2017 MESSAGE FROM THE BOARD OF DIRECTORS
The 2016 irrigation season enjoyed bountiful water through a very hot and dry summer. RWP was able to begin a week early and add a week at the end of the irrigation season to assist our shareholders in maintaining their landscape and agricultural endeavors.
Unplanned, RWP did have to replace the corroded, leaking, riveted metal siphon under Monument Road with a new composite piping which created a down time of 5 days for the area at the South end of our service area. The cost of this project was $42,600.00 we also encountered a failure of critical controls on the hydro generator, which provides power to the main plant pump station and the tie in to the Xcel Energy interconnections. No damage was encountered to the controls and generator other than the upgrade, with a minimum down time for production of electricity and pumping for irrigation water. The cost for this necessity was $22,800.00. We also required extensive repair to one of our main pumps at the power plant, costing us $11,000.00. Our staff, providing the best service with our aging infrastructure, completed these major and expensive repairs, along with various other repairs.
2016 planned capital projects completed are 1. No Thouroughfare power canals spill gate, costing $51,700.00, and 2. Hydro generated tail runner speed ring was welded and reinforced by our employees. This repair avoids a very expensive replacement. A third project of replacing the two (2) river spill gates at the Gunnison Diversion dam, although not completed, is proceeding. Stainless steel for this was purchased at lower than market rates and our designed set of engineered drawings will speed up construction as well as keeping costs down, estimated at $97,000.00
The generator windings were also inspected, painted and new brushes installed to protect this very critical asset of our system.
As you are aware, the RWP Board is always concerned with maintaining sufficient funds for future repairs and capital improvements. Thus the Board has approved a $5 per share increase to $180 for 2017 and requests your support of this increase. RWP has always placed protection and growth of assets as one of our top priorities. After a 6-month analysis, the Board approved an Investment Policy and an Investment Committee whose purpose is to invest our funds in a conservative, liquid, diversified investments. In November, we consolidated our cash funds and invested with a local Wealth Management Company. While it is too early to look at yields, we are confident of a minimum of 3.0% in combined cash return and appreciation of our assets. Using our cash more wisely can only protect our shareholders from increased expenses.
Redlands Water and Power Company