To The Members of ... Community Water Company of Green Valley:We are proud to submit this 2001 Annual Report to you, our members and owners. The past year was one of intense capital improvement, environmental law change, and continuous growth. During 2002, major ongoing storage and supply improvements will be completed and placed in service. The Company remains in sound financial position; however, escalating operating costs may require us to increase our rates for the first time in 14 years. We are committed to keeping you informed throughout the rate making process. Capital Improvements . . . During 2001, many planned projects identified in our Water System Improvement Plan were initiated to serve our customers better. A new production well, scheduled for completion in 2002, was drilled in the northern portion of our service area as a replacement for our oldest well. A transmission main, consisting of approximately 3,500 feet of 16-inch diameter ductile iron pipe, was installed to provide the necessary source of supply from our upper reservoirs to the west side of our system, and construction of a two million gallon reservoir was started on Duval Mine Road. These new additions to our system will serve our customers and enhance service reliability for many, many years to come. Growth . . . We continued to experience moderate growth in our service area. A total of 73 new residential, commercial, and irrigation accounts were added through fill-in of existing lots and the growth of several small subdivisions. This compares to 121 new accounts added in 2000. Water sales decreased approximately 40 million gallons from the prior year. We attribute this decrease to our focus on conservation efforts and increased precipitation during the year. Fourteen Years Since Last Rate Increase . . . We last increased our water rates in 1987. During those fourteen years, operating costs, such as those for power, chemicals, labor, materials, and supplies, have all increased. Although the Company has long prided itself in maintaining the lowest rates possible, we must evaluate the need for a rate increase. This year, we may file an application with the Arizona Corporation Commission for an increase based on this evaluation. While we are unable to predict what increase may be approved by the Commission, we will keep you apprised of our progress and strive to continue to offer the best water rates possible. ·Statements of Revenues and Expenses Water Quality . . . Once again, the water delivered to our customers 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. Major changes in the Safe Drinking Water rules reduce the allowable level of arsenic in drinking water from 50 parts-per-billion to 10 parts-per-billion. This will require treatment of existing supplies or locating higher quality sources over the implementation period of the new rule. There is a heavy financial burden associated with any feasible solution and we continue to work closely with the regulatory community to meet these new rules. Conservation . . . Your Company vigorously promotes water conservation by participating in area-wide conservation efforts, publishing tips in the local newspaper, distributing water saving devices, and educating our members on the need for conservation, to cite just a few examples. We are pleased to report a significant decrease in the per capita usage of our customers. Initial indications are that our 2001 daily per capita usage was approximately 135 gallons as compared to 143 gallons in 2000. We will continue to work with you, our customer, to conserve water in our desert community. In 2001, we sponsored two water conservation related events. The first presentation was conducted at the home of a customer who volunteered to have her home retrofitted for gray water reuse. The second public presentation was conducted by a local water resources professional and demonstrated methods our customers might employ to harvest and reuse rain water. We are committed to bringing important information such as this to you, and plan similar presentations in 2002. We also launched a sophisticated conservation related feature on our website. Water On the Web (WOW) enables you to see your individual household water consumption for the past 13 months. Your usage is compared both to those similar households in your immediate area and to the overall Company average usage for similar type homes. Customized conservation messages and water saving tips are provided, depending on how your usage compares to overall company usage. WOW has received considerable local and national acclaim and we are proud to offer this level of information to you. Central Arizona Project (CAP) Water . . . As an additional source of supply, the Company holds an allocation of 1,337 acre-feet of Central Arizona Project CAP water, a renewable surface water supply. The Company has also committed to an additional allocation of 1,521 acre-feet which we believe will be granted in 2003. One focus in 2002 will be to evaluate the best use of this valuable resource and groundwater alternative. In closing . . . we would like once again to express the commitment of each of our staff and your Board of Directors to produce the lowest cost, highest quality drinking water. We remain committed to open communications in the communities we serve and look forward to serving you in 2002. We urge you to attend our annual meeting on April 29, 2002 at 10:00 AM at the Pima County Library (Conrad Joyner Branch) here in Green Valley. We look forward to seeing you there.
Raymond L. Smith, Ph. D. Chairman
of the Board
Michael D. Weber, P. E. President
& General Manager
April 17, 2002 Balance Sheets
2001 2000* Assets Utility plant: Plant in service, at cost $14,974,931 $14,085,344 Construction work in progress 427,704 218,366 15,402,635 14,303,710 Less accumulated depreciation 5,114,108 4,892,953 Total utility plant 10,288,527 9,410,757 Current assets: Cash and cash equivalents 1,209,915 1,304,321 Securities available-for-sale, at market 416,375 616,431 Accounts receivable, less allowance for doubtful accounts of $3,200 in 1999 and 1998 169,592 164,630 Materials and supplies 50,774 50,687 Prepayments 19,197 22,724 Total current assets 1,865,853 2,158,793 Deferred charges 346,367 292,747 $12,500,747 $11,862,297 Membership Interest and Liabilities Membership interest: Memberships and contributions $ 48,010 $ 48,010 Accumulated surplus 6,859,149 6,609,291 Accumulated other Comprehensive income 6,939 3,768 Total membership interest 6,914,098 6,661,069 Current liabilities: Accounts payable 347,528 180,513 Accrued taxes 85,502 80,694 Other liabilities 69,878 58,999 Total current liabilities 502,908 320,206 Deferred credits: Refundable advances for construction 3,901,510 3,758,380 Other 90,805 92,831 Total deferred credits 3,992,315 3,851,211 Contributions in-aid-of construction net 1,091,426 1,029,811 $12,500,747 $11,862,297 Statements of Revenues and Expenses
2001 2000* Operating revenues $2,036,745 $2,037,879 Operating expenses: Operations 1,147,142 1,086,176 Maintenance 113,806 197,443 Depreciation 324,881 343,309 Taxes - other 291,444 280,110 Total operating expenses 1,877,273 1,907,038 Excess of operating revenues over operating expenses 159,472 130,841 Other revenues: Interest income 73,766 71,631 Other income, net 16,620 17,188 Excess of revenues over expenses $ 249,858 $ 238,044
2001 2000* Cash flows from operating activities: Excess of revenues over expenses $ 249,858 $ 238,044 Adjustments:
Depreciation and amortization 324,881 343,309
Depreciation and amortization included
in operations and maintenance 43,505 31,053
Net change in deferred charges (28,233) 20,778
Net change in deferred credits (12,507) 0
Change in:
Accounts receivable (4,962) 11,164 Materials and supplies (87) (1,582) Prepayments 3,527 2,283 Accounts payable (11,867) (19,746) Accrued taxes 4,808 5,757 Other liabilities 10,879 (8,062) Total adjustments 340,425 395,883 Net cash provided by
operating activities 590,283 633,927
Cash flows from investing activities: Capital expenditures (1,095,819) (681,745) Proceeds from maturities and sale of securities available-for-sale 503,227 6,594 Purchases of securities available-for-sale (300,000) 0 Central Arizona Project capital expenditures (28,746) (57,491) Net cash used in investing activities (921,338) (732,642) Cash flows from financing activities:
Proceeds from refundable advances
and contributions 303,339 677,514
Repayments of refundable advances (66,690) (53,470)
Net cash provided by
financing activities 236,649 624,044
Net increase (decrease) in cash and cash equivalents (94,406) 525,329 Cash and cash equivalents at beginning of year 1,304,321 778,992 Cash and cash equivalents at end of year $ 1,209,915 $1,304,321 Non Cash Investing activities: Accounts Payable purchase of utility plant $ 303,446 $ 124,564
*As revised Available at our office is the complete audited financial statements. Community Water Company of Green Valley
(520) 625-8409 |