Connecting with Customers

South Central Connecticut Regional Water Authority | Annual Report 2005-06

“Our reputation is built on strong, positive customer relationships. They are the center of our success. Service is what counts for customers.”

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Our Crews:

Above:Paul Prusinksi, Jay Giri, Anthony Carangleo, Tony Ferraro

Right:Rich Stufcliffe, Tom Vinci, Antonio Arroyo

Facing Page:Ron Bonenfant, John Rivera, Larry Lynn

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Marie B. Kennedy

Regional Water Authority Customer

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our mission

Provide a reliable supply of high quality water at a

reasonable cost for today and future generations while

promoting the preservation of watershed land and aquifers.

our vision

Will be nationally recognized as a premier provider of water

and related services and products throughout the region.

our values

Prompt, courteous, service

Respect for our employees

Honesty and integrity

Safety

Innovation and efficiency

Diversity

Recreational and educational opportunities

“Fueled by over a century of experience and trust, our mission at the Regional Water Authority is to provide a reliable supply

of high-quality water at a reasonable cost for today and future generations…”

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We felt it was time to hear from some of the people who deal with us every day –

our customers. This 2006 fiscal year annual report opens with some letters from

customers that express appreciation for the service we offer each and every day

to the Greater New Haven region.

Unlike gas or electric utilities, our service is consumed. Just like food, water

requires special protection. People cannot live without water. Providing clean

water to the homes and businesses that depend upon us every day is both a

privilege and a responsibility.

It’s not just individual departments who hear from customers. We receive letters

as well. A memorable one came from an East Haven customer who wrote to us

after she received her water quality report. In her letter, she said:

“Because of such service on your part, I know our water is safe. I appreciate

and thank you for the chart and information you give us and for all that you

as a group, do to make our water safe. We in the United States are privileged

in comparison to other countries who lack this treasured resource of water. I

dare say many Americans never stop to think how important water is and how

carefully we ought to use it.”

That letter says it so well. Indeed, water is a precious resource. It’s an uncommon

commodity, an everyday symbol of our community’s bounty and something

that citizens are entitled to. Our system, first conceived by Eli Whitney, Jr., in

�849, is a marvel of engineering and civic gumption.

Fueled by over a century of experience and trust, our mission at the Regional

Water Authority is to provide a reliable supply of high-quality water at a

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“Indeed, water is a precious resource. It’s an uncommon commodity, an everyday symbol of our community’s bounty and something that citizens are entitled to.”

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“Investment in the infrastructure that delivers high-quality water efficiently to our customers is our priority. In the last two years,

we devoted over $59 million into building and maintaining our region’s water system.”

reasonable cost for today and future generations while promoting the

preservation of watershed land and aquifers. We provide 55 million gallons

of water per day to some 400,000 consumers. We own and protect more than

25,000 acres of land.

Our reputation is built on strong, positive customer relationships. They are the

center of our success. Service is what counts for customers. Three areas of our

company – customer service, construction and field service have an 85 percent

satisfaction rating. A regional survey of 500 individuals from Greater New

Haven cites our commitment to recreation, environmental education and the

safe disposal of household hazardous waste. On pages �4-�5, recreation permit

holders share their joys about our program. We take pride in connecting with

our customers.

On the following pages you will read about some projects and individuals who

turn to the Regional Water Authority for assistance. You will read about the

Hill Health Center pediatrician who wanted to improve his patients’ dental

health; two fire departments that know the value of water in their community;

and an array of non-profit community groups whose thirst is quenched by our

Whitney’s bottled water.

Investment in the infrastructure that delivers high-quality water efficiently to

our customers is our priority. In the last two years, we devoted over $59 million

to building and maintaining our region’s water system. We built treatment

plants, pump stations and water storage towers. We installed miles of main. We

also cleaned and lined water mains to sustain our infrastructure.

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“Investment in the infrastructure that delivers high-quality water efficiently to our customers is our priority. In the last two years,

we devoted over $59 million into building and maintaining our region’s water system.”

In 2006, we invested over $2.� million to acquire over ��0 acres of land and

conservation easements on another �6 acres in our region. All of this property

is within the watershed of our reservoirs. We dedicate resources to this because

acquiring the land strengthens our multi-barrier approach to producing quality

water for our consumers. It also ensures that land will remain as open space.

After all, the health of our waters is a measure of how we live on the land.

We connect with customers by remaining committed to their needs and continue

to add services. We introduced PipeSafe Plus Sewer Line Protection for our

customers. Much like our successful water line protection plan, which has been

around for eight years, the new plan offers quick repairs to a homeowner’s sewer

line. Our certified laboratory continues to offer testing for other water services

and recently we began issuing sewer bills to some municipalities on behalf of the

Water Pollution Control Authority. These initiatives, which stem from customer

requests, provide us with added revenue that keeps water rates low.

The following customer profiles offer a brief glimpse of our work and are a

testament to the talents and abilities of our employees. We believe the profiles

also explain who we are and what matters to us. Our values, which open up this

book, are at the core of who we are as an organization.

Claire BennittChairperson,

Regional Water Authority

David Silverstone President & Chief

Executive Officer

R. Douglas Marsh Chairperson,

Representative Policy Board

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“In 2006, we invested over $2.3 million to acquire over 170 acres of land and conservation easements on another 76 acres in our region.

All of this property is within the watershed of our reservoirs.”

Dr. Steve Updegrove

Pediatrician

Hill Health Center

“Parents spent additional money on the beverages

without gaining additional benefits for their families…

[Since the start of Captain Fluoride], “it’s gratifying

to see patients come around to drinking tap water,

and make the connection that fluoride is essential to

childhood health.”

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Bottled water-toting parents at New Haven’s Hill Health

Center faced a dilemma. They filled sippie cups with

filtered or spring water because they sensed it was better

for their children. However, those kids were missing out

on the benefits of fluoride.

Adding fluoride to the public water supplies is one of

the public health achievements of the twentieth century.

Fluoride, first added to municipal water systems in the

�940s, has a topical effect that helps in stabilizing the

enamel surface of teeth.

Dr. Steve Updegrove, a pediatrician at Hill Health Center,

speculated about the risk of tooth decay. He wondered

if the benefits of fluoride were lost as families, many on

fixed incomes, were reaching for bottled water. “Parents

spent additional money on the beverages without gaining

additional benefits for their families,” said Updegrove.

The bottled water phenomenon is in part the result of

greater weight consciousness that has led people to drink

beverages without calories. “From the standpoint of the

health of teeth, it’s good to buy water instead of juice or

soda. But a beverage with no sugar shouldn’t also lack

fluoride,” said Updegrove.

First he studied over 200 clinic patients to find out if they

drink tap water. Over 40 percent of the patients bought

bottled spring water because they thought it was better.

Patients knew that fluoride prevents tooth decay, but over

half didn’t know it was in tap water.

Armed with information from his study, Updegrove

approached the Authority’s education department for

assistance in developing materials that would be

informative, fun and appeal to youngsters

and their parents. Together with the

Authority they developed a brochure

explaining the benefits of fluoride, along with

a cartoon-hero, Captain Fluoride, who leads

youngsters through a series of games, including word

puzzles and a maze of water pipes leading to a sparkling

smile. This program also received support from the

American Dental Association’s Harris Fund and the federal

Department of Health and Human Services.

Since the start of Captain Fluoride, “it’s gratifying to see

patients come around to drinking tap water,” Updegrove

said “and make the connection that fluoride is essential to

childhood health.”

Besides New Haven, the Women, Infants & Children

clinics in Milford and West Haven are spreading the

message that tap water has fluoride for a healthy smile.

Much like water, a fire department is a vital service to its citizens. The

department is on call 24 hours a day, seven days a week. Flexibility is

an essential part of the job. No day is predictable.

Each fire, each emergency call, is different. When the alarm goes off, a

fire crew responds. Simultaneously, there must be water on demand

and proper pressure in hydrants so firefighters can extinguish the

flames. The RWA creed on fire protection is clear: “Take firefighting

seriously. A hydrant should never be out of service.”

Milford Assistant Fire Chief James Wilkinson noted that most parts of

the country don’t have as good a municipal water system as our region

does. “We don’t rely upon dozens of big water tankers to pump water

from a pond and truck it to a fire. For us, the infrastructure is in place

waiting for us to tap. We know hydrants work. Water supply is not

an issue; for us it’s a given,” said Wilkinson, a �2-year veteran of the

department. Last year, Milford handled �,000 calls for service.

A few years ago, the City of Milford and the Authority improved water

pressure and firefighting capabilities for the shoreline community of

nearly 5�,000 people. “Those benefits are far-reaching and enhance

service throughout the town,” said Wilkinson. The town has over 2�5

miles of water main and more than �,��0 fire hydrants.

Handling more than �5,000 cases last year, the 400 women and men

of the New Haven Fire Department help protect the City of New

Haven which is 2�.� square miles and home to over �25,000 residents.

James Wilkinson

Assistant Fire Chief

Milford

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“We couldn’t fight fires in our urban environment without water. It is

definitely essential,” said New Haven Fire Chief Michael Grant, who

for nearly 20 years has enjoyed a close working relationship with the

Authority, especially with people in its operations division. Authority

crews also aid his department by responding to fire calls that are two-

alarm or greater. The crews help ensure that the more than 2,0�0 hydrants

have adequate pressure and supply during blazes in the city.

With many high-rise buildings, bustling retail shops, restaurants and

theatres, several blocks in downtown New Haven comprise a “high-value

district.” Here, the sidewalks show the strength of the city’s fire protection

system. Hydrants are just �00 feet apart, on both sides of the street,

ensuring that in emergencies, firefighters could pump between 8,000 and

�0,000 gallons of water per minute.

Chief Grant cites the improvements the Authority made by installing

larger mains that upgraded “weak areas” in the system. “This year, we are

working closely on the cement lining project, especially when hydrants are

taken out and replaced by temporary ones in the area. My first exposure to

the Authority was when I was assigned to work on the hydrant program,”

said Grant.

Back in the mid-�990s, the water system was taxed so severely by illegally

opened or vandalized hydrants that three key branches of city government – Fire, Police and Mayor –

joined with the Authority to clamp down on the openings. Tampering with a hydrant reduces water

pressure, hinders firefighting capabilities and threatens neighborhood safety. As part of the campaign,

Grant visited elementary school students to talk about fire protection and to explain why opening

hydrants is dangerous. Through the collaboration, sprinkler caps were placed on selected hydrants and

city parks offered sprinkler sites as a safe way for kids to cool off.

Michael Grant

Fire Chief

New Haven

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Barrie Collins doesn’t mince words

when she describes why she has kept

a Regional Water Authority recreation

permit for close to 25 years.

“I wouldn’t be without a pass. There

are very few unspoiled places in

overdeveloped southern Connecticut,”

she said. “Where else can you go �0

to �5 minutes from home, get away

from noise, and be in a place that is

wilderness? It’s naturalistic. And the

water views can’t be beat.”

Through its recreation program,

the Authority offers people the

opportunity to drink up the rich

images of the great outdoors. With

eight recreation areas spanning �0 towns in Greater New Haven,

there is something for everyone. “It’s always changing, never in

four seasons will you see the same scene,” said Barrie.

The nearly 60 miles of trails to choose from certainly offer a

great variety. There are easy, short flat trails like the Pine Trail at

Genesee, or more challenging ones like the ridge at Northford’s

Big Gulph. “Most of the trails permit you to go in a circle, so

Dr. Stephen and Barrie Collins

Regional Water Authority Recreation Permit Holders

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there’s no need to double back or retrace steps,”

explained Barrie, who is excited by the diversity of

flowers at Lake Bethany. “There must be �5 varieties.”

Others like the program because they can run the trails

or fish some �� miles of streams and rivers.

For James Doris, who likes to be in the woods and has

kept a permit for just over �0 years, the three-mile trail

at Maltby is a favorite for running. “You can get a good

run at Lake Bethany too,” he said.

Deer, turkeys, butterflies and bunnies bedeck the

trails and winding dirt service roads. Turtles and

salamanders soak up the sun on the rocks along the

waters edge. A great horned owl perches high up in the

trees at Maltby. In conjunction with the Department

of Environmental Protection, James volunteers to

conduct the hawk surveys. Several times a year, he

heads to the Lake Chamberlain recreation area with a

recorded owl call, where he will sit, listen and look for

birds of prey like falcons and hawks. ‘I’ve seen red-tail

hawks, northern goshawks and Cooper’s hawks over

the last two years,” said James.

The recreation program presents the “signs of nature as

she is meant to be,” said Barrie.

James Doris

Regional Water Authority

Recreation Permit Holder

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From the 5,000 runners at the New Haven Labor Day Road Race, to area youth groups and schools, our Whitney’s bottled water quenches thirst.

Over the past year, more than 32,300 of our 16.9-ounce bottles of water went to civic and nonprofit groups in our region.

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From the 5,000 runners at the New Haven Labor Day Road Race, to area youth groups and schools, our

Whitney’s bottled water quenches thirst. Over the past year, more than �2,�00 of our �6.9-ounce bottles

of water went to civic and nonprofit groups in our region.

Events like the Connecticut Food Bank’s Walk Against Hunger, the four-mile Julia’s Run for Children,

City Wide Youth Coalition’s Youth Walk, and the local American Cancer Society’s Relays for Life all had

Whitney’s bottled water. Areas schools from North Branford to Orange to West Haven and New Haven

distribute the bottles of water at their functions. Groups who need an army of volunteers, to staff their

events, offer our bottled water as a refreshment to keep their troops hydrated

and happy. Cold bottles of Whitney’s greeted volunteers at the International

Festival of Arts and Ideas, and the Guilford Handcrafts Festival as well as

New Haven’s Jazz in the Parks. City Seeds, which operates a farmers’ market,

promoted the opening of a new market in downtown New Haven with our

bottled water.

Some groups who receive the donations of bottled water choose to sell it to

raise money for their organizations. In Madison, the Island Avenue Elementary School Parent-Teacher

Organization did just that when it sold Whitney’s Water at the school’s “Family Movie Night.” “Your

donation helped us raise over $�,400 to fund field trips and cultural arts programs for students,” wrote

the PTO co-vice president in her note to the Authority. Bottled water was sold at the Foxon Recreation

League opening day baseball game. “The donation helps bring in additional revenue to run our league,”

said league secretary.

Because water is a vital and an often forgotten nutrient, organizations with a focus on health feature it in

their service programs. The Milford Red Cross makes water available to individuals at blood drives and

health clinics. Our bottled water was part of a smoking cessation program at a hospital.

So while our bottled water might not flood the market, the donations are an important ingredient in our

support of the community.

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Independent Auditors’ Report To the Members of South Central Connecticut Regional Water Authority:

We have audited the accompanying statements of net assets of the South Central Connecticut Regional Water Authority (the “Authority”) as of May ��, 2006 and 2005, and the related statements of revenues, expenses, and changes in net assets and cash flows for the year ended May ��, 2006, and five-month period from January �, 2005 through May ��, 2005. These financial statements are the responsibility of the Authority’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We did not audit the financial statements of the Watershed Fund, a blended component unit of the Authority, which statements reflect total assets constituting 0.28% and 0.26% of the total assets of the Authority as of May ��, 2006 and 2005, respectively, and total revenues constituting 0.08% and 0.�2% of the total revenues of the Authority for the year ended May ��, 2006, and the five-month period from January �, 2005 through May ��, 2005. Those financial statements were audited by other auditors whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included for the Authority, is based solely on the reports of such other auditors.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the financial statements referred to above present fairly, in all material respects, the net assets of the Authority as of May ��, 2006 and 2005, and the changes in its net assets and cash flows for the year ended May ��, 2006, and five-month period from January �, 2005 through May ��, 2005, in conformity with accounting principles generally accepted in the United States of America.

The “Management’s Discussion and Analysis” is not a required part of the basic financial statements but is supplemental information required by the Governmental Accounting Standards Board (“GASB”). This supplemental information is the responsibility of the Authority’s management. We have applied certain limited procedures, which consisted principally of inquiries of management of the Authority regarding the methods of measurement and presentation of this supplemental information. However, we did not audit such information and we do not express an opinion on it.

As discussed in Note 2 to the financial statements, in 2005, the Authority adopted GASB Statement No. 40, Deposit and Investment Risk Disclosures—an amendment of GASB Statement No. �.

As discussed in Note 2 to the financial statements, the Authority changed its accounting year end from December �� to May �� commencing on January �, 2005.

August 2�, 2006

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Management’s Discussion and Analysis: Year Ended May 31, 2006

introduction

The South Central Connecticut Regional Water Authority (“the Authority”) changed its fiscal year as of January �, 2005, from a calendar year to one ending May ��st. To achieve this, the Authority created a transitional or “stub” period comprising the five months from January �, 2005 through May ��, 2005, with the first new fiscal year running from June �, 2005 through May ��, 2006 (“FY 2006”). A primary reason for the change was the Authority’s recognition that water revenues in the months from June through August are the most volatile because they are the most weather-dependent. The new fiscal year will enhance the organization’s management of its revenues and expenditures because it will comprehend most of the fiscal year’s volatility in revenues at the end of the first quarter, rather than at the end of the third quarter.

As noted in our Independent Auditors’ Report from Deloitte & Touche LLP, Management’s Discussion and Analysis (MD&A) provides supplemental information to the audit and should be read in conjunction with it. The purpose of the MD&A is to introduce and highlight the more detailed information provided in the audited financial statements. For example, it will assess improvement to or deterioration of the Authority’s financial position and will identify factors that, in management’s opinion, affected financial performance during the fiscal period under review.

contents of the audited financial statements

The Authority’s audited financial statements include the following:

K Statement of net assets This statement provides information about the Authority’s investments in resources (assets) and its obligations to creditors (liabilities), with the difference between them reported as net assets.

K Statement of revenues, expenses, and changes in net assets This statement demonstrates changes in net assets from one fiscal period to another by accounting for revenues and expenditures and measuring the financial results of operations. The information may be used to determine how the Authority has funded its costs.

K Statement of cash flows This statement provides information concerning the Authority’s cash receipts and payments, as well as net changes in cash resulting from operations, capital financing, and investing.

K Notes to financial statements Notes to the audited financial statements contain information essential to understanding them, such as the Authority’s accounting methods and policies.

the authority’s business

The primary purpose of the Authority according to its enabling legislation is to provide and assure an adequate supply of pure water at a reasonable cost to its water district and, to the degree consistent with the foregoing, to advance water conservation and the conservation and compatible recreational use of land held by the Authority.

The Watershed Fund, established by the Authority for the purpose of protecting land on the watershed through the acquisition of open space and promotion of environmental education, is included as a blended component unit in the audited financial statements. (See note � to the audited financial statements, Organization.)

fiinancial highlights

May 31, December 31,

Summary: Revenues, expenses and changes in net assets “FY 2006” “Stub” 2005 (1) “FY 2004”

(In thousands of dollars)

Operating revenues:

Water revenues $ 65,217 $ 23,216 $ 58,275

Other 8,695 2,630 7,524

Total operating revenues 73,912 25,846 65,799

Operating expenses:

Operating and maintenance 34,091 15,874 31,783

Expenses associated with “Other” revenue 4,196 1,321 3,177

Depreciation 12,670 4,625 10,297

Payments in lieu of taxes (“PILOT”) 5,795 2,279 5,493

Total operating expenses 56,752 24,099 50,750

Operating income 17,160 1,747 15,049

Nonoperating revenues and expenses:

Interest expense—net (14,954) (5,946) (14,586)

Gain (loss) on disposal of assets 1,447 (214) (1,887)

Realized and unrealized gains/(losses) on investments (211) 64 (30)

Amortization of bond discount, premium, issuance costs and deferred refunding losses (2,880) (1,183) (1,881)

Total nonoperating revenues and expenses (16,598) (7,279) (18,384)

Gain (loss) before contributions 562 (5,532) (3,335)

Capital contributions 1,775 592 1,787

Change in net assets $ 2,337 $ (4,940) $ (1,548)

(1) The five-month period ended May 31, 2005, allowed the Authority to make the transition to its new fiscal year, beginning June 1, 2005, from its former fiscal year which was the calendar year ended December 31, 2004.

The following items �-5 highlight differences in the three columns of figures on the preceding page which present a summary of revenues, expenses and changes in net assets for three fiscal periods , i.e., for FY 2004; for the transitional period of five months from January through May, 2005; and, for the Authority’s new fiscal year, beginning June �, 2005 (“FY 2006”). Much of the difference between the middle column and the first and third columns arises because the middle column represents a period of only five months, while the other two each represent periods of twelve months. As a result, the following explanations concentrate primarily on differences between FY 2004 and FY 2006.

1. Operating revenuesContributing to the increase in operating revenue was an increase of 5.�% in revenues from rates and charges that took effect on October 2�, 2005. The Authority proposed this increase to meet the requirements of its Water System Revenue Bond Resolution, General Bond Resolution (“the General Bond Resolution”), in connection with the issuance of its Twentieth Series Bonds to fund its program of capital improvements.

Also a factor was an increase in revenue in FY 2006 resulting from the Authority’s newly initiated service protection plan, known as PipeSafe Plus, and a dryer-than-normal summer period during fiscal year 2006.

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2. Operating expensesIncreases in operating expense reflect increased salaries and wages taking effect in January of 2005 and 2006, as well as an increase in costs associated with employee benefits.

Additions to utility plant resulted in a higher figure for depreciation.

PILOT made to municipalities increased, as shown.

3. Non-operating income and expensesFY 2006 enjoyed higher rates of earning on investments than FY 2004 because of changes in the financial markets.

Realized and unrealized gains on investments decreased by $2�5,000 between May ��, 2005 and May ��, 2006, because there was a greater difference between the market value of investments and their cost on the latter date.

4. Disposal of assetsIn FY 2006, the Authority sold land in Woodbridge and Milford, resulting in a gain on disposal of assets.

5. AmortizationThe amortization of bond discount, premium, issuance costs, and deferred refunding losses (i.e., termination of the interest rate swap) was higher in FY 2006 than in FY 2004 because FY 2006 represents one full year of amortization associated with terminating the interest rate swap, compared to just three months in FY 2004.

May 31, December 31,

Summary: Net assets “FY 2006” 2005 “FY 2004”

(In thousands of dollars)

Assets:

Capital assets $ 446,330 $ 437,254 $ 431,488

Other assets:

Current 23,929 21,320 21,693

Restricted assets 59,838 53,474 62,556

Other long-term 12,277 13,552 14,132

Total assets $ 542,374 $ 525,600 $ 529,869

Liabilities:

Current liabilities $25,934 $27,259 $27,153

Other long-term liabilities 2,000 2,000 2,000

Long-Term debt 371,071 355,309 354,744

Total liabilities 399,005 384,568 383,897

Net assets:

Invested in capital—net of related debt 95,448 101,250 103,229

Restricted 30,842 23,628 24,069

Unrestricted 17,079 16,154 18,674

Total net assets 143,369 141,032 145,972

Total liabilities and net assets $ 542,374 $ 525,600 $ 529,869

The following items �-�0 explain the summarized statement of net assets shown directly above, again concentrating primarily on the differences between fiscal year 2004 and fiscal year 2006.

1. Capital assetsThe increase in capital assets results largely from completion of the Whitney Water Treatment Plant, placed into service in April, 2005, an increase partially offset by growth in accumulated depreciation over the same period. Other expenditures for capital assets are more routine than the new water treatment plant, such as additions to pumping equipment, improvements to existing water treatment plants, upgrades to the distribution system (including new pipe), and improvements in information technology.

2. Current assets The following itemizes the increase of $2.2 million in current assets between December ��, 2004 and May ��, 2006:

From 12/31/04 to 5/31/06

(Decrease) in cash and cash equivalents and short-term investments $ (278,124)

(Decrease) in accounts receivable, net (502,692)

Increase in accrued water revenue 3,351,620

Increase in interest receivable 173,517

Increase in materials and supplies 629,374

(Decrease) in prepayments and other current assets (1,137,600)

Net increase in current assets $ 2,236,095

Higher debt service transfers in FY 2006 resulted in less cash on hand.

The increase in accrued water revenue resulted from two rate increases, the first occurring in September, 2004, and the second in October, 2005.

The increase in interest receivable reflects higher rates of earnings in the financial markets.

Higher prices for inventory and purchasing more of certain inventory items in advance of price increases resulted in the increase in materials and supplies.

The decrease in prepayments reflects a lower receivable for public fire service. Billing of this service is done in December and July.

3. Restricted assets (investments)The term “restricted assets” refers primarily to certain funds established under the Authority’s General Bond Resolution whose use is restricted as required by that document, e.g.:

K Construction Fund;

K Rate Stabilization Fund;

K PILOT Fund;

K Capital Contingency Fund;

K Debt Service Fund

The Authority invests these restricted assets in securities as allowed by the General Bond Resolution, e.g., in direct obligations of the federal or state governments (or agencies) or in obligations guaranteed by the federal government. The decline of $2.� million in restricted assets between the end of FY 2004 and the end of FY 2006 mostly reflects expenditure from the Construction Fund to pay for the Authority’s ongoing program of capital improvements.

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4. Other long-term assetsThis category of asset has two components, the larger being an interest rate swap associated with the Authority’s Eighteenth Series Bonds issued in May, 200�, which the Authority terminated in September, 2004. Also referred to as a “regulatory asset,” the amount shown for the terminated swap decreases each month as the cost of the termination is amortized, resulting in the decrease by $�.9 million shown for this line item between the end of FY 2004 and the end of FY 2006. For more information, please refer to note 2, Derivative Instruments, of the audited financial statements.

The other component of this line item is a second regulatory asset, representing an estimated cost of $2 million associated with the Authority’s anticipated environmental remediation of a middle school site in the town of Hamden, Connecticut.

5. Current liabilitiesCurrent liabilities decreased by $�.2 million between the end of FY 2004 and the end of FY 2006. Primarily, the decrease concerned the completion of the Whitney Water Treatment Plant in April, 2005, and an associated decrease in payables, partially offset by an increase in accrued interest payable resulting from issuance of the Authority’s Twentieth Series Bonds in October, 2005.

6. Long-term debtLong-term debt increased by $�6.� million between the end of FY 2004 and the end of FY 2006, as a result of the Authority’s issuing its Twentieth Series Bonds in October, 2005, partially offset by principal payments on other outstanding debt.

7. Invested in capital, net of related debtThis line represents the Authority total capital assets, less long-term debt, an amount which decreased by $�.8 million between the end of FY 2004 and the end of FY 2006. Over that period, long-term debt increased by a greater amount than utility plant-in-service.

8. Net assets, restricted Restricted net assets increased by $6.8 million between the end of FY 2004 and the end of FY 2006, primarily because the value of those investments exceeded amounts payable from them on the latter date.

9. Unrestricted net assetsUnrestricted net assets decreased by $�.6 million between the end of FY 2004 and the end of FY 2006 because the Authority had lower balances due for current liabilities on the latter date.

10. Total net assetsThe Authority’s total net assets decreased by $2.6 million between the end of FY 2004 and the end of FY 2006, largely because long-term debt increased by more than capital assets during that period.

the authority’s customer base

The Authority’s customer base is primarily residential and commercial. Of its approximately �08,000 customers, 98,000 are residential, and 6,400 are commercial with the remainder being industrial, public authority, and miscellaneous. In FY 2006, as is typical, �6% of the Authority’s total revenue came from its residential customers which means that changes in the region’s economic condition affect revenues only modestly. The highest consuming customers of the Authority, i.e., commercial/ industrial/institutional users of one million or more cubic feet per quarter, provide less than 5% of the Authority’s total annual revenue.

the operating budget for fy 2006

Operating revenue exceeded budget by approximately �% as a result of dry summer weather in 2005, resulting in higher-than-anticipated draft and water revenues for the fiscal year ended May ��, 2006. Also, the Authority implemented an increase in revenue from rates and charges equal to 5.�%, effective October 2�, 2005. Operating and maintenance expense for FY 2006 was $29,000 under budget because the cost of payroll and consulting fees was lower than anticipated, partially offset by higher costs associated with employee benefits and transportation.

liquidity and capital resources in fy 2006

In FY 2006, the Authority received $�0 million in cash from operations and $� million from investment earnings. These amounts were sufficient to pay for operations and maintenance ($�6 mllion); to fund debt service transfers ($28 million); and, to fund PILOT transfers for payments to municipalities ($6 million).

The Authority funds its program of capital improvement largely through the issuance of debt, most recently in October, 2005, with its Water System Revenue Bonds, Twentieth Series, in the amount of $2�.4 million. In conjunction with the Twentieth Series, the Authority implemented an increase in necessary revenues from rates and charges.

credit rating

In October, 2005, Standard & Poors and Moody’s Investors Service affirmed ratings of A+ and A2, respectively, on the Authority’s outstanding debt.

financial statement presentation

The Authority’s financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

request for information

Please note that the audited financial statements include data from the year ended May ��, 2006 and the five month period from January �, 2005 through May ��, 2005. Comparable information for earlier years is available as noted below.

This financial report is designed to provide a general overview of the South Central Connecticut Regional Water Authority’s finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed in writing to the Vice-President, Finance and Administration, South Central Connecticut Regional Water Authority, 90 Sargent Drive, New Haven, Connecticut 065��.

24

2006 2005

ASSEtS

UTILITy PLANT:

Property, plant, and equipment in service $ 522,453,207 $ 500,637,174

Accumulated depreciation (136,656,303) (125,469,461)

Utility plant in service 385,796,904 375,167,713

Construction work in progress 4,211,653 6,400,231

Utility plant—net 390,008,557 381,567,944

NONUTILITy LAND AT COST 56,321,482 55,686,215

CURRENT ASSETS:

Cash and cash equivalents 2,061,991 2,623,915

Short-term investments 429,347 593,340

Accounts receivable, less allowance for doubtful accounts of $284,971 and $300,480 in 2006 and 2005, respectively 4,745,577 4,508,927

Accrued water revenue 11,188,951 9,319,042

Accrued interest receivable 315,584 263,419

Materials and supplies 2,002,962 1,474,061

Prepaid expenses and other assets 3,184,701 2,537,651

Total current assets 23,929,113 21,320,355

RESTRICTED ASSETS 59,838,226 53,473,638

WATERSHED FUND ASSETS 1,509,448 1,362,774

REGULATORy ASSETS 10,767,404 12,189,146

TOTAL $ 542,374,230 $ 525,600,072

LIABILItIES AND NEt ASSEtS

LIABILITIES:

Revenue bonds payable—net of deferred refunding losses—less current portion $ 371,071,033 $ 355,308,816

Current liabilities:

Current portion of revenue bonds payable 9,092,500 9,615,000

Accounts payable 2,499,599 2,225,639

Customer deposits and advances 719,212 516,029

Other accrued liabilities 4,785,415 4,338,687

Total current liabilities 17,096,726 16,695,355

Liabilities payable from restricted assets:

Accounts payable for construction 1,304,009 3,775,315

Accrued interest payable 6,303,116 5,540,486

Customer deposits and advances 1,230,473 1,248,434

Total liabilities payable from restricted assets 8,837,598 10,564,235

Other liabilities 2,000,000 2,000,000

Total liabilities 399,005,357 384,568,406

NET ASSETS:

Invested in capital assets—net of related debt 95,447,933 101,250,246

Restricted assets 30,841,917 23,627,818

Unrestricted assets 17,079,023 16,153,602

Total net assets 143,368,873 141,031,666

TOTAL $ 542,374,230 $ 525,600,072

See notes to financial statements.

Statements of Net Assets

as of May 31, 2006 and 2005

25

Statements Of Revenues, Expenses, and Changes in Net Assets

for the year Ended May 31, 2006, and Five-Month Period from January 1, 2005 through May 31, 2005

2006

Five-Month Period From January 1, 2005

Through May 31, 2005

OPERAtING REVENUES:

Residential and commercial $ 53,299,517 $ 19,013,069

Industrial 3,095,209 952,840

Fire protection 4,888,243 1,945,888

Public authority 2,598,349 871,959

Wholesale 1,335,324 432,126

Other 8,694,955 2,629,654

Total operating revenues 73,911,597 25,845,536

OPERAtING EXPENSES:

Operating and maintenance expense 34,137,040 15,808,976

Expense associated with “Other” revenue 4,195,727 1,321,541

(Recoveries) provision for uncollectible accounts (46,060) 64,674

Depreciation 12,669,959 4,625,191

Payment in lieu of taxes 5,794,695 2,278,622

Total operating expenses 56,751,361 24,099,004

Operating income 17,160,236 1,746,532

NONOPERAtING INCOME (EXPENSE):

Interest income 2,606,202 901,166

Gain (loss) on disposal of assets 1,446,829 (213,859)

Realized and unrealized (losses) gains on investments (210,880) 64,069

Interest expense (17,560,565) (6,847,251)

Amortization of bond discount, premium, issuance cost, and deferred refunding losses (2,879,741) (1,182,894)

Total nonoperating expense (16,598,155) (7,278,769)

Income (loss) before contributions 562,081 (5,532,237)

CAPItAL CONtRIBUtIONS 1,775,126 592,472

CHANGE IN NET ASSETS 2,337,207 (4,939,765)

TOTAL NET ASSETS—Beginning 141,031,666 145,971,431

TOTAL NET ASSETS—Ending $ 143,368,873 $ 141,031,666

See notes to financial statements.

26

Statements of Cash Flows

for the year Ended May 31, 2006, and Five-Month Period from January 1, 2005 through May 31, 2005

2006

Five-Month Period From January 1, 2005

Through May 31, 2005

CASH FLOWS FROM OPERAtING ACtIVItIES:

Cash received from water sales $ 62,966,407 $ 24,641,780

Cash received from other services 8,662,360 2,613,722

Cash paid to employees (14,401,916) (6,556,682)

Cash paid to suppliers for operations (19,583,611) (8,698,521)

Cash paid to suppliers for other services (4,375,496) (1,415,163)

Payments in lieu of taxes (5,942,863) (1,812,661)

Net cash provided by operating activities 27,324,881 8,772,475

CASH FLOWS FROM INVEStING ACtIVItIES:

Interest received 2,554,037 779,814

Purchase of short-term investments (429,347) (593,340)

Purchase of restricted investments (415,171,748) (52,856,636)

Sale of restricted investments 408,922,739 61,935,260

Net cash (used in) provided by investing activities (4,124,319) 9,265,098

CASH FLOWS FROM CAPItAL AND RELAtED FINANCING ACtIVItIES:

Payments for utility plant (25,300,908) (11,170,766)

Proceeds from disposition of assets 2,860,970 35,305

Proceeds from issuance of Revenue Bonds 23,415,211 —

Payment of revenue bonds (9,617,000) —

Interest paid (16,895,885) (7,640,131)

Contributions in aid of construction 1,775,126 592,472

Net cash used in capital and related financing activities (23,762,486) (18,183,120)

NEt DECREASE IN CASH AND CASH EQUIVALENtS (561,924) (145,547)

CASH AND CASH EQUIVALENtS—Beginning of period 2,623,915 2,769,462

CASH AND CASH EQUIVALENtS—End of period $ 2,061,991 $ 2,623,915

RECONCILIAtION OF OPERAtING INCOME tO NEt CASH PROVIDED BY OPERAtING ACtIVItIES:

Operating income $ 17,160,236 $ 1,746,532

Adjustments to reconcile operating income to net cash provided by operating activities:

Depreciation 12,669,959 4,625,191

Changes in:

Prepaid expenses and other assets (647,050) 1,784,650

Accounts receivable and accrued water revenue (2,106,559) (842,369)

Materials and supplies (528,901) (100,473)

Watershed Fund assets (146,674) (12,540)

Accounts payable 273,960 (210,839)

Customer deposits 203,182 (64,004)

Other accrued liabilities 446,728 1,846,327

Total adjustments 10,164,645 7,025,943

NET CASH PROVIDED By OPERATING ACTIVITIES $ 27,324,881 $ 8,772,475

See notes to financial statements.

2�

1. organizationThe South Central Connecticut Regional Water Authority and Component Units (the “Authority”) was created, effective July 25, �9��, pursuant to Special Act No. ��-98 (the “Act”) as amended, by the Connecticut State Legislature. The primary purpose of the Authority is to provide and assure an adequate supply of pure water at a reasonable cost to the South Central Connecticut Regional Water District (the “District”) and, to the degree consistent with the foregoing, to advance water conservation and the conservation and compatible recreational use of land held by the Authority. The five-member Authority is elected by the ��-member Representative Policy Board, (the “RPB”). The RPB consists of a member from each of the �6 municipalities within the District and one member appointed by the Governor of Connecticut.

During �999, the Authority established the Watershed Fund, a separate legal entity organized for the purpose of protecting watershed land that has a distinctive ecological significance through open space acquisition and environmental education. Although it is a separate legal entity from the Authority, the Watershed Fund is included as a blended component unit in the Authority’s financial statements (see Note 5). Requests for complete financial statements for the Watershed Fund should be addressed in writing to President, The Watershed Fund, 90 Sargent Drive, New Haven, CT 065��.

2. summary of significant accounting policiesThe accounting records of the Authority are maintained in accordance with accounting principles generally accepted in the United States of America. All assets, liabilities, net assets, revenues and expenses are accounted for in a proprietary fund, with revenues recorded when earned and expenses recorded at the time liabilities are incurred. The more significant accounting policies are summarized below.

The five-member Authority has approved the Authority’s change of the accounting year end to May ��, commencing on January �, 2005.

The Authority has elected, under GASB Statement No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Government Entities That Use Proprietary Fund Accounting, to follow only GASBs issued after November �0, �989.

Basis of Accounting—The Authority utilizes the accrual basis of accounting wherein revenues are recognized when earned and expenses when incurred.

Regulatory Accounting Policies—The Authority follows generally accepted accounting principles, which for regulated public utilities include Statement of Financial Accounting Standards (“SFAS”) No. ��, Accounting for the Effects of Certain Types of Regulation (“SFAS No. ��”). Under SFAS No. ��, regulated companies defer costs and credits on the statement of net assets as regulatory assets and liabilities (see Note 2 under the caption “Regulatory Assets”) when it is probable that those costs and credits will be recoverable through the ratemaking process in a period different from when they otherwise would have been reflected in income. These deferred regulatory assets and liabilities are then reflected in revenues or expenses in the period in which the same amounts are reflected in rates.

Utility Plant—Utility plant is stated at cost. Cost includes material and direct labor, as well as indirect items, including engineering, supervision, payroll taxes, employee benefits, transportation, and capitalized interest on significant construction projects.

The costs of maintenance and repairs are charged to the appropriate operations and maintenance expense accounts as incurred, while the costs of renewal and betterments are capitalized. The book value of depreciable utility plant retired in the ordinary course of business is removed from the asset and accumulated depreciation accounts. Gain or loss realized upon disposal is credited or charged to income.

Depreciation—Depreciation expense is computed using the straight-line method based on service lives. Half of a year’s depreciation is assessed for assets in the year they are placed in or removed from service.

Estimated service lives range from five years for data processing equipment and automobiles to �00 years for source of supply and supply mains.

Restricted Assets—Restricted assets, consisting principally of investments in U.S. Government obligations, are carried at fair value. All investments are held in the Authority’s name by banks. Interest on investments is accrued as earned.

Watershed Fund Assets—The assets in the Watershed Fund are stated at fair value.

Revenue Recognition—The Authority accrues revenue based on an estimate of water service provided to each customer from the last meter reading date to the balance sheet date. Interest is accrued on unpaid customer accounts after �0 days from the billing date.

Other Revenue—Other revenue is comprised of revenue from the Pipesafe Service Protection Plans, laboratory testing services, computer billing services, data hosting fees, fleet repairs, and miscellaneous charges.

Cash and Cash Equivalents—Cash and cash equivalents include cash on hand, amounts due from banks and repurchase agreements that are collateralized by U.S. government securities. The Authority considers all unrestricted investments with an original maturity of three months or less to be cash equivalents.

Short-term Investments—The Authority considers all unrestricted investments with a maturity date of more than three months, but less than one year to be short-term investments.

Materials and Supplies—Materials and supplies are stated at the lower of weighted average cost or market.

Customers’ Advances for Construction—Cash advances to reimburse the Authority for costs to construct supply mains are contributed to the Authority by customers, real estate developers, and builders in order to extend water service to their properties. The value of these contributions is recorded as “customer deposits and advances.” The Authority makes refunds on these deposits and advances in accordance with the deposit and advance agreements. After all refunds are made, any remaining balance in the customer advance account for which work has been completed is recorded as a capital contribution.

Capital Contributions—Capital contributions include contributions-in-aid-of-construction resulting from direct nonrefundable contributions and the portion of customers’ advances for construction that become nonrefundable. Also included are capital grants representing nonrefundable contributions for construction purposes from governmental agencies.

Notes to Financial Statements

for the year Ended May 31, 2006, and Five-Month Period from January 1, 2005 through May 31, 2005

28

Regulatory Assets—Regulatory assets include the following deferred charges in 2005: a $2 million liability for anticipated environmental remediation costs in the town of Hamden and a $8.8 million unamortized loss from terminating the interest rate swap associated with the Eighteenth Series Bonds. Because future rates will be established at a level sufficient to recover these costs, the Authority recorded a regulatory asset in accordance with SFAS No. �� as of December ��, 200�. See Note ��, “Other Liabilities.”

Derivative Instruments—On March ��, 2002, the Authority entered into an agreement with a counter- party for a forward-dated, Bond Market Association (“BMA”) based interest rate swap at a fixed rate of 5.262% and with an effective date of May �, 200�, to hedge a portion ($80.� million) of its proposed current refunding of the Authority’s Eleventh Series Bonds.

On September �, 2004, the Authority issued Bond Anticipation Notes (“BANS”) to partially pay the unwind cost of the interest rate swap. The BANS were paid in full on September 22, 2004, with proceeds from the Nineteenth Series Revenue Bonds. On October �, 2004, the Authority terminated the interest rate swap and paid the remaining balance of the termination payment to the counter-party, eliminating the derivative instrument liability. At that time, the Authority converted the $80.� million it had hedged with the interest rate swap to $50.� million in fixed rate bonds and $�0 million in variable rate bonds.

The Authority entered into the interest rate swap to manage the effect of fluctuating interest rates on earnings and cash flows in future periods. The swap qualified as a derivative instrument under SFAS No. ���, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. ���”). This standard requires an entity to recognize the fair value of all derivative instruments as either assets or liabilities in the balance sheet, with the offsetting unrealized gain or loss recognized in earnings. This standard permits the deferral of hedge gains and losses to other comprehensive income, under specific hedge accounting provisions, until the hedged transaction is realized. However, the Authority is a governmental agency and, therefore, its financial statements are prepared in accordance with the provisions of GASB No. �4, which do not provide for other comprehensive income. Accordingly, cash flow hedge accounting cannot be afforded the Authority. The Authority terminated the interest rate swap in 2004 and because future rates will be established at a level sufficient to recover these costs, the Authority has recorded a regulatory asset and has begun amortizing the loss over the life of the refunded bonds, through July 20�2 under the provisions of SFAS No. ��.

Use of Estimates—The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of investments, accrued water revenue, useful life of capital assets and self-insurance liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Recent Accounting Pronouncements—Effective January �, 2005, the Authority adopted GASB Statement No. 40, Deposit and Investment Risk Disclosures—an amendment of GASB Statement No. �. The statement

establishes more comprehensive disclosure requirements addressing other common risks of the deposits and investments of state and local governments. The adoption of this standard did not have a financial impact on the financial position, results of operations or cash flows of the Authority. The adoption of this standard required additional footnote disclosures to the financial statements (see Note 4).

In November 200�, GASB issued GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries. This Statement establishes accounting and financial reporting standards for impairment of capital assets. A capital asset is considered impaired when its service utility has declined significantly and unexpectedly. This Statement also clarifies and establishes accounting requirements for insurance recoveries. The Authority has completed the process of evaluating the impact of adopting Statement of Governmental Accounting Standard No. 42. The adoption of this standard did not have a financial impact on the financial position, results of operations or cash flows of the Authority.

In July 2004, GASB issued GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. This Statement establishes standards for the measurement, recognition, and display of OPEB expense/expenditures and related liabilities (assets), Note disclosures, and, if applicable, Required Supplementary Information (“RSI”) in the financial reports of state and local governmental employers. The Authority has not completed the process of evaluating the impact that will result from adopting Statement of Governmental Accounting Standard No. 45. This standard will be effective for the Authority for its fiscal year ending May ��, 2009.

In December 2004, GASB issued GASB Statement No. 46, Net Assets Restricted by Enabling Legislation—an amendment of GASB Statement No. 34. This Statement clarifies that a legally enforceable enabling legislation restriction is one that a party external to a government—such as citizens, public interest groups, or the judiciary—can compel a government to honor. The Statement states that the legal enforceability of an enabling legislation restriction should be reevaluated if any of the resources raised by the enabling legislation are used for a purpose not specified by the enabling legislation or if a government has other cause for reconsideration. This Statement also specifies the accounting and financial reporting requirements if new enabling legislation replaces existing enabling legislation or if legal enforceability is reevaluated and requires governments to disclose the portion of total net assets that is restricted by enabling legislation. The Authority has not completed the process of evaluating the impact that will result from adopting this Statement. This standard will be effective for the Authority for its fiscal year ending May ��, 200�.

In March 2005, GASB issued GASB Statement No. 4�, Accounting for Termination Benefits. This Statement provides accounting and reporting guidance for state and local governments that offer benefits such as early retirement incentives or severance to employees that are involuntarily terminated. The Authority has not completed the process of evaluating the impact that will result from adopting this Statement. This standard will be effective for the Authority for its fiscal year ending May ��, 200�.

29

3. utility plantThe following is a summary of total utility plant—net:

Interest capitalized in connection with construction work-in-progress for the fiscal year ended May ��, 2006 and January �, 2005 through May ��, 2005, totaled $�0,��0 and $�0,250, respectively.

During fiscal year 2006, the Authority retired assets with accumulated depreciation totaling approximately $�.8 million.

Assets of the Authority are depreciated using the following useful lives:

Asset Description Useful Life (Years)

Source of supply and supply mains 100

Wells and springs 30

Other water source structures 10

Power and pumping structures 30

Pumping equipment 20

Water treatment plant structure 43

Water treatment equipment 23

Distribution tanks 50

Distribution mains 85

Services 50

Meters 15

Hydrants 60

Hydraulic shovel and front loader 8

Hydraulic backhoe 6

Compressors 10

Computer equipment 5

General structures 32

Furniture and fixtures 12

Autos and trucks 5

Other equipment 10

2006 June 1, 2005 Additions transfers Retirements May 31, 2006Capital assets not being depreciated:

Land $ 6,131,414 $ — $ 1,329,977 $ — $ 7,461,391

Construction work in progress 6,400,231 18,788,740 (20,977,318) — 4,211,653

Total capital assets not being depreciated 12,531,645 18,788,740 (19,647,341) — 11,673,044

Other capital assets:

Source of supply 22,867,200 — 476,240 (130,686) 23,212,754

Pumping structures and equipment 23,681,227 — 1,187,141 — 24,868,368

Water treatment plant and equipment 147,546,311 — 5,762,424 (117,984) 153,190,751

Transmission and distribution 261,495,121 385,847 13,265,708 (1,195,524) 273,951,152

General plant 38,915,901 1,563,395 284,973 (995,478) 39,768,791

Total other capital assets 494,505,760 1,949,242 20,976,486 (2,439,672) 514,991,816

Less accumulated depreciation:

Source of supply 5,819,512 312,777 3,205 (107,371) 6,028,123

Pumping structures and equipment 8,748,045 914,246 17,645 9,679,936

Water treatment plant and equipment 33,516,384 4,217,157 99,244 (82,628) 37,750,157

Transmission and distribution 53,437,156 4,381,627 105,465 (790,160) 57,134,088

General plant 23,948,364 2,958,280 11,409 (854,054) 26,063,999

Total accumulated depreciation 125,469,461 12,784,087 236,968 (1,834,213) 136,656,303

Total other capital assets—net 369,036,299 (10,834,845) 20,739,518 (605,459) 378,335,513

Utility plant—net $ 381,567,944 $ 7,953,895 $ 1,092,177 $ (605,459) $ 390,008,557

2005 January 1, 2005 Additions transfers Retirements May 31, 2005 Capital assets not being depreciated:

Land $ 5,999,464 $ — $ 131,950 $ — $6,131,414

Construction work in progress 62,932,975 9,852,700 (66,385,444) — 6,400,231

Total capital assets not being depreciated 68,932,439 9,852,700 (66,253,494) — 12,531,645

Other capital assets:

Source of supply 22,826,056 — 41,144 — 22,867,200

Pumping structures and equipment 22,736,929 — 964,298 (20,000) 23,681,227

Water treatment plant and equipment 85,507,483 — 62,116,695 (77,867) 147,546,311

Transmission and distribution 258,935,828 — 2,959,950 (400,657) 261,495,121

General plant 40,568,380 508,631 171,407 (2,332,517) 38,915,901

Total other capital assets 430,574,676 508,631 66,253,494 (2,831,041) 494,505,760

Less accumulated depreciation:

Source of supply 5,685,704 133,698 110 — 5,819,512

Pumping structures and equipment 8,386,839 360,837 12,035 (11,666) 8,748,045

Water treatment plant and equipment 32,369,373 992,743 209,452 (55,184) 33,516,384

Transmission and distribution 51,886,378 1,818,568 16,855 (284,645) 53,437,156

General plant 24,902,982 1,277,381 4,318 (2,236,317) 23,948,364

Total accumulated depreciation 123,231,276 4,583,227 242,770 (2,587,812) 125,469,461

Total other capital assets—net 307,343,400 (4,074,596) 66,010,724 (243,229) 369,036,299

Utility plant—net $ 376,275,839 $ 5,778,104 $ (242,770) $ (243,229) $ 381,567,944

�0

5. watershed fundIn January �999, the Authority established the Watershed Fund, a separate legal entity organized and operated exclusively for charitable, educational, and scientific purposes within the meaning of Section 50�(c)(�) of the Internal Revenue Code of �986, specifically for the purpose of protecting watershed land that has distinctive ecological significance through open space acquisition and environmental education. The Watershed Fund is governed by a twelve-member Board of Directors, which includes certain members of the five-member Authority and the RPB. The five-member Authority elects the Board of Directors. Although it is a separate legal entity from the Authority, the Watershed Fund is included as a blended component unit in the Authority’s financial statements, as required by GASB Statement No. �4, The Financial Reporting Entity.

Upon the establishment of the Watershed Fund, the Authority made an initial donation of $�,2�4,000 to the Fund. The most recent contribution to the Fund by the Authority was in 2000 for $452,000. No contributions have been made subsequently.

4. restricted assetsPursuant to the Water System Revenue Bond Resolution (the “General Bond Resolution”) of the Authority adopted July ��, �980, as amended and supplemented, certain funds of restricted assets are required to be maintained. The assets of these funds can be used only for the purposes specified in the General Bond Resolution.

Additionally, the General Bond Resolution defines allowable investment securities as direct obligations of the United States of America, or obligations on which punctual payments of interest and principal are unconditionally guaranteed by the United States of America.

Funds of restricted assets were maintained for the following purposes and are described further below:

2006 2005

Construction $ 23,547,286 $ 19,360,121

Debt service 16,105,866 13,812,899

PILOT 1,569,968 1,443,224

Operating reserve 5,553,257 5,616,618

Capital contingency 3,739,282 3,728,641

Rate stabilization 7,500,239 7,522,587

Other purposes 1,822,328 1,989,548

Restricted assets at market value $ 59,838,226 $ 53,473,638

As of May ��, 2006, the Authority had the following investments and maturities in the following categories:

Values below are at fair value excluding accrued interest of $408,�99.

Investment Maturities (in Years)

Fair Value Less than 1 1 to 5 6 to 10 More than 10

Rate Stabilization Investments—

Repurchase agreements $ 1,569,494 $ 1,569,494 $ — $ — $ —

Government agencies:

Federal Home Loan Bank 1,779,330 — 1,779,330 — —

Federal National Mortgage Association 1,705,235 489,690 1,215,545 — —

Federal Home Loan Mortgage Corporation 2,010,805 1,491,585 519,220 — —

Federal Farm Credit Bank 435,375 — 435,375 — —

Debt service:

First American Treasury Obligation 97,984 97,984 — — —

U.S. Treasury Bill 16,007,882 16,007,882 — — —

Construction fund:

First American Treasury Obligation 4,016,837 4,016,837 — — —

State of Connecticut Bonds 19,530,449 19,530,449 — — —

PILOT:

First American Treasury Obligation 256 256 — — —

U.S. Treasury Bill 1,569,712 1,569,712

Operating Reserve:

Federal Home Loan Mortgage Corporation 4,826,471 — 1,253,096 3,573,375 —

First American Treasury Obligation 726,786 726,786 — — —

Capital Contingency:

First American Treasury Obligation 415,043 415,043 — — —

Federal Home Loan Bank 1,732,500 — — 1,732,500 —

Federal National Mortgage Association 1,591,739 — 1,591,739 — —

Total $ 58,015,898 $ 45,915,718 $ 6,794,305 $ 5,305,875 $ —

Restricted assets consist of investments in U.S. government obligations and accounts receivable totaling $�,822,�28 and $�,989,548 at May ��, 2006 and 2005, respectively. The level of funds required by the General Bond Resolution was met on May ��, 2006 and 2005. See Note 6 for additional information regarding restricted assets.

��

6. revenue bonds payableThe Authority has issued Water System Revenue Bonds to finance capital projects and to provide for certain restricted funds as required by the General Bond Resolution.

Revenue bonds outstanding consist of the following:

Issuance DateOriginal

Maturity DateOriginal

Principal Interest Rate May 31, 2006

Tenth 1992 2012 $ 9,725,000 5.75%–6.500% $ 247,000

Thirteenth 1994 2014 16,300,000 4.00%–6.125% 487,000

Fourteenth 1996 2016 15,245,000 3.60%–5.375% 698,000

Fifteenth 1999 2029 40,767,500 4.00%–5.125% 31,350,000

Sixteenth 2000 2030 30,025,000 4.75%–5.375% 23,905,000

Seventeenth (Refunding Bonds) 2002 2016 43,605,000 3.00%–5.250% 35,700,000

Eighteenth (Refunding and new money bonds) 2003 2033 236,535,000 2.00%–5.250% 230,680,000

Nineteenth 2004 2033 44,300,000 2.00%–4.625% 41,860,000

Twentieth 2005 2035 23,405,000 3.00%–5.000% 23,405,000

388,332,000

Unamortized bond discount (1,100,481)

Unamortized bond premium 6,888,025

Unamortized bond issuance costs (5,079,307)

Deferred refunding losses (8,381,864)

Unamortized Surety Bond costs (494,840)

Total revenue bonds payable 380,163,533

Less current portion (9,092,500)

Revenue bonds payable—net of current maturities $ 371,071,033

Issuance DateOriginal

Maturity DateOriginal

Principal Interest Rate May 31, 2005

Tenth 1992 2012 $ 9,725,000 5.75%–6.500% $ 247,000

Thirteenth 1994 2014 16,300,000 4.00%–6.125% 488,000

Fourteenth 1996 2016 15,245,000 3.60%–5.375% 699,000

Fifteenth 1999 2029 40,767,500 4.00%–5.125% 31,350,000

Sixteenth 2000 2030 30,025,000 4.75%–5.375% 23,905,000

Seventeenth (Refunding Bonds) 2002 2016 43,605,000 3.00%–5.250% 38,895,000

Eighteenth (Refunding and new money bonds) 2003 2033 236,535,000 2.00%–5.250% 234,660,000

Nineteenth 2004 2033 44,300,000 2.00%–4.625% 44,300,000

374,544,000

Unamortized bond discount (1,247,911)

Unamortized bond premium 6,811,483

Unamortized bond issuance costs (4,978,893)

Deferred refunding losses (9,690,617)

Unamortized Surety Bond costs (514,246)

Total revenue bonds payable 364,923,816

Less current portion (9,615,000)

Revenue bonds payable—net of current maturities $ 355,308,816

Bonds require annual principal payments in varying amounts on the respective due dates.

�2

Bond discount, premium, and issuance costs are amortized using the interest method over the terms of the series. In accordance with the provisions of Governmental Accounting Standards Board Statement No. 23, Accounting and Financial Reporting for Refunding of Debt Reported by Proprietary Activities (“GASB 2�”), the Authority has recorded deferred losses on debt refunding which are being amortized on a straight-line method over the shorter of the life of the new debt or the old debt.

In 200�, a deferred loss of $�0,5�9,�98 was recorded for the Eighteenth Series Bonds; and in 2002, a deferred loss of $�,866,2�6 was recorded for the Seventeenth Series Bonds. These losses are being amortized over the life of the refunded debt in accordance with GASB 2�.

Aggregate maturities of the revenue bonds are as follows:

Fiscal Years Ending May 31 Principal Interest

2007 $ 9,092,500 $ 18,602,826

2008 10,525,000 17,564,726

2009 10,328,500 17,709,115

2010 11,185,000 16,875,013

2011 11,369,000 16,626,212

2012–2016 51,897,000 74,648,307

2017–2021 55,070,000 62,417,556

2022–2026 70,065,000 47,563,238

2027–2031 90,020,000 27,994,575

2032–2036 68,780,000 5,504,303

Total $ 388,332,000 $ 305,505,871

The following represents the more significant requirements of the General Bond Resolution:

Rate Covenants—The Authority is required to establish rates and charges at levels sufficient to cover annual operating and maintenance expenses (exclusive of depreciation), payments in lieu of taxes (“PILOT”), all debt service requirements and any amounts necessary to meet reserve requirements established by the General Bond Resolution. In addition, collected revenues (as defined by the General Bond Resolution), less operating and maintenance expenses incurred and PILOT must equal ��0% of annual debt service and collected revenues, less operating and maintenance expenses incurred, must equal �25% of annual debt service before PILOT.

The Act provides that the rates and charges proposed by the Authority are subject to the approval of the RPB subsequent to a public hearing. However, the Act also provides that the RPB shall approve such rates and charges proposed by the Authority unless it finds that such rates and charges will provide funds insufficient for, or significantly in excess of, the amounts required to meet all expenses of the Authority and the requirements of the General Bond Resolution.

As of May ��, 2006 and 2005, the Authority was in full compliance with the requirements of the General Bond Resolution.

Maintenance of Funds—The General Bond Resolution provides for the maintenance of certain funds, which for financial reporting purposes, are subparts of the Authority’s overall enterprise fund. All revenues (as defined by the General Bond Resolution) collected by the Authority are deposited into the Revenue Fund and applied first to the payment of operating expenses, as defined, and then deposited to restricted funds required to be maintained by the General Bond Resolution. Any funds remaining in the Revenue Fund at the end of the year, after the above requirements are met, are to be transferred to the General Fund, which is available to the Authority for any lawful purpose of the Authority. As of May ��, 2006 and 2005, no amounts of cash and cash equivalents are designated for use in the Construction Fund.

The restricted funds required to be maintained under the General Bond Resolution are as follows:

Construction—Bond proceeds and other amounts deposited in the Construction Fund may be applied only toward payment of the costs of water system capital projects upon submission of a requisition to the trustee.

Debt Service—The Authority is required to maintain a Debt Service Fund to ensure payment of interest and principal when due. A deposit must be made each month to provide funds for payment of interest and principal becoming due. No such deposits need be made if the fund already contains sufficient dollars to satisfy interest coming due within six months and principal coming due within �2 months. The General Bond Resolution provides that, if the balances of the Debt Service Fund and Debt Reserve Fund are insufficient to pay interest, principal, or sinking fund payments, the deficiency must be withdrawn from any of the other funds maintained by the Authority.

Debt Reserve—The Authority is required to maintain a Debt Reserve Fund in an amount equal to the maximum aggregate of principal and interest payments becoming due in any one year in which bonds are outstanding. Amounts in the Debt Reserve Fund are to be used by the Authority in the event debt service requirements cannot be fully paid from amounts in the Debt Service Fund. As part of its strategy of debt management, the Authority purchased a surety bond in December 200�, to satisfy the requirements of the General Bond Resolution. The $�0 million that was in the fund was then used for capital improvements.

��

Payments-in-Lieu-of-Taxes (“PILOT”)—The Act requires the Authority to make PILOT to the municipalities in which the Authority owns property. The Authority is required to make monthly deposits into the PILOT Fund in amounts sufficient to provide funds for PILOT that have become due in that month.

Operating Reserve—The Authority is required to maintain an Operating Reserve Fund in an amount equal to at least one-sixth of the amount budgeted for operating expenses at the beginning of the year. Amounts in the Operating Reserve Fund may be used to pay operating expenses to the extent monies are not otherwise available.

Capital Contingency—The Authority must maintain a Capital Contingency Fund in an amount equal to or greater than �% of outstanding bonds to provide for the cost of capital projects made necessary by emergency or other unforeseen circumstances or events.

Insurance Reserve—The General Bond Resolution requires the Authority both to keep its property insured and to carry general liability insurance or it must maintain an insurance reserve fund. The Authority does not maintain an insurance reserve fund because it carries property insurance and has coverage for general liability through a member-owned program of “captive” insurance.

Rate Stabilization—The Authority established its Rate Stabilization Fund in �996. The balance in the fund as of May ��, 2006 and May ��, 2005, was $�,500,2�9 and $�,522,58�, respectively.

Per the General Bond Resolution, before the last day of the first month of each fiscal year, the Authority will deposit (i) in the Rate Stabilization Fund Variable Rate Bonds Sub-account the amount, if any, by which the interest on variable rate bonds assumed for rate-making purposes or, if lower, the maximum amount of interest payable under an interest rate limitation contract, exceeded the amount of interest and related costs actually paid during the previous fiscal year. On October �, 2004, the Authority converted $�0 million of its Eighteenth Series Bonds to variable rate bonds and funded the Variable Rate Bonds Sub-account appropriately in January 2005.

Also per the General Bond Resolution, the Authority will deposit (ii) in the Rate Stabilization Fund Surplus Sub-account the amount, if any, determined by the Authority which shall not exceed the amount in excess of the debt service coverage tests for the previous fiscal year.

7. defeasance of long-term debtOn January �0, 2002, the Authority issued $4�,605,000 in Water System Revenue Bonds, Seventeenth Series Bonds, in order to advance refund $4�,4�0,000 of the Authority’s Tenth, Eleventh, and Thirteenth through Sixteenth Series Water System Revenue Bonds (“the Refunded Bonds”). The net proceeds of the refunding portion of the Seventeenth Series Bonds and certain other cash amounts were deposited in escrow with the trustee and invested in U.S. government securities such that the earnings thereon, together with principal, will be sufficient solely for the purpose of paying principal and interest on the Refunded Bonds. In the opinion of bond counsel, by deposit of the investment securities with the trustee, the Authority affected a legal defeasance under the terms of its General Bond Resolution, and the Refunded Bonds will not be considered as outstanding for any purpose. Accordingly, the Refunded Bonds are considered extinguished; therefore, the investment securities and Refunded Bonds do not appear on the balance sheet of the Authority. The principal payments on the defeased debt began on August �, 2002. The principal of the defeased debt has been reduced by $��,�95,000 as of May ��, 2006, leaving a balance of $26,6�5,000.

The aggregate principal and interest payments of the Seventeenth Series Bonds total $60.2 million, replacing the aggregate principal and interest payments of $69.5 million on the Refunded Bonds. The transaction generated a deferred loss of $�.9 million, which is being amortized over the life of the refunded debt.

�4

8. defined benefit pension plansPlan Description—The Authority’s two retirement plans are single-employer defined benefit pension plans administered under a Master Trust Agreement by the five-member Authority. The retirement plans provide retirement, disability, and death benefits to plan members and their beneficiaries. Cost-of-living adjustments are not provided to members and beneficiaries, but may be made at the discretion of the Authority. The Authority establishes and amends benefit provisions of the plan.

Funding Policy—The contribution requirements of the plans are calculated annually through an actuarial valuation prepared as of January � of each year.

Annual Pension Cost and Net Pension Obligation—The retirement plans’ annual pension cost and net pension obligation for the current period were as follows:

2006

(Dollar Amounts in Thousands)Salaried

PlanBargaining

Unit Plan

Annual required contribution $ 537 $ 493

Contributions made (550) (550)

Decrease in net pension obligation (13) (57)

Net pension benefit—beginning of period — —

Net pension benefit—end of period $ (13) $ (57)

2005

(Dollar Amounts in Thousands)Salaried

PlanBargaining

Unit Plan

January 1, 2005 to May 31, 2005 required contribution $ 230 $ 230

Contributions made (230) (230)

Increase (decrease) in net pension obligation — —

Net pension obligation—beginning of period — —

Net pension obligation—end of period $ — $ —

The annual required contributions for the current period were determined as part of the January �, 2006, actuarial valuations using the aggregate cost method. The actuarial assumptions included (a) 8.5% rate of return on investments (net of administrative expenses); and (b) projected salary increases of 5% (salaried plan only) per year. The actuarial value of the assets was determined using techniques that smooth the effects of short-term volatility on the market value of investments.

Three-Year Trend Information(Dollar amounts in thousands)

Salaried Plan Bargaining Unit Plan

Fiscal year Ended

Annual Pension Cost

(“APC”)

Percentage of APC

Contributed

Annual Net Pension

ObligationPension Cost

(“APC”)

Percentage of APC

ContributedNet Pension

Obligation

12/31/03 $ 387 100 % $ — $ 270 100 % $ —

12/31/04 443 100 % — 421 100 % —

5/31/05 (1) 230 100 % — 230 100 % —

(1) Represents pension costs for the five-month sub period January 1, 2005 through May 31, 2005.

Analysis of Pension Funding Progress(Dollar amounts in thousands)

Salaried Plan

Actuarial Valuation Date

(a) Actuarial Value of

Assets

(b) Benefit

Obligation

Excess (Deficiency)

of Assets Over

Obligation a - b

Funding Ratio a / b

(c) Annual

Covered Payroll

Excess as a % of

Covered Payroll

((a - b)/c)

1/1/2003 $ 21,264 $ 21,854 $ (590) 97.3 % $ 9,020 (6.5)%

1/1/2004 20,848 22,621 (1,773) 92.2 % 9,348 (19.0)%

1/1/2005 20,980 23,402 (2,422) 89.7 % 9,647 (25.1)%

Bargaining Unit Plan

Actuarial Valuation Date

(a) Actuarial Value of

Assets

(b) Benefit

Obligation

Excess (Deficiency)

of Assets Over

Obligation a - b

Funding Ratio a / b

(c) Annual

Covered Payroll

Excess as a % of

Covered Payroll

((a - b)/c)

1/1/2003 $ 13,432 $ 15,094 $ (1,662) 89.0 % $ 7,380 (22.5)%

1/1/2004 13,174 14,373 (1,199) 91.7 % 7,648 (15.7)%

1/1/2005 13,132 15,145 (2,013) 86.7 % 7,723 (26.1)%

9. voluntary investment planEffective as of July �, �985, the Authority established a voluntary investment plan covering eligible salaried employees. The Authority is obligated to contribute an amount equal to 50% of an employee’s contribution, not to exceed �% of compensation. Effective as of January �, �99�, eligible bargaining unit employees were allowed to participate in the voluntary investment plan with no match from the Authority. Effective as of April ��, 2005, the Authority is obligated to contribute an amount equal to �5% of a bargaining unit employee’s contribution, not to exceed 2.�% of base compensation. Contributions associated with the plan were $�08,095 and $�2�,50� for the year ended May ��, 2006 and the five month period January �, 2005 through May ��, 2005, respectively.

10. post-retirement health care and life insurance benefitsIn addition to providing pension benefits, the Authority provides certain health care benefits for retired employees and their qualified dependents through an insurance company. Substantially all of the Authority’s employees may become eligible if they reach normal retirement age or otherwise qualify for retirement under the Authority’s pension plans. The Authority recognizes the cost of providing these benefits on an accrual basis. The Authority also provides death benefits to retired employees.

�5

The cost of health insurance benefits provided to retired employees was approximately $�,0�8,900 and $��2,400 and there were �68 and �52 individuals covered under these benefits in for the year ended May ��, 2006 and the five month period January �, 2005 through May ��, 2005, respectively. The cost of death benefits provided was $�0,000 and $�2,000 for the year ended May ��, 2006 and the five month period January �, 2005 through May ��, 2005, respectively.

11. other liabilitiesNewhall Road Property—On July �0, 200�, the Connecticut Department of Environmental Protection (“DEP”) issued Order No. SRD-�28 to the Authority, the Olin Corporation, the Town of Hamden and the State of Connecticut Board of Education to investigate and remediate certain environmental conditions and to conduct a public participation program with respect to a number of properties, including the Hamden Middle School, in the Newhall Road area of Hamden. All parties requested a hearing on the order within the time allowed by the relevant statute, which stays the order. Since then, the parties have met with staff of DEP and among themselves to explore prospects for a negotiated settlement. The parties have conducted investigations of the areas subject to the order and have negotiated a Consent Order. All parties have agreed to the language of the Consent Order. The estimated cost of investigation and remediation for which the Authority is responsible under the Consent Order is between $�.5 million and $�.� million. Expenditures under the Consent Order are ongoing and anticipated to continue into 2008. The Authority recorded a liability totaling $2 million related to this Consent Order as of December ��, 2002 in Other Long-Term Liabilities. The balance as of May ��, 2006 and 2005, remains at $2,000,000.

On August ��, 2006, the Commissioner of DEP announced her proposed decision on a remedy which includes the potential for delay of more than four years in the timing of the Authority’s remediation work to allow for elements of the remedy conducted by other parties to be completed first. The DEP’s range of cost estimates for the Authority’s scope of remediation is between $5 million and $� million. The proposed remedy decision is subject to a 60 day comment period, following which the Commissioner will render a final decision on the remedy. The Authority is in the process of analyzing the appropriate set of legal responses to ensure that its obligations under the Consent Order are not inappropriately expanded as a result of the Commissioner’s proposed remedy. Management believes that its cost estimate of $�.5 million to $�.� million is still sound.

12. hazwaste centralAs agent for the South Central Connecticut Regional Council of Governments, the Authority owns and operates, on behalf of Hazwaste Central, a regional collection center for household hazardous waste, located at its headquarters on Sargent Drive.

Since Hazwaste Central receives its revenue after incurring its operating costs, the Authority provides advance funding to the organization. The Authority is reimbursed for its advances when revenue is received by that organization.

13. commitments and contingenciesIn the opinion of the Authority and its legal counsel, various legal matters in which the Authority is currently involved will not materially affect the Authority’s financial position or net income.

Litigation—A number of claims and suits are pending against the Authority for alleged damages to persons and properties and for other alleged liabilities arising out of its operations. The probable outcome of such matters cannot be determined at this time; however, in the opinion of management, any ultimate liability that may arise from these actions is not expected to materially affect the Authority’s financial position.

Risk Management—The Authority is subject to certain business risks common to the utility industry. Some of these risks are mitigated by external insurance coverage obtained by the Authority. For other significant business risks associated with worker’s compensation, automobile, and general liability, however, the Authority elected as of October ��, 2000, to self-insure and participate in a program of “captive” insurance. It is management’s belief that its exposure to loss arising from self-insured risks or its participation in a program of “captive” insurance will not materially affect the financial results of the Authority’s operations and cash flows.

Self-Insurance—The Authority administers a program of self-insurance and provides for losses by charging operating expense as liabilities are incurred. The Authority records a liability when it is probable that it has incurred an uninsured loss and it can reasonably estimate that loss. The Authority’s liability for unpaid claims is based upon the estimated cost of settling the claims after a review of estimated recoveries. Changes in the amounts recorded for liabilities for the year ended May ��, 2006 and the five month period January �, 2005 through May ��, 2005, respectively, were as follows:

2006 January 1, 2005Claims and

Expenses PaidAdditional

Reserves May 31, 2006

Medical and dental claims $ 262,713 $ (3,042,357) $ 3,034,660 $ 255,016

Insurance reserve for “captive” (October 1, 2000—present) 1,316,517 (1,272,438) 1,512,558 1,556,637

Insurance reserve (Pre October 1, 2000) 614,743 (296,082) 35,000 353,661

Self-insurance liability $ 2,193,973 $ (4,610,877) $ 4,582,218 $ 2,165,314

2005 January 1, 2004Claims and

Expenses PaidAdditional

Reserves May 31, 2005

Medical and dental claims $ 254,987 $ (1,179,858) $ 1,187,584 $ 262,713

Insurance reserve for “captive” (October 1, 2000—present) 1,103,035 (448,879) 662,361 1,316,517

Insurance reserve (Pre October 1, 2000) 112,016 (124,620) 627,347 614,743

Self-insurance liability $ 1,470,038 $ (1,753,357) $ 2,477,292 $ 2,193,973

�6

Esti

mat

ed

Popula

tion

Se

rved

RPB V

ote

s

Miles

of

M

ain

Cust

omer

s A

Hyd

ran

ts

Lan

dh

old

ings

(A

cres

)

Con

serv

atio

n

Ease

men

ts

Miles

of

Recr

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on T

rails

Miles

of

Fish

ing

Area

s

Bethany 12 4 1 5 1 3,272.36 7.60 8.4 2.0

Branford 27,656 7 140 8,426 732 1,158.25 34.87 4.0 2.5

Cheshire 21,277 4 148 6,518 1,065 146.20 224.87 — —

DerbyB — — C — — — — —

DurhamB — — — — — 167.00 11.07 — —

East Haven 27,446 6 110 8,473 541 777.13 3.7 0.5

Guilford — 4 C — — 3,218.03 6.5 —

HaddamB — — — — — 103.66 — —

Hamden 51,928 11 216 15,143 998 1,187.61 206.49 — 5.1

Killingworth — 2 — — — 1,227.36 64.63 3.2 0.1

Madison — 6 — — — 4,526.75 24.26 13.5 0.6

Milford 52,796 11 239 18,115 1,377 11.60 — —

New Haven 125,012 14 263 22,537 2,033 24.60 81.55 0.3 —

North Branford 4,478 9 41 1,466 222 5,963.40 5.6 0.8

North Haven 21,124 5 146 7,757 700 55.20 — 1.5

Orange 9,565 3 100 3,733 514 553.14 1.9 0.8

Prospect — 1 C — 2 829.04 — —

West Haven 52,910 9 150 13,529 851 269.48 2.9 1.5

WolcottB — — 3 – 24 — — —

Woodbridge 1,078 3 17 459 83 1,728.07 200.00 4.1 1.7

Governor’s Representative — 1 — — — — — —

Totals 395,282 100 1,574 106,161 9,143 25,218.88 855.34 54.1 17.1

A – Metered customers within district; B – Not within district; C – Less than one mile

regional water authority statistics: 2005

about the regional water authority

The South Central Connecticut Regional Water Authority is a non-profit public corporation and political

subdivision of the State of Connecticut. We provide an average of 55 million gallons of water a day to a

population of almost 400,000 persons in �2 south central Connecticut municipalities. As of December 2005,

we employed 290 individuals.

In �980 the Authority acquired the New Haven Water Company, an investor-owned water utility, which was

founded in �849. The Authority’s offices are located at 90 Sargent Drive in New Haven, just off Exit 46 of the

Connecticut Turnpike (Long Wharf exit).

members of the south central connecticut regional water authority

Claire C. Bennitt Chairperson

Joseph A. Cermola Vice Chairperson

Anthony DiSalvo Secretary / Treasurer

Richard G. Bell

C. Anthony Edge

members of the representative policy board

Robert H. Brinton, Sr. Bethany

Alexandra Breslin Bethanyas of June 1, 2006

R. Douglas Marsh Chairperson Branford

David Borowy Vice ChairpersonCheshireas of July 1, 2006

John E. Leary, Jr. Treasurer;Chairpersonas of July 1, 2006East Haven

Carolie Evans Guilford

Stephen A. Mongillo Hamden

Richard W. Albrecht SecretaryKillingworth

Deborah Bunnell Madison

Joseph A. Oslander Madisonas of July 1, 2006

Kevin J. Curseaden Milford

Orest Dubno Vice ChairpersonNew Haven

Dan Troiano North Branford

Anthony P. Rescigno North Haven

Brian M. Stone Orange

Robert E. Harvey, Jr. Prospect

T. Gregory Malloy Treasurer as of July 1, 2006West Haven

Christopher R. Dickerson Woodbridge

Mark Levine Woodbridgeas of July 1, 2006

F. Patrick McFadden, Jr. Governor’s Representative

Wheelch

air Ac

cess

Boat

Fishing

Cross-

Country

Skiin

g

Bicyc

ling

Horse

back R

iding

Strea

m Fish

ing

Lake

Fish

ing

Hiking

Genesee Recreation Area

Lake Saltonstall Recreation Area

Hammonasset Recreation Area

Lake Chamberlain Recreation Area

Maltby Lakes Recreation Area

Big Gulph Recreation AreaLake Bethany Recreation Area

Sugarloaf Hills Recreation Area

CheshireProspect

Bethany

Hamden

Woodbridge

NorthHaven

North Branford Guilford

Madison

Killingworth

Orange

Milford

WestHaven

NewHaven

EastHaven

Branford

regional water authority recreation areasregional water authority management

David Silverstone President & Chief Executive Officer

Thomas Chaplik Vice President – Water Quality

Kathleen Etkin Vice President – Finance & Administration

Edward O. Norris, III Vice President – Engineering

Mary L. Pepe Vice President – Operations

Janet S. Ryan Chief Technology Officer

Noel B. Grant Vice President – Customer Relations

Lucy Moran Controller

general counsel:Murtha, Cullina, LLPHartford, CT 06�0�-�469

auditors:Deloitte & Touche, LLPNew York, NY �028�-�4�4

office of consumer affairs:Joseph C. LeeNew Haven, CT 065��-�809

Writer: JP Huwiler

Photographers:

Harold Shapiro;

Sarah Beth Yoder, pages 16, 19

William T. O’Brien, New Haven Road Race, pages 17, 19

Images on page 19:

Top center: Julia’s Run for Children, courtesy of LEAP

Bottom center: Walk Against Hunger courtesy of Connecticut Food Bank

Designer: Paul Kazmercyk, GraniteBay Design

90 Sargent Drive, New Haven CT 065�� | (20�)562-4020 | www.rwater.com