Restricted Cash — Bond Project Funds
This restricted cash balance consists of funds remaining from the issuance of the Series 2014,
2015, 2019 and 2020 tax-exempt bonds (the “Bonds”) in December of 2014, October of 2015,
April of 2019, and April and August of 2020, respectively. The proceeds from those bond
issuance transactions are maintained in separate restricted cash accounts, with Trustee
oversight, and are subject to withdrawal as a reimbursement of eligible capital project
expenditures for the years 2014 through 2019, as defined by the indenture and issuance
documents associated with each offering. The restricted cash accounts are also used as a
“conduit” for the transfer of money from operating cash to restricted cash, allowing the
Trustee to make the required payments to bondholders for principal and interest due semi-
annually.
As of December 31, 2019, the funds in these restricted cash accounts totaled approximately
$3.4 million. During 2020, approximately $3.4 million was withdrawn from the restricted cash
accounts to make the principal and interest payments for the Bonds, on January 1, July 1 and
October 1. In December 2020, approximately $215,000 was transferred into these restricted
cash accounts from the Company’s operating cash accounts, to provide the funds needed to
make the net principal and interest payments due on January 1, 2021 for the Bonds. As of
December 31, 2020, the funds in these restricted cash accounts totaled approximately
$237,000.
Concentration of Credit Risks
Financial instruments that subject the Company to credit risk consist primarily of cash
(including cash equivalents and restricted cash) and accounts receivable. Cash balances are
invested in financial institutions insured by the Federal Deposit Insurance Corporation
(“FDIC”). At December 31, 2020 and 2019, the Company had approximately $9,300,000 and
$9,600,000 in excess of FDIC insured limits, respectively. Our accounts receivable balances
primarily represent amounts due from the residential, commercial and industrial customers
of our regulated water utility operations, as well as receivables from our Service Corporation
customers.
Accounts Receivable — Billed, Net
Water utility accounts receivable (regulated) are recorded at invoiced amounts.
Non-regulated accounts receivable are recorded based on contracted prices when the
Company obtains an unconditional right to payment under the terms of the contract.
The allowance for doubtful accounts is our best estimate of the amount of probable credit
losses in our existing accounts receivable and is determined based on historical write-off
experience and the aging of account balances. We review the allowance for doubtful
accounts quarterly. Account balances are written off against the allowance when it is
probable the receivable will not be recovered.
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