (Parallel Operation) Cogenerators are defined as facilities that
produce electrical energy and utilize the heat energy by-product for other purposes (e.g.,
heating or cooling). The customer shall notify the District prior to the installation of this
equipment in order to provide design information and obtain approval for connection of
the equipment to the District’s facilities.


                                      CHAPTER 7.40

                               RESALE OF ELECTRICITY

Section:

       7.40.010      Resale of Electricity

7.40.010   Resale of Electricity

7.40.010.1 Customers shall not resell any of the electricity received from the District
unless there is advance written permission from the General Manager.

7.40.010.2 Customers shall not deliver electricity to premises other than those specified
in the customer's application for service, unless written permission of the District is
obtained in advance.




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                                     CHAPTER 7.44

                                    POWER POLES

Section:

      7.44.010       Signs/advertising on Power Poles

7.44.010 Signs/advertising on Power Poles It is a misdemeanor for any person to
place or maintain any signs or other advertising upon the power poles within the District.

(Penal Code 556.1)


                                     CHAPTER 7.45

                         ELECTRIC SYSTEM MASTER PLAN

Sections:

      7.45.010       General
      7.45.020       Facility Construction
      7.45.030       Facility Fees

7.45.010 General In order to be in a state of readiness to serve electric energy to
customers of the District, the District shall prepare and maintain an Electric System
Master Plan which shall analyze growth trends, zoning, land uses, approved subdivisions
and projects, existing electric system facilities and the need for improvements to the
electric system. The Master Plan also serves as a blueprint for the orderly expansion of
the District’s electric system to accommodate growth and development of areas served
by the District. The General Manager shall cause such a Master Plan to be prepared and
reviewed every five years and shall submit said plan to the Board of Directors for review,
discussion, modification and formal adoption.

7.45.020 Facility Construction Based on the adopted Electric System Master Plan, the
District shall construct, within the limits of funding sources available and as approved by
the Board of Directors, the basic backbone facilities required to serve electric energy to
the customers of the District. Backbone system facilities shall include substations, main
feeder lines and tie lines that have as their purpose to provide adequate capacity and
service reliability.

7.45.030 Facility Fees Master Plans shall be used as the basis to evaluate the District’s
electric Facility Fees. The Facility Fee is an implementation of California Government
Code 66000 et seq., commonly referred to as AB1600. This Government Code section
provides the mechanism by which the District shall establish fees on new development
for electric system improvements attributable to new development. The General Manager
shall review and modify Facility Fees in accordance with the Master Plan and shall
submit said fees to the Board of Directors for review, discussion, modification and formal
adoption.


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                                     CHAPTER 7.46

                       ELECTRIC SYSTEM LINE EXTENSIONS
Sections:

      7.46.010      General
      7.46.020      Conditions
      7.46.030      Cost Sharing

7.46.010 General A Line Extension is an addition or modification of electrical equipment
and/or an increase in the size or length of the District’s existing electrical facilities to
serve new customer electric load within the District’s service area. Facilities will be
extended to provide service in accordance with District’s Policies and Electric System
Construction Standards. Each line extension shall be subject to evaluation as to
feasibility, permanence, and compatibility with the District’s system. Final determination
as to specific conditions applicable to the extension, including type of construction,
availability of voltage and phase, route, equipment location and other design details shall
be made solely by the District. Customer compliance with District’s Policies and Electric
System Construction Standards are a condition of service. The Customer is required to
sign a Development Agreement for any proposed Line Extension and pay all applicable
Fees.

7.46.020 Conditions Any person or firm who is developing property within the service
territory of the District, where an extension of the District's distribution tap lines or
backbone system is required, shall make application for such electric system extension to
the District Electric Department.

7.46.020.1 The applicant shall enter into a Development Agreement with the District
which shall outline the terms and conditions specific to the project.

7.46.020.2 All costs associated with the extension of electric service shall be at the
expense of the applicant and shall be in accordance with the Development Agreement.
These costs include District labor, materials and fees. Costs also include those costs
associated with construction and installation of trenches, conduits, vaults, roads and
other civil improvements necessary for receiving and installing electric facilities. All
electric facilities installed, hereunder, shall be and remain the property of the District.

7.46.020.3 New Construction of the District's electric system shall be built only along
roads or highways and upon private lands across which satisfactory easements,
encroachment permits and/or rights of way have been obtained for the benefit of the
District.

7.46.020.4 The installation of a line extension does not alleviate the applicant from
payment of Facilities Fees or Connection Fees.




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7.46.030 Cost Sharing When a customer/developer has contributed to the construction
of the District's electric system facilities and subsequent development is connected to or
benefits from said facilities, the costs shall be shared based on benefits and the amount
realized shall be collected from said subsequent development, subject to the following:

7.46.030.1. This condition shall remain in effect for a period of ten years from the date of
acceptance of the facilities by the District. For projects where the total amount eligible for
reimbursement is less than $5,000, no reimbursement agreement will be executed.

7.46.030.2. Cost shares shall be calculated based on that portion of the line to be used
by the additional Customer and on the resulting total number of Customers served by the
line segment in question. For overhead lines, cost sharing shall be on a per-pole basis;
for underground lines, sharing shall be on a per-foot basis. Sharing of monies collected
shall be based on the number of users of each segment of line who are still eligible for
cost sharing refunds.

7.46.030.3. Cost subject to sharing includes monies paid to the District for District
construction labor and materials per the executed Electric Development Agreement. No
adjustments to the amount eligible for reimbursement shall be made for the effects of
inflation (or deflation).

7.46.030.4 Upon completion of the construction, the District shall provide final
documentation to the applicant of the total amount eligible for reimbursement. When
subsequent parties who owe money through reimbursement request service from the
District, the amount owed shall be paid to the District. The District shall then pay the
appropriate amount to the individuals who are the owners of record of the project APN on
the date that the subsequent parties are connected. Each subsequent party shall be
subject to an administrative charge to cover administrative duties associated with the
reimbursement.


                                      CHAPTER 7.48

                  ELECTRIC SYSTEM CONSTRUCTION STANDARDS

Sections:

       7.48.010      Underground Facilities Policy
       7.48.020      Underground Electric Supply (GO 128)
       7.48.030      Overhead Electric Lines (GO 95)
       7.48.040      Construction Information Booklets

7.48.010 Underground Facilities Policy It shall be the policy of the District to require
all new or rebuild construction to be placed underground. Special circumstances may
dictate undergrounding is not practical and the District reserves the right to make the final
determination. The installation of overhead secondary electrical facilities to serve single-
family dwellings, within an existing overhead subdivision, shall be permitted. All multi-
family dwellings, commercial buildings and land parcels that are to be divided into four or


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more individual lots, shall require the installation of underground facilities regardless of
location. It is the customer/developer responsibility to comply with respective City, Town,
County or other governing agencies that may have more stringent standards regarding
underground utility installations.

7.48.020 Underground Electric Supply

7.48.020.1 General Order No. 128 of the Public Utilities Commission of the State of
California, promulgating and providing rules for underground electric line construction, as
amended, is hereby declared to be the minimum and standard requirement for all
underground electric line construction and reconstruction hereafter done by, for, or on
behalf of the District, as well as for any such construction hereafter accepted or to be
accepted into the District system.

7.48.020.2 The adoption of General Order No. 128 shall apply in the future to any and all
amendments as may hereafter be ordered by the Public Utilities Commission, and an up-
to-date, true and correct copy of said order and rules, with future amendments, shall be
kept at the District office at all times.

7.48.020.3 The requirements of said General Order No. 128 shall hereafter be referred to
in all bids, plans, specifications and contracts for work done by, for, or on behalf of the
District, as well as to construction or reconstruction hereafter to be accepted into the
District system.

7.48.030 Overhead Electric Lines

7.48.030.1 General Order No. 95 of the Public Utilities Commission of the State of
California contains the minimum and standard requirements for all overhead electric line
construction and reconstruction hereafter done by or on behalf of the District, as well as
for any such construction hereafter to be accepted in the District system.

7.48.030.2 The adoption of General Order No. 95 shall apply in the future to any and all
amendments as may hereafter be ordered by the Public Utilities Commission, and an up-
to-date, true and correct copy of said order and rules, with future amendments, shall be
kept at the District office at all times.

7.48.030.3 The requirements of said General Order No. 95 shall hereafter be referred to
in all bids, plans, specifications and contracts for work done by, for, or on behalf of the
District, as well as to construction or reconstruction hereafter to be accepted in the
District system.
7.48.040 Overhead Optical Communictions Cable
7.48.040.1 The National Safety Electric Code (NESC) provides the minimum and
standard requirements for the installation and construction of District owned and
maintained optical communication cable located in the electric (supply) space of
overhead electric distribution lines. The NESC is published by the Institute of Electrical
and Electronics Engineers (IEEE) and is also a recognized American National Standards
Institute (ANSI) standard.


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7.48.040.2 The adoption of the NESC shall apply in the future to any and all amendments
and revisions as may hereafter be ordered by IEEE and/or ANSI, and an up-to-date, true
and correct copy of said standard shall be kept at the District office at all times.

7.48.040.3 The requirements of said NESC shall be referred to in all bids, plans,
specifications and contracts for work done by, for or on behalf of the District, as well as to
construction or reconstruction hereafter to be accepted in the District system regarding
District owned optical communication cable located in the electric (supply) space of
overhead electric distribution lines.

7.48.040.4 Third-party entities are specifically restricted from installing or constructing
optical communication cable in the electric or supply space of the District’s overhead
electric distribution lines. The requirements of General Order No. 95 shall apply to any
and all optical communication cable and/or any other type of communication cable not
owned or maintained by the District.

7.48.040.5 Construction Information Booklets The District shall periodically update
its Contractor Construction Specifications and its New Construction Information Booklet.
Copies of these booklets shall be made available for public review at the District offices
or on the District’s website www.tdpud.org.


                                      CHAPTER 7.52

                       STREET AND SECURITY LIGHT SERVICE

Sections:

       7.52.010      Definitions
       7.52.010      Rates

7.52.010    Definitions

7.52.010.1 Street lights Street lights are those lighting systems installed along public and
governmental corridors.

7.52.010.2 Security lights Security lights are those lighting systems installed on private
and commercial property.

7.52.020    Rates

7.52.020.1 The unmetered street/security light rate is listed in the Miscellaneous Fees
Schedule. Street and security lights of the same wattage are charged the same rate.

7.52.020.1(A) All new street lights shall be metered.

7.52.020.1(B) The District shall no longer install new security lights.


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7.52.020.1(C) The District intends to research and locate customers and owners of
record for each street/security light and assign appropriate billing. If there is no
corresponding customer or owner of record, the street/security light may be removed.


                                     CHAPTER 7.56

                               SERVICE CONNECTIONS

Sections:

      7.56.010      General
      7.56.020      Underground Services
      7.56.030      Overhead Services
      7.56.040      Meter Requirements
      7.56.050      Primary Voltage Supply

7.56.010 General

7.56.010.1 A Customer, before proceeding with the wiring or installation of equipment,
shall request a determination of the availability of electric service from the District. The
District will advise the Customer of the most suitable phase and voltage available on
established circuits. Nominal secondary delivery voltages supplied by the District are as
listed in Section 7.04 of these Regulations.

7.56.010.2 The District will only energize service connections after it has been
determined that District’s Electric System Construction Standards have been complied
with and the Customer’s electrical equipment/installation has been approved by the Town
of Truckee or other county or state Electrical Inspectors.

7.56.010.3 For specific construction information, customer should reference District’s
Electric System Construction Standards (See Section 7.48).

7.56.010.4 The District is not obligated to serve any customer who fails to implement and
complete all of the District’s requirements for service.

7.56.010.5 If District personnel see that a meter socket and/or service are in need of
repair and not being repaired, then the District shall inform the customer of the problem,
and a time limit of 30 days shall be given to the customer to make corrections.

7.56.010.5(A) If the problem is not corrected within the time limit, the customer may be
disconnected.

7.56.010.5(B) The District reserves the right to shorten this time period if a safety
problem exists.




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7.56.020   Underground Services

7.56.020.1 Underground service facilities at secondary voltages:

In areas supplied by the District's overhead facilities, where the District's existing
distribution pole line is located, and at a distance not to exceed 125 feet to the customer's
premises, the District will furnish and install into the customer's trench and conduit, cable
from the existing distribution pole line to the customer's service entrance. Service
connections of District installed cable shall be made by District personnel. For distances
over 125 feet or for commercial services, the customer shall be charged actual costs for
materials and labor. The customer shall be charged a fee as specified in the District's
established connection charges.

7.56.020.2 At the time of application for electric service, the customer will provide the
District with a set of plans for the project. District staff will indicate on the plans the
approved placement of the electric panel. The District reserves the right to refuse service
to any customer not complying with the approved location.

7.56.020.2(A) The trench, conduit and backfill shall be furnished by the customer at their
expense from a place on the building designated by District personnel to a place on the
pole or at the splice box also designated by District personnel. The District will provide, at
the customer’s expense, the secondary splice box should one be required.

7.56.020.2(B) All required trench clearances shall be maintained per California General
Order No. 128, unless superseded herein.

7.56.020.3 Service Conduit Requirements:

7.56.020.3(A) Refer to District’s Electric Construction Standards for size and type of
conduit.

7.56.020.3(B) Minimum size acceptable to the District of underground conduit shall be 3"
for a single phase panel.
7.56.020.3(C) Water pipe or water pipe fittings are not permitted.

7.56.020.3(D) The conduit shall be one continuous length, with no sweeps or bends from
the ground line to the meter socket.

7.56.020.3(E) The service conduit shall be supplied and installed by the customer.

7.56.020.3(F) Separate living units such as apartments, condos, townhouses, etc.
located on the same premises shall be served by a maximum of one conduit from any
one of the District's poles. In no case shall there be more than two electric conduits on
any one of the District's poles.

7.56.020.3(G) The District may elect to provide one conduit on the pole, connected to a
splice box located on the property line of two adjacent lots. In this instance, customers of
affected lands must make conduit runs to the splice box and not the pole.


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7.56.020.4 If a pole is needed as a result of not being able to trench, bore, or obtain the
necessary permits for a road crossing, the District will install the riser pole and necessary
hardware and anchors. The customer shall pay to the District all actual costs for the
District to install the pole to include the cost of the pole, hardware, anchors, labor and
overheads. The District will be responsible for the riser on the pole (with the exception of
the first 10 feet) and the span of secondary conductor between the distribution system
and the riser pole if within the 125 foot limit as referenced in Section 7.56.020.1. If the
customer's service entrance is greater than 125 feet from the distribution system, the
customer will pay to the District, in addition to the charges referenced in this section, the
fee for additional footage as referenced in Section 7.56.020.1.

7.56.020.4(A) Said pole shall be of sufficient height to provide the District's conductors a
legal clearance above the roadway.

7.56.030 Overhead Services

7.56.030.1 Overhead service facilities, at secondary voltage, 480 volts or less:

In areas supplied by the District's overhead facilities, where the District's distribution pole
line is located on a street, highway, lane, alley, or private easement immediately
contiguous and at a distance not to exceed 200 feet to the customer's premises the
District will, in accordance with the established service connection charges, furnish and
install a service drop from its pole line to a point of attachment determined by District
personnel, on the customer's building or other permanent support; said support shall be
provided by customer. Connection made at the weatherhead connecting the District's
service line to the customer's service line shall be made by District personnel. For
distances over 200 feet, the customer shall be charged actual costs for labor and
materials.

7.56.030.1(A) At the time of application for electric service, the customer will provide the
District with a set of plans for the project. District staff will indicate on the plans the
approved placement of the electric panel. The District reserves the right to refuse service
to any customer not complying with the approved location.

7.56.030.2 Permanent Overhead Service Requirements:

7.56.030.2(A) No periscope of service conduit through roof will be permitted with the
following possible exceptions:

7.56.030.2(A)(1) A round or octagonal shaped building with a corresponding shaped roof.

7.56.030.2(A)(2) A building with a flat roof designed to roll water and carry the weight of
snow.

7.56.030.2(A)(3) It is the customer's responsibility to check first and obtain written
approval of any exceptions to this rule.



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7.56.030.2(B) The required ground clearances for conductors shall be maintained per
District Standard.

7.56.030.2(C) Customer shall furnish and install an approved rain-tight service or
weatherhead at a point suitable for connecting the customer's service entrance
conductors to the District's conductors.

7.56.030.2(D) The point of attachment must be located as designated by District
personnel.

7.56.030.2(E) Eye bolts or equally secured means are required for the support of the
service drop. Eye bolts or clevises will be supplied by the District, but must be installed
through a minimum of 2" x 4" backing. Lag screws are not permissible.

7.56.030.2(F) Customer shall leave a minimum of 18" of conductor protruding beyond the
weatherhead of an overhead service.

7.56.040 Meter Requirements

7.56.040.1 The Customer shall be required to supply, install, and maintain meter
mounting equipment of a type acceptable to the District. Requirements for meter
equipment, clearances, and locations are contained in Section 7.72 of these Regulations
and the District's Electric System Construction Standards.

7.56.050    Primary Voltage Supply

7.56.050.1 Primary voltage supply to customer's premises:

By means of underground facilities wherever in the District’s judgment it is practicable to
do so, the District, at customer’s expense, will construct a primary voltage supply line
from its distribution facilities to a termination point installed on the customer’s premises in
accordance with Section 7.46 of these Regulations.

7.56.050.1(A) Notwithstanding the provisions of Section 7.72.060, if the District initiates
the rebuild of a portion of existing overhead distribution facilities by placing said facilities
underground, resulting in the requirement to modify the service panels of the customers
served thereby, the District may, based on special circumstances present, pay for all or a
portion of the costs of modification of the customer service panels and related equipment.

7.56.050.1(B) The General Manager of the District shall have the sole authority to
authorize payment on the part of the District for conversion of customer service panels
and related equipment under Section 7.56.050.1(A). The General Manager's approval
concluding that unique circumstances are present in this matter such that it is in the
public interest and benefits the District to pay for all or a portion of the cost of conversion
of the customer service panels and related equipment.

7.56.050.1(C) In judging whether there are unique circumstances present which justify a
finding that it is in the public interest and serves the public good for the District to pay for


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all or a portion of the cost of converting customer service panels and related equipment,
the General Manager may consider matters relating to public safety, historic preservation,
District operation and maintenance costs, and any other matter that the General Manager
deems appropriate.


                                      CHAPTER 7.60

                               HAZARDOUS MATERIALS

Section:

       7.60.010      Handling Hazardous Materials

7.60.010 Please refer to the District Safety Manual for procedures for handling
Hazardous Materials.


                                      CHAPTER 7.64

                                     NET METERING

Sections:

       7.64.010      Net Metering Applicability, Territory, Rates
       7.64.020      Net Metering Special Conditions

7.64.010    Net Metering Applicability, Territory, Rates

7.64.010.1 Applicable to residential or commercial customers eligible for service where a
part or all of the electrical requirements of the customer can be supplied from a solar or
wind power production source owned and operated by the customer, where such source
is connected for parallel operation with the service of the District and where such source
is located on the customers premises and is intended to offset part or all of the customers
electrical requirements.

7.64.010.1(A) This schedule provides rates, terms and conditions for the sale of energy
by the District. Prices, terms and conditions for the purchase of net energy transmitted by
the customer to the District are included herein for reference only. Such prices, terms and
conditions and the terms of inter-connection and parallel operation are outlined in the
generation agreement required for service under this tariff. The purpose of this tariff is to
facilitate terms of service to customers with solar or wind power production systems of
not more than one megawatt.

7.64.010.1(B) Applicability of this tariff does not extend to customers whose solar or wind
power production source exceeds 1000 kilowatts or one megawatt.

7.64.010.2 Territory The entire area served by the District’s electric system.


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7.64.010.3 Rates

7.64.010.3(A) Customer charge-Same as applicable residential or commercial customer
charge.

7.64.010.3(B) Energy charge-On the residential or commercial energy rate applicable to
that customer.

7.64.010.3 (C) Net energy credit-All kilowatt-hours, per kilowatt-hour — the net energy
credit will be computed at a rate for payment equal to the monthly average non-firm
energy price the District pays during the applicable billing month.

7.64.020   Net Metering Special Conditions

7.64.020.1 Generation Agreement A generation agreement with the customer is required
for service under the schedule.

7.64.020.2 For eligible residential and small commercial customer-generators, the net
energy metering calculation shall be made by measuring the difference between the
electricity supplied to the eligible customer-generator and the electricity generated by the
eligible customer-generator and fed back to the electric grid over a 12-month period. The
following rules shall apply to the annualized net metering calculation:

7.64.020.3(A) The eligible customer-generator account shall, at the end of the 12-month
period following the date of final interconnection of the customer-generator’s system with
the District, and at each anniversary month thereafter, be evaluated and reconciled for
electricity used or generated during that period. The District will determine if the
customer-generator was a net consumer or a net producer of electricity during that
period.

7.64.020.3(B) This evaluation and reconciliation for electricity used or generated may be
standardized by the District for the 12 month billing period ending with the March billing,
rather than using each customer’s respective anniversary month.

7.64.020.3(C) At the end of each 12-month period, where the electricity supplied during
the period by the District exceeds the electricity generated by the customer-generator
during that same period, the customer-generator is a net electricity consumer and the
District shall be owed compensation for the customer-generator’s net kilowatt-hour
consumption over that same period. The compensation owed for the customer-generator
shall be calculated as follows:

The net balance of moneys owed to the District shall be paid in accordance with the
normal billing cycle. If the customer-generator is a net producer over a normal billing
cycle, any excess kilowatt-hours generated during the billing cycle shall be carried over to
the following billing period as kilowatt-hour credits according to the procedures set forth in
this section, and appear as a credit on the customer-generator’s account. This credit
may be utilized in the following billing cycle if the customer is a net consumer during that


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cycle. If the customer is a net generator at the end of each 12-month period, then (3) of
schedule D-NM: Domestic–Net Metering in Appendix A shall apply.

7.64.020.3(D) At the end of each 12-month period, where the electricity generated by the
customer-generator during that 12-month period exceeds the electricity supplied during
that same period, the customer-generator is a net electricity producer and the District
shall retain any excess kilowatt-hours generated during the prior 12-month period. The
customer-generator shall be compensated by the District for the excess kilowatt-hours
generated at its annual average non-firm energy price the District pays during the prior
12-month period.

7.64.020.3(E) If a customer-generator terminates the customer relationship with the
District; the District shall reconcile the customer-generator’s consumption and production
of electricity during any part of a 12-month period following the last reconciliation and
shall apply only the months since the most recent 12-month reconciliation.


                                       CHAPTER 7.68

                   ILLEGAL USE OR DIVERSION OF ELECTRICITY
Section:

       7.68.010      Illegal Use or Diversion of Electricity

7.68.010   Illegal Use or Diversion of Electricity

7.68.010.1 When the General Manager determines that a customer or other person or
entity has received unmetered electric service, or when the General Manager determines
that a customer or other person or entity has caused electric service to be improperly or
inaccurately metered, the District shall render bills for such service, including
administrative costs, based upon its reasonable estimate of the service actually furnished
for the full period during which the service was unmetered or improperly metered.

7.68.010.2 The customer will be held liable for District’s facilities located on their property
which are tampered with regardless of who did the tampering.

7.68.010.3 The District may disconnect service without notice or refuse service, if the
customer’s actions or the condition of his/her premises is such as to indicate intent to
defraud the District.

7.68.010.4 In the event electric service is disconnected due to illegal use or diversion of
electricity, all costs associated with restoring electric service to a property will be the
responsibility of the customer or the party requesting to have the electric service restored.

7.68.010.5 The customer is responsible to restore their service to its original state
pursuant to the District’s Policies and Electric System Construction Standards prior to the
District reconnecting service. The customer may be required to have their service re-
inspected by the Town of Truckee or the appropriate agency in which the property is


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located prior to reconnection. In addition, the District will perform its own inspection to
verify the diversion has been corrected.

7.68.010.6 When the General Manager determines that a violation of the California
Penal and/or Civil Codes having to do with unauthorized use of electricity with intent to
defraud, tampering with electric meter with intent to defraud, malicious interference or
connection with electric line, or malicious interference or obstruction with electric line may
have occurred, the General Manager shall contact the appropriate County Sheriff's
Office, Town of Truckee Police Department or appropriate County District Attorney's
Office, and inquire concerning the feasibility of filing criminal charges against the person
or entity suspected of violating any of such Penal and/or Civil Code sections. If, after
such inquiry, the General Manager determines that it is in the best interest of the District
to file such criminal charges, and that there is a reasonable possibility of successful
prosecution of any such person or entity, then the General Manager shall, on behalf of
the District, file criminal charges with the appropriate District Attorney's Office.


                                      CHAPTER 7.72

                                        METERING
Sections:

       7.72.010      General
       7.72.020      Number of Meters
       7.72.030      Service and Meter Standards
       7.72.040      Meter Panel and Meter Locations
       7.72.050      Customer Responsibility for District Facilities
       7.72.060      Customer Responsibility for Customer Facilities
       7.72.070      Standard of Meter Accuracy
       7.72.080      Meter Tests
       7.72.090      Meter Errors
       7.72.100      Non-registering Meters

7.72.010 General All electricity supplied by the District shall be measured by wattmeter.
Registration shall be in kilowatt-hours for general usage and billing, and kilowatts for
demand billings. For billing purposes, all meters located on the customer's premises will
be billed separately and the readings thereof shall not be combined unless the District
determines that a combined reading will result in an operating convenience. The owner
of the property shall be responsible for tenant disputes resulting from improperly marked
services or revised wiring.

7.72.020    Number of Meters

7.72.020.1 The cost of each meter installation shall be paid by the customer prior to
installation according to the District's rate schedule.

7.72.020.2 For a residence or business, one (1) meter per service or building shall be
installed.



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7.72.020.3 For apartments, condominiums, townhouses, and other multiple dwelling
units, one meter per unit, apartment, condominium, etc. shall be installed. Said meters
shall be grouped together at one common location on the building per District standards.

7.72.020.4 For multiple businesses, offices, or commercial buildings, the original
installation shall be one meter per unit and the building(s) shall be so wired. Said meters
shall be grouped together at one common location on the building per District standards.

Subsequent enlargement or restriction of the original area(s) which does affect the
electrical metering shall be handled in one of the following ways:

 7.72.020.4(A) Any subsequent remodeling of commercial buildings wherein complete
unit(s) are added to a business, the customer/owner shall have the following options:

7.72.020.4(A)(1) The meter(s) for the additional unit(s) may be connected in the
customer/owner's name. Section 7.72.010 shall prevail for the billing of each meter
including separate minimums.

7.72.020.4(A)(2) The customer/owner may rewire, at their expense, so that the additional
unit(s) are all combined under one meter.

7.72.020.4(B) Any subsequent remodeling of commercial buildings wherein unit(s) are
divided and occupied by two or more customers, the customer(s) will be required to
rewire, at their expense, so that the partial unit(s) are metered separately or combined
with another meter serving the customer(s). Refer to Section 7.72.020.4(A)(2). NO
SPLIT BILLS WILL BE RENDERED BY THE DISTRICT.

7.72.020.5 For structures with mixed residential and commercial tenants, all residential
units must be metered individually.
7.72.020.6 For residential or commercial units that share electrical wiring such that usage
for one unit is being metered through the meter for another, the District reserves the right
to transfer the services for these units into the owner’s name until such time as the
problem is corrected and each unit is metered appropriately.
7.72.020.7 The District is not obligated to serve any customer who builds with exceptions
to Section 7.72.020.3 and/or 7.72.020.4 above unless the customer obtains written
approval from the District prior to building.
7.72.030 Service and Meter Standards - The District has adopted for its own standards
the standards set forth by the Electric Utility Service Equipment Requirements Committee
(EUSERC), of which the District is a member in good standing.
7.72.040   Meter Panel and Meter Locations
7.72.040.1 All meters shall be installed by the District upon the customer's premises in a
location marked out and approved by the District and such location shall at all times be
kept accessible for meter reading, testing, inspection, and meter connects and
disconnects.


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7.72.040.2 If such location becomes inaccessible, the customer shall be asked in writing
to correct the problem within a 30 day period. If the inaccessibility continues beyond this
period the District may disconnect service to that customer until such time as the
customer corrects the problem or meets the District's standards for service and/or meter
locations.

7.72.050   Customer Responsibility for District Facilities

7.72.050.1 Any and all meters and meter accessories located on the customer's
premises remain the property of the District. Therefore, the customer shall exercise
reasonable care to prevent such facilities from being damaged or destroyed and shall
refrain from tampering with such facilities. If any defect therein is discovered by the
customer, he shall promptly notify the District.

7.72.050.2 The customer will be held liable and may be responsible for applicable fees
for District's facilities located on their premises which are damaged or destroyed
regardless of who did the damage or destruction.

7.72.050.3 The customer will be held liable for District's facilities located on their
premises which are tampered with regardless of who did the tampering.

7.72.050.4 The District holds the integrity of its seals, meter ring and/or meter
accessories in high esteem; therefore, any effort by any unauthorized person, whether
qualified or not, to cut, remove, modify, distort, bend, or otherwise damage or destroy its
seals, meter ring and/or meter accessories shall be viewed by the District as an attempt
to tamper with the District's facilities.

7.72.050.4(A) On any service which Section 7.72.050.4 above is found to have taken
place, the meter shall be removed and inspected and, if no further tampering is noted, the
meter shall be returned to the socket and resealed. The customer shall then be notified
of the condition as found and of the District's policies relating to meter seals, charges and
meter tampering.

7.72.050.4(B) Subsequent discovery of the above conditions with the same customer at
the same or a different location, shall result in the implementation of the Miscellaneous
Fees Schedule.

7.72.050.4(C) If, during the removal and inspection as noted above, it is further
discovered that the seal sealing the glass or polycarbonate cover to the meter base has
been cut, removed, modified, distorted, bent or other wise damaged or destroyed, said
meter will be removed from further service until tested and accuracy recalibrated.
Another meter and a locking meter ring shall be installed. A fee as shown on the
Miscellaneous Fees Schedule to cover the cost of testing and recalibration of the meter
may be charged to the customer.

7.72.050.5 In the absence of a customer, Section 7.72.050 shall apply to the property
owner.



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7.72.060 Customer Responsibility for Customer Facilities The customer shall at their
sole risk and expense furnish, install, inspect and keep in good and safe condition all
electrical facilities required for receiving electric energy from the lines of the District,
regardless of the location of the transformers, meters, or other equipment of the District,
and for utilizing such energy, including all necessary protective devices and suitable
housing thereof. The customer shall be solely responsible for the transmission and
delivery of all electrical energy over or through the customer's wires and equipment. The
District shall not be responsible for any loss or damage occasioned thereby.

All main switches, circuit breakers, fuses and similar devices required in connection with
a service and meter installation on a customer's premises shall be furnished, installed
and maintained by the Customer. Any of the aforementioned devices shall be Underwriter
Laboratory approved.

7.72.060.1 In the absence of a customer, Section 7.72.060 shall apply to the property
owner.

7.72.070 Standard of Meter Accuracy

7.72.070.1 The District recognizes the State of California approved minimum of 2% slow
to a maximum of 2% fast before any recalculation of billing will take place.

7.72.070.2 Meters tested and recalibrated in the District's facility shall leave that facility at
the highest possible degree of accuracy the facility is capable of producing. However, in
no case will a meter be less than 99.7% nor more than 100.3% when taken from the test
bench.

7.72.070.3 The District's meter standard(s) shall be tested annually by an Independent
Contractor.

7.72.070.4 All meters returned from service, regardless of the reason, shall be tested and
recalibrated before being returned to service.

7.72.080    Meter Tests

7.72.080.1 Any customer may request the District to test the meter serving their
premises. Customer requested tests shall be performed as quickly as possible. No notice
of time of testing will be sent to the customer unless he/she specifically requests such
notice at the time of their original request for a test.

7.72.080.2 All mechanical meters brought in for testing, trouble-shooting or high bill
inquiries shall be replaced by digital meters. Digital meters shall have an accuracy of
0.1% or less on test runs.

7.72.080.3 Any customer who requests a meter test shall be charged a fee to cover the
reasonable cost of the test in accordance with the Miscellaneous Fees Schedule if the
meter has been tested within the last three years. The fee is refundable if the meter test
result is more than 2% fast.


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7.72.090   Meter Errors

7.72.090.1 Where, in the opinion of the District, appropriate tests reveal that a meter is
registering more than two percent (2%) fast, the District will refund to the customer the
amount of the overcharge based on corrected meter readings for the period the meter
was in use, but in no instance exceeding six (6) months.

7.72.090.2 Where, in the opinion of the District, appropriate tests reveal that a meter is
registering more than two percent (2%) slow, the District may bill the customer for the
amount of the undercharge based on corrected meter readings for the period the meter
was in use, but in no instance exceeding six (6) months.

7.72.090.3 If it is discovered that an error has been made in reading a customer's meter
or there has been a malfunction in the metering equipment, the District may correct the
error by recalculating the charges back to the date such error occurred. If the date the
error occurred cannot be clearly identified, the recalculation period shall not exceed six
(6) months. The customer's account shall then be charged or credited for the amount
determined. If the calculation results in a charge to the customer, the customer shall be
given a reasonable period of time to pay the amount owed.


                                     CHAPTER 7.80

                            REPAIRS AND MAINTENANCE
Section:

      7.80.010      Current and         Ordinary     Repairs     and
                    Maintenance

7.80.010 Current and Ordinary Repairs and Maintenance The District hereby
construes the terms "all current and ordinary repairs" and "current and ordinary upkeep or
maintenance," as contained in Public Contract Code Section 20205.2, to include the
repair, upkeep and maintenance of the entire District water and electrical distribution
systems, to allow for routine extension and expansion of District electrical and water
facilities to meet the increased demand placed on such systems by the growing needs of
District customers, and to include minor and routine work which District staff is capable of
performing. Such work shall include, but shall not be limited to, the following:

7.80.010.1 Reconductoring

7.80.010.2 Pole relocation(s)

7.80.010.3 Routine pole replacement of broken or deteriorated poles, or where a size or
height increase is needed.

7.80.010.4 Electrical work on energized lines.



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7.80.010.5 Pulling of underground cable in conduit systems, and installation of overhead
conductors and poles and associated equipment.

7.80.010.6 The making of underground electrical splices and terminations.

7.80.010.7 The installation of transformers, switches, regulators, reclosers, and related
equipment that is either provided by a customer at the customer's expense or acquired
by the District by competitive bidding procedure.

The list set forth herein is not exclusive, and the District may determine that other similar
types of work are included within the terms "current and ordinary repairs" and "current
and ordinary upkeep or maintenance" as contained in Public Contract Code Section
20205.2.


                                      CHAPTER 7.83

                        RENEWABLE PORTFOLIO STANDARD

Sections:

       7.83.010      Background
       7.83.020      Objectives
       7.83.030      Qualified Resources
       7.83.040      Target
       7.83.050      Strategies for Meeting Objectives
       7.83.060      Ongoing Review

7.83.010    Background

7.83.010.1 The State of California has an existing California Renewables Portfolio
Standard Program (RPS program) that is intended to increase the amount of electricity
generated each year from eligible renewable energy resources.

7.83.010.2 On April 12, 2011, the Governor of the State of California signed California
Senate Bill 2 of the First Extraordinary Session (SBX1-2, Chapter 1, Statutes of 2011,
First Extraordinary Session), known as the California Renewable Energy Resources Act.

7.83.010.3 On September 9, 2011, the California Legislature ended the First
Extraordinary Session.

7.83.010.4 SBX1-2 became effective on December 10, 2011, ninety-one days after the
end of the First Extraordinary Session.

7.83.010.5 SBX1-2 states the intent of the Legislature that the amount of electricity
generated per year from eligible renewable energy resources be increased to an amount
that equals at least 20% of the total electricity sold to retail customers in California per
year by December 31, 2013, and 33% by December 31, 2020.



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7.83.010.6 Pursuant to the provisions of Public Utilities Code section 399.30(a), the
District must adopt and implement a renewable energy resources procurement plan
(hereinafter referred to as the “RPS Procurement Plan”) to fulfill unmet long-term
generation resource needs, that requires the District to procure a minimum quantity of
electricity products from eligible renewable energy resources, including renewable energy
credits, as a specified percentage of the total kilowatt-hours sold to the District’s retail
end-use customers each compliance period, to achieve specified procurement targets.

7.83.020 Objectives

The District’s RPS Objectives
   • Meet the intent of SBX1-2 to encourage renewable resources.
   • Maintain reliable overall energy supply portfolio.
   • Minimize adverse impact of acquiring new renewable energy resources on
      customer electric rates.

7.83.030 Qualified Resources

The District’s Electric Qualified RPS Resources
   • Renewable resources are defined as non-fossil fueled electric generating
      resources. These include resources that meet the definition of “Eligible renewable”
      pursuant to section 398.4(h) of the California Public Utilities code, which sets forth
      the requirements for power content labels:

      Eligible renewable energy resources pursuant to the California Renewables
      Portfolio Standard Program (Article 16 (commencing with Section 399.11)),
      including any of the following:
          o Biomass and biowaste (includes landfill gas)
          o Geothermal
          o Eligible hydroelectric(small hydro)
          o Solar
          o Wind
          o Other categories as determined by the Energy Commission.

7.83.030.1 The District has adopted and implemented, or will adopt and implement an
RPS Procurement Plan that will include eligible renewable energy resources, defined
pursuant to Public Utilities Code section 399.30 (i).

7.83.030.2 The provisions of Public Utilities Code section 399.30(i) apply to the District
since the DISTRICT was in existence before January 1, 2009, provides retail electric
service to 13,167 customer accounts as of December 2011, and is interconnected to a
balancing authority that is located outside the state of California (NV Energy) but within
the Western Electric Coordinating Council.




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7.83.030.3 The District has adopted and implemented, or will adopt and implement, an
RPS Procurement Plan that includes the minimum procurement requirements
(Procurement Requirements) of eligible renewable energy resource electricity products
associated with contracts executed after June 1, 2010 for each Compliance Period,
consistent with Public Utilities Code section 399.30(c)(3) and section 399.16.

7.83.040   RPS Target

   •   At such time that projected resources do not exceed projected demand, the
       District will strive to include qualifying resources to meet projected demand.

7.83.040.1 The District has adopted and implemented, or will adopt and implement, an
RPS Procurement Plan that includes compliance periods (Compliance Periods) pursuant
to Public Utilities Code section 399.30(b). Such Compliance Periods shall be January 1,
2011 to December 31, 2013, inclusive (Compliance Period 1), January 1, 2014 to
December 31, 2016, inclusive (Compliance Period 2), January 1, 2017 to December 31,
2020, inclusive (Compliance Period 3), and each calendar year after 2020.

7.83.040.2 The District has adopted and implemented, or will adopt and implement, an
RPS Procurement Plan that includes specified procurement targets (Procurement
Targets) of renewable energy resources for each Compliance Period pursuant to Public
Utilities Code section 399.30(c)(1) and (2). Procurement Targets must average twenty
percent (20%) of retail sales for the period January 1, 2011 to December 31, 2013, must
meet twenty-five percent (25%) of retail sales by December 31, 2016, must meet thirty-
three percent (33%) of retail sales by December 31, 2020, and must meet thirty-three
percent (33%) of retail sales for all years thereafter.

7.83.040.3 The District has adopted and implemented, or will adopt and implement, an
RPS Procurement Plan that includes provisions that address a demonstration of
reasonable progress in 2014 and 2015 to ensure the twenty five percent (25%) RPS
procurement requirement by 2016, and reasonable progress in each of 2017, 2018, and
2019 to ensure the thirty three percent (33%) RPS procurement requirement by 2020,
pursuant to Public Utilities Code section 399.30(c)(2);

7.83.050 Renewable Portfolio Standard Procurement Plan

Strategies for meeting RPS objectives:
   • Public benefit funds may be used to implement projects and may be used to
       supplement the production projects.
   • The District will strive to acquire small hydro electric from WAPA within the NV
       Energy control area.
   • In the future, the District may contract for geothermal generation, landfill gas and
       wind generation backed by natural gas that can be delivered reasonably to the
       District.

7.83.050.1 The District has adopted and implemented, or will adopt and implement, an
RPS Procurement Plan that provides a definition for contract or ownership agreements


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originally executed prior to June 1, 2010 (Grandfathered Resources) consistent with
Public Utilities Code section 399.16(d). Grandfathered Resources shall include any
contract or ownership agreement originally executed prior to June 1, 2010 for resources
that were RPS eligible under the rules in place when the contract was executed, and for
which any subsequent contract amendments or modifications occurring after June 1,
2010 do not increase the nameplate capacity for the facility or expected quantities of
annual generation, or substitute a different renewable energy resource; the duration of
the contract may be extended if the original contract specified a procurement
commitment of fifteen (15) or more years.

7.83.050.2 The District has adopted and implemented, or will adopt and implement, an
RPS Procurement Plan that includes rules for application of excess procurement (Excess
Procurement) of eligible renewable energy resource electricity from one Compliance
Period to a subsequent Compliance Period consistent with Public Utilities Code section
399.30(d)(1) and in the same manner as section 399.13(a)(4)(B). Beginning January 1,
2011, Excess Procurement from one Compliance Period may be applied to a subsequent
Compliance Period; to determine the quantity of Excess Procurement for the applicable
Compliance Period.

7.83.050.3 The District has adopted and implemented, or will adopt and implement, an
RPS Procurement Plan that includes conditions for delaying timely compliance consistent
with Public Utilities Code section 399.30(d)(2) and section 399.15(b). The District may
approve a waiver of timely compliance (Waiver of Timely Compliance) in the event that
there is inadequate transmission capacity (§ 399.15(b)(5)(A)), permitting, interconnection,
or other factors that delay procurement, or insufficient supply (§ 399.15(b)(5)(B)),
unanticipated curtailment are mandated to address needs of the balancing authority (§
399.15(b)(5)(C)), or related factors existed;

7.83.050.4 The District has adopted and implemented, or will adopt and implement, an
RPS Procurement Plan that establishes procedures to employ in the event of an approval
of a Waiver of Timely Compliance, which provisions require the District to establish
additional reporting for intervening years to demonstrate that reasonable actions under
the District’s control are being taken (§ 399.15(b)(6)) and to demonstrate that all
reasonable actions within the District’s control have been taken to ensure compliance in
the future (§ 399.15(b)(7)); in no event shall the deficit from prior compliance periods be
added to subsequent compliance periods in the event of a Waiver of Timely Compliance
(§ 399.15(b)(9));

7.83.060 Ongoing Review

7.83.060.1 Annually, the General Manager of the District shall cause to be reviewed, the
District’s RPS Procurement Plan to determine compliance the RPS program;

7.83.060.2 Annual review of the RPS Procurement Plan shall include consideration of
each of the following elements:

7.83.060.2(A) By December 31, 2013 (end of Compliance Period 1):



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      •   Verify that the District has met an average of twenty percent (20%) of retail
          sales with eligible renewable resources for the period January 1, 2011 to
          December 31, 2013.

      •   If targets are not met, the District must:
          o Ensure than any Waiver of Timely Compliance was compliant with the
               provisions in the RPS Procurement Plan,
          o Review the applicability and appropriateness of excusing performance
               based on the Cost Limitations on Expenditures provisions of the RPS
               Procurement Plan.

7.83.060.2(B) By December 31, 2014:
      • Ensure that the District is making reasonable progress toward meeting the
          December 31, 2016 compliance obligation of twenty-five percent (25%) of retail
          sales with eligible renewable resources, consistent with the RPS Procurement
          Plan.

7.83.060.2(C) By December 31, 2015:
      • Ensure that the District is making reasonable progress toward meeting the
          December 31, 2016 compliance obligation of twenty-five percent (25%) of retail
          sales with eligible renewable resources, consistent with the RPS Procurement
          Plan.

7.83.060.2(D) December 31, 2016 (end of Compliance Period 2):
      • Verify that the District has met twenty-five percent (25%) of retail sales with
          eligible renewable resources for the period ending December 31, 2016;

      •   If targets are not met, the District must:
          o Review the applicability of applying Excess Procurement from Compliance
               Period 1 consistent with the provisions of the RPS Procurement Plan,
          o Ensure than any Waiver of Timely Compliance was compliant with the
               provisions in the RPS Procurement Plan,
          o Review applicability and appropriateness of excusing performance based
               on the Cost Limitations on Expenditures provisions of the RPS Procurement
               Plan.

7.83.060.2(E) By December 31, 2017:
      • Ensure that the District is making reasonable progress toward meeting the
          December 31, 2020 compliance obligation of thirty-three percent (33%)
          renewable resources electricity, consistent with the RPS Procurement Plan.

7.83.060.2(F) By December 31, 2018:
      • Ensure that the District is making reasonable progress toward meeting the
          December 31, 2020 compliance obligation of thirty-three percent (33%)
          renewable resources electricity, consistent with the RPS Procurement Plan.




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7.83.060.2(G) By December 31, 2019:
      • Ensure that the District is making reasonable progress toward meeting the
          December 31, 2020 compliance obligation of thirty three percent (33%)
          renewable resources electricity, consistent with the RPS Procurement Plan.

7.83.060.2(H) December 31, 2020 (end of Compliance Period 3), and annually thereafter,
      • Verify that that the District met thirty-three percent (33%) of retail sales with
          eligible renewable resources consistent with the RPS Procurement Plan;
      • If targets are not met, the District must:
          o Review the applicability of applying Excess Procurement from a previous
              Compliance Period consistent with the provisions of the RPS Procurement
              Plan,
          o Ensure than any Waiver of Timely Compliance was compliant with the
              provisions in the RPS Procurement Plan,
          o Review applicability and appropriateness of excusing performance based
              on the Cost Limitations on Expenditures provisions of the RPS Procurement
              Plan.

7.83.060.3 If it is determined that the District has failed to comply with the provisions of its
RPS Procurement Plan, the Board of Directors shall take steps to correct any untimely
compliance, including:

7.83.060.3(A) Review the District’s RPS Procurement Plan to determine what changes, if
any, are necessary to ensure compliance in the next Compliance Period;

7.83.060.3(B) Report quarterly to the Board of Directors regarding the progress being
made toward meeting the compliance obligation for the next Compliance Period;

7.83.060.3(C) Report to the Board of Directors regarding the status of meeting
subsequent compliance targets, and all steps being taken to ensure that the obligation is
timely met.




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                                 BYLAWS OF THE
                      TRUCKEE DONNER PUBLIC UTILITY DISTRICT

Section 1

Quorum Three members of the Board shall constitute a quorum. No business shall regularly
be entered upon until a quorum is present, nor shall business regularly be proceeded with
when the members are reduced below a quorum. 2.01.010

Section 2

Duties of Officers In addition to the duties specified by applicable law and other provisions
of these rules, as well as resolutions and ordinances of the District, the officers of the District
shall have the following duties:

   1) The President shall, when present, preside at all meetings of the District. The
      President should cause an agenda to be prepared and distributed by the Clerk/Ex-
      officio Secretary in advance of the meeting, which shall list each item of business or
      correspondence to come before the meeting insofar as is known.

       The President shall act as official spokesman of the Board at the discretion of the
       Board, execute contracts and other documents on behalf of the District when
       authorized by the Board of Directors, and shall perform such other duties as are
       assigned from time to time. 2.02.020.1

   2) The Vice President shall perform the duties of the President in the absence or
      disability of the President. 2.02.020.2

   3) The District Manager shall function as the Clerk/Ex-officio Secretary of the Board as
      well as performing all other acts and duties imposed by the Board. 2.02.020.3

       In addition to those other acts and duties imposed by the Board, the Clerk/Ex-officio
       Secretary of the Board shall be entitled to:

       a) Schedule and call a special meeting of the Board of Directors if he determines that
          it is necessary to do so and if he is unable to contact the President of the Board
          regarding the need to call such a meeting.

       b) Cancel any regular or special meeting if he determines that a quorum of the Board
          of Directors will not be present.

       c) Schedule, reschedule and cancel public hearings (except hearings on the adoption
          of a rate increase ordinance) if he determines that it is necessary to do so

   4) The Treasurer of the District shall be appointed by the Board by name and shall have
      such duties as assigned by the Board pursuant to Resolution 2008-21. 2.02.020.4



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   5) The Assistant Treasurer shall be appointed by the Board by name and shall have such
      duties as assigned by the Board pursuant to Resolution 2008-21. 2.02.020.5

   6) The Accountant shall be appointed by the Board by name and shall have such duties
      as assigned by the Board pursuant to Resolution 2008-23. 2.02.020.6

   7) The District Counsel shall be the Parliamentarian of the District, shall advise it with
      respect to the applicable laws, interpret rules, bylaws and policies, coordinate actions
      with the other consultants, and shall perform such other acts as requested by the
      Board of Directors. 2.02.020.7

   8) The officers of the District shall be elected at the first meeting in December of each
      year for a one year term. It shall be the policy of the Board to attempt to give each
      Director the opportunity to serve as President and Vice President for one year during
      their four-year term. Notwithstanding the foregoing, an incumbent President or Vice
      President may be re-elected to that office. The officers serve at the pleasure of the
      Board and may be removed from office prior to the expiration of their one-year term.
      2.02.020.8

Section 3

Place of Meeting Until changed by further resolution amending these rules, the place of
meeting of the Board of Directors shall be the Board Room of the Truckee Donner Public
Utility District, in Truckee, California. When appropriate notice has been given, any meeting
may be scheduled at another location within the District. The Board of Directors may, upon
showing of special circumstances, hold Board meetings outside the District. All legislative
meetings of said Board shall be open to the public and shall be held at said office and place
of meeting; provided, however, that meetings duly opened at said office may be adjourned to
such other place or places within the confines of said District as may be found convenient or
necessary by the Board, and provided further that this rule shall not preclude the Board from
holding executive sessions when permitted by law. 2.04.010

Section 4

Time of Meeting The time for regular meetings of the Board is the first and third Wednesday
of each month at 6:00 P.M. If and when said Wednesday falls on a legal holiday, then said
regular meeting shall be held at 6:00 P.M. on the next business day following the legal
holiday or other day agreed to by the Board. 2.04.020

Section 5

Adjourned Meetings If the business coming before the Board at any regular or adjourned
meeting is not finished on the day fixed for such meeting, or if for any reason such
adjournment is deemed proper, the Board may adjourn to such time and place as may be
specified in the Order of Adjournment. When the Order of Adjournment fails to state the hour



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to which the adjourned meeting is to be held, it shall be held at the hour specified for regular
meetings. In the event that an adjourned meeting is not called, and a special meeting does
not take place prior to the next regular meeting, then the unfinished items shall be placed on
the agenda for the next regular meeting. 2.04.030

Section 6

Special Meetings A special meeting may be called at any time by the President or by a
majority of the members of the Board, by delivering personally, by mail, or e-mail written
notice to each member of the Board, and to each local newspaper of general circulation,
radio or television station requesting notice in writing. Such notice must be delivered
personally, by mail at least 24 hours before the time of such meeting as specified in the
notice. The call and notice shall specify the time and place of the special meeting and the
business to be transacted. No other business shall be considered at such meetings by the
Board. Such written notice may be dispensed with as to any member who at or prior to the
time the meeting convenes files with the Clerk/Ex-officio Secretary a written waiver of notice.
Such waiver may be given by telegram. Such written notice may also be dispensed with as to
any member who is actually present at the meeting at the time it convenes. 2.04.040

Section 7

Written Notice of all Meetings In addition to the requirements contained in other sections of
theses Bylaws, advance written notice shall be given for all meetings in the following manner:
2.04.050

   1) A written notice of all meetings (agenda) shall be mailed or e-mailed to each Director
      as far in advance of the meeting as possible; but, in any event, either mailed, e-mailed
      or expressly hand-delivered so as to be received 72 hours in advance of the meeting.
      Notwithstanding the foregoing, and in accordance with Section 2.04.040 herein, notice
      for all special meetings shall be made at least 24 hours in advance of said meeting.
      Any Director may, at his discretion, file a signed waiver of such notice with the District.
      2.04.050.1

   2) Written notice of all meetings (agenda) shall be delivered or mailed as far in advance
      as possible, but, in any event, to be received 72 hours prior to the meeting, to all
      newspapers, radio stations, individuals and entities which have filed a request of such
      notice with the District and to all parties with business pending on that particular
      agenda of the meeting. 2.04.050.2

   3) Written notice of all meetings (agenda) shall be posted at the District office, Town hall,
      the Truckee Branch of the Nevada County Library, District Web site and such other
      locations as may from time to time be determined by the Board of Directors.
      2.04.050.3




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Availability of agenda packet On all Board or committee meeting agendas a statement will
be made advising that the complete packet of related material is available for public review at
the District office and on the District’s website. 2.04.055

Agenda, discussion and debate - Regular and Special Meetings The Clerk/Ex-officio
Secretary of the District shall cause a Notice of Meeting (agenda) to be prepared which will
state the matter to be heard in a manner that is easy to comprehend. 2.04.060

   1) The Clerk/Ex-officio Secretary of the District and the President of the Board shall be
      jointly responsible for compiling the agenda for all regular meetings. In the case of
      special meetings, the Clerk/Ex-officio Secretary and those parties calling such
      meetings shall be responsible for the preparation of the agenda. 2.04.060.1

   2) Each Director will have the right to request items to be placed on the agenda for any
      specific meeting, either: 1) Verbally requesting it if this request is supported by at least
      one additional Board member during a Board meeting, or 2) verbally or in writing to the
      President with the President’s support. Such requests must be made in a timely
      manner and shall comply with the deadlines established for the preparation of the
      Notice of Meeting (agenda). 2.04.060.2

   3) No item will be placed on the agenda until the following conditions have been met.
      Items on an agenda not meeting the conditions will be either struck from the agenda or
      will be tabled to the next meeting without discussion. 2.04.060.3

       3A) Information regarding the topic must be in the hands of the Board members prior
       to the Monday evening before the regular meeting and not less than three days prior
       to any special meeting with some exceptions in the case of an emergency meeting.
       2.04.060.3(A)

       3B) The item as it appears on the agenda will have adequate staff and consultant
       preparation prior to the presentation to the Board for discussion and review. Without
       this, such items will be referred to staff by the Chair. 2.04.060.3(B)

       3C) The consultants and staff and Board will be kept informed by memo and regular
       correspondence of all major projects and proposals well in advance of it being placed
       on the agenda for Board review. 2.04.060.3(C)

      3D) Debate and/or discussion on each agenda topic is limited to five minutes for each
      Director. The Board, by majority vote, may waive this provision for any agenda topic.
      2.04.060.3(D)




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Section 9

Order of Business The order of business in conducting the meeting of the Board shall be as
follows:    2.04.070

    1. Call to order
    2. Roll call
    3. Pledge of Allegiance
    4. Changes to the agenda
    5. Public input
    6. Director’s update
    7. Special business/public hearings
    8. Consent calendar
    9. Action items
   10. Workshop items
   11. Routine business (such as approval of minutes and Treasurer report )
   12. Closed session
   13. Return to public session
   14. Adjournment

Section 10

Voting Every action of the Board shall be taken by ordinance, resolution, motion, or
unanimous consent. In the case of every action except one taken by simple motion or
unanimous consent, the roll of Directors shall be called, and their individual votes recorded in
the formal minutes. All official Board actions will require the affirmative vote of at least three
Directors. 2.04.080

Section 11

Statements from Visitors All members of the public attending Board meetings and having
an interest in any agenda item shall have the right to address the Board before a vote is
taken on such item. They shall be encouraged to ask questions directly related to reports
made to the Board by members of the District's staff or consultants immediately after such
reports are made and prior to Board action. 2.04.090

Section 12- Approval of Minutes – Replaced by Section 13

Section 13

Board Meeting Minutes

   1) The District’s Board meeting minutes shall be action only minutes listing the title of the
      topic, a brief description of the topic, action taken or direction given, and any
      appropriate roll call votes. Resolutions and ordinances shall be attached as part of the
      action minutes. These minutes shall be a permanent record of the District. 2.08.010.1



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   2) All Board meeting minutes will be officially recorded on electronic medium. The
      original recordings shall be preserved perpetually by the District Clerk or his/her
      designee. 2.08.010.2

   3) Within 48 hours of a meeting, a copy of the action minutes shall be prepared in draft
      form. 2.08.010.3

   4) Appropriate recording and play-back equipment shall be provided by the District. The
      equipment, recordings and copies of the action minutes shall be kept in library format.
      The equipment, duplicate recordings and copies of the action minutes shall be made
      available to the general public for review and inspection upon appointment during
      regular business hours of the District. 2.08.010.4

   5) Copies of the action minutes and of the Board meeting recordings shall be made
      available to any interested party upon their request and payment of the cost of the
      tape 2.08.010.5

Section 14

Recording of the Meetings The Clerk/Ex-officio Secretary shall arrange to have tape
recordings made of the meetings of the Board, except when the Board goes into closed
session, for use in preparation of the minutes. The Clerk/Ex-officio Secretary shall make
duplicates of the recordings available to anyone for review upon arrangement. 2.04.100

Section 15

Committees Standing and select committees for the performance of such duties as may
appear necessary and proper shall from time to time be appointed by the President. In the
absence of any members of any committee, the presiding officer may appoint a substitute
who shall serve during such absence. 2.04.100

Section 16

Budgets The General Manager shall prepare a budget calendar for Board review at the first
regular meeting in August prior to the budget cycle (annually or bi-annually). The General
Manager shall present a proposed budget for the ensuing calendar year(s) to the Board in the
last quarter of the budget cycle period for the next budget cycle, The Board shall adopt such
budget with any changes ordered by it, not later than the second regular meeting in
December. The Manager or individual Board members may recommend changes in the
budget from time to time, and the Board may adopt such changes. A public hearing shall be
held prior to adoption of the budget. 2.16.010




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Section 17

Board Vacancies All vacancies occurring on the Board of Directors, for whatever reason,
shall be filled according to the rules contained in the California Government Code. 2.20.010

Section 18

Parliamentary Procedures As to all matters not hereinabove provided for, the conducting of
the business of the Board and its parliamentary procedure shall conform to the RULES OF
ORDER REVISED by H.M Robert, which RULES OF ORDER are by reference made a part
of these by laws. 2.24.010

Section 19

Amendment of Bylaws Any proposed amendment to the Bylaws must be submitted in
writing to the Clerk/Ex-officio Secretary of the District. The Clerk shall cause a copy to be
distributed to each Director and shall cause the same to be placed on the agenda for the next
regular meeting of the Board of Directors. In order to become effective, the amendment, or
any modification thereof, shall require a vote of the majority of the Board. 2.28.010




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Resolution No. 2012 - AA

  ADOPTING AMENDMENTS TO THE DISTRICT CODE
             TITLES 2 THROUGH 7

WHEREAS, the Board of Directors of the Truckee Donner Public Utility District wishes
to amend the District Code Titles 2 through 7; and

WHEREAS, the District Code provides rules and regulations intended to convey a
comprehensive description of the manner in which the District operates, handles its
finances and performs its accounting; and

WHEREAS, periodically, the District Code should be reviewed and updated to conform
to District Board directives, new applicable laws and regulations and improvements; and

WHEREAS, a workshop was held on May 2, 2012 for the Board and the public to review
and comment on the proposed changes to Titles 2 through 7; and

WHEREAS, the revised version of Titles 2 through 7 will bring the District’s policies up-
to-date and will replace all preceding resolutions affecting such Titles.

NOW THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby adopt
the amended District Code, Titles 1 through 8.

PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public
Utility District in a meeting duly called and held within said District on the sixth day of
June, 2012 by the following roll call vote:

AYES:

ABSTAIN:

NOES:
ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT

By: ____________________________________
Tony Laliotis, President of the Board

ATTEST:

____________________________________
Michael D. Holley, Clerk of the Board
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Resolution No. 2012 - BB
               AMENDING THE DISTRICT BYLAWS

WHEREAS, the Board of Directors of the Truckee Donner Public Utility District wishes to
amend the District Bylaws; and

WHEREAS, the Bylaws help to define the Board and how they function regarding
operations, duties, normal activity and powers; and

WHEREAS, the Bylaws had not been updated since 2007; and

WHEREAS, a workshop was held on May 2, 2012 for the Board and the public to review
and comment on the proposed changes to the Bylaws; and

WHEREAS, the revised version of the Bylaws will bring the District up-to-date and will
replace all preceding resolutions or ordinances affecting the Bylaws.

NOW THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby adopt the
amended District Bylaws.

PASSED AND ADOPTED by the Board of Directors of the Truckee Donner Public Utility
District in a meeting duly called and held within said District on the sixth day of June 2012.

AYES:

NOES:

ABSTAIN:

ABSENT:


TRUCKEE DONNER PUBLIC UTILITY DISTRICT

_____________________________
Tony Laliotis, President


ATTEST:
_________________________________
Michael D. Holley, P.E. Clerk of the Board




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                                             Agenda Item #                       13



CONSENT
To:         Board of Directors
From:       Steven Poncelet
Date:       June 06, 2012
Subject:    Consideration of Awarding a Contract to Design a New District Web
            Site

1. WHY THIS MATTER IS BEFORE THE BOARD
This item is before the Board as the contract for the District's new website is more than
$15,000 and requires Board approval.


2. HISTORY
The District's last major work on our website (www.tdpud.org) was done in 2007.
Since that time, the content of the website has been periodically updated and new
content has been added in conjunction with the District's work on conservation
programs, water meters, tree trimming, and increased communications/outreach.
Although the current website has served the District well, the ability to easily access
information needs to be improved and the technology behind websites and
communication continues to evolve rapidly.

In addition to the many new District programs, the District has also increased our level
of communication and outreach to our customers and stakeholders. One positive
outcome of this effort has been increased customer interaction with District staff and
our website as customers become aware of our programs and services and want to
access them. In many cases, the customer will first attempt to gather information from
the website but, if unable to find what they want, are forced to contact District staff.
This is true for both customer service functions and District programs.

A workshop was held in November, 2011 and the Board directed staff to implement a
new District website in 2012.


3. NEW INFORMATION
The District issued a Request for Proposals (RFP) on April 24, 2012 for the TDPUD
2012 Website Design Project. The purpose of the project is to replace the existing
website with one that is more resembling of today's technology, social environment,
and communication needs of our customers. The successful vendor will secure the
required software, work collaboratively with District staff in the design/launch of the
website, and will include provisions for on-going support and upgrades. The new
website will be based on a Content Management System (CMS) platform. The project

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                                          g      y      (     )p            p j
would be managed by the Public Information and Conservation Department, but would
draw heavily from the GIS/IT Department for technical support and would address the
needs of each department in the District.

The RFP deadline was May 16, 2012 and the District received three proposals from
Smallpond, Vision Internet, and Revize Software Systems. A District scoring
committee was created to evaluate the proposals and Vision Internet and Revize
Software were invited to make presentations to the scoring committee on May 30,
2012. Based on the review of the proposals and the vendor presentations, Vision
Internet was found to be the proposal that was most advantageous to the District by all
members of the scoring committee. A summary of the average score for each vendor
follows (Score out of 100 points maximum): Vision Internet (89.3), Revize (88), and
Smallpond (71).

4. FISCAL IMPACT
The contract for the TDPUD 2012 Website Design Project and first year web-hosting
and support is for an amount of $24,728 with a 10% change order authorization of
$2,473 for a total amount not to exceed $27,201 for a contract term ending December
31, 2013. The contract will also include an option to extend the $3,600 annual hosting
and support, at the District's option, at the current contract terms and conditions plus a
3-5% annual increase as part of Vision Internet's COLA adjustments. Sufficient funds
exist in the approved FY12 and FY13 budgets for this project.


5. RECOMMENDATION
Award a contract for the TDPUD 2012 Website Design Project to Vision Internet for an
amount of $24,728 with a 10% change order authorization of $2,473 for a total amount
not to exceed $27,201 for a contract term ending December 31, 2013.




Steven Poncelet                                                         Michael D. Holley
Public Information & Conservation Manager                               General Manager




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                                              Agenda Item #                      14



CONSENT
To:          Board of Directors
From:        Michael D. Holley
Date:        June 06, 2012
Subject:     Consideration of a Process to Fill a Position on the Board

1. WHY THIS MATTER IS BEFORE THE BOARD
Only the Board of Directors can determine the process to fill a vacancy on the Board.

2. HISTORY
At the April 18, 2012 regular Board meeting, Director Laura Clauson Ferree stated she
will be resigning from her position as Director. She has now given her formal
resignation with an effective date of June 1, 2012.

The Board discussed the options and directed staff to call for an election once the
formal resignation is received.

3. NEW INFORMATION
California Government Code Section 1780 lays out the process to fill a vacancy on a
special district board. The effective date of the vacancy was June 1, 2012. In lieu of
making an appointment, the Board decided to call a special election to fill the vacancy.
The election must be held on the next established election date that is 130 days or
more after the date the District Board calls the election. This date is November 6,
2012.

The District has notified both the Nevada and Placer County Election Offices of the
vacancy on the Truckee Donner PUD Board with a Statement of Facts and notification
that the vacancy will be filled by election.
4. FISCAL IMPACT
There is no fiscal impact with this action.
5. RECOMMENDATION
Call for an election to fill the vacant Board position created by the resignation of
Director Ferree as of June 1, 2012.




Michael D. Holley
General Manager

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                                              Agenda Item #                     15



CONSENT
To:         Board of Directors
From:       Michael D. Holley
Date:       June 06, 2012
Subject:    Consideration of State Mandated Resolutions for the General
            Election on November 6, 2012

1. WHY THIS MATTER IS BEFORE THE BOARD
Nevada County and Placer County Elections Divisions have notified the District of
state-mandated preparations for the November 6 General Election. These
requirements and deadlines must be met before the Elections Office may prepare for
and/or administer an election for the District. Only the Board can approve resolutions.


2. HISTORY
Every two years, director position elections take place during the November General
Election. The District is required to submit resolutions in regards to the election to
Placer and Nevada Counties. The resolutions are very routine in nature, with the only
change being Joe Aguera, and Jeff Bender, the directors whose terms have expired.
The third director position is the vacant seat.


3. NEW INFORMATION
On November 6, 2012, three Director's seats will be up for election.
   • Joseph Aguera
   • Jeff Bender
   • Vacant position
The District must submit paperwork to the counties by June 30, 2012.

Attachment 1 is the resolution 2012-AA and attachment required by Nevada County
Elections. Attachment 2 is the resolution 2012-BB and attachment required by Placer
County.

4. FISCAL IMPACT
There is no fiscal impact associated with this item.




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5. RECOMMENDATION
Approve the resolutions to conduct the District's November election:

A) Resolution 2012-AA Calling General District Election (Nevada County)

B) Resolution 2012-BB Notice of Governing Board Member Election and/or Notice to
   Submit Measure(s) to a Vote of the Voters (Placer County)




Michael D. Holley
General Manager




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Resolution No. 2012 - AA
     CALLING GENERAL DISTRICT ELECTION

WHEREAS, an election will be held within the Truckee Donner Public Utility District on
November 6, 2012 for the purpose of electing two members to the District Board of
Directors; and

WHEREAS, whenever two or more elections are called to be held on the same day, in the
same territory, or in part of the same territory, such elections should be consolidated;

NOW, THEREFORE, BE IT RESOLVED that an election be held on November 6, 2012 for
the purpose of electing three members to the District Board of Directors; and

BE IT FURTHER RESOLVED THAT the Truckee Donner Public Utility District requests the
governing body of the County of Nevada, as prescribed by Elections Code Section 10402
and 10403 to consolidate the regularly scheduled district election with any other elections to
be held on November 6, 2012 and

BE IT FURTHER RESOLVED that the Candidate is to pay for the publication of the
candidate’s statement, pursuant to Elections Code Section 13307. The limitation on the
number of words that a candidate may use in his/her Candidate’s Statement is 200 words;
and

BE IT FURTHER RESOLVED that the Truckee Donner Public Utility District agrees to
reimburse the County of Nevada for the district’s prorated share of the costs of the election.

PASSED AND ADOPTED by the following vote on June 6, 2012:

YES Votes ___                 NO Votes _____                ABSENT ______

TRUCKEE DONNER PUBLIC UTILITY DISTRICT

_____________________________
Tony Laliotis, President

ATTEST:

______________________________
Michael D. Holley, District Clerk




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                        NOTICE OF DISTRICT ELECTION
                              Truckee Donner Public Utility District

Notice is hereby given that a General District Election will be held in this district on November
6, 2012. There are two elective offices that are to be filled at that election, for which
candidates may be nominated, and the titles of the election to those offices are for short
terms of long terms area as follows:

Title of Office                     Name of Incumbent                  Length of Term
Director                            Joseph Aguera                      4 years
Director                            Jeff Bender                        4 years
Director                            vacant position                    4 years

The policy of the Truckee Donner Public Utility District with respect to payment of the costs of
printing the 200-word Candidate’s Statement of Qualifications that appear in the Sample
Ballot booklets is as follows (check one):


       The District will pay the cost
       .
       The candidate will pay the cost. If the candidate is to pay the cost, the County Clerk is
       authorized to require payment in advance and to determine the cost of printing,
       handling, and mailing the candidate’s statement.


Also enclosed is a copy of a map of the district boundary lines in compliance with Elections
Code Section 10522.

Dated this sixth day of June 2012.




       (SEAL)


                                                        _________________________
                                                        Barbara Cahill, District Secretary




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Resolution No. 2012 - BB
NOTICE OF GOVERNING BOARD MEMBER ELECTION AND/OR
NOTICE TO SUBMIT MEASURE(S) TO A VOTE OF THE VOTERS


                            RESOLUTION OF THE GOVERNING BODY OF

                                 Truckee Donner Public Utility District

                DECLARING AN ELECTION BE HELD IN ITS JURISDICTION;
        REQUESTING THE BOARD OF SUPERVISORS TO CONSOLIDATE THIS ELECTION
              WITH ANY OTHER ELECTION CONDUCTED ON SAID DATE; AND
               REQUESTING ELECTION SERVICES BY THE COUNTY CLERK

WHEREAS, this District Governing Body orders an election to be held in its jurisdiction on
November 6, 2012; at which election the issue(s) to be presented to the voters shall be:

                   NOMINATION OF CANDIDATES FOR THE GOVERNING BODY

   1.        Said election shall be to fill a vacancy for the following Board Member(s) who resigned
             and/or whose term(s) expired:

         Incumbent’s                     Division Number                  Regular/Short
            Name                          (if applicable)                    Term
         Joe Aguera                              N/A                      Regular Term
         Jeff Bender                             N/A                      Regular Term
         Vacant Position                         N/A                      Regular Term

   2.        Said Directors for this District are elected in the following manner:

         _X_ At Large.
         There are no divisions in the District; all voters within the District vote for all candidates.

         ____ By Division.
         Districts are split into areas; only those voters residing in the area may vote for candidates who
         run in the area.

         ____ Qualified by Division-Elected at Large
         Directors must qualify to run by living in a specific division, but all voters within the District may
         vote on all candidates.

   3.        Said District has determined the following election particulars:

             •   The length of the Candidate Statement shall not exceed 200 words.
             •   The cost of the Candidate Statement shall be paid by the Candidate.




                                                      251
                                                      252



                 MEASURE(S) TO BE SUBMITTED TO THE VOTERS (IF APPLICABLE)

     4.      Said District _______ request that the following measure(s) be decided at this election.
                (Specify does or does not)

             •    Said Governing Board orders the following measure(s) to be put to a vote of the
                  residents of the District:
                         (See attached wording marked Exhibit(s) ________)

     5.      Said District has determined the following election particulars:
             • In the case of a tie vote, the election shall be determined by LOT.
                (Specify lot or runoff election)

             •    The County Clerk is requested to provide election services. If the District requests the
                  Placer County Elections Division to provide election services, all applicable costs will be
                  paid for by the District.
                  (Specify requested or not requested)

     6.      The District hereby certifies that:

          __ There have been changes to the District boundary lines since our last election as shown on
          the attached map and/or legal description.

          _X_ There have been no District boundary changes since our last election, but the District
          understands that the Placer County Public Works Mapping Division will verify our District
          “boundary lines prior to the election.

BE IT RESOLVED that the Board of Supervisors of the County of Placer is hereby requested to:

1.        Consolidate the election with any other applicable election conducted on the same day.

2.        Authorize and direct the County Clerk, at Governing Body expense, to provide all necessary
          election services.

This Resolution shall be considered a Notice of Election and Specification of Election Order if
applicable.

PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held within the District
on the sixth day of June 2012 by the following roll call vote:
AYES:
NOES:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT

_____________________________
Tony Laliotis, President

ATTEST:

______________________________
Michael D. Holley, District Clerk


                                                      252
                                           253




                             NOTICE OF VACANCIES
To: Placer County Clerk-Registrar, Elections Division

From: Truckee Donner Public Utility District

Pursuant to Elections Code Section 10509, please be advised of the following:

   1. The District has two Director seat(s) facing election. The name(s) of the
      incumbent(s) is/are listed below:

      Incumbent’s Name            Division Number (if applicable)    Regular/Short Term
      Joseph Aguera                      N/A                               4 years
      Jeff Bender                        N/A                               4 years
      Vacant Position                    N/A                               4 years

   2. The regular term(s), if any, will expire on the first Friday of December, 2012. The
      short term(s), if any, will expire on the first Friday of December 2012.

   3. The length of the Candidate Statement shall not exceed 200 words. The cost of
      the Candidate Statement shall be paid by the candidate. In the case of a tie vote,
      the election shall be determined by lot.

   4. The District hereby certifies that (please check one):
              There have been changes to the District boundary lines since our last
          election as shown on the map and/or legal description delivered to the Placer
          County Elections Division on or before June 30, 2010.

          X     There have been no District boundary changes since our last election,
          but the District understands that the Placer county Mapping Division will verify
          our District boundary lines prior to the election.

   5. The County Clerk is requested to provide election services.




_____________________________                                        (Seal)
Barbara Cahill, District Secretary




                                           253
                                               254




                                               Agenda Item #                    16



CONSENT
To:         Board of Directors
From:       Sanna Schlosser
Date:       June 06, 2012
Subject:    Consideration of the Award of a Contract for Phase 2 of the Electric
            SCADA Reliability Improvement Project

1. WHY THIS MATTER IS BEFORE THE BOARD
Board approval is required for expenditures in excess of $15,000.


2. HISTORY
The District has 5 electric and 55 water facilities located throughout our service
territory. The communication systems to these remote sites, which are integral to
electric and water SCADA systems, are antiquated, difficult to maintain, exhibit overall
low reliability and have very limited bandwidth. The District has installed
communication conduit with underground electric and water system extensions since
approximately 2000. This allows the District to install new communication media to
improve communication reliability to our electric and water facilities.

The Phase 1 project included construction of fiber optic links from the main office on
Donner Pass Road to Martis Valley and Truckee Substations, Glenshire Drive Well
and Old Greenwood Well.


3. NEW INFORMATION
Staff prepared bid documents for a contractor to procure, install, and test optical
cables in a proposed Phase 2 project to connect the District office and Richards Drive
Pump Station, Donner Lake Tank, West Reed PRV, and Wolfe Estates Hydro Station
areas. Remaining District facilities will be connected with optical cables in a phased
approach over the next several years. Bids were sent out on May 7, 2012. The bid
opening was held at 10:00AM on May 29 and 3 bids were received. A summary of the
bids is shown below:

 Bidder                             Amount       Responsive
 Terry Hansen Electric              $236,710     Yes
 Golden State Utility Co.           $286,200     Yes
 Curtis & Sons Construction, Inc.   $369,368     Yes




                                               254
                                               255




The bid from Terry Hansen Electric did not include their Debarment Certificate in their
bid package. It was later received by the District. This can be waived as a minor
irregularity at the discretion of the Board as it provides no competitive advantage for
the Bidder.

4. FISCAL IMPACT
Sufficient funds exist within the approved FY12 District capital budgets for this project.
Project benefits will accrue to the Electric and Water departments, therefore it is
proposed to split costs equally between the departments.



5. RECOMMENDATION
A) Declare the missing Debarment Certificate from Terry Hansen Electric's bid
   package a minor irregularity.

B) Award the SCADA Reliability Improvement Project to Terry Hansen Electric in the
   amount of $236,710 plus a 10 percent change order allowance for an amount not
   to exceed $260,381.




Stephen Hollabaugh                                                      Michael D. Holley
Assistant General Manager                                               General Manager




                                               255
                                                   256




                                               Agenda Item #                     17



SPECIAL BUSINESS
To:          Board of Directors
From:        Michael D. Holley
Date:        June 06, 2012
Subject:     Consideration of Appointing a Vice President of the Board

1. WHY THIS MATTER IS BEFORE THE BOARD
Per District Code, the officers of the District shall be elected by the Board.


2. HISTORY
Director Laura Ferree was elected Vice President of the Board on December 7, 2011.


3. NEW INFORMATION
Director Ferree has given her resignation, leaving the office of Vice President vacant.
The Board needs to elect a Director as Vice President to serve the remainder of the
term to December 2012.


4. FISCAL IMPACT
There is no direct fiscal impact with this item.


5. RECOMMENDATION
Elect a Board Vice President to serve the remainer of 2012.




Michael D. Holley
General Manager




                                                   256
                                              257




                                              Agenda Item #                     18



ACTION
To:          Board of Directors
From:        Michael D. Holley
Date:        June 06, 2012
Subject:     Consideration of Adopting a Resolution to Commend Director Ferree

1. WHY THIS MATTER IS BEFORE THE BOARD
The matter involves recognizing the important contributions and service of a Director.


2. HISTORY
On August 17, 2011, Laura Clauson Ferree was appointed to the Board of Directors to
replace Director Hillstrom who resigned in June 2011. The term was to expire in
November 2012.


3. NEW INFORMATION
Director Ferree has given her notice of resignation as of June 1, 2012. The Board now
has an opportunity to recognize Laura Clausen Ferree for her service to the District.
The resolution is included as Attachment 1.


4. FISCAL IMPACT
There is no fiscal impact with this matter.


5. RECOMMENDATION
Adopt a resolution to recognize Laura Clauson Ferree for her term on the Truckee
Donner PUD Board.




Michael D. Holley
General Manager




                                              257
                                              258




Resolution No. 2012 - XX
                        Commending Laura Ferree
                 For Her Service on the Board of Directors

WHEREAS, the Truckee Donner Public Utility District is a customer owned public utility
organized as a Special District under the laws of the state of California, and

WHEREAS, the Truckee Donner Public Utility District, established in 1927, provides electric and
water utility services to the community of Truckee, and

WHEREAS, the laws of the state of California require the Truckee Donner Public Utility District to
have an elected Board of Directors, and

WHEREAS, Laura Ferree was appointed to the Truckee Donner Public Utility Board of Directors
In August 2011; and

WHEREAS, during her term as a Director, Laura has demonstrated leadership, superior
principles, knowledge, follow-through and dedication to service to the community; and

WHEREAS, Laura Ferree has contributed much to the District during her term as Director. She
displayed the ability to assimilate and discuss complex issues regarding utility operations and
management; and

WHEREAS, Laura Ferree served as Vice President in 2012.

NOW THEREFORE BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE DISTRICT
THAT: the Truckee Donner Public Utility District hereby wishes to express its appreciation and
gratitude to Laura Ferree for her hard work and accomplishments.

PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held within the
District on the sixth day of June 2012 by the following roll call vote:

AYES:

NOES:

ABSENT:

TRUCKEE DONNER PUBLIC UTILITY DISTRICT
_____________________________
Tony Laliotis, President

ATTEST:
______________________________
Michael D. Holley, District Clerk


                                              258
                                                 259




                                                Agenda Item #                       19



ACTION
To:          Board of Directors
From:        Robert Mescher
Date:        June 06, 2012
Subject:     Consideration of the Draft Audited Financial Report for 2011

1. WHY THIS MATTER IS BEFORE THE BOARD
The District is required to have its financial records audited each year. As the Board is
responsible for hiring auditors, the auditors present their findings directly to the Board.


2. HISTORY
In October 2011, the Board awarded a contract with the accounting firm, Moss-Adams,
to perform the District's audit for 2011.


3. NEW INFORMATION
The 2011 audit is now complete and unqualified. Julie Desimone, a partner of Moss-
Adams, will present the audit results to the Board which includes the drafts of the
Consolidated Financial Statements and the Primary Government Only Financial
Statements for the year ended December 31, 2011. Ms. Desimone will discuss the
management letter which includes recommendations.

Attached are drafts of the audited financial statements and the management letter.


4. FISCAL IMPACT
This is a report of the financial activity for 2011. There is no fiscal impact.


5. RECOMMENDATION
Accept the Audited Financial Reports for 2011.




Robert Mescher                                                             Michael D. Holley
Administrative Services Manager                                            General Manager


                                                 259
                 260




       TRUCKEE DONNER
    PUBLIC UTILITY DISTRICT

     FINANCIAL STATEMENTS

Including Independent Auditors’ Report

    December 31, 2011 and 2010




                 260
                                                                        261




                                                      TABLE OF CONTENTS




Independent Auditors’ Report .................................................................................................................. 1

Management’s Discussion and Analysis .................................................................................................. 2

Financial Statements ............................................................................................................................... 8

   Consolidated Balance Sheets .............................................................................................................. 9

   Consolidated Statements of Revenue, Expenses, and Changes in Net Assets ................................... 12

   Consolidated Statements of Cash Flows............................................................................................ 13

Notes to Financial Statements ............................................................................................................... 15

Supplemental Information ...................................................................................................................... 45

   Consolidating Balance Sheets ........................................................................................................... 46

   Consolidating Statement of Revenues, Expenses, and Changes in Net Assets .................................. 49

   Consolidating Statements of Cash Flows ........................................................................................... 50

   Other Post Employment Benefits Plans - Required Supplementary Information.................................. 52




                                                                        261
                                                       262




                                    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, 2011 and 2010, 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, 2011 and 2010 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.

The management’s discussion and analysis on pages 2 through 6 as well as the pension and other post
employment benefit plans funding schedules are 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.


Portland, Oregon
______________, 2012




                                                       262
                                                    263
                      TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                            MANAGEMENT’S DISCUSSION AND ANALYSIS
                                  December 31, 2011 and 2010



MANAGEMENT’S DISCUSSION AND ANALYSIS

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, 2011 and 2010. 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
management discussion and analysis.

FINANCIAL HIGHLIGHTS

The District’s net capital assets decreased $0.2 million (0%) from $122.1 million at December 31, 2010 to
$121.9 million at December 31, 2011, mainly because of the sale of land held for sale. Electric and Water
distribution assets were replaced at about the same pace as accumulated depreciation. Beginning in
2009, automated meter reading devices were installed to enable volumetric billing of water in compliance
with California Assembly Bill 2572, instead of flat-rate billing. Water meters have been installed at
approximately 90% of all customer locations and the remaining meters are planned to be installed by
2017.

The District’s total net assets increased $6.9 million (10%) from $70.4 million at December 31, 2010, to
$77.3 million at December 31, 2011. The increase was due to a $2 million decrease in debt related to
capital assets and a $5 million increase in unrestricted assets.

The operating revenues in 2010 and 2011 were $33.5 million for each year. Electric revenues increased
slightly in 2011, but the 1.75% water rate increase in 2011 was more than offset by decreased
consumption attributed to the conservation programs and the effect of volumetric billing.

Operating expenses of the District increased by $1.7 million (6%) from $27.6 million in 2010 to $29.3
million in 2011, substantially due to increased purchased power costs and increased depreciation.

Non-operating revenues increased $1.0 million from 2010, mostly because of a gain on the sale of land.
Non-operating expenses remained about the same.

No new debt was issued in 2010, but $7.8 million debt was issued in 2011 to refinance an existing
pension obligation. (See notes 1(J), 5, and 9(B)).

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.




                                   See accompanying auditors’ report.
                                                                                                    Page 2
                                                    263
                                                        264
                        TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                              MANAGEMENT’S DISCUSSION AND ANALYSIS
                                    December 31, 2011 and 2010



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(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.

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.

The Notes to the Financial Statements 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.




                                      See accompanying auditors’ report.
                                                                                                            Page 3
                                                        264
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                               TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                    MANAGEMENT’S DISCUSSION AND ANALYSIS
                                          December 31, 2011 and 2010



DISTRICT HIGHLIGHTS

The condensed financial statements at December 31, 2011, 2010, and 2009 are presented below.

                                              CONDENSED BALANCE SHEETS
                                                                                                         Increase
                                                                                                        (Decrease)
                           ASSETS                       2011            2010            2009            2011 - 2010
     Current assets                                 $ 42,758,767    $ 40,131,454    $ 40,590,535    $     2,627,313
     Non-current assets:
          Capital assets, net                         121,918,394    122,071,635     118,270,925            (153,241)
          Restricted assets                             2,021,017       1,884,183       3,761,627           136,834
          Other long-term assets                       16,374,169       9,540,843     10,321,541          6,833,326
                     TOTAL ASSETS                   $ 183,072,347   $ 173,628,115   $ 172,944,628   $     9,444,232


            LIABILITIES AND NET ASSETS
     Current liabilities                            $ 10,928,960    $ 10,033,179    $ 10,907,411    $       895,781
     Non-current liabilities
          Long-term debt, net of current
                portion                                90,522,322     88,780,242      93,996,886          1,742,080
          Unearned revenues                             4,335,944       4,447,397       4,216,188           (111,453)
                Total Liabilities                     105,787,226    103,260,818     109,120,485          2,526,408
     Net Assets
          Invested in capital assets, net
                of related debt                        42,160,866     40,245,805      37,247,841          1,915,061
          Restricted for debt service                  16,187,007     15,768,308      16,061,200            418,699
          Unrestricted                                 18,937,248     14,353,184      10,515,102          4,584,064
                Total Net Assets                       77,285,121     70,367,297      63,824,143          6,917,824
                     TOTAL LIABILITIES
                           AND NET ASSETS           $ 183,072,347   $ 173,628,115   $ 172,944,628   $     9,444,232


In 2011, the District’s current assets increased $2.6 million, predominantly due to increased cash
reserves. (See note 2). The District’s net capital assets decreased $0.2 million, primarily because of the
sale of land held for sale. Electric and Water distribution assets were replaced at about the same pace as
accumulated depreciation. Non-current restricted assets increased $0.1 million, mostly attributed to a
market adjustment of long-term investments. Other long-term assets increased $6.8 million as a result of
recording the $7.6 deferred pension obligation that was refinanced. (See notes 1(J), 5, and 9(B)). Total
liabilities increased $2.5 million, mainly due to $7.8 million additional debt issued, less the annual
reduction of existing debt. No new debt was issued in 2010 and 2009. The District’s total net assets
increased $6.9 million, substantially due to a $2.0 million decrease in debt related to capital assets and a
$5.0 million increase in unrestricted assets.

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 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.



                                            See accompanying auditors’ report.
                                                                                                                Page 4
                                                            265
                                                       266
                          TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                 MANAGEMENT’S DISCUSSION AND ANALYSIS
                                       December 31, 2011 and 2010



Net assets restricted for debt service represents amounts restricted for payments related to outstanding
revenue bonds.

The District had income before capital contributions of $4.3 million, $5.0 million, and $4.2 million for the
years ended December 31, 2011, 2010 and 2009, 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 years ended December 31, 2011, 2010, and 2009.

                           CONDENSED REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
                                                                                                     Increase
                                                                                                    (Decrease)
                                                    2011           2010            2009             2011 - 2010
    Sales to consumers                          $ 31,053,129   $ 31,118,286    $ 30,301,191     $        (65,158)
    Other operating revenues                       2,430,965      2,358,141       2,503,380              72,824
         Total Operating Revenues                 33,484,094     33,476,427      32,804,571                7,667
    Operating expenses                            29,284,060     27,620,502      26,924,724           1,663,558
         Operating Income (Loss)                   4,200,034      5,855,925       5,879,847           (1,655,892)
    Non-operating revenues (expenses)                120,208       (902,905)      (1,713,890)         1,023,113
         Income (loss) before
              capital contributions                4,320,242      4,953,020       4,165,957             (632,779)
    Capital contributions, net                     2,597,582      1,590,134       8,709,498           1,007,448
         Change in net assets                      6,917,824      6,543,154      12,875,455             374,670
         NET ASSETS, Beginning of Year            70,367,297     63,824,143      50,948,688           6,543,154
              NET ASSETS, END OF YEAR           $ 77,285,121   $ 70,367,297    $ 63,824,143     $     6,917,824



Total Operating revenues were $33.5 million in 2011, $33.5 million in 2010 and $32.8 million in 2009.
Electric revenues increased slightly in 2011, but the 1.75% water rate increase in 2011 was more than
offset by decreased consumption attributed to conservation programs and the effect of volumetric billing,
resulting in flat revenues, district-wide. The increase in sales to consumers of $0.7 million (2%) in 2010
was primarily because of customer demand and rate increases to fund increased operating costs and
reserves.

Total operating expenses were $29.3 million in 2011, $27.6 million in 2010 and $26.9 million in 2009. The
increases of $1.7 million (6%) in 2011 and $0.6 million in 2010 were due to increased purchased power
costs and depreciation.

The net of non-operating revenues, less non-operating expenses, increased $1.0 million in 2011
substantially because of the sale of land. The increase of $0.8 million in 2010 was mostly due to
increased investment income and special tax revenue.

The net capital contributions increased $1.0 million in 2011, but decreased $7.1 million in 2010 attributed
to changes in construction and development activities.




                                        See accompanying auditors’ report.
                                                                                                           Page 5
                                                       266
                                                               267
                             TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                       MANAGEMENT’S DISCUSSION AND ANALYSIS
                                             December 31, 2011 and 2010



CAPITAL ASSETS

As of December 31, 2011, 2010 and 2009, the District had $121.9 million, $122.1 million, and $118.3
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


                                                        2011             2010             2009
    Electric distribution facilities                $ 46,895,992     $ 42,895,235     $ 41,569,466
    Water distribution facilities                     102,184,801      91,627,643       84,674,907
    General plant                                      11,709,868      11,751,073       10,402,163
         Sub-totals                                   160,790,661     146,273,951      136,646,536
    Less: Accumulated depreciation                    (42,699,978)     (37,979,543)     (34,688,094)
         Net of accumulated depreciation              118,090,683     108,294,408      101,958,442
    Construction work in progress                       3,827,711      13,488,564       16,023,820
    Land held for future use                                     -        288,663          288,663
               TOTALS                               $ 121,918,394    $ 122,071,635    $ 118,270,925


Net capital assets (additions, less retirements and depreciation) increased $0.2 million (0%) in 2011 and
$3.8 million (3%) in 2010. Water distribution facilities increased $17.5 from 2009 to 2011 as the 2006
Pipeline Replacement Project was completed and placed into service.

LONG-TERM DEBT

Long-term debt includes revenue bonds and notes payable. At December 31, 2011, 2010 and 2009, the
District had $96.5 million, $94.0 million, and $99.0 million, respectively, in long-term debt outstanding,
including current maturities. No new debt was issued in 2010 and 2009, but $7.8 million debt was issued
in 2011 to refinance an existing pension obligation. (See notes 1(J), 5, and 9(B)).

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
                                          Accounting & Finance Department
                                          11570 Donner Pass Road
                                          Truckee, CA 96161




                                            See accompanying auditors’ report.
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    FINANCIAL STATEMENTS




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                          TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                      CONSOLIDATED BALANCE SHEETS
                                         December 31, 2011 and 2010




                                      CONSOLIDATED BALANCE SHEETS


                                      ASSETS
                                                                          2011            2010
      CURRENT ASSETS
       Funds
         Operating                                                   $     8,149,507 $     9,178,740
         Designated                                                        9,500,894       6,958,539
         Restricted                                                       15,509,694      15,268,711
            Total Funds                                                   33,160,095      31,405,990
        Accounts receivable, net                                           6,075,570       5,009,273
        Unbilled revenues                                                  2,508,386       2,676,662
        Accrued interest receivable                                          101,902         140,868
        Materials and supplies                                               547,150         560,298
        Prepaid expenses                                                     320,059         301,540
        Other                                                                 45,605          36,823
              Total Current Assets                                        42,758,767      40,131,454

      NON-CURRENT ASSETS
      Other Non-Current Assets
         Restricted funds                                                  2,021,017       1,884,183
         Special assessments receivable                                    6,870,615       7,454,452
         Deferred charges
            Unamortized debt expense                                       1,146,426       1,277,378
            Other                                                          8,357,128         809,013
              Total Other Non-Current Assets                              18,395,186      11,425,026

      CAPITAL ASSETS
         Utility plant                                                   160,790,661     146,273,951
         Accumulated depreciation                                        (42,699,978)    (37,979,543)
         Construction work in progress                                     3,827,711      13,488,564
         Land held for future use                                                  -         288,663
            Total Utility Plant                                          121,918,394     122,071,635

              TOTAL ASSETS                                           $ 183,072,347 $ 173,628,115




The accompanying notes are an integral part of these consolidated financial statements.
                                                                                                       Page 9
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                                         CONSOLIDATED BALANCE SHEETS
                                            December 31, 2011 and 2010




                          LIABILITIES AND NET ASSETS
                                                                           2011            2010
     CURRENT LIABILITIES
      Other Liabilities
        Accounts payable                                              $     2,451,579 $     2,375,124
        Customer deposits                                                     488,230         423,850
        Other                                                                 744,161         748,259
           Total Other Liabilities                                          3,683,970       3,547,233
       Current Liabilities Payable From Restricted Assets
        Current portion of long-term debt                                   5,933,250       5,196,145
        Accrued interest payable                                            1,311,740       1,289,801
           Total Current Liabilities Payable from Restricted Assets         7,244,990       6,485,946
             Total Current Liabilities                                     10,928,960      10,033,179

     NON-CURRENT LIABILITIES
      Long-term debt, net of discounts, premiums and losses                88,983,704      86,953,400
      Installment loans                                                     1,538,618       1,826,842
      Unearned revenues                                                     4,335,944       4,447,397
        Total Non-Current Liabilities                                      94,858,266      93,227,639

           Total Liabilities                                              105,787,226     103,260,818

     NET ASSETS
      Invested in capital assets, net of related debt                      42,160,866      40,245,805
      Restricted for debt service                                          16,187,007      15,768,308
      Unrestricted                                                         18,937,248      14,353,184
         Total Net Assets                                                  77,285,121      70,367,297

                   TOTAL LIABILITIES AND NET ASSETS                   $ 183,072,347 $ 173,628,115




The accompanying notes are an integral part of these consolidated financial statements.
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   CONSOLIDATED STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET ASSETS
                   For the Years Ended December 31, 2011 and 2010




   CONSOLIDATED STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET ASSETS



                                                                         2011          2010
         OPERATING REVENUES
          Sales to customers                                          $ 31,053,129 $ 31,118,286
           Water meter surcharge                                          746,759         753,642
           Standby fees                                                   186,520        186,590
           Other                                                        1,497,686      1,417,909
             Total Operating Revenues                                  33,484,094     33,476,427

         OPERATING EXPENSES
         Purchased power                                               11,342,992     10,645,657
         Operations and maintenance                                     6,548,249      6,372,644
         Consumer services                                              2,753,561      2,577,461
         Administration and general                                     3,422,302      3,275,605
         Depreciation                                                   5,216,956      4,749,135
             Total Operating Expenses                                  29,284,060     27,620,502

                   Operating Income                                     4,200,034      5,855,925

         NON-OPERATING REVENUE (EXPENSES)
         Special tax revenue                                             3,293,878     3,185,379
         Investment income                                                 539,017       771,528
         Interest expense                                               (4,381,426)   (4,632,316)
         Amortization                                                     (105,797)     (111,062)
         Other non-operating revenues                                       38,656       168,566
         Other non-operating expenses                                      (41,928)     (178,774)
         Gain (loss) on disposition of assets                              777,808      (106,226)
             Total Non-Operating Expenses                                 120,208       (902,905)

              Income Before Contributions                               4,320,242      4,953,020

         CAPITAL CONTRIBUTIONS                                          2,597,582      1,590,134

           CHANGE IN NET ASSETS                                         6,917,824      6,543,154

             NET ASSETS - Beginning of Year                            70,367,297     63,824,143

              NET ASSETS - END OF YEAR                                $ 77,285,121 $ 70,367,297




The accompanying notes are an integral part of these consolidated financial statements.
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                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                              For the Years Ended December 31, 2011 and 2010




                             CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                          2011             2010
     CASH FLOWS FROM OPERATING ACTIVITIES
       Received from customers                                       $    33,103,216 $     33,407,500
       Paid to suppliers for goods and services                          (17,838,792)     (17,178,291)
       Paid to employees for services                                     (5,074,968)      (5,446,586)
          Net Cash Flows from Operating Activities                       10,189,456       10,782,623

     CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
       Principal payments on long-term debt                               (3,138,000)      (2,805,000)
       Proceeds from long-term debt issued                                 7,816,000                -
       Payment of existing pension obligation                             (7,816,000)               -
       Interest payments on long-term debt                                  (648,723)        (603,381)
          Net Cash Flows from Noncapital Financing Activities             (3,786,723)      (3,408,381)

     CASH FLOWS FROM CAPITAL AND RELATED
     FINANCING ACTIVITIES
       Capital expenditures for utility plant                             (4,062,590)      (8,725,310)
        Cost of disposal of property net of salvage                         (354,563)        (168,410)
        Proceeds from sale of land                                         1,092,308                -
        Capital contributions, connection and facility fees                  711,067          728,488
        Special assessments receipts                                         583,837          567,671
        Special tax receipts                                               2,833,368        3,168,192
        Principal payments on long-term debt                              (2,002,145)      (2,181,484)
        Interest payments on long-term debt                               (3,882,279)      (4,089,185)
          Cash Flows From Capital and Related Financing Activities        (5,080,997)     (10,700,038)

     CASH FLOWS FROM INVESTING ACTIVITIES
       Matured long-term investment reinvested in short-term              1,912,958                -
       Interest income received                                             436,430          654,658
          Cash Flows from Investing Activities                            2,349,388          654,658

              Net Change in Cash and Cash Equivalents                     3,671,124        (2,671,138)

        CASH AND CASH EQUIVALENTS – Beginning of Year                    29,457,117       32,128,255

              CASH AND CASH EQUIVALENTS – END OF YEAR                $   33,128,241 $     29,457,117



     NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES

     Developer and customer added capital assets                     $    1,775,189 $      1,020,728
     Recognition of prior period unearned revenues                   $    2,780,676 $      2,446,493




The accompanying notes are an integral part of these consolidated financial statements.
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                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                             For the Years Ended December 31, 2011 and 2010




                                                                           2011             2010
   RECONCILIATION OF OPERATING INCOME TO NET CASH
    FLOWS FROM OPERATING ACTIVITIES
     Operating income                                                 $    4,200,034    $    5,855,925
     Noncash items included in operating income
      Depreciation and amortization                                        5,216,957         4,749,135
      Amortization of deferred expenses                                       62,232            62,232
      Depreciation charged to other accounts                                 353,422           225,125
     Changes in assets and liabilities
      Accounts receivable and unbilled revenues                             (440,910)         (237,513)
      Materials and supplies                                                  13,148            99,474
      Prepaid expenses and other current assets                              (18,519)             (600)
      Accounts payable                                                       579,207          (183,712)
      Customer deposits                                                       60,030           168,586
      Other current liabilites                                               163,855            43,971


          NET CASH FLOWS FROM OPERATING ACTIVITIES                    $   10,189,456    $   10,782,623



   RECONCILIATION OF CASH AND CASH EQUIVALENTS
    TO THE BALANCE SHEET
     Operating                                                        $    8,149,507    $    9,178,740
     Designated                                                            9,500,894         6,958,539
     Restricted bond funds - current                                      15,509,694        15,268,711
     Restricted bond funds - non-current                                   2,021,017         1,884,183
       Total Cash and Investments                                         35,181,112        33,290,173

     Less: Long-term investments                                          (1,698,881)       (3,594,876)
           Mark to market adjustment                                        (353,990)         (238,180)


         TOTAL CASH AND CASH EQUIVALENTS                              $   33,128,241    $   29,457,117




The accompanying notes are an integral part of these consolidated financial statements.
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                                  NOTES TO FINANCIAL STATEMENTS
                                     December 31, 2011 and 2010



NOTES TO FINANCIAL STATEMENTS

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 is a legal entity that was 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) is a
         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) is a
         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 the 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, that are a result of exchange and exchange like transactions, are
recognized when the exchange takes place.

The District follows all pronouncements of the GASB, and has elected not to follow Financial Accounting
Standards Board (FASB) pronouncements issued after November 30, 1989.




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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    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 ALLOWANCES FOR DOUBTFUL ACCOUNTS

Accounts receivable are recorded at the invoiced amount and are reported net of allowances of $88,845
and $124,134 for 2011 and 2010, 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.

    I.   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 16
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                                  NOTES TO FINANCIAL STATEMENTS
                                     December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    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. (See note 4).

In 2011, the District refinanced an existing $7.8 million pension side fund obligation for its participation in
CalPERS. (See notes 5 and 9(B)). Prior to 2011, the annual side fund payments were expensed and
described in the Notes to Financial Statements. The pension liability was not required to be reported on
the District’s Balance Sheet, but the future pension expense was included in budget and rate calculations.
This pension obligation will be deferred through 2022.

    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
                          Electric                         23 – 35 years
                          Water                            15 – 40 years
                 Computer software and hardware             3 – 7 years
                 Building and improvements                 20 – 33 years
                 Equipment and furniture                    4 – 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 related to capital assets was issued in 2010 and 2011; no interest was capitalized in 2010 or
in 2011.

    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

The District records estimated revenues earned, but not billed to customers, as of the end of the year.
Revenues are recorded as meters are read on a cycle basis throughout each month for electric and water
customers. Unbilled revenues, representing estimated consumer usage for the period between the last
meter reading and the end of the period, are accrued in the period of consumption. Water customers
without meters are billed on a flat-rate basis, and revenues are recorded as billed. 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 17
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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    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 electric and
water 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 electric and water 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 dba NV Energy
(SPPC), whereby SPPC will provide transmission services to the District through December 31, 2027. In
addition, the District purchases scheduling services from Northern California Power Agency (NCPA).
These purchases of services represented 8.5% and 10.2% of total purchased power costs in 2011 and
2010, respectively.

Beginning January 1, 2005, the District entered into an 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 the power from WAPA to the District is
difficult, the District assigns the power from WAPA to NCPA. The scheduler then uses the value of this
power to offset power purchases from the Utah Associated Municipal Power System (UAMPS) or other
deliverable power purchases.

In December of 2005, the District entered into an agreement with UAMPS. Subsequently, the District
entered into many pooling appendices for power capacity and energy that relate to various time periods
from January 2008 through March 2028. Also in 2009, the District signed an agreement with UAMPS for
approximately 5 MW of the Nebo natural gas generation plant capacity.

In 2011 and 2010, the UAMPS contract, along with its appendices, and the WAPA contract comprised the
majority of a diversified power portfolio that balanced risk and cost for the District.

    P.   INCOME TAXES

As a government agency, the District is exempt from payment of federal and state income taxes.

    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 notes 5 and 7). The District had revenues of $933,545 in 2011 and
$900,233 in 2010.

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 notes 5 and 7). The District levied ad valorem taxes of $2,360,333
in 2011 and $2,285,146 in 2010.

Taxes are assessed based on the county tax year ending June 30, resulting in unearned revenues for
each of the community facility districts. (See note 6).


                                                                                                   Page 18
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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    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 unearned revenues on the balance sheet.

    S. RECENT ACCOUNTING PRONOUNCEMENTS IMPLEMENTED BY THE DISTRICT

In June of 2007, GASB issued Statement No. 51, “Accounting and Financial Reporting for Intangible
Assets.” This Statement is effective for financial statements for periods beginning after June 15, 2009.
Governments possess many different types of assets that may be considered intangible assets, including
easements, water rights, timber rights, patents, trademarks, and computer software. The objective of this
statement is to establish accounting and financial reporting requirements for intangible assets to enhance
the comparability of the accounting and financial reporting of such assets among state and local
governments. This statement requires that an intangible asset be recognized in the statement of net
assets only if it is considered identifiable. Additionally, this statement establishes a specified-conditions
approach to recognizing intangible assets that are internally generated. This statement also establishes
guidance specific to intangible assets related to amortization. This statement was implemented in fiscal
year 2010 with no significant impact.

In December 2009, GASB issued Statement No. 57, “OPEB Measurements by Agent Employers and
Agent Multiple – Employer Plans.” This statement addressed issues related to the use of the alternative
measurement method and the frequency and timing of measurements by employers that participate in
agent multiple-employer Other Post-Employment Benefit (OPEB) plans. The statement amended
previous GASB statements on OPEB plans, and improved the consistency of reporting for OPEB plans.
This statement was implemented in fiscal year 2011.

In June 2010, GASB issued Statement No. 59, “Financial Instruments Omnibus.” This statement
addresses topics relating to the reporting and disclosure of certain financial instruments and external
investment pools, and includes some clarifications to GASB Statement No. 53. The District assessed the
financial statement impact of adopting the new statement, and its impact was not material. This statement
was implemented in fiscal year 2011.

In December 2010, GASB issued Statement No. 62, “Codification of Accounting and Financial Reporting
Guidance Contained in the Pre-November 30, 1989 FASB and AICPA Pronouncements.” This statement
incorporates into GASB’s authoritative literature certain accounting and financial reporting guidance
issued on or before November 30, 1989 included in: FASB Statements and Interpretations, Accounting
Principles Board Opinions, and Accounting Research Bulletins of the AICPA Committee on Accounting
Procedure that do not conflict with or contradict GASB pronouncements. The statement also supersedes
GASB Statement No. 20, “Accounting and Financial Reporting for Proprietary Funds and Other
Governmental Entities That Use Proprietary Fund Accounting” which eliminates the election for business-
type activities to apply post-November 30, 1989 FASB Statements and Interpretations that do not
contradict or conflict with GASB pronouncements. The District assessed the financial statement impact of
adopting the new statement, and its impact was not material. This statement was implemented in fiscal
year 2011.


                                                                                                    Page 19
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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    T. ACCOUNTING PRONOUNCEMENTS TO BE IMPLEMENTED IN UPCOMING YEARS

In November 2010, GASB issued Statement No. 61, “The Financial Reporting Entity - Omnibus – An
Amendment of GASB Statements No. 14 and No. 34.” This statement modifies GASB Statement 34
requirements for inclusion of component units and amends criteria for reporting of component units. The
statement also clarifies the reporting of equity interests in legally separate organizations. This statement
is effective for periods after June 15, 2012. The District has elected not to early implement GASB
Statement No. 61 and has not determined its effect on the District’s financial statements.

In June 2011, GASB issued Statement No. 63, “Financial Reporting of Deferred Outflows of Resources,
Deferred Inflows of Resources, and Net Position.” This statement provides guidance on reporting
deferred inflows and outflows of resources. The statement will also standardize the presentation of
deferred inflows and outflows of resources and their effect on a government’s net position. This statement
is effective for periods beginning after December 15, 2011. The District has elected not to early
implement GASB Statement No.63, but the District does not believe that its impact will be material.

    U. RECLASSIFICATION

Certain amounts in the 2010 Financial Statements have been reclassified in order to conform to the 2011
presentation.

NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS

Cash, cash equivalents 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 board designated accounts may be used to pay for selected capital projects. Such accounts have
been designated by the Board for the following purposes:

        Electric Capital Replacement

        Starting in 2009, the Board has set aside funds designated for future electric infrastructure
        replacement.

        Electric Vehicle Reserve

        Beginning in 2009, the Board set aside funds designated for future electric utility vehicle
        replacements.

        Electric Rate Reserve

        In compliance with Board rules, the District has created an electric rate stabilization fund in
        anticipation of future costs. During both 2011 and 2010, there was no utilization of these funds to
        offset increased power costs in lieu of raising electric rates.




                                                                                                   Page 20
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                    TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                              NOTES TO FINANCIAL STATEMENTS
                                 December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

      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. In 2008, the Board
      adopted an ordinance to charge a $5 monthly surcharge to all customers of treated water
      beginning January 2009 through December 2013. Water meters and automated meter reading
      devices are being installed, and customers will be billed volumetrically in accordance with
      California Assembly Bill 2572. 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.

      Water Vehicle Reserve

      Beginning in 2009, the Board set aside funds designated for future water utility vehicle
      replacements.

      Prepaid Connection Fees

      In compliance with Board rules, the District has set aside prepaid connection fees to cover
      installation costs of water services.

      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.

      Glenshire Lease Proceeds

      From 2009 until 2011, the District received funds for a parcel leased in Glenshire. In 2011, the
      balance of the “Glenshire Lease Proceeds” fund was transferred to the restricted fund, “Glenshire
      Escrow Account,” which is used to pay the installment loan associated with Glenshire water
      system improvements.




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                                       NOTES TO FINANCIAL STATEMENTS
                                          December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

As of December 31, board designated accounts consisted of the following:

                                                                         2011            2010
            Electric capital replacement fund                       $      11,606    $    124,642
            Electric vehicle reserve                                      166,772         295,803
            Electric rate reserve                                       2,384,084        2,306,459
            Reserve for future meters                                     426,169         153,033
            Water capital replacement fund                              3,388,950        1,920,655
            Water vehicle reserve                                          57,585         138,714
            Prepaid connection fees                                        81,479          81,117
            Debt service coverage fund                                  2,940,454        1,885,527
            Donner Lake Assessment District surcharge fund                 43,795          33,009
            Glenshire lease proceeds                                            -          19,580
                 Totals                                             $   9,500,894    $   6,958,539


Certain assets have been restricted by bond 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.

       Special Tax Bonds: Gray’s Crossing and Old Greenwood

       The terms of the special tax bonds issued for the Mello-Roos Community Facilities Districts
       require reserve funds as security for each principal and interest payment as they come due.
       Reserve funds are 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.




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                               NOTES TO FINANCIAL STATEMENTS
                                  December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

      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 were 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 Account

      The District received cash and other assets as part of its acquisition of the Glenshire Mutual
      Water Company. Also, the District will continue to receive a monthly water system upgrade
      surcharge from Glenshire residents until November 30, 2017. This cash is utilized to pay the
      installment loan related to the Glenshire water system improvements as specified in the terms of
      the acquisition agreement.

      In 2011, the District sold a parcel from the Glenshire Mutual Water Company assets. The net
      proceeds of $294,940 were transferred to the Glenshire Escrow Account and the monthly water
      system upgrade surcharge was reduced from $10.75 to $4.75.

      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
      Improvement Fund also has a reserve fund as required by the California – Safe Drinking Water –
      State Revolving Fund (SRF). This fund is required to set aside $40,043 semi-annually for ten
      years beginning in 2006.

      2006 COP Water System Project Fund

      During 2006, the District issued $26.6 million in water Certificates of Participation (2006 COP)
      (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.




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                                        NOTES TO FINANCIAL STATEMENTS
                                           December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

        Other (Area Improvement Funds)

        The District received 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.

As of December 31, restricted cash and cash equivalents and investments consisted of the following:

                                                                        2011            2010
             Certificates of Participation                          $   7,714,106   $   7,343,768
             Special tax bonds                                          4,607,396       4,608,700
             Facilities fees                                             991,254        1,389,369
             DWR-Prop 55 reserve fund                                    308,346         306,946
             Glenshire escrow accounts                                   498,719         189,168
             Donner Lake Special Assessment District improvement        2,556,368       2,386,587
             Donner Lake Special Assessment District reserve fund        481,130         401,304
             2006 COP Water System Project fund                           22,023         227,425
             Solar Initiative                                            230,028         178,825
             Other (area improvement funds)                              121,341         120,802
                        Total Restricted Cash and Cash
                                Equivalents and Investments         $ 17,530,711    $ 17,152,894


Cash and investments are comprised of the following cash and cash equivalents and investments as of
December 31:

                                                                        2011            2010
             Cash and cash equivalents                              $ 33,128,241    $ 29,457,117
             Mark to market adjustment                                   353,990         238,180
             Investments – government bonds                             1,698,881       3,594,876
                 Totals                                             $ 35,181,112    $ 33,290,173


Cash and cash equivalents were $33,128,240 and $29,457,117 at December 31, 2011 and 2010,
respectively. Cash equivalents substantially consist of investments in the state pooled fund, money
market funds and government bonds. 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.

Adjustments necessary to record investments at market value are recorded in the operating statement as
increases or decreases in investment income. Market values may have changed significantly after year
end.




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                          TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                   NOTES TO FINANCIAL STATEMENTS
                                      December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

        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 fund 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, 2011 and 2010
the District’s deposits and investments were held as follows:

                                                                              2011             2010
              Cash on hand                                              $        1,900    $       1,200
              Deposits                                                         690,265          554,019
              LAIF                                                           24,706,598       20,969,184
              Money Market Funds                                              8,083,468        8,170,894
              Government Bonds                                                1,698,881        3,594,876
                 Totals                                                 $ 35,181,112      $ 33,290,173



        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 is 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 2011 and 2010:

                              Investment                                    Maturity

                 LAIF                                                 3 months or less
                 Federated U.S. Treasury Cash Reserve                 3 months or less
                 Fidelity Institutional Prime                         3 months or less
                 Fidelity Money Market                                3 months or less
                 Federal Home Loan Mortgage                             09/15/2011
                 Federal Farm Credit Banks                              03/02/2021


        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 is rated AAAm
by S&P and AAA-mf by Moody’s. The Federated U.S. Treasury Cash Reserve is rated AAAm by S&P
and Aaa-mf by Moody’s. Federal Farm Credit Banks is rated AA+ by S&P and Aaa by Moody’s.




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                                   NOTES TO FINANCIAL STATEMENTS
                                      December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

        DISCLOSURES RELATING TO CONCENTRATION OF CREDIT RISK

Concentration of credit risk is the risk of loss attributed to the magnitude of investments in a single issuer.
The District’s investment policy requires diversification, but does not include specific limitations by issuer.

As of December 31, 2011 and 2010 the portfolio included the following investment requiring disclosure:

                                                                                2011                2010
     Federal Home Loan Mortgage                                               matured               5.7%
     Federal Farm Credit Banks                                                  4.8%                5.1%


        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 District’s investment policy does not contain
legal or policy requirements that would limit the exposure to custodial credit risk for deposits. However,
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, 2011 and 2010 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). This investment fund
has an equity interest in the State of California’s (State’s) Pooled Money Investment Account (PMIA).
PMIA funds are on deposit with the State’s Centralized Treasury System and are managed in compliance
with the California Government Code according to a statement of investment policy which sets forth
permitted investment vehicles, liquidity parameters, and maximum maturity of investments. 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.




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                             TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                        NOTES TO FINANCIAL STATEMENTS
                                           December 31, 2011 and 2010



NOTE 3 – CAPITAL ASSETS

Capital assets consist of the following at December 31, 2011 and 2010:


                                                 January 1,                                             December 31,
                                                    2011             Additions        Reductions            2011
     Electric distribution facilities           $ 42,895,235     $     4,064,797     $       (64,039)   $ 46,895,993
     Water distribution facilities                91,627,643          10,573,081             (15,923)    102,184,801
     General plant                                11,751,073            688,712            (729,919)      11,709,866
                                                 146,273,951          15,326,590           (809,880)     160,790,661
     Less: Accumulated depreciation               (37,979,543)        (5,453,483)           733,048       (42,699,978)
     Construction work in progress                13,488,564           4,181,758         (13,842,611)       3,827,711
     Land held for future use                        288,663             24,901            (313,564)                -
          Totals                                $ 122,071,635    $ 14,079,766        $ (14,233,007)     $ 121,918,394



                                                 January 1,                                             December 31,
                                                    2010             Additions        Reductions            2010
     Electric distribution facilities           $ 41,569,467     $     1,395,129     $       (69,361)   $ 42,895,235
     Water distribution facilities                84,674,906           8,123,963          (1,171,226)     91,627,643
     General plant                                10,402,163           1,729,289           (380,379)      11,751,073
                                                 136,646,536          11,248,381          (1,620,966)    146,273,951
     Less: Accumulated depreciation               (34,688,094)        (4,912,415)         1,620,966       (37,979,543)
     Construction work in progress                16,023,820          11,374,415         (13,909,671)     13,488,564
     Land held for future use                        288,663                     -                 -         288,663
          Totals                                $ 118,270,925    $ 17,710,381        $ (13,909,671)     $ 122,071,635


As of December 31, 2011 and 2010, the plant in service included land and land rights, $1,876,099 and
$1,789,557 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 2011, there were open contracts with one contractor totaling $0.2 million. All completed
work was paid or accrued, and recorded in construction work in progress.

At the end of 2010, there were open contracts with three contractors totaling $0.4 million. All completed
work was paid or accrued, and recorded in construction work in progress.




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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



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 $2,834,079 of which $496,990 is included in capital assets on the accompanying
balance sheet. During 2011 and 2010, there were no material expenditures for this project.

A local cable television service provider filed an objection in September 2004 with the Nevada County
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. Since
2009, the District has been exploring options to sell or lease the existing infrastructure to provide a return
on investment in the project.




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                                         NOTES TO FINANCIAL STATEMENTS
                                            December 31, 2011 and 2010



NOTE 5 – LONG-TERM DEBT

Long-term debt consisted of the following at December 31, 2011:

                                         January 1,                                             December 31,     Due within
                                           2011               Additions       Reductions             2011        one year
Certificates of Participation –
     Electric, 2.5% to 5.75%,
     due serially to 2013 (net of
     unamortized premiums of
     $15,524).                       $     9,380,741      $               -   $   (2,970,215)   $    6,410,526   $   3,110,000
Pension Obligation Bonds
     Electric, 5%
     due semi-annually                                -         7,816,000          (198,000)         7,618,000        428,000
State Revolving Fund Loan –
     Water, 2.34%, due semi-annually
     beginning in 2006 to 2026.           10,081,855                      -        (282,469)         9,799,386        574,890
Special Tax Bonds – Mello
     Roos, 2.25% to 5.7%, due
     serially to 2013 (net of
     unamortized discounts of
     $102,167).                           11,936,037                      -        (143,204)        11,792,833        130,000
Special Tax Bonds – Mello
     Roos, 3.25% to 5.7%,
     due serially to 2035 (net of
     unamortized discounts of
     $250,007).                           14,939,941                      -          (79,948)       14,859,993        115,000
Special Tax Bonds – Mello
     Roos, 3.50% to 5.50%,
     due serially to 2035 (net of
     unamortized discounts of
     $169,907).                           18,629,703                      -        (139,610)        18,490,093        180,000
Certificates of Participation –
     Water, 4.00% to 5.00%,
     due serially to 2036 (net of
     unamortized discounts of
     $99,398, premiums of
     $445,295 and arbitrage of            24,182,097                      -       (1,028,695)       23,153,402        870,000
     $7,507).
Department of Water Resources,
     3.18%, due semiannually to
     2021, secured by real
     and personal property.                2,718,138                      -        (221,868)         2,496,270        228,910
Installment loans, 5.4% to 6.23%,
     various payment terms and
     due dates, secured by
     equipment.                            2,107,875                      -        (272,806)         1,835,069        296,450
          Totals                     $ 93,976,387         $     7,816,000     $   (5,336,815)   $ 96,455,572     $   5,933,250




                                                                                                                       Page 29
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                                       NOTES TO FINANCIAL STATEMENTS
                                          December 31, 2011 and 2010



NOTE 5 – LONG-TERM DEBT (Continued)



Long-term debt consisted of the following at December 31, 2010:

                                       January 1,                                          December 31,     Due within
                                         2010            Additions       Reductions             2010        one year
Certificates of Participation –
     Electric, 2.5% to 5.75%,
     due serially to 2013 (net of
     unamortized premiums of
     $45,738).                       $ 12,229,844    $               -   $   (2,849,103)   $    9,380,741   $   2,940,000
State Revolving Fund Loan –
     Water, 2.34%, due semi-annually
     beginning in 2006 to 2026.         10,637,030                   -        (555,175)        10,081,855        568,242
Special Tax Bonds – Mello
     Roos, 2.25% to 5.7%, due
     serially to 2013 (net of
     unamortized discounts of
     $108,964).                         12,019,204                   -          (83,167)       11,936,037        110,000
Special Tax Bonds – Mello
     Roos, 3.25% to 5.7%,
     due serially to 2035 (net of
     unamortized discounts of
     $265,053).                         14,994,831                   -          (54,890)       14,939,941         95,000
Special Tax Bonds – Mello
     Roos, 3.50% to 5.50%,
     due serially to 2035 (net of
     unamortized discounts of
     $180,298).                         18,744,255                   -        (114,552)        18,629,703        150,000
Certificates of Participation –
     Water, 4.00% to 5.00%,
     due serially to 2036 (net of
     unamortized discounts of
     $107,209, premiums of
     $480,286 and arbitrage of          24,996,322                   -        (814,225)        24,182,097        830,000
     $179,022).
Department of Water Resources,
     3.18%, due semiannually to
     2021, secured by real
     and personal property.              2,933,120                   -        (214,982)         2,718,138        221,867
Installment loans, 5.4% to 6.23%,
     various payment terms and
     due dates, secured by
     equipment.                          2,429,207                   -        (321,332)         2,107,875        281,036
          Totals                     $ 98,983,813    $               -   $   (5,007,426)   $ 93,976,387     $   5,196,145




                                                                                                                  Page 30
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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010




NOTE 5 – LONG-TERM DEBT (Continued)

On April 3, 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. (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 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.

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 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.

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.




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                                       NOTES TO FINANCIAL STATEMENTS
                                          December 31, 2011 and 2010



NOTE 5 – LONG-TERM DEBT (Continued)

In June 2011, the District refunded (refinanced) an existing $7.8 million pension side fund obligation for its
participation in CalPERS. (See notes 1(J) and 9(B)). Prior to 2011, the annual side fund payments were
expensed and described in the Notes to Financial Statements. The pension side fund liability was
amortized through June 2022 with a 7.75% rate. This liability was not required to be reported on the
District’s Balance Sheet, but the future pension expense was included in budget and rate calculations.
The new refunding rate of 5% reduces the District’s annual pension costs by almost $100,000 through
2022.

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 2010 or in 2011.
Scheduled payments on debt are:


                                                   Principal          Interest         Total
             2012                              $     5,933,250    $    4,602,608   $ 10,535,858
             2013                                    6,303,392         4,306,814     10,610,206
             2014                                    3,184,097         4,091,247       7,275,344
             2015                                    3,409,830         3,961,459       7,371,289
             2016                                    3,635,919         3,820,715       7,456,634
             2017-2021                             20,700,949         16,660,957     37,361,906
             2022-2026                             16,371,288         12,374,211     28,745,499
             2027-2031                             18,320,000          8,178,193     26,498,193
             2032-2036                             18,750,000          2,550,800     21,300,800
                                                   96,608,725     $ 60,547,004     $ 157,155,729
             Plus: Unamortized premiums               460,819
                    Arbitrage rebate                     7,507
             Less: Unamortized discounts              (621,479)
                       Total carrying value    $ 96,455,572




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                                     NOTES TO FINANCIAL STATEMENTS
                                        December 31, 2011 and 2010



                                        NOTE 6 – UNEARNED REVENUES

For transactions that have not yet met revenue recognition requirements, revenues are deferred and
reflected in the accompanying balance sheets. As of December 31, 2011 and 2010, unearned revenues
consist of unearned special assessment revenues, development agreement deposits, connection fees
and other deposits.

Unearned revenues consisted of the following at December 31, 2011 and 2010:

                                                   January 1,                                        December 31,
                                                     2011            Additions     Reductions            2011
          Unearned tax revenues                $     1,628,751   $     1,628,625   $   (1,628,752)   $   1,628,624
          Development agreement deposits             1,748,499          613,864         (740,552)        1,621,811
          Connection fees and other deposits         1,070,147          426,734         (411,372)        1,085,509
              Totals                           $     4,447,397   $     2,669,223   $   (2,780,676)   $   4,335,944



                                                   January 1,                                        December 31,
                                                     2010            Additions     Reductions            2010
          Unearned tax revenues                $     1,556,627   $     1,628,752   $   (1,556,628)   $   1,628,751
          Development agreement deposits             1,576,173          716,966         (544,640)        1,748,499
          Connection fees and other deposits         1,083,388          331,984         (345,225)        1,070,147
              Totals                           $     4,216,188   $     2,677,702   $   (2,446,493)   $   4,447,397


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.

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 2011 and 2010 respectively, taxes of
$866,950 and $927,140 were levied by Old Greenwood. Of these amounts, $433,475 and $463,570
relate to 2011 and 2010, 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 2012 and
2011 and are included in unearned revenues on the accompanying balance sheets.




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                                NOTES TO FINANCIAL STATEMENTS
                                   December 31, 2011 and 2010



NOTE 7 – COMMUNITY FACILITIES DISTRICTS (Continued)

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 2011 and 2010, taxes of $2,390,301
and $2,330,364 respectively were levied by Gray’s Crossing. Of this amount, $1,195,150 and $1,165,182
relate to 2011 and 2010, 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 2012 and
2011 and is included in unearned revenues on the accompanying balance sheets.

The official statements and continuing disclosures may be viewed on the web site of Electronic Municipal
Market Access (EMMA) of the Municipal Securities Rulemaking Board (MSRB), http://emma.msrb.org/.
The Committee on Uniform Securities Identification Procedures number (CUSIP) for these special tax
bonds is CUSIP 897817.

NOTE 8 – DONNER LAKE WATER COMPANY AQUISITION

In 2001, the District acquired the Donner Lake Water Company by initiating an eminent domain lawsuit.
As a part of the takeover, the District replaced the entire water system, which cost approximately
$15.6 million and was completed in 2006. The District initially estimated the replacement cost to be
$13 million. The Donner Lake property owners agreed to reimburse the District for the full costs of the
replacement. Therefore, an assessment was placed on each Donner Lake homeowner’s property for a
pro-rata share of the $13 million payable immediately or with an option to pay over 20 years. The
assessment is collected by Nevada County and Placer County on behalf of the District and is secured by
the Donner Lake property owners. A monthly $6.65 water system upgrade surcharge is paid by the
Donner Lake customers to reimburse the District for the $2.6 million cost incurred in excess of the
assessment.

In 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 District is required to fund a reserve account by making semi-annual reserve
payments in the amount of $40,043 for a 10-year period.

As of December 31, 2011 and 2010, the assessment receivable from the property owners was
$6,870,615 and $7,454,452 respectively, of which $622,071 and $607,597 is due in the next year. These
amounts are shown as Special Assessments Receivable in the Balance Sheet. The proceeds of the
assessment and surcharge are placed in the Donner Lake Special Assessment District Improvement
Fund and used to pay the debt service for the water system improvements.




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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010




NOTE 9 – EMPLOYEE BENEFIT PLANS

    A. CALPERS MISCELLANEOUS 2.7% AT 55 RISK POOL PENSION PLAN

The District and bargaining unit employees elected to participate in the Public Agency portion of California
Public Employees’ Retirement System (CalPERS) “Miscellaneous 2% at 60 Risk Pool,” effective August
21, 2004. On November 15, 2010, the Board of Directors adopted an amendment to the CalPERS
Miscellaneous Risk Pool Pension to increase retiree benefits from the 2% at 60 Plan to the 2.7% at 55
Plan, effective January 1, 2011. The employees pay the additional cost through increased payroll
deductions and a relinquishment a 3% employer match to the deferred compensation plan.

The CalPERS Miscellaneous 2.7% at 55 Risk Pool is a cost-sharing multi-employer defined benefit 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’ comprehensive annual
financial report may be obtained from:

                                 California Public Employees’ Retirement System
                                 400 Q Street
                                 P.O. Box 942701
                                 Sacramento, CA 94229-2701
                                 Tel. 888-225-7377
                                 http://www.calpers.ca.gov

Prior to January 2011, active plan participants were required to contribute 7% of their annual covered
salary, of which the District paid 4% on behalf of the participants. Effective January 2011, active
participants are required to contribute 8% of their annual covered salary, of which the District pays 4%.
The District and the employees are also 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, 2011 and 2010 was 17.086% and 17.418% of 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 CalPERS.

The District’s annual pension cost (APC) for the years ended December 31, 2011, 2010, and 2009
respectively, was $1,238,501, $1,190,116, and $1,291,312, and was equal to the District’s annual
required contributions (ARC) as determined by the June 30, 2010, 2009 and 2008 actuarial valuations
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 and methods include:

                Actuarial Cost Method            Entry Age Actuarial Cost Method
                Amortization Method              Level Percent of Payroll
                Average Remaining Period         19 Years as of the Valuation Date
                Asset Valuation Method           15 Year Smoothed Market
                Investment Rate of Return        7.75% (Net of Administrative Expenses)
                Projected Salary Increases       3.55% - 14.45%
                Inflation                        3%
                Payroll Growth                   3.25%




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                                   NOTES TO FINANCIAL STATEMENTS
                                      December 31, 2011 and 2010



NOTE 9 – EMPLOYEE BENEFIT PLANS (Continued)

The plan’s unfunded actuarial accrued liability is being amortized as a level percentage of projected
payrolls on an open basis over a period not to exceed 30 years.

Retirement plans like the District’s with less than 100 active members are required to participate in a risk
pool. Therefore, the funding progress for the District for the June 30, 2010 and 2009 valuation dates are
for the entire pool, not just the District employees. The following are funding schedules for the current
and former CalPERS pooled pension plans:

            Schedule of Pension Plan Funding Progress - 2.7% @ 55 (Started Participation January 1, 2011)


                          Accrued        Actuarial      Unfunded     Funded     Annual
           Valuation     Liabilities      Value of      Liabilities   Ratio    Covered     UL as a %
              Date          (AL)       Assets (AVA)        (UL)     (AVA/AL)    Payroll    of Payroll
           06/30/2008 $ 1,823,366,479 $ 1,529,548,799 $ 293,817,680   83.9%  $ 414,589,514   70.9%
           06/30/2009 $ 2,140,438,884 $ 1,674,260,302 $ 466,178,582   78.2%  $ 440,071,499 105.9%
           06/30/2010 $ 2,297,871,345 $ 1,815,671,616 $ 482,199,729   79.0%  $ 434,023,381 111.1%


            Schedule of Pension Plan Funding Progress - 2% @ 60 (Ended participation December 31, 2010)


                         Accrued      Actuarial    Unfunded     Funded     Annual
           Valuation    Liabilities    Value of    Liabilities   Ratio    Covered     UL as a %
              Date         (AL)      Assets (AVA)     (UL)     (AVA/AL)    Payroll    of Payroll
           06/30/2007 $ 498,934,859 $ 479,520,670 $ 19,414,189   96.1%  $ 171,052,819   11.3%
           06/30/2008 $ 532,483,463 $ 513,147,099 $ 19,336,364   96.4%  $ 183,387,608   10.5%
           06/30/2009 $ 582,841,869 $ 553,953,526 $ 28,888,343   95.0%  $ 184,319,666   15.7%

As of July 1, 2011, the District contribution rate changed to 14.113% of payroll. This was equivalent to the
scheduled 27.616%, less 13.503% for the pension side fund that was refinanced on June 30, 2011.

    B. EXISTING PENSION OBLIGATION - PENSION SIDE FUND

At the time of joining the CalPERS Miscellaneous 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 used the actuarial assumption of a 7.75% investment return and it was amortized on
a closed basis, ending in 2022. On June 30, 2011, the District refinanced the existing $7.8 million
pension side fund obligation with amortized payments through 2022 and a 5% rate. (See notes 1(J) and
5). A portion of the debt service of the existing pension obligation is paid by the employees as a 3.5%
payroll deduction. The remaining debt service is paid by the District and recorded as pension expense;
allocated 63% to the Electric Utility and 37% to the Water Utility. The net side fund pension expense for
the six months ending December 31, 2011 was $340,836.




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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 9 – EMPLOYEE BENEFIT PLANS (Continued)

    C. DEFERRED COMPENSATION PLAN

The District maintains two deferred compensation plans: a 401(a) and a 457 plan, (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 Plans’ assets and
corresponding liabilities (if any) on the accompanying balance sheets.

    D. 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, 2010, there were eleven 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.

On November 7, 2007, the Board approved a participation agreement with CalPERS to be the plan
administrator for the District's other post employment benefit (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 from the prior year, plus accrued interest, were transferred to the California
Employers’ Retiree Benefit Trust Program (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. Copies of the CalPERS’ comprehensive annual financial report, that includes CERBT
investment performance, may be obtained from:

                                 California Public Employees’ Retirement System
                                 400 Q Street
                                 P.O. Box 942701
                                 Sacramento, CA 94229-2701
                                 Tel. 888-225-7377
                                 http://www.calpers.ca.gov




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                                       NOTES TO FINANCIAL STATEMENTS
                                          December 31, 2011 and 2010



NOTE 9 – EMPLOYEE BENEFIT PLANS (Continued)

The District's annual OPEB expense is calculated based on the ARC, an amount actuarially determined in
accordance within the 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. The plan’s unfunded
actuarial accrued liability is being amortized as a level percentage of projected payrolls on an open basis,
over a period not to exceed 30 years, using the entry age normal cost method.

The following table shows the components of the District’s annual OPEB cost, the amount actually
contributed to the plan, and changes in the net OPEB obligation to the Retiree Health Plan:


                    Annual                                              % of          Change in       OPEB         Net OPEB
       Fiscal      Required        Interest    Annual                  Annual         Net OPEB     Obligation     Obligation
        Year      Contribution       and        OPEB      Actual     OPEB Cost        Obligation     (Asset)        (Asset)
      Ended*         (ARC)       Adjustments    Cost    Contribution Contributed        (Asset)    January 1     December 31
     12/31/2009   $ 203,500      $        -   $ 203,500 $ 202,680          99.6%      $      820   $ (98,104)    $     (97,284)
     12/31/2010   $ 207,600      $        -   $ 207,600 $ 212,008        102.1%       $ (4,408)    $ (97,284)    $    (101,692)
     12/31/2011   $ 271,200      $      1,322 $ 272,522 $ 237,501          87.1%      $ 35,021     $ (101,692)   $     (66,671)

Actuarial valuations of an ongoing plan are required at least once every two years and 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.

Significant actuarial assumptions include:

                   Actuarial Cost Method                     Projected Unit Credit
                   Discount Rate                             7.5%
                   General Inflation                         3% Annual Increase
                   Amortization of Unfunded Liability        25 Years; Level Annual Payments

The following is a funding schedule for the Retiree Health Plan:
                                     Schedule of Retiree Health Plan Funding Progress


                              Accrued         Actuarial          Unfunded      Funded    Annual
           Valuation         Liabilities       Value of          Liabilities    Ratio    Covered     UL as a %
             Date*              (AL)         Assets (AVA)           (UL)      (AVA/AL)   Payroll     of Payroll
           01/01/2007    $      1,369,600   $      198,800   $      1,170,800   14.5%  $   4,925,600   23.8%
           01/01/2009    $      1,748,000   $      230,900   $      1,517,100   13.2%  $   5,276,400   28.8%
           01/01/2011    $      2,501,800   $      645,700   $      1,856,100   25.8%  $   6,307,400   29.4%
           07/01/2011    $      2,657,000   $      661,400   $      1,995,600   24.9%  $   6,226,000   32.1%

                        *Funding began in 2007. Valuations are required once every two years. In 2011, the vaulation
                         date changed to July 1 in compliance with GASB Statement No. 57.




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                               NOTES TO FINANCIAL STATEMENTS
                                  December 31, 2011 and 2010




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.




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                                         NOTES TO FINANCIAL STATEMENTS
                                            December 31, 2011 and 2010



NOTE 11 – SEGMENT DISCLOSURE

The District has issued revenue bonds to finance electric and water distribution facilities. The District also
issued special tax bonds secured by tax revenues from Mello-Roos Community Facilities Districts. Each
project has an external requirement to be reported separately, and investors in the revenue bonds and
special tax bonds rely solely on the revenue generated by the individual projects for repayment. Summary
financial information for each project is presented on the following pages for the years ending December
31, 2011 and 2010.

         BALANCE SHEETS

                                                                           December 31, 2011
                                                                                           Gray's              Old
                          ASSETS                      Electric           Water            Crossing       Greenwood
    Current assets                                $ 17,591,504       $ 15,899,801     $    6,718,213     $    2,549,249
    Non-current assets:
         Capital assets, net                          41,035,844         80,882,550                  -                 -
         Restricted assets                                       -        2,021,017                  -                 -
         Other long-term assets                        8,378,619          7,459,211          365,367            170,972
               Total Noncurrent Assets                49,414,463         90,362,778          365,367            170,972
               TOTAL ASSETS                       $ 67,005,967       $ 106,262,579    $    7,083,580     $    2,720,221

           LIABILITIES AND NET ASSETS
    Current liabilities                           $    6,632,745     $    3,028,771   $      903,167     $      364,277
    Non-current Liabilities
         Long-term debt, net of current               10,653,047         35,151,357       33,055,086         11,662,832
               portion
         Unearned revenues                             2,156,675           550,643         1,195,151            433,475
                    Total Liabilities                 19,442,467         38,730,771       35,153,404         12,460,584
    Net Assets
         Invested in capital assets, net              40,978,938         45,788,507       (32,984,719)       (11,621,860)
               of related debt
         Restricted for debt service                   5,793,876          6,645,790        2,737,118          1,010,223
         Unrestricted                                    790,686         15,097,511        2,177,777            871,274
                    Total Net Assets                  47,563,500         67,531,808       (28,069,824)        (9,740,363)
                          TOTAL LIABILITIES
                                 AND NET ASSETS   $ 67,005,967       $ 106,262,579    $    7,083,580     $    2,720,221




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                                        NOTES TO FINANCIAL STATEMENTS
                                           December 31, 2011 and 2010



NOTE 11 – SEGMENT DISCLOSURE (Continued)

                                                                          December 31, 2010
                                                                                          Gray's              Old
                         ASSETS                      Electric           Water            Crossing       Greenwood
   Current assets                                $ 17,047,683       $ 14,165,563     $    6,404,461     $    2,551,447
   Non-current assets:
        Capital assets, net                          40,083,780         81,987,855                  -                 -
        Restricted assets                                       -        1,884,183                  -                 -
        Other long-term assets                          872,346          8,098,639          387,512            182,346
              Total Noncurrent Assets                40,956,126         91,970,677          387,512            182,346
              TOTAL ASSETS                       $ 58,003,809       $ 106,136,240    $    6,791,973     $    2,733,793

          LIABILITIES AND NET ASSETS
   Current liabilities                           $    5,649,704     $    3,180,340   $      856,545     $      384,290
   Non-current Liabilities
        Long-term debt, net of current
              portion                                 6,657,919         36,971,644       33,324,643         11,826,036
        Unearned revenues                             2,140,780           677,865         1,165,182            463,570
                   Total Liabilities                 14,448,403         40,829,849       35,346,370         12,673,896
   Net Assets
        Invested in capital assets, net
              of related debt                        40,041,718         45,139,908       (33,182,131)       (11,753,690)
        Restricted for debt service                   5,425,987          6,612,474        2,719,710          1,010,137
        Unrestricted                                 (1,912,299)        13,554,009        1,908,024            803,450
                   Total Net Assets                  43,555,406         65,306,391       (28,554,397)        (9,940,103)
                         TOTAL LIABILITIES
                                AND NET ASSETS   $ 58,003,809       $ 106,136,240    $    6,791,973     $    2,733,793




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                                      NOTES TO FINANCIAL STATEMENTS
                                         December 31, 2011 and 2010



NOTE 11 – SEGMENT DISCLOSURE (Continued)


       STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET ASSETS




                                                              Year ended December 31, 2011
                                                                                     Gray’s              Old
                                               Electric           Water             Crossing       Greenwood
   Operating Revenues
        Sales to consumers                   $ 21,106,358     $    9,946,771    $              -   $             -
        Other operating revenues                2,718,676          1,283,733                   -                 -
   Operating expenses                          (18,753,199)       (6,885,349)                  -                 -
   Depreciation                                 (1,659,556)       (3,557,400)                  -                 -
   Non-operating revenues (expenses)              (446,332)         (117,773)          484,573            199,740
             Income (loss) before
                  capital contributions         2,965,947           669,982            484,573            199,740
   Capital contributions, net                   1,042,147          1,555,435                   -                 -
   CHANGE IN NET ASSETS                         4,008,094          2,225,417           484,573            199,740


   NET ASSETS, BEGINNING                       43,555,406         65,306,391        (28,554,397)        (9,940,103)


   NET ASSETS, ENDING                        $ 47,563,500     $ 67,531,808      $ (28,069,824)     $    (9,740,363)




                                                              Year ended December 31, 2010
                                                                                     Gray’s              Old
                                               Electric           Water             Crossing       Greenwood
   Operating Revenues
        Sales to consumers                   $ 20,922,276     $ 10,196,010      $              -   $             -
        Other operating revenues                2,698,466          1,371,802                   -                 -
   Operating expenses                          (17,853,963)       (6,729,531)                  -                 -
   Depreciation                                 (1,609,711)       (3,139,424)                  -                 -
   Non-operating revenues (expenses)              (640,959)         (855,232)          429,246            164,040
             Income (loss) before
                  capital contributions         3,516,109           843,625            429,246            164,040
   Capital contributions, net                     889,157           700,977                    -                 -
   CHANGE IN NET ASSETS                         4,405,266          1,544,602           429,246            164,040


   NET ASSETS, BEGINNING                       39,150,140         63,761,789        (28,983,643)       (10,104,143)


   NET ASSETS, ENDING                        $ 43,555,406     $ 65,306,391      $ (28,554,397)     $    (9,940,103)




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                                         NOTES TO FINANCIAL STATEMENTS
                                            December 31, 2011 and 2010



NOTE 11 – SEGMENT DISCLOSURE (Continued)



       STATEMENTS OF CASH FLOWS



                                                                    Year ended December 31, 2011
                                                                                           Gray’s            Old
                                                      Electric          Water             Crossing       Greenwood
   NET CASH PROVIDED BY (USED IN)
       Operating activities                       $    5,704,742    $    4,484,714    $              -   $             -
       Noncapital financing activities                (3,786,723)                -                   -                 -
       Capital and related financing activities       (1,816,493)       (3,159,654)         (185,931)          81,081
       Investing activities                               30,744         2,320,690            (8,432)              6,386
   Net increase (decrease) in cash and
       cash equivalents                                  132,270         3,645,750          (194,363)          87,467
   Cash and Cash Equivalents, Beginning               13,447,916        10,476,861         3,949,121         1,583,219
       CASH AND CASH
            EQUIVALENTS, ENDING                   $ 13,580,186      $ 14,122,611      $    3,754,758     $   1,670,686




                                                                    Year ended December 31, 2010
                                                                                           Gray’s            Old
                                                      Electric          Water             Crossing       Greenwood
   NET CASH PROVIDED BY (USED IN)
       Operating activities                       $    5,848,631    $    4,933,992    $              -   $             -
       Noncapital financing activities                (3,408,381)                -                   -                 -
       Capital and related financing activities       (2,394,024)       (8,633,476)          231,071           96,391
       Investing activities                               43,617          574,480             29,157               7,404
   Net increase (decrease) in cash and
       cash equivalents                                   89,843        (3,125,004)          260,228          103,795
   Cash and Cash Equivalents, Beginning               13,358,073        13,601,865         3,688,893         1,479,424
       CASH AND CASH
            EQUIVALENTS, ENDING                   $ 13,447,916      $ 10,476,861      $    3,949,121     $   1,583,219




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                       TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                  NOTES TO FINANCIAL STATEMENTS
                                     December 31, 2011 and 2010



NOTE 12 – MARTIS VALLEY GROUNDWATER STUDY

The Martis Valley aquifer underlies about 35,000-acres in both Placer and Nevada counties, near the
Town of Truckee. It is the main water supply for numerous public and private entities. This area has
seen significant growth in the last few decades with more planned for the future. Maintaining an adequate
water supply and protecting water quality are critical for the region's future.

The Truckee Donner Public Utility District (TDPUD), Northstar Community Services District (NCSD) and
Placer County Water Agency (PCWA) are the three primary public water agencies that depend on the
Martis Valley Basin for their water supply. Together, the TDPUD, NCSD and PCWA (Partnership
Agencies) have partnered to update a groundwater management plan and help develop a groundwater
model for the Martis Valley basin.

The Martis Valley Groundwater Management Plan (GMP) is being updated to reflect current water
resources planning in the region and to incorporate the latest information and understandings of the
underlying groundwater basin. This collaborative effort will provide the guidance necessary to align
groundwater policy. In addition to updating the groundwater management plan, a computer model of the
groundwater basin will be developed, which will incorporate available data and enhance understanding of
the groundwater basin. A climate change modeling component will be part of the final groundwater model.

Development of the GMP started in April of 2011 and is expected to take about two years to complete.
The total cost of the project is approximately $1,000,000, which includes federal funding of approximately
$500,000 from the U.S. Bureau of Reclamation and $250,000 from Lawrence Livermore National
Laboratory; and contributions of $150,000 from TDPUD and $100,000 from the other members of the
Partnership Agencies.

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.




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          306




SUPPLEMENTAL INFORMATION




          306
                                                                        307
                                          TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                              REQUIRED SUPPLEMENTAL INFORMATION
                                                        December 31, 2011

CONSOLIDATING BALANCE SHEETS
CONSOLIDATING BALANCE SHEETS
As of December 31, 2011                                                                         Component Units
                                                        Electric              Water          Gray's
                                                       Operations        Operations         Crossing       Old Greenwood      Eliminations          Totals
                                ASSETS
CURRENT ASSETS
 Funds
   Operating                                       $      5,045,574 $         2,285,885 $      409,473 $          408,575 $                  - $     8,149,507
   Designated                                             2,562,462           6,938,432                -                -                    -       9,500,894
   Restricted                                             5,986,031           4,916,267       3,345,285        1,262,111                     -      15,509,694
    Total Funds                                          13,594,067        14,140,584         3,754,758        1,670,686                     -      33,160,095
 Accounts receivable, net                                 1,510,546           725,488         2,961,606          877,930                     -       6,075,570
 Unbilled revenues                                        1,808,610           699,776                 -                -                     -       2,508,386
 Accrued interest receivable                                  7,887            91,533             1,849              633                     -         101,902
 Materials and supplies                                    429,996              117,154                -                -                    -        547,150
 Prepaid expenses                                          217,131              102,928                -                -                    -        320,059
 Other                                                       23,267              22,338                -                -                    -         45,605
         Total Current Assets                            17,591,504        15,899,801         6,718,213        2,549,249                     -      42,758,767


NON-CURRENT ASSETS
 Other Non-Current Assets
   Restricted funds                                                 -         2,021,017                -                -                    -       2,021,017
   Special assessments receivable                                   -         6,870,615                -                -                    -       6,870,615
   Deferred charges
     Unamortized debt issue costs                            21,491             588,596        365,367            170,972                    -       1,146,426
     Other                                                8,357,128                   -                -                -                    -       8,357,128
         Total Other Non-Current Assets                   8,378,619           9,480,228        365,367            170,972                    -      18,395,186

CAPITAL ASSETS
   Utility plant                                         54,804,438      105,986,223                   -                -                    -     160,790,661
   Accumulated depreciation                             (16,753,721)      (25,946,257)                 -                -                    -     (42,699,978)
   Construction work in progress                          2,985,127             842,584                -                -                    -       3,827,711
     Total Utility Plant                                 41,035,844        80,882,550                  -                -                    -     121,918,394

         TOTAL ASSETS                              $     67,005,967 $ 106,262,579 $           7,083,580 $      2,720,221 $                   - $ 183,072,347



                                                                                                                                                             Page 46

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                                                                                 308
                                                   TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                                         REQUIRED SUPPLEMENTAL INFORMATION
                                                                   December 31, 2011




                                                                                                           Component Units
                                                                     Electric            Water          Gray's
                                                                    Operations         Operations      Crossing       Old Greenwood      Eliminations          Totals
                     LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
 Other liabilities
   Accounts payable                                             $      2,056,751 $         394,828 $              - $              - $                  - $     2,451,579
   Customer deposits                                                    363,766            124,464                -                -                    -        488,230
   Other                                                                419,203            324,958                -                -                    -        744,161
     Total other liabilities                                           2,839,720           844,250                -                -                    -       3,683,970
 Current liabilities payable from restricted assets:
  Current portion of long-term debt                                    3,600,870          1,907,380       295,000            130,000                    -       5,933,250
   Accrued interest payable                                             192,155            277,141        608,167            234,277                    -       1,311,740
     Total Current Liabilities Payable from Restricted Assets          3,793,025          2,184,521       903,167            364,277                    -       7,244,990
        Total Current Liabilities                                      6,632,745          3,028,771       903,167            364,277                    -      10,928,960


NON-CURRENT LIABILITIES
 Long-term debt, net of discounts, premiums and losses                10,490,527         33,775,259     33,055,086       11,662,832                     -      88,983,704
 Installment loans                                                      162,520           1,376,098               -                -                    -       1,538,618
 Unearned revenues                                                     2,156,675           550,643       1,195,151           433,475                    -       4,335,944
   Total non-current liabilities                                      12,809,722         35,702,000     34,250,237       12,096,307                     -      94,858,266
     Total Liabilities                                                19,442,467         38,730,771     35,153,404       12,460,584                     -     105,787,226


NET ASSETS
 Invested in capital assets, net of related debt                      40,978,938         45,788,507    (32,984,719)     (11,621,860)                    -      42,160,866
 Restricted for debt service                                           5,793,876          6,645,790      2,737,118        1,010,223                     -      16,187,007
 Unrestricted                                                           790,686          15,097,511      2,177,777           871,274                    -      18,937,248
   Total Net Assets                                                   47,563,500         67,531,808    (28,069,824)      (9,740,363)                    -      77,285,121


      TOTAL LIABILITIES AND NET ASSETS                          $     67,005,967 $ 106,262,579 $         7,083,580 $      2,720,221 $                   - $ 183,072,347




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                      309
   TRUCKEE DONNER PUBLIC UTILITY DISTRICT

       REQUIRED SUPPLEMENTAL INFORMATION
                 December 31, 2011




THIS PAGE IS INTENTIONALLY LEFT BLANK




                                            Page 48

                      309
                                                                        310
                                        TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                             REQUIRED SUPPLEMENTAL INFORMATION
                                                       December 31, 2011

STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
                                                      Component Units
CONSOLIDATING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
For the Year Ended December 31, 2011
                                                        Electric          Water            Gray's
                                                       Operations       Operations        Crossing       Old Greenwood      Eliminations         Totals
OPERATING REVENUES
 Sales to customers                                $     21,106,358 $      9,946,771 $               - $             - $                - $      31,053,129
 Water meter surcharge                                            -          746,759                 -               -                  -           746,759
 Interdepartmental sales                                  1,213,270            2,318                 -               -         (1,215,588)                -
 Standby fees                                                25,480          161,040                 -               -                  -           186,520
 Other                                                    1,479,926          373,616                 -               -           (355,856)        1,497,686
   Total Operating Revenues                              23,825,034       11,230,504                 -               -         (1,571,444)       33,484,094

OPERATING EXPENSES
 Purchased power                                         11,342,992                -                 -               -                  -        11,342,992
 Operations and maintenance                               3,330,131        4,433,706                 -               -         (1,215,588)        6,548,249
 Consumer services                                        1,959,336          794,225                 -               -                  -         2,753,561
 Administration and general                               2,120,740        1,657,418                 -               -           (355,856)        3,422,302
 Depreciation                                             1,659,556        3,557,400                 -               -                  -         5,216,956
   Total Operating Expenses                              20,412,755       10,442,749                 -               -         (1,571,444)       29,284,060

       Operating Income                                   3,412,279           787,755                -               -                     -      4,200,034

NON-OPERATING REVENUE (EXPENSES)
 Special tax revenue                                              -                -        2,360,333          933,545                     -      3,293,878
 Investment income                                           35,405          506,620           (8,585)           5,577                     -        539,017
 Interest expense                                          (380,735)      (1,463,164)      (1,831,258)        (706,269)                    -     (4,381,426)
 Amortization                                               (11,628)         (28,411)         (47,588)         (18,170)                    -       (105,797)
 Other non-operating revenues                                     -                -           36,467            2,189                     -         38,656
 Other non-operating expenses                                     -                -          (24,796)         (17,132)                    -        (41,928)
 Gain (loss) on disposition of assets                       (89,374)         867,182                -                -                     -        777,808
   Total Non-Operating Expenses                            (446,332)          (117,773)      484,573           199,740                     -       120,208

     Income Before Contributions                          2,965,947           669,982        484,573           199,740                     -      4,320,242

CAPITAL CONTRIBUTIONS, net                                1,042,147        1,555,435                 -               -                     -      2,597,582

 CHANGE IN NET ASSETS                                     4,008,094        2,225,417         484,573           199,740                     -      6,917,824

   NET ASSETS - Beginning of Year                        43,555,406       65,306,391      (28,554,397)      (9,940,103)                    -     70,367,297

     NET ASSETS - END OF YEAR                      $     47,563,500 $     67,531,808 $    (28,069,824) $    (9,740,363) $                  - $   77,285,121
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                                                          TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                                                   REQUIRED SUPPLEMENTAL INFORMATION
                                                                             December 31, 2011


 STATEMENTS OF CASH FLOWS
 For the Year Ended December 31, 2011                                                                               Component Units
CONSOLIDATING STATEMENTS OF CASH FLOWS
                                  Electric                                                     Water             Gray's
                                                                            Operations       Operations        Crossing         Old Greenwood      Eliminations          Total
 CASH FLOWS FROM OPERATING ACTIVITIES
   Received from customers                                              $     23,485,662 $     11,188,998 $                - $               - $      (1,571,444) $     33,103,216
   Paid to suppliers for goods and services                                  (14,617,254)      (4,792,982)                 -                 -        1,571,444         (17,838,792)
   Paid to employees for services                                             (3,163,666)      (1,911,302)                 -                 -                    -      (5,074,968)
     Net Cash Flows from Operating Activities                                  5,704,742        4,484,714                  -                 -                    -     10,189,456

 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
   Principal payments on long-term debt                                       (3,138,000)                 -                -                 -                    -      (3,138,000)
   Proceeds from long-term debt issued                                         7,816,000                  -                -                 -                    -      7,816,000
   Payment of existing pension obligation                                     (7,816,000)                 -                -                 -                    -      (7,816,000)
   Interest payments on long-term debt                                          (648,723)                 -                -                 -                    -        (648,723)
     Net Cash Flows from Noncapital Financing Activities                      (3,786,723)                 -                -                 -                    -      (3,786,723)

 CASH FLOWS FROM CAPITAL AND RELATED
  FINANCING ACTIVITIES
   Capital expenditures for utility plant                                     (2,373,448)      (1,689,142)                 -                 -                    -      (4,062,590)
   Cost of disposal of property net of salvage                                  (129,437)        (225,126)                 -                 -                    -        (354,563)
   Proceeds from sale of land                                                            -      1,092,308                  -                 -                    -      1,092,308
   Capital contributions, connection and facility fees                          549,063           162,004                  -                 -                    -        711,067
   Special assessments receipts                                                          -        583,837                  -                 -                    -        583,837
   Special tax receipts                                                                  -                -       1,893,704           939,664                     -      2,833,368
   Principal payments on long-term debt                                          (51,447)      (1,555,698)         (245,000)         (150,000)                    -      (2,002,145)
   Interest payments on long-term debt                                          188,776        (1,527,837)       (1,834,635)         (708,583)                    -      (3,882,279)
     Cash Flows From Capital and Related Financing Activities                 (1,816,493)      (3,159,654)         (185,931)           81,081                     -      (5,080,997)

 CASH FLOWS FROM INVESTING ACTIVITIES
   Matured long-term investment reinvested in short-term                                 -      1,912,958                  -                 -                    -      1,912,958
   Interest income received                                                       30,744          407,732             (8,432)           6,386                     -        436,430
     Cash Flows from Investing Activities                                         30,744        2,320,690             (8,432)           6,386                     -      2,349,388

         Net Change in Cash and Cash Equivalents                                132,270         3,645,750          (194,363)           87,467                     -      3,671,124

   CASH AND CASH EQUIVALENTS – Beginning of Year                              13,447,916       10,476,861         3,949,121         1,583,219                     -     29,457,117

         CASH AND CASH EQUIVALENTS – END OF YEAR                        $     13,580,186 $     14,122,611 $       3,754,758 $       1,670,686 $                   - $   33,128,241


 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES
    During 2011: $508,979 and $1,266,210 of capital assets were contributed to the electric and water utilities, respectively, by customers and developers.
                    $783,065 and $368,859 of prior period unearned revenues were recognized by the electric and water utilities, respectively.                                         Page 50
                    $1,165,182 and $463,570 of prior period unearned revenues were recognized by the component units, Gray's Crossing and Old Greenwood, respectively.
                                                                                                   311
                                                                                 312
                                                TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                                    REQUIRED SUPPLEMENTAL INFORMATION
                                                              December 31, 2011




                                                                                                Component Units
                                                           Electric          Water           Gray's
                                                          Operations       Operations       Crossing       Old Greenwood     Eliminations         Total


RECONCILIATION OF OPERATING INCOME TO NET CASH
 FLOWS FROM OPERATING ACTIVITIES
  Operating income                                    $      3,412,279 $       787,755 $               - $             - $                  - $    4,200,034
  Noncash items included in operating income
   Depreciation and amortization                             1,659,557        3,557,400                -               -                    -      5,216,957
   Amortization of deferred expenses                            62,232                  -              -               -                    -        62,232
   Depreciation charged to other accounts                     239,536          113,886                 -               -                    -       353,422
  Changes in assets and liabilities
    Accounts receivable and unbilled revenues                 (380,553)         (60,357)               -               -                    -       (440,910)
    Materials and supplies                                      10,025            3,123                -               -                    -        13,148
    Prepaid expenses and other current assets                  (36,361)          17,842                -               -                    -        (18,519)
    Accounts payable                                          518,073            61,134                -               -                    -       579,207
    Customer deposits                                           41,180           18,850                -               -                    -        60,030
    Other current liabilities                                 178,774           (14,919)               -               -                    -       163,855


       NET CASH FLOWS FROM OPERATING ACTIVITIES       $      5,704,742 $      4,484,714 $              - $             - $                  - $   10,189,456



RECONCILIATION OF CASH AND CASH EQUIVALENTS
 TO THE BALANCE SHEET
 Operating                                            $      5,045,574 $      2,285,885 $       409,473 $        408,575 $                  - $    8,149,507
 Designated                                                  2,562,462        6,938,432               -                -                    -      9,500,894
 Restricted bond funds - current                             5,986,031        4,916,267       3,345,285        1,262,111                    -     15,509,694
 Restricted bond funds - non-current                                 -        2,021,017               -                -                    -      2,021,017
   Total Cash and Investments                               13,594,067       16,161,601       3,754,758        1,670,686                    -     35,181,112

  Less: Long-term investments                                        -       (1,698,881)               -               -                    -     (1,698,881)
        Mark to market adjustment                              (13,881)        (340,109)               -               -                    -       (353,990)


      TOTAL CASH AND CASH EQUIVALENTS                 $     13,580,186 $     14,122,611 $     3,754,758 $      1,670,686 $                  - $   33,128,241




                                                                                                                                                                Page 51

                                                                                 312
                                                                       313
                                  TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                         REQUIRED SUPPLEMENTAL INFORMATION
                                                   December 31, 2011


                 Pension Plan Funding History - 2.7% @ 55 (Started Participation January 1, 2011)
OTHER POST EMPLOYMENT BENEFITS PLANS - REQUIRED SUPPLEMENTARY INFORMATION
                 For the Years Ended June 30, 2006 through 2010



                                  Accrued           Actuarial          Unfunded      Funded     Annual
                 Valuation       Liabilities         Value of          Liabilities    Ratio    Covered     UL as a %
                    Date            (AL)          Assets (AVA)            (UL)      (AVA/AL)    Payroll    of Payroll
                 06/30/2006   $ 1,280,157,040    $ 1,069,546,974   $    210,610,066   83.5%  $ 304,898,179   69.1%
                 06/30/2007   $ 1,627,025,950    $ 1,362,059,317   $    264,966,633   83.7%  $ 376,292,121   70.4%
                 06/30/2008   $ 1,823,366,479    $ 1,529,548,799   $    293,817,680   83.9%  $ 414,589,514   70.9%
                 06/30/2009   $ 2,140,438,884    $ 1,674,260,302   $    466,178,582   78.2%  $ 440,071,499 105.9%
                 06/30/2010   $ 2,297,871,345    $ 1,815,671,616   $    482,199,729   79.0%  $ 434,023,381 111.1%


                 Pension Plan Funding History - 2% @ 60 (Ended Participation December 31, 2010)
                 For the Years Ended June 30, 2003 through 2009



                                   Accrued         Actuarial           Unfunded      Funded     Annual
                 Valuation        Liabilities       Value of           Liabilities    Ratio    Covered     UL as a %
                    Date             (AL)         Assets (AVA)            (UL)      (AVA/AL)    Payroll    of Payroll
                 06/30/2003   $    430,371,544   $ 429,814,105     $        557,439   99.9%  $ 159,238,690    0.4%
                 06/30/2004   $    437,494,341   $ 428,025,075     $      9,469,266   97.8%  $ 159,135,314    6.0%
                 06/30/2005   $    484,351,523   $ 459,996,995     $     24,354,528   95.0%  $ 174,127,476   14.0%
                 06/30/2006   $    478,122,215   $ 454,602,459     $     23,519,756   95.1%  $ 170,458,082   13.8%
                 06/30/2007   $    498,934,859   $ 479,520,670     $     19,414,189   96.1%  $ 171,052,819   11.3%
                 06/30/2008   $    532,483,463   $ 513,147,099     $     19,336,364   96.4%  $ 183,387,608   10.5%
                 06/30/2009   $    582,841,869   $ 553,953,526     $     28,888,343   95.0%  $ 184,319,666   15.7%

                 Retiree Health Plan Funding History
                 For the Years Ended January 1, 2006, 2007, 2009, and 2011; and July 1, 2011*


                                   Accrued         Actuarial           Unfunded      Funded    Annual
                 Valuation        Liabilities       Value of           Liabilities    Ratio    Covered     UL as a %
                   Date*             (AL)         Assets (AVA)            (UL)      (AVA/AL)   Payroll     of 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%
                 01/01/2009   $      1,748,000   $      230,900    $      1,517,100   13.2%  $   5,276,400   28.8%
                 01/01/2011   $      2,501,800   $      645,700    $      1,856,100   25.8%  $   6,307,400   29.4%
                 07/01/2011   $      2,657,000   $      661,400    $      1,995,600   24.9%  $   6,226,000   32.1%

                 *Retire Health Plan funding began in 2007. Valuations are required once every two years. The valaution
                  date changed to July 1 in compliance with GASB Statement No. 57.                                        Page 52

                                                                       313
                 314




       TRUCKEE DONNER
    PUBLIC UTILITY DISTRICT

 PRIMARY GOVERNMENT ONLY

     FINANCIAL STATEMENTS

Including Independent Auditors’ Report

    December 31, 2011 and 2010




                 314
                                                                        315




                                                      TABLE OF CONTENTS




Independent Auditors’ Report .................................................................................................................. 1

Management’s Discussion and Analysis .................................................................................................. 2

Financial Statements ............................................................................................................................... 8

   Consolidated Balance Sheets .............................................................................................................. 9

   Consolidated Statements of Revenue, Expenses, and Changes in Net Assets ................................... 12

   Consolidated Statements of Cash Flows............................................................................................ 13

Notes to Financial Statements ............................................................................................................... 15

Supplemental Information ...................................................................................................................... 43

   Consolidating Balance Sheets ........................................................................................................... 44

   Consolidating Statement of Revenues, Expenses, and Changes in Net Assets .................................. 47

   Consolidating Statements of Cash Flows ........................................................................................... 48

   Other Post Employment Benefits Plans - Required Supplementary Information.................................. 50




                                                                        315
                                                         316




                                     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, 2011 and 2010, 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.

The financial statements referred to above include only the primary government of the Truckee Donner Public
Utility District which consists of all departments that comprise the District's legal entity. The financial statements
do not include financial data for the District’s legally separate component units, which accounting principles
generally accepted in the United States of America require to be reported with the financial data of the District’s
primary government. As a result, the primary government financial statements do not purport to, and do not,
present fairly the financial position of the reporting entity of the Truckee Donner Public Utility District, as of
December 31, 2011 and 2010, the results of operations, or its cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America. In accordance with accounting
principles generally accepted in the United States of America, the Truckee Donner Public Utility District, has
issued separate reporting entity financial statements, for which we have issued our report dated
_______________.

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, 2011 and 2010 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.

The management’s discussion and analysis on pages 2 through 6 as well as the pension and other post
employment benefit plans funding schedules are 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.


Portland, Oregon
______________, 2012




                                                         316
                                                    317
                      TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                            MANAGEMENT’S DISCUSSION AND ANALYSIS
                                  December 31, 2011 and 2010



MANAGEMENT’S DISCUSSION AND ANALYSIS

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, 2011 and 2010. 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
management discussion and analysis.

FINANCIAL HIGHLIGHTS

The District’s net capital assets decreased $0.2 million (0%) from $122.1 million at December 31, 2010 to
$121.9 million at December 31, 2011, mainly because of the sale of land held for sale. Electric and Water
distribution assets were replaced at about the same pace as accumulated depreciation. Beginning in
2009, automated meter reading devices were installed to enable volumetric billing of water in compliance
with California Assembly Bill 2572, instead of flat-rate billing. Water meters have been installed at
approximately 90% of all customer locations and the remaining meters are planned to be installed by
2017.

The District’s total net assets increased $6.2 million (6%) from $108.9 million at December 31, 2010, to
$115.1 million at December 31, 2011. The increase was due to a $2 million decrease in debt related to
capital assets and a $4 million increase in unrestricted assets.

The operating revenues in 2010 and 2011 were $33.5 million for each year. Electric revenues increased
slightly in 2011, but the 1.75% water rate increase in 2011 was more than offset by decreased
consumption attributed to the conservation programs and the effect of volumetric billing.

Operating expenses of the District increased by $1.7 million (6%) from $27.6 million in 2010 to $29.3
million in 2011, substantially due to increased purchased power costs and increased depreciation.

Non-operating revenues increased $0.9 million from 2010, mostly because of a gain on the sale of land.
Non-operating expenses remained about the same.

No new debt was issued in 2010, but $7.8 million debt was issued in 2011 to refinance an existing
pension obligation. (See notes 1(J), 5, and 8(B)).

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.




                                   See accompanying auditors’ report.
                                                                                                    Page 2
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                        TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                              MANAGEMENT’S DISCUSSION AND ANALYSIS
                                    December 31, 2011 and 2010



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(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.

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.

The Notes to the Financial Statements 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.




                                      See accompanying auditors’ report.
                                                                                                            Page 3
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                               TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                    MANAGEMENT’S DISCUSSION AND ANALYSIS
                                          December 31, 2011 and 2010



DISTRICT HIGHLIGHTS

The condensed financial statements at December 31, 2011, 2010, and 2009 are presented below.

                                              CONDENSED BALANCE SHEETS
                                                                                                               Increase
                                                                                                              (Decrease)
                           ASSETS                         2011              2010              2009            2011 - 2010
     Current assets                                 $ 33,491,305      $ 31,213,246      $ 32,114,355      $     2,278,059
     Non-current assets:
          Capital assets, net                           121,918,394       122,071,635       118,270,925           (153,241)
          Restricted assets                               2,021,017         1,884,183         3,761,627           136,834
          Other long-term assets                         15,837,830         8,970,985         9,718,002         6,866,845
                     TOTAL ASSETS                   $ 173,268,546     $ 164,140,049     $ 163,864,909     $     9,128,497


            LIABILITIES AND NET ASSETS
     Current liabilities                            $     9,661,516   $     8,830,044   $     9,769,822   $       831,472
     Non-current liabilities
          Long-term debt, net of current
                portion                                  45,804,404        43,629,563        48,523,596         2,174,841
          Unearned revenues                               2,707,318         2,818,645         2,659,562           (111,327)
                Total Liabilities                        58,173,238        55,278,252        60,952,980         2,894,986
     Net Assets
          Invested in capital assets, net
                of related debt                          86,767,445        85,181,626        82,402,592         1,585,819
          Restricted for debt service                    12,439,666        12,038,461        12,365,973           401,205
          Unrestricted                                   15,888,197        11,641,710         8,143,364         4,246,487
                Total Net Assets                        115,095,308       108,861,797       102,911,929         6,233,511
                     TOTAL LIABILITIES
                           AND NET ASSETS           $ 173,268,546     $ 164,140,049     $ 163,864,909     $     9,128,497


In 2011, the District’s current assets increased $2.3 million, predominantly due to increased cash
reserves. (See note 2). The District’s net capital assets decreased $0.2 million, primarily because of the
sale of land held for sale. Electric and Water distribution assets were replaced at about the same pace as
accumulated depreciation. Non-current restricted assets increased $0.1 million, mostly attributed to a
market adjustment of long-term investments. Other long-term assets increased $6.9 million as a result of
recording the $7.6 deferred pension obligation that was refinanced. (See notes 1(J), 5, and 8(B)). Total
liabilities increased $2.9 million, mainly due to $7.8 million additional debt issued, less the annual
reduction of existing debt. No new debt was issued in 2010 and 2009. The District’s total net assets
increased $6.2 million, substantially due to a $2.0 million decrease in debt related to capital assets and a
$4.0 million increase in unrestricted assets.

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 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.



                                            See accompanying auditors’ report.
                                                                                                                      Page 4
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                           TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                  MANAGEMENT’S DISCUSSION AND ANALYSIS
                                        December 31, 2011 and 2010



Net assets restricted for debt service represents amounts restricted for payments related to outstanding
revenue bonds.

The District had income before capital contributions of $3.6 million, $4.4 million, and $3.7 million for the
years ended December 31, 2011, 2010 and 2009, 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 years ended December 31, 2011, 2010, and 2009.

                            CONDENSED REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
                                                                                                         Increase
                                                                                                        (Decrease)
                                                     2011             2010             2009             2011 - 2010
     Sales to consumers                          $ 31,053,129     $ 31,118,286     $ 30,301,191     $        (65,157)
     Other operating revenues                        2,430,965        2,358,141        2,503,380             72,824
          Total Operating Revenues                  33,484,094      33,476,427       32,804,571                7,667
     Operating expenses                             29,284,060      27,620,502       26,924,724           1,663,558
          Operating Income (Loss)                    4,200,034        5,855,925        5,879,847          (1,655,891)
     Non-operating revenues (expenses)                (564,105)      (1,496,191)      (2,154,196)           932,086
          Income (loss) before
               capital contributions                 3,635,929        4,359,734        3,725,651            (723,805)
     Capital contributions, net                      2,597,582        1,590,134        8,709,498          1,007,448
          Change in net assets                       6,233,511        5,949,868      12,435,149             283,643
          NET ASSETS, Beginning of Year            108,861,797     102,911,929       90,476,780           5,949,868
               NET ASSETS, END OF YEAR           $ 115,095,308    $ 108,861,797    $ 102,911,929    $     6,233,511


Total Operating revenues were $33.5 million in 2011, $33.5 million in 2010 and $32.8 million in 2009.
Electric revenues increased slightly in 2011, but the 1.75% water rate increase in 2011 was more than
offset by decreased consumption attributed to conservation programs and the effect of volumetric billing,
resulting in flat revenues, district-wide. The increase in sales to consumers of $0.7 million (2%) in 2010
was primarily because of customer demand and rate increases to fund increased operating costs and
reserves.

Total operating expenses were $29.3 million in 2011, $27.6 million in 2010 and $26.9 million in 2009. The
increases of $1.7 million (6%) in 2011 and $0.6 million in 2010 were due to increased purchased power
costs and depreciation.

The net of non-operating revenues, less non-operating expenses, increased $0.9 million in 2011
substantially because of the sale of land. The increase of $0.7 million in 2010 was mostly due to
increased investment income.

The net capital contributions increased $1.0 million in 2011, but decreased $7.1 million in 2010 attributed
to changes in construction and development activities.




                                         See accompanying auditors’ report.
                                                                                                                Page 5
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                             TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                       MANAGEMENT’S DISCUSSION AND ANALYSIS
                                             December 31, 2011 and 2010



CAPITAL ASSETS

As of December 31, 2011, 2010 and 2009, the District had $121.9 million, $122.1 million, and $118.3
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


                                                        2011             2010             2009
    Electric distribution facilities                $ 46,895,992     $ 42,895,235     $ 41,569,466
    Water distribution facilities                     102,184,801      91,627,643       84,674,907
    General plant                                      11,709,868      11,751,073       10,402,163
         Sub-totals                                   160,790,661     146,273,951      136,646,536
    Less: Accumulated depreciation                    (42,699,978)     (37,979,543)     (34,688,094)
         Net of accumulated depreciation              118,090,683     108,294,408      101,958,442
    Construction work in progress                       3,827,711      13,488,564       16,023,820
    Land held for future use                                     -        288,663          288,663
               TOTALS                               $ 121,918,394    $ 122,071,635    $ 118,270,925



Net capital assets (additions, less retirements and depreciation) increased $0.2 million (0%) in 2011 and
$3.8 million (3%) in 2010. Water distribution facilities increased $17.5 from 2009 to 2011 as the 2006
Pipeline Replacement Project was completed and placed into service.

LONG-TERM DEBT

Long-term debt includes revenue bonds and notes payable. At December 31, 2011, 2010 and 2009, the
District had $51.3 million, $48.5 million, and $53.2 million, respectively, in long-term debt outstanding,
including current maturities. No new debt was issued in 2010 and 2009, but $7.8 million debt was issued
in 2011 to refinance an existing pension obligation. (See notes 1(J), 5, and 8(B)).

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
                                          Accounting & Finance Department
                                          11570 Donner Pass Road
                                          Truckee, CA 96161




                                            See accompanying auditors’ report.
                                                                                                       Page 6
                                                               321
            322




    FINANCIAL STATEMENTS




8
            322
                                                  323
                         TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                   CONSOLIDATED BALANCE SHEETS
                                      December 31, 2011 and 2010




                                   CONSOLIDATED BALANCE SHEETS


                                   ASSETS
                                                                           2011               2010
   CURRENT ASSETS
    Funds
      Operating                                                       $     7,331,459    $     8,255,100
      Designated                                                            9,500,894          6,958,539
      Restricted                                                           10,902,298         10,660,011
         Total Funds                                                       27,734,651         25,873,650
     Accounts receivable, net                                               2,236,034          1,626,848
     Unbilled revenues                                                      2,508,386          2,676,662
     Accrued interest receivable                                               99,420            137,425
     Materials and supplies                                                   547,150            560,298
     Prepaid expenses                                                         320,059            301,540
     Other                                                                     45,605             36,823
           Total Current Assets                                            33,491,305         31,213,246

   NON-CURRENT ASSETS
   Other Non-Current Assets
      Restricted funds                                                      2,021,017          1,884,183
      Special assessments receivable                                        6,870,615          7,454,452
      Deferred charges
         Unamortized debt expense                                             610,087            707,520
         Other                                                              8,357,128            809,013
           Total Other Non-Current Assets                                  17,858,847         10,855,168

   CAPITAL ASSETS
      Utility plant                                                       160,790,661        146,273,951
      Accumulated depreciation                                            (42,699,978)       (37,979,543)
      Construction work in progress                                         3,827,711         13,488,564
      Land held for future use                                                      -            288,663
         Total Utility Plant                                              121,918,394        122,071,635

           TOTAL ASSETS                                               $ 173,268,546      $ 164,140,049




The accompanying notes are an integral part of these consolidated financial statements.
                                                                                                     Page 9
                                                  323
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                         TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                       CONSOLIDATED BALANCE SHEETS
                                          December 31, 2011 and 2010




                        LIABILITIES AND NET ASSETS
                                                                           2011            2010
   CURRENT LIABILITIES
    Other Liabilities
      Accounts payable                                                $     2,451,579 $     2,337,424
      Customer deposits                                                       488,230         423,850
      Other                                                                   744,161         785,959
         Total Other Liabilities                                            3,683,970       3,547,233
     Current Liabilities Payable From Restricted Assets
      Current portion of long-term debt                                     5,508,250       4,841,145
      Accrued interest payable                                                469,296         441,666
         Total Current Liabilities Payable from Restricted Assets           5,977,546       5,282,811
           Total Current Liabilities                                        9,661,516       8,830,044

   NON-CURRENT LIABILITIES
    Long-term debt, net of discounts, premiums and losses                  44,265,786      41,802,721
    Installment loans                                                       1,538,618       1,826,842
    Unearned revenues                                                       2,707,318       2,818,645
      Total Non-Current Liabilities                                        48,511,722      46,448,208

         Total Liabilities                                                 58,173,238      55,278,252

   NET ASSETS
    Invested in capital assets, net of related debt                        86,767,445      85,181,626
    Restricted for debt service                                            12,439,666      12,038,461
    Unrestricted                                                           15,888,197      11,641,710
       Total Net Assets                                                   115,095,308     108,861,797

                 TOTAL LIABILITIES AND NET ASSETS                     $ 173,268,546 $ 164,140,049




The accompanying notes are an integral part of these consolidated financial statements.
                                                                                                  Page 10
                                                          324
                 325




THIS PAGE IS INTENTIONALLY LEFT BLANK




                 325
                                                  326
                        TRUCKEE DONNER PUBLIC UTILITY DISTRICT

   CONSOLIDATED STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET ASSETS
                   For the Years Ended December 31, 2011 and 2010




   CONSOLIDATED STATEMENTS OF REVENUE, EXPENSES, AND CHANGES IN NET ASSETS



                                                                           2011             2010
    OPERATING REVENUES
     Sales to customers                                                $ 31,053,129 $ 31,118,286
      Water meter surcharge                                                 746,759          753,642
      Standby fees                                                           186,520          186,590
      Other                                                                1,497,686        1,417,909
       Total Operating Revenues                                          33,484,094        33,476,427

    OPERATING EXPENSES
    Purchased power                                                      11,342,992        10,645,657
    Operations and maintenance                                            6,548,249         6,372,644
    Consumer services                                                     2,753,561         2,577,461
    Administration and general                                            3,422,302         3,275,605
    Depreciation                                                          5,216,956         4,749,135
       Total Operating Expenses                                          29,284,060        27,620,502

              Operating Income                                             4,200,034        5,855,925

    NON-OPERATING REVENUE (EXPENSES)
    Investment income                                                        542,025          736,066
    Interest expense                                                      (1,843,899)      (2,081,040)
    Amortization                                                             (40,039)         (44,991)
    Gain (loss) on disposition of assets                                     777,808         (106,226)
       Total Non-Operating Expenses                                         (564,105)      (1,496,191)

         Income Before Contributions                                       3,635,929        4,359,734

    CAPITAL CONTRIBUTIONS                                                  2,597,582        1,590,134

      CHANGE IN NET ASSETS                                                 6,233,511        5,949,868

       NET ASSETS - Beginning of Year                                   108,861,797       102,911,929

         NET ASSETS - END OF YEAR                                      $ 115,095,308 $ 108,861,797




The accompanying notes are an integral part of these consolidated financial statements.
                                                                                                   Page 12
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                        TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                             For the Years Ended December 31, 2011 and 2010




                             CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                           2011            2010
   CASH FLOWS FROM OPERATING ACTIVITIES
     Received from customers                                          $    33,103,216 $    33,407,500
     Paid to suppliers for goods and services                             (17,838,792)    (17,178,291)
     Paid to employees for services                                        (5,074,968)     (5,446,586)
        Net Cash Flows from Operating Activities                          10,189,456      10,782,623

   CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
     Principal payments on long-term debt                                  (3,138,000)     (2,805,000)
     Proceeds from long-term debt issued                                    7,816,000               -
     Payment of existing pension obligation                                (7,816,000)              -
     Interest payments on long-term debt                                     (648,723)       (603,381)
        Net Cash Flows from Noncapital Financing Activities                (3,786,723)     (3,408,381)

   CASH FLOWS FROM CAPITAL AND RELATED
   FINANCING ACTIVITIES
     Capital expenditures for utility plant                                (4,062,590)     (8,725,310)
      Cost of disposal of property net of salvage                            (354,563)       (168,410)
      Proceeds from sale of land                                            1,092,308               -
      Capital contributions, connection and facility fees                     711,067         728,488
      Special assessments receipts                                            583,837         567,671
      Principal payments on long-term debt                                 (1,607,145)     (1,896,484)
      Interest payments on long-term debt                                  (1,339,061)     (1,533,455)
        Cash Flows From Capital and Related Financing Activities           (4,976,147)    (11,027,500)

   CASH FLOWS FROM INVESTING ACTIVITIES
     Matured long-term investment reinvested in short-term                 1,912,958               -
     Interest income received                                                438,476         618,097
        Cash Flows from Investing Activities                               2,351,434         618,097

            Net Change in Cash and Cash Equivalents                        3,778,020       (3,035,161)

      CASH AND CASH EQUIVALENTS – Beginning of Year                       23,924,777      26,959,938

            CASH AND CASH EQUIVALENTS – END OF YEAR                   $   27,702,797 $    23,924,777




The accompanying notes are an integral part of these consolidated financial statements.
                                                                                                  Page 13
                                                            327
                                                    328
                         TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                              For the Years Ended December 31, 2011 and 2010




                                                                           2011           2010
   RECONCILIATION OF OPERATING INCOME TO NET CASH
     FLOWS FROM OPERATING ACTIVITIES
      Operating income                                                $    4,200,034 $     5,855,925
      Noncash items included in operating income
       Depreciation and amortization                                       5,216,957       4,749,135
       Amortization of deferred expenses                                      62,232         62,232
       Depreciation charged to other accounts                                353,422        225,125
      Changes in assets and liabilities
        Accounts receivable and unbilled revenues                           (440,910)       (237,513)
        Materials and supplies                                                13,148         99,474
        Prepaid expenses and other current assets                            (18,519)            (600)
        Accounts payable                                                     579,207        (183,712)
        Customer deposits                                                     60,030        168,586
        Other current liabilites                                             163,855         43,971


           NET CASH FLOWS FROM OPERATING ACTIVITIES                   $   10,189,456 $    10,782,623



   RECONCILIATION OF CASH AND CASH EQUIVALENTS
     TO THE BALANCE SHEET
     Operating                                                        $    7,331,459 $     8,255,100
     Designated                                                            9,500,894       6,958,539
     Restricted bond funds - current                                      10,902,298      10,660,011
     Restricted bond funds - non-current                                   2,021,017       1,884,183
        Total Cash and Investments                                        29,755,668      27,757,833


      Less: Long-term investments                                         (1,698,881)     (3,594,876)
            Mark to market adjustment                                       (353,990)       (238,180)


          TOTAL CASH AND CASH EQUIVALENTS                             $   27,702,797 $    23,924,777




The accompanying notes are an integral part of these consolidated financial statements.
                                                                                                 Page 14
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                       TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                  NOTES TO FINANCIAL STATEMENTS
                                     December 31, 2011 and 2010



NOTES TO FINANCIAL STATEMENTS

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 financial results of these blended component units are not included in this report. However,
the District has issued an additional consolidated report that includes these component units. A copy of
that report can be requested from the District.

The following is a description of the District’s blended component units:

         Truckee Donner Public Utility District Financing Corporation is a legal entity that was 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) is a
         legal entity created to issue special tax bonds to finance various public improvements needed to
         develop property located within Old Greenwood.

         Truckee Donner Public Utility District Community Facilities District No. 04-1 (Gray’s Crossing) is a
         legal entity created to issue special tax bonds to finance various public improvements needed to
         develop property located within Gray’s Crossing.

         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 the 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.




                                                                                                      Page 15
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                                                    330
                       TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010




NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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, that are a result of exchange and exchange like transactions, are
recognized when the exchange takes place.

The District follows all pronouncements of the GASB, and has elected not to follow Financial Accounting
Standards Board (FASB) 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 ALLOWANCES FOR DOUBTFUL ACCOUNTS

Accounts receivable are recorded at the invoiced amount and are reported net of allowances of $88,845
and $124,134 for 2011 and 2010, 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.

    I.   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.




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                                  NOTES TO FINANCIAL STATEMENTS
                                     December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    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. (See note 4).

In 2011, the District refinanced an existing $7.8 million pension side fund obligation for its participation in
CalPERS. (See notes 5 and 8(B)). Prior to 2011, the annual side fund payments were expensed and
described in the Notes to Financial Statements. The pension liability was not required to be reported on
the District’s Balance Sheet, but the future pension expense was included in budget and rate calculations.
This pension obligation will be deferred through 2022.

    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
                          Electric                         23 – 35 years
                          Water                            15 – 40 years
                 Computer software and hardware             3 – 7 years
                 Building and improvements                 20 – 33 years
                 Equipment and furniture                    4 – 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 related to capital assets was issued in 2010 and 2011; no interest was capitalized in 2010 or
in 2011.

    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

The District records estimated revenues earned, but not billed to customers, as of the end of the year.
Revenues are recorded as meters are read on a cycle basis throughout each month for electric and water
customers. Unbilled revenues, representing estimated consumer usage for the period between the last
meter reading and the end of the period, are accrued in the period of consumption. Water customers
without meters are billed on a flat-rate basis, and revenues are recorded as billed. 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.



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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    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 electric and
water 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 electric and water 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 dba NV Energy
(SPPC), whereby SPPC will provide transmission services to the District through December 31, 2027. In
addition, the District purchases scheduling services from Northern California Power Agency (NCPA).
These purchases of services represented 8.5% and 10.2% of total purchased power costs in 2011 and
2010, respectively.

Beginning January 1, 2005, the District entered into an 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 the power from WAPA to the District is
difficult, the District assigns the power from WAPA to NCPA. The scheduler then uses the value of this
power to offset power purchases from the Utah Associated Municipal Power System (UAMPS) or other
deliverable power purchases.

In December of 2005, the District entered into an agreement with UAMPS. Subsequently, the District
entered into many pooling appendices for power capacity and energy that relate to various time periods
from January 2008 through March 2028. Also in 2009, the District signed an agreement with UAMPS for
approximately 5 MW of the Nebo natural gas generation plant capacity.

In 2011 and 2010, the UAMPS contract, along with its appendices, and the WAPA contract comprised the
majority of a diversified power portfolio that balanced risk and cost for the District.

    P.   INCOME TAXES

As a government agency, the District is exempt from payment of federal and state income taxes.

    Q. 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 unearned revenues on the balance sheet.




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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

    R. RECENT ACCOUNTING PRONOUNCEMENTS IMPLEMENTED BY THE DISTRICT

In June of 2007, GASB issued Statement No. 51, “Accounting and Financial Reporting for Intangible
Assets.” This Statement is effective for financial statements for periods beginning after June 15, 2009.
Governments possess many different types of assets that may be considered intangible assets, including
easements, water rights, timber rights, patents, trademarks, and computer software. The objective of this
statement is to establish accounting and financial reporting requirements for intangible assets to enhance
the comparability of the accounting and financial reporting of such assets among state and local
governments. This statement requires that an intangible asset be recognized in the statement of net
assets only if it is considered identifiable. Additionally, this statement establishes a specified-conditions
approach to recognizing intangible assets that are internally generated. This statement also establishes
guidance specific to intangible assets related to amortization. This statement was implemented in fiscal
year 2010 with no significant impact.

In December 2009, GASB issued Statement No. 57, “OPEB Measurements by Agent Employers and
Agent Multiple – Employer Plans.” This statement addressed issues related to the use of the alternative
measurement method and the frequency and timing of measurements by employers that participate in
agent multiple-employer Other Post-Employment Benefit (OPEB) plans. The statement amended
previous GASB statements on OPEB plans, and improved the consistency of reporting for OPEB plans.
This statement was implemented in fiscal year 2011.

In June 2010, GASB issued Statement No. 59, “Financial Instruments Omnibus.” This statement
addresses topics relating to the reporting and disclosure of certain financial instruments and external
investment pools, and includes some clarifications to GASB Statement No. 53. The District assessed the
financial statement impact of adopting the new statement, and its impact was not material. This statement
was implemented in fiscal year 2011.

In December 2010, GASB issued Statement No. 62, “Codification of Accounting and Financial Reporting
Guidance Contained in the Pre-November 30, 1989 FASB and AICPA Pronouncements.” This statement
incorporates into GASB’s authoritative literature certain accounting and financial reporting guidance
issued on or before November 30, 1989 included in: FASB Statements and Interpretations, Accounting
Principles Board Opinions, and Accounting Research Bulletins of the AICPA Committee on Accounting
Procedure that do not conflict with or contradict GASB pronouncements. The statement also supersedes
GASB Statement No. 20, “Accounting and Financial Reporting for Proprietary Funds and Other
Governmental Entities That Use Proprietary Fund Accounting” which eliminates the election for business-
type activities to apply post-November 30, 1989 FASB Statements and Interpretations that do not
contradict or conflict with GASB pronouncements. The District assessed the financial statement impact of
adopting the new statement, and its impact was not material. This statement was implemented in fiscal
year 2011.

    S. ACCOUNTING PRONOUNCEMENTS TO BE IMPLEMENTED IN UPCOMING YEARS

In November 2010, GASB issued Statement No. 61, “The Financial Reporting Entity - Omnibus – An
Amendment of GASB Statements No. 14 and No. 34.” This statement modifies GASB Statement 34
requirements for inclusion of component units and amends criteria for reporting of component units. The
statement also clarifies the reporting of equity interests in legally separate organizations. This statement
is effective for periods after June 15, 2012. The District has elected not to early implement GASB
Statement No. 61 and has not determined its effect on the District’s financial statements.




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                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In June 2011, GASB issued Statement No. 63, “Financial Reporting of Deferred Outflows of Resources,
Deferred Inflows of Resources, and Net Position.” This statement provides guidance on reporting
deferred inflows and outflows of resources. The statement will also standardize the presentation of
deferred inflows and outflows of resources and their effect on a government’s net position. This statement
is effective for periods beginning after December 15, 2011. The District has elected not to early
implement GASB Statement No.63, but the District does not believe that its impact will be material.

    T. RECLASSIFICATION

Certain amounts in the 2010 Financial Statements have been reclassified in order to conform to the 2011
presentation.

NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS

Cash, cash equivalents 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 board designated accounts may be used to pay for selected capital projects. Such accounts have
been designated by the Board for the following purposes:

        Electric Capital Replacement

        Starting in 2009, the Board has set aside funds designated for future electric infrastructure
        replacement.

        Electric Vehicle Reserve

        Beginning in 2009, the Board set aside funds designated for future electric utility vehicle
        replacements.

        Electric Rate Reserve

        In compliance with Board rules, the District has created an electric rate stabilization fund in
        anticipation of future costs. During both 2011 and 2010, 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. In 2008, the Board
        adopted an ordinance to charge a $5 monthly surcharge to all customers of treated water
        beginning January 2009 through December 2013. Water meters and automated meter reading
        devices are being installed, and customers will be billed volumetrically in accordance with
        California Assembly Bill 2572. As meters are installed, these funds are used to pay for related
        costs.




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                                       NOTES TO FINANCIAL STATEMENTS
                                          December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

       Water Capital Replacement

       Starting in 2006, the Board has set aside a portion of water revenues designated for future water
       infrastructure replacement.

       Water Vehicle Reserve

       Beginning in 2009, the Board set aside funds designated for future water utility vehicle
       replacements.

       Prepaid Connection Fees

       In compliance with Board rules, the District has set aside prepaid connection fees to cover
       installation costs of water services.

       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.

       Glenshire Lease Proceeds

       From 2009 until 2011, the District received funds for a parcel leased in Glenshire. In 2011, the
       balance of the “Glenshire Lease Proceeds” fund was transferred to the restricted fund, “Glenshire
       Escrow Account,” which is used to pay the installment loan associated with Glenshire water
       system improvements.

As of December 31, board designated accounts consisted of the following:

                                                                     2011            2010
            Electric capital replacement fund                    $     11,606    $    124,642
            Electric vehicle reserve                                  166,772         295,803
            Electric rate reserve                                    2,384,084       2,306,459
            Reserve for future meters                                 426,169         153,033
            Water capital replacement fund                           3,388,950       1,920,655
            Water vehicle reserve                                      57,585         138,714
            Prepaid connection fees                                    81,479          81,117
            Debt service coverage fund                               2,940,454       1,885,527
            Donner Lake Assessment District surcharge fund             43,795          33,009
            Glenshire lease proceeds                                         -         19,580
                 Totals                                          $   9,500,894   $   6,958,539




                                                                                                 Page 21
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                                NOTES TO FINANCIAL STATEMENTS
                                   December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

Certain assets have been restricted by bond 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.

       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 were 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 Account

       The District received cash and other assets as part of its acquisition of the Glenshire Mutual
       Water Company. Also, the District will continue to receive a monthly water system upgrade
       surcharge from Glenshire residents until November 30, 2017. This cash is utilized to pay the
       installment loan related to the Glenshire water system improvements as specified in the terms of
       the acquisition agreement.

       In 2011, the District sold a parcel from the Glenshire Mutual Water Company assets. The net
       proceeds of $294,940 were transferred to the Glenshire Escrow Account and the monthly water
       system upgrade surcharge was reduced from $10.75 to $4.75.




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                                NOTES TO FINANCIAL STATEMENTS
                                   December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

        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
        Improvement Fund also has a reserve fund as required by the California – Safe Drinking Water –
        State Revolving Fund (SRF). This fund is required to set aside $40,043 semi-annually for ten
        years beginning in 2006.

        2006 COP Water System Project Fund

        During 2006, the District issued $26.6 million in water Certificates of Participation (2006 COP)
        (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 received 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.




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                                     NOTES TO FINANCIAL STATEMENTS
                                        December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

As of December 31, restricted cash and cash equivalents and investments consisted of the following:

                                                                        2011            2010
             Certificates of Participation                          $   7,714,106   $   7,343,768
             Facilities fees                                              991,254       1,389,369
             DWR-Prop 55 reserve fund                                     308,346         306,946
             Glenshire escrow accounts                                    498,719         189,168
             Donner Lake Special Assessment District improvement        2,556,368       2,386,587
             Donner Lake Special Assessment District reserve fund        481,130         401,304
             2006 COP W ater System Project fund                          22,023         227,425
             Solar Initiative                                            230,028         178,825
             Other (area improvement funds)                              121,341         120,802
                        Total Restricted Cash and Cash
                            Equivalents and Investments             $ 12,923,315    $ 12,544,194



Cash and investments are comprised of the following cash and cash equivalents and investments as of
December 31:
                                                                        2011            2010
             Cash and cash equivalents                              $ 27,702,797    $ 23,924,777
             Mark to market adjustment                                   353,990         238,180
             Investments – government bonds                             1,698,880       3,594,876
                 Totals                                             $ 29,755,667    $ 27,757,833


Cash and cash equivalents were $27,702,797 and $23,924,777 at December 31, 2011 and 2010,
respectively. Cash equivalents substantially consist of investments in the state pooled fund, money
market funds and government bonds. 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.

Adjustments necessary to record investments at market value are recorded in the operating statement as
increases or decreases in investment income. Market values may have changed significantly after year
end.




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                          TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                   NOTES TO FINANCIAL STATEMENTS
                                      December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

        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 fund 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, 2011 and 2010
the District’s deposits and investments were held as follows:

                                                                             2011             2010
              Cash on hand                                              $        1,900   $        1,200
              Deposits                                                         690,265         554,019
              LAIF                                                          21,695,547       17,971,782
              Money Market Funds                                             5,669,075        5,635,956
              Government Bonds                                               1,698,880        3,594,876
                 Totals                                                 $ 29,755,667     $ 27,757,833



        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 is 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 2011 and 2010:

                              Investment                                    Maturity

                 LAIF                                                 3 months or less
                 Federated U.S. Treasury Cash Reserve                 3 months or less
                 Fidelity Institutional Prime                         3 months or less
                 Fidelity Money Market                                3 months or less
                 Federal Home Loan Mortgage                             09/15/2011
                 Federal Farm Credit Banks                              03/02/2021


        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 is rated AAAm
by S&P and AAA-mf by Moody’s. The Federated U.S. Treasury Cash Reserve is rated AAAm by S&P
and Aaa-mf by Moody’s. Federal Farm Credit Banks is rated AA+ by S&P and Aaa by Moody’s.




                                                                                                          Page 25
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                                   NOTES TO FINANCIAL STATEMENTS
                                      December 31, 2011 and 2010



NOTE 2 – CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)

        DISCLOSURES RELATING TO CONCENTRATION OF CREDIT RISK

Concentration of credit risk is the risk of loss attributed to the magnitude of investments in a single issuer.
The District’s investment policy requires diversification, but does not include specific limitations by issuer.

As of December 31, 2011 and 2010 the portfolio included the following investment requiring disclosure:

                                                                            2011             2010
               Federal Home Loan Mortgage                                  matured           5.7%
               Federal Farm Credit Banks                                    4.8%             5.1%



        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 District’s investment policy does not contain
legal or policy requirements that would limit the exposure to custodial credit risk for deposits. However,
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, 2011 and 2010 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). This investment fund
has an equity interest in the State of California’s (State’s) Pooled Money Investment Account (PMIA).
PMIA funds are on deposit with the State’s Centralized Treasury System and are managed in compliance
with the California Government Code according to a statement of investment policy which sets forth
permitted investment vehicles, liquidity parameters, and maximum maturity of investments. 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 26
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                                        NOTES TO FINANCIAL STATEMENTS
                                           December 31, 2011 and 2010



NOTE 3 – CAPITAL ASSETS

Capital assets consist of the following at December 31, 2011 and 2010:

                                                 January 1,                                             December 31,
                                                    2011             Additions        Reductions            2011
     Electric distribution facilities           $ 42,895,235     $     4,064,797     $       (64,039)   $ 46,895,993
     Water distribution facilities                91,627,643          10,573,081             (15,923)    102,184,801
     General plant                                11,751,073            688,712            (729,919)      11,709,866
                                                 146,273,951          15,326,590           (809,880)     160,790,661
     Less: Accumulated depreciation               (37,979,543)        (5,453,483)           733,048       (42,699,978)
     Construction work in progress                13,488,564           4,181,758         (13,842,611)       3,827,711
     Land held for future use                        288,663             24,901            (313,564)                -
          Totals                                $ 122,071,635    $ 14,079,766        $ (14,233,007)     $ 121,918,394



                                                 January 1,                                             December 31,
                                                    2010             Additions        Reductions            2010
     Electric distribution facilities           $ 41,569,467     $     1,395,129     $       (69,361)   $ 42,895,235
     Water distribution facilities                84,674,906           8,123,963          (1,171,226)     91,627,643
     General plant                                10,402,163           1,729,289           (380,379)      11,751,073
                                                 136,646,536          11,248,381          (1,620,966)    146,273,951
     Less: Accumulated depreciation               (34,688,094)        (4,912,415)         1,620,966       (37,979,543)
     Construction work in progress                16,023,820          11,374,415         (13,909,671)     13,488,564
     Land held for future use                        288,663                     -                 -         288,663
          Totals                                $ 118,270,925    $ 17,710,381        $ (13,909,671)     $ 122,071,635


As of December 31, 2011 and 2010, the plant in service included land and land rights, $1,876,099 and
$1,789,557, 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 2011, there were open contracts with one contractor totaling $0.2 million. All completed
work was paid or accrued, and recorded in construction work in progress.

At the end of 2010, there were open contracts with three contractors totaling $0.4 million. All completed
work was paid or accrued, and recorded in construction work in progress.




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                       TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



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 $2,834,079 of which $496,990 is included in capital assets on the accompanying
balance sheet. During 2011 and 2010, there were no material expenditures for this project.

A local cable television service provider filed an objection in September 2004 with the Nevada County
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. Since
2009, the District has been exploring options to sell or lease the existing infrastructure to provide a return
on investment in the project.




                                                                                                     Page 28
                                                     342
                                                                343
                              TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                         NOTES TO FINANCIAL STATEMENTS
                                            December 31, 2011 and 2010



NOTE 5 – LONG-TERM DEBT

Long-term debt consisted of the following at December 31, 2011:

                                         January 1,                                             December 31,     Due within
                                           2011               Additions       Reductions             2011        one year
 Certificates of Participation –
      Electric, 2.5% to 5.75%,
      due serially to 2013 (net of
      unamortized premiums of
      $15,524).                      $     9,380,741      $               -   $   (2,970,214)   $    6,410,527   $   3,110,000
 Pension Obligation Bonds
      Electric, 5%
      due semi-annually                               -         7,816,000          (198,000)         7,618,000        428,000
 State Revolving Fund Loan –
      Water, 2.34%, due semi-annually
      beginning in 2006 to 2026.          10,081,855                      -        (282,469)         9,799,386        574,890
 Certificates of Participation –
      Water, 4.00% to 5.00%,
      due serially to 2036 (net of
      unamortized discounts of
      $99,398, premiums of
      $445,295 and arbitrage of           24,182,097                      -       (1,028,695)       23,153,402        870,000
      $7,507).
 Department of Water Resources,
      3.18%, due semiannually to
      2021, secured by real
      and personal property.               2,718,138                      -        (221,868)         2,496,270        228,910
 Installment loans, 5.4% to 6.23%,
      various payment terms and
      due dates, secured by
      equipment.                           2,107,875                      -        (272,806)         1,835,069        296,450
           Totals                    $ 48,470,706         $     7,816,000     $   (4,974,052)   $ 51,312,654     $   5,508,250




                                                                                                                      Page 29
                                                                343
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                              TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                        NOTES TO FINANCIAL STATEMENTS
                                           December 31, 2011 and 2010



                                     NOTE 5 – LONG-TERM DEBT (Continued)

Long-term debt consisted of the following at December 31, 2010:

                                        January 1,                                          December 31,     Due within
                                          2010            Additions       Reductions             2010        one year
 Certificates of Participation –
      Electric, 2.5% to 5.75%,
      due serially to 2013 (net of
      unamortized premiums of
      $45,738).                      $ 12,229,844     $               -   $   (2,849,103)   $    9,380,741   $   2,940,000
 State Revolving Fund Loan –
      Water, 2.34%, due semi-annually
      beginning in 2006 to 2026.         10,637,030                   -        (555,175)        10,081,855        568,242
 Certificates of Participation –
      Water, 4.00% to 5.00%,
      due serially to 2036 (net of
      unamortized discounts of
      $107,209, premiums of
      $480,286 and arbitrage of          24,996,322                   -        (814,225)        24,182,097        830,000
      $179,022).
 Department of Water Resources,
      3.18%, due semiannually to
      2021, secured by real
      and personal property.              2,933,120                   -        (214,982)         2,718,138        221,867
 Installment loans, 5.4% to 6.23%,
      various payment terms and
      due dates, secured by
      equipment.                          2,429,207                   -        (321,332)         2,107,875        281,036
           Totals                    $ 53,225,523     $               -   $   (4,754,817)   $ 48,470,706     $   4,841,145



On April 3, 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.




                                                                                                                  Page 30
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                       TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                 NOTES TO FINANCIAL STATEMENTS
                                    December 31, 2011 and 2010



NOTE 5 – LONG-TERM DEBT (Continued)

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 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.

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.

In June 2011, the District refunded (refinanced) an existing $7.8 million pension side fund obligation for its
participation in CalPERS. (See notes 1(J) and 8(B)). Prior to 2011, the annual side fund payments were
expensed and described in the Notes to Financial Statements. The pension side fund liability was
amortized through June 2022 with a 7.75% rate. This liability was not required to be reported on the
District’s Balance Sheet, but the future pension expense was included in budget and rate calculations.
The new refunding rate of 5% reduces the District’s annual pension costs by almost $100,000 through
2022.




                                                                                                     Page 31
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                           TRUCKEE DONNER PUBLIC UTILITY DISTRICT

                                         NOTES TO FINANCIAL STATEMENTS
                                            December 31, 2011 and 2010



NOTE 5 – LONG-TERM DEBT (Continued)

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 2010 or in 2011.
Scheduled payments on debt are:


                                                     Principal          Interest           Total
             2012                                $     5,508,250    $     2,075,275   $    7,583,525
             2013                                      5,798,394          1,798,104        7,596,498
             2014                                      2,594,096          1,605,552        4,199,648
             2015                                      2,729,830          1,503,594        4,233,424
             2016                                      2,865,919          1,395,680        4,261,599
             2017-2021                                15,160,949          5,234,337       20,395,286
             2022-2026                                 7,161,288          2,838,899       10,000,187
             2027-2031                                 4,030,000          1,770,375        5,800,375
             2032-2036                                 5,095,000           708,075         5,803,075
                                                      50,943,726    $ 18,929,891      $ 69,873,617
             Plus: Unamortized premiums                  460,819
                      Arbitra