To The Members of ... Community Water Company of Green Valley:
We are proud to submit this 2000 Annual Report to you, our members. As you may know, Community Water Company (Company) is an Arizona not-for-profit corporation whose members are its owners. This past year was marked by opportunity, improvement, change, and many challenges. At year end, we are pleased to say, your Company is in sound financial position having achieved an overall increase in membership and revenues, while completing several significant well maintenance milestones ahead of schedule. Growth & Opportunity We added a total of 121 new residential, commercial, and irrigation accounts through fill-in of existing lots and the growth of several small subdivisions in our service area. This compares to 191 new accounts added in 1999. Water sales increased from 677,662,600 gallons in 1999 to 688,940,400 gallons in 2000, representing an increase of approximately 1.7 %. We were also provided an opportunity to serve a large area just North of our service area boundary, and received a favorable decision from the Arizona Corporation Commission on the expansion request in January 2001. This expansion adds approximately 1 ¼ square miles to our service area within the Town of Sahuarita. New homebuilders in the expansion area will add to the ranks of a number of well established homebuilders already working in our service area. The Company has embarked on a capital improvement plan that entails the completion of a new two million gallon reservoir, tie-line, and new well in 2001. These projects pose several permitting challenges, but once completed will serve the Company and its members well into the future. Sources of funds for these projects are both developer funds advances and Company capital. A Time of Change 2000 also brought with it a change in leadership. After nearly five years of service, Alan Forrest left the company to pursue other interests. Mike Weber filled the vacancy as President & General Manager. Mike previously served as Operations Manager of Citizens Water Resources, the state's largest private water company. Together with our veteran staff of employees and seasoned Board of Directors comprised of many of our members, the Company remains in good hands, and we wish Alan the best in his new endeavors. Regulatory Challenges Given our desert environment, the Company actively promotes water conservation by participating in area-wide conservation organizations, publishing member tips in the Green Valley News & Sun, distributing water saving devices to our members, and educating our members on the dire need for conservation, to cite just a few examples. However, even with these efforts, we have historically not met our mandatory conservation goal established by the Arizona Department of Water Resources. We will continue to work with our members to conserve water in our service area. We were encouraged with the number of members who attended our presentation on the state's largest renewable water supply, the Central Arizona Project (CAP), in October at the Green Valley Public Library. This presentation touched on topics ranging from water conservation to availability and use of surface water supplies. We are committed to bringing important information such as this to our members, and plan similar presentations in 2001. Water Quality The quality of water delivered to our members remains of paramount importance. In 2000, the water delivered to our members met or surpassed every health and safety measure required by the United States Environmental Protection Agency, the Arizona Department of Environmental Quality, and Pima County. Our certified distribution system operators take thousands of water quality samples and system measurements to ensure that only the highest quality water available is delivered. But water quality regulations are dynamic and ever changing. We are actively tracking changes to environmental regulations in an effort to continue our remarkable record. For example, new rules have recently been proposed regarding arsenic regulations; these changes would drastically reduce the allowable level of arsenic in drinking water and would likely require treatment or locating higher quality sources of water over the implementation period of the new rule. The downside of new regulations such as this is the significant financial impact they will have on our customers. We are working closely with the regulatory community to ensure that our members' health and interests are best protected and that we will meet any other regulations that may be imposed, however stringent they may be. Central Arizona Project As an additional source of supply, the Company also holds an allocation of 1,337 acre feet of CAP water, a renewable surface water supply, and has embarked on a long range plan which will include the assessment and feasibility of the best use of this valuable alternative to groundwater. The first component of the plan, a hydrogeology study of our service area, was completed in 2000. Financial Due to efficiency of our
operations and a moderate but steady growth rate, our members enjoyed a
thirteenth consecutive year without a rate increase. Even though the Company
prides itself in maintaining low rates, we will likely need to file for a rate
increase in the coming year due to increased capital and operating costs. The
Company commits itself to keeping our members informed throughout the
ratemaking process. ·
Statements of Revenues and Expenses In Closing We would like once again to express the commitment of each of our staff and Board Members to produce the lowest cost, highest quality drinking water for our members. We remain committed to open, honest communications in the community we serve and look forward to serving you in 2001. We urge you to attend our annual report meeting on May 7, 2001 at 10:00 am at the Green Valley Public Library. Raymond L. Smith Michael D. Weber April 18, 2001
Balance Sheets 2000 1999 Assets Utility plant: Plant in service, at cost $14,085,344 $13,493,789 Construction work in progress 218,366 29,090 14,303,710 13,522,879 Less accumulated depreciation 4,892,953 4,515,193 9,410,757 9,007,686 Current assets: Cash and cash equivalents 1,304,321 778,992 Securities available-for-sale, at market 616,431 607,191 Accounts receivable, less allowance for doubtful accounts of $3,200 in 1999 and 1998 164,630 175,794 Materials and supplies 50,687 49,105 Prepayments 22,724 25,007 Total current assets 2,158,793 1,636,089 Deferred charges 292,747 256,034 $11,862,297 $10,899,809 Membership Interest and Liabilities
Membership interest:
Memberships and contributions $ 48,010 $ 48,010
Accumulated surplus 6,404,582 6,195,414
Accumulated other
comprehensive income 3,758 (12,066)
6,456,360 6,231,358
Current liabilities: Accounts payable 180,513 75,695 Accrued taxes 80,694 74,937 Other liabilities 58,999 67,061 Total current liabilities 320,206 217,693 Deferred credits:
Refundable advances for
construction 3,758,380 3,284,126
Other 92,831 81,812
3,851,211 3,365,938
Contributions in-aid-of construction 1,234,520 1,084,820
$11,862,297 $10,899,809
Statements of Revenues and Expenses 2000 1999 Operating revenues $ 2,037,879 $ 2,009,580 Operating expenses: Operations 1,086,176 1,031,012 Maintenance 197,443 105,525 Depreciation 372,185 368,640 Taxes - other 280,110 269,230 Total operating expenses 1,935,914 1,774,407 Excess of operating revenues over operating expenses 101,965 235,173 Other revenues: Interest income 90,015 71,631 Other income, net 17,188 15,813 Excess of revenues over expenses $ 209,168 $ 322,617
2000 1999 Cash flows from operating activities: Excess of revenues over expenses $ 209,168 $ 322,617 Adjustments: Depreciation 372,185 368,640 Depreciation included in operations and maintenance 31,053 42,979 Gains on sale of securities 0 (886) Net change in deferred charges 20,778 380 Net change in deferred credits 10,929 (34,778) Change in: Accounts receivable 11,164 (31,980) Materials and supplies (1,582) (4,374) Prepayments 2,283 (8,353) Accounts payable (19,746) (31,819) Accrued taxes 5,757 (2,365) Other liabilities (8,062) 4,039 Total adjustments 424,759 201,483 Net cash provided by operating activities 633,927 524,100 Cash flows from investing activities: Capital expenditures (681,745) (489,425) Proceeds from maturities and sale of securities available-for-sale 6,594 158,395 Purchases of securities available-for-sale 0 (402,747) Central Arizona Project capital expenditures (57,491) (64,176) Net cash used in investing activities (732,642) (797,953) Cash flows from financing activities: Proceeds from refundable advances and contributions 677,514 215,620 Repayments of refundable advances (53,470) (59,096) Net cash provided by financing activities 624,044 156,524 Net increase (decrease)
in cash and cash equivalents 525,329 (117,329)
Cash and cash equivalents
at beginning of year 778,992 896,321
Cash and cash equivalents
at end of year $ 1,304,321 $778,992
Non Cash Investing activities: Purchase of utility plant $ 124,564 $ 0
Available at our office is the complete audited financial statements. Community Water Company of Green Valley
(520) 625-8409 |