11/15/2017
You may have wondered about tanker trucks you have seen entering and leaving Pinebrook. They represent a short-term test of a possible opportunity for the Gorgoza Mutual Water Company to increase needed capital reserves without having to make a significant increase in rates.
Parts of the Gorgoza system are more than 40 years old. The Company has recently completed a comprehensive study of its assets to identify useful lives and repair and replacement costs. That study illuminated the need to increase the Company’s capital reserves to approximately $3,000,000 by the year 2030, a requirement that would require an immediate increase your water bills of at least $10.00 per month.
Coincidently, Gorgoza was approached by the parent company of Mount Olympus Water about the possibility of purchasing water from Gorgoza’s spring water source. The Mount Olympus spring had become contaminated forcing them to find other spring sources (some as far away as California), plus their inventory was depleted by the high demand for bottled water caused by the multiple hurricanes that hit the southeastern United States this year.
The Gorgoza Board recognized that this might be a way to fund part of our capital reserve needs. The Board carefully reviewed our current and historic water system yields and demands, and determined that the system we have built up over years has source capacities and redundancies well in excess of current and projected needs. In other words, Gorgoza has sufficient source capacity to sell water to Mount Olympus without compromising its ability to meet all obligations to its shareholders.
Accordingly, Gorgoza’s Board determined to authorize the sale of a limited amount of its spring water on a trial basis during the fall and winter months when our system has minimal other demands.
A few summary points:
• The sales price to the purchaser is significantly higher than what shareholders pay.
• All equipment and delivery costs are paid by the water purchaser, at no cost to the Gorgoza shareholders
• Water deliveries are restricted to daylight hours on weekdays, with no idling of the trucks while the tanks are being filled.
• All revenues from water sales will be added to Gorgoza’s capital reserve funds, offsetting needs that would otherwise have to be met by increased assessments.
• The Company’s highest obligation is to its shareholders. The arrangement with this purchaser is for the sale of surplus water, and will be curtailed or cut-off entirely if needed to protect local needs.
• In the event the purchaser wants to explore a long-term arrangement with Gorgoza after the purchaser’s current emergency passes, the Board will conduct a thorough review of the trial period operations before any further commitment is made.
• Long-term arrangements, if made, will include the purchaser paying to move the location where the trucks are loaded to a better location, likely somewhere along Pinebrook Boulevard.
Gorgoza hopes that this information will be helpful to you. If you have further questions, please contact Shelly at 435-649-7948 or via email at [email protected]
Thank you.
