Financials: JWC operating at a loss

JENKINSVILLE – In person, the Jenkinsville Water Company annual meeting was orderly and efficient, concluding in about 30 minutes and lacking the discord of previous meetings.

On paper, though, the water company continues to operate at a loss.

In financial documents distributed at last week’s annual meeting, the water company reported a net operating loss of $21,537 for the fiscal year ending Dec. 31, 2018.

The water company has reported an operating loss for at least six of the past seven years, according to federal tax returns.

For 2018, the JWC reported $484,853 in total operating income against $506,390 in operating expenses on its profit and loss statement.

Figures provided in the document couldn’t be independently verified because the water company’s Form 990 tax returns for 2017 and 2018 were not available for public inspection as of press time.

JWC president Greg Ginyard insisted that the water company is not operating at a deficit. He attributed the net operating loss to depreciation expenses, which totaled $96,232, according to JWC documents.

“It’s not a deficit. We’ve had no tax problems,” Ginyard said. “What you saw on the loss was depreciation.”

Depreciation alone, however, doesn’t fully account for operating losses the JWC has reported in previous years.

In 2017, the water company reported an operating loss of $107,135 with $93,217 listed for depreciation, depletion and amortization, which still leaves a deficit of $13,918.

The same was true in 2016, when the JWC reported a net operating loss of $128,783, but depreciation, depletion and amortization accounted for only $93,605, which would still leave a deficit of $35,178, according to tax records.

Additionally, the water company is continuing to repay loans to the U.S. Department of Agriculture.

In 2018, rural development loan interest payments accounted for $67,554, the water company’s third greatest individual expense, according to JWC financials.

Long-term liabilities from USDA loans total $583,590, documents state.

Fairfield County Councilwoman Bertha Goins, who attended last week’s meeting, said the water company’s financial picture further illustrates why she thinks the county needs a central water authority.

Fairfield County and the Town of Winnsboro for months have been negotiating the formation of a water authority. Ginyard previously told The Voice he doesn’t support a water authority.

“We need a regional water service,” Goins said. “With discrepancies over finances and lawsuits, that’s one of the main reasons why.”

Ginyard says all is well

At last week’s meeting, Ginyard voiced optimism that the JWC has weaned itself off purchasing water from the Mid County Water Company.

Previously, the S.C. Department of Health and Environmental Control required the JWC to purchase outside water because it lacked capacity to be self-sufficient, especially in cases of emergency.

In 2017, the JWC borrowed $800,000 from Co-Bank with the intent to pay for water system upgrades. Terms of the loan weren’t specified in JWC financials.

Last summer the water company tapped Barwick Plumbing Company LLC to install a new well, awarding a $654,000 contract to the Sumter County firm.

Mid County water purchases have steadily declined since 2016, falling from $97,539 to $26,623, according to financials provided by the JWC.

Ginyard said the well is already bearing fruit, saying it’s already producing 400 gallons of water per minute. He estimates once fully operational, the well will produce 140,000 gallons per day.

“When we put this well in operation, it’s going to be rally great,” Ginyard said. “It’s going to create a savings for us because electricity bills will go down around us. They won’t have to produce as much as they normally do.”

Still, Ginyard told members the water company is still contractually required to purchase 100,000 gallons of water from Mid County, whether the JWC uses it or not.

Ginyard also said Mid County imposed three rate increases last year, which he said the JWC absorbed. He told members the contract has no sunset clause, but remained hopeful it could be renegotiated.

“We’re not using any Mid County water, but we’re paying for 100,000 gallons whether we use it or not,” he said.