Tucson Water Company - Finances

Following instructions from the board of directors the treasurer prepares an annual budget itemizing the past year’s income and expenses, the proposed current year’s income and expenses, and the current bank balance. The proposed year’s budget is then discussed and approved by the membership at the annual members meeting in May.

The company’s operating income originates from:

1) accounts receivable (AR) – payments received from the quarterly water bills mailed to the lot owners of Tucson Estates (36). Water rates are reviewed and changes are approved by the membership at the annual meeting. Rates are separated into Domestic and Irrigation charges. Domestic and irrigation meters are read each month to record usage. Presently (in 2011-2012), domestic rates are a flat $40 monthly charge per household up to a maximum of 15,000 gallons per month, then progressively higher. Irrigation rates are a flat $40 per month, year round, until exceeding a maximum annual usage limit (typically about 400,000 gal or 1¼ AF), then progressively higher.

2) annual assessments – approved by members at the annual meeting (in the history of the company there has never been an annual assessment)

3) special assessments – approved by the board of directors under extraordinary conditions to continue to operate the company (in the history of the company there was one special assessment of $500 to each of the 37 customers, in June of 2003)

4) fines, penalties, late charges, and other fees – may be included with, or in addition to, the quarterly water bill. In the history of the company no fine has ever been assessed for violating water restrictions or other rules, one penalty has been assessed to reconnect discontinued service, numerous late charges have been assessed at 10% of the outstanding balance 60 days past due or 90 days after each billing period, no other fees have ever been charged (e.g. repair or replacement of meters or meter pits)

5) water tap fees – since the last water tap fee was paid among the 36 lots of the subdivision there has been one tap fee of ~$18,000 paid by the school district for a 2” irrigation tap.

The company’s operating expenses (accounts payable – AP) fall into seven general categories:

1. Water Treatment and Testing

2. Domestic Operation and Maintenance

3. Domestic System Improvements

4. Irrigation Operation and Maintenance

5. Irrigation System Improvements

6. Administration and Office Supplies

7. Insurance and Miscellaneous

Our Financial Statement:

The treasurer’s report at the annual members meeting itemizes all past and proposed AR/AP amounts into a budget. Note: for IRS and bookkeeping purposes all AR appear as journal credits (deposits) and all AP as a journal debits itemized against one of the seven categories above. If there is any outstanding debt, repaid amounts are included in the appropriate AP category.