METROPOLITAN UTILITIES DISTRICT

Notes to Basic Financial Statements

December 31, 2022 and 2021

• Restricted for environmental funds represent net position whose use is restricted through external constraints imposed by the Nebraska Department of Environmental Quality and the Nebraska Game and Parks Commission. Restricted for debt service requirements represent net position whose use is restricted per the provisi ons of the Series 2012, Series 2015, Series 2018 and Series 2022 water revenue bonds, and the Series 2018 and Series 2022 gas revenue bonds.

• Unrestricted net position consists of net position that does not meet the definition of net investment in capital assets or restricted for environmental, debt reserve funds, debt service requirements, or capital.

When both restricted and unrestricted resources are available for use, it is the District’s policy to use restricted first, and then unrestricted resources when they are needed.

(h) Bond Premium and Discounts

Bond premium and discounts are deferred and amortized over the life of the bond using the straight-line method, which approximates the effective interest method.

(i) Cash and Cash Equivalents and Investments

Cash and cash equivalents include cash on hand, bank demand accounts, overnight repurchase agreements, and short-term liquid investments purchased with an original maturity of 90 days or less. At December 31, 2022, the Gas Department held $75.4 million in noncurrent “Cash and cash equivalents – restricted” and “Investments – restricted” which is comprised of proceeds remaining from the Gas System Revenue Bonds Series 2022 issued in March 2022, which will be expended to finance a portion of the continued replacement of cast iron mains throughout the District’s gas system, expansion of and improvements to the District’s liquified natural gas Plant and related infrastructure improvements. At December 31, 2022 and 2021, the Gas Department held current “Cash and cash equivalents – restricted” of $0.9 million and $0.2 million, respectively, pursuant to various bond resolutions.

At December 31, 2022, the Water Department held $61.6 million in noncurrent “Cash and cash equivalents – restricted” and “Investments – restricted” which is made up of $0.2 million in funds required by the Nebraska Game and Parks Commission for environmental mitigation of wetlands, $3.0 million pursuant to various bond resolutions, and $58.4 million of proceeds remaining from the Water System Revenue Bond Series 2022 issued in October 2022, which will be expended to finance a portion of the costs for capital improvement plan activity, primarily for the District’s Florence Water Treatment Plant and Platte South Water Treatment Plant, water pumping station additions and improvements, land acquisition costs for possible future reservoirs, and other water system infrastructure improvements. At December 31, 2021, the Water Department held $5.8 million in noncurrent “Cash and cash equivalents – restricted” and “Investments – restricted” which is made up of $0.2 million in funds required by the Nebraska Game and Parks Commission for environmental mitigation of wetlands, $3.0 million pursuant to various bond resolutions, and $2.6 million of proceeds remaining from the Water System Revenue Bond Series 2018 issued in September 2018, which will be expended to upgrade the District’s Florence Water Treatment Plant and for other improvements to the District’s Water System. At December 31, 2022 and 2021, the Water Department also held current “Cash and cash equivalents – restricted” of $2.7 million and $1.9 million, respectively, pursuant to various bond resolutions.