the entire balance in this account, which included $23.4 million of principal due on the bonds
being refunded, as well as approximately $375,000 of accrued interest due on these bonds,
was paid out to the holders of those debt instruments.
This restricted cash balance also consists of funds that resulted from the issuance of the
Series 2015A tax-exempt bonds in October of 2015, as notated and fully described in Note
10 of these audited financial statements. The refinance money proceeds, as described in Note
10, from that bond issuance are maintained in a separate restricted cash account, pending the
completion of the refinance of existing tax-exempt bonds on November 30, 2015, the date at
which the required 30-day notice period to bondholders has expired from the date of
notification after the close of the October 27, 2015 bond closing. As of November 27, 2015,
the entire balance in this account, which included $16.2 million of principal due on the bonds
being refunded, as well as approximately $165,000 of accrued interest due on these bonds,
was paid out to the holders of these debt instruments.
Investments — Bond Project Funds
As discussed above, approximately $17.2 million of monies from the 2014 and 2015
restricted cash bond project funds were invested in instruments of varying maturities through
the end of 2016. At maturity, these funds will be utilized to reimburse qualifying and eligible
capital project expenditures as they go “used and useful” throughout 2016.
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 our 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, 2015 and 2014, the Company had approximately $9,200,000 and
$48,700,000 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.
