To The Members of ...
Community Water Company of Green Valley:
1998 was another successful year for Community Water Company of Green
Valley. We made significant capital improvements, increasing the efficiency
and reliability of our water distribution system. Water quality remains
high, water service remains reliable, and our financial position remains
strong.
Growth . . . in 1998, we continued to experience steady growth
in the area. Capital improvements to the water system added significantly
to utility plant in service. Major capital projects funded by the Company
include the construction of water mains, to improve the flow of water,
and the installation of a computerized operating system, which allows for
remote control and monitoring of our production facilities. In addition,
developers advanced the Company more than $500,000 for water system expansion
associated with new subdivisions in the area.
Conservation . . . during the year we pumped 730 million gallons
of water, an average of about 141 gallons per person per day (GPCD). In
comparison with 1997 - when we had a GPCD of 149 - it is clear that our
members made a serious effort to conserve water in 1998. The current goal
set for us by the Arizona Department of Water Resources is 132 GPCD. Even
though we made significant progress in reducing our overall water use during
the past year, more needs to be done.
Water quality . . . the water delivered to your home continues
to meet or exceed the standards for safe drinking water. Over time, regulatory
requirements for safe drinking water will continue to become more stringent.
We are confident in our ability to meet these challenges. In late 1999,
we will prepare and distribute an annual Water Quality Report to each of
our customers. This report will let you know what is in the water you drink
and should provide reassurance as to its safety.
Financial . . . your Company is in a sound financial position,
operating with an excess of total revenues over total expenses. The excess
of revenues over expenses is generally used to fund capital projects. Based
on projected cash flows, management expects that within two years the Company
may find it necessary to seek a rate increase. It should be noted that
our last rate increase took effect in 1987.
Year 2000 . . . in meeting our goal to provide reliable water
service to our customers, your Company has undertaken an aggressive program
to ensure a smooth transition into the year 2000. All necessary Y2K modifications
to our computer systems have been completed and tested.
The business of providing safe and reliable water in a desert community
presents us with significant and unique challenges. We look forward to
working with our members and the local community to address water issues
that affect us all.
Raymond L. Smith
Chairman
Alan D. Forrest
President
April 14, 1999
Balance Sheets
For the years ended
December 31, 1998 and 1997
1998
1997
Assets
Utility plant:
Plant in service, at cost
$13,027,553 $12,033,578
Construction work in progress
42,525
169,888
13,070,078 12,203,466
Less accumulated
depreciation
4,141,084
3,801,095
8,928,994
8,402,371
Current assets:
Cash and cash equivalents
896,321
465,291
Securities available-for-sale,
at market
391,363
586,408
Accounts receivable, less allowance
for doubtful accounts of $3,200
in 1998 and 1997
143,814
131,162
Materials and supplies
44,731
51,482
Prepayments
16,654
14,848
Total current assets
1,492,883
1,249,191
Deferred charges
192,238
134,379
$10,614,115 $ 9,785,941
Membership Interest and Liabilities
Membership interest:
Memberships and contributions
$ 48,010
$ 48,010
Accumulated surplus
5,872,797
5,601,361
Accumulated other
comprehensive income
16,458
9,474
5,937,265
5,658,845
Current liabilities:
Accounts payable
107,514
51,973
Accrued taxes
77,302
80,153
Other liabilities
63,022
58,669
Total current liabilities
247,838
190,795
Deferred credits:
Refundable advances for
construction
3,197,356
2,773,426
Other
216,680
234,243
3,414,036
3,007,669
Contributions in-aid-of
construction
1,014,976
928,632
$10,614,115
$ 9,785,941
Statements of Revenues and Expenses
For the years ended
December 31, 1998 and 1997
1998
1997
Operating revenues
$1,935,347
$1,967,884
Operating expenses:
Operations
1,022,725
1,123,647
Maintenance
103,859
112,849
Depreciation
352,523
333,336
Taxes - other
267,541
275,850
Total operating expenses
1,746,648
1,845,682
Excess of operating revenues
over operating expenses
188,699
122,202
Other revenues (expenses):
Interest expense
0
(25,093)
Interest income
66,108
57,664
Other income, net
16,629
14,510
Excess of revenues over expenses
before income taxes
271,436
169,283
Income tax benefit
0
26,997
Excess of revenues
over expenses
$ 271,436
$ 196,280
Statement of Cash Flows
For the years ended
December 31, 1998 and 1997
1998
1997
Cash flows from operating activities:
Excess of revenues over expenses $271,436
$196,280
Adjustments:
Depreciation
352,523
333,336
Depreciation included in
operations and maintenance
42,468
28,209
(Gains) losses on sale of securities
(641)
2,296
Net change in deferred charges
6,317
10,203
Net change in deferred credits
13,873
(1,537)
Change in:
Accounts receivable
(12,652)
16,032
Materials and supplies
6,751
4,908
Prepayments
(1,806)
3,378
Accounts payable
55,541
(13,815)
Accrued taxes
(2,851)
13,114
Accrued interest
0
(2,071)
Other liabilities
4,353
30,613
Total adjustments
463,876
424,666
Net cash provided by
operating activities
735,312
620,946
Cash flows from investing activities:
Capital expenditures
(920,973)
(777,489)
Proceeds from maturities and sale
of securities available-for-sale
302,029
304,647
Purchases of securities
available-for-sale
(100,000)
(348,974)
Central Arizona Project
capital expenditures
(64,176)
0
Net cash used in investing activities (783,120)
(821,816)
Cash flows from financing activities:
Proceeds from refundable advances
and contributions
522,915
432,544
Repayments of refundable advances (44,077)
(46,509)
Repayments of long-term debt
0
(439,380)
Net cash provided (used) by
financing activities
478,838
(53,345)
Net increase (decrease)
in cash and cash equivalents
431,030
(254,215)
Cash and cash equivalents
at beginning of year
465,291
719,506
Cash and cash equivalents
at end of year
$896,321
$465,291
Available at our office is the complete audited financial statements.
Community Water Company of Green Valley
PO Box 1078
Green Valley, AZ 85622-1078
(520) 625-8409
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