Investments — Bond Project Funds
As discussed above, the approximately $17.2 million of these bond funds, which were held in
investment accounts as of December 31, 2015, were sold and transferred to the restricted
cash accounts during 2016. These funds were then used to reimburse the Company for
eligible capital project expenditures for the years 2014 through 2016, which were initially
funded from working capital. The funds, now held in the restricted cash accounts, were also
used to make the principal and interest payments for the bonds, on January and July 1“.
The Company determines the appropriate classification of its investments in debt and equity
securities at the time of purchase and reevaluates such determinations at each balance-sheet
date. Debt securities are classified as held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded
as either short-term or long-term on the consolidated balance sheet, based on contractual
maturity date and are stated at amortized cost.
The fair value of all securities is determined by quoted market prices. The estimated fair
value of securities for which there are no quoted market prices is based on similar types of
securities that are traded in the market.
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, 2016 and 2015, the Company had approximately $16,950,000
and $9,200,000 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
Accounts receivable are recorded at the invoiced amounts. 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.
Accounts Receivable — Unbilled, Net
We read our customer meters on a monthly basis and record revenues based on meter reading
results. Information from the last meter reading date is used to estimate the value of unbilled
revenues through the end of the accounting period: Estimates of water utility revenues for
water delivered to customers but not yet billed are accrued at the end of each accounting
period. Actual results could differ from those estimates.
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