Maintenance, repairs and minor improvements are charged to expense as incurred. Improve-
ments which significantly increase the value of property, plant and equipment are capitalized.
Cash and Cash Equivalents
Cash and cash equivalents generally consist of cash, money market funds and other short-
term liquid investments with original maturities of three months or less.
Restricted Cash - RSF
This restricted cash balance consists of funds maintained for the Rate Stabilization Fund
(“RSF”), which was established in conformity with the requirements of NHPUC Order
25,292, as explained more fully in Note 12 of these financial statements. The RSF is an
imprest fund of $5 million, which is subject to funding above or below the imprest fund
balance, reflecting actual revenue performance as it relates to prescribed revenue levels
supported by the RSF. Of the approximately $6.5 million in restricted cash as of December
31, 2016 and in compliance with the rules governing the use of the RSF, approximately $1.5
million is reserved as a potential return to rate payers as a component of the new water rates
set as a result of the next promulgated rate case before the NHPUC, which is in process at
this time and a final order is anticipated for late 2017.
Restricted Cash — Bond Project Funds
This restricted cash balance consists of funds remaining from the issuance of the Series 2014
and 2015 tax-exempt bonds (the “Bonds”) in December of 2014 and October of 2015,
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 reim-
bursement 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, 2015, the funds in these restricted cash accounts totaled approximately
$2.5 million. An additional amount of approximately $17.2 million of these bond funds were
held in investment accounts as of December 31, 2015; all of which were sold and transferred
to the restricted cash accounts during 2016. During 2016, approximately $1.5 million was
transferred into the restricted cash accounts from working capital and approximately $3.8
million was withdrawn from the restricted cash accounts to make the principal and interest
payments for the Bonds, on January 1 and July 1. Also during 2016, approximately $13.1
million was withdrawn from the restricted cash accounts, and transferred to the Company’s
operating cash accounts, for reimbursements of qualifying capital projects completed and
“used and useful” during 2016, which were initially funded from working capital. In
December 2016, approximately $3.3 million 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, 2017 for the Bonds. As of
December 31, 2016, the funds in these restricted cash accounts totaled approximately $7.6
million.
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