Agenda - 02-19-2019 4-a - OWASA Annual Update Presentation

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OWASA Annual Report 8 January 29, 2019 Page 7 to heat the boilers that heat our anaerobic digesters. In addition, the new HVAC system in the Administration Building has eliminated OWASA's use of natural gas for building heating, also supporting our decreased use of natural gas. 12. Annual fiscal report 2017-18 In September, OWASA presented its Comprehensive Annual Financial Report(CAFR) for Fiscal Year 2018 (beginning July 1, 2017 and ending June 30, 2018). OWASA's financial position improved during the fiscal year with net income less debt service being about$10.7 million. The financial reserves will be used for planned capital improvements needs. About 69% of OWASA's $19.2 million capital expenditures for fiscal year 2018 were invested in replacing and rehabilitating existing infrastructure. The remaining 31% of capital expenditures were invested in expanding or enhancing the community's water and wastewater systems, for example, to increase the size of some pipes and install new meters. OWASA is a special purpose local government entity organized under state law. We are a public, non-profit agency and are required by law to use cost-of-service rates, meaning we set our rates, fees, and charges to cover the cost for each of our services. We do not levy or collect taxes, nor do we receive funding from taxing authorities. OWASA's credit ratings from Fitch of AA+ and Aal from Moody's remain unchanged. Standard&Poor's increased OWASA's rating to AAA during the year. 13. Infrastructure investment OWASA maintains 750 miles of water and wastewater pipes, a water treatment plant, a wastewater treatment plant,pump stations, and other infrastructure. Meeting the community's needs and increasing system resiliency requires ongoing rehabilitation of the water, wastewater, and reclaimed water systems. Capital investments, including debt payments for capital projects, account for about half of our costs. In the last fiscal year, we invested about $19.2 million to renew, replace and improve infrastructure. Our five-year Capital Improvements Program can be viewed here. Key accomplishments in 2018: 1. Construction of a chemical facility at Cane Creek Reservoir to improve the taste and odor of our treated water; 2. Completion of a risk and reliability study for the water treatment and wastewater treatment plants to identify risks that would prevent OWASA from meeting or exceeding federal, state, and local quality requirements; 3. Installation of upgraded security equipment at the water treatment plant, water supply reservoirs, and other critical water facilities; 4. Replacement of filter media and improvements to the filtering process at the water treatment plant; 5. Completion of water and wastewater pipe replacements along Hillsborough Street in advance of planned resurfacing by the Town of Chapel Hill;