Greetings, ladies and gentlemen. Thank you for standing by. Welcome to the Global Water Resources, Inc. 2020 Second Quarter Conference Call. [Operator Instructions] I would like to remind everyone that this call is being recorded on August 6, 2020, at 1:00 P.M. Eastern Time. I would now like to turn the conference over to Heather Krupa, Vice President and Controller. Please go ahead.

Welcome, everyone, and thank you for joining us on today's call. Yesterday, we issued our 2020 second quarter financial results by press release, a copy of which is available on our website at www.gwresources.com. Speaking today is Ron Fleming, President and Chief Executive Officer; and Mike Liebman, Chief Financial Officer. Mr. Fleming will summarize the key operational events of the quarter, following which Mr. Liebman will review the financial results for the quarter. Mr. Fleming and Mr. Liebman will be available for questions at the end of the call. Before we begin, I would like to remind you that certain information presented today may include forward-looking statements. Such statements reflect the company's current expectations, estimates, projections and assumptions regarding future events. These forward-looking statements involve a number of assumptions, risks, uncertainties, estimates and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on any forward-looking statements, which reflect management's views as of the date hereof and are not guarantees of future performance. For additional information regarding factors that may affect future results, please read the sections Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations, included within our latest Form 10-K filed with the SEC. Such filings are available at www.sec.gov. Certain non-GAAP measures may be included within today's call. For a reconciliation of these measures to the comparable GAAP financial measures, please see the tables included in yesterday's earnings release, which is available on our website. Unless otherwise stated, all amounts discussed are in U.S. dollars. I will now turn the call over to Mr. Ron Fleming.

Thank you, Heather. Good morning, everyone, and thank you for joining us today. We are very pleased to report the results for the second quarter of 2020. First and foremost, I always begin by discussing our top priority, which is the health and safety of our employees and our customers. Considering the COVID-19 pandemic we are currently navigating, it is appropriate to start here again. As an essential utility whose services are vital during a health pandemic, our company moved quickly and early to implement all national, local and industry-specific guidance to maximize social distancing and other measures to protect the health and safety of our employees and customers and safeguard our operations. These measures continue to be modified as guidance and the situation on the ground changes, but generally, all measures remain in place and have gone well, and we have not incurred any significant disruptions throughout 2020 resulting from the pandemic, either operationally or financially. However, at this point, we cannot predict the impact it could have on operations and financial results going forward. We expect some customers to eventually have difficulty paying their utility bills due to COVID-19-related unemployment, but we're ready to work with them to set up payment plans and offer other options. For example, we previously rolled out an expanded customer assistance program. In the meantime, we voluntarily have suspended disconnections for non-payment and eliminated late fees. Moving back to our typical operational highlights. I am very pleased to announce that in accordance with our top priority, we continue to perform at an extremely high level on employee safety and regulatory compliance nonrecordable incident. As of today, our staff has only experienced 2 minor OSHA recordable incidents in 1,068 days. As evidence of our success in the quarter, we were able to reduce our…

Thank you, Ron. Hello, everyone. Total revenue for the quarter was $9.9 million, which was up $768,000 or 8.4% compared to Q2 of 2019. This increase is primarily driven by the 4.2% organic connection growth, increased consumption and our approved rate increase. Year-to-date through Q2 of 2020, revenue was up -- was at $18.1 million compared to $16.8 million in 2019. This reflects an increase of $1.3 million or 7.6%. Similar to the quarter, this increase is primarily driven by the organic connection growth, increased consumption and approved rate increase. Operating expenses in Q2 2020 were $8.2 million compared to $6.9 million in 2019. This is an increase of $1.3 million or 18.7%. Notable changes in operating expenses include increased operating and maintenance costs by $123,000; increased G&A expense by $975,000, which can primarily be attributed to a non-cash deferred compensation expense of $654,000 related to restricted shares awarded to the executive team. It's worth noting that to some extent, we have shifted towards restricted shares and options as incentive compensation for our employees and away from equity-like incentive compensation that results in real cash expense to the company. The remaining increases in G&A is primarily driven by increased professional fees and personnel expense. Lastly, we had increased depreciation and amortization expense by $188,000, primarily due to the increases in our fixed assets associated with our capital expenditures plan. Year-to-date through Q2 of 2020, operating expenses were $14.6 million compared to $13.4 million in 2019. This is an increase of $1.2 million or 8.9%. Now to discuss other expense. Other expense for Q2 of 2020 was $1.8 million compared to $1.1 million in 2019. The $700,000 increase was primarily due to non-cash asset disposals of $550,000. Year-to-date through Q2 of 2020, other expense was $3 million compared to $1.3 million…

Thank you, Mike. It is clear, we remain well positioned to weather these uncertain and turbulent times with a strong balance sheet and disciplined strategy. In fact, from an operational and financial perspective, we have never been stronger. And we have more than ample liquidity and capital resources to pursue expansion through organic growth, acquisitions and new projects, both big and small. As we handle this high growth, we intend to remain at the forefront of the water management industry and advance our mission of achieving efficiency and consolidation. We truly believe that expanding our platform and applying our expertise throughout these regional service areas and to new utilities will be beneficial to all stakeholders involved. We appreciate your investment in and support of us as we grow Global Water to address important utility, water resource and economic development issues in Arizona and potentially beyond. That highlight concludes our prepared remarks. Thank you. Mike and I are now available to answer any questions.

[Operator instructions] The first question is from Gerry Sweeney of ROTH Capital.

Just a couple of quick questions here. I know you discussed the growth permits, especially in June -- I'm sorry, July. I know, I think April and May were actually down a little bit. But just curious as to time line and from once those permits are issued, how long to breaking ground? And some of the homes were up and occupied. And just want to get a little bit better tone and tenor of how construction operations, etcetera, going in Maricopa?

Yes. Sure, absolutely. So we actually did over 100 permits in June, and then it was that stat that I gave earlier in July. So the last 2 months have been quite strong and more than recovered from the dip in March, April and May. So the way that process works, Gerry, is it's typically less than 12 months from the time the home builder built the permit to their goal of having a home that's available for sale. So they pull the meters a little bit earlier than that, so they have an active meter. The builder does that before it gets converted to the final end user, so that they have water availability for part of the construction process. So we're somewhere before that. So it's safe to say, it's typically well within a year.

Got it. And then just a little bit of a different question. I know some time ago, you had an announcement with City of Coolidge, Saint Holdings providing some operations for that area. That's also where I think Nikola Motors is located. Are you going to be providing some of the services to Nikola Motors? Or is that the area, just curious that's been an area of interest as of late, just the company in its entirety?

Yes, for sure. Look, we're very excited about that. Progress continues to be made. I would think about it this way, Gerry. Nikola is the project that's really going to put that entire region on the map and attract further industrial and commercial and ultimately, residential growth because of its location there. We signed a contract with a land owner, the Saint Holdings, you mentioned them, for an area of, I think it's north of 2,000 acres actually for what they call Inland Port Arizona. They sold about 300 or 400 acres of that entire project to Nikola. So it's part of it, but it's a much smaller part than what's actually planned and is occurring. And then beyond that, going into that area, it's not really efficient, and from a regional planning perspective to build a utility just for an industrial park, even if it's sizable like that 2,000 acres. So we worked with the City of Coolidge to ensure we could be the integrated water and wastewater provider for a much larger area. And ultimately, sign a license agreement with them to be that provider for 30 square miles. So Nikola is the one moving the fastest. Nikola is the -- kind of the one catching all the attention. But it will really start, we believe, lots of activity in that area, where we will be the provider. At this point, I will say, we filed for the Certificate of Convenience and Necessity, our service area right with the Corporation Commission in the quarter for that industrial park. And at this point, it looks like we'll be getting that CCN in by the end of the year, and we've already started to move into more detailed engineering design. So lots of activity, lots of good stuff going on. Today, I can't tell you I've inked the contract with Nikola to also be their provider, but we're working on that is all I can say for the moment.

[Operator Instructions]. This concludes the question-and-answer session. I would like to turn the conference back over to Ron Fleming for any closing remarks.

Thank you, operator. Again, I would just like to thank everybody for participating on this call and for your continued interest in Global Water Resources. Thanks, and we look forward to speaking with you again.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.