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Fiscal Year Ended September 30, 2018

MACON-BIBB, GEORGIA


Table of

2019 Save The Dates

CONTENTS 2 4

Welcome

5

Meet the Board A Continuation of Excellence in Leadership MWA Vision and Mission Our Guiding Principles

5

MWA Core Values Who We Are as Water Professionals

9

The MWA System – Quality, Capacity, & Reliability America’s Best Tasting Drinking Water

11

Awards and Accolades Striving for Perfection, No System Deficiencies

12

Community Partnerships Building a Better Community with Our Partners

13

Asset Management Reinvesting in the Infrastructure of Life

15

Economic Development Honoring Industry

17

Financial Summary Revenues, Expenses and More

19

Financial Leverage Evident in Our Debt Coverage, Bond Rating

20

Affordability The Value of Water and Sewer Services

21

Competitiveness How We Rank According to Rates

May 5 – 11, 2019

National Drinking Water Week

May 6, 2019

Water Professionals Appreciation Day

June 1, 2019

14th Annual MWA Kids Fishing Derby

October 12, 2019

15th Annual Ocmulgee Alive! River Cleanup


Welcome

Tony Rojas, MWA President & Executive Director

Guy Boyle, Executive VP of Business Operations

While the Authority’s Comprehensive Annual Finance Report (CAFR) communicates our financial performance for a fiscal year, it does not tell the entire story of our role as a utility and the positive impact our Board Members and dedicated employees have on our community through their service and leadership. That is the purpose of this Popular Annual Financial Report (PAFR), and this is why we publish it.

It’s been a full year since we presented the Popular Annual Financial Report (PAFR) to our customers and what a busy year it has been. Since last reporting to you on our operations, we have replaced our 35 year old in-house, proprietary billing and financial software system with a state-of-the-art software package from Cayenta Software. Work began on this project in 2015 and we launched the system on April 4, 2018. The new system has enabled us to implement daily billing, additional payment options and retrieve customer information in a more efficient and timely manner, to name a few of the benefits.

Topping the list of the Macon Water Authority’s (MWA) most recent investments in Macon-Bibb County’s future is the project to renew and rehabilitate our Lower Poplar and Rocky Creek Water Reclamation Facilities. The $40 million investment, our largest capital project in recent history, will ensure these facilities are available to meet our customers’ needs while continuing to fulfill their fundamental role of protecting the Ocmulgee River. The operators of these facilities, members of our Maintenance Department and the Design/ Build Team of Haskell and Barge Design are to be commended for maintaining the efficient operation of these treatment facilities while major components are under construction and keeping the project on schedule and in budget. Another notable investment for the Authority is the project to replace our Enterprise Resource Planning and Customer Billing Software. This conversion project certainly presented its share of challenges; however the associates of our Customer Care, Finance, Billing, Field Service, and Meter Reading Departments were up to the challenge. I know they join me in thanking our customers for their patience and understanding during some of the most difficult phases of the conversion. Finally, I would also like to say a special thanks to all of our employees for another great year. Whether you are serving in the field, in one of our offices, one of our plants or laboratories, you continue to serve a critical mission and reflect our values in all the good work you do. In the pages of this 2018 PAFR, we trust that you will gain a better understanding of the operations of the MWA and our commitment to providing you with quality water and sewer services. Sincerely, Tony Rojas | President & Executive Director

We are investing more than $40 million to completely rehabilitate our two wastewater reclamation facilities.

These upgrades and enhancements are all taking place while maintaining affordable and competitive rates. In fact, our rates continue to be some of the most affordable in the state of Georgia. The PAFR is a condensed version of what may be found in our Comprehensive Annual Financial Report (CAFR), which is located on our website at www.maconwater.org. The contents of this 2018 PAFR reflect another strong financial year. Although we did experience a slight decline in seasonal water demand by our customers, the financial performance of the Authority remained very strong and we once again received a clean audit report from our independent audit firm for 2018. The Authority was once again recognized for outstanding achievement in financial reporting by the Government Finance Officers Association (GFOA), for our Fiscal Year 2017 CAFR. I hope you find this PAFR informative, and I would personally welcome any comments or feedback regarding its content.

...while maintaining affordable and competitive rates. In fact, our rates Sincerely, continue to be some of Guy Boyle | EVP Business Operations & the most affordable in Chief Financial Officer the state of Georgia.

MaconWater.org • 2


Harold Blevins

Information Technology Director

Macon-Bibb County Voters

Kirk Nylund Customer Care Director

Guy Boyle

Macon Water Authority Board

Exective Vice President Business Operations

Arleen Samuels

Accounting and Purchasing Manager

Systems Analyst

Network Analyst

BI Data Analyst

User Support Analyst

Billing

Customer Care

Field Services

Meter Readers

Accounting

Accounts Payable

Purchasing

Meter Repair

Financial Analyst

Virgil Adams

General Counsel

Tony Rojas

Paul Cumbess

Exective Director & President

Stephanie King Lisa Golphin Senior Executive Assistant Strategic Planning

Interim Human Resources Director

Warehouse Coordinator

Warehouse Clerks

Human Resources Administrator

Risk Management Coordinator

Mark Wyzalek

Laboratory

Env Comp/Laboratory Director

Kendra Finney Executive Administrative Assistant

Frank Evans

Maintenance, Instrumentation, Electrical

Gary McCoy

Water Treatment Operators

Maintenance Manager

Ray Shell

Water Treatment Director

Executive Vice President Field & Plant Operations

Wastewater Treatment Director

Michel Wanna

3 • MaconWater.org

Macon Water Authority Organizational Chart

Building & Grounds

Wastewater Treatment Operators

Field Operations Director

Engineering

Blaine Harrell

MSI Truck Drivers

MSI Manager

Training O icer

Darryl Macy

Water Distribution & Sewer Conveyance Manager

Water Distribution

Sewer Conveyance


Meet the BOARD The Macon Water Authority (MWA) was created by an Act of the General Assembly of the State of Georgia. The MWA is governed by a seven-member Board of Directors who consist of a Chairman elected countywide, four Members elected from respective Districts of Macon-Bibb County, and two Members appointed from the ranks of the elected Representatives of the Macon-Bibb County Commission. Sam Hart, Sr. completed his fourth year as the Chairman of the MWA, prior to being re-elected in the Spring of 2018. Frank Patterson, who has served District 4 since 2004, also was re-elected and continues in his role as Vice Chairman. Finally, Dr. Anissa Jones won the 2018 election for the District 1 seat, becoming the newest Member of the Authority. Additional Members of the MWA Board include Javors J. Lucas, who has served District 2 for 36 years, and Dwight Jones, who is in his fifth year representing District 3.

Rounding out the MWA Board are the two appointed Members from the Macon-Bibb County Commission – Bert Bivins, III and Larry Schlesinger, another newcomer, having just completed his first year on the Authority. MWA Board Meetings are held on the first Thursday of every month and are open to the public. The MWA also conducts business through monthly Committee Meetings, which include referrals to the Pension, Finance, Engineering, Personnel, Policy and Outdoor Recreation Committees. With two new members joining the ranks of the MWA Board, the community benefits from both experience and energy, with all Authority Members noted for character and integrity as well. The leadership offered by the MWA Board is a major contributor to one of the best water utilities in the industry. For complete bios on all MWA Board Members, please visit www.maconwater.org.

Board Members from left: Bert Bivins, III, Dwight Jones, Dr. Anissa Jones, Samuel F. Hart, Sr., Frank Patterson, Larry Schlesinger, and Javors Lucas.

Board Member Spotlight: Dr. Anissa Jones

Dr. Anissa Monique Jones, DC, is a Macon native and the newest Member of the MWA Board, representing the citizens of District 1. Dr. Jones won the General Election for the District 1 seat of the MWA in the Summer of 2018. Upon taking office, Dr. Jones was appointed by her fellow MWA Board Members to Chair the Authority’s Personnel Committee, and likewise serve on the Board of Directors for Macon Soils and the Macon Water Alliance. Professionally, Dr. Jones is the first African-American Chiropractor in Macon, Georgia, who has been practicing locally for more than 20 years. She received her B.S. in Biology from Fort Valley State University in 1994, and then her Doctor of Chiropractic from Life University in 1998. In addition, she also graduated with an MBA from Wesleyan College in 2005. Following a one-year residency and Associateship with Gaudet Chiropractic Center, she established her own practice – Total Health Chiropractic and Wellness Center – in 2002. Dr. Jones is a celebrated physician in the region, being named as a top American Chiropractic by the Consumers’ Research Council of America. She also was awarded the 2005 Heritage Registry of Who’s Who and the Foxington Registry of Who’s Who Executives and Business Professionals. In 2013, Dr. Jones was given the distinct honor of becoming the first African-American and the first female to be the President of the Georgia Chiropractic Association for District 14. In 2017, she was voted Best of the Best Chiropractic and Massage Therapy Facility in Macon. The complete bio on Dr. Jones is available on the MWA website at www.maconwater.org. Dr. Anissa Jones was sworn into office in January of 2019.

MaconWater.org • 4


Our

MWA CORE VALUES

We will grow as a premier regional public utility that embraces innovation, while focused on the comprehensive management of water resources and recognized for superior customer service, financial and environmental stewardship, community service, and leadership.

Service

VISION

Our

MISSION Our mission is to provide quality water and sewer services for the enhancement of the quality of life and economic well‐ being of the customers and communities we serve.

5 • MaconWater.org

MWA Core Values are evident in everything we do, exemplified by the talents of our 222 employees, working within various departments of utility operations.

Taking the lead in providing outstanding service for all who interact or conduct business with the Macon Water Authority are the utility’s Customer Care, Administration and Operations Departments. These groups of MWA employees are on the front line of responding to customer needs, whether at the Authority’s headquarters, treatment facilities or through the utility’s call center. Currently, Customer Care is more efficient than ever, thanks to the MWA’s adoption and implementation last year of the innovative Cayenta Billing and Financial Software.

Integrity

Many organizations and professionals talk about their integrity, but at the MWA it is exemplified through the Finance Department, which oversees the sound, fiscally responsible stewardship of ratepayer dollars. There are no shortcuts to business integrity, which is evident in the MWA Finance Department being awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association (GFOA) for 21 consecutive years. This past year, the GFOA also honored the MWA with the Award for Outstanding Achievement in Popular Annual Financial Reporting (PAFR) for the sixth consecutive year. With bond ratings and debt coverage ratios among the best in the industry, there is no doubting the integrity of the MWA’s Finance Department to operate honestly and openly, while striving to maintain the public’s trust.

Innovation

Innovation is not only the use of new technology to work smarter, it’s thinking “outside the box” as well. The MWA’s Engineering and Maintenance Departments quite frequently utilize innovation to resolve problems and offer resolutions to various issues. Whether being the first utility of its kind to use drone technology to locate and address maintenance issues within the system, or advanced SCADA Technology to monitor all points of water production and distribution, the MWA embraces innovation and change for the opportunities they offer us to do our jobs better.


MaconWater.org • 6


7 • MaconWater.org


Professionalism

Professionalism is not only a “look,” it is a way of life that others want to emulate. If a utility leads the industry in regulatory compliance – to the point where others turn to it for guidance in the ever-changing world of regulatory oversight – there is no questioning its level of professionalism. The water professionals working in the MWA’s Department of Laboratory and Environmental Compliance are noted for their professional certifications, credentials and experience. Among the leading lab technicians in the state, they are committed to protecting the public’s health and welfare, as well as the Authority’s reputation as a model water and sewer utility in the industry.

Safety

The water industry is not commonly referenced as a dangerous business. While accidents may happen, the MWA takes every step possible to ensure the safety and welfare of all employees and customers. Whether it is through the production of clean, safe drinking water for our customers or the reclamation of treated wastewater, safety comes first.

Stewardship

Stewardship certainly describes the core value of the MWA when caring for the financial resources of its stakeholders, but it’s also applicable for a utility that oversees the care and cultivation of natural resources, such as our lakes, rivers and streams. MWA Water Operations make sure clean, safe drinking water arrives at every home and business we serve. In addition, Wastewater Operations make sure residential, commercial and industrial waste are properly collected and treated to assure that our environment remains clean and pristine. As a multiple winner of industry awards for system and facility excellence, the MWA is well respected among its peers as a “green” utility dedicated to environmental stewardship. MaconWater.org • 8


Quality, Capacity, and Reliability ARE HALLMARKS OF OUR SYSTEM

Thanks to the work of Authority leadership and our 222 employees, the MWA provides customers with clean, safe and reliable drinking water 24 hours a day and 365 days a year. Our water quality, storage capacity, and distribution reliability set us apart from others in the industry, as evident by the American Water Works Association (AWWA) selecting the MWA a decade ago as the Best Tasting Drinking Water in North America.

Water Quality…made possible by:

• The MWA going above and beyond minimum testing standards. • An annual system review by water professionals and regulators from Georgia EPD. • High quality source water drawn from Javors Lucas Lake and the Ocmulgee River. • Reinvestments in the system to improve our assets and operations.

System Capacity

• Javors Lucas Lake holds approximately 5.9 billion gallons of water at full pool. • The MWA can pump 35-110 million gallons per day (MGD) from the Ocmulgee River, as needed. • The Frank C. Amerson, Jr. Water Treatment Plant has a production capacity of 60 MGD, which can expand to 90 MGD in the future. • The MWA has 36.9 million gallons of finished drinking storage in 23 tanks, distributed to customers through 1,664 miles of transmission mains and water lines.

Distribution Reliability

Thanks to proper planning, prepared contingencies, system redundancies, and a dedicated staff of water professionals, MWA customers can turn on their faucets without worrying if water is going to flow. Even during natural disasters or emergencies that threaten the integrity of our system, service interruptions and outages are rare occurrences at the MWA. 9 • MaconWater.org


The Pursuit to Perfection: “NO DEFICIENCIES” When the Georgia Environmental Protection Division (EPD) comes to review your system, it can be an intimidating and daunting process for a water utility. And even when the results constitute a passing grade, the regulatory agency typically finds deficiencies that need to be addressed. So you can imagine the excitement among MWA water professionals when the state’s top regulatory agency found “No Deficiencies” in the MWA system during last year’s sanitary survey, which is a complete analysis of facilities, operations, and all other aspects of drinking water production and distribution. Perhaps these results reflect the MWA’s continual pursuit of perfection? “In all of my 38 years in the water industry, including 16 years at the Macon Water Authority, this is the first time I’ve ever seen EPD report that they found no deficiencies in a sanitary survey,” says Gary McCoy, MWA Director of Water Operations. “EPD looks very hard for deficiencies in all of the public water systems they examine throughout the state. We scored an excellent evaluation, which not too many systems can claim.” Regulatory officials from Georgia EPD visited the MWA for four days of total evaluation of the water system. This EPD sanitary survey is conducted at public water utilities every three years. During this past year’s review, EPD officials spent three days at the Amerson Water Treatment Plant and one day touring all of the water tanks in the system, in addition to checking all records of the distribution system. Additional points of examination of the EPD sanitary survey included a review of lab tests for the past 10 years, as well as the Authority’s safety program and its maintenance records. EPD officials also inspected MWA pumps and meters, checked to make sure filters at the Amerson Plant performed efficiently, made sure chemical processes functioned properly, and much more. MaconWater.org • 10


‘18

Awards and

RECOGNITIONS GFOA Certificate of Achievement The Government Finance Officers Association (GFOA) recognized the MWA with its Certificate of Achievement for Excellence in Financial Reporting for the 21st consecutive year.

GFOA Outstanding Achievement Award GFOA also recognized the MWA with its Award for Outstanding Achievement in Popular Annual Financial Reporting for the sixth consecutive year.

GAWP Golden Hydrant Society

GAWP Wastewater Plant Platinum Award

The MWA’s Reggie Cooper was inducted into the inaugural class of the Georgia Association of Water Professionals’ (GAWP) Golden Hydrant Society, which recognizes individual achievement in the field of water distribution.

The Rocky Creek Water Reclamation Facility received a GAWP Platinum Award for attaining 100% permit compliance for 19 consecutive years, making it one of only three facilities in Georgia to achieve this feat.

GAWP Certificate of Achievement The Frank C. Amerson, Jr. Water Treatment Plant received a GAWP Certificate of Achievement, or honorable mention, for Best Operated Water Plant in Georgia.

GAWP Water Plant Gold Award The Amerson Water Treatment Plant also received a GAWP Gold Award for achieving 100% permit compliance – that’s no permit violations in the pretreatment or treatment of drinking water – during the year.

GAWP Wastewater Plant Gold Award The Lower Poplar Water Reclamation Facility received a GAWP Gold Award for attaining 100% permit compliance during the year.

11 • MaconWater.org

GAWP President’s Award Gary McCoy, MWA Director of Water Operations, received the GAWP President’s Award for outstanding leadership and support of this industry association and its water professionals.

GAWP Collection System Platinum Award GAWP presented MWA employees with the Collection System of Excellence Platinum Award for achieving a score of 95% or higher on the annual review of its sewer system for five consecutive years.

GAWP Distribution System Gold Award GAWP also presented the MWA with its Water Distribution System of Excellence Gold Award for achieving a score of 95% or higher on the annual review of its water system this past year.


Community

Some of the Alliance partners and beneficiaries include:

PARTNERSHIPS Macon Water Alliance Exemplifies the Power of Partnerships The MWA formed the Macon Water Alliance in 2015 as a non-profit, 501(c)3 dedicated to a mission of providing and maintaining funds for the support and enhancement of community education on environmental issues, educational activities and water resource focused assistance programs. To make this possible, the Macon Water Alliance facilitates partnerships with like-minded organizations and individuals within the community and industry. The Macon Water Alliance established an Employee Advisory Board, which provides feedback from MWA Employees on key causes or organizations they feel can benefit from contributions, but the Macon Water Alliance Board of Directors makes the final approval of what organizations, charities, and events receive funding.

Other community partnerships of the Macon Water Alliance and/or MWA include:

Some of the signature events and programs involving the Macon Water Alliance include: • The Annual MWA Kids Fishing Derby

• Georgia Adopt-A-Stream

• Annual Ocmulgee Alive! River Cleanup

• The MWA Water Assistance Program, which collects donations to help fellow citizens in need with their monthly utility payments.

• Macon-Bibb County Earth Day • National Drinking Water Week

Contributions to the Macon Water Alliance Come In a Variety of Ways: • The Alliance receives donations from Sponsors of signature events. • MWA Employees and Board Members’ donations.

• MWA Customers also make contributions either through the Authority’s “Round Up” program or from monthly donations added to their water bill payments.

MaconWater.org • 12


Asset MANAGEMENT Investing $40 Million in Wastewater Treatment Plant Upgrades When assets have reached the end of their life expectancy, whether they are breaking down or not, the Macon Water Authority is proactive to address system conditions before they become critical. As MWA leaders note, if you take care of the system, it will take care of you.

This past year, the Macon Water Authority (MWA) put its asset management skills on display when the utility kicked off one of the largest capital projects in its history – more than $40 million worth of work to renew and rehabilitate both the Rocky Creek and Lower Poplar Water Reclamation Facilities. The Authority’s Rocky CreekLower Poplar Wastewater Capital Improvement Plan (CIP) Project represents the culmination of years of analysis and preparation, as well as the manifestation of a utility’s philosophy to stay ahead of the needs of its customers, while ensuring future business and industry will have the sewer quality and capacity needed to thrive. To fund the project, the MWA issued approximately $40 million in revenue bonds to renew and rehabilitate assets at both facilities, which 13 • MaconWater.org

were in need of extensive renovations. The project will take approximately two years to complete. The Haskell Company has been selected as the DesignBuild Contractor, with Barge Design serving as the DesignBuild Engineers and Jacobs Engineering retained to provide program management services. In addition, the MWA Rocky CreekLower Poplar Wastewater CIP Project will engage the services of local minority companies from Macon-Bibb County and contiguous counties to accomplish $4.3 million of the project’s work. Excluding machinery and equipment, this equates to nearly 17.5% of the investment in the construction of the project. The Authority’s goal is to have minority businesses responsible for 20% of the project. Additionally, the MWA has garnered 14.6% participation from local companies. In all, the Rocky Creek-Lower Poplar Wastewater CIP Project has 36 local and/or minority owned companies providing contract labor to-date.


MaconWater.org • 14


Economic

DEVELOPMENT Serving Existing Industry and Attracting New Businesses to Macon-Bibb County

Economic Development is inherent to the mission of the MWA, evident not just in the words of that mission statement, but in the financial investment the Authority makes for economic and industrial development purposes. The MWA invests $704,000 annually into a revolving fund for the development of “industrial-ready” sites. The MWA also invests in human resources, with a workforce of highly trained and skilled water professionals who often provide expertise to business and industry to help companies with their decisions to expand, relocate, or start a business in Macon-Bibb County. The MWA works very closely with the Macon-Bibb County Industrial Authority to support their concentrated business recruitment and retention efforts. The value of the MWA in local and state economic development is evident not just when a new company announces plans to locate in Macon-Bibb County. There are countless other examples, too, of how the MWA has cultivated strong working relationships with existing businesses and industry, meeting their water and sewer capacity needs while doing everything possible to assure their success. As a result, commercial and industrial customers tend to stay, providing jobs and a positive economic impact that spreads throughout the region. If success breeds success, this year’s industry investments serve as indicators of how the MWA has played a critical role in local, state, and regional economic development. 15 • MaconWater.org

Macon-Bibb County Population Jobs New Jobs Created in 2018

MACON

FOUNDED IN 1823

New Private Investment Square Footage in New Construction

154,432 78,154 1,200 $800 Million 2 Million

For more information on Macon's Labor Force please visit www.mbcia.com.


Nichiha Invests $120 Million to Expand its Macon-Bibb County Facility The Nichiha Corporation is in the process of expanding its operations in MaconBibb County by investing approximately $120 million in its facility, creating more than 70 new jobs, locally. Nichiha specializes in fiber cement products designed for interior and exterior commercial and industrial applications. “We appreciate Nichiha’s investment in Macon-Bibb County and look forward to the company’s future growth and success in Georgia.” – Former Governor Nathan Deal

Embraer Invests $1.6 Million in a New 155,000 Square-Foot Macon Facility Embraer, a Brazilian based company and the third largest civil aircraft manufacturer of 150-passenger commercial jets in the world, is set to bring its commercial jet aircraft maintenance operations to the Middle Georgia Regional Airport. The company will create 100 new jobs at its new 155,000 square-foot facility and will have an estimated annual payroll of $4.5 million. In addition, Embraer will invest roughly $1.6 million into the operations of the new facility.

Business Climate – Existing Industry

There is a reason why businesses have made their home in MaconBibb County. The MWA works very closely with state and local economic development agencies to provide reliable water and sewer capacity that complements any brand of business seeking to relocate to Macon-Bibb. In fact, some of the largest and most recognized industries are thriving right here in Macon. Here are just a few that we are proud to have in our community.

Stevens Aerospace and Defense Systems Brings 150 New Jobs to Macon Stevens Aerospace and Defense Systems, a leading aircraft manufacturer based in Greenville, South Carolina, is slated to expand operations to a bigger facility in Macon. The company will bring its large cabin aircraft operations to a 48,000 square-foot facility at the Middle Georgia Regional Airport, an investment that will offer 150 new jobs to the area at a cost of $1 million.

Amazon’s 1 Million Square-Foot Fulfillment Center Brings 500 New Jobs Amazon is set to open its 1 million square-foot Fulfillment Center this spring, which will bring more than 500 new jobs to Macon-Bibb County and an economic impact in excess of $90 million to the region. The new facility, which is the company’s fourth in Georgia, is located on a 96-acre industrial site that was purchased and prepared with funds from the MWA. “Our new facility in Macon will create hundreds of full-time jobs with competitive pay and great benefits. We’re glad to be a part of this community and provide a positive economic impact for the region.” – Sanjay Shah, Amazon Vice President of North America Customer Fulfillment MaconWater.org • 16


Financial SUMMARY

This past fiscal year (FY 2018 was from Oct. 1, 2017 – Sept. 30, 2018), the MWA operated through a year of lower than normal seasonal demand due to unseasonably high rainfall levels from late May through late August. The summer months are normally a time of year when high seasonal demand peaks due to the watering of lawns and gardens. The Authority saw some of our lowest production levels during the summer months in the past few years. Even with the challenges imposed by a fall in seasonal water demand, overall, the MWA had a very productive operating year. Our commitment to providing reliable, responsive and quality water and sewer services to our customers continues to be the driving force behind everything we do. In addition, Directors and Managers continued to focus on expense containment, with an eye on conservative stewardship of financial resources and capital assets. The Authority persisted with following a conservative, long-range plan, which is used to provide a path for capital planning and for operational budgeting. The MWA also continued to produce and update our rolling, fiveyear capital plan, with a focus to the future and rehabilitating, replacing and enhancing our water and sewer infrastructure. With an annual focus on longrange affordable rate setting, five-year capital planning, and a conservative operational budgetary process, the Authority met all obligations to water and sewer customers, bond holders, vendors and employees. The strength of the Authority’s balance sheet continues to contribute to maintaining our position as one of the most affordable and competitively priced water and sewer utilities within the state of Georgia, as documented in the updated rate studies included on pages 21-22 in this PAFR. During FY 2018, the Authority’s operating revenues were $54,016,375, while operating expenses, which included depreciation, were $51,582,527. The Authority’s Amerson Water Treatment Plant produced and delivered approximately 8.1 billion gallons of drinking water to MWA customers during the year. The Rocky Creek and Lower Poplar Water Reclamation Facilities treated approximately 11.5 billion gallons of wastewater during this same period. For complete details, the MWA Comprehensive Annual Financial Report (CAFR) is located online at www.maconwater.org. 17 • MaconWater.org


Revenue

Total Operating Revenue = $54,016,375

Revenue

• The Authority’s Operating Revenue decreased 0.32% vs. 2017

$30 M

• Water revenues decreased 3.0% vs. 2017

$25 M

2014

2015

2016

2017

2018

• Sewer revenues increased 0.20% over 2017 • Other operating revenues, including various types of permits and fees, increased 17.9% versus fiscal year 2017. Non-Operating revenues increased 61.1%* versus fiscal year 2017 * Excludes gains on disposal of capital assets.

Expenses

Total Operating Expenses = $51,582,527

$20 M

$15 M

$10 M

$5 M

$0 Water Revenue

Operating Expenses increased $1,943,021 or 3.9% versus fiscal year 2017. The primary drivers of this increase when compared to 2017 were: • Costs associated with additional pension funding over 2017 = $500,000 • Costs associated with an increase in depreciation expense = $1,452,000

Sewer Revenue

Other Operating Revenue

Operating Expenses

Non-Operating Revenue

Macon-Bibb County Macon-Bibb County Industrial Authority

$60 M

Interest & Fiscal Charges

$50 M

Depreciation General & Administration

$40 M

Customer Care

$30M

Engineering Maintenance

$20 M

Sewer Conveyance $10 M

Water Reclamation Water Distribution

$0 2012

2013

2014

2015

2016

2017

2018

Amerson Water Treatment Plant

MaconWater.org • 18


Financial LEVERAGE The Authority’s Outstanding Debt

As of September 30, 2018, the MWA had $80.6 million in outstanding debt. This compares with $86.5 million that was outstanding at the end of the previous fiscal year. Outstanding debt is comprised of water and sewer revenue bonds payable to bond holders in the amount of $74.3 million, as well as $6.1 million in notes payable to the Georgia Environmental Finance Authority (GEFA) and $130,781 in capital leases. Water and sewer revenue bonds, as well as low interest GEFA loans, have been a major financing tool for the renewal and replacement of water and sewer infrastructure.

The Authority’s Debt Coverage A measure of financial stability and responsible stewardship of financial resources may be found in a healthy debt coverage ratio. Debt coverage is a calculation that assesses a business’s ability

to pay principal and interest owed to its investors. Debt coverage is also a metric that contributes to the determination of bond ratings by public rating agencies, such as Standard & Poor’s and Moody’s, for outstanding Authority bonds. Coverage is calculated by taking Total Revenues minus Total Expenses (Excluding Depreciation), and dividing that by the total principal and interest paid to bond holders during the year. [$55,174,474 $36,488,947 = $18,685,527 / $7,899,132 = 2.37] The Authority’s Coverage for 2018 was a very healthy 2.37, which was slightly down from the 2.53 coverage the previous fiscal year. Authority Bond Covenants require a minimum of 1.2 times for coverage; the higher the coverage ratio, the more favorable a financial outlook for the Authority, which generally equates to a more favorable bond rating and lower interest rates.

Balance Sheet

The Authority Board sets a target for coverage at 1.75, so achieving a ratio of 2.37 significantly improved upon both the bond covenant requirements and the MWA Board target.

The Authority’s Bond Rating The MWA maintained its strong, investment grade “AA” bond rating with Standard & Poor’s and Aa1 with Moody’s. These ratings reflect continued strong financial stewardship by both the MWA Board and Staff during 2018. Strong bond ratings allow the Authority to borrow at reduced interest rates and issue new debt at more favorable rates. In addition, due to strong financial leadership, the Authority was able to continue to take advantage of variable rates on our variable rate bonds that were well below the fixed rate market rates. This enabled the Authority to save rate payers thousands of dollars in additional interest payments to debt holders over the year.

Authority Debt Long Term

Short Term

Debt Coverage

2018

$74,435,725

$6,169,725

2.37

$210,147,201

2017

$80,599,405

$5,916,904

2.53

$118,679,173

$213,167,718

2016

$86,529,205

$5,478,059

2.65

$319,199,430

$109,259,431

$211,669,812

2015

$81,522,688

$5,181,115

2.71

2014

$327,435,055

$106,966,171

$221,366,975

2014

$86,698,839

$5,003,280

2.61

2013

$328,184,874

$108,794,760

$220,481,788

2013

$91,702,083

$5,040,849

1.81

2012

$333,505,535

$105,446,297

$228,059,238

2012

$86,742,546

$4,948,974

2.40

Total Assets

Total Liabilities

Total Net Position

2018

$321,568,896

$108,361,716

$213,207,180

2017

$320,325,001

$110,177,800

2016

$323,503,682

2015

19 • MaconWater.org


Affordability Affordability of water and sewer services have been studied by governments and professional associations, such as the American Water Works Association (AWWA), in an effort to measure the economic impact of water and sewer rates on customers within a community. The Macon Water Authority measures our rates against several economic indicators, including the impact of water and sewer rates on median household income (MHI); the impact of rates on low wage earners; and the impact of rates on families living at the federal poverty level. Industry officials often reference that water and sewer rates are considered affordable when they require under 2.0%-2.5% (4-5% collectively) of MHI or wage earnings.

The graphs below use the MHI of $38,247 for Macon-Bibb County Georgia from 2017, which is the latest federal census data available.

Typical Family of 1-4 People, Using 5,500 Gallons a Month MWA Water Bill as % of MHI

0.80%

MWA Sewer Bill as % of MHI

0.77%

0.00%

0.50%

1.00%

1.50%

2.00%

(% Considered Affordable)

The graph below shows MWA’s affordability based on the Federal Poverty Level of $24,250/year for a family of four.

Family of 4 at the Federal Poverty Income Level Using 5,500 Gallons of Water a Month MWA Water Bill as % of Annual Income

1.26%

MWA Sewer Bill as % of Annual Income

1.22%

0.00%

0.50%

1.00%

1.50%

2.00%

(% Considered Affordable)

MaconWater.org • 20


Competitiveness

The University of North Carolina Environmental Finance Center (EFC) and the Georgia Environmental Finance Authority (GEFA) collect rates from hundreds of local governments and water/sewer utilities from across Georgia – accounting for over 90 percent of all water/sewer customers served by public water systems in the state. According to this data, the MWA again ranks among those utilities with the most affordable and value-based rates in Georgia.

The following “Value Ranking” is based on a family using 5,500 or 7,500 gallons of water for one month. Sewer rates also are included in these calculations. Typical Family of 1-4

Typical Family of 2-4

Water Used

5,500 Gallons

7,500 Gallons

Typical MWA Monthly Bill

$50.77

$62.88

Average Monthly Bill for Utilities in Study

$61.26

$76.00

Highest Rate Charged by Utilities in the Study

$145.55

$194.99

Percent that a typical MWA monthly bill is lower than the average utility in the study

-17.1%

-17.3%

Amount that a typical MWA monthly bill is lower than the highest utility in the study

$94.78

$132.11

The following “Value Ranking” is based on a sub-sample of the 369 utilities in the study. This sub-sample is comprised of 51 water and sewer utilities in Georgia that serve customers with similar income levels as those found in the Macon-Bibb area. Typical Family of 1-4

Typical Family of 2-4

Water Used

5,500 Gallons

7,500 Gallons

Typical MWA monthly bill

$50.77

$62.88

Average monthly bill for utilities in the study

$50.12

$59.06

Highest rate charged by utilities in the study

$93.16

$127.04

Amount that a typical MWA monthly bill is slightly higher than the average utility in this sub-sample

$0.65

$3.82

Amount that a typical MWA bill is lower than the highest utility in the study

$42.39

$64.16

21 • MaconWater.org


Rate Comparisons of Water Providers in Georgia from Most to Least Expensive Monthly Bill Comparisons*

Typical Family of 1-4

Typical Family of 2-4

System

5,500 Gallons of Water Used

7,500 Gallons of Water Used

Atlanta

$136.57

$194.99

Paulding County

$105.63

$146.88

Jackson County Water & Sewer Authority

$98.04

$132.68

Athens-Clarke County

$89.84

$130.52

Cowetta County Water & Sewer Authority

$88.69

$117.63

Polk County Water Authority

$86.77

$114.93

Twiggs County

$83.76

$104.76

Rockdale County Water & Sewer Authority

$83.51

$104.53

Gwinnett County

$83.45

$109.25

Douglasville-Douglas County Water & Sewer Authority

$82.06

$109.84

Newton County Water & Sewer Authority

$80.72

$107.84

Carroll County

$80.65

$100.32

Henry County Water & Sewer Authority

$78.86

$103.62

Marietta Water

$77.16

$102.34

College Park

$77.07

$101.19

Jones County

$76.89

$94.05

McDonough

$76.26

$100.06

City of Augusta

$74.81

$85.41

City of Monroe

$70.15

$95.25

Cherokee County Water & Sewer Authority

$66.51

$90.91

Clayton County Water Authority

$64.82

$88.90

Forsyth County

$63.92

$82.10

Butts County Water & Sewer Authority

$63.63

$85.13

Fulton County

$58.66

$77.22

Cobb County

$54.71

$73.67

Columbia County

$51.40

$60.94

Macon Water Authority

$50.77

$62.88

Columbus Water Works

$46.94

$60.28

Savannah - (Inside City Limits)

$43.39

$56.96 * Rate Survey Data as of July 2018

MaconWater.org • 22


790 2nd Street Macon, GA 31201 (478) 464-5600 A digital copy of the MWA’s 2018 PAFR is available online at MaconWater.org

23 • MaconWater.org

Profile for M&R marketing group

Macon Water Authority 2018 Popular Annual Financial Report  

Macon Water Authority 2018 Popular Annual Financial Report  

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