THE MUNICIPAL AUTHORITY OF THE TOWNSHIP OF ROBINSON

Transcription

1 THE MUNICIPAL AUTHORITY OF THE TOWNSHIP OF ROBINSON ALLEGHENY COUNTY, PENNSYLVANIA ANNUAL CONSULTING ENGINEER S REPORT FOR OPERATING YEAR TO AND BUDGET FOR FISCAL YEAR ENDING NIRA Consulting Engineers, Inc. 950 Fifth Avenue Coraopolis, Pennsylvania Telephone: (412) Facsimile: (412) mail@niraengineers.com Web Site:

2 THE MUNICIPAL AUTHORITY OF THE TOWNSHIP OF ROBINSON ALLEGHENY COUNTY, PENNSYLVANIA ANNUAL REPORT FISCAL YEAR ENDING BUDGET FISCAL YEAR ENDING MEMBERS OF THE AUTHORITY BOARD Term Expires Dr. Charles Blocksidge, Chairman December 31, 2016 George Douglas, Jr., Vice Chairman December 31, 2015 Nicholas A. Bonesso, Secretary December 31, 2017 Prospero Castelluccio, Treasurer December 31, 2015 Kathaleen Swish, Asst. Sec/Treasurer December 31, 2019 Stan E. Celich, Member December 31, 2018 Richard Young, Member December 31, 2019 MANAGEMENT AND ADVISORS Yukevich, Marchetti, Fischer & Zangrilli, Solicitor Case Sabatini Auditor U.S. Bank, Trustee NIRA Consulting Engineers, Inc., Engineer Anthony T. Lenze, Executive Director Kent Lockridge, Assistant Manager June 2015 NIRA Consulting Engineers, Inc. 950 Fifth Avenue Coraopolis, Pennsylvania Telephone: (412) Facsimile: (412)

3 THE County of Allegheny, Commonwealth of Pennsylvania ANNUAL REPORT FISCAL YEAR ENDING JUNE 30, 2015 BUDGET FISCAL YEAR ENDING JUNE 30, 2016 TABLE OF CONTENTS Page Number Letter of Transmittal Synopsis of Revenues and Expenses for Period Ending June 30, Trust Indenture Requirements 2 Revenues and Expenses Water System Operating Revenues, Table 1 5 Water System Operating Expenses, Table 1 (continued) 6 Sewer System Operating Revenues, Table 2 9 Sewer System Operating Expenses, Table 2 (continued) 10 Proposed FY 15/16 Budget Water System Operating Revenues, Table 3 13 Water System Operating Expenses, Table 3 (continued) 14 Sewer System Operating Revenues, Table 4 17 Sewer System Operating Expenses, Table 4 (continued) 18 Budget Test Summary of Revenues, Expenses and Debt Service Payments 21 Engineer s Report Sales and Rate Review 22 Water System Operating Expenses Sewer System Operating Expenses Proposed Fiscal Year 2015/2016 Budget Budget Test 23 Bond Capital Projects BRIF Projects Tapping Fees 24 Insurance Appendix A: Capital Improvement Plan Project Cost and Schedule Appendix B: Debt Service Schedule Appendix C: 2004 Tap Fee Schedule Appendix D: Insurance Coverage Information

4 SYNOPSIS OF REVENUES AND EXPENSES 2014/2015 OPERATING YEAR The following summary indicates the projected revenues and budgeted revenues for the fiscal year ending June 30, 2015, the projected operating expenses and budgeted expenses for the same period, and the net income available for debt service and other costs: Water System Projected Budgeted Favorable or to 6/30/15 to 6/30/15 Unfavorable Total Operating Revenues $5,049,136 $4,543,018 $ 506,118 Total Operating Expenses 2,842,042 2,802,251 $ 39,791 Net Operating Income $2,207,094 $1,740,767 $ 466,327 Comprehensive Sewer System Including Groveton Projected Budgeted Favorable or to 6/30/15 to 6/30/15 Unfavorable Total Operating Revenues $4,441,095 $4,227,426 $213,669 Total Operating Expenses 2,691,559 2,533,264 $158,295 Net Operating Income $1,749,536 $1,694,162 $ 55,374 1

5 TRUST INDENTURE REQUIREMENTS Rate Covenant and Particular Covenants The Authority covenants that it will annually adopt, maintain, charge and collect, from the customers served by its System, so long as any bonds remain outstanding and funds for their payment have not been provided, in accordance with the Act, which, after making due and reasonable allowances for delinquencies, contingencies and a margin of error in the estimates, together with all other anticipated Receipts and Revenues of the Authority, are at all times at least sufficient with respect to the System to provide annually funds to pay: (i) the current expenses incurred by the Authority, (ii) annual debt service requirements on Subordinate Debt, and (iii) an amount equal to 110% of the annual debt service requirements with respect to its outstanding bonds issued pursuant to this Indenture. The Authority further covenants with the owners of the bonds that it will provide that the water and sewer rates and other charges will be set in accordance with the Act. The Authority also covenants that it will not contract with any public body or customer for the furnishing of water and sewer service at prices less than its reasonable worth or at prices less than those approved by the Consulting Engineer. The Authority also covenants with the owners of the bonds that if at any time the revenues collected by the Authority are not sufficient to enable the Authority to comply with the provisions of this Section 9.01, the Authority will promptly revise its schedule so to comply with this Section 9.01 and any deficiencies in transfers of funds required to be made pursuant to this Article will be remedied before the end of the next ensuing fiscal year. Before the adoption of any revision of the rate schedule, all computations and estimates upon which such revision are based must be approved by the Consulting Engineer. Forthwith, upon the adoption of such revision, the Authority must cause certified copies of the revised rate schedule to be filed with the Consulting Engineer and the Trustee. The Authority covenants that it will employ the Consulting Engineer to perform the duties that are imposed on the Consulting Engineer by the provisions of this Indenture. In addition to the other duties prescribed elsewhere herein, the Consulting Engineer shall prepare and file with the Authority, the Representative of the Purchasers of each series of bonds of the Authority then outstanding, the Bond Insurer and the Trustee on or before June 15, 2009, and on or before June 15 of each year thereafter, an Annual Report on the System. The Annual Report of the Consulting Engineer shall set forth: (a) advice and recommendations as to: (i) (ii) (iii) the proper current expenses of the Authority with respect to the System during the next fiscal year of the Authority; the Capital Additions that should be made during said fiscal year to keep the System in good condition, repair and working order; any necessary or advisable revision of the rate schedule; 2

6 TRUST INDENTURE REQUIREMENTS Consulting Engineer Report (b) an estimate for the fiscal year of the amounts of money that should be expended to comply with the recommendations set forth in the Annual Report; (c) an estimate of the Receipts and Revenues to be derived during the fiscal year from the System; (d) a report as to compliance by the Authority with its covenants concerning insurance under Article IX and advice and recommendations as to the Authority s figure obligations thereunder; and (e) information required by the Authority s continuing disclosure agreement in compliance with Rule 15c2-12. The fees and expenses incurred by the Consulting Engineer in connection with the services performed under this Article shall be payable out of moneys in the Revenue Fund. The aforesaid Annual Report of the Consulting Engineer is to be used by the Authority as the basis for the preparation of the budget for the next succeeding fiscal year. The Authority covenants that, at the written request of any Registered Owner of the bonds, it will furnish to such Registered Owner a copy of the Annual Report of the Consulting Engineer and any revision thereof. Within thirty (30) days after the authentication and delivery of additional bonds, a revised Report for the balance of the then current fiscal year must be prepared by the Consulting Engineer and filed with the Authority, the Representative of the Purchasers of all outstanding bonds, Bond Counsel and the Trustee. The Authority covenants that it will on or before June 30 of each year, beginning June 30, 2009, prepare and adopt a budget for the next fiscal year in accordance with the advice and recommendations of the Consulting Engineer, which budget must contain an estimate of the gross revenues to be derived from the System for the period covered by such budget and of current expenses to be incurred; a copy of the budget must be promptly filed with the Representative of the Purchasers of all outstanding bonds, the Bond Insurer and the Trustee. Any budget may be amended from time to time with the approval of the Consulting Engineer and the amended budget must be promptly filed with the Trustee, the Bond Insurer and the Representative of the Purchasers of all outstanding bonds. The Authority further covenants that within ninety (90) days after the authentication and delivery of any additional bonds under this Indenture, it will adopt a revised budget for the balance of the current fiscal year in accordance with the recommendations of the Consulting Engineer and will immediately file a copy of the 3

7 TRUST INDENTURE REQUIREMENTS Consulting Engineer Report budget, after it has been adopted, with the Representative of the Purchasers of all outstanding bonds, the Bond Insurer and the Trustee. Until the adoption of the annual budget for a particular fiscal year, the budget for the preceding fiscal year will be deemed to be in force for such particular fiscal year. The Authority covenants that all compensation, salaries, fees or wages paid by it in connection with the administration of the Authority will be reasonable; that it will not incur any indebtedness for current administrative expenses in excess of the appropriate budget of current administrative expenses unless such debt is approved by the Consulting engineer; that no more persons will be employed by it than are necessary; and that it will operate and administer the System in an efficient and economical manner. The Authority will duly and punctually pay, or cause to be paid, but only from the Net Revenues pledged under and by this Indenture, the principal of, the interest on and the premium (if any) due upon the redemption of, every bond issued hereunder and secured hereby, at the place and on the dates and in the manner specified herein and in the bonds, according to the true intent and meaning hereof. 4

8 TABLE 1 REVENUES AND EXPENSES WATER SYSTEM OPERATING REVENUES Projected Budgeted Difference To 6/30/15 FY 14/15 Projected METERED SALES Domestic $1,592,982 $1,420,000 $172,982 Commercial 2,120,806 2,115,968 $4,838 Wholesale (Moon & FTWA) 1,037, ,000 $337,771 Total Metered Service $4,751,559 $4,235,968 $515,591 UNMETERED SALES Fire Protection (Public) [Kennedy Twp] $4,515 $4,100 $415 Fire Protection (Private) 173, ,000 $3,219 Total Unmetered Sales $177,734 $174,100 $3,634 MISCELLANEOUS REVENUES Penalties $41,648 $46,000 ($4,352) Interest on Investments ($1) Merchandise & Job Revenue 2,516 9,000 ($6,484) Other Income Verizon, Sprint 56,509 60,700 ($4,191) (Water Tower Lease) Miscellaneous 18,621 16,700 $1,921 Total Miscellaneous Revenue $119,843 $132,950 ($13,107) TOTAL OPERATING REVENUES $5,049,136 $4,543,018 $506,118 5

9 TABLE 1 REVENUES AND EXPENSES WATER SYSTEM OPERATING EXPENSES Projected Budgeted Difference To 6/30/15 FY 14/15 Projected STANDBY SERVICE Water Purchases $16,680 $15,000 $1,680 Power Costs 0 0 $0 Total Standby Service $16,680 $15,000 $1,680 WATER TREATMENT PLANT Operating Labor $288,057 $276,013 $12,044 Sludge Disposal Labor 1,193 2,635 ($1,442) Power Treatment Plant 263, ,000 ($16,376) Power Raw Water Station 33,886 42,000 ($8,114) Heating Treatment Plant 8,811 8,284 $527 Heating Raw Water Station $43 Chemicals 144, ,000 ($5,540) Supplies 1,055 8,433 ($7,378) Laboratory 21,992 15,792 $6,200 General Maintenance 33,459 23,999 $9,460 Maintenance - GAC Filters 54,996 55,000 ($4) Sludge Truck Operation 1,496 3,967 ($2,471) Sludge Removal 16,335 15,195 $1,140 Miscellaneous 0 16,055 ($16,055) Year 1 Customer First SCADA Sup. & Cov. 18,888 18,888 $0 Total Treatment & Pumping $889,043 $917,009 ($27,966) 6

10 TABLE 1 REVENUES AND EXPENSES WATER SYSTEM OPERATING EXPENSES Projected Budgeted Difference To 6/30/15 FY 14/15 Projected DISTRIBUTION SYSTEM Operating Labor $452,069 $440,446 $11,623 D.S. Vehicle Expense 38,177 50,000 ($11,823) D.S. Equipment, Supplies, Paving 58,811 15,000 $43,811 Meter Reading / Repair /Replacement Labor 3,129 7,220 ($4,091) Materials (Sand & Gravel) 19,419 39,056 ($19,637) Materials (Asphalt) 44,108 50,000 ($5,892) Misc. Meals, Mileage, Training, Etc. 3,129 0 $3,129 Labor / Water Storage & Pumping $292 Water Storage & Pumping Maint & Materials 3,685 4,824 ($1,139) Power / Water Storage & Pumping 15,043 12,812 $2,231 Total Distribution System $637,862 $619,358 $18,504 7

11 TABLE 1 REVENUES AND EXPENSES WATER SYSTEM OPERATING EXPENSES GENERAL AND ADMINISTRATION Projected Budgeted Difference To 6/30/15 FY 14/15 Projected Trustee Fees $15,056 $14,497 $559 Director s Fees & Expenses 4,831 4,829 $2 Administrative Salaries 137, ,813 ($702) Office Salaries 99,541 99,076 $465 Professional Services Legal 20,731 20,000 $731 Professional Services Engineering 23,419 20,000 $3,419 Professional Services Accounting Services 8,667 25,795 ($17,128) Retirement 212, ,740 $25,947 Employee Benefits 508, ,477 $5,294 Insurance 70,529 57,800 $12,729 Payroll Taxes 76,252 81,728 ($5,476) Office Supplies 66,992 50,000 $16,992 Telephone 24,619 25,708 ($1,089) Utilities 6,861 6,145 $716 Conferences, Training, Memberships, Etc. 3,709 5,000 ($1,291) Miscellaneous 18,681 12,276 $6,405 Total General & Administrative $1,298,457 $1,250,884 $47,573 TOTAL WATER SYSTEM OPERATING EXPENSES $2,842,042 $2,802,251 $39,791 8

12 TABLE 2 REVENUES AND EXPENSES SEWER SYSTEM OPERATING REVENUES Operating Revenues Metered Sales Projected Budgeted Difference To 6/30/15 FY 14/15 Projected Domestic $1,836,488 $1,684,110 $152,378 Commercial 2,353,765 2,297,356 $56,409 Sewer Surcharge 194, ,994 $13,609 Total Metered Sales $4,384,856 $4,162,460 $222,396 Miscellaneous Revenues Penalties $30,135 $45,887 ($15,752) Interest on Investments $0 Miscellaneous 25,555 18,530 $7,025 Total Miscellaneous Revenues $56,239 $64,966 ($8,727) TOTAL OPERATING REVENUES $4,441,095 $4,227,426 $213,669 9

13 TABLE 2 REVENUES AND EXPENSES SEWER SYSTEM OPERATING EXPENSES SEWAGE TREATMENT PLANT Projected Budgeted Difference To 6/30/15 FY 14/15 Projected Plant Operating Labor $487,000 $435,972 $51,028 Sludge Disposal Labor 65,495 61,330 $4,165 Power 131, ,237 $594 Natural Gas at Moon Run Sew.Treat. Plant 14,000 14,000 $0 Chemicals 66,863 23,143 $43,720 Supplies 28,582 23,863 $4,719 Laboratory 37,280 21,195 $16,085 General Maintenance 28,937 35,000 ($6,063) Sewage Treatment Services ALCOSAN 199, ,000 $9,025 MTMA 385, ,000 $45,753 CORAOPOLIS 48,701 51,369 ($2,668) Sludge Disposal 97,261 98,556 ($1,295) Miscellaneous 0 0 $0 Total Sewage Treatment Plant $1,590,728 $1,425,665 $165,063 10

14 TABLE 2 REVENUES AND EXPENSES SEWER SYSTEM OPERATING EXPENSES COLLECTION SYSTEM Projected Budgeted Difference To 6/30/15 FY 14/15 Projected Pump Station Power $42,808 $38,971 $3,837 Sludge Truck Operation 8,489 20,000 ($11,511) General Maintenance Sewers 29,727 28,837 $890 General Maintenance Pump Stations 34,831 28,275 $6,556 Supplies 209 2,705 ($2,496) Vehicle Expenses 28,008 20,000 $8,008 Miscellaneous, Meals $392 Labor Meter Reading & Repairs 41,113 43,218 ($2,105) EPA Consent Order Cleaning & Televising 0 0 $0 Total Collection System $185,910 $182,339 $3,571 11

15 TABLE 2 REVENUES AND EXPENSES SEWER SYSTEM OPERATING EXPENSES GENERAL AND ADMINISTRATION Projected Budgeted Difference To 6/30/15 FY 14/15 Projected Trustee Fees $16,556 $14,497 $2,059 Director s Fees & Expenses 4,831 4,829 $2 Administrative Salaries 137, ,810 ($699) Office Salaries 99,548 99,024 $524 Professional Services Legal 14,175 17,253 ($3,078) Professional Services Engineering 32,496 20,000 $12,496 Professional Services Accounting Services 8,667 26,665 ($17,998) Retirement 106,361 93,388 $12,973 Employee Benefits 261, ,488 ($41,268) Insurance 70,529 57,692 $12,837 Payroll Taxes 63,725 60,069 $3,656 Office Supplies 66,289 58,804 $7,485 Telephone 15,443 20,000 ($4,557) Utilities 6,832 6,153 $679 Conferences, Training, Memberships, etc. 2,797 4,603 ($1,806) Miscellaneous 8,341 1,985 $6,356 Total General and Administrative $914,921 $925,260 ($10,339) TOTAL OPERATING EXPENSES $2,691,559 $2,533,264 $158,295 12

16 TABLE 3 PROPOSED FY 15/16 BUDGET WATER SYSTEM OPERATING REVENUE Operating Revenues Metered Sales Proposed FY 15/16 Budget Domestic $1,899,000 Commercial 2,300,000 Wholesale 1,441,986 Total Metered Sales $5,640,986 Unmetered Sales Fire Protection (Public) $4,500 Fire Protection (Private) 175,000 Total Unmetered Sales $179,500 Miscellaneous Revenues Penalties $41,000 Interest on Investments 500 Merchandise and Job Revenue 2,500 Other Income Verizon, and Sprint 57,000 (Water Tower Leases) Miscellaneous 18,000 Total Miscellaneous Revenues $119,000 TOTAL OPERATING WATER SYSTEM REVENUES $5,939,486 13

17 TABLE 3 PROPOSED FY 15/16 BUDGET WATER SYSTEM OPERATING EXPENSES Standby Service Proposed FY 15/16 Budget Water Purchases $14,000 Power Costs 0 Total Standby Service $14,000 Water Treatment Plant Operating Labor $297,000 Sludge Disposal Labor 1,230 Power Treatment Plant 313,000 Power Raw Water Station 40,100 Heating Treatment Plant 8,900 Heating Raw Water Station 800 Chemicals 176,000 Supplies 1,100 Laboratory 23,000 General Maintenance 60,000 Maintenance GAC Filters 55,000 Sludge Truck Operation 2,000 Sludge Removal 24,000 Miscellaneous 1,000 Year 1 Customer First SCADA Support & Coverage 19,000 Total Treatment & Pumping $1,022,130 14

18 TABLE 3 PROPOSED FY 15/16 BUDGET WATER SYSTEM OPERATING EXPENSES Distribution System Proposed FY 15/16 Budget Operating Labor $373,314 D.S. Vehicle Expense 39,000 D.S. Equipment, Supplies, Paving 60,000 Labor for Meter Reading & Installation 92,317 Paving (Outside Contractor) 55,000 Materials (Sand & Gravel) 20,000 Materials (Cold Patch) 6,000 Misc. Meals, Mileage, Training, etc. 3,000 Labor/Water Storage & Pumping 300 Water Storage & Pumping Maintenance & Materials 4,000 Power/Water Storage & Pumping 15,000 Total Distribution System $667,931 15

19 TABLE 3 PROPOSED FY 15/16 BUDGET WATER SYSTEM OPERATING EXPENSES General and Administrative Proposed FY 15/16 Budget Trustee Fees $15,100 Director s Fees & Expenses 5,000 Administrative Salaries 141,224 Office Salaries 102,527 Professional Services Legal 20,000 Professional Services Engineering 20,000 Professional Services Accounting Services 28,360 Retirement 165,000 Employee Benefits 400,000 Insurance 70,000 Payroll Taxes 80,000 Office Supplies 67,000 Telephone 25,000 Utilities 7,000 Conferences, Training, Memberships, etc. 3,800 Miscellaneous 16,000 Total General and Administrative $1,166,011 TOTAL WATER SYSTEM OPERATING EXPENSES $2,870,072 16

20 TABLE 4 PROPOSED FY 15/16 BUDGET SEWER SYSTEM OPERATING REVENUES Proposed FY 15/16 Budget Operating Revenues Metered Sales Domestic $1,890,000 Commercial 2,450,000 Sewer Surcharge 190,000 Total Metered Sales $4,530,000 Miscellaneous Revenues Penalties $30,000 Interest on Investments 500 Miscellaneous/Billed Labor 25,500 Total Miscellaneous Revenues $56,000 TOTAL SEWER SYSTEM OPERATING REVENUES $4,586,000 17

21 TABLE 4 PROPOSED FY 15/16 BUDGET SEWER SYSTEM OPERATING EXPENSES Sewage Treatment Plant Proposed FY 15/16 Budget Plant Operating Labor $501,610 Sludge Disposal Labor 67,460 Power 132,000 Natural Gas at Moon Run Sewage Treatment Plant 14,000 Chemicals 65,000 Supplies 30,000 Laboratory 40,000 General Maintenance 40,000 Sewage Treatment Services ALCOSAN 221,000 MTMA 400,000 CORAOPOLIS 50,000 Sludge Disposal 100,000 Miscellaneous 10,000 Total Sewage Treatment Plant $1,671,070 18

22 TABLE 4 PROPOSED FY 15/16 BUDGET SEWER SYSTEM OPERATING EXPENSES Proposed FY 15/16 Budget Collection System Pump Station Power $43,000 Sludge Truck Operation 9,000 General Maintenance - Sewers 35,000 General Maintenance - Pump Stations 35,000 Supplies 1,000 Vehicle Expenses 30,000 Miscellaneous 700 Labor for Meter Reading, & Repairs 42,346 Total Collection System $196,046 19

23 TABLE 4 PROPOSED FY 15/16 BUDGET SEWER SYSTEM OPERATING EXPENSES General and Administrative Proposed FY 15/16 Budget Trustee Fees $17,000 Director s Fees & Expenses 5,000 Administrative Salaries 141,224 Office Salaries 102,534 Professional Fees Legal 20,000 Professional Fees Engineering 20,000 Professional Fees Accounting Services 28,360 Retirement 165,000 Employee Benefits 400,000 Insurance 70,000 Payroll Taxes 65,000 Office Supplies 68,000 Telephone 16,000 Utilities 7,000 Conferences, Training, Memberships, etc. 3,000 Miscellaneous 3,500 Total General and Administrative $1,131,618 TOTAL SEWER SYSTEM OPERATING EXPENSES $2,998,734 20

24 BUDGET TEST SUMMARY OF REVENUES, EXPENSES, AND DEBT SERVICE PAYMENTS Operating Revenues Revenues Water System $5,939,486 Sewer System 4,586,000 TOTAL OPERATING REVENUES $10,525,486 Operating Expenses Expenses Water System $2,870,072 Comprehensive Sewer System 2,998,734 TOTAL OPERATING EXPENSES $5,868,806 NET OPERATING REVENUES (Before Debt Service) $4,656,680 Debt Service Payments Debt Service $3,457,490 Debt Service Coverage 10% 345,749 Total Debt Service + Cover 3,803,239 Net Operating Revenues 4,656,680 Difference $853,441 21

25 SALES AND RATE REVIEW Effective December 2014, a rate increase was enacted for both water and sewer in the percentage amounts of 12.6% and 5.2% respectively. Based upon data examined before the impact of the rate increase, the following is apparent: 1. Bulk water sales to FTMA have increased due to second quarter 2015 indirect sales to Consol Energy. The data suggests that Findlay Township is continuing to use less water, probably due to leak mitigation. PROPOSED FISCAL YEAR 2015/2016 BUDGET We have budgeted for flat residential and commercial water and sewer sales. Bulk sales were increased by 172,000,000 gallons per year to account for the predicted Consol Energy from FTMA usage. The additional revenue from bulk sales is estimated at $663,920. The first full year term of the rate increase of 12.6% for water and 5.2% for sewer has been taken into account. Wages were increased from the previous fiscal year. Water treatment plant power and chemicals costs have been increased from the previous year to account for the projected 471,000 gallons/day in additional water to be sold to FTMA. The projected average daily water production for the plant is expected to be 3.16 MGD. The budget test on page 21 projects a surplus of $868,137 after allowing for a 10% debt service cover of $345,749. The Net Operating Revenues are projected to be 23.8% higher than necessary to meet expenses, debt service and cover. Therefore, no rate increase is necessary for the next fiscal year. BOND CAPITAL PROJECTS In 2014, the Authority issued new Water and Sewer Revenue Bonds limited in the aggregate principal amount of $8,740,000 to finance capital projects. As of this writing, the following projects were in the design/permitting stage: 1. Campbells Run Sewage Treatment Plant upgrades 2. Construction of the Park Manor Boulevard Waterline Loop 3. FTMA Flow Control and Metering System 4. Replacement of Schuler Lane Waterline 5. Replacement of Moon Run Road Waterline BRIF PROJECTS The following capital projects were advanced/completed utilizing the Bond Redemption and Improvement Fund Capital Account: 1. Replacement of the Blue Ridge Waterline 22

26 2. 16 Valve Replacement at Ewings Mill Road 3. Continuing update of GIS system and the location of manholes, valves, and hydrants 4. Campbells Run Corrective Action Planning 5. Meter Reading Equipment 6. Accessories to Tap Machine 7. Permalog Logger, Correlator, Amplification system, software, startup, training for waterline leak detection 8. Chemical Feed Pump at WTP 9. Activator at WTP Ford Super Duty F-350 Truck 11. Mechanical seals at Thormberry and Chartiers Pump Station 12. Turbidity Meters for Chartiers 3 & 4 at WTP 13. Pump controller and probe for Bayer Pump Station 14. MXU s 15. Sensaphone dialer for Groveton Ball Field Pump Station 16. Campbells Run Sewage Repairs 17. Submersible sewage pump at Groveton Ball Field Pump Station TAPPING FEES The Tapping Fee Study (Act 203 with Act 57 Amendments) has been prepared to assess fees for private sanitary sewer and water connection to the public sewerage and water system. The adopted fees for residential connections are as follows: 1. Water - $2, Sewer - $1, The 2004 Tapping Fee Schedule is provided in Appendix C. The Water and Sewer Systems have continued to be operated and maintained in a manner consistent with insuring the maximum useful life of the facilities. Sincerely, NIRA Consulting Engineers, Inc. Douglas J. Evans, P.E. 23