10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

Commission file number 001-34245

THE YORK WATER COMPANY

(Exact name of registrant as specified in its charter)

Pennsylvania	23-1242500
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
130 East Market Street, York, Pennsylvania	17401
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (717) 845-3601

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, No par value	YORW	The NASDAQ Global Select Market
(Title of Class)	(Trading Symbol)	(Name of Each Exchange on Which Registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

⌧ Yes ◻ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

⌧ Yes ◻ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ◻	Accelerated filer ◻		Non-accelerated filer ⌧
Small reporting company ☒		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes		⌧ No
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common stock, No par value	13,093,427 Shares outstanding as of August 5, 2021

TABLE OF CONTENTS

PART I	Financial Information
Item 1.	Financial Statements	3
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II	Other Information
Item 6.	Exhibits	27
Signatures		28

Page 2

THE YORK WATER COMPANY

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Balance Sheets (Unaudited)

(In thousands of dollars, except per share amounts)

	Jun. 30, 2021			Dec. 31, 2020
ASSETS
UTILITY PLANT, at original cost	$	457,196		$	438,670
Plant acquisition adjustments		(3,673	)		(3,707	)
Accumulated depreciation		(94,377	)		(91,340	)
Net utility plant		359,146			343,623
OTHER PHYSICAL PROPERTY, net of accumulated depreciation of $471 in 2021and $458 in 2020		729			742
CURRENT ASSETS:
Cash and cash equivalents		6			2
Restricted cash		–			5,000
Accounts receivable, net of reserves of $792 in 2021 and $655 in 2020		4,206			5,184
Unbilled revenues		3,179			2,847
Recoverable income taxes		653			721
Materials and supplies inventories, at cost		1,033			1,010
Prepaid expenses		1,808			1,526
Total current assets		10,885			16,290
OTHER LONG-TERM ASSETS:
Prepaid pension cost		3,802			2,209
Note receivable		255			255
Deferred regulatory assets		41,996			39,893
Other assets		4,163			3,945
Total other long-term assets		50,216			46,302
Total Assets	$	420,976		$	406,957

The accompanying notes are an integral part of these statements.

Page 3

THE YORK WATER COMPANY

Balance Sheets (Unaudited)

(In thousands of dollars, except per share amounts)

	Jun. 30, 2021		Dec. 31, 2020
STOCKHOLDERS' EQUITY AND LIABILITIES
COMMON STOCKHOLDERS' EQUITY:
Common stock, no par value, authorized 46,500,000 shares, issued and outstanding 13,090,055 shares in 2021 and 13,060,817 shares in 2020	$	87,100	$	85,935
Retained earnings		60,606		57,317
Total common stockholders' equity		147,706		143,252
PREFERRED STOCK, authorized 500,000 shares, no shares issued		–		–
LONG-TERM DEBT		126,996		123,573
COMMITMENTS		–		–
CURRENT LIABILITIES:
Accounts payable		8,359		6,540
Dividends payable		2,193		2,192
Accrued compensation and benefits		1,469		1,417
Accrued interest		958		959
Deferred regulatory liabilities		581		525
Other accrued expenses		358		360
Total current liabilities		13,918		11,993
DEFERRED CREDITS:
Customers' advances for construction		10,907		10,326
Deferred income taxes		45,787		43,538
Deferred employee benefits		4,821		4,793
Deferred regulatory liabilities		27,059		25,444
Other deferred credits		2,328		2,731
Total deferred credits		90,902		86,832
Contributions in aid of construction		41,454		41,307
Total Stockholders' Equity and Liabilities	$	420,976	$	406,957

The accompanying notes are an integral part of these statements.

Page 4

THE YORK WATER COMPANY

Statements of Income (Unaudited)

(In thousands of dollars, except per share amounts)

	Three Months Ended June 30						Six Months Ended June 30
	2021			2020			2021			2020
OPERATING REVENUES	$	13,801		$	13,320		$	26,882		$	26,197
OPERATING EXPENSES:
Operation and maintenance		2,949			2,618			5,755			5,281
Administrative and general		2,441			2,072			4,852			4,316
Depreciation and amortization		2,198			2,043			4,372			4,067
Taxes other than income taxes		311			294			647			624
		7,899			7,027			15,626			14,288
Operating income		5,902			6,293			11,256			11,909
OTHER INCOME (EXPENSES):
Interest on debt		(1,222	)		(1,156	)		(2,436	)		(2,351	)
Allowance for funds used during construction		311			114			573			215
Other pension costs		(303	)		(340	)		(607	)		(681	)
Gain on life insurance		–			–			–			515
Other income (expenses), net		(44	)		(121	)		(145	)		(246	)
		(1,258	)		(1,503	)		(2,615	)		(2,548	)
Income before income taxes		4,644			4,790			8,641			9,361
Income taxes		160			608			452			1,177
Net Income	$	4,484		$	4,182		$	8,189		$	8,184
Basic Earnings Per Share	$	0.35		$	0.32		$	0.63		$	0.63
Diluted Earnings Per Share	$	0.35		$	0.32		$	0.63		$	0.63

The accompanying notes are an integral part of these statements.

Page 5

THE YORK WATER COMPANY

Statements of Common Stockholders' Equity (Unaudited)

(In thousands of dollars, except per share amounts)

For the Periods Ended June 30, 2021 and 2020

	Common Stock Shares		Common Stock Amount		Retained Earnings			Total
Balance, March 31, 2021		13,071,733	$	86,436	$	58,574		$	145,010
Net income		–		–		4,484			4,484
Cash dividends declared, $0.1874 per share		–		–		(2,452	)		(2,452	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		12,152		571		–			571
Stock-based compensation		6,170		93		–			93
Balance, June 30, 2021		13,090,055	$	87,100	$	60,606		$	147,706
Balance, December 31, 2020		13,060,817	$	85,935	$	57,317		$	143,252
Net income		–		–		8,189			8,189
Cash dividends declared, $0.3748 per share		–		–		(4,900	)		(4,900	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		23,068		1,044		–			1,044
Stock-based compensation		6,170		121		–			121
Balance, June 30, 2021		13,090,055	$	87,100	$	60,606		$	147,706

	Common Stock Shares		Common Stock Amount		Retained Earnings			Total
Balance, March 31, 2020		13,024,187	$	84,424	$	51,865		$	136,289
Net income		–		–		4,182			4,182
Cash dividends declared, $0.1802 per share		–		–		(2,347	)		(2,347	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		9,812		433		–			433
Stock-based compensation		–		15		–			15
Balance, June 30, 2020		13,033,999	$	84,872	$	53,700		$	138,572
Balance, December 31, 2019		13,014,898	$	83,976	$	50,209		$	134,185
Net income		–		–		8,184			8,184
Cash dividends declared, $0.3604 per share		–		–		(4,693	)		(4,693	)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans		19,101		844		–			844
Stock-based compensation		–		52		–			52
Balance, June 30, 2020		13,033,999	$	84,872	$	53,700		$	138,572

The accompanying notes are an integral part of these statements.

Page 6

THE YORK WATER COMPANY

Statements of Cash Flows (Unaudited)

(In thousands of dollars, except per share amounts)

	Six Months Ended June 30
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	8,189		$	8,184
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on life insurance		–			(515	)
Depreciation and amortization		4,372			4,067
Stock-based compensation		121			52
Decrease in deferred income taxes		(72	)		(69	)
Other		38			206
Changes in assets and liabilities:
(Increase) decrease in accounts receivable and unbilled revenues		443			(1,176	)
Decrease in recoverable income taxes		68			547
Increase in materials and supplies, prepaid expenses, prepaid pension cost, regulatory and other assets		(4,471	)		(3,772	)
Increase in accounts payable, accrued compensation and benefits, accrued expenses, deferred employee benefits, regulatory liabilities, and other deferred credits		3,415			1,522
Increase (decrease) in accrued interest		(1	)		701
Net cash provided by operating activities		12,102			9,747
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility plant additions, including debt portion of allowance for funds used during construction of $320 in 2021 and $120 in 2020		(16,043	)		(8,986	)
Cash received from surrender of life insurance policies		–			672
Net cash used in investing activities		(16,043	)		(8,314	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Customers' advances for construction and contributions in aid of construction		1,204			1,885
Repayments of customer advances		(476	)		(105	)
Proceeds of long-term debt issues		23,910			14,759
Repayments of long-term debt		(20,575	)		(12,805	)
Changes in cash overdraft position		(1,263	)		(1,331	)
Issuance of common stock		1,044			844
Dividends paid		(4,899	)		(4,680	)
Net cash used in financing activities		(1,055	)		(1,433	)
Net change in cash, cash equivalent, and restricted cash		(4,996	)		–
Cash, cash equivalents, and restricted cash at beginning of period		5,002			2
Cash and cash equivalents at end of period	$	6		$	2
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	2,016		$	2,170
Income taxes		217			–
Supplemental disclosure of non-cash investing and financing activities: Accounts payable includes $5,166 in 2021 and $2,854 in 2020 for the construction of utility plant.

The accompanying notes are an integral part of these statements.

Page 7

THE YORK WATER COMPANY

Notes to Interim Financial Statements

(In thousands of dollars, except per share amounts)

1.  Basis of Presentation

The interim financial statements are unaudited but, in the opinion of management, reflect all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation of results for such periods.  Because the financial statements cover an interim period, they do not include all disclosures and notes normally provided in annual financial statements, and therefore, should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.  Additionally, based on the duration and severity of the novel coronavirus ("COVID-19") pandemic, the Company is uncertain of the ultimate impact it could have on the business.

2.  Accounts Receivable and Contract Assets

Accounts receivable and contract assets are summarized in the following table:

	As of Jun. 30, 2021			As of Dec. 31, 2020			Change
Accounts receivable – customers	$	4,782		$	5,633		$	(851	)
Other receivables		216			206			10
		4,998			5,839			(841	)
Less: allowance for doubtful accounts		(792	)		(655	)		(137	)
Accounts receivable, net	$	4,206		$	5,184		$	(978	)
Unbilled revenue	$	3,179		$	2,847		$	332

Differences in timing of revenue recognition, billings, and cash collections result in receivables and contract assets.  Generally, billing occurs subsequent to revenue recognition, resulting in a contract asset reported as unbilled revenue on the balance sheet.  The Company does not receive advances or deposits from customers before revenue is recognized so no contract liabilities are reported.  Accounts receivable are recorded when the right to consideration becomes unconditional and are presented separately on the balance sheet.  The changes in accounts receivable – customers and in unbilled revenue were primarily due to normal timing difference between performance and the customer’s payments.

3.  Common Stock and Earnings Per Share

Net income of $4,484 and $4,182 for the three months ended June 30, 2021 and 2020, respectively, and $8,189 and $8,184 for the six months ended June 30, 2021 and 2020, respectively, is used to calculate both basic and diluted earnings per share.  Basic earnings per share is based on the weighted average number of common shares outstanding.  Diluted earnings per share is based on the weighted average number of common shares outstanding plus potentially dilutive shares.  The dilutive effect of employee stock-based compensation is included in the computation of diluted earnings per share and is calculated using the treasury stock method and expected proceeds upon exercise or issuance of the stock-based compensation.

Page 8

The following table summarizes the shares used in computing basic and diluted earnings per share:

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Weighted average common shares, basic		13,068,806		13,022,088		13,062,374		13,015,842
Effect of dilutive securities:
Employee stock-based compensation		1,435		882		1,088		579
Weighted average common shares, diluted		13,070,241		13,022,970		13,063,462		13,016,421

On March 11, 2013, the Board of Directors, or the Board, authorized a share repurchase program granting the Company authority to repurchase up to 1,200,000 shares of the Company's common stock from time to time.  The stock repurchase program has no specific end date and the Company may repurchase shares in the open market or through privately negotiated transactions.  The Company may suspend or discontinue the repurchase program at any time.  No shares were repurchased during the three or six months ended June 30, 2021 and 2020.  As of June 30, 2021, 618,004 shares remain authorized for repurchase.

4.  Debt

For the six months ended June 30, 2021, the Company did not enter into any new long-term debt arrangements or modify its outstanding long-term debt, which is summarized in the table below.

	As of Jun. 30, 2021			As of Dec. 31, 2020
8.43% Senior Notes, Series D, due 2022	$	7,500		$	7,500
Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029		12,000			12,000
3.00% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series A of 2019, due 2036		10,500			10,500
3.10% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series B of 2019, due 2038		14,870			14,870
3.23% Senior Notes, due 2040		15,000			15,000
4.00% - 4.50% York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045		10,000			10,000
4.54% Senior Notes, due 2049		20,000			20,000
3.24% Senior Notes, due 2050		30,000			30,000
Committed Line of Credit, due September 2023		10,035			6,700
Total long-term debt		129,905			126,570
Less discount on issuance of long-term debt		(175	)		(181	)
Less unamortized debt issuance costs		(2,734	)		(2,816	)
Long-term portion	$	126,996		$	123,573

Subsequent to June 30, 2021, the Company renewed its committed line of credit and extended the maturity date to September 2023.

Page 9

5.  Interest Rate Swap Agreement

The Company is exposed to certain risks relating to its ongoing business operations.  The primary risk managed by using derivative instruments is interest rate risk.  The Company utilizes an interest rate swap agreement to effectively convert the Company's $12,000 variable-rate debt issue to a fixed rate.  Interest rate swaps are contracts in which a series of interest rate cash flows are exchanged over a prescribed period.  The notional amount on which the interest payments are based ($12,000) is not exchanged.  The interest rate swap provides that the Company pays the counterparty a fixed interest rate of 3.16% on the notional amount of $12,000.  In exchange, the counterparty pays the Company a variable interest rate based on 59% of the U.S. Dollar one-month LIBOR rate on the notional amount.  The intent is for the variable rate received from the swap counterparty to approximate the variable rate the Company pays to bondholders on its variable rate debt issue, resulting in a fixed rate being paid to the swap counterparty and reducing the Company's interest rate risk.  The Company’s net payment rate on the swap was 3.09% and 2.91% for the three months ended June 30, 2021 and 2020, respectively, and 3.02% and 2.59% for the six months ended June 30, 2021 and 2020, respectively.

The interest rate swap agreement is classified as a financial derivative used for non-trading activities.  The accounting standards regarding accounting for derivatives and hedging activities require companies to recognize all derivative instruments as either assets or liabilities at fair value on the balance sheet.  In accordance with the standards, the interest rate swap is recorded on the balance sheet in other deferred credits at fair value (see Note 6).

The Company uses regulatory accounting treatment rather than hedge accounting to defer the unrealized gains and losses on its interest rate swap.  These unrealized gains and losses are recorded as a regulatory asset.  Based on current ratemaking treatment, the Company expects the unrealized gains and losses to be recognized in rates as a component of interest expense as the swap settlements occur.  Swap settlements are recorded in the income statement with the hedged item as interest expense.  Swap settlements resulted in the reclassification from regulatory assets to interest expense of $93 and $87 for the three months ended June 30, 2021 and 2020, respectively, and $184 and $156 for the six months ended June 30, 2021 and 2020, respectively. The overall swap result was a (gain) loss of $212 and $189 for the three months ended June 30, 2021 and 2020, respectively, and $(219) and $901 for the six months ended June 30, 2021 and 2020, respectively. The Company expects to reclassify $369 from regulatory assets to interest expense as a result of swap settlements over the next 12 months.

The interest rate swap agreement contains provisions that require the Company to maintain a credit rating of at least BBB- with Standard & Poor's.  If the Company's rating were to fall below this rating, it would be in violation of these provisions, and the counterparty to the derivative could request immediate payment if the derivative was in a liability position.  On October 21, 2020, Standard & Poor's affirmed the Company's credit rating at A-, with a stable outlook and adequate liquidity.  The Company's interest rate swap was in a liability position as of June 30, 2021.  If a violation due to credit rating, or some other default provision, were triggered on June 30, 2021, the Company would have been required to pay the counterparty approximately $2,368.

The interest rate swap will expire on October 1, 2029.  Other than the interest rate swap, the Company has no other derivative instruments.

6.  Fair Value of Financial Instruments 

The accounting standards regarding fair value measurements establish a fair value hierarchy which indicates the extent to which inputs used in measuring fair value are observable in the market.  Level 1 inputs include quoted prices for identical instruments and are the most observable.  Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, commodity rates and yield curves.  Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability.

The Company has recorded its interest rate swap liability at fair value in accordance with the standards.  The liability is recorded under the caption “Other deferred credits” on the balance sheet.  The table below illustrates the fair value of the interest rate swap as of the end of the reporting period.

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Description	June 30, 2021	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,328	$2,328

Fair values are measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curve as of the date of the valuation.  These inputs to this calculation are deemed to be Level 2 inputs.  The balance sheet carrying value reflects the Company's credit quality as of June 30, 2021.  The rate used in discounting all prospective cash flows anticipated to be made under this swap reflects a representation of the yield to maturity for 30-year debt on utilities rated A- as of June 30, 2021.  The use of the Company's credit rating resulted in a reduction in the fair value of the swap liability of $40 as of June 30, 2021.  The fair value of the swap reflecting the Company's credit quality as of December 31, 2020 is shown in the table below.

Description	December 31, 2020	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,731	$2,731

The carrying amount of current assets and liabilities that are considered financial instruments approximates fair value as of the dates presented.  The Company's total long-term debt, with a carrying value of $129,905 at June 30, 2021, and $126,570 at December 31, 2020, had an estimated fair value of approximately $147,000 and $151,000, respectively.  The estimated fair value of debt was calculated using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration and risk profile.  These inputs to this calculation are deemed to be Level 2 inputs.  The Company recognized its credit rating in determining the yield curve, and did not factor in third party credit enhancements including the letter of credit on the 2008 Pennsylvania Economic Development Financing Authority Series A issue.

Customers' advances for construction and note receivable had carrying values at June 30, 2021 of $10,907 and $255, respectively.  At December 31, 2020, customers' advances for construction and note receivable had carrying values of $10,326 and $255, respectively.  The relative fair values of these amounts cannot be accurately estimated since the timing of future payment streams is dependent upon several factors, including new customer connections, customer consumption levels and future rate increases.

7.  Commitments

The Company entered into a consent order agreement with the Pennsylvania Department of Environmental Protection in December 2016 after the Company determined it exceeded the action level for lead as established by the Lead and Copper Rule, or LCR, issued by the U.S. Environmental Protection Agency.  The Company did not have an exceedance in any subsequent compliance test.  Under the agreement, the Company successfully completed its commitment to exceed the LCR replacement schedule by replacing all the known company-owned lead service lines within four years from the agreement.  Any additional company-owned lead service lines that are discovered will be replaced and included in utility plant but are not expected to have a material impact on the financial position of the Company.

The Company was granted approval by the Pennsylvania Public Utility Commission, or PPUC, to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the agreement.  The tariff modification allows the Company to replace customer-owned service lines at its own initial cost.  The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period.  The cost for the customer-owned lead service line replacements was approximately $1,258 and $1,204 through June 30, 2021 and December 31, 2020, respectively, and is included as a regulatory asset.  Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $1,500.  This estimate is subject to adjustment as more facts become available.

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8.  Revenue

The following table shows the Company’s revenues disaggregated by service and customer type.

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Water utility service
Residential	$	8,543	$	8,664	$	16,688	$	16,741
Commercial and industrial		3,629		3,216		6,939		6,557
Fire protection		795		783		1,601		1,584
Wastewater utility service
Residential		474		425		945		835
Commercial and industrial		79		75		158		151
Billing and revenue collection services		120		14		239		29
Collection services		11		–		11		14
Other revenue		10		5		20		10
Total Revenue from Contracts with Customers		13,661		13,182		26,601		25,921
Rents from regulated property		140		138		281		276
Total Operating Revenue	$	13,801	$	13,320	$	26,882	$	26,197

Utility Service

The Company provides utility service as a distinct and single performance obligation to each of its water and wastewater customers.  The transaction price is detailed in the tariff pursuant to an order by the PPUC and made publicly available.  There is no variable consideration and no free service, special rates, or subnormal charges to any customer.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied over time through the continuous provision of utility service through a stand-ready obligation to perform and the transfer of water or the collection of wastewater through a series of distinct transactions that are identical in nature and have the same pattern of transfer to the customer.  The Company uses an output method to recognize the utility service revenue over time.  The stand-ready obligation is recognized through the passage of time in the form of a fixed charge and the transfer of water or the collection of wastewater is recognized at a per unit rate based on the actual or estimated flow through the meter.  Each customer is invoiced every month and the invoice is due within twenty days.  The utility service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.  A contract asset for unbilled revenue is recognized for the passage of time and the actual or estimated usage from the latest meter reading to the end of the accounting period.  The methodology is standardized and consistently applied to reduce bias and the need for judgment.

Billing and Revenue Collection Service

The Company provides billing and revenue collection service as distinct performance obligations to three municipalities within the service territory of the Company.  The municipalities provide wastewater service to their residents and the Company acts as the billing and revenue collection agent for the municipalities.  The transaction price is a fixed amount per bill prepared as established in the contract.  There is no variable consideration.  Due to the fact that both the billing performance obligation and the revenue collection performance obligation are materially complete by the end of the reporting period, the Company does not allocate the transaction price between the two performance obligations.  The performance obligations are satisfied at a point in time when the bills are sent as the municipalities receive all the benefits and bears all of the risk of non-collection at that time.  Each municipality is invoiced when the bills are complete and the invoice is due within thirty days.  The billing and revenue collection service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.

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Collection Service

The Company provides collection service as a distinct and single performance obligation to several municipalities within the service territory of the Company.  The municipalities provide wastewater service to their residents.  If those residents are delinquent in paying for their wastewater service, the municipalities request that the Company post for and shut off the supply of water to the premises of those residents.  When the resident is no longer delinquent, the Company will restore water service to the premises.  The transaction price for each posting, each shut off, and each restoration is a fixed amount as established in the contract.  There is no variable consideration.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied at a point in time when the posting, shut off, or restoration is completed as the municipalities receive all the benefits in the form of payment or no longer providing wastewater service.  Each municipality is invoiced periodically for the posting, shut offs, and restorations that have been completed since the last billing and the invoice is due within thirty days.  The collection service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.  A contract asset for unbilled revenue is recognized for postings, shut offs, and restorations that have been completed from the last billing to the end of the accounting period.

Service Line Protection Plan

The Company provides service line protection as a distinct and single performance obligation to current water customers that choose to participate.  The transaction price is detailed in the plan’s terms and conditions and made publicly available.  There is no variable consideration.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied over time through the continuous provision of service line protection through a stand-ready obligation to perform.  The Company uses an output method to recognize the service line protection revenue over time.  The stand-ready obligation is recognized through the passage of time.  A customer has a choice to prepay for an entire year or to pay in advance each month.  The service line protection plan has no returns or extended warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no material performance obligations remain unsatisfied as of the end of the reporting period.

9.  Rate Matters

From time to time, the Company files applications for rate increases with the PPUC and is granted rate relief as a result of such requests.  Most recently, the PPUC authorized an increase in rates effective March 1, 2019.

The PPUC permits water utilities to collect a distribution system improvement charge, or DSIC.  The DSIC allows the Company to add a charge to customers' bills for qualified replacement costs of certain infrastructure without submitting a rate filing.  This surcharge mechanism typically adjusts periodically based on additional qualified capital expenditures completed or anticipated in a future period.  The DSIC is capped at 5% of base rates, and is reset to zero when new base rates that reflect the costs of those additions become effective or when a utility's earnings exceed a regulatory benchmark.  During its most recent quarterly reporting period, the Company's earnings were below the regulatory benchmark and the Company began recognizing DSIC in June 2021 for bills rendered after July 1, 2021 that included June consumption.  The DSIC provided revenues of $25 for the three and six months ended June 30, 2021 and $0 for the three and six months ended June 30, 2020.

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10.  Pensions

Components of Net Periodic Pension Cost

	Three Months Ended June 30						Six Months Ended June 30
	2021			2020			2021			2020
Service cost	$	272		$	235		$	543		$	469
Interest cost		302			364			604			728
Expected return on plan assets		(913	)		(800	)		(1,826	)		(1,599	)
Amortization of actuarial loss		121			93			242			185
Amortization of prior service cost		(3	)		(3	)		(6	)		(6	)
Rate-regulated adjustment		796			686			1,593			1,373
Net periodic pension expense	$	575		$	575		$	1,150		$	1,150

Pension service cost is recorded in operating expenses.  All other components of net periodic pension cost are recorded as other pension costs in other income (expenses).

Employer Contributions

The Company previously disclosed in its financial statements for the year ended December 31, 2020 that it expected to contribute $2,300 to its pension plans in 2021.  For the six months ended June 30, 2021, contributions of $1,150 have been made.  The Company expects to contribute the remaining $1,150 during the final two quarters of 2021.

11.  Stock-Based Compensation

On May 2, 2016, the Company’s stockholders approved The York Water Company Long-Term Incentive Plan, or LTIP.  The LTIP was adopted to provide the incentive of long-term stock-based awards to officers, directors and key employees. The LTIP provides for the granting of nonqualified stock options, incentive stock options, stock appreciation rights, performance restricted stock grants and units, restricted stock grants and units, and unrestricted stock grants.  A maximum of 100,000 shares of common stock may be issued under the LTIP over the ten-year life of the plan.  The maximum number of shares of common stock subject to awards that may be granted to any participant in any one calendar year is 2,000.  Shares of common stock issued under the LTIP may be treasury shares or authorized but unissued shares.  The LTIP will be administered by the Compensation Committee of the Board, or the full Board, provided that the full Board will administer the LTIP as it relates to awards to non-employee directors of the Company.  The Company filed a registration statement with the Securities and Exchange Commission on May 11, 2016 covering the offering of stock under the LTIP.  The LTIP was effective on July 1, 2016.

On August 19, 2019, the Board accelerated the vesting period for restricted stock granted in 2017, 2018, and 2019 to one retiring officer from three years to that officer’s 2020 retirement date which had been fully recognized as of March 31, 2020.

On May 3, 2021, the Board awarded stock to non-employee directors effective May 3, 2021.  This stock award vested immediately.  On May 3, 2021, the Compensation Committee awarded restricted stock to officers and key employees effective May 3, 2021.  This restricted stock award vests ratably over three years beginning May 3, 2021.

The restricted stock awards provide the grantee with the rights of a shareholder, including the right to receive dividends and to vote such shares, but not the right to sell or otherwise transfer the shares during the restriction period.  As a result, the awards are included in common shares outstanding on the balance sheet.  Restricted stock awards result in compensation expense valued at the fair market value of the stock on the date of the grant and are amortized ratably over the restriction period.

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The following tables summarize the stock grant amounts and activity for the six months ended June 30, 2021.

	Number of Shares	Grant Date Weighted Average Fair Value
Nonvested at beginning of the period	6,682		$39.30
Granted	6,170		$51.40
Vested	(2,820)		$39.94
Forfeited	–		–
Nonvested at end of the period	10,032		$46.56

For the three months ended June 30, 2021 and 2020, the statement of income includes $93 and $15 of stock-based compensation, respectively, and related recognized tax benefits of $27 and $4, respectively. For the six months ended June 30, 2021 and 2020, the statement of income includes $121 and $52 of stock-based compensation, respectively, and related recognized tax benefits of $35 and $15, respectively. The total fair value of the shares vested in the six months ended June 30, 2021 was $113. Total stock-based compensation related to nonvested awards not yet recognized is $467 which will be recognized over the remaining three year vesting period.

12.  Income Taxes

The Company filed for a change in accounting method under the Internal Revenue Service tangible property regulations, or TPR, effective in 2014.  Under the change in accounting method, the Company is permitted to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return.  This ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable.  It also results in increases to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.

The Company’s effective tax rate was 3.4% and 12.7% for the three months ended June 30, 2021 and 2020, respectively, and 5.2% and 12.6% for the six months ended June 30, 2021 and 2020, respectively.  The lower effective tax rate is primarily due to higher deductions from the TPR.  The effective tax rate will vary depending on the level of eligible asset improvements expensed for tax purposes under TPR each period.

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Item 2. Management's Discussion and Analysis of

Financial Condition and Results of Operations.

(In thousands of dollars, except per share amounts)

Forward-looking Statements

Certain statements contained in this report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933.  Words such as "may," "should," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify forward-looking statements.  These forward-looking statements include certain information relating to the Company’s business strategy; statements including, but not limited to:

• the amount and timing of rate changes and other regulatory matters including the recovery of costs recorded as regulatory assets;

• expected profitability and results of operations;

• trends;

• goals, priorities and plans for, and cost of, growth and expansion;

• strategic initiatives;

• availability of water supply;

• water usage by customers; and

• the ability to pay dividends on common stock and the rate of those dividends.

The forward-looking statements in this report reflect what the Company currently anticipates will happen.  What actually happens could differ materially from what it currently anticipates will happen.  The Company does not intend to make a public announcement when forward-looking statements in this report are no longer accurate, whether as a result of new information, what actually happens in the future or for any other reason.  Important matters that may affect what will actually happen include, but are not limited to:

• changes in weather, including drought conditions or extended periods of heavy rainfall;

• natural disasters, including pandemics such as the current outbreak of the novel strain of coronavirus known as “COVID-19” and the effectiveness of the Company’s pandemic plans;

• levels of rate relief granted;

• the level of commercial and industrial business activity within the Company's service territory;

• construction of new housing within the Company's service territory and increases in population;

• changes in government policies or regulations, including the tax code;

• the ability to obtain permits for expansion projects;

• material changes in demand from customers, including the impact of conservation efforts which may reduce the demand of customers for water;

• changes in economic and business conditions, including interest rates;

• loss of customers;

• changes in, or unanticipated, capital requirements;

• the impact of acquisitions;

• changes in accounting pronouncements;

• changes in the Company’s credit rating or the market price of its common stock; and

• the ability to obtain financing.

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General Information

The primary business of the Company is to impound, purify to meet or exceed safe drinking water standards and distribute water.  The Company also owns and operates two wastewater collection systems and five wastewater collection and treatment systems.  The Company operates within its franchised water and wastewater territory, which covers portions of 51 municipalities within three counties in south-central Pennsylvania.  The Company is regulated by the Pennsylvania Public Utility Commission, or PPUC, for both water and wastewater in the areas of billing, payment procedures, dispute processing, terminations, service territory, debt and equity financing and rate setting.  The Company must obtain PPUC approval before changing any practices associated with the aforementioned areas.

Water service is supplied through the Company's own distribution system.  The Company obtains the bulk of its water supply from both the South Branch and East Branch of the Codorus Creek, which together have an average daily flow of 73.0 million gallons.  This combined watershed area is approximately 117 square miles.  The Company has two reservoirs, Lake Williams and Lake Redman, which together hold up to approximately 2.2 billion gallons of water.  The Company supplements its reservoirs with a 15-mile pipeline from the Susquehanna River to Lake Redman which provides access to an additional supply of 12.0 million gallons of untreated water per day.  The Company also owns nine wells which are capable of providing a safe yield of approximately 597,000 gallons per day to supply water to the customers of its satellite systems in Adams County.  As of June 30, 2021, the Company's average daily availability was 35.6 million gallons, and average daily consumption was approximately 20.2 million gallons.  The Company's service territory had an estimated population of 202,000 as of December 31, 2020.  Industry within the Company's service territory is diversified, manufacturing such items as fixtures and furniture, electrical machinery, food products, paper, ordnance units, textile products, air conditioning systems, laundry detergent, barbells, and motorcycles.

The Company's water business is somewhat dependent on weather conditions, particularly the amount and timing of rainfall.  Revenues are particularly vulnerable to weather conditions in the summer months.  Prolonged periods of hot and dry weather generally cause increased water usage for watering lawns, washing cars, and keeping golf courses and sports fields irrigated.  Conversely, prolonged periods of dry weather could lead to drought restrictions from governmental authorities.  Despite the Company’s adequate water supply, customers may be required to cut back water usage under such drought restrictions which would negatively impact revenues.  The Company has addressed some of this vulnerability by instituting minimum customer charges which are intended to cover fixed costs of operations under all likely weather conditions.

The Company’s business does not require large amounts of working capital and is not dependent on any single customer or a very few customers for a material portion of its business.  Increases in revenues are generally dependent on the Company’s ability to obtain rate increases from the PPUC in a timely manner and in adequate amounts and to increase volumes of water sold through increased consumption and increases in the number of customers served.  The Company continuously looks for water and wastewater acquisition and expansion opportunities both within and outside its current service territory as well as additional opportunities to enter into bulk water contracts with municipalities and other entities to supply water.

The Company has agreements with several municipalities to provide sewer billing and collection services.  The Company also has a service line protection program on a targeted basis in order to further diversify its business.  Under this optional program, customers pay a fixed monthly fee, and the Company will repair or replace damaged customer service lines, as needed, subject to an annual maximum dollar amount.  The Company continues to review and consider opportunities to expand both initiatives.

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Impact of COVID-19

In December 2019, an outbreak of a novel strain of coronavirus (“COVID-19”) was reported.  On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic.  On March 6, 2020, Governor Tom Wolf signed an emergency disaster declaration for the Commonwealth of Pennsylvania which was extended for an additional ninety days five times, most recently on May 19, 2021.  This emergency declaration was ended on June 16, 2021, by joint resolution of the Pennsylvania legislature.  However, developments in this area continue at the local, state, and national levels and the Company continues to stay abreast of these developments.  The Company has taken steps, consistent with directions from local, state, and federal authorities, to mitigate known risks with the health and safety of its employees and customers as its first priority.

The Company is an essential, life-sustaining business and has continued normal operations.  The Company continues to monitor guidance from state and local authorities and, although most restrictions have been lifted, has made some modifications to its operations in order to comply with Pennsylvania’s guidelines.  This includes implementing enhanced safety procedures in its lobby and other measures such as holding virtual meetings and maintaining social distancing practices, when appropriate.  These restrictions are not expected to materially impede the Company’s ability to complete its planned capital expenditures or acquisitions.  The Company has not experienced any material supply chain disruptions.  The Company has been informed of longer lead times for some items, although this does not impact critical operating supplies or repair parts.  The Company continues to maintain relationships with its vendors to identify issues in a timely manner while also seeking out additional vendor relationships to diversify its supply chain.  The Company has addressed the longer lead times by placing orders proactively with its vendors to align with current lead times.  If the delays increase materially, the Company may re-prioritize some of its capital projects or experience higher operating expenses or capital costs.  The Company believes it has sufficient liquidity and access to the capital markets if needed.

As a water and wastewater utility, it is the Company’s mission to provide uninterrupted water and wastewater service.  Due to the effect of COVID-19 on the general public, in compliance with an order from the PPUC, the Company paused shut-off procedures for delinquent customers on March 13, 2020.  In addition, the Company stopped billing late payment charges.  These customers were billed at normal tariff rates for the water they used, and wastewater service provided.  As allowed by the PPUC, the Company resumed normal shut-off procedures and began billing late payment charges for most customers in January 2021.  Remaining PPUC required customer protections specific to the COVID-19 pandemic fully expired on April 1, 2021 with the exception of the requirement to offer extended term payment agreements to certain “protected customers” as defined by PPUC order.  Certain customers are eligible to receive utility assistance made available through federal relief funds through organizations not related to the Company.

The Company has begun to see demand by customer class revert back to close to pre-pandemic levels.  However, the Company may continue to experience changes in demand as the response to this pandemic continues.  The duration and magnitude of these changes is currently unknown and difficult to predict.

To date, there has been no material impact on the Company’s workforce, operations, financial performance, liquidity, or supply chain as a result of COVID-19.  However, the ultimate duration and severity of the pandemic or its effects on the economy, the capital and credit markets, or the Company’s workforce, customers, and suppliers, as well as governmental and regulatory responses, are uncertain.

Results of Operations

Three Months Ended June 30, 2021 Compared

With Three Months Ended June 30, 2020

Net income for the second quarter of 2021 was $4,484, an increase of $302, or 7.2%, from net income of $4,182 for the same period of 2020.  The primary contributing factors to the increase were higher operating revenues and lower income taxes which were partially offset by higher expenses.

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Operating revenues for the second quarter of 2021 increased $481, or 3.6%, from $13,320 for the three months ended June 30, 2020 to $13,801 for the corresponding 2021 period.  The increase was primarily due to growth in the customer base.  The average number of water customers served in 2021 increased as compared to 2020 by 742 customers, from 68,790 to 69,532 customers.  The average number of wastewater customers served in 2021 increased as compared to 2020 by 293 customers, from 3,028 to 3,321 customers, due to acquisitions during 2020.  Total per capita consumption for the second quarter of 2021 was approximately 5.5% higher than the same period of last year, but residential demand decreased.  Additional billing and revenue collection services also added to revenues.

Operating expenses for the second quarter of 2021 increased $872, or 12.4%, from $7,027 for the second quarter of 2020 to $7,899 for the corresponding 2021 period.  The increase was primarily due to higher expenses of approximately $190 for wastewater treatment, $167 for insurance, $155 for depreciation, $138 for water treatment and distribution system maintenance, $130 for wages, and $32 for outside services.  Other expenses increased by a net of $105.  The increased expenses were partially offset by reduced expenses of $45 for purchased power.

Interest on debt for the second quarter of 2021 increased $66, or 5.7%, from $1,156 for the second quarter of 2020 to $1,222 for the corresponding 2021 period.  The increase was primarily due to an increase in long-term debt outstanding.  The average debt outstanding under the lines of credit was $8,416 for the second quarter of 2021 and $9,149 for the second quarter of 2020.  The weighted average interest rate on the lines of credit was 1.30% for the quarter ended June 30, 2021 and 1.73% for the quarter ended June 30, 2020.

Allowance for funds used during construction increased $197, from $114 in the second quarter of 2020 to $311 in the corresponding 2021 period due to a higher volume of eligible construction.

Other income (expenses), net for the second quarter of 2021 reflects decreased expenses of $77 as compared to the same period of 2020.  Higher earnings on life insurance policies of approximately $36 and lower charitable contributions of $32 were the primary reasons for the decrease.  Other expenses decreased by a net of $9.

Income taxes for the second quarter of 2021 decreased $448, or 73.7%, compared to the same period of 2020 primarily due to higher deductions from the Internal Revenue Service, or IRS, tangible property regulations, or TPR.  The Company’s effective tax rate was 3.4% for the second quarter of 2021 and 12.7% for the second quarter of 2020.

Six Months Ended June 30, 2021 Compared

With Six Months Ended June 30, 2020

Net income for the first six months of 2021 was $8,189, an increase of $5, or 0.1%, from net income of $8,184 for the same period of 2020.  The primary contributing factors to the increase were lower income taxes and higher operating revenues which were partially offset by higher expenses and a prior year gain on life insurance, not repeated this year.

Operating revenues for the first six months of 2021 increased $685, or 2.6%, from $26,197 for the six months ended June 30, 2020 to $26,882 for the corresponding 2021 period.  The increase was primarily due to growth in the customer base.  The average number of water customers served in 2021 increased as compared to 2020 by 782 customers, from 68,688 to 69,470 customers.  The average number of wastewater customers served in 2021 increased as compared to 2020 by 319 customers, from 2,989 to 3,308 customers, due to acquisitions during 2020.  Total per capita consumption for the first six months of 2021 was approximately 2.7% higher than the same period of last year, but residential demand decreased.  Additional billing and revenue collection services also added to revenues.  For the remainder of the year, the Company expects revenues to show a modest increase due to the distribution system improvement charge, or DSIC, allowed by the PPUC.  The DSIC allows the Company to add a charge to customers’ water bills for qualified replacement costs of certain infrastructure without submitting a rate filing.  An increase in the number of water and wastewater customers from acquisitions and growth within the Company’s service territory are also expected to add to revenues.  The duration and severity of the COVID-19 pandemic including any resulting economic slowdown or changes in consumption patterns could impact results.  Other regulatory actions and weather patterns could also impact results.

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Operating expenses for the first six months of 2021 increased $1,338, or 9.4%, from $14,288 for the first six months of 2020 to $15,626 for the corresponding 2021 period.  The increase was primarily due to higher expenses of approximately $305 for depreciation, $285 for wastewater treatment, $234 for insurance, $217 for water treatment and distribution system maintenance, $154 for wages, $51 for billing and revenue collection services, and $49 for outside services.  Other expenses increased by a net of $127.  The increased expenses were partially offset by reduced expenses of $84 for purchased power.  For the remainder of the year, the Company expects depreciation expense to continue to rise due to additional investment in utility plant, and other expenses to increase at a moderate rate as costs to treat water and wastewater, and to maintain and extend the distribution system, continue to rise.

Interest on debt for the first six months of 2021 increased $85, or 3.6%, from $2,351 for the first six months of 2020 to $2,436 for the corresponding 2021 period.  The increase was primarily due to an increase in long-term debt outstanding.  The average debt outstanding under the lines of credit was $7,623 for the first six months of 2021 and $8,804 for the first six months of 2020.  The weighted average interest rate on the lines of credit was 1.30% for the six months ended June 30, 2021 and 2.28% for the six months ended June 30, 2020.  Interest expense for the remainder of the year is expected to be slightly higher due to continued borrowings under the line of credit.

Allowance for funds used during construction increased $358, from $215 in the first six months of 2020 to $573 in the corresponding 2021 period due to a higher volume of eligible construction.  Allowance for funds used during construction for the remainder of the year is expected to increase based on a projected increase in the amount of eligible construction.

A non-recurring gain on life insurance of $515 was recorded in the first six months of 2020 as a result of a death benefit from a life insurance policy.  No similar gains are anticipated at this time.

Other income (expenses), net for the first six months of 2021 reflects decreased expenses of $101 as compared to the same period of 2020.  Higher earnings on life insurance policies of approximately $60 and lower charitable contributions of $35 were the primary reasons for the decrease.  Other expenses decreased by a net of $6.  For the remainder of the year, other income (expenses) will be largely determined by the change in market returns and discount rates for retirement programs and related assets.

Income taxes for the first six months of 2021 decreased $725, or 61.6%, compared to the same period of 2020 primarily due to higher deductions from the IRS TPR.  The Company’s effective tax rate was 5.2% for the first six months of 2021 and 12.6% for the first six months of 2020.  The Company's effective tax rate for the remainder of 2021 will largely be determined by the level of eligible asset improvements expensed for tax purposes under TPR each period.

Rate Matters

See Note 9 to the financial statements included herein for a discussion of rate matters.

Effective July 1, 2021, the Company's tariff included a distribution system improvement charge on revenues of 1.67%.  A partial month of this surcharge is included in results of operations for the three and six months ended June 30, 2021 for bills rendered after July 1, 2021 that included June consumption.

The Company does not expect to file a rate increase request in 2021.

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Acquisitions and Growth

On April 22, 2021, the Company signed an agreement to purchase the water assets and wastewater collection and treatment assets jointly owned by Letterkenny Industrial Development Authority and Franklin County General Authority in Letterkenny and Greene Townships, Franklin County, Pennsylvania.  Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in the first quarter of 2022 at which time the Company will add approximately 90 water and wastewater customers.

On May 27, 2020, the Company signed an agreement to purchase the water assets and wastewater collection and treatment assets of Country View Manor Community, LLC in Washington Township, York County, Pennsylvania.  Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in the first quarter of 2022 at which time the Company will add approximately 50 water and wastewater customers.

On March 4, 2019, the Company signed an agreement to purchase the wastewater collection assets of West Manheim Township in York County, Pennsylvania.  Completion of the acquisition is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in 2021 at which time the Company will add approximately 1,800 wastewater customers.  These wastewater customers are currently water customers of the Company.

On October 8, 2013, the Company signed an agreement to purchase the wastewater collection and treatment assets of SYC WWTP, L.P. in Shrewsbury and Springfield Townships, York County, Pennsylvania.  On July 1, 2020, the Company signed an agreement to purchase the Albright Trailer Park water assets and wastewater collection assets of R.T. Barclay, Inc. in Springfield Township, York County, Pennsylvania.  Completion of the acquisitions is contingent upon receiving approval from all required regulatory authorities.  Closing is expected in the first quarter of 2022, at which time the Company will add approximately 90 combined wastewater customers and approximately 60 water customers through an interconnection with its current water distribution system.  The wastewater customers of the Albright Trailer Park are currently served by SYC WWTP, L.P. and the water customers are currently served by the Company, each through a single customer connection to the park.

In total, these acquisitions are expected to be immaterial to Company results.  The Company is also pursuing other bulk water contracts and acquisitions in and around its service territory to help offset any further declines in per capita water consumption and to grow its business.

On May 10, 2017, the Company signed an emergency interconnect agreement with Dallastown-Yoe Water Authority.  The effectiveness of this agreement is contingent upon receiving approval from all required regulatory authorities.  Approval is expected to be granted in 2022 at which time the Company will begin construction of a water main extension to a single point of interconnection and either supply a minimum agreed upon amount of water to the authority, receive a payment in lieu of water, or provide water during an emergency, at current tariff rates.

Capital Expenditures

For the six months ended June 30, 2021, the Company invested $16,043 in construction expenditures for routine items and an upgrade to the enterprise software system as well as various replacements and improvements to infrastructure.  The Company was able to fund construction expenditures using internally-generated funds, line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions from developers, municipalities, customers, or builders.

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The Company anticipates construction expenditures for the remainder of 2021 of approximately $16,500 exclusive of any potential acquisitions not yet approved.  In addition to routine transmission and distribution projects, a portion of the anticipated expenditures will be for additional main extensions, an elevated water tank, completion of a wastewater treatment plant, and various replacements and improvements to infrastructure.  The Company intends to use primarily internally-generated funds for its anticipated construction and fund the remainder through cash, line of credit borrowings, proceeds from its stock purchase plans and customer advances and contributions.  Customer advances and contributions are expected to account for between 5% and 10% of funding requirements during the remainder of 2021.  The Company believes it will have adequate credit facilities and access to the capital markets, if necessary, to meet its anticipated capital needs in the remainder of 2021.

Liquidity and Capital Resources

Cash

The Company manages its cash through a cash management account that is directly connected to its line of credit.  Excess cash generated automatically pays down outstanding borrowings under the line of credit arrangement.  If there are no outstanding borrowings, the cash is used as an earnings credit to reduce banking fees.  Likewise, if additional funds are needed beyond what is generated internally for payroll, to pay suppliers, to fund capital expenditures, or to pay debt service, funds are automatically borrowed under the line of credit.  As of June 30, 2021, the Company borrowed $10,035 on its line of credit and had a cash balance of $6.  The cash and the cash management facility connected to the line of credit are expected to provide the necessary liquidity and funding for the Company's operations, capital expenditures, acquisitions, and potential buybacks of stock for the foreseeable future.

Accounts Receivable

The accounts receivable balance tends to follow the change in revenues but is also affected by the timeliness of payments by customers and the level of the reserve for doubtful accounts.  For the three months ended June 30, 2021, a strengthening in the timeliness of payments, compared to the end of 2020, resulted in a decrease in accounts receivable – customers.  A reserve is maintained at a level considered adequate to provide for losses that can be reasonably anticipated based on inactive accounts with outstanding balances.  Management periodically evaluates the adequacy of the reserve based on past experience, agings of the receivables, adverse situations that may affect a customer’s ability to pay, current economic conditions, and other relevant factors.  During 2021, management’s assessment included consideration of the COVID-19 pandemic along with past trends during times of economic instability and regulations from the PPUC regarding customer turn-offs and collections and determined its allowance for doubtful accounts should remain elevated compared to historical norms.  If the status of these factors deteriorates, the Company may incur additional expenses for uncollectible accounts and experience a reduction in its internally-generated funds.

Internally-generated Funds

The amount of internally-generated funds available for operations and construction depends on the Company’s ability to obtain timely and adequate rate relief, changes in regulations including taxes, customers’ water usage, weather conditions, customer growth and controlled expenses.  During the first six months of 2021, the Company generated $12,102 internally from operations as compared to the $9,747 it generated during the first six months of 2020, primarily due to higher net income when adjusted for the non-cash gain on life insurance in 2020 and a decrease in accounts receivable – customers due to a strengthening in the timeliness of payments.

Credit Lines

Historically, the Company has borrowed $15,000 to $20,000 under its lines of credit before refinancing with long-term debt or equity capital.  As of June 30, 2021, the Company maintained an unsecured line of credit in the amount of $50,000 at an interest rate of LIBOR plus 1.05% with an unused commitment fee and an interest rate floor.  The Company had $10,035 in outstanding borrowings under its line of credit as of June 30, 2021.  The interest rate on the line of credit borrowings as of June 30, 2021 was 1.30%.  Subsequent to June 30, 2021, the Company renewed its committed line of credit and extended the maturity date to September 2023.

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The Company has taken steps to manage the risk of reduced credit availability.  It has established a committed line of credit with an increase in the total amount available and a 2-year revolving maturity that cannot be called on demand.  There is no guarantee that the Company will be able to obtain sufficient lines of credit with favorable terms in the future.  If the Company is unable to obtain sufficient lines of credit or to refinance its line of credit borrowings with long-term debt or equity when necessary, it may have to eliminate or postpone capital expenditures.  Management believes the Company will have adequate capacity under its current lines of credit to meet anticipated financing needs throughout 2021 and 2022.

Long-term Debt

The Company’s loan agreements contain various covenants and restrictions.  Management believes it is currently in compliance with all of these restrictions.  See Note 6 to the financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 for additional information regarding these restrictions.

The Company’s total long-term debt as a percentage of the total capitalization, defined as total common stockholders’ equity plus total long-term debt, was 46.8% as of June 30, 2021, compared with 46.9% as of December 31, 2020.  The Company expects to allow the debt percentage to trend upward until it approaches fifty percent before considering additional equity.  A debt to total capitalization ratio between forty-six and fifty percent has historically been acceptable to the PPUC in rate filings.  Due to its ability to generate more cash internally, the Company has been able to keep its ratio below fifty percent.

The variable rate line of credit and the interest rate swap of the Company use the LIBOR as a benchmark for establishing the rates.  The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced that it intends to stop encouraging or compelling banks to submit rates for the calculation of LIBOR rates.  For most LIBOR rates, the cessation date is expected to be June 30, 2023.  The Company’s line of credit agreement explicitly states that another index may be used if LIBOR is discontinued or otherwise unavailable.  The Company believes that it is implicit in its other agreements that a successor rate to LIBOR may be used.  The Company is not yet aware what successor rate will be used and therefore cannot estimate the impact to the Company’s financial position, results of operations and cash flows, but it could include an increase in the cost of the variable rate indebtedness.

Income Taxes, Deferred Income Taxes and Uncertain Tax Positions

The Company filed for a change in accounting method under the IRS TPR effective in 2014.  Under the change in accounting method, the Company is permitted to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return.  This ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable.  It also results in increases to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.  The Company expects to continue to expense these asset improvements in the future.

The Company’s effective tax rate will largely be determined by the level of eligible asset improvements expensed for tax purposes that would have been capitalized for tax purposes prior to the implementation of TPR.

The Company has a substantial deferred income tax asset primarily due to the excess accumulated deferred income taxes on accelerated depreciation from the 2017 Tax Act and the differences between the book and tax balances of the customers’ advances for construction and contributions in aid of construction and deferred compensation plans.  The Company does not believe a valuation allowance is required due to the expected generation of future taxable income during the periods in which those temporary differences become deductible.

The Company has seen an increase in its deferred income tax liability amounts primarily as a result of the accelerated depreciation deduction available for federal tax purposes which creates differences between book and tax depreciation expense.  The Company expects this trend to continue as it makes significant investments in capital expenditures subject to accelerated depreciation or TPR.

The Company has determined there are no uncertain tax positions that require recognition as of June 30, 2021.

Page 23

Common Stock

Common stockholders’ equity as a percent of the total capitalization was 53.2% as of June 30, 2021, compared with 53.1% as of December 31, 2020.  The volume of share repurchases and higher debt from capital expenditures, among other things, could reduce this percentage in the future.  It is the Company’s general intent to target a ratio between fifty and fifty-four percent.

Credit Rating

On October 21, 2020, Standard & Poor’s affirmed the Company’s credit rating at A-, with a stable outlook and adequate liquidity.  The Company’s ability to maintain its credit rating depends, among other things, on adequate and timely rate relief, which it has been successful in obtaining, its ability to fund capital expenditures in a balanced manner using both debt and equity and its ability to generate cash flow.  The Company’s objectives are to continue to maximize its funds provided by operations and maintain a strong capital structure in order to be able to attract capital.

Physical and Cyber Security

The Company maintains security measures at its facilities, and collaborates with federal, state, and local authorities and industry trade associations regarding information on possible threats and security measures for water and wastewater utility operations.  The costs incurred are expected to be recoverable in water and wastewater rates and are not expected to have a material impact on its business, financial condition, or results of operations.

The Company relies on information technology systems in connection with the operation of the business, especially with respect to customer service, billing, accounting, and in some cases, the monitoring and operation of treatment, storage, and pumping facilities.  In addition, the Company relies on these systems to track utility assets and to manage maintenance and construction projects, materials and supplies, and human resource functions.  The information technology systems may be vulnerable to damage or interruption from cyber security attacks or other cyber-related events, including, but not limited to, power loss, computer systems failures, internet, telecommunications or data network failures, physical and electronic loss of data, computer viruses, intentional security breaches, hacking, denial of service actions, misappropriation of data, and similar events.  In some cases, administration of certain functions may be outsourced to third-party service providers that could also be targets of cyber security attacks.  A loss of these systems, or major problems with the operation of these systems, could harm the business, financial condition, and results of operations of the Company through the loss or compromise of customer, financial, employee, or operational data, disruption of billing, collections or normal field service activities, disruption of electronic monitoring and control of operational systems, and delays in financial reporting and other normal management functions.

Possible impacts associated with a cyber security attack or other events may include remediation costs related to lost, stolen, or compromised data, repairs to data processing systems, increased cyber security protection costs, adverse effects on our compliance with regulatory and environmental laws and regulation, including standards for drinking water, litigation, and reputational damage.

The Company has implemented processes, procedures, and controls to prevent or limit the effect of these possible events, and maintains insurance to help defray costs associated with cyber security attacks.  The Company has not experienced a material impact on business or operations from these attacks.  Although the Company does not believe its systems are at a materially greater risk of cyber security attacks than other similar organizations and despite the implementation of robust security measures, the Company cannot provide assurance that the insurance will fully cover the costs of a cyber security event, and its robust security measures do not guarantee that reputation and financial results will not be adversely affected by such an incident.

Page 24

Environmental Matters

The Company entered into a consent order agreement with the Pennsylvania Department of Environmental Protection in December 2016 after the Company determined it exceeded the action level for lead as established by the Lead and Copper Rule, or LCR, issued by the U.S. Environmental Protection Agency.  The Company did not have an exceedance in any subsequent compliance test.  Under the agreement, the Company successfully completed its commitment to exceed the LCR replacement schedule by replacing all the known company-owned lead service lines within four years from the agreement.  Any additional company-owned lead service lines that are discovered will be replaced and included in utility plant but are not expected to have a material impact on the financial position of the Company.

The Company was granted approval by the PPUC to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the agreement.  The tariff modification allows the Company to replace customer-owned service lines at its own initial cost.  The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period.  The cost for the customer-owned lead service line replacements was approximately $1,258 and $1,204 through June 30, 2021 and December 31, 2020, respectively, and is included as a regulatory asset.  Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $1,500.  This estimate is subject to adjustment as more facts become available.

Critical Accounting Estimates

The methods, estimates, and judgments the Company used in applying its accounting policies have a significant impact on the results reported in its financial statements.  The Company’s accounting policies require management to make subjective judgments because of the need to make estimates of matters that are inherently uncertain.  The Company’s most critical accounting estimates include regulatory assets and liabilities, revenue recognition, accounting for its pension plans, and income taxes.  There has been no significant change in accounting estimates or the method of estimation during the quarter ended June 30, 2021.

Off-Balance Sheet Arrangements

The Company does not use off-balance sheet transactions, arrangements or obligations that may have a material current or future effect on financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenues or expenses.  The Company does not use securitization of receivables or unconsolidated entities. For risk management purposes, the Company uses a derivative financial instrument, an interest rate swap agreement discussed in Note 5 to the financial statements included herein.  The Company does not engage in trading or other risk management activities, does not use other derivative financial instruments for any purpose, has no guarantees and does not have material transactions involving related parties.

Page 25

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company's management, with the participation of the Company's President and Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report.  Based upon this evaluation, the Company's President and Chief Executive Officer along with the Chief Financial Officer concluded that the Company's disclosure controls and procedures as of the end of the period covered by this report are effective such that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934, as amended, is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Company’s management, including the President and Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.  A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

No change in the Company's internal control over financial reporting occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Page 26

PART II - OTHER INFORMATION

Item 6. Exhibits

Exhibit No.	Description
3	Amended and Restated Articles of Incorporation.  Incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 4, 2010.
3.1	Amended and Restated By-Laws.  Incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2012.
31.1	Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Page 27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	THE YORK WATER COMPANY
	/s/ Joseph T. Hand
Date: August 5, 2021	Joseph T. Hand Principal Executive Officer
	/s/ Matthew E. Poff
Date: August 5, 2021	Matthew E. Poff Principal Financial and Accounting Officer

Page 28

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Joseph T. Hand, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of The York Water Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 5, 2021	/s/ Joseph T. Hand
	Joseph T. Hand
	President and CEO

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Matthew E. Poff, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of The York Water Company;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 5, 2021	/s/ Matthew E. Poff
	Matthew E. Poff
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The York Water Company (the “Company”) on Form 10-Q for the period ending June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Joseph T. Hand, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)); and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	THE YORK WATER COMPANY
Date: August 5, 2021	/s/ Joseph T. Hand
	Joseph T. Hand
	Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The York Water Company (the “Company”) on Form 10-Q for the period ending June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Matthew E. Poff, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)); and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	THE YORK WATER COMPANY
Date: August 5, 2021	/s/ Matthew E. Poff
	Matthew E. Poff
	Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Aug. 05, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Document Transition Report	false
Entity File Number	001-34245
Entity Registrant Name	YORK WATER CO
Entity Central Index Key	0000108985
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-1242500
Entity Address, Address Line One	130 East Market Street
Entity Address, City or Town	York
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	17401
City Area Code	717
Local Phone Number	845-3601
Title of 12(b) Security	Common Stock, No par value
Trading Symbol	YORW
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,093,427

XML

Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
ASSETS
UTILITY PLANT, at original cost	$ 457,196	$ 438,670
Plant acquisition adjustments	(3,673)	(3,707)
Accumulated depreciation	(94,377)	(91,340)
Net utility plant	359,146	343,623
OTHER PHYSICAL PROPERTY, net of accumulated depreciation of $471 in 2021 and $458 in 2020	729	742
CURRENT ASSETS:
Cash and cash equivalents	6	2
Restricted cash	0	5,000
Accounts receivable, net of reserves of $792 in 2021 and $655 in 2020	4,206	5,184
Unbilled revenues	3,179	2,847
Recoverable income taxes	653	721
Materials and supplies inventories, at cost	1,033	1,010
Prepaid expenses	1,808	1,526
Total current assets	10,885	16,290
OTHER LONG-TERM ASSETS:
Prepaid pension cost	3,802	2,209
Note receivable	255	255
Deferred regulatory assets	41,996	39,893
Other assets	4,163	3,945
Total other long-term assets	50,216	46,302
Total Assets	420,976	406,957
COMMON STOCKHOLDERS' EQUITY:
Common stock, no par value, authorized 46,500,000 shares, issued and outstanding 13,090,055 shares in 2021 and 13,060,817 shares in 2020	87,100	85,935
Retained earnings	60,606	57,317
Total common stockholders' equity	147,706	143,252
PREFERRED STOCK, authorized 500,000 shares, no shares issued	0	0
LONG-TERM DEBT	126,996	123,573
COMMITMENTS
CURRENT LIABILITIES:
Accounts payable	8,359	6,540
Dividends payable	2,193	2,192
Accrued compensation and benefits	1,469	1,417
Accrued interest	958	959
Deferred regulatory liabilities	581	525
Other accrued expenses	358	360
Total current liabilities	13,918	11,993
DEFERRED CREDITS:
Customers' advances for construction	10,907	10,326
Deferred income taxes	45,787	43,538
Deferred employee benefits	4,821	4,793
Deferred regulatory liabilities	27,059	25,444
Other deferred credits	2,328	2,731
Total deferred credits	90,902	86,832
Contributions in aid of construction	41,454	41,307
Total Stockholders' Equity and Liabilities	$ 420,976	$ 406,957

XML

Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
ASSETS
Other physical property, accumulated depreciation	$ 471	$ 458
CURRENT ASSETS:
Accounts receivables, reserves	$ 792	$ 655
COMMON STOCKHOLDERS' EQUITY:
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, authorized (in shares)	46,500,000	46,500,000
Common stock, issued (in shares)	13,090,055	13,060,817
Common stock, outstanding (in shares)	13,090,055	13,060,817
Preferred stock, authorized (in shares)	500,000	500,000
Preferred stock, issued (in shares)	0	0

XML

Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statements of Income [Abstract]
OPERATING REVENUES:	$ 13,801	$ 13,320	$ 26,882	$ 26,197
OPERATING EXPENSES:
Operation and maintenance	2,949	2,618	5,755	5,281
Administrative and general	2,441	2,072	4,852	4,316
Depreciation and amortization	2,198	2,043	4,372	4,067
Taxes other than income taxes	311	294	647	624
Operating expenses	7,899	7,027	15,626	14,288
Operating income	5,902	6,293	11,256	11,909
OTHER INCOME (EXPENSES):
Interest on debt	(1,222)	(1,156)	(2,436)	(2,351)
Allowance for funds used during construction	311	114	573	215
Other pension costs	(303)	(340)	(607)	(681)
Gain on life insurance	0	0	0	515
Other income (expenses), net	(44)	(121)	(145)	(246)
Other income (expenses)	(1,258)	(1,503)	(2,615)	(2,548)
Income before income taxes	4,644	4,790	8,641	9,361
Income taxes	160	608	452	1,177
Net Income	$ 4,484	$ 4,182	$ 8,189	$ 8,184
Basic Earnings Per Share (in dollars per share)	$ 0.35	$ 0.32	$ 0.63	$ 0.63
Diluted Earnings Per Share (in dollars per share)	$ 0.35	$ 0.32	$ 0.63	$ 0.63

XML

Statements of Common Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2019	$ 83,976	$ 50,209	$ 134,185
Balance (in shares) at Dec. 31, 2019	13,014,898
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 0	8,184	8,184
Cash dividends declared	0	(4,693)	(4,693)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans	$ 844	0	844
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans (in shares)	19,101
Stock-based compensation	$ 52	0	52
Stock-based compensation (in shares)	0
Balance at Jun. 30, 2020	$ 84,872	53,700	138,572
Balance (in shares) at Jun. 30, 2020	13,033,999
Balance at Mar. 31, 2020	$ 84,424	51,865	136,289
Balance (in shares) at Mar. 31, 2020	13,024,187
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 0	4,182	4,182
Cash dividends declared	0	(2,347)	(2,347)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans	$ 433	0	433
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans (in shares)	9,812
Stock-based compensation	$ 15	0	15
Stock-based compensation (in shares)	0
Balance at Jun. 30, 2020	$ 84,872	53,700	138,572
Balance (in shares) at Jun. 30, 2020	13,033,999
Balance at Dec. 31, 2020	$ 85,935	57,317	$ 143,252
Balance (in shares) at Dec. 31, 2020	13,060,817		13,060,817
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 0	8,189	$ 8,189
Cash dividends declared	0	(4,900)	(4,900)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans	$ 1,044	0	1,044
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans (in shares)	23,068
Stock-based compensation	$ 121	0	121
Stock-based compensation (in shares)	6,170
Balance at Jun. 30, 2021	$ 87,100	60,606	$ 147,706
Balance (in shares) at Jun. 30, 2021	13,090,055		13,090,055
Balance at Mar. 31, 2021	$ 86,436	58,574	$ 145,010
Balance (in shares) at Mar. 31, 2021	13,071,733
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 0	4,484	4,484
Cash dividends declared	0	(2,452)	(2,452)
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans	$ 571	0	571
Issuance of common stock under dividend reinvestment, direct stock and employee stock purchase plans (in shares)	12,152
Stock-based compensation	$ 93	0	93
Stock-based compensation (in shares)	6,170
Balance at Jun. 30, 2021	$ 87,100	$ 60,606	$ 147,706
Balance (in shares) at Jun. 30, 2021	13,090,055		13,090,055

XML

Statements of Common Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cash dividends declared (in dollars per share)	$ 0.1874	$ 0.1802	$ 0.3748	$ 0.3604

XML

Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 8,189	$ 8,184
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on life insurance	0	(515)
Depreciation and amortization	4,372	4,067
Stock-based compensation	121	52
Decrease in deferred income taxes	(72)	(69)
Other	38	206
Changes in assets and liabilities:
(Increase) decrease in accounts receivable and unbilled revenues	443	(1,176)
Decrease in recoverable income taxes	68	547
Increase in materials and supplies, prepaid expenses, prepaid pension cost, regulatory and other assets	(4,471)	(3,772)
Increase in accounts payable, accrued compensation and benefits, accrued expenses, deferred employee benefits, regulatory liabilities, and other deferred credits	3,415	1,522
Increase (decrease) in accrued interest	(1)	701
Net cash provided by operating activities	12,102	9,747
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility plant additions, including debt portion of allowance for funds used during construction of $320 in 2021 and $120 in 2020	(16,043)	(8,986)
Cash received from surrender of life insurance policies	0	672
Net cash used in investing activities	(16,043)	(8,314)
CASH FLOWS FROM FINANCING ACTIVITIES:
Customers' advances for construction and contributions in aid of construction	1,204	1,885
Repayments of customer advances	(476)	(105)
Proceeds of long-term debt issues	23,910	14,759
Repayments of long-term debt	(20,575)	(12,805)
Changes in cash overdraft position	(1,263)	(1,331)
Issuance of common stock	1,044	844
Dividends paid	(4,899)	(4,680)
Net cash used in financing activities	(1,055)	(1,433)
Net change in cash, cash equivalents, and restricted cash	(4,996)	0
Cash, cash equivalents, and restricted cash at beginning of period	5,002	2
Cash and cash equivalents at end of period	6	2
Cash paid during the period for:
Interest, net of amounts capitalized	2,016	2,170
Income taxes	$ 217	$ 0
Supplemental schedule of non-cash investing and financing activities:
Accounts payable includes $5,166 in 2021 and $2,854 in 2020 for the construction of utility plant

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Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility plant additions, debt portion of allowance for funds used during construction	$ 320	$ 120
Supplemental schedule of non-cash investing and financing activities:
Accounts payable for construction of utility plant	$ 5,166	$ 2,854

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Basis of Presentation

6 Months Ended

Jun. 30, 2021

Basis of Presentation [Abstract]

Basis of Presentation

1.  Basis of Presentation

The interim financial statements are unaudited but, in the opinion of management, reflect all adjustments, consisting of only normal recurring accruals, necessary for a fair presentation of results for such periods.  Because the financial statements cover an interim period, they do not include all disclosures and notes normally provided in annual financial statements, and therefore, should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.  Additionally, based on the duration and severity of the novel coronavirus ("COVID-19") pandemic, the Company is uncertain of the ultimate impact it could have on the business.

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Accounts Receivable and Contract Assets

6 Months Ended

Jun. 30, 2021

Accounts Receivable and Contract Assets [Abstract]

Accounts Receivable and Contract Assets

2.  Accounts Receivable and Contract Assets

Accounts receivable and contract assets are summarized in the following table:

	As of Jun. 30, 2021			As of Dec. 31, 2020			Change
Accounts receivable – customers	$	4,782		$	5,633		$	(851	)
Other receivables		216			206			10
		4,998			5,839			(841	)
Less: allowance for doubtful accounts		(792	)		(655	)		(137	)
Accounts receivable, net	$	4,206		$	5,184		$	(978	)
Unbilled revenue	$	3,179		$	2,847		$	332

Differences in timing of revenue recognition, billings, and cash collections result in receivables and contract assets.  Generally, billing occurs subsequent to revenue recognition, resulting in a contract asset reported as unbilled revenue on the balance sheet.  The Company does not receive advances or deposits from customers before revenue is recognized so no contract liabilities are reported.  Accounts receivable are recorded when the right to consideration becomes unconditional and are presented separately on the balance sheet.  The changes in accounts receivable – customers and in unbilled revenue were primarily due to normal timing difference between performance and the customer’s payments.

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Common Stock and Earnings Per Share

6 Months Ended

Jun. 30, 2021

Common Stock and Earnings Per Share [Abstract]

Common Stock and Earnings Per Share

3.  Common Stock and Earnings Per Share

Net income of $4,484 and $4,182 for the three months ended June 30, 2021 and 2020, respectively, and $8,189 and $8,184 for the six months ended June 30, 2021 and 2020, respectively, is used to calculate both basic and diluted earnings per share.  Basic earnings per share is based on the weighted average number of common shares outstanding.  Diluted earnings per share is based on the weighted average number of common shares outstanding plus potentially dilutive shares.  The dilutive effect of employee stock-based compensation is included in the computation of diluted earnings per share and is calculated using the treasury stock method and expected proceeds upon exercise or issuance of the stock-based compensation.

The following table summarizes the shares used in computing basic and diluted earnings per share:

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Weighted average common shares, basic		13,068,806		13,022,088		13,062,374		13,015,842
Effect of dilutive securities:
Employee stock-based compensation		1,435		882		1,088		579
Weighted average common shares, diluted		13,070,241		13,022,970		13,063,462		13,016,421

On March 11, 2013, the Board of Directors, or the Board, authorized a share repurchase program granting the Company authority to repurchase up to 1,200,000 shares of the Company's common stock from time to time.  The stock repurchase program has no specific end date and the Company may repurchase shares in the open market or through privately negotiated transactions.  The Company may suspend or discontinue the repurchase program at any time.  No shares were repurchased during the three or six months ended June 30, 2021 and 2020.  As of June 30, 2021, 618,004 shares remain authorized for repurchase.

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Debt

6 Months Ended

Jun. 30, 2021

Debt [Abstract]

Debt

4.  Debt

For the six months ended June 30, 2021, the Company did not enter into any new long-term debt arrangements or modify its outstanding long-term debt, which is summarized in the table below.

	As of Jun. 30, 2021			As of Dec. 31, 2020
8.43% Senior Notes, Series D, due 2022	$	7,500		$	7,500
Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029		12,000			12,000
3.00% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series A of 2019, due 2036		10,500			10,500
3.10% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series B of 2019, due 2038		14,870			14,870
3.23% Senior Notes, due 2040		15,000			15,000
4.00% - 4.50% York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045		10,000			10,000
4.54% Senior Notes, due 2049		20,000			20,000
3.24% Senior Notes, due 2050		30,000			30,000
Committed Line of Credit, due September 2023		10,035			6,700
Total long-term debt		129,905			126,570
Less discount on issuance of long-term debt		(175	)		(181	)
Less unamortized debt issuance costs		(2,734	)		(2,816	)
Long-term portion	$	126,996		$	123,573

Subsequent to June 30, 2021, the Company renewed its committed line of credit and extended the maturity date to September 2023.

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Interest Rate Swap Agreement

6 Months Ended

Jun. 30, 2021

Interest Rate Swap Agreement [Abstract]

Interest Rate Swap Agreement

5.  Interest Rate Swap Agreement

The Company is exposed to certain risks relating to its ongoing business operations.  The primary risk managed by using derivative instruments is interest rate risk.  The Company utilizes an interest rate swap agreement to effectively convert the Company's $12,000 variable-rate debt issue to a fixed rate.  Interest rate swaps are contracts in which a series of interest rate cash flows are exchanged over a prescribed period.  The notional amount on which the interest payments are based ($12,000) is not exchanged.  The interest rate swap provides that the Company pays the counterparty a fixed interest rate of 3.16% on the notional amount of $12,000.  In exchange, the counterparty pays the Company a variable interest rate based on 59% of the U.S. Dollar one-month LIBOR rate on the notional amount.  The intent is for the variable rate received from the swap counterparty to approximate the variable rate the Company pays to bondholders on its variable rate debt issue, resulting in a fixed rate being paid to the swap counterparty and reducing the Company's interest rate risk.  The Company’s net payment rate on the swap was 3.09% and 2.91% for the three months ended June 30, 2021 and 2020, respectively, and 3.02% and 2.59% for the six months ended June 30, 2021 and 2020, respectively.

The interest rate swap agreement is classified as a financial derivative used for non-trading activities.  The accounting standards regarding accounting for derivatives and hedging activities require companies to recognize all derivative instruments as either assets or liabilities at fair value on the balance sheet.  In accordance with the standards, the interest rate swap is recorded on the balance sheet in other deferred credits at fair value (see Note 6).

The Company uses regulatory accounting treatment rather than hedge accounting to defer the unrealized gains and losses on its interest rate swap.  These unrealized gains and losses are recorded as a regulatory asset.  Based on current ratemaking treatment, the Company expects the unrealized gains and losses to be recognized in rates as a component of interest expense as the swap settlements occur.  Swap settlements are recorded in the income statement with the hedged item as interest expense.  Swap settlements resulted in the reclassification from regulatory assets to interest expense of $93 and $87 for the three months ended June 30, 2021 and 2020, respectively, and $184 and $156 for the six months ended June 30, 2021 and 2020, respectively. The overall swap result was a (gain) loss of $212 and $189 for the three months ended June 30, 2021 and 2020, respectively, and $(219) and $901 for the six months ended June 30, 2021 and 2020, respectively. The Company expects to reclassify $369 from regulatory assets to interest expense as a result of swap settlements over the next 12 months.

The interest rate swap agreement contains provisions that require the Company to maintain a credit rating of at least BBB- with Standard & Poor's.  If the Company's rating were to fall below this rating, it would be in violation of these provisions, and the counterparty to the derivative could request immediate payment if the derivative was in a liability position.  On October 21, 2020, Standard & Poor's affirmed the Company's credit rating at A-, with a stable outlook and adequate liquidity.  The Company's interest rate swap was in a liability position as of June 30, 2021.  If a violation due to credit rating, or some other default provision, were triggered on June 30, 2021, the Company would have been required to pay the counterparty approximately $2,368.

The interest rate swap will expire on October 1, 2029.  Other than the interest rate swap, the Company has no other derivative instruments.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2021

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

6.  Fair Value of Financial Instruments 

The accounting standards regarding fair value measurements establish a fair value hierarchy which indicates the extent to which inputs used in measuring fair value are observable in the market.  Level 1 inputs include quoted prices for identical instruments and are the most observable.  Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, commodity rates and yield curves.  Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability.

The Company has recorded its interest rate swap liability at fair value in accordance with the standards.  The liability is recorded under the caption “Other deferred credits” on the balance sheet.  The table below illustrates the fair value of the interest rate swap as of the end of the reporting period.

Description	June 30, 2021	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,328	$2,328

Fair values are measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curve as of the date of the valuation.  These inputs to this calculation are deemed to be Level 2 inputs.  The balance sheet carrying value reflects the Company's credit quality as of June 30, 2021.  The rate used in discounting all prospective cash flows anticipated to be made under this swap reflects a representation of the yield to maturity for 30-year debt on utilities rated A- as of June 30, 2021.  The use of the Company's credit rating resulted in a reduction in the fair value of the swap liability of $40 as of June 30, 2021.  The fair value of the swap reflecting the Company's credit quality as of December 31, 2020 is shown in the table below.

Description	December 31, 2020	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,731	$2,731

The carrying amount of current assets and liabilities that are considered financial instruments approximates fair value as of the dates presented.  The Company's total long-term debt, with a carrying value of $129,905 at June 30, 2021, and $126,570 at December 31, 2020, had an estimated fair value of approximately $147,000 and $151,000, respectively.  The estimated fair value of debt was calculated using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration and risk profile.  These inputs to this calculation are deemed to be Level 2 inputs.  The Company recognized its credit rating in determining the yield curve, and did not factor in third party credit enhancements including the letter of credit on the 2008 Pennsylvania Economic Development Financing Authority Series A issue.

Customers' advances for construction and note receivable had carrying values at June 30, 2021 of $10,907 and $255, respectively.  At December 31, 2020, customers' advances for construction and note receivable had carrying values of $10,326 and $255, respectively.  The relative fair values of these amounts cannot be accurately estimated since the timing of future payment streams is dependent upon several factors, including new customer connections, customer consumption levels and future rate increases.

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Commitments

6 Months Ended

Jun. 30, 2021

Commitments [Abstract]

Commitments

7.  Commitments

The Company entered into a consent order agreement with the Pennsylvania Department of Environmental Protection in December 2016 after the Company determined it exceeded the action level for lead as established by the Lead and Copper Rule, or LCR, issued by the U.S. Environmental Protection Agency.  The Company did not have an exceedance in any subsequent compliance test.  Under the agreement, the Company successfully completed its commitment to exceed the LCR replacement schedule by replacing all the known company-owned lead service lines within four years from the agreement.  Any additional company-owned lead service lines that are discovered will be replaced and included in utility plant but are not expected to have a material impact on the financial position of the Company.

The Company was granted approval by the Pennsylvania Public Utility Commission, or PPUC, to modify its tariff to include the cost of the annual replacement of up to 400 lead customer-owned service lines over nine years from the agreement.  The tariff modification allows the Company to replace customer-owned service lines at its own initial cost.  The Company will record the costs as a regulatory asset to be recovered in future base rates to customers, over a four-year period.  The cost for the customer-owned lead service line replacements was approximately $1,258 and $1,204 through June 30, 2021 and December 31, 2020, respectively, and is included as a regulatory asset.  Based on its experience, the Company estimates that lead customer-owned service lines replacements will cost $1,500.  This estimate is subject to adjustment as more facts become available.

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Revenue

6 Months Ended

Jun. 30, 2021

Revenue [Abstract]

Revenue

8.  Revenue

The following table shows the Company’s revenues disaggregated by service and customer type.

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Water utility service
Residential	$	8,543	$	8,664	$	16,688	$	16,741
Commercial and industrial		3,629		3,216		6,939		6,557
Fire protection		795		783		1,601		1,584
Wastewater utility service
Residential		474		425		945		835
Commercial and industrial		79		75		158		151
Billing and revenue collection services		120		14		239		29
Collection services		11		–		11		14
Other revenue		10		5		20		10
Total Revenue from Contracts with Customers		13,661		13,182		26,601		25,921
Rents from regulated property		140		138		281		276
Total Operating Revenue	$	13,801	$	13,320	$	26,882	$	26,197

Utility Service

The Company provides utility service as a distinct and single performance obligation to each of its water and wastewater customers.  The transaction price is detailed in the tariff pursuant to an order by the PPUC and made publicly available.  There is no variable consideration and no free service, special rates, or subnormal charges to any customer.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied over time through the continuous provision of utility service through a stand-ready obligation to perform and the transfer of water or the collection of wastewater through a series of distinct transactions that are identical in nature and have the same pattern of transfer to the customer.  The Company uses an output method to recognize the utility service revenue over time.  The stand-ready obligation is recognized through the passage of time in the form of a fixed charge and the transfer of water or the collection of wastewater is recognized at a per unit rate based on the actual or estimated flow through the meter.  Each customer is invoiced every month and the invoice is due within twenty days.  The utility service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.  A contract asset for unbilled revenue is recognized for the passage of time and the actual or estimated usage from the latest meter reading to the end of the accounting period.  The methodology is standardized and consistently applied to reduce bias and the need for judgment.

Billing and Revenue Collection Service

The Company provides billing and revenue collection service as distinct performance obligations to three municipalities within the service territory of the Company.  The municipalities provide wastewater service to their residents and the Company acts as the billing and revenue collection agent for the municipalities.  The transaction price is a fixed amount per bill prepared as established in the contract.  There is no variable consideration.  Due to the fact that both the billing performance obligation and the revenue collection performance obligation are materially complete by the end of the reporting period, the Company does not allocate the transaction price between the two performance obligations.  The performance obligations are satisfied at a point in time when the bills are sent as the municipalities receive all the benefits and bears all of the risk of non-collection at that time.  Each municipality is invoiced when the bills are complete and the invoice is due within thirty days.  The billing and revenue collection service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.

Collection Service

The Company provides collection service as a distinct and single performance obligation to several municipalities within the service territory of the Company.  The municipalities provide wastewater service to their residents.  If those residents are delinquent in paying for their wastewater service, the municipalities request that the Company post for and shut off the supply of water to the premises of those residents.  When the resident is no longer delinquent, the Company will restore water service to the premises.  The transaction price for each posting, each shut off, and each restoration is a fixed amount as established in the contract.  There is no variable consideration.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied at a point in time when the posting, shut off, or restoration is completed as the municipalities receive all the benefits in the form of payment or no longer providing wastewater service.  Each municipality is invoiced periodically for the posting, shut offs, and restorations that have been completed since the last billing and the invoice is due within thirty days.  The collection service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.  A contract asset for unbilled revenue is recognized for postings, shut offs, and restorations that have been completed from the last billing to the end of the accounting period.

Service Line Protection Plan

The Company provides service line protection as a distinct and single performance obligation to current water customers that choose to participate.  The transaction price is detailed in the plan’s terms and conditions and made publicly available.  There is no variable consideration.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied over time through the continuous provision of service line protection through a stand-ready obligation to perform.  The Company uses an output method to recognize the service line protection revenue over time.  The stand-ready obligation is recognized through the passage of time.  A customer has a choice to prepay for an entire year or to pay in advance each month.  The service line protection plan has no returns or extended warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no material performance obligations remain unsatisfied as of the end of the reporting period.

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Rate Matters

6 Months Ended

Jun. 30, 2021

Rate Matters [Abstract]

Rate Matters

9.  Rate Matters

From time to time, the Company files applications for rate increases with the PPUC and is granted rate relief as a result of such requests.  Most recently, the PPUC authorized an increase in rates effective March 1, 2019.

The PPUC permits water utilities to collect a distribution system improvement charge, or DSIC.  The DSIC allows the Company to add a charge to customers' bills for qualified replacement costs of certain infrastructure without submitting a rate filing.  This surcharge mechanism typically adjusts periodically based on additional qualified capital expenditures completed or anticipated in a future period.  The DSIC is capped at 5% of base rates, and is reset to zero when new base rates that reflect the costs of those additions become effective or when a utility's earnings exceed a regulatory benchmark.  During its most recent quarterly reporting period, the Company's earnings were below the regulatory benchmark and the Company began recognizing DSIC in June 2021 for bills rendered after July 1, 2021 that included June consumption.  The DSIC provided revenues of $25 for the three and six months ended June 30, 2021 and $0 for the three and six months ended June 30, 2020.

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Pensions

6 Months Ended

Jun. 30, 2021

Pensions [Abstract]

Pensions

10.  Pensions

Components of Net Periodic Pension Cost

	Three Months Ended June 30						Six Months Ended June 30
	2021			2020			2021			2020
Service cost	$	272		$	235		$	543		$	469
Interest cost		302			364			604			728
Expected return on plan assets		(913	)		(800	)		(1,826	)		(1,599	)
Amortization of actuarial loss		121			93			242			185
Amortization of prior service cost		(3	)		(3	)		(6	)		(6	)
Rate-regulated adjustment		796			686			1,593			1,373
Net periodic pension expense	$	575		$	575		$	1,150		$	1,150

Pension service cost is recorded in operating expenses.  All other components of net periodic pension cost are recorded as other pension costs in other income (expenses).

Employer Contributions

The Company previously disclosed in its financial statements for the year ended December 31, 2020 that it expected to contribute $2,300 to its pension plans in 2021.  For the six months ended June 30, 2021, contributions of $1,150 have been made.  The Company expects to contribute the remaining $1,150 during the final two quarters of 2021.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2021

Stock-Based Compensation [Abstract]

Stock-Based Compensation

11.  Stock-Based Compensation

On May 2, 2016, the Company’s stockholders approved The York Water Company Long-Term Incentive Plan, or LTIP.  The LTIP was adopted to provide the incentive of long-term stock-based awards to officers, directors and key employees. The LTIP provides for the granting of nonqualified stock options, incentive stock options, stock appreciation rights, performance restricted stock grants and units, restricted stock grants and units, and unrestricted stock grants.  A maximum of 100,000 shares of common stock may be issued under the LTIP over the ten-year life of the plan.  The maximum number of shares of common stock subject to awards that may be granted to any participant in any one calendar year is 2,000.  Shares of common stock issued under the LTIP may be treasury shares or authorized but unissued shares.  The LTIP will be administered by the Compensation Committee of the Board, or the full Board, provided that the full Board will administer the LTIP as it relates to awards to non-employee directors of the Company.  The Company filed a registration statement with the Securities and Exchange Commission on May 11, 2016 covering the offering of stock under the LTIP.  The LTIP was effective on July 1, 2016.

On August 19, 2019, the Board accelerated the vesting period for restricted stock granted in 2017, 2018, and 2019 to one retiring officer from three years to that officer’s 2020 retirement date which had been fully recognized as of March 31, 2020.

On May 3, 2021, the Board awarded stock to non-employee directors effective May 3, 2021.  This stock award vested immediately.  On May 3, 2021, the Compensation Committee awarded restricted stock to officers and key employees effective May 3, 2021.  This restricted stock award vests ratably over three years beginning May 3, 2021.

The restricted stock awards provide the grantee with the rights of a shareholder, including the right to receive dividends and to vote such shares, but not the right to sell or otherwise transfer the shares during the restriction period.  As a result, the awards are included in common shares outstanding on the balance sheet.  Restricted stock awards result in compensation expense valued at the fair market value of the stock on the date of the grant and are amortized ratably over the restriction period.

The following tables summarize the stock grant amounts and activity for the six months ended June 30, 2021.

	Number of Shares	Grant Date Weighted Average Fair Value
Nonvested at beginning of the period	6,682		$39.30
Granted	6,170		$51.40
Vested	(2,820)		$39.94
Forfeited	–		–
Nonvested at end of the period	10,032		$46.56

For the three months ended June 30, 2021 and 2020, the statement of income includes $93 and $15 of stock-based compensation, respectively, and related recognized tax benefits of $27 and $4, respectively. For the six months ended June 30, 2021 and 2020, the statement of income includes $121 and $52 of stock-based compensation, respectively, and related recognized tax benefits of $35 and $15, respectively. The total fair value of the shares vested in the six months ended June 30, 2021 was $113. Total stock-based compensation related to nonvested awards not yet recognized is $467 which will be recognized over the remaining three year vesting period.

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Income Taxes

6 Months Ended

Jun. 30, 2021

Income Taxes [Abstract]

Income Taxes

12.  Income Taxes

The Company filed for a change in accounting method under the Internal Revenue Service tangible property regulations, or TPR, effective in 2014.  Under the change in accounting method, the Company is permitted to deduct the costs of certain asset improvements that were previously being capitalized and depreciated for tax purposes as an expense on its income tax return.  This ongoing deduction results in a reduction in the effective income tax rate, a net reduction in income tax expense, and a reduction in the amount of income taxes currently payable.  It also results in increases to deferred tax liabilities and regulatory assets representing the appropriate book and tax basis difference on capital additions.

The Company’s effective tax rate was 3.4% and 12.7% for the three months ended June 30, 2021 and 2020, respectively, and 5.2% and 12.6% for the six months ended June 30, 2021 and 2020, respectively.  The lower effective tax rate is primarily due to higher deductions from the TPR.  The effective tax rate will vary depending on the level of eligible asset improvements expensed for tax purposes under TPR each period.

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Revenue (Policies)

6 Months Ended

Jun. 30, 2021

Revenue [Abstract]

Revenue

Utility Service

The Company provides utility service as a distinct and single performance obligation to each of its water and wastewater customers.  The transaction price is detailed in the tariff pursuant to an order by the PPUC and made publicly available.  There is no variable consideration and no free service, special rates, or subnormal charges to any customer.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied over time through the continuous provision of utility service through a stand-ready obligation to perform and the transfer of water or the collection of wastewater through a series of distinct transactions that are identical in nature and have the same pattern of transfer to the customer.  The Company uses an output method to recognize the utility service revenue over time.  The stand-ready obligation is recognized through the passage of time in the form of a fixed charge and the transfer of water or the collection of wastewater is recognized at a per unit rate based on the actual or estimated flow through the meter.  Each customer is invoiced every month and the invoice is due within twenty days.  The utility service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.  A contract asset for unbilled revenue is recognized for the passage of time and the actual or estimated usage from the latest meter reading to the end of the accounting period.  The methodology is standardized and consistently applied to reduce bias and the need for judgment.

Billing and Revenue Collection Service

The Company provides billing and revenue collection service as distinct performance obligations to three municipalities within the service territory of the Company.  The municipalities provide wastewater service to their residents and the Company acts as the billing and revenue collection agent for the municipalities.  The transaction price is a fixed amount per bill prepared as established in the contract.  There is no variable consideration.  Due to the fact that both the billing performance obligation and the revenue collection performance obligation are materially complete by the end of the reporting period, the Company does not allocate the transaction price between the two performance obligations.  The performance obligations are satisfied at a point in time when the bills are sent as the municipalities receive all the benefits and bears all of the risk of non-collection at that time.  Each municipality is invoiced when the bills are complete and the invoice is due within thirty days.  The billing and revenue collection service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.

Collection Service

The Company provides collection service as a distinct and single performance obligation to several municipalities within the service territory of the Company.  The municipalities provide wastewater service to their residents.  If those residents are delinquent in paying for their wastewater service, the municipalities request that the Company post for and shut off the supply of water to the premises of those residents.  When the resident is no longer delinquent, the Company will restore water service to the premises.  The transaction price for each posting, each shut off, and each restoration is a fixed amount as established in the contract.  There is no variable consideration.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied at a point in time when the posting, shut off, or restoration is completed as the municipalities receive all the benefits in the form of payment or no longer providing wastewater service.  Each municipality is invoiced periodically for the posting, shut offs, and restorations that have been completed since the last billing and the invoice is due within thirty days.  The collection service has no returns or warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no performance obligations remain unsatisfied as of the end of the reporting period.  A contract asset for unbilled revenue is recognized for postings, shut offs, and restorations that have been completed from the last billing to the end of the accounting period.

Service Line Protection Plan

The Company provides service line protection as a distinct and single performance obligation to current water customers that choose to participate.  The transaction price is detailed in the plan’s terms and conditions and made publicly available.  There is no variable consideration.  Due to the fact that the contract includes a single performance obligation, no judgment is required to allocate the transaction price.  The performance obligation is satisfied over time through the continuous provision of service line protection through a stand-ready obligation to perform.  The Company uses an output method to recognize the service line protection revenue over time.  The stand-ready obligation is recognized through the passage of time.  A customer has a choice to prepay for an entire year or to pay in advance each month.  The service line protection plan has no returns or extended warranties associated with it.  No revenue is recognized from performance obligations satisfied in prior periods and no material performance obligations remain unsatisfied as of the end of the reporting period.

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Accounts Receivable and Contract Assets (Tables)

6 Months Ended

Jun. 30, 2021

Accounts Receivable and Contract Assets [Abstract]

Accounts Receivable and Contract Assets

Accounts receivable and contract assets are summarized in the following table:

	As of Jun. 30, 2021			As of Dec. 31, 2020			Change
Accounts receivable – customers	$	4,782		$	5,633		$	(851	)
Other receivables		216			206			10
		4,998			5,839			(841	)
Less: allowance for doubtful accounts		(792	)		(655	)		(137	)
Accounts receivable, net	$	4,206		$	5,184		$	(978	)
Unbilled revenue	$	3,179		$	2,847		$	332

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Common Stock and Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Common Stock and Earnings Per Share [Abstract]

Shares Used in Computing Basic and Diluted Earnings per Share

The following table summarizes the shares used in computing basic and diluted earnings per share:

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Weighted average common shares, basic		13,068,806		13,022,088		13,062,374		13,015,842
Effect of dilutive securities:
Employee stock-based compensation		1,435		882		1,088		579
Weighted average common shares, diluted		13,070,241		13,022,970		13,063,462		13,016,421

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Debt (Tables)

6 Months Ended

Jun. 30, 2021

Debt [Abstract]

Debt

For the six months ended June 30, 2021, the Company did not enter into any new long-term debt arrangements or modify its outstanding long-term debt, which is summarized in the table below.

	As of Jun. 30, 2021			As of Dec. 31, 2020
8.43% Senior Notes, Series D, due 2022	$	7,500		$	7,500
Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029		12,000			12,000
3.00% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series A of 2019, due 2036		10,500			10,500
3.10% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series B of 2019, due 2038		14,870			14,870
3.23% Senior Notes, due 2040		15,000			15,000
4.00% - 4.50% York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045		10,000			10,000
4.54% Senior Notes, due 2049		20,000			20,000
3.24% Senior Notes, due 2050		30,000			30,000
Committed Line of Credit, due September 2023		10,035			6,700
Total long-term debt		129,905			126,570
Less discount on issuance of long-term debt		(175	)		(181	)
Less unamortized debt issuance costs		(2,734	)		(2,816	)
Long-term portion	$	126,996		$	123,573

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2021

Fair Value of Financial Instruments [Abstract]

Fair Value of Interest Rate Swap

The Company has recorded its interest rate swap liability at fair value in accordance with the standards.  The liability is recorded under the caption “Other deferred credits” on the balance sheet.  The table below illustrates the fair value of the interest rate swap as of the end of the reporting period.

Description	June 30, 2021	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,328	$2,328

Fair values are measured as the present value of all expected future cash flows based on the LIBOR-based swap yield curve as of the date of the valuation.  These inputs to this calculation are deemed to be Level 2 inputs.  The balance sheet carrying value reflects the Company's credit quality as of June 30, 2021.  The rate used in discounting all prospective cash flows anticipated to be made under this swap reflects a representation of the yield to maturity for 30-year debt on utilities rated A- as of June 30, 2021.  The use of the Company's credit rating resulted in a reduction in the fair value of the swap liability of $40 as of June 30, 2021.  The fair value of the swap reflecting the Company's credit quality as of December 31, 2020 is shown in the table below.

Description	December 31, 2020	Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2)
Interest Rate Swap	$2,731	$2,731

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Revenue (Tables)

6 Months Ended

Jun. 30, 2021

Revenue [Abstract]

Revenues Disaggregated by Service and Customer Type

The following table shows the Company’s revenues disaggregated by service and customer type.

	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Water utility service
Residential	$	8,543	$	8,664	$	16,688	$	16,741
Commercial and industrial		3,629		3,216		6,939		6,557
Fire protection		795		783		1,601		1,584
Wastewater utility service
Residential		474		425		945		835
Commercial and industrial		79		75		158		151
Billing and revenue collection services		120		14		239		29
Collection services		11		–		11		14
Other revenue		10		5		20		10
Total Revenue from Contracts with Customers		13,661		13,182		26,601		25,921
Rents from regulated property		140		138		281		276
Total Operating Revenue	$	13,801	$	13,320	$	26,882	$	26,197

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Pensions (Tables)

6 Months Ended

Jun. 30, 2021

Pensions [Abstract]

Components of Net Periodic Pension Cost

Components of Net Periodic Pension Cost

	Three Months Ended June 30						Six Months Ended June 30
	2021			2020			2021			2020
Service cost	$	272		$	235		$	543		$	469
Interest cost		302			364			604			728
Expected return on plan assets		(913	)		(800	)		(1,826	)		(1,599	)
Amortization of actuarial loss		121			93			242			185
Amortization of prior service cost		(3	)		(3	)		(6	)		(6	)
Rate-regulated adjustment		796			686			1,593			1,373
Net periodic pension expense	$	575		$	575		$	1,150		$	1,150

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2021

Stock-Based Compensation [Abstract]

Restricted Stock

The following tables summarize the stock grant amounts and activity for the six months ended June 30, 2021.

	Number of Shares	Grant Date Weighted Average Fair Value
Nonvested at beginning of the period	6,682		$39.30
Granted	6,170		$51.40
Vested	(2,820)		$39.94
Forfeited	–		–
Nonvested at end of the period	10,032		$46.56

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Accounts Receivable and Contract Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Accounts Receivable and Contract Assets [Abstract]
Accounts receivable - customers	$ 4,782	$ 5,633
Other receivables	216	206
Accounts receivable	4,998	5,839
Less: allowance for doubtful accounts	(792)	(655)
Accounts receivable, net	4,206	5,184
Unbilled revenue	3,179	$ 2,847
Change in accounts receivable - customers	(851)
Change in other receivables	10
Change in accounts receivable	(841)
Change in allowance for doubtful accounts	(137)
Change in accounts receivable, net	(978)
Change in unbilled revenue	$ 332

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Common Stock and Earnings Per Share (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Mar. 11, 2013
Common Stock and Earnings Per Share [Abstract]
Net income	$ 4,484	$ 4,182	$ 8,189	$ 8,184
Shares Used in Computing Basic and Diluted Earnings per Share [Abstract]
Weighted average common shares, basic (in shares)	13,068,806	13,022,088	13,062,374	13,015,842
Effect of dilutive securities [Abstract]
Employee stock-based compensation (in shares)	1,435	882	1,088	579
Weighted average common shares, diluted (in shares)	13,070,241	13,022,970	13,063,462	13,016,421
Stock Repurchase Program [Abstract]
Number of shares authorized to be repurchased under the stock repurchase program (in shares)					1,200,000
Number of shares repurchased under the stock repurchase program (in shares)	0	0	0	0
Number of remaining shares authorized to be repurchased under the stock repurchase program (in shares)	618,004		618,004

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Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020
Debt [Abstract]
Total long-term debt	$ 129,905	$ 126,570
Less discount on issuance of long-term debt	(175)	(181)
Less unamortized debt issuance costs	(2,734)	(2,816)
Long-term portion	126,996	123,573
8.43% Senior Notes, Series D, due 2022 [Member]
Debt [Abstract]
Total long-term debt	$ 7,500	7,500
Interest rate	8.43%
Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029 [Member]
Debt [Abstract]
Total long-term debt	$ 12,000	12,000
3.00% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series A of 2019, due 2036 [Member]
Debt [Abstract]
Total long-term debt	$ 10,500	10,500
Interest rate	3.00%
3.10% Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series B of 2019, due 2038 [Member]
Debt [Abstract]
Total long-term debt	$ 14,870	14,870
Interest rate	3.10%
3.23% Senior Notes, due 2040 [Member]
Debt [Abstract]
Total long-term debt	$ 15,000	15,000
Interest rate	3.23%
4.00% - 4.50% York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045 [Member]
Debt [Abstract]
Total long-term debt	$ 10,000	10,000
4.00% - 4.50% York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045 [Member] | Minimum [Member]
Debt [Abstract]
Interest rate	4.00%
4.00% - 4.50% York County Industrial Development Authority Exempt Facilities Revenue Bonds, Series 2015, due 2029 - 2045 [Member] | Maximum [Member]
Debt [Abstract]
Interest rate	4.50%
4.54% Senior Notes, due 2049 [Member]
Debt [Abstract]
Total long-term debt	$ 20,000	20,000
Interest rate	4.54%
3.24% Senior Notes, due 2050 [Member]
Debt [Abstract]
Total long-term debt	$ 30,000	30,000
Interest rate	3.24%
Committed Line of Credit, due September 2023 [Member]
Debt [Abstract]
Total long-term debt	$ 10,035	$ 6,700

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Interest Rate Swap Agreement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Interest Rate Swap Agreement [Abstract]
Total long-term debt	$ 129,905		$ 129,905		$ 126,570
Interest Rate Swap [Member]
Interest Rate Swap Agreement [Abstract]
Notional amount of swap	$ 12,000		$ 12,000
Fixed interest rate	3.16%		3.16%
Net payment rate on swap	3.09%	2.91%	3.02%	2.59%
Interest rate swap settlements reclassified from regulatory assets to interest expense	$ 93	$ 87	$ 184	$ 156
Overall interest rate swap (gain) loss	212	$ 189	(219)	$ 901
Interest rate swap settlements to be reclassified during the next 12 months	369		369
Potential payment to counterparty	$ 2,368		$ 2,368
LIBOR [Member] | Interest Rate Swap [Member]
Interest Rate Swap Agreement [Abstract]
Percentage of variable interest rate	59.00%		59.00%
Term of variable rate			1 month
Variable Rate Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding Bonds, Series 2008A, due 2029 [Member]
Interest Rate Swap Agreement [Abstract]
Total long-term debt	$ 12,000		$ 12,000		$ 12,000

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Interest Rate Swap [Abstract]
Term of debt on utilities rated A- used to discount prospective cash flows	30 years
Reduction in fair value of swap liability	$ 40
Fair Value Measurements [Abstract]
Customers' advances for construction	10,907	$ 10,326
Note receivable	255	255
Fair Value on a Recurring Basis [Member]
Interest Rate Swap [Abstract]
Interest rate swap	2,328	2,731
Fair Value on a Recurring Basis [Member] | Fair Value Measurements at Reporting Date Using Significant Other Observable Inputs (Level 2) [Member]
Interest Rate Swap [Abstract]
Interest rate swap	2,328	2,731
Carrying Amount [Member]
Fair Value, Financial Liabilities [Abstract]
Total long-term debt	129,905	126,570
Estimated Fair Value [Member]
Fair Value, Financial Liabilities [Abstract]
Total long-term debt	$ 147,000	$ 151,000

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Commitments (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2021 USD ($) ServiceLine	Dec. 31, 2020 USD ($)
Company-Owned Lead Service Lines [Member]
Commitments [Abstract]
Term to replace all remaining company-owned lead service lines	4 years
Customer-Owned Lead Service Lines [Member]
Commitments [Abstract]
Number of lead customer-owned service lines to be replaced annually | ServiceLine	400
Term of tariff modification to replace customer-owned lead service lines	9 years
Recovery period of regulatory asset	4 years
Costs incurred to replace customer-owned lead service lines	$ 1,258	$ 1,204
Costs to be incurred to replace customer-owned lead service lines	$ 1,500

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Revenue (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) Municipality	Jun. 30, 2020 USD ($)
Revenue [Abstract]
Revenue from contracts with customers	$ 13,661	$ 13,182	$ 26,601	$ 25,921
Rents from regulated property	140	138	281	276
Total operating revenue	13,801	13,320	$ 26,882	26,197
Utility Service [Member]
Revenue [Abstract]
Number of days for customer to make payment after being invoiced			20 days
Water Utility Service [Member] | Residential [Member]
Revenue [Abstract]
Revenue from contracts with customers	8,543	8,664	$ 16,688	16,741
Water Utility Service [Member] | Commercial and Industrial [Member]
Revenue [Abstract]
Revenue from contracts with customers	3,629	3,216	6,939	6,557
Water Utility Service [Member] | Fire Protection [Member]
Revenue [Abstract]
Revenue from contracts with customers	795	783	1,601	1,584
Wastewater Utility Service [Member] | Residential [Member]
Revenue [Abstract]
Revenue from contracts with customers	474	425	945	835
Wastewater Utility Service [Member] | Commercial and Industrial [Member]
Revenue [Abstract]
Revenue from contracts with customers	79	75	158	151
Billing and Revenue Collection Services [Member]
Revenue [Abstract]
Revenue from contracts with customers	120	14	$ 239	29
Number of municipalities within the service territory provided service | Municipality			3
Number of days for customer to make payment after being invoiced			30 days
Collection Services [Member]
Revenue [Abstract]
Revenue from contracts with customers	11	0	$ 11	14
Number of days for customer to make payment after being invoiced			30 days
Other Revenue [Member]
Revenue [Abstract]
Revenue from contracts with customers	$ 10	$ 5	$ 20	$ 10

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Rate Matters (Details) - DSIC [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Rate Matters [Abstract]
Distribution system improvement charge revenue	$ 25	$ 0	$ 25	$ 0
PPUC [Member] | Maximum [Member]
Rate Matters [Abstract]
Distribution system improvement charge percentage over base rate			5.00%
PPUC [Member] | Minimum [Member]
Rate Matters [Abstract]
Distribution system improvement charge percentage over base rate			0.00%

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Pensions (Details) - Pension Plans [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Components of Net Periodic Pension Cost [Abstract]
Service cost	$ 272	$ 235	$ 543	$ 469
Interest cost	302	364	604	728
Expected return on plan assets	(913)	(800)	(1,826)	(1,599)
Amortization of actuarial loss	121	93	242	185
Amortization of prior service cost	(3)	(3)	(6)	(6)
Rate-regulated adjustment	796	686	1,593	1,373
Net periodic pension expense	575	$ 575	1,150	$ 1,150
Employer Contributions [Abstract]
Estimated employer contributions in 2021					$ 2,300
Contributions made by employer			1,150
Estimated future contributions in 2021	$ 1,150		$ 1,150

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Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
	Aug. 19, 2019 Officer	Jun. 30, 2021 USD ($) $ / shares shares	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) $ / shares shares	Jun. 30, 2020 USD ($)	May 02, 2016 shares
Officer Retiring in 2020 [Member]
Stock-Based Compensation [Abstract]
Number of retiring officers receiving accelerated vesting period | Officer	1
LTIP [Member]
Stock-Based Compensation [Abstract]
Maximum number of shares of common stock that can be issued under the plan (in shares)						100,000
Term of plan				10 years
Maximum number of shares of common stock subject to awards that may be granted to a participant per calendar year (in shares)				2,000
Restricted Stock [Member] | LTIP [Member]
Number of Shares [Roll Forward]
Nonvested at beginning of the period (in shares)				6,682
Granted (in shares)				6,170
Vested (in shares)				(2,820)
Forfeited (in shares)				0
Nonvested at end of the period (in shares)		10,032		10,032
Grant Date Weighted Average Fair Value [Abstract]
Nonvested at beginning of the period (in dollars per share) | $ / shares				$ 39.30
Granted (in dollars per share) | $ / shares				51.40
Vested (in dollars per share) | $ / shares				39.94
Forfeited (in dollars per share) | $ / shares				0
Nonvested at end of the period (in dollars per share) | $ / shares		$ 46.56		$ 46.56
Stock-Based Compensation Expense [Abstract]
Stock-based compensation expense | $		$ 93	$ 15	$ 121	$ 52
Recognized tax benefits related to stock-based compensation expense | $		27	$ 4	35	$ 15
Fair value of vested shares | $				113
Stock-based compensation expense not yet recognized | $		$ 467		$ 467
Period of recognition				3 years
Restricted Stock [Member] | LTIP [Member] | Officer Retiring in 2020 [Member]
Stock-Based Compensation [Abstract]
Vesting period				3 years
Restricted Stock [Member] | LTIP [Member] | Officers and Key Employees [Member]
Stock-Based Compensation [Abstract]
Vesting period				3 years

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Taxes [Abstract]
Effective tax rate	3.40%	12.70%	5.20%	12.60%