Transcript [Presentation Title/Subject]

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
1. Introduction
2. Military Buildup
3. GWA Overview
4. Capital Improvement Program
5. Ongoing and upcoming initiatives
6. Conclusion
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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!!
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1. Introduction
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Consolidated Commission on Utilities (CCU)
The CCU is an independent governing board
 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
Current CCU Board Members
Simon A. Sanchez, II - Elected and Chairman Since 2003
– Former Vice Chairman of the PUC, Senator and Businessman
Benigno M. Palomo - Elected Since 2003
– Former Senator and 30 year Government of Guam Employee
Eloy P. Hara - Elected Since 2007
– Former Assistant GM of GPA and PUC Member
Gloria B. Nelson - Elected Since 2005
– Teacher and Former Chair of Guam Board of Education
Joseph T. Duenas - Elected Since 2008
– Former PUC Chairman and Rev & Tax/DOA Director, Local Businessman
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From Left to Right:
Eloy P. Hara, Vice-Chair for GWA, CCU Chairman for the Committee on Customer Relations
Joseph T. Duenas, Treasurer
Gloria 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 wellpositioned for remarkable growth
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2. Military Buildup and Guam Waterworks Authority
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Military Buildup and GWA: Collaboration
GWA has been actively involved in all military buildup discussions
 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
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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
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3. GWA Overview
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Background
GWA is the sole supplier of civilian island water and wastewater needs
 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
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GWA’s Water System
GWA provides all water service to the civilian population on Guam
 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
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Existing GWA and Navy Water Systems
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GWA’s Wastewater System
GWA collects and treats wastewater throughout the island
 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
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Existing GWA and Navy Wastewater Systems
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4. Capital Improvement Program
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FY 2011 Budget Sources and Uses of Funds
FY 2011 Income Sources:
Base Rate Water/Wastewater
Percentage
78%
Surcharge
8%
System Development Charge
4%
Grants
11%
Total:
100%
$8,649,690
$3,000,000
Base Rate
Water/Wastewater
$6,682,067
Surcharge
$63,541,331
System Development
Charge
Grants
FY2011 Uses of Funds:
Percentage
Labor
22.9%
Power
17.6%
Debt Service ( 2005 Bond, BOG ST)
16.2%
CIP ( Grants, Cash)
14.8%
Other
13.1%
Surcharge (GPA, Navy, Retiree)
8.2%
Purchased Water
7.2%
Total:
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100.0%
Labor
7.2%
Power
8.2%
22.9%
Debt Service ( 2005
Bond, BOG ST)
13.1%
17.6%
CIP ( Grants, Cash)
14.8%
Other
16.2%
Surcharge (GPA, Navy,
Retiree)
GWA’s Capital Improvement Program
GWA’s CIP represents funding of necessary improvements unrelated to the buildup
 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
GWA's Capital Improvement Program: Sources and Uses
($000s)
Fiscal Year Ending September 30
2010
2011
2012
2013
2014
Total
$9,212
$24,112
$34,032
$16,951
$25,146
$109,453
4,000
10,635
4,299
17,856
15,518
52,308
66
3,784
2,350
4,614
1,750
12,564
101
8,213
6,400
8,400
3,835
26,949
$13,379
$46,744
$47,081
$47,821
$46,249
$201,274
$0
$500
$2,000
$2,500
$2,500
$7,500
Proceeds form the 2005 Bonds
4,730
4,797
0
0
0
9,527
Proceeds from the 2010 Bonds
0
27,798
36,432
19,872
0
84,102
(3)
Capital Improvement Program
(1)
Water Production, Treatment and Distribution
Wastewater Collection and Treatment
Electrical, Including Monitoring and Control
Miscellaneous
Total
Sources of Funds
Current Revenues (2)
Proceeds from Future Bonds
0
0
0
16,800
20,500
37,300
Proceeds from Loans (4)
0
5,000
0
0
0
5,000
System Development Charges (5)
0
0
0
0
14,600
14,600
8,649
8,649
8,649
8,649
8,649
43,245
$13,379
$46,744
$47,081
$47,821
$46,249
$201,274
Grants
Total
1.
2.
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.
3.
4.
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.
5.
Represents expenditure of amounts collected annually starting in 2010.
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Potable Water CIP Summary ( x 1,000)
CIP #
Name
PW 05-01
Ground Water Disinfection
$727
PW 05-02
Water Reservoir Condition Assessment
$439
PW 05-03
Booster Pump Rehabilitation, Phase II
$303
PW 05-04
Ugum Water Treatment Plant Refurbishment
$200
PW 05-05
“A” Series Well Transmission Line
$745
PW 05-06
Water Booster Pump Station
$500
PW 05-07
Meter Replacement Program
$3,500
PW 05-08
Barrigada Tank Repair/Replacement
$2,000
PW 05-09
Leak Detection / Line Replacement
$3,077
PW 05-10
Potable Water System Planning
PW 05-11
Implement Ground Water Rule
PW 05-12
Brigade II (Ugum Lift) BPS Upgrade
PW 05-13
Deep Well Rehabilitation
PW 05-14
New Deep Wells at Down Hard Well Sites
PW 05-15
Rehabilitation of Asan Springs Ground Reservoir
$900
PW 05-16
Master Meters
$100
$1,500
PW 09-01
Ugum Water Treatment Plant Intake Modifications
$1,470
$2,200
PW 09-02
Water Wells
$2,356
$1,000
PW 09-03
Water Distribution System Pipe Replacement
$1,848
$5,384
PW 09-04
Pressure Zone Realignment/Development 2005 Impr.
$1,150
$2,400
PW 09-05
Northern System Water Distribution System 2005 Impr.
PW 09-06
Central Water Distribution System 2005 Improvements
$600
$300
$600
PW 09-07
Southern Water Distribution System 2005 Improvements
$500
$650
$1,300
PW 09-08
Mechanical/Electrical Equipment Replacement
$500
$430
$860
PW 09-09
Water Reservoir Internal/External Corrosion Asmt.
$500
PW 09-10
Water Reservoir Internal/External Corrosion Rehb.
PW 09-11
Water System Reservoirs 2005 Improvements
PW 11-01
PW 11-02
Total
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2011
2012
2013
2014
2015
$125
$600
$59
$3,766
$6,000
$364
$200
$500
$800
$1,200
$548
$3,773
$2,425
$9,500
$5,500
$3,500
$5,698
$5,520
$300
$875
$1,400
$500
$800
$800
$800
$400
$400
$3,697
$8,000
$5,000
$3,000
$12,503
Distribution System Upgrades
$1,500
$1,682
$618
Ugum Water Treatment Plant Reservoir Replacement
$1,322
$2,350
$34,032
$16,951
$26,112
$25,146
$31,823
Wastewater CIP Summary ( x $1,000)
CIP #
Name
WW 05-01
Old Agat Wastewater Collection (Phase II)
WW 05-02
Collection Line Upgrade/ Collection System Upgrades*
WW 05-03
NDWTP Diffuser Installation*
WW 05-04
Wastewater System Planning
WW 05-05
Wastewater Vehicles
WW 05-06
Wastewater Pump Station Upgrades*
WW 05-07
NDWWTP - Chlorine Tanks
WW 05-08
Umatac-Merizo STP Improvements*
WW 09-01
LS Priority 1 Upgrades*
WW 09-02
Moratorium
$5,000
WW 09-03
Old Agat Collection Continuation (Phase III)
$1,200
WW 09-04
Manhole Frame Seal Repair*
WW 09-05
Agat Manhole Rehabilitation
WW 09-06
Wastewater Collection System Repl./Rehabilitation*
WW 09-07
Sewer Upgrades
WW 09-08
Facilities Plan/Design for STP Repl.
WW 09-09
Facilities Plan/Design for the N. District STP Bio-solids*
WW 09-10
Facilities Plan/Design for Agat-Santa Rita STP Repl.
WW 09-11
WWTP Priority 1 Upgrades
$6,751
WW 11-01
Priority 1 Sewer Upgrades – Agat District
$2,500
WW 11-02
Priority 1 Sewer Upgrades – Baza Garden District
WW 11-03
STP Replacement
WW 11-04
Facilities Plan/Design for the Umatac-Merizo STP Impr.
WW 11-05
Facilities Plan for Hagatna STP Impr. & Effluent WWPS*
WW 11-06
Hagatna STP Improvements and Effluent WWPS*
WW 11-07
Northern District STP Expansion – Biosolids Electrical*
WW 11-08
Agat/Santa Rita STP Replacement
Total
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2011
2012
2013
2014
2015
$1,200
$1,500
$235
$250
$100
$2,575
$600
$1,624
$650
$3,567
$6,267
$12,078
$140
$14,289
$10,635
$4,299
$17,856
$15,518
$12,218
Electrical and General Plant CIP Summary ( x $1,000)
CIP #
Name
2011
MC 05-01
Laboratory Modernization
$400
$400
$400
MC 05-02
Land Survey
$743
$500
$500
$493
MC 09-01
General Plant Improvements / Water Distribution System
$7,070
$5,500
$7,500
$3,342
$997
$8,213
$6,400
$8,400
$3,835
$997
Total
2012
Name
EE 05-01
Well Electrical Protection
$134
EE 05-02
SCADA Pilot Project
$300
EE 09-01
Wastewater Pumping Station Electrical Upgrade
EE 09-02
Electrical Upgrade - Water Wells
EE 09-03
Electrical Upgrade - Water Booster Pump Stations
$650
EE 09-04
Electrical Upgrade -Water Booster Pump Stations
$350
EE 09-05
Electrical Upgrade - Other Water Booster Pump Stations
$250
EE 09-06
SCADA Improvements – Phase 1
$250
EE 09-07
SCADA Improvements – Phase 2
$1,100
EE 09-08
SCADA Improvements – Phase 3
$1,500
EE 09-09
SCADA Improvements – Phase 4
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2012
2014
CIP #
Total
2011
2013
2013
2015
2014
2015
$614
$500
$3,784
$500
$2,000
$500
$1,000
$850
$750
$1,250
$2,350
$4,614
$1,750
5. Ongoing and upcoming initiatives
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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
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6. Conclusion
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Conclusion
GWA’s has improved dramatically and is poised for even stronger performance in the coming years
 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
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