deliveries from SEWD.The City has told SEWD that it believes it was overcharged between $800,000  and $2,300,000. If the City’s assertion is correct, it could mean that the Company was undercharged.The Company cannot determine whether SEWD agrees with the City’s assertion or whether and in what amount SEWD will make a refund to the City. If SEWD were to make a refund to the City, it could have a future operating fund shortfall, which might result in higher future purchased water costs for the Company’s Stockton district. However, the Company believes that if purchased water costs increased, the increase would be recovered in customers’ future billings. The Company is involved in other proceedings or litigation arising in the ordinary course of operations.The Company believes the ultimate resolution of such matters will not materially affect its finan- cial position, results of operations or cash flows. Negotiations to renew separate bank credit agreements for the Company and Cal Water that were scheduled to expire on April 30, 2003, have been completed.The new agreements, which replace a com- bined $60 million credit line, became effective on February 28, 2003, and expire on April 30, 2005. Under the new agreements the Company will have available a total of $65 million. Of the total, $55 million is designated for Cal Water and $10 million for the Company including funding of its subsidiaries’ operations. Cal Water’s $55 million portion can be used solely for purposes of the regulated California utility. On July 1, 2003, the credit facility available to Cal Water will be reduced to $45 million.The reduction will lower the commitment fee paid by Cal Water on the unused portion of the credit line. Like the prior agreements, the new agreements also have a 30-day out-of-debt requirement that must be met by December 31, 2003. On February 28, 2003, the Company issued two series of senior notes to institutional investors, each for $10 million.The 5.48% Series L notes mature in February 2018.The 4.58% Series K notes mature in December 2010. Proceeds from the notes were used to repay outstanding short-term bank borrowings. In February 2003, the Commission staff recommended that the Company be fined up to $9,600,000 and refund $470,000 in revenue for failing to report two acquisitions as required by the Commission. One acquisition was completed prior to adoption of the reporting requirement by the Commission; the other was inadvertently not reported.The Company acquired the two water systems, which serve 283 customers, for approximately $140,000.The Company is preparing its response to the staff report. The Company does not believe that the staff’s recommendation will be upheld when this matter is considered by the Commission; accordingly, no liability has been accrued. 16 SUBSEQUENT EVENTS 54 CALIFORNIA WATER SERVICE GROUP