To The Members of ...
Community Water Company of Green Valley:
We are pleased to submit Community Water Company of Green Valley's 1999
Annual Report to our membership. During the past year, we continued to make
improvements to our water system and its operation. As a result, water quality
remains high, water service remains reliable, and our financial position remains
strong.
A few of our accomplishments in 1999 have been the rehabilitation of two
groundwater wells and a storage reservoir, replacement of service lines,
completion of a long-term Water System Improvement Plan and delivery of the
Company's first annual Water Quality Report
to our customers. In addition, the Company won an award from the Arizona Water
and Pollution Control Assoc. for Small Facility Water Distribution System of the
Year and our Operations Manager received an award for the
Outstanding Individual/Professional of the Year from the American Public Works
Association, Southern Arizona Branch.
Community Water Company of Green Valley will face some significant challenges
in the future. For example, the Environmental Protection Agency (EPA) plans to
adopt more stringent drinking water quality regulations during the next several
years. We do not know what the costs associated with meeting these new standards
will be, however, it appears that physical treatment of all our groundwater will
be required prior to delivery – at present, we only disinfect our water. Since
our system was not designed to accommodate treatment, this could prove to be a
very capital intensive proposition.
Securing adequate water resources to meet the needs of our community, well
into the future, is also an important endeavor. One thing that becomes more
clear with each passing year, is that we cannot continue to depend on
groundwater alone to meet all of our water supply needs. In the coming year, we
will continue to evaluate the various water supply alternatives available to us.
In addition, we will continue working with other entities in the region to
ensure a viable water future for us all.
You may be interested to know that Community Water Company of Green Valley
has not had a rate increase in over thirteen years. Steady growth in our
customer base and efficient operation of the system have allowed us to go this
long without a rate increase, however, this is no longer the case. Based on
projected cash flows – which include expenditures to meet EPA's new
requirements and needed infrastructure improvements – we expect it will be
necessary for the Company to seek a rate increase within the next year or two.
The business of providing safe and reliable water service 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 13, 2000
Balance Sheets
For the years ended
December 31, 1999 and 1998
1999
1998
Assets
Utility plant:
Plant in service, at cost
$13,493,789 $13,027,553
Construction work in progress
29,090
42,525
13,522,879 13,070,078
Less accumulated
depreciation
4,515,193
4,414,084
9,007,686
8,928,994 Current assets:
Cash and cash equivalents
778,992
896,321
Securities available-for-sale,
at market
607,191
391,363
Accounts receivable, less allowance
for doubtful accounts of $3,200
in 1999 and 1998
175,794
143,814
Materials and supplies
49,105
44,731
Prepayments
25,007
16,654
Total current assets
1,636,089
1,492,883
Deferred charges
256,034
192,238
$10,899,809 $10,614,115 Membership Interest and Liabilities
Membership interest:
Memberships and contributions
$ 48,010
$ 48,010
Accumulated surplus
6,195,414
5,872,797
Accumulated other
comprehensive income
(12,066)
16,458
6,231,358
5,937,265 Current liabilities:
Accounts payable
75,695
107,514
Accrued taxes
74,937
77,302
Other liabilities
67,061
63,022
Total current liabilities
217,693
247,838 Deferred credits:
Refundable advances for
construction
3,284,126
3,197,356
Other
81,812
216,680
3,365,938
3,414,036
Contributions in-aid-of
construction
1,084,820
1,014,976
$10,899,809
$ 10,614,115
Statements of Revenues and Expenses
For the years ended
December 31, 1999 and 1998
1999
1998
Operating revenues
$2,009,580
$1,935,347 Operating expenses:
Operations
1,031,012
1,022,725
Maintenance
105,525
103,859
Depreciation
368,640
352,523
Taxes - other
269,230
267,541
Total operating expenses
1,774,407
1,746,648
Excess of operating revenues
over operating expenses
235,173
188,699 Other revenues:
Interest income
71,631
66,108
Other income, net
15,813
16,629
Excess of revenues
over expenses
$ 322,617
$ 271,436
Statement of Cash Flows
For the years ended
December 31, 1999 and 1998
1999
1998
Cash flows from operating activities:
Excess of revenues over expenses
$322,617
$271,436
Adjustments:
Depreciation
368,640
352,523
Depreciation included in
operations and maintenance
42,979
42,468
Gains on sale of securities
(886)
(641)
Net change in deferred charges
380
6,317
Net change in deferred credits
(134,778)
13,873
Change in:
Accounts receivable
(31,980)
(12,652)
Materials and supplies
(4,374)
6,751
Prepayments
(8,353)
(1,806)
Accounts payable
(31,819)
55,541
Accrued taxes
(2,365)
(2,851)
Other liabilities
4,039
4,353
Total adjustments
201,483
463,876
Net cash provided by
operating activities
524,100
735,312 Cash flows from investing activities:
Capital expenditures
(489,425)
(920,973)
Proceeds from maturities and sale
of securities available-for-sale
158,395
302,029
Purchases of securities
available-for-sale
(402,747)
(100,000)
Central Arizona Project
capital expenditures
(64,176) (64,176)
Net cash used in investing activities (797,953)
(783,120)
Cash flows from financing activities:
Proceeds from refundable advances
and contributions
215,620
522,915
Repayments of refundable advances (59,096)
(44,077)
Net cash provided by
financing activities
156,524
478,838 Net increase (decrease)
in cash and cash equivalents
(117,329)
431,030
Cash and cash equivalents
at beginning of year
896,321
465,291
Cash and cash equivalents
at end of year
$778,992
$896,321
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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