2016 Annual Meeting Program & Annual Report
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1 Your local water supplier must comply with regulations set forth by the Safe Drinking Water Act. This requires your utility to monitor and treat for almost 100 different parameters in the water delivered to your tap. As a result, drinking water is the most regulated and controlled substance you can ingest more than any food, drug or beverage. -American Water Works Association 2016 Annual Meeting Program & Annual Report
2 Directors, Staff Board of Directors: Front (l to r): Glen Gilbertson, Vice- President; Robert Wood, President; Randy Huot, Sec.- Treas.; Pat Manning. Back: Randy Ronning; Vic Hendriks; Duane Holoch; Jim Schurdevin; Dave Reiff. Staff: Top (l to r): Greg Merrigan, Manager; Donna Henriksen, Office Manager; Tom Hollingsworth, Operations Supervisor; Leanne Brown, Accounting. Bottom: Operators Phil Iverson; Rob Ganschow and Andy Ganschow 2
3 Welcome! Welcome to the 2016 Clay Rural Water System Annual Meeting/Open House. This format gives you an opportunity to see your water system up close. This is the 37th annual meeting of the water system. The Clay Rural Water System provides water service to 2,320 locations in parts of five counties in southeast South Dakota. The sole purpose of the water system is to provide safe, quality drinking water to its members for domestic, farm and business use. Clay RWS is a member-owned, non-profit corporation incorporated in July, The water system was financed and constructed from primarily with member connection fees and loans and grants from the Farmers Home Administration. It became fully operational in The original construction cost of the system was $5.8 million. Service Area Service to the member population base of 5,700 is provided from two water treatment plants located in central Clay County and southern Union counties. Water is distributed from the treatment plants through a network of 1,200 miles of pipeline, six storage reservoirs with a capacity of 1,040,000 gallons, and five booster stations. Clay RWS is governed by a nine-member Board of Directors, elected by the membership from three voting districts. Our Mission: The Mission of the Clay Rural Water System is to provide high quality water service to the members of the corporation at the lowest possible cost, consistent with sound business practice. 3
4 From the President and Manager On behalf of the Board of Directors and Staff, we would like to welcome you to the 2016 Annual Membership Meeting. This is an opportunity to review the performance of your water system during the past year and to see its workings first-hand Financial Performance: In 2015, the financial performance of the water system allowed us to meet all of our financial requirements. Total operating revenue was $1,974,152, which was an increase over Our cash positon from 2014 to 2015 increased favorably as a result. Total water sold in 2015 was 250,842,000 gallons which was an increase of 3.4% over ranks 4th all-time for water sales in gallons sold. No general rate increase was instituted in Operational Update: Our main focus in 2015 was continued installation of our automatic meter reading system, which was completed in June. We have seen many positive benefits of the new system including timely, accurate readings, better sales and production figures and daily reports that allow us to notify members when they may have a water leak on their side of the water meter. We have also seen a reduction in the number of contacts we have had to make to collect delinquent accounts. We spent over $185,000 last year maintaining wells, treatment equipment and distribution facilities. In addition we spent $42,000 rebuilding a treatment component at the Wakonda water plant. From an operational standpoint we find ourselves maintaining a 36 year old water system, while meeting continuing demand for service for new members. This past year we added 22 new users which brought our total members over 2,320 at years end. We thank the members of the water system for their continuing support for this, their water system. We take our role as the caretakers of the system very seriously. Last year we marked the 40th anniversary of our incorporation and took the opportunity to honor our founding fathers for their vision. Sincerely, Robert Wood, President, Board of Directors and Greg Merrigan, System Manager 4
5 Minutes of 2015 Annual Meeting The 36th Annual Meeting of the Clay Rural Water System was held at the 4-H Center in Vermillion on March 28, President Bob Wood called the meeting to order at 10:32 a.m. He welcomed everyone and thanked them for coming. He announced that a quorum of 60 members was present. He noted that 40 years ago, the idea for this water system was born right here at the Clay County Extension Office. County Agent Bob Schurrer assembled a group of 14 rural residents to advance the idea of building a rural water system. Bob stated "It is appropriate that we pause and remember the original members of the Board of Directors who worked tirelessly to turn a dream into a reality. These 14 individuals spread the word on the benefits of a rural water system and took leadership roles in their communities to get it built. When construction was done, 1,000 members began receiving water. Their foresight has allowed us to expand the system to over 2300 members." They and the other Directors will be recognized later in the meeting. Sec./Treas., Tom Manning presented the minutes of the 2014 Annual Meeting/Open House. A motion was made, seconded and carried to approve the minutes. President Bob Wood presented the President's Report. He reviewed the 2014 Financial Performance of the System; talked about operational activities including working to finish the AMR Project, monies spent on maintaining wells, treatment equipment and distribution facilities, bringing the Wakonda generator up to EPA emission standards and adding 30 new users; he commended the Staff for a job well done; recognized members of the current Board of Directors; and talked about 40 years of Clay RW. Sec./Treas., Tom Manning presented the Treasurer's Report. A motion was made, seconded and carried to approve the report. Attorney, Mike McGill, reported on the recently held District Elections. There was only one candidate in each District so the following were declared winners: District I - Patricia Manning, District II - Glen Gilbertson, and District III - Dave Reiff. Manager, Greg Merrigan, presented his report. He noted the Employees had worked 10,000 days without a lost-time accident; the investment made into the facilities; the SD DENR Awards; operational upgrades; AMR; and showed the National publication that Clay RW was featured in last October's issue of Treatment Plant Operator. Greg Merrigan then paid tribute to Clay Rural Water with a special presentation of their 40th Anniversary. Jeremiah Corbin spoke on behalf of the South Dakota Association of Rural Water Systems. He also presented (2) five-year service pins to Attorney Mike McGill, and Director Glen Gilbertson. There was no Old Business and no New Business. A couple of questions were asked and answered and Door Prizes were drawn. The winner of the TV was Willard Forsythe of Akron and the (5) $30 Restaurant Certificates were won by: Mike Swim, Jim Ross, Marty Erickson, Gary Blaschke, and Zach Holoch. A motion was made, seconded and carried to adjourn at 11:25 a.m. A catered meal from HyVee was served by Staff and Directors. ATTEST: Randy Huot, Secretary RECORDED BY: Donna Henriksen 5
6 Five Year Comparisons Total Plant Investment $25,694,000 $21,363,214 $14,738,820 Total Revenue $1,974,152 $1,698,126 $1,241,479 (Other Revenue-Grants) $827,290 $435,931 Other Income $3,576 Operating Costs $1,993,673 $1,623,333 $1,125,111 (Less Debt) (Includes Depreciation) Principal and Interest Payments $588,862 $510,830 $436,859 Amount Owed On Long-Term Debt $9,102,237 $6,988,996 $3,980,566 Average Number of Members 2,320 2,112 1,750 Total Gallons Sold 250,723, ,502, ,435,000 Miles of Pipeline 1,200 1, Cost of Production (Wak., Wyn.) $1.60/$1.41 $1.39/$.79 $1.71 Average Farm Bill (Dollars/Gallons) $78.59/12,116 $71.52/11,165 $61.15/9,236 Average Residence Bill (Dollars/Gallons) $58.65/7,116 $52.14/7,155 $47.30/5,068 6
7 Financial Information 2015 Revenue - $1,974, Expenses - $2,312,396 7
8 Balance Sheet Assets (What We Own) 12/31/ /31/2014 Property, Plant, Equipment $25,694,072 $25,614,127 Less Accumulated Depreciation ($11,610,445) ($10,906,057) Total $14,083,627 $14,708,070 Cash $361,714 $344,336 Accounts Receivable (includes construction) $138,260 $108,145 Materials and Supplies $90,356 $92,934 Prepayments $7,400 $6,370 Restricted Funds $256,956 $242,700 Notes Receivable $76,820 $79,786 Other Deposits $0.00 $0.00 Total $931,506 $874,271 Total Assets $15,015,133 $15,582,341 Liabilities (What We Owe) Accounts Payable $52,815 $48,535 Construction Payable $0.00 $0.00 Accrued Leave Payable $34,317 $40,736 Customer Deposits and Prepaids $6,556 $9,135 Notes Payable $9,102,237 $9,319,593 Accrued Interest Payable $35,591 $36,963 Total Liabilities $9,231,516 $9,454,962 Net Assets $5,783,617 $6,127,379 Total Liabilities and Equity $15,015,133 $15,582,341 8
9 Income Statement Operating Revenue 12/31/ /31/2014 Water Sales $1,844,199 $1,772,145 Membership and Reconnect Fees $4,551 $6,914 Hookup Line Installation $80,708 $86,448 Interest and Dividends $14,681 $15,167 Misc Income $26,437 $42,536 Other Income $3,576 $9,130 Total Operating Revenue $1,974,152 $1,932,340 Operating Expenses Source of Supply $25,405 $35,928 Pumping $61,349 $78,698 Water Treatment - Operation and Maint. $98,355 $91,605 Water Treatment - Chemicals and Equip. $185,333 $180,976 Transmission and Distribution $142,507 $161,667 Customer Accounting and Collecting $34,066 $37,658 Director Per Diem and Expenses $27,450 $22,635 General Office Salaries $151,771 $139,482 Office Supplies and Expenses $50,279 $35,686 Outside Services Employed $19,559 $43,084 Insurance $37,341 $33,791 Employee Pension and Benefits $167,056 $159,596 Transportation $37,275 $53,202 Misc General Expenses $35,324 $27,891 O and M of General Property $95,402 $89,304 Interest on Long Term Debt $318,723 $315,700 Total Expenses $1,487,195 $1,506,903 Increase (Decrease) Before Depreciation $486,957 $425,437 Depreciation $825,201 $785,886 Increase (Decrease) in Unrestricted Net Assets $(338,244) $(360,449) 9
10 Who Uses Clay Rural Water? How Much Water Do They Use? How Much Do They Pay? 10
11 Number of Users Per Year Million Gallons of Water Sold Per Year Sales in Dollars Per Year 11
12 Notes to Financial Statements: These printed statements are excerpts from the December 31, 2014 and 2015 audited financial statements prepared by the firm of Quam and Berglin, CPA s, Elk Point, SD. The complete audit report is on file with the Clay Rural Water System, Inc., Wakonda, SD. Statement of Non-Discrimination: These facilities are operated in accordance with U.S. Dept. of Agriculture policy, which prohibits discrimination on the basis of race, color, sex, age, handicap, religion, or national origin. Any person who believes he or she has been discriminated against in any USDA related activity should write to: Under Secretary, Rural Development, Washington DC
Annual Meeting Program & Annual Report
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