HomeMy WebLinkAboutAgenda Packet - North Fork Water Company - 04/06/2021 (BOD)BOARD OF DIRECTORS ANNUAL MEETINGApril 6, 2021 - 2:00 PMVia Teleconference
(Immediately after the conclusion of the April 6, 2021 Annual Meeting of the
Shareholders)
There will be no public location for attending this meeting in person.
Members of the public and Shareholders may listen and provide public comment
telephonically.
Anyone wishing to join the meeting may do so using the following information:
DIAL: 1-209-425-5876 and enter ACCESS CODE: 676 743 30#
You may also join by clicking HERE to join the meeting via Microsoft Teams.
AGENDA
CALL TO ORDER
ROLL CALL OF BOARD MEMBERS
APPROVAL OF AGENDA
PUBLIC COMMENTS
DISCUSSION AND POSSIBLE ACTION ITEMS:
1.Board Re-Organization
a) Election of Officers:
-President
-Vice President
-Secretary
-Chief Financial Officer
-General Manager
2.Approve Minutes of May 21, 2020 Board of Directors Organizational Meeting
3.Report Regarding Acquisition of North Fork Water Company Shares by East
Valley Water District
4.Consider Approval of Proposed FY 2021-22 Water Deliveries and
Operational Update
5.Consider Approval of Financial Statements for FY 2020-21
6.Consider Approval of Budget and Assessments for FY 2021-22
D IRE C T O RS' C O M M E NT S
AD J O URN
Pursuant to Government Code Section 54954.2(a), any request for a disability-related modification or
accommodation, including auxiliary aids or services, that is sought in order to participate in the above-agendized
public meeting should be directed to the North Fork Board Secretary (909)885-4900 at least 72 hours prior to
said meeting.
NF Minutes 5/21/2020 sma
Draft pending approval
NORTH FORK WATER COMPANY
31111 GREENSPOT RD.
HIGHLAND, CA 92346
BOARD OF DIRECTORS ORGANIZATIONAL MEETING May 21, 2020
VIA TELECONFERENCE
MINUTES
President Carrillo called the Annual Board of Directors meeting to order at 2:22 p.m.
PRESENT: Chris Carrillo
David Smith
Phillip Goodrich
James Morales Jr.
Ron Coats
ABSENT: None
EVWD Staff: John Mura
Brian Tompkins
Justine Hendricksen
Jeff Noelte
Patrick Milroy
Kerrie Bryan
Shayla Antrim
Kathy Burke
Rudy Guerrero
LEGAL COUNSEL: Michele Staples
STOCKHOLDERS: Michelle Beresford
Tom McNeal
Fred McNeal
Kenneth Meddock (Representing First American Title)
GUEST(S): Jean Cihigoyenetche (EVWD Legal Counsel)
Marty Cihigoyenetche (EVWD Legal Counsel)
APPROVAL OF AGENDA
M/S/C (Smith-Goodrich) by unanimous roll call vote that the May 21, 2020 agenda
be approved as submitted.
NF Minutes 5/21/2020 sma
AMENDMENT OF ARTICLES OF INCORPORATION AND BY-LAWS TO REDUCE THE
NUMBER OF DIRECTORS FROM SEVEN TO FIVE
As discussed during the annual Shareholder meeting, changing the number of
directors requires amendments to both the Articles of Incorporation and the By-Laws,
with the amendment of the Articles requiring approval of a majority of the shareholders
and the Board, and the amendment of the By-Laws requiring approval of a majority of
the shareholders (no Board approval required).
M/S/C (Morales-Goodrich) by unanimous roll call vote to amend the Articles of
Incorporation to reduce the number of directors from seven to five.
BOARD RE-ORGANIZATION
ELECTION OF OFFICERS
Director Coats moved that the current slate of officers be as follows:
M/S/C (Coats-Goodrich) by unanimous roll call vote that David E. Smith be
appointed Board President.
M/S/C (Coats- Goodrich) by unanimous roll call vote that Phillip Goodrich be
appointed Vice President.
M/S/C (Coats- Goodrich) by unanimous roll call vote that Justine Hendricksen be
appointed Secretary.
M/S/C (Coats- Goodrich) by unanimous roll call vote that Brian Tompkins be
appointed Treasurer.
M/S/C (Coats- Goodrich) by unanimous roll call vote that John Mura be appointed
General Manager.
The Board Secretary announced that President Smith will take his position as President.
APPROVAL OF BOARD OF DIRECTORS ANNUAL MEETING MINUTES FOR APRIL 2, 2019
M/S/C (Carrillo-Goodrich) by unanimous roll call vote that the April 2, 2019 Board
of Directors annual meeting minutes be approved as submitted.
REPORT REGARDING STATUS OF EAST VALLEY WATER DISTRICT ACQUISITION OF
SHARES
NF Minutes 5/21/2020 sma
The General Manager provided an update regarding the status of remaining shares of
North Fork Water Company (NFWC) not owned by East Valley Water District (EVWD) and
the efforts to acquire the remaining shares. He stated that EVWD staff has been in
negotiations with remaining shareholders and has offered fair market value for their
shares. He added that EVWD currently owns approximately 97% of NFWC shares and
EVWD Board of Directors approved action to acquire the remaining shares by eminent
domain if necessary.
PROPOSED FY 2020-21 WATER DELIVERIES AND OPERATIONAL UPDATE
The Operations Manager provided an update on water deliveries and operations to the
Board. He discussed the proposed abandonment of several weirs due to liability issues
and no longer being utilized.
The Chief Financial Officer reviewed proposed revisions to the Capital Improvement
Program. He stated that staff recommends that $80,000 be transferred from the Plunge
Creek Crossing project to the Weir Abandonment project due to urgency and potential
liability concerns.
M/S/C (Coats-Goodrich) by unanimous roll call vote that the Board accept the FY
2020-21 Water Deliveries and Operational Update as submitted.
FINANCIAL STATEMENTS FOR FY 2019-20
The Chief Financial Officer reviewed the Financial Report, executive summary and
operating budget with the Board. He stated that there were no findings in the
independent accountant’s review.
M/S/C (Morales-Goodrich) by unanimous roll call vote that the Board accept and
file the Financial Report as submitted.
BUDGET AND ASSESSMENTS FOR 2020-21
The Chief Financial Officer reviewed the proposed operating budget and the proposed
fiscal year 2020-21 assessments. He stated that there was a reduction in operating labor
which reduced the annual budget. He stated that staff is proposing the 2020-21
Operating Budget be funded through assessments, at $13 per share, and operating
reserves.
M/S/C (Carrillo-Goodrich) by unanimous roll call vote that the Board approve the
proposed 2020-21 operating budget and $13 assessment per share.
DIRECTORS’ COMMENTS
Director Morales thanked Director Carrillo for his service serving as Board President and
stated that he looks forward to President Smith taking over the position.
NF Minutes 5/21/2020 sma
President Smith thanked Director Carrillo for his time serving as Board President.
PUBLIC COMMENTS
President Smith declared the public participation of the meeting open at 2:51 p.m.
There being no written or verbal comments the public participation section was closed.
ADJOURN
The meeting was adjourned at 2:52 p.m.
________________________
David E. Smith, President
____________________________
Justine Hendricksen, Secretary
S TAF F R E P ORT
Agenda Item #3.
Meeting Date: Ap ril 6, 2021
Dis c ussion Item
To: North F ork Water C ompany Meeting
F rom: Legal C ouns el
Subject: R eport R egarding Acquis ition of North F o rk Water C ompany S hares by Eas t Valley Water Dis tric t
R E C O MME N D AT IO N:
T his item is fo r info rmatio n o nly.
B AC KGR O UN D / AN ALYS IS :
Eas t Valley Water Dis tric t (“Distric t”) is the current o wner of over 99% of s hares in North F o rk Water
C o mp any. O n Ap ril 22, 2020, the Dis tric t’s Bo ard of Directo rs authorized the initiation of eminent d o main
p ro ceedings to ac q uire the app ro ximate 1% of s hares in No rth F o rk Water C o mp any no t owned by the Dis tric t
(“projec t”).
O n Augus t 11, 2020, as part of the eminent domain p roc es s , the Dis tric t sent written o ffers o f jus t c omp ensatio n
to the other remaining s hareho ld ers o ffering to p urc has e their s hares at the apprais ed value. T he apprais ed s hare
value of $569.00 p er s hare was es tablis hed thro ugh an ap p rais al updated on Ap ril 27, 2020 b y Brian J. Brad y
and As s ociates , who the Dis tric t retained in 2017. Two s hareho lders agreed to sell their s hares to the Dis tric t
upon receipt o f the Dis tric t’s written offer. T he Distric t then retained Web b and As s o c iates to perfo rm a review
o f the project for c o mp liance with the C alifo rnia Environmental Q uality Act, whic h d etermined that the project is
categoric ally exemp t. A Notice o f Exemptio n was is s ued, posted , and bec ame final o n O c to b er 21, 2020.
O n January 27, 2021, the Dis tric t held a duly notic ed pub lic hearing to consider the nec es s ity o f ac q uiring the
remaining s hares no t owned b y the Dis tric t. After s aid pub lic hearing, the Dis tric t ap p ro ved a R es o lutio n of
Neces s ity autho rizing eminent domain p ro ceedings to acquire the remaining No rth F o rk Water C o mp any s hares
to c o ns o lid ate and improve the efficiency of water s ervic e within the Dis tric t’s s ervic e area. S ince appro ving the
R es o lutio n of Nec es s ity, the Dis tric t has c ontinued to nego tiate with o ther No rth F o rk Water C ompany
s hareho ld ers to acquire the remaining s hares to taling les s than 1% interest in No rth F ork Water C ompany.
NE X T S T EP S :
T he Dis tric t will soon file s uit in S an Bernardino C o unty S uperior C ourt s eeking to acquire the remaining s hares
in No rth F o rk Water C o mp any thro ugh eminent domain.
R ecommended b y:
Jo hn Mura
G eneral Manager
R es p ectfully s ubmitted :
Martin C ihigoyenetc he
Legal C o unsel fo r EVW D
F IS C AL IMPAC T
T here is no fis cal impac t to No rth F o rk Water C o mp any as s o ciated with this agend a item.
STAFF REPORT
Agenda Item #4.
Meeting Date: April 6, 2021
Discussion Item
To: North Fork Water Company Meeting
From: General Manager
Subject: Cons ider Approval o f Proposed FY 2021-22 Water Deliveries and Operational Update
RECOMMEND ATION:
Staff recommends that the Board o f Directors review and approve the proposed FY 2021-22 Delivery
Schedule and Operational Update.
BACKGROUN D / ANALYSIS:
The 1885 contract terms established spec ific water delivery ob ligations to the North Fork Water Company
(Company) shareho lders during contract and non-contract periods. The contract months of June through
November are ass igned spec ific delivery obligations and non-contract months receive 25% of the river flo w.
During FY 2020-21 monthly water deliveries during non-contract months were estimated for upcoming months
based on previous San Bernard ino Valley Water Conservation District flow reports.
DISCUSSION
In January Shareho lders received 1.2 Miner’s Inch (MI) per share, February, 1.3 MI, and March, 1.0 MI. April,
0.94 MI and May is estimated at 0.97 MI. Delivery amounts for June through November will be at the
contracted amounts, per the North Fork contract agreement. Even though the flow amounts reported for this
year indicate that the Santa Ana River is flowing slightly below average, it has been noticed that the North Fork
customers that have converted to the new water meter delivery method are us ing less water. A total of eleven
water meters have been installed to date and only three weirs still need to be converted off the d itch.
In the event of a s ignificant rain fall of more than one-half inch, deliveries will automatically be halted. When
water quality is compromised, water is not taken down the ditch to protect the d itch from large quantities of
sed imentation. If a customer would like to continue their scheduled delivery fo llowing a rain fall, customers may
contact East Valley Water District Operations Divis ion to resume their regularly scheduled delivery. In add ition,
deliveries may be halted due to c ircumstances beyond the Company’s control because of San Bernard ino
County Flood Contro l, Southern California Ed ison, or another outs ide event. Staff will be sure to maintain
communication with shareholders that may be impacted by unexpected delivery disruptions.
R ecommended b y:
Jo hn Mura
G eneral Manager
R espec tfully sub mitted:
P atrick Milroy
O p erations Manager
T he c hart b elo w s hows the propo s ed month b y mo nth water d elivery s ched ule:
R E VIE W B Y O T HE R S :
T his agenda item has been reviewed by the Ad minis tratio n, F inanc e, and O p eratio ns Dep artments .
F IS C AL IMPAC T
T here is no fis cal impac t as s o c iated with this agend a item.
ATTACH M E N TS:
Description Type
P resentation P resentation
WATER DELIVERIES &
OPERATIONAL UPDATE
April 6, 2021
WATER DELIVERIES
MONTH ALLOTMENT
(MINER’S INCHES PER DAY)
ALLOTMENT PER SHARE
(MINER’S INCHES)
January -May 25% of Santa Ana River Flow
June 500 2.0
July 600 2.5
August 600 2.5
September 550 2.3
October 450 1.9
November 400 1.6
December 25% of Santa Ana River Flow
2021-22 PROJECTED WATER DELIVERIES
MONTH ALLOTMENT
(MINER’S INCHES PER DAY)
ALLOTMENT PER SHARE
(MINER’S INCHES)
January (Actual)287 1.2
February (Actual)337 1.3
March (Actual)237 1.0
April (Actual)225 0.94
May (Estimate)225 0.97
June 500 2.0
July 600 2.5
August 600 2.5
September 550 2.3
October 450 1.9
November 400 1.6
December (Estimate)25%of River Flow 1.0
CAPITAL IMPROVEMENT PROGRAM
CAPITAL IMPROVEMENT
PROJECT
APPROVED
BUDGET
EXPENDITURES
TO DATE
BUDGET
REMAINING
Plunge Creek Crossing $ 50,000 $ 5,281 $ 44,719
Facility Abandonments 130,000 20,743 109,257
TOTAL $ 180,000 $ 26,024 $ 153,976
SUMMARY OF PROJECTS FUNDED BY CAPITAL RESERVE (RESTRICTED CASH)
STAFF REPORT
Agenda Item #5.
Meeting Date: April 6, 2021
Discussion Item
To: North Fork Water Company Meeting
From: General Manager
Subject: Cons ider Approval of Financ ial Statements for FY 2020-21
RECOMMEND ATION:
Staff recommends that the financ ial statements for FY 2020-21 be adopted and filed.
BACKGROUND / ANALYSIS:
Section 5.05(b) of the North Fork Water Company (Company) Bylaws require that the Chief Financial Officer
render to the Board of Directors (Board) an accounting of the Company’s transactions and financial condition at
regular meetings of the Board. In order to comply with this section of the Bylaws, annual financ ial statements are
prepared by staff, reviewed by an independent accounting firm, and presented to the Board at each annual
shareho lders’ meeting.
DISCUSSION
Attached are the Company’s financ ial statements as of, and for the twelve months ended, January 31, 2021. The
statements are presented in comparative form, prior to current year, in order to identify s ignificant variances.
Notab le items are:
Statement of Financial Position
Operating Cash decreased by 13% from $126,091 to $109,307 representing use of the Operating Reserve.
Cash - Restricted for Capital Projects remains unchanged at $160,135. No weir abandonments were
completed due to limited staff activity during the COVID-19 pandemic.
Assessment receivables decreased from $9,191 to $1,974 because East Valley Water District acquired 251
shares and resolved associated outstanding balance due.
Statement of Activities
Weir Abandonments - Due to the COVID-19 pandemic restrictions, the weir abandonment program has
been postponed to the next fiscal year.
Insurance - The Company's general liability insurance increased because East Valley Water District's
insurance provider raised rates.
The financial statements were reviewed by the accounting firm of CliftonLarsonAllen LLC (CLA), who had no
findings as a result of their review procedures.
R ecommended b y:
Jo hn Mura
G eneral Manager
R espec tfully sub mitted:
Brian Tomp kins
C hief F inancial O ffic er
R E VIE W B Y O T HE R S :
T his agenda item has been reviewed by the Ad minis tratio n and F inanc e Departments.
F IS C AL IMPAC T
T here is no fis cal impac t as s o c iated with this agend a item.
ATTACH M E N TS:
Description Type
P resentation P resentation
North Fork Financial Statement F Y 2020-2 1 Backup Material
FINANCIAL STATEMENTS
FY 2020-21
April 6, 2021
FINANCIAL STATEMENTS
AND REPORTS
•Annual Financial Report
•Review Company’s Financial Position and
Results of Operations
•Instrument of Financial Disclosure
INDEPENDENT
ACCOUNTANT’S
REVIEW
NO FINDINGS
STATEMENT OF FINANCIAL POSITION
Assets
Cash $ 109,307
Cash –Restricted for Capital Projects 160,135
Fixed Assets / Water Rights 3,515,862
Less: Accumulated Depreciation (742,112)
Construction In Progress 0
Other Assets 20,422
TOTAL ASSETS $ 3,063,614
Liabilities $ 10,946
Shareholder Equity 3,052,668
TOTAL LIABILITIES & EQUITY $ 3,063,614
STATEMENT OF ACTIVITIES
BUDGET ACTUAL
Operating Labor / Equipment -EVWD $ 11,000 $ 11,743
Contract Maintenance 10,000 7,800
Legal Services 26,000 43,374
Other Professional Services 4,700 4,650
Administration 12,000 13,350
Materials & Supplies 100 0
Insurance 3,700 6,284
Property, Franchise Taxes 32,500 28,612
Depreciation 0 61,118
Operating Expenses $ 100,000 $ 176,931
Shareholder Assessment –Operating ($13)93,028 92,560
Change In Equity -Decrease $ 6,972 $ 84,371
HIGHLAND, CALI F O R NIA
fo r years ending
January 31, 2021 and January 31, 2020
FINANCIAL STATEMENTS
North Fork Water Company
A C ALI F O R NIA CORPO RATION
Table of Contents
Schedule Page
Organization Data 1
Independent Accountants’ Review Report 2 - 3
Statements of Financial Position 4
Statements of Activities 5
Statements of Changes in Shareholders' Equity 6
Statements of Cash Flows 7
Notes to Financial Statements 8 - 11
Supplementary Information
Schedule of Property, Plant and Equipment, and
Accumulated Depreciation
One
12 - 13
Schedule of Shareholders Two 14
Statement of Financial Position Comments Three 15 - 16
North Fork Water Company
(A California Corporation)
Organization Data
January 31, 2021 and 2020
1
DATE AND STATE OF INCORPORATION 1885 - California
DURATION OF CHARTER Perpetual Existence
NATURE OF BUSINESS
Water Company Located in Highland, California
DATE OF EXEMPTION LETTER September 13, 1964
OFFICERS
David Smith President
Phillip Goodrich Vice President
Brian Tompkins Treasurer
Justine Hendricksen Secretary
DIRECTORS
David Smith
Ronald Coats
James Morales, Jr.
Phillip Goodrich
Chris Carrillo
MANAGER
Under Agreement with East Valley Water District
2
3
2021 2020
Current Assets
Cash 109,307$ 126,091$
Cash - Restricted for Capital Projects 160,135 160,135
Prepaid Expenses 18,448 17,111
Assessments Receivable 1,974 9,191
Total Current Assets 289,864 312,528
Property, Plant, and Equipment
Improvements - Fencing 2,840 2,840
Pipelines and Valves 2,857,411 2,857,411
Construction In Progress - 5,281
Less: Accumulated Depreciation (742,112) (686,275)
Total Property, Plant, and Equipment 2,118,139 2,179,257
Other Assets
Water Rights - January 31, 1952 655,611 655,611
Total Other Assets 655,611 655,611
Total Assets 3,063,614$ 3,147,396$
Current Liabilities
Accounts Payable 10,946$ 10,357$
Total Current Liabilities 10,946 10,357
Balance, January 31, 2020
Capital Stock Authorized 7,200 Shares - 7,156 Issued
and Outstanding at $100 Stated Value 715,600 715,600
Additional Paid-In Capital 466,496 478,522
Contributed Capital 1,457,078 1,494,924
Retained Earnings 413,494 447,993
Total Shareholders' Equity 3,052,668 3,137,039
Total Liabilities and Shareholders' Equity 3,063,614$ 3,147,396$
See accompanying notes and Independent Accountants' Review Report.
LIABILITIES AND SHAREHOLDERS' EQUITY
North Fork Water Company
(A California Corporation)
Statements of Financial Position
January 31, 2021 and 2020
ASSETS
4
2021 2020
Revenues
Water Sales -$ -$
Expenses
Repairs and Maintenance
Labor and Equipment 11,743 9,417
Contracted 7,800 7,150
Weir Abandonments - 20,743
Administration 13,350 10,220
Accounting Fees 2,400 2,400
Other Professional Services 2,250 8,031
Legal 43,374 55,051
Materials and Supplies - 1,301
Property Taxes 27,812 31,065
Insurance 6,284 3,674
Depreciation 61,118 55,837
Total Expenses 176,131 204,889
Loss from Operations (176,131) (204,889)
Excess of Expenses over Revenues before
Provision for Income Taxes (176,131) (204,889)
Provision for Income Taxes
State Income Taxes 800 800
Excess of Expenses over Revenues before Contributions (176,931) (205,689)
Contributions
Shareholder Assessments - Operating 92,560 114,532
Change in Equity (84,371)$ (91,157)$
See accompanying notes and Independent Accountants' Review Report.
North Fork Water Company
(A California Corporation)
Statements of Activities
January 31, 2021 and 2020
5
Cumulative
Common Stock Additional Excess of Total
Issued and Paid-in Contributed Revenue Over Shareholders'
Outstanding Capital Capital Expenses Equity
Balance, January 31, 2020 715,600$ 478,522$ 1,494,924$ 447,993$ 3,137,039$
Shareholder Assessments 92,560 92,560
Excess of Expenses
Over Revenues (176,931) (176,931)
Allocate Depreciation (12,026) (37,846) 49,872 -
Balance, January 31, 2021 715,600$ 466,496$ 1,457,078$ 413,494$ 3,052,668$
Cumulative
Common Stock Additional Excess of Total
Issued and Paid-in Contributed Revenue Over Shareholders'
Outstanding Capital Capital Expenses Equity
Balance, January 31, 2019 715,600$ 490,548$ 1,532,770$ 489,278$ 3,228,196$
Shareholder Assessments 114,532 114,532
Excess of Expenses
Over Revenues (205,689) (205,689)
Allocate Depreciation (12,026) (37,846) 49,872 -
Balance, January 31, 2020 715,600$ 478,522$ 1,494,924$ 447,993$ 3,137,039$
See accompanying notes and Independent Accountants' Review Report.
January 31, 2020
January 31, 2021
North Fork Water Company
(A California Corporation)
Statements of Changes in Shareholders' Equity
January 31, 2021 and 2020
6
2021 2020
Cash Flows from Operating Activities
Cash Paid for Services and Materials (115,761)$ (156,228)$
Income Taxes Paid (800) (800)
Net Cash used by Operating Activities (116,561) (157,028)
Cash Flows from Financing Activities
Contributions from Shareholders to Pay Suppliers 99,777 120,650
Net Cash Provided by Financing Activities 99,777 120,650
Cash Flows from Investing Activities
Acquisition and Construction of Assets - -
Net Cash used for Investing Activities - -
Net Increase (Decrease) in Cash (16,784) (36,378)
Cash, Beginning of Year 286,226 322,604
Cash, End of Year 269,442$ 286,226$
Reconciliation of Excess of Expenses over
Revenues to Net Cash Used By Operating Activities
Excess of Revenue over (under) Expenses (176,931)$ (205,689)$
Adjustments:
Depreciation 61,118 55,837
(Increase) Decrease in:
Prepaid Expenses (1,337) (533)
Increase (Decrease) in:
Accounts Payable and Accrued Liabilities 589 (6,643)
Net Cash used by Operating Activities (116,561)$ (157,028)$
See accompanying notes and Independent Accountants' Review Report.
North Fork Water Company
(A California Corporation)
Statements of Cash Flows
January 31, 2021 and 2020
7
North Fork Water Company
(A California Corporation)
Notes to Financial Statements
January 31, 2021 and 2020
8
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Operations
North Fork Water Company (the Company) is a mutual water company. The Company's primary purpose
is to secure surface water from the Santa Ana River and other available sources for delivery to its
shareholders in accordance with its delivery schedules and rules and regulations.
Capitalization Policy
The Company’s capitalization basis is cost if assets are purchased or constructed and acquisition value if
assets are contributed.
Depreciation of Plant and Equipment
The carrying values of plant and equipment are depreciated over the estimated useful lives of the assets
using the straight-line method.
Provision for Income Taxes
The Company is exempt from federal income taxes under Section 501(c)(12) of the Internal Revenue
Code. Therefore, no provision for federal income taxes is reflected in the financial statements.
State franchise tax is computed at the current corporate rate. For the fiscal years ended January 31, 2021
and 2020 state franchise taxes were $800.
Use of Estimates
The preparation of financial statements in conformity with United States generally accepted accounting
principles requires management to make estimates and assumptions that affect certain reported amounts
and disclosures. Accordingly, the actual results could differ from those estimates.
North Fork Water Company
(A California Corporation)
Notes to Financial Statements
January 31, 2021 and 2020
9
NOTE 1 - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES – continued
Cash and Cash Equivalents
For purposes of the statement of cash flows, the North Fork Water Company considers cash and cash
equivalents as short term, highly liquid investments that are both readily convertible to known amounts
of cash and so near their maturity that they present insignificant risk of changes in value because of
changes in interest rates. Cash equivalents have an original maturity date of three months or less from the
date of purchase.
As of January 31, 2021, the Company had $19,442 deposited with financial institutions that were in excess
of federal depository insurance limits. The federal deposit insurance limit is $250,000.
NOTE 2 - RELATED PARTY TRANSACTIONS
As of January 31, 2021, East Valley Water District owned 99.5% of the outstanding shares of the
Company. The Company and East Valley Water District have certain officers and directors in common.
The following related party transactions occurred for the years ending January 31, 2021 and January 31,
2020:
East Valley Water District paid the Company operating and capital assessments of $91,433 and
$105,411
The Company paid East Valley Water District for labor and administration of $25,093 and $19,637
NOTE 3 – DEPARTURE FROM US GAAP
As noted in Note 2, East Valley Water District owns 99.5% of the Company and may appoint (or approve)
a controlling majority of the members of the Company’s governing board. Under the AICPA’s Audit and
Accounting Guide for State and Local Governments, this characterizes the Company as a governmental
entity and therefore subject to the financial reporting standards required by the Governmental Accounting
Standards Board (GASB). The accompanying financial statements were prepared in accordance with the
reporting requirements of the Financial Accounting Standards Board (FASB) which represents a known
departure from US GAAP.
North Fork Water Company
(A California Corporation)
Notes to Financial Statements
January 31, 2021 and 2020
10
NOTE 4 - PROPERTY, PLANT, AND EQUIPMENT
A summary of changes in property, plant and equipment follows:
Balance Balance
January 31, 2020 Additions Deletions January 31, 2021
Distribution System
Pipelines 2,851,372$ -$ -$ 2,851,372$
Ditch Diversion Boxes 4,729 - - 4,729
Valves 1,310 - - 1,310
2,857,411 - - 2,857,411
Improvements
Fencing – North Fork Intake 2,840 - - 2,840
Construction In Progress
Pipeline Replacement 5,281 - (5,281) -
Total 2,865,532$ -$ (5,281)$ 2,860,251$
Balance Balance
Balance, January 31, 2021 January 31, 2019 Additions Deletions January 31, 2020
Distribution System
Pipelines 2,851,372$ -$ -$ 2,851,372$
1/31/2020 4,729 - - 4,729
Valves 1,310 - - 1,310
2,857,411 - - 2,857,411
Improvements
Fencing – North Fork Intake 2,840 - - 2,840
Construction In Progress
Pipeline Replacement 5,281 - - 5,281
Total 2,865,532$ -$ -$ 2,865,532$
North Fork Water Company
(A California Corporation)
Notes to Financial Statements
January 31, 2021 and 2020
11
NOTE 5 - ANNUAL SHAREHOLDER ASSESSMENTS
Annual shareholder operating assessments were set at $13 per share for the year ended January 31, 2021.
No capital assessments were levied during the year.
NOTE 6 - SUBSEQUENT EVENTS
In the preparation of these financial statements, the Company considered subsequent events through
March 22, 2021, which is the date these financial statements were issued.
THIS PAGE IS LEFT BLANK
INTENTIONALLY
SUPPLEMENTARY INFORMATION
Schedule One
Page 1 of 2
January 31, 2021
Date Beginning Ending Remaining Beginning Ending
Acquired Balance Balance Life Years Balance Provision Balance
Canal Replacements 1995 41,862$ 41,862$ 24 20,512$ 837$ 21,349$
Canals - 1/2 interest Various 67,610 67,610 67,610 - 67,610
Ditch Diversion Boxes 1985 4,729 4,729 15 3,277 95 3,372
Canals - 36" Pipeline 1995 8,958 8,958 23 4,565 179 4,744
Canal Replacement (La Tourette)1997 37,511 37,511 26 17,249 750 17,999
Canal Replacement (Plunge Creek
Syphon to Cram School)1999 68,937 68,937 28 28,967 1,380 30,347
Pipeline Replacement
90' of 26" Pipeline
(behind Walmart)2002 9,941 9,941 30 3,781 199 3,980
Pipeline Replacement
16" Pipeline (Highland Avenue)2004 3,010 3,010 32 1,020 60 1,080
Canal Replacement
36" Pipeline - SAR to
Plunge Creek Sandbox)2009 2,493,592 2,493,592 38.5 523,656 49,872 573,528
Pipeline Replacement
50' of 30" DIP - Highland at
VFW Hall 2011 26,205 26,205 40 4,716 524 5,240
Pipeline Replacement
220' of 24" - SAR Xing to Turnout 2014 34,333 34,333 43 4,122 687 4,809
6" Gate Valve (Wier 17)2014 1,310 1,310 13 396 66 462
Pipeline Replacement
80' of 30" - SAR Xing at 7 Oaks Dam 2017 59,413 59,413 46 3,564 1,188 4,752
2,857,411 2,857,411 683,435 55,837 739,272
Improvements:
Security Fencing - NF Intake 2003 2,840 2,840 0 2,840 2,840
Totals 2,860,251$ 2,860,251$ 686,275$ 55,837$ 742,112$
Construction in Progress Various 5,281$ -$ 0 ---
North Fork Water Company
(A California Corporation)
Schedule of Property, Plant and Equipment, and Accumulated Depreciation
January 31, 2021
Property, Plant and Equipment Accumulated Depreciation
12
Schedule One
Page 2 of 2
January 31, 2020
Date Beginning Ending Remaining Beginning Ending
Acquired Balance Balance Life Years Balance Provision Balance
Canal Replacements 1995 41,862$ 41,862$ 24 19,675$ 837$ 20,512$
Canals - 1/2 interest Various 67,610 67,610 67,610 - 67,610
Ditch Diversion Boxes 1985 4,729 4,729 15 3,182 95 3,277
Canals - 36" Pipeline 1995 8,958 8,958 23 4,386 179 4,565
Canal Replacement (La Tourette)1997 37,511 37,511 26 16,499 750 17,249
Canal Replacement (Plunge Creek
Syphon to Cram School)1999 68,937 68,937 28 27,587 1,380 28,967
Pipeline Replacement
90' of 26" Pipeline
(behind Walmart)2002 9,941 9,941 30 3,582 199 3,781
Pipeline Replacement
16" Pipeline (Highland Avenue)2004 3,010 3,010 32 960 60 1,020
Canal Replacement
36" Pipeline - SAR to
Plunge Creek Sandbox)2009 2,493,592 2,493,592 38.5 473,784 49,872 523,656
Pipeline Replacement
50' of 30" DIP - Highland at
VFW Hall 2011 26,205 26,205 40 4,192 524 4,716
Pipeline Replacement
220' of 24" - SAR Xing to Turnout 2014 34,333 34,333 43 3,435 687 4,122
6" Gate Valve (Wier 17)2014 1,310 1,310 13 330 66 396
Pipeline Replacement
80' of 30" - SAR Xing at 7 Oaks Dam 2017 59,413 59,413 46 2,376 1,188 3,564
2,857,411 2,857,411 627,598 55,837 683,435
Improvements:
Security Fencing - NF Intake 2003 2,840 2,840 0 2,840 2,840
Totals 2,860,251$ 2,860,251$ 630,438$ 55,837$ 686,275$
Construction in Progress Various 5,281$ 5,281$ 0 ---
Property, Plant and Equipment Accumulated Depreciation
North Fork Water Company
(A California Corporation)
Schedule of Property, Plant and Equipment, and Accumulated Depreciation
January 31, 2020
13
Schedule Two
Number of
Shareholder Certificate Number(s)Shares
Brucie Cagle 1373 4.00
Richard and Sandra Christianson 1148 3.00
East Valley Water District 7,123.50
Christina Moreno 1379 8.50
Nigel C. Smith 1378 3.00
Santiago Avina 1308 9.00
Michael & Patricia Raley 1414 5.00
Total 7,156.00
North Fork Water Company
(A California Corporation)
Schedule of Shareholders
January 31, 2021
14
Schedule Three
Page 1 of 2
See accompanying notes and Independent Accountants’ Review Report.
15
North Fork Water Company
(A California Corporation)
Statement of Financial Position Comments
January 31, 2021 and 2020
CURRENT ASSETS
Current assets consisted of the following:
2021 2020
Cash in Checking 269,442$ 286,226$
Prepaid Insurance 5,124 2,624
Prepaid Taxes 13,324 14,487
Assessments Receivable 1,974 9,191
Totals 289,864$ 312,528$
WATER RIGHTS
There is an agreement dated May 23, 1895, between North Fork Water Company and Bear Valley Land and
Water Company (now Bear Valley Mutual Water Company) that provides for delivery of water to North Fork
Water Company as follows:
Month Day Inches
June 500
July 600
August 600
September 550
October 450
November 400
December through May ¼ Flow of Santa Ana
River at a point known
as "The Divide"
The water deliveries in the period June through November may be reallocated between months, but no more
than 600 day inches are to be delivered in any one month.
Water rights, as summarized above, have been valued at $655,611, which is the difference between the par
value of the capital stock outstanding and the value of the remaining assets at January 31, 1952.
Schedule Three
Page 2 of 2
See accompanying notes and Independent Accountants’ Review Report.
16
North Fork Water Company
(A California Corporation)
Statement of Financial Position Comments
January 31, 2021 and 2020
PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant and equipment, and accumulated depreciation is shown in Schedule One.
The value of the one-half interest in canals was the appraised value in 1940, with subsequent additions being
valued at cost.
The provision for depreciation amounted to $61,118 computed at established rates using the straight-
line method.
CURRENT LIABILITIES
Current liabilities consisted of the following:
2021 2020
Accrued Liabilities
Accounts Payable
Labor and Burden 1,362$ 1,525$
Legal - January 150 1,884
Landscaping 650 650
EVWD Insurance Reimbursement 8,784 6,298
Total Accounts Payable 10,946$ 10,357$
STAFF REPORT
Agenda Item #6.
Meeting Date: April 6, 2021
Discussion Item
To: North Fork Water Company Meeting
From: General Manager
Subject: Cons ider Approval of Budget and Assessments for FY 2021-22
RECOMMEND ATION:
Staff recommends that the Board of Directors review and adopt the proposed FY 2021-22 Budget and
Assessments.
BACKGROUND / ANALYSIS:
Each year at the North Fork Water Company (N FWC or Company) annual shareho lders’ meeting, staff
presents proposed operating and cap ital budgets that pred ict the cost of service delivery for the upcoming year,
inc lud ing repairs to components of the Company’s water d istribution system.
DISCUSSION
Operating Budget
The Operating Budget funds routine operations, repairs, and maintenance for the Company water delivery
system. It also pays for administrative services such as record-keeping and legal services, to keep shareholders
informed about meetings and finances. The Operating Budget proposed for fiscal year 2021-22 is shown below
with prior year budget and actual numbers for comparison:
T he bud get fo r O p erating Labor and Equip ment C harges remains at $11,000. Although the need to operate weirs
has almos t completely b een eliminated , P roductio n s taff c o ntinues to routinely ins pec t fac ilities along the North
F o rk p ip eline for p ro blems as it is still an imp o rtant, s econd ary intake for water to the Dis tric t’s P lant 134.
T he bud get for legal s ervic es has b een ad jus ted up ward as the b udget fo r 2020-21 was c learly too lo w.
C o ntinued legal s uppo rt will b e needed fo r planning ongo ing operations of the C o mp any onc e it is wholly owned
b y E VW D.
S taff p ro poses that the 2021-22 O perating Bud get be fund ed thro ugh a c ombination of operating as s es s ments ,
at $13 per s hare, and o p erating cash o n hand . T hes e two sources would provid e $93,028 and $6,972,
res p ectively. T he draw on o p erating cas h will leave a balanc e of ap p ro ximately $102,000 at the end o f the fis c al
year.
C ap ital Imp ro vements
T he NF W C C ap ital Imp ro vement P rogram (C I P ) has two o p en c ap ital p ro jec ts, desc rib ed b elo w:
P lunge Creek Crossing – T he purpose o f this projec t is to rep air leaks in the North F ork pipeline as it
c ros s es P lunge C reek. T he rec o mmend ed method for rep air is to make minor rep airs to the pipe as
need ed , and then reinfo rc e c o nc rete armoring aro und the pipe. T he Bo ard has authorized a b udget of
$50,000 for this p ro ject, ho wever, with mo s t irrigators having s o ld their shares or having b een transitio ned
to the Dis tric t’s distrib utio n pipeline s ystem, and the Dis tric t’s P lant 134 taking a majo rity of water
d eliveries from the S tate Water P roject, s taff is developing an alternate recommend atio n fo r the P lunge
C reek c ro s s ing. T here are no p lans to incur c o s ts on this p rojec t in F Y 2021-22.
F acility Abandonments – T he p urp o s e of this projec t is to effectively and safely abandon weirs , p ip es ,
and o ther o p en facilities that are no lo nger needed fo r C o mpany operations . T here were no ab and o nments
c omp leted in F Y 2020-21 d ue to the need to fo cus limited EVW D staffing res o urces on maintenanc e
ac tivities. S taff is currently in d is cus s ions with Merlin Jo hnson C onstruc tion ab o ut res uming
ab and o nments , p ossibly completing 2 or 3 in F Y 2021-22. T he es timated c os t fo r eac h aband o nment is
$22,000 and there is $109,257 remaining in the b ud get for this work.
T he tab le b elo w p res ents a summary of the C ap ital Impro vement P rogram at 1/31/2021:
As no c apital exp enditures oc curred in F Y 2020-21, and the propos ed wo rk targeted for completion in F Y
2021-22 is p ro jec ted to be les s than the current C ap ital R es erve (R es tricted C ash) balanc e o f $160,135, s taff is
not rec o mmend ing a c ap ital as s essment fo r fis cal year 2021-22.
R E VIE W B Y O T HE R S :
T his agenda item has been reviewed by the Ad minis tratio n, F inanc e, and O p eratio ns Dep artments .
F IS C AL IMPAC T
R ecommended b y:
Jo hn Mura
G eneral Manager
R espec tfully sub mitted:
Brian Tomp kins
C hief F inancial O ffic er
F IS C AL IMPAC T
Adoptio n of the O perating Budget as p resented autho rizes operating expenses o f $95,000 fo r fis c al year 2021-
22 and d oes not c hange autho rized expend itures fro m capital res erves.
ATTACH M E N TS:
Description Type
P resentation P resentation
BUDGET & ASSESSMENTS
April 6, 2021
PROPOSED 2021-22 BUDGET
DESCRIPTION ADOPTED 2020-21
BUDGET
PROPOSED 2021-22
BUDGET
OPERATING EXPENSES
Operating Labor/Equipment -EVWD $ 11,000 $ 11,000
Contract Services 10,000 8,500
Legal Services 26,000 31,000
Materials & Supplies 100 100
Administration 12,000 12,000
Other Professional Services 4,700 2,500
Insurance 3,700 6,400
Property/Franchise Taxes 32,500 28,500
Total Operating Expenses $ 100,000 $ 100,000
PROPOSED 2021-22 ASSESSMENTS
DESCRIPTION PROPOSED 2021-22
BUDGET
Proposed Expenses
Operating Expenses $ 100,000
Capital Expenditures 0
TOTA L PROPOSED EXPENSES $ 100,000
Proposed Funding -7,156 Shares
Operating Assessment -$13 per share $ 93,028
Operating Cash -Current Balance $ 109,307 6,972
Capital Assessment 0
TOTAL FUNDING $ 100,000
$13
2020-21
ASSESSMENTS
$0
CAPITAL
ASSESSMENTS