Turlock Irrigation District Management’s Discussion and Analysis (Unaudited) December 31, 2020 and 2019
TID has a credit requirement for all new service connections, which requires new customers to place a deposit with TID. Financial reporting TID maintains its accounts in accordance with generally accepted accounting principles for proprietary funds as prescribed by the Governmental Accounting Standards Board (GASB). TID is accounted for as an enterprise fund and is financed and operated in a manner similar to that of a private business enterprise. TID uses the economic resources measurement focus and the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. TID’s accounting records generally follow the Uniform System of Accounts for public utilities and licensees prescribed by the Federal Energy Regulatory Commission (FERC), except as it relates to the accounting for contributions in aid of construction (CIAC). TID provides energy for residential, commercial, and industrial use and provides irrigation water for agricultural use. Accordingly, TID defines operating revenues as sales of energy, wholesale sales of energy and natural gas, irrigation sales, and other miscellaneous energy and irrigation service revenues. Operating expenses include the costs of sales and services, administration expenses, depreciation, depletion and amortization. Nonoperating revenue and expense typically includes interest income on investments, interest expense, and other miscellaneous items. In accordance with the GASB accounting rules which govern regulatory accounting, the Board has taken various regulatory actions for ratemaking purposes that result in the deferral of revenue or expense recognition. At December 31, 2020 and 2019, TID had total regulatory assets of $47.0 million and $50.6 million, respectively, and total regulatory credits of $153.3 million and $128.2 million, respectively. The regulatory credits are recognized in the statement of revenues, expenses and changes in net position when the Board concludes that they should be used for ratemaking purposes. Investment policies and procedures The Board reviews TID’s investment policy on an annual basis. TID has contracted with Public Financial Management, Inc. (PFM), a leading investment manager of public entity funds, to invest TID’s cash and investments. PFM only purchases investments on behalf of TID which are permitted by TID’s investment policy. The Bank of New York Mellon Trust Company holds these investments in custody. Debt management program TID regularly reviews its debt structure, which includes the issuance of refunding bonds to achieve debt service savings.
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