The Gorgoza Mutual Water Company has worked hard over the years to develop what we consider the finest privately owned water company in Summit County, consistently providing high quality water at low rates. We have multiple wells and storage facilities, all of which were located and developed to provide the best possible hedge against the variable precipitation patterns in this, the second-driest state in the nation. We monitor the depths of water in each of our wells, the amount of water in our storage tanks, and the performance of our several pressure zones on a real-time basis so that we can manage our valuable resources in an efficient and economical manner.
While the Company is fundamentally sound, the current drought is extreme and presents challenges that are unprecedented in our 45-year history. We have been able to meet your needs without interruption, but our system has been stressed. We have been able to maintain our water deliveries over the years without the need for rationing (with only one exception) and hope to be able to do so going forward even during these dry times. The Company continues to make upgrades in anticipation of future challenges, and we want to tell you about our plans. They include encouraging conservation through individual monitoring and rate structure incentives, as well as further investment to develop new capacity.
The first upgrade you will see is the conversion of our metering program from once-monthly readings to one where data will be able in real time. With the Company’s investment in this system, each home will be able to monitor and adjust water use as the month goes on, if desired. We expect that this enhancement will result in increased conservation. It should also allow earlier leak detection and promote more efficient use of your sprinkling systems. We are excited about these new capabilities and will furnish additional information as they become operational.
An additional project will be to increase our source capacity by drilling a new well. Our experience in this dry year demonstrates the value of enhancing our water sources. We have been fortunate to have partnered for more than a decade with the owners of the Woodward resort. They have allowed the Company to drill and equip two wells on their property. These wells provide water from Woodward’s separate water rights during the winter months (at Woodward’s expense) and are used exclusively by the Company to supply our system during the summer months. This beneficial relationship yields hundreds of gallons per minute in additional water from a very favorable aquifer that we would not otherwise be able to access. We are happy to announce our agreement for the drilling of a third well on the Woodward property this year. As with the existing wells, the full capacity of the new well will be available to the Company during the summer months.
The Company has been able to maintain the same base assessment rate of $55.00 per month per Class A share for a remarkable 13 years, absorbing increased operating costs, inflationary pressures and, particularly increase electrical costs. In the meantime, capital projects such as replacement of old water lines and well maintenance have largely been funded from the sale of a small percentage of the Company’s spring water. While those revenues will continue to be dedicated to capital projects, the metering system upgrade and the new well will require additional capital expenditures which the Company plans to fund with cash, not by increasing debt.
The Company’s Board of Directors has carefully monitored those plans and expenses and has determined that a rate increase is now necessary. Several rate scenarios were evaluated, and the Board ultimately determined to adopt a rate schedule that would encourage additional conservation measures with minimal financial impact on most water users. Beginning January 1 of this year, the Company’s base water assessment will increase to $60.00 per month for the use of up to 8,000 gallons of water. Monthly water usage above that amount will be charged at increasingly steep rates to encourage conservation and more equitably allocate our costs of operation. If you have your account set up on auto-pay basis, please remember to change the base payment amount.
We appreciate the opportunity to serve you.