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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
Commission file number 0-690
THE YORK WATER COMPANY
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1242500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
130 EAST MARKET STREET, YORK, PENNSYLVANIA 17405
(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:
Name of Each Exchange on
Title of Each Class Which Registered
None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
(Title of Class)
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.
YES X NO
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K 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. X
The aggregate market value of the Common Stock, no par value,
held by nonaffiliates of the registrant (based on the bid price
of such stock) on February 5, 2001 was $57,431,585.
As of February 5, 2001 there were 3,042,733 shares of Common
Stock, no par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 2000 Annual Report to Shareholders are
incorporated by reference into Part II.
Portions of the Proxy Statement for the Company's 2001 Annual
Meeting of Shareholders are incorporated by reference into Part
III.
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 and distribute
water. The Company operates entirely within its franchised
territory located in York County, Pennsylvania. The Company is
regulated by the Pennsylvania Public Utility Commission (PPUC) in
the areas of billing, payment procedures,
dispute processing, terminations, service territory, and rate
setting. The Company must obtain PPUC approval before changing
any of the aforementioned procedures. Water service is supplied
through the Company's own distribution system to the City of
York, the Boroughs of North York, West York, Manchester, Mount
Wolf, New Salem, Hallam, Jacobus, Loganville, Yorkana, Seven
Valleys, East Prospect, Jefferson, Glen Rock, New Freedom,
Railroad, and portions of the Townships of Manchester, East
Manchester, West Manchester, North Codorus, Shrewsbury, North
Hopewell, Hopewell, Springettsbury, Spring Garden, Conewago,
Springfield, York, Hellam, Windsor, Lower Windsor, Dover and
Jackson. The Company obtains its water supply from the south
branch and east branch of the Codorus Creek which drains an area
of approximately 117 square miles. The Company's present average
daily consumption is 19,541,520 gallons, and its present safe
daily yield is 23,000,000 gallons.
The Company's service territory has an estimated population of
146,000. Territory expansion during 2000 included: the
completion of water mains to serve Windsor Water District 3, Cape
Horn Water District, and additional main in Conewago Township.
Industry within the Company's service territory is diversified,
manufacturing such items as furniture, electrical machinery, food
products, paper, ordnance, textile products, air conditioning
equipment and weight training equipment. Within the area served
by the Company there are no competitors.
An evaluation of the need for additional sources of supply was
conducted during 1998 by an engineering consulting firm retained
by the Company. The analysis indicated that an additional source
of supply would be needed by the year 2006. Available options
were identified and analyzed by the Company and its consultants,
including estimates of construction costs. The option selected
was a pipeline from the Susquehanna River to Lake Redman, the
Company's largest reservoir. The Company plans to build an
intake and a pump station on its land in Lower Windsor Township,
York County. The water would then be pumped 13 miles through a
30-inch diameter pipe and released into Lake Redman. This option
has the lowest estimated cost, provides potential expandability,
and has the least impact on the environment. The Company will
begin the process of applying for permits in 2001.
The Company's business is somewhat dependent on weather
conditions, particularly the amount of rainfall; however, minimum
customer charges are in place, and the Company expects to cover
its fixed costs of operations under all likely weather
conditions.
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. Operating revenue is derived from the following
sources and in the following percentages: residential, 59%;
commercial and industrial, 29%; other, 12%. The Company
presently has 88 employees.
During the last five years ended in 2000, the Company has
maintained an increasing growth in number of customers and
distribution facilities as shown by the following chart:
2000 1999 1998 1997 1996
Average daily
consumption
(gallons
per day) 19,541,520 20,928,000 19,488,000 19,405,000 18,593,000
Miles of
mains at
year end 703 696 671 655 641
Additional
distribution
mains
installed
(ft.) 67,072 130,262 85,431 77,274 78,619
Number of
customers 49,195 48,144 47,173 46,458 45,800
Population
served 146,000 144,000 142,000 140,700 143,000
During 2000, the per capita volume of water sold did not
significantly change compared to 1999. The Company does not
anticipate any change in the level of water usage which would
have a material impact on future results of operations.
Item 2. Properties.
The accounting and executive offices of the Company are located
in two two-story brick and masonry buildings, containing a total
of approximately 21,861 square feet, at 124 and 130 East Market
Street, York, Pennsylvania.
The Company has two impounding dams located in York and
Springfield Townships adjoining the Borough of Jacobus to the
south. The lower dam is constructed of compacted earth with a
concrete core wall and is 660 feet long and 50 feet high and
creates a reservoir covering approximately 220 acres containing
about 1,150,000,000 gallons of water. About 800 acres
surrounding the reservoir are planted with more than 1,200,000
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, Lake
Redman, is constructed of compacted earth and is 1,000 feet long
and 50 feet high and creates a reservoir covering approximately
290 acres containing about 1,600,000,000 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.
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 75,000,000 gallons per day.
From here, raw water is pumped approximately two miles to the
filtration plant through pipes located on a right-of-way owned by
the Company.
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 12 dual media filters having a
stated capacity of 31,000,000 gallons per day and being capable
of filtering 46,500,000 gallons per day for short periods if
necessary. Based on an average daily consumption in 2000 of
19,541,520 gallons, the Company believes the pumping and
filtering facilities are adequate to meet present and anticipated
demands.
Clear water reservoirs of the Company which are located in Spring
Garden Township adjacent to the filtration plant are capable of
storing up to 32,000,000 gallons of water, and there are
standpipes located throughout the Company's service area capable
of storing another 19,890,000 gallons of clear water.
The Company's distribution center and material and supplies
warehouse are located at 1801 Mt. Rose Avenue, Springettsbury
Township. There are two one-story concrete block buildings
aggregating 26,680 square feet of area.
The distribution system of the Company has approximately 703
miles of main water lines.
All of the Company's properties described above are held in fee
by the Company. There are no material encumbrances on such
properties.
In addition, the Company has entered into a "Joint Use and Park
Management Agreement" dated December 29, 1976, with the County of
York, Pennsylvania, whereby the Company has licensed its present
reservoir lands and waters, comprised of approximately 1,175
acres and including two lakes, to the County of York for fifty
(50) years for county park purposes.
York County has, in return, agreed not to erect a dam upstream on
the east branch of the Codorus Creek and to waive flood damages
to the County's Spring Valley Tract of park lands if, as planned,
the Company builds a third dam around the year 2020. The Company
and its customers are thereby assured of a future reservoir site
at reasonable expense.
Item 3. Legal Proceedings.
There are no material legal proceedings involving the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the security holders during
the fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for the Registrant's Common Stock and Related
Security Holder Matters.
The information set forth under the caption "Market for Common
Stock and Dividends" on page 9 of the 2000 Annual Report to
Shareholders is incorporated herein by reference.
Item 6. Selected Financial Data.
The information set forth under the caption "Highlights of Our
185th Year" of the 2000 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 2000 Annual Report to Shareholders is
incorporated herein by reference.
This annual report on Form 10-K contains certain forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements made with
respect to the results of operations and businesses of the
Company. Words such as "may," "should," "believe," "anticipate,"
"estimate," "expect," "intend," "plan" and similar expressions
are intended to identify forward-looking statements.
Forward-looking statements include certain information relating
to the Company's business strategy, including the markets in
which it operates, the services it provides, its plans for
construction, its expansion of its service territories, water
usage by its customers and its plans to invest in new
technologies. These forward-looking statements are based upon
management's current plans, expectations, estimates and
assumptions and are subject to a number of risks and
uncertainties that could significantly affect current plans,
anticipated actions and the Company's financial condition and
results of operations. Factors that may cause actual results to
differ materially from those discussed in such forward-looking
statements include, among others, the following possibilities:
(i) weather conditions, particularly the amount of rainfall; (ii)
the level of commercial and industrial business activity within
the Company's service territory; (iii) construction of new
housing within the Company's service territory; (iv) governmental
regulations affecting the Company's rates and service
obligations; and (v) general economic and business conditions,
including interest rates, which are less favorable than expected.
The Company does not intend to update these cautionary
statements.
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.
The Company does not use derivative financial instruments for
speculative trading purposes. The Company's operations are
exposed to market risks primarily as a result of changes in
interest rates and foreign currency exchange rates. This
exposure to these market risks relates to the Company's debt
obligations under its lines of credit. Loans granted under these
lines bear interest based upon the prime or LIBOR rate plus basis
points. The Company has not entered into financial instruments
such as interest rate swaps or interest rate lock agreements.
The Company's 4.40% Industrial Development Authority Revenue
Refunding Bonds Series 1994 have a mandatory tender date of May
15, 2004. The 6% Series 1995 bonds have a mandatory tender date
of June 1, 2005. The Company is required to purchase any
unremarketed 1994 and 1995 bonds, despite the rate.
Item 8. Financial Statements and Supplementary Data.
The following financial statements set forth in the 2000 Annual
Report to Shareholders are incorporated herein by reference:
Balance Sheets as of December 31, 2000 and 1999 Page 12
Statements of Income for Years Ended December 31,
2000, 1999 and 1998 Page 13
Statements of Shareholders' Investment for Years
Ended December 31, 2000, 1999 and 1998 Page 13
Statements of Cash Flows for Years Ended
December 31, 2000, 1999 and 1998 Page 14
Notes to Financial Statements Page 15
Independent Auditors' Report Page 21
Except for the above financial data and the information specified
under Items 5, 6 and 7 of this report, the 2000 Annual Report to
Shareholders is not deemed to be filed as part of this report.
Selected quarterly financial data are not presented because the
Company does not meet the tests set forth in Item 302 (a)(5) of
Regulation S-K.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
KPMG LLP was previously the principal accountants for The York
Water Company. On March 29, 2000, that firm's appointment as
principal accountants was terminated and Stambaugh Ness, PC was
engaged as principal accountants. The decision to change
accountants was approved by the Board of Directors.
In connection with the audits of the two fiscal years ended
December 31,1999, and the subsequent interim period through March
29, 2000, there were no disagreements with KPMG LLP on any matter
of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements
if not resolved to their satisfaction would have caused them to
make reference in connection with their opinion to the subject
matter of the disagreement.
The audit reports of KPMG LLP on the financial statements of The
York Water Company as of and for the years ended December 31,
1999 and 1998, did not contain any adverse opinion or disclaimer
of opinion, nor were they qualified or modified as to
uncertainty, audit scope, or accounting principles.
There were no disagreements with accountants on accounting and
financial disclosure.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information set forth under the captions "Election of
Directors" and "Section 16(a) Beneficial Ownership Reporting
Compliance" of the Proxy Statement issued pursuant to Regulation
14A for the Company's 2001 Annual Meeting of Shareholders to be
held May 7, 2001 is incorporated herein by reference.
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 2001 Annual Meeting
of Shareholders to be held May 7, 2001 is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information set forth under the caption "Voting Securities
and Principal Holders Thereof" of the Proxy Statement issued
pursuant to Regulation 14A for the Company's 2001 Annual Meeting
of Shareholders to be held May 7, 2001 is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
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
2001 Annual Meeting of Shareholders to be held May 7, 2001 is
incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) Certain documents filed as a part of the Form 10-K.
The financial statements set forth under Item 8 of this Form
10-K.
Schedule Schedule Page
Number Description Number
II Valuation and Qualifying Accounts 9
The report of the Company's independent auditors with respect to
the financial statement schedule appears on page 7.
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.
The exhibits are set forth in the Index to Exhibits shown on
pages 10, 11 and 12.
(b) Reports on Form 8-K.
The Company filed a Form 8-K on January 10, 2001 announcing that
its common stock was approved for listing on the Nasdaq National
Market.
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of The York Water
Company:
Under date of February 28, 2001, we reported on the balance sheet
of The York Water Company as of December 31, 2000 and the related
statements of income, shareholders' investment, and cash flows
for the year then ended as contained in the 2000 annual report to
shareholders. The financial statements of The York Water Company
as of December 31, 1999 and for the two years then ended were
audited by other auditors whose report was dated February 25,
2000. These financial statements and our report thereon are
incorporated by reference in the annual report on Form 10-K for
the year 2000. In connection with our audit of the
aforementioned financial statements, we also audited the related
financial statement schedule as of December 31, 2000, as listed
in Item 14(a). This financial statement schedule is the
responsibility of the Company's management. Our responsibility
is to express an opinion on the 2000 financial statement schedule
based upon our audit.
In our opinion, such 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.
Stambaugh Ness, PC
February 28, 2001
York, Pennsylvania
Independent Auditors' Report
To the Shareholders and Board of Directors of The York Water
Company:
We have audited the accompanying balance sheet of The York Water Company as of
December 31, 1999 and the related statements of income, shareholders'
investment, and cash flows for each of the years in the two-year period ended
December 31, 1999. In connection with our audits of the financial statements,
we have also audited the financial statement schedule as listed in Item 14(a)
for each of the years in the two-year period ended December 31, 1999. These
financial statements and financial statement schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and signifi-
cant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The York Water Company as of
December 31, 1999 and the results of its operations and its cash flows for each
of the years in the two-year period ended December 31, 1999, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
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.
KPMG LLP
Baltimore, Maryland
February 25, 2000
THE YORK WATER COMPANY
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 31, 2000
Additions Charged to
Balance
at Costs Balance
beginning and Recov- Deduc- At End
Of Year Expenses eries tions Of Year
FOR THE YEAR
ENDED
DECEMBER 31,
2000:
Reserve for
uncollectible
accounts $120,000 $ 85,356 $19,193 $ 94,549 $130,000
FOR THE YEAR
ENDED DECEMBER
31, 1999:
Reserve for
uncollectible
accounts $120,000 $ 87,795 $12,992 $100,787 $120,000
FOR THE YEAR
ENDED
DECEMBER 31,
1998:
Reserve for
uncollectible
accounts $110,000 $103,957 $ 7,115 $101,072 $120,000
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 26, 2001 By: /s/ W. T. Morris
William T. Morris
President and Chief Executive
Officer
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/ W. T. Morris By: /s/ Jeffrey S. Osman
William T. Morris Jeffrey S. Osman
(Principal Executive and (Principal Accounting Officer)
Financial Officer and
Director)
Dated: March 26, 2001 Dated: March 26, 2001
Directors: Date
By: /s/Horace Keesey III March 26, 2001
Horace Keesey III
(Chairman)
By: /s/Irvin S. Naylor March 26, 2001
Irvin S. Naylor
By: /s/Chloe Eichelberger March 26, 2001
Chloe Eichelberger
By: /s/John L. Finlayson March 26, 2001
John L. Finlayson
By: /s/George Hay Kain, III March 26, 2001
George Hay Kain, III
By: /s/Michael W. Gang March 26, 2001
Michael W. Gang
By: /s/George W. Hodges March 26, 2001
George W. Hodges
By: /s/Thomas C. Norris March 26, 2001
Thomas C. Norris
INDEX TO EXHIBITS
Page Number of
Exhibit Exhibit Incorporation
Number Description By Reference
3 Amended and Restated Incorporated herein by
Articles of Incorporation reference. Filed
previously with the
Securities and Exchange
Commission as Exhibit
4.1 to Amendment No. 1
to Form S-3 dated June
12, 1997 (File No. 33-
81246).
3.1 By-Laws Incorporated herein by
reference. Filed
previously with the
Securities and Exchange
Commission as Exhibit
4.2 to Form S-3 dated
July 1, 1996 (File No.
333-7307).
4.1 Optional Dividend Incorporated herein by
Reinvestment Plan Reference. Filed
previously with the
Securities and Exchange
Commission as the
Prospectus included in
Amendment No. 1 to Form
S-3 dated June 12, 1997
(File No. 33-81246).
4.2 Loan Agreement between Filed herewith.
The York Water Company
and the Pennsylvania
Infrastructure Invest-
ment Authority for
$800,000 at 1.00%
dated August 24, 1999
4.6 Note Agreement Relative Incorporated herein by
to the $6,000,000 10.17% reference. Filed previously
Senior Notes, Series A with the Securities and
and $5,000,000 9.60% Exchange Commission as
Senior Notes, Series B Exhibit 4.5 to the Company's
dated January 2, 1989 1989 Form 10-K.
4.8 Note Agreement Relative Incorporated herein by
to the $6,500,000 10.05% reference. Filed previously
Senior Notes, Series C with the Securities and
dated August 15, 1990 Exchange Commission as Exhibit
4.6 to the Company's 1990 Form
10-K.
4.11 Note Agreement Relative Incorporated herein by
to the $7,500,000 8.43% reference. Filed previously
Senior Notes, Series D with the Securities and
dated December 15, 1992 Exchange Commission as Exhibit
4.7 to the Company's 1992 Form
10-K.
4.12 Fourth Supplemental Incorporated herein by
Acquisition, Financing reference. Filed previously
and Sale Agreement with the Securities and
Relative to the Exchange Commission as Exhibit
$2,700,000 4.75% Water 4.8 to the Company's Quarterly
Facilities Revenue Report Form 10-Q for the
Refunding Bonds dated quarter ended June 30, 1994.
February 1, 1994
4.13 Fifth Supplemental Incorporated herein by
Acquisition, Financing reference. Filed previously
and Sale Agreement with the Securities and
Relative to the Exchange Commission as Exhibit
$4,300,000 5% Water 4.9 to the Company's Quarterly
Facilities Revenue Report Form 10-Q for the
Refunding Bonds dated quarter ended September 30,
October 1, 1995 1995.
4.14 Shareholder Rights Incorporated herein by
Agreement reference. Filed previously
with the Securities and
Exchange Commission as Exhibit
1 to Form 8-A dated January
26, 1999.
10.1 Articles of Agreement Incorporated herein by
Between The York Water reference. Filed previously
Company and Springetts- with the Securities and
bury Township Relative Exchange Commission as Exhibit
to Extension of Water 10.1 to the Company's 1989
Mains dated April 17, Form 10-K.
1985
10.2 Articles of Agreement Incorporated herein by
Between The York Water reference. Filed previously
Company and Windsor with the Securities and
Township Relative to Exchange Commission as Exhibit
Extension of Water Mains 10.2 to the Company's 1989
dated February 9, 1989 Form 10-K.
10.3 Articles of Agreement Incorporated herein by
Between The York Water reference. Filed previously
Company and Windsor with the Securities and
Township, Yorkana Exchange Commission as Exhibit
Borough, Modern Trash 10.3 to the Company's 1989
Removal of York, Inc. and Form 10-K.
Lower Windsor Township
Relative to Extension of
Water Mains dated July 18,
1989
10.4 Articles of Agreement Incorporated herein by
Between The York Water reference. Filed previously
Company and North Codorus with the Securities and
Township Relative to Exchange Commission as Exhibit
Extension of Water Mains 10.4 to the Company's 1990
dated September 20, 1989 Form 10-K.
10.5 Articles of Agreement Incorporated herein by
Between The York Water reference. Filed previously
Company and York Township with the Securities and
Relative to Extension of Exchange Commission as Exhibit
Water Mains dated 10.5 to the Company's 1990
December 29, 1989 Form 10-K.
11 Common Shares Used in Filed herewith.
Computing Earnings Per
Share
13 2000 Annual Report to Filed herewith.
Shareholders
23 Consent of Independent Filed herewith.
Auditors
Stambaugh Ness, PC
23.1 Consent of Independent Filed herewith.
Auditors
KPMG LLP
Exhibit 4.2
THE YORK WATER COMPANY - ME#89042
PROMISSORY NOTE
$800,000.00
Harrisburg, PA
August 24, 1999
FOR VALUE RECEIVED, THE YORK WATER COMPANY, a Pennsylvania for
profit Corporation with an office at 130 East Market Street, Box
15089, York, Pennsylvania ("Maker"), promises to pay to the order
of the PENNSYLVANIA INFRASTRUCTURE INVESTMENT AUTHORITY, a body
corporate and politic organized and existing under the laws of
the Commonwealth of Pennsylvania (the "Commonwealth") with an
office in 22 South Third Street, Harrisburg, Pennsylvania 17101
("Payee"), at such office of Payee, or at such other office of
Payee or such other place as Payee may designate from time to
time in writing, the principal sum of Eight Hundred Thousand
Dollars ($800,000.00) (or so much thereof as has been advanced by
Payee to or for the benefit of Maker pursuant to the Loan
Agreement (as hereinafter defined) in lawful money of the United
States of America, together with interest thereon from the date
of this Promissory Note (the "Note") at the rates hereinafter
provided, and both payable as hereinafter provided.
1. Interest Rate. The principal sum outstanding from time to
time hereunder shall bear interest at the rate of One Percent
(1.000%) per annum for the twenty (20) year term. The annual
interest rate shall be calculated on the basis of a 360-day year
by multiplying the interest rate in effect hereunder by a
fraction. the numerator of which is the actual number of days the
principal sum is outstanding, and the denominator of which is
360.
2. Payments of Interest Only. Interest only on the unpaid
principal sum shall be payable in monthly installments on the
first day of each calendar month beginning with the first
calendar month following a loan advance to or for the benefit of
the Maker pursuant to the Loan Agreement and ending January 1,
2000 the month preceding the hereinafter defined amortization
date.
3. Payments of Principal and Interest. On February 1, 2000 the
amortization date (" Amortization Date"), the unpaid principal
sum then outstanding and all accrued and unpaid interest shall
become due and payable as follows:
Principal and interest shall be payable in 235 consecutive
monthly installments commencing on the first day of each calendar
month beginning with February 1, 2000 and continuing the first
day of each calendar month thereafter to and including August 1,
2019.
The 235 principal and interest installments beginning on
February 1, 2000 and ending on August 1, 2019 shall be in the
amount of $3,749.88. On August 1, 2019, the unpaid principal sum
then outstanding and all accrued and unpaid interest shall become
due and payable.
4. Prepayments. Maker may not prepay at any time all or any
portion of the unpaid principal sum hereunder without first
obtaining the prior written consent of the Payee, which consent
shall not be unreasonably withheld. The Maker shall submit a
letter of intent to prepay within fifteen (15) days preceding the
first day of the month prior to the month the Maker intends to
prepay. If the Payee consents to the Maker's prepayment, the
Maker may prepay on the date that is mutually agreed upon by both
the Payee and the Maker, all or any portion of the unpaid
principal sum hereunder without penalty or premium; provided,
however that:
(a) Any prepayment (whether voluntary or involuntary) shall be
applied first to any accrued or unpaid interest hereunder up to
the date of such prepayment., then to any other sums which may be
payable to Payee under the Loan Documents (as hereinafter
defined) up to the date of such prepayment and then to the
principal sum hereunder;
(b) Any such prepayment shall be applied to installments due
hereunder in the inverse order of their maturity; and
(c) The acceptance of any such prepayment where there is an event
of default in existence hereunder shall not constitute a waiver,
release or accord and satisfaction thereof or of any rights with
respect thereto by Payee.
5. Security. This Note, and the due performance by Maker of all
of its obligations hereunder, is secured by, inter alia, a lien
and perfected security interest in future receipts, including
those generated from the operation of the System and/or accounts,
accounts receivable and contract rights now owned and hereinafter
acquired generated from the operation of the System as well as
any proceeds of general intangibles generated therefrom, subject
only to the liens outstanding as of the date of Authority
approval. Reference is hereby made to the Loan Agreement of even
date between Maker and Payee ("Loan Agreement") for a full
description of the System and the collateral pledged pursuant
thereto, the terms upon which this Note is secured, and the
documents with respect thereto (each of which is hereinafter
referred to individually as a "Loan Document" and collectively as
the "Loan Documents"). Any collateral securing any of Maker's
obligations under any of the Loan. Documents are hereinafter
referred to as a "Collateral".
6. Late Charge. In the event that any payment of principal or
interest due to Payee hereunder shall not be paid when due and
shall remain unpaid in excess of thirty (30) days after the due
date, in addition to and not in limitation of any other rights
or remedies which Payee may have in respect thereof under any of
the Loan Documents or in respect of any Collateral, Maker shall
pay Payee on demand a "late charge" computed at the rate of four
cents ($.04) for each dollar (or part thereof) of the amount not
paid, to cover the extra expense and inconvenience to Payee in
ensuring payment of such delinquent amount. The amount of any
such "late charge" not paid promptly following demand therefor
shall be deemed outstanding and payable pursuant to this Note.
7. Events of Default. In addition to any other event referred to
herein, the occurrence of which, by the terms hereof, constitutes
an Event of Default hereunder, the occurrence of any one or more
of the following events shall constitute an Event of Default
hereunder:
(a) Maker shall fail to make any payment of principal and/or
interest due to Payee under this Note or under any of the other
Loan Documents when the same shall become due and payable,
whether at maturity or by acceleration or otherwise.
(b) Maker shall fail to observe and perform any of the covenants
or agreements on its part to be observed or performed under this
Note or under any of the other Loan Documents within ten ( 10)
days after notice from Payee of such noncompliance.
(c) Any representation or warranty of the Maker under this Note
or under any of the other Loan Documents shall be untrue in any
material respect when made.
(d) Any Event of Default shall occur under the terms of any of
the other Loan Documents.
8. Remedies. Upon the occurrence of any Event of Default, then
the entire unpaid principal sum hereunder plus all interest
accrued thereon plus all other sums due and payable to Payee
under the Loan Documents shall, at the option of Payee, become
due and payable immediately without presentment, demand, notice
of nonpayment, protest, notice of protest or other notice of
dishonor, all of which are hereby expressly waived by Maker.
In addition to the foregoing, upon the occurrence of any event of
default Payee may forthwith exercise singly, concurrently,
successively or otherwise any and all rights and remedies
available to Payee under any of the Loan Documents or with
respect to any Collateral, or available to Payee by law, equity ,
statute or otherwise.
9. Confession of Judgement. Maker hereby irrevocably authorizes
and empowers any attorney of record, or the Prothonotary or Clerk
of any court in the Commonwealth of Pennsylvania or elsewhere, to
appear for Maker at any time or times, after the occurrence of an
Event of Default, in any such court in any action brought against
Maker by Payee with respect to the aggregate amounts payable
under the Loan Documents, with or without declaration filed, as
of any term, and therein to confess or enter judgment against
Maker for all sums payable by Maker to Payee under the Loan
Documents, as evidenced by an affidavit signed by a duly
authorized designee of Payee setting forth such amount then due
from Maker to Payee, plus reasonable attorneys' fees, with costs
of suit, release of errors and without right of appeal. If a copy
of this Note, verified by an affidavit, shall have been filed in
such action, it shall not be necessary to file the original as a
warrant of attorney. Maker waives the right to any stay of
execution and the benefit of all exemption laws now or hereafter
in effect. No single exercise of the foregoing warrant and power
to bring any action or confess judgment therein shall be deemed
to exhaust the power, but the power shall continue undiminished
and may be exercised from time to time as often as Payee shall
elect until all amount payable to Payee under the Loan Documents
shall have been paid in full.
10. Remedies Cumulative. etc.
(a) No right or remedy conferred upon or reserved to Payee under
any of the Loan Documents, or with respect to any Collateral, or
now or hereafter existing at law or in equity or by statute or
other legislative enactment, is intended to be exclusive of any
other right or remedy, and each and every such right or remedy
shall be cumulative and concurrent, and shall be in addition to
every other such right or remedy, and may be pursued singly,
concurrently, successively or otherwise, at the sole discretion
of Payee, and shall not be exhausted by any one exercise thereof
but may be exercised as often as occasion therefor shall occur.
No act of Payee shall be deemed or construed as an election to
proceed under any one such right or remedy to the exclusion of
any other such right or remedy; furthermore, each such right or
remedy of Payee shall be separate, distinct and cumulative and
none shall be given effect to the exclusion of any other. The
failure to exercise or delay in exercising any such right or
remedy, or the failure to insist upon strict performance of any
term of any of the Loan Documents, shall not be construed as
a waiver or release of the same, or of any Event of Default
thereunder, or of any obligation or liability of Maker
thereunder.
(b) The recovery of any judgment by Payee and/or the levy of
execution under any judgment upon any Collateral shall not affect
in any manner or to any extent any security interest under the
Loan Agreement in such Collateral, or any rights, remedies or
powers of Payee under any of the Loan Documents or with respect
to any Collateral, but such lien and such security interest, and
such rights, remedies and power of Payee shall continue
unimpaired as before. Further, the exercise by Payee of its
rights and remedies and the entry of any judgment by Payee shall
not affect in any way the interest rate payable hereunder or
under any of the Loan Documents of any amounts due to Payee but
interest shall continue to accrue, on such amounts at the rate
specified herein or in such Loan Document.
(c) Maker hereby waives presentment, demand, notice of
nonpayment, protest, notice of protest or other notice of
dishonor, and any and all other notices in connection with any
default in the payment of, or any enforcement of the payment of
all amounts due under the Loan Documents. To the extent permitted
by law, Maker waives the right to any stay of execution and the
benefit of all exemption laws now or hereafter in effect. Maker
further waives and releases all errors, defects and imperfections
in any proceedings instituted by Payee under the terms of any
Loan Document or with respect to any Collateral.
(d) Maker agrees that Payee may release, compromise, forebear
with respect to, waive, suspend, extend or renew any of the terms
of the Loan Documents (and Maker hereby waives any notice of any
of the foregoing), and that the Loan Documents may be amended,
supplemented or modified by Payee and the other signatory parties
and that Payee may resort to any Collateral in such order and
manner as it may think fit, or accept the assignment,
substitution, exchange or pledge of any other Collateral in place
of, or release for such consideration, or none, as it may
require, all or any portion of any Collateral, without in any way
affecting the validity of any lien over or other security
interest in the remainder of any such Collateral (or the priority
thereof or the position of any subordinate holder of any security
interest with respect thereto), and any action taken by Payee
pursuant to the foregoing shall in no way be construed as a
waiver or release of any right or remedy of Payee, or of any
Event of Default, or of any liability or obligation of Maker,
under any of the Loan Documents.
11. Costs and Expenses. Following the occurrence of any Event of
Default, Maker shall pay upon demand all costs and expenses
(including all amounts paid to attorneys, accountants, real
estate brokers and other advisors employed by Payee and/or to any
contractors for labor and materials), incurred by Payee in the
exercise of any of its rights, remedies or powers under any of
the Loan Documents or with respect to any Collateral with respect
to such event of default, and any amount thereof not paid on the
first business day following demand therefor shall be added to
the principal sum hereunder and shall bear interest at the rate
of One Percent (1.000%) per annum for the remainder of the twenty
(20) year term from the date of such demand until paid in full,
and shall be secured by the Collateral. In connection with and as
part of the foregoing, in the event that any of the Loan
Documents is placed in the hands of an attorney for the
collection of any sum payable thereunder, Maker agrees to pay
reasonable attorneys' fees for the collection of the amount being
claimed under such Loan Document, as well as all costs,
disbursements and allowances provided by law, the payment of
which sums shall be secured by the Collateral. Nothing in this
Paragraph shall limit the Maker's obligation to pay costs and
expenses for which Maker is already liable under any other Loan
Document.
12. Revenue. Taxes or Stamps. Maker shall pay the cost of any
revenue, tax or other stamps now or hereafter required by the
laws of the Commonwealth of Pennsylvania or the United States to
be affixed to this Note and if any taxes are imposed under the
laws of the Commonwealth of Pennsylvania or the United States
with respect to debts secured by a mortgage, or with respect to
evidences of indebtedness so secured, Maker shall pay or
reimburse Payee upon demand the amount of such taxes without
credit against any indebtedness evidenced by this Note. If
Maker does not or may not do so, Payee may at its option
accelerate the indebtedness evidenced by this Note to maturity as
in the case of default by Maker.
13. Severability .In the event that for any reason one or more of
the provisions of this Note or their application to any person or
circumstances shall be held to be invalid, illegal or
unenforceable in any respect or to any extent, such provisions
shall nevertheless remain valid, legal and enforceable in all
such other respects and to such extent as may be permissible. In
addition, any such invalidity , illegality or unenforceability
shall not affect any other provisions of this Note, but this Note
shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
14. Successors and Assigns. This Note inures to the benefit of
Payee and binds Maker, and their respective successors and
assigns, and the words "Payee" and "Maker' whenever occurring
herein shall be deemed and construed to include such respective
successors and assigns.
15. Notices. All notices required to be given to any of the
parties hereunder shall be in writing and shall be deemed to have
been sufficiently given to all purposes when presented personally
to such party or sent by certified or registered mail, return
receipt requested, to such party at its address set forth below:
Maker:
The York Water Company
130 East Market Street
Box 15089
York, PA 17405
Payee:
Pennsylvania Infrastructure Investment Authority
22 South Third Street
Harrisburg, Pennsylvania 17101
Attention: Executive Director
Such notice shall be deemed to be given when received if
delivered personally or two (2) days after the date mailed if
sent by certified or registered mail. Any notice of any change in
such address shall also be given in the manner set forth above.
Whenever the giving of notice is required, the giving of such
notice may be waived in writing by the party entitled to receive
such notice.
16. Definitions: Number and Gender. In the event Maker consists
of more than one person or entity, the obligations and
liabilities hereunder of each of such persons and entities shall
be joint and several and the word "Maker" shall mean all or some
or any of them. For purposes of this Note, the singular shall be
deemed to include the plural, the plural the singular and the
neuter shall be deemed to include the masculine and feminine, as
the context may require. The references herein to the Loan
Documents or any one of them shall include any supplements to or
any amendments of or restatements of such Loan Documents or any
one of them.
17. Incorporation by Reference. All of the terms and provisions
of the Loan Documents, to the extent not inconsistent herewith,
are hereby incorporated herein by reference.
18. Captions. The captions or headings of the paragraphs in this
Note are for convenience only and shall not control or affect the
meaning or construction of any of the terms or provisions of this
Note.
19. Governing Law .This Note shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, Maker has executed this Promissory Note the
date and year first above written.
ATTEST: THE YORK WATER COMPANY
Jeffrey S. Osman, Secretary/Treasurer (SEAL)
William T. Morris, President
EXHIBIT 11
THE YORK WATER COMPANY
COMMON SHARES USED IN
COMPUTING EARNINGS
PER SHARE
2000 1999 1998 1997 1996
Common shares
outstanding,
beginning of
the year 2,989,091 2,979,722 2,934,782 2,900,524 2,549,496
Weighted average
shares issued in
connection with
1996 stock
subscription - - - - 66,432
Weighted average
shares repurchased
in 1999 - (7,392) - - -
Weighted average
shares issued in
connection with the
Employee Stock
Purchase Plan 2,156 1,701 1,565 1,569 1,744
Weighted average
shares issued in
connection with
the Optional
Dividend Rein-
vestment Plan 19,428 16,236 14,938 10,376 9,892
3,010,675 2,990,267 2,951,285 2,912,469 2,627,564
All share data has been restated to reflect the June 1997
four-for-one stock split.
EXHIBIT 13
THE YORK WATER COMPANY
2000 ANNUAL REPORT TO SHAREHOLDERS
The York Water Company's 2000 Annual Report to Shareholders
is attached hereto.
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of
The York Water Company:
We consent to the incorporation by reference in the
registration statements No. 2-80547 on Form S-3, No. 33-81246 on
Form S-3 as amended, and No. 33-26180 on Form S-8, as amended, of
The York Water Company of our report dated February 28, 2001,
relating to the balance sheet of The York Water Company as of
December 31, 2000, and the related statements of income,
shareholders' investment, and cash flows for the year then ended,
which report appears in the 2000 annual report to shareholders
and is incorporated by reference in the annual report on Form
10-K of The York Water Company.
We also consent to incorporation by reference in the
registration statements No. 2-80547 on Form S-3, No. 33-81246 on
Form S-3, as amended, and No. 33-26180 on Form S-8, as amended,
of The York Water Company of our report dated February 28, 2001
relating to the financial statement schedule as listed in Item
14(a) for the year ended December 31, 2000, which is a part of
the Company's December 31, 2000 annual report on Form 10-K, which
report appears in such annual report on Form 10-K.
Stambaugh Ness, PC
March 30, 2001
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors of The York Water
Company:
We consent to incorporation by reference in the registration
statements No. 2-80547 on Form S-3, No. 33-81246 on Form S-3 as
amended, and No. 33-26180 on Form S-8, as amended, of the
York Water Company of our report included herein.
KPMG LLP
Baltimore, Maryland
March 27, 2001