NOTE 5 – WATER, LAND AND OTHER FIXED ASSETS

The Company’s water rights and current water and wastewater service agreements, including capitalized terms not defined herein, are more fully described in Note 4 to the 2021 Annual Report.

Investment in Water and Water Systems

The Company’s Investments in water and water systems consist of the following costs and accumulated depreciation and depletion:

​

​

Construction in Progress

Construction in progress represents costs incurred on various construction projects currently underway, that as of the balance sheet date have not been completed and placed into service. The construction in progress account consists primarily of water facilities being constructed that the Company anticipates will be placed in service during calendar year 2022. During the three months ended November 30, 2021, the Company incurred (1) $0.5 million of costs related to its construction projects and (2) completed the single-family rental units resulting in the transfer of $1.0 million of costs to a separate account for tracking the capitalized costs of the rental units.

​

Single-Family Rental Homes

During the three months ended November 30, 2021, the Company completed construction of the first three houses in its single-family rental business. The costs of constructing the homes and landscaping are capitalized and being depreciated over five to thirty-years depending on the asset type. All three houses were placed in service and leased effective November 1, 2021. During the three months ended November 30, 2021, the Company contracted for construction of the fourth house, which is also located in the first development phase of Sky Ranch, with construction expected to begin during the second quarter of fiscal 2022 and an estimated completion near the end of fiscal 2022.

​

The Company has reserved 46 lots in the second development phase of Sky Ranch to build additional rental units, but as of November 30, 2021, the Company has not started construction on any of these units.