Columbus Water Works. Component Unit of the Consolidated Government of Columbus, Georgia. Comprehensive Annual Financial Report

Transcription

1 Columbus Water Works Component Unit of the Consolidated Government of Columbus, Georgia Comprehensive Annual Financial Report Fiscal Year Ended June 25, 2015 and 2014

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3 COLUMBUS, GEORGIA COMPREHENSIVE ANNUAL FINANCIAL REPORT A COMPONENT UNIT OF THE CONSOLIDATED GOVERNMENT OF COLUMBUS, GEORGIA FOR THE FISCAL YEAR ENDED JUNE 25, 2015 AND 2014 Prepared by Division of Finance, Customer Service, Information & Environmental Services Timothy J. Murphy, Senior Vice-President Columbus Water Works 1421 Veterans Parkway Columbus, Georgia 31901

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5 COLUMBUS, GEORGIA Comprehensive Annual Financial Report A Component Unit of the Consolidated Government of Columbus, Georgia For the Fiscal Year Ended June 25, 2015 and 2014 INTRODUCTION This Section Contains the Following Subsections TABLE OF CONTENTS MANAGERIAL CHART LISTING OF PRINCIPAL OFFICIALS AND CONSULTANTS MEMBERS, BOARD OF WATER COMMISSIONERS LETTER OF TRANSMITTAL CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING -1-

6 TABLE OF CONTENTS Page I. Introductory Section Title Page 1 Table of Contents 2 Managerial Chart 4 Listing of Principal Officials and Consultants 5 Board of Water Commissioners 6 Letter of Transmittal 7 Certificate of Achievement 17 II. Financial Section Title Page 19 Independent Auditor s Report 20 Management Discussion and Analysis 22 Financial Statements Statements of Net Position 42 Statements of Revenues, Expenses & Changes In Net 44 Position Statements of Cash Flows 46 Notes to the Financial Statements 48 III. Statistical Section Title Page 85 Statistical Section Contents 86 Financial Trends Net Position by Component 87 Change in Net Position 88-2-

7 TABLE OF CONTENTS Page Revenue Capacity -Schedule of Operating Revenues by Source 90 Capital Contributions by Source 91 Schedule of Water, Wastewater & CSO Rates 92 Schedule of Connection and Service Fees 93 Comparison- Water and Sewer Rates 94 Debt Capacity Revenue Covering All Debt 95 Outstanding Debt 96 Demographic and Economic Information General Information 98 Selected Economic Characteristics 99 Population Statistics 100 Labor Market Information 101 Operating Information Schedule of Employees by Division 107 Schedule of Expenses by Function 108 Schedule of Ten Largest Water Customers 109 Schedule of Number of Available Service Installations 110 Schedule of Capital Assets and Volumetric Usage

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9 Columbus Water Works Columbus, Georgia Listing of Principal Officials and Auditors Board of Water Commissioners Dr. Carole Rutland, Chair Mr. Karl Douglass, Treasurer Mr. Reynolds Bickerstaff Mr. G. Sanders Griffith III Honorable Mayor Teresa Tomlinson President Steven R. Davis, P.E. Executive Vice-President, CFO, Water Board Secretary Emory E. Blount Senior Vice-President, Finance, Customer Service, Asset Management, Information & Environmental Services Timothy J. Murphy, CPFO Senior Vice-President, Engineering, Communication & Field Services Billy C. Cobb, P.E. Senior Vice-President, Strategic Planning & Employee Services GwenDolyn H. Ruff, SPHR Senior Vice-President, Water Resource Operations & Managed Maintenance John T. Peebles Auditors Robinson, Grimes & Company, P.C. -5-

10 Columbus Water Works Board of Water Commissioners Dr. Carole Rutland Chair Mr. Karl Douglass Treasurer Mr. Reynolds Bickerstaff Mr. G. Sanders Griffith -6- Honorable Teresa Tomlinson Mayor Ex-Officio

11 October 20, 2015 Board of Water Commissioners Steven R. Davis, President Timothy J. Murphy, Senior Vice President Finance Columbus Water Works Columbus, Georgia Ladies and Gentlemen: The Comprehensive Annual Financial Report (CAFR) of the Columbus Water Works (CWW) for the fiscal year ended June 25, 2015 and 2014 is hereby submitted. This report describes the Columbus Water Works financial activities, economic condition and services as a whole and is presented in three sections: Introductory, Financial and Statistical. Management is responsible for the accuracy of the data and the contents of this report to include all disclosures. To the best of our knowledge and belief, the enclosed data is accurate in all material aspects and is reported in a manner designed to fairly represent the financial position and operations of CWW. All disclosures required to ensure a full understanding of this report have been included. Columbus Water Works is responsible for the financial statements and the related information in this report. A system of internal accounting controls is maintained to provide reasonable assurance that assets are safeguarded and that the records reflect only authorized transactions. Limitations exist in any system of internal controls. However, based on recognition that the cost of the system should not exceed its benefits, management believes its system of internal accounting controls maintains an appropriate cost/benefit relationship. -7-

12 Columbus Water Work s system of internal accounting controls is evaluated on an ongoing basis by the internal financial staff. Independent external auditors also consider certain elements of the internal control system in order to determine their auditing procedures for the purpose of expressing an opinion on the financial statements. Management believes that its policies and procedures provide guidance and reasonable assurance that the CWWs operations are conducted according to management s intentions and to a high standard of business ethics. In management s opinion, the financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of the Water Works in conformity with accounting principles generally accepted in the USA. Government Profile The Board of Water Commissioners of Columbus, Georgia was created pursuant to legislative authority granted originally in 1902 and reaffirmed by the ratification in 1971 of the Charter of the Consolidated Government of Columbus. The Board is responsible for the supervision and control of building, construction, operation of the water and sewerage utilities in Muscogee County and the Ft. Benning Military Installation, charged with exclusive jurisdiction, control and management of all water and sewerage facilities with powers including, but not limited to, the power to establish and charge rates, to operate water and sewerage systems as one revenue producing undertaking, and to charge separately or collectively for such services. The Board of Water Commissioners consists of five members including the Mayor of Columbus (exofficio) and four members appointed by the Council of Columbus to serve fouryear staggered terms. The President and staff of the CWW supervise day-today operations. Employee staffing was established and approved for 280 positions fiscal year ending Economic Condition and Outlook Columbus (population served 255,936) is in west central Georgia, 110 miles southwest of Atlanta and 82 miles east of Montgomery, Alabama. Located on the east bank of the Chattahoochee River, which is the Georgia-Alabama State boundary, Columbus draws commercial activity from east Alabama as well as from nearby Georgia counties. Columbus acts as a regional trade center and is -8-

13 the hub of a Metropolitan Statistical Area (MSA) that includes Phenix City (Alabama) and Ft. Benning. The Columbus MSA civilian labor force as of June 2015 was 127,278. In addition to this civilian labor base, the area s economy includes 40,000 soldiers and civilians employed at Ft. Benning, the home of the Maneuver Center of Excellence and the Army Infantry School. Construction activity for the Columbus community remained stable as reflected by 2,950 building permits issued with an accumulated valuation of $259,475,564 through June The addition of new offices, commercial businesses and manufacturing facilities either relocating or expanding in the community, have added 580 new jobs and a total of 27 million in capital investments this fiscal year. Unemployment in Muscogee County is slightly higher than the state average. The total civilian labor force in Muscogee County for June 2015 was 80,845 of which 74,538 were employed and 6,307 were unemployed. The largest major industry sector was Health Care and Social Assistance, with 17.83% of the employment, followed by Accommodation and Food Services with 12.10%, and Retail Trade with 11.73% and respectively. Water and Sewage System Water Supply and Distribution The North Columbus Water Resource Facility (NCWRF) derives its water supply from Lake Oliver Reservoir on the Chattahoochee River with the Ft. Benning Water Treatment Facility deriving its water supply directly from the Chattahoochee. The distribution system is comprised of 6,107,522 feet of pipe in Columbus and 1,192,250 feet of pipe in Ft. Benning. The combined water treatment permitted capacity of 98 million gallons per day (MGD) is ample to meet the average daily consumption of MGD for NCWRF and 2.87 MGD for Ft. Benning. The NCWRF had a maximum day s filtration of MGD and the Ft. Benning Plant had a maximum day s filtration of 3.96 MGD for the period ending June 25, The water distribution system served 65,592 active metered accounts as of June 25,

14 The capacity of various components of the water system is as follows: Intakes 90 MGD North Columbus Pumps 25.9 MGD Raw Water Pumps 90 MGD Ft. Benning Storage 5.75 MG Raw Water Mains 90 MGD High Service Storage 11.5 MG Clearwells 13.5 MG NCWRF Storage 4 MG High Service Pumps 40 MGD Raw Water Storage 8.0 MG Sewage System Columbus Water Works operates the sewer system within Muscogee County and has one pollution control facility, South Columbus Water Resource Facility (SCWRF). The hydraulic design capacity of the SCWRF is 42 MGD per day, but flow is not a condition of the National Pollutant Discharge Elimination System (NPDES) permit. The SCWRF maximizes flows during wet weather periods, treating peak flows up to 84 MGD. The capacity of the treatment plant is therefore determined by the mass quantities of total suspended solids (TSS) and carbonaceous biochemical oxygen (CBOD) demand in the effluent discharge. The average daily flow for the twelve months ending June 25, 2015 was MGD. In addition to the SCWRF, CWW operates and maintains two Combined Sewer Overflow (CSO) treatment facilities with a maximum combined treatment capacity of 121 MGD. The sewage collection system is comprised of 5,295,098 feet of pipe in Columbus and 860,112 feet of pipe in Ft. Benning ranging in size from 6 inches to 96 inches. The total treated final effluent flow for the twelve months ending June 25, 2015 was billion gallons. As of June 25, 2015, the sewer system served over 60,742 active sewer accounts. All the water and sewage facilities are reported to be in good condition. Service availability has not been restricted by inadequate facilities nor has expansion been limited by any regulatory agency. Strategic Planning and Effective Utility Management (EUM) Initiative The EUM Initiative identified Ten Attributes of Effectively Managed Water Sector Utilities (Attributes) which describe desired outcomes that are applicable to all water and wastewater utilities. The Attributes emerged from an extensive analysis of current utility management practices and discussions with leaders in the utility industry, regarding what they viewed as promising developments in utility management efforts. These Attributes can be viewed as a continuum of, or -10-

15 a set of building blocks for, management improvement opportunities. They are deliberately not listed in a particular order, since utility managers will determine their relevance and relative importance based on individual circumstances. The Ten Attributes identified by the study are: Product Quality Employee and Leadership Development Financial Viability Operational Resiliency Water Resource Adequacy Customer Satisfaction Operational Optimization Infrastructure Stability Community Sustainability Stakeholder Understanding and Support Columbus Water Works has also embraced the concept of the Five Keys to Management Success, which is a complement report from the EUM study. These five keys are specific management approaches and systems which have been proven to help water and wastewater utilities manage more effectively. They create a supportive climate for a utility as it works towards the outcomes outlined in the Attributes, and can help integrate the utility s improvement efforts across the Attributes. The Five Keys to Management Success are: Leadership Effective leadership ensures that our strategic direction is understood, communicated, embraced, and followed on an ongoing basis throughout the organization. Leadership has an important responsibility to communicate with our stakeholders, community leaders and customers. This reflects our commitment to organizational excellence, leading by example to establish and reinforce our culture to embrace positive change and to strive for continual improvement. Strategic Business Planning Preparation of a strategic business plan involves taking a long-term -11-

16 view of our goals and operations and establishing a clear vision and mission. The strategic business plan guides our goals, objectives, performance measurement efforts, and operational activities. Organizational Approaches Effective organizational approaches actively engage our employees in improvement efforts. It deploys an explicit change management process that anticipates and plans for change and encourages staff at all levels to embrace change. It also utilizes effective implementation strategies that seek, identify, and celebrate early, step-by-step victories. Measurement An effective measurement system helps us to focus on operational issues, identifying performance expectations, and facilitating decision making. This system is supported by a well-defined decision framework which ensures performance metrics are evaluated, communicated, and responded to in a timely manner. Continual Improvement Management Framework A continual improvement management framework requires us to conduct an honest and comprehensive self-assessment to identify management strengths and operational areas for improvement. It also defines and implements operational requirements, procedures and establishes priorities, supporting roles and responsibilities. Columbus Water Works strategic direction is spelled out in strategies, goals, and objectives, which are supported by tactics, actions, and responsibilities with targeted measurable performance indicators. Each strategic initiative is spearheaded by individual organized teams made up of diverse groups of CWW employees that reflect an equitable distribution of our skills and resources. -12-

17 CWW Strategic initiatives: Enhance Customer Satisfaction Use effective customer service relationships and approaches to achieve excellence in customer satisfaction Strengthen Regional Partnerships Expand CWW influence and increase regional service opportunities Leverage Information Technology Provide Information Technology capabilities to realize the benefits of improved organizational effectiveness and efficiency to maximize customer satisfaction Optimize Infrastructure Performance Optimize asset functionality, condition and operations to provide our customers with the Best In Class utility performance Develop Sustainable Workforce Recruit, retain and maintain a workforce that is competent, motivated, diverse and adaptive Maintain Financial Stability Use sound financial planning and management, develop revenues and identify potential revenue sources, while effectively controlling operational costs As a component of our strategic planning process, we actively solicit feedback and participation from our customers and key stakeholders. We conduct monthly customer satisfaction surveys, in addition to periodic stakeholder interviews, as a venue to gain valuable community input on significant issues. We also evaluate and consider industry trends, as well as legislative, economic and environmental concerns when developing our strategic programs. During FY 14-15, CWW conducted a comprehensive mid-cycle review of the current Five-Year Strategic Plan as a way to ensure our strategic initiatives continue to be relevant and timely and affect continuous improvement. This has proven to be extremely successful for us and we will continue to utilize this practice. We incorporated feedback from our stakeholder interview process, the customer satisfaction survey results, the online community leaders survey, and from core members of the strategy teams. As a result of the mid-cycle review, we have developed a fiscal year planning document which identifies key projects -13-

18 and activities which aligns with our operational direction and also provides a deliberate and strategic approach to achieving these specific goals. For FY and beyond, CWW will continue to identify and explore opportunities to improve our operational activities to ensure that wastewater is efficiently collected and properly treated, that our community is provided with a safe and dependable drinking water supply, and that we embrace our legacy of being economically and environmentally responsible. As a premier leader in the water and wastewater industry, our strategic focus in the upcoming years is on customer service and satisfaction, effective communications, employee and leadership development, implementation of operational cost-efficiencies, sustainability, and strengthening our community and regional partnerships. Other Information Columbus Water Works continues to enjoy a stable financial position. This stability is based upon the organization s solid liquidity position, conservative budgeting, and programmed annual rate increases. CWWs financial policies include a component for management of reserve funds and a component relative to coverage requirements. The following is a summary of these policies: Reserve Fund Policy: Operating Reserve maintained at days of annual revenue requirements Capital Reserve maintained at one year of average annual CIP expenditures or 100% of estimated annual depreciation expense Coverage Requirements: Senior Debt Service Coverage is maintained at 1.2 times revenue as required by bond covenants MADS (Maximum Annual Debt Service) Coverage 1.2 times ratio to demonstrate ability to issue additional debt when needed All Obligations Coverage must maintain a 1.05 times ratio as required by State mandate -14-

19 To support these operational policies, since 2002, CWWs annual study conducted by Raftelis Financial Consultants reviewed rates as well as financial conditions and needs. As a result of the annual studies, CWW will or has implemented the following rate adjustments as indicated: Five Year Rate Plan January 2011 Average rate increase 3.88% - adopted January 2012 No Rate Increase January 2013 Average rate increase 4.95% - adopted January 2014 Average rate increase 4.73% - adopted January 2015 Average rate increase 4.88% - adopted Five Year Rate Plan January 2016 Average rate increase 4.95% - proposed January 2017 Average rate increase 4.95% - proposed January 2018 Average rate increase 4.95% - proposed January 2019 Average rate increase 4.95% - proposed January 2020 Average rate increase 4.95% - proposed Projected rate increases over the next few years are consistent with the national average of historical increases. The smoothing of future rate impacts depends on reserve fund balances that are within policy limits and continuation of the capital improvement plan. In accordance with the bond resolutions and ordinances, the Board has audits of the System performed by certified public accounting firms. Accordingly, the Component Unit Financial Statements as of June 25, 2015 were examined by Robinson, Grimes & Company, P.C., Certified Public Accountants Consultants, and a copy of the independent auditor s report on the Component Unit Financial Statements is included in the financial section of this report. Detailed information is outlined in the Management s Discussion and Analysis, which is included in the Financial Section. -15-

20 The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to CWW for its comprehensive annual financial report for the fiscal year ending June 25, This is the twenty-first year that CWW has received this prestigious award. In order to be awarded a Certificate of Achievement, CWW must publish an easily readable and efficiently organized comprehensive annual financial report satisfying both generally accepted accounting principles and applicable legal requirements. The Certificate of Achievement is valid for a one-year period. We believe that our current comprehensive annual financial report continues to meet the requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Respectfully submitted, Steven R. Davis President Timothy J. Murphy, CPFO Senior Vice President, Finance -16-

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23 COLUMBUS, GEORGIA Comprehensive Annual Financial Report A Component Unit of The Consolidated Government of Columbus, Georgia For the Fiscal Year Ended June 25, 2015 and 2014 FINANCIAL SECTION This Section Contains the Following Subsections REPORT OF INDEPENDENT AUDITORS MANAGEMENT S DISCUSSION AND ANALYSIS FINANCIAL STATEMENTS -19-

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26 MANAGEMENT S DISCUSSION AND ANALYSIS The discussion and analysis of Columbus Water Works (CWW s) financial performance provides an overall review of activities for the fiscal year ended June 25, Readers should review the financial statements and corresponding notes to enhance their understanding of CWW s financial performance. Mission Columbus Water Works mission is to provide a safe and dependable drinking water supply to protect public health and meet our customers needs, to enhance our valued water resources by collecting and treating wastewater and combined sewer flows, and to instill in future generations a legacy of responsible environmental stewardship of our watershed. Responsibility and Controls Columbus Water Works has prepared and is responsible for the financial statements and related information included in this report. A system of internal accounting controls is maintained to provide reasonable assurance that assets are safeguarded and that the records reflect only authorized transactions. Limitations exist in any system of internal controls. However, based on recognition that the cost of the system should not exceed its benefits, management believes its system of internal accounting controls maintains an appropriate cost/benefit relationship. Columbus Water Works system of internal controls is evaluated on an ongoing basis by CWW s internal financial staff. Independent external auditors also consider certain elements of the internal control system in order to determine their auditing procedures for the purpose of expressing an opinion on the financial statements. Management believes that its policies and procedures provide guidance and reasonable assurance that CWW s operations are conducted according to management s intentions and to a high standard of business ethics. In management s opinion, the financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of the Water Works in conformity with accounting principles generally accepted in the USA. Audit Assurance The opinion of Robinson, Grimes & Company, P.C., our independent external auditors, is included in this report. -22-

27 Financial Historical Summary Beginning in 2002, the Board of Water Commissioners approved and implemented a comprehensive Five-Year Financial Plan. The projected rate increases associated with the Financial Plan have met projections. In October 2004, CWW assumed ownership of the water and wastewater facilities serving Fort Benning under a 50-year contract. Projected rate increases over the next five years are consistent with the national average of historical increases, with Columbus Water Works having one of the lowest rates in southeast cities. Financial Highlights Fiscal Year (FY) ended 2015 This section presents management s analysis of the CWW s financial condition and activities for the Fiscal Year ended June Management believes the Columbus Water Works financial condition is strong and that CWW is well within its debt covenants as well as the more stringent financial policies and guidelines set by the Board of Water Commissioners. The following are key financial highlights: Operations For Fiscal Year ended 2015, CWW delivered 9.73 billion gallons of water and treated billion gallons of wastewater, as compared to 9.20 billion gallons of water delivered and billion gallons of wastewater treated in Fiscal Year ended Liabilities and Net Position Total liabilities amounted to $ million and net position amounted to $ million at year-end. Of the net position, $36.75 million was unrestricted and was available to support short-term operations, reflective of a strong liquidity position. Long-term Debt Normal debt payments were made throughout the year, retiring current portion due of debt. Capital Contributions For FY ended 2015, capital grants and contributions were $5.04 million as compared to $7.20 million for FY ended Total Debt Service As of FY ended June 2015, debt service coverage was 1.61 as compared to 1.79 for FY ended June Operating Revenues Total combined Columbus and Fort Benning operating revenues were $61.43 million, an increase over FY ended 2014 in the amount of $1.95 million. Operating Expenses Operating expenses before depreciation amortization increased $722 thousand as compared to Fiscal Year ended Operating -23-

28 expenses including depreciation/amortization increased $1.34 million, an increase of 2.38% as compared to Fiscal Year ended Operating Income Operating income for the year was $3.81 million, as compared to $3.19 million for FY ended This amount includes activities related to Fort Benning contractual operations. Capital Expenditures CWW expended $25.52 million in capital expenditures in FY 2015 on various Capital Improvements. Capital Contributions and Grants Capital assets of $5.0 million and $7.2 million were acquired through contributions from developers, and Fort Benning, for the FY ended 2015 and 2014, respectively. For FY ended 2015, capital grants and contributions represent contributions of contributed lines and capital by developers of $2.84 million, contributed water and sewer system by Fort Benning of $2.19 million and no capital grants. Capital grants and contributions for FY ended 2014 represented contributions of contributed lines by developers of $6.4 million, contributed water and sewer system by Fort Benning of $788 thousand, and no capital grants. Columbus Water Works owns and operates the water/wastewater treatment facilities as well as the distribution/collection facilities for Columbus-Muscogee County. CWW serves a population of approximately 255,936, which includes Fort Benning, and provides supplemental water supply to wholesale customers - Talbot and Harris Counties. With a budget of $70 million, CWW s customer base includes over 65,592 active water accounts and 61,123 active sewer accounts. Potable water is supplied by two water treatment plants. The North Columbus Water Resource (NCWRF) plant withdraws raw water from Lake Oliver, an impoundment on the Chattahoochee River. The Fort Benning Water Treatment Plant withdraws raw water from the Chattahoochee River. CWW currently has a combined water withdrawal permit of 98 MGD. The wastewater collection system consists of 5,295,098 feet of pipe in Columbus and 860,112 feet of pipe in Fort Benning, along with 36 lift stations in Columbus and an additional 35 lift stations in Fort Benning. Advanced secondary treated wastewater is discharged to the Chattahoochee River downstream of the confluence with Bull Creek. A combined sewer treatment system (CSO) is also operated by CWW. The system includes two CSO treatment facilities to control and treat CSO overflows to ensure compliance with the State regulations and the U.S. EPA s National CSO control policy. -24-

29 Overview of the Financial Statements This report is intended to serve as an introduction to CWW s basic financial statements. The financial statements report detailed information about CWW using full accrual accounting methods as utilized by the private sector. However, rate-regulated accounting principles applicable to private sector utilities are not used by government utilities. General The following overview of the financial activities of Columbus Water Works summarizes basic financial statements for the fiscal year ended June 25, Basic financial statements consist of: Statements of Net Position Statements of Revenues, Expenses and Changes in Net Position Statements of Cash Flows Notes to Basic Financial Statements The purpose of these statements is to provide sufficient information to assess the overall financial position of Columbus Water Works. Changes in net position over a continuous period of time serve as indicators of Columbus Water Works overall financial health and are considered in conjunction with management s short and longterm plans for financing operations and programs. The Statements of Net Position present the financial position of CWW on a full accrual historical cost basis. While the Statements of Net Position provide information about the nature and amount of resources and obligations at year-end, the Statements of Revenues, Expenses, and Changes in Net Position present the results of the business activities over the course of the year and information as to how the net position changed for the year. The Statements of Net Position include all CWW s assets and liabilities and information about the nature and amounts of investments in assets and obligations to creditors (liabilities). These statements provide data for calculating analytical review measures such as rate of return, capital structure and liquidity. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. These statements also provide certain -25-

30 information about CWW s recovery of its costs. Columbus Water Works rates are based on a cost of service rate study. Rate setting policies use different methods of cost recovery not fully provided for by generally accepted accounting standards. The primary objectives of the rate model are to improve equity among customer classes and to ensure that capital costs are allocated on the basis of long-term capacity needs, ensuring that growth pays for growth. The Statements of Revenues, Expenses and Changes in Net Position account for all revenues and expenses. These statements measure the success of CWW s operations and determine cost recovery through user fees, charges, and profitability. The Statements of Cash Flows provide information regarding CWW s cash receipts, disbursements and net changes in cash as a result of operating activities, non-capital financing activities, capital financing activities, and investing activities. These statements present cash receipts and cash disbursement information, without consideration of the earnings event when an obligation arises or depreciation of capital assets. The notes to the financial statements provide required disclosures and other information that are essential to a full understanding of material data provided in the statements. The notes present information about CWW s accounting policies, significant account balances and activities, material risks, obligations, commitments, contingencies and subsequent events, if any. The financial statements were prepared from the detailed books and records of CWW. The financial statements were audited and adjusted, if material, during the independent external audit process. The following comparative condensed financial statements serve as the key financial data and indicators for management, monitoring and planning. Results of Operations Columbus Water Works finances remained strong with adequate liquid assets, reliable systems to meet demand, and a reasonable level of unrestricted net assets. For FY ended June 2015, total operating expenses increased 2.38% and operating revenue increased 3.28% over FY For FY ended June 2014, total operating expenses increased 4.82% over FY 2013, and operating revenues increased 2.79%. -26-

31 Net Position The following statements, Condensed Statements of Net Position and Condensed Statements of Revenues, Expenses and Changes in Net Position, as well as Revenues by Class of Customer report CWW s net position and changes therein. The following is a summary of CWW s Statements of Net Position. Condensed Statements of Net Position (Balance Sheets) Fiscal Year 2013 to 2014 Comparison Fiscal Year 2014 to 2015 Comparison For FY ended June 25, $ Change % Change $ Change % Change Assets: Current Assets and other Assets $ 90,734, ,403,866 21,669, % $ 112,403, ,589,235 (4,814,631) -4.28% Capital Assets 519,118, ,933,396 8,814, % 527,933, ,677,130 4,743, % Total Assets 609,853, ,337,262 30,483, % 640,337, ,266,365 (70,897) -0.01% Deferred Outflows Deferred amount of bond refunding 7,161,333 6,838,220 (323,113) -4.51% 6,838,220 6,271,375 (566,845) -8.29% Deferred amount from pensions 0 2,271,308 2,271, % 2,271,308 2,117,955 (153,353) -6.75% Total Deferred Outflows 7,161, ,109, ,948, % 9,109, ,389,330 (720,198) -7.91% Liabilities: Other Liabilities 16,868,692 16,933,414 64, % 16,933,414 17,404, , % Long-term Liabilities 202,118, ,625,199 27,506, % 229,625, ,864,201 (13,760,998) -5.99% Total Liabilities 218,987, ,558,613 27,571, % 246,558, ,268,799 (13,289,814) -5.39% Deferred Inflows Deferred from Pension Plan Investments % 0 1,317,688 1,317, % Net Position: Net investments in capital assets 340,403, ,395,922 14,992, % 355,395, ,066,987 6,671, % Restricted for capital activities and debt service 18,829,313 21,571,472 2,742, % 21,571,472 15,253,741 (6,317,731) % Unrestricted 25,100,344 25,920, , % 25,920,783 36,748,480 10,827, % Total Net Position 387,029, ,888,177 15,859, % 402,888, ,069,208 11,181, % Fiscal Year 2015 to 2014 As shown in preceding table, total net position increased by $11.18 million in Fiscal Year 2015 as compared to Fiscal Year Current and other assets decreased by $4.81 million and capital assets increased $4.74million. Statements of Revenues, Expenses and Changes in Net Position While the Statements of Net Position reflects the changes in the financial position, the Statements of Revenues, Expenses, and Changes in Net Position provide answers and more detailed information as to nature and source of these changes. An examination of the individual categories affecting the source of changes in net position is illustrated in the following table. -27-

32 Condensed Statements of Revenues, Expenses and Changes in Net Position Fiscal Year 2013 to 2014 Comparison Fiscal Year 2014 to 2015 Comparison Fiscal Year Ended June 25, $ Change % Change $ Change % Change Operating Revenues Water Sales $ 20,815,144 $ 20,357,663 $ (457,481) -2.20% $ 20,357,663 $ 21,486,011 $ 1,128, % Sewer Charges 22,733,302 23,517, , % 23,517,627 23,623, , % Fort Benning Water and Sewer Charges 6,619,918 6,901, , % 6,901,885 7,026, , % Fort Benning CM100 O&M Services 4,239,272 5,120, , % 5,120,837 5,563, , % Tapping, CSO fees and miscellaneous charges 3,456,615 3,579, , % 3,579,837 3,732, , % Total Operating Revenue 57,864,251 59,477,849 1,613, % 59,477,849 61,431,349 1,953, % Operating Expenses System Services 6,792,375 6,902, , % 6,902,076 7,190, , % South Columbus Water Resources Facility 4,280,253 4,591, , % 4,591,060 4,161,531 (429,529) -9.36% North Columbus Water Resources Facility 4,429,056 4,137,787 (291,269) -6.58% 4,137,787 4,142,140 4, % CSO Plants 1,144,192 1,052,395 (91,797) -8.02% 1,052, ,213 (60,182) -5.72% Managed Maintenance 2,651,699 2,745,982 94, % 2,745,982 2,921, , % Engineering 1,356,374 1,460, , % 1,460,877 1,431,265 (29,612) -2.03% Information Services 1,071,430 1,118,345 46, % 1,118,345 1,370, , % Water Quality Monitoring 1,729,145 1,858, , % 1,858,625 2,026, , % Fort Benning 4,338,200 4,508, , % 4,508,599 4,649, , % Customer Services 1,557,062 1,609,360 52, % 1,609,360 1,697,951 88, % Finance, ES and Administration 4,154,804 4,449, , % 4,449,816 4,338,213 (111,603) -2.51% Meter Maintenance 1,637,318 1,692,184 54, % 1,692,184 1,927, , % Depreciation 18,552,657 20,156,528 1,603, % 20,156,528 20,773, , % Total operating expenses 53,694,565 56,283,634 2,589, % 56,283,634 57,622,477 1,338, % Operating Income 4,169,686 3,194,215 (975,471) % 3,194,215 3,808, , % Non-operating Revenue (expenses) Interest Revenue 88,619 83,955 (4,664) -5.26% 83, ,245 52, % Ft Benning Financing Contract Bond Issuance 4,860,492 4,860, ,860,492 4,860, % Administrative fees and other revenue (375,783) 4,264,315 4,640, % 4,264,315 1,138,833 (3,125,482) % Interest Expense (1,747,410) (660,080) 1,087, % (660,080) (814,702) (154,622) 23.42% City of Columbus participation expense (3,114,733) (3,158,884) (44,151) 1.42% (3,158,884) (3,243,185) (84,301) 2.67% Gain (loss) on disposal of assets 137,206 79,833 (57,373) % 79, , , % Total non-operating revenue (expenses) (151,609) 5,469,631 5,621, % 5,469,631 2,333,499 (3,136,132) % Income before capital grants and contributions 4,018,077 8,663,846 4,645, % 8,663,846 6,142,371 (2,521,475) % Capital grants and contributions 3,268,506 7,195,298 3,926, % 7,195,298 5,038,660 (2,156,638) % Change in Net Position 7,286,583 15,859,144 8,572, % 15,859,144 11,181,031 (4,678,113) % Net Position at Beginning of Year 377,046, ,029,033 9,982, % 387,029, ,888,177 15,859, % Ending Net Position $ 387,029,033 $ 402,888,177 $ 15,859, % $ 402,888,177 $ 414,069,208 $ 11,181, % Fiscal Years 2015 to 2014 For Fiscal Year ended 2015, the change in net position amounted to $11.18 million as compared to $15.86 million for Fiscal Year ended Operating Revenues Water Consumption Sales For FY ended 2015, total water sales increased 5.54% ($1.13 million) from FY ended For FY ended 2014, total water sales decreased 2.20% ($457,481) from FY ended

33 Water Consumption Sales Customer Class Water Sales by Customer Class Water Sales by Customer Class Water Sales by Customer Class Multi-Residential 1,737,312 1,636,895 1,552,485 Water Commercial 3,137,145 2,985,956 3,565,920 Harris County 644, , ,088 Talbot County 90,527 34,296 77,831 Water Sprinkler 1,815,654 1,667,544 2,203,580 Industrial Sprinkler 209, , ,179 Water Industrial 1,237,873 1,248,354 1,480,655 Water Residential 11,537,797 10,743,282 11,077,714 Other Billed 1,076,378 1,310,909 59,692 Water No-Bill - 1,064 - $ 21,486,011 $ 20,357,663 $ 20,815,144 Operating Revenues Wastewater Charges For FY 2015, total sewer revenue increased 0.45% ($105,406) over FY For FY 2014, total sewer revenues increased 3.45% ($784,325) over FY Wastewater Charges Customer Class Sewer Charges by Customer Class Sewer Charges by Customer Class Sewer Charges by Customer Class Multi-Residential 2,537,094 2,489,007 2,178,438 Sewer Commercial 4,373,370 4,271,483 4,825,577 Sewer Permitted 1,159,813 1,127, ,848 Sewer Industrial 574, , ,476 Sewer Residential 14,528,514 14,519,117 13,364,166 Sewer No-Bill 449, , ,797 $ 23,623,033 $ 23,517,627 $ 22,733,302 Operating Revenue - Other Revenue For FY ended 2015, other operating revenues increased 4.61% ($719,746) in combined sewer overflow fees, tapping fees, Fort Benning Services, and other miscellaneous charges. For FY ended 2014, other revenues increased 8.99% from FY Other Revenue Fort Benning Water & Sewer Charges 7,026,101 6,901,885 6,619,918 Operating and Maintenance Fees - Fort Benning 5,563,339 5,120,837 4,239,272 CSO Fees 1,917,933 1,849,853 1,826,390 Tapping Fees and Miscellaneous Charges 1,814,932 1,729,984 1,630,225 Total Other Revenue $ 16,322,305 $ 15,602,559 $ 14,315,

34 Operating Expenses Total operating expenses increased 2.38% ($1.34million) in FY 2015 compared to an increase of 4.82% in Most of the increase was attributable to increases in sewer maintenance and information service support. For FY ended 2015, depreciation increased 3.06% ($616,887) over FY For FY 2014, depreciation increased by 8.64% ($1.6 million) over FY Non-Operating Revenues (Expenses) Total non-operating revenues (expenses) for FY ended 2015 decreased by $3.14 million from FY ended For FY 2015, interest expense increased by $154,662 and interest revenue increased by $52,290. Gain on sale of assets increased $175,983 for FY ended Columbus Water Works participation costs to the City of Columbus increased $84,301 from FY ended Capital Contributions and Grants For FY ended 2015, contributed lines by developer were $2.85 million, along with the contributed water and sewerage system by Fort Benning of $2.19 million. For FY ended 2014, contributed lines by developers were $6.41 million, along with the contributed water and sewerage system by Fort Benning of $788,014. Capital Assets and Debt Administration Property, plant and equipment in service and construction in progress are recorded at cost, if purchased or constructed. Assets acquired through contributions from developers or other customers are capitalized at their estimated fair market value, if available, or at engineers estimated fair market value or cost to construct at the date of the contribution. The capitalization threshold for capital assets is $ Detailed information on capital asset activity may be found in Note 6 of the Financial Statements. -30-

35 Description FY 2014 to 2015 Comparison FY 2014 FY 2015 % Change FY 2013 FY 2014 FY 2013 to 2014 Comparison % Change Capital Assets not being depreciated Land $ 2,553,149 $ 2,553, % $ 2,553,149 $ 2,553, % Construction in progress 82,422,040 58,089, % 116,970,057 82,422, % 84,975,189 60,642, % 119,523,206 84,975, % Capital assets being depreciated Building and equipment 22,045,884 22,210, % 13,972,421 22,045, % Watershed study 3,010,320 3,010, % 3,010,320 3,010, % Filtration plant 39,678,503 53,114, % 39,488,664 39,678, % Sewage disposal plant 67,445,828 87,253, % 67,165,480 67,445, % Water distribution system 117,635, ,836, % 104,984, ,635, % Water system - Ft. Benning 126,391, ,070, % 98,158, ,391, % Sewer system 233,052, ,381, % 227,899, ,052, % Sewer system - Ft. Benning 83,019,542 84,216, % 77,685,831 83,019, % Elevated tanks 3,316,499 6,923, % 3,316,499 3,316, % Furniture and fixtures 2,889,617 3,045, % 2,768,771 2,889, % Autos, trucks and equipment 11,632,568 11,998, % 10,502,431 11,632, % Intercommunication system 3,418,316 3,845, % 3,418,316 3,418, % Laboratory equipment 1,052,830 1,121, % 945,980 1,052, % Capitalized studies/it projects 5,775,447 5,854, % 3,533,814 5,775, % 720,365, ,883, % 656,850, ,365, % Total Capital Assets 805,340, ,526, % 776,374, ,340, % Accumulated depreciation (277,407,228) (296,849,108) 7.0% (257,255,242) (277,407,228) 7.8% Capital assets, net of depreciation $ 527,933,396 $ 532,677, % $ 519,118,893 $ 527,933, % Long-term Debt One area that demonstrates CWW s financial strength and future borrowing capability is seen in its debt coverage ratio. Detailed information on long-term debt activity may be found in the Notes to Financial Statements. The following table provides a comparison of the debt coverage ratio on all debt for FY 2014 to 2015 and for FY 2013 to Description FY 2014 to 2015 Comparision FY 2013 to 2014 Comparision FY 2014 FY 2015 % Change FY 2013 FY 2014 % Change Change in Net Positions 15,859,144 11,181,031-29% 7,286,583 15,859, % Allowable Adjustments 16,780,195 19,792,642 18% 19,750,150 16,780,195-15% Adjusted Change in Net Position 32,639,339 30,973,673-5% 27,036,733 32,639,339 21% Debt Service Payments 18,245,259 19,244,627 5% 17,825,771 18,245,259 2% Debt Coverage % % -31-

36 Debt Administration The following is a summary of changes in the carrying costs of long-term debt obligations of Columbus Water Works for the last two fiscal years: FY ended June 25, 2015 Beginning Balance Additions, Including Amortization or Bond Discounts Decreases Balance Revenue Bonds $ 191,439,729 $ - $ (10,803,513) $ 180,636,216 Notes Payable 30,672,041 - (1,670,774) $ 29,001,267 $ 222,111,770 $ - $ (12,474,287) $ 209,637,483 FY ended June 25, 2014 Beginning Balance Additions, Including Amortization or Bond Discounts Decreases Balance Revenue Bonds $ 176,004,940 $ 38,395,766 $ (22,960,977) $ 191,439,729 Notes Payable 32,293,197 - (1,621,156) $ 30,672,041 $ 208,298,137 $ 38,395,766 $ (24,582,133) $ 222,111,770 Also listed are summaries of outstanding bond issues and current GEFA loans, as well as future committed loans to complete the Capital Improvement Program. The Five- Year financial plan with rate increases is associated with repayment of these loans. Additional information regarding the Columbus Water Works debt administration program is included in the Notes to the Financial Statements. -32-

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38 Growth Projections: The 2013 Facilities Master Plan (FMP) population projections were taken from the Regional Water Plan (RWP) for Muscogee County. These projections were produced by the Georgia Governor s Office of Planning and Budget (OPB). The population data was broken down by county, and Muscogee County projections included the population projected on base at Fort Benning. Due to the unique population trends at Fort Benning and CWW s recent history of analyzing its growth patterns, the population projections for Fort Benning were separated from the Columbus service area. Population projections for the Fort Benning service area were estimated using the Department of Defense BRAC population projections, as developed during the 2007 Master Plan. The following table provides the population projections for the CWW service area. CWW Service Area Population Projections Year Municipal Service Area 1 FB Population Projections (2007 Master Plan) ,985 59, ,306 60, ,671 61, ,892 64, ,580 71, Does not include wholesale customer or Fort Benning population served by CWW. Wastewater flow projections and water demand were developed based on the growth trends throughout the service area. Residential/commercial demands and flows are based on the population projections, while industrial and wholesale customer demands are based on proposed land use plans, development plans and contractual agreements. The following two tables present a summary of the water demand projections and the wastewater flow projections, respectively. Summary of Wastewater (WW) Flow Projections for the SCWRF Municipal Service Area WW Flow Projections Fort Benning WW Flow Projections Wholesale Customer WW Flow Projections Total SCWRF WW Flow Projections AAF 1 PDF 1 AAF 1 PDF 1 AAF 1 PDF 1 AAF 1 Year (MGD) (MGD) (MGD) (MGD) (MGD) (MGD) (MGD) PDF 1, 2 (MGD) Annual Average Flow (AAF), Peak Day Flow (PDF) 2. CWW maximizes the combined sewer flow into the SCWRF, while plant capacity is available. The current plant capacity is 84 MGD. -34-

39 Year Municipal Service Area AAD (MGD) PDD (MGD) Wholesale Customers 1 AAD (MGD) PDD (MGD) Summary of Water Demand Projections Fort Benning Service Area 2 AAD (MGD) PDD (MGD) CWW Service Area Total AAD (MGD) PDD (MGD) CWW Service Area Total with Emergency / Contractual Demand 3 AAD (MGD) PDD (MGD) AAD (MGD) CWW Service Area Planning Demands 4 PDD (MGD) Includes Harris, Talbot, Chattahoochee, and Marion counties. 2. CWW s current contractual obligation to Fort Benning is 22 MGD PDD. 3. Includes the contractual obligation amount of 22 MGD PDD (8.8 MGD AAD) for Fort Benning through 2023 and the mutual aid agreement amount of 8 MGD (PDD and AAD) for Phenix City. Additionally, it includes future planned emergency connections of 0.5 MGD in 2023 / 1.0 MGD in 2038 for Fort Mitchell Water Authority and 0.5 MGD starting in 2015 through 2038 for Marion County. 4. Master Planning Capital Improvements will not be planned around providing emergency demands (for Phenix City, Fort Mitchell, and Marion County) that do not have contractual obligations. Other Selected Information Selected Data for Analysis: Employees at year end Average Employees Water and Wastewater customers at year end: Water customers 76,319 75,717 75,229 Wastewater customers 70,477 65,606 65,414 Water consumption (millions of gallons (000)): Retail residential and commercial 9,727,558 9,205,649 10,479,683 Total water consumption 9,727,558 9,205,649 10,479,683 Wastewater treated (millions of gallons (000)): Retail residential and commercial 11,519,400 12,712,385 9,400,185 Total wastewater gallons treated 11,519,400 12,712,385 9,400,185 Per average employee: Total Operating revenues 223, , ,957 Total Operating expenses 209, , ,142 Revenues per million gallons consumed/treated: Water services revenues: Retail residential and commercial Wastewater service revenues: Retail residential and commercial Expenses per consumption/treatment: Water service expenses: Expenses excluding depreciation/amortization Expenses Wastewater service expenses: Expenses excluding depreciation/amortization Expenses Ratio of operating revenue to: Operating expenses Operating expenses net of depreciation Total assets Net Position

40 Capital Improvement Program Columbus Water Works considers sustainability when making many decisions. A simple, but powerful definition of sustainability is a program, development, or project that meets the needs of the present without compromising the ability of future generations to meet their own needs. One critical component to maintaining sustainability is the CWW Capital Improvement Plan (CIP). The CIP is a list of improvement projects developed from various CWW programs that are based on the company s goals. These programs have developed a list of 70 projects (following table) recommended over a 5-year planning horizon at an estimated cost of $98 million. In order to maintain sustainability, CWW must balance three attributes; economic impact, social impact, and environmental impact. The economic impact of funding the proposed projects within five (5) years is not sustainable relative to customer affordability; therefore, CWW has developed a prioritization tool. This prioritization tool used in conjunction with the CWW financial plan, allows CWW to maintain economic sustainability. Each of the 70 projects has a champion who is intimately familiar with the project. The project champions used the prioritization tool to score their projects. Once this scoring was complete, a CIP team of senior staff and department managers reviewed the results to calibrate the CIP tool. Columbus Water Works staff has used an integrated approach with stakeholder involvement and financial planning to prioritize projects recommended from the following programs: Facility Master Plan, Asset Management Program, Information Technology Master Plan, Energy Gap Analysis, Project Champions and Strategy Teams. This comprehensive approach allows CWW to remain sustainable both financially and in meeting our customers level of service. The current CIP was separated into two phases. From the list of prioritized projects, the first 16 projects were chosen to be completed in the first two years. The estimated cost of the projects over the time frame totaled $25 Million. At this time seven of the sixteen projects are in design with the remaining under construction. Fort Benning Renewals and Extensions (R&E) It is a CWW goal to insure that our Fort Benning customers receive the same high standards of water quality and service that are provided to the Columbus customers. In order to achieve that goal, CWW is currently developing a tool to address the Capital Improvement needs on Fort Benning. It will be very similar to the aforementioned CIP. Projects are introduced to the R&E program through a champion, who is intimately familiar with the capital need. The champion will utilize a prioritization tool to score -36-

41 their project. Like the CIP, it balances the same three attributes; economic impact, social impact, and environmental impact. Once a year the existing and new projects in addition to their scores are reviewed by a team of senior staff and department managers to evaluate the results and calibrate the R&E tool. The finalized lists of prioritized projects are then forecasted out based on the current and future R&E funds. At this time, 27 projects have been identified for the initial rollout of the program. Request for Information: This financial report is designed to provide an overview of Columbus Water Works financial operations and financial condition. Should the reader have questions regarding any information included in this report or wish to request additional financial information, please contact Columbus Water Works at P.O. Box 1600, Columbus, Georgia or by phone at

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44 3, 28 Collection System Rehabilitation 5, 40 Pipe Cleaning and Lining 4, 39 Small Line Replacement 6 Meter Change Out/AMR Program 53 Sewer Easement Trail 36 [Ú # 7, 11,18, 42, 43, 47, 51, 54, 55, 56, 58, 59, 60, 61, 62, 63, 64, # # 25 10, 12, 13 2, 32 # # # kj ^_ "M3Q ^_ # ^_ ^_ 8, 9, 27, 45, 49 # 5, , , 15,16 46, 52, 65, 66, 67, 68, 69, Q 50 ^ 44 [Ú 50 kj kj kj 3, , ^_ ^_ UT ^_ # Capital Improvement Projects Underway Capital Improvement Project (Unfunded) Project # Prioritized Project Rank Project # Prioritized Project Rank 1 CS 05 LakeOliver Lift S tation Pum p Replacem ent DS 05 Green IslandHills WTM CS 06 RockyCreek Can S tation Replacem ent DS 06 OldRiver RoadBPS CS 08 Collection S ystem Rehabilitation Project PhaseI DS 07 NorthColum bus Tank DS 24 S m all PipeReplacem ent/lowpressureim provem ents DS 09-BuenaVistaRoadPum p S tation DS 25 PipeCleaningandLiningReplacem ent DS 26 S m all PipeReplacem ent/lowpressureim provem ents 86 6 Meter ChangeOut /AMRProgram DS 27 PipeCleaningandLiningReplacem ent Power GridS witchgear NCWRF DS 28 Tank Inspection andrehabilitation R1-Custom er Inform ation S ystem Electrical Distribution Grid R2-Business Continuity EnergyAutom ation Eficiency River Pum p # NewLab RoofReplacem ents Power MonitoringIm provem ents W14 Evaluation ofreliabilityofncwrfrawwater Transm ission Mains Prim arys witchgear S CWRF W15 Connection for Em ergencyncwrfrawwater Pum ps Process Control S erver Room Control Room WW07 Influent S creen Conveyor/Com pactor Pum p S tation Optim ization Im provem ents WW08 Influent Pum pings tation R7-GIS Projects Rollup WW09 Blower Im provem ents RoofingProject S CADANetwork Capital Improvement Project (Unfunded) 52 S CWRFExterior Lighting Project # Prioritized Project Rank 53 S ewer Easem ent Trail AltitudeValves S olar Developm ent Bulk chem ical feedandstorage S olids dewatering Colum bus lift stations security 2 56 Valvereplacem ent CS 01 Heiferhorn Creek Trunk Upgrade VariableFrequencyDrives at S outhcom m ons CS O CS 02 WeracobaCreek Trunk Upgrade Ventilation anddehum idification CS 03 MarinaCoveLift S tation ForceMain Upgrade W01 NCWRFFull-S calecapacityevaluation CS 04 MarinaCoveLift S tation Pum p Replacem ent W02 NCWRFTracer S tudy CS 09 Dozier Creek Collection S ystem InflowInvestigation W04 NCWRFReplace36-inchfilteredwater pipefrom Filter Buildings 1and CS 10 Generator Installation PhaseI W16 Em ergencyncwrfrawwater Pum pingfacilities CS 11 Can S tation Replacem ent W17 NCWRFEm ergencychlorines crubber CS 12 HydraulicModel Calibration FlowMonitoringandS pot S urvey W19 NCWRFLightningProtection CS 13 Collection S ystem Rehabilitation Project PhaseI Water/Wastewater Plant Optim ization Im pr CS 14 Flatrock Creek S anitarys ewer Extension WW01 Disinfection Im provem ents CS 15 Heiferhorn Creek S anitarys ewer Extension WW02&WW11 Digester Im provem ents CS 16 DOT/CityS treets Projects WW10 Disinfection Im provem ents CS 19 RockyCreek Efluent Lift S tation Upgrade WW12 AlkalinityS torageandfeedim provem ents DS 01 S hepherddrivebps Dem olition WW13 S econdaryclarifier Im provem ents DS 02 WTM S upplyfor Bunker Hill Tank 35.4 µ Columbus Water Works CAPITAL IMPROVEMENT PROGRAM (7/17/2015) UT 17 Altitude Valves, 41 Tank Inspection and Rehabilitation [Ú 19 Columbus Lift Stations Security [Ú 48 Pump Station Optimization Improvements #* 25 Generator Installation 26 Can Station Replacement ^_

45 (A COMPONENT UNIT OF THE CONSOLIDATED GOVERNMENT OF COLUMBUS, GEORGIA) FINANCIAL STATEMENTS JUNE 25, 2015 AND

46 COLUMBUS, GEORGIA STATEMENTS OF NET POSITION JUNE 25, 2015 AND * CURRENT ASSETS Cash and cash equivalents $ 14,356,769 $ 11,815,275 Accounts receivable 6,681,388 10,916,333 Inventories 965, ,632 Total current assets 22,003,467 23,731,240 NON-CURRENT ASSETS Unrestricted assets Investments 36,115,450 22,687,804 Restricted assets Cash and cash equivalents Construction 11,002,429 37,252,570 Debt service 3,041,176 2,801,962 Renewal and extension 3,018,265 3,695,386 Investments Construction 29,403,192 14,379,872 Debt service 0 2,545,874 Renewal and extension 3,005,256 5,309,158 Capital assets (net of accumulated depreciation) 532,677, ,933,396 Total non-current assets 618,262, ,606,022 Total Assets 640,266, ,337,262 DEFERRED OUTFLOWS Deferred amount from bond refunding 6,271,375 6,838,220 Deferred amount from pensions 2,117,955 2,271,308 Total Deferred Outflows 8,389,330 9,109,528 (*) Restated. See Note 13 The Notes to the Basic Financial Statements are an Integral Part of the Statement. -42-

47 CURRENT LIABILITIES Revenue bonds, current portion $ 10,160,000 $ 9,615,000 Notes payable, current portion 1,720,547 1,670,775 Accounts payable 2,800,272 2,740,221 Construction contracts payable 370, ,792 Accrued payroll 523, ,756 Customer deposits 173, ,146 Accrued interest on bonds payable 1,031, ,474 Accrued interest on notes payable 58,688 62,009 Accrued compensated absences 565, ,241 Total current liabilities 17,404,598 16,933,414 NON-CURRENT LIABILITIES Revenue bonds, net of premiums and current portion 170,476, ,824,729 Notes payable, net of current portion 27,280,720 29,001,266 Accrued compensated absences, net of current portion 260, ,187 Net pension liability 11,508,526 13,270,017 Net other postemployment benefits obligation 6,338,000 5,272,000 Total non-current liabilities 215,864, ,625,199 Total Liabilities 233,268, ,558,613 DEFFERED INFLOWS Deferred inflows from pensions 1,317,688 0 NET POSITION Net investment in capital assets 362,066, ,395,922 Restricted for: Capital projects, net of related debt 12,212,565 16,223,636 Debt service 3,041,176 5,347,836 Unrestricted 36,748,480 25,920,783 Total net position $ 414,069,208 $ 402,888,177 The Notes to the Basic Financial Statements are an Integral Part of the Statement. -43-

48 COLUMBUS, GEORGIA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FOR THE YEARS ENDED JUNE 25, 2015 AND OPERATING REVENUES Water sales $ 21,486,011 $ 20,357,663 Sewer charges 23,623,033 23,517,627 CSO fees 1,917,933 1,849,853 Fort Benning Water and Sewer Charges 7,026,101 6,901,885 Fort Benning CM100 O&M Charges 5,563,339 5,120,837 Tapping fees and miscellaneous charges 1,814,932 1,729,984 Total operating revenues 61,431,349 59,477,849 OPERATING EXPENSES System services 7,190,561 6,902,076 South Columbus Water Resources Facility 4,161,531 4,591,060 North Columbus Water Resources Facility 4,142,140 4,137,787 CSO plants 992,213 1,052,395 Managed maintenance 2,921,780 2,745,982 Engineering 1,431,265 1,460,877 Information services 1,370,108 1,118,345 Water quality monitoring 2,026,323 1,858,625 Fort Benning 4,649,812 4,508,599 Customer services 1,697,951 1,609,360 Finance, employee services and administration 4,338,213 4,449,816 Meter readers 1,927,165 1,692,184 Depreciation 20,773,415 20,156,528 Total operating expenses 57,622,477 56,283,634 Operating income 3,808,872 3,194,215 The Notes to the Basic Financial Statements are an Integral Part of the Statement. -44-

49 NON-OPERATING REVENUES (EXPENSES) Interest income 136,245 83,955 Ft Benning Financing Contract Bond Issuance 4,860,492 4,860,492 Administrative fees and other revenue (expense) (Note 15) 1,138,833 4,264,315 Interest expense (814,702) (660,080) CWW - City of Columbus participation expense (2,821,619) (2,743,755) Fort Benning - City of Columbus participation expense (421,566) (415,129) Gain on disposal of assets/scrap materials 255,816 79,833 Total non-operating revenues 2,333,499 5,469,631 Income before capital grants and contributions 6,142,371 8,663,846 Capital Grants and Contributions 5,038,660 7,195,298 Change in net position 11,181,031 15,859,144 Total net position, beginning (Restated. See Note 13) 402,888, ,029,033 Total net position, ending $ 414,069,208 $ 402,888,177 The Notes to the Basic Financial Statements are an Integral Part of the Statement. -45-

50 COLUMBUS, GEORGIA STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 25, 2015 AND CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers $ 65,661,965 $ 58,515,340 Payments to suppliers (23,014,388) (22,862,468) Payments to employees (13,245,731) (12,916,278) Net cash provided by operating activities 29,401,846 22,736,594 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Payments to City of Columbus participation expense (3,280,859) (3,093,888) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from sale of capital assets/scrap materials 249,479 79,833 Proceeds from capital debt, net issuance costs 0 25,012,852 Ft Benning Financing Contract Bond Issuance 4,860,492 4,860,492 Proceeds from administrative fees and other revenue 1,145,458 4,753,569 Purchases of capital assets (14,007,422) (15,624,168) Principal paid on capital debt (11,285,774) (10,811,156) Interest paid on capital debt (7,958,854) (7,362,767) Net cash provided by (used in) in capital and related financing activities (26,996,621) 908,655 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds (purchases) of investments (23,487,166) 9,560,963 Interest and dividends 216, ,363 Net cash provided by (used in) investing activities (23,270,920) 9,661,326 Net increase (decrease) in cash and cash equivalents (24,146,554) 30,212,687 Beginning 55,565,193 25,352,506 Ending $ 31,418,639 $ 55,565,193 The Notes to the Basic Financial Statements are an Integral Part of the Statement. -46-

51 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 3,808,872 $ 3,194,215 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 20,773,415 20,156,528 Changes in: Receivables, Net 4,230,615 (962,509) Inventories 34,323 (37,344) Accounts and other payables 513, ,780 Accrued expenses 40, ,924 Total adjustments 25,592,974 19,542,379 Net cash provided by operating activities $ 29,401,846 $ 22,736,594 NONCASH CAPITAL FINANCING ACTIVITIES: Capital assets of $5,038,660 and $7,195,298 were acquired through contributions from developers and Ft. Benning for years ending June 25, 2015 and 2014, respectively. The Notes to the Basic Financial Statements are an Integral Part of the Statement. -47-

52 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 1: Reporting Entity The Board of Water Commissioners was created pursuant to legislative authority originally in 1902 and reaffirmed by the ratification of the Charter of the Consolidated Government of Columbus, Georgia ( Columbus ). The Board of Water Commissioners is responsible for the supervision and control of construction, management and operation of Columbus Water Works ( CWW ). Members of the Board of Water Commissioners are elected to serve by the Consolidated Government of Columbus, Georgia. CWW is considered a component unit of the Consolidated Government of Columbus, Georgia. CWW supplies services to approximately 70,000 water connections serving Columbus. These services include supplying water and sewer services and maintaining and installing water and sewer lines in Columbus. As part of this responsibility, CWW must make sure that all federal, state, local laws and guidelines are followed, including issues which affect the environment. To fulfill this commitment, CWW maintains water treatment plants, sewer processing facilities and a service center, which supports the maintenance of the system. Not only must CWW meet the current demands of Columbus, but they must plan and build to ensure the proper level of service in the future. NOTE 2: Summary of Significant Accounting Policies Fund Accounting CWW is an enterprise fund component of the Consolidated Government of Columbus, Georgia. Enterprise funds are used to account for operations that (a) are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of net change in net position is appropriate for management accountability purposes. The measurement focus is on determination of change in net position, financial position and cash flows. Basis of Presentation and Accounting CWW s financial statements are presented on the full accrual basis in accordance with accounting principles generally accepted in the United States of America -48-

53 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 2: Summary of Significant Accounting Policies - (Continued) Basis of Presentation and Accounting (Continued) All activities of CWW are accounted for within a single proprietary (enterprise) fund. Proprietary funds are used to account for operations that are (a) financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenue earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The accounting and financial reporting treatment applied to CWW is determined by its measurement focus. The transactions of CWW are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operations are included on the statements of net position. Net position is segregated into net investment in capital assets; restricted for capital projects, net of related debt; debt service; and unrestricted components. Operating income reported in the financial statements includes revenues and expenses related to the primary, continuing operations. Principal operating revenues are charges to customers for sales or services. Principal operating expenses are the costs of providing goods or services and include administrative expenses and depreciation of capital assets. Other revenues and expenses are classified as non-operating in the financial statements. When both restricted and unrestricted resources are available, it is CWW s policy to use restricted resources first, then unrestricted resources as they are needed. Budgets and Budgetary Accounting CWW operates under an annual Board-approved budget prepared on the accrual basis. However, since CWW is accounted for as an enterprise fund, budgetary comparisons are not presented in the accompanying financial statements. Cash and Cash Equivalents CWW s cash and cash equivalents include cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. CWW utilizes a purchase order encumbrance system. These encumbrances lapse at yearend. -49-

54 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 2: Summary of Significant Accounting Policies - (Continued) Accounts Receivable CWW has elected to record bad debts using the direct write-off method. Accounting principles generally accepted in the United States of America require that the allowance method be used to recognize bad debts; however, the effect of using the direct write-off method is not materially different from the results that would have been obtained under the allowance method. Inventories Inventories are stated at the lower-of-cost (determined by the first-in, first-out method) or market. Restricted Assets The accounts shown on the statement of net position as restricted assets include proceeds from grants, revenue bonds and other funds, which have been set aside either in the construction account or transferred to the debt service or renewal and extension accounts. Those funds are to be used, respectively, for approved construction, payments of principal and interest on the revenue bonds as such payments become due, and for replacements, extensions and improvements to the system including the purchase of equipment. Capital Assets and Related Depreciation and Amortization Capital assets in service and construction in progress are recorded at cost, if purchased or constructed. Assets acquired through contributions from developers or other customers are capitalized at their fair market value, if available, or at engineers estimated fair value or cost to construct at the date of the contribution. Costs of studies that directly result in specific construction projects are capitalized. The capitalization threshold for capital assets is $500. Maintenance and repairs, which do not significantly extend the value or life of property, plant and equipment, are expensed as incurred. Interest costs during construction are capitalized net of related investment earnings on the proceeds. Assets are depreciated using the straight-line method over the following estimated useful lives: Building and plant Water and sewer system Water and sewer system contributed by Ft. Benning Furniture, fixtures and equipment Automobiles, trucks and equipment years 50 years 25 years 5-10 years 5-10 years -50-

55 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 2: Summary of Significant Accounting Policies - (Continued) Deferred Outflows and Inflows of Resources -During the year ended June 25, 2014, CWW implemented the provisions of GASB No. 65, Items Previously Reported as Assets and Liabilities ( GASB 65 ). This provides financial reporting guidance related to deferred inflows of resources and deferred outflows of resources. In addition, GASB 65 requires that costs associated with the issuance of long-term debt be expensed in the period incurred. Previously, these costs were capitalized and amortized over the term of the related debt. Deferred outflows of resources related to bond refunding are the difference between the reacquisition price and the net carrying amount of the old debt resulting from current and advance bond refundings. These amounts are amortized over the remaining life of the debt which is included as a component of interest expense. For the years ending June 25, 2015 and 2014, interest expense included amortization of deferred outflows totaling $566,845 and $566,845, respectively. Deferred outflows of resources related to pensions are the CWW contributions to the pension plans made subsequent to the measurement date and will reduce the pension liability in future years. Deferred inflows of resources from pensions are the difference between the projected and actual earnings on pension plan investments and the changes in proportion and differences between employer contributions and proportionate share of contributions. Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, pension expense, and information about the fiduciary net position of the pension plan have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. City of Columbus Participation Columbus Council passed Resolution Number , which requires the Board of Water Commissioners to remit to Columbus six percent (6%) of the net receipts collected by CWW. -51-

56 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 2: Summary of Significant Accounting Policies - (Continued) Compensated Absences Compensated absences are those absences for which employees will be paid, such as vacation leave. A liability for compensated absences that are attributable to services already rendered and that are not contingent on a specific event that is outside the control of CWW and its employees is accrued as employees earn the rights to the benefits. Bond Premiums Bond premiums are amortized over the life of the debt using the straight line method. For the years ended June 25, 2015 and 2014 interest expense was offset by amortization of bond premiums of $1,188,512 and $940,977, respectively. Bond premiums are presented as liabilities increasing the face amounts of the related bonds payable. Capital Grants and Contributions Capital grants and contributions are recognized in the Statements of Revenues, Expenses and Changes in Net Position when earned. Contributions include developer contributed utility systems, capacity and other supplemental support by other utilities and industrial customers and federal, state and local grants in support of system improvements. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reclassifications Certain items in the 2014 financial statements have been reclassified in order to be in conformity with the 2015 statement presentation. NOTE 3: Deposit and Investment Risk Disclosures Cash and investments include bank balances and investments that at June 25, 2015 and 2014 were entirely insured or collateralized by securities held by CWW s agent in CWW s name. -52-

57 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 3: Deposit and Investment Risk Disclosures - Continued Investments State statutes limit investments to: bonds or obligations of governmental entities and/or political subdivisions of this state; bonds or obligations of the U.S. government which are fully guaranteed; obligations of agencies of the U.S. government; bonds or other obligations of public housing agencies or municipal corporations in the United States; and certificates of deposit of national or state banks insured by the Federal Deposit Insurance Corporation and federal savings and loan associations. Investments are reported at fair value. Short-term investments are recorded at cost, which approximates fair value. CWW has no investment policy that would further limit its investment choices. Interest Rate Risk - CWW does not have a formal policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Concentration of Credit Risk - CWW is not limited on the amount that may be invested in any one issuer. -53-

58 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 3: Deposit and Investment Risk Disclosures (Continued) As of June 25, 2015, CWW had the following investments: Investment Type Fair Value/ Carrying Amount Cost Credit Quality Rating (a) Maturity Dates Unrestricted Investments: Certificates of Deposit $ 36,115,450 $ 36,115,450 N/A Various Total Unrestricted Investments 36,115,450 36,115,450 Restricted Investments: Certificates of Deposit 3,005,256 3,005,256 N/A Various Federal Home Loan Bank Bonds 29,403,192 29,400,000 AA+ Various Total Restricted Investments 32,408,448 32,405,256 Total Investments $ 68,523,898 $ 68,520,

59 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 3: Deposit and Investment Risk Disclosures (Continued) As of June 25, 2014, CWW had the following investments: Investment Type Fair Value/ Carrying Amount Cost Credit Quality Rating (a) Maturity Dates Unrestricted Investments: Certificates of Deposit $ 22,687,804 $ 22,687,804 N/A Various Total Unrestricted Investments 22,687,804 22,687,804 Restricted Investments: Certificates of Deposit 7,855,032 7,855,032 N/A Various Federal Home Loan Bank Bonds 14,379,872 14,379,872 AAA Various Total Restricted Investments 22,234,904 22,234,904 Total Investments $ 44,922,708 $ 44,922,

60 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 3: Deposit and Investment Risk Disclosures (Continued) A reconciliation of cash and investments as shown on the statements of net position is summarized as follows: Cash and Cash Equivalents $ 14,356,769 $ 11,815,275 Cash and Cash Equivalents - Restricted Assets 17,061,870 43,749,918 Total Cash 31,418,639 55,565,193 Investments 36,115,450 22,687,804 Investments - Restricted Assets 32,408,448 22,234,904 Total Investments 68,523,898 44,922,708 Total Cash and Investments $ 99,942,537 $ 100,487,901 NOTE 4: Accounts Receivable Accounts receivable are summarized as follows: Consumers - Current Bills $ 4,578,930 $ 5,754,145 Consumers - Unbilled 2,086,545 4,965,055 General 15, ,133 Total Accounts Receivable $ 6,681,388 $ 10,916,

61 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 5: Inventories The major classifications of inventories are summarized as follows: Materials and Supplies $ 921,189 $ 932,092 Automotive 44,121 67,540 Total Inventories $ 965,310 $ 999,

62 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 6: Capital Assets Capital assets as of June 25, 2015 are summarized as follows: Balance June 25, 2014 Deletions/ Reclassifications Balance June 25, 2015 Additions Capital Assets, not being depreciated: Land $ 2,553,149 $ 0 $ 0 $ 2,553,149 Construction in Progress 82,422,040 17,949,782 (42,282,104) 58,089,718 Total not depreciated 84,975,189 17,949,782 (42,282,104) 60,642,867 Capital Assets, being depreciated: Building and Equipment 22,045, ,626 (23,332) 22,210,178 Watershed Study 3,010, ,010,320 Filtration Plant 39,678, ,828 13,237,368 53,114,699 Sewage Disposal Plant 67,445, ,512 19,142,460 87,253,800 Water Distribution System 117,635,911 1,207,117 3,993, ,836,769 Water System - Fort Benning 126,391, , , ,070,507 Sewer System 233,052,963 1,845, , ,381,781 Sewer System - Fort Benning 83,019,542 1,196, ,216,251 Elevated Tanks 3,316,499 59,800 3,547,387 6,923,686 Furniture and Fixtures 2,889,617 72,523 83,336 3,045,476 Autos, Trucks, and Equipment 11,632,568 1,046,516 (680,677) 11,998,407 Intercommunication System 3,418,316 23, ,414 3,845,398 Laboratory Equipment 1,052,830 66,145 2,151 1,121,126 Capitalized Studies/IT Projects 5,775,447 28,545 50,981 5,854,973 Total depreciated 720,365,435 7,567,367 40,950, ,883,371 Total Capital Assets $ 805,340,624 $ 25,517,149 $ (1,331,535) $ 829,526,

63 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 6: Capital Assets (Continued) Balance June 25, 2014 Additions Deletions/ Reclassifications Balance June 25, 2015 Accumulated depreciation: Building and Equipment $ (7,637,173) $ (752,212) $ 37,459 $ (8,351,926) Watershed Study (2,048,365) (24,986) 0 (2,073,351) Filtration Plant (19,852,551) (886,361) 3,500 (20,735,412) Sewage Disposal Plant (34,648,846) (1,581,223) 51,182 (36,178,887) Water Distribution System (48,199,637) (4,456,032) 0 (52,655,669) Water System - Fort Benning (26,951,377) (2,491,639) 0 (29,443,016) Sewer System (97,521,271) (7,025,237) 28,894 (104,517,614) Sewer System - Fort Benning (23,343,298) (1,681,605) 0 (25,024,903) Elevated Tanks (1,596,088) (79,967) 0 (1,676,055) Furniture and Fixtures (2,414,764) (156,619) 9,592 (2,561,791) Autos, Trucks, and Equipment (7,669,270) (809,018) 1,155,874 (7,322,414) Intercommunication System (2,008,816) (193,698) 0 (2,202,514) Laboratory Equipment (786,354) (81,838) 23,034 (845,158) Capitalized Studies/IT Projects (2,729,418) (552,980) 22,000 (3,260,398) Accumulated Depreciation (277,407,228) (20,773,415) 1,331,535 (296,849,108) Capital Assets, Net of Depreciation $ 527,933,396 $ 4,743,734 $ 0 $ 532,677,

64 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 6: Capital Assets (Continued) Capital assets as of June 25, 2014 are summarized as follows: Balance June 25, 2013 Additions Capital Assets, not being depreciated: Land $ 2,553,149 0 Deletions/ Reclassifications Balance June 25, 2014 $ $ 0 $ 2,553,149 Construction in Progress 116,970,057 24,307,855 (58,855,872) 82,422,040 Total not depreciated 119,523,206 24,307,855 (58,855,872) 84,975,189 Capital Assets, being depreciated: Building and Equipment 13,972, ,920 7,424,543 22,045,884 Watershed Study 3,010, ,010,320 Filtration Plant 39,488,664 40, ,562 39,678,503 Sewage Disposal Plant 67,165, ,684 80,664 67,445,828 Water Distribution System 104,984, ,727 11,731, ,635,911 Water System - Fort Benning 98,158,198 63,329 28,169, ,391,207 Sewer System 227,899, ,427 4,392, ,052,963 Sewer System - Fort Benning 77,685, ,487 4,618,224 83,019,542 Elevated Tanks 3,316, ,316,499 Furniture and Fixtures 2,768,771 99,626 21,220 2,889,617 Autos, Trucks, and Equipment 10,502,431 1,064,652 65,485 11,632,568 Intercommunication System 3,418, ,418,316 Laboratory Equipment 945,980 57,833 49,017 1,052,830 Capitalized Studies/IT Projects 3,533,814 93,214 2,148,419 5,775,447 Total depreciated 656,850,929 4,663,176 58,851, ,365,435 Total Capital Assets $ 776,374,135 $ 28,971,031 $ (4,542) $ 805,340,

65 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 6: Capital Assets (Continued) Balance June 25, 2013 Additions Deletions/ Reclassifications Balance June 25, 2014 Accumulated depreciation: Building and Equipment $ (6,974,526) $ (662,647) $ 0 $ (7,637,173) Watershed Study (1,700,524) (347,841) 0 (2,048,365) Filtration Plant (19,028,397) (824,154) 0 (19,852,551) Sewage Disposal Plant (33,169,290) (1,482,428) 2,872 (34,648,846) Water Distribution System (43,963,168) (4,236,469) 0 (48,199,637) Water System - Fort Benning (24,582,507) (2,368,870) 0 (26,951,377) Sewer System (90,657,744) (6,863,527) 0 (97,521,271) Sewer System - Fort Benning (21,700,402) (1,642,896) 0 (23,343,298) Elevated Tanks (1,525,058) (71,030) 0 (1,596,088) Furniture and Fixtures (2,268,467) (146,297) 0 (2,414,764) Autos, Trucks, and Equipment (7,083,893) (587,047) 1,670 (7,669,270) Intercommunication System (1,813,636) (195,180) 0 (2,008,816) Laboratory Equipment (730,208) (56,146) 0 (786,354) Capitalized Studies/IT Projects (2,057,422) (671,996) 0 (2,729,418) Accumulated Depreciation (257,255,242) (20,156,528) 4,542 (277,407,228) Capital Assets, Net of Depreciation $ 519,118,893 $ 8,814,503 $ 0 $ 527,933,

66 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 7: Capitalized Interest Net interest costs for capital asset construction are capitalized as part of the project cost. Net interest expense capitalized to date for projects under construction at June 25, 2015 and 2014 is $25,785,122 and $20,326,042, respectively. Interest expense capitalized for the years ended June 25, 2015 and 2014 totaled $6,566,006 and $6,181,775, respectively. Interest income capitalized for the years ended June 25, 2015 and 2014 totaled $94,939 and $30,209, respectively. NOTE 8: Accounts Payable Accounts payable are summarized as follows: Trade $ 1,731,383 $ 1,633,657 City of Columbus Participation 1,068,889 1,106,564 Total Accounts Payable $ 2,800,272 $ 2,740,221 NOTE 9: Accrued Compensated Absences Vacation leave for regular, full-time employees with an effective hire date on or after June 26, 2009 shall be accrued at 10 days per year during the first 10 years of employment; 15 days per year at 10 to 20 years of employment; 20 days per year at 20 to 25 years of employment; and 25 days per year after 25 years of employment. Employees with an effective hire date prior to June 26, 2009 shall accrue 10 days per year during the first complete five years of service, with one additional day for each year thereafter, to a maximum of 25 days per year after 20 complete years of service. Accrued vacation payable at June 25, 2015 and 2014 totals $826,153 and $823,428 respectively Short Term $ 565,414 $ 566,241 Long Term 260, ,187 Total Accrued Compensated Absences $ 826,153 $ 823,

67 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 10: Long-Term Debt At June 25, 2015 and 2014, respectively, long-term debt consists of the following: Revenue Bonds CWW issues bonds whereby the payment is made solely from the revenue of CWW Maturities Maturities Current Long-Term Current Long-Term Revenue Bond Series 2009 due in annual installments beginning May 1, 2010 through 2025; interest at 2.00 to 5.00 percent. $ 2,620,000 $ 25,920,000 $ 2,520,000 $ 28,540,000 Revenue Bond Series 2012A (partial refunding of Series 2005) due in annual installments of $1,115,0000 to $5,050,000 beginning May 1, 2017 through May 1, 2025; interest at 3.00 to 5.00 percent. 0 27,705, ,705,000 Revenue Bond Series 2012B (refunding of Series 2003) due in annual installments of $4,220,000 to $5,575,000 beginning May 1,2013 through May 1, 2020; interest at.71 to 2.75 percent. 4,395,000 21,465,000 4,330,000 25,860,

68 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 10: Long-Term Debt - (Continued) Maturities Maturities Current Long-Term Current Long-Term Revenue Bond Series 2013A (refunded Series 2007) due in annual installments of $590,000 to $7,495,000 beginning May 1,2013 through May 1, 2031; interest at 2.00 to 5.00 percent. 1,700,000 48,170,000 1,650,000 49,870,000 Revenue Bond Series 2014 (refunded remaining Series 2005) due in annual installments of $150,000 to $3,450,000 beginning May 1,2015 through May 1, 2034; interest at 2.00 to 5.00 percent. 1,445,000 30,435,000 1,115,000 31,880,000 Bond Premiums, net of amortization 0 16,781, ,969,729 Total Revenue Bonds 10,160, ,476,216 9,615, ,824,

69 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 10: Long-Term Debt - (Continued) Notes Payable Current Long-Term Current Long-Term Drinking Water State Revolving Loan Fund due in eighty (80) quarterly installments, commencing February 1, 2001; interest accrues at 0 percent. 25, ,028 25, ,786 Clean Water State Revolving Loan Fund due in eighty (80) quarterly installments, commencing December 1, 2011; interest accrues at 3.67 percent. 176,876 3,760, ,754 3,937,295 Clean Water State Revolving Loan Fund due in two hundred fourty (240) monthly installments, commencing April 1, 2009; interest accrues at 3.00 percent. 1,121,224 17,690,620 1,088,978 18,811,

70 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 10: Long-Term Debt - (Continued) Current Long-Term Current Long-Term Clean Water State Revolving Loan Fund due in two hundred eleven (211) monthly installments, commencing September 1, 2011; interest accrues at 3.00 percent. 37, ,869 36, ,198 Drinking Water State Revolving Loan Fund due in seventy-seven (78) quarterly installments commencing December 1, 2008; interest accrues at 3 percent. 359,360 5,137, ,030 5,497,144 Total Notes Payable 1,720,547 27,280,720 1,670,775 29,001,266 Total Long-Term Debt, including bond premiums $ 11,880,547 $ 197,756,936 $ 11,285,775 $ 210,825,

71 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 10: Long-Term Debt - (Continued) As of June 25, 2015, debt service requirements to maturity for principal and interest are as follows: Bonds Payable Year Ending June 25, Principal Interest Total 2016 $ 10,160,000 $ 6,900,439 $ 17,060, ,915,000 6,631,409 17,546, ,560,000 6,300,509 16,860, ,740,000 5,960,508 16,700, ,085,000 5,618,068 16,703, ,780,000 20,969,625 74,749, ,805,000 9,522,500 50,327, ,810,000 1,289,600 17,099,600 $ 163,855,000 $ 63,192,658 $ 227,047,658 Notes Payable Year Ending June 25, Principal Interest Total 2016 $ 1,720,547 $ 871,703 $ 2,592, ,776, ,239 2,592, ,829, ,131 2,592, ,885, ,014 2,592, ,942, ,180 2,592, ,520,987 2,311,480 12,832, ,863, ,549 9,506, ,738 15, ,756 $ 29,001,267 $ 6,777,314 $ 35,778,581 Total Long-Term Debt Year Ending June 25, Principal Interest Total 2016 $ 11,880,547 $ 7,772,142 $ 19,652, ,691,012 7,447,648 20,138, ,389,120 7,063,640 19,452, ,625,235 6,667,522 19,292, ,027,069 6,268,248 19,295, ,300,987 23,281,105 87,582, ,668,559 10,165,049 59,833, ,273,738 1,304,618 17,578,356 $ 192,856,267 $ 69,969,972 $ 262,826,

72 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 10: Long-Term Debt - (Continued) Bond Covenants The various bond indentures contain significant limitations and restrictions on annual debt service requirements, maintenance of and flow of monies through various restricted accounts, minimum amounts to be maintained in various sinking funds, and minimum revenue bond coverage. CWW is in compliance with all such significant limitations and restrictions. During the year ended June 25, 2014 CWW refunded the remaining 2005 Bond. The refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $243,732. Because the refunded bonds were called on June 13, 2014, this difference is recognized in the current period as a decrease to interest expense. CWW completed the refunding to reduce its total debt service payments by $4,618,718 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $4,513,103. During the year ended June 25, 2013, CWW advance refunded the 2007 Bond Series and three revolving GEFA loans. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $5,158,201. This difference, reported in the accompanying financial statements as a deferred outflow of resources, is being charged to interest expense through the year 2031 using the straight-line method over the life of the new debt. CWW completed the advance refunding to reduce its total debt service payments by $3,337,982 and to obtain an economic gain (difference between the present values of the old and new debt service payments) of $2,724,541. During the year ended June 25, 2012, CWW advance refunded the 2003 Bond. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $1,963,083. This difference, reported in the accompanying financial statements as a deferred outflow of resources is being charged to interest expense through the year 2020 using the straight-line method. CWW completed the advance refunding to reduce its total debt service payments by $2,850,643 and to obtain an economic gain (difference between the present value of the old and new debt service payments) of $2,698,639. During the year ended June 25, 2012, CWW advance refunded a portion of the 2005 Bond. The advance refunding resulted in a difference between the reacquisition price and the net carrying amount of the old debt of $2,400,017. This difference, reported in the accompanying financial statements as a deferred outflow of resources is being charged to interest expense through the year 2025 using the straight-line method. CWW completed the advance refunding to reduce its total debt service payments by $2,303,580 and to obtain an economic gain (difference between the present value of the old and new debt service payments) of $2,154,

73 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 10: Long-Term Debt - (Continued) Changes in Long-Term Obligations The following is a summary of changes in the carrying costs of long-term debt obligations of CWW for the fiscal year ended June 25, 2015: 2015 Beginning Balance Increases, Including Amortization of Bond Premiums Decreases Ending Balances Amounts Due Within One Year Long-Term Amounts Revenue Bonds $ 191,439,729 $ 0 $ (10,803,513) $ 180,636,216 $ 10,160,000 $ 170,476,216 Notes Payable 30,672,041 0 (1,670,774) 29,001,267 1,720,547 27,280,720 Compensated Absences 823, ,966 (566,241) 826, , ,739 $ 222,935,198 $ 568,966 $ (13,040,528) $ 210,463,636 $ 12,445,961 $ 198,017,675 The following is a summary of changes in the carrying costs of long-term debt obligations of CWW for the fiscal year ended June 25, 2014: 2014 Beginning Balance Increases, Including Amortization of Bond Premiums Decreases Ending Balances Amounts Due Within One Year Long-Term Amounts Revenue Bonds $ 176,004,940 $ 38,395,766 $ (22,960,977) $ 191,439,729 $ 9,615,000 $ 181,824,729 Notes Payable 32,293,197 0 (1,621,156) 30,672,041 1,670,775 29,001,266 Compensated Absences 773, ,912 (522,035) 823, , ,187 $ 209,071,688 $ 38,967,678 $ (25,104,168) $ 222,935,198 $ 11,852,016 $ 211,083,

74 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 11: Other Postemployment Benefits Plan description The Columbus Water Works Retiree Healthcare Plan is a singleemployer defined benefit healthcare plan administered by CWW. The Plan does not issue a separate financial report. The Plan provides continuation of medical and dental insurance benefits to eligible non-medicare retirees and their covered dependents in the active plan, a fully insured Point-of-Service Plan (POS). Non-Medicare retirees and covered dependents that are covered by the POS are also covered by a fully insured dental plan. There is no dental coverage after age 65. Medicare-eligible retirees are covered by a Medicare Supplement Plan F. Funding policy The contribution requirements of plan members are established and may be amended by CWW. The required contribution is based on a pay-as-you-go basis. The 2015 monthly participation contribution rates for POS-High Option for health coverage is $75.00 and dental coverage is $1.00 for single coverage and $ for health coverage and $2.00 for dental for family coverage. The monthly employee contribution rates to the POS-Low Option for health coverage are $30.00 for single coverage and $ for family coverage. Vision coverage is also an option this year at a cost of $7.22 for single coverage and $17.33 for family coverage. The Medicare Supplement plan does not require retiree contributions (spouses pay 100% at premium amount). The Medicare Supplement Plan F premium rates vary by age and range from $178 - $270. When a retiree becomes eligible for Medicare, the spouse may continue POS coverage until he/she reaches age 65 at family premium amount. Annual OPEB Cost and Net OPEB Obligation CWW s annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of CWW s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in CWW s net OPEB obligation to the Retiree Healthcare Plan: -70-

75 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 11: Other Postemployment Benefits (Continued) Normal cost $ 778,000 $ 694,000 Amortization of Actuarial liability 593, ,000 Annual Required Contribution (ARC) 1,371,000 1,206,000 Interest on net OPEB obligation 211, ,000 Adjustment to ARC (203,000) (134,000) Annual OPEB cost 1,379,000 1,212,000 Contributions made (313,000) (320,000) Increase in NetOPEB obligation 1,066, ,000 Net OPEB obligation - beginning of year 5,272,000 4,380,000 Net OPEB obligation - end of year $ 6,338,000 $ 5,272,000 CWW s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for June 25, 2015 and the two preceding years were as follows: Annual Percentage of OPEB Net OPEB Year ended OPEB cost Cost contributed Obligation June 25, 2013 $ 1,212, % $ 4,380,000 June 25, 2014 $ 1,212, % $ 5,272,000 June 25, 2015 $ 1,379, % $ 6,338,

76 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 11: Other Postemployment Benefits (Continued) Funded Status and Funding Progress As of July 1, 2015, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $15,430,000, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability (UAAL) of $15,430,000, as disclosed in the following table. Unfunded Actuarial Actuarial UAAL Actuarial Actuarial Accrued Accrued as % of Valuation Value of Liability Liability Funded Covered Covered Date Assets (AAL) (UAAL) Ratio Payroll Payroll July 1, ,669,000 12,669, % 10,538, % July 1, ,330,000 13,330, % 12,254, % July 1, ,430,000 15,430, % 13,286, % Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Amounts determined regarding the funded status of the plan and the annual required contributions of CWW are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing or benefit costs between CWW and the plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. -72-

77 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 11: Other Postemployment Benefits - (Continued) In the July 1, 2015 actuarial valuation, the actuarial cost method used was the projected unit credit method with benefits attributed from date of hire to assumed termination of employment. The amortization method is 30 years, level percent of payroll. Total payroll was assumed to grow at 3.25% annually. The remaining amortization period of the UAAL is 30 years and is open. The actuarial assumptions included a 4.0% discount rate representing an unfunded (pay-as-you-go) plan. The healthcare cost trend rate is 8.00% for the POS and 6.00% for the Medicare Supplemental Plan F reduced by decrements to an ultimate rate of 4.50% after seven and two years, respectively. NOTE 12: Capital Grants and Contributions Capital grants and contributions for 2015 represent contributions of contributed lines by developers of $2,845,649, contributed water and sewer system by Ft. Benning of $2,193,011 for fiscal year ended June 25, Capital grants and contributions for 2014 represent contributions of contributed lines by developers of $1,269,227, contributed water and sewer system by Ft. Benning of $788,014, and contributed funding for development of Oxbow Meadows Environment Learning Center facilities by the City of $5,138,057 for fiscal year ended June 25,

78 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 13: Restatement Due to implementation of Governmental Accounting Standards Board ( GASB ) No. 68 entitled Accounting and Financial Reporting for Pensions An Amendment of GASB Statement No. 27, CWW has restated items on the Statement of Net Position as summarized below: As previously GASB 68 reported Restatement As restated Statement of Net Position: Deferred outflows of resources: Deferred amount of pensions $ 0 $ 2,271,308 $ 2,271,308 Net pension liability 0 13,270,017 13,270,017 Unrestricted Net Position 36,919,492 (10,998,709) 25,920,783 NOTE 14: Employee Benefit Plans CWW contributes to the Consolidated Government of Columbus, Georgia Public Employee Retirement Systems Pension and Benefit Trust Fund, a public employee retirement plan, administered by the Consolidated Government of Columbus, Georgia (Consolidated Government). The Fund is a cost sharing multiple-employer defined benefit plan. Financial information on the plans is included in the Comprehensive Annual Financial Report of the Consolidated Government of Columbus, GA. A copy of a financial report can be obtained by writing to the Consolidated Government of Columbus, Georgia, P.O. Box 1340, Columbus, Georgia The Consolidated Government of Columbus, Georgia administers three defined benefit plans-employee s Pension Plan, Death Benefit Plan, and Major Disability Income Plan of which CWW participates. Substantially all of the eligible employees of CWW are covered by these plans. Although the assets of the plans are co-mingled for investment purposes, each plan s assets may be used only for the payment of benefits to the members of the plan, in accordance with the terms of the plan. -74-

79 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 14: Employee Benefit Plans - (Continued) Employees Pension Plan Plan Description The Employees Pension Plan is a cost sharing multiple-employer defined benefit pension plan that covers the employees of the Consolidated Government, which includes CWW as well as other related agencies and authorities. The plan provides retirement and pre-retirement death benefits to plan members and their beneficiaries. The basic pension formula is 2% of annual earnings time up to 30 years if service. Contributions All participating employees are required to contribute 4 % (for employees hired prior to July 1, 2012) or 8% (for employees hired after June 30, 2012) of their pensionable earnings to the plan. The employer s contribution to the plan is actuarially determined on an annual basis. The contribution requirements may be amended by the City ordinance, but employer contribution requirement is subject to state minimums. The amounts contributed by CWW to the plan for years ended June 30, 2015, 2014 and 2013 were $2,052,320, $2,238,104 and $2,050,491, respectively, which are equal to the required contributions for each year. The required contributions for the plan as a whole for the years ending June 30, 2015, 2014 and 2013 were $11,301,324, $12,580,686, and $12,103,455, respectively. The required contributions by CWW to the plan for the years ending June 30, 2015, 2014 and 2013 were 18.16%, 17.79% and 16.94%, respectively, of the required minimum contributions for the plan as a whole. Death Benefit Plan for Retirees Plan Description The Death Benefit Plan is a cost sharing multiple employer defined benefit plan that covers employees of the Consolidated Government, which includes CWW as well as other related agencies and authorities. The plan provides a death benefit to those employees who on the day prior to retirement are insured for group life insurance under the Columbus, Georgia Employees Group Insurance Plan. In addition, a death benefit for spouses and dependents is optional provided a monthly premium is paid. Contributions Employees may elect to pay a monthly contribution for death benefit coverage for their spouse and dependents. The employer s contribution to the plan is actuarially determined on an annual basis and subject to state minimums. The amounts contributed by CWW for the plan years ended June 30, 2015, 2014 and 2013 were $36,374, $21,024, and $25,488, respectively, which are equal to the required contributions for each year. -75-

80 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 14: Employee Benefit Plans - (Continued) The required contributions for the plan as a whole for the years ending June 30, 2015, 2014 and 2013 were $404,161, $239,999, and $276,199, respectively. The required contributions by CWW to the plan for the years ending June 30, 2015, 2014 and 2013 were 9.00%, 8.76% and 9.22%, respectively, of the required minimum contributions for the plan as a whole. Major Disability Income Plan Plan Description The Major Disability Income Plan is a cost sharing multiple employer defined benefit plan that covers each full-time employee of the Consolidated Government, which includes CWW as well as other related agencies and authorities. The plan provides a monthly benefit to those employees who become totally disabled prior to attainment of age 64 years and six months and supply written proof of entitlement to a benefit under the Federal Social Security Act. Contributions Contributions by employees are neither required nor permitted. The employer s contribution to the plan is actuarially determined on an annual basis. The amounts contributed by CWW for the plan years ended June 30, 2015, 2014 and 2013 were $29,261, $12,180 and $10,249 respectively, which are equal to the required contributions for each year. The required contributions for the plan as a whole for the years ending June 30, 2015, 2014 and 2013 were $302,591, $129,992, and $111,063, respectively. The required contributions by CWW to the plan for the years ending June 30, 2015, 2014 and 2013 were 9.67%, 9.37% and 9.23%, respectively, of the required minimum contributions for the plan as a whole. -76-

81 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 14: Employee Benefit Plans - (Continued) Pension liabilities, Pension expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 25, 2015, CWW reported a liability for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of July 1, An expected total pension liability as of June 30, 2014 was determined using standard roll-forward techniques. CWW s portion of the net pension liability was based on contributions to the plans during the year ended June 25, At June 30, 2014, measurement date, CWW s proportion of the net pension liability was % which was a decrease.0005% from its proportion measured as of June 30, For the year ended June 25, 2015, CWW recognized pension expense of $1,827,505. At June 25, 2015, CWW reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 0 $ 0 Changes of assumptions 0 0 Net difference between projected and actual earnings on pension plan investments 0 1,317,688 Changes in proportion and differences between Employer contributions and proportionate share of contributions 0 0 Employer contributions subsequent to the measurement date 2,117,955 0 Total $ 2,117,955 $ 1,317,

82 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 14: Employee Benefit Plans - (Continued) CWW contributions subsequent to the measurement date of $2,117,955 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 25, Other amounts reported as deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 25: 2016 $ (329,422) 2017 (329,422) 2018 (329,422) 2019 (329,422) 2020 Thereafter $ (1,317,688) Actuarial assumptions: The total pension liability as of June 30, 2014 was determined by an actuarial valuation as of July 1, 2013 using the following actuarial assumptions, applied to all periods included in the measurement: Discount rate: 6.18% per annum (2.5% is attributable to long-term inflation); this rate was used to discount all future payments Salary increases: 3.25% per annum Cost of living increases: None assumed Mortality basis: Sex-distinct rates set forth in the 1994 Group Annuity Mortality Static Table; future generational improvements in mortality have not been reflected. Retirement (General employees): Retirement is assumed to occur after 15 years of service at the rate of 5% at each of ages 55 through 60, 10% at age 61, 30% at age 62, 15% at each of ages 63 and 64, and 100% thereafter. -78-

83 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 14: Employee Benefit Plans - (Continued) Retirement (Public Safety employees): Retirement is assumed to occur after 20 years of service at the rate of 3% at each of ages 50 through 54, 20% at each of ages 55 through 59, 10% at age 60,25% at age 61,50% at age 62, and 30% at each of ages 63 and 64; 100% of employees are assumed to retire at age 65 regardless of service. Future contributions: Contributions from the employers and employees are assumed to be made as legally required. Changes: The actuarial assumptions did not change from the prior measurement date since GASB67/68 is first effective for this measurement period. Determination of the Long-term expected rate of return on Plan Assets: Expected Target Long term Asset Class Allocation Real Return per Annum Core fixed income 33.00% 2.17% Global fixed income 4.00% 1.83% Large cap growth equity 15.00% 4.27% Large cap core equity 13.00% 4.27% Large cap value equity 15.00% 4.27% Mid cap equity 2.00% 4.44% Small cap equity 2.00% 4.44% International equity 10.00% 5.35% Emerging markets equity 3.00% 7.22% Real estate 3.00% 4.06% Total or weighted arithmetic average % 3.68% -79-

84 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 14: Employee Benefit Plans - (Continued) Sensitivity of CWW s proportionate share of the net pension liability to changes in the discount rate: The following presents CWW s proportionate share of the net pension liability calculated using the discount rate of 6.18%, as well as what CWW s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.18%) or 1-percentage-point higher (7.18%) than the current rate: 1% Current 1% Decrease discount rate Increase 5.18% 6.18% 7.18% CWW's proportionate share of the net pension liability $ 16,191,156 $ 11,508,526 $ 7,568,189 Pension plan fiduciary net position Detailed information about the pension plans fiduciary net position is available in the stand-alone financial report issued each year. The plans fiduciary net position has been determined on the same basis used by the pension plan and is equal to the market value of assets calculated under the accrual basis of accounting. This report is available at the plans administrative office: City of Columbus, Department of Human Resources, 100 Tenth Street, Columbus, GA NOTE 15: Administrative Fees On June 2, 1992, the Consolidated Government of Columbus, Georgia passed an ordinance which requires a charge for residential solid waste collection to be billed on a monthly cycle. CWW has been appointed as the billing and collection agent only, and remits all charges collected, less an administrative fee, to the Consolidated Government of Columbus, Georgia. CWW received $132,654 and $130,411 in administrative fees for the years ended June 25, 2015 and 2014, respectively. For the years ended June 25, 2015 and 2014, CWW recognized $160,300 and $521,973 in fees from the administration of construction contracts at Ft. Benning. This is for Base Realignment and Closure (BRAC) contract modifications for Ft. Benning outside of the normal service contract. For the year ended June 25,2014, CWW recognized $3,948,192 for 2009 Bond contract administration fees associated with construction of the Ft Benning Water Plant. For the years ended June 25, 2015 and 2014, Bond issuance costs of $0 and $481,579 were charged to other administrative expenses, respectively. -80-

85 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 16: Commitments and Contingencies CWW is under obligation for various construction contracts in the amounts of $26,435,447 at June 25, At that date, $5,320,505 had been spent, leaving an uncompleted contractual obligation of $21,114,943. In 2004, CWW entered into a fifty-year contract with the Department of the Army for privatization of the Fort Benning water and sewerage system under which CWW assumed all responsibility for operations, maintenance, repairs, investments and replacement of all system components. Revenue generated during the years ended June 25, 2015 and 2014, was $12,589,440 and $12,022,722, respectively. Expenses and capital outlay during the years ended June 25, 2015 and 2014 amounted to $4,681,969 and $4,508,599 excluding debt service payments, respectively. The capital required for the construction, maintenance, repairs and operational expenses will be funded entirely from revenue generated from Fort Benning. During the year ended June 25, 2009, the Fort Benning contract was modified. As part of the modification, CWW agreed to finance the cost of necessary upgrades to the water and sewerage system through the issuance of the 2009 Revenue Bond Series. In order to offset the costs incurred by CWW, Fort Benning agreed to pay CWW monthly amounts sufficient to provide 1.25 times the debt service coverage of the 2009 Revenue Bond Series until the bonds are retired. Payments during each of the years ended June 25, 2015 and 2014 amounted to $4,860,492 and are included in non-operating revenue. CWW is the defendant in lawsuits arising from normal operations. Management has reviewed pending litigation with legal counsel and believes that the ultimate liability, if any, resulting from these actions will be settled within insurance limits and will not materially affect the financial position of CWW. -81-

86 COLUMBUS, GEORGIA NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 25, 2015 AND 2014 NOTE 17: Risk Management CWW carries commercial insurance for various risks of loss related to torts, destruction of assets and errors and omissions including coverage under auto, general liability and umbrella policies of $1,000,000, $3,000,000 and $10,000,000, respectively. In addition, CWW has established a self-funded program for workers compensation. An excess coverage insurance policy covers aggregate claims in excess of $150,000 up to $1,000,000. There have been no settlements to exceed insurance coverage in the past three fiscal years. CWW belongs to the subsequent injury fund with the State of Georgia, which reduces their exposure based on re-injured employees. Management elected to expense claims as they are paid; therefore, no estimated liability has been accrued. Claims and associated expenses are as follows: Estimated Liability at Beginning of Year $ 0 $ 0 $ 0 Claims Incurred 271, , ,098 Claims Paid (271,230) (238,232) (138,098) Estimated Liability at End of Year $ 0 $ 0 $ 0-82-

87 COLUMBUS, GEORGIA REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED JUNE 25, 2015 Defined Benefit Pension Plans Schedule of Proportionate Share of the Net Pension Liability 2015 CWW's proportion of the net pension liability % CWW's proportionate share of the net pension liability $ 11,508,526 CWW's covered-employee payroll during the measurement period $ 13,034,377 CWW's proportionate share of the net pension liability as a percentage of its covered-employee payroll 88.29% Plan fiduciary net position as a percentage of the total pension liability 68.70% Schedule of Contributions Pension Death benefit Disability income Contractually required contribution $ 2,052,320 $ 36,374 $ 29,261 Contributions in relation to the contractually required contribution 2,052,320 36,374 29,261 Contribution deficiency (excess) $ 0 $ 0 $ 0 CWW's covered-employee payroll $ 13,034,377 $ 13,034,377 $ 13,034,377 Contributions as a percentage of covered-employee payroll 15.75% 0.28% 0.22% NOTES TO REQUIRED SUPPLEMENTARY INFORMATION Methods and Assumptions Used in Calculations of Actuarially Determined Contributions The actuarial methods and assumptions below were used to determine the contractually required contributions above for the year ended June 30, There were no changes in assumptions or benefits that affect the measurement of the total pension liability since the prior measurement date. Valuation date July 1, 2014 Actuarial cost method Frozen initial liability Amortization method Level dollar, closed Remaining amortization method 11 years Asset valuation method Three-year smoothed market value Inflation rate 2.50% Salary increases 3.25% Investment rate of return 7.00% The schedules above are intended to show information for the last 10 years. Additional years will be displayed as they become available. -83-

88 -84-

89 COLUMBUS, GEORGIA Comprehensive Annual Financial Report A Component Unit of the Consolidated Government of Columbus, Georgia For the Fiscal Year Ended June 25, 2015 and 2014 STATISTICAL SECTION (Unaudited) COMMENTS Statistical tables differ from financial statements because they usually cover more than two fiscal years and may contain non-accounting data. These schedules reflect financial trends of the water and sewer system and social and economic data. -85-

90 STATISTICAL SECTION This part of the Columbus Water Works comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, notes disclosures, and required supplementary information says about the organization s overall financial health. CONTENTS Financial Trends These schedules contain trend information to help the reader understand how the Columbus Water Works financial performance has changed over time. Revenue Capacity These schedules contain trend information to help the reader assess the Columbus Water Works most significant local revenue source. Debt Capacity These schedules present information to help the reader assess the affordability of the Columbus Water Works current levels of outstanding debt and the Columbus Water Works ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Columbus Water Works financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the Columbus Water Works financial report relates to the services provided and the activities performed. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. -86-

91 Financial Trends Net Position by Component Fiscal Year Ended June 25, Invested in capital assets, net of related debt $ 296,302,850 $ 312,980,325 $ 324,560,202 $ 327,465,492 $ 340,403,342 $ 355,395,922 $ 362,066,987 Restricted 20,448,968 15,595,613 20,471,990 22,937,391 18,829,313 21,571,472 15,253,741 Unrestricted 42,001,805 38,869,854 40,937,978 40,338,276 27,796,378 25,920,783 36,748,480 Total net assets $ 358,753,623 $ 367,445,792 $ 385,970,170 $ 390,741,159 $ 387,029,033 $ 402,888,177 $ 414,069,208 Note: Columbus Water Works implemented GASB 45 in FY ended 6/25/09. Columbus Water Works implemented GASB 65 restating FY 6/25/14 and 6/25/13-87-

92 Financial Trends Change in Net Position Change in Net Position Fiscal Year Ended June 25, Operating Revenues Water Sales $ 17,838,290 $ 18,251,165 $ 21,682,986 $ 21,110,880 $ 20,815,144 $ 20,357,663 $ 21,486,011 Sewer Charges 21,213,912 21,745,344 23,331,988 22,584,710 22,733,302 23,517,627 23,623,033 Fort Benning Water and Sewer Charges 6,094,849 6,094,849 6,488,659 6,619,929 6,619,918 6,901,885 7,026,101 Fort Benning CM100 O&M Services 517, ,933 1,502,489 4,239,272 5,120,837 5,563,339 CSO fees 1,719,927 1,716,970 1,830,860 1,848,707 1,826,390 1,849,853 1,917,933 Tapping fees and miscellaneous charges 1,553,837 1,561,819 1,583,509 1,709,269 1,630,225 1,729,984 1,814,932 Total Operating Revenue 48,420,815 49,888,146 55,885,935 55,375,984 57,864,251 59,477,849 61,431,349 Operating Expenses Field Services 5,668,268 5,116,673 6,171,860 5,426,688 6,792,375 6,902,076 7,190,561 South Columbus Water Resources Facility North Columbus Water Resources Facility 4,151,848 4,124,103 4,352,811 4,532,121 4,280,253 4,591,060 4,161,531 3,722,715 3,533,378 4,332,581 4,772,404 4,429,056 4,137,787 4,142,140 CSO Plants 1,001, ,581 1,065,638 1,027,584 1,144,192 1,052, ,213 Managed Maintenance 1,861,794 2,352,747 2,463,691 2,492,426 2,651,699 2,745,982 2,921,780 Engineering 1,191,281 1,273,702 1,345,178 1,349,543 1,356,374 1,460,877 1,431,265 Information Services 561, , , ,938 1,071,430 1,118,345 1,370,108 Water Quality Monitoring 1,289,560 1,491,452 1,512,279 1,556,156 1,729,145 1,858,625 2,026,323 Fort Benning 2,025,413 2,687,110 3,083,993 3,686,699 4,338,200 4,508,599 4,649,812 Customer Service 1,597,957 1,593,897 1,651,330 1,502,714 1,557,062 1,609,360 1,697,951 Meter Maintenance 1,450,316 1,521,625 1,528,406 1,537,554 1,637,318 1,692,184 1,927,165 Finance, Employee services and Administration 3,891,317 3,298,563 3,641,412 4,232,226 4,154,804 4,449,816 4,338,213 Depreciation and amortization 16,792,157 17,754,084 18,178,292 21,625,885 18,552,657 20,156,528 20,773,415 Total operating expenses 45,205,715 46,657,881 50,319,908 54,699,938 53,694,565 56,283,634 57,622,477 Operating Income 3,215,100 3,230,265 5,566, ,046 4,169,686 3,194,215 3,808,872 Non-operating Revenue (expenses) Interest Revenue 1,171, , , ,561 88,619 83, ,245 Ft Benning Financing Bond Issuance 5,265,638 4,860,492 4,860,492 4,860,492 4,860,492 4,860,492 Administrative fees and other revenue 448, ,217 3,259, ,138 (375,783) 4,264,315 1,138,833 Interest Expense (4,332,843) (4,063,532) (3,566,027) (3,463,050) (1,747,410) (660,080) (814,702) City of Columbus participation expense (2,825,492) (2,854,208) (3,307,164) (3,205,570) (3,114,733) (3,158,884) (3,243,185) Gain (loss) on disposal of assets 48,461 88,243 2,575,552 77, ,206 79, ,816 Total non-operating revenue (expenses) (5,490,566) (227,269) 4,291,635 (773,713) (151,609) 5,469,631 2,333,499 Income before capital grants and contributions (2,275,466) 3,002,996 9,857,662 (97,667) 4,018,077 8,663,846 6,142,371 Capital grants and contributions 8,531,222 5,689,174 8,666,716 4,868,656 3,268,506 7,195,298 5,038,660 Change in Net Position 6,255,756 8,692,170 18,524,378 4,770,989 7,286,583 15,859,144 11,181,031 Net Position at Beginning of Year $ 352,497,867 $ 358,753,623 $ 367,445,792 $ 385,970,170 $ 387,029,033 $ 402,888,177 $ 414,069,208 Note: Columbus Water Works implemented GASB 34 in FY ended 6/25/02. Note: Columbus Water Works implemented GASB 68 in FY ended 6/25/15. Adjustment made in Net Position at Beginning of Year for

93 Revenue Capacity Schedule of Operating Revenue by Source Last Ten Fiscal Years Fiscal Year Water Sales Sewer Charges Fort Benning Water & Sewer Charges Fort Benning CM100 O&M Services Tapping Fees & Miscellaneous Total 2006/07 $ 19,167,131 $ 20,885,313 $ 6,400,042 $0 $ 4,211,090 $ 50,663, /08 $ 17,603,442 $ 20,385,879 $ 6,475,568 $0 $ 3,476,274 $ 47,941, /09 $ 17,838,290 $ 21,213,912 $ 6,094,849 $0 $ 3,273,764 $ 48,420, /10 $ 18,251,165 $ 21,745,344 $ 6,094,849 $ 517,999 $ 3,278,789 $ 49,888, /11 $ 21,682,986 $ 23,331,988 $ 6,488,659 $ 967,933 $ 3,414,369 $ 55,885, /12 $ 21,110,880 $ 22,584,710 $ 6,619,929 $ 1,502,489 $ 3,557,976 $ 55,375, /13 $ 20,815,144 $ 22,733,302 $ 6,619,918 $ 4,239,272 $ 3,456,615 $ 57,864, /14 $ 20,357,663 $ 23,517,627 $ 6,901,885 $ 5,120,837 $ 3,579,837 $ 59,477, /15 $ 21,486,011 $ 23,623,033 $ 7,026,101 $ 5,563,339 $ 3,732,865 $ 61,431,

94 Revenue Capacity Comparison of Operating Revenues by Source Last Ten Fiscal Years Fiscal Year Ended June 25, Operating Revenues Water Sales $ 17,361,659 $ 19,167,131 $ 17,603,442 $ 17,838,290 $ 18,251,165 Sewer Charges 19,958,401 20,885,313 20,385,879 21,213,912 21,745,344 Fort Benning Water and Sewer Charges 6,501,709 6,400,042 6,475,568 6,094,849 6,094,849 Fort Benning CM100 O&M Services ,999 Tapping Fees & Misc. 3,781,478 4,211,090 3,476,274 3,273,764 3,278,789 Total Operating Revenue $ 47,603,247 $ 50,663,576 $ 47,941,163 $ 48,420,815 $ 49,888,146 Fiscal Year Ended June 25, Operating Revenues Water Sales $ 21,682,986 $ 21,110,880 $ 20,815,144 $ 20,357,663 $ 21,486,011 Sewer Charges 23,331,988 22,584,710 22,733,302 23,517,627 23,623,033 Fort Benning Water and Sewer Charges 6,488,659 6,619,929 6,619,918 6,901,885 7,026,101 Fort Benning CM100 O&M Services 967,933 1,502,489 4,239,272 5,120,837 5,563,339 Tapping Fees & Misc. 3,414,369 3,557,976 3,456,615 3,579,837 3,732,865 Total Operating Revenue $ 55,885,935 $ 55,375,984 $ 57,864,251 $ 59,477,849 $ 61,431,

95 Revenue Capacity Capital Contributions by Source Fiscal Year Ended June 25, Capital Contributions Developer Lines $ 2,682,431 $ 1,593,506 $ 968,633 $ 1,426,409 $ 3,301,207 $ 1,482,173 $ 1,269,227 $ 2,845,649 Miscellaneous Contributions ,138,057 - Fort Benning 3,451,698 3,588,238 4,599,561 7,220,490 1,567,449 1,773, ,014 2,193,011 Capital Grants 1,328,785 3,349, ,980 19,817-12, Total Capital Contributions* $ 7,462,914 $ 8,531,222 $ 5,689,174 $ 8,666,716 $ 4,868,656 $ 3,268,506 $ 7,195,298 $ 5,038,660 Note: Columbus Water Works implemented GASB 65 in FY ended June Restating balances for 2012 and

96 Revenue Capacity Schedule of Water & Wastewater & CSO Rates *WATER RATES Per CCF 1-15 Over Over Non-Industrial $1.58 $1.70 $3.06 $2.36 $0.00 $3.21 $6.46 $64.51 $ Industrial $1.58 $1.46 $3.06 $2.36 $0.00 $3.21 $6.46 $64.51 $ * Monthly meter base charge is $4.85 per account ** Monthly sewer base charge is $2.78 per account Current Rate (Effective Jan 1, 2015) **SEWER RATES Per CCF CSO RATES Per CCF Over 1004 Size Charge Size Charge 5/8" $4.85 3" $ /4" $4.85 4" $ " $5.75 6" $ /2" $6.64 8" $ " $ " $80.67 Previous Fiscal Years Water and Wastewater Effective MONTHLY METER CHARGE Residential Water Over 1-15CCF 15CCF Base Charge Industrial Water Residential Sewer 1-15CCF Over 15CCF 1-15 CCF Over 15CCF Industrial Sewer Base Charge 1-15CCF Over 15CCF Jan-14 $1.51 $1.63 $4.41 $1.51 $1.40 $2.93 $2.26 $2.53 $2.93 $2.26 Jan-13 $1.45 $1.56 $4.10 $1.45 $1.34 $2.80 $2.16 $2.35 $2.80 $2.16 Jan-12 $1.38 $1.49 $3.91 $1.38 $1.28 $2.67 $2.06 $2.24 $2.67 $2.06 Jan-11 $1.38 $1.49 $3.91 $1.38 $1.28 $2.67 $2.06 $2.24 $2.67 $2.06 Jan-10 $1.31 $1.41 $3.70 $1.31 $1.21 $2.59 $2.00 $2.17 $2.59 $2.00 Jan-09 $1.24 $1.33 $3.49 $1.24 $1.14 $2.52 $1.94 $2.11 $2.52 $1.94 Jan-08 $1.20 $1.29 $3.37 $1.20 $1.10 $2.42 $1.86 $2.02 $2.42 $1.86 Jan-07 $1.16 $1.25 $3.26 $1.16 $1.07 $2.32 $1.78 $1.94 $2.32 $1.78 Jan-06 $1.16 $1.25 $3.16 $1.16 $1.07 $2.14 $1.69 $1.88 $2.14 $1.69 Jan-05 $1.12 $1.20 $3.04 $1.12 $1.03 $2.03 $1.60 $1.80 $2.03 $1.60 Previous Fiscal Years Combined Sewer Overflow (CSO) PER CCF Effective Over 1004 Jan-14 $0.00 $3.06 $6.16 $61.47 $ Jan-13 $0.00 $2.92 $5.87 $58.57 $ Jan-12 $0.00 $2.78 $5.59 $55.81 $ Jan-11 $0.00 $2.78 $5.59 $55.81 $ Jan-10 $0.00 $2.71 $5.45 $54.45 $ Jan-09 $0.00 $2.64 $5.32 $53.12 $ Jan-08 $0.00 $2.58 $5.19 $51.82 $ Jan-07 $0.00 $2.52 $5.06 $50.56 $ Jan-06 $0.00 $2.46 $4.94 $49.33 $ Jan-05 $0.00 $2.29 $4.59 $45.87 $

97 Revenue Capacity Connection & Service Fees Effective January 2015 Service connection fee $ Transfer Service fee $ Delinquent charge - (lock or remove) $ Unauthorized Use - (meter pulled) $ After business hours cut on charge $ Returned check charge $ Meter locked $ Meter removed - NSF check $ Thermal Expansion Device (TED) $ Water System Connection charge 5/8" meter $ 1, (developer installed) $ " meter $ 1, (developer installed) $ /2" meter $ 2, " meter $ 2, " meter or larger COST Sewer system connection charge Standard 6" $ 1, All other COST Locate sewer tap $ " Sewer stub out $ Garbarge Fee (billed on behalf of City of Columbus) Monthly $ Low Income Monthly Fee $ Fire Service charges Monthly (Fire Line) $ Annual fire protection (per line) $ Fire hydrants (monthly) $ 4.17 Sewer Availability Fees (Impact Fees) 5/8" meter $ " meter $ /2" meter $ 1, " meter $ 1, " meter $ 3, " Meter $ 10, " meter $ 20, " meter $ 35, " meter Cost -93-

98 Revenue Capacity Comparison of Water & Sewer Rates April 2015 (20 ccf) $ $50 $100 $150 $200 $250 $300 $350 $400 $450 Atlanta $ Charleston Mobile Chattanooga Raleigh Charlotte Birmingham Jacksonville Tampa Nashville $ $ $ $ $ $ $ $ $ Greenville Savannah Augusta Montgomery Macon Columbus Phenix City Harris County* Talbot County* $ $ $ $ $ $85.73 $81.44 $80.47 $62.73 Previous Fiscal 20 ccf Atlanta $ $ $ $ $ $ $ $ $ Charleston $ $ $ $ $ $ $ $ $ Mobile $ $ $ $ $ $98.93 $98.93 $96.89 $96.89 Chattanooga $ $ $ $ $ $92.45 $ $ $ Raleigh $ $ $ $ $ $90.04 $82.61 $71.70 $65.79 Charlotte $ $ $ $ $ $ $ $95.81 $90.22 Birmingham $ $ $ $ $ $ $ $ $ Jacksonville $ $ $ $ $ $ $ $ $94.75 Tampa $ $ $ $ $ $ $ $ $98.53 Nashville $ $ $ $ $ $ $ $ $ Greenville $ $ $ $ $ $99.02 $99.02 $96.02 $93.03 Savannah $ $ $97.82 $92.29 $ Augusta $ $ $ $ $ $98.58 $95.83 $93.02 $92.03 Montgomery $ $ $ $99.15 $98.14 $90.63 $90.85 $85.60 $81.53 Macon $ $94.00 $94.00 $87.50 $83.50 $74.80 $76.50 $73.95 $73.10 Columbus $85.73 $81.69 $78.00 $74.35 $74.35 $71.42 $68.65 $66.14 $63.65 Phenix City $81.44 $79.04 $79.04 $76.98 $ $83.88 $77.56 $76.41 $73.95 Harris County* $80.47 $80.47 $76.23 $76.23 $76.23 $76.23 $76.23 $61.74 $61.74 Talbot County* $62.73 $62.73 $62.73 $62.73 $62.73 $62.73 $62.73 $62.73 $62.73 * Water Only -94-

99 Debt Capacity Revenue Covering All Debt Last Ten Fiscal Years Fiscal Year Change in Net Position Allowable Adjustments Adjusted Change in Net Debt Service Payments Coverage (%) 2006/07 14,427,613 13,173,228 27,600,841 15,989, /08 791,302 22,948,721 23,740,023 17,063, /09 6,255,756 15,053,097 21,308,853 18,313, /10 8,692,170 18,585,878 27,278,048 23,076, /11 18,524,378 15,917,915 34,442,293 20,217, /12 7,404,035 23,892,311 31,296,346 19,942, /13 7,286,583 19,750,150 27,036,733 17,825, /14 15,859,144 16,780,195 32,639,339 18,245, /15 11,181,031 19,792,642 30,973,673 19,244,

100 Debt Capacity Outstanding Debit Debt Administration The following is a summary of changes in the carrying costs of long-term debt obligations of Columbus Water Works for the fiscal year ended June 25, 2015: Beginning Balance Additions, Including Amortization or Bond Discounts Decreases Balance Revenue Bonds $ 191,439,729 $ - $ (10,803,513) $ 180,636,216 Notes Payable 30,672,041 - (1,670,774) $ 29,001,267 $ 222,111,770 $ - $ (12,474,287) $ 209,637,483 Additional detailed information on outstanding debt may be found in the Note 10 of the Financial Statements included in the Financial Section of this report. Fiscal Year Ending Balance Per Capita (1) The following table expresses the outstanding debt balance as a total of per capita and personal income for the previous ten fiscal periods: of Personal Population Personal Income Percentage Income 2004 $ 127,683,630 $ % 187,523 5,267, $ 161,401,056 $ % 191,614 5,391, $ 165,638,746 $ % 185,271 5,696, $ 207,218,072 $ 1, % 188,660 6,188, $ 202,804,069 $ 1, % 187,046 6,613, $ 243,001,141 $ 1, % 186,984 7,016, $ 231,168,661 $ 1, % 190,414 7,321, $ 221,170,576 $ 1, % 189,885 7,256, $ 214,758,889 $ 1, % 194,107 7,295, $ 208,298,137 $ 1, % 198,413 8,014, $ 222,111,770 $ 1, % 202,824 8,117, $ 209,637,484 $ 1,034 * 3.9% 202,825 8,117,122 (1) - See Schedule of Demographic and Economic Statistics for population data. * Based on Previous Year Demographic Data - when current year unavailable. Also listed on the following page are summaries of outstanding bond issues and current GEFA loans, as well as future committed loans to complete the Five-Year Capital Improvement Program. -96-

101 COLUMBUS WATER AND SEWERAGE REVENUE BONDS OTHER OBLIGATIONS YEARS TO 5/1/ A 2012B Combined Principal & Interest Building Authority /1 Building Authority /1 GEFA SRF /1/ /97-8/17 GEFA SRF /1/1992 5/92-2/12 GEFA DWSRF /02-2/22 GEFA DWSRF /01-5/20 GEFA CWSRF 97001P1 6/08-7/23 GEFA CWSRF 97001P2 6/08-7/23 GEFA DWSRF 01001P 09/08-3/28 GEFA CWSRF 03001PA 03/09-3/29 GEFA CWSRF 03001PB 03/09-3/29 TOTAL Subordinate Obligations TOTAL Bonds & Other Obligations ,020 5,911,700 3,921, , ,116 11,293, , , , , ,881 25,757 2,078,737 13,372, ,820 5,939,500 3,901,563 2,165,113 1,975,163 14,330, , , , , ,881 25,757 2,087,044 16,417, ,740 5,948,250 3,903,863 2,165,113 1,975,163 14,342, , , , , ,881 25,757 1,075, , ,787 4,361,197 18,703, ,939,000 4,276,963 2,290,112 1,975,163 3,236,676 17,717, , , , , ,881 25,757 1,077, ,518 1,921,149 5,608,759 23,326, ,562,002 3,241,175 3,186,362 1,975,163 3,890,855 14,855, , , , , ,881 25,757 1,077, ,518 1,671,149 5,362,429 20,217, ,789,212 2,140,050 1,975,163 3,890,605 13,795, , , , ,881 25,757 1,077, , ,518 1,671,149 46,363 5,082,449 18,877, ,541, ,581 3,890,105 1,265,485 4,914, ,661 13,452,177 4,321,192 2,313,792 25,757 10,003, , ,518 1,671,149 55,635 19,230,665 32,682, ,547,443 3,888,905 1,248,150 4,930,026 3,967,150 15,581,674 25, , ,518 1,671,149 55,635 2,592,250 18,173, ,888,905 1,248,150 4,948,261 3,969,850 2,597,211 16,652,377 25, , ,518 1,671,149 55,635 2,592,251 19,244, ,888,105 1,248,150 4,961,734 3,970,350 2,992,100 17,060,439 25, , ,518 1,671,149 55,635 2,592,250 19,652, ,888,305 2,363,150 5,671,854 3,969,350 1,653,750 17,546,409 25, , ,518 1,671,149 55,635 2,592,250 20,138, ,889,305 2,322,400 5,693,704 3,304,350 1,650,750 16,860,509 25, , ,518 1,671,149 55,635 2,592,250 19,452, ,885,905 2,330,900 5,712,853 3,123,100 1,647,750 16,700,508 25, , ,518 1,671,149 55,635 2,592,250 19,292, ,888,105 2,320,050 5,728,313 3,121,850 1,644,750 16,703,068 25, , ,518 1,671,149 55,635 2,592,251 19,295, ,885,755 5,300,400 3,121,600 3,646,750 15,954, , ,518 1,671,149 55,635 2,566,493 18,520, ,890,255 5,273,250 3,055,350 3,669,000 15,887, , ,518 1,671,149 55,635 2,566,493 18,454, ,886,505 5,295,500 2,862,600 3,839,750 15,884, , ,518 1,671,149 55,635 2,566,493 18,450, ,889,505 5,297,750 1,847,850 3,856,250 14,891, , ,518 1,671,149 55,635 2,566,493 17,457, ,705 5,302,500 1,847,850 4,455,500 12,131, , ,518 1,671,149 55,635 2,566,493 14,698, ,722,850 2,343,000 10,065, , ,518 1,671,149 55,635 2,566,493 12,632, ,724,100 2,342,500 10,066, , ,518 1,671,149 55,635 2,566,493 12,633, ,720,600 2,343,250 10,063, , ,424 1,671,149 55,635 2,435,399 12,499, ,721,850 2,345,000 10,066, ,191 1,257,589 41,752 1,618,532 11,685, ,721,850 2,342,500 10,064, , ,191 10,383, ,719,850 2,345,750 10,065, , ,191 10,384, ,344,250 2,344, , ,565 2,503, ,343,000 2,343,000 2,343, ,346,750 2,346,750 2,346,750 TOTALS 1,040,580 26,300,452 25,034,151 15,589,698 11,428,512 58,203,501 40,815,835 42,561,245 85,345,011 52,749, ,068,546 2,117,273 1,413,190 9,642,484 1,399,291 3,951, ,600 14,312,035 6,383,786 10,289,139 33,927, ,275 84,774, ,842,908 Principal 955,000 23,095,000 47,550,000 15,665,000 40,000,000 41,780,000 27,705,000 38,685,000 53,725,000 3,295, ,305,000 2,041,000 1,150,000 8,002,891 1,318,722 3,293, ,598 12,417,054 4,508,728 7,663,359 25,110, ,479 Avg.Rate% Loan Date 10/1/1998 8/5/2002 8/4/2003 1/1/2005 1/18/2007 6/24/2009 4/26/2012 4/26/2012 3/21/2013 6/13/2014 9/1/1991 6/1/1992 8/1/1997 2/1/1992 2/1/2002 5/1/2000 6/1/ /1/2011 9/1/2008 3/1/2009 8/1/

102 Demographic and Economic Information General Information The Census Bureau's Population Estimates Program publishes population numbers between censuses. Estimates from the Population Estimates Program are for the past, while projections provide population estimates for future dates. The Census Bureau publishes July 1 estimates for years after the last decennial census (2010), as well as for past decades. Data series for births, deaths, and domestic and international migration are used to update the decennial census base counts. In general, estimates released in a given year refer to the population on July 1 of the previous year. The 2010 population of Muscogee County was estimated at 189,885. This represents a 1.81% percent increase from the 2000 census. The total civilian labor force in Muscogee County for June, 2015 was 80,845 of which 74,538 were employed and 6,307 were unemployed. The unemployment rate was 7.8 percent. The average weekly wage for Muscogee County in 1st Quarter 2015 was $823, which equates to $20.58 per hour or $42,796 per year, assuming a 40-hour week worked year-round. The largest major industry sector was Health Care and Social Assistance, with percent of the employment, followed by Accommodation and Food Services with percent and Retail Trade with percent, respectfully. Source: Labor Market Statistics, Quarterly Census of Employment and Wages Program -98-

103 Demographic and Economic Information Selected Economic Characteristics Muscogee County Median Age of Population (years) 33.3 Estimated Total Population 200,887 Age Distribution Persons 0 19 years 29.1% Persons years 59.3% Persons 65 years and over 11.6% Median Household Income $41,339 Total Personal Income (BEA) $8,117,121 Total Housing Units 82,690 Public Road Mileage Area of Muscogee County Miles Square Miles Fiscal Year Population Last Ten Fiscal Years Median Age of Population Median Household Income Annual Per Capita Personal Income BEA Total Personal Income , ,731 28,418 5,090, , ,393 29,770 5,267, , ,130 30,733 5,391, , ,954 33,119 5,696, , ,406 34,836 6,188, , ,095 37,083 6,613, , ,276 38,542 7,016, , ,060 36,712 7,321, , ,359 37,527 7,256, , ,564 39,611 7,688, , ,088 40,011 8,014, , ,443 40,021 8,117, , ,339 39,012 8,117,121 Source: United States Census Bureau (Population, age and income figures are estimates in other than census years) -99-

104 Demographic and Economic Information Population Statistics Muscogee County Last Ten Fiscal Years Year Population , , , , , , , , , ,887 *Source Georgia Department of Labor -100-

105 Demographic and Economic Information Labor Market Information MSA Labor Force & Unemployment Rates Unemployment Rate Annual Averages Last Ten Fiscal Years % % % % % % % % % % Source: Georgia Department of Labor, Workforce Information and Analysis Note: Population, age and income are estimates in other than census years Columbus-Georgia MSA Labor Force Data 2014* County Labor Force Employment Unemployment Number Rate Chattahoochee 2,417 2, % Harris 15,615 14, % Marion 3,390 3, % Muscogee 81,544 74,579 6, % MSA - Total 102,966 94,549 8, % *Does not include Russell County, Alabama -101-

106 Demographic and Economic Information Labor Market Information Labor Force and Unemployment Rates 2014 Annual Averages Source: Georgia Department of Labor; Workforce Information & Analysis, U.S. Bureau of Labor Statistics -102-

107 Demographic and Economic Information Labor Market Information Labor Force and Unemployment Rates As indicated in the table below, the 2014 annual average civilian labor force in Muscogee County was 81,544 of which 74,579 were employed and 6,965 were unemployed. The unemployment rate was 8.6 percent. Area Civilian Labor Number Number Unemployment Force Employed Unemployed Rate Muscogee County 81,544 74,579 6, % Georgia 4,756,708 4,414, , % United States 155,922, ,305,000 9,617, % Source: Georgia Department of Labor, Workforce Information & Analysis, Local Area Unemployment Statistics Below are the Not Seasonally Adjusted Labor Force, Employment and Unemployment data in Muscogee County for June, Civilian Labor Force Employment Unemployment Unemployment Rate (%) 80,845 74,538 6, % Source: Georgia Department of Labor, Workforce Information & Analysis, Local Area Unemployment Statistics Below is the Not Seasonally Adjusted Labor Force, Employment and Unemployment data in Columbus MSA for July, Civilian Labor Force Employment Unemployment Unemployment Rate (%) 127, ,879 9, % Source: Georgia Department of Labor, Workforce Information & Analysis, Local Area Unemployment Statistics -103-

108 Demographic and Economic Information Labor Market Information Top Ten Employers June 2015 Employer Number of Labor Employees Force % Fort Benning 40,000 57% TSYS 4,690 7% Muscogee County School District 4,300 6% Aflac 3,670 5% Columbus Regional Healthcare 3,180 System 5% Columbus Consolidated 3,130 Government 4% Kia Motors Manufacturing 3,000 Georgia 4% St. Francis Hospital Inc. 3,000 4% BlueCross BlueShield of 1,650 Georgia 2% Columbus State University 1,360 2% Pratt & Whitney 1,000 1% Synovus Financial Corp % June 2013 Employer Number of Labor Employees Force % Fort Benning 42,000 57% Muscogee County School District 6,000 8% TSYS 4,300 6% Columbus Regional Healthcare System 3,883 5% Aflac 3,700 5% Kia Motors Manufacturing Georgia 3,000 4% Columbus Consolidated Government 2,943 4% Pezold Management 2,200 3% BlueCross BlueShield of Georgia 1,650 2% St. Francis Hospital Inc. 1,445 2% Callaway Gardens 1,200 2% Columbus State University 1,010 1% Source: Greater Columbus Chamber of Commerce June 2014 Employer Number of Labor Employees Force % Fort Benning 42,000 57% Muscogee County School District 6,000 8% TSYS 4,500 6% Columbus Regional Healthcare System 4,000 5% Aflac 3,700 5% Kia Motors Manufacturing Georgia 3,000 4% Columbus Consolidated Government 2,943 4% Pezold Management 2,200 3% St. Francis Hospital Inc. 2,000 3% BlueCross BlueShield of Georgia 1,400 2% Callaway Gardens 1,200 2% Columbus State University 1,010 1% June 2012 Employer Number of Labor Employees Force % Fort Benning 42,000 57% Muscogee County School District 6,000 8% TSYS 4,300 6% Columbus Regional Healthcare System 3,883 5% Aflac 3,700 5% Kia Motors Manufacturing 3,000 4% Columbus Consolidated Government 2,943 4% Pezold Management 2,200 3% St. Francis Hospital Inc. 1,800 2% BlueCross BlueShield of Georgia 1,650 2% Callaway Gardens 1,200 2% Columbus State University 1,010 1% -104-

109 June 2011 Employer Number of Labor Employees Force % Fort Benning 42,487 59% Muscogee County School District 6,100 9% TSYS 4,400 6% Aflac 4,000 6% Columbus Regional Healthcare System 3,883 5% Columbus Consolidated Government 2,943 4% Pezold Management 2,200 3% BlueCross BlueShield of Georgia 1,650 2% St. Francis Hospital Inc. 1,445 2% Callaway Gardens 1,200 2% Columbus State University 1,140 2% COLUMBUS WATER WORKS Demographic and Economic Information Labor Market Information Industries June 2010 Employer Number of Labor Employees Force % Fort Benning 42,000 59% Muscogee County School District 6,000 8% TSYS 4,400 6% Aflac 4,000 6% Columbus Regional Healthcare System 3,883 5% Columbus Consolidated Government 2,943 4% Pezold Management 2,200 3% BlueCross BlueShield of Georgia 1,650 2% St. Francis Hospital Inc. 1,445 2% Callaway Gardens 1,200 2% Columbus State University 1,010 1% June 2009 Employer Number of Labor Employees Force % Ft. Benning 42,000 58% Muscogee County School District 6,350 9% TSYS 4,400 6% AFLAC, Inc. 3,450 5% Columbus Regional Healthcare Systems 3,400 5% Columbus Consolidated Government 2,950 4% Blue Cross and Blue Shield of Georgia 1,650 2% Pezold Management Assoc 1,500 2% St. Francis Hospital 1,450 2% Callaway Gardens Resort 1,200 2% Synovus Financial Corporation 1,050 1% June 2008 Employer Number of Labor Employees Force % Fort Benning (US Army) 33,779 55% TSYS 6,000 10% Muscogee County School District 5,927 10% AFLAC, Incorporated 3,300 5% Columbus Consolidated Government 2,847 5% Columbus Regional Healthcare Systems 2,603 4% W.C. Bradley Company 2,000 3% Blue Cross/Blue Shield of Georgia 1,700 3% Swift Denim, Inc. 1,600 3% St. Francis Hospital, Inc. 1,409 2% Tom s Food, Inc % Source: Greater Columbus Chamber of Commerce -105-

110 Demographic and Economic Information Labor Market Information - Industries The largest major industry sector was Health Care and Social Assistance, with 17.83%, followed by Accommodation and Food Services with 12.10% and Retail Trade with 11.73%. Major industries in Columbus MSA for the 1st Quarter 2015: Industry Group Establishments Employ % Establishments Employees % Establishments Employees % Establishments Employees % Health Care and Social Assistance , % , % , % , % Accommodation and Food Services , % , % , % , % Retail Trade , % , % , % , % Finance and Insurance , % , % 326 9, % 323 9, % Educational Services 115 7, % 139 9, % 119 8, % 114 8, % Public Administration 49 7, % 84 8, % 51 7, % 51 7, % Manufacturing 139 6, % 157 8, % 135 6, % 135 6, % Admin., Support, Waste Mgmt, Remediation 263 4, % 311 5, % 252 4, % 243 4, % Professional, Scientific & Technical Svc 404 4, % 446 5, % 387 3, % 395 4, % Construction 325 2, % 431 3, % 331 2, % 349 2, % Wholesale Trade 159 2, % 194 2, % 163 2, % 174 2, % Other Services (except Public Admin.) 431 2, % 473 2, % 430 2, % 446 2, % Transportation and Warehousing 105 1, % 123 1, % 99 1, % 91 1, % Real Estate and Rental and Leasing 235 1, % 250 1, % 227 1, % 223 1, % Mgt.of Companies and Enterprises 60 1, % 61 1, % 61 1, % 60 1, % Information 59 1, % 69 1, % 60 1, % 65 1, % Arts, Entertainment, and Recreation % 51 1, % % % Utilities % % % % Mining % % % % Ag & Forestry % % % % Industry Group Establishments Employ % Establishments Employees % Establishments Employees % Establishments Employees % ees Health Care and Social Assistance , % , % , % , % Retail Trade , % , % , % % Accommodation and Food Services , % , % , % , % Education Services 332 9, % 133 8, % 137 8, % 131 8, % Public Administration 132 8, % 53 6, % 53 6, % 53 6, % Finance and Insurance 54 7, % 346 5, % 378 6, % 275 6, % Manufacturing 138 6, % 145 5, % 153 6, % 93 5, % Information 245 4, % 85 5, % 84 5, % 404 4, % Professional, Scientific & Technical Svc 405 4, % 401 4, % 391 4, % 376 4, % Admin., Support, Waste Mgmt, Remediation 346 3, % 257 4, % 368 6, % 173 2, % Construction 166 2, % 362 3, % 390 3, % 499 2, % Wholesale Trade 451 2, % 172 2, % 175 2, % 53 1, % Other Services (except Public Admin.) 233 1, % 457 2, % 499 2, % 266 1, % Transportation and Warehousing 83 1, % 86 1, % 86 1, % % Mgt. of Companies and Enterprises 60 1, % 59 1, % 56 1, % % Real Estate and Rental and Leasing 71 1, % 235 1, % 256 1, % % Arts, Entertainment, and Recreation % % 51 1, % % Utilities % % % % Mining % % % % Ag & Forestry % % % % Source: Georgia Department of Labor, Workforce Information & Analysis, Employment & Wages Unit -106-

111 Operating Information 2015 Employees by Division Administration 03 Finance, Customer and Information Services & Environmental Compliance 80 Strategic Planning and Employee Services 07 Plant Operations & MMD 79 Engineering, Field Services & Communication 111 Total Employees by Division Last Ten Fiscal Years Fiscal Year Ended Function/Division Administration Division of Finance, Customer Service, Information Services & Environmental Compliance Division of Employee Service & Strategic Planning Divison of Plant Operations & MMD Divison of Engineering, Field Services & Communication Customer/Employee and Financial Services Customer and Financial Services Water Resource Operations, MMD and Security Water and Environmental Resource and MMD Operations Engineering and Field Services Engineering Environmental Compliance and Communication Information/Environmental Compliance/WQM Information Services 6 6 Operations and Technical Services Total

112 Fiscal Year COLUMBUS WATER WORKS Operating Information Schedule of Expenses by Function Direct Cost of Providing Water Direct Cost of Treating Sewerage 2005/06 $ 8,882,760 $ 12,907,552 2,466, /07 $ 10,498,936 $ 12,494,063 3,033, /08 $ 10,909,568 $ 12,684,028 3,278, /09 $ 11,597,571 $ 13,290,842 3,891, /10 $ 12,579,149 $ 13,422,857 3,298, /11 $ 13,977,459 $ 14,989,597 3,641, /12 $ 15,154,373 $ 15,206,385 4,232, /13 $ 15,659,664 $ 15,699,033 4,179, /14 $ 15,487,769 $ 16,604,649 4,449, /15 $ 15,447,357 $ 17,063,492 4,338,213 Indirect/ Administrative Operating Total Costs $ $ 24,256,915 $ $ 26,026,902 $ $ 26,871,834 $ $ 28,779,730 $ $ 29,300,569 $ $ 32,608,468 $ $ 34,592,984 $ $ 35,538,053 $ $ 36,542,234 $ $ 36,849,062 NOTE: The expenses listed above exclude depreciation, interest and paying agent fees

113 Operating Information Schedule of Ten Largest Water Customers Fiscal Year Ended 2015 Fiscal Year Ended 2014 Customer Consumption (CCF) Water & Sewer Sales Customer Consumption (CCF) Water & Sewer Sales Usage % Amount % Usage % Amount % Fort Benning 425, % $ 7,026, % Fort Benning 818, % $ 6,901, % *Harris County 335, % 695, % *Harris County 290, % 603, % Eastman Kodak 231, % 520, % Eastman Kodak 128, % 487, % Denim North America 103, % 452, % Denim North America 120, % 422, % Hostess Brands LLC 85, % 349, % Pratt Whitney 91, % 250, % Jack T. Rutledge 80, % 305, % Muscogee County Jail 78, % 287, % Mid American Apt. Corp 73, % 266, % Midtown Medical Cent 75, % 276, % Pratt Whitney 72, % 245, % DMI Columbus LLC 55, % 158, % DMI Columbus Inc. 67, % 160, % Jack T. Rutledge 54, % 192, % Midtown Medical Center 61, % 242, % Kemira Chemicals INC 39, % 150, % Subtotal 1,535,299 12% 10,265,043 19% Subtotal 1,753,243 15% 9,730,123 19% Balance from all others 10,971,442 88% 43,818,036 81% Balance from all others 10,073,250 85% 42,189,055 81% Total w/ft. Benning 12,506, % $ 54,083, % Total w/ft. Benning 11,826, % $ 51,919, % *No Sewer Charge - (CCF = Hundred Cubic Feet = 750 Gallons) *No Sewer Charge - (CCF = Hundred Cubic Feet = 750 Gallons) Fiscal Year Ended 2013 Fiscal Year Ended 2012 Customer Consumption (CCF) Water & Sewer Sales Customer Consumption (CCF) Water & Sewer Sales Usage % Amount % Usage % Amount % Fort Benning 1,551, % $ 6,901, % Fort Benning 2,306, % $ 6,901, % *Harris County 286, % 546, % *Harris County 253, % 476, % Eastman Kodak 129, % 472, % Eastman Kodak 189, % 539, % Denim North America 125, % 428, % DMI Columbus LLC 154, % 257, % Pratt Whitney 100, % 278, % Denim North America 122, % 419, % Jack T. Rutledge 85, % 300, % Pratt Whitney 96, % 264, % Midtown Medical Center 68, % 223, % Mid American Apt. Corp 84, % 257, % DMI Columbus LLC 62, % 149, % The Medical Center 81, % 252, % Kemira 50, % 184, % Muscogee County Jail 74, % 250, % Muscogee County Jail 49, % 173, % Kemira 62, % 224, % Subtotal 2,510,319 18% 9,660,256 17% Subtotal 3,424,935 23% 9,845,123 19% Balance from all others 11,143,293 82% 48,203,996 83% Balance from all others 11,712,944 77% 42,705,516 81% Total w/ft. Benning 13,653, % $ 57,864, % Total w/ft. Benning 15,137, % $ 52,550, % *No Sewer Charge - (CCF = Hundred Cubic Feet = 750 Gallons) * No Sewer Charge - (CCF = Hundred Cubic Feet = 750 Gallons) Fiscal Year Ended 2011 Fiscal Year Ended 2010 Consumption (CCF) Water & Sewer Sales Consumption (CCF) Water & Sewer Sales Customer Usage % Amount % Customer Usage % Amount % Fort Benning 1,964, % $ 6,619, % Fort Benning 1,996, % $ 6,857, % *Harris County 432, % 778, % *Harris County 392, % 667, % Eastman Kodak 189, % 663, % Denim North America 187, % 612, % Denim North America 143, % 560, % Eastman Kodak 174, % 587, % Mid American Apt. Corp. 105, % 350, % Mid American Apt. Corp. 95, % 299, % Pratt Whitney 87, % 655, % Pratt Whitney 76, % 211, % The Medical Center 81, % 237, % The Medical Center 74, % 200, % Muscogee County Jail 64, % 218, % Jack T Rutledge 51, % 164, % Kemira 60, % 216, % Kemira 48, % 161, % Interstate Brands 58, % 230, % *Talbot County 29, % 67, % Subtotal 3,188,213 21% 10,531,718 20% Subtotal 3,125,120 23% 9,829,419 22% Balance from all others 11,747,201 79% 41,939,848 80% Balance from all others 10,517,170 77% 35,317,632 78% Total w/ft. Benning 14,935, % $ 52,471, % Total w/ft. Benning 13,642, % $ 45,147, % *No Sewer Charge - (CCF = Hundred Cubic Feet = 750 Gallons) *No Sewer Charge - (CCF = Hundred Cubic Feet = 750 Gallons) Fiscal Year Ended 2009 Fiscal Year Ended 2008 Consumption (CCF) Water & Sewer Sales Consumption (CCF) Water & Sewer Sales Customer Usage % Amount % Customer Usage % Amount % Fort Benning 3,943, % $ 6,094, % Fort Benning 2,365, % $ 6,353, % *Harris County 451, % 729, % *Harris County 403, % 631, % Denim North America 156, % 537, % Denim North America 179, % 533, % Eastman Kodak 121, % 405, % Polychrome 170, % 529, % Mid American Apt. Corp. 119, % 357, % Mid American Apt. Corp. 113, % 319, % The Medical Center 97, % 260, % Sunfresh Beverages 110, % 347, % Pratt Whitney 72, % 199, % The Medical Center 99, % 253, % Kemira 66, % 198, % Pratt Whitney 72, % 189, % Jack T Rutledge 55, % 171, % Kemira 69, % 235, % Muscogee County Jail 53, % 162, % Muscogee County Jail 61, % 141, % Subtotal 5,138,100 39% 9,116,906 20% Subtotal 3,645,193 26% 9,533,618 21% Balance from all others 7,931,413 61% 36,030,145 80% Balance from all others 10,194,272 74% 34,931,271 79% Total w/ft. Benning 13,069, % $ 45,147, % Total w/ft. Benning 13,839, % $ 44,464, % *No Sewer Charge - (CCF = Hundred Cubic Feet = 750 Gallons) *No Sewer Charge - (CCF = Hundred Cubic Feet = 750 Gallons) -109-

114 Operating Information Available Service Installations Last Ten Fiscal Years Fiscal Year Residential Commercial & Industrial Total /,,, 2005/06 63,510 8,335 71, /07 63,951 8,258 72, /08 64,331 8,273 72, /09 64,713 8,674 73, /10 65,066 8,792 73, /11 66,812 7,568 74, /12 66,159 8,270 74, /13 66,196 9,029 75, /14 66,808 8,909 75, /15 67,333 8,986 76,319 * *65,592 active accounts Comparision of Available Service Installations Fiscal Year Ended June 25, 2015 Commercial & Industrial 12% Residential 88% Residential Commercial & Industrial -110-

115 Operating Information Capital Assets Indicators of Use & Volume Water Information: Available Water Services 73,387 73,858 74,380 74,429 75,225 75,717 76,319 Water Main Miles 1,333 1,336 1,351 1,359 1,361 1,364 1,383 Average Daily Consumption (MGD) Maximum Daily Design (MGD) Total Water Billed Gallons 12,817,499 11,573,428 12,056,505 11,523,399 10,479,683 9,205,649 9,727,558 Wastewater Information: Available Wastewater Services 65,110 65,263 65,306 65,415 68,414 68,606 70,477 Sewer Main Miles 1,131 1,135 1,153 1,153 1,154 1,159 1,166 Sewer Pumping Stations Average Daily Flow (MGD) Total wastewater gallons 12,728,000 14,276,350 8,975,000 9,374,580 9,400,185 12,712,385 11,519,400 MGD=Milliion Gallons Day Water Customers and Volumetric Consumption 77,000 14,000,000 76,500 76,000 12,000,000 75,500 75,000 10,000,000 74,500 74,000 73,500 73,000 72,500 72,000 73,387 73,858 74,380 74,429 75,225 75,717 76,319 8,000,000 6,000,000 4,000,000 71, ,000,000 Available Water Services Total Water Billed Gallons Waterwater Customers and Volumetric Consumption 71,000 16,000,000 70,000 14,000,000 69,000 68,000 12,000,000 67,000 10,000,000 66,000 65,000 64,000 63,000 65,110 65,263 65,306 65,415 68,414 68,606 70,477 8,000,000 6,000,000 4,000,000 62, ,000,000 Available Wastewater Services Total wastewater gallons -111-

116