|
UNITED STATES
|
||||||
|
SECURITIES AND EXCHANGE COMMISSION
|
||||||
|
Washington, D.C. 20549
|
||||||
|
FORM 10-K
|
||||||
|
(Mark One)
|
||||||
|
ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
|
|||||
|
For the fiscal year ended December 31, 2010
|
||||||
|
OR
|
||||||
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|||||
|
For the transition period from __________to____________
|
||||||
|
Commission file number 001-34245
|
||||||
|
THE YORK WATER COMPANY
|
||||||
|
(Exact name of registrant as specified in its charter)
|
||||||
 |
||||||
|
PENNSYLVANIA
|
23-1242500
|
|||||
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|||||
|
130 EAST MARKET STREET, YORK, PENNSYLVANIA
|
17401
|
|||||
|
(Address of principal executive offices)
|
(Zip Code)
|
|||||
|
Registrant's telephone number, including area code (717) 845-3601
|
||||||
|
Securities registered pursuant to Section 12(b) of the Act:
|
||||||
|
None
|
||||||
|
(Title of Each Class)
|
(Name of Each Exchange on Which Registered)
|
|||||
|
Securities registered pursuant to Section 12(g) of the Act:
|
||||||
|
COMMON STOCK, NO PAR VALUE
|
||||||
|
(Title of Class)
|
||||||
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
||||||
|
¨ YES
|
ýNO
|
|||||
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
|
||||||
|
¨ YES
|
ýNO
|
|||||
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
||||||
|
ý YES
|
¨NO
|
|||||
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
||||||
|
¨ YES
|
¨NO
|
|||||
|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
|
||||||
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):
|
||||||
|
Large accelerated filer ¨
|
Accelerated filer ý
|
|||||
|
Non-accelerated filer ¨
|
Small Reporting Company ¨
|
|||||
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
|
||||||
|
¨ YES
|
ýNO
|
|||||
|
The aggregate market value of the Common Stock, no par value, held by nonaffiliates of the registrant on June 30, 2010 was $179,516,943.
|
||||||
|
As of March 7, 2011 there were 12,696,512 shares of Common Stock, no par value, outstanding.
|
||||||
|
DOCUMENTS INCORPORATED BY REFERENCE
|
||||||
|
Portions of the 2010 Annual Report to Shareholders are incorporated by reference into Parts I and II.
|
||||||
|
Portions of the Proxy Statement for the Company's 2011 Annual Meeting of Shareholders are incorporated by reference into Part III.
|
||||||
THE YORK WATER COMPANY
PART I
|
Item 1.
|
Business.
|
The Company is a corporation duly organized under the laws of the Commonwealth of Pennsylvania in 1816.
The business of the Company is to impound, purify to meet or exceed safe drinking water standards and distribute water. The Company operates within its franchised territory, which covers 39 municipalities within York County, Pennsylvania and seven municipalities within Adams County, Pennsylvania. The Company is regulated by the Pennsylvania Public Utility Commission, or PPUC, in the areas of billing, payment procedures, dispute processing, terminations, service territory, debt and equity financing and rate setting. The Company must obtain PPUC approval before changing any practices associated with the aforementioned areas. Water service is supplied through the Company's own distribution system. The Company obtains its water supply from both the South Branch and East Branch of the Codorus Creek, which together have an average daily flow of 73.0 million gallons per day. This combined watershed area is approximately 117 square miles. The Company has two reservoirs, Lake Williams and Lake Redman, which together hold up to approximately 2.2 billion gallons of water. The Company has a 15-mile pipeline from the Susquehanna River to Lake Redman which provides access to an additional supply of 12.0 million gallons of water per day. As of December 31, 2010, the Company's average daily availability was 35.0 million gallons, and daily consumption was approximately 18.9 million gallons. The Company's service territory had an estimated population of 182,000 as of December 31, 2010. Industry within the Company's service territory is diversified, manufacturing such items as fixtures and furniture, electrical machinery, food products, paper, ordnance units, textile products, air conditioning systems, laundry detergent, barbells and motorcycles.
The Company's business is somewhat dependent on weather conditions, particularly the amount of rainfall. The Company has minimum customer charges in place which are intended to cover fixed costs of operations under all likely weather conditions. Although the Company is not a seasonal business, there is generally an increase in revenues during the second and third quarters from higher consumption due to the hot and dry conditions typical of the summer months. The Company's business does not require large amounts of working capital and is not dependent on any single customer or a very few customers.
Competition
As a regulated utility, the Company operates within an exclusive franchised territory that is substantially free from direct competition with other public utilities, municipalities and other entities. Although the Company has been granted an exclusive franchise for each of its existing community water systems, the ability of the Company to expand or acquire new service territories may be affected by currently unknown competitors obtaining franchises to surrounding water systems by application or acquisition. These competitors may include other investor-owned utilities, nearby municipally-owned utilities and sometimes from strategic or financial purchasers seeking to enter or expand in the water industry. The addition of new service territory and the acquisition of other utilities are generally subject to review and approval by the PPUC.
Water Quality and Environmental Regulations
Provision of water service is subject to regulation under the federal Safe Drinking Water Act, the Clean Water Act and related state laws, and under federal and state regulations issued under these laws. The federal Safe Drinking Water Act establishes criteria and procedures for the U.S. Environmental Protection Agency, or EPA, to develop national quality standards. Regulations issued under the Act, and its amendments, set standards on the amount of certain contaminants allowable in drinking water. Current requirements are not expected to have a material impact on the Company’s operations or financial condition as we currently meet or exceed standards.
The Clean Water Act regulates discharges from water treatment facilities into lakes, rivers, streams and groundwater. The Company complies with this Act by obtaining and maintaining all required permits and approvals for discharges from our water facilities and by satisfying all conditions and regulatory requirements associated with the permits.
Under the requirements of the Pennsylvania Safe Drinking Water Act, or SDWA, the Pennsylvania Department of Environmental Protection, or DEP, monitors the quality of the finished water we supply to our customers. DEP requires the Company to submit weekly reports showing the results of daily bacteriological and other chemical and physical analyses. As part of this requirement, the Company conducts over 77,000 laboratory tests annually. Management believes that the Company complies with the standards established by the agency under the SDWA. DEP also assists the Company by preventing and eliminating pollution by regulating discharges into the Company’s watershed area.
Page 2
DEP and the Susquehanna River Basin Commission, or SRBC, regulate the amount of water withdrawn from streams in the watershed to assure that sufficient quantities are available to meet the Company’s needs and the needs of other regulated users. Through its Division of Dam Safety, DEP regulates the operation and maintenance of the Company’s impounding dams. The Company routinely inspects its dams and prepares annual reports of their condition as required by DEP regulations. DEP reviews these reports and inspects the Company’s dams annually. DEP most recently inspected the Company’s dams in April 2010 and noted no significant violations.
Since 1980, DEP has required any new dam to have a spillway that is capable of passing the design flood without overtopping the dam. The design flood is either the Probable Maximum Flood, or PMF, or some fraction of it, depending on the size and location of the dam. PMF is very conservative and is calculated using the most severe combination of meteorological and hydrologic conditions reasonably possible in the watershed area of a dam.
The Company engaged a professional engineer to analyze the spillway capacities at the Lake Williams and Lake Redman dams and validate DEP’s recommended design flood for the dams. Management presented the results of the study to DEP in December 2004, and DEP then requested that the Company submit a proposed schedule for the actions to address the spillway capacities. Thereafter, the Company retained an engineering firm to prepare preliminary designs for increasing the spillway capacities to pass the PMF through armoring the dams with roller compacted concrete. Management met with DEP in September 2006 to review the preliminary design and discuss scheduling, permitting, and construction requirements. The Company is currently completing the final design and permitting process and expects to begin armoring one of the dams between 2011 and 2013. The second dam is expected to be armored in a year or two following the first dam armoring. The cost to armor each dam is expected to be approximately $5.5 million.
Capital expenditures and operating costs required as a result of water quality standards and environmental requirements have been traditionally recognized by state public utility commissions as appropriate for inclusion in establishing rates. The capital expenditures currently required as a result of water quality standards and environmental requirements have been budgeted in our capital program and represent less than 10% of our expected total capital expenditures over the next 5 years.
Growth
During the five year period ended December 31, 2010, the Company maintained growth in the number of customers and distribution facilities. The Company presently has 110 full time employees.
The following table sets forth certain of our summary statistical information.
|
(In thousands of dollars)
|
For the Years Ended December 31,
|
||||
|
2010
|
2009
|
2008
|
2007
|
2006
|
|
|
Revenues
|
|||||
|
Residential
|
$24,478
|
$23,299
|
$20,572
|
$19,722
|
$17,972
|
|
Commercial and industrial
|
11,440
|
10,734
|
9,671
|
9,290
|
8,497
|
|
Other
|
3,087
|
3,010
|
2,595
|
2,421
|
2,189
|
|
Total
|
$39,005
|
$37,043
|
$32,838
|
$31,433
|
$28,658
|
|
Average daily consumption
|
|||||
|
(gallons per day)
|
18,875,000
|
18,233,000
|
18,298,000
|
19,058,000
|
18,769,000
|
|
Miles of mains
|
|||||
|
at year-end
|
925
|
922
|
884
|
845
|
817
|
|
Additional distribution mains
|
|||||
|
installed/acquired (ft.)
|
19,886
|
200,439
|
206,140
|
147,803
|
159,330
|
|
Number of customers
|
|||||
|
at year-end
|
62,505
|
62,186
|
61,527
|
58,890
|
57,578
|
|
Population served
|
|||||
|
at year-end
|
182,000
|
180,000
|
176,000
|
171,000
|
166,000
|
Please refer to the “Highlights of Our 195th Year” section of our 2010 Annual Report to Shareholders filed herewith as Exhibit 13 for summary financial information for the last five years.
Page 3
For further information regarding requesting copies of the Company’s financial reports, please see the “Financial Reports and Investor Relations” portion of the Shareholder Information section of our 2010 Annual Report to Shareholders filed herewith as Exhibit 13. The Company makes available free of charge, on or through its website (www.yorkwater.com), its annual report on Form 10-K, its quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC.
|
Item 1A.
|
Risk Factors.
|
The rates we charge our customers are subject to regulation. If we are unable to obtain government approval of our requests for rate increases, or if approved rate increases are untimely or inadequate to cover our investments in utility plant and equipment and projected expenses, our results of operations may be adversely affected.
Our ability to maintain and meet our financial objectives is dependent upon the rates we charge our customers, which are subject to approval by the PPUC. We file rate increase requests with the PPUC, from time to time, to recover our investments in utility plant and equipment and projected expenses. Any rate increase or adjustment must first be justified through documented evidence and testimony. The PPUC determines whether the investments and expenses are recoverable, the length of time over which such costs are recoverable, or, because of changes in circumstances, whether a remaining balance of deferred investments and expenses is no longer recoverable in rates charged to customers. Once a rate increase application is filed with the PPUC, the ensuing administrative and hearing process may be lengthy and costly. The timing of our rate increase requests are therefore dependent upon the estimated cost of the administrative process in relation to the investments and expenses that we hope to recover through the rate increase.
We can provide no assurances that future requests will be approved by the PPUC; and, if approved, we cannot guarantee that these rate increases will be granted in a timely or sufficient manner to cover the investments and expenses for which we sought the rate increase. If we are unable to obtain PPUC approval of our requests for rate increases, or if approved rate increases are untimely or inadequate to cover our investments in utility plant and equipment and projected expenses, our results of operations may be adversely affected.
We are subject to federal, state and local regulation that may impose costly limitations and restrictions on the way we do business.
Various federal, state and local authorities regulate many aspects of our business. Among the most important of these regulations are those relating to the quality of water we supply our customers and water allocation rights. Government authorities continually review these regulations, particularly the drinking water quality regulations, and may propose new or more restrictive requirements in the future. We are required to perform water quality tests that are monitored by the PPUC, the EPA, and the DEP, for the detection of certain chemicals and compounds in our water. If new or more restrictive limitations on permissible levels of substances and contaminants in our water are imposed, we may not be able to adequately predict the costs necessary to meet regulatory standards. If we are unable to recover the cost of implementing new water treatment procedures in response to more restrictive water quality regulations through our rates that we charge our customers, or if we fail to comply with such regulations, it could have a material adverse effect on our financial condition and results of operations.
We are also subject to water allocation regulations that control the amount of water that we can draw from water sources. The SRBC and DEP regulate the amount of water withdrawn from streams in the watershed for water supply purposes to assure that sufficient quantities are available to meet our needs and the needs of other regulated users. In addition, government drought restrictions could cause the SRBC or DEP to temporarily reduce the amount of our allocations. If new or more restrictive water allocation regulations are implemented or our allocations are reduced due to weather conditions, it may have an adverse effect on our ability to supply the demands of our customers, and in turn, on our revenues and results of operations.
Page 4
Our business is subject to seasonal fluctuations, which could affect demand for our water service and our revenues.
Demand for our water during the warmer months is generally greater than during cooler months due primarily to additional requirements for water in connection with cooling systems, swimming pools, irrigation systems and other outside water use. Throughout the year, and particularly during typically warmer months, demand will vary with temperature and rainfall levels. If temperatures during the typically warmer months are cooler than expected, or there is more rainfall than expected, the demand for our water may decrease and adversely affect our revenues.
Weather conditions and overuse may interfere with our sources of water, demand for water services, and our ability to supply water to our customers.
We depend on an adequate water supply to meet the present and future demands of our customers and to continue our expansion efforts. Unexpected conditions may interfere with our water supply sources. Drought and overuse may limit the availability of surface water. These factors might adversely affect our ability to supply water in sufficient quantities to our customers and our revenues and earnings may be adversely affected. Additionally, cool and wet weather, as well as drought restrictions and our customers’ conservation efforts, may reduce consumption demands, also adversely affecting our revenue and earnings. Furthermore, freezing weather may also contribute to water transmission interruptions caused by pipe and main breakage. If we experience an interruption in our water supply, it could have a material adverse effect on our financial condition and results of operations.
The current concentration of our business in central and southern Pennsylvania makes us susceptible to adverse developments in local economic and demographic conditions.
Our service territory presently includes 39 municipalities within York County, Pennsylvania and seven municipalities within Adams County, Pennsylvania. Our revenues and operating results are therefore subject to local economic and demographic conditions in the area. A change in any of these conditions could make it more costly or difficult for us to conduct our business. In addition, any such change would have a disproportionate effect on us, compared to water utility companies that do not have such a geographic concentration.
Contamination of our water supply may cause disruption in our services and adversely affect our revenues.
Our water supply is subject to contamination from the migration of naturally-occurring substances in groundwater and surface systems and pollution resulting from man-made sources. In the event that our water supply is contaminated, we may have to interrupt the use of that water supply until we are able to substitute the flow of water from an uncontaminated water source through our interconnected transmission and distribution facilities. In addition, we may incur significant costs in order to treat the contaminated source through expansion of our current treatment facilities or development of new treatment methods. Our inability to substitute water supply from an uncontaminated water source, or to adequately treat the contaminated water source in a cost-effective manner, may have an adverse effect on our revenues.
The necessity for increased security has and may continue to result in increased operating costs.
We have taken steps to increase security measures at our facilities and heighten employee awareness of threats to our water supply. We have also tightened our security measures regarding the delivery and handling of certain chemicals used in our business. We have and will continue to bear increased costs for security precautions to protect our facilities, operations and supplies. We are not aware of any specific threats to our facilities, operations or supplies. However, it is possible that we would not be in a position to control the outcome of such events should they occur.
Page 5
We depend on the availability of capital for expansion, construction and maintenance.
Our ability to continue our expansion efforts and fund our construction and maintenance program depends on the availability of adequate capital. There is no guarantee that we will be able to obtain sufficient capital in the future or that the cost of capital will not be too high for future expansion and construction. In addition, approval from the PPUC must be obtained prior to our sale and issuance of securities. If we are unable to obtain approval from the PPUC on these matters, or to obtain approval in a timely manner, it may affect our ability to effect transactions that are beneficial to us or our shareholders. A single transaction may itself not be profitable but might still be necessary to continue providing service or to grow the business.
The failure to maintain our existing credit rating could affect our cost of funds and related liquidity.
Standard & Poor's Ratings Services rates our outstanding debt and has given a credit rating to us. Their evaluations are based on a number of factors, which include financial strength as well as transparency with rating agencies and timeliness of financial reporting. In light of the difficulties in the financial services industry and the difficult financial markets, there can be no assurance that we will be able to maintain our current strong credit rating. Failure to do so could adversely affect our cost of funds and related liquidity.
We may face competition from other water suppliers that may hinder our growth and reduce our profitability.
We face competition from other water suppliers for acquisitions, which may limit our growth opportunities. Furthermore, even after we have been the successful bidder in an acquisition, competing water suppliers may challenge our application for extending our franchise territory to cover the target company’s market. Finally, third parties either supplying water on a contract basis to municipalities or entering into agreements to operate municipal water systems might adversely affect our business by winning contracts that may be beneficial to us. If we are unable to compete successfully with other water suppliers for these acquisitions, franchise territories and contracts, it may impede our expansion goals and adversely affect our profitability.
An important element of our growth strategy is the acquisition of water systems. Any pending or future acquisitions we decide to undertake will involve risks.
The acquisition and integration of water systems is an important element in our growth strategy. This strategy depends on identifying suitable acquisition opportunities and reaching mutually agreeable terms with acquisition candidates. The negotiation of potential acquisitions as well as the integration of acquired businesses could require us to incur significant costs. Further, acquisitions may result in dilution for the owners of our common stock, our incurrence of debt and contingent liabilities and fluctuations in quarterly results. In addition, the businesses and other assets we acquire may not achieve the financial results that we expect, which could adversely affect our profitability.
We have restrictions on our dividends. There can also be no assurance that we will continue to pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends.
The terms of our debt instruments impose conditions on our ability to pay dividends. We have paid dividends on our common stock each year since our inception in 1816 and have increased the amount of dividends paid each year since 1997. Our earnings, financial condition, capital requirements, applicable regulations and other factors, including the timeliness and adequacy of rate increases, will determine both our ability to pay dividends on our common stock and the amount of those dividends. There can be no assurance that we will continue to pay dividends in the future or, if dividends are paid, that they will be in amounts similar to past dividends.
Page 6
If we are unable to pay the principal and interest on our indebtedness as it comes due or we default under certain other provisions of our loan documents, our indebtedness could be accelerated and our results of operations and financial condition could be adversely affected.
Our ability to pay the principal and interest on our indebtedness as it comes due will depend upon our current and future performance. Our performance is affected by many factors, some of which are beyond our control. We believe that our cash generated from operations, and, if necessary, borrowings under our existing credit facilities will be sufficient to enable us to make our debt payments as they become due. If, however, we do not generate sufficient cash, we may be required to refinance our obligations or sell additional equity, which may be on terms that are not as favorable to us. No assurance can be given that any refinancing or sale of equity will be possible when needed or that we will be able to negotiate acceptable terms. In addition, our failure to comply with certain provisions contained in our trust indentures and loan agreements relating to our outstanding indebtedness could lead to a default under these documents, which could result in an acceleration of our indebtedness.
We depend significantly on the services of the members of our senior management team, and the departure of any of those persons could cause our operating results to suffer.
Our success depends significantly on the continued individual and collective contributions of our senior management team. If we lose the services of any member of our senior management or are unable to hire and retain experienced management personnel, our operating results could suffer.
There is a limited trading market for our common stock; you may not be able to resell your shares at or above the price you pay for them.
Although our common stock is listed for trading on the NASDAQ Global Select Market, the trading in our common stock has substantially less liquidity than many other companies quoted on the NASDAQ Global Select Market. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the market of willing buyers and sellers of our common stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. Because of the limited volume of trading in our common stock, a sale of a significant number of shares of our common stock in the open market could cause our stock price to decline.
The failure of, or the requirement to repair, upgrade or dismantle, either of our dams may adversely affect our financial condition and results of operations.
Our water system includes two impounding dams. While we maintain robust dam maintenance and inspection programs, a failure of the dams could result in injuries and damage to residential and/or commercial property downstream for which we may be responsible, in whole or in part. The failure of a dam could also adversely affect our ability to supply water in sufficient quantities to our customers and could adversely affect our financial condition and results of operations. We carry liability insurance on our dams, however, our limits may not be sufficient to cover all losses or liabilities incurred due to the failure of one of our dams. The estimated costs to maintain and upgrade our dams are included in our capital budget. Although such costs have previously been recoverable in rates, there is no guarantee that these costs will continue to be recoverable and in what magnitude they will be recoverable.
We are subject to market and interest rate risk on our $12,000,000 variable rate PEDFA Series A bond issue.
We are subject to interest rate risk in conjunction with our $12,000,000 variable interest rate debt issue. This exposure, however, has been hedged with an interest rate swap. This hedge will protect the Company from the risk of changes in the benchmark interest rates, but does not protect the Company’s exposure to the changes in the difference between its own variable funding rate and the benchmark rate. A breakdown of the historical relationships between the Company’s cost of funds and the benchmark rate underlying the interest rate swap could result in higher interest rates adversely affecting our financial results.
Page 7
The holders of the $12,000,000 variable rate PEDFA Series A Bonds may tender their bonds at any time. When the bonds are tendered, they are subject to an annual remarketing agreement, pursuant to which a remarketing agent attempts to remarket the tendered bonds pursuant to the terms of the Indenture. In order to keep variable interest rates down and to enhance the marketability of the Series A Bonds, the Company entered into a Reimbursement, Credit and Security Agreement with PNC Bank, National Association (“the bank”) dated as of May 1, 2008. This agreement provides for a three-year direct pay letter of credit issued by the bank to the trustee for the Series A Bonds. The letter of credit expires May 6, 2012 and is reviewed annually for a possible one-year extension. The bank is responsible for providing the trustee with funds for the timely payment of the principal and interest on the Series A Bonds and for the purchase price of the Series A Bonds that have been tendered or deemed tendered for purchase and have not been remarketed. If the bank is unable to meet its obligations, the Company would be required to buy any bonds which had been tendered.
|
Item 1B.
|
Unresolved Staff Comments.
|
The Company has no unresolved staff comments.
|
Item 2.
|
Properties.
|
Source of Supply
The Company has two impounding dams located in York and Springfield Townships adjoining the Borough of Jacobus to the south. The lower dam, the Lake Williams Impounding Dam, is constructed of compacted earth with a concrete core wall and is 700 feet long and 58 feet high and creates a reservoir covering approximately 165 acres containing about 870 million gallons of water. About 800 acres surrounding the reservoir are planted with more than 1.2 million evergreen trees, which the Company believes will protect the area both from pollution and also from soil erosion, which might otherwise fill the reservoir with silt. The upper dam, the Lake Redman Impounding Dam, is constructed of compacted earth and is 1,000 feet long and 52 feet high and creates a reservoir covering approximately 290 acres containing about 1.3 billion gallons of water. About 600 acres surrounding the reservoir are planted with grass, which the Company believes will protect the area both from pollution and also from soil erosion, which might otherwise fill the reservoir with silt.
In addition to the two impounding dams, the Company owns a 15-mile pipeline from the Susquehanna River to Lake Redman that provides access to a supply of an additional 12.0 million gallons of water per day. As of December 31, 2010, the Company's present average daily availability was 35.0 million gallons, and daily consumption was approximately 18.9 million gallons.
Pumping Stations
The Company's main pumping station is located in Spring Garden Township on the south branch of the Codorus Creek about 1,500 feet upstream from its confluence with the west branch of the Codorus Creek and about four miles downstream from the Company's lower impounding dam. The pumping station presently houses pumping equipment consisting of three electrically driven centrifugal pumps and two diesel-engine driven centrifugal pumps with a combined pumping capacity of 68.0 million gallons per day. The pumping capacity is more than double peak requirements and is designed to provide an ample safety margin in the event of pump or power failure. A large diesel backup generator is installed to provide power to the pumps in the event of an emergency. The raw water is pumped approximately two miles to the filtration plant through pipes owned by the Company.
The Susquehanna River Pumping Station is located on the western shore of the Susquehanna River several miles south of Wrightsville, PA. The pumping station is equipped with three Floway Vertical Turbine pumps rated at 6 million gallons per day each. The pumps are driven by three Caterpillar 3512 Diesel Engines rated at 1175 H.P. each. The pumping station pumps water from the Susquehanna River approximately 15 miles through a combination of 30” and 36” ductile iron main to the Company’s upper impounding dam, located at Lake Redman.
Page 8
Water Treatment
The Company's filtration plant is located in Spring Garden Township about one-half mile south of the City of York. Water at this plant is filtered through twelve dual media filters having a stated capacity of 31.0 million gallons per day with a maximum supply of 42.0 million gallons per day for short periods if necessary. Based on an average daily consumption in 2010 of approximately 18.9 million gallons, the Company believes the pumping and filtering facilities are adequate to meet present and anticipated demands. In 2005, the Company performed a capacity study of the filtration plant and in 2007, began upgrading the facility to increase capacity for future growth. The project is expected to continue over the next several years.
The Company’s sediment recycling facility is located at its Spring Garden Township location. This state of the art facility employs cutting edge technology to remove fine, suspended solids from untreated water. The Company estimates that through this energy efficient, environmentally friendly process, approximately 600 tons of sediment will be removed annually, thereby improving the quality of the Codorus Creek watershed.
Transmission and Distribution
The distribution system of the Company has approximately 925 miles of main water lines which range in diameter from 2 inches to 36 inches. The distribution system includes 28 booster stations and 30 standpipes and reservoirs capable of storing approximately 58 million gallons of potable water. All booster stations are equipped with at least two pumps for protection in case of mechanical failure. Following a deliberate study of our customer demand and pumping capacity, standby generators have been installed at all critical booster stations to provide emergency power in the event of an electric utility interruption.
Other Properties
The Company's distribution center and material and supplies warehouse are located at 1801 Mt. Rose Avenue, Springettsbury Township, and are composed of three one-story concrete block buildings aggregating 30,680 square feet.
The accounting and executive offices of the Company are located in one three-story and one two-story brick and masonry buildings, containing a total of approximately 21,861 square feet, at 124 and 130 East Market Street, York, Pennsylvania.
All of the Company's properties described above are held in fee by the Company. There are no material encumbrances on such properties.
In 1976, the Company entered into a Joint Use and Park Management Agreement with York County under which the Company licensed use of certain of its lands and waters for public park purposes for a period of 50 years. This property includes two lakes and is located on approximately 1,700 acres in Springfield and York townships. Of the Park’s acreage, approximately 500 acres are subject to an automatically renewable one-year license. Under the Joint Use Agreement, York County has agreed not to erect a dam upstream on the East Branch of the Codorus Creek or otherwise obstruct the flow of the creek. The Joint Use Agreement subordinates the County’s use of the lands and waters for recreational purposes to our prior and overriding use of the lands and waters for utility purposes.
|
Item 3.
|
Legal Proceedings.
|
There are no material legal proceedings involving the Company.
|
Item 4.
|
(Removed and Reserved).
|
Page 9
PART II
|
Item 5.
|
Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
The information set forth under the caption "Market for Common Stock and Dividends" and “Dividend Policy” of the 2010 Annual Report to Shareholders is incorporated herein by reference.
The Company has no securities authorized for issuance under equity compensation plans with the exception of an employee stock purchase plan. The employee stock purchase plan allows employees to purchase stock at a 5% discount up to a maximum of 10% of their gross compensation. Under this plan, approximately 38,000 authorized shares remain unissued as of December 31, 2010.
Purchases of Equity Securities by the Company
The Company did not repurchase any of its securities during the fourth quarter of 2010.
Performance Graph
The information set forth under the caption “Performance Graph” of the 2010 Annual Report to Shareholders is incorporated herein by reference.
|
Item 6.
|
Selected Financial Data.
|
The information set forth under the caption "Highlights of Our 195th Year" of the 2010 Annual Report to Shareholders is incorporated herein by reference.
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
The information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2010 Annual Report to Shareholders is incorporated herein by reference.
This annual report on Form 10-K contains certain matters which are not historical facts, but which are forward-looking statements. Words such as "may," "should," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements. The Company intends these forward-looking statements to qualify for safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include certain information relating to the Company’s business strategy; statements including, but not limited to:
|
·
|
expected profitability and results of operations;
|
|
·
|
goals, priorities and plans for, and cost of, growth and expansion;
|
|
·
|
strategic initiatives;
|
|
·
|
availability of water supply;
|
|
·
|
water usage by customers; and
|
|
·
|
ability to pay dividends on common stock and the rate of those dividends.
|
Page 10
The forward-looking statements in this Annual Report reflect what the Company currently anticipates will happen. What actually happens could differ materially from what it currently anticipates will happen. The Company does not intend to make a public announcement when forward-looking statements in this Annual Report are no longer accurate, whether as a result of new information, what actually happens in the future or for any other reason. Important matters that may affect what will actually happen include, but are not limited to:
|
·
|
changes in weather, including drought conditions;
|
|
·
|
levels of rate relief granted;
|
|
·
|
the level of commercial and industrial business activity within the Company's service territory;
|
|
·
|
construction of new housing within the Company's service territory and increases in population;
|
|
·
|
changes in government policies or regulations;
|
|
·
|
the ability to obtain permits for expansion projects;
|
|
·
|
material changes in demand from customers, including the impact of conservation efforts which may impact the demand of customers for water;
|
|
·
|
changes in economic and business conditions, including interest rates, which are less favorable than expected;
|
|
·
|
changes in, or unanticipated, capital requirements;
|
|
·
|
changes in accounting pronouncements;
|
|
·
|
changes in our credit rating or the market price of our common stock;
|
|
·
|
the ability to obtain financing; and
|
|
·
|
other matters set forth in Item 1A, “Risk Factors”.
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
(All dollar amounts are stated in thousands of dollars.)
The Company does not use off-balance sheet transactions, arrangements or obligations that may have a material current or future effect on financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenues or expenses. The Company does not use securitization of receivables or unconsolidated entities. The Company uses a derivative financial instrument, an interest rate swap agreement discussed in Note 4 to the financial statements, for risk management purposes. The Company does not engage in trading or other risk management activities, does not use other derivative financial instruments for any purpose, has no lease obligations, no guarantees and does not have material transactions involving related parties.
The Company's operations are exposed to market risks primarily as a result of changes in interest rates. This exposure to market risks relates to the Company's debt obligations under its lines of credit. As of February 2011, the Company has unsecured lines of credit with maximum availability of $33,000 with three banks. One line of credit includes a $4,000 portion which is payable upon demand and carries an interest rate of LIBOR plus 2.00%, and a $13,000 committed portion with a revolving 2-year maturity (currently May 2012), which currently carries an interest rate of LIBOR plus 2.00%. The Company had no outstanding borrowings under the committed portion and no on-demand borrowings under this line of credit as of December 31, 2010. The second line of credit, in the amount of $11,000, is a committed line of credit, which matures in May 2012 and carries an interest rate of LIBOR plus 1.50%. This line of credit has a compensating balance requirement of $500. The Company had no outstanding borrowings under this line of credit as of December 31, 2010. The third line of credit, in the amount of $5,000, is a committed line of credit, which matures in June 2011 and carries an interest rate of LIBOR plus 2.00%. The Company had no outstanding borrowings under this line of credit as of December 31, 2010. Other than lines of credit, the Company has long-term fixed rate debt obligations as discussed in Note 4 to the financial statements included in the 2010 Annual Report to Shareholders included as Exhibit 13 to this Form 10-K and a variable rate PEDFA loan agreement described below.
Page 11
In May 2008, the Pennsylvania Economic Development Financing Authority, or the PEDFA, issued $12,000 aggregate principal amount of PEDFA Exempt Facilities Revenue Bonds, Series A. The proceeds of this bond issue were used to refund the $12,000 PEDFA Exempt Facilities Revenue Bonds, Series B of 2004 which were refunded due to bond insurer downgrading issues. The PEDFA then loaned the proceeds to the Company pursuant to a variable interest rate loan agreement with a maturity date of October 1, 2029. In connection with the loan agreement, the Company retained its interest rate swap agreement whereby the Company exchanged its floating rate obligation for a fixed rate obligation. The purpose of the interest rate swap is to manage the Company’s exposure to fluctuations in the interest rate. If the interest rate swap agreement works as intended, the receive rate on the swap should approximate the variable rate we pay on the PEDFA Series A Bond Issue, thereby minimizing our risk. See Note 4 to the financial statements of our 2010 Annual Report to Shareholders included as Exhibit 13 to this Form 10-K.
The table below provides information about the Company’s financial instruments that are sensitive to changes in interest rates, including long-term debt obligations and the interest rate swap. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For the interest rate swap, the table presents the undiscounted net payments and weighted average interest rates by expected maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contract. Weighted average variable rates are based on implied forward rates in the yield curve at the reporting date.
|
(In thousands of dollars)
|
Expected Maturity Date
|
|||||||
|
Liabilities
|
2011
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
Total
|
Fair Value
|
|
Long-term debt:
|
||||||||
|
Fixed Rate
|
$41
|
$42
|
$42
|
$43
|
$43
|
$72,962
|
$73,173
|
$82,000
|
|
Average interest rate
|
1.00%
|
1.00%
|
1.00%
|
1.00%
|
1.00%
|
6.67%
|
6.66%
|
|
|
Variable Rate
|
-
|
$12,000
|
-
|
-
|
-
|
-
|
$12,000
|
$12,000
|
|
Average interest rate
|
0.38%
|
0.38%
|
-
|
-
|
-
|
-
|
0.38%
|
|
|
(In thousands of dollars)
|
Expected Maturity Date
|
|||||||
|
Interest Rate Derivatives
|
2011
|
2012
|
2013
|
2014
|
2015
|
Thereafter
|
Total
|
Fair Value
|
|
Interest Rate Swap –
Notional Value $12,000
|
$1,341
|
|||||||
|
Variable to Fixed *
|
$351
|
$307
|
$226
|
$157
|
$103
|
$458
|
$1,602
|
|
|
Average pay rate
|
3.16%
|
3.16%
|
3.16%
|
3.16%
|
3.16%
|
3.16%
|
3.16%
|
|
|
Average receive rate
|
0.24%
|
0.63%
|
1.27%
|
1.84%
|
2.30%
|
2.89%
|
2.45%
|
|
|
*Represents undiscounted net payments.
|
||||||||
The variable rate portion of the liabilities section of the table includes the $12,000 variable rate loan due in 2012, as the underlying bonds could be tendered at any time. If all of the bonds were tendered and could not be remarketed, the earliest that the Company would have to buy them back would be fourteen months from the date of notification. As of February 28, 2011, there had been no such notification. If the bonds are able to be remarketed as intended for the term of the bonds, the loan will be due in October 2029. Interest on the $12,000 variable rate loan is included at an assumed interest rate of 0.38%, which represents the rate paid to bondholders for the PEDFA Series A issue at December 31, 2010.
Page 12
|
Item 8.
|
Financial Statements and Supplementary Data.
|
The following financial statements set forth in the printed 2010 Annual Report to Shareholders are incorporated herein by reference:
|
Management’s Report on Internal Control Over Financial Reporting
|
Page 18
|
|
|
Report of Independent Registered Public Accounting Firm
|
||
|
on Internal Control Over Financial Reporting
|
Page 19
|
|
|
Report of Independent Registered Public Accounting Firm
|
Page 20
|
|
|
Balance Sheets as of December 31, 2010 and 2009
|
Page 21
|
|
|
Statements of Income for Years Ended December 31, 2010, 2009 and 2008
|
Page 22
|
|
|
Statements of Common Stockholders’ Equity and Comprehensive Income
|
||
|
for Years Ended December 31, 2010, 2009 and 2008
|
Page 23
|
|
|
Statements of Cash Flows for Years Ended December 31, 2010, 2009 and 2008
|
Page 24
|
|
|
Notes to Financial Statements
|
Page 25
|
|
Except for the above financial data and the information specified under Items 1, 5, 6, 7, and 7A of this report, the 2010 Annual Report to Shareholders is not deemed to be filed as part of this report.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
None.
Page 13
|
Item 9A.
|
Controls and Procedures.
|
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
The Company's management, with the participation of the Company's President and Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, the Company's President and Chief Executive Officer along with the Chief Financial Officer concluded that the Company's disclosure controls and procedures as of the end of the period covered by this report are effective such that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Company’s management, including the President and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
The Company’s management’s report on internal control over financial reporting is set forth in Item 8 of this annual report on Form 10-K and is incorporated by reference herein.
|
(b)
|
Attestation Report of the Independent Registered Public Accounting Firm
|
The Company’s internal control over financial reporting as of December 31, 2010 has been audited by ParenteBeard LLC, the independent registered public accounting firm who also audited the Company’s financial statements. ParenteBeard’s attestation report on the Company’s internal control over financial reporting is set forth in Item 8 of this annual report on Form 10-K and is incorporated by reference herein.
|
(c)
|
Change in Internal Control Over Financial Reporting
|
No change in the Company's internal control over financial reporting occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
|
Item 9B.
|
Other Information.
|
None.
Page 14
PART III
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Directors, Business Experience, and Directorships
The information set forth under the caption "Election of Directors" of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
Executive Officers
|
Name
|
Age
|
Principal Occupation During Last Five Years
|
Officer Since
|
|
|
Jeffrey R. Hines, P.E.
|
49
|
President and Chief Executive Officer,
|
5/1/1995
|
|
|
The York Water Company, March 2008 to date
|
||||
|
Chief Operating Officer and Secretary,
|
||||
|
The York Water Company, January 2007 to March 2008
|
||||
|
Vice President-Engineering and Secretary,
|
||||
|
The York Water Company, May 1995 to January 2007
|
||||
|
Joseph T. Hand
|
48
|
Chief Operating Officer,
|
3/3/2008
|
|
|
The York Water Company, March 2008 to date
|
||||
|
Chief, Navigation Branch, Baltimore District,
|
||||
|
U.S. Army Corps of Engineers, September 2006
|
||||
|
to February 2008
|
||||
|
Deputy Commander and Deputy District Engineer,
|
||||
|
Baltimore District, U.S. Army Corps of Engineers,
|
||||
|
June 2003 to September 2006
|
||||
|
Kathleen M. Miller
|
48
|
Chief Financial Officer and Treasurer,
|
1/1/2003
|
|
|
The York Water Company, January 2003 to date
|
||||
|
Vernon L. Bracey
|
49
|
Vice President-Customer Service,
|
3/1/2003
|
|
|
The York Water Company, March 2003 to date
|
||||
|
Bruce C. McIntosh
|
58
|
Vice President-Human Resources, Secretary and Assistant Treasurer,
|
5/4/1998
|
|
|
The York Water Company, March 2008 to date
|
||||
|
Vice President-Human Resources and Assistant Treasurer,
|
||||
|
The York Water Company, January 2003 to February 2008
|
||||
|
Mark S. Snyder, P.E.
|
40
|
Vice President-Engineering,
|
5/1/2009
|
|
|
The York Water Company, May 2009 to date
|
||||
|
Engineering Manager,
|
||||
|
The York Water Company, December 2006 to May 2009
|
||||
|
Project Engineer, Buchart Horn, Inc., York, PA,
|
||||
|
an international engineering firm, April 2001 to
|
||||
|
December 2006
|
||||
|
John H. Strine
|
54
|
Vice President-Operations,
|
5/1/2009
|
|
|
The York Water Company, May 2009 to date
|
||||
|
Operations Manager,
|
||||
|
The York Water Company, February 2008 to May 2009
|
||||
|
Maintenance and Grounds Superintendent,
|
||||
|
The York Water Company, August 1991 to February 2008
|
||||
Page 15
Section 16(a) Beneficial Ownership Reporting Compliance
The information set forth under the caption "Section 16(a) Beneficial Ownership Reporting Compliance” of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
Code of Ethics
The Company’s Board of Directors has adopted a Code of Conduct applicable to all Directors, officers and employees. There were no waivers of the code made for any Director, officer or employee during 2010. A copy of the Code of Conduct was filed with the Securities and Exchange Commission as Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. The Code of Conduct is also available, free of charge, on the Company’s website at www.yorkwater.com. The Company intends to disclose amendments to, or Director, officer and employee waivers from, the Code of Conduct, if any, on its website, or by Form 8-K to the extent required.
Audit Committee
The information set forth under the caption “Committees and Functions” of the Proxy Statement issued pursuant to Regulation 14A for the Company’s 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
The Board of Directors has determined that John L. Finlayson, Chairman of the Audit Committee, is an Audit Committee financial expert within the meaning of the applicable SEC rules. Mr. Finlayson was a Certified Public Accountant, and has an understanding of generally accepted accounting principles and financial statements, as well as the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves. Mr. Finlayson is experienced in the preparation and auditing of financial statements of public companies, and has an understanding of accounting estimates, internal control over financial reporting and audit committee functions. He is independent, as such term is defined by NASDAQ.
|
Item 11.
|
Executive Compensation.
|
The information set forth under the caption "Compensation of Directors and Executive Officers" of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
Compensation Committee Interlocks and Insider Participation
The information set forth under the caption “Compensation Committee Interlocks and Insider Participation” of the Proxy Statement issued pursuant to Regulation 14A for the Company’s 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
Compensation Committee Report
The information set forth under the caption “Compensation Committee Report” of the Proxy Statement issued pursuant to Regulation 14A for the Company’s 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
Page 16
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
The Company has no securities authorized for issuance under equity compensation plans with the exception of an employee stock purchase plan. The employee stock purchase plan allows employees to purchase stock at a 5% discount up to a maximum of 10% of their gross compensation. Under this plan, approximately 38,000 authorized shares remain unissued as of December 31, 2010.
The information set forth under the caption "Security Ownership of Certain Beneficial Owners and Management" of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
The information set forth under the captions “Election of Directors” and “Disclosure of Related Party Transactions” of the Proxy Statement issued pursuant to Regulation 14A for the Company’s 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
|
Item 14.
|
Principal Accounting Fees and Services.
|
The information set forth under the caption, "Ratification of Appointment of Independent Registered Public Accounting Firm" of the Proxy Statement issued pursuant to Regulation 14A for the Company's 2011 Annual Meeting of Shareholders to be held May 2, 2011 is incorporated herein by reference.
Page 17
PART IV
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
|
(a)(1)
|
Certain documents filed as a part of the Form 10-K.
|
The financial statements set forth under Item 8 of this Form 10-K.
|
(a)(2)
|
Financial Statement schedules.
|
|
Schedule
|
Schedule
|
Page
|
|
Number
|
Description
|
Number
|
|
II
|
20
|
|
|
for the years ended December 31, 2010, 2009 and 2008
|
The report of the Company's independent registered public accounting firm with respect to the financial statement schedule appears on page 19.
All other financial statements and schedules not listed have been omitted since the required information is included in the financial statements or the notes thereto, or is not applicable or required.
|
(a)(3)
|
Exhibits required by Item 601 of Regulation S-K.
|
The exhibits are set forth in the Index to Exhibits shown on pages 22 through 25.
Page 18
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
The York Water Company
The audits referred to in our report dated March 8, 2011 relating to the financial statements of The York Water Company, incorporated in Item 8 of this Form 10-K by reference to the Annual Report to Shareholders for the year ended December 31, 2010, also included the audit of the financial statement schedule listed in Item 15(a)(2). This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement schedule based upon our audits.
In our opinion, the financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
|
/s/ParenteBeard LLC
|
|
ParenteBeard LLC
|
|
York, Pennsylvania
|
|
March 8, 2011
|
Page 19
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 2010
|
Additions
|
|||||
|
Description
|
Balance at
Beginning
of Year
|
Charged to
Cost and
Expenses
|
Recoveries
|
Deductions
|
Balance at
End of Year
|
|
FOR THE YEAR ENDED
DECEMBER 31, 2010
Reserve for
uncollectible accounts
|
$225,000
|
$223,185
|
$31,026
|
$234,211
|
$245,000
|
|
FOR THE YEAR ENDED
DECEMBER 31, 2009
Reserve for
uncollectible accounts
|
$195,000
|
$231,974
|
$27,914
|
$229,888
|
$225,000
|
|
FOR THE YEAR ENDED
DECEMBER 31, 2008
Reserve for
uncollectible accounts
|
$193,000
|
$176,534
|
$38,224
|
$212,758
|
$195,000
|
The Deductions column above represents write-offs of accounts receivable during the applicable year.
Page 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
THE YORK WATER COMPANY
|
|
|
(Registrant)
|
|
|
Dated: March 7, 2011
|
By: /s/Jeffrey R. Hines
|
|
Jeffrey R. Hines
|
|
|
President and CEO
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
By: /s/Jeffrey R. Hines
|
By: /s/Kathleen M. Miller
|
|
Jeffrey R. Hines
|
Kathleen M. Miller
|
|
(Principal Executive Officer
and Director)
|
(Principal Accounting Officer
and Chief Financial Officer)
|
|
Dated: March 7, 2011
|
Dated: March 7, 2011
|
|
Directors:
|
Date:
|
|
By: /s/Thomas C. Norris
|
March 7, 2011
|
|
Thomas C. Norris
|
|
|
By: /s/Cynthia A. Dotzel
|
March 7, 2011
|
|
Cynthia A. Dotzel
|
|
|
By: /s/John L. Finlayson
|
March 7, 2011
|
|
John L. Finlayson
|
|
|
By: /s/Michael W. Gang
|
March 7, 2011
|
|
Michael W. Gang
|
|
|
By: /s/Jeffrey R. Hines
|
March 7, 2011
|
|
Jeffrey R. Hines
|
|
|
By: /s/George W. Hodges
|
March 7, 2011
|
|
George W. Hodges
|
|
|
By: /s/George Hay Kain, III
|
March 7, 2011
|
|
George Hay Kain, III
|
|
|
By: /s/Jeffrey S. Osman
|
March 7, 2011
|
|
Jeffrey S. Osman
|
|
|
By: _________________
|
March 7, 2011
|
|
Steven R. Rasmussen
|
|
|
By: /s/Ernest J. Waters
|
March 7, 2011
|
|
Ernest J. Waters
|
Page 21
INDEX TO EXHIBITS
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
|
3
|
Amended and Restated Articles of Incorporation
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 3.1 to Form 8-K dated May 4, 2010.
|
||
|
3.1
|
By-Laws
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 3.1 to Form 8-K dated January 24, 2007.
|
||
|
4.1
|
Dividend Reinvestment and Direct Stock Purchase and Sale Plan
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as the Prospectus included in Post-Effective Amendment No. 1 to Form S-3 dated June 26, 2008 (File No. 333-59072).
|
||
|
4.2
|
Indenture, dated as of October 1, 2010, by and between The York Water Company and Manufacturers and Traders Trust Company, as trustee, relative to the $15,000,000 5.0% Monthly Senior Notes
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.1 to the Company's October 8, 2010 Form 8-K.
|
||
|
4.3
|
First Supplemental Indenture, dated as of October 1, 2010, by and between The York Water Company and Manufacturers and Traders Trust Company, as trustee (which includes the form of Note)
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.2 to the Company's October 8, 2010 Form 8-K.
|
||
|
10.1
|
Articles of Agreement Between The York Water Company and Springettsbury Township relative to Extension of Water Mains dated April 17, 1985
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.1 to the Company's 1989 Form 10-K.
|
||
|
10.2
|
Articles of Agreement Between The York Water Company and Windsor Township relative to Extension of Water Mains dated February 9, 1989
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.2 to the Company's 1989 Form 10-K.
|
||
|
10.3
|
Articles of Agreement Between The York Water Company and York Township relative to Extension of Water Mains dated December 29, 1989
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.5 to the Company's 1990 Form 10-K.
|
||
|
10.4
|
Note Agreement relative to the $6,000,000 10.17% Senior Notes, Series A and $5,000,000 9.60% Senior Notes, Series B dated January 2, 1989
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.5 to the Company's 1989 Form 10-K.
|
Page 22
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
|
10.5
|
Note Agreement relative to the $6,500,000 10.05% Senior Notes, Series C dated August 15, 1990
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.6 to the Company's 1990 Form 10-K.
|
||
|
10.6
|
Note Agreement relative to the $7,500,000 8.43% Senior Notes, Series D dated December 15, 1992
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.7 to the Company's 1992 Form 10-K.
|
||
|
10.7
|
Promissory Note between The York Water Company and the Pennsylvania Infrastructure Investment Authority for $800,000 at 1.00% dated August 24, 1999
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 4.2 to the Company's 2000 Form 10-K.
|
||
|
10.8
|
Loan Agreement between The York Water Company and Pennsylvania Economic Development Financing Authority, dated as of April 1, 2004 relative to the $2,350,000 4.05% and $4,950,000 5% Exempt Facilities Revenue Bonds
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.2 to the Company's September 15, 2009 Form 8-K.
|
||
|
10.9
|
Loan Agreement between The York Water Company and York County Industrial Development Authority, dated as of October 1, 2006 relative to the $10,500,000 4.75% Exempt Facilities Revenue Bonds
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.3 to the Company's September 15, 2009 Form 8-K.
|
||
|
10.10
|
Trust Indenture dated October 1, 2006 between the York County Industrial Development Authority and Manufacturers and Traders Trust Company, as trustee
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.4 to the Company's September 15, 2009 Form 8-K.
|
||
|
10.11
|
Variable Rate Loan Agreement between The York Water Company and Pennsylvania Economic Development Financing Authority, dated as of May 1, 2008 relative to the $12,000,000 Exempt Facilities Revenue Bonds
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.1 to the Company’s May 12, 2008 Form 8-K.
|
||
|
10.12
|
Trust Indenture dated as of May 1, 2008 between Pennsylvania Economic Development Financing Authority and Manufacturers and Traders Trust Company, as trustee
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.5 to the Company's September 15, 2009 Form 8-K.
|
Page 23
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
|
10.13
|
Reimbursement, Credit and Security Agreement, dated as of May 1, 2008 between The York Water Company and PNC Bank, National Association
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.3 to the Company’s May 12, 2008 Form 8-K.
|
||
|
10.14
|
Loan Agreement between The York Water Company and Pennsylvania Economic Development Financing Authority, dated as of October 1, 2008 relative to the $15,000,000 6.0% Exempt Facilities Revenue Bonds
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.1 to the Company’s October 15, 2008 Form 8-K.
|
||
|
10.15
|
Trust Indenture dated as of October 1, 2008 between Pennsylvania Economic Development Financing Authority and Manufacturers and Traders Trust Company, as trustee
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.6 to the Company's September 15, 2009 Form 8-K.
|
||
|
10.16
|
Cash Incentive Plan
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 10.1 to the Company's January 28, 2005 Form 8-K.
|
||
|
10.17
|
|
Filed herewith.
|
||
|
10.18
|
|
Filed herewith.
|
||
|
10.19
|
|
Filed herewith.
|
Page 24
|
Exhibit
Number
|
Exhibit
Description
|
Page Number of
Incorporation
By Reference
|
||
|
13
|
Filed herewith.
|
|||
|
14
|
Company Code of Conduct
|
Incorporated herein by reference. Filed previously with the Securities and Exchange Commission as Exhibit 14 to the Company's 2002 Form 10-K.
|
||
|
23
|
|
Filed herewith.
|
||
|
31.1
|
|
Filed herewith.
|
||
|
31.2
|
|
Filed herewith.
|
||
|
32.1
|
|
Filed herewith.
|
||
|
32.2
|
Filed herewith.
|
Page 25