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Guam Waterworks Authority. Guam Society of Professional Engineers Presentation John M. Benavente, P.E. Martin L. Roush, P.E. January 25, 2011. December 6, 2010. Presentation Agenda. Mission Statement:.
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Guam Waterworks Authority Guam Society of Professional Engineers Presentation John M. Benavente, P.E. Martin L. Roush, P.E. January 25, 2011 December 6, 2010
Mission Statement: GWA will Provide the community of Guam with outstanding customer service in delivering excellent water and wastewater services in a safe , reliable, responsible, and cost effective manner. GWA recognizes that employees are its greatest asset!!
The CCU is an independent governing board Consolidated Commission on Utilities (CCU) • The CCU was created by Public Law in 2002 • Five members elected at large with staggered four year terms to oversee the Guam Waterworks Authority and the Guam Power Authority • Functions like a Board of Directors with fiduciary, strategic and oversight responsibilities • Includes setting of rates subject to the regulatory review and approval of the Public Utilities Commission • The CCU hires GWA’s General Manager, Chief Financial Officer and Attorney and retains contracting authority for GWA • The CCU has acted independently to improve GWA performance, obtain federal compliance, and plan for the future From Left to Right: Eloy P. Hara, Vice-Chair for GWA, CCU Chairman for the Committee on Customer RelationsJoseph T. Duenas, TreasurerGloria B. Nelson, Secretary, Chair for the CCU Committee for Employee Development and Relations Benigno M. Palomo, Vice Chair for GPA, CCU Chairman for the Committee on Social Welfare Simon A. Sanchez, II, Chairman
GWA Overview • GWA has faced some challenges over the past few years and has taken significant steps to address those challenges • Multi-year rate increases have been put in place to replenish necessary reserves, improve debt service coverage, fund capital needs and provide future liquidity • GWA is making prudent capital investments to meet EPA requirements while improving the system in a cost-effective manner • GWA is well-positioned to accommodate and benefit from the anticipated military buildup while committing its core resources to the system's generic growth and capital needs • GWA possesses the credit fundamentals of an essential island utility with experienced management and strong regulatory support firmly in place • GWA’s continues to improve its engineering capacity and the utility is well-positioned for remarkable growth
GWA has been actively involved in all military buildup discussions Military Buildup and GWA: Collaboration • GWA and the Department of the Navy signed an MOU in July 2010 detailing broad agreement to upgrade water and wastewater systems to support the buildup while protecting the environment • GWA and USEPA worked together to identify $1.14 Billion in projects to insure the buildup and Guam’s resulting growth can be supported for the long term • The Record of Decision contained the Department of Defense’s commitment to pursue this funding from Japan and Federal sources • The Department of Defense is negotiating with Japan to determine how it will invest its $740 million for water, wastewater and power improvements • GWA continues regular meetings with the Department of Defense and USEPA to plan the final scope and timing for upgrades • GWA and GPA will be engaging Performance Management Contractors to assist in Buildup and Other infrastructure upgrade needs
Military Buildup and GWA: Details The Department of Defense to provide $580M to upgrade GWA infrastructure for civilian and military growth • The Department of Defense to provide loans from the Government of Japan at no cost to GWA rate payers • Allocation of $580 Million: • $340 million to upgrade Guam’s two largest wastewater plants, increasing their capacity and changing processing to secondary treatment • This upgrade will provide sufficient treatment capacity to absorb Guam’s growth beyond the buildup • $160 million for a new Northern water system to be connected to existing GWA and Navy water systems, providing greater reliability and enough capacity for all northern customers beyond the buildup • $80 million for upgrades of Guam’s central wastewater collection system • Repayment costs related to Japan’s $580 million will be paid by the Department of Defense • The recent GWA financing of $118M will be used to upgrade infrastructure that is not related to the buildup
GWA is the sole supplier of civilian island water and wastewater needs Background • In 2002, GWA became a Guam public corporation under the control of the Consolidated Commission on Utilities (CCU) • GWA facts: • 311 full time employees • 39,000 customers • $495 million in total assets • $74M O&M Budget www.guamwaterworks.org
GWA provides all water service to the civilian population on Guam GWA’s Water System • Three water systems • Extensive facilities • 108 operable wells, 2 springs • 1 treatment plant • 29 reservoirs • 26 booster stations • 800 miles of pipe • Population served • 156,000 (civilian) • Department of Defense maintains separate system • GWA buys some of its water from the U.S. Navy for its needs
GWA collects and treats wastewater throughout the island GWA’s Wastewater System • 7 service basins • Extensive facilities • 145 miles of pipe • 72 pumping stations • 7 treatment plants • 3 ocean outfalls • Population served • 100,000 (civilian) • Treats all Air Force and part of Navy wastewater • GWA will add the new Marine base to join Anderson Air Force base as two large military wastewater customers
GWA’s CIP represents funding of necessary improvements unrelated to the buildup GWA’s Capital Improvement Program • Only 65% of the CIP is being funded with revenue bonds • Future bond issue size may decrease substantially with additional sources from the military buildup anticipated • Escalated to future dollars using an assumed annual rate of escalation of 4%. • Revenues available for capital improvements after paying operating expenses and debt service. • Assumes bonds are issued in FY2013 to fund approximately $37.3 million of the remaining CIP through FY2014. • Amount in FY2011 represents a portion of the proceeds from the $30 million Bank of Guam loan obtained in June 2010. • Represents expenditure of amounts collected annually starting in 2010.
Current Major Initiatives • Compliance with the current Stipulated Order and negotiation of a consent decree or a second Stipulated Order • Implement the recommendations of the management audit • Implement the capital improvement programs to improve operation reliability, production capability and reduce overall operational cost • Continue the training and certification programs to insure having adequate personnel to effectively and efficiently run the systems • Continue our CTP compensation program to attract and retain qualified and experienced employees • Continue to work with DoD to upgrade infrastructure utilizing federal family funding • Continue to work towards compliance with the Safe Drinking Water Act and the Clean Water Act
GWA’s has improved dramatically and is poised for even stronger performance in the coming years Conclusion • Utility is poised for significant growth due to military buildup • Elected CCU governance structure is working • Positive actions taken by the PUC has led to a return to financial health and credit rating agencies confidence • Experienced management and engineering team • Stable and increasing revenue base • 2010 $118M bonds to trigger major infrastructure upgrades • Working collaboratively with USEPA on new Consent Decree to reflect the impact of military buildup • Military buildup to fund $580 Million in improvements at no cost to GWA ratepayers • Substantial engineering help needed in the Horizon
