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Home My WebLink About12-15-2000 BM MinutesMeee eck wieeearoaeene Pag ae!som LA< ALASKA ENERGY AUTHORITY Board Meeting December 15,2000 Minvtes nae The pure. .oo +:ao . :tee ote2bca ES |ae -.a4 e7.: !.aesoera= ; .F ;".eer Syaa indJ"te : fee SeeLyeaegheeA Frees:Feateeinrae ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY ea,ALASKAiEENERGYAUTHORITY 813 WEST NORTHERN LIGHTS BLVD.«©ANCHORAGE,ALASKA 99503 ©907/269-3000 ©FAX 907/269-3044 TOLL FREE (ALASKA ONLY)888 /300-8534 AGENDA ALASKA ENERGY AUTHORITY Board of Directors > December 15,2000 1.CALL TO ORDER 2.BOARD OF DIRECTORS ROLL CALL 3.PUBLIC ROLL CALL 4.PUBLIC COMMENTS 5.PRIOR MINUTES --August 15,2000 6.OLD BUSINESS 7.NEW BUSINESS A.Financial.Statements/Audit Presentation (KPMG) 8.DIRECTOR COMMENTS A.Director's Status Report of AEA Programs and Projects B.Next Meeting Date 9.BOARD COMMENTS 10.ADJOURNMENT hiall\bjfboard\agendat ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY {=ALASKAME=ENERGY AUTHORITY 813 WEST NORTHERN LIGHTS BLVD.¢ANCHORAGE,ALASKA 99503 ©907/269-3000 ©FAX 907/269-3044 TOLL FREE (ALASKA ONLY)888 /300-8534 ALASKA ENERGY AUTHORITY BOARD OF DIRECTORS December 15,2000 -11:31 a.m. Anchorage,and Juneau,Alaska 1.CALL TO ORDER Chairman Hughes called the meeting of the Alaska Energy Authority to order on December 15, 2000 at 11:31 a.m.A quorum was established. 2.BOARD OF DIRECTORS ROLL CALL Directors present in Anchorage:Mr.Wilson Hughes (Chairman/Public Member),and Commissioner Debby Sedwick (Department of Community and Economic Development). Directors present in Juneau:Commissioner Joe Perkins (Department of Transportation and Public Facilities),and Deputy Commissioner Larry Persily (Designee for Department of Revenue Commissioner). 3.PUBLIC ROLL CALL AIDEA/AEA staff present in Anchorage:Robert Poe,Jr.(Executive Director),Valorie F.Walker (Deputy Director-Finance),James A.McMillan (Deputy Director-Credit),Karl Reiche (Acting Deputy Director-Project Development &Operations),David E.Germer (Deputy Director-Business Development &Rural Energy),Amy McCollum (Accountant),Leona Hakala (Loan Officer), Brenda Applegate (Accountant),Katelyn Markley (Development Specialist),Chris Mello (Project Manager),Bruce Tiedeman (Acting Rural Energy Manager),and Brenda J.Fuglestad (Administrative Assistant). Others attending in Anchorage:Kathy Porterfield (KPMG,LLP),Keith Laufer (Foster Pepper Rubini &Reeves,LLC),Brian Bjorkquist (Department of Law). 4.PUBLIC COMMENTS There was no public comment. 5.PRIOR MINUTES August 15,2000 The August 15,2000,minutes were unanimously approved as presented. AEA Board Meeting December 15,2000 Meeting Minutes Page 2 6.OLD BUSINESS There was no old business. 7.NEW BUSINESS 7A.Financial Statements/Audit Presentation (KPMG) Ms.Kathy Porterfield,Managing Partner with KPMG,LLP,summarized the audited financial statements,letter to the Board,and the management letter. Ms.Porterfield said the purpose of the audit is for KPMG to gain reasonable assurance that the financial statements are free of material misstatement.KPMG conducted appropriate audit procedures and has concluded that the financial statements are fairly stated in all material respects in accordance with generally accepted accounting principles,resulting in an unqualified or a clean opinion.KPMG obtained reasonable assurance during the audit that the financial statements are free of material misstatement. Ms.Porterfield said that pursuant to the Authority taking over responsibility for the rural energy programs,there were significant accounting entries made.Net assets of approximately $400 million were brought into the Authority representing the net assets of those programs.In addition,in the year 2000,the Authority transferred approximately $55.5 million back out to the Railbelt Energy Fund and the State's General Fund. She said the Four Dam Pool had been carried at historical cost in the financial statements,and there is an accounting standard that requires that when certain circumstances occur, writedowns for impairment in value may be required.The Authority has determined,and KPMG agreed,that based upon the pending sale,the historical cost of the Four Dam Pool was significantly higher than its fair value.In the financial statements there is a writedown of slightly over $41 million. In reviewing the management letter,Ms.Porterfield said that based upon the evaluation of internal control,KPMG has recommendations that should be brought to the Board's attention. She said the recommendations all revolve around the management of the rural energy programs.It was KPMG's conclusion that the processes and procedures that had been in place at the division prior to the transfer did not provide for the best fiscal management of the rural energy programs.The Authority has carried on some of these processes during the year because it was the transition year and they are still in the process of evaluating what the appropriate procedures are. The division utilized an external bookkeeping firm to keep track of project costs.Their practice was to set up a bank account for each funding source for each project,so at the end of June 30,2000,there were over 100 bank accounts.It was extremely difficult to get good project cost data,not to mention the inefficiency of having to reconcile 100 bank accounts and pay for that service.It is KPMG's recommendation that this practice be discontinued,as it is not the best way in which to manage the programs. AEA Board Meeting December 15,2000 Meeting Minutes Page 3 Because the rural energy programs receive a substantial amount of federal money they are required to follow federal regulations.There is one particular regulation that has to do with recovery of costs;the division did not follow federal requirements for recovery of certain costs. As a result,KPMG discovered what is called "questioned costs"which means that there are costs charged to federal programs that we do not believe meet the grantors requirements.As a result of these "questioned costs,"the Authority may have to send money back to the federal government.KPMG recommends that the Authority implement a more refined time management system which encompasses an approved methodology for allocating payroll costs to federal awards or undergo an indirect cost rate study. KPMG also recommended that AEA ensure that its internal process include appropriate monitoring of subrecipients as required by federal regulations.Also,that the Authority limit the amount of changes made to and transfers between the various funding sources.Any transfers which are made should be approved by a responsible individual.At the conclusion of a project, a complete reconciliation of expenditures versus funding source should be performed to ensure that restricted funds have been appropriately spent,and that available unrestricted funds can be transferred to another eligible project.During the audit it was difficult to tell from the records kept whether a project had overspent state dollars,federal dollars,or unencumbered dollars. KPMG recommended that in future grant agreements the Authority negotiate the ability to earn interest to better leverage the funding it receives.The Authority should continue with the implementation of a process to analyze all projects at completion to ensure that only approved funding sources have been utilized. In terms of financial reporting,the rural energy programs are accounted for in three different systems,one of which is not currently capable of accounting for some of the project cost data for projects the Authority manages.With regard to all of the problems that were found and the issues that are being raising today,the Authority needs to look at finding one accounting system that can accommodate all of the needs for all of its projects and programs.The Authority also needs to put processes in place to make sure that all of the federal regulations that it is now subject to are complied with. Mr.Poe said staff has had discussions with regard to the management letter and staff agrees with the findings of KPMG.Staff is in the process of putting systems in place to deal with the issues. The Board acknowledged the challenges involved with the merger and complimented staff on their aggressiveness toward dealing with and resolving the issues. 8.DIRECTOR COMMENTS There were no Director comments. 9.BOARD COMMENTS There were no Board member comments. AEA Board Meeting December 15,2000 Meeting Minutes Page 4 10.ADJOURNMENT There being no objection and no further business of the Board,the meeting was adjourned at 11:45 a.m. a Robert Poe,Jr.,Secretary ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY x ALASKAMm=ENERCY AUTHORITY Mae BT 813 WEST NORTHERN LIGHTS BLVD.©ANCHORAGE,ALASKA 99503 ©907/269-3000 «FAX 907/269-3044 TOLL FREE (ALASKA ONLY)888 /300-8534 ALASKA ENERGY AUTHORITY BOARD OF DIRECTORS , August 15,2000 -11:45 a.m.. Anchorage,and Juneau,Alaska 1.CALL TO ORDER Chairman Hughes called the meeting of the Alaska Energy Authority to order on August 15,2000 at 11:45 a.m.A quorum was established. 2.BOARD OF DIRECTORS ROLL CALL Directors present in Anchorage:Mr.Wilson Hughes (Chairman/Public Member),Deputy Commissioner Larry Persily (Designee for Department of Revenue Commissioner),Commissioner Deborah Sedwick (Department of Community and Economic Development),and Mr.Robert Loescher (Public Member). Directors present in Juneau:Commissioner Joe Perkins (Department of Transportation and Public Facilities). 3.PUBLIC ROLL CALL AIDEA staff present in Anchorage:Keith A.Laufer (Acting Executive Director),Valorie F.Walker (Deputy Director-Finance),David E.Germer (Deputy Director-Business Development &Rural Energy),Karl E.Reiche (Acting Deputy Director-Project Development &Operations),Katelyn Markley (Development Specialist),Bruce Tiedeman (Acting Rural Energy Manager),and Brenda J.Fuglestad (Administrative Assistant). Others attending in Anchorage:Vicki Irwin (Sealaska Corporation),Theresa Obermeyer (self), Margie Baumen (freelance),Wesley Loy (Anchorage Daily News),Albert Kookesh (Alaska State House of Representatives),Ken Vassar (Wohlforth Vassar Johnson &Brecht),Robert G.Poe (Commissioner of Administration),Richard Holden (consultant),Brian Bjorkquist and Mike Mitchell (Department of Law),and Jon Rubini (Foster Pepper Rubini &Reeves LLC). 4.PUBLIC COMMENTS Representative Kookesh,representing himself and representing Representative Jewel, Representative Kapsner,Representative Morgan,and Senator Adams,expressed a concern about an impact on Rural Alaska.He said that when House Bill 40 was going through the House there was concern about taking an organization and dismembering it to create a new department. There was concern because they were afraid that Rural Alaska would lose contacts that were felt to be important in the administration.He said they were assured time and again by the AEA Board Meeting August 15,2000 Meeting Minutes Page 2 Administration that would not be the case.Representative Kookesh said Rural Alaska has taken a huge hit and that hit is a loss of a member of the Administration who was the energy director for the state.He stated he would not get into specifics,but wanted to tell the Board of this concern. He believes that Rural Alaska has taken a hit that will not be easy to overcome.He said they are disappointed to the point that they are hurt,that somebody that is as important to Rural Alaska is no longer there.He said that when they had the option of moving the Division of Energy into Community and Economic Development they did not want to do that because they were afraid that it might get lost in the bureaucracy.He said,in hindsight,maybe that's what should have, been done.Representative Kookesh said this is the message they want to voice to the Board today,Senator Adams,himself,Representative Jewel,Representative Kapsner,and Representative Morgan,in hindsight,may have made a mistake.He said he did not want to cause anybody any discomfort other than to tell the Board and AIDEA that when they are back in the Legislature they will be doing everything they can to remedy the situation.He thanked the Board for their time and stated he understood the legalities of getting into personality issues.Representative Kookesh stated he wanted to make the message clear that Rural Alaska is not happy.Rural Alaska is very disappointed and those who represent and live in Rural Alaska are very disappointed., Ms.Obermeyer commented on Representative Kookesh's statement.She stated there is no accountability in government and also commented on the lawsuits against her. 5.PRIOR MINUTES February 10,2000 The February 10,2000,minutes were unanimously approved as presented. 6.OLD BUSINESS There was no old business. 7.NEW BUSINESS 7A.Resolution No.2000-02,Resolution of the Alaska Energy Authority Relating to the Appointment of an Executive Director Mr.Laufer distributed a revised Resolution No.2000-02 indicating the changes made were the insertion of Robert G.Poe,Jr.into the blanks that were previously in the resolution and adding an effective date of August 29,2000.The other change made was to modify the language so that it clearly indicated in the resolution that the Executive Director has the ability to delegate signing authority to other members of the Authority's staff.Mr.Laufer stated the resolution is for the appointment of the Executive Director of the Authority. MOTION:Mr.Loescher moved for the approval of Resolution No.2000-02.Seconded by Deputy Commissioner Persily.There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. 7B.Rural Energy Program Update e Power Cost Equalization Program/Four Dam Pool Sale AEA Board Meeting .August 15,2000 =- Meeting Minutes Page 3 Mr.Laufer distributed a chart to the Board members regarding Power Cost Equalization (PCE). He stated that House Bill 446 and 447 provided for the sale of the Four Dam Pool to the Purchasing Utilities,and that the funds that are realized for the sale are to be deposited in a Power Cost Equalization Endowment Fund.In addition,House Bill 447 deposited $100 million from the constitutional budget reserve into the Power Cost Equalization Endowment Fund. Mr.Laufer updated the Board as to the status of the Four Dam Pool sale and reviewed in detail House Bill 446 and 447 and what the funding mechanism has done for the PCE program and, what remains to be done. Mr.Laufer said the utilities are currently in the process of forming a joint action agency.The Authority is in the process,through legal counsel,of preparing a definitive sale agreement that was contemplated in the MOU and in the legislation.One of the primary elements will be the approval by each of the governing organizations in the communities.We will endeavor to complete the approvals by the end of year 2000.Staff is looking to accomplish the sale by December 2001. Mr.Laufer stated Matanuska Electric Association (MEA)filed litigation,particularly attacking section 2 of HB 446,which is a section that relates to telephone cooperatives and the requirements for sales of telephone cooperatives.The issue with the litigation brought by MEA is that it alleges there are constitutional problems with the way the bill was adopted,specifically the single subject rule and certain issues as to legislative procedures and the number of readings, changes,and titles,etc. The litigation makes the assertion that section 2 is invalid and should be severed,but in the alternative if the court determines that section 2 cannot be severed,the Bill should be declared unconstitutional and invalid.The Attorney General's office filed an answer that basically asserts that there are no problems with the Bill;the Bill is constitutional,it was duly adopted,and in any event if there were constitutional problems then section 2 should and could be severed. In response to Board members'questions,Mr.Bjorkquist stated that it is difficult in litigation to give any type of estimate of how much time it will take to resolve.He said the issues presented are matters of legal interpretation and not a case where there is any serious degree of factual dispute.If the legislation were found invalid then the components of the legislation would no longer be in effect.The authorization to sell the Four Dam Pool would no longer be valid and the PCE Endowment Fund would no longer be in existence,so the impacts from the invalidation of the legislation would seriously impact AIDEA/AEA. Mr.Laufer said the Attorney General in addition to representing the state is representing AIDEA/AEAin this litigation. Mr.Laufer said that assuming the Bill is declared constitutional,the table shows the effect of HB 446 and 447 on the PCE program.Mr.Laufer reviewed the table with the Board.The earnings (7%of the market value)from the Endowment Fund in any given year become available for deposit into the PCE fund the following fiscal year.The other monies deposited in the Endowment Fund are the Four Dam Pool sale in FY2002 and debt service for fiscal year 2000. As we described to the Legislature,the program that is in place not does not fully fund PCE.Staff has been working closely with the Congressional Delegation to find other funding that could be made available for PCE to cover the deficiency or through another program which would reduce the need for PCE. / AEA Board Meeting August 15,2000 Meeting Minutes Page 4 In response to Board questions,Mr.Laufer said that there are various components of the legislation that impacted the Southeast Intertie.Under the legislation there was a loan for approximately $20 million appropriated for the construction of the Southeast Intertie.As part of HB 447,that money was reappropriated for other purposes.As part of the negotiation with the utilities,in order to gain their support for the reappropriation of that money,the MOU provided that the utilities would receive a $5 million credit against the purchase price for the sale representing the subsidy value for that low market interest loan.Part of our transaction with the utilities, provides that they receive a $5 million credit at closing to recognize that subsidy value.The agreement also provides that $5 million credit is required to be repaid by the utilities if the utilities do not have a finance plan that indicates demonstrated sources of financing for the intertie by a date certain,or if they have not commenced construction of the intertie within 10 years.In addition,the Authority has agreed to finance up to $5 million to be used by the utilities if they proceed with the intertie.The sale is not conditioned in any way upon the construction of the Southeast Intertie.- : Mr.Laufer also stated that the PCE Endowment Fund,by statute,is administered and invested by the Department of Revenue.The PCE and Rural Capitalization Fund,which is the annual fund that is used to make the payments for PCE,is currently administered by the Department of Revenue,but there is some discussion as to transferring that to AIDEA/AEA administration for efficiencies. Mr.Laufer said the sale would require all of the communities to approve because the sale contemplated by the legislation is that a joint utility organization be formed that includes all of the utilities.So if any particular utility did not approve that would be problematic and would not allow for the transfer to go forward.The other element that requires unanimous utility action is the requirement that the State be released from its ongoing obligation.That requires action by each of the individual utilities."If any utility were to opt out or not approve that would impede the entire sale. The Board requested copies of the final documents,laws,charts,and any other narrative or interpretations regarding the PCE program.Staff stated they would comply. e Bulk Fuel Program Mr.Laufer said the Denali Commission initiated its third party review of the bulk fuel consolidation program.This was primarily as a result of the fact that there were significant cost increases over the original estimates that had been provided for these projects by the Division of Energy.Based on discussions with the third party consultant,staff believes the review will indicate that there are several areas where changes should be made in the way projects are sized and originally designed,and also,certain management changes that should be made in the way these projects are administered.Staff feels fairly comfortable that the review will offer no surprises. For the current year,staff has been working with DCED,the Governor's Disaster Cabinet and Disaster Planning team to identify communities in the disaster area that may have difficulty getting their bulk fuel deliveries this fall.At this point,staff knows that the Bulk Fuel Revolving Loan Fund will be insufficient for the demand.However,there may be other programs within the BIA and the USDA that can help finance bulk fuel purchases.Staff will continue working with the Disaster Cabinet and DCED to identify the need for emergency funds and hopefully obtain those funds to make sure that all of the communities'bulk fuel needs for this coming winter are satisfied. AEA Board Meeting |"August 15,2000 Meeting Minutes Page 5 e Rural Energy Programs Overview Mr.Bruce Tiedeman (Acting Rural Energy Manager)stated staff is in the process of merging support functions into AIDEA such as accounting,personnel,and administration.Staff continues to focus on Rural Alaska and its energy related projects.He read the mission statement for the rural energy group stating it is "To assist in the development of safe,reliable,and efficient energy systems throughout Alaska that are financially viable and environmentally sound.” He explained the mission of rural energy is not just to build infrastructures and leave them but to also train operators.As of July 31%,staff had approximately 148 active projects with a value of approximately $70-$80 million which are in different levels of development from design to construction to closeout.The projects are based upon the communities'needs and requests. Once staff receives the request an assessment is done providing a historical background check which includes gathering information from the local entities.Staff then tries to match the projects with the different types of funding sources.The communities have an opportunity for input at all phases of the project. ; Mr.Tiedeman said staff endeavors to give as many local people an opportunity to work on those energy projects as possible.Staff also works with other contractors and entities in the communities,such as HUD.If HUD or other entities have an ongoing project in the community staff tries to piggy back some of our logistics with that entity.With this partnership approach staff tries to leverage as many funds as possible so no one entity takes the entire burden of the funding. Recently,staff received a "Good Neighbor”award,whichis a federally recognized award throughHUDforeffortsinthebulkfuelconsolidationupgrades. He said staff has been obtaining funding through the Denali Commission.The communities also contribute through whatever funding they have available.The communities contribute in-kind services such as the use of equipment,and they provide long term site control for wherever thatprojectisgoingtobe,and also the labor force. e Bulk Fuel Upgrade Program There are over a thousand different tanks in 200 different communities that are in varying degrees of code compliance,many of which have code violations.Staff has an MOU with the EPA,the Coast Guard,and DEC whereby if staff is working with a rural community they will not shut them down.They give staff time to help get the community up to code.Along with that code compliance,staff also provides the necessary manuals to keep the project in operation once upgraded. e Rural Power Systems Upgrade The Rural Power Systems Upgrade program includes the powerhouse and transmission systems. Diesel power is the major component of power generation in Rural Alaska.Many of the systems were built more than 15 years ago and are coming to the end of their useful life.Presently there are 34 active projects.The Denali Commission has funded ten of the projects in the amount of approximately $6 million. AEA Board Meeting "4 August 15,2000 Meeting Minutes Page 6 e Power Cost Equalization Currently,there are 97 utilities servicing approximately 190 communities,which has an impact on all of the programs.The biggest challenge with PCE is getting the utilities to report in a timely fashion. e Other programs Staff also deals with alternative energy development,which is where staff looks at other ways to provide cheap,reliable energy in Rural Alaska.It is hoped that AEA can replace some of the old diesel systems,but this is a long-term approach. The Rebuild America program is the energy conservation program.The key target areas for this program at this time are public facilities and fish processors. Staff normally has approximately 25-30 people being trained and certified each year for program updates regarding regulations,new forms,etc.The newest program is the Bulk Fuel Operators Training program.It has been funded through the Denali Commission and the STEP program.It is hoped that staff will train and certify approximately 10-15 operators this year.Staff is also in the process of identifying sites that need remediation training. The last category is emergencies.This is our response to Bulk Fuel Emergencies and Electrical Emergencies.This past year there have been five bulk fuel emergencies and thirteen electrical emergencies.Many of these are a result of oil spills,natural disasters,equipment failures,fires, etc.Historically,approximately 6-10 emergencies occur every year.A lot of them are due to extreme weather in Rural Alaska.For those with erosion problems staff tries to direct them through the HUD imminent threat grant program. Mr.Tiedeman stated that staff is looking forward to working as a unified group with AIDEA/AEA. e Statewide Energy Plan Mr.Laufer said the energy plan was split into regional plans.The first priority in the jointly funded energy plan is to focus on Rural Alaska.The plan is jointly funded between the Denali Commission,AIDEA,and USDA.At the current time,the committee is entering into the second major phase which is to do an assessment of all of the electric utility systems in Rural Alaska and get a handle on their condition and efficiency and the need for infrastructure investment.That assessment process is expected to be completed later this year.The next aspect of the plan is to get community input.A draft Rural Energy Plan is expected by the end of the year. In response to Board questions,Mr.Laufer said that it was not that it wasn't a priority of AIDEA to get a southeast energy plan done,but that all of the parties agreed that the time frames were such and the Denali Commission's efforts in Rural Alaska were such that the Denali Commission believed that a rural plan needed to come first.Senator Stevens was particularly looking for a rural plan first.In focusing our efforts,both the Denali Commission,AIDEA,and the USDA agreed as part of the joint arrangement for preparing this plan that the plan would be staged with Rural Alaska coming first and the other regions to follow. Mr.Loescher said that he objected to the Southeast Alaska energy plan not being a priority.He said Southeast Alaska is working to get the Four Dam Pool communities and the rural AEA Board Meeting 7s -August 15,2000 Meeting Minutes Page 7 communities to work together to come up with a consensus plan to determine where the interties need to go.He said that then they could sequence the funding requests to wherever they need to go.Southeastern Alaska is at a point where a discussion can be held with some reasonable database where progress can be made in the next six months.This will stabilize the approach at least on a consensus political basis so it can be tied with technical information in order to have a plan.If AIDEA does not participate,this is not going to happen.Mr.Loescher registered his concern for the record that staff is getting out of sequence with the people and a regional plan for Southeast Alaska can be accomplished among the communities.He requested reconsideration in, the process in going forward to make Southeast Alaska a priority in the plan. Mr.Laufer said staff has been in close contact with the Southeast Conference and the Southeast Intertie groups.At this point,it has been staged and the funding from the Denali Commission has been allocated thus far to working on the "Rural Plan.”To the extent the Authority were to proceed differently,staff will have to work with the Denali Commission and our other fundingpartnerstofigureouthowbesttoaccomplishthatinthetimeframesuggested. Mr.Loescher said he is uncomfortable with the Division of Energy restructuring and integration into AIDEA/AEA.Mr.Loescher requested a copy of the structure,programs,and budget of the merger on a current basis so that he could understand what it is that staff is doing.Mr.Laufer stated staff would provide materials to describe the budget,and programs of the rural energy group and the integration of the administrative functions with AIDEA/AEA's along with background material. 8.DIRECTOR COMMENTS A.Proposed Changes to AEA Regulations Mr.Laufer stated that staff would begin a review of the existing AEA regulations regarding the Power Project Fund and Bulk Fuel Revolving Loan Fund.A draft of the proposed regulation changes will be submitted to the Board for review and comment. 9.|BOARD COMMENTS There were no Board member comments. 10.ADJOURNMENT There being no objection and no further business of the Board,the meeting was adjourned at 12:50 p.m. at) Robert Poe,Jr.Secretary ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY /«>ALASKA@@E™=ENERGY AUTHORITY 813 WEST NORTHERN LIGHTS BLVD.«©ANCHORAGE,ALASKA 99503 ©907/269-3000 ©FAX 907/269-3044 TOLL FREE (ALASKA ONLY)888 /300-8534 MEMORANDUM TO:Board of Directors Alaska Energy Authority FROM:Robert Poe,Jr.RP Executive Director DATE:December 15,2000 SUBJECT:Financial Reports Included with your packet are the June 30,2000,Financial Statements,Letter to the Board of Directors,and Management Letter. Ms.Kathy Porterfield,Managing Partner of the Anchorage office of KPMG,LLP,will be in attendance at the meeting to discuss the reports and to answer any questions the Board members may have. h:allbjfifinance\vfw\financial reports ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Letter to the Board of Directors October 5,2000 eae 601 West Fifth Avenue Suite 700 Anchorage,AK 99501-2258 October 5,2000 The Board of Directors Alaska Energy Authority (a Component Unit of the State of Alaska) Dear Members: We have audited the financial statements of the Alaska Energy Authority (a Component Unit of the State of Alaska)(AEA)for the year ended June 30,2000,and have issued our report thereon dated October 5, 2000.Under generally accepted auditing standards,we are providing you with the following information related to the conduct of our audit. Our Responsibility Under Generally Accepted Auditing Standards Our audit of your financial statements as of and for the year ended June 30,2000 was planned and performed to obtain reasonable assurance about whether the financial statements are free of material misstatements,whether caused by error or fraud.In planning and performing our audit,we considered internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements.An audit does not include examining the effectiveness of internal control and does not provide assurance on internal control. Significant Accounting Policies The significant accounting policies used by AEA are described in note 2 to the financial statements.No new accounting policies were adopted in fiscal year 2000. Significant Transactions Pursuant to legislation effective July 1,1999,rural energy programs previously administered by the former Department of Community and Regional Affairs,Division of Energy,were transferred to AEA for administration,as part of a larger reorganization of state agencies.Five general energy programs comprising more than twenty smaller programs were moved to AEA.Rural energy programs were originally part of AEA prior to the reorganization that occurred in 1993.The 1999 reorganization resulted in a residual equity transfer in of $399,320,000.During the year,the Authority transferred $55,603,000 to the Railbelt Energy Fund and to the State General Fund;the transfers were recorded as residual equity transfers out. Management Judgments and Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based upon management's current judgments.Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management's current judgments.We evaluated the key factors and assumptions used to develop management's judgments and estimates in determining that amountsrecordedwerereasonableinrelationtothefinancialstatementsofAEAtakenasawhole. a 'a KPMG LLP KPMG LLP.2 U.S.lined liability partnership,isamemberofKPMGIniernational,8 Swiss association. mana The Board of Directors Alaska Energy Authority (a Component Unit of the State of Alaska) October 5,2000 Page 2 The allowances for loan and lease losses represent management's judgment as to the amount required to absorb potential losses in the loan and lease portfolio.The factors used by management to determine the allowances include historical loss experience,individual delinquencies,existing economic conditions and other factors.Management's estimates of potential loss are charged to operating expense through provisions for loan or lease losses. AEA's development projects are carried at cost,adjusted for permanent impairments of value.AEA follows Statement of Financial Accounting Standards No.121 (SFAS No.121),Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.This statement requires recognition of impairment losses for long-lived assets whenever events or changes in circumstances result in the carrying amount of the assets exceeding the sum of the expected future cash flows associated with such assets.In accordance with SFAS No.121,the Authority wrote down its investment in the Four Dam Pool Project by $41,358,000 during the year ended June 30,2000. Significant Audit Adjustments We did not propose corrections of the financial statements that could,in our judgment,either individually or in the aggregate,have a significant effect on AEA's financial reporting process. Disagreements with Management There were no disagreements with management on financial accounting and reporting matters that,if not satisfactorily resolved,would have caused a modification of our report on AEA's 2000 financial reporting. Consultation with Other Accountants To the best of our knowledge management has not consulted with or obtained opinions,written or oral, from other independent accountants during the past year that were subject to the requirements of Statement on Auditing Standards No.50,Reports on the Application ofAccounting Principles. Major Issues Discussed with Management Prior to Retention We generally discuss a variety of matters,including the application of accounting principles and auditing standards,with management prior to retention each year as AEA's auditors.However,these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Difficulties Encountered in Performing the Audit We encountered no difficulties in dealing with management in performing our audit. xk KOR OK This information is intended solely for the information and use of the Board of Directors and is not intended to be used and should not be used by anyone other than these specified parties. Very truly yours, KPIG,LEP ALASKA ENERGY AUTHORITY Management Letter October 5,2000 LKEPAYKE 601 West Fifth Avenue Suite 700 Anchorage,AK 99501-2258 October 5,2000 The Board of Directors Alaska Energy Authority Dear Members: We have audited the financial statements of Alaska Energy Authority (the Authority or AEA)for the year ended June 30,2000,and have issued our report thereon dated October 5,2000.In planning and performing our audit of the financial statements of the Authority we considered internal control in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements. An audit does not include examining the effectiveness of internal control and does not provide assurance on internal control.We have not considered internal control since the date of our report. A material weakness is a condition in which the design or operation of specific internal control components does not reduce to a relatively low level the risk that errors or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions.Our consideration of internal control would not necessarily disclose all matters in internal control that might be material weaknesses under standards established by the American Institute of Certified Public Accountants.However,we noted no matters involving internal control and its operation that we consider to be material weaknesses as defined above. The comments and recommendations which follow have been discussed with the appropriate members of management,and are intended solely to improve internal control or result in other operating efficiencies and are summarized as follows: Fiscal Management of Rural Energy Programs During the year,the Authority underwent several significant changes,primarily due to the transfer of responsibility for administration of the rural energy programs from the Department of Community and Regional Affairs,Division of Energy (Division).The responsibility for five general programs was transferred to AEA.These programs consist of managing various federal awards,bulk fuel upgrade construction projects,loan programs and other rural energy operations.The Authority initially retained the organizational structure and operational processes in place at the Division on July 1,1999.These processes did not necessarily provide for prudent and efficient fiscal management.AEA is continuing an ongoing evaluation of how best to manage these programs,and certain changes are already in process.The following is a description of improvement opportunities,as well as our recommendations: e The Division utilized a bookkeeping firm to provide accounting services for projects managed on behalf of communities.Currently,bank accounts are established by project for each funding source.The number of accounts exceeded 100 as of June 30,2000.This process makes it difficult to obtain accurate information with regards to overall project costs and also is extremely inefficient since each bank account must be reconciled on a monthly basis. 4 KPMG LLP KPMG LLP.a US.limited liability partnership,is-a memiber of KPMG Intarnational,a Swiss association. mana The Board of Directors Alaska Energy Authority October 5,2000 Page 2 We recommend that the Authority consolidate its accounting function,and develop a project managenient system in order to simplify this process,become more efficient and to provide better reporting of the costs of the rural energy programs. The rural energy programs are subject to various federal regulations,including Office of Management and Budget (OMB)Circular A-133,Audits of States,Local Governments,and Non- Profit Organizations (OMB A-133)and OMB Circular A-87,Cost Principles for State,Local and Indian Tribal Governments (OMB A-87).These regulations specify how recipients of federal funding can recover indirect costs.If the principles for cost recovery are not followed,the federal government can ask for return of funds advanced to the Authority.The Division charged general and administrative costs to federal awards based on budgeted amounts,which conflicts with the applicable OMB cost circulars. We recommend that the Authority implement a more refined time management system which encompasses an approved methodology for allocating payroll costs to federal awards or undergo an indirect cost rate study. The Authority receives federal funding that is then passed on to other entities,known as subrecipients.Federal regulation requires that the Authority comply with specific subrecipient monitoring procedures to ensure that the subrecipient spends the federal funds in accordance with terms of the grant agreements.In particular,the Authority is responsible for ensuring that the subrecipients obtain the necessary federal single audits required by OMB A-133,as applicable. The Division did not have a procedure in place to ensure that all such audits were completed. We recommend that AEA ensure that its internal processes include appropriate monitoring of subrecipients as required by federal regulations. Many projects utilize several funding sources for construction of the projects.In order to limit the amount of restricted funds used on these projects,the Division has historically changed funding sources for the specific projects.These transfers make it extremely difficult to monitor status of project expenditure versus funding available at any particular point in time. We recommend that the Authority limit the amount of changes made to and transfers between the various funding sources.Any transfers which are made should be approved by a responsible individual.At the conclusion of a project,a complete reconciliation of expenditures versus funding source should be performed to ensure that restrictedfunds have been appropriately spent, and that available unrestrictedfunds can be transferred to another eligible project. The grants negotiated by the Division historically did not permit earning of interest. We recommend that in future grant agreements,the Authority negotiate the ability to earn interest to better leverage the funding it receives. The Division did not have a process in place to analyze projects at their completion to ensure that all state appropriations and grants had been properly spent on the projects contemplated by the original appropriation or grant.Given the Division's propensity to transfer funding sources among projects,the likelihood of such errors is magnified. We agree with the Authority's plan to implement a process to analyze all projects at completion to ensure that only approvedfunding sources have been utilized. The Board of Directors Alaska Energy Authority October 5,2000 Page 3 Project Management Agreements As part of the Bulk Fuel Upgrade programs,the Authority signs Project Management Agreements with the various cities to administer the grants received from the U.S.Department of Housing and Urban Development.These agreements require that the Authority be responsible for,among other duties,to obtain single audits as required under OMB A-133.Through our discussion with management,we determined that these duties were not being performed,and that single audits were,in some cases,several years behind. We understand that the Authority has engaged auditors to complete all the necessary audits for the programs,in order to comply with the project management agreements.We further recommend that in the future,the Authority eliminate this requirement from the agreements and place the responsibility of obtaining single audits back on the communities receiving the federal funding. Financial Reporting Process Rural energy project and accounting data is currently maintained on 3 different systems.AKSAS is currently not capable of accounting for the costs of projects managed by the Authority pursuant to its project management agreements,which is a key operational issue. We agree with the Authority's decision to identify a system that will fulfill all of its needs.We recommend that the Authority move all Rural Energy Group funds to one system in order to facilitate the financial management and reporting process. Our audit procedures are designed primarily to enable us to form an opinion on the financial statements, and therefore may not bring to light all weaknesses in policies or procedures that may exist.We aim, however,to use our knowledge of the Authority's organization gained during our work to make comments and suggestions that we hope will be useful to you. We would be pleased to discuss these comments and recommendations with you at any time. **KOK* This report is intended solely for the information and use of the Board of Directors and management and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, KPIMc&LEP ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Financial Statements and Schedules June 30,2000 (With Independent Auditors'Report Thereon) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Table of Contents Page Independent Auditors'Report ] Balance Sheet 2 Statement of Revenues and Expenses 3 Statements of Changes in Fund Equity 4 Statements of Cash Flows 5 Notes to Financial Statements 6-19 Schedules 1 Schedule of Bradley Lake Hydroelectric Project Trust Account Activities 20 2 Schedule of Projects -Balance Sheet 21 3 Schedule of Projects -Revenues and Expenses 22 ) KEPHMKE 601 West Fifth Avenue Suite 700 Anchorage,AK 99501-2258 Independent Auditors'Report The Board of Directors Alaska Energy Authority (a Component Unit of the State of Alaska): We have audited the accompanying balance sheet of Alaska Energy Authority (a Component Unit of the State of Alaska)as of June 30,2000,and the related statement of revenues and expenses,changes in fund equity,and cash flows for the year then ended.These financial statements are the responsibility of Alaska Energy Authority's management.Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion. In our opinion,the financial statements referred to above present fairly,in all material respects,the financial position of Alaska Energy Authority (a Component Unit of the State of Alaska)as of June 30, 2000,and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The supplementary information included in the schedule is presented for the purpose of additional analysis and is not a required part of the basic financial statements.Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and,in our opinion,is fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPIc LEP October 5,2000 KPMG LLP.KPMG LLP a US.limited liability partnership,is a member of KPMG International,a Swiss association. ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Balance Sheet June 30,2000 (Stated in Thousands) Assets Property,plant and equipment (notes 4 and 5) Less accumulated depreciation Net property,plant and equipment Other assets -cash and investments -restricted (note 3) Current assets: Due from State of Alaska Operating revenue receivable Accrued interest receivable Total current assets Loans receivable,net of allowance (note 7) Grants receivable Fund Equity and Liabilities Fund equity: Contributed capital Accumulated deficit Total fund equity Long-term debt,net of current portion (note 6): Bonds payable Arbitrage interest payable Total long-term debt Current liabilities: Accounts payable Grants payable Current portion of bonds payable (note 6) Other accrued interest Deferred revenue Retainage payable Other liabilities Total current liabilities See accompanying notes to financial statements. $890,209 310,214 579,995 146,177 46,432 13,774 1,244 61,450 24,035 10,004 $821,661 #F963,518 (316,713) 646,805 142,387 149 142,536 9,450 11,540 4,180 3,246 444 103 3,357 32,320 $821,661 ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Statement of Revenues and Expenses Year ended June 30,2000 (Stated in Thousands) Revenues: Revenue from operating plants $25,259 Federal grants 22,284 Operating transfer from State of Alaska 9,163 State of Alaska appropriations 7,020 Investment income 5,667 Receipts from other agencies 1,239 Other revenue 69 Total revenues 70,701 Expenses: Impairment loss (note 5)41,358 Grants and projects 26,075 Depreciation 22,974 Power cost equalization grants 14,583 Interest 10,017 Plant operating 6,567 General and administrative 2,685 Provision for loan losses (note 7)1,093 Total expenses 125,352 Deficiency of revenues over expenses $(54,651) See accompanying notes to financial statements. ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Statement of Changes in Fund Equity Year ended June 30,2000 (Stated in Thousands) Accumulated Contributed Total Deficit Capital Fund Equity Balance at June 30,1999 $(262,062)619,80]357,739 Residual equity transfers in (note 1)-399,320 399,320 Residual equity transfers out (note 1)-(55,603)(55,603) Deficiency of revenues over expenses (54.651)-(54,651) Balance at June 30,2000 $(316,713)963,518 646.805 See accompanying notes to financial statements. ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Statement of Cash Flows Year ended June 30,2000 (Stated in Thousands) Reconciliation of deficiency of revenues over expenses to net cash provided by operating activities: Deficiency of revenues over expenses Adjustments to reconcile deficiency of revenues over expenses to net cash provided by operating activities: Depreciation Provision for loan losses (note 7) Impairment loss (note 5) Amortization of deferred interest and bond discount Amortization of bond issuance costs Bond interest expense Investment income Changes in assets and liabilities: Increase in due from State and other agencies Increase in grants receivable Increase in loans receivable Decrease in operating revenue receivable Increase in deferred revenue Increase in grants payable Decrease in accounts payable Decrease in other liabilities Net cash provided by operating activities Cash flows from noncapital financing activities - Residual equity transfer Cash flows from capital and related financing activities: Repayment of bonds Interest paid on borrowings Construction of capita!projects Net cash used in capital and related financing activities Cash flows from investing activities: Net increase in restricted cash and investments Interest received from Bradley Lake Hydroelectric Project investments Interest received from other investments Net cash provided by investing activities Cash and investments at beginning of year Cash and investments at end of year See accompanying notes to financial statements. $(54,651) 22,974 1,093 41,358 1,475 134 8,408 (5,667) (1,244) (7,773) (2,428) (3,882) 289 11,341 (413) (3,625) 7,389 86,908 (4,874) (7,310) (56) (12,240) (87,479) 1,952 3,470 (82,057) (1) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 Organization and Operations The Alaska Energy Authority (AEA)was created by the Alaska State Legislature in 1976.AEA is a public corporation and a component unit of the State of Alaska (State).AEA's mission is to promote,develop, and advance the general prosperity and economic welfare of Alaskans by providing a means to operate and maintain existing power projects that tap Alaska's natural resources to achieve the lowest reasonable consumer power costs. Throughout the 1980's,AEA worked to develop the State's energy resources as a key element in diversifying Alaska's economy.A number of large-scale projects were constructed.Today,AEA's six hydroelectric projects have an installed capacity of 164 megawatts,and the Alaska Intertie's 170 miles of transmission line link Interior Alaska with the cheaper energy available in the Southcentral portion of the State. Pursuant to statute,on August 12,1993,the Board of Directors of the Alaska Industrial Development and Export Authority (AIDEA),a public corporation and a political subdivision of the State,became the Board of Directors of AEA.Concurrently,the Executive Director of AIDEA was also appointed as Executive Director of AEA.The corporate structure of AEA was retained but the ability to construct and acquire energy projects was eliminated.AEA retained its operating assets including the Four Dam Pool (Solomon Gulch,Swan Lake,Terror Lake and Lake Tyee Hydroelectric Projects),the Bradley Lake Hydroelectric Project,the Alaska Intertie and the Larsen Bay Hydroelectric Project.The intent of the legislation was that ongoing operation of the operating assets be assumed by the electric utility companies that use or purchase power from the assets with oversight responsibility retained by AEA;this has occurred to the extent possible. Pursuant to legislation effective July 1,1999,rural energy programs previously administered by the former Department of Community and Regional Affairs,Division of Energy,were transferred to AEA for administration,as part of a larger reorganization of state agencies.Five general energy programs comprising more than twenty smaller programs were moved to AEA.Rural energy programs were originally part of AEA prior to the reorganization that occurred in 1993.The 1999 reorganization resulted in a residual equity transfer in of $399,320,000.During the year,the Authority transferred $55,603,000 to the Railbelt Energy Fund and to the State General Fund;the transfers were recorded as residual equity transfers out. The following is a description of AEA's existing projects: (a)Bradley Lake Hydroelectric Project The project has installed capability of 126 megawatts and transmits its power to the State's main power grid via two parallel 20-mile transmission lines.The project,which cost in excess of $300 million,went into commercial operation in 1991.The project is now operated by Homer Electric Association under contract with AEA.Bradley Lake serves Alaska's Railbelt from Homer to Fairbanks as well as the Delta Junction area. 6 (Continued) (2) (b) (c) (d) (e) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 Four Dam Pool Project The Solomon Gulch,Swan Lake,Terror Lake and Lake Tyee Hydroelectric projects,collectively known as the Four Dam Pool,came on line in the 1980's and serve,respectively,the communities of Valdez and Glennallen,Ketchikan,Kodiak,and Petersburg and Wrangell. The project gained its name from the fact that all costs are pooled,with the same kwh rate charged for electricity drawn from any one of the four projects.The local utilities are responsible for day-to- day operation of the projects.(See note 5) Alaska Intertie The 170-mile,345-kilovolt transmission line interconnects the power distribution systems of Anchorage and Fairbanks.The Alaska Intertie allows Golden Valley Electric Association in Fairbanks to purchase electricity produced with lower cost energy,such as natural gas and hydroelectric,from the Anchorage and Kenai Peninsula utilities.The Alaska Intertie reduces the number of black/brownouts throughout the system.Operations and maintenance duties are overseen by the Intertie Operating Committee. Larsen Bay Hydroelectric Project The 475-kilowatt project went into commercial operation in mid-1991.In addition to producing electricity for this isolated Kodiak Island community,the project replaced the City of Larsen Bay's old water supply system and provides a better source of water with reduced maintenance and improved water quality.The City of Larsen Bay operates the project.(See note 6) Rural Energy Programs The rural energy programs of the Authority include Bulk Fuel Storage Upgrades,Rural Power System Upgrades,Power Cost Equalization,Alternative Energy,Utility Training and Technical Assistance,two active loan programs funded from the Bulk Fuel Revolving Loan Fund and the Power Project Fund and one inactive loan program. Summary of Significant Accounting Policies (a)Basis ofAccounting -Enterprise Fund Accounting The accounts of AEA are organized as an Enterprise Fund.Accordingly,the financial activities of AEA are recorded using the accrual basis of accounting,whereby revenues are recorded when earned and expenses are recorded when goods or services are received or the related liability is incurred. Statement No.20 of the Government Accounting Standards Board (GASB),Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting,provides two options for reporting proprietary fund activities (including component units using proprietary fund accounting).AEA has elected to apply all applicable GASB pronouncements and all FASB Statements and Interpretations,Accounting Principles Board 7 (Continued) (b) () (d) (e) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 Opinions and Accounting Research Bulletins issued on or before November 30,1989,unless they conflict with or contradict GASB pronouncements. Property,Plant and Equipment Property,plant and equipment are stated at cost and depreciation is charged to operations by use of the straight-line method over their estimated useful lives.The estimated economic lives of the assets are as follows: Utility plant Life in years Intangible 30-50 Production 30-50 Transmission 20-40 General 5-30 For hydroelectric plants financed through tax-exempt borrowings,interest costs on the borrowings, less any interest earned on the related investments acquired with proceeds of the borrowings are capitalized from the date of the borrowing until the assets are placed in service.Ordinary repairs and maintenance are expensed as incurred. The Authority follows Statement of Financial Accounting Standards No.121 (SFAS No.121), Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. This statement requires recognition of impairment losses for long-lived assets whenever events or changes in circumstances result in the carrying amount of the assets exceeding the sum of the expected future cash flows associated with such assets. Cash and Investments All of AEA's cash and investments are restricted and are not considered to be cash equivalents for purposes of preparing the statement of cash flows. AEA's marketable securities are reported at fair value in the financial statements.Unrealized gains and losses are reported as components of the deficiency of revenues over expenses.Fair values are obtained from independent sources. Contributed Capital Funds received from federal,State or other sources for purposes of acquisition of property,plant and equipment are accounted for as contributed capital. Income Taxes The Internal Revenue Code provides that gross income for tax purposes does not include income accruing to a State or territory or any political subdivision thereof which is derived from the exercise of any essential governmental function or from any public utility.AEA is a political subdivision of the State performing an essential governmental function and is therefore exempt from State and federal income taxes. 8 (Continued) (3) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 (=Grant Revenue Recognition The Authority recognizes grant revenue under the provisions of Governmental Accounting Standards Board Statement No.33,Accounting and Financial Reporting for Nonexchange Transactions,whereby, revenue is recognized when all applicable eligibility requirements,including time requirements,are met. Cash and Investments Pursuant to various agreements relating to its operation,AEA has established funds to account for assets restricted to construction,operation and financing activities. The restricted cash and investments are held in trust accounts for the following activities as of June 30 (stated in thousands): Bradley Lake Hydroelectric Project: Capital reserve fund Debt service fund Renewal and contingency fund Unallocated construction fund Excess earnings fund Revenue fund Operating reserve fund Operating fund Cost of issuance Subtotal Loan funds Four Dam Pool self-insurance fund Southeast Energy fund Power Cost Equalization and Rural Electric Capitalization fund Rural!Energy Operation fund Four Dam Pool self-help fund Power Development Fund Alaska Intertie operations fund Four Dam Pool renewal and replacement revolving loan fund Electric Service Extension fund Larsen Bay Hydroelectric Project funds Four Dam Pool Transfer fund Total cash and investments $12,834 7,007 5,000 2,069 129 158 535 998 129 28,859 69,002 19,009 12,079 9,217 3,265 2,640 1,169 597 218 84 37 1 $146,177 (Continued) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 AEA's cash and investments are categorized below to give an indication of risk assumed by AEA at year- end.Category |includes investments that are insured,registered or collateralized with securities held by AEA or its agents in AEA's name.Category 2 includes uninsured and unregistered investments or collateralized investments,with securities held by the pledging financial institution's trust department in AEA's name.Category 3 includes uninsured and unregistered investments for which the securities are held by the counter party,or by its trust department or agent but not in AEA's name. (Stated in Thousands) Fair value at Category 1 Category 2 Category 3 June 30,2000 U.S.Treasury and Agency Securities $16,351 --16,351 Repurchase agreements --_-14,001 14,001 Cash with State Treasury -_-79,646 79,646 Other investments -_-26,791 9,388 36,179 $16.351 26,791 103.035 146,177 (4)Property,Plant and Equipment A summary of property,plant and equipment and related accumulated depreciation is as follows at June 30, 2000 (stated in thousands): Intangible $2,989 Production 581,685 Transmission 339,177 General 7,716 931,567 Less:Four Dam Pool impairment loss (note 5)(41,358) Less:Accumulated depreciation (310,214) Net property,plant and equipment $579,995 (5)Four Dam Pool Sale Pursuant to ch.60 SLA 2000 (the Legislation),AEA has been authorized to sell the Four Dam Pool Projects to an entity to be formed by the City of Ketchikan,the City of Wrangell,the City of Petersburg, Copper Valley Electric Association,Inc.and Kodiak Electric Association,Inc.Pursuant to the Legislation, AEA may sell the Projects pursuant to the terms of a Memorandum of Understanding between AEA and the Purchasing Utilities dated April 11,2000,as amended in accordance with the Legislation (the MOU). Pursuant to the MOU there are various conditions that must be satisfied prior to consummation of the sale. Assuming all conditions can be satisfied,the parties anticipate the sale of the Projects to be consummated on or before December 31,2001.Pursuant to ch.75 SLA 2000,the proceeds of the sale along with certain other project funds have been appropriated to the power cost equalization and rural electric capitalization 10 (Continued) (6) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 fund or the power cost equalization endowment fund established under the Legislation.In accordance with Statement of Financial Accounting Standard No.121,the Authority wrote down its investment in the Four Dam Pool Project by $41,358,000 during the year ended June 30,2000. Long-term Debt Following is a summary of long-term debt at June 30,2000 (stated in thousands): (a) Bradley Lake Power: Revenue Bonds,First Series (a)$9,910 Revenue Bonds,Second Series (a)13,055 Revenue Refunding Bonds,Third Series (a)59,485 Revenue Refunding Bonds,Fourth Series (a)47,710 Revenue Refunding Bonds,Fifth Series (a)30,640 Larsen Bay Fixed Rate Revenue Bonds (b)625 Arbitrage interest payable (c)149 Less -bond discount and deferred interest (14,858) 146,716 Less -current portion of bonds payable (4,180) Total long-term debt $142,536 AEA issued the Power Revenue Bonds,First and Second Series (Bradley Lake Bonds),in September 1989 and August 1990,respectively,for the long term financing of the construction costs of the Bradley Lake Hydroelectric Project and refunded AEA's Variable Rate Demand Bonds which were issued in November 1985 to provide interim financing of the project.AEA issued the Power Revenue Refunding Bonds,Third and Fifth Series in April 1999 to refund a portion of the First Series Bonds and to provide costs of issuance.AEA issued the Power Revenue Refunding Bonds, Fourth Series in April 2000 to refund a portion of the Second Series Bonds and to provide costs of issuance (see below).All of the revenues derived by AEA from the operation of the project and all moneys,securities and funds (except the excess earnings fund),including a capital reserve fund,held or set aside are pledged and assigned to secure the payment of principal,redemption premium,if any, and interest on the bonds.No other revenues of AEA are pledged as security for the payment of the bonds.AEA has covenanted to notify the State Legislature of any failure to maintain the capital reserve fund at its required level.The bonds are further secured by bond insurance.AEA collects from each power purchaser a percentage share of annual project costs.The outstanding Bradley Lake Bonds mature annually each July 1 through the year 2021 with interest rates ranging from 5% to 6.9%. 11 (Continued) (5) (c) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 On April 4,2000,AEA issued $47,710,000 of Power Revenue Refunding Bonds,Fourth Series,for the purpose of refunding $46,235,000 of the Second Series Bonds.The refunded Second Series Bonds were called on July 1,2000.The refunding resulted in aggregate debt service payments over the next twenty-two years in a total amount approximately $6,400,000 less than the debt service payment which would be due on the refunded bonds.There was an economic gain of approximately $3,500,000. Larsen Bay Fixed Rate Revenue Bonds were issued May 1991 for the long term financing of a portion of the construction costs of the Larsen Bay Hydroelectric Project.All of the revenues derived by AEA from the operation of the project are pledged and assigned to secure payment of the bonds.No other revenues of AEA are pledged as security for the payment of the bonds.The bonds are further secured by a letter of credit.The bonds mature annually each April 1 through the year 2011 with interest rates ranging from 7.3%to 7.75%. An event of default exists under the terms of certain agreements entered into in conjunction with the issuance of the Larsen Bay Bonds.The City of Larsen Bay has failed to pay certain costs relating to the Larsen Bay Hydroelectric Project.As the bonds are supported by a letter of credit,no bondholder loss of principal or interest is anticipated.AEA is working with the City of Larsen Bay and the issuer of the letter of credit in an effort to resolve the default. The arbitrage interest payable is due to the Internal Revenue Service for the excess of investment income on the proceeds of AEA's tax exempt bonds over the related interest expense in accordance with Section 148 of the Internal Revenue Code of 1986.The accumulated arbitrage interest payable amount is computed each year,and the amount is first due after the end of the fifth bond year and every five years thereafter.AEA maintains a separate account with the trustee and each year sets aside a sufficient amount to satisfy the liability. 12 (Continued) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 Scheduled maturities of long-term debt as of June 30,2000 are as follows (stated in thousands): Bradley Lake Power Revenue Bonds Total Larsen Bay First Second Third Fourth Fifth Bradley Revenue Maturity date Series Series Series Series Series Lake Bonds Total 2001 $-1,535 2,605 -__-4,140 40 4,180 2002 -_-2,740 1,855 -4,595 40 4,635 2003 --_2,875 1,950 -4,825 45 4,870 2004 -_-_3,030 2,055 -_5,085 45 5,130 2005 --_3,200 2,170 -5,370 50 5,420 2006-2010 9,810 9,215 7,315 2,785 -_29,125 325 29,450 2011-2015 -2,305 21,485 10,875 -_34,665 80 34,745 2016-2020 50 -_16,235 17,480 15,490 49,255 -49,255 2021-2025 50 -__8,540 15,150 23,740 -23,740 $9,910 13,055 59,485 47,710 30,640 160,800 625 161,425 Interest expense on borrowings totaled $10,016,987 for the year ended June 30,2000. debt ofthe State. 13 Obligations issued are not deemed to constitute a (Continued) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 In addition,the Authority has participated in the following debt agreements: Other Debt -In 1982,AEA assumed $44,858,858 of 5%mortgage notes payable which require quarterly principal and interest payments to the Rural Utilities Service (RUS)in connection with the Solomon Gulch Hydroelectric Project.Concurrent with the assumption,AEA deposited with a trustee Treasury notes sufficient to satisfy and provide for timely repayment of all principal and interest due on the assumed RUS loans.Accordingly,the loans and related trust assets are not included in the financial statements of AEA.At June 30,2000,the unpaid principal balance of the notes was $29,134,000 and the trust assets had a fair value of $27,266,477. Conduit Financing -City and Borough of Sitka -Utility Revenue Refunding Bonds,Series 1997 and Utility Revenue Bonds,Series 1992 -In May 1992,AEA issued $56,890,000 of tax-exempt bonds that allowed the City and Borough of Sitka (Sitka)to refinance its 1979 municipal bonds,resulting in significant debt service savings to Sitka.In November 1997,AEA issued $22,080,000 of tax-exempt bonds to advance refund and defease $20,145,000 of the Series 1992 bonds (collectively with the Series 1992 bonds,the Sitka Bonds).The Sitka Bonds are not included in these financial statements. As of June 30,2000,the outstanding balance was $51,055,000. The Sitka Bonds are special obligations of AEA secured under a trust indenture by and between AEA and U.S.Bank Trust National Association,as trustee.The Sitka Bonds are payable solely from the sources provided under the trust indenture.They are equally and ratably secured by a pledge and assignment of the municipal revenue bonds of Sitka held by AEA under the trust indenture,the obligation of Sitka to make payments under its loan agreement with AEA and the money and securities held under the trust indenture,including a capital reserve fund.AEA has covenanted to notify the State Legislature of any failure to maintain the capital reserve fund at its required level. The bonds are further secured by bond insurance. The Sitka Bonds do not constitute an indebtedness or other liability of the State and do not directly, indirectly or contingently obligate the State or any political subdivision thereof to levy any form of taxation for the payment of the bonds.Neither the full faith and credit nor the taxing power of the State or Sitka is pledged for the payment of the Sitka Bonds. 14 (Continued) (7) (8) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 Loans The Authority administers the Power Project Loan Program,the Rural Electrification Revolving Loan Fund and the Bulk Fuel Revolving Loan Fund.Loans outstanding at year-end are classified as follows (stated in thousands): Number Amount Power Project Loan Program 33.0 $21,712 Rural Electrification Revolving Loan Fund 1]2,466 Bulk Fuel Revolving Loan Fund 43 1,170 87 25,348 Less:Allowance for !oan losses (1,313) $24,035 Loans which are more than 90 days past due on which the accrual of interest has been discontinued amounted to $1,543,524 at June 30,2000. An analysis of changes in the allowance for loan losses for the year ended June 30,2000 follows (stated in thousands): Balance at beginning of year $- Residual equity transfer 220 Provision for loan losses 1,093 $1,313 Pension Plan Effective July 1,1997,AEA adopted the provisions of Governmental Accounting Standards Board Statement No.27 (GASB 27),Accounting for Pensions by State and Local Governmental Employers. There was no impact on the financial statements as a result of GASB 27. (a)Plan Description AEA contributes to the State of Alaska Public Employees'Retirement System (PERS),a defined benefit,agent multiple-employer public employee retirement system which was established and is administered by the State to provide pension,post-employment healthcare,death and disability benefits to eligible employees.Benefit and contribution provisions are established by State law and may be amended by the State Legislature. 15 (Continued) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 Each fiscal year,PERS issues a publicly available financial report that includes financial statements and required supplementary information.That report may be obtained by writing to the State of Alaska,Department of Administration,Division of Retirement and Benefits,P.O.Box 110203, Juneau,Alaska,99811-0203 or by calling (907)465-4460. (b)Funding Policy and Annual Pension Cost Employee contribution rates are 6.75%for employees,as required by State statute.The funding policy for PERS provides for periodic employer contributions at actuarially determined rates that, expressed as a percentage of annual covered payroll,are sufficient to accumulate sufficient assets to pay benefits when due.AEA's rate for 2000 was 8.13%. AEA's annual pension cost for the current year and the related information is as follows: Contribution rates: Employee 6.75% Employer 8.13% Annual pension cost $177,200 Contributions made $177,200 Actuarial valuation date June 30,1997 Actuarial cost method Projected unit credit Amortization method Level dollar,open Amortization period Rolling 25 years Actuarial assumptions: Inflation rate 4.00% Investment return 8.25% Projected salary increase Inflation rate 4.00% Productivity and merit 1.50% Health cost trend 5.50% In the current year,AEA determined,in accordance with provisions of GASB 27,that no pension liability (asset)existed to PERS and there was no previously reported liability (asset)to PERS. (9)Risk Management AEA is exposed to various risks of loss.AEA obtains coverage for its risks through the purchase of commercial insurance,participation in the State Risk Management Pool and the establishment of self- insurance plans. (a)General Liability -Watercraft and Aviation All risks are covered by the State insurance plan through an annual charge assessed by the State Division of Risk Management and payroll markup. 16 (Continued) (b) (c) (d) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 Property 1.Four Dam Pool Facilities: The Four Dam Pool (FDP)property risks are covered by commercial insurance purchased through the State Division of Risk Management for losses in excess of $10,000,000 up to $60,000,000.The risk of losses for the first $10,000,000 is retained.However,AEA maintains an insurance fund to cover the self retained risks and other noninsurable risks,as well as a $10,000,000 line of credit secured by the insurance fund for this purpose.(See note 11) AEA's self-insurance for the FDP is currently funded through:(a)an annual insurance premium payment from the FDP project management committee,(b)investment revenue from investment of the insurance fund and (c)certain interruptible power sales revenues. 2.Alaska Intertie: The utilities participating in the Alaska Intertie operating agreement retain the property risk associated with the Alaska Intertie. 3.Bradley Lake and Larsen Bay Hydroelectric Projects: The risks are covered by commercial insurance purchased through the State Division of Risk Management,and the self-insured retentions are the responsibility of the respective projects from operating funds. Boiler and Machinery These risks are covered by commercial insurance purchased through the State Division of Risk Management and a private carrier. Additionally,utilities benefiting from the use of the facilities owned by AEA participate in the responsibility for deductibles and self insured retentions under the terms of the respective agreements. Workers Compensation Insurance AEA participates in the State Risk Management Pool.The risks are transferred to the pool and the premium is charged to AEA based on payroll expenditures. 17 (Continued) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 (10)Related Parties (a) (b) (c) (d) Alaska Industrial Development and Export Authority Pursuant to understandings and agreements between AIDEA and AEA,AIDEA provides administrative,treasury,personnel,legal,data processing,communications,and other services to AEA. Four Dam Pool Project Management Committee Effective October 28,1985,AEA entered into a long-term power sales agreement with entities purchasing electric power from the FDP Project.Pursuant to the agreement,a Project Management Committee (PMC)was formed.The PMC is comprised of a representative from AEA and each of the power purchasers.The participating power purchasers make monthly payments to the PMC,net of each purchaser's operating costs associated with the respective FDP facility,for the power purchaser's share of total estimated annual costs,including a "debt service component,”at a set price for kilowatt hours purchased each month,with an annual settlement to adjust the payments to actual cost.The PMC makes monthly payments to AEA for a fixed annual administrative fee and to reimburse operating and maintenance costs incurred by AEA.The PMC makes annual payments to AEA for the debt service component of the wholesale power rate and for insurance. Alaska Intertie Operating Committee Effective May 1,1986,AEA entered into an agreement with utilities using the Alaska Intertie for wheeling of electrical power.Pursuant to the agreement,the Intertie Operating Committee (IOC) was established to manage the system.The IOC is comprised of a representative from AEA and each of the utilities.AEA is to be reimbursed for operation and maintenance costs on a monthly basis with an annual settlement to adjust the payments to actual costs.The agreement may be terminated by mutual agreement of the participants. Bradley Lake Project Management Committee Effective December 7,1987,AEA entered into a power sales agreement with entities purchasing electric power produced by the Bradley Lake Hydroelectric Project.Pursuant to the agreement,a PMC was formed.The PMC is comprised of a representative from AEA and each of the power purchasers.The participating power purchasers make monthly payments directly to the bond trustee based on their respective percentage share of the estimated annual project costs,including debt service,for each fiscal year with an annual settlement to adjust the payments to actual costs,which includes a fixed annual administrative fee to AEA. 18 (Continued) ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Notes to Financial Statements June 30,2000 (11)Commitments and Contingencies (12) (a)| (b) (c) Litigation AEA,in the normal course of business,is involved in various claims and pending litigation.The State Department of Law manages all pending litigation of AEA,and any liability arising from the settlement of pending claims is a liability for which the Department of Law or AEA requests an appropriation from the Legislature to satisfy judgment in the event that the judgment exceeds available funds or the proceeds from applicable insurance policies.In the opinion of management, the disposition of current claims and pending litigation are not presently expected to have a material adverse effect on AEA's financial statements. Four Dam Pool Project Repairs and Improvements Prior to July 1998,AEA received $19,353,419 from the FDP power purchasers to be expended for repairs and improvements to the FDP projects,in lieu of "debt service component”payments under the long term power sales agreement.These funds were deposited into the Four Dam Pool Self-Help Fund.AEA received an additional $1,600,000 in August 1999 from the FDP power purchasers to be held in trust for repairs and improvements to the FDP projects,in lieu of "debt service component” payments.Additional amounts for repairs are expected to be required in the future,which may reduce AEA revenue.Until October 28,2000,any reduction in revenues would be offset by a reduction of the interest payments due on the note payable to the State's Four Dam Pool Transfer Fund.AEA's commitments for future repairs to the FDP facilities approximates $15,500,000. Unused Line of Credit At June 30,2000 AEA had an unused $10 million line of credit relating to the FDP self-insurance fund.(See note 9) Subsequent Event Effective July 1,2000,the State of Alaska transferred to AEA the fiduciary responsibility for a portion of the State's rebate share of the federal Trans-Alaska Pipeline Liability Fund.Pursuant to law,the amounts transferred to AEA and income earned thereon may only be used for the remediation of above ground storage tanks. 19 Balance at June 30,1999 Interest received Bond principal paid Bond interest paid Construction expenditures Operating revenue received Operating expenses paid Transfers between funds Refunding of bonds Balance at June 30,2000 $ Schedule of Bradley Lake Hydroelectric Project Trust Account Activities ALASKA ENERGY AUTHORITY (a component Unit ofthe State of Alaska) Year ended June 30,2000 (Stated in Thousands) Schedule 1 Debt Capital Renewal and Construction Excess Operating Service Reserve Contingency Unallocated Earnings Revenue Operating Reserve Cost of Fund Fund Fund Fund Fund Fund Fund Fund Issuance Total 6,853 13,146 5,000 2,042 408 136 1,100 535 287 29,507 95 1,001 372 7 45 218 52 40 12 1,952 (3,610)_----_--_-(3,610) (7,217)---___--___-_-(7,217) _--(90)_-_-___-(90) --___-11,814 _--1,814 _-__(321)-(1,931)_-(162)(2,414) 10,886 (1,313)(372)_(3)(10,900)1,777 (40)(35)_- _--=-(1,110)-_=27 (1,083) 7,007 12,834 5,000 2,069 129 158 998 $35 129 28,859 20 Schedule 2 ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Schedule of Projects -Balance Sheet June 30,2000 (Stated in Thousands) Administration Bradiey Lake Alaska Larsen Bay and Power Hydroelectric Four Dam Intertie Hydroelectric Development Rural Energy Consolidated Assets Project Pool Project Project Project Project Project Subtotal Eliminati Balance Property,plant and equipment $306,872 457,490 124,246 1,601 _-890,209 _890,209 Less accumulated depreciation 60,567 [99,918 49,390 339 =_310,214 -310,214 Net property,plant and equipment 246,305 257,572 74,856 1,262 _--$79,995 -579,995 Other assets -cash and investments -restricted 28.859 21,867 597 37 1,169 93 648 146,177 -_146,177 Current assets: Due from State of Alaska and other agencies _____46,432 46,432 --46,432 Operating revenue receivable _-13,043 359 367 5 _13,774 -13,774 Accrued interest receivable 910 243 _---_-10,468 11,62!(10,377)1,244 Total current assets 910 13,286 359 367 5 56,900 71827 (10,377)61,450 Loans receivable,net of allowance -_-_-_-24,035 24,035 _24,035 Four Dam Pool receivable _-__-__184,572 184,572 (184,572)_- Grants receivable _--____10,004 10,004 _10,004 $276.074 292,725 75,812 1.666 1,174 369,159 1,016,610 (194,949)821.661 Fund Equity and Liabilities Fund equity: Contributed capital $162,975 316,316 124,250 923 15,337 343,717 963,518 -963,518 Accumulated Deficit (37,306)(226,423)(49,377)(49)(12,926)9,368 (316,713)_(316,713) Total fund equity 125.669 89,893 74,873 874 2.411 353,085 646,805 _646,805 Long-term debt,net of current portion Bonds payable 141,824 _-563 _-142,387 _142,387 Four Dam Pool payable _-184,572 _--__-184,572 (184,572)_ Arbitrage interest payable 149 _-=__149 =149 Total long-term debt 141,973 184.572 _563 --327,108 (184,572)142,536 Current liabilities: Accounts payable 459 3,918 940 13 30 4,090 9,450 -9,450 Grants payable _-____-11,540 11,540 -11,540 Current portion of bonds payable 4,140 __-40 _-4,180 _4,180 Four Dam Pool interest payable _10,377 _=>_-_-10,377 (10,377)_ Other accrued interest 3,234 __12 -_-3,246 3,246 Deferred Revenue --___-444 444 -_444 Retainage payable 103 _____-103 _103 Other liabilities 496 3,965 (1)164 (1,267)-3,357 =3,357 Total current liabilities 8,432 18,260 939 229 (1,237)16,074 42,697 (10,377)32,320 $276,074 292,725 75,812 1.666 1,174 369,159 1.016610 (194,949)821.661 21 Revenues: Revenue from operating plants Federal grants Operating transfer from State of Alaska Operating transfer from Four Dam Pool Transfer Fund State of Alaska appropriations Investment income Receipts from other agencies Other revenue Total revenues Expenses: Write-down of plant assets Grants and projects Depreciation Power Cost Equilization grants Interest Plant operating General and administrative Provision for loan loss Total expenses Deficiency of revenues over expenses ALASKA ENERGY AUTHORITY (a Component Unit of the State of Alaska) Schedule of Projects -Revenues and Expenses Year ended June 30,2000 (Stated in Thousands) Schedule 3 Administration Bradley Lake Alaska Larsen Bay and Power Hydroelectric Four Dam Intertie Hydroelectric Development Rural Energy Consolidated Project Pool Project Project Project Project Project btotal Eli Balance $11,814 12,308 980 157 -__-25,259 -_25,259 --_-__-22,284 22,284 _22,284 -_-_--_9,163 9,163 _9.163 _-_---_10,377 10,377 (10,377)_- ---_-_-7,020 7,020 _7,020 1,895 850 17 4 _2,901 5,667 _$,667 -_-_1,239 1,239 _1,239 -_-__--_1 68 69 -_-69 13,709 13,158 997 161 t 53,052 81,078 (10,377)70,701 _-41,358 __-__41,358 _-41,358 _-__--26,075 26,075 _-26,075 6,973 12,563 3,401 37 --_-22.974 -22,974 _--_-_14,583 14,583 -14,583 9,938 10,393 _63 -__20,394 (10,377)10,017 2,245 3,357 946 19 _-6,567 _6,567 225 402 51 43 30 1,934 2,685 -2,685 --__-_-1,093 1,093 _1,093 19.381 68,073 4,398 162 30 43,685 $35,729 (10,377)125,352 $(5,672)(54,915)(3,401)(1)(29)9,367 (54,651)_-(54.651) 22