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RELATED PARTY TRANSACTIONS | 12 Months Ended
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Aug. 31, 2016
Related Party Transactions |
RELATED PARTY TRANSACTIONS | On December 16, 2009, the Company entered into a Participation Agreement with the District, whereby the Company agreed to provide funding to the District in connection with the District joining the South Metro Water Supply Authority (“SMWSA”). The Company provided funding of $113,600, $78,600, and $114,900 for the fiscal years ended August 31, 2016, 2015, and 2014, respectively. Through the WISE Financing Agreement, to date the Company made payments of $2,870,500 to purchase certain rights to use existing water transmission and related infrastructure acquired by the WISE project and to construct the connection to the WISE system. The amounts are included as Investments in Water and Water Systems on the Company’s balance sheet as of August 31, 2016. The Company anticipates spending the following over the next five fiscal years to fund the District’s purchase of its share of the water transmission line and additional facilities, water and related assets for WISE and to fund operations and water deliveries related to WISE:
|  | Estimated WISE Costs
|  | For the Fiscal Years Ended August 31,
|  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021
Operations |  | $ | 96,600 |  |  | $ | 96,600 |  |  | $ | 96,600 |  |  | $ | 96,600 |  |  | $ | 96,600 |
Water Delivery |  |  | 45,000 |  |  |  | 225,000 |  |  |  | 495,000 |  |  |  | 675,000 |  |  |  | 855,000 |
Capital |  |  | 464,000 |  |  |  | 339,000 |  |  |  | 464,000 |  |  |  | 1,339,200 |  |  |  | 57,100 |
Other |  |  | 43,500 |  |  |  | 23,600 |  |  |  | 86,600 |  |  |  | 23,600 |  |  |  | 23,600 |
|  | $ | 649,100 |  |  | $ | 684,200 |  |  | $ | 1,142,200 |  |  | $ | 2,134,400 |  |  | $ | 1,032,300 |
The Company has outstanding loans of $800,400 to the District and Sky Ranch Metropolitan District No. 5, which are both related parties, as discussed below: The District In 1995, the Company extended a loan to the District. The loan provided for borrowings of up to $250,000, is unsecured, and bears interest based on the prevailing prime rate plus 2% (5.5% at August 31, 2016). The maturity date of the loan is December 31, 2020. Beginning in January 2014, the District and the Company entered into a funding agreement that allows the Company to continue to provide funding to the District for day-to-day operations and accrue the funding into a note that bears interest at a rate of 8% per annum and remains in full force and effect for so long as the 2014 Amended and Restated Lease Agreement remains in effect. The $628,500 balance of the notes receivable at August 31, 2016, includes borrowings of $260,200 and accrued interest of $368,300. The $591,200 balance of the notes receivable at August 31, 2015, includes borrowings of $237,000 and accrued interest of $354,200. Sky Ranch Metropolitan District No. 5 Each year, beginning in 2012, the Company has entered into an Operation Funding Agreement with Sky Ranch Metropolitan District No. 5 obligating the Company to advance funding to the district for the district's operations and maintenance expenses for the then current calendar year. The District is expected to repay the amounts advanced pursuant to the funding agreements from future revenues from property tax assessments. All payments are subject to annual appropriations by the district in its absolute discretion. The advances by the Company accrue interest at a rate of 8% per annum from the date of the advance. In November 2014, but effective as of January 1, 2014, the Company entered into a Facilities Funding and Acquisition Agreement with Sky Ranch Metropolitan District No. 5 obligating the Company to either finance district improvements or to construct improvements on behalf of the district subject to reimbursement. Improvements subject to this agreement are determined pursuant to a mutually agreed upon budget. Each year in September, the partieis are to mutually determine the improvements required for the following year and finalize a budget by the end of October. Each advance or reimbursable expense accrues interest at a rate of 6% per annum. No payments are required by the district unless and until the district issues bonds in an amount sufficient to reimburse the Company for all or a portion of the advances and costs incurred. Pursuant to the Operation Funding Agreements and the Facilities Funding and Acquisition Agreement, the Company has provided funding to the district in the amounts of $8,500, $97,500 and $50,900 for the fiscal years 2016, 2015, and 2014, respectively. The $171,900 balance of the receivable at August 31, 2016, includes advances of $156,900 and accrued interest of $15,000. Upon the district’s ratification of the advances and related expenditures, the amount was reclassified to long-term and is recorded as part of Notes receivable – related parties.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(k)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864 + Details
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