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HomeMy WebLinkAboutParity Bond Augusta Richmond GA DOCUMENT NAME: tlr iIJ bJlld DOCUMENT TYPE:. KfSJ / lb Ii/) !( YEAR: :;1 DDD BOX NUMBER: I 0 FILE NUMBER: ;i/q/6 NUMBER OF PAGES: Js4 ~~ 11 J Y r / ~ . PARITY BOND RESOLUTION A RESOLUTION TO PROVIDE FOR THE ISSUANCE OF WATER AND SEWERAGE REVENUE BONDS, SERIES 2002, PURSUANT TO AND IN CONFORMITY WITH A BOND RESOLUTION ADOPTED OCTOBER 21, 1996, AS SUPPLEMENTED DECEMBER 3 AND 17, 1996, AND AS RATIFIED, REAFFIRMED, BROADENED AND EXTENDED BY A RESOLUTION ADOPTED AUGUST 22, 2000, AS SUPPLEMENTED SEPTEMBER 15, 2000, TO PROVIDE FUNDS TO FINANCE, IN WHOLE OR IN PART, THE COST OF ADDING TO, EXTENDING, IMPROVING AND EQUIPPING THE WATER AND SEWERAGE SYSTEM OF AUGUSTA, GEORGIA, TO PROVIDE FOR THE PREP A YMENT IN FULL OF A LOAN FROM THE GEORGIA ENVIRONMENTAL FACILITIES AUTHORITY, AND TO PAY EXPENSES NECESSARY TO ACCOMPLISH THE FOREGOING; TO RATIFY, REAFFIRM AND ADOPT ALL APPLICABLE TERMS, PROVISIONS, COVENANTS AND CONDITIONS OF THE BOND RESOLUTION OF OCTOBER 21, 1996, AS SUPPLEMENTED DECEMBER 3 AND 17, 1996, AND THE BOND RESOLUTION OF AUGUST 22, 2000, AS SUPPLEMENTED SEPTEMBER 15, 2000; TO PROVIDE FOR THE ADOPTION OF RA TES AND THE COLLECTION OF FEES AND CHARGES FOR THE SERVICES, FACILITIES AND COMMODITIES TO BE FURNISHED BY THE WATER AND SEWERAGE SYSTEM; TO PROVIDE FOR THE ISSUANCE UNDER CERTAIN TERMS AND CONDITIONS OF ADDITIONAL PARITY BONDS; TO PROVIDE FOR THE CREATION AND MAINTENANCE OF CERTAIN FUNDS; TO PROVIDE REMEDIES IN THE EVENT OF DEFAULT FOR THE OWNERS OF SAID BONDS; TO RATIFY AND AUTHORIZE THE PREPARATION, USE AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND A FINAL OFFICIAL STATEMENT IN CONNECTION WITH THE OFFER AND SALE OF THE SERIES 2002 BONDS; TO PROVIDE . FOR THE ANNUAL SUBMISSION OF CERT AIN FINANCIAL INFORMATION AND OPERATING DATA PURSUANT TO RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION; TO PROVIDE FOR THE ADOPTION OF A SUPPLEMENTAL RESOLUTION FINALIZING THE TERMS OF THE SERIES 2002 BONDS; AND FOR OTHER PURPOSES: WHEREAS, under the provisions of Article IX, Section III, Paragraph II(a) of the Constitution of the State of Georgia and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq.), and pursuant to referenda, as authorized and required by said act, which were held within the City of Augusta (the "City") and Richmond COWlty (the "County"), the City and the County were consolidated; and WHEREAS, the referenda held with respect to consolidation within the City of Hephzibah, a municipality located within the County, failed; and WHEREAS, said consolidation does not include the Town of Blythe, Georgia, a municipality located within the County; and WHEREAS, said act has been amended by subsequent acts, including Georgia Laws 1997, p. 4024 et seq., which amendment is, as follows: AO 708654.3 , Said county-wide government shall be a new political entity, a body politic and corporate, and a political subdivision of the state to be known as "Augusta, Georgia," at times in this Act called the "consolidated government" or "Augusta-Richmond County," having all the governmental and corporate powers, duties, and functions heretofore held by and vested in the City of Augusta and Richmond County, and also the powers, duties, and functions provided in this charter; and WHEREAS, said act, as amended is hereinafter referred to as the "Act" and Augusta, Georgia, consolidated government and Augusta-Richmond County, as referred to in the Act, are hereinafter referred to as the "Consolidated Government"; and WHEREAS, pursuant to the Act, the Consolidated Government now constitutes a county and a municipality under the laws and the Constitution of the State of Georgia, and is a political subdivision of the State of Georgia in the exercise of the respective powers of a municipality and a county; and WHEREAS, pursuant to Article IX, Section II, Paragraph II of the Constitution of the State of Georgia, the Municipal Home Rule Act of 1965 (codified, as amended, at O.C.G.A 9 36- 35-1 et seq.) and an ordinance adopted by the Augusta-Richmond County Commission-Council of the Consolidated Government on October 1,1996 (Georgia Laws 1997, p. 4690 et seq.), the Commission-Council amended the designation of its governing body from the "Augusta- Richmond County Commission-Council" to the "Augusta-Richmond County Commission" (the "Commission"); and WHEREAS, prior to the consolidation of the City and the County, the City and the County each owned, operated and maintained their own respective water and sewerage systems, and pursuant to the Act, the water and sewerage systems of the City and the County are now owned and operated by the Consolidated Government and pursuant to the 1996 Resolution (hereinafter defined) have been combined into one revenue producing undertaking, hereinafter referred to as the "System," which definition shall also include such water and sewerage system, as now existent and as hereafter added to, extended, improved and equipped; and WHEREAS, the Consolidated Government acting by and through the Commission, by virtue of the authority of the Constitution of the State of Georgia, the Act and Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended (the "Revenue Bond Law"), is authorized to issue revenue bonds, to fund in part a reasonably required debt service reserve and to acquire additional water and sewerage facilities by the addition thereto of improvements to the System, and to construct such additions, and to operate and maintain the System, as added to, extended, improved and equipped, for its own use, and for the use of the public and to prescribe and revise rates, and to collect fees and charges for the services, facilities and commodities furnished by the System, as now existent and as same is hereafter added to, extended, improved and equipped, and in anticipation of the collection of revenues from the System, to issue revenue bonds to fund in part a reasonably required debt service reserve and -2- AO 708654.3 finance the cost of such additions, extensions and improvements to the System and to pay all expenses necessary to accomplish the foregoing; and WHEREAS, pursuant to a resolution adopted on October 21, 1996, as supplemented on December 3 and 17, 1996 (the "1996 Resolution"), the Consolidated Government issued $62,880,000 aggregate principal amount of Richmond County Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A (the "Series 1996A Bonds"), dated December 1, 1996, bearing interest from date at the rates per annum set forth below, all interest payable semiannually on April 1 and October 1 in each year, commencing on April 1, 1997, and maturing on October 1 in the following years and principal amounts: Year Amount Rate Year Amount Rate 1997 $ 265,000 3.60% 2006 $ 1,260,000 6.00% 1998 350,000 3.80 2007 1,335,000 6.00 1999 365,000 4.00 2008 1,415,000 4.90 2000 375,000 4.10 2009 1,485,000 5.00 2001 395,000 4.20 2010 1,560,000 5.10 2002 410,000 4.30 2012 3,355,000 5.00 2003 1,100,000 4.40 2017 10,000,000 5.125 2004 1,155,000 4.50 2022 13,305,000 5.25 2005 1,205,000 4.60 2028 23,545,000 5.25 and of the Series 1996A Bonds there is now outstanding $61,130,000 aggregate principal amount thereof, being bonds maturing in the years 2002 through 2010, 2012, 2017, 2022 and 2028 and the Series 1996A Bonds are secured by a lien on the Pledged Revenues (as defined in the 1996 Resolution) in accordance with the 1996 Resolution; and WHEREAS, pursuant to the 1996 Resolution, the Consolidated Government also issued $3,760,000 aggregate principal amount of Richmond County Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B (the "Series 1996B Bonds"), dated December 1, 1996, bearing interest from date at the rates per annum set forth below, all interest payable semiannually on April 1 and October 1 in each year, commencing on April 1, 1997, and maturing on October 1 in the following years and principal amounts: Year 1997 1998 1999 2000 2001 2002 Amount $655,000 585,000 605,000 610,000 640,000 665,000 Rate 5.60% 5.80 5.90 6.10 6.20 6.25 and of the Series 1996B Bonds there is now outstanding $665,000 aggregate principal amount thereof, being bonds maturing in the year 2002 and the Series 1996B Bonds are secured on a -3- AO 708654.3 parity with the Series 1996A Bonds as to lien on the Pledged Revenues in accordance with the 1996 Resolution; and WHEREAS, pursuant to the ] 996 Resolution, the Consolidated Government also issued $5,910,000 aggregate principal amount of Richmond County Water and Sewerage Revenue Refunding Bonds, Series 1997 (the "Series 1997 Bonds"), dated January 1, 1997, bearing interest from date at the rates per annum set forth below, all interest payable semiannually on April 1 and October 1 in each year, commencing on April ], ] 997, and maturing on October 1 in the following years and principal amounts: Year Amount Rate Year Amount Rate 1997 $100,000 3.60% 2006 $ 190,000 4.70% ]998 140,000 3.80 2007 200,000 4.80 1999 145,000 4.00 2008 2] 0,000 4.90 2000 150,000 4. ]0 2009 220,000 5.00 2001 155,000 4.20 2010 230,000 5.10 2002 160,000 4.30 20]2 500,000 5.00 2003 170,000 4.40 2017 1,490,000 5. ]25 2004 175,000 4.50 2021 1,490,000 5.25 2005 ] 85,000 4.60 and of the Series 1997 Bonds there is now outstanding $5,220,000 aggregate principal amount thereof, being bonds maturing in the years 2002 through 2010, 2012, 2017 and 2021 and the Series 1997 Bonds are secured on a parity with the Series 1996A Bonds and the Series 1996B Bonds (collectively, the "Series 1996 Bonds") as to lien on the Pledged Revenues in accordance with the 1996 Resolution; and WHEREAS, in accordance with the provisions of the Act pertaining to the consolidation of Richmond County and the municipalities of Augusta and Hephzibah and the referenda held pursuant thereto, the certificates pertaining to such referenda and other information and documents are set forth in the validation proceeding pertaining to the Series 1996/1997 Bonds in the case of State of Georgia VS'. Richmond County, same being Civil Action File No. 96-RCCV- 960, which validation proceeding in its entirety, by this reference thereto, is incorporated herein and made a part hereof; and WHEREAS, pursuant to a resolution adopted on August 22, 2000, as supplemented on September 15, 2000 (the "2000 Resolution"), the Consolidated Government issued $97,080,000 aggregate principal amount of Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2000 (the "Series 2000 Bonds"), dated September 1,2000, bearing interest from date at the rates per annum set forth below, all interest payable semiannually on April 1 and October 1 in each year, commencing on April 1, 2000, and maturing on October 1 in the following years and principal amounts: -4- AO 7086543 Year Amount Rate Year Amount Rate 2006 $ 355,000 4.40% 2014 $ 2,740,000 5.00% 2007 1,405,000 4.50 2015 2,875,000 5.15 2008 1,775,000 4.55 2016 3,020,000 5.25 2009 2,165,000 4.60 2017 3,180,000 5.25 2010 2,265,000 4.65 2018 3,345,000 5.25 2011 2,375,000 4.80 2022 15,240,000 5.25 2012 2,485,000 4.90 2026 18,705,000 5.25 2013 2,605,000 5.00 2030 32,545,000 5.25 and the entire $97,080,000 aggregate principal amount of the Series 2002 Bonds is now outstanding and the Series 2002 Bonds are secured on a parity with the Series 1996 Bonds and the Series 1997 Bonds (collectively, the "Series 1996/1997 Bonds") as to lien on the Pledged Revenues; and WHEREAS, the Consolidated Government has determined that it is necessary and essential to add to, extend, improve and equip the System and has further determined that by the expenditure on its part of approximately $130,000,000, the System can be added to, extended, improved and equipped in accordance with, or substantially in accordance with, the "Engineer's Report, Water and Sewerage Revenue Bonds, Series 2002," dated May 2002 (the "Engineering Report") and prepared by CH2M Hill (the "Consulting Engineers"); and WHEREAS, the Consolidated Government has received a recommendation from A.G. Edwards & Sons, Inc. and SunTrust Capital Markets, Inc. (collectively, the "Underwriter") that, due to present market conditions, it is advisable, feasible and in the best interest of the Consolidated Government to prepay that certain GEFA Loan, Contract/Project No. SRF95-001, incurred by the Consolidated Government on June 1, 1996 (the "Refunded GEF A Obligation"), at this time in order to effect a savings in the debt service requirements on the Consolidated Government's now outstanding water revenue obligations and the Consolidated Government has determined, after its own independent study and investigation, that it is in the best interest of the Consolidated Government and its citizens and taxpayers to prepay the Refunded GEF A Obligation as aforesaid; and WHEREAS, it has been determined that the most feasible method of raising the funds required to finance the capital improvements to the System now contemplated as well as in the future is for the Consolidated Government to issue the Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2002 (the "Series 2002 Bonds") hereinafter authorized as additional parity bonds under the 1996 Resolution, as ratified, reaffirmed, broadened and extended by the 2000 Resolution (collectively, the "Prior Resolutions") and this 2002 Resolution; and WHEREAS, the Consolidated Government has received a recommendation from the Purchaser, and the Consolidated Government has after careful study and investigation determined, that the prepayment of the Refunded GEF A Obligation should be made by the prepayment in full of the Refunded GEF A Obligation within 90 days of the date of the issuance and delivery of the Series 2002 Bonds; and -5- AO 708654.3 WHEREAS, upon the recommendation of the Underwriter, with which recommendation the Consolidated Government concurs, it has been determined that the Consolidated Government should make due and legal provision to fund a reasonably required debt service reserve for the Series 2002 Bonds; and WHEREAS, the Consolidated Government has applied to Credit Issuers (as defined in the 1996 Resolution) for the issuance of a Credit Facility (as defined in the 1996 Resolution) to enhance the Consolidated Government's credit by assuring owners of the Series 2002 Bonds that the principal of and interest on the Series 2002 Bonds will be paid promptly when due; and WHEREAS, it is contemplated that the Series 2002 Bonds will be sold in the near future and in finalizing the terms of the Series 2002 Bonds and to accept the offer of the Underwriter to purchase the Series 2002 Bonds, the Consolidated Government will adopt a resolution supplementing this 2002 Resolution and said supplemental resolution will set forth, anlong other things, the aggregate principal amount of the Series 2002 Bonds to be issued, the interest rate or rates that the Series 2002 Bonds hereinafter authorized to be issued will bear, the principal amount to mature in each year and the maturities of the Series 2002 Bonds which will be designated as term bonds and subject to mandatory redemption and the terms of any Credit Facility (as so described, the "2002 Supplemental Resolution"); and WHEREAS, it was provided in Section 9 of Article V of the 1996 Resolution, as ratified, reaffirmed, broadened and extended in Section 25 of the 2000 Resolution, that additional revenue bonds or obligations could be issued, from time to time, payable from the Pledged Revenues of the System on a parity with the outstanding Series 1996/1997 Bonds and Series 2000 Bonds (the "Outstanding Prior Bonds"), upon meeting certain terms and conditions, as set forth therein, which are as follows: (a) The payments covenanted to be made into the Sinking Fund, as the same may have been enlarged and extended in any proceedings authorizing the issuance of any Additional Bonds, must be currently being made in full amount as required and the Debt Service Account and Reserve Account held within the Sinking Fund must be at their proper respective balances. (b) Except in the case of Additional Bonds issued for refunding purposes pursuant to Article V, Section 8 of the 1996 Resolution, there shall have been procured and filed with the Consolidated Government (i) a report by Independent Certified Public Accountants to the effect that the Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of such Additional Bonds must have been equal to at least 1 .25 times the maximum Debt Service Requirement for any succeeding Sinking Fund Year on the [Outstanding] Prior Bonds and any other issue or issues of Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued, or in lieu of the foregoing formula, if a new schedule of rates and charges for the services, facilities and commodities furnished by the System shall have been adopted and shall be in effect and Independent Certified Public Accountants shall certify that -6- AO 708654.3 had this new rate schedule been in effect during the period described above, the Pledged Revenues of the System would have equaled the requirements of the above formula; or (ii) (x) a report by Independent Certified Public Accountants to the effect that the historical Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of the proposed Additional Bonds were equal to at least 1.10 times the historical Debt Service Requirement on all Bonds (other than [Subordinate Bonds]) which were outstanding during such 12-month period, and (y) a report by the Consulting Engineers to the effect that the forecasted Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for each Fiscal Year in the Forecast Period are expected to equal at least 1.25 times the maximum annual Debt Service Requirement on all Bonds (other than [Subordinate Bonds]) which will be outstanding immediately after the issuance of the proposed Additional Bonds, in the then current or any succeeding Sinking Fund Year. The reports by the Independent Certified Public Accountant that are required by this paragraph (b) may contain pro forma adjustments to historical Pledged Revenues equal to 100 percent of the increased annual amount attributable to any revision in the schedule of rates, fees and charges for the services, facilities and commodities furnished by the System, imposed prior to the date of delivery of the proposed Additional Bonds and not fully reflected in the historical Pledged Revenues actually received during such 12-month period. Such pro forma adjustments shall be based upon a report of the Consulting Engineers as to the amount of Operating Revenues which would have been received during such 12-month period had the new rate schedule been in effect throughout such 12-month period. For the purpose of calculating the maximum Debt Service Requirements under this subparagraph (b), the maximum annual Debt Service Requirements shall be reduced by an amount equal to any capitalized interest funded from the proceeds of the Additional Bonds proposed to be issued in each succeeding Sinking Fund Year for the period for which said interest has been capitalized. (c) An Independent Certified Public Accountant shall certify in triplicate to the Consolidated Government that the requirements of subparagraph (a) above are being complied with and that the requirements of subparagraph (b) above have been met. A copy of such certificate shall be furnished to the Designated Representative of the original purchasers of the [Outstanding] Prior Bonds. (d) Except when Bonds are being issued solely for the purpose of refunding outstanding Bonds, the Consulting Engineers for the Consolidated Government shall provide the Consolidated Government with a written report recommending the additions, extensions and improvements to be made to the System and stating that same are feasible, designating in reasonable detail the work and installation proposed to be done and the estimated cost of -7- AO 708654.3 accomplishing the undertaking. The Consulting Engineers shall set forth in said report the forecasted Pledged Revenues to be derived from the System which will be available for debt service payments in each of the next 10 years and shall indicate the projected coverage of such debt service payments in each succeeding Sinking Fund Year. An executed duplicate original of such report of the Consulting Engineers as required by this provision shall be furnished to the Designated Representative of the original purchasers of the [Outstanding ]Prior Bonds issued hereunder not less than 10 days before any proceedings are taken to actually issue such Additional Bonds. (e) The Consolidated Govenm1ent shall pass proper proceedings reciting that all of the above requirements have been met, shall authorize the issuance of the Additional Bonds and shall provide in such proceedings, among other things, the date such Additional Bonds shall bear, the rate or rates of interest and maturity dates, as well as the registration and redemption provisions. Except for Additional Bonds that bear interest at a Variable Rate, the interest on the Additional Bonds of any such issue shall fall due on April 1 and October 1 of each year, and the Additional Bonds shall mature in installments on October 1, but, as to principal, not necessarily in each year or in equal installments. Any such proceeding or proceedings shall require the Consolidated Government to increase the monthly payments then being made into the Sinking Fund to the extent necessary to pay the principal of and the interest on the [Outstanding] Prior Bonds and on all such Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued as same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, and to create upon the issuance of the proposed Additional Bonds to be issued a reserve in the Reserve Account at least equal to the Reserve Requirement on the [Outstanding] Prior Bonds and any Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued and to maintain said reserve in an amount sufficient for that purpose; provided, however, the Consolidated Government may satisfy funding of the required reserve through the purchase of a Reserve Account Surety Bond meeting the requirements of the Resolutions. Any such proceeding or proceedings shall restate and reaffirm, by reference, all of the applicable terms, conditions and provisions of the Resolutions. If any Additional Bonds would bear interest at a Variable Rate, the resolution under which such Additional Bonds are issued shall provide a maximum rate of interest per annum which such Additional Bonds may bear. In connection with the issuance of any Additional Bonds under the Resolutions, the Consolidated Government may obtain or cause to be obtained one or more Credit Facilities providing for payment of all or a portion of the principal of, premium, if any, or interest due or to become due on such Additional Bonds, providing for the purchase of such Additional Bonds by the Credit Issuer, or providing funds for the purchase of such Additional Bonds by the Consolidated Government. In connection therewith the Consolidated Government shall enter into Credit Facility Agreements with such Credit Issuers providing for, among -8- AO 708654.3 other things, (i) the payment of fees and expenses to such Credit Issuer for the issuance of such Credit Facility; (ii) the terms and conditions of such Credit Facility and the Additional Bonds affected thereby; and (iii) the security, if any, to be provided for the issuance of such Credit Facility. The Consolidated Government may in a Credit Facility Agreement agree to directly reimburse such Credit Issuer for amounts paid under the terms of such Credit Facility, together with interest thereon; provided, however, that no Reimbursement Obligation shall be created, for purposes of the Resolutions, until amounts are paid under such Credit Facility. Any such Reimbursement Obligation shall be deemed to be a part of the Additional Bonds to which the Credit Facility relates which gave rise to such Reimbursement Obligation, and references to principal and interest payments with respect to such Additional Bonds shall include principal and interest (except. for Additional Interest) due on the Reimbursement Obligation incurred as a result of payment of such Additional Bonds with the Credit Facility. All other amounts payable under the Credit Facility Agreement (including any Additional Interest) shall be fully subordinate to the payment of debt service on Bonds (other than [Subordinate Bonds]). Any such Credit Facility shall be for the benefit of and secure such Additional Bonds or portion thereof as specified in the applicable bond resolution authorizing such Additional Bonds. (f) Such Additional Bonds or obligations and all proceedings relative thereto, and the security therefor, shall be validated as prescribed by law. WHEREAS, as required by the Prior Resolutions, attached hereto as Exhibit A is a certificate of an Independent Certified Public Accountant (as defined in the 1996 Resolution) certifying to the Commission that the Consolidated Government has complied and is now complying with the requirements of Paragraph (a) and that the Consolidated Government has met the requirements of Paragraph (b )(ii)(x) as set forth above and a copy of said certificate has been furnished to the Designated Representative of the original purchasers of the Outstanding Prior Bonds; and WHEREAS, as required by the 1996 Resolution, attached hereto as Exhibit B is the Engineering Report recommending the additions, extensions and improvements to be made to the System and that same are feasible, describing in reasonable detail the undertaking and the estimated cost thereof, setting forth the forecasted Pledged Revenues to be derived from the System which will be available for debt service payments on the Outstanding Prior Bonds and the proposed Additional Bonds hereinafter authorized to be issued in each of the next 10 years and the projected coverage of such debt service payments in each succeeding Sinking Fund Year and that the requirements of Paragraph (b )(ii)(y) as set forth above have been met. WHEREAS, prior to the actual issuance and delivery of the Series 2002 Bonds, the Consolidated Government will enter into a contract with SunTrust Bank (the "Paying Agent"), pursuant to which the Paying Agent will agree to act as Paying Agent and as Bond Registrar for the Series 2002 Bonds and to perform various functions with respect to the Series 2002 Bonds, including, but not limited to, the authentication of the Series 2002 Bonds by the manual signature of a duly authorized officer of the Paying Agent, as Bond Registrar, the registration, transfer, exchange and related mechanical and clerical functions, as well as the preparation, signing and -9- AO 708654.3 issuance of checks and drafts in payment of the principal of and interest on the Series 2002 Bonds as same become due and payable; and WHEREAS, the Consolidated Government has obtained certain loans from the Georgia Environmental Facilities Authority ("GEF A"), and prior to the issuance of the Series 2002 Bonds GEF A will consent to the issuance of the Outstanding Prior Bonds and any additional revenue bonds secured by a lien on the Pledged Revenues of the System ranking on a parity as to lien on the Pledged Revenues with the Outstanding Prior Bonds, and that the lien on the Pledged Revenues of the System securing the payment of said loans is in all respects junior and subordinate to the lien on the Pledged Revenues securing the payment of the Outstanding Prior Bonds and any parity bonds therewith; and WHEREAS, the Outstanding Prior Bonds are the only revenue obligations of the Consolidated Government now outstanding having as security for the payment thereof and interest thereon a first or prior lien on the Pledged Revenues of the System and the Consolidated Government has been and is now complying and will continue to comply in all respects with the applicable terms, covenants and provisions of the Prior Resolutions. NOW, THEREFORE, BE IT RESOL VED by the Augusta-Richmond County Commission and it is hereby resolved by the authority of same, as follows: Section 1. Definitions. Capitalized terms used herein and not defined shall have the meanings set forth in the Prior Resolutions. For the purpose of this 2002 Resolution the definitions set forth in the Prior Resolutions shall be and are hereby anlended and added to, effective as of the date of the issuance and delivery of the Series 2002 Bonds herein authorized to be issued, as follows: "Additional Bonds" shall mean any revenue bonds of the Consolidated Government ranking on a parity with the Outstanding Prior Bonds and the Series 2002 Bonds which may hereafter be issued pursuant to Article V, Section 8 of the 1996 Resolution, Section 25 of the 2000 Resolution and Section 25 of this 2002 Resolution. "Beneficial Owner" shall mean, with respect to the Series 2002 Bonds, the owners of a beneficial interest in the Series 2002 Bonds registered in Book-Entry Form. "Bond Registrar," when used with respect to the Series 2002 Bonds, means SunTrust Bank, its successors and assigns or any successor commercial bank or trust company appointed by the Consolidated Government to maintain, in accordance with the provisions of the Resolutions, the registration books of the Consolidated Government for any series of Bonds secured by the Resolutions. "Book-Entry Form" or "Book-Entry System" shall mean, with respect to the Series 2002 Bonds, a form or system, as applicable, under which (i) the ownership of beneficial interests in the Series 2002 Bonds and bond service charges may be transferred only through book-entry and (ii) physical Series 2002 Bonds in fully registered, certificated form are registered only in the name of a Securities Depository or its nominee as holder, with physical Series 2002 Bond certificates immobilized in the custody of a Securities Depository. -10- AO 708654.3 "Consulting Engineer," when used with respect to the Series 2002 Bonds, shall mean CH2M Hill, Atlanta, Georgia, or its successors or such other engineer, engineers or engineering firm that might hereafter be employed in relation to the supervision of the additions, extensions and improvements to be made to the System and in relation to the services to be rendered as contemplated by this 2002 Resolution. "Debt Service Requirement" means the amounts required in each Sinking Fund Year to pay the principal of and interest on the Outstanding Prior Bonds, the Series 2002 Bonds and any Additional Bonds as same become due and payable; provided, however, with respect to any term obligation which is required to be repaid prior to its stated maturity through the operation of a mandatory sinking fund, the amount of principal coming due in any Sinking Fund Year with respect to such obligation shall be the amount required to be deposited into the sinking fund for the retirement of the principal amount of such obligation rather than the entire principal amount of such debt coming due at the stated maturity. If any Bonds outstanding or proposed to be issued bear interest at a Variable Rate, the interest rate per annum on such Bonds for purposes of calculating the Debt Service Requirement shall be the lesser of (a) the 30-year Revenue Bond Index, (b) the maximum interest rate for such Bonds permitted by the supplemental bond resolution authorizing the issuance thereof or ( c) the "cap" rate, if any, established with respect to such bonds in a related Hedge Agreement. With respect to any Bonds secured by a Credit Facility, Debt Service Requirement shall include (a) any commission or commitment fee obligations with respect to such Credit Facility, (b) the outstanding amount of any Reimbursement Obligation owed to the relevant Credit Issuer and the interest thereon, (c) any Additional Interest owned on Bank Bonds to a Credit Issuer and (d) any remarketing agent fees. With respect to Bonds for which there exists a related Hedge Agreement, Debt Service Requirement shall include the net amounts paid with respect to such Hedge Agreement. "Designated Representative of the original purchasers" or "Representative of the original purchaser," when used with respect to the Series 2002 Bonds, shall be construed to mean A.G. Edwards & Sons, Inc., Atlanta, Georgia, its successors or assigns. "Engineering Report," when used with respect to the Series 2002 Bonds, shall mean the report entitled "Engineer's Report, Water and Sewerage Revenue Bonds, Series 2002," dated May 2002, and prepared by the Consulting Engineer. "Investment Earnings" means all interest received on and profits derived from investments made with Pledged Revenues or any moneys in the funds and accounts established under Article IV and Article V of the 1996 Resolution, as such accounts may be redesignated under this 2002 Resolution. "Outstanding Prior Bonds" shall mean the outstanding Series 1996/1997 Bonds and Series 2000 Bonds. "Paying Agent," when used with respect to the Series 2002 Bonds, means SunTrust Bank, Atlanta, Georgia, its successors and assigns or any successor commercial bank or trust company appointed by the Consolidated Government to serve as paying agent, in accordance with the terms of the Resolutions and any supplemental resolution, for any series of Bonds secured by the Resolutions. -11- AO 708654.3 "Prior Resolutions" means collectively the 1996 Resolution and the 2000 Resolution. "Reserve Requirement" means the least of (i) the highest Debt Service Requirement in the then current or any succeeding Sinking Fund Year, (ii) 10 percent of the aggregate principal amount of the Prior Bonds, the Series 2002 Bonds and Additional Bonds outstanding, or (iii) 125 percent of the average annual Debt Service Requirement in the current or any succeeding Sinking Fund Year. "Resolutions" means collectively the 1996 Resolution, the 2000 Resolution and this 2002 Resolution, and as same may be supplemented from time to time. "Series 2002 Bonds" means the Consolidated Government's Water and Sewerage Revenue Bonds, Series 2002 in the aggregate principal amount not to exceed $154,070,000 and authorized to be issued pursuant to Section 2 of this 2002 Resolution. "Sinking Fund Custodian," when used with respect to the Series 2002 Bonds, means SunTrust Bank, Atlanta, Georgia, its successors and assigns, or any successor custodian for the Sinking Fund hereafter appointed by the Consolidated Government; provided, however, the Sinking Fund Custodian shall at all times be a commercial bank or trust company. "Subordinate Bonds" shall mean additional bonds or obligations issued form time to time payable from the Pledged Revenues and secured by a lien on the Pledged Revenues junior and subordinate to the lien created by the Resolutions. "2002 Capitalized Interest Fund" shall mean the "Augusta, Georgia Water and Sewerage System Capitalized Interest Fund-2002" created in Section 18 of this 2002 Resolution. "2002 Construction Fund" shall mean the "Augusta, Georgia Water and Sewerage System Construction Fund-2002" created in Section 17 of this 2002 Resolution. "2002 Construction Fund Depository" means SunTrust Bank, its successors and assigns, or any successor custodian for the 2002 Construction Fund hereafter appointed by the Consolidated Government; provided, however, the 2002 Construction Fund Depository shall at all times be a commercial bank or trust company. "2002 Resolution" means this resolution of the Augusta-Richmond County Commission of Augusta, Georgia adopted May 30, 2002, ratifying, reaffirming, broadening and extending the Prior Resolutions and authorizing the issuance of the Series 2002 Bonds, as same may be supplemented from time to time, including by the 2002 Supplemental Resolution. Whenever used in this 2002 Resolution, the singular shall include the plural and the plural shall include the singular, unless the context otherwise indicates. Section 2. Authorization. All the terms, provisions and conditions contained in Section 9 of Article V of the 1996 Resolution, as ratified, reaffirmed, broadened and extended in Section 25 of the 2000 Resolution, having been met and complied with, there be and there is hereby authorized to be issued, pursuant to and in conformity with the Prior Resolutions, the -12- AO 7086543 Constitution of the State of Georgia, the Revenue Bond Law and the Act, revenue bonds in the aggregate principal amount not to exceed $154,070,000 for the purpose of providing funds to finance, in whole or in part, the cost of adding to, extending, improving and equipping the System, acquiring the necessary property or rights in property therefor, both real and personal, to pay a portion of the interest accruing on the Series 2002 Bonds during the estimated period of construction of additions, extensions and improvements to the System, to prepay in full the Refunded GEF A Obligation, to fund a reasonably required debt service reserve and to pay all expenses necessary to accomplish the foregoing. The revenue bonds shall be designated "Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2002," shall be dated June 1, 2002, or the first day of the month in which issued or delivered, or the first day of the month preceding the month of issuance and delivery, all being at the option of the Commission, shall be initially issued as book-entry only bonds in fully registered form without coupons, shall be in the denomination of $5,000 or any integral multiple thereof, shall be numbered R-1 upward, shall be transferable to subsequent owners as hereinafter provided, shall bear interest from date at such rate or rates per annum not exceeding 6.0 percent in any year, all interest payable semiannually on April 1 and October 1 in each year, commencing on October 1, 2002, and the principal shall mature on October 1 in the years 2002 through 2032, in such principal amounts so that the maturing annual debt service in any calendar year on the Series 2002 Bonds will not exceed $23,001,205 and the maturing annual debt service in any calendar year on the Outstanding Prior Bonds and the Series 2002 Bonds will not exceed $23,001,470. The principal amount of the Series 2002 Bonds shall be payable at maturity, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender thereof at the principal corporate trust office of the Paying Agent in Atlanta, Georgia, and payments of interest on the Series 2002 Bonds shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on the fifteenth day of the calendar month next preceding the April 1 and October 1 interest payment dates and such payments of interest shall be mailed to the registered owner at the address shown on the bond registration book. Notwithstanding the foregoing, so long as the Series 2002 Bonds are in Book-Entry Form, principal and interest shall be payable to the Securities Depository or its nominee, all as set forth in Section 7 hereof. Both the principal of and interest on the Series 2002 Bonds shall be payable in lawful money of the United States of America. i Section 3. Execution; Form of Series 2002 Bonds. The Series 2002 Bonds shall be executed on behalf of the Consolidated Government by use of the manual or facsimile signature of the Mayor of the Commission and attested by the manual or facsimile signature of the Clerk of the Commission and the official seal of the Consolidated Government shall be impressed thereon or a facsimile thereof imprinted thereon, and the Series 2002 Bonds shall be authenticated by the manual signature of a duly authorized signatory of the Bond Registrar. The validation certificate to be printed on the Series 2002 Bonds shall be executed by use of the manual or facsimile signature of the Clerk of the Superior Court of Richmond County and the official seal of said Court shall be impressed thereon or a facsimile thereof shall be imprinted thereon. If there is a municipal bond insurance policy insuring payment of the Series 2002 Bonds when due, there shall be printed on the Series 2002 Bonds a Statement of Insurance prepared by the Credit Issuer. In case any officer whose signature shall appear on the Series 2002 Bonds shall cease to be such officer before delivery of such Series 2002 Bonds, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer -13- AO 708654.3 had remained in office until such delivery. The Series 2002 Bonds, the certificate of authentication and registration, form of assignment and the certificate of validation to be endorsed upon the Series 2002 Bonds shall be in substantially the following form, with such variations, omissions and insertions as are required or permitted by this 2002 Resolution, to wit: -14- AO 708654.3 No.R- UNITED STATES OF AMERICA STATE OF GEORGIA AUGUSTA, GEORGIA WATER AND SEWERAGE REVENUE BOND SERIES 2002 BOND DATE: INTEREST RATE: MATURITY DATE: $ CUSIP: FOR VALUE RECEIVED, AUGUSTA, GEORGIA (the "Consolidated Government"), a political subdivision of the State of Georgia, hereby promises to pay solely from the special fund provided therefor, as hereinafter set forth, to CEDE & CO., or registered assigns, the principal sum of DOLLARS in lawful money of the United States of America on the maturity date specified above, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender hereof at the principal corporate trust office of SunTrust Bank, Atlanta, Georgia, Paying Agent and Bond Registrar, and to pay to the registered owner hereof, solely from said special fund, interest on said principal amount from the date hereof or from the most recent interest payment date to which interest has been paid, at the rate per annum specified above, semiannually on April 1 and October 1 in each year (each an "lnterest Payment Date"), commencing October 1, 2002, until payment of the principal amount hereof. Payments of interest on this Bond shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on the fifteenth day of the calendar month next preceding each lnterest Payment Date and such interest payments shall be mailed to the registered owner at the address shown on the bond registration book. This Bond is one of a duly authorized issue in the aggregate principal amount of $154,070,000 (the "Series 2002 Bonds") of like tenor, except as to numbers, denominations, interest rates and dates of maturity and redemption provisions, issued by the Consolidated Government for the purpose of providing funds to finance, in whole or in part, the cost of adding to, extending, improving and equipping the water and sewerage system (the "System"), acquiring the necessary property or rights in property therefor, both real and personal, to pay a portion of the interest accruing on the Series 2002 Bonds during the estimated period of construction of additions, extensions and improvements to the System, to prepay in full a loan from the Georgia Environmental Facilities Authority, to fund a reasonably required debt service reserve and to pay all expenses necessary to accomplish the foregoing. The Series 2002 Bonds are issued under authority of the Revenue Bond Law of the State of Georgia (Title 36, Chapter 82, Article 3 of the Official Code of Georgia Annotated, as amended), and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq., as amended), and were duly authorized by the Augusta-Richmond County Commission (the "Commission") by a resolution adopted on October 21, 1996, as supplemented on December 3 and 17, 1996 (the "1996 Resolution"), a resolution adopted on August 22, 2000, as supplemented September 15, 2000 (the "2000 Resolution") and a resolution adopted on May _, 2002, as supplemented on , 2002 -15- AO 708654.3 (the "2002 Resolution" and together with the 1996 Resolution and the 2000 Resolution, the "Resolutions"). The Series 2002 Bonds rank on a parity as to lien on the Pledged Revenues (as hereinafter defined) of the System with the Consolidated Government's outstanding Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A, Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B, Water and Sewerage Revenue Refunding Bonds, Series 1997 and Water and Sewerage Revenue Bonds, Series 2000 (collectively, the "Outstanding Prior Bonds"). In addition to the Outstanding Prior Bonds and the Series 2002 Bonds (collectively, the "Bonds"), the Consolidated Government may issue, under certain terms and conditions as provided in the Resolutions, additional revenue bonds, and if issued, such bonds will rank on a parity as to lien on the Pledged Revenues of the System with the Bonds. Reference to the Resolutions is hereby made for a complete description of the funds charged with, and pledged to, the payment of the principal of and the interest on the Bonds or any other issue of bonds issued on a parity therewith, the nature and extent of the security, a statement of rights, duties and obligations of the Consolidated Government, the rights of the owners of the Series 2002 Bonds and the terms and conditions under which additional bonds may be issued, to all the provisions of which the owner hereof, by the acceptance of this Bond, assents. The person in whose name this Bond is registered on the registration books kept by the Bond Registrar shall be deemed to be the owner of this Bond for all purposes. The Series 2002 Bonds are being issued by means of a book-entry system, with actual Series 2002 Bonds immobilized at The Depository Trust Company, New York, New York (the "Securities Depository"), or its successor as Securities Depository, evidencing ownership of the Series 2002 Bonds in principal amounts of $5,000 or integral multiples thereof, and with transfers of beneficial ownership effected on the records of the Securities Depository and its participants pursuant to the rules and procedures established by the Securities Depository. Actual Series 2002 Bonds are not available for distribution to the owners of beneficial interests in the Series 2002 Bonds registered in book-entry form (the "Beneficial Owners"), except under the limited circumstances set forth in the 2002 Resolution. The principal, redemption premium (if any) and interest on the Series 2002 Bonds are payable by the Paying Agent to Cede & Co., as nominee of the Securities Depository. Transfers of principal, redemption premium (if any) and interest payments to participants of the Securities Depository is the responsibility of the Securities Depository; transfers of principal, redemption premium (if any) and interest to Beneficial Owners of the Series 2002 Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of Beneficial Owners. Neither the Consolidated Government nor the Paying Agent is responsible or liable for maintaining, supervising or reviewing the records maintained by the Securities Depository, its participants or persons acting through such participants. If the Series 2002 Bonds are no longer registered to a Securities Depository or its nominee, this Bond may be registered as transferred only upon the registration books kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in person, or by his or her attorney duly authorized in writing, upon presentation and surrender to the Bond Registrar of this Bond duly endorsed for registration of transfer or accompanied by an assignment duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new registered bond certificate, in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor. In addition, if the Series 2002 Bonds are no longer registered to a Securities Depository, this Bond may be exchanged by the registered owner hereof or his or her duly authorized attorney upon presentation at the principal corporate trust office of the Bond -16- AO 708654.3 Registrar for an equal aggregate principal amount of Series 2002 Bonds of the same maturity and in any authorized denominations in the manner, subject to the conditions and upon payment of charges, if any, provided in the Resolutions. This Bond is transferable only upon the bond registration book kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in person, or by attorney duly authorized in writing, upon the surrender and presentation to the Bond Registrar of this Bond duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or attorney duly authorized in writing, and thereupon a new registered bond, in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor. The Series 2002 Bonds are issuable in the form of registered bonds in the denomination of $5,000 or any integral multiple thereof and are exchangeable at the principal corporate trust office of the Bond Registrar in the manner, subject to the conditions and upon payment of charges, if any, provided in the Resolutions. The Bonds and such revenue bonds of the Consolidated Government as may in the future be issued on a parity therewith, are equally and ratably secured by a pledge of and a lien on the "Pledged Revenues," which are defined in the Resolutions to include net operating revenues of the System (gross operating revenues of the System after provision for payment of all reasonable expenses of operation and maintenance) and earnings on investments made with moneys and securities from time to time on deposit in the funds and accounts established in the Resolutions. The Resolutions provide, among other things, for prescribing and revising rates and collecting fees and charges for the services, facilities and commodities furnished by the System, as now existent ffi1d as hereinafter added to, extended, improved and equipped to the extent necessary to produce revenues sufficient (i) to pay the reasonable and necessary costs of operating and maintaining the System, including any contractual obligations incurred pertaining to the operation of the System, (ii) to produce Pledged Revenues (excluding earnings on investments made with moneys and securities from time to time on deposit in the construction funds) in each Fiscal Year (as defined in the 1996 Resolution) equal to at last 110 percent of the amount required to discharge the payment of the Bonds and any bonds issued on a parity therewith then outstanding as the Sffi11e become due and payable, (iii) to pay into the special fund designated "Augusta, Georgia Water and Sewerage System Sinking Fund" the an10unts required to pay the principal of and the interest on the Bonds and any other bonds hereafter issued on a parity therewith as the same become due payable, either at maturity or by proceedings for mandatory redemption, and to create and maintain a reserve therein for that purpose, and (iv) to create and maintain a reserve for extensions and improvements to the System. This Bond shall not be deemed to constitute a debt of the State of Georgia or the Consolidated Government nor a pledge of the faith and credit of said State or Consolidated Government, nor shall the State or Consolidated Government be subject to any pecuniary liability hereon. This Bond shall not be payable from, nor be a charge upon, any funds other than the Pledged Revenues, and is payable solely from the special fund provided therefor from the Pledged Revenues, including all future additions thereto and any other moneys deposited therein. No owner of this Bond shall ever have the right to enforce payment hereof against any -17- AO 708654.3 other property of the State of Georgia or the Consolidated Government, nor shall this Bond constitute a charge, lien or encumbrance, legal or equitable, upon any other property of the Consolidated Government other than the Pledged Revenues pledged to the payment hereof. The issuance of this Bond shall not directly, indirectly or contingently obligate the State or the Consolidated Government to levy or to pledge any form of taxation whatever therefor or to make any appropriation for its payment. The Series 2002 Bonds may be redeemed prior to their respective maturities, either in whole at any time or in part on any date not earlier than October 1, _ from any moneys available for such purpose as provided in the 2002 Resolution by payment of the principal amount thereof and accrued interest thereon to date of redemption, together with a premium of _ percent of such principal amount if redeemed on or prior to September 30, _, _ percent of such principal amount if redeemed thereafter and on or prior to September 30, _, and at par without a premium if redeemed thereafter and before maturity. In addition, the Series 2002 Bonds maturing October I, _ are subject to mandatory redemption prior to maturity in accordance with the provisions of the 2002 Resolution, in part, by lot in such manner as may be designated by the Bond Registrar at par plus accrued interest to the redemption date, in the following principal amounts on October I in the following years: Year Amount $ maturity. principal amount of Bonds maturing October I, shall be paid at Notice designating the Bonds (or the portion of the principal amount of the Series 2002 Bonds in multiples of $5,000) to be acquired by redemption, as aforesaid, shall be mailed, postage prepaid, not less than 30 days nor more than 60 days prior to the redemption date to all registered owners of Series 2002 Bonds to be redeemed in whole or in part at the addresses which appear in the bond registration book, but failure so to mail any such notice shall not affect the validity of the proceedings for such redemption or cause the interest to accrue on the principal amount of the Series 2002 Bonds so designated for redemption after the redemption date. To the extent and in the manner permitted by the Resolutions, modifications, alterations, amendments, additions and recisions of the provisions of the Resolutions, or of any resolution supplemental thereto or of the Series 2002 Bonds, may be made by the Consolidated Government with the consent of the owners of at least 65 percent in aggregate principal amount of the Series 2002 Bonds then outstanding, including any parity obligations therewith then outstanding, and without the necessity for notation hereon of reference thereto. -18- AO 708654.3 This Bond is issued with the intent that the laws of the State of Georgia shall govern its construction. In case of default, the owner of this Bond shall be entitled to the remedies provided in the Resolutions authorizing its issuance and in said Revenue Bond Law and any amendments thereto. It is hereby recited and certified that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been done, have happened and have been performed in due and legal form as required by law, and that provision has been made for the allocation from the anticipated revenues of the System, as now existent and as hereafter added to, extended, improved and equipped, of amounts sufficient to pay the principal of and the interest on the Series 2002 Bonds as the same mature, or are acquired by mandatory redemption, and to create and maintain a reserve for that purpose, and that said revenues are irrevocably allocated and pledged to the payment of the Series 2002 Bonds and the interest thereon. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolutions until this Bond shall have been authenticated and registered upon the bond registration book kept for that purpose by the Bond Registrar, which authentication and registration shall be evidenced by the execution by the manual signature of a duly authorized signatory of the Bond Registrar of the certificate hereon. IN WITNESS WHEREOF, Augusta, Georgia has caused this Bond to be executed by use of the [manual][facsimile] signature of the Mayor of the Commission of the Consolidated Government and [its official seal to be impressed hereon] [a facsimile of its official seal to be imprinted hereon] and attested by use of the [manual][facsimile] signature of the Clerk of the Commission of the Consolidated Govenm1ent, as of I, 2002. AUGUSTA, GEORGIA (S E A L) By: Mayor, Augusta-Richmond County Commission Attest: Clerk -19- AO 708654.3 Date of Authentication and Registration: CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of the Series 2002 Bonds described in the resolutions of , 2002 and _, 2002. SUNTRUST BANK, as Bond Registrar By: Authorized Signatory * * * * * * * * * * VALIDATION CERTIFICATE STATE OF GEORGIA ) ) COUNTY OF RICHMOND) The undersigned Clerk of the Superior Court of Richmond County, State of Georgia, HEREBY CERTIFIES that this Bond was validated and confirmed by judgment of the Superior Court of Richmond County, Georgia, on ,2002 and that no intervention or objection was filed in the proceedings validating same and that no appeal from said judgment of validation has been taken. .' WITNESS my [facsimile] signature and seal of the Superior Court of Richmond County, Georgia. (S E A L) Clerk, Superior Court, Richmond County, Georgia * * * * * * * * * * -20- AO 708654.3 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto [Please print or typewrite name and address including postal zip code of assignee.] [Please insert Social Security or Tax Identification Number.] the within bond and all rights thereunder, hereby constituting and appomtmg attorney to transfer this Bond on the bond registration book kept for such purpose by the Bond Registrar, with full power of substitution in the premises. DATED (Signature Guaranteed) Registered Owner Notice: Signature(s) must be guaranteed by an eligible guarantor institution (such as banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved Signature Guarantee Medallion Program pursuant to S.E.C. Rule 17Ad-15. Notice: The signature(s) on this assignment must correspond with the name as it appears on the face of the within bond in every particular without alterations, enlargement or any change whatsoever. * * * * * * * * * * STATEMENT OF INSURANCE * * * * * * * * * * -21- AO 708654.3 Section 4. Required Authentication; Proof of Owner-ship. Only those Series 2002 Bonds which shall have endorsed thereon a certificate of authentication and registration substantially in the form hereinbefore set fmih, duly executed by the manual signature of an authorized signatory of the Bond Registrar shall be entitled to any benefit or security under this 2002 Resolution and such certificate upon any of the Series 2002 Bonds when duly executed shall be conclusive evidence that such Series 2002 Bond has been duly authenticated, registered and delivered. It shall not be necessary that the same signatory of the Bond Registrar sign the certificate of authentication and registration on all of the Series 2002 Bonds that may be issued hereunder at anyone time. The person in whose name any Series 2002 Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and the payment of the principal amount, interest and premium, if any, shall be made only to or upon the order of the registered owner thereof. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 2002 Bond, including redemption premium, if any, and the interest thereon to the extent of the sums so paid. Section 5. Bond Reeistrar; Transfer and Exchange. The Bond Registrar shall keep the bond registration book for the registration of the Series 2002 Bonds and for the registration of transfers of the Series 2002 Bonds as herein provided. The transfer of any Series 2002 Bond shall be registered upon the bond registration book upon the surrender and presentation of the Series 2002 Bond to the Bond Registrar duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or attorney authorized in writing in such form as shall be satisfactory to the Bond Registrar. Upon any such registration of transfer, the Bond Registrar shall authenticate and deliver in exchange for such Series 2002 Bond or Series 2002 Bonds so surrendered, a new Series 2002 Bond or Series 2002 Bonds registered in the name of the transferee, of the same series and maturity, in any denomination or denominations authorized by this 2002 Resolution, and in an aggregate principal amount equal to the aggregate principal amount of the Series 2002 Bonds so surrendered. Any Series 2002 Bond, upon presentation and surrender thereof to the Bond Registrar, together with an assignment duly executed by the registered owner or duly authorized attorney, in such form as may be satisfactory to the Bond Registrar, may be exchanged, at the option of the registered owner, for an aggregate principal amount of Series 2002 Bonds of the same series and maturity equal to the principal amount of the Series 2002 Bond so surrendered and of any authorized denomination or denominations. The Bond Registrar may make a charge for every exchange or registration of transfer of the Series 2002 Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to the owner for the privilege of transferring or exchanging the Series 2002 Bonds under this 2002 Resolution. Section 6. Lost. Destroved. Mutilated Bonds. If any Series 2002 Bond shall become mutilated, the Bond Registrar in its discretion and at the expense of the owner of such Series 2002 Bond shall authenticate and deliver a new Series 2002 Bond of like tenor and series registered in the name of the owner in exchange and substitution for such mutilated Series 2002 Bond. If any Series 2002 Bond shall become lost, destroyed or wrongfully taken, evidence of such loss, destruction or wrongful taking within a reasonable time thereafter may be submitted to the Consolidated Government and if such evidence shall be satisfactory and indemnity of a character and in an amount satisfactory shall be given, then the Consolidated Government at the expense of the owner shall cause a new Series 2002 Bond of like tenor and series registered in -22- AO 708654.3 the name of the owner to be authenticated by the Bond Registrar and delivered to the registered owner. Section 7. Global Form; Securities Depository; Ownership of Series 2002 Bonds. (a) Upon the initial issuance, the ownership of each Series 2002 Bond shall be registered in the name of the Securities Depository or the Securities Depository Nominee, and ownership thereof shall be maintained in Book-Entry Form by the Securities Depository for the account of the Agent Members thereof. Initially, each maturity of the Series 2002 Bonds shall be registered in the name of Cede & Co., as the nominee of The Depository Trust Company. Beneficial Owners will not receive Series 2002 Bonds from the Bond Registrar evidencing their ownership interests. Except as provided in subsection (c) of this Section 7, the Series 2002 Bonds may be transferred, in whole but not in part, only to the Securities Depository or the Securities Depository Nominee, or to a successor Securities Depository selected or approved by the Consolidated Government or to a nominee of such successor Securities Depository. (b) With respect to Series 2002 Bonds registered in the name of the Securities Depository or the Securities Depository Nominee, neither the Consolidated Government, the Bond Registrar nor the Paying Agent shall have any responsibility or obligation to any Agent Member or Beneficial Owner. Without limiting the foregoing, neither the Consolidated Government, the Bond Registrar nor the Paying Agent shall have any responsibility Qt..-obligation with respect to: (i) the accuracy of the records of the Securities Depository, the Securities Depository Nominee or any Agent Member with respect to any Beneficial Ownership interest in the Series 2002 Bonds; (ii) 'i:t4~ delivery to any Agent Member, any Beneficial Owner or any other person, other than the Securities Depository or the Securities Depository Nominee, of any notice with respect to the Series 2002 Bonds; or (iii) the payment to any Agent Member, any Beneficial Owner or any other person, other than the Securities Depository or the Securities Depository Nominee, of any amount with respect to the principal, premium, if any, or interest on the Series 2002 Bonds. So long as any Series 2002 Bonds are registered in Book-Entry Form, the Consolidated Government, the Bond Registrar and the Paying Agent may treat the Securities Depository as, and deem the Securities Depository to be, the absolute owner of such Series 2002 Bonds for all purposes whatsoever, including without limitation: (iv) the payment of principal, premium, if any, and interest on such series of Series 2002 Bonds; (v) giving notices of redemption and other matters with respect to such Series 2002 Bonds; -23- AO 708654.3 (vi) registering transfers with respect to such Series 2002 Bonds; (vii) the selection of Series 2002 Bonds for redemption; and (viii) voting and obtaining consents under the 2002 Resolution. So long as any Series 2002 Bonds are registered in Book-Entry Form, the Paying Agent shall pay all principal of, premium, if any, and interest on the Series 2002 Bonds only to the Securities Depository or the Securities Depository Nominee as shown in the Bond Register, and all such payments shall be valid and effective to fully discharge the Consolidated Government's obligations with respect to payment of principal of, premium, if any, and interest on the Series 2002 Bonds to the extent so paid. (c) If at any time (i) the Consolidated Government determines that the Securities Depository is incapable of discharging its responsibilities described herein, (ii) the Securities Depository notifies the Consolidated Government or the Paying Agent that it is unwilling or unable to continue as Securities Depository with respect to the Series 2002 Bonds, or (iii) the Securities Depository shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor Securities Depository is not appointed by the Consolidated Government within 90 days after the Consolidated Government receives notice or becomes aware of such condition, as the case may be, then this Section 7 shall no longer be applicable and the Consolidated Government shall execute' and the Bond Registrar shall authenticate and deliver Series 2002 Bond certificates representing the Series 2002 Bonds to the bondholders. Series 2002 Bonds issued pursuant to this subsection (c) shall be registered in such names and authorized denominations as. the Securities Depository, pursuant to instructions from the Agent Member or otherwise, shall instruct the Bond Registrar. Upon exchange, the Bond Registrar shall authenticate and deliver such Series 2092 Bond certificates representing the Series 2002 Bonds to the persons in whose names such Series 2002 Bonds are so registered on the Business Day immediately preceding the date of such exchange. Section 8. Optional Redemption of Series 2002 Bonds. The Series 2002 Bonds shall be subject to redemption on the dates and at the prices set forth in the 2002 Supplemental Resolution. Section 9. Procedure for and Notice of Redemption. The Consolidated Government shall select the maturities of Series 2002 Bonds to be optionally redeemed in part. If less than all of the Series 2002 Bonds of a single maturity are to be redeemed, the Bond Registrar shall treat any Series 2002 Bond of such maturity outstanding in a denomination of greater than $5,000 as two or more separate Series 2002 Bonds in the denomination of $5,000 each and shall assign separate numbers to each for the purpose of determining the Series 2002 Bonds or the principal amount of such Series 2002 Bonds in a denomination greater than $5,000 to be redeemed by lot. With respect to any Series 2002 Bond called for partial redemption, the registered owner thereof shall surrender such Series 2002 Bond to the Bond Registrar in exchange for one or more Series 2002 Bonds in any authorized denomination in the aggregate principal amount equal to the umedeemed principal amount of such Series 2002 Bond so surrendered. -24- AO 708654:1 The Bond Registrar shall furnish the Consolidated Government on or before the 451h day next preceding each mandatory redemption date (or optional redemption date if such option is exercised) with its certificate setting forth the Series 2002 Bonds that have been selected for mandatory redemption (or optional redemption) either in whole or in part on such date. Not less than 30 days nor more than 60 days before any date upon which any such optional redemption or mandatory redemption is to be made a notice of such redemption signed by a duly authorized signatory of the Bond Registrar designating the Series 2002 Bonds to be redeemed (in whole or in part) shall be filed at the place at which the principal of and interest on the Series 2002 Bonds shall be payable and shall be mailed, postage prepaid, to all registered owners of Series 2002 Bonds to be redeemed (in whole or in part) at addresses which appear upon the bond registration book. It is expressly provided, however, that the failure so to mail any such notice of the optional redemption or mandatory redemption of the Series 2002 Bonds shall not affect the validity of the proceedings for such redemption or cause the interest to continue to accrue on the principal amount of such Series 2002 Bonds so designated for redemption after the redemption date. However, it is expressly understood and agreed that should the Consolidated Government hereafter elect to issue any Additional Bonds, as herein authorized, it shall have the right to exercise any optional redemption provision to redeem the Bonds of any such future issue or issues before it redeems the Series 2002 Bonds, or it may redeem the Series 2002 Bonds before it redeems the Bonds of any such future issue or issues, or it may redeem some of the Series 2002 Bonds and some of the Bonds of any such future issue or issues at the same time. If less than a full maturity within an issue of Bonds is redeemed, then such redemption shall be by lot in such manner as may be designated by the Bond Registrar. Section 10. Purchase in Open Market. Nothing herein contained shall be construed to limit the right of the Consolidated Govenmlent to purchase with any excess moneys, as hereinabove defined, in the Sinking Fund and for sinking fund purposes, the Series 2002 Bonds in the open market at a price not exceeding the callable price hereinabove set forth. Any such Series 2002 Bonds so purchased cannot be reissued and same shall be disposed of as is hereinafter provided in this 2002 Resolution. Section 11. Effect of Call for Redemption. Notice having been given in the manner and under the conditions hereinabove provided, the Series 2002 Bonds so designated for redemption or the portion of the Series 2002 Bonds so designated for partial redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price hereinabove specified, and from and after the date of redemption so designated, unless default shall be made in the payment of the Series 2002 Bonds so designated for redemption or the portion of the Series 2002 Bonds so designated for partial redemption, interest on the principal amount of said Series 2002 Bonds so designated for redemption shall cease to accrue on the redemption date. Section 12. Cancellation of Bonds. All Bonds paid, purchased or redeemed shall be canceled or otherwise destroyed upon their payment and a record of such destruction shall be -25- AO 708654.3 made and preserved in the permanent records of the Consolidated Govenm1ent and in the records of the Bond Registrar pertaining to the Series 2002 Bonds. Section 13. Pledl!e of Revenues: Parity Bonds. The Series 2002 Bonds shall stand on a parity and shall be of equal dignity with the Outstanding Prior Bonds and shall be secured by the lien created pursuant to the provisions of the Prior Resolutions, as the same is ratified, reaffirmed, broadened and extended by this 2002 Resolution, just as if the Outstanding Prior Bonds and the Series 2002 Bonds had been issued simultaneously under the same resolution. Section 14. Approval of System Improvements. The additions, extensions and improvements to the System and equipment therefor shall be accomplished substantially in accordance with the Engineering Report. The Engineering RepOli and the additions, extensions and improvements set forth therein are hereby authorized and approved and the Engineering Report, by this reference thereto, is incorporated herein and made a part hereof. Section 15. Application of the Series 2002 Bond Proceeds. The estimated application of the proceeds of the sale of the Series 2002 Bonds shall be set forth in the 2002 Supplemental Resolution. Such application will provide for, among other things, the application of accrued interest, the amount of proceeds allocable to capitalized interest, the deposit to the 2002 Construction Fund, the prepayment in full of the Refunded GEF A Obligation, the required deposit to the Debt Service Reserve Account and the payment of the costs and expenses of the undertaking contemplated hereby. Section 16... Engineerinl! Report. The additions, extensions and improvements to the System now contemplated shall be accomplished in accordance, or substantially in accordance, with the Engineering Report, attached hereto as Exhibit B. Section 17. Construction Fund. There is hereby created a special fund designated the "Augusta, Georgia Water and Sewerage System Construction Fund-2002" (the "2002 Construction Fund"). The moneys so deposited into the 2002 Construction Fund as aforesaid and as more specifically set forth in the 2002 Supplemental Resolution, and any other funds acquired for this purpose by gift, donation, grant or otherwise, shall be held by the 2002 Construction Fund Depository in trust for the owners of the Series 2002 Bonds and shall be applied toward the payment of the cost of adding to, extending, improving and equipping the System, in accordance, or substantially in accordance, with the Engineering Report and in accordance with and subject to the provisions and restrictions set forth in this 2002 Resolution and the applicable provisions and restrictions set forth in the Prior Resolutions, and the Consolidated Government covenants that it will not cause or permit to be paid from the 2002 Construction Fund any sums represented as aforesaid, except in accordance, or substantially in accordance, with the Engineering RepOli and the provisions and restrictions set forth in the Prior Resolutions and in this 2002 Resolution. The moneys so deposited into the 2002 Construction Fund shall be used for the purposes herein and for the applicable purposes provided in Section 3 of Article IV of the 1996 Resolution and moneys therein shall be held, invested and expended in the manner and by the procedure established under the provisions of said Article IV, Section 3 of the 1996 Resolution. Said Article and each and every appropriate provision thereof be and they are hereby declared -26- AO 708654.3 applicable to the Series 2002 Bonds, the 2002 Construction Fund and the 2002 Construction Fund Depository and for the purpose of making same applicable to the Series 2002 Bonds, the 2002 Construction Fund and the 2002 Construction Fund Depository, the Consolidated Government does hereby reaffirm and adopt the same verbatim herein, except that said Article is broadened and extended to provide for the additions, extensions and improvements to the System in accordance with the Engineering Report as herein contemplated. When the additions and improvements to the System shall have been completed, such fact shall be evidenced by a certificate from the Consulting Engineers stating the date of completion, and should there then be any balance in the 2002 Construction Fund, such balance, unless otherwise provided, shall be paid into the special account designated as the Debt Service Account held within the Sinking Fund. In the event of a default in payment of the Series 2002 Bonds, the Paying Agent shall notify the 2002 Construction Fund Depository thereof and the 2002 Construction Fund Depository shall, without further authorization or direction, transfer the remaining funds in the 2002 Construction Fund to the Paying Agent or Sinking Fund Custodian to be used to pay principal and interest on the Series 2002 Bonds. Section 18. Creation of 2002 Capitalized Interest Fund: Use of Monevs in 2002 Capitalized Interest Fund. There is hereby created by the Consolidated Government a fund designated "Augusta, Georgia Water and Sewerage System Capitalized Interest Fund-2002." There shall be paid into the 2002 Capitalized Interest Fund such amount from the proceeds of the sale of the Series 2002 Bonds allocable to capitalized interest. Such moneys shall be transferred to the Debt Service Account held within the Sinking Fund on each Interest Payment Date until the balance in the 2002 Capitalized Interest Fund has been reduced to zero. The amounts so transferred shall be used to pay interest coming due on the Series 2002 Bonds. Section 19. Flow of Funds: SinkiD!! Fund. The Consolidated Government is now operating and will continue to operate the System on a fiscal year basis commencing on January 1 in each year and extending through December 31 in such year, but it reserves the right by the adoption of proper proceedings to change its fiscal year as provided in the 1996 Resolution. The Consolidated Government covenants that all revenues arising from the ownership or operation of the System and properties in connection therewith as now existent and as hereafter added to, extended and improved shall be collected by the Consolidated Government or by its agents or employees and deposited promptly with the depository to the credit of a special fund heretofore created and designated in Section 2 of Article III of the 1996 Resolution as the "Richmond County Water and Sewerage System Revenue Fund-1996" and redesignated pursuant to the 2000 Resolution as the "Augusta, Georgia Water and Sewerage System Revenue Fund" (the "Revenue Fund"). The moneys deposited into the Revenue Fund shall be used and disbursed from the Revenue Fund as hereinafter provided. There shall first be paid from the Revenue Fund the Expenses of Operation and Maintenance. The Consolidated Government covenants that it will continue to maintain the sinking fund created and designated in Article V, Section 2, Paragraphs 2 and 4 of the 1996 Resolution as the "Richmond County Water and Sewerage System Sinking Fund" and redesignated pursuant to the 2002 Resolution as the "Augusta, Georgia Water and Sewerage System Sinking Fund" -27- AO 708654.3 (the "Sinking Fund"), which Sinking Fund now consists of two accounts which are to be held therein, created and designated as "Debt Service Account" and "Debt Service Reserve Account." The payments to be made into the Sinking Fund must be adjusted so as to provide sufficient moneys with which to pay the principal of and the interest on the Outstanding Prior Bonds and the Series 2002 Bonds as the same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year and to create and maintain a reserve in the Sinking Fund equal to the Reserve Requirement on the Outstanding Prior Bonds and the Series 2002 Bonds. After there have been paid from the Revenue Fund the sums required or permitted to be paid for Expenses of Operation and Maintenance pursuant to the provisions of this Section 19, there shall next be paid from the Revenue Fund into the Sinking Fund the following amounts: (a) Taking into consideration the moneys then on hand and the moneys to be deposited therein and in the 2002 Capitalized Interest Fund simultaneously with the issuance and delivery of the Series 2002 Bonds, there shall be deposited into the Debt Service Account for the purpose of paying the principal of and interest on the Outstanding Prior Bonds and the Series 2002 Bonds as same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, (i) an amount sufficient to pay the interest on the Series 2002 Bonds and the principal of and interest on the Outstanding Prior Bonds coming due on October 1, 2002, and (ii) commencing with the month of October 2002 from month to month thereafter an amount equal to one-sixth of the interest on the Outstanding Prior Bonds and Series 2002 Bonds coming due on the next ensuing Interest Payment Date and one- twelfth of the principal on the Outstanding Prior Bonds and Series 2002 Bonds coming due on the next ensuing October I, such aggregate monthly payments to continue from month to month until sufficient funds are on hand in the Sinking Fund to pay all of the Outstanding Prior Bonds and Series 2002 Bonds as same mature or are acquired by mandatory redemption and the interest which will become due and payable thereon. (b) Upon the issuance of the Series 2002 Bonds, the Reserve Account shall be funded by a combination of cash and one or more Reserve Account Surety Bonds held for the credit of the Reserve Account. Simultaneously with the issuance of the Series 2002 Bonds, there shall be on deposit in the Reserve Account, taking into account moneys on deposit therein and amounts being provided by the Consolidated Government from lawfully available funds, such amount, if any, as may be required to create in the Reserve Account a reserve equal to the Reserve Requirement upon the date of issuance of the Series 2002 Bonds. The Reserve Account shall be maintained for the purpose of paying the principal of and interest on the Outstanding Prior Bonds and the Series 2002 Bonds falling due in any year as to which there would otherwise be a default and if money is taken from the Reserve Account for the payment of such principal and interest, the money so taken shall be replaced in the Reserve Account from the first moneys in the Revenue Fund thereafter available and not required to be used for Expenses of Operation and Maintenance of the System and not required to be paid into the Debt Service Account as provided in subparagraph] 9(a) above. (c) All sums required to be paid to comply with the provisions of subparagraphs (a) and (b) above shall be paid on or before the 25th day of the month in which the -28- AO 708654.3 payment is due, and if, in any month, for any reason, the full amount herein required to be paid in such month shall not be paid into the Sinking Fund, any deficiency shall be added to and shall become a part of the amount required to be paid into the Sinking Fund in the next succeeding month; provided, however, the Consolidated Government covenants and agrees that in the event it hereafter elects to issue Additional Bonds, pursuant to the provisions of this 2002 Resolution, the above stated payments into the Sinking Fund will be increased to the extent necessary to pay the principal of and interest on the Outstanding Prior Bonds, the Series 2002 Bonds and on any Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued coming due, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year and to create upon the issuance of the bonds to be issued and thereafter maintain a reserve for that purpose in an amount at least equal to the Reserve Requirement on the Outstanding Prior Bonds, the Series 2002 Bonds, the Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued. Section 20. Debt Service Reserve Account. In the event a withdrawal of moneys is made from the Reserve Account or any draw is made upon any Reserve Account Surety Bond held within the Reserve Account for the payment of principal of or interest on the Outstanding Prior Bonds or the Series 2002 Bonds, the first moneys available in the Revenue Fund and not required to pay Expel1.ses of Operation and Maintenance or to make the monthly payments into the Debt Service Account as hereinabove provided, shall be immediately paid into the Reserve Account or paid to th(: Reserve Account Surety Bond Providers as hereinafter described until the amount on deposit in;the Reserve Account after payments of any amounts payable under the succeeding sentence equals the Reserve Requirement; provided, however, such payments will in any event be at least _sufficient to restore the Reserve Account to its proper balance within 12 months after the date :upon which money is taken from the Reserve Account or the date upon which a draw on any Reserve Account Surety Bond is made. In the event of a drawdown on any Reserve Account Surety Bond, the Consolidated Government shall on a pro rata basis make (1) all payments (if any) into the Reserve Account necessary to restore the amount of cash or securities, if any, on deposit, therein immediately prior to such draw and (2) make all payments to any Reserve Account Surety Bond Providers as a repayment of such drawdown (such payments to be made on a pro rata basis to each Reserve Account Surety Bond Provider based upon the amount drawn and not reimbursed under each Reserve Account Surety Bond), and (3) upon making full repayment to any Reserve Account Surety Bond Provider, shall thereafter make payments into the Reserve Account, to the extent that the then applicable Reserve Requirement exceeds the aggregate of the amount available to be drawn on a Reserve Account Surety Bond and the amount of cash or securities, if any, on deposit therein immediately prior to such draw. Repayment or any drawdown on the Reserve Account Surety Bond (other than repayments which reinstate the Reserve Account Surety Bond) and any interest or fees due the Reserve Account Surety Bond Provider under such Reserve Account Surety Bond shall be secured by a lien on the Pledged Revenues subordinate to payments into the Debt Service Account, the Reserve Account and payments to any Credit Issuer securing the Outstanding Prior Bonds, the Series 2002 Bonds and any Additional Bonds. Any such Reserve Account Surety Bond shall be pledged to the benefit of the owners of all of the Outstanding Prior Bonds, the Series 2002 Bonds and any Additional Bonds. The Consolidated Government reserves the right, if it deems it necessary in order to acquire such a -29- AO 708654.3 Reserve Account Surety Bond, to amend the Resolutions without the consent of any of the owners of the Outstanding Prior Bonds, the Series 2002 Bonds and any Additional Bonds in order to grant the Reserve Accollnt Surety Bond Provider such additional rights as it may demand, provided that such amendment shall not, in the written opinion of Bond Counsel filed with the Consolidated Government, impair or reduce the security granted to the owners of the Outstanding Prior Bonds, the Series 2002 Bonds and any Additional Bonds or any of them. It is expressly provided, however, that if on October 2 in any year there are on deposit in the Debt Service Account of the Sinking Fund any money and securities, same shall be withdrawn therefrom and immediately deposited into the Revenue Fund: It is expressly provided further, however, that if on October 2 in any year there are on deposit in the Reserve Account of the Sinking Fund moneys and securities (such securities to be valued at their market value plus accrued interest thereon to October 2) the aggregate amount of which, together with the amounts available under any Reserve Account Surety Bond, is in excess of the then required Reserve Requirement, such excess moneys shall be withdrawn from the Sinking Fund and immediately deposited into the Revenue Fund. The calculation and determination of such excess amount in accordance with this provision shall be the responsibility of the chief financial officer of the utilities department of the Consolidated Government and such financial officer shall notify the Sinking Fund Custodian and make or cause to be made any transfer of funds required pursuant to the provisions of this subparagraph. The Consolidated Government may at any time fulfill any portion of its obligation to fund the Reserve Account by depositing in the Reserve Account a Reserve Account Surety Bond payable on any interest and/or principal payment date in an amount equal to any portion of the reserve requirement then required to be maintained within the Reserve Account. Before any such Reserve Account Surety Bond is substituted for cash or deposited in lieu of cash within the Reserve Account, (A) there shall be filed with the Consolidated Government and the Sinking Fund Custodian (i) an opinion of nationally recognized bond counsel to the effect that such substitutiQn will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes; (ii) a certificate of Moody's or Standard & Poor's, whichever rating agency maintains a rating on the outstanding Bonds, to the effect that (a) if the issuer(s) of the Reserve Account Surety Bond were insuring payment of principal and interest on the Bonds to which the Reserve Account relates, such Bonds would receive the highest rating available from such rating agency (or any similar rating agency then in existence) and (b) that the substitution of such Reserve Account Surety Bond for cash within the Reserve Account will not, in and of itself, result in a -reduction of the ratings issued for the Bonds outstanding, and (iii) a copy of the Reserve Account Surety Bond issued to fulfill the Consolidated Government's obligation to fund the Reserve Account together with an opinion of counsel satisfactory to the Sinking Fund Custodian to the effect that the Reserve Account Surety Bond is valid and enforceable in accordance with its terms, (B) the Consolidated Government shall not secure any obligation to the Reserve Account Surety Bond Provider by a lien equal to or superior to the lien granted to the Bonds; (C) the Reserve Account Surety Bond shall permit a drawing by the Consolidated Government for the full stated amount in the event (i) the Reserve Account Surety Bond expires or terminates for any reason prior to the final maturity of the Bonds, and (ii) the Consolidated Government fails to satisfy the Reserve Requirement by the deposit to the Reserve Account of cash, obligations, a substitute Reserve Account Surety Bond, or any combination thereof, on or before the date of such expiration or termination; (D) if the rating issued by the -30- AO 708650 Rating Agency to the Reserve Account Surety Bond Provider is withdrawn or reduced below the rating assigned to that of the Bonds immediately prior to such action by the Rating Agency, the Consolidated Government shall provide a substitute Reserve Account Surety Bond within 60 days after such rating change, and, if no substitute Reserve Account Surety Bond is obtained by such date, shall fund the Reserve Requirement in not more than 24 equal monthly payments commencing not later than the first day of the month immediately succeeding the date representing the end of such 60 day period; and (E) if the Reserve Account Surety Bond Provider commences any insolvency proceedings or is determined to be insolvent or fails to make payments when due on its obligations, the Consolidated Government shall provide a substitute Reserve Account Surety Bond within 60 days thereafter, and, if no substitute Reserve Account Surety Bond is obtained by such date, shall fund the Reserve Requirement in not more than 24 equal monthly payments commencing not later than the first day of the month immediately succeeding the date representing the end of such 60 day period. If the events described in either clauses (D) or (E) above occur, the Consolidated Government shall not relinquish the Reserve Account Surety Bond at issue until after the Reserve Requirement is fully satisfied by the provision of cash, obligations, or a substitute Reserve Account Surety Bond or any combination thereof. Each such Reserve Account Surety Bond shall be unconditional and irrevocable and shall provide liquidity for the life of the Bonds with respect to which the Reserve Account Surety Bond is purchased and, if the Reserve Account Surety Bond is purchased with respect to more than one issue of Bonds hereunder, then for the life of the issue with the longest term. So long as the balance of the Reserve Account equals the Reserve Account Requirement on the Outstanding Prior Bonds, the Series 2002 Bonds and any Additional Bonds, any reimbursement agreement entered into between the Consolidated Government and any such Reserve Account Surety Bond Provider may provide that the Consolidated Government will be obligated to repay such provider an amount equal to any drawdown on the Reserve Account Surety Bond plus a market rate of interest over a specified period of time not to exceed three years but such obligation shall be junior and subordinate in right of payment to all outstanding Bonds. Section 21. Utility General Fund. After there have been paid from the Revenue Fund in each month all amounts required or permitted to be paid as provided herein, all moneys remaining in the Revenue Fund shall be paid at the end of each month into the special fund created and designated in Article V, Section 2, Paragraph 6 of the 1996 Resolution as the "Richmond County Water and Sewerage System Utility General Fund" and redesignated pursuant to the 2002 Resolution as the "Augusta, Georgia Water and Sewerage System Utility General Fund" (the "Utility General Fund"). Except as set forth below, expenditures shall be made from the Utility General Fund only for the purpose of: (a) paying principal of and/or interest on the Outstanding Prior Bonds, the Series 2002 Bonds and any Additional Bonds then outstanding and falling due at any time for the payment of which money is not available in the Sinking Fund securing the payment of same; (b) making payments into the Sinking Fund in the amounts required in order to accumulate and maintain the Reserve Account created therein at its proper balance; ( c) paying such expenses as may be necessary to alleviate or remove the effects of an emergency having a major impact on the System caused by some extraordinary occurrence which makes it necessary to use the funds of the System, to the extent that moneys on deposit in the Revenue Fund are insufficient to meet such emergencies; (d) paying Expenses of Operation and Maintenance for which moneys are not available in the Revenue Fund; (e) making replacements, additions, extensions and improvements and acquiring equipment and paying the cost of any engineering studies, surveys or plans and specifications pertaining to the future -31- AO 708650 development or expansion of the System deemed to be reasonable and in the best interest of the Consolidated Government and the holders of the Bonds; (f) payment of the charges of the Utility General Fund Depository for investment services; and (g) paying to any Reserve Account Surety Bond Provider interest on amounts drawn under such Reserve Account Surety Bond. The Consolidated Government shall maintain at all times a minimum balance in the Utility General Fund equal to the lesser of $2,500,000 or 5 percent of the Operating Revenues of the System for the immediately preceding Fiscal Year. It is expressly provided, however, that should bonds be hereafter issued ranking as to lien on the Pledged Revenues junior and subordinate to the lien securing the payment of the Outstanding Prior Bonds and the Series 2002 Bonds authorized to be issued hereunder, including any issue or issues of Additional Bonds hereafter issued, then such payments into the Utility General FWld as provided in this Section may be suspended and such moneys shall be available to the extent necessary to pay the principal of and interest on such junior lien bonds and to create and maintain a reasonable reserve therefor and such moneys may be allocated and pledged for that purpose. Section 22. Plede:ed Revenues. As provided in the Prior Resolution and as hereby ratified and reaffirmed, all Pledged Revenues immediately shall become subject to a lien to secure the payment by the Consolidated Government of the amounts therein agreed to be paid. The Consolidated Government hereby pledges such Pledged Revenues and hereby covenants and agrees that the Pledged Revenues are hereby pledged to the extent necessary to secure the payment by the Consolidated Government of the amounts herein agreed to be paid with respect to the Outstanding Prior Bonds, the Series 2002 Bonds and any Additional Bonds and such pledge shall be valid and binding against the Consolidated Government and against all other parties and against all claims of any kind against the Consolidated Government, whether arising in tort, contract or otherwise, irrespective of whether or not such parties have notice thereof. Section 23. Rate Covenant. The Consolidated Government covenants and agrees that it has heretofore placed into effect a schedule of rates, fees and charges for the services, facilities and commodities furnished by the System and as often as it shall appear necessary the Consolidated Government shall revise and adjust such schedule of rates, fees and charges for either water or sewerage services and facilities, or both, to the extent necessary to produce funds sufficient to operate and maintain the System on a sound business-like basis and to create and maintain the Sinking Fund created by the 1996 Resolution, as same has been enlarged and extended by the 2000 Resolution and this 2002 Resolution, in accordance with and in compliance with the terms, covenants and provisions of the Resolutions and to create and maintain a reserve therefor in the amount as required by the Resolutions or such larger amounts as may be required in any proceedings authorizing any such issue or issues of Additional Bonds, as well as to create and maintain a reserve for extensions and improvements to the System. Such rates, fees and charges, in addition to the foregoing requirements, shall be maintained at such level so as to produce Pledged Revenues (excluding Investment Earnings, if any, on the Construction Fund created under this 2002 Resolution) equal to 1.1 times the anlount required to discharge the payment of the principal of and the interest on the Outstanding Prior Bonds, the Series 2002 Bonds and any future parity issues, either at maturity or by proceedings for mandatory redemption, but in no event, however, will said amount be less than that required -32- AO 708654.3 to create and maintain the Debt Service Account and the Reserve Account as required by the Resolutions. Without limiting the foregoing, the Consolidated Government hereby covenants to take such action as may be necessary to cause the revenues of the System to equal or exceed the forecasted revenues of the System set forth on Table 6-8 of the Engineering Report for the period set forth therein. The rates, fees and charges shall be classified in a reasonable manner to cover users of the services and facilities furnished by the System so that as near as practicable such rates, fees and charges shall be uniform in application to all users falling within any reasonable class. No free services shall at any time be furnished from the System and it will undertake within its health powers or such other applicable powers now or hereafter provided by law, to require the owners of all improved property abutting any water line or sewerage line to COlmect with the System. No customer shall be connected to the System or served by the Consolidated Government without a proper meter having been first installed. All services shall be furnished in accordance with rates now or hereafter established, including services furnished to any county, municipal corporation or other public board or body. In the event the Consolidated Government shall fail to adopt a schedule or schedules of rates, fees and charges, or to revise its schedule or schedules of rates, fees and charges, in accordance with the provisions of this Section, any Bondholder without regard to whether any Event of Default, as defined in Article VlII of the 1996 Resolution, shall have occurred, may institute and prosecute in any court of competent jurisdiction, an appropriate action to compel the Consolidated Government to adopt a schedule or schedules of rates, fees and charges, or to revise its schedule or schedules of rates, fees and charges in accordance with the requirements of this Section and the applicable requirements of Section 3 of Article V of the 1996 Resolution. Section 24. Sinking Fund Disbursements. Subject to the terms and conditions set forth in the Resolutions, moneys in the Sinking Fund shall be disbursed for (a) the payment of the interest on the Outstanding Prior Bonds and the Series 2002 Bonds as such interest becomes due and payable; (b) the payment of the principal of the Outstanding Prior Bonds and the Series 2002 Bonds as same becomes due and payable, either at maturity or by proceedings for mandatory redemption; ( c) the optional redemption of the Outstanding Prior Bonds and the Series 2002 Bonds before maturity at the price and under the conditions provided therefor in the Resolutions; (d) the purchase of the Outstanding Prior Bonds and the Series 2002 Bonds in the open market; provided, however, the price paid shall not exceed the authorized call price; (e) the transfer of excess moneys, if any, in the Sinking Fund (as described in Section 5 of Article V of the 1996 Resolution, Section 20 of the 2000 Resolution and Section 20 of this 2002 Resolution) to the Revenue Fund; (f) the payment of charges for paying the Outstanding Prior Bonds and the Series 2002 Bonds and interest thereon and the charges for the registration of the Outstanding Prior Bonds and the Series 2002 Bonds and their transfer or exchange in accordance with the terms thereof; and (g) the payment of any charges for investment services. Section 25. Additional Bonds. The Consolidated Government further covenants and agrees that it will not exercise the privilege as provided in Section 9 of Article V of the 1996 Resolution, as ratified, reaffirmed, broadened and extended in Section 25 of the 2000 Resolution, of issuing additional bonds or obligations ranking as to lien on the Pledged Revenues of the -33- AD 708654.3 System on a parity with the Outstanding Prior Bonds and the Series 2002 Bonds, unless or until all the following conditions are met: (a) The payments covenanted to be made into the Sinking Fund, as the same may have been enlarged and extended in any proceedings authorizing the issuance of any Additional Bonds, must be currently being made in the full amount as required and the Debt Service Account and Reserve Account held within the Sinking Fund must be at their proper respective balances. (b) Except in the case of Additional Bonds issued for refunding purposes pursuant to Article V, Section 8 of the 1996 Resolution, there shall have been procured and filed with the Consolidated Government (i) a report by Independent Certified Public Accountants to the effect that the Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of such Additional Bonds must have been equal to at least 1.25 times the maximum Debt Service Requirement for any succeeding Sinking Fund Year on the Outstanding Prior Bonds, the Series 2002 Bonds and any other issue or issues of Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued, or in lieu of the foregoing formula, if a new schedule of rates and charges for the services, facilities and commodities furnished by the System shall have been adopted and shall be in effect and Independent Certified Public Accountants shall certify that had this new rate schedule been in effect during the period described above, the Pledged Revenues of the System would have equaled the requirements of the above formula; or (ii) (x) a report by Independent Certified Public Accountants to the effect that the historical Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of the proposed Additional Bonds were equal to at least 1.10 times the historical Debt Service Requirement on all Bonds (other than Subordinate Bonds) which were outstanding during such 12-month period, and (y) a report by the Consulting Engineers to the effect that the forecasted Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for each Fiscal Year in the Forecast Period are expected to equal at least 1.25 times the maximum annual Debt Service Requirement on all Bonds (other than Subordinate Bonds) which will be outstanding immediately after the issuance of the proposed Additional Bonds, in the then current or any succeeding Sinking Fund Year. The reports by the Independent Certified Public Accountant that are required by this paragraph (b) may contain pro forma adj ustments to historical Pledged Revenues equal to 100 percent of the increased arumal amount attributable to any revision in the schedule of rates, fees and charges for the services, facilities and commodities furnished by the System, imposed prior to the date of delivery of the proposed Additional Bonds and not fully reflected in the historical Pledged Revenues actually received during such 12-month period. Such pro forma adjustments shall be based upon a report of the Consulting Engineers as to the amount of Operating Revenues which would have been received during such 12-month period had the new rate schedule been in effect throughout such 12-month period. -34- AO 708654.3 F or the purpose of calculating the maximum Debt Service Requirements under this subparagraph (b), the maximum annual Debt Service Requirements shall be reduced by an amount equal to any capitalized interest funded from the proceeds of the Additional Bonds proposed to be issued in each succeeding Sinking Fund Year for the period for which said interest has been capitalized. (c) An Independent Certified Public Accountant shall certify in triplicate to the Consolidated Government that the requirements of subparagraph (a) above are being complied with and that the requirements of subparagraph (b) above have been met. A copy of such certificate shall be furnished to the Designated Representative of the original purchasers of the Prior Bonds and the Series 2002 Bonds. (d) Except when Bonds are being issued solely for the purpose of refunding outstanding Bonds, the Consulting Engineers for the Consolidated Government shall provide the Consolidated Government with a written report recommending the additions, extensions and improvements to be made to the System and stating that same are feasible, designating in reasonable detail the work and installation proposed to be done and the estimated cost of accomplishing the undertaking. The Consulting Engineers shall set forth in said report the forecasted Pledged Revenues to be derived from the System which will be available for debt service payments in each of the next 10 years and shall indicate the projected cove~age of such debt service payments in each succeeding Sinking Fund Year. An executed duplicate original of such report of the Consulting Engineers as required by this provision shall be furnished to the Designated Representative of the original purchasers of the Prior Bonds and the Series 2002 Bonds issued hereunder not less than 10 days before any proceedings are taken to actually issue such Additional Bonds. j e) The C~hsolidated Government shall pass proper proceedings reciting that all of the above requirements have been met, shall authorize the issuance of the Additional Bonds and shall provide in such proceedings, among other things, the date such Additional Bonds shall bear, the rate or rates of interest and maturity dates, as well as the registration and redemption provisions. Except for Additional Bonds that bear interest at a Variable Rate, the interest on the Additional Bonds of any such issue shall fall due on April 1 and October 1 of each year, and the Additional Bonds shall mature in installments on October 1, but, as to principal, not necessarily in each year or in equal installments. Any such proceeding or proceedings shall require the Consolidated Government to increase the monthly payments then being made into the Sinking Fund to the extent necessary to pay the principal of and the interest on the Prior Bonds, the Series 2002 Bonds and on all such Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued as same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, and to create upon the issuance of the proposed Additional Bonds to be issued a reserve in the Reserve Account at least equal to the Reserve Requirement on the Prior Bonds, the Series 2002 Bonds and any Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued and to maintain said reserve in an amount sufficient for that purpose; provided, however, the Consolidated Government may satisfy funding of -35- AO 708654.:1 the required reserve through the purchase of a Reserve Account Surety Bond meeting the requirements of the Resolutions. Any such proceeding or proceedings shall restate and reaffirm, by reference, all of the applicable terms, conditions and provisions of the Resolutions. If any Additional Bonds would bear interest at a Variable Rate, the resolution under which such Additional Bonds are issued shall provide a maximum rate of interest per annum which such Additional Bonds may bear. In connection with the issuance of any Additional Bonds under the Resolutions, the Consolidated Government may obtain or cause to be obtained one or more Credit Facilities providing for payment of all or a portion of the principal of, premium, if any, or interest due or to become due on such Additional Bonds, providing for the purchase of such Additional Bonds by the Credit Issuer, or providing funds for the purchase of such Additional Bonds by the Consolidated Government. In connection therewith the Consolidated Government shall enter into Credit Facility Agreements with such Credit Issuers providing for, among other things, (i) the payment of fees and expenses to such Credit Issuer for the issuance of such Credit Facility; (ii) the terms and conditions of such Credit Facility and the Additional Bonds affected thereby; and (iii) the security, if any, to be provided for the issuance of such Credit Facility. The Consolidated Government may in a Credit Facility Agreement agree to directly reimburse such Credit Issuer for amounts paid under the terms of such Credit Facility, together with interest thereon; provided, however, that no Reimbursement Obligation shall be created, for purposes of the Resolutions, until amounts are paid under such Credit Facility. Any such Reimbursement Obligation shall be deemed to be a part of the Additional Bonds to which the Credit Facility relates which gave rise to such Reimbursement Obligation, and references to principal and interest payments with respect to such Additional Bonds shall include principal and interest (except for Additional Interest) due on the Reimbursement Obligation incurred as a result of payment of such Additional Bonds with the Credit Facility. All other amounts payable under the Credit Facility Agreement (including any Additional Interest) shall be fully subordinate to the payment of debt service on Bonds (other than Subordinate Bonds). Any such Credit Facility shall be for the benefit of and secure such Additional Bonds or portion thereof as specified in the applicable bond resolution authorizing such Additional Bonds. (f) Such Additional Bonds or obligations and all proceedings relative thereto, and the security therefor, shall be validated as prescribed by law. It is expressly provided that nothing contained herein, however, restricts the issuance of Subordinate Bonds. Section 26. Ratification of 1996 Resolution. All of the applicable terms, covenants, conditions and provisions of Aliicle V, Article VI, Article VII, Article VIII, Article IX and Article X and each Section thereof of the 1996 Resolution not herein specifically referred to are hereby declared applicable and are broadened and extended so as to cover the bonds issued hereunder and hereby ratified and reaffirmed as so extended and said terms, covenants, conditions and provisions shall apply for all purposes to the Series 2002 Bonds. Section 27. Arbitraee Covenants. The Consolidated Govermllent hereby covenants and agrees that it will not, subsequent to the date of the issuance and delivery of the Series 2002 Bonds, intentionally use any portion of the proceeds of the Series 2002 Bonds to acquire higher -36- AO 708654.3 yielding investments, or to replace funds which were used directly or indirectly to acquire higher yielding investments, except as may otherwise be permitted by the Internal Revenue Code of 1986, as amended (the "Code") or the regulations promulgated thereunder, including, but not limited to, complying with the requirements of Section 148(f) of the Code and the regulations promulgated thereunder and the payment of rebate, if any, required to be made, and that it will expend the proceeds of the Series 2002 Bonds in. compliance with the applicable provisions of Sections 141 to 150, inclusive, of the Code. Anything herein or in the Prior Resolutions notwithstanding, earnings on amounts in any fund or account may, and shall to the extent necessary, be used to make the payments required under this Section 27. Section 28. Certification. The Mayor and Clerk of the Commission are hereby authorized and directed to execute, for and on behalf of the Consolidated Government, a certification, based upon facts, estimates and circumstances, as to the reasonable expectations regarding the amount, expenditure and use of the proceeds of the Series 2002 Bonds, as well as such other documents (including, without limitation, elections under Section 148 of the Code) as may be necessary or advisable in connection with the issuance and delivery of the Series 2002 Bonds. Section 29. Use of Proceeds and Tax Covenant. The Series 2002 Bonds are being issued by the Consolidated Government in compliance with the conditions necessary for interest income on. the Series 2002 Bonds to be excluded from gross income for federal income tax purposes pursuant to the provisions of Section 103(a) of the Code relating to obligations of the State or any political subdivision thereof. It is the intention of the Consolidated Government that the interest on the Series 2002 Bonds be and remain excludable from gross income for federal income tax purposes, and; to that end, the Consolidated Government hereby covenants with the holders ofthe Series 2002 Bonds as follows: (a) It will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the tax exempt status of interest on the Series 2002 Bonds under Section 103 of the Code. (b) It will not directly or indirectly use or permit the use of any proceeds of the Series 2002 Bonds or any other funds of the Consolidated Government or take or omit to take any action that would cause the Series 2002 Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. To that end, the Consolidated Government will comply with all requirements of Section 148 of the Code to the extent applicable to the Series 2002 Bonds. ( c) It will not permit any use of the facilities financed or refinanced by the Series 2002 Bonds which would cause the Series 2002 Bonds to be "private activity bonds" within the meaning of Section 141 of the Code. In the event that at any time the Consolidated Government is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys held under this 2002 Resolution, the Consolidated Government shall take such action as may be necessary. -37- AO 708654.3 Any subsequent proceeding or proceedings authorizing the issuance of Additional Bonds or obligations as permitted under the Resolutions shall in nowise conflict with the terms, covenants and conditions of the Resolutions but shall for all legal purposes contain all of the applicable covenants, agreements and provisions of said Resolutions for the equal protection and benefit of all bondholders. Section 30. Severabilitv. In case anyone or more of the provisions of this 2002 Resolution, or the Series 2002 Bonds issued hereunder, shall for any reason be held illegal or invalid, such illegality or invalidity shall not affect any other provisions of this 2002 Resolution or the Series 2002 Bonds, but this 2002 Resolution and the Series 2002 Bonds shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. Section 31. Contract. The provisions, terms and conditions of this 2002 Resolution shall constitute a contract by and between the Consolidated Government and the owners of the Outstanding Prior Bonds and the owners of the Series 2002 Bonds authorized to be issued hereunder, and after the issuance of the Series 2002 Bonds this 2002 Resolution shall not be repealed or amended in any respect which will adversely affect the rights and interests of the owners of the bonds of said issues, nor shall the governing body of the Consolidated Government pass any proceedings in any way adversely affecting the rights of such owners so long as any of the Bonds authorized by the Resolutions, or the interest thereon, shall remain unpaid or until provision shall have been duly made therefor, provided, however, that this covenant shall not be construed as prohibiting modifications hereof or amendments hereto to the extent and in the manner as provided in Article IX of the 1996 Resolution, as ratified, reaffirmed, broadened and extended by the 2000 Resolution and this 2002 Resolution. Any subsequent proceeding or proceedings authorizing the issuance of Additional Bonds or obligations with the Outstanding Prior Bonds and the Series 2002 Bonds as permitted under Section 9 of Article V of the 1996 Resolution, as ratified, reaffirmed, broadened and extended in Section 25 of the 2000 Resolution and Section 25 of this 2002 Resolution, shall in nowise conflict with the terms, covenants and conditions of the Resolutions, but shall for all legal purposes contain all the applicable covenants, agreements and provisions of the Resolutions for the equal protection and benefit of all owners of the Outstanding Prior Bonds, Series 2002 Bonds and such Additional Bonds. Section 32. Authorization of Preliminary Official Statement. The use of a Preliminary Official Statement with respect to the Series 2002 Bonds is hereby ratified and approved and the preparation and use of a final Official Statement, to be dated the date of adoption of the 2002 Supplemental Resolution, in substantially the form as the Preliminary Official Statement but containing the information included in this 2002 Resolution, as supplemented, is hereby authorized and approved. Section 33. Continuinl! Disclosure. The Consolidated Government hereby covenants and agrees that it will, to the extent allowed by applicable law, comply with and carry out all of the provisions of the Continuing Disclosure Certificate to be executed by the Consolidated Government and dated as of the date of the issuance and delivery of the Series 2002 Bonds, as originally executed and as it may be amended from time to time in accordance with its terms (the "Disclosure Certificate"). Notwithstanding any other provision of this 2002 Resolution or the -38- AO 708654.3 Prior Resolutions, failure of the Consolidated Government to comply with the Continuing Disclosure Certificate shall not be considered a default under the Resolutions, and under no circumstances shall such failure affect the validity or the security for the payment of the Series 2002 Bonds or the Outstanding Prior Bonds. It is expressly provided, however, that any beneficial owner of the Series 2002 Bonds may take such action, to the extent and in such manner as may be allowed by applicable law, as may be necessary and appropriate, including seeking mandamus or specific performance by court order, to cause the Consolidated Government to comply with its obligations under this Section. The cost to the Consolidated Govermllent of performing its obligations set forth in this Section shall be paid solely from funds lawfully available for such purpose and nothing set forth herein or in the Disclosure Certificate shall obligate the levy of any tax to comply with the Consolidated Government's obligations under this Section. Section 34. Supplemental Resolution. The Commission, after the Series 2002 Bonds have actually been sold, shall adopt a resolution supplementing this resolution and among other things will specify in said supplemental resolution the interest rate or rates per annum which the Series 2002 Bonds shall bear, the principal amount of Series 2002 Bonds, the maturities of the Series 2002 Bonds which shall be designated as term bonds subject to mandatory redemption, will provide for the optional redemption provisions applicable to the Series 2002 Bonds, will authorize and approve the execution and delivery of a bond purchase agreement, will provide for the terms of any Credit Facility and will provide for the actual issuance and delivery of the Series 2002 Bonds upon payment therefor by the purchaser thereof. Section 35. Validation.. The Series 2002 Bonds herein authorized. to be issued shall be validated in the manner provided by law, and to that end notice of the adoption of this 2002 Resolution and a copy thereof shall be served on the District Attorney of the Augusta Judicial Circuit, in order that proceedings for the above purpose be instituted in the Superior Court of Richmond County. Section 36. Repealer. Any and all resolutions, or parts of resolutions, in conflict with this 2002 Resolution this day passed be and are hereby repealed, and this 2002 Resolution shall be in full force and effect from and after its adoption. APPROVED on May 30, 2002. ~BY ~aY r ..:~~~~~t~~~~ "~"--~-r-:-~-~'; el a 1. Bom r, Clerk of Commission ;:-. - " . . - 2~: ~ --- ----- ,- ~,- .- .. -- , ,..,- '~ -- 51sEj.if .,~ AO 708654.3 ~ ,.-. ~- "" - ...., ~. , ~ . ,1/- ". "/r_~ .-39- ....--. -- - Exhibit A Certificate of Indeoendent Certified Public Accountants to A-I AO 7086543 :~. ., CHERRY BEKAERr&. HOLLAND - CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS May 27,2002 City of Augusta Augusta, Georgia Ladies and Gentlemen: We have examined the books and records of Augusta, Georgia with respect to its Water and Sewerage System (the "System") and hereby certify that the payments covenanted to be made into the "Augusta, Georgia Water and Sewerage System Sinking Fund" (the "Sinking Fund") originally created and designated as the "Richmond County Water and Sewerage System Sinking Fund" in Paragraphs 2 and 4 of Section 2 of Article Vof the Bond Resolution adopted by the Augusta-Richmond County Commission (the "Commission") on October 21, 1996, as supplemented by resolutions adopted by the Commission on December 3, 1996 and December 17, 1997, as ratified, reaffirmed, broadened and extended by resolutions of the Commission adopted on August 22,2000 and j September 15, 2000 (collectively, the "Resolution"),are currently being made in the full amount as required and said "Debt Service Account" and "Debt Service Reserve Account" held within the Sinking Fund are at their proper respective balances. All capitalized terms used herein have the meanings assigned to them in the Resolution. Based on such examination of the System, the Pledged Revenues (excluding Investment Earnings, .if any, on construction funds created under the Resolution) for the period of twelve consecutive months ended December 31, 2001 are equal to at least 1.10 times the historical Debt Service Requirement on all Bonds (other than Subordinate Bonds) during such period. Very truly yours, CHERRY, BEKAERT & HOLLAND, L.L.P. ~ I ~L Aftc..j d--7~ 4-(qz~l.L.~ . Cherry, Bekaert & Holland, L.L.P. 1029 Greene Street (3090 I) . P.O. Box 2247 . Augusta. GA 30903 . (706) 724-3557 . Fax (706) 724-1667 Offices Throughout The Southeast. Represented Internationally Through Summit International Associates.lnc. Exhibit B Engineering Report B-1 AO 708654.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - .... - - - - - ... - - - - - - - - -. Augusta, Georgia Water & Sewerage Revenue Bonds, Series 2002 --- , ..-- , . . ': ':" :\"v~~ t'~'::~0~~~~i\,;~'~ ;" ~f}'J,~':}~:('?/l/'::/. ~~. Engineer's. Aep~ra~,.'i;Y. fr;~~~-,,:'>.. May 30, 2002 . - -.. . . . .- ~...: ,c.'";. f'"'.::' :.::::'~ ~j.-~: .~, -., ;---~:".. '}'- Prepared by CH2MHILL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . REPORT Engineer's Report Water and Sewerage Revenue Bonds, Series 2002 Prepared for Augusta Utilities .O.epartment May 30,2002 .... ... Prepared by CH2MHILL Utility Management Services . . .... ... . . .... - .... - .- - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Contents 1.0 Introd ucti on .. ......................... ........ ..... ........ .......................... ..... .........;......... ........ ....... ....... 1-1 1.1 Authorization and Purpose .................................................................................. 1-1 1.2 References ... ....... ........ ...... ...... ....................... ........... ..... ....... ....... ..... .......... ... .......... 1-2 . . 1.3 Assumptions. ............ ............. ............... ....... .............. ........ .................~.......... ......... 1-3 2.0 System History and Organization, and County Growth............................................ 2-1 2.1 Organizational Structure..... ........ .................... ............ .....,.................. ....... .......... 2-1 2.1.1 Augusta ....... ................ ..... .................... ..................... ..... .:......... ................. 2-1 2.1.2 System Management ................................................................................ 2-1 2.2 Augusta-Richmond County Population Trends ............................................... 2-6 3.0 Water System... ............ .................... .... .................. ...................... .....~.......... ................ ....... 3-1 3.1 Overview of Potable Water System..................................................................... 3-1 3.2 Water Service Area.. ............. ................... .......... ....................................... ............. 3-1 3.3 Water Supply....;...:.. ................. ....... ........... .......... ...... ........... ............ ........ ..... ........ 3-1 3.3.1 Raw Water Pumping .... .............. ............ ................. .:............. ...... ....... ..... 3-3 3.3.2 Raw Water Transmission and Storage................................................... 3-4 3.4 Water Trea tment Facilities.............. ................................ ................. ........... .......... 3-5 3.4.1 Highland Avenue WTP System Processes............................................ 3-5 3.5 Finished Water Storage, Chemical Feed Systems, and High Service Pumping......... ............. ..~ ......... ............. ........ ......... ............. ..... .... ...................... ...... 3-6 3.5.1 Finished Water Storage ............................................................................ 3-6 3.5.2 Chemical Feed Systems................. .................. ................................ ......... 3-7 3.5.3 High Service Pumping ............................................................................. 3-7 3.6 Water Distribution System... ............. ....................... ................. ................. .......... 3-8 3. 7 Water Quality ...... ..... ........................ ............... ............................. ........................ 3-13 3.8 Projected Water Demand ............................................................................ ........ 3-13 3.9 Regula tory Impacts................................ ........... ................................................... 3-16 3.9.1 Existing Regulations ............................................................................... 3-17 3.9.2 Recently Promulgated Regulations..............................:....................... 3-18 3.9.3 Future Regulations ................................................................................. 3-19 4.0 Wastewater S ys tern ...... ...... ....... ............................. ...... ........... ...... ..... ......... ..... ..... ....... ...... 4-1 4.1 Overview of Wastewater System......................................................................... 4-1 4.2 Wastewater Collection and Conveyance ............................................................ 4-2 4.3 Wastewater Treatment Facilities ......................................................................... 4-3 4.4 Projected Wastewater Flows ...................................;............................................ 4-5 4.5 Regula tory Impacts..................... .............................. .......... ..... .... ...... ......... ........... 4-7 4.5.1 Watershed Management .......................................................................... 4-7 4.5.2 Total Maximum Daily Load (TMDL) Development............................ 4-8 4.5.3 NPDES Permitting and Nutrient Management.................................... 4-8 4.5.4 Onsite Septage Systems. ................... ..... ........... ..... ..... .......... ................... 4-9 4.5.5 Residuals Management and 503 Regulations .......................................4-9 4.5.6 General Permit for Stormwater Discharge Associated with Industrial Activity....... ................... ......... ......... ............. .......... .................. 4-9 P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORl\SEC 1 & 2 LSFINALDOC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 4.5.7 Stormwater Pollution Prevention Plan ..................................................4-9 4.5.8 Spill Prevention, Control, and Countermeasures Plan............~......... 4-10 4.5.9 Municipal Storm Water Discharge Permit .......................................... 4-10 4.5.10 Security and Vulnerability..................................................................... 4-10 5.0 Proposed System CIP ........................................................................................................ 5-1 5.1 Planning Criteria and Assumptions.................................................................... 5-1 5.2 Cost Opinions for Recommended Projects ........................................................5-1 5.3 Summary of Capital Improvements.................................................................... 5-2 5.3.1 Water Treatment.............. ............... .......... ........................... ........ ............. 5-3 5.3.2 Water Distribution System ...................................................................... 5-6 5.3.3 W astewa ter Trea tment................ ................... ....... ................... ................ 5-8 5.3.4 Wastewater Conveyance....... ..... .......... ............ ........ .......... ........ .............. 5-9 5.3.5 System-wide Improvements ................................................................. 5-11 5.4 Anticipated Future W ork.................................................................................... 5-12 6.0 Financial Performance ...... ........... ..... ............................. ...... ........ ......... ............................ 6-1 6.1 Historical Performance .... .............. .............. ............ .......... ............... .... ................ 6-1 6.2 Water and Sewer Rates ......................................................................................... 6-1 6.3 Financial Policies......... ........ ........ .... .... ......... ....... ...... ........ .... .......... ........ ............ ... 6-4 6.4 Projected Operating Results.. ................................. .......... ................ ........ ...... ...... 6-5 6.4.1 Revenues .... .......:..... ........... ..................... ......... ................... ........ ............... 6-5 6.4.2 Expenses.... .... ....... ....... ........ ....... .................. ...... ............... ......................... 6-7 6.4.3 Debt Service... ..... ....... ..... .................. ...... ................. ...... ..... ..... .......... ........ 6-7 6.4.4 Debt Service Coverage ................... ....... ..... ............................. ................. 6-8 6.4.5 Opera ting Fund Balances................ .................. ......... .................. ............ 6-8 6.5 Capital Financing .. .......... ....................... ................ ........ ........ ................... ........... 6-10 6.6 Conclusions................ ............. ........ ..................... ............ ........ ................. ..... ....... 6-10 Appendices A Acronyms B Population Growth within Census Tracts C Future Water Treatment Regulations D 10-Year Capital Improvement Plan Tables 2-1 Population Forecasts....................... ............. ........ ............. ............................... .................. 2-8 3-1 Water Withdrawal Permits ............ .................................................................................... 3-2 3-2 Existing Equipment at the Raw Water Pump Station.................................................... 3-4 3-3 Water Treatment Plants and CWorination System ........................................................ 3-5 3-4 Summary of High Service Pumping ................................................................................ 3-7 3-5 . Pressure Gradient Summary ...................... ....................................................................... 3-9 3-6 Surface Water Storage Facilities...................................................................................... 3-10 3-7 Surface Water Pumping Facilities................................................................................... 3-10 3-8 Groundwater System Storage Facilities......................................................................... 3-11 3-9 Groundwater System Pumping Facilities.............................:........................................ 3-12 IIIP:\161047\161047 AUD 2002 PMIBOND FINANCING REPOR1\SEC 1 & 2 LSANALDOC III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 3-10 Water Demand 2001 ................ ...~...................;.................................................................. 3-13 3-11 The 10 Largest Water Customers.................................................................................... 3-14 3-12 Projected Water Consumption ........................................................................................ 3-15 3-13 Projected Water Usage by Customer Class ...................................................................3-15 3-14 Summary of Stage 1 D /DBP Rule Limits ...................................................................... 3-19 4-1 Wastewater Treatment PJants Owned by Augusta........................................................ 4-3 4-2 J. B. Messerly WWTP Effluent Limitations ..................................................................... 4-4 4-3 Spirit Creek EffluenfLimita tions........ ............ .............. ....... ......... ....... ............ ......... .... .... 4-4 4-4 Wastewater Flows, by Plant (mgd) .................................................................................. 4-5 4-5 10 Largest Wastewater Custom~rs ......................................:............................................4-6 5-1 Series 2002 Bond Projects-Summary of Estimated Costs............................................ 5-2 5-2 Series 2002 Bond Projects-'-Summary of Estimated Water Trea'tment Costs............. 5-4 5-3 Summary of Site Evaluation Findings for Selected Sites............................................... 5-5 5-4 Series 2002 Bond Projects-'-Summary of Estimated Costs for Water Distribution Projects. .......... ... ........... ..... ..... ............. ..... ...................:..... ......... ......... '" ... ..... 5-6 5-5. Series 2002 Bond Projects-'-Stmunary of Estimated Wastewater Treatment System Costs. .... ... .... .... ..... ... ..... .... ... ...... ....... ........ ......... ..... .............. ....... ......... 5-8 5-6 Series 2002 Bond Projects-Summary of Estimated Wastewater Conveyance System Costs. ................... .......... ................. ......... ........................ ....... .......... 5-9 5-7 Series 2002 Bond Projects-Summary of Estimated System-wide Costs.................. 5-12 6-1 Historical Water and Sewer System Operating Results ................................................6-2 6-2 Current Water and Sewer Rates (Effective 4/1/2002)................................................... 6-3 6-3 Comparison of Typical Monthly Residential Customer Bills....................................... 6-3 6-4 Water and Sewer System Operating Results .................................................................. 6-6 6-5 Additional Bonds Test...................................................... .......... ............. ........................... 6-8 6-6 Operating Fund, Sources and Uses of Cash Flows ........................................................ 6-9 6-7 Funding Decisions.... ..... ... ................ ...... ..................................................... ..................... 6-11 Figures ... ... 2-1 Loca tion Map.............................:............ ............... .................. ................~. ..... ............. ........ 2-2 2-2 Utilities Department Organiza tion Chart............................ ............. ............ ........ ........... 2-5 2-3 .Population Growth by Region .......................................................................................... 2-7 3-1 Water Service Area and Major Water Distribution Lines ............................................. 3-2 3-2 Existing Wells and Water Treatment Plants ........................................,.......................... 3-3 3-3 Water Pumping Stations....... ......................................... .......... ........:..... ................... ......... 3-9 4-1 Wastewater Service Area and Treatment Plants ............................................................ 4-1 4- 2 Drainage Basins.......................... ............................................ ......... .:............ ... ................... 4-2 5-1 Proposed Capital Improvements - Water System ......................................................... 5-6 5-2 Proposed Capital Improvements - Wastewater System............................................. 5-10 . . . - - . . ... - - - ... ., . . IVP:\1610471161047 AUD2002 PMIBOND FINANCING REPORl\SEC 1 & 2 LSFINALDOC IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0 Introduction 1.1 Authorization and Purpose CH2M HILL was retained to prepare this Engineer's Report ("the Report") as an analysis of the feasibility of issuing $151,600,000 Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2002 (the "Series 2002 Bonds"). CH2M HILL has served as the overall program manager for both the $42 million water and sewerage (also referred to as "wastewater") capital improvement program in Augusta, funded by the 1996 bond issue, and the $94,000,000 water and sewerage capital improvement program in Augusta, funded by the 2000 bond issue. CH2M HILL also completed the Augusta Master Plan 2000, approved by the Augusta-Richmond County Commission on July 19, 2000, which presented a multiple phase capital improvement plan (CIP). This plan identified capital improvements to be financed through the Series 2000 Bonds and the Series 2002 Bonds. The proceeds of the Series 2002 Bonds will be applied in the following approximate amounts: $130,000,000 -(combined with interest earnings) will finance improvements to the County water and wastewater system; $ 1,894,120 -costs of issuance (including underwriter's discount, legal fees, rating fees, and other miscellaneous costs associated with issuance of the Series 2002 Bonds); $ 2,792,971 -original issue discount; $ 1,207,211 -payment of the premium for a debt service reserve surety bond and bond insurance; ~ .... $ 11,935,010 -capitalized interest through April 1, 2004; and $ 5,831 -contingency associated with the preliminary sizing of the Series 2002 Bonds. The "System" is defined as the water and wastewater facilities that are owned and operated by Augusta, Georgia (" Augusta") together with all water and wastewater facilities acquired or us~d by Augusta in furnishing water and wastewater services. Major components of the Systeh1 are referred to herein as the "Water System" and the "Wastewater System." This Report contains the following sections: · Section 1- Introduction - outlines authorization and purpose of the Report, study references, and assumptions. · Section 2 - System History and Organization, and County Growth - provides an overview of the System's history, organization, management, and county population trends. . ... .... - ~ . ~ ... - - ~ - . .- - - - - - - ... ... ... P:\161 047\161047 AVO 2002 PM\BONO FINANCING REPORT\SEC 1 & 2 LSFINALOOC I-I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 · Section 3 - Water System - describes the current Water System service area, facilities, operations, and assets. · Section 4 - Wastewater System - describes the current Wastewater System's service area, facilities, operations, and assets. · Section 5 - Proposed System CIP - provides the planning criteria and assumptions used for identifying needed capital improvements and describes the purpose and function of categories of planned improvements · Section 6 - Financial PerfoJ:lIlance - describes historical and projected financial performance, Augusta's financial policies, and a funding analysis for the Series 2002 Bonds. 1.2 References CH2M HILL reviewed and relied upon information provided by the Augusta Utilities Department (the "Department"). As part of previous and current project assignments CH2M HILL has independently verified a significant portion of this information. Although CH2M HILL offers no assurances regarding information not independeritly verified, CH2M HILL has no reason to believe that the information is invalid for the purposes of this Report. Information used to complete this Report included: · Interviews with Department staff · Preliminary Official Statement, Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2002, dated May, 2002. · Augusta Utilities Department, 2002 Budget Workbook · AUGUSTA-RICHMOND COUNTY, GEORGIA, Annual Financial Statements, 1997-2001 · AUGUSTA-RICHMOND COUNTY UTILITIES, Financial Statements and Accompanying Informationfor the year ended 1997-1999 · City of Augusta, Georgia and Richmond County, Georgia, Combined.Water and Sewerage Funds, Combined Balance Sheets, 1997-2001. · Augusta-Richmond County Utilities, Miscellaneous Statistical Data for the years ended. 1997-2001 (prepared by Augusta Utilities Department) · Augusta Canal Power Utilization and Raw Water Pumping Engineering Study, prepared by ZEL Engineers, July 6, 1998. · Augusta-Richmond County Comprehensive Land Use Plan (prepared by Augusta-Richmond County Planning Commission) · The Regional Economic Forecast of Population and EmploY111.ent Comprehensive Study, volume II., prepared by DRI/McGraw-Hill for the Georgia Department of Natural Resources (DNR), September 1996. P:\161047\161047 AUD 2002 PMIBOND FINANCING REPOR1\SEC 1 & 2 LSFINALDOC 1.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 · Georgia Office of Planning and Budget Projection-The Georgia County Guide, Eighteenth Edition 1999. Center for AgribuSiness and Economic Development. Ed. Boatright, Susan R. Bachtel, and Douglas C. Bachtel. 1999. · Master Plan 2000 for Water and Wastewater Systems, Augusta Utilities Department, Technical Memorandum 1.2A: Population Distribution and Water and Wastewater Flow Projections, AprilS, 2002 (An update to TM 1.2 prepared by Diane Reilly, Consultant) · Master Plan 2000 for Water and Wastewater Systems, Augusta Utilities Department, Technical Memorandum 2.1A: Water System Regulatory Compliance Review, April 4, 2002 (An update to TM 2.1 prepared by CH2M HILL) · Master Plan 2000 for Water and Wastewater Systems, Augusta Utilities Department, Technical Memorandum 2.2A: Wastewater Treatment Regulatory Review, April 4, 2002 (An update to TM 2.2 prepared by CH2M HILL) · Master Plan 2000 for Water and Wastewater Systems, Augusta Utilities Department, Technical Memorandum 5.1: James B. Messerly WWTP Evaluation, January 21, 2000 (prepared by CH2M HILL) · Master Plan 2000 for Water and Wastewater Systems; Augusta Utilities Department, Technical Memorandum 5.2: Augusta-Richmond County Wastewater Conveyance System Evaluation, April 4, 2002 (prepared by CH2M HILL) · Master Plan 2000 for Water and Wastewater Systems, Augusta Utilities Department, Summary of Recommendations for Expansions and Improvements, February 4, 2000 (prepared by CH2M HILL) · Water Distribution System Analysis for Augusta-Richmond County, Georgia, September 2001 (prepared by CH2M HILL) · Highland Avenue Water Treatment Plant Preliminary Design Report, November 2001 (prepared by CH2M HILL) .. ~ · Raw Water Intake and Water Plant Site Assessment, Technical Memorandum No.1, Apri113, 2001 (prepared by CH2M HILL) · Raw Water Intake and Water Plant Site Assessment, Technical Memorandum No.2, September 26, 2001 (prepared by CH2M HILL) . .... """" · Raw Water Intake and Water Plant Site Assessment, Technical Memorandum No.3, October, 2001 (prepared by CH2M HILL) . ... ... ... ..... 1.3 Assumptions - - - - CH2M HILL also made certain assumptions about future conditions with regard to the System..While these assumptions are reasonable for the purposes of this Report, actual conditions may differ from those assiuned. To the extent that future conditions differ from those assumed, results will vary from those forecast. CH2M HILL's principal assumptions regarding future conditions are: ... ... .- - - - ..... - -- P:\1610471161047 AUD 2002 PMlBOND FINANCING REPOR1\SEC 1 & 2 LSFINALDOC 1-3 - - . . . . . It . . . . . . . . . . . . . . . . . . . . .' . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONOS, SERIES 2002 · Augusta's population will increase from the 2000 level of 199,775 to 242,150 by 2020, according to the Augusta-Richmond County Comprehensive Land Use Plan. In addition, many areas of the County are under new development as a result of a shift in growth patterns. This growing, shifting population will require that the Dep~rtment expand service to new areas to provide water and wastewater utility service to new customers. · Augusta has adopted a policy to mandate conversion to central wastewater collection when service is available. The Department is developing plans to ensure enforcement but conservatively estimates that actual connections will occur over a period of 3 years following completion of new collection lines in unsewered areas. · System water consumption and wastewater flows will increase in proportion to the forecast increases in the number of water and wastewater accounts and per capita flows, with limited price elasticity adjustments to reflect responses to projected tate increases. · The Augusta-Richmond County Commission will adopt the rate increases necessary to implement the financial plan outlined in Section 6. Additional assumptions used in preparing the crp are described in Section 5. .... ~ . ..... -- - - .-. - -. ..... -. - .... - -) ... .- - -. .- -- -. - P:\1610471161047 AUD 2002 PMIBOND FINANCING REPORl\SEC 1 & 2 LSFINALDOC 1-4 - - . . . . . . .. . . e. . . . . . . . . . . . . . . . . . . . . . . . . . e . . .' . . . . 2.0;System History and Organization, and County Growth Augusta, Georgia (Augusta) is a political subdivision of the State of Georgia, created on January 1,1996 pursuant to Acts of the General Assembly of the State of Georgia, which authorized the consolidation of the municipal corporation known as "The City Council of Augusta" and the political subdivision known as "Richmond County, Georgia" (the "Consolidation Charter"). See Figure 2-1 for the County's location in Georgia. Augusta owns the water supply, treatment, and distribution system, as well as the wastewater collection and treatment system. The Department is responsible for the operation and maintenance of the water treatment and distribution facilities (the "Water System"), as well as the wastewater conveyance and treatment facilities (the "Wastewater System") that serve Augusta's service area. In addition, the Department provides customer service functions including meterreading and customer billing, revenue collections, and inspection of new construction. 2.1 Organizational Structure 2.1.1 Augusta On January 1, 1996, Augusta was created as a consolidated city-county government, whose territorial jurisdiction extends to all of what was formerly Richmond County. Blythe and Hephzibah, small municipalities with populations of approximately 400 and 2,600, respectively, still hold their own municipal charters within the consolidated territory. The relationship between Augusta and Blythe and Hephzibah is similar to that of counties and municipalities within the territorial limits of such counties. As a result of consolidation, Augusta is able to provide public services throughout its territoriallirnits through a single organization and management structure. Augusta has a municipal form of government. Under the Consolidation Charter, the governing authority of Augusta is a board "of commissioners designated as the Augusta- Richmond County Commission (the "Commission"). The Commission consists bf a Mayor, who is the chief executive officer of the Commission, and 10 commissioners. 2.1.2 System Management The System is managed by Augusta through the Department. The Administrator of Augusta, who is appointed by the Commission upon recommendation of the Mayor, oversees the management of the operations and capital program of the Department. The chief managerial officer of the Department is the Director, who is appointed by the Commission. P:\1610471161047 AUD 2002 PM\BOND FINANCING REPORl\SEC 1 & 2lSFINALDOC 2-1 . . . . . . . . . . . . . . . . . " . . . . .. . . . . . . . . . .. . . . 8 . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 N A 100 0 100f.t.les ~~ CH2MHILL Rgure 2.1 localioo Map Augvsta. GecKgia ~2OO201llAn.\,l.&q.au1011lS ADMINISTRA TOR. George R. Kolb, age 53, has been the Administrator of Augusta since May 1, 2001. From April of 1992 to January of 2001, Mr. Kolb was the Deputy City Manager of the City of Richmond, Virginia. From August of 1989 to April of 1992, Mr. Kolb was the Assistant to the City Manager/Employee Services of the City of Saginaw, Michigan. From October of 1981 to October of 1988, Mr. Kolb was the City Manager of the City of Albion, Michigan. Mr. Kolb received a B.B.A. degree in Marketing from Eastern Michigan University in 1970 and a Masters of Public Administration in Urban Administration from the University of Michigan in 1971. Mr~ Kolb also studied in the Senior Executives in State and Local Government graduate program at John F. Kennedy School of Government of Harvard University. DIRECTOR OF FINANCE. David Persaud, age 47, has been. the Director of Finance of Augusta since June 3,2002. Mr. Persaud was the Director of Finance for Chatham County, Georgia from November of 1985 through May of 2002. From August of 1984 through November of 1985, Mr. Persaud was the Director of Finance of the City of Mount Dora, Florida. From February of 1982 through August of 1984, Mr. Persaud was the accountant for Glynn County, Georgia. Prior to August of 1984, Mr. Persaud was employed in the private sector. Mr. Persaud received a B.S. degree in Business Administration and Accounting from the University of Coast California and a Masters degree in Public Administration from Savannah State University. P:1l61047\161047 AUD 2002 PM\BOND FINANCING REPOR1\SEC 1 & 2 LSFINALDOC 2-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 He is a Certified Government Financial Manager (CGFM) and has a Chartered Pension Executive (CPE) certification. DIRECTOR. N. Max Hicks, P.E., age 62, has been the Director of the Augusta Utilities Department since June 4,1996. From 1991 to 1996, Mr. Hicks was the General Superintendent and the Assistant General Superintendent, respectively, of the City's Water Works Office. From 1989 to 1991, Mr. Hicks was Public Works Director for the City of Toccoa, Georgia. Prior to that, he was a partner, director, and vice president of the.consulting engineering firm of Zimmerman, Evans, and Leopold, Inc., Augusta, Georgia. Mr. Hicks studied Engineering and English at Charlotte College (now University of North Carolina at Charlotte), Charlotte, North Carolina, and Economics and Accounting at the University of South Carolina at Aiken, Aiken, South Carolina. Mr. Hicks is a Registered Professional Engineer in Georgia and South Carolina. Mr. Hicks was the 1996 recipient of the Elizabeth McIntire Award for Outstanding Service in Water Supply from the Georgia Water and Pollution Control Associa tion. ASSISTANT DIRECTOR OF FINANCE & ADMINISTRATION. Steven J. Little, c.P.A., age 45, has been the Assistant Director of Finance and Administration of the Augusta Utilities Department since December of 2001. From 2000.to 2001, he was the Assistant to the Chief Financial Officer at the national headquarters for Electrolux Home Products, makers of Frigidaire appliances, located in Augusta, Georgia. Prior to that, he was the Chief Financial Officer for a start-up medical referral company and its sister corporation in Aiken, South Carolina. His previous experience includes over 10 years of public accounting, with an emphasis in auditing local governments, and internal auditing for a private utility company. Mr. Little is a certified public accountant. He received a B.B.A. degree in Accounting from Iowa State University in 1982. ASSISTANT DIRECTOR, WASTEWATER TREATMENT. D. Allen Saxon, Jr.; age 45, has been the Assistant Director of Wastewater for the Augusta Utilities Department since March 5, 2001. Mr. Saxon previously served as the Supervisor of Water Pollution for the City for 17 years until September of 1994, when he resigned to further his education. He is an active member of the Georgia Water & Pollution Control Association and the Water Environment Federation. Mr. Saxon was Georgia's 1990 recipient of the William D. Hatfield Award from the Water Environment Federation. Mr. Saxon earned a B.B.A. degree in 1983 from Augusta College and an M.s. degree in 1996 from Georgia State University. Mr. Saxon is certified as a Class I Wastewater Treatment System Operator by the State of Georgia. ASSISTANT DIRECTOR, WATER PRODUCTION. .... ... Clifford A. (Drew) Goins, age 47, has been the Assistant Director of Water for the Augusta Utilities Department since May 29, 2001, Mr. Goins has been employed by the City for almost 20 years in various capacities. He began his employment with the City as a Resident Engineer in 1982 until his promotion to Assistant Commissioner of Public Works and Director of Engineering in 1990. From 1993 through 1996, Mr. Goins served as the acting Commissioner of Public Works and Director of Engineering while the Commissioner of . . .... .. ... - .... ., . . P:\161047\161047 AUD 2002 PM\BOND FINANCING REPORl\SEC 1 & 2 LSFINALDOC 2-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 Public Works was reassigned to the position of acting City Administrator. After serving in that capacity, Mr. Goins served as the Assistant Director of Public Works and ~ngineering until he accepted his current position. Mr. Goins has been a 10th District Chapter Director for American Public Works Georgia and a committee member of the American Public Works National Engineering & Teclmology PET. He received a Bachelor of Civil Engineering Technology Degree from Southern Technical Institute in 1981. ASSIST ANT DIRECTOR, ENGINEERING & CONSTRUCTION. Douglas A. Cheek,P .E., age 37, has been the Assistant Director of Engineering and Construction for the Augusta Utilities Department since May 29, 2001. From August of 1998 until June of 2001, Mr. Cheek served as the City/County Engineer for Augusta. From February of 1995 until July of 1998, Mr. Cheeks served as the Bridge Construction Liaison Engineer for the Georgia Department of Transportation's Metro Atlanta District Office. In June of 1998, Mr. Cheek received a Bachelor of Civil Engineering from the Georgia Institute of Technology in Atlanta, Georgia. He also studied Biology at Clayton State College in Morrow, Georgia from 1982 to 1984. Mr. Cheek is a Registered Professional Engineer in Georgia. CUSTOMER SERVICE SUPERINTENDENT. Alma Stephenson, age 53, has been the Superintendent of Sales, Collections, and Customer Service of the Augusta Utilities Department since June 4, 1996. Ms. Stephenson was employed by the City for 27 years and was appointed Director of Consolidated Revenue/Manager of the Water Works Office and Sales Department in June of 1995, after serving for 8 years as the Assistant Director of Consolidated Revenue/Manager of the Water Works Office and Sales Department. The Department has 234 full-time equivalent positions authorized in its FY 2002 budget and had 12 vacancies as of March 31, 2002. Figure 2-2 illustrates the current organization of the Department. No employees of the System are represented by labor organizations or are subject to provisions of collective bargaining agreements, and the Commission is not aware of any union organiZing efforts. The System's plant operators and maintenance and repair personnel are required to meet the certification levels prescribed by the State of Georgia Board of Certification of Water and Wastewater Operators. Augusta pays f?r continuing education programs to ensure that System personnel are qualified, and achieve and maintain certification of their qualifica- tions. The System's operators meet or exceed the minimum credentials required by the State of Georgia. Additionally, all field employees must attend safety meetings and participate in safety training programs; these cover shoring and trenching, confined space entry, lock-out/ tag- out, and other safety topics. P:\161047\161047 AUD 2002 PM\BOND ANANCING REPOR1\SEC 1 & 2lSFINALDOC 2-4 . . . . I-I-N OOZO . OWO fu~~ cca:!!! . cnc:CCC 'ii:flj~ WC) . . ~~~ ~S5 w_lD . ~~ <(Z I-W en> . =>W (!)oo =>w <((!) . <( a: W . ~ en C) Z . <( a: w . ~ . . . . . . . . . . . . . . . . . . . . . . . . . . ... WI' - - ... - . ...., ,C :GJ ...E...... .. . ... "I.i' ,ta 'CL. CLJ 13 (I). CD .... ~. - .- ..... :::I :t:,;::j!~: ~~';l!,~, ;'li~,U" :'i!ma:. ~,~.,~~ 011'.., ~J!.!u" '-;liI'u, t~,~,g~ ~:~f~t~ ~ ~~ 'i"!!~ !!.~.; ~"I t~" ~"O::i ijC.l~ P:~ . ~Q~ g;~~' ~~, ~~~ ~j l!J. ~~ ~~1 ~1 *~!! ~i:i1 ~2~ '03 ~~e! ~~ ~~~ !Ej] 1~i ~~ ." N u o Cl ...J <( Z u: en ...J N .., If"'" "ll~ 1ol:~ ~&) ~~~ ~~i ~~N m j 'Jj1! I:I,J .58 .~g E:.." .~ ~,~! ~ .. ;:l.~ R'ht lill .'ll '8'11 '11 .11,1.1 ')1 '0 aD Q illjjjt/ i5c~S! . a a as s iJlfl (,:}6)800 u ~ a: o <l. W a: (!) Z U Z <( Z u: C) Z o ~ :::;: <l. 8 N C) => <( ~ 10 i2 ",. o 10 li~, . it! ~ ~!Jl .l:ar. .e~ ~:~ !Xc ;~if ;~. .:~~' E;a. .e.,C1 ;~~ ~g li'4&,~~ ~l l.of .%~ ~~,. s* ~ ~M i!!t3 t&J;:~ ~. I;;' ~I ~ ~~ 1\l]'t ~ ,~" i~~ :~~ .c:.' ~:i:~ ~i;'ry :~~ II\~ ,l... ," _ ~~~ .~"". .tln 1t~. . ""t!~: . .~$ '~~ ; E~ ..,~s~ ~~ ,-f ~g ;~2: ;~:o ~i~ ~~ .~~ U)~ ~_. >:.~; ,"!;~ ~,'k fU., II.. ~ ~ ~ ~m ~~ Ii: . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 2.2 Augusta-Richmond County Population Trends - - From 1990 to 2000, the total population of Richmond County grew by 5.3 percent, from 189,719 to 199,775 according to the US Bureau of the Census. Statewide, the population in Georgia increased by 26.4 percent during the 1990s. Despite the relatively slow growth, the County ranks seventh in the State in terms of total population, behind five metropolitan Atlanta counties (Fulton, DeKalb, Cobb, Gwinnett, and Clayton) and Savannah's Chatham County. While the growth rate of Ri~ond County has been relatively modest compared to the accelerated growth experienced elsewhere in the State, previously undeveloped areas of the County have experienced significant population growth. This redistribution of in- county population has precipitated some of the requirements for planned capital improvements. The general population shift within the County from more densely developed areas, which have infrastructure in place to support the water and wastewater demands of the population, to more rural areas, which previously had limited services or were unserved, will require the Department to expand System capacity in the growth areas. Appendix B shows population growth by Census Tract, illustrating the recent growth (in positive percent change) occurring in theless developed areas of the County (measured by 1990 density). The Department retained CH2M HILL to prepare the Master Plan 2000 for Water and Wastewater Systems to meet the needs of its shifting population efficiently and cost- effectively. Several population projections have been developed for the County and are presented in Table 2-1. The projections used by CH2M HILL in forecasting water and wastewater flows (see Sections 3.8 and 4.5) were based on theuHigh" year 20JO forecast presented in the Augusta-Richmond County Comprehensive Land Use Plan. The 2000 population estimate presented is from the U.S. Bureau of the Census. The 2020 projection is extrapolated based . on the expected percentage change between 2000 and 2010 shown in Figure 2-3. Use of the Planning Commission's "High" 2010 projection will help ensure that the Department will have adequate infrastructure in place to support future growth. While growth is affected by factors that Augusta cannot directly control, such as growth in adjacent counties and the health of the Augusta Metropolitan Statistical Area's (MSA) economy, the pattern of population distribution that ultimately occurs will be heavily influenced by the economic development and growth management policies of the local government. The population distribution projections delineate a range of water and wastewater infrastructure needs, and related system financing options and constraints. ... - ... . ... ... ... - - WI' - WI' - .... - - - - - P:\161047\161047 AUD 2002 PM\BOND FINANCING REPORlISEC 1 & 2 LSFINALDOC 2-Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-I-gj 0:20 OWN 0..::;;", ~~~ "'o..W a:WCl) lli~~ ~WZ Cl~O 2:::JQ) W5g,: <2 I-W "'Gj =>0: gw <~ 0: ~ '" Cl ~ 0: ~ :;: z~ - - - - - ., ... ., . - ... ... ... ... - - - - - - - - - g: u. :~ o <" ,~. l'l ,~ .2>. ., .~2J h, "'10 ~0 0..:1(. .~~ >.Q ..i~' :g><: :g ego ~g'~~~ .~~~ <=Q)11l c::.,.~ {!~<( <'5~g K~'6> .u. Cl e .='" ~ .2 tk;-:'~ c; Ol~N'" 5 &! t--"6, ~ Ol>,~ :>,1;j .u:.:a "'8 ~ L:c:5=> 3 ell." e~8 . Cl &.~ 5::)~ ~ al &5. o:J Cfj'.c O-<llo. g@.c o 0;1. <ll :; 0- o Q. -?fi. r-- "" " ~ i 1 u :l tli i ,: .. o ::l a. ~ z ii ! ~ i ~ ! .0 . .5 t :l I 8 I ! ft ~, .~ 11 ~ .~ u o Cl ...J "" 2 u:: '" --' N ad U W F2 0: o 0.. W 0: Cl 2 U ~ 2 u:: Cl 2 o Q) SE 0.. 8 N Cl => "" r-- .,. o to f2 ;g to ci: j .J .;.I. ~~ ]:~ ~~. i: ~. N~ Zj n.:! v:: . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 2-1 Population Forecasts Augusta-Richmond County, 1990 (estimate) through 2020 Forecast Augusta-Richmond County Planning Projection used for this Analysis Percent Change Augusta-Richmond County Planning Commission2 Low 189,719 Percent Change . Moderate Percent Change High Percent Change "Building Permit" Projection3 Percent Change Regional Economic Forecast4 Percent Change Georgia Office of Planning and Budget5 189,719 211,688 234,582 Percent Change 11.6% 10.8% Sources:1US Bureau of the Census, 2000 Census. . 2 Augusta-Richmond County Comprehensive Land Use Plan, prepared by Augusta-Richmond County Planning Commission) 3The Building Permit Projection uses the August-Richmond Planning Commission's 1998 population estimate, based on building permit activity, as a starting point and then applies the moderate projection's growth rate (from the Comprehensive Land Use Plan) 4The Regional Economic Forecast of Population and Employment Comprehensive Study, Volume II. prepared by DRI/McGraw-Hill for the Georgia Department of Natural Resources (DNR), September 1996. 5Georgia Office of Planning and Budget projection- The Georgia County Guide, Eighteenth Edition 1999. Center for Agribusiness and Economic Development. Ed. Boatright, Susan R. and Douglas C. Bachtel. 1999. 1990 (estimate) 189,719 2000 (projected) 199,7751 2010 (projected) 222,497 5.3% 11.4% 196,465 203,450 3.6% 3.6% 189,719 199,990 213,826 5.4% 6.9% 189,719 204,439 222,497 7.8% 8.8% 189,719 208,022 222,414 9.6% 6.9% 189,719 207,261 230,423 9.2% 11.2% . a ... . ... ... . ... ., - - - - - - - - at. - - - - - ... - - - P:1161047\161047 AUD 2002 PMIBOND FINANCING REPORl\SEC 1 & 2 LSFINALDOC 2020 (projected) 242,150 8.8% 233,745 5.1% 260,904 13.2% 2-8 . . . . . . . . . . .. . . . . . . . . . . . . . 3.0 Water System 3.1 Overview of Potable Water System Augusta owns and operates a potable water system serving 58,246 residential and 7,424 commercial and industrial customers as of December 31, 2001.The Water System's surface water supply is the Savannah River, supplemented by groundwater wells throughout the County. Water from the Savannah River is treated at the Highland Avenue Water Treatment Plant (WTP). Water from the wells is treated at one of three groundwater treatment plants (GWTPs). Water transmission and distribution facilities convey treated water from these plants throughout the Water System service area. 3.2 Water Service Area ... ... The Water System supplies water to residential, commercial, and industrial customers located within the County. The service area encompasses approximately 210 square miles (approximately 88 percent of the land area of the County exclusive of Fort Gordon) containing an estimated population in excess of 180,000. The water systems of Fort Gordon and the Cities. of Blythe and Hephzibah provide water service within their respective jurisdictions in the County. Figure 3-1 presents the areas currently served by the Water System with overlays of existing major water distribution lines. Generally, the service area can be characterized as having complete water service coverage for potential customers who wish to connect to the Water System. Projects defined in Section 5 as part of the CIP will continue to enhance the Water System's ability to serve this area. . . . . 3.3 Water Supply - .. The Water System's primary source of raw water is the Savannah River, withdrawing directly from the river as well as from the Augusta Canal, which is fed by and located parallel to the river. The Water System has four raw water intakes on the canal, two primary and two secondary, plus an additional diesel-engine-driven standby raw water pump that can pump from either the canal or the river. The raw water supply is pumped from the Water System's raw water facilities located between the Augusta Canal and the Savannah River to the Highland Avenue WTP through a system of parallel raw water lines. There are four raw water transmission lines: a 30-inch-diameter cast iron pipe, 36-inch steel pipe, 60-inch ductile iron (DI) pipe, and an inactive 42-inch pre-stressed concrete cylinder pipe. The Georgia Water Quality Control Act authorizes the DNR Environmental Protection Division (EPD) to regulate the withdrawal of water from lakes, streams, and aquifers in Georgia. Augusta holds permits for raw water sources as noted in Table 3-1. - - - - - - - - - - - - - - P:\161047\161047 AVO 2002 PM\BONO FINANCING REPORT\SEC 3 & 4 LSFINALOOC AO 733055.1 3-1 . . . . . .' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 LEGEND: N. A lB:W Augusta Watei seMce Area- N 1&Ijoi"WaJa lineS IV Streets '~_Macmsnol_I'i>ftG""*",; ~",/lIyftIa 80Cll 0 l!OOJFtet ~---:....-.J .CH2MHILL WOC2OO2ll1&ln. \~tCl1N. .~fII,,*~"~V""'~ ..i:.\:JlQXI2'_~t\IlIr.flAQr:lOOl.U-,filUCI.ImY,,2!II2ER.)'1W_P""" Figu," 3-1 WalefSiirViCli AAiii and Majol'Water oisllibli1ioriUries < ' ~. GeoIgia TABLE 3-1 Water Withdrawal Permits Permitted Withdrawal (mgd) Raw Water Source Monthly Average 24 hour Max. Day Surface Water: Primary Source: Savannah River/Augusta Canal EPD Permit No. 121-0191-06 60.0 60.0 North Location: Savannah River EPD Permit No. 121-0191-09 (being relocated to the new intake site) Groundwater: 15.0 18.5 Monthly Average Annual Average 26 Active Wells -located at GWTP Nos. 1,2, and 3 plus three individual sites (Rural Chlorination Sys.) EPD Permit No. 121-0007 Note: mgd = million gallons per day 18.4 17.4 In 1991 EPD issued to the former County a permit for withdrawal of raw water from the Savannah River of 30 mgd monthly average and 37 mgd maximum daily capacity. The P:\161 047\161 047 AUD 2002 PM\BOND FINANCING REPORl\SEC 3 & 4 LSFINALDOC AO 733055.1 3-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 intake was located just north of Interstate 20,where a new WTP was initially planned (EPD Permit No. 121-0191-09), referred to as the North Location. The plant at this location was not constructed. After the consolidation of the former City of Augusta and Richmond County, all permits were also consolidated. In June 2000, EPD approved the transfer of 15 mgd monthly average capacity to the current secondary raw water intake (EPD Permit No. 121- 0191-06), increasing the monthly average/24-hour maximum day withdrawal capacity from the Savannah River to 60 mgd. The remaining 15-mgd capacity from this North Location will be relocated to a new WTP intake discussed further in Section 5. In addition, Augusta is permitted to withdraw supplemental raw water from the Tuscaldosa Formation aquifer through 32 wells: 26 actively producing, 5 deactivated, and 1 inactive. The Water System is currently permitted to withdraw groundwater under EPD Permit No. 121-0007 to pw:np 18.4 mgd maximum month average; and 17.4 mgd maximum annual average. See Figure 3-2 for the location of the wells and WTPs in the service area. LEGEND: 00 Ground WiJIBr Treatment Plant D SulfaceWalerTrealmentPlant o Wells @ Wells (Kept on Rural Chlorination) .... ~l . . N A ~_ 0 BOOOF:etJI ----'------' FIGURE 3.2 Existing Wells and Water Treatment Plants . Augusta, Georgia 3.3.1 Raw Water Pumping Withdrawal of raw water from Augusta's primary raw water supply is accomplished via a raw water intake (RWI) that has an aggregate pump capacity of 88 mgd and is located on the Augusta Canal. Raw water pumping is accomplished primarily using two pumps, Units 1 and 4, with capacities of 20 mgd and 30 mgd, respectively. Units 1 and 4 are powered by water-driven turbines, originally constructed in 1952 and 1975, respectively, and improved in 1993 and 1999. Unit 1 is a two-stage centrifugal pump and Unit 4 is a single-stage centrifugal pump. Units 2 and 3 are older pumps, each with a capacity of 9.0 mgd, which are P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AD 733055.1 3-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2002 used as supplemental supply for peak demands and when one of the other units is taken out of service for maintenance. These pumps were originally constructed in 1898, were improved in 1939, and received major upgrading in 1999. A fifth unit, Unit 5, is a standby diesel-engine-driven raw water pump, with a water intake which can be used in the Augusta Canal or the Savannah River, and a raw water pumping capacity of 20 mgd. This standby auxiliary pump was originally constructed in 1975 and is housed in the same building as Unit 4, which received major upgrading in 1999. See Table 3-2 for detailed information on the five raw water pumps. Table 3-2 outlines information on the existing raw water pump station equipment as well as its general condition.. The Department maintenance staff has rated the pumps based upon equipment age, performance, and reliability. Those rated" good" are considered reliable for continuous use with little maintenance, while those rated "fair" are older and considered reliable for occasional use only. For pumps rated "fair", maintenance is more difficult due to age of equipment and wear. Upgrading of the pump station is part of the planned capital improvements described in Section 5. TABLE 3.2 Existing Equipment at the Raw Water Pump Station Pump Flow Capacity Turbine Flow Installed No. (mgd) (cfs) Capacity Comments No.1 20 550 1 ,650 hp Good condition NO.2 9 250 750 hp Fair condition No.3 9 250 750 hp Fair condition No.4 30 814 2,500 hp Good condition No.5 20 (17 if withdrawing water directly from the river) o (Diesel-driven) 2,000 hp Good condition Source: Technical Memorandum 4.2: Highland Avenue Filtration Plant Evaluation, December 18,1999 Note: cfs = cubic feet per second 3.3.2 Raw Water Transmission and Storage Raw water is currently transmitted from the existing PS to the raw water reservoirs at the Highland Avenue WTP via three pipelines: 30-inch cast iron and 36-inch steel pipes and a recently completed 60-inch DI transmission line. (An existing 42-inch concrete pipeline has been taken' out of service to be evaluated for possible use as a backup supply line.) The pipelines have a total capacity range of 102.15 to 163.40 mgd or a firm carrying capacity with the 60-inch line out of service of 38.7 to 61.88 mgd, at typical velocity ranges of 5 to 8 feet per second (fps) for pumped flow, respectively. Augusta has raw water storage capacity of approximately 379 acre-feet or 124 million gallons (MG) at two raw water storage reservoirs that serve the Water System. They provide pre-settling of suspended matter in the raw water as well as storage during times of low river or canal flows. Water flows by gravity from these reservoirs to the WTP. P:\ 161 047\161047 AUD 2002 PM\BOND FINANCING REPORl\SEC 3 & 4 LSFINALDOC AO 733055.1 3-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2002 3.4 Water Treatment Facilities Augusta owns four WTPs and a rural cWorination system, as summarized in Table 3-3. TABLE 3-3 Water Treatment Plants and Chlorination System Rated Plants Capacity for 2001 Production Date of EPD Operating Permit Treatment of of Treated Water Original Dates of No. CS2450000 Raw Water (maximum day) Construction Improvements Highland Avenue WTP 60.0 mgd 40.50 mgd 1939 1949,1954,1987, Permitted to 60 mgd but 1994,2000 improvements, currently under design, are necessary before plant can sustain that production level. Current sustainable capacity 45 mgd. Peach Orchard (GWTP No.1) 5.0 mgd 6.49 mgd 1966 1969, 1996 Original capacity of 10 mgd reduced to 5 mgd in 2001; the new GWTP No. 3 replaced lost capacity. Highway 56 Loop (GWTP No.2) 10.0 mgd 8.95 mgd 1979 1985, 1992, 1996 Old Waynesboro Road (GWTP 5.0 mgd 6.08 mgd 2001 No.3) Rural Chlorination System 3.7 mgd 1.77 mgd 1972 Each year since 1981 Totals 83.7 mgd 63.79 mgd* *Current operating limit 78.4 mgd The rural chlorination system is served by three wells identified as Brown Road, Plantation Road, and Kimberly-Clarke Wells; at each well there is a cWorine solution feed system for disinfection, a caustic soda solution feed system for pH adjustment, and fluoridation via addition of hydrofluosilicic acid. Results of regular water quality sampling at the wells are in compliance with state (EPD) permit requirements. ... WI' 3.4.1 Highland Avenue WTP System Processes The following processes used by the Department are standard for similar water treatment systems and comply fully with current regulatory requirements. Using this treatment tedmology results in a treated water that complies with permit criteria and satisfies user demands for a high quality, reliable wat~r supply. Pre-Flash Mixing and Flow Splitting: Pre-treatment chemicals are added just downstream of the raw water venturi meter and control valve. These chemicals include cWorine, lime, and alum. (Polymer, when added, is injected upstream of the flow meter.) Flocculation: Flocculation is provided through six flocculation basins-the effluents from the first two are combined and split among sedimentation basins 1,2, and 3. Each of the remaini1.'1g four sedimentation basins has its own flocculation basin. - - .. - . - - - - - - P:\161047\161047 AUD 2002 PM\BOND FINANCING REPORlISEC 3 & 4 LSFINALDOC AO 733055.1 3-5 - - ... ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTlUTIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 Sedimentation Basins: Flow into sedimentation basins 1,2, and 3 is through a series of 12 inlets for each basin. Settled water from these first three basins enters a settled water flume that is separate from the one serving the other basins. The two settled water flumes combine in the filter influent flume. Sedimentation basins 4, 5,6, and 7 each receive flow from their respective flocculation basin. Influent into the basins is through a series of 10 openings in the bottom of the respective inlet flume. The effluent from basins 4, 5, 6, and 7 combines in a single settled water flume, which flows to the filter influent flume. Filtration: From the sedimentation basins, settled water flows through two separate channels (one from sedimentation basins 1 through 3; the second from sed4nentation basins 4 through 7) to the filter influent flume. The Highland Avenue WTP includes 10 dual-media, two-celled filters, each with a surface area of approximately 1,050 square feet (ft2). At the current rated capacity of 60 mgd, the filtration rate is 4.0 gallons per minute (gpm)/ft2 with all filters in service. Each filter includes Leopold underdrains, 8 inches of gravel, 9 inches of sand, and 20 inches of anthracite. Backwash troughs are cast-in-place concrete. Rotary surface wash arms with nozzles are included for cleaning the expanded media dt,U'ing backwashing. Filter effluent piping includes a rate-of-flow controller for each filter. Post Flash Mixing: Post flash mixing occurs in a two-compartment basin, with each compartment having a pitched blade turbine mixer. Post-treatment chemicals (fluoride, lime, phosphate, and chlorine solution) are added as the filtered water enters the basin in the transition piece from a 72-inch pipe to a 6-foot by 4-foot rectangular opening. 3.5 Finished Water Storage, Chemical Feed Systems, and High Service Pumping ~ - Once the water is treated, distribution throughout the system requires high service pumping and storage in order to maintain a reliable, continuous supply for residential, commercial, and industrial customer uses. The systems described below are maintained at a level to provide operating pressures throughout the system that exceed EPD requirements of 35 psi minimum line pressure (measured at remote fire hydrants located in residential areas). The Department generally maintains line pressures of 60 psi to 120 psi (measured at the remote fire hydrants located in residential areas as described above), which is within the American Water Works Association (AWWA) guidelines, promotes high levels of customer satisfaction, and provides adequate fire protection in the system. - - . - - 3.5.1 Finished Water Storage The Highland Avenue WTP finished water storage tanks (clearwells) supply the lower pressure zones directly by gravity while the remaining capacity is pumped to the Water System's storage facilities located in various pressure zones. The treated water is then fed by gravity or pumped throughout the water distribution network. - - - - ~ - .... - - - - - P:\1610471161047 AUD 2002 PM\BOND FINANCING REPOR1\SEC 3 & 4lSFINALDOC AO 733055.1 3-6 ...... - - - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 There are five clearwells at the Highland Avenue WTP, with a total storage capacity of 15.45 MG: · Clearwell No.1 -1.25 MG · Clearwell No.2 - 3.0 MG · Clearwell No.3 - 5.0 MG · Clearwell No.4 - 1.6 MG · Clearwell No.5 - 4.6 MG Clearwell No.2 was modified in 2000 to add baffling for disinfection concentration multiplied by time (CT). This will facilitate continued compliance with Safe Drinking Water Act (SDW A) regulations. The current modifications will result in all treated water being directed through Clearwell No.2. Two additional 3D-inch influent pipes were added from the post flash mix basin into this clearwell. Several pipes connect Clearwell No.2 with the four other finished water clearwells. . 3.5.2 Chemical Feed Systems The chemical feed system at the Highland A venue WTP includes: a liquid lime system that has two bulk tanks and three lime slurry feed pumps; a dry lime system used as a backup to the liquid feed system: a chlorination system with five chlorine containers on-line and five that serve on a standby basis; a polymer feed system used when required by high turbidity levels; a powdered activated carbon (PAC) system used when required for taste and odor problems; and a phosphate feed system. Also, the liquid alum system includes two bulk tanks, a day tank, and new feed pumps. 3.5.3 High Service Pumping There are three sets of high service pumps at the Highland A venue WTP: the genera tor building pumps (also identified as the old Fort Gordon high service pumps), the filter gallery pumps, and the auxiliary pumps plus the Central Avenue Booster Pump Station (BPS). An additional set of high service pumps is located at the Wrightsboro Road BPS. Table 3-4 lists each system's pumping capacities in gpm, elevation of the pressure zone served (nornillal mean sea level [msl], feet) and the difference in elevation the pumps must pump against (head, feet). The pressure zone. is designated in elevation (ft msl) of the water surface in storage tanks serving the area 'when the water is at the full tank level. Reworking of the high service pumps is included as part of the Highland Avenue WTP improvements listed in Section 5. TABLE 3-4 Summary of High Service Pumping From To Head (ft) Flow Elevation Elevation Total Dynamic Head Location (msl) (msl) (TDH) gpm Central Avenue BPS 433 420 66 3,000 ------------------ ------------------------------------------- Aux. High Service Pump 433 564 173 8,100 Aux. High Service Pump - Diesel 433 564 173 8,100 ----------------------------------------------------------------------- High Service Pump - Diesel 433 564 160 2,000 P:\161047\161047 AUD2002 PMlBOND FINANCING REPORnsEC 3 & 4lSFINALDOC AD 733055.1 3-7 . . . . . . . . . . . . . . . . . . . . . . . . ... .. ENGINEER'S REPORT AUGUSTA UTIUTIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 3-4 Summary of High Service Pumping From To Head (ft) Flow Elevation Elevation Total Dynamic Head Location (msl) (msl) (TDH) gpm High Service Pump 433 564 160 5,600 High Service Pump - Backup 433 564 160 2,000 High Service Pump 433 564 160 3,500 ----------- Fort Gordon Pump 433 630 or 598* 310 1,250 Fort Gordon Pump 433 630 or 598* 300 2,500 Fort Gordon Pump 433 630 or 598* 300 2,500 Fort Gordon Pump 433 630 or 598* 300 1,250 Wrightsboro Road Pump 564 630 100 700 Wrightsboro Road Pump 564 630 100 900 Wrightsboro Road Pump 564 630 100 900 *This station can pump to either pressure zone. 3.6 Water Distribution System . The water distribution system includes approximately 1,010 miles of pipelines ranging in size from 6 inches to 24 inches in diameter. Most of the pipelines are made of cast iron or ductile iron (DI). Approximately 20 percent of these pipelines have been in service for 50 years or more, with the oldest pipelines installed approximately 140 years ago. Finished water is distributed from the Highland Avenue WTP by gravity and by pumping. Finished water is pumped using the Filter Gallery PS, the Auxiliary High Service PS, and the Fort Gordon PS. Gravity flow is used to supply the 417-ft msl gradient (Intermediate,. North) and the 310-ft msl gradient (Low). The Auxiliary High Service PS is used to supply the northern part of the system, which has pressure zone elevations of 564 ft msl and 500 ft msl. The Fort Gordon PS is used to supply the western part of the Water System and can supply either the 598-ft msl system or the 630-ft msl system. The Wrightsboro Road PS has been recently refurbished to supply the 630-ft msl pressure zone. Finished water is pumped from GWTP No.1 into the Intermediate-South pressure gradient (417 ft msl) and from GWTP No.2 into the Pine Hill pressure gradient (457 ft msl). Distribution system PSs situated at various locations are used to feed isolated higher pressure zones. See Figure 3-3 for the locations of the PSs and pressure zones. ... .. . . ... ... ... - .. ... ... .. .. ... ... - -. - ... - . -. - - - -. - P:\161047\161047 AUD 2002 PMlBOND FINANCING REPOR1\SEC 3 & 4 LSFINALDOC AO 733055.1 3-8 - ... - - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2002 LEGEND: l!J . GrlMld WalBf T lliotmonI PIaiIt IJ 6uifllgo~ Trua1mOnI Pilinl :6. w8ter ~ S18lions CJ PmoureZones N IA IlllOO .lDXIFolII .P"'""""""""I CH2MHILL ~.\"_1O!.M- ~Rt"""""'''''1' . .,F19lf~~~ Water.Pilm' in . 'StatiOns .. ... .P.,9.. ......; Aug/Jsf1f.: GectJJia 11 ........_ ..""at.""~amp N............ . Water levels in the finished water clearwells at the Highland Avenue WTP and system pressure requirements at the 417-ft msl gradient limit gravity flow from the clearwells into the 417-ft msl (Intermediate-North) pressure zone. Areas in the 417-ft msl (Intermediate- South) pressure zone not served from the Highland Avenue WTP are supplied from GWTP No.1. In addition to the pressure zones listed above, the distribution system contains several smaller pressure zones created by the significant variations in elevation throughout Augusta. These isolated pressure zones are fed using individual wells, BPSs, or pressure reducing valves (PRVs) to meet the Department's operating pressure requirements. A swnmary of pressure zones is presented in Table 3-5. TABLE 3-5 Pressure Gradient Summary System Surface Water Plant Pressure Zones Overflow Elevation (ft) Water Source ~ .. Super High High Adjusted High Intermediate-North Low 630 .564 500 433/417 310 Fort Gordon PS or BPS from the 564 pressure zone High Service and Auxiliary High Service PS PRV from the564 pressure zone Gravity or BPS from the 433/417 pressure zone PRVs from the 433 pressure zone . . . . ... .. P:\161 047\161 047 AUD 2002 PM\BOND FINANCING REPORT\SEC 3 & 4 LSFINALDOC AD 733055.1 3-9 .' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA urlUTIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 3-5 Pressure Gradient Summary System Groundwater Plant Pressure Zones High Pine Hill High PineHil/ Intermediate-South Overflow Elevation (It) Water Source 597 521 457 433 BPS from the 417 pressure zon~ or the Fort Gordon Ps GWTP No 3 GWTP No 2 and Pine Hill Wells 1- and 2 GWTP No. 1 or BPS from the 433 pressure zone In addition, the distribution system is equipped with several storage tanks and BPSs. A summary of the distribution system storage facilities for the surface water plants is presented in Table 3-6. A summary of the surface water system pumping facilities is presented in Table 3-7. TABLE 3-6 Surface Water Storage Facilities Location Location Elevation Pressure Systems Served Gallons Capacity Highland Ave WTP Clearwel/l 433 1,250,000 Highland Ave WTP Clearwell 2 433 3,000,000 Highland Ave WTP Clearwel/ 3 433 5,000,000 Highland Ave WTP Clearwel/ 4 433 1,600,000 Highland Ave WTP Clearwel/ 5 433 4,600,000 .-----------------------------------------------------------------------------------------------------------------------_. Total Clearwells 433 All 15,450,000 Berckmans Road 417 433/417 500,000 Highland Ave Tank 564 564 500,000 Highpoint Tank 564 564 1,000,000 Walton Way Extension 500 500 750,000 Belair Road 630 630 1,000,000 Total Elevated Storage 3,750,000 ... - - .... TABLE 3-7 Surface Water Pumping Facilities . . Location From To Head (It) Rate (gpm) - - .- - Summary of Surface Water System Pumping Central Avenue BPS 433 417 663,000 --------------------------------- ------- Aux. High Service Pump 433 564 173 8,100 Aux. High Service Pump - Future 433 564 0 Aux. High Service Pump - Future 433 564 0 Aux. High Service Pump -- Diesel 433 564 173 8,100 ---------------------------------------------------------------------------- High Service Pump - Diesel 433 564 160 . 2,000 . - .. - - - -- - .. P:\1610471161047 AUD 2002 PMlBOND ANANCING REPORnsEC 3 & 4 LSFINAL.DOC AO 733055.1 3-10 - - . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 3-7 Surface Water Pumping Facilities Head Rate Location From To (ft) (gpm) Summary of Surface Water System Pumping High Service Pump 433 564 160 5,600 High Service Pump - Backup 433 564 160 2,000 High Service Pump 433 564 160 3,500 ----------------- ------ Fort Gordon Pump 433 630 or 597 310 1,250 Fort Gordon Pump 433 630 or 597 300 2,500 Fort Gordon Pump 433 630 or 597 300 2,500 Fort Gordon Pump 433 630 or 597 300 1,250 ----------------- - Wrightsboro Road BPS 564 630 100 900 Wrightsboro Road BPS 564 630 100 900 Wrightsboro Road BPS 564 630 100 700 Total Pumping 42,300 Table 3-8 presents a summary of groundwater system storage facilities. - TABLE 3-8 Groundwater System Storage Facilities Location Elevation System Gallons Groundwater System Ground Storage GWTP NO.1 Clearwell 162 417 500,000 GWTP No.2 Clearwell 128 457 1,000,000 GWTP No.3 Clearwell 240 521 2,000,000 Faircrest Avenue 436 597 5,000,000 Faircrest Avenue 417 597 500,000 Windsor Spring Road 417 417 500,000 Richmond Hill Road 417 597 500,000 Golden Camp Road 417 597 250,000 Algernon 417 417 2,000,000 Morgan Road 470 597 5,000,000 Cedar Ridge 417 521 1,000,000 Pine Hill 457 521 300,000 Rose Hill 412 457 2,000,000 Wallie Drive 457 457 300,000 Total Ground 20,850,000 Groundwater System Elevated Storage Pine Hill 521 521 150,000 Highway 56 457 457 500,000 Tobacco Road 597 597 500,000 Fairington Drive 597 597 250,000 Georgetown 597 597 500,000 Lumpkin Road 597 597 250,000 Old Waynesboro Road 521 521 500,000 P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC 3-11 AO 733055.1 .. .. . . .0 . ... - - - - - - - - - - - - .- - ... - - - - - - - - - - - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 3-8 Groundwater System Storage Facilities Location Elevation 597 System 597 Gallons 500,000 3,150,000 Greenland Road Total Elevated Table 3-9 presents a summary of groundwater system pumping facilities. ... - ... - TABLE 3-9 Groundwater System Pumping Facilities Location From To Head (ft) gpm Summary of Groundwater System Pumping GWTP NO.1 - Pump 1 162 417 310 1 ,400 GWTP NO.1 - Pump 2 162 417 310 1,400 GWTP NO.1 - Pump 3 162 417 310 1,400 GWTP No.1 - Pump 4 162 417 310 1,400 GWTP No. 1 - Pump 5 162 417 310 1 ,400 ------------ ---- GWTP NO.2 - Pump 1 128 457 352 1,800 GWTP NO.2 - Pump 2 128 457 352 1,800 GWTP NO.2 - Pump 3 128 457 352 1,800 GWTP No.2 - Pump 4 128 457 352 1,800 GWTP No.2 - Pump 5 128 457 352 1,800 ------- --------- - -------------- GWTP NO.3 - Pump 1 240 521 337 1,850 GWTP No.3 - Pump 2 240 521 337 1,850 GWTP No.3 - Pump 3 240 521 337 1,850 GWTP NO.3 - Pump 4 240 521 337 1,850 ------------- -------------------------------------- Morgan Road BPS 417 597 180 2,300 Morgan Road BPS 417 597 180 2,300 Cedar Ridge 417 521 1,000 Cedar Ridge 417 521 1,000 Brown's Road BPS 457 521 124 1,400 Brown's Road BPS 457 521 124 1 ,400 Faircrest HPS 417 597 285 1,050 Faircrest BPS 417 597 285 1,050 Faircrest BPS 417 597 285 1,050 Faircrest BPS 417 597 285 1,050 Richmond Hill BPS 417 597 280 1,060 Richmond Hill BPS 417 597 280 1,060 Richmond Hill BPS 417 597 280 1,060 Norton Road BPS 433 417 59 1,360 Norton Road BPS 433 417 59 1,360 Norton Road BPS 433 417 52 2,350 Golden Camp BPS - Vertical 417 597 285 1,050 Golden Camp BPS 417 597 236 1,100 . . . . - -. - - . - -- - -- .- -- P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 3-12 - - - -- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 3-9 Groundwater System Pumping Facilities Location Summary of Groundwater System Pumping Golden Camp BPS (spare) Golden Camp BPS (spare) Total Groundwater Pumping From To Head (ft) gpm 417 417 597 597 700 700 48,800 The distribution system delivers water to customers through meters at each point of service connection, which are read once per month for billing purposes. The 2001 ratio of non-billed water to purchased water or unaccounted for water (representing water that was lost because of unmetered usage or leaks), was approximately 9.5 percent (monthly average). This lost and unaccounted for rate is not unusual for water systems of Augusta's vintage. The significant number of older, large meters contributes significantly to this amount of unaccounted for water usage. The Department is in the process of replacing all older meters, including the smaller residential units. 3.7 Water Quality As a retail water system, Augusta is required to conduct appropriate testing of distribution system water quality. The results of this testing indicate that the Water System's program is in compliance with regulatory criteria. The system's raw water supply has been of such high quality that it is considered to be ideal for the surface water treatment processes used by Augusta. See Section 3.9 on regulatory impacts for further discussion of water quality requirements 3.8 Projected Water Demand During 2001, Augusta billed customers for approximately 13,364 million gallons of water. See Table 3-10 for the number of customers by class and average daily water consumption. The total revenue of the 10 largest customers represented 14.28 percent of 2001 sales. The 10 largest water customers of the System are presented in Table 3-11. No independent investigation has been made of the stability or financial condition of any of the customers listed in Table 3-11. Consequently, no definitive representation can be made as to whether such customers will remain major customers of the Water System. Total water sales for year ending December 31,2001, were $17,810,769. TABLE 3-10 Water Demand 2001 Actual 2001 water consumption, metered and billed (million gallons) ) Water Demand Average Daily, delivered from WTPs (mgd) Maximum Daily, delivered from WTPs (mgd) 13,364 40.5 59.1 P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AD 733055.1 3-13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 3-10 Water Demand 2001 Actual 2001 water consumption, metered and billed (million gallons) ) Number of Water Connections (End of Year) Residential Commercial and Industrial Total 13,364 58,246 7,424 65,670 TABLE 3-11 The 10 Largest Water Customers (for the 12-month period ending December 31, 2001) Thousand Gallons Annual % of Total Water Customer (kgal) Metered Billing Revenues Nutra Sweet 604,304 753,462 4.23% Huron Tech 195,414 244,260 1.37% Castleberry 193,245 245,293 1.38% MCG 173,785 246,668 1.38% Shapiro '160,141 200,166 1.12% Monsanto Dairy 145,276 184,039 1.03% Avondale 143,469 179,276 1.01% Searle 142,804 178,921 1,00% Kendall 129,612 162,318 0.91% University Hospital 114,893 150,822 0.85% Total of 10 Largest Water Customers 2,002,943 2,545,225 14.28% ... . Augusta's projection of future water production needs is based on the County's anticipated total population, excluding Fort Gordon. The geographical distributionof population is not a factor in plant-level planning but is important planning water transmission as part of the hydraulic distribution of water to customers. EPD requires utility systems to consider water conservation in their planning efforts and Augusta continues to practice passive conservation rather than a more aggressive conservation program. With the current level of conservation, Augusta is expected to experience a small increase in per capita use over the next few years. The Technical Memorandum prepared to analyze the projected water demand (Technical Memorandum 1.2A:' Population Distribution and Water and Wastewater Flow Projections, April 5,2002), estimates that the Water System will experience a 2 percent (0.09 percent per year) increase in per capita water usage by the year 2020 largely due to the availability of water service and pressures for previously deferred uses (e.g. irrigation). . . . . . . ... - - 'W' .- - P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4lSFINALDOC AD 733055.1 3-14 ... - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 Table 3-12 presents Augusta's 2000 and projected per capita water usage in gpd. This usage rate is determined by total water produced divided by population. This rate then includes both customer-billed usage plus Unaccounted for water. The per capita needs include residential and commercial usage. Industrial needs are presented separately because they are not directly linked to population growth. The projected annual average production in mgd and maximum day production are planning-level estimates (e.g. +/-10%) of the future needs of the Department's service area. TABLE 3-12 Projected Water Consumption 2000 to 2020 Total Population Per capita Water Usage, gpd (commercial and residential) Industrial Usage, mgd Annual Avg. Water Usage, mgd Max. Day Water Usage, mgd IUS Bureau of the Census, 2000 Census 2000 199,7751 151 10.3 41.3 61.1 2010 222,497 153 10.5 44.5 71.2 2020 242,150 154 10.7 48,0 77.0 While the Department is taking actions to encourage conservation, it should be noted that the development pattern and population distribution will also affect the level of water consumption. This includes both per capita water usage and the maximum day production, factors that are held constant in these projections. For example, the northeastern part of the service area, the former City of Augusta, is expected to have limited population growth in most areas and with implementation of water conservation, the net increase in demand should be relatively low. However, other areas are projected to have significant growth which will increase water demand even with conservation measures. Residential and commercial water usage is projected to be directly related to population growth. Industrial needs, however, generally develop independently of population growth. It is assumed that industrial water usage, exclusive of co~~rvation, will increase by 5 percent over the planning period (2000 through 2020). Table 3-13 summarizes water usage by customer class. TABLE 3-13 Projected Water Usage by Customer Class 2000 to 2020 Class 2000 2010 2020 18,6 20.4 22.4 36.0 44.4 48.4 12.4 13.6 14.9 14.8 16.3 17.9 10.3 10.5 10.7 Residential Avg. Annual Water Usage Max. Day Water Usage (Peaking factor: varies) Commercial Avg. Annual Water Usage Max. Day Water Usage (Peaking factor: 1.2) Industrial Avg. Annual Water Usage P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AD 733055.1 3-15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 3-13 Projected Water Usage by Customer Class. 2000 to 2020 Class Max. Day Water Usage (Peaking factor: 1.0) Total Avg. Annual Water Usage 41.3 44.5 Max. Day Water Usage 61.1 71.2 . Source: Technical Memorandum 1.2A: Population Distribution and Water and Wastewater Flow . Projections, April 5, 2002. 2000 10.3 2010 10.5 2020 10.7 48.0 77.0 The peaking factor defined in Technical Memorandum 1.2A: Population Distribution and Water and Wastewater Flow Projections, April 5, 2002, for industrial usage is assumed to be 1.0; in other words, maximum day and average annual needs are assumed to be, for analytical purposes, rougWy the same. Commercial consumption is expected to have a maximum day peaking factor of 1.2 times average day demand. All additional peak day needs are assumed to be associated with residential consumption. These peaking factors are employed to determine the peak day requirements for capacity sizing in the Department's facilities. System-wide maximum day needs are currently 1.47 times average annual usage. By 2010, the system-wide peaking factor is expected to increase to 1.6 as additional water becomes available for irrigation. System-wide maximum day demands are projected to be 71.2 mgd as a consequence, representing roughly a 16 percent increase in required maximum day delivery capacity. The major growth is anticipated in areas where residential lots are large and home irrigation systems are becomiIig predominant. New developments that will use the significant open spaces will also have irrigation of common grounds and recreation areas such as golf courses. This increase in per capita demand will be somewhat offset by conservation measures, but the net result is expected to still be a significant increase in average and maximum day consumption. It is assumed that total Augusta water demands will increase by as much as 16 percent over the next 8 years. ... ... To meet projected demands, the Department has authorized design of upgrades to the HigWand Avenue WTP and started construction of a new (15 mgd) WTP. The current withdrawal permits for raw water from the Savannah River will be sufficient to meet surface water supply needs for both facilities, as discussed in Section 5. - - ... - 3.9 Regulatory Impacts . . The Department has responded to the challenges of the 1996 Amendments to the SDW A to produce drinking water that is in compliance with all applicable rules. However, drinking water regulations have recently been changed imposing still more stringent regulations, with additional regulations planned for the near future. The recently promulgated and planned SDW A regulations will have an impact on the drinking water treatment plants and distribution system. The Department is currently in compliance with all of the primary and secondary standards as promulgated by the SDW A. ... - . ... ... - - - - - - - - ... - P:\161047\161047 AUD 2002 PMIBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AD 733055.1 3-16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 The Department has taken a proactive approach for compliance with the recently promulgated and the proposed regulations by developing water quality goals that are more stringent than current regulations. The developed water goals will position the Department to meet the future regulations. Drinking water regulations that impact the Department can be divided into three categories: · Existing regulations · Recently promulgated regulations · Future regulations. The following is a brief discussion of each category and the impact on the Department drinking water supply system. 3.9.1 Existing Regulations EPD has issued rules (Rules and Regulations of the DNR, Chapter 391-3-5- Safe Drinking Water) to establish policies, procedures, requirements, and standards for implementing the drinking water regulations. 3.9.1.1 Surface Water Treatment Rule The Surface Water Treatment Rule (5WTR), promulgated in 1992, establishes treatment techniques instead of maximum contaminant levels (MCLs) for the control of Giardia, . viruses, heterotrophic plate count (HPC) bacteria, and Legionella. The SWTR required all water systems to maintain a filtered water turbidity of 05 Nephelometric Turbidity Unit (NTU) and to provide a minimum level of inactivation of Giardia and viruses.by maintaining adequate contact time with the primary disinfectant. In addition, the SWTR required all water systems to maintain a detectable chlorine residual in the distribution system. The Department is currently in compliance with all of the SWTR requirements. 3.9:1.2 Total Coliform Rule The Total Coliform Rule was promulgated on June 29, 1989. Total coliforms include both fecal coliforms and E. coli. Compliance with the Coliform Rule is based on the results of sampling in the distribution system. The frequency and number of collected samples are a function of the system size (number of people served). The Department has maintained compliance with the Total Coliform Rule by (1) maintaining adequate distribution system disinfectant residual and (2) frequently flushing low flow areas. - - 3.9.1.3 Primary Contaminants EPD currently regulates a list of 83 contaminants that includes inorganic and organic compounds. These contaminants do not occur at concentrations of concern in most surface waters that are not subject to containination. Surface waters used by the Department, from the Savannah River, have concentrations of regulated contaminants well below US Environmental Protection Agency (EP A) prescribed limits. - - . . - - ... ... 3.9.1.4 Lead and Copper Rule On June 7, 1991, the EP A published Action Limits (ALs) and national primary drinking water regulations for lead and copper. Under this regulation, lead and copper levels must . - - - -- - - P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AD 733055.1 3-17 - - ... - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 not exceed ALs of 0.015 mg/L and 1.3 mg/L, respectively, in 90 percent of the samples collected. Actions required for AL exceedances include collecting source water samples, conducting public education, conducting a corrosion control study, and establishing a corrosion control program. This Rule also requires that lead and copper be monitored at consumers' taps every 6 months. Samples at consumers' taps must be taken at high-risk locations, which include homes with lead solder installed after 1982, lead service lines, and lead interior piping. Revisions to the Lead and Copper Rule were promulgated in April 2000. The revisions reduced the frequency of monitoring required for low lead and copper tap levels and updated the analytical methods used for analyzing lead and copper levels. The Department currently controls' the corrosivity of its finished water by adding a phosphate-based corrosion inhibitor. The Water System has continuously been in compli- ance with the lead and copper ALs. 3.9.1.5 Risk Management Plans (RMPs) The EP A set a deadline of June 21, 1999 for all utilities that store hazardous chemicals (including chlorine gas) above a specified threshold limit, to prepare a risk management plan (RMP). The regulation outlines requirements for preventing or minimizing the conse- quences of catastrophic releases of toxic, reactive, flammable, or explosive chemicals. The threshold level for chlorine is 2,500 pounds. The RMP must include evaluations of buildings and equipment to protect the safety of workers around chlorine facilities and to develop an emergency response plan if a leak occurs. Key information developed will be submitted to the EP A and posted on the internet for public access. The Department has prepared an RMP for the Highland Avenue WTP. In addition, the Department is improving the existing safety program that provides guidance' to operators on correct chlorine operations and maintenance procedures and the emergency response plan to be used if there is a leak. The Department is planning to install onsite chlorine generation at the Highland Avenue Plant and the proposed Tobacco Road Plant to eliminate safety and security concerns associated with chlorine gas. - - 3.9.1.6 Residuals Management The State of Georgia currently prohibits the direct discharge of water treatment residuals to a receiving stream. A National Pollutant Discharge Elimination System (NPDES) permit is required which specifies an acceptable pH and total suspended solids (TSS) concentration for the discharge of any waste or decant stream from WTPs. The Highland A venue WTP is currently discharging all of the waste sb."eams to Turknett Pond. An NPDES permit was obtained by the Department to allow discharge of decant from the Turknett Pond. Settled sludge in the pond is dredged when needed by the Department. - ... . . 3.9.2 . Recently Promulgated Regulations 3.9.2.1 Interim Enhanced Surface Water Treatment Rule (IESWTR) The IESWTR was promulgated in December 1998 and established a 2-log Cryptosporidium removal requirement for filtered systems. Under this rule, conventional treatment is assumed to meet the Cryptosporidium removal requirement by maintaining a filtered turbidity of 0.3 NTU 95 percent of the time and at no time exceed 1.0 NTU. The IESWTR also - - - - . - - - -- - -- P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AD 733055.1 3-18 - - - - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 requires individual filter monitoring and additional requirements related to distribution system tank covers. The Highland Avenue Plant is in compliance with the IESWTR requirements. 3.9.2.2 Disinfectants and Disinfection Byproducts (D/DBP) Rule - Stage 1 Stage 1 D /DBP Rule limits resulted in the final maximum contaminant level (MCL) requirements shown in Table 3-14. The Department has taken these requirements into consideration in both the upgrade of the Highland WTP and the new WTP currently under a design contract with the intent of maintaining full compliance. TABLE 3-14 Summary of Stage 1 D/DBP Rule Limits Final Stage 1 MCLs Total Trihalomethanes (TTHMs): 80 micrograms per liter (Ilg/L) Haloacetic Acids (HAA5): 60 Ilg/L Bromate: 10 Ilg/L Chlorite: 1.0 mglL final Stage 1 Maximum Residual Disinfectant Levels Free Chlorine: 4.0 mglL as CI2 Chloramine: 4.0 mg/L as CI2 Chlorine Dioxide: 0.8 mg/L as CI02 - - ... - 3.9.2.3 Filter Backwash Rule The Filter Backwash Rule was promulgated in June 2001 and applies to all systems that use conventional or direct filtration and that recycle spent filter backwash water. The Highland Avenue WTP does not practice recycling. The proposed Tobacco Road WTP will discharge all produced waste' streams, including backwash, to the wastewater treatment plant (WWTP). Therefore, the Filter Backwash Rule is not expected to have any impact on the existing or proposed water plants. 3.9.2.4 Arsenic Rule The Arsenic Rule was promulgated on January 22, 2001. This rule established an MCL of 0.01 mg/L. The Arsenic Rule applies to both Community and Non-Transient, Non- Community Water Systems. Systems.must meet this requirement by January 2006. Despite the new lower limit, it is not anticipated that the arsenic regulations will have an impact on the Department. Arsenic is not expected to occur ill the surface water supply at concentrations of concern. . . 3.9.3 Future Regulations The EP A is currently in the process of developing additional regulations related to microbial and disinfection byproducts. The planned regulations are being developed as a follow up to the IESWTR and Stage DBPs. See Appendix C for a detailed discussion of these regulations. ...... - . . - - - - ... - ... ... P:\161047\161047 AUD 2002 PMlBOND RNANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 3-19 . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 4.0 Wastewater System 4.1 Overview of Wastewater System The Wastewater System serves approximately 44,048 residential and 5,591 commercial and industrial customers, as of December 31, 2001. . The Wastewater System provides sewer services to an area of approximately 106 square miles with an estimated population in excess of 150,683. Figure 4-1 shows the areas currently served by the Wastewater System with overlays of existing wastewater collection lines and location of WWTPs. Augusta has the non-exclusive right to provide water and wastewater service within the County. The wastewater systems of Fort Gordon and the Cities of Blythe and Hephzibah provide wastewater service within those jurisdictions in the County. The Department's service area includes all or parts of eight drainage basins shown in Figure 4-2. LEGEND: lIT3l AUguSta SeWer3ile Si!tVice Area" /V ~Unes .... WasteylaiN rmalment Plani 'N A ~~~_notindixJef<>t~ 800ll 0 8000FeiII .......- . .-. - . - - - - - - ... .. - -- - - ... - CH2MHIlL ~m201M.n.\A&q.rcI';Ci.N Sc:ua:,..PalIl:....~~q.J'PCOt..0IliI:1'.2lXlt1lw,NtiOl.Dt'(.'2lE:lER...'....~"'- ~gure ~1 Wastewater Service Afeaand T reabnenl Plants, - dO . .. .. _ _~:cOO;g;a - - - - -- P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4LSFINAL.DOC AO 733055.1 4.1 - - ...... - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 9OCO 0 -lDlO FM'l ~ : :;::.:~::~.::~~ ::-~:::":.".. '...,....."..'"..,-",'..,-. ~~~fmll1~I('mIJI~~~~~ . ~::~ : ~ ~~:::::;: ~~ ::~:::~::; ~~~:~,,,' .::;. ~:::::~~~~::~~~~}::~i~i,~:: {"-' .::::: ~:~ ~.::~~ ~ ~~ "::\~: ',< ,~~.~~.~;; ~:~J~~~~' N A f.lgtire 4;2 llrninage Bi>sins ~Geci,;i. CH2MHILL W042D0'201MIL\Augutb,10JJNII roa.-:f"f"lo:I';:!I~~~.~~'l''''~t,Ioor.~,XUlUlol4'~''''' 4.2 Wastewater Collection and Conveyance .- _. Augusta/s wastewater collection system dates from storm water drains constructed in downtown Augusta prior to 1900. Over timet wastewater was diverted into the storm water drains, and Augusta/s downtown storm water drains evolved into a combined storm and wastewater collection system. Until 1968, this system emptied into the Savannah River without treatment. In the 1980s and early 1990s, Augusta eliminated all known combined sewers by constructing trunk wastewater mains to keep wastewater separate from storm water. It is possible that undocumented interconnections of the two systems were not eliminated and remain. As a result, the Department has an ongoing program to verify complete separation of the storm water drain and wastewater collection systems. Augusta/s wastewater collection and conveyance system consists of 8 drainage basins, 28 wastewater pumping stations, and approximately 640 miles of collection pipes which transport primarily sanitary sewage. Approximately 80 percent of the wastewater collection system is drained by gravity; the remainder requires pumping at least once. The wastewater collection system includes pipes ranging in size from 8-inch to 72-inch diameter. Approximately 20 percent of the wastewater collection system has been in service for 50 years or more. The wastewater collection system includes standby pumps and a standby power system. . The piping in the wastewater collection system was constructed using a wide variety of materials, including clay, brick, concrete, and polyvinyl chloride (PVC), creating significant problems for maintenance of the system. In a recent system evaluation of the Spirit, Butler, and Rocky Creek basins, major infiltration and inflow (III) has been identified. An . . . ... .. . . . ... - .-. - P:\161 047\161 047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 4.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 estimated 10 percent of the current wastewater flows are contributed by III. Rehabilitation is underway for portions of these basins, but significant reduction of III will require a continuous III program. The CIP (Section 5) addresses additional corrections to the problems encountered in these basins. 4.3 Wastewater Treatment Facilities Augusta owns two WWTPs as summarized in Table 4-1. TABLE 4-1 Wastewater Treatment Plants Owned by Augusta ~ermitted 2001 Treated Treatment Date of Wastewater Capacity Original (Maximum Dates of Receiving Plant (Monthly Avg) Construction Day) Improvements Stream James B. Messerly (also 46.1 mgd 1968 36.8 mgd 1976, 1984, Butler Creek known as the Butler Creek 1995, 1997, WWTP) 2001,2002 Spirit Creek 2.24 mgd 1988 3.2 mgd 1995 Spirit Creek Totals 48.34 mgd 40.0 mgd The J. B. Messerly WWTP has two separate treatment trains, the North Plant and the South Plant. The North Plant, constructed in 1976, was originally designed to provide only pri- mary treatment.1 Later, an oxidation ditch was constructed to provide secondary treatment capacity of approximately 17.8 mgd. In 1984, the South Plant was constructed with a design capacity of 28.4 mgd. Flow equalization basins were added in 1995. In 1997, the first stage of a wetlands system was constructed to provide additional ammonia-nitrogen removal. In 2001 the second stage of the wetlands system was completed along with the first phase of various retrofit projects to significantly improve plant performance. These retrofits included improvements to secondary clarifiers, primary clarifiers; sludge pumps, and various mech- anical and electrical systems throughout the plant. In 2002 the third stage of the wetlands will be completed and the second phase of retrofit projects will begin. Effluent flows from the wetlands to the Savannah River by way of Butler Creek. . . The J. B. Messerly WWTP receives domestic wastewater from the surrounding community as well as a significant load (3,120 million gallons in 2001) from 18 major industrial con- tributors. The J. B. Messerly WWTP was originally rated, based on "normal strength" wastewater, to have a treatment capacity of 46 mgd, and is currently permitted for a capaCity of 46.1 mgd (monthly average). The influent strength of the wastewater has increased over the years as a result of additional industrial waste and reduction in collection system III. This increased organic loading has reduced the effective capacity. Recent upgrades and further improvements discussed in Section 5 will restore the full capacity of the J.B. Messerly WWTP. ~ .. ... .. . . ... ., - - 1 The primary treatment system includes the primary clarifiers, primary sludge pumps, and scum pumps. This system removes settled solids from screened and degritted wastewater. The secondary treatment system includes aeration basins, aeration blower systems, and secondary clarification. ... - P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 4.3 . .- .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 The Department's planned improvements to the wastewater treatment system are expected to maximize use of existing plant components and increase the level of reliability in meeting stringent effluent limits. See Section 5 for a description of the capital improvements. The J. B. Messerly WWTP discharges under NPDES Permit GA0037621, which was issued in 1996, was modified in January 2002, and expires in June 2006. Table 4-2 presents the plant's permit information. TABLE 4-2 J. B. Messerly WWTP Effluent Limitations Parameter Flow - m3/day (mgd) BOD 5-day--mg/L (kg/day) TSS-mg/L (kg/day) Ammonia as Numg/L (kg/day) Fecal Coliform Bacteria Discharge Limitations Monthly Average Weekly Average 174488 (46.1) 218016 (57.6) 10 (1,747) 15 (2,184) 30 (5243) 45 (6551) 1.5 (262) 2.25 (328) 200/100 mL 400/100 mL 0.013 0.013. Total Residual Chlorine--mg/L Daily maximum limitations. m3/d cubic meters per day mL milliliters mg/L milligrams per liter kg/day kiJogramsper day The Spirit Creek WWTP consists of primary treatment shredding and screening, secondary treatment in aerated lagoons, disinfection, and polishing lagoons. The Spirit Creek WTP discharges under NPDES Permit GA0047147, which was issued in 1999 and expires in October 2004. A detailed Wastewater Treatment Master Plan will be funded by the Series 2002 Bonds to address future permit compliance needs. Table 4-3 presents the plant's . permit information. TABLE 4-3 Spirit Creek Effluent Limitations Discharge Limitations . - - - - ~ - m3/d mL mg/L kg/day Parameter Flow - m3/day (mgd) BOD 5-day mg/L (kg/day) TSS mg/L (kg/day) Ammonia as N mg/L (kg/day) Fecal Coliform Bacteria Total Residual Chlorine mg/L Daily maximum limitations. cubic meters per day milliliters milligrams per liter kilograms per day Monthly Average 8,478 (2.24) 30 (255) 30 (255) 17.4(148) 200/100 mL 0.24 Weekly Average 10,598 (2.80) 45 (318) 45 (318) 26.1 (185) 400/100 mL 0.24. ... - - - . - .... .- - - -- P:\161 047\161 047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 4-4 - - - - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2002 4.4 Projected Wastewater Flows To estimate future wastewater flows, the projected population and proportion of water accounts connected to the wastewater system in each WWTP's service area were considered. . WWTP service area population projections were constructed through an allocation of year 2000 Census population by tract. Population projections for the service areas were developed assuming that those Census tracts with population growth will continue to receive a constant proportion of the population increase associated with growing tracts. This population increase will come from either new population growth or from population shifts within the County. For tracts with declining population, the rate (percentage) of decline is projected to remain stable through the planning period. Wastewater flows were projected based on the estimated proportion bfhouseholds connected to the Wastewater System, using the 1990 Census as a basis2. This proportion is expected to change over time as new residences and businesses, as well as some portion of the existing residences not served currently, connect to the Wastewater System. It is assumed that residential and commercial wastewater flows will grow in proportion to the growth in the sewered population. However, if the Department implements a successful III reduction program, a reduction in future per capita wastewater flows of 2 percent may be achieved by 2020. Table 4-4 presents the sewered population and percentage change in sewered population in each WWTP's service area, as well as projected annual average flows and maximum month flows. The maximum month flows were calculated as 120 percent of the annual average flow based on historical flows. TABLE 4-4 Wastewater Flows, by Plant (mgd) (a) 2000 to 2020 Plant Spirit Creek WWTP (Capacity: 3 mgd) Sewered Population Percent Change 2000 2010 2020 10,950 24,924 35,577 14.2% 127.6% 42.7% 3.4 7.2 10.0 4.0 8,6 12.0 Average Annual Flow Max. Month Flow (b) ... - J. B. Messerly WWTP (Capacity: 46.1 mgd) Sewered Population Percent Change 139,732 156,548 165,603 2.8% 12.0% 5.8% 31.5 34.8 36.7 37.8 41.8 44.1 ... - ... - . . . . ... .... ... - .- - .. WI Average Annual Flow Max. Month Flow (b) 2 The 2000 Census did not collect information on the source of wastewater disposal. P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC A0.733055.1 4-5 . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 4-4 Wastewater Flows, by Plant (mgd) (a) 2000 to 2020 Plant 2000 2010 2020 Total WWTP Flows (Capacity: 49.1 mgd) Sewered Population 150,683 181,472 201,179 Percent Change 3.6% 20.4% 10.9% Average Annual Flow 34.9 42.0 46.7 Max. Month Flow (b) 41.8 50.4 56.1 (a) The figures presented in this'table will be impacted by changes to the overall level of III in the WWTP service areas. (b) The maximum day flows are 120 percent of the annual average flows based on historical relationships. Major 1/1 improvements have begun within the collection system serving the Spirit Creek WWTP that will significantly reduce flows. AssUming the WWTP service area remains the same, however, the Spirit Creek WWTP will need to be significantly expanded in the near future to meet the demands of the growing population in the southern census tracts. An evaluation of expansion options is now underway with recommended expansion to be funded in future years (see Section 5). The J. B. Messerly WWTP is the larger of the two' plants in the Wastewater System. Increases in wastewater flows to this plant are the result of expanding service areas, as well as a growing population. Based on current service areas, however, the Messerly WWTP has sufficient capacity to treat maximum month wastewater flows. The combined volume of the 10 largest customers represented 23.56 percent of 2001 sales. The 10 largest wastewater customers of the Wastewater System are presented in Table 4-4. No independent investigation has been made of the stability or financial condition of any of the customers listed in Table 4-5. Consequently no representation can be made as to whether such customers will continue as major customers. TABLE 4-5 10 Largest Wastewater Customers (for the 12-month period ending December 31, 2001) Annual Billing % of Total (based upon water consumption plus Sewer Customer kgal Metered additional sewer surcharges) Revenues Nutra Sweet 604,304 1,409,137 7.89% Castleberry 243,847 344,708 1.93% EKA Noble, Inc. 187,396 462,911 2.59% Shapiro 177,655 482,104 2.70% Amoco 162,460 369,880 2.07% ... . ... ... . . P:\161047\161047 AUD 2002 PMIBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 4-6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 4-5 10 Largest Wastewater Customers (for the 12-month period ending December 31, 2001) Annual Billing % of Total (based upon water consumption plus Sewer Customer kgal Metered additional sewer surcharges) Revenues Procter & Gamble 148,372 208,573 1. 17% Monsanto Dairy 144,225 247,259 1.38% Avondale 143,469 221 ,407 1.24% Searle 142,804 212,273 1.19% Kendall 129,612 252,139 1.41% Total of 10 Largest Wastewater Customers 2,084,144 4,210,391 23.56% Total sewer charges including industrial sewer surcharges (unaudited number) for year ending 12/31/2001 were $17,868,934. 4.5 Regulatory Impacts The following regulatory issues affecting the Wastewater System are discussed below: · Watershed Management · Total Maximum Daily Load (TMDL) Development · NPDES Permitting and Nutrient Management · Onsite Septage Systems · Residuals Management and 503 Regulations · General Permit for Stormwater Discharge Associated with Industrial Activity · Stormwater Pollution Prevention Plans (SWP3s) · Spill Prevention, Control, and Countermeasures Plan · Municipal Stormwater Discharge Permit · Security and Vulnerability ... .. .... ... 4.5.1 Watershed Management The EPD has formulated a policy to require municipalities to conduct watershed _ assessments and develop watershed management programs to address non-point poll~tion sources. These studies are required for new, or the renewal of, NPDES discharge permits. In addition, EPD requires a Source Water Assessment Plans (SWAP) for water supply watersheds to assess the potential for water supply contamination. The Department is conducting a watershed assessment for the entire County area that drains into the Savannah River. Initial implementation of the recommended management plan to be funded by the Series 2002 Bonds is expected to begin later this year. This will allow Augusta to meet the next cycle of NPDES permit renewals which will likely require . . P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINAL.DOC AO 733055.1 4-7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 watershed management implementation benchmarks. Simultaneously, the Department is . conducting a SWAP for the Savannah River watershed upstream of the current water intake. Recommendations for source water protection will be developed in the next phase of study, as required by the SDW A. 4.5.2 Total Maximum Daily Load (TMDL) Development The Clean Water Act (CW A) provides a trigger mechanism for requiring development of TMDls when a water body does not meet water quality standards. When setting a TMDL, the regulatory agency must consider the designated uses of the water body, water quality standards, various pollutant sources, and the ability of the water body to assimilate pollutants. The State of Georgia has a court-mandated schedule for development of TMDLs that is the most aggressive in the country. The proposed TMDLs for the Savannah River basin must be developed by June 2004. The current 303d list of impaired water bodies lists fecal coliforms, dissolved oxygen (DO), and metals as the water quality parameters not meeting standards in portions of the Savannah River basin. Results of the watershed . assessment and the recommendations in the watershed management plan will provide Augusta with an approach for watershed management to meet the anticipated TMDLs. 4.5.3 NPDES Permitting and Nutrient Management The NPDES is a federal program for regulating the discharge of pollutants to the waters of the United States. In Georgia, the EPD has been delegated the authority to administer the program. EPD has adopted a"zero tolerance" policy for permit violations and is imposing penalties or issuing Consent Orders specifying actions that the permittee must take when violations occur. Augusta facilities were not designed with a "zero tolerance" perspective, and therefore do not have the level of redundancy that would be included in a facility designed today. Although operationalexcursions and facility bypasses are expected to be infrequent, Augusta's infrastructure will be evaluated for modifications that would prevent overflows and bypasses, retain pollutants, or upgrade treatment capal:>ilities to enhance the ability to achieve 100 percent compliance with permit conditions. ... _. - - As a result of interstate discussions on water resources, EPD decided to mandate maximum retention of a community's water consumption to minimize the amount of water lost. This will require the Department to increase efforts to rehabilitate system facilities, including replacement of some major lines. EPD expects to be working on the implementation strategy and policy in the next year. Permit conditions may change to restrict the consumptive retention of water which may necessitate the elimination of onsite septage systems where feasible and a revision to the water pricing structure. EP A's proposed Capacity, Maintenance, Operation, and Management, also referred to as CMOM, program will require increased accountability for operation and maintenance of wastewater collection systems. This proposed program has been in development for several years, and has been undergoing federal administrative review since January 2000. It is anticipated that when the CMOM program is implemented, it will use NPDES permits as the enforcement vehicle. The Department has begun implementation of CMOM elements. Currently, the State of Georgia requires nutrient removal only in basins where water quality in lakes downstream of a discharge is found to be adversely impacted by the discharge. . . - - - - - - - - P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 4-6 .. - . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 However, the federal EP A is currently considering the possible need for nationwide nutrient discharge limitations due to concerns about off-shore waters. The greatest concern is in the Gulf of Mexico, but any shallow waters such as those along the Georgia coast could be affected'by this possible policy change. 4.5.4 Onsite Septage Systems The design of septage systems is regulated by the Georgia Department of Health (Georgia Code Chapter 290-5-26). Local jurisdictions establish minimum lot requirements for septage systems and requirements for connection to a central wastewater collection system. With the increasing emphasis on minimizing water consumption and water quality issues in watershed management, it will be necessary to evaluate policies related to septage systems and prepare for an expanded role for central wastewater collection systems in the future. Augusta has adopted a policy to mandate conversion to central wastewater collection when service is available and is implementing a program to extend service to 10,000 new customers in the next 10 years. This policy and program will limit the potential impacts of pending regulations related to onsite septage systems. 4.5.5 Residuals Management and 503 Regulations The EP A mandates that wastewater residuals be managed in compliance with its 503 regulations. Since 1993, these regulations have required that utilities obtain 503 permits and provide annual documentation of compliance with regulatory requirements. The 503 regulations identify different classes of sludge and mandate minimum practices for treatment, handling, and disposal of each class of sludge. 4.5.6 General Permit for Stormwater Discharge Associated with Industrial Activity In 1993, EPD issued NPDES Permit 000000 - Authorization to Discharge Under the National Discharge Elimination System Storm water Discharges Associated with Industrial Activity. This permit requires properties with certain activities - those included in a specific list of SIC Codes -- to file a Notice of Intent for coverage under the permit and to prepare and maintain a Stormwater Pollution Prevention Plan (SWP3) and a Spill Prevention, Control, and Countermeasures Plan (SPCCP). ... - ..... - In 1998, EPD issued a new general permit, GAROOOOOO, and mandated that any entity with an intent to use that general permit would have to update its plans and conform to the new requirements of the permit. The Department plans to update and modify all SWP3s to conform to the additional conditions in the 1998 storm water permit, and identify new . locations which might be subject to an SWP3. -. - - -- - - .... - - - 4.5.7 Stormwater Pollution Prevention Plan .- - As part of the compliance requirements for the General Permit for Industrial Activity, EPD requires that covered properties prepare a SWP3. This plan describes the stormwater discharge points, the potential pollution sources on the site and the material handling and housekeeping practices used to prevent contamination of stormwater runoff. EPD has issued a general storm water permit that can be used by any location wishing to conform to the permit conditions, as opposed to applying for a site-specific permit. During the original - - -- - - - P:\161 047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 4-9 - - -- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 round of storm water permit issuance, the Department complied with the general conditions for its storm water permitting. 4.5.8 Spill Prevention, Control, and Countermeasures Plan The EP A, through 40 CFR Part 112, mandates that an SPCCP be prepared for any facility or location where one of several threshold oil-based material storage triggers are exceeded: any tank of 660-gallon capacity or greater; 1,320 gallons of total onsite storage; or a 20,000-gallon underground tank of petroleum-based product. This requirement is administered by EPD through the General Permit for Stormwater Discharges Associated with Industrial Activity. In addition to the SWP3, any facility meeting the material storage triggers mentioned above must prepare an SPCCP. An SPCCP provides documentation on oil-based products and specifies reporting and documenfation requirements for best management practices (BMPs). The Department has implemented a formal inspection of all system facilities and document the tanks and quantities of oil-based products stored onsite. This review will either (1) identify those locations that need an SPCCP or, (2) if no SPCCP is required, satisfy the regulatory requirements and thus provide legal protection. The Department will also prepare a statement for each facility as to whether that facility needs an SPCCP and what basis was used to determine the applicability for each facility. - - - - 4.5.9 Municipal Storm Water Discharge Permit EPD currently requires municipalities with populations generally over 100,000 (Phase 1 communities) to obtain an NPDES permit to operate a Municipal Separate Storm Sewer System (MS4). In 2003, a general permit will be prepared (Phase 2 Regulations), which will cover communities in other "urbanized areas." Each Phase 2 community, including Augusta-Richmond County, will be required to submit a Notice of Intent to be covered by the general permit, and must implement a stormwater management program that addresses the six "minimum control measures of the MS4 program: · Public education and outreach . Public participation/ involvement · Illicit discharge detection and elimination · Construction site runoff · Post-construction runoff control · Pollution prevention/ good housekeeping The stormwater management program must be phased in over the initial 5-year permit period. - - - - 4.5.10 Security and Vulnerability a - As a consequence of recent terrorist.acts against the US, there are several pending Federal and State requirements dealing with security and vulnerability. The Department is currently conducting an assessment of security and vulnerability to ascertain what actions and precautions should be implemented. - - - - ... - - -- - - - - -- P:\1610471161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 3 & 4 LSFINALDOC AO 733055.1 4-10 - - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0 Proposed SystemCIP Proceeds of the Water and Sewerage Revenue Bonds, Series 2002 program (2002 Program) will be used to fund a 5-year Capital Improvement Plan (CIP) that will assist in eliminating current System deficiencies, meeting current and future regulatory requirements, and accommodating future demands related to system growth. It is anticipated that construction associated with the CIP will be completed in 2006. The 2002 Bonds are being issued to qualify for the 5-year spending period provided for in the Treasury Regulations for certain capital projects involving a substantial amount of construction expenditures and for which a construction period longer than 3 years is necessary . 5.1 Planning Criteria and Assumptions The Department's Master Plan 2000, which defines CIP needs through 2020, uses a number of planning criteria for identifying the facilities necessary for the System. The Master Plan includes Technical Memoranda (TMs) that document a baseline approach to evaluating the System facilities with respect to water demands, wastewater conveyance . needs, and treatment requirements. Some of these TMs have been updated to reflect new information such as the 2000 Census and changes in regulations. The major planning criteria and assumptions used for development of the CIP include: · Population in Augusta is shifting from developed areas to undeveloped areas where water and sewer services were previously unavailable. · Water and wastewater system demand will increase as the population grows in Augusta. Projected water demands for the design year of 2020 are for average day demand of 48 mgd and maximum day demand of 77 mgd. Wastewater flow projections are for an average day flow of 46.7 mgd and a maximum month flow of 56.1 mgd. ... ... o Water and wastewater treatment improvements and expansions must be planned for compliance with all current regUlatory requirements, as well as changes to these requirements that are anticipated in the next 5 years. A significant number of the CIP projects defined in the Master Plan 2000 began and will be completed within the Water and Sewerage Revenue Bonds, Series 2000 program (2000 Program). Other projects were only designed under the 2000 Program, anticipating that construction would be funded under the 2002 Program. TheCIP projects planned for the 2002 Program are discussed in the following paragraphs. - - - - - - - - - - - - - - 5.2 Cost Opinions for Recommended Projects ... ... -- A cost opinion was prepared for each of the recommended projects to establish an initial construction budget for projects to be funded by the Series 2002 Bonds. The cost - - P:\161047\161047 AUD 2002 PMlBOND RNANCING REPORTlSEC 5 LSRNALDOC AO 733056.1 5.1 - - - - . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 opinions also include, as indirect costs, engineering and other technical services. Other designated projects may include only planning or special services and not include construction costs. The cost opinions were prepared using 2001 construction costs from similar projects in the Augusta area and the State of Georgia. The cost opinions were based on recent design engineering estimates or inspection of facilities and projections of equipment and facility needs, experience with similar projects, and manufacturer prices for recommended equipment. By necessity, some project cost opinions were developed ill advance of detailed engineering work including preparation of specifications and detailed design drawings. For these projects, all of the required information concerning the nature and full scope of the project has not yet been obtained so cost opinions are based upon similar facilities constructed recently in this area. Rehabilitation of an existing facility (e.g., Messerly WWTP or the Highland Avenue WTP) could encounter a variety of unforeseen factors that can affect project costs and schedule. Examples of these factors include contaminated soils, piping and duct banks not located in the same locations as indicated on drawings, concealed defects in existing construction, need to upgrade facilities to current codes, and incomplete demolition of former structures (or abandoned in place rather than removed as shown on the record drawings). For this reason, contingencies are included to cover unforeseen costs. This cost opinion also includes cost values for construction allowances. These are known scope activities that cannot be quantified at this stage of cost estimation and as such, are defined through the use of allowances. These allowances have been developed as percentages of construction cost based on experience with numerous other projects and range from 10 percent to 25 percent. These allowances, at a Program level, are anticipated to be more than sufficient to meet project requirements. 5.3 Summary of Capital Improvements ... .. The 5-year CIP is summarized in Table 5-1 and further described in the following sections. It will provide for upgrades and development of the water treatment and distribution system, wastewater conveyance, and wastewater treatment facilities. For the Water System, the CIP provides for significant improvements to the existing Highland Avenue WTP, improvements to the water distribution system, and construction of a new WTP. For the Wastewater System, the CIP provides for significant improvements to the J.B. Messerly WWTP and expansions and extensions to the wastewater conveyance system. . ... .. ... ... TABLE 5-1 Series 2002 Bond Projects-Summary of Estimated Costs Recommended Improvements Note: All estimated costs in 2002 dollars Water Treatment Facilities (Section 5.3.1) Water Distribution System (Section 5.3.2) Wastewater Treatment Plants (Section 5.3.3) Wastewater Conveyance System (Section 5.3.4) System-Wide Projects (Section 5.3.5) TOTAL SYSTEM Estimated Costs 57,829,000 14,739,000 8,867,800 41,219,200 7,345,000 130,000,000 . . . . ... .. .- - ... - . . P:\161047\161047 AUD 2002 PMIBOND FINANCING REPORTlSEC 5 LSFINAL.DOC AO 733056.\ 5-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2002 The Series 2002 Bonds projects are discussed below. Planning-level cost estimates have been developed from available information for guidance in project evaluation. Final project costs will depend on actual labor and material costs, competitive market conditions, actual site conditions, implementation schedules, and other variables. Detailed engineering design plans have been completed for some projects and the proceeds of the Series 2002 Bonds will fund their construction. Other projects for which detailed engineering design plans have not yet been developed will involve both design and construction funded by the proceeds of the Series 2002 Bonds. Project budgets are based upon either the completed engineering plans or conceptual layouts for those yet to be designed. An allowance has been added to all construction costs to cover legal, administrative, financial, engineering, and program management costs. The construction costs are based on Augusta and Atlanta area market conditions, as of the first quarter of 2002. 5.3.1 Water Treatment The existing HigWand Avenue'WTP has a rated capacity of 60 mgd and the three existing Ground Water Treatment Plants (GWTP) together add 20 mgd: GWTP No.1 with a capacity of 5 mgd (located at Peach Orchard Rd.), GWTP No.2 with a capacity of 10 mgd (located at the Highway 56 Loop), and GWTP No.3 with a capacity of 5 mgd (located on Old Waynesboro Rd.). A portion of Well Field No.1 (5 mgd) was phased out and replaced by GWTP No.3 and Well Field No.3. The strategy for meeting the 2020 water needs defined in Master Plan 2000 for the Augusta Utilities Department reconimends surface water as the primary water source. This requires expansion and modification of the HigWand Avenue WTP to increase reliability and efficiency, and to sustain operation capacity of 60 mgd. The design for this expansion and upgrade of the raw water pumping system serving the HigWand Avenue WTP is underway. The first phase of the construction will be funded by proceeds of the Series 2002 Bonds. In addition, design and construction of a new 15-mgd SWTP is underway to meet additional demarid and minimize reliance upon groundwater supply. A contract for both design and construction of this facility was authorized in 2001 covering the initial phase. This new SWTP will be completed with proceeds of the Series 2002 Bonds. Upon completion of this 15-mgd facility, the remaining wells serving GWTP No.1 will be taken off-line. The system will then have a total production capability of 75 mgd from surface water supply only, as required by EPD to meet the projected 77- mgd maximum day demand. A reserve capacity of 18 mgd will be available from the GWTPs. Implementation of this strategy began with the completion of GWTP No.3 and the initial design of the HigWand Avenue WTP upgrade and the new SWTP (currently identified as the Tobacco Road WTP). 5.3.1.1 Improvements to the Water Treatment Plants f Improvements to the water ,treatment system to be funded by the Series 2002 Bonds are shown in Table 5-2. ... - - .. - - P:\161047\161047 AVO 2002 PMlBOND FINANCING REPORTlSEC 5 LSFINAL.DOC AO 733056.1 5-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 The Highland Avenue WTP improvements currently being designed include upgrades to and expansion of the plant to meet anticipated regulatory needs and future demands. These improvements will enable the treatment plant to serve as a primary water supply for Augusta, with production capacity of 60 mgd. Upon completion of design, the Series 2002 Program will fund initial construction of the recommended components noted in Table 5-2. TABLE 5-2 Series 2002 Bond Projects-Summary of Estimated Water Treatment Costs Recommended Improvements Note: All estimated costs in 2002 dollars Highland Avenue WTP Phase 1: New Treatment System Pre-flash Mixing New ChemicaVFilter/Administration Bldg. Pumping Systems UV Treatment System Electrical, Instrumentation and Controls Site Work General Conditions Total for Phase 1 Improvements Estimated Costs 150,000 8,000,000 1,200,000 1,800,000 3,050,000 1,500,000 629,000 16,329,000 Upgrade Raw Water Pumping - Diesel Auxlllary System $10,000,000 Total Highland Avenue WTP Improvements $26,329,000 New SWTP Raw Water Pump Station Treatment Facility UV.Treatment System Raw Water Storage 2,400,000 21,500,000 3,200,000 4,400,000 Total New WTP $31,500,000 $57,829,000 Total Water Treatment System ... - ... .. The raw water pump station will be upgraded in two phases. The first phase, funded by Series 2002 bonds, will include an engine-powered pumping station with three diesel engine-driven vertical turbine pumps; interconnection to the existing piping; and installation of two new. lines crossing the Augusta Canal. This project will provide redundancy in pumping capacity to further assure reliable supply of raw water to the Highland Avenue WTP. Phase 2, to be constructed later, will replace the current hydropowered pumping system. Augusta has been instructed by'EPD to move toward use of surface water supply as its primary water supply source and away from groundwater due to the shallow depths of its older well fields No.1 and 2, the reduction of aquifer recharge areas from development activity, and the EPD policy of minimizing groundwater reliance if quality surface water is available. In order to meet projected water demands and commit Augusta to surface water as its primary supply source (with groundwater as reserve capacity), an additional source of water supply is required. Augusta has begun the design and. construction a new 15-mgd SWTP which will withdraw water from the Savannah River. Development of the new plant required location df a second RWI along the Savannah River. Augusta has two permits for . ... - - - - - P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 5 LSFINAL.DOC AO 733056.1 5-4 .. .. ... ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 withdrawing water from the Savannah River, one on the Augusta Canal for the HigWand Avenue WTP at 60 mgd (EPD Permit No. 121-0191-06) and another on the Savannah River for 15 mgd(EPD Permit No. 121-0191-09) to be assigned to the new SWTP intake location. A systematic approach was adopted in selecting the optimum site for the new: RWI and SWTP. The process provided Augusta with maximum flexibility in evaluating and screening the available options. Impacts on the distribution system, raw water pipeline, future growth, and many other factors were part of the process. The findings from the evaluation of the selected sites are summarized in Table 5-3. The locations shown on Figure 5-1 were determined to provide Augusta with the best combination for the new SWTP. TABLE 5-3 Summary of Site Evaluation Findings for Selected Sites Evaluation Criteria Selected Sites Impact on Distribution System Will eliminate capital projects and provide needed relief in projected growth areas. Land Availability and Zoning Geotechnical and Topographic Conditions Environmental Issues Raw Water Pipeline Raw Water Intake Raw Water Quality - .. .-. - - .. .-. .. Permitting River-side property is City-owned. Industrial area, zoning, and aesthetics requirements expected to be minimal for the RWI and the SWTP. Typical construction conditions will be used for the RWI and the SWTP with only limited special construction methods. Additional field investigations at the RWI site and SWTP site found no environmentally sensitive areas. Significantly less expensive than the other alternative and will involve shorter construction schedule and minimal impact on traffic. Will allow design consideration of multiple configurations to determine most cost- effective alternative. Upstream of the industrial area and wastewater discharges from neighboring systems. Existing withdrawal capacity of 15 mgd from the Savannah River will be transferred to meet initial requirements but a new withdrawal permit will be needed for ultimate requirements of 60 mgd. . . - - ..... - - - - ... - -- - - -- P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 5 LSFINAL.DOC AO 733056.1 5-5 - - - -- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 LEGEND: EJ Augusla W.... SeM:ilAma' /V Maj>r w.... Liles /\! Slreels N W_OistribulionPl1ljecls . W.,.,SOWIy i'n>ieC1s =~A.wcb1sr1dn:tdJFo1 GM1tn. r-OcnIis Road GST;;~ N A am. 0 8l)JFeIII ~- FIGURE 5-1 Proposed Capital Improvements-Water System Augusta, Georgia 5.3.2 Water Distribution System Table 5-4 is a summary of water distribution system improvements to be funded by the 2002 Program. The construction projects are shown on Figure 5-1. TABLE 5-4 Series 2002 Bond Projects-Summary of Estimated Costs for Water Distribution Projects Recommended Improvements Note: All estimated costs in 2002 dollars Estimated Costs Primary Supply System Central Connector GWTP NO.3 - 20. Main Hwy 56 24" Water Main Hwy 56 20. Water Main Rose Hill lines - Windsor Spring Rd. 3,800,000 2,710,000 1,250,000 800,000 1,250,000 9,810,000 Other System Improvements 4,929,000 Total Water Distribution System 14,739,000 5.3.2.1 Primary Supply System Improvements The Master Plan identified several distribution system improvements that will be completed as part of a program to maintain adequate system pressure and improve reliability and operating conditions. The Water Distribution System Analysis further clarified the improvements and identified others. The following list identifies the most P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 5 LSFINAL.DOC AO 733056.\ 5-6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILmES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 critical projects from Table 5-4; these are major improvements to be completed within the next 5 years. These projects will strengthen delivery capability throughout the system. · The Central Connector will improve hydraulic capacity from the Highland Avem,le WTP to GWTP No.1 and the 417 ft service area: the GWTP No.1 high service pumps will serve as a booster station after the well field is taken out of service. The 12-inch Old Savannah Rd. line, and the Central Avenue 24-inch pipeline, or its alternative, the White Rd. extension, are also part of this project, which is designed to increase flow capacity into the 433 ft zone and increase pressures during peak hour conditions. ' · . Service will be improved in the rapidly growing southern water service area of Augusta by expanding the distribution system supplied by the recently completed GWTP No. 3. This line, the GWTP No.3 20-inch main, will stabilize pressures throughout the area now that sufficient supply is available. · The Highway 56 20-inch and 24-inch water mains will be installed from the new WTP along Highway 56 north to add flow capacity from the new WTP towards GWTP No.1 to ensure effective distribution of the new WTP flows to the 417 ft zone. · Additional new lines will be required to allow gravity feed from the 521 zone to the western part of the 457 ft zone, which is currently served by the Rose Hill Pump Station. This will include 16-inch and 12-inch lines referred to as the Rose Hill Lines- Windsor Spring Road. 5.3.2.2 Other System Improvements Other system improvements include multiple water distribution line improvements listed in the Master Plan and Water Distribution System Analysis to complete pressure distribution, strengthen supply, and support fire protection in the city. Refitting and replacing all water meters with meters fitted for radio-read will improve meter reading and billing efficiency and eliminate older meters that are no longer reliable. These various distribution system improvements include the following: Other System Improvements 500 Zone Elev Storage1.5MG (site acquisition) Dennis Rd 3.0 MG GS & PS Meter Replacement Program Pleasant Home Rd Kings Chapel Wrightsboro Road System Upgrade SCADA Systems/CMMS 100,000 1,500,000 2,500,000 60,000 144,000 125,000 100,000 4,529,000 State highway improvements require the Department to relocate water lines prior to roadway improvements. These relocations allow for accelerated improvement to related water system assets and location of new assets away from roadways where repair and maintenance can be costly. Highway projects to be built are: P:\161047\ 161047 AUD 2002 PMlBOND FINANCING REPORnsEC 5 LSFINAL.DOC AO 733056.1 5-7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILmES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 Other System Improvements: State Highway Projects 1-20/ 1-520 Crossings and Improvements St. Sebastian / Greene Street System US 25 Improvements Total Highway Projects: 160,000 160,000 80,000 400,000 5.3.3 Wastewater Treatment Planned improvements to the J.B. Messerly WWTP will result in increased treatment capacity from the addition of new facilities, will maximize the use of existing plant components, and will increase the level of reliability in meeting stringent effluent limits. The prioritized projects summarized in Table 5-5 address components of the J. B. Messerly facility that are most susceptible to failure and that pose limitations to future growth and development. These projects are a continuation of ongoing improvements and will be implemented following completion of an updated portion of the Master Plan 2000 that focuses specifically on this facility (identified as the Wastewater Treatment ~~fl~. . TABLE 5-5 Series 2002 Bond Projects-Summary of Estimated Wastewater Treatment System Costs Recommended Improvements Note: All estimated costs in 2002 dollars Messerly WWTP Solids Handling System Secondary Treatment Systems Effluent Disinfection System Electrical and Control Systems Miscellaneous Improvements Total WWTP Improvements. Estimated Costs 1,200,000 5,869,000 528,000 840,000 430,800 8,867,800 - - The Master Plan 2000 suggested prioritization of improvements and continues as the general guide for the following projects to be funded by the Series 2002 Bonds. Solids Handling System: This system will be upgraded with the rerouting of filtrate to one of the equalization basins; the addition of a transfer pumping station; modification of equalization inlet and outlet piping to accommodate filtrate/ centrate and feed back into the plant for treatment; and replacement of the digester control system. Secondary System: An additional 5 MG of aeration basin volume will be provided which should give sufficient capacity through year 2010. The additional aeration basin volume will also require modifications to the plant flow splitting scheme, yard piping (both liquid and air), and controls. The blowers will be replaced and upgraded with an additional 8,700 scfm of blower capacity to match the additional aeration basin capacity for year 2010 conditions. In addition to the blowers, the blower control systems will be replaced and the blower buildings upgraded, including new HV AC systems, lights, and air Wet louvers. . . Effluent Disinfection: Replacement of the effluent disinfection system has been recommended for safety and security reasons rather than as a capacity-related issue. The gas chlorination system will be replaced with a liquid sodium hypochlorite disinfection system. - - - -- - - P:\161047\161047 AUD 2002 PM\BOND FINANCING REPORTlSEC 5 LSFINAL.DOC AO 733056.1 5-8 - - ... - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTIUTlES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 Electrical and Control Systems: Many existing flow measurement devices are out of service and will be repaired or replaced. Additional flow measurement devices will be installed for flow streams that should be measured for process control but are not currently measured. Flow meters will be integrated with the plant control system. Miscellaneous Improvements: To improve operating conditions and safety for personnel, most plant doors and handrails will be replaced and the plant air system will be upgraded. A detailed Wastewater Treatment Master Plan will be developed to address current and future needs, making adjustments for upgrades that have been completed and evaluating the needs for those previously planned and noted above. This plan will also include recommendations regarding the Spirit Creek WWTP. 5.3.4 Wastewater Conveyance Table 5-6 is a summary of wastewater conveyance system improvements to be funded by the Series 2002 Bonds. The construction projects are shown in Figure 5-2. TABLE ~ Series 2002 Bond Projects-Summary of Estimated Wastewater Conveyance System Costs Recommended Improvements Note: All estimated costs in 2002 dollars Estimated Costs Planning/Operations/Monitoring Interceptor Upgrades Infiltration/Inflow Reduction Unsewered Pockets Expansions/Extensions 840,000 17,613,200 3,260,000 12,506,000 7,000,000 Total Conveyance System Improvements 41,219,200 ... .. - - . . - - - - - - . P:\161047\161047 AUD 2002 PMIBOND FINANCING REPORTlSEC 5 LSRNALDOC AO 733056.1 !;-9 - - .. - . . . . . . . . . . . . . . . . . . . e. . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 LEGEND: ~Augusta Water Selvi:e Area' D C<xMlyance Projects /\ /' Sewerngel.ines' N L1lie ExleitsibrislUpgmdes iii Wastewiler t reatinentPlan1s : Augusta _Anta'*"",." _Fort Gon*Jn. HephZJ!>a/J or~ 80XI 0 <<OJ Feel ~""----.,I N A CH2MHILL ~2l\n01iW\.\AlqtatIll>>H ~;:J.~~f"ca-'~~~~......o.:te:1ftllUliMl:rAlXJ;lR'lmlEil5-2~CIfI!d-~:o Agure 5-2 Proposed Capital Improvements ~ Wastewater System . . "'~ GOOpia 5.3.4.1 Planning/Operations/Monitoring The 2002 Program includes initial Planning/Operations/Monitoring projects that will provide immediate benefit by "identifying previously undetected problems and . developing baseline information for the Department's system-wide hydraulic capacity management plan. Projects to be funded by the 2002 Program include: Planning/OperationslMonitoring Wetlands Study and Scope of Mitigation Flow Monitoring & Modeling SCADA Systems/CMMS Total Planning/Operations/Monitoring 60,000 450,000 330,000 840,000 5.3.4.2 Interceptor Upgrades The Butler Creek and Rae's Creek interceptors will be upgraded with new lines to replace or supplement current pipes. The required areas have been defined by previously completed designs. -- Interceptor Upgrades Butler Creek Interceptor Sewer Rae's Creek Relief Sewer Main Interceptor Sewer Total Interceptor Upgrades 3,650,000 8,863,200 5,100,000 17,613,200 .. .. . ... - - - - .- - P:\161047\161047AUD 2002 PMlBOND FINANCING REPORTlSEC 5 LSFINALDOC AO 733056.1 5-10 - - . . . . .. . . . . . . . . .' . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILmES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 5.3.4.3 llnfiltrationJlnflow Reduction The collection systems in the following basins will have ongoing infiltration/inflow (1/1) reduction projects funded by this program. The result will be reduced external flow, resulting in more capacity for wastewater flow and fewer maintenance problems. The allocation among basins is estimated to be as follows: In Reduction Interceptor Rights-of-way Clearing Butler Creek Rocky Creek Spirit Creek Total III Reduction 320,000 980,000 980,000 980,000 3,260,000 5.3.4.4 Pocketed Sewers Throughout the exiSting collection system, there are various "pockets" of unsewered areas. These are locations ranging in size from one block long to entire subdivisions that were bypassed when sewers were first built in a neighborhood and are now adjacent to or surrounded by sewered areas. These projects will enhance environmental protection through reduced reliance on septic systems and will provide additional customer connections to the system. Projects that will provide sewer service to the following pockets have been identified for the 2002 Program: Unsewered Pockets Farrington Sewer Jamestown Sewer Ridge Forest Drive Horsepen Collection Phase 2 Olive Road Wimberly Park Meadowbrook Drive Total Pockets 4,700,000 2,000,000 1,300,000 1,381,000 1,450,000 350,000 1,325,000 12,506,000 - ..... 5.3.4.5 Expansions and Extensions "Expansion" is defined as providing sewer service to basins not currently having access to sewer systems. An "extension" is'defined as lengthening a line beyond its current point of terminus to unsewered areas. These projects will enhance environmental protection through reduced reliance on septic systems and will provide additional customer connections to the system. The proposed areas for sewer expansion and extensions are listed below: - .... - .... Expansions/Extensions Butler Interceptor Improvements Butler Creek Collector Extension Industrial PS / FM Total Expansion/Extension Projects 2,000,000 3,700,000 1,300,000 7,000,000 - - - - ..... .. - - ... - 5.3.5 System-wide Improvements System-wide improvements are summarized in Table 5-7. . - -- - -- - - - - - ..... P:\161047\161047AUD 2002 PMlBOND FINANCING REPORTlSEC 5 LSRNALDOC AO 733056.1 5-11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 TABLE 5-7 Series 2002 Bond Projects-Summary of Estimated System-wide Costs Recommended Improvements Estimated Note: All estimated costs in 2002 dollars Costs System-wide Projects New Utility Admin.lMaint. Facility Program Management Legal, Advertising, Other Professional Watershed Assessment Implementation 2,000,000 5,000,000 130,000 215,000 7,345,000 A new Utility Administration/Maintenance Building, currently under design, will be constructed with Series 2002 Bond funds. This building will relieve space constraints for administrative and engineering operations, and is being designed to address the Department's needs for the next 10 years considering both space requirements and implementation of new management and communication technologies. To continue effective implementation of the CIP, various professional services will be required to assist the Department, including Program and Construction Management (Program Management) and legal support related to land and rights-of-way acquisition. 5.4 Anticipated Future Work .-. - "- ... - - - .- - The system will require continued investment to meet projected demands throughout the service area, address regulatory requirements, and meet its commitment to deliver quality services. Priority capital improvement funding needed to meet projected demands and address system deficiencies is summarized in Appendix D, Table D-l. Series 2002 Bonds will fund the completion of: · Projects begun under the 2000 Program and other key facilities that are most susceptible to failure, · Projects that will alleviate potential limitations to future growth and development, and . . · Projects that will provide service to areas that need water and sewer infrastructure immediately. Improvements planned for later years will continue strengthening and expanding the water distribution and sewer collection network. Work will also include completing projects initiated with funds from the Series 2002 Bonds such as the upgrades to the Highland Avenue WTP, the J. B. Messerly WWTP, and the Spirit CreekWWTP. - '- -' - . .- -- - ..... - P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 5 LSFINALDOC AO 733056.1 5-12 .- - - "'II!l' . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .- . . . 6.0 Financial Performance This section presents an overview and evaluation of the historical and projected financial performance of the System for the study period 2002 through 2011. 6.1 Historical Performance Table 6-1 presents the financial performance of the Department for the past 5 years, 1997- 2001. System revenues increased from $29.5 to $38.3 million during this period, an increase of 29.8 percent. Operations and maintenance (O&M) expenses increased 65.1 percent, from $19.2 million to $31.7 million. This large increase was a result of increased depreciation as new capital projects were finished, costs associated with improvements to the WWTP operations, and rising personnel costs. After deducting depreciation and other expenses, net revenues available to pay debt service totaled between $14.6 and $18.2 million. Over the 5-year period, the Department received sales tax proceeds of approximately $21.0 million. During that same period, the Department made net transfers to Augusta's General Fund totaling $11.4 million. These transfers were eliminated in 2000 as a result of restrictions imposed by the bond resolution in 2000. The Department's minimum debt service coverage requirement for the issuance of additional debt is 1.25 times maximum annual debt service. Additionally, the Department has an annual rate covenant of 1.10 times debt service payments. Between 1997 and 2000, actual debt service coverage ranged from 3.07 to 4.32. Following issuance of the Series 2000 Bonds, actual debt service coverage remained substantially in excess of the minimum requirement at 1.65 times actual debt service for 2001. 6.2 Water and Sewer Rates The Department's current water rate structure consists of a monthly customer charge and a two-tiered volumetric rate. For residential customers with metered consumption exceeding 3,000 gallons per month, the current monthly customer charge is $7.28. The volumetric rate is $1.00 per kgal for the first 3,000 gallons and $1.12 for each additional kgaL For customers using less than 3,000 gallons per month, a $10.51 customer charge applies with no volumetric charges. The Department's current sewer rate structure is based on monthly gallons of water used and also consists of a monthly customer charge and volumetric rate. 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ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2002 I current monthly customer ~arge is $13.24 and the volumetric rate is $1.22 per kgal. For customers using less than 3',000 gallons per month, a $9.44 customer charge applies with no volumetric charges. Custo~er charges and volumetric rates by meter size for both residential and non-residential customers are shown in Table 6-2. j. TABLE 6-2 ; Current Water and Sewer Rates (Effective 411/2002) i Water Customer Rate Kgals Metered Charge (per kgal) i RESIDENTIAL RATES Less than 31 $10.51 NA Greater than 3 $7.28 $1.00, $1.12" NON-RESIDENTIAL RATES $7.90 $1.28,1.41" $13.95 $1.54 $11.19 Same $19.94 Same $18.55 Same $33.31 Same $26.64 Same $48.12 Same $44.58 Same $81.00 Same $6:4.58 Same $117.35 Same $108,89 Same $198.33 Same $157.95 Same $287.95 Same $210.96 Same $384.90 Same $273.76 Same $487.47 Same 1 " The first charge is applied to each of the first 3 kgals of metered consumption; the second charge is applied to each additional kgal. ; I The current monthly water bill for a typical residential water customer is $17.00, and the , residential sewer bill is $24.221. A comparison of typical residential monthly water and I . sewer bills for customers of yarious systems throughout Georgia is presented in Table 6-3. This table indicates that Augusta's existing water and sewer rates are relatively low compared to those of other Georgia communities. ! TABLE 6-3 I I Comparison of Typical Monthly Residential Customer Bills I Monthly Billing Local Jurisdiction i Water" Clayton County I 18.00 City of Cumming (inside City limits) 19.20 Augusta I $17.00 City of Lawrenceville 12.78 City of Gainesville 22.50 Henry County 30.21 Cherokee County 31.50 Fayette County 35.60 Gwinnett County 31.60 . Douglas County 29.44 City of Roswell 22.20 ~b~~ ~~ Rockdale County 35.63 Forsyth County 33.24 Paulding County i . 38.75 \ "Based on average consumption of19;000 gallons per month. Data source: State of Georgia Water and Sewerage Systems Rate Comparisons 2000/2001 I j I I I' 1 Both water and sewer bills are based 6n average consumption of 9,000 gallons per month. I I . P:\161047\ 161047 AUD 2002 PMIBOND FINANCING REPORTlSEC 6 LSFINALDOC AO 733090.1 I Meter Size All Meters AII.Meters 5/8" & *" NA NA NA NA NA NA NA NA NA NA 1" 1-1/4" & 1-1/2" 2" 3" 4" 6" 8" 10" 12" A .. . .- - . . Sewer Customer Charge Sewer" 18.90 20.10 $24.22 30.19 33.98 30.21 31.50 31.50 36.73 39.73 48.75 45.75 40.55 43.56 38.75 Rate (per kgal) $9.44 $13.24 NA $1.22 Total 36.90 39.30 $41 .22 42.97 56.48 60.42 63.00 67.10 68.33 69.17 70.95 71.25 76.18 76.80 77.50 6-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I i I ! j I I For purposes of this analys~, equal percentage water and sewer rate increases are projected and are assumed to be applied uniformly across customer classes2. Two 11 percent rate increases have already bee~ adopted in 2001 and 2002, and 11 percent per annum increases are scheduled in 2003 through 2007 followed by3 percent per annum increases in 2008 through 2011. These planned rate increases will be applied to all water and sewer customer charges, volumetric rates, apd industrial surcharge rates and will increase the typical residential customer's mon~hly water bill in 2011 to $32.30 ($24.76 in 2002 dollars) and monthly sewer bill to $45.91 (or $35.19 in 2002 dollars)3. While this represents a total increase of 89.7 percent in cbmbined monthly bills over the 10-year forecast period, the combined monthly bill in c~rent dollars ($59.95) is below the median of the range of typical monthly bills presented in Table 6-3, without accounting for prospective increases in these communities' water and se~er rates. i ,Water and sewer tap fees are $350 per service for residential connections4. The water and sewer tap fees assessed to n~w customers connecting to the system are conservatively assumed to remain constan~ throughout the forecast period. ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 ... ., I 6.3 Financial Policies . ~. The Department uses a system of fund accounting to track water and sewer system revenues and expenditures. I There are three funds: the Operating Fund, the Renewal Fund, and the Bond Fund. With tn;e exception of sales tax proceeds, all revenues are deposited into the Operating Fund. Operaqng Fund expenses include all O&M expenses, transfers to the Renewal Fund for capital piojects, and transfers to the Bond Fund for capital projects funded through debt proce~ds. Bond proceeds are deposited into a Construction Fund, a j restricted asset of the Operapng Fund. I As indicated in the Bond Re~olution, the Department is required to maintain a minimum balance in the Operating F~d of the lesser of $2,500,000 or 5 percent of the preceding fiscal year's operating revenues. 'Jihe Operating Fond's cash and investment balance as of January 1, 2002, was $24,888,031. ~oughout the forecast period, Operating Fund cash balances are projected to range from a low of $4.0 million to $25.1 million. . I ~ thepast, the Department .pas maae transfers from the Operating Fund to Augusta's General Fund. In 1997, 1998,;and1999 these transfers totaled approximately $5:2 million, $3.7 million, and $2.5 millio~,respectively. Conversely, over the same period, the Department has received salb tax revenues totaling approximately $21.0 million. To ensure financial integrity and self-syfficiency,the Bond Resolution contemplates, and this analysis assumes, that the Departmel}t will not make transfers to Augusta's General Fund other than payments in lieu of taxes and franchise fees, nor receive sales tax revenue in the future. I i . I t f I i . . . ... - . . 2 The Department established a uniforTT1'water and sewer rate schedule for the System effective April 1, 1996. 3 A 3.0 percent discount rate was used. . 4 Tap fees vary depending on water meter and tap sizes. Cost does not include additional fees assessed for road crossing or sidewalk replacement. - ... - - - P:\161047\161047 AUD 2002 PMlBOND ANANCING REPORTlSEC 6 LSFINAL.DOC AO 733090.1 6-4 ... ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 6.4 Projected Operating Results Table 6-4 presents projected operating results for the System, including projected revenues, expenses, debt service, and debt service coverage through 2011. 6.4.1 Revenues Projections of new customers, water and sewer consumption by customer class, and proposed rate increases are used to forecast water and sewer sales revenues over the plan- ning period. As of December 31,2001, the System provided service to 65,670 active water accounts and 49,639 active sewer accounts. Growth of residential water customers is based on projected population growth and is consistent with historical customer growth patterns. Annual water system growth is expected to range between 0.83 and 1:21 percent-an increase of between 600 and 800 new water accounts per annum. Total water accounts are projected to increase 10.5 percent over the 10-year study period. Sewer customer growth projections are established from a detailed analysis of the proposed extension of sewer service to isolated pockets of water customers within the Department's service area. Annual sewer customer growth is expected to fluctuate between 1.02 percent in 2011 and 3.22 percent in 2004 as collection lines are extended to these as well as new System customers. New sewer accounts are projected to increase between 600 and 1,725 annually; the total number of sewer accounts is projected to increase 20.1 percent over the forecast period. This analysis assumes that revenue collection for one-half of annual new customers is delayed until the following year. In addition, water and sewer commercial and industrial customer accounts are projected to remain constant over the forecast period. Weighted average montWy consumption estimates by customer class were developed from customer billing information and are consistent with historical revenues. However, to account for reduced consumption in response to proposed rate increases, consumption estimates across all customer classes are forecast using a'n elasticity of demand factor of 0.155. The elasticity factor is also applied to industrial surcharge revenues which are subject to the proposed rate increase schedule. Annual water sales revenues are forecast to increase from $19.8 to $36.9 million and sewer sales and industrial surcharge revenues from $19.7 to $38.7 million. Water and sewer tap fees are projected based on new accounts resulting from system growth and expansion. These fees are expected to generate $6.1 million between 2002 and 2011. Cut-on fees, set to recover administrative costs associated with new accounts, and other miscellaneous revenues are assumed to remain unchanged over the study period. These fees and revenue items are expected to total $11.5 million between 2002 and 2011. Interest revenues are assumed to earn 3.5 percent on bond proceeds in the Construction Fund and 1.51 percent on balances in the Operating Fund. 5 Price elasticity of demand is equal to the percentage change in quantity demanded divided by the percentage change in price. An elasticity factor of 0.15 indicates that, for every 10% increase in price, demand (consumption) will decrease by 1.5%. 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OlOfhlO coco (0 m(')' M mC\l C\I (0...... '<t ga ~ ffi (Y).....'V (O(')fhm mo m ..-- ......- ..0 co..... lO (O~ 00 0)-,_- 0 fhfh ~ ffi LOCO'..... M.....(J7l.O 0...... ...... C'i<o ai ~m 0 ......C\I 0 aifh 0 fh ~ ffi 4i z CD o .~ Ql en .ECD Ql t3 .2 .2 III ~ ~'OQl Qlc:en ~dl.E .cC\lt3CD t3 g '0 .2 O)C\I Ql ~ :S~~~ .~"1::'0 .E xm....m wenQ.O (ij <5 I- <0 <h Ul ~ .., ~ '<t ~ 01 ~ .., ~ ~ o It? N U! o ": 01 U! c..> o Cl ..J <( z u: (J) -' <0 c..> W ~ a: o a. w a: o z C3 z <( z u: Cl z o III 5ii a. 8 '" Cl ~ <( s-: ~o ~g ';;:", ~~ ;go !i:< .2 1ii a: QI 01 ClI .. QI > o o QI (J ~ QI U) 15 QI C . . . . . . . . . . . . . . . . .~ . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGEREVENUE BONDS, SERIES 2002 In 2011, total revenues of $77.2 million are projected to be comprised of water sales (47.8 percent), sewer sales (50.1 percent), other revenues (1.5 percent), and water and sewer tap fees (less than 1 percent). Total revenues are expected to grow 87.4 percent from $41.2 million in 2002 to $77.2 million in 2011. Of the $36.0 million differential, nearly $35.5 million is attributed to water and sewer rate increases (98.6 percent) and $0.5 million to system growth and expansion (1.4 percent). 6.4.2 Expenses Total system O&M expenses for 2001 were $31.7 million and are projected to be $35.7 million in 2002. System operating expenses have been developed with a forward looking perspective and include incremental costs related to the installation of new capital facilities. Expenses are stated in 10 categories: Administration (includes payments to the General Fund in lieu of Franchise Fees and Taxes), Customer Service, Construction and Maintenance, Raw Water, Surface Water Treatment, Groundwater, Messerly Treatment Plant, New Programs and Positions, New WTP, and Depreciation. The escalation rate for these categories is computed as the annual rate of inflation (3 percent) plus half the rate of annual residential customer growth; for water-related categories, 3.58 percent, for sewer- related categories, 4.05 percents. Operating capital, excluded from the debt service coverage calculation, is expected to total $4.2 million in 2002 and is escalated at 3.82 percent per annum throughout the forecast period. Additional O&M expenses attributed to the capital improvement program are included in the fiscal year 2002 budget for each category and include additional staffing expenses and recurring costs related to process changes, system expansions, and other circumstances. Two of the cost centers, New Programs and Positions and NewWTP, are projected to total $19.0 million over the 10-year period and are comprised exclusively of incremental operating costs required for new facilities. Total operating expenses are expected to grow 61.3 percent from $35.7 to $57.6 million over the study period. Of the $21.9 million differential, $11.1 million (50.7 percent) is attributed to increases in O&M costs and $10.8 million (49.3 percent) is attributed to rising depreciation costs as new projects are placed ~to service. .- .. a - 6.4.3 Debt Service - - Projected debt service includes debt service for both existing and proposed revenue bond issues. Currently, the Department is repaying four revenue bond issues: Series 1996A Bonds, Series 1996B Bonds, Series 1997 Bonds, and Series 2000 Bonds. The combined annual principal and interest payment for the existing revenue bonds ranges between $9.7 and $11.7 million over the forecast period. The 1996B Bonds will be retired in 2002, the 1997 Bonds in 2021, the 1996A Bonds in 2028, and the 2000 Bonds in 2030. Using $8.4 million of proceeds from the Series 2002 Bonds, the Department will repay the outstanding principal on one of three loans issued by the Georgia Environmental Facilities Authority (GEFA). Subject to the bond resolution, these loans are not included in the parity coverage requirements and are therefore not included in debt service coverage calculations. - - - - - - - - - - -- - -- 6 For categories such as Administration and Customer Service, 3.82 percent is used-an average of the two escalation rates. Exceptions are: depreciation is escalated based on the installation of new capital; payments in lieu of franchise fees are escalated at 3.0 percent per annum; and payments in lieu of taxes are not escalated. P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlSEC 6 LSFINAL.DOC AO 733090.1 6-7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 Proposed bond amounts were selected to fund the capital program, maintain appropriate Operating Fund reserves, meet debt service coverage criteria, and minimize rate impacts. In addition to existing debt service and the projected debt service schedule for the Series 2002 Bonds, annual debt service includes payments associated with a scheduled debt issue of $127.0 million in 2005. This future debt issue assumes a 30-year term, an interest rate of 6.0 percent, an issuance cost of $750,000, and an underwriter's discount equal to 0.5 percent of the par amount. The future debt issue also assumes a debt service reserve surety bond premium equal to 2.5 percent of debt service requirements and a bond insurance cost equal to 30 basis points of total debt service. Capitalized interest o~ the Series 2002 Bonds and the subsequent issue in 2005 totals $16.3 million. Annual debt service costs are budgeted at $10.0 million in 2002. Future debt service costs are projected to increase to $30.9 million in 2011 under the proposed bond issuance schedule. 6.4.4 Debt Service Coverage Debt service coverage is evaluated in terms of the System as a whole (combined water and sewer). For new debt issues, the System has a minimum parity coverage requirement of 1.25 times maximum annual debt service during the forecast period. Additionally, the system has an annual rate covenant of 1.10 times debt service payments. System debt service coverage is estimated to be 1.69 in 2002 and projected to range from 1.34 to 1.70 over the study period as shown in Table 6-4. As indicated in Table 6-5, under rate projections established in the Bond Resolution for the Series 2002 Bonds and upon completion of the construction period, the System will generate net revenues available for debt service in excess of maximum annual debt service requirements in ratios ranging from 1.36 to 1.78, and above Bond Resolution requirements of 1.25 for Additional Bonds. TABLE 6-5 Additional Bonds Test' Net Revenues Available Maximum Debt Service Debt Service Coverage 2006 $31,275,879 23,001,470 1.36 2007 $36,446,559 23,001,470 1.58 2008 $38,628,437 23,001,470 1.68 2009 $39,676,378 23,001,470 1.72 2010 $40,839,602 23,001,470 1.78 "The Additional Bonds test shows debt service coverage ratios for the forecast period following completion of construction using the maximum annual debt service payment (which occurs in 2025). 6.4.5 Operating Fund Balances Operating Fund cash flows are presented in Table 6-6. In addition to operating expenses and debt service payments, uses of cash include current revenue financing of planned capital improvements, GEFA loan payments, Renewal and Extension project funding, and the Department's budgeted requirements for operating capital. Expenditures for Renewal and Extension projects are budgeted at $2 million and are escalated at 3.0 percent annually. These funds are used for minor or miscellaneous capital improvements to existing infrastructure. - - Scheduled rate increases provide for compliance with the Bond Resolution requirement to . maintain Operating Fund balances equal to the lesser of $2.5 million or 5 percent of the preceding fiscal year's operating revenues. Operating fund balances range from $4.0 million to $25.1 million over the forecast period and reflect the effect of debt service payments inclusive of all other cash requirements of the Department. ... - . . 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ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2002 6.5 Capital Financing The capital improvement program will require approximately $285.5 million ($267.5 million in 2002 dollars) in total funding over the 10-year period, as discussed in Section 5 and shown in Appendix D and Table 6-7. Three sources of funds will be used to fund the capital program: bond proceeds (86.5 percent), current revenues (8.7 percent), and interest in the Construction Fund (4.8 percent). Just over $247 million in bond proceeds will be generated by separate issues in 2002 ($127.3 million) and 2005 ($120.0 million). Current revenue . transfers totaling $25.0 million will be made from the Operating Fund over the forecast period and are expected in 2004 ($20 million) and 2006 ($5 million). Interest in the Construction Fund is projected to total $13.9 million over the lO-year period. Proposed water and sewer rate increases are projected to generate nearly $197.4 million in additional revenues over the forecast period; tap fees are projected to generate $6.1 million. Use of these funds provides an appropriate matching of revenues to capital expenses (including debt service payments) planned to accommodate system growth and extension of sewer service to unsewered areas. In the event that actual growth in the Department's water and sewer systems is less than projected, project deferrals may be employed without degradation of services to ensure adequate matching of system revenues and projected capital expenditures. 6.6 Conclusions . CH2M HILL's projection of the financial performance of the System for the 10-year period 2002 through 2011 is summarized as follows: · Total revenues are projected to increase 87.4 percent over the 10-year period. Operating expenses, including incremental expenses attributed to planned capital expenditures, are projected to increase by 61.3 percent over the forecast period. · Projects identified in the Department's lO-year CIP reflect priority needs of the system and, after adjusting for inflation, are expected to total $285.5 million. These expenditures will be funded through a combination of debt issues in 2002 and 2005 ($247.3 million), current revenues ($25.0 million), and interest on the Construction Fund ($13.9 million). · Financing of the planned lO-year capital program will be enabled by planned system- wide water and sewer rate increases of 11 percent per annum from 2003 through 2007, and 3 percent increases from 2008 through 2011. The typical residential bill for both water and sewer service is project~d to increase 89.7 percent over the forecast period as a result of these rate increases. However, projected residential bills are expected to remain comparable to, and competitive with, those of other Georgia coinmunities. · Given scheduled water and sewer rate increases throughout the forecast period, net revenues of the System will b~ sufficient to meet projected debt service obligations on the Series 2002 Bonds and planned 2005 bonds. - - . . - .. .. - - - - - - - P:\161047\161047 AUD 2002 PMIBOND FINANCING REPORTlSEC 6 LSFINAL.DOC AO 733090.\ 6-10 - - - -- . . li:!z~ 0 0 0 C') ow~ C') a:> 10 10 C\J . fh~en 10 III C') C') Ol_ a:a:!:!:! ..... a:> 0 0 C') en<a: ..... C\J I'- '<t '<t 0 :b . - "- w 0 '<t Ol (h (h I'- a:wen (h (h WCl _ N <D (h (h ~ff1~ ..... . ~~5 (h w_<O !3~ 0 C') 10 10 C') . ..... <D 0 0 10 <z C'). '<to "l "l I-W 0 en> ..... C') C') C\J C\J C\J . ::>w 0 '<t a:> a:> a:> '<t ela: (h (h ::>w N ..... 10. (h (h <C!. <el C') ..... ..... . C2 (h (h (h w C') 0 ;,: C\J ..... CO w a:> <D' ..... . en C') C') "!. 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C\J I'- q Ol Ol I'- 10 0 0 cD cD cD '<t 0 Ol 0 Ol Ol C') 0 C') CD 0 <D. <C!. a:> . 0 a:> 0 (h 0 ..... Ol N a:>" <D C\J (h C\J C\J . <D (h (h (h (h (h . Ol a:> 10 10 <D C') C\J ..... ..... C\J ()) C!- <D. <C?. 10" e (\') -.i Ol '<t '<t 0 0 <D 0 I'- I'- C') 0 III q (h (h "!. C\J a:>. . N ..... <D C') M a:> C\J 10 (h (h <D 0 ..... (h (h 0 (h Cl . -l C') 10 I'- C\J Ol < 10 Ol Ol Ol C') z <D 1'-" I'- ~ Ol u: ... en N as C\J 0" C') -.i -' ... 0 I'- 10 Ol '<t <D w 0 (h 1'-. "!. (h q "l 10_ 0 . w N I'- I'- C\J Ol ,.... ~ (h C\J (h C\J C\J a: ..... ..... ..... 0 . (h (h (h "- '<t 10 0 C\J I'- w a: C\J Ol 0 '10 '<t el - ..I ~ 1'-. 0 III "l z ... <( a:> C\J 0 Ol C\J U Ol 10 0 '<t 0 z . .... ~ C\J. 0 Ol "!. < 0 z .... 10 I'- ..0 M <D u: a:> '<t C\J ..... a:> Cl . C\J C\J (h (h C\J z 0 (h (h (h <0 ~ - 0;-0 "- .. c'O '0 '" OC <:> en C :;] Ol..... ._ C . C <:> c: :;] 0 '0:;] Ol:;] '" ... asLL. (J) C.!!!. Cl - 0 tii _III '0 OlLL. OLL. ::> 'w C Sf Ol Ol 0 C C III C C < 'u alO Ol > .... .... 0 "0 .!2o r-- . Q) C')~ .- ::J 0 Ola... as ._ ;go-: 0.- CI:'O(J) wt) c' <tS:,t: r0;- o c: 0 ca.- o Ol ::J alO ~o co .- 2 0"0 ....- .....Ol..... ..... :;] 012 Wo- C) a....o LL ~o C..... C c: 0 C (J) .... 1C<"'l . W c: C (J) 'O~ Ol C :;] Ol..... c..... ....I '6 '6> C iijCl) t: ttS 0 .... (J) iij __ (J) e~ m c: Q) 0 - C as :;] C E Ol C - 'OC: ~o c( ::> 0)( 0> .....0 0 cO ... ~ LL. alO ....w al<( Ou:<( Eo .... wo a:<: - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . Appendix A. Acronyms AWWA BPS CIP CMOM DI D /DBP DNR DO EPA EPD FM GEFA fps gpm/ft2 gpd GWTP IDSE IESWTR III kgal LAS LRAA LTIESWTR LTIESWTR MCC MCL(G) MG mgd msl NPDES American Water Works Association booster pump station Capital Improvement Plan Capacity, Maintenance, Operation, and Management ductile iron Disinfectants /Disinfection Byproducts Rule Department of Natural Resources Dissolved Oxygen United States Environmental Protection Agency State of Georgia, Department of Natural Resources, Environmental Protection Division force main Georgia Environmental Facilities Authority feet per second gallons per minute per square foot gallons per day groundwater treatment plant Initial Distribution System Evaluation Interim Enhanced Surface Water Tre~tment Rule infiltration and inflow 1,000 gallons land application system Locational Running Annual Average Long-Term 1 Enhanced Surface Water Treatment Rule Long-Term 2 Enhanced Surface Water Treatment Rule motor control center maximum contaminant level (goal) million gallons million gallons per day mean sea level National Pollutant Discharge Elimination System P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlAPPENDICES.DOC A.l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NTU O&M PS PSI PVC RMP SCADA scfm SDWA SWAP SWTR TTHM WTP WWTP Nephelometric Turbidity Unit Operations and maintenance pump station pounds per square inch polyvinyl chloride risk management plan Supervisory Control and Data Acquisition standard cubic feet per minute Safe Drinking Water Act Source Water Assessment Plan Surface Water Treatment Rille total trihalomethanes water treatment plant wastewater treatment plant P:\161 047\161 047 AUD 2002 PMlBOND FINANCING REPORTlAPPENDICES.DOC A-2 . . . . . Appendix B . Population Growth within Census Tracts . . . . Population Growth within Census Tracts (a) . Augusta-Richmond County, 1990 to 2000 . 1990 1990 1990 Density 2000 2000 Change, . Census Census Population (persons Census Population 2000 1990 to Tract Acres population Share per acre) Population Share Density 2000 . 1 1,152 4,672 2.6% 4.06 4,237 2.2% 3.68 -9.3% 2 640 3,260 1.8% 5.09 3,204 1.7% 5.01 -1. 7% . 3 320 1,963 1.1% 6.13 1,739 0.90;'; 5.43 -11.4% . 4 384 783 0.4% 2.04 920 0.5% 2.40 17.5% 6 512 2,691 1.5% 5.26 3,051 1.6% 5.96 13.4% . 7 320 1,837 1.0% 5.74 1,264 0.7% 3.95 -31.2% 8 384 1,022 0.6% 2.66 685 0.4% 1.78 -33.0% . 9 320 3,394 1.9% 10.61 2,664 1.4% 8.33 -21.5% 10 512 3,311 1.8% 6.47 3,412 1.8% 6.66 3.1% . 11 512 1,753 1.0% 3.42 1,829 1.0% 3.57 4.3% . 12 960 4,808 2.7% 5.01 4,826 2.5% 5.03 0.4% 13 448 1,748 1.0% 3.90 1,512 0.8% 3.38 -13.5% . 14 384 2,755 1.5% 7.17 2,953 1.5% 7.69 7.2% 15 320 2,411 1.3% 7.53 1,636 0.9% 5.11 -32.1% . 16 2,112 8,876 4.9% 4.20 8,316 4.3% 3.94 -6.3% 101.01 1,280 3,994 2.2% 3.12 4,062 2.1% 3.17 1.7% . 101.02 1,984 6,274 3.5% 3.16 6,884 3.6% 3.47 9.7% . 101.04 1,920 3,466 1.9% 1.81 3,845 2.0% 2.00 10.9% 101.05 1,216 5,654 3.1% 4.65 5,333 2.8% 4.39 -5,7% - 102.01 1,472 5,356 3.0% 3.64 5,275 2.7% 3.58 -1.5% ,., 102.03 1,216 4,014 2.2% 3.30 4,432 2.3% 3.64 10.4% . 102.04 8,000 4,480 2,5% 0.56 7,930 4.1% 0.99 77.0% 103 1,280 5,899 3.3% 4.61 5,337 2.8% 4.17 -9,5% . 104 1,216 4,987 2.8% 4.10 4,259 2.2% 3.50 -14.6% . 105.04 3,136 7,541 4.2% 2.40 6,836 3.6% 2.18 -9.3% 105.05 2,368 8,126 4.5% 3.43 8,255 4.3% 3.49 1.6% . 105.06 1,280 5,282 2.9% 4.13 4,661 2.4% 3.64 -11 .8% 105.07 1,728 6,701 3.7% 3.88 6,059 3.2% 3.51 -9.6% .. 105.08 768 3,844 2.1% 5.01 3,331 1.7% 4.34 -13.3% ... 105.09 1,024 4,602 2.5% 4.49 4,455 2.3% 4.35 -3.2% - 105.10 1,344 5,456 3.0% 4,06 5,103 2.7% 3.80 -6.5% - .. 105.11 1,792 3,796 2.1% 2.12 3,855 2,0% 2.15 1.6% - 106 17,856 6,512 3.6% 0.36 5,840 3.0% 0.33 -10.3% .- 107.03 3,008 8,210 4.5% 2.73 9,602 5.0% 3.19 17.0% - 107.04 5,504 6,859 3.8% 1.25 9,845 5.1% 1.79 43.5% - 107.05 4,032 7,363 4.1% 1.83 9,881 5.1% 2.45 34.2% - - 107,06 7,616 3,548 2.0% 0.47 5,225 2.7% 0.69 47.3% - 109.Q1 37,824 5,508 3.1% 0.15 8,166 4.3% 0.22 48.3% 109.02 44,800 7,823 4.3% 0.17 11,302 5.9% 0.25 44.5% - Total (b) 207,167 180,579 100% 1.11 196,685 100% 1.21 8.9% ...... (a) Source: US Bureau of the Census. -- - (b) Excludes Census Tract 108 (Fort Gordon), which had an estimated 9,140 persons in 1990 and 7,754 in - 2000. -. - ....... .... - P:\161047\161047 AUD 2002 PMlBOND FINANCING REPORTlAPPENDICES.DOC B-1 -- ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix C .Future Water Treatment Regulations long-Term 2 Enhanced Surface Water Treatment Rules (l T2ESWTR) The LT2ESWTR, mcorporates system-specific treatment requirements based on a Microbial Framework approach. This approach generally involves assignment of systems into one of several categories (or bins) based on results of source water Cryptosporidium monitoring. Additional treatment requirements depend on the bin to which the system is assigned. Systems will then chose technologies to comply with additional treatment requirements from a toolbox of options. To determine bin classification for systems greater than or equal to 10,000 customers, source water Cnjptosporidium monitoring must be conducted using EP A Method 1622/23 and no less than 10-L samples. Cryptosporidium, E. coli, and turbidity source water sampling must be carried out on a predetermined schedule for 24 months with two choices: · Bin classification based on the highest12-month running annual averages of monthly samples or · Optional bin classification based on 2-year mean if facility conducts twice-per-month monitoring for 24 months. Systems with at least 2 years of historical Cryptosporidium data that are equivalent in sample number, frequency, and data quality (volume analyzed, percent recovery) to data that would be collected under the LT2ESWTR may use those data to determine bin classification by submitting the data to the State/Primacy Agency. Systems that provide 2.5 logs of treat- ment for Cryptosporidium in addition to conventional treatment are exempt from monitoring for purposes of selecting bin placement. "Conventional treatment" is defined as coagulation, flocculation, sedimentation, and granular media filtration. Action bins (for conventional treatment plants) have been structured considering the total Cryptosporidium oocyst count, uncorrected for recovery, as measured using EP A Method 1623 and 10-L samples. Systems have 3 years following initial bin classification to meet the treatment requirements associated with the bin (see Table C-1). The State/Primacy Agency may grant systems an additional 2-year extension to comply when capital investments are necessary . Systems currently using ozone, cWorine dioxide, ultraviolet (UV) treatment, or membranes in addition to conventional treatment may receive credit for those technologies towards bin . requirements. The additional treatment requirements in Table C-l are based in part on the assumption that conventional treatment plants in compliance with the IESWTR achieve an average of 3 logs removal of Cryptosporidium. The total Cryptosporidium removal P:\161047\161047 AUD 2002 PMIBOND FINANCING REPORTlAPPENDlCES.DOC C.1 . . . . . . . . . . . . . . . . . . . . . . . . '. . . . . . . . . . .. . . . . . . . . requirements for the action bins with 1 log, 2 log, and 2.5 log additional treatment correspond to total Cryptosporidium removals of 4,5, and 5.5 log, respectively. Meeting the log treatment requirements identified for each" action bin" in Table C-1 may necessitate one or more actions from an array of management strategies which include watershed control, reducing influent Cryptosporidium concentrations, improved system performance, and additional treatment barriers. Based on available information, the Federal Advisory Committee (F AC) recommended in its September Agreement that L TIESWTR use a "toolbox" approach, and that the specific tools (when properly designed and imple- mented) receive log credit (or range of credit) as shown in Table C-2. EP A must use the best information available in developing the final rule and will request comment on the pro- posed log credits shown in Table C-2. EP A will also provide guidance for determining if toolbox options are properly designed and implemented. " TABLE C-l Bin Requirements as Set Forth in September 2000 Agreement in Principle Average Cryptosporidium Concentration Bin Number Additional treatment requirements for systems with conventional treatment that are in full compliance with IESWTR Cryptosporidium < 0.075/LNo action 2 0.075/L ~ Cryptosporidium 1-log treatment (systems may use any technology or combination of < 1.0/L technologies from toolbox as long as total credit is at least l-Iog) 3 1.0/L ~ Cryptosporidium 2.0-log treatment (systems must achieve at least l-Iog of the required < 3.0/L 2-log treatment using ozone, chlorine dioxide, UV, membranes, bag/cartridge filters, or in-bank filtration) 4 Cryptosporidium > 3.0/L 2.5 log treatment (systems must achieve at least l-Iog of the required 2.5-log treatment using ozone, chlorine dioxide, UV, membranes, bag/cartridge filters, or in-bank filtration) In the next few years, the anticipated Stage 2 D/DBP Rule and the anticipated LTESWTR are expected to require increased levels of Giardia and Cryptosporidium removal! inactivation, while at the same time effectively limiting the maximum free chlorine CTfor the disinfection process. As a result, many utilities may need to consider an alternative primary disinfectant, such as ozone or UV, in order to balance the requirements of the two upcoming regulations. The Department has incorporated the design and construction of UV facilities at the Highland Avenue and the Tobacco Road WTPs. The UV facilities will be sized based on research data currently available and based on draft copies of the proposed L TIESWTR that have been released by the EP A for public comment. In addition, a filtered water turbidity goal of 0.1 NTU is also being established for both water plants to ensure compliance with possible .future reduction and potential inactivation credits of Cryptosporidium. P:\161047\161047 AUD 2002 PMlBOND FINANCING REPOR1\APPENDlCES.DOC C-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TABLE C-2 Microbial Toolbox Components to be Used in Addition to Existing Treatment (from Stage 2 M-DBP, FAC Agreement in Principle, September Signature Copy) Potential Loq Credit 0.5 l 1 I 2 ~ APPROACH Watershed Control WATERSHED CONTROL PROGRAM (1) X I I I Reduction in oocyst concentration (3) As measured Reduction in viable oocyst concentration (3) As measured Alternative Source INTAKE RELOCATION (3) As measured Change to Alternative Source of Supply (3) As measured Management of Intake to Reduce Capture of Oocysts in Source Water (3) As measured Managing Timing of Withdrawal (3) As measured Managing Level of Withdrawal in Water Column (3) As measured Pretreatment OFF-STREAM RAW WATER STORAGE 3.1.1.1.1 . . WI DETENTION - X DAYS (1) Off-Stream Raw Water Storage wi Detention - Y weeks (1) X Pre-Settling Basin w/Coagulant X ~ Lime Softening (1) .. In-Bank Filtration (1) X ... ImDroved Treatment LOWER FINISHED WATER TURBIDITY (0.15 NTU X 95 PERCENTILE IN COMBINED FILTERED EFFLUENT) Slow Sand Filters (1) X Roughing Filter (1) X .. Membranes (MF, UF, NF, RO) (1) X Bag Filters (1 ) X ... Cartridge Filters (1) X ImDroved Disinfection CHLORINE DIOXIDE (2) X X OZONE (2) X X X UV (2) X Peer Review I Other Demonstration I Validation or System Performance Peer Review Proaram (ex. Partnershio Phase IV) I X I f Performance studies demonstrating reliable specific log removals for technologies not listed above. This provision does not supercede other As demonstrated inactivation reauirements. Key to table symbols: (X) indicates potential.log credit based on proper design and implementation in accordance with EPA guidance. Arrow indicates estimation of potential log credit based on site-specific or technology-specific demonstration of performance. Table footnotes: (1) Criteria to be specified in guidance to determine allowed credit, (2) Inactivation dependent on dose and source water characteristics, (3) Additional monitoring for Cryptosporidium after this action would determine new bin classification and whether a<;lditional treatment is required. - ... .A .. D/DBPRule - Stage 2 . . Considerable debate resulted from the proposed Stage 2 D /DBP Rule with TTHM and HAA limits of 40 and 30 Ilg/L, respectively. As a result, EP A and various stakeholders formed the FAC to address concerns of interested parties. The result is the September 12 Signature .... - .lIIIir. - ..... .. ... - P:\161 047\161047 AUD 2002 PMlBOND FINANCING REPORTlAPPENDlCES.DOC C-3 . . . . . .. . . . . . . .. . . . . . . . . Copy oHhe Stage 2 M-DBP Agreement in Principle (Agreement). Table C-3 summarizes the proposed Stage 2 D /DBP Rule limits that resulted from the Agreement TABLE C-3 Summary of Stage 2 D/DBP Rule Limits Parameter Timeline Action Monitoring IDSE Monitoring . Phase 1 Phase 2 Phase 2 Monitoring - - . . . . .' . . . . Bromate MCL Conduct Cryptosporidium and Initial Distribution System Evaluation (lOSE) monitoring and submit results to State/Primacy Agency lOSE: monitor bimonthly (on regular schedule of approximately every 60 days) for one year at 8 distribution sites per plant (at sites that are in addition to Stagel/DBP compliance monitoring sites). For plants with chlorine distribution systems, sites will include: . One near distribution system entry point . Two at average residence time, . Five at points representative of highest THM and HAA5 concentrations . THM/HAAs of 80/60 I!g/L running annual average (RAA) . THM/HAAs of 120/100l!g/L locational running annual average (LAM) . Based on Stage 1 monitoring sites THM/HAAs of 80/60 I!g/L LRAA based on all new sampling sites based on lOSE Monitor quarterly (on a regular schedule approximately every 90 days) at 4 sites: . One representative average from among current Stage 1 locations . One representative of highest HAA5 identified under IDSE . Two at highest TTHM identified during IDSE At least one quarterly sample must be taken during the peak historical month for DBP levels. I . · 0.010 mg/L for purposes of Stage 2. . Under review to 0.005 mg/L as part of 6-year review a Plus 2 years for systems requiring capital improvements .... .. ... - . _. - ... ..... .... ... . . - .. .... - P:\161 047\161047 AUD 2002 PM\BOND FINANCING REPORl\APPENDICES.DOC . . 2 years and 2.112 years, respectively after promulgation 3 years after promulgation 6 years after promulgation 6 years after promulgation C-4 . . . . . . . . . . . . . . . . . . . . . . . .' . . .' . . . . . . . . . . . . . . . . Appendix D 10-Year Capital Improvement Plan Cost Estimates for 10-Year Capital Improvement Plan Recommended Improvements Note: All estimated costs in 2002 dollars. 2002 2005 2008 Water Treatment Facilities 57,829,000 38,500,000 2,000,000 Water Distribution System 14,739,000 13,700,000 1,500,000 Wastewater Treatment Plants 8,867,800 33,100,000 15,200,000 Wastewater Conveyance System 41,219,200 20,000,000 4,200,000 System-Wide Projects 7,345,000 7,200,000 2,100,000 10-Year CIP Projects Estimated Costs 130,000,000 112,500,000 25,000,000 P:\161047\161047 AUD 2002 PM\BOND FINANCING REPORTlAPPENDlCES.DOC 0-1 CLERK'S CERTIFICATE GEORGIA, RICHMOND COUNTY I, Lena J. Bonner, Clerk of the Augusta-Richmond County Commission (the "Commission"), DO HEREBY CERTIFY that the foregoing pages constitute a true and correct copy of the resolution adopted by the Commission at an open public meeting duly called and lawfully assembled on May 30, 2002, authorizing the issuance of not to exceed $154,070,000 August, Georgia Water and Sewerage Revenue Bonds, Series 2002, the original of said resolution being duly recorded in the Minute Book of said Commission, which Minute Book is in my custody and control. I do hereby further certify that the following members of said Commission were present at said meeting:' Bobby Hankerson Andy Cheek Tommy Boyles Ulmer Bridges W. H. Mays, III Richard Colclough Bill Kuhlke, Jr. , Lee B~ard and that the following members were absent: Steve Shepard Marion Williams and that said resolution was duly adopted by a vote of: Aye~ Nay --L Abstain - WITNESS my hand and the official seal of Augusta, Georgia this May 30 _, 2002. ~4k 1 k (SEAL) AO 708654.3 . \' :::f.Jb .# / ~? /.J " J/ l~.:rr.: PARITY BOND RESOLUTION A RESOLUTION TO PROVIDE FOR THE ISSUANCE OF WATER AND SEWERAGE REVENUE BONDS, SERIES 2000, PURSUANT TO AND IN CONFORMITY WITH A BOND RESOLUTION ADOPTED OCTOBER 21,1996, AS SUPPLEMENTED DECEMBER 3 AND 17, 1996, TO PROVIDE FUNDS TO FINANCE, IN WHOLE OR IN PART, THE COST OF ADDING TO, EXTENDING, IMPROVING AND EQUIPPING THE WATER AND SEWERAGE SYSTEM OF AUGUSTA, GEORGIA, AND TO PAY EXPENSES NECESSARY TO ACCOMPLISH THE FOREGOING; TO RATIFY, REAFFIRM AND ADOPT ALL APPLICABLE TERMS, PROVISIONS, COVENANTS AND CONDITIONS OF THE BOND RESOLUTION OF OCTOBER 21, 1996, AS SUPPLEMENTED DECEMBER 3 AND 17, 1996; TO PROVIDE FOR THE ADOPTION OF . RATES AND THE COLLECTION OF FEES AND CHARGES FOR THE SERVICES, FACILITIES AND COMMODITIES TO BE FURNISHED BY THE WATER AND SEWERAGE SYSTEM; TO PROVIDE FOR THE ISSUANCE UNDER CERTAIN TERMS AND CONDITIONS OF ADDITIONAL PARITY BONDS; TO PROVIDE FOR THE CREATION AND MAINTENANCE OF CERTAIN FUNDS; TO PROVIDE REMEDIES IN THE EVENT OF DEFAULT FOR THE OWNERS OF SAID BONDS; TO RATIFY AND AUTHORIZE THE PREPARATION, USE AND DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT AND A FINAL OFFICIAL STATEMENT IN CONNECTION WITH THE OFFER AND SALE OF THE SERIES 2000 BONDS; TO PROVIDE FOR THE ANNUAL SUBMISSION OF CERTAIN FINANCIAL INFORMATION AND OPERATING DATA PURSUANT TO RULE 15c2-12 OF THE SECURITIES AND EXCHANGE COMMISSION; TO PROVIDE FOR THE ADOPTION OF A SUPPLEMENTA~ RESOLUTION FINALIZING THE TERMS OF THE SERIES 2000 BONDS; AND FOR OTHER PURPOSES: WHEREAS, under the provisions of Article. IX, Section III, Paragraph II(a) of the Constitution of the State of Georgia and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq.), and pursuant to referenda, as authorized and required by said act, which were held within the City of Augusta (the "City") and Richmond County (the "County"), the City and the County were consolidated; and WHEREAS, the referenda held with respect to consolidation within the City of Hephzibah, a municip?.lity located within the County, failed; and WHEREAS, said consolidation does not include the City of Blythe, Georgia, a municipality located within the County; and ',' WHEREAS, said act was amended pursuant to Georgia Laws 1997, p. 4024 et seq., which amendment is, as follows: Said county-wide government shall be a new political entity, a body politic and corporate, and a political subdivision of the state to be known as "Augusta, Georgia," at times in this Act called the "consolidated government" or "Augusta- Richmond County," having all the governmental and corporate powers, duties, and AOCORP 333597.4 functions heretofore held by and vested in the City of Augusta and Richmond County, and also the powers, duties, and functions provided in this charter. ; and WHEREAS, said act, as amended is hereinafter referred to as the "Act" and Augusta, Georgia, consolidated government and Augusta-Richmond County are hereinafter referred to as the "Consolidated Government"; and WHEREAS, pursuant to the Act, the Consolidated Government now constitutes a county and a municipality under the laws and the Constitution of the State of Georgia, and is a political subdivision of the State of Georgia in the exercise of the respective powers of a municipality and a county; and WHEREAS, pursuant to Article IX, Section II, Paragraph II of the Constitution of the State of Georgia, the Municipal Home Rule Act of 1965 (O.C.G.A. S 36-35-1 et seq., as amended), and an ordinance adopted by the Augusta-Richmond County Commission-Council of the Consolidated Government on October I, 1996 (Georgia Laws 1997, p. 4690 et seq.), the Commission-Council amended the designation of its governing body from the "Augusta-Richmond County Commission- Council" to the "Augusta-Richmond County Commission" (the "Commission"); and WHEREAS, prior to the consolidation of the City and the County, the City and the County each owned, operated and maintained their own respective water and sewerage systems, and pursuant to the Act, the water and sewerage systems of the City and the County are now owned and operated by the Consolidated Governinent and pursuant to the 1996 Resolution (hereinafter defined) have been ~ombined into one revenue producing undertaking, hereinafter referred to as the "System," which definition shall also include such water and sewerage system, as now existent and as hereafter added to, extended, improved and equipped; and WHEREAS, the Consolidated Government acting by and through the Commission, by virtue of the authority of the Constitution of the State of Georgia, the Act and Title 36, Chapter 82, Article.] of the Official Code of Georgia Ann,otated, as amended (the "Revenue Bond Law"), is authorized to issue revenue bonds, to fund in part a reasonably required debt service reserve and to acquire additional water and sewerage facilities by the addition thereto of improvements to the System, and to construct such additions, and to operate and maintain the System, as added to, extended, improved and equipped, for its own use, and for the use of the public and to prescribe and revise rates, and to collect fees and charges for the services, facilities and commodities furnished by the System, as now existent and as same is hereafter added to', extended, improved and equipped, and in anticipation of the collection of revenues from the System, to issue revenue bonds to fund in part a reasonably required debt service reserve and finance the cost of such additions, extensions and improvements to the System and to pay all expenses necessary to accomplish the foregoing; and WHEREAS, the Consolidated Government heretofore, pursuant to a resolution adopted on October 21, 1996, as supplemented on December 3 and 17, 1996 (the" 1996 Resolution"), has authorized the issuance of, and issued and delivered, $62,880,000 aggregate principal amount of Richmond County Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A -2- AOCORP 333597.4 (the "Series 1996A Bonds"), dated December I, 1996, in the form of fully registered bonds without coupons, in the denomination of $5,000 or any integral multiple thereof, numbered RA-1 upward, transferable to subsequent owners as therein provided, bearing interest from date at the rates per annum set forth below, all interest payable April I, 1997 and semiannually thereafter on the 1st days of April and October in each year, and matUring on the 1st day of October, in the years and principal amounts, as follows: Year Amount Rate Year Amount Rate 1997 $ 265,000 3.60% 2006 $ 1,260,000 6.00% 1998 350,000 3.80 2007 1,335,000 6.00 1999 365,000 4.00 2008 1,415,000 4.90 2000 375,000 4.10 2009 1,485,000 5.00 2001 395,000 4.20 2010 1,560,000 5.10 2002 410,000 4.30 2012 3,355,000 5.00 2003 I, I 00,000 4.40 2017 10,000,000 5.125 2004' 1,155,000 4.50 2022 13,305,000 5.25 2005 1,205,000 4.60 2028 23,545,000 5.25 and of the Series 1996A Bonds there is now outstanding $61,900,000 aggregate principal amount thereof, being bonds maturing in the years 2000 through 2010,2012,2017,2022 and 2028 and the Series 1996A Bonds are secured by a lien on the Pledged Revenues (as defined in the 1996 Resolution) in accordance with the 1996 Resolution; and WHEREAS, in the 1996 Resolution, the Consolidated Government also authorized the issuance and delivery of, and issued and delivered, $3,760,000 aggregate principal amount of Richmond County Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B (the "Series 1996B Bonds"), dated December 1, 1996, in the form of fully registered bonds without coupons, in the denomination of$5,000 or any integral multiple thereof, numbered RB-1 upward, transferable to subsequent owners as therein provided, bearing interest from date at the rates per annum set forth below, all interest payable April I, 1997 and semiannually thereafter on the I st days of April and October in each year, and maturing on the 1 st day of October, in the years and principal amounts, as follows: Year 1997 1998 1999 2000 2001 . 2002 Amount $655,000 585,000 605,000 610,000 640,000 665,000 Rate 5.60% 5.80 5.90 6.10 6.20 6.25 and of the Series 1996B Bonds there is now outstanding $1,915,000 aggregate principal amount thereof, being bonds maturing in the years 2000 through 2002 and the Series 1996B Bonds are secured by a lien on the Pledged Revenues in accordance with the 1996 Resolution; and -3- AOCORP 333597.4 WHEREAS, in the 1996 Resolution, the Consolidated Government also authorized the issuance and delivery of, and issued and delivered, $5,910,000 aggregate principal amount of Richmond County Water and Sewerage Revenue Refunding Bonds, Series 1997 (the "Series 1997 Bonds"), dated January I, 1997, in the form of fully registered bonds without coupons, in the denominat~on of $5,000 or any integral multiple thereof, numbered R-l upward, transferable to subsequent owners as therein provided, bearing interest from date at the rates per annum set forth below, all interest payable April I, 1997 and semiannually thereafter on the I st days of April and October in each year, and maturing on the 1st day of October, in the years and principal amounts, as follows: Year Amount Rate Year Amount Rate 1997 $100,000 3.60% 2006 $ 190,000 4.70% 1998 140,000 3.80 2007 200,000 4.80 1999 145,000 4.00 2008 210,000 4.90 2000 150,000 4.10 2009 220,000 5.00 2001 155,000 4.20 2010 230,000 5.10 2002 160,000 4.30 2012 500,000 5.00 2003 170,000 4.40 2017 1,490,000 5.125 2004 175,000 4.50 2021 1,490,000 5.25 2005 185,000 4.60 and of the Series 1997 Bonds there is now outstanding $5,525,000 aggregate principal amount thereof, being bonds maturing in the years 2000 through 2010, 2012, 2017 and 2021 and the Series 1997 Bonds are secured by a lien on the Pledged Revenues in accordance with the 1996 Resolution; and WHEREAS, at the time of the issuance of the Series 1996A Bonds and the Series 1996B Bonds (collectively, the "Series 1996 Bonds"), there was outstanding $6,220,000 aggregate principal amount of the County's Water and Sewerage Revenue Bonds, Series 1986 issued pursuant to resolutions adopted by the County on April 24, 1984 and November 24, 1986 (collectively, the "Prior Lien Resolutions") which were secured by a first and prior lien on the net revenues of the County's water and sewerage system (the "Prior Lien Bonds"); and WHEREAS, the Series 1996 Bonds were originally issued as junior lien bonds pursuant to the 1996 Resolution and were junior and subordinate in right of payment and as to the lien on the net revenues of the County's water and sewerage system to the Prior Lien Bonds, and upon the issuance of the Series 1997 Bonds which provided funds to be applied toward the cost of acquiring by redemption, payment or otherwise the Prior Lien Bonds, the Series 1996 Bonds and the Series 1997 Bonds (collectively, the "Series 1996/1997 Bonds") were the only outstanding water and sewerage revenue bonds having a lien on the Pledged Revenues, the Series 1996 Bonds no longer being junior lien obligations of the County's water and sewerage system and the Series 1996 Bonds and Series 1997 Bonds having a first or prior lien on the Pledged Revenues; and WHEREAS, in accordance with the provisions of the Act pertaining to the consolidation of Richmond County and the municipalities of Augusta and Hephzibah and the referenda held pursuant -4- AOCORP 333597.4 thereto, the certificates pertaining to such referenda and other information and documents are set forth in the validation proceeding pertaining to the Series 1996/1997 Bonds in the case of the State of Georgia vs. Richmond County, same being Civil Action File No. 96-RCCV-960, which validation proceeding in its entirety, by this reference thereto, is incorporated herein and made a part hereof; and WHEREAS, the Consolidated Government has determined that it is necessary and essential to add to, extend, improve and equip the System and has further determined that by the expenditure on its part of approximately $98,900,000, the System can be added to, extended, improved and equipped in accordance with, or substantially in accordance with, the "Engineer's Report: Water and Sewerage Revenue Bonds, Series 2000" dated August 21, 2000 (the "Engineering Report") and prepared by CH2M Hill (the "Consulting Engineers"); and WHEREAS, it has been determined that the most feasible method of raising the funds required to finance the capital improvements to the System now contemplated as well as in the future is for the Consolidated Government to issue the Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2000 (the "Series 2000 Bonds") hereinafter authorized as additional parity bonds under the 1996 Resolution and this 2000 Resolution; and WHEREAS, upon the recommendation of A.G. Edwards & Sons, Inc. and SunTrust Equitable Securities Corporation (collectively, the "Underwriter"), with which recommendation the Consolidated Government concurs, it has been determined that the Consolidated Government should make due and legal provision to fund a reasonably required debt service reserve for the Series 2000 Bonds and the Consolidated Government anticipates funding the Reserve Account (as defined in the 1996 Resolution) with a Reserve Account Surety Bond (as defined in the 1996 Resolution); and WHEREAS, the Consolidated Government has applied to Credit Issuers (as defined in the 1996 Resolution) for the issuance of a Credit Facility (as defined in the 1996 Resolution) to enhance the Consolidated Government's credit by assuring owners of the Series 2000 Bonds that the principal of and interest,on the Series 2000 ~onds will be paid promptly when due; and WHEREAS, it is contemplated that the Series 2000 Bonds will be sold in the near future and in finalizing the terms of the Series 2000 Bonds and to accept the offer of the Underwriter to purchase the Series 2000 Bonds, the Consolidated Government will adopt a resolution suppleme~ting this 2000 Resolution and said supplemental resolution will set forth, among other things, the aggregate principal amount of the Series 2000 Bonds to be issued, the interest rate or rates that the Series 2000 Bonds hereinafter authorized to be issued will bear, the principal amount to mature in each year and the maturities of the Series 2000 Bonds which will be designated as term bonds and subject to mandatory redemption and the terms of any Credit Facility and Reserve Account Surety Bonds (as so described, the "2000 Supplemental Resolution"); and WHEREAS, it was provided in Section 9 of Article V of the 1996 Resolution that additional revenue bonds or obligations could be issued, from time to time, payable from the Pledged Revenues of the System on a parity with the outstanding Series 1996/1997 Bonds (the "Prior Bonds"), upon meeting certain terms and conditions, as set forth therein, which are as follows: -5- AOCORP 333597.4 For the purpose of calculating the maximum Debt Service Requirements under this subparagraph (b), the maximum annual Debt Service Requirements shall be reduced by an amount equal to any capitalized interest funded from the proceeds of the Additional Bonds proposed to be issued in each succeeding Sinking Fund Year for the period for which said interest has been capitalized. (c) An Independent Certified Public Accountant shall certify in triplicate to the Consolidated Government that the requirements of subparagraph (a) above are being complied with and that the requirements of subparagraph (b) above have been met. A copy of such certificate shall be furnished to the Designated Representative of the original purchasers of the Additional Bonds. (d) Except when Bonds are being issued solely for the purpose of refunding outstanding revenue Bonds, the Consulting Engineers for the Consolidated Government shall provide the Consolidated Government with a written report recommending the additions, extensions and improvements to be made to the System and stating that _same are feasible, designating in reasonable detail the work and installation proposed to be done and the estimated cost of accomplishing the undertaking. The Consulting Engineers shall set forth in said report the forecasted Pledged Revenues to be derived from the System which will be available for debt service payments in each of the next 10 years and shall indicate the projected coverage of such debt service payments in each succeeding Sinking Fund Year. An executed duplicate original of such report of the Consulting Engineers as required by this provision shall be furnished to the Designated Representative of the original purchasers of the [Prior Bonds] not less than ten days before any proceedings are taken to actually issue such Additional Bonds. (e) The Consolidated Government shall pass proper proceedings reciting that all of the above requirements have been met, shall authorize the issuance of the Additional Bonds and shall provide in such proceedings, among other things, the date such Additional Bonds shall bear, the rate or rates of interest and maturity dates, as well as the registration and redemption provisions. Except for Additional Bonds that bear interest at a Variable Rate, the interest on the Additional Bonds of any such issue shall fall due on April 1 and October I of each year, and the Additional Bonds shall mature in installments on October I, but, as to principal, not necessarily in each year or in equal installments. Any such proceeding or proceedings shall require the Consolidated Government to increase the monthly payments then being made into the Sinking Fund to the extent necessary to pay the principal of and the interest on the [prior Bonds] and on all such Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued as same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, and to create upon the issuance of the proposed Additional Bonds to be issued a reserve in the Reserve Account at least equal to the Reserve Requirement on the [Prior Bonds] and any Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued and to maintain said reserve in an amount sufficient for that purpose; provided, however, the Consolidated Government may satisfy funding of the -7- AOCORP 333597.4 (a) The payments covenanted to be made into the Sinking Fund, as the same may have been enlarged and extended in any proceedings authorizing the issuance of any . Additional Bonds, must be currently being made in full amount as required and the Debt Service Account and Reserve Account held within the Sinking Fund must be at their proper respective balances. (b) Except in the case of Additional Bonds issued for refunding purposes pursuant to Article V, Section 8 [of the 1996 Resolution] there shall have been procured and filed with the Consolidated Government (i) a report by Independent Certified Public Accountants to the effect that the Pledged Revenues (excluding Investment Earnings, if any, on the Construction Funds created under [the 1996] Resolution and the Prior Lien Resolutions) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of such Additional Bonds must have been equal to at least 1.25 times the maximum Debt Service Requirement for any succeeding Sinking Fund Year on the [Prior Bonds] and any other issue or issues of Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued, or in lieu of the foregoing formula, if a new schedule of rates and charges for the services, facilities and commodities furnished by the System shall have been adopted and shall be in effect and Independent Certified Public Accountants shall certify that had this new rate schedule been in effect during the period described above, the Pledged Revenues of the System would have equaled the requirements of the above formula; or (ii) (x) a report by Independent Certified Public Accountants to the effect that the historical Pledged Revenues (excluding Investment Earnings, if any, on the Construction Funds created under [the 1996] Resolution and the Prior Lien Resolutions) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of the proposed Additional Bonds were equal to at least 1.10 times the historical Debt Service Requirement on all Bonds (other than Subordinate Bonds) which were outstanding during such 12-month period, and (y) a report by the Consulting Engineers to the effect that the forecasted Pledged Revenues (excluding Investment Earnings, if any, on the Construction Funds created under [the 1996] Resolution and the Prior Lien Resolutions) for each Fiscal Year in the Forecast Period are expected to equal at least 1.25 times the maximum annual Debt Service Requirement on all Bonds (other than Subordinate Bonds) whi~h will be outstanding immediately after the issuance of the proposed Additional Bonds, in the then current or any succeeding Sinking Fund Year. The reports by the Independent Certified Public Accountant that are required by this paragraph (b) may contain pro forma adjustments to historical Pledged Revenues equal to 100 percent of the increased annual amount attributable to any revision in the schedule of rates, fees, and charges for the services, facilities, and commodities furnished by the System, imposed prior to the date of delivery of the proposed Additional Bonds and not fully reflected in the historical Pledged Revenues actually received during such 12-month period. S~ch pro forma adjustments shall be based upon a report of the Consulting Engineers as to the amount of Operating Revenues which would have been received during such 12-month period had the new rate schedule been in effect throughout such 12-month period. -6- AOCORP 333597.4 required reserve through the purchase of a Reserve Account Surety Bond meeting the requirements of the Resolution. Any such proceeding or proceedings shall restate and reaffirm, by reference, all ofthe applicable terms, conditions and provisions of [the 1996] Resolution. If any Additional Bonds would bear interest at a Variable Rate, the resolution under which such Additional Bonds are issued shall provide a maximum rate of interest per annum which such Additional Bonds may bear. In connection with the issuance of any Additional Bonds under the Resolution, the Consolidated Government may obtain or cause to be obtained one or more Credit Facilities providing for payment of all or a portion of the principal of, premium, if any, or interest due or to become due on such Additional Bonds, providing for the purchase of such Additional Bonds by the Credit Issuer, or providing funds for the purchase of such Additional Bonds by the Consolidated Government. In connection therewith the Consolidated Government shall enter into Credit Facility Agreements with such Credit Issuers providing for, among other things, (i) the payment of fees and expenses to such Credit Issuer for the issuance of such Credit Facility; (ii) the terms and conditions of such Credit Facility and the Additional Bonds affected thereby; and (iii) the security, if any, to be provided for the issuance of such Credit Facility. The Consolidated Government may in a Credit Facility Agreement agree to directly reimburse such Credit Issuer for amounts paid under the terms of such Credit Facility, together with interest thereon; provided, however, that no Reimbursement Obligation shall be created, for purposes of the Resolution, until amounts are paid under such Credit Facility. Any such Reimbursement Obligation shall be deemed to be a part of the Additional Bonds to which the Credit Facility rebtes which gave rise to such Reimbursement Obligation, and references to principal and interest payments with respect to such Additional Bonds shall include principal and interest (except for Additional Interest) due on the Reimbursement Obligation incurred as a result of payment of such Additional Bonds with the Credit Facility. All other amounts payable under the Credit Facility Agreement (including any Additional Interest) shall be fully subordinate to the payment of debt service on Bonds (other than Subordinate Bonds). Any such Credit Facility shall be for the benefit of and secure such Additional Bonds or portion thereof as specified in the applicable bond resolution authorizing such Additional Bonds. (f) Such Additional Bonds or obligations and all proceedings relative thereto, and the security therefor, shall be validated as prescribed by law. WHEREAS, as required by the 1996 Resolution, attached hereto as Exhibit A is a certificate of an Independent Certified Public Accountant (as defined in the 1996 Resolution) certifying to the Commission that the Consolidated Government has complied and is now complying with the requirements of Paragraph (a) and that the Consolidated Government has met the requirements of Paragraph (b)(ii)(x) as set forth above and a copy of said certificate has been furnished to the Designated Representative ofthe original purchasers of the Prior Bonds; and WHEREAS, as required by the 1996 Resolution, attached hereto as Exhibit B is the Engineering Report recommending the additions, extensions and improvements to be made to the System and that same are feasible, describing in reasonable detail the undertaking and the estimated cost thereof, setting forth the forecasted Pledged Revenues to be derived from the System which will be available for debt service payments on the Prior Bonds and the bonds hereinafter authorized to -8- AOCORP 333597.4 be issued in each of the next 10 years and the projected coverage of such debt service payments in each succeeding Sinking Fund Year and that the requirements of Paragraph (b )(ii)(y) as set forth above have been met. WHEREAS, prior to the actual issuance and delivery of the Series 2000 Bonds, the Consolidated Government will enter into a contract with SunTrust Bank, Atlanta, Georgia (the "Paying Agent"), pursuant to which the Paying Agent will agree to act as Paying Agent and as Bond Registrar for the Series 2000 Bonds and to perform various functions with respect to the Series 2000 Bonds, including, but not limited to, the authentication of the Series 2000 Bonds by the manual signature of a duly authorized officer of the Paying Agent, as Bond Registrar, the registration, transfer, exchange and related mechanical and clerical functions, as well as the preparation, signing and issuance of checks and drafts in payment of the principal of and interest on the Series 2000 Bonds as same become due and payable; and WHEREAS, the Consolidated Government has obtained certain loans from the Georgia Environmental Facilities Authority ("GEF A"), same being Contract/Project No. N94-CS 1- WQ, Contract/Project No. SRF95-001 and Contract/Project No. SRF91-033 and GEFA has heretofore consented to the issuance of the Prior Bonds and any additional revenue bonds secured by a lien on the Pledged Revenues of the System ranking on a parity as to lien on the Pledged Revenues with the Prior Bonds, and that the lien on the Pledged Revenues of the System securing the payment of said loans is in all respects junior and subordinate to the lien on the Pledged Revenues securing the payment of the Prior Bonds and any parity bonds therewith, copies of said loan contracts and a copy of said consent to said subordination by GEF A being on file and of record in the permanent records of the Consolidated Government and same by this reference thereto are incorporated and made a part hereof; and WHEREAS, the Prior Bonds are the only revenue obligations of the Consolidated Government now outstanding having as security for the payment thereof and interest thereon a first or prior lien on the Pledged Revenues of the System and the Consolidated Government has been and is now complying and will continue to comply in all respects with the applicable terms, covenants and provisions of the 1996 Resolution. NOW, THEREFORE, BE IT RESOLVED by the Augusta-Richmond County Commission and it is hereby resolved by the authority of same, as follows: Section 1. Definitions. Capitalized terms used herein and not defined shall have the meanings set forth in the 1996 Resolution. For the purpose of this 2000 Resolution the definitions set forth in the 1996 Resolution shall be and are hereby amended and added to, effective as of the date of the issuance and delivery of the Series 2000 Bonds herein authorized to be issued, as follows: "Additional Bonds" shall mean any revenue bonds of the Consolidated Government ranking on a parity with the Prior Bonds and the Series 2000 Bonds which may hereafter be issued pursuant to Article V, Section 8 of the 1996 Resolution and Section 25 of this 2000 Resolution. "Agent Member" shall mean a member of, or participant in, the Securities Depository. -9- AOCORP 333597.4 "Beneficial Owner" shall mean the owners of a beneficial interest in the Series 2000 Bonds registered in Book-Entry Form. "Bond Registrar," when used with respect to the Series 2000 Bonds, means SunTrust Bank, Atlanta, Georgia, its successors and assigns or any successor commercial bank or trust company appointed by the Consolidated Government to maintain, in accordance with the provisions of the Resolutions, the registration books of the Consolidated Government for any series of Bonds secured by the Resolutions. "Book-Entry Form" or "Book-Entry System" shall mean, with respect to the Series 2000 Bonds, a form or system, as applicable, under which (i) the ownership of beneficial interests in the Series 2000 Bonds and bond service charges may be transferred only through book-entry and (ii) physical Series 2000 Bonds in fully registered, certificated form are registered only in the name of a Securities Depository or its nominee as holder, with physical Series 2000 Bond certificates immobilized in the custody of a Securities Depository. "Consulting Engineer," when used with respect to the Series 2000 Bonds, shall mean CH2M Hill, Atlanta, Georgia, or its successors or such other engineer, engineers or engineering firm that might hereafter be employed in relation to the supervision of the additions, extensions and improvements to be made to the System and in relation to the services to be rendered as contemplated by this 2000 Resolution. "Debt Service Requirement" means the amounts required in each Sinking Fund Year to pay the principal of and interest on the Prior Bonds, the Series 2000 Bonds and any Additional Bonds as same become due and payable; provided, however, with respect to any term obligation which is required to be repaid prior to its stated maturity through the operation of a mandatory sinking fund, the amount of principal coming due in any Sinking Fund Year with respect to such obligation shall be the amount required to be deposited into the sinking fund for the retirement of the principal amount of such obligation rather than the entire principal amount of such debt coming due at the stated maturity. If any Bonds outstanding or proposed to be issued bear interest at a Variable Rate, the interest rate per annum on such Bonds for purposes of calculating the Debt Service Requirement shall be the lesser of (a) the 30-year Revenue Bond Index, (b) the maximum interest rate for such Bonds permitted by the supplemental bond resolution authorizing the issuance thereof or (c) the "cap" rate, if any, established with respect to such bonds in a related Hedge Agreement. With respect to any Bonds secured by a Credit Facility, Debt Service Requirement shall include (a) any commission or commitment fee obligations with respect to such Credit Facility, (b) the outstanding amount of any Reimbursement Obligation owed to the relevant Credit Issuer and the interest thereon, ( c) any Additional Interest owned on Bank Bonds to a Credit Issuer and (d) any remarketing agent fees. With respect to Bonds for which there exists a related Hedge Agreement, Debt Service Requirement shall include the net amounts paid with respect to such Hedge Agreement. "Designated Representative of the original purchasers" or "Representative of the original purchaser," when used with respect to the Series 2000 Bonds, shall be construed to mean A.G. Edwards & Sons, Inc., Atlanta, Georgia, and SunTrust Equitable Securities Corporation, Atlanta, Georgia, their successors or assigns. -10- AOCORP 333597.4 "Engineering Report," when used with respect to the Series 2000 Bonds, shall mean the report entitled "Engineer's Report: Water and Sewerage Revenue Bonds, Series 2000," dated August 21, 2000, and prepared by the Consulting Engineer. "Expenses of Operation and Maintenance" means all expenses reasonably incurred in connection with the operation and maintenance of the System, including salaries, wages, the cost of materials and supplies, rentals of leased property, if any, payments to others for the purchase of water, if any, and for the treatment and disposal of sewage, the cost of audits, Paying Agent's and Bond Registrar's fees, payment of premiums for insurance required by the Resolutions and other insurance which the Consolidated Government deems prudent to carryon the System and its operations and personnel, and, generally, all expenses, exclusive of interest on the Bonds and depreciation or amortization, which under accounting principles generally accepted for municipal utility purposes are properly allocable to operation and maintenance; however, only such expenses as are reasonably and properly necessary or desirable for the proper operation and maintenance of the System shall be included. "Expenses of Operation and Maintenance" also includes the Consolidated Government's obligations under any contract with any other political subdivision or public agency or authority of one or more political subdivisions pursuant to which the Consolidated Government undertakes to make payments measured by the expenses of operating and maintaining any facility which constitutes part of the System and which is owned or operated in part by the Consolidated Government and in part by others. "Investment Earnings" means all interest received on and profits derived from investments made with Pledged Revenues or any moneys in the funds and accounts established under Article IV and Article V of the 1996 Resolution, as may be redesignated under this 2000 Resolution. "1996 Resolution" means the bond resolution of the Consolidated Government adopted on October 21, 1996, as supplemented on December 3 and 17, 1996, authorizing the issuance of the Series 1996/1997 Bonds. "Paying Agent," when used with respect to the Series 2000 Bonds, means SunTrust Bank, Atlanta, Georgia, its successors and assigns or any successor commercial bank or trust company appointed by the Consolidated Government to serve as paying agent, in accordance with the terms of the Resolutions and any supplemental resolution, for any series of Bonds secured by the Resolutions. "Prior Bonds" shall mean the outstanding Series 1996/1997 Bonds. "Reserve Account Surety Bond Provider" means any provider of a Reserve Account Surety Bond. "Reserve Requirement" means the least of (i) the highest Debt Service Requirement in the then current or any succeeding Sinking Fund Year, (ii) 10 percent of the aggregate principal amount of the Prior Bonds, the Series 2000 Bonds and Additional Bonds outstanding, or (iii) 125 percent of the average annual Debt Service Requirement in the current or any succeeding Sinking Fund Year. -11- AOCORP 333597.4 "Resolutions" means collectively the 1996 Resolution and this 2000 Resolution, and as same may be supplemented from time to time. "Revenue Fund" shall mean the "Augusta, Georgia Water and Sewerage System Revenue Fund" originally created and designated as the "Richmond County Water and Sewerage System Revenue Fund--1996" in Article V, Section 2 of the 1996 Resolution and subsequently redesignated as set forth in Section 19 of this 2000 Resolution. "Securities Depository" means any securities depository that is a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to provisions of Section 17 A of the Securities Exchange Act of 1934, operating and maintaining, with its participants or otherwise, a Book-Entry System to record ownership of beneficial interest in bonds and bond service charges, and to effect transfers of bonds in Book-Entry Form, and means, initially, The Depository Trust Company (a limited purpose trust company), New York, New York. "Securities Depository Nominee" means any nominee of a Securities Depository and shall initially mean Cede and Co., New York, New York, as nominee of The Depository Trust Company. "Series 2000 Bonds" means the Consolidated Government's Water and Sewerage Revenue Bonds, Series 2000 in the aggregate principal amount not to exceed $98,900,000 and authorized to be issued pursuant to Section 2 of this 2000 Resolution. "Sinking Fund" shall mean the "Augusta, Georgia Water and Sewerage System Sinking Fund" originally created and designated as the "Richmond County Water and Sewerage System Sinking Fund" in Article V, Section 2, Paragraphs 2 and 4 of the 1996 Resolution and subsequently redesignated as set forth in Section 19. of this 2000 Resolution. "Sinking Fund Custodian," when used with respect to the Series 2000 Bonds, means SunTrust Bank, Atlanta, Georgia, its. successors and assigns, or any successor custodian for the Sinking Fund hereafter appointed by the Consolidated Government; provided, however, the Sinking Fund Custodian shall at all times be a commercial bank or trust company. "2000 Capitalized Interest Fund" shall mean the "Augusta, Georgia Water and Sewerage System Capitalized Interest Fund--2000" created in Section 18 of this 2000 Resolution. "2000 Construction Fund" shall mean the "Augusta, Georgia Water and Sewerage System Construction Fund--2000" created in Section 17 of this 2000 Resolution. "2000 Construction Fund Depository" means SunTrust Bank, Atlanta, Georgia, its successors and assigns, or any successor custodian for the 2000 Construction Fund hereafter appointed by the Consolidated Government; provided, however, the 2000 Construction Fund Depository shall at all times be a commercial bank or trust company. "2000 Resolution" means this resolution of the Augusta-Richmond County Commission of Augusta, Georgia adopted August 22,2000, ratifying, reaffirming, broadening and extending the -12- AOCORP 333597.4 1996 Resolution and authorizing the issuance of the Series 2000 Bonds, as same may be supplemented from time to time, including by the 2000 Supplemental Resolution setting the rates of interest on the Series 2000 Bonds, among other things. "Utility General Fund" shall mean the "Augusta, Georgia Water and Sewerage System Utility General Fund" originally created and designated as the "Richmond County Water and Sewerage System Utility General Fund" in Article V, Section 2, Paragraph 6 of the 1996 Resolution and redesignated as set forth in Section 21 of this 2000 Resolution. Whenever used in this 2000 Resolution, the singular shall include the plural and the plural shall include the singular, unless the context otherwise indicates. Section 2. Authorization. All the terms, provisions and conditions contained in Section 9 of Article V of the 1996 Resolution having been met and complied with, there be and there is hereby authorized to be issued, pursuant to and in conformity with the 1996 Resolution, the Constitution of the State of Georgia, the Revenue Bond Law and the Act, revenue bonds in the aggregate principal amount not to exceed $98,900,000 for the purpose of providing funds to fmance, in whole or in part, the cost of acquiring; constructing and equipping facilities, plants and other structures for the System, adding to, extending, improving and equipping the System, acquiring the necessary property or rights in property therefor, both real and personal, to pay a portion of the interest accruing on the Series 2000 Bonds during the estimated period of construction of additions, extensions and improvements to the System, to fund a reasonably required debt service reserve and to pay all expenses necessary to accomplish the foregoing. The revenue bonds shall be designated "Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2000," shall be dated September 1,2000, or the first day ofthe month in which issued or delivered, or the first day of the month preceding the month of issuance and delivery, all being at the option of the Commission, shall be initially issued as book-entry only bonds in fully registered form without coupons, shall be in the denomination of $5,000 or any integral multiple thereof, shall be numbered R-l upward, shall be transferable to subsequent owners as hereinafter provided, shall bear interest from date at such rate or rates per annum not exceeding 6.5 percent in any year, all interest payable semiannually on the 1st days of April and October in each year, commencing on April I, 2001, and the principal shall mature on the first day of October within the years 2003 to 2030, inclusive, in such principal amounts so that the maturing annual debt service in any calendar year on the Series 2000 Bonds will not exceed $12,822,600 and the maturing annual debt service in any calendar year on the Prior Bonds and the Series 2000 Bonds will not exceed $12,826,875. The principal amount of the Series 2000 Bonds shall be payable at maturity, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender thereof at the principal corporate trust office of the Paying Agent in Atlanta, Georgia, and payments of interest on the Series 2000 Bonds shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on the fifteenth day of the calendar month next preceding the Aprill and October I interest payment dates and such payments of interest shall be mailed to the registered owner at the address shown on the bond registration book. Notwithstanding the foregoing, so long as the Series 2000 Bonds are in Book-Entry Form, principal and interest shall be payable to the Securities Depository or its nominee, all as set forth in -13- AOCORP 333597.4 Section 7 hereof. Both the principal of and interest on the Series 2000 Bonds shall be payable in lawful money of the United States of America. Section 3. Execution; Form of Series 2000 Bonds. The Series 2000 Bonds shall be executed on behalf of the Consolidated Government by use of the manual or facsimile signature of the Mayor of the Commission and attested by the manual or facsimile signature of the Clerk of the Commission and the official seal of the Consolidated Government shall be impressed thereon or a facsimile thereof imprinted thereon, and the Series 2000 Bonds shall be authenticated by the manual signature of a duly authorized signatory of the Bond Registrar. The validation certificate to be printed on the Series 2000 Bonds shall be executed by use of the manual or facsimile signature of the Clerk of the Superior Court of Richmond County and the official seal of said Court shall be impressed thereon or a facsimile. thereof shall be imprinted thereon. If there is a municipal bond insurance policy insuring payment of the Series 2000 Bonds when due, there shall be printed on the Series 2000 Bonds a Statement ofInsurance prepared by the Credit Issuer. In case any officer whose signature shall appear on the Series 2000 Bonds shall cease to be such officer before delivery of such Series 2000 Bonds, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. The Series 2000 Bonds, the certificate of authentication and registration, form of assignment and the certificate of validation to be endorsed upon the Series 2000 Bonds shall be in substantially the following form, with such variations, omissions and insertions as are required or permitted by this 2000 Resolution, to wit: -14- AOCORP 333597.4 No.R- $ UNITED STATES OF AMERICA ST ATE OF GEORGIA AUGUSTA, GEORGIA WATER AND SEWERAGE REVENUE BOND SERIES 2000 BOND DATE: MATURITY DATE: INTEREST RATE: CUSIP: September 1,2000 FOR VALUE RECEIVED, Augusta, Georgia (the "Consolidated Government"), a political subdivision of the State of Georgia, hereby promises to pay solely from the special fund provided therefor, as hereinafter set forth, to CEDE & CO. or registered assigns, the principal sum of DOLLARS in lawful money of the United States of America on the maturity date specified above, unless redeemed prior thereto as hereinafter provided, upon presentation and surrender hereof at the principal corporate trust office of SunTrust Bank, Atlanta, Georgia, Paying Agent and Bond Registrar, and to pay to the registered owner hereof, solely from said special fund, interest on said principal amount from the date hereof or from the most recent interest payment date to which interest has been paid, at the rate per annum specified above, semiannually on the 1 st days of April and October in each year (each an "Interest Payment Date"), commencing April 1, 200 I, until payment of the principal amount hereof. Payments of interest on this Bond shall be made by check or draft payable to the registered owner as shown on the bond registration book kept by the Bond Registrar at the close of business on the 15th day of the calendar month next preceding each Interest Payment Date and such interest payments shall be mailed to the registered owner at the address shown on the bond registration book. . This Bond is one of a duly authorized issue in the aggregate principal amount of $ (the "Series 2000 Bonds") oflike tenor, except as to numbers, denominations, interest rates and dates of maturity and redemption provisions, issued by the Consolidated Government for the purpose of providing funds to finance, in whole or in part, the cost of acquiring, constructing and equipping facilities, plants and other structures of the water and sewerage system (the "System"), adding to, extending, improving and equipping the System, acquiring the necessary property or rights in property therefor, both real and personal, to pay a portion of the interest accruing on the Series 2000 Bonds during the estimated period of construction of additions, extensions and improvements to the System, to fund a reasonably required debt service reserve and to pay all expenses necessary to accomplish the foregoing. The Series 2000 Bonds are issued under authority of the Revenue Bond Law of the State of Georgia (Title 36, Chapter 82, Article 3 of the Official Code of Georgia -15- AOCORP 333597.4 Annotated, as amended), and an act of the General Assembly of the State of Georgia (Georgia Laws 1995, p. 3648 et seq., as amended by Georgia Laws 1997, p. 4024 et seq., and were duly authorized by the Augusta-Richmond County Commission (the "Commission") by a resolution adopted on October 21,1996, as supplemented on December 3 and 17,1996 (the "1996 Resolution") and a resolution adopted on August 22, 2000, as supplemented September _, 2000 (the "2000 Resolution" and, together with the 1996 Resolution, the "Resolutions"). The Series 2000 Bonds shall stand on a parity as to lien on the Pledged Revenues (as hereinafter defined) of the System with the Consolidated Government's outstanding Water and Sewerage Revenue Refunding and Improvement Bonds, Series 1996A (the "Outstanding Series 1996A Bonds"), the Consolidated Government's outstanding Taxable Water and Sewerage Revenue Refunding Bonds, Series 1996B (the "Outstanding Series 1996B Bonds") and the Consolidated Government's outstanding Water and Sewerage Revenue Refunding Bonds, S'eries 1997 (the "Outstanding Series 1997 Bonds" and, together with the Outstanding Series 1996A Bonds and Outstanding Series 1996B Bonds, the "Prior Bonds"). In addition to the Prior Bonds and the Series 2000 Bonds (collectively, the "Bonds"), the Consolidated Government may issue, under certain terms and conditions as provided in the Resolutions, additional revenue bonds, and if issued, such bonds will rank on a parity as to lien on the Pledged Revenues of the System with the Bonds. Reference to the Resolutions is hereby made for a complete description of the funds charged with, and pledged to, the payment of the principal of and the interest on the Prior Bonds, the Series 2000 Bonds or any other issue of bonds issued on a parity therewith, the nature and extent of the security, a statement of rights, duties and obligations of the Consolidated Government, the rights of the owners of the Series 2000 Bonds and the terms and conditions under which additional bonds may be issued, to all the provisions of which the owner hereof, by the acceptance of this Bond, assents. The person in whose name this Bond is registered on the registration books kept by the Bond Registrar shall be deemed to be the owner of this Bond for all purposes. The Series 2000 Bonds are being issued by means of a book-entry system, with actual Series 2000 Bonds immobilized at The Depository Trust Company, New York, New York (the "Securities Depository"), or its successor as Securities Depository, evidencing ownership ofthe Series 2000 Bonds in principal amounts of $5,000 or integral multiples thereof, and with transfers of beneficial ownership effected on the records of the Securities Depository and its participants pursuant to the rules and procedures established by the Securities Depository. Actual Series 2000 Bonds are not available for distribution to the owners of beneficial interests in the Series 2000 Bonds registered in book-entry form (the "Beneficial Owners"), except under the limited circumstances set forth in the 2000 Resolution. The principal, redemption premium (if any) and interest on the Series 2000 Bonds are payable by the Paying Agent to Cede & Co., as nominee of the Securities Depository. Transfers of principal, redemption premium (if any) and interest payments to participants of the Securities Depository is the respomibility of the Securities Depository; transfers of principal, redemption premium (if any) and interest to Beneficial Owners of the Series 2000 Bonds by participants of the Securities Depository will be the responsibility of such participants and other nominees of Beneficial Owners. Neither the Consolidated Government nor the-Paying Agent is responsible or liable for maintaining, supervising or reviewing the records maintained by the Securities Depository, its participants or persons acting through such participants. If the Series 2000 Bonds are no longer registered to a Securities Depository or its nominee, this Bond may be registered as transferred only upon the registration books kept for that purpose at the principal corporate trust office of the Bond Registrar -16- AOCORP 333597.4 by the registered owner hereof in person, or by his or her attorney duly authorized in writing, upon presentation and surrender to the Bond Registrar of this Bond duly endorsed for registration of transfer or accompanied by an assignment duly executed by the registered owner or his or her attorney duly authorized in writing, and thereupon a new registered bond certificate, in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor. In addition, if the Series 2000 Bonds are no longer registered to a Securities Depository, this Bond may be exchanged by the registered owner hereof or his or her duly authorized attorney upon presentation at the principal corporate trust office of the Bond Registrar for an equal aggregate principal amount of Series 2000 Bonds of the same maturity and in any authorized denominations in the manner, subject to the conditions and upon payment of charges, if any, provided in the Resolutions. This Bond is transferable only upon the bond registration book kept for that purpose at the principal corporate trust office of the Bond Registrar by the registered owner hereof in person, or by attorney duly authorized in writing, upon the surrender and presentation to the Bond Registrar of this Bond duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or attorney duly authorized in writing, and thereupon a new registered bond, in the same aggregate principal amount and of the sa.rne maturity shall be issued to the transferee in exchange therefor. The Series 2000 Bonds are issuable in the form of registered bonds in the denomination of $5,000 or any integral multiple thereof and are exchangeable at the principal corporate trust office of the Bond Registrar in the manner, subject to the conditions and upon payment of charges, if any, provided in the Resolutions. The Bonds and such revenue bonds of the Consolidated Government as may in the future be issued on a parity therewith, are equally and ratably secured by a pledge of and a lien on the "Pledged Revenues," which are defined in the Resolutions to include net operating revenues of the System (gross operating revenues of the System after provision for payment of all reasonable expenses of operation and maintenance) and earnings on investments made with moneys and securities from time to time on deposit in the funds and accounts established in the Resolutions. The Resolutions provide, among other things, for prescribing and revising rates and collecting fees and charges for the services, facilities and commodities furnished by the System, as now existent and as hereinafter added to, extended, improved and equipped to the extent necessary to produce revenues sufficient (i) to pay the reasonable and necessary costs of operating and maintaining the System, including any contractual obligations incurred pertaining to the operation of the System, (ii) to produce Pledged Revenues (excluding earnings on investments made with moneys and securities from time to time on deposit in the construction funds) in each Fiscal Year (as defined in the 1996 Resolution) equal to at last 110 percent of the amount required to discharge the payment of the Bonds and any bonds issued on a parity therewith then outstanding as the same become due and payable, (iii) to pay into the special fund designated "Augusta, Georgia Water and Sewerage System Sinking Fund" the amounts required to pay the principal of and the interest on the Bonds and any other bonds hereafter issued on a parity therewith as the same become due payable, either at maturity or by proceedings for mandatory redemption, and to create and maintain a reserve -17- AOCORP 333597.4 therein for that purpose, and (iv) to create and maintain a reserve for extensions and improvements to the System. This Bond shall not be deemed to constitute a debt of the State of Georgia or the Consolidated Government nor a pledge of the faith and credit of said State or Consolidated Government, nor shall the State or Consolidated Government be subject to any pecuniary liability hereon. This Bond shall not be payable from, nor be a charge upon, any funds other than the Pledged Revenues, and is payable solely from the special fund provided therefor from the Pledged Revenues, including all future additions thereto and any other moneys deposited therein. No owne~ of this Bond shall ever have the right to enforce payment hereof against any other property of the State of Georgia or the Consolidated Government, nor shall this Bond constitute a charge, lien or encumbrance, legal or equitable, upon any other property of the Consolidated Government other than the Pledged Revenues pledged to the payment hereof. The issuance of this Bond shall not directly, indirectly or contingently obligate the State or the Consolidated Government to levy or to pledge any form of taxation whatever therefor or to make any appropriation for its payment. The Series 2000 Bonds may be redeemed prior to their respective maturities, either in whole at any time or in part on any Interest Payment Date, in any year not earlier than October I, _ from any moneys available for such purpose as provided in the 2000 Resolution by payment of the principal amount thereof and accrued interest thereon to date of redemption, together with a premium of _ percent of such principal amount if redeemed on or prior to September 30, _, _ percent of such principal amount if redeemed thereafter and on or prior to September 30, _, and at par without a premium if redeemed thereafter and before maturity. In addition, the Series 2000 Bonds maturing October I, _ are subject to mandatory redemption prior to maturity in accordance with the provisions of the 2000 Resolution, in part, by lot in such manner as may be designated by the Bond Registrar at par plus accrued interest to the redemption date, in the following principal amounts on October I, in the years, as follows: Year Amount $ maturity. principal amount of Bonds maturing October I, shall be paid at Notice designating the Bonds (or the portion of the principal amount of the Series 2000 Bonds in multiples of $5,000) to be acquired by redemption, as aforesaid, shall be mailed, postage prepaid, not less than 30 days nor more than 60 days prior to the redemption date to all registered owners of Series 2000 Bonds to be redeemed in whole or in part at the addresses which appear in the bond registration book, but failure so to mail any such notice shall not affect the validity of the -18- AOCORP 333597.4 proceedings for such redemption or cause the interest to accrue on the principal amount of the Series 2000 Bonds so designated for redemption after the redemption date. To the extent and in the manner permitted by the Resolutions, modifications, alterations, amendments, additions and recisions of the provisions of the Resolutions, or of any resolution supplemental thereto or of the Series 2000 Bonds, may be made by the Consolidated Government with the consent of the owners of at least 65 percent in aggregate principal amount of the Series 2000 Bonds then outstanding, including any parity obligations therewith then outstanding, and without the necessity for notation hereon of reference thereto. This Bond is issued with the intent that the laws of the State of Georgia shall govern its construction. In case of default, the owner of this Bond shall be entitled to the remedies provided in the Resolutions authorizing its issuance and in said Revenue Bond Law and any amendments thereto. It is hereby recited and certified that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been done, have happened and have been performed in due and legal form as required by law, and that provision has been made for the allocation from the anticipated revenues of the System, as now existent and as hereafter added to, extended, improved and equipped, of amounts sufficient to pay the principal of and the interest on the Series 2000 Bonds as the same mature, or are acquired by mandatory redemption, and to create and maintain a reserve for that purpose, and that said revenues are irrevocably allocated and pledged to the payment of the Series 2000 Bonds and the interest thereon. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Resolutions until this Bond shall have been authenticated and registered upon the bond registration book kept for that purpose by the Bond Registrar, which authentication and registration shall be evidenced by the execution by the manual signature of a duly authorized signatory of the Bond Registrar of the certificate hereon. -19- AOCORP 333597.4 IN WITNESS WHEREOF, Augusta, Georgia has caused this Bond to be executed by use of the [manual][facsimile] signature of the Mayor of the Commission of the Consolidated Government and [its official seal to be impressed hereon] [a facsimile of its official seal to be imprinted hereon] and attested by use of the [manual][facsimile] signature of the Clerk of the Commission of the Consolidated Government, as of the 1st day of September, 2000. AUGUSTA, GEORGIA (S E A L) By: Mayor, Augusta-Richmond County Commission Attest: Clerk -20- AOCORP 333597.4 Date of Authentication and Registration: CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond is one of the Series 2000 Bonds described in the resolutions of August 22, 2000 and September _, 2000. SunTrust Bank, as Bond Registrar By: Authorized Signatory ********** VALIDATION CERTIFICATE STATE OF GEORGIA ) ) COUNTY OF RICHMOND) The undersigned Clerk of the Superior Court of Richmond County, State of Georgia, HEREBY CERTIFIES that this Bond was validated and confirmed by judgment ofthe Superior Court of Richmond County, Georgia, on the _ day of September, 2000 and that no intervention or objection was filed in the proceedings validating same and that no appeal from said judgment of validation has been taken. WITNESS my [facsimile] signature and seal of the Superior Court of Richmond County, Georgia. (S E A L) Clerk, Superior Court, Richmond County, Georgia ********** -21- AOCORP 333597.4 ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto [Please print or typewrite name and address including postal zip code of assignee.] [Please insert Social Security or Tax Identification Number.] the within bond and all rights thereunder, hereby constituting and appointing attorney to transfer this Bond on the bond registration book kept for such purpose by the Bond Registrar, with full power of substitution in the premises. DATED (Signature Guaranteed) Registered Owner Notice: Signature(s) must be guaranteed by an eligible guarantor institution (such as banks, stockbrokers, savings and loan . associations and credit unions) with membership in an approved Signature Guarantee Medallion Program pursuant to S.E.C. Rule 17Ad-15. Notice: The signature(s) on this assignment must correspond with the name as it appears on the face of the within bond in every particular without alterations, enlargement or any change whatsoever. ********** [STATEMENT OF INSURANCE] . ********** "\ -22- AOCORP 333597.4 Section 4. Required Authentication; Proof of Ownership. Only those Series 20.0.0. Bonds which shall have endorsed thereon a certificate of authentication and registration substantially in the form hereinbefore set forth, duly executed by the manual signature of an authorized signatory of the Bond Registrar shall be entitled to any benefit or security under this 20.0.0. Resolution and such certificate upon any of the Series 20.0.0. Bonds when duly executed shall be conclusive evidence that such Series 20.0.0. Bond has been duly authenticated, registered and delivered. It shall not be necessary that the same signatory of the Bond Registrar sign the certificate of authentication and registration on all of the Series 20.0.0. Bonds that may be issued hereunder at anyone time. The person in whose name any Series 20.0.0. Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes and the payment of the principal amount, interest and premium, if any, shall be made only to or upon the order of the registered owner thereof. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 20.0.0. Bond, including redemption premium, if any, and the interest thereon to the extent of the sums so paid. Section 5. Bond Registrar; Transfer and Exchan!!e. The Bond Registrar shall keep the bond registration book for the registration of the Series 20.0.0. Bonds and for the registration of transfers of the Series 20.0.0. Bonds as herein provided. The transfer of any Series 20.0.0. Bond shall be registered upon the bond registration book upon the surrender and presentation of the Series 20.0.0. Bond to the Bond Registrar duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or attorney authorized in writing in such form as shall be satisfactory to the Bond Registrar. Upon any such registration of transfer, the Bond Registrar shall authenticate and deliver in exchange for such Series 20.0.0. Bond or Series 20.0.0. Bonds so surrendered, a new Series 20.0.0. Bond or Series 20.0.0. Bonds registered in the name of the transferee, of the same series and maturity, in any denomination or denominations authorized by this 20.0.0. Resolution, and in an aggregate principal amount equal to the aggregate principal amount of the Series 20.0.0. Bonds so surrendered. Any Series 20.0.0. Bond, upon presentation and surrender thereof to the Bond Registrar, together with an assignment duly executed by the registered owner or duly authorized attorney, in such form as may be satisfactory to the Bond Registrar, may be exchanged, at the option of the registered owner, for an aggregate principal amount of Series 20.0.0. Bonds of the same series and maturity equal to the principal an10unt of the Series 2000 Bond so surrendered and of any authorized denomination or denominations. The Bond Registrar may make a charge for every exchange or registration of transfer of the Series 20.00. Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer, but no other charge shall be made to the owner for the privilege of transferring or exchanging the Series 20.0.0. Bonds under this 20.0.0. Resolution. Section 6. Lost. Destroved. Mutilated Bonds. If any Series 20.0.0. Bond shall become mutilated, the Bond Registrar in its discretion and at the expense of the owner of such Series 20.0.0. Bond shall authenticate and deliver a new Series 20.0.0. Bond of like tenor and series registered in the name of the owner in exchange and substitution for such mutilated Series 20.0.0. Bond. If any Series 20.0.0. Bond shall become lost, destroyed or wrongfully taken, evidence of such loss, destruction or wrongful taking within a reasonable time thereafter may be submitted to the Consolidated Government and if such evidence shall be satisfactory and indemnity of a character and in an amount satisfactory shall be given, then the Consolidated Government at the expense of the owner shall -23- AOCORP 333597.4 cause a new Series 2000 Bond of like tenor and series registered in the name of the owner to be authenticated by the Bond Registrar and delivered to the registered owner. Section 7. Global Form: Securities Deoository: Ownershio of Series 2000 Bonds. (a) Upon the initial issuance, the ownership of each Series 2000 Bond shall be registered in the name of the Securities Depository or the Securities Depository Nominee, and ownership thereof shall be maintained in Book-Entry Form by the Securities Depository for the account of the Agent Members thereof. Initially, each maturity of the Series 2000 Bonds shall be registered in the name of Cede & Co., as the nominee of The Depository Trust Company. Beneficial Owners will not receive Series 2000 Bonds from the Bond Registrar evidencing their ownership interests. Except as provided in subsection (c) of this Section 7, the Series 2000 Bonds may be transferred, in whole but not in part, only to the Securities Depository or the Securities Depository Nominee, or to a successor Securities Depository selected or approved by the Consolidated Government or to a nominee of such successor Securities Depository. (b) With respect to Series 2000 Bonds registered in the name of the Securities Depository or the Securities Depository Nominee, neither the Consolidated Government; the Bond Registrar nor the Paying Agent shall have any responsibility or obligation to any Agent Member or Beneficial Owner. Without limiting the foregoing, neither the Consolidated Government, the Bond Registrar nor the Paying Agent shall have any responsibility or obligation with respect to: (i) the accuracy of the records of the Securities Depository, the Securities Depository Nominee or any Agent Member with respect to any Beneficial Ownership interest in the Series 2000 Bonds; (ii) the delivery to any Agent Member, any Beneficial Owner or any other person, other than the Securities Depository or the Securities Depository Nominee, of any notice with respect to the Series 2000 Bonds; or (iii) the payment to any Agent Member, any Beneficial Owner or any other person, other than the Securities Depository or the Securities Depository Nominee, of any amount with respect to the principal, premium, if any, or interest on the Series 2000 Bonds. So long as any Series 2000 Bonds are registered in Book-Entry Form, the Consolidated Government, the Bond Registrar and the Paying Agent may treat the Securities Depository as, and deem the Securities Depository to be, the absolute owner of such Series 2000 Bonds for all purposes whatsoever, including without limitation: (i) the payment of principal, premium, if any, and interest on such series of Series 2000 Bonds; (ii) giving notices of redemption and other matters with respect to such Series 2000 Bonds; -24- AOCORP 333597.4 (iii) registering transfers with respect to such Series 2000 Bonds; (iv) the selection of Series 2000 Bonds for redemption; and (v) voting and obtaining consents under the 2000 Resolution. So long as any Series 2000 Bonds are registered in Book-Entry Form, the Paying Agent shall pay all principal of, premium, if any, and interest on the Series 2000 Bonds only to the Securities Depository or the Securities Depository Nominee as shown in the Bond Register, and all such payments shall be valid and effective to fully discharge the Consolidated Government's obligations with respect to payment of principal of, premium, if any, and interest on the Series 2000 Bonds to the extent so paid. (c) If at any time (i) the Consolidated Government determines that the Securities Depository is incapable of discharging its responsibilities described herein, (ii) the Securities Depository notifies the Consolidated Government or the Paying Agent that it is unwilling or unable to continue as Securities Depository with respect to the Series 2000 Bonds, or (iii) the Securities Depository shall no longer be registered or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation and a successor Securities Depository is not appointed by the Consolidated Government within 90 days after the Consolidated Government receives notice or becomes aware of such condition, as the case may be, then this Section 7 shall no longer be applicable and the Consolidated Government shall execute and the Bond Registrar shall authenticate and deliver Series 2000 Bond certificates representing the Series 2000 Bonds to the bondholders. Series 2000 Bonds issued pursuant to this subsection ( c) shall be registered in such names and authorized denominations as the Securities Depository, pursuant to instructions from the Agent Member or otherwise, shall instruct the Bond Registrar. Upon exchange, the Bond Registrar shall authenticate and deliver such Series 2000 Bond certificates representing the Series 2000 Bonds to the persons in whose names such Series 2000 Bonds are so registered on the Business Day immediately preceding the date of such exchange. Section 8. Optional Redemption of Series 2000 Bonds. The Series 2000 Bonds shall be subject to redemption as provided in the 2000 Supplemental Resolution. Section 9. Procedure for and Notice of Redemption. The Consolidated Government shall select the maturities of Series 2000.Bonds to be redeemed in part. Ifless than all of the Series 2000 Bonds of a single maturity are to be redeemed, the Bond Registrar shall treat any Series 2000 Bond of such maturity outstanding in a: denomination of greater than $5,000 as two or more separate Series 2000 Bonds in the denomination of $5,000 each and shall assign separate numbers to each for the purpose of determining the Series 2000 Bonds or the principal. amount of such Series 2000 Bonds in a denomination greater than $5,000 to be redeemed by lot. With respect to any Series 2000 Bond called for partial redemption, the registered owner thereof shall surrender such Series 2000 Bond to the Bond Registrar in exchange for one or more Series 2000 Bonds in any authorized denomination in the aggregate principal amount equal to the unredeemed principal amount of such Series 2000 Bond so surrendered. -25- AOCORP 333597.4 The Bond Registrar shall furnish the Consolidated Government on or before the 45th day next preceding each mandatory redemption date (or optional redemption date if such option is exercised) with its certificate setting forth the Series 2000 Bonds that have been selected for mandatory redemption (or optional redemption) either in whole or in part on such date. Not less than 30 days nor more than 60 days before any date upon which any such optional redemption or mandatory redemption is to be made a notice of such redemption signed by a duly authorized signatory of the Bond Registrar designating the Series 2000 Bonds to be redeemed (in whole or in part) shall be filed at the place at which the principal of and interest on the Series 2000 Bonds shall be payable and shall be mailed, postage prepaid, to all registered owners of Series 2000 Bonds to be redeemed (in whole or in part) at addresses which appear upon the bond registration book. It is expressly provided, however, that the failure so to mail any such notice ofthe optional redemption or mandatory redemption of the Series 2000 Bonds shall not affect the validity of the proceedings for such redemption or cause the interest to continue to accrue on the principal amount of such Series 2000 Bonds so designated for redemption after the redemption date. However, it is expressly understood and agreed that should the Consolidated Government hereafter elect to issue any Additional Bonds, as herein authorized, it shall have the right to exercise any optional redemption provision to redeem the Bonds of any such future issue or issues before it redeems the Series 2000 Bonds, or it may redeem the Series 2000 Bonds before it redeems the Bonds of any such future issue or issues, or it may redeem some of the Series 2000 Bonds and some of the Bonds of any such future issue or issues at the same time. If less than a full maturity within an issue of Bonds is redeemed, then such redemption shall be by lot in such manner as may be designated by the Bond Registrar. Section 10. Purchase in Open Market. Nothing herein contained shall be construed to limit the right of the Consolidated Government to purchase with any excess moneys, as hereinabove defined, in the Sinking Fund and for sinking fund purposes, the Series 2000 Bonds in the open market at a price not exceeding the callable price hereinabove set forth. Any such Series 2000 Bonds so purchased cannot be reissued and same shall be disposed of as is hereinafter provided in this 2000 Resolution. Section 11. Effect of Call for Redemption. Notice having been given in the manner and under the conditions hereinabove provided, the Series 2000 Bonds so designated for redemption or the portion of the Series 2000 Bonds so designated for partial redemption shall, on the redemption date designated in such notice, become and be due and payable at the redemption price hereinabove specified, and from and after the date of redemption so designated, unless default shall be made in the payment of the Series 2000 Bonds so designated for redemption or the portion of the Series 2000 Bonds so designated for partial redemption, interest on the principal amount of said Series 2000 Bonds so designated for redemption shall cease to accrue on the redemption date. Section 12. Cancellation of Bonds. All Bonds paid, purchased or redeemed shall be canceled or otherwise destroyed upon their payment and a record of such destruction shall be made -26- AOCORP 333597.4 and preserved in the permanent records of the Consolidated Government and in the records of the Bond Registrar pertaining to the Series 2000 Bonds. Section 13. Pledee of Revenues: Paritv Bonds. The Series 2000 Bonds shall stand on a parity and shall be of equal dignity with the Prior Bonds and shall be secured by the lien created pursuant to the provisions of the 1996 Resolution, as the same is ratified, reaffirmed, broadened and extended by this 2000 Resolution, just as if the Prior Bonds and the Series 2000 Bonds had been issued simultaneously under the same resolution. Section 14. Approval of System Improvements. The additions, extensions and improvements to the System and equipment therefor shall be accomplished substantially in accordance with the Engineering Report. The Engineering Report and the additions, extensions and improvements set forth therein are hereby authorized and approved and the Engineering Report, by this reference thereto, is incorporated herein and made a part hereof. Section 15. Aoolication of the Series 2000 Bond Proceeds. The estimated application of the proceeds of the sale of the Series 2000 Bonds shall be set forth in the 2000 Supplemental Resolution. Such application will provide for, among other things, the application of accrued interest, the amount of proceeds allocable to capitalized interest, the deposit to the 2000 Construction Fund, the purchase of a Reserve Account Surety Bond and the payment of the costs and expenses of the undertaking contemplated hereby. Section 16. Eneineering Report. The additions, extensions and improvements to the System now contemplated shall be accomplished in accordance, or substantially in accordance, with the Engineering Report, attached hereto as Exhibit B. Section 17. Construction Fund. There is hereby created a special fund designated the "Augusta, Georgia Water and Sewerage System Construction Fund--2000" (the "2000 Construction Fund"). The moneys so deposited into the 2000 Construction Fund as aforesaid and as more specifically set forth in the 2000 Supplemental Resolution, and any other funds acquired for this purpose by gift, donation, grant or otherwise, shall be held by the 2000 Construction Fund Depository in trust for the owners of the Series 2000 Bonds and shall be applied toward the payment of the cost of adding to, extending, improving and equipping the System, in accordance, or substantially in accordance, with the Engmeering Report and in accordance with and subject to the provisions and restrictions set forth in this 2000 Resolution and the applicable provisions and restrictions set forth in the 1996 Resolution, and the Consolidated Government covenants that it will not cause or permit to be paid from the 2000 Construction Fund any sums represented as aforesaid, except in accordance with, or substantially in accordance with, the Engineering Report and the provisions and restrictions set forth in the 1996 Resolution and in this 2000 Resolution. The moneys so deposited into the 2000 Construction Fund shall be used for the purposes herein and for the applicable purposes provided in Section 3 of Article IV of the 1996 Resolution and moneys therein shall be held, invested and expended in the manner and by the procedure established under the provisions of said Article IV, Section 3 of the 1996 Resolution. Said Article and each and every appropriate provision thereof be and they are hereby declared applicable to the Series 2000 Bonds, the 2000 Construction Fund and the 2000 Construction Fund Depository and -27- AOCORP 333597.4 for the purpose of making same applicable to the Series 2000 Bonds, the 2000 Construction Fund and the 2000 Construction Fund Depository, the Consolidated Government does hereby reaffirm and adopt the same verbatim herein, except that said Article is broadened and extended to provide for the additions, extensions and improvements to the System in accordance with the Engineering Report as herein contemplated. When the additions and improvements to the System shall have been completed, such fact shall be evidenced by a certificate from the Consulting Engineers stating the date of completion, and should there then be any balance in the 2000 Construction Fund, such balance, unless otherwise provided, shall be paid into the special account designated as the Debt Service Account held within the Sinking Fund. In the event of a default in payment of the Series 2000 Bonds, the Paying Agent shall notify the 2000 Construction Fund Depository thereof and the 2000 Construction Fund Depository shall, without further authorization or direction, transfer the remaining funds in the 2000 Construction Fund to the Paying Agent or Sinking Fund Custodian to be used to pay principal and interest on the Series 2000 Bonds. Section 18. Creation of 2000 Capitalized Interest Fund: Use of Monevs in 2000 Capitalized Interest Fund. There is hereby created by the Consolidated Government a fund designated "Augusta, Georgia Water and Sewerage System Capitalized Interest Fund-2000." There shall be paid into the 2000 Capitalized Interest Fund such amount from the proceeds of the sale of the Series 2000 Bonds allocable to capitalized interest. Such moneys shall be transferred to the Debt Service Account held within the Sinking Fund on each Interest Payment Date until the balance in the 2000 Capitalized Interest Fund has been reduced to zero. The amounts so transferred shall be used to pay interest coming due on the Series 2000 Bonds. Section 19. Flow of Funds: Sinking Fund. The Consolidated Government is now operating and will continue to operate the System on a fiscal year basis commencing on the I st day of January in each year and extending through the 31st day of December in such year, but it reserves the right by the adoption of proper proceedings to change its fiscal year as provided in the 1996 Resolution. The Consolidated Government covenants that all revenues arising from the ownership or operation of the System and properties in connection therewith as now existent and as hereafter added to, extended and improved shall be collected by the Consolidated Government or by its agents or employees and deposited promptly with the depository to the credit of a special fund heretofore created and designated in Section 2 of Article III of the 1996 Resolution as the "Richmond County Water and Sewerage System Revenue Fund--1996" and herein redesignated pursuant to this 2000 Resolution as the "Augusta, Georgia Water and Sewerage System Revenue Fund" (the "Revenue Fund"). The moneys deposited into the Revenue Fund shall be used and disbursed from the Revenue Fund as hereinafter provided. There shall first be paid from the Revenue Fund the Expenses of Operation and Maintenance. The Consolidated Government covenants that it will continue to maintain the sinking fund created and designated in Article V, Section 2, Paragraphs 2 and 4 of the 1996 Resolution as the "Richmond County Water and Sewerage System Sinking Fund" and herein redesignated pursuant to this 2000 Resolution as the "Augusta, Georgia Water and Sewerage System Sinking Fund" (the -28- AOCORP 333597.4 "Sinking Fund"), which Sinking Fund now consists of two acco,:!nts which are to be held therein, created and designated as "Debt Service Account" and "Debt Service Reserve Account." The payments to be made into the Sinking Fund must be adjusted so as to provide sufficient moneys with which to pay the principal of and the interest on the Prior Bonds and the Series 2000 Bonds as the same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year and to create and maintain a reserve in the Sinking Fund equal to the Reserve Requirement on the Prior Bonds and the Series 2000 Bonds. After there have been paid from the Revenue Fund the sums required or permitted to be paid for Expenses of Operation and Maintenance pursuant to the provisions of this Section 19, there shall next be paid from the Revenue Fund into the Sinking Fund the following amounts: (a) Taking into consideration the moneys then on hand and the moneys to be deposited therein and in the 2000 Capitalized Interest Fund simultaneously with the issuance and delivery of the Series 2000 Bonds, there shall be deposited into the Debt Service Account for the purpose of paying the principal of and interest on the Prior Bonds and the Series 2000 Bonds as same become due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, (i) art amount sufficient to pay the principal of and interest on the Prior Bonds coming due on October 1, 2000, and (ii) commencing with the month of October 2000 from month to month thereafter an amount equal to one-sixth of the interest on the Prior Bonds and Series 2000 Bonds coming due on the next ensuing Interest Payment Date and one-twelfth of the principal on the Prior Bonds and Series 2000 Bonds coming due on the next ensuing October I, such aggregate monthly payments to continue from month to month until sufficient funds are on hand in the Sinking Fund to pay all of the Prior Bonds and Series 2000 Bonds as same mature or are acquired by mandatory redemption and the interest which will become due and payable thereon. (b) Upon the issuance of the Series 2000 Bonds, the Consolidated Government shall purchase a Reserve Account Surety Bond for the credit of the Reserve Account. Simultaneously with the issuance of the Series 2000 Bonds, there shall be on deposit in the Reserve Account, taking into account moneys on deposit therein and amounts being provided by the Consolidated Government from lawfully available funds, such amount, if any, as may be required to create in the Reserve Account a reserve equal to the Reserve Requirement upon the date of issuance of the Series 2000 Bonds. The Reserve Account shall be maintained for the purpose of paying the principal of and interest on the Prior Bonds and the Series 2000 Bonds falling due in any year as to which there would otherwise be a default and if money is taken from the Reserve Account for the payment of such principal and interest, the money so taken shall be replaced in the Reserve Account from the first moneys in the Revenue Fund thereafter available and not required to be used for Expenses of Operation and Maintenance of the System and not required to be paid into the Debt Service Account as provided in subparagraph 20(a) above. (c) All sums required to be paid to comply with the provisions of subparagraphs (a) and (b) above shall be paid on or before the 25th day of the month in which the payment is due, and if, in any month, for any reason, the full amount herein required to be paid in such month shall not be paid into the Sinking Fund, any deficiency shall be added to and shall -29- AOCORP 333597.4 become a part of the amount required to be paid into the Sinking Fund in the next succeeding month; provided, however, the Consolidated Government covenants and agrees that in the event it hereafter elects to issue Additional Bonds, pursuant to the provisions of this 2000 Resolution, the above stated payments into the Sinking Fund will be increased to the extent necessary to pay the principal of and interest on the Prior Bonds, the Series 2000 Bonds and on any Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued coming due, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Yearand to create upon the issuance of the bonds to be issued and thereafter maintain a reserve for that purpose in an amount at least equal to the Reserve Requirement on the Prior Bonds, the Series 2000 Bonds, the Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued. Section 20. Debt Service Reserve Account. In the event a withdrawal of moneys is made from the Reserve Account or any draw is made upon any Reserve Account Surety Bond held within the Reserve Account for the payment of principal of or interest on the Prior Bonds or the Series 2000 Bonds, the first moneys available in the Revenue Fund and not required to pay Expenses of Operation and Maintenance and not required to make the monthly payments into the Debt Service Account as hereinabove provided, shall be immediately paid into the Reserve Account or paid to the Reserve Account Surety Bond Provider as hereinafter described until the amount on deposit in the Reserve Account after payments of any amounts payable under the succeeding sentence equals the Reserve Requirement; provided, however, such payments will in any event be at least sufficient to restore the Reserve Account to its proper balance within 12 months after the date upon which money is taken from the Reserve Account or the date upon which a draw on any Reserve Account Surety Bond is made. In the event of a drawdown on any Reserve Account Surety Bond, the Consolidated Government shall on a pro rata basis make (1) all payments (if any) into the Reserve Account necessary to restore the amount of cash or securities, if any, on deposit, therein immediately prior to such draw and (2) make all payments to any Reserve Account Surety Bond Providers as a repayment of such drawdown (such payments to be made on a pro rata basis to each Reserve Account Surety Bond Provider based upon the amount drawn and not reimbursed under each Reserve Account Surety Bond), and (3) upon making full repayment to any Reserve Account Surety Bond Provider, shall thereafter make payments into the Reserve Account, to the extent that the then applicable Reserve Requirement exceeds the aggregate of the amount available to be drawn on a Reserve Account Surety Bond and the amount of cash or securities, if any, on deposit therein immediately prior to such draw. Repayment or any drawdown on the Reserve Account Surety Bond (other than repayments which reinstate the Reserve Account Surety Bond) and any interest or fees due the Reserve Account Surety Bond Provider under such Reserve Account Surety Bond shall be secured by a lien on the Pledged Revenues subordinate to payments into the Debt Service Account, the Reserve Account and payments to any Credit Issuer securing the Prior Bonds, the Series 2000 Bonds and any Additional Bonds. Any such Reserve Account Surety Bond shall be pledged to the benefit of the owners of all of the Prior Bonds, the Series 2000 ~onds and any Additional Bonds. The Consolidated Government reserves the right, if it deems it necessary in order to acquire such a Reserve Account Surety Bond, to amend the Resolutions without the consent of any of the owners of the Prior Bonds, the Series 2000 Bonds and any Additional Bonds in order to grant the Reserve Account Surety Bond -30- AOCORP 333597.4 Provider such additional rights as it may demand, provided that such amendment shall not, in the written opinion of Bond Counsel filed with the Consolidated Government, impair or reduce the security gr3.llted to the owners of the Prior Bonds, the Series 2000 Bonds and any Additional Bonds or any of them. It is expressly provided, however, that if on the 2nd day of October in any year there are on deposit in the Debt Service Account of the Sinking Fund any money and securities, same shall be withdrawn therefrom and immediately deposited into the Revenue Fund. It is expressly provided further, however, that if on the 2nd day of October in any year there are on deposit in the Reserve Account of the Sinking Fund moneys and securities (such securities to be valued at their market value plus accrued interest thereon to October 2nd) the aggregate amount of which, together with the amounts available under any Reserve Account Surety Bond, is in excess of the then required Reserve Requirement, such excess moneys shall be withdrawn from the Sinking Fund and immediately deposited into the Revenue Fund. The calculation and determination of such excess amount in accordance with this provision shall be the responsibility of the chief financial officer of the utilities department of the Consolidated Government and such financial officer shall notify the Sinking Fund Custodian and make or cause to be made any transfer of funds required pursuant to the provisions of this subparagraph. The Consolidated Government may at any time fulfill any portion of its obligation to fund the Reserve Account by depositing in the Reserve Account a Reserve Account Surety Bond payable on any int~rest and/or principal payment date in an amount equal to any portion of the reserve requirement then required to be maintained within the Reserve Account. Before any such Reserve Account Surety Bond is substituted for cash or deposited in lieu of cash within the Reserve Account, (A) there shall be filed with the Consolidated Government and the Sinking Fund Custodian (i) an opinion of nationally recognized bond counsel to the effect that such substitution will not adversely affect the exclusion of interest on the Bonds from gross income for federal income tax purposes; (ii) a certificate of Moody's or Standard & Poor's, whichever rating agency maintains a rating on the outstanding Bonds, to the effect that (a) if the issuer(s) of the Reserve Account Surety Bond were insuring payment of principal and interest on the Bonds to which the Reserve Account relates, such Bonds would receive the highest rating available from such rating agency (or any similar rating agency then in existence) and (b) that the substitution of such Reserve Account Surety Bond for cash within the Reserve Account will not, in and of itself, result in a reduction of the ratings issued for the Bonds outstanding, and (iii) a copy of the Reserve Account Surety Bond issued to fulfill the Consolidated Government's obligation to fund the Reserve Account together with an opinion of counsel satisfactory to the Sinking Fund Custodian to the effect that the Reserve Account Surety Bond is valid and enforceable in accordance with its terms, (B) the Consolidated Government shall riot secure any obligation to the Reserve Account Surety Bond Provider by a lien equal to or superior to the lien granted to the Bonds; (C) the Reserve Account Surety Bond shall penl1it a drawing by the Consolidated Government for the full stated amount in the event (i) the Reserve Account Surety Bond expires or terminates for any reason prior to the final maturity of the Bonds, and (ii) the Consolidated Government fails to satisfy the Reserve Requirement by the deposit to the Reserve Account of cash, obligations, a substitute Reserve Account Surety Bond, or any combination thereof, on or before the date of such expiration or termination; (D) if the rating issued by the Rating Agency to the Reserve Account Surety Bond Provider is withdrawn or reduced below the rating assigned to -31- AOCORP 333597.4 that of the Bonds immediately prior to such action by the Rating Agency, the Consolidated Government shall provide a substitute Reserve Account Surety Bond within 60. days after such rating change, and, if no substitute Reserve Account Surety Bond is obtained by such date, shall fund the Reserve Requirement in not more than 24 equal monthly payments commencing not later than the first day of the month immediately succeeding the date representing the end of such 60. day period; and (E) if the Reserve Account Surety Bond Provider commences any insolvency proceedings or is determined to be insolvent or fails to make payments when due on its obligations, the Consolidated Government shall provide a substitute Reserve Account Surety Bond within 60. days thereafter, and, if no substitute Reserve Account Surety Bond is obtained by such date, shall fund the Reserve Requirement in not more than 24 equal monthly payments commencing not later than the first day of the month immediately succeeding the date representing the end of such 60. day period. If the events des;;ribed in either clauses (D) or (E) above occur, the Consolidated Government shall not relinquish the Reserve Account Surety Bond at issue until after the Reserve Requirement is fully satisfied by the provision of cash, obligations, or a substitute Reserve Account Surety Bond or any combination thereof. Each such Reserve Account Surety Bond shall be unconditional and irrevocable and shall provide liquidity for the life of the Bonds with respect to which the Reserve Account Surety Bond is purchased and, if the Reserve Account Surety Bond is purchased with respect to more than one issue of Bonds hereunder, then for the term of the Bonds for which it was purchased. So long as the balance of the Reserve Account equals the Reserve Account Requirement on the Prior Bonds, the Series 20.0.0. Bonds and any Additional Bonds, any reimbursement agreement entered into between the Consolidated Government and any such Reserve Account Surety Bond Provider may provide that the Consolidated Government will be obligated to repay such provider an amount equal to any drawdown on the Reserve Account Surety Bond plus a market rate of interest over a specified period of time not to exceed three years but such obligation shall be junior and subordinate in right of payment to all outstanding Bonds. Section 21. Utility General Fund. After there have been paid from the Revenue Fund in each month all amounts required or permitted to be paid as provided herein, all moneys remaining in the Revenue Fund shall be paid at the end of each month into the special fund created and designated in Article V, Section 2, Paragraph 6 of the 1996 Resolution as the "Richmond County Water and Sewerage System Utility General Fund" and herein redesignated pursuant to this 20.0.0. Resolution as the "Augusta, Georgia Water and Sewerage System Utility General Fund" (the "Utility General Fund"). Except as set forth below, expenditures shall be made from the Utility General Fund only for the purpose of: (a) paying principal of and/or interest on the Prior Bonds, the Series 20.0.0. Bonds and any Additional Bonds then outstanding and falling due at any time for the payment of which money is not available in the Sinking Fund securing the payment of same; (b) making payments into the Sinking Fund in the amounts required in order to accumulate and maintain the Reserve Account created therein at its proper balance; (c) paying such expenses as may be necessary to alleviate or remove the effects of an emergency having a major impact on the System caused by some extraordinaiy occurrence which makes it necessary to use the funds of the System, to the extent that moneys on deposit in the Revenue Fund are insufficient to meet such emergencies; (d) paying Expenses of Operation and Maintenance for which moneys are not available in the Revenue Fund; (e) making replacements, additions, extensions and improvements and acquiring equipment and paying the cost of any engineering studies, surveys or plans and specifications pertaining to the future development or expansion of the System deemed to be reasonable and in the best interest of -32- AOCORP 333597.4 the Consolidated Government and the holders of the Bonds; (f) payment of the charges of the Utility General Ft~nd Depository for investment services; and (g) paying to any Reserve Account Surety Bond Provider interest on amounts drawn under such Reserve Account Surety Bond. The Consolidated Government shall maintain at all times a minimwn balance in the Utility General Fund equal to the lesser of $2,500,000 or 5 percent of the Operating Revenues of the System for the immediately preceding Fiscal Year. It is expressly provided, however, that should bonds be hereafter issued ranking as to lien on the Pledged Revenues junior and subordinate to the lien securing the payment of the Prior Bonds, and the Series 2000 Bonds authorized to be issued hereunder, including any issue or issues of Additional Bonds hereafter issued, then such payments into the Utility General Fund as provided in this Section may be suspended and such moneys shall be available to the extent necessary to pay the principal of and interest on such junior lien bonds and to create and maintain a reasonable reserve therefor and such moneys may be allocated and pledged for that purpose. Section 22. Pledged Revenues. As provided in the 1996 Resolution and as hereby ratified and reaffirmed, all Pledged Revenues immediately shall become subject to a lien to secure the payment by the Consolidated Government of the amounts therein agreed to be paid. The Consolidated Government hereby pledges such Pledged Revenues and hereby covenants and agrees that the Pledged Revenues are hereby pledged to the extent necessary to secure the payment by the Consolidated Government of the amounts herein agreed to be paid with respect to the Prior Bonds, the Series 2000 Bonds and any Additional Bonds and such pledge shall be valid and binding against the Consolidated Government and against all other parties and against all claims of any land against the Consolidated Government, whether arising in tort, contract or otherwise, irrespective of whether or not such parties have notice thereof. Section 23. Rate Covenant. The Consolidated Government covenants and agrees that it has heretofore placed into effect a schedule of rates, fees and charges for the services, facilities and commodities furnished by the System and as often as it shall appear necessary the Consolidated Government shall revise and adjust such schedule of rates, fees and charges for either water or sewerage services and facilities, or both, to the extent necessary to produce funds sufficient to operate and maintain the System on a sound business-like basis and to create and maintain the Sinking Fund created by the 1996 Resolution, as same has been enlarged and extended by this 2000 Resolution, in accordance with and in compliance with the terms, covenants and provisions of the Resolutions and to create and maintain a reserve therefor in the amount as required by the Resolutions or such larger amounts as may be required in any proceedings authorizing any such issue or issues of Additional Bonds; as well as to create and maintain a reserve for extensions and improvements to the System. Suc.h rates, fees and charges, in addition to the foregoing requirements, shall be maintained at such level so as to produce Pledged Revenues (excluding Investment Earnings, if any, on the Construction Fund created under this 2000 Resolution) equal to 1.1 times the amount required to discharge the payment of the principal of and the interest on the Prior Bond?, the Series 2000 Bonds and any future parity issues, either at maturity or by proceedings for mandatory redemption, but in no event, however, will said amount be less than that required to create and maintain the Debt -33- AOCORP 333597.4 Service Account and the Reserve Account, as required by the Resolutions. Without limiting the foregoing, the Consolidated Government hereby adopts a uniform increase to its current rate schedule equal to II percent, effective April I, 200 I, and hereby covenants to take such actions hereafter as necessary to cause the revenues of the System to equal or exceed the forecasted revenues of the System set forth on Table 6-8 of the Engineering Report for the period set forth therein. The rates, fees and charges shall be classified in a reasonable manner to cover users of the services and facilities furnished by the System so that as near as practicable such rates, fees and charges shall be uniform in application to all users falling within any reasonable class. No free services shall at any time be furnished from the System and it will undertake within its health powers or such other applicable powers now or hereafter provided by law, to require the owners of all improved property abutting any water line or sewerage line to connect with the System. No customer shall be connected to the System or served by the Consolidated Government without a proper meter having been first installed. All services shall be furnished in accordance with rates now or hereafter established, including services furnished to any county, municipal corporation or other public board or body. In the event the Consolidated Government shall fail to adopt a schedule or schedules of rates, fees and charges, or to revise its schedule or schedules of rates, fees and charges, in accordance with the provisions of this Section, any Bondholder without regard to whether any Event of Default, as defined in Article VIII of the 1996 Resolution, shall have occurred, may institute and prosecute in any court of competent jurisdiction, an appropriate action to compel the Consolidated Government to adopt a schedule or schedules of rates, fees and charges, or to revise its schedule or schedules of rates, fees and charges in accordance with the requirements of this Section and the applicable requirements of Section 3 of Article V of the 1996 Resolution. Section 24. Sin kine Fund Disbursements. Subject to the terms and conditions set forth in the Resolutions, moneys in the Sinking Fund shall be disbursed for (a) the payment of the interest on the Prior Bonds and the Series 2000 Bonds as such interest becomes due and payable; (b) the payment of the principal of the Prior Bonds and the Series 2000 Bonds as same becomes due and payable, either at maturity or by proceedings for mandatory redemption; (c) the optional redemption of the Prior Bonds and the Series 2000 Bonds before maturity at the price and under the conditions provided therefor in the Resolutions; (d) the purchase of the Prior Bonds and the Series 2000 Bonds in the open market; provided, however, the price paid shall not exceed the authorized call price; (e) the transfer of excess moneys, if any, in the Sinking Fund (as described in Section 5 of Article V of the 1996 Resolution and Section 20 of this 2000 Resolution) to the Revenue Fund; (f) the payment of charges for paying the Prior Bonds and the Series 2000 Bonds and interest thereon and the charges for the registration of the Prior Bonds and the Series 2000 Bonds and their transfer or exchange in accordance with the terms thereof; and (g) the payment of any charges for investment services. Section 25. Additional Bonds. The Consolidated Government further covenants and agrees that it will not exercise the privilege as provided in Section 9 of Article V of the 1996 Resolution of issuing additional bonds or obligations ranking as to lien on the Pledged Revenues of the System on a parity with the Prior Bonds and the Series 2000 Bonds, unless or until all the following conditions are met: -34- AOCORP 333597.4 (a) The payments covenanted to be made into the Sinking Fund, as the same may have been enlarged and extended in any proceedings authorizing the issuance of any Additional Bonds, must be currently being made in full amount as required and the Debt Service Account and Reserve Account held within the Sinking Fund must be at their proper respective balances. (b) Except in the case of Additional Bonds issued for refunding purposes pursuant to Article V, Section 8 of the 1996 Resolution, there shall have been procured and filed with the Consolidated Government (i) a report by Independent Certified Public Accountants to the effect that the Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of such Additional Bonds must have been equal to at least 1.25 times the maximum Debt Service Requirement for any succeeding Sinking Fund Year on the Prior Bonds, the Series 2000 Bonds and any other issue or issues of Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued, or in lieu of the foregoing formula, if a new schedule of rates and charges for the services, facilities and commodities furnished by the System shall have been adopted and shall be in effect and Independent Certified Public Accountants shall certify that had this new rate schedule been in effect during the period described above, the Pledged Revenues of the System would have equaled the requirements of the above formula; or (ii) (x) a report by Independent Certified Public Accountants to the effect that the historical Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for a period of 12 consecutive months out of the most recent 18 consecutive months preceding the month of adoption of the proceedings authorizing the issuance of the proposed Additional Bonds were equaL to at least 1.10 times the historical Debt Service Requirement on all Bonds (other than Subordinate Bonds, as hereinafter defined) which were outstanding during such 12-month period, and (y) a report by the Consulting Engineers to the effect that the forecasted Pledged Revenues (excluding Investment Earnings, if any, on construction funds) for each Fiscal Year in the Forecast Period are expected to equal at least 1.25 times the maximum annual Debt Service Requirement on all Bonds (other than Subordinate Bonds) which will be outstanding immediately after the issuance of the proposed Additional Bonds, in the then current or any succeeding Sinking Fund Year. The reports by the Independent Certified Public Accountant that are required by this paragraph (b) may contain pro forma adjustments to historical Pledged Revenues equal to 100 percent of the increased annual amount attributable to any revision in the schedule of rates, fees and charges for the services, facilities and commodities furnished by the System, imposed prior to the date of delivery of the proposed Additional Bonds and not fully reflected in the historical Pledged Revenues actually received during such 12-month period. Such pro forma adjustments shall be based upon a report of the Consulting Engineers as to the amount of Operating -35- AOCORP 333597.4 Revenues which would have been received during such 12-month period had the new rate schedule been in effect throughout such 12-month period. For the purpose of calculating the maximum Debt Service Requirements under this subparagraph (b), the maximum annual Debt Service Requirements shall be reduced by an amount equal to any capitalized interest funded from the proceeds of the Additional Bonds proposed to be issued in each succeeding Sinking Fund Year for the period for which said interest has been capitalized. ( c) An Independent Certified Public Accountant shall certify in triplicate to the Consolidated Government that the requirements of subparagraph (a) above are being complied with and that the requirements of subparagraph (b) above have been met. A copy of such certificate shall be furnished to the Designated Representative of the original purchasers of the Prior Bonds and the Series 2000 Bonds. (d) Except when. Bonds are being issued solely for the purpose of refunding outstanding Bonds, the Consulting Engineers for the Consolidated Government shall provide the Consolidated Government with a written report recommending the additions, extensions and improvements to be made to the System and stating that same are feasible, designating in reasonable detail the work and installation proposed to be done and the estimated cost of accomplishing the undertaking. The Consulting Engineers shall set forth in said report the forecasted Pledged Revenues to be derived from the System which will be available for debt service payments in each of the next 10 years and shall indicate the projected coverage of such debt service payments in each succeeding Sinking Fund Year. An executed duplicate original of such report of the Consulting Engineers as required by this provision shall be furnished to the Designated Representative of the original purchasers of the Prior Bonds and the Series 2000 Bonds issued hereunder not less than 10 days before any proceedings are taken to actually issue such Additional Bonds. ( e) The Consolidated Government shall pass proper proceedings reciting that all of the above requirements have been met, shall authorize the issuance of the Additional Bonds and shall provide in such proceedings, among other things, the date such Additional Bonds shall bear, the rate or rates of interest and maturity dates, as well as the registration and redemption provisions. Except for Additional Bonds that bear interest at a Variable Rate, the interest on the Additional Bonds of any such issue shall fall due on April I and October I of each year, and the Additional Bonds shall mature in installments on October 1, but, as to principal, not necessarily in each year or in equal installments. Any such proceeding or proceedings shall require the Consolidated Government to increase the monthly payments then being made into the Sinking Fund to the extent necessary to pay the principal of and the interest on the Prior Bonds, the Series 2000 Bonds and on all such Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued as same become -36- AOCORP 333597.4 due and payable, either at maturity or by proceedings for mandatory redemption, in the then current Sinking Fund Year, and to create upon the issuance ofthe proposed Additional Bonds to be issued a reserve in the Reserve Account at least equal to the Reserve Requirement on the Prior Bonds, the Series 2000 Bonds and any Additional Bonds therewith then outstanding and on the proposed Additional Bonds to be issued and to maintain said reserve in an amount sufficient for that purpose; provided, however, the Consolidated Government may satisfy funding ofthe required reserve through the purchase of a Reserve Account Surety Bond meeting the requirements of the Resolutions. Any such proceeding or proceedings shall restate and reaffirm, by reference, all of the applicable terms, conditions and provisions of the Resolutions. If any Additional Bonds would bear interest at a Variable Rate, the resolution under which such Additional Bonds are issued shall provide a maximum rate of interest per annum which such Additional Bonds may bear. In connection with the issuance of any Additional Bonds under the Resolutions, the Consolidated Government may obtain or cause to be obtained one or more Credit Facilities providing for payment of all or a portion of the principal of, premium, if any, or interest due or to become due on such Additional Bonds, providing for the purchase of such Additional Bonds by the Credit Issuer, or providing funds for the purchase of such Additional Bonds by the Consolidated Government. In connection therewith the Consolidated Government shall enter into Credit Facility Agreements with such Credit Issuers providing for, among other things, (i) the payment of fees and expenses to such Credit Issuer for the issuance of such Credit Facility; (ii) the terms and conditions of such Credit Facility and the Additional Bonds affected thereby; and (iii) the security, if any, to be provided for the issuance of such Credit Facility. The Consolidated Government may in a Credit Facility Agreement agree to directly reimburse such Credit Issuer for amounts paid under the terms of such Credit Facility, together with interest thereon; provided, however, that no Reimbursement Obligation shall be created, for purposes of the Resolutions, until amounts are paid under such Credit Facility. Any such Reimbursement Obligation shall be deemed to be a part of the Additional Bonds to which the Credit Facility relates which gave rise to such Reimbursement Obligation, and references to principal and interest payments with respect to such Additional Bonds shall include principal and interest (except for Additional Interest) due on the Reimbursement Obligation incurred as a result of payment of such Additional Bonds with the Credit Facility. All other amounts payable under the Credit Facility Agreement (including any Additional Interest) shall be fully subordinate to the payment of debt service on Bonds (other than Subordinate Bonds). Any such Credit Facility shall be for the benefit of and secure such Additional Bonds or portion thereof as specified in the applicable bond resolution authorizing such Additional Bonds. (f) Such Additional Bonds or obligations and all proceedings relative thereto, and the security therefor, shall be validated as prescribed by law. It is expressly provided that nothing contained herein, however, restricts the issuance of additional bonds or obligations from time to time payable from the Pledged Revenues and secured -37- AOCORP 333597.4 by a lien on the Pledged Revenues junior and subordinate to the lien created by the Resolutions ("Subordinate Bonds"). Section 26. Ratification of 1996 Resolution. All of the applicable terms, covenants, conditions and provisions of Article V, Article VI, Article VII, Article VIII, Article IX and Article X and each Section thereof of the 1996 Resolution not herein specifically referred to are hereby declared applicable and are broadened and extended so as to cover the bonds issued hereunder and hereby ratified and reaffirmed as so extended and said terms, covenants, conditions and provisions shall apply for all purposes to the Series 2000 Bonds. Section 27. Arbitra!!e Covenants. The Consolidated Government hereby covenants and agrees that it will not, subsequent to the date of the issuance and delivery of the Series 2000 Bonds, intentionally use any portion of the proceeds of the Series 2000 Bonds to acquire higher yielding investments, or to replace funds which were used directly or indirectly to acquire higher yielding investments, except as may otherwise be permitted by the Internal Revenue Code of 1986, as amended (the "Code") or the regulations promulgated thereunder, including, but not limited to, complying with the requirements of Section 148(f) of the Code and the regulations promulgated thereunder and the payment of rebate, if any, required to be made, and that it will expend the proceeds of the Series 2000 Bonds in compliance with the applicable provisions of Sections 141 to 150, inclusive, of the Code. Anything herein or in the 1996 Resolution notwithstanding, earnings on amounts in any fund or account may, and shall to the extent necessary, be used to make the payments required under this Section 27. Section 28. Certification. The Mayor and Clerk of the Commission are hereby authorized and directed to execute, for and on behalf of the Consolidated Government, a certification, based upon facts, estimates and circumstances, as to the reasonable expectations regarding the amount, expenditure and use of the proceeds of the Series 2000 Bonds, as well as such other documents (including, without limitation, elections under Section 148 of the Code) as may be necessary or advisable in connection with the issuance and delivery of the Series 2000 Bonds. Section 29. Use of Proceeds and Tax Covenant. The Series 2000 Bonds are being issued by the Consolidated Government in compliance with the conditions necessary for interest income on the Series 2000 Bonds to be excluded from gross income for federal income tax purposes pursuant to the provisions of Section 103(a) ofthe Code relating to obligations of the State or any political subdivision thereof. It is the intention of the Consolidated Government that the interest on the Series 2000 Bonds be and remain excludable from gross income for federal income tax purposes, and, to that end, the Consolidated Government hereby covenants with the holders of the Series 2000 Bonds as follows: (a) That it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the tax exempt status of interest on the Series 2000 Bonds under Section 103 of the Code. (b) That they will not directly or indirectly use or permit the use of any proceeds of the Series 2000 Bonds or any other funds of the Consolidated Government or take or omit to take any action that would cause the Series 2000 Bonds to be "arbitrage bonds" within the meaning of Section -38- AOCORP 333597.4 148 of the Code. To that end, the Consolidated Government will comply with all requirements of Section 148 of the Code to the extent applicable to the Series 2000 Bonds. In the event that at any time the Consolidated Government is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys held under this 2000 Resolution, the Consolidated Government shall take such action as may be necessary. Any subsequent proceeding or proceedings authorizing the issuance of Additional Bonds or obligations as permitted under the Resolutions shall in nowise conflict with the terms, covenants and conditions of the Resolutions but shall for all legal purposes contain all of the applicable covenants, agreements and provisions of said Resolutions for the equal protection and benefit of all bondholders. Section 30. Severabilitv. In case anyone or more of the provisions of this 2000 Resolution, or the Series 2000 Bonds issued hereunder, shall for any reason be held illegal or invalid, such illegality or invalidity shall not affect any other provisions of this 2000 Resolution or the Series 2000 Bonds, but this 2000 Resolution and the Series 2000 Bonds shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. Section 31. Contract. The provisions, terms and conditions of this 2000 Resolution shall constitute a contract by and between the Consolidated Government and the owners of the Prior Bonds and the owners of the Series 2000 Bonds authorized to be issued hereunder, and after the issuance of the Series 2000 Bonds this 2000 Resolution shall not be repealed or amended in any respect which will adversely affect the rights and interests of the owners of the bonds of said issues, nor shall the governing body of the Consolidated Government pass any proceedings in any way adversely affecting the rights of such owners so long as any of the Bonds authorized by the Resolutions, or the interest thereon, shall remain unpaid or until provision shall have been duly made therefor, provided, however, that this covenant shall not be construed as prohibiting modifications hereof or amendments hereto to the extent and in the manner as provided in Article IX of the 1996 Resolution, as ratified, reaffirmed, broadened and extended by this 2000 Resolution. Any subsequent proceeding or proceedings authorizing the issuance of Additional Bonds or obligations with the Prior Bonds and the Series 2000 Bonds as permitted under Section 9 of Article V of the 1996 Resolution, as ratified, reaffirmed, broadened and extended in Section 25 of this 2000 Resolution, shall in nowise conflict with the terms, covenants and conditions of the Resolutions, but shall for all legal purposes contain all the applicable covenants, agreements and provisions of the Resolutions for the equal protection and benefit of all owners of the Prior Bonds, Series 2000 Bonds and such Additional Bonds. Section 32. Authorization of Preliminary Official Statement. The use of a Preliminary Official Statement with respect to the Series 2000 Bonds is hereby ratified and approved and the preparation and use of a final Official Statement, to be dated the date of adoption of the 2000 Supplemental Resolution, in substantially the form as the Preliminary Official Statement but containing the information included in this 2000 Resolution, as supplemented, is hereby authorized and approved. -39- AOCORP 333597.4 Section 33. Continuin2 Disclosure. The Consolidated Government hereby covenants and agrees that it will, to the extent allowed by applicable law, comply with and carry out all of the provisions ofthe Continuing Disclosure Certificate to be executed by the Consolidated Government and dated as of the date of the issuance and delivery of the Series 2000 Bonds, as originally executed and as it may be amended from time to time in accordance with its terms (the "Disclosure Certificate"). Notwithstanding any other provision of this 2000 Resolution or the 1996 Resolution, failure of the Consolidated Government to comply with the Continuing Disclosure Certificate shall not be considered a default under the Resolutions, and under no circumstances shall such failure affect the validity or the security for the payment of the Series 2000 Bonds or the Prior Bonds. It is expressly provided, however, that any beneficial owner of the Series 2000 Bonds may take such action, to the extent and in such manner as may be allowed by applicable law, as may be necessary and appropriate, including seekiq.g mandamus or specific performance by court order, to cause the Consolidated Government to comply with its obligations under this Section. The cost to the Consolidated Government of performing its obligations set forth in this Section shall be paid solely from funds lawfully available for such purpose and nothing set forth herein or in the Disclosure Certificate shall obligate the levy of any tax to comply with the Consolidated Government's obligations under this Section. Section 34. Suoolemental Resolution. The Commission, after the Series 2000 Bonds have actually been sold, shall adopt a resolution supplementing this resolution and among other things will specify in said supplemental resolution the interest rate or rates per annum which the Series 2000 Bonds shall bear, the principal amount of Series 2000 Bonds, the maturities of the Series 2000 Bonds which shall be designated as term bonds subject to mandatory redemption, will provide for the optional redemption provisions applicable to the Series 2000 Bonds, will authorize and approve the execution and delivery of a bond purchase agreement, will provide for the terms of any Credit Facility and Reserve Account Surety Bond and will provide for the actual issuance and delivery of the Series 2000 Bonds upon payment therefor by the purchaser thereof. Section 35. Validation. The Series 2000 Bonds herein authorized to be issued shall be validated in the manner provided by law, and to that end notice of the adoption of this 2000 Resolution and a copy thereof shall be served on the District Attorney of the Augusta Judicial Circuit, in order that proceedings for the above purpose be instituted in the Superior Court of Richmond County. Section 36. Repealer. Any and all resolutions, or parts of resolutions, in conflict with this 2000 Resolution this day passed be and are hereby repealed, and this 2000 Resolution shall be in full force and effect from and after its adoption. -40- AOCORP 333597.4 AOCORP 333597.4 Exhibit A Certificate of Independent Certified Public Accountants A-I Augusta-Richmond County Commission Augusta, Georgia We have examined the books and records of Augusta, Georgia with respect to its Water and Sewerage System (the "System") and hereby certify that the payments covenanted to be made into the "Richmond County Water and Sewerage System Fund NO.2" (the "Sinking Fund") created in Paragraph 4 of Section 2 of Article V of the Bond Resolution adopted by the Augusta-Richmond County Commission on October 21, 1996, as supplemented by resolutions adopted by the Commission on December 3, 1996 and December 17, 1997 (collectively, the "Resolution"), are currently being made in the full amount as required and said "Debt Service Account" and "Debt Service Reserve Account" held within the Sinking Fund are at their proper respective balances. All capitalized terms used herein have the meanings assigned to them in the Resolution, Based on such examination of the System, the Pledged Revenues (excluding Investment Earnings, if any, of the Construction Fund created under the Resolution) for the period of twelve consecutive months ended January 3 I, 2000 are equal to at least 1.10 times the historical Debt Service Requirement on the outstanding Series 1996/1997 Bonds during the period. ~, ,~.J- 7~/l'~.P. Augusta, Georgia August 22, 2000 EXHIBIT A >> Exhibit B Ene:ineerine: Reoort B-1 AOCORP 333597.4 ~ .~." CONSULTING ENGINEER'S CERTIFICATE The undersigned hereby certifies as follows: The undersigned is an authorized signatory of CH2M HILL (the "Consulting Engineer"). The Consulting Engineer has been designated pursuant to the hereinafter-described Bond Resolution as the Consulting Engineer for the additions, extensions, and improvements to the water and sewer system of Augusta, Georgia (the "Consolidated Government") to be financed by the proceeds of the Consolidated Government's Water and Sewerage Revenue Bonds, Series 2000, in the original aggregate principal amount of $97,080,000 (the "Bonds"). The Bonds were issued pursuant to a Bond Resolution (the "Master Resolution") adopted by the Augusta- Richmond County Commission on October 21, 1996, as ratified, reaffirmed, supplemented, and amended by resolutions adopted by the Commission on December 3, 1996, December 17, 1996, August 22,2000, and September 15, 2000 (collectively the "Bond Resolution"). The Consulting Engineer has prepared the attached draw schedule (the "Draw Schedule"), which sets forth the dates and amounts for anticipated withdrawals of moneys from the "Augusta, Georgia Water and Sewerage System Construction Fund -:- 2000" (the "Construction Fund") created under the Bond Resolution to be used for the payment of obligations during the course of construction of the system improvements. In accordance with the Draw Schedule, moneys currently on deposit in the Construction Fund are not presently needed for the payment of any current obligations during the course of construction. This Certificate is being delivered to the Consolidated Government pursuant to paragraph (c) of Section 3 of Article IV of the Master Resolution. October 2, 2000 CH2M HILL ~~ Program Manager P:143875/161047 AUD 2000 PM/DocumentslDrawSchedule.xls 10/0212000 ~)~ \ -. CLERK'S CERTIFICATE GEORGIA, RICHMOND COUNTY I, Lena Bonner, Clerk of the Augusta-Richmond County Commission (the "Commission"), DO HEREBY CERTIFY that the foregoing pages constitute a true and correct copy of the resolution adopted by the Commission at an open public meeting duly called and lawfully assembled on the 22ndday of August, 2000, authorizing the issuance of not to exceed $98,900,000 August, Georgia Water and Sewerage Revenue Bonds, Series 2000, the original of said resolution being duly recorded in the Minute Book of said Commission, which Minute Book is in my custody and control. I do hereby further certify that the following members of said Commission were present at said meeting: . Lee Beard Andy Cheek Marion Williams Jerry Brigham Steve Shepard Ulmer Bridges Richard Colclough William Mays, III Henry Brigham Bill Kuhlke and that the following members were absent: and that said resolution was duly adopted by- a vote of Aye 10 Nay Abstain :~::i;'::SS my hmdmd ilie official seal of A~?;ijiZ;; August, ~-' - ^'. ~ 0- _,. ~c., ~ ~ -~,~ 0 ~ '"' --. ~ '~ ~~~ :~"\.....~ "~~:~ . -.. , - ~~ ~ . '. -" .. ~~ .-::~..... --. ......- ,,- ....- .... ...- ;......... ~ ~~--.;...... ~ .. t ' AOCORP 333597.4 I I I I I I I I I I' I' I f I~ I I .1 I I' Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2000 Engineer's Report August 2000 . Prepared by CH2MHILL EXHIBIT B_ I I I I I I I I I I I' I I I I I I I I REPORT Engineer's Report Water and Sewerage Revenue Bonds, Series 2000 Prepared for Augusta Utilities Department August 21, 2000 Prepared by CH2MHILL Management Solutions I I I I I I I I I I I I I I I I I I I Contents 1.0 In trod u cti on .............................................................................................. ................... .1-1 1.1 Authorization and Purpose ............................................................................1-1 1.2 References .. ................... .................... ............ ........................ ....... ..... ......... ...... .1-2 1.3 Assumptions ............... ................. ....................... ............ .............. ....... ......... .....1-3 2.0 System History and Organization, and County Growth ......................................2-1 2.1 Organizational Struchue ........... ....... ..... ....... ............ ............ ............ ......... ......2-1 2.1.1 Augusta;...............................................................................................2-1 2.1.2 System Management ...... ......... ................ ..... .................. ....... .............2-1 2.2 Augusta-Richmond County Population Trends..........................................2-3 3.0 Water System ................................................................................................................ 3-1 3.1 Overview of Potable Water System ............................ ........ ...........................3-1 3.2 Water Service Area ......................................................................................... ..3-1 3.3 Water Supply..... .................................... .................................. ....................... ..3-1 3.3.1 Raw Water Pumping ...................................... ................................... .3-2 3.3.2 Raw Water Transmission and Storage .......................:.....................3-3 3.4 Water Treatment Facilities............................................................................ ..3-4 3.4.1 Highland Avenue WTP System Processes ......................................3-4 3.5 Finished Water Storage, Chemical Feed Systems, and High Service Pumping 3-5 3.5.1 Finished Water Storage ................................ ........ ..............................3-5 3.5.2 Chemical Feed Systems ......................................... .............. ..... ..........3-5 3.5.3 High Service Pumping ...... .............................. ............ .......................3-6 3.6 Water Distribution System ................................. ............................................3-6 3.7 Water Quality................................................................................................ .3-10 3.8 Projected Water Demand .................. ...................................... ..... .................3-10 3.9 Regula tory Impacts....................................................................................... .3-13 3.9.1 Summary ...... .................................................................... ..................3-13 3.9.2 State of Georgia Regulations ...........................................................3-13 3.9.3 Surface Water Treatment Rule and Interim Enhanced Surface Water Trea tment Rule.............................................................................................. .3-14 3.9.4 Disinfectants and Disinfection Byproducts Rule..........................3-14 3.9 S Lead and Copper Rule............................................ ...............;..........3-14 3.9.6 Arsenic............................................................................................... .3-15 3.9.7 Risk Management Plans (RMPs) ................................;....................3-15 3.9.8 Residuals Management .................... ............. ...................................3-15 4.0 S ewerage System.................................. ....... ............................................ .............. ..... ..4-1 4.1 Overview of Sewerage System..........:............................................................4-1 4.2 Sewerage SerVice Area................................................................................... .4-1 4.3 Wastewater Collection and Conveyance ......................................................4-1 4.4 Wastewater Treatment Facilities ......... .................. ......................... ......... .......4-2 4.5 Projected W astewa ter Flows.......................................................................... .4-3 4.6 Regula tory Impacts;....... ~................................................................................ .4-5 4.6.1 Watershed Management .......................................................... ...... ....4-5 G:\PUBLlCA TIONSIENGINEERSREPORT.DOC I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 4.6.2 TMDL Development........... ........... ......... .......................... ............... ...4-5 4.6.3 NPDES Permitting and Nutrient Management..............................4-6 4.6.4 Onsite Septage Systems..... ....................... ....................... ........ ..... ......4-6 4.6.5 Residuals Management and 503 Regulations .................................4-6 4.6.6 Spill Prevention, Control, and Countermeasures Plan..................4-6 4.6.7 Storm Water Management Plans ......................................................4-7 5.0 Proposed System CIP .... .......................... ...................................................:.... ............5-1 5.1 Planning Criteria and Assumptions ................. ...... ................ ................. ......5-1 5.2 Summary of Capital Improvements ..............................................................5-1 5.2.1 Water Treatment .............................. ......... ........................... ........... ....5-2 5.2.2 Water Distribution System ............................................. ...................5-4 5.2.3 Wastewater Trea tment ........ ......... ............ ...... ................... ........... ......5-6 5.2.4 Wastewater Conveyance ......... ....... ......... ..... ......... ......... ....................5-7 5.2.5 System-wide improvements.. ..... .... ... ......... ............................. ...... ....5-9 5.2.6 System Enhancement Projects ............................. ....... ...... ....... ........5-10 5.3 Anticipated Future Work ..... ................................. ...... ............. ............ .........5-10 6.0 Financial Performance.............. ............................................ ...... ................ ......... ........ 6-1 6.1 Historical Performance ................................... ............. .... ................. ...............6-1 6.2 Water and Sewer Rates............... ................. ....................................................6-1 6.3 Financial Policies............................................................................................. .6-5 6.4 Projected Operating Results ............... ..... .............. ...................;.....................6-5 6.4.1 Revenues.....................................................................:........................ 6-5 6.4.2 Expenses.............................................................................................. .6-7 6.4.3 Debt Service......................................................................................... .6-8 6.4.4 Debt Service Coverage .......................................................................6-8 6.4.5 Opera ting Fund Balances................................................................. ..6-9 6.5 Capital Financing............................................................................................ .6-9 6.6 Series 2000 Bonds Analysis.. ............ ........ ....................................~...... ........... .6-9 6.7 Conclusions.................................................................................................... .6-14 Appendix A Acronyms......... ..... ........ ....................... ................................... ............. ....... .... A-I Appendix B Estimated Growth within Census Tracts ................................................... B-1 Appendix C 10 year Capital Improvement Plan...............................................................C-1 IIIG:\PUBLlCATIONSIENGINEERSREPORT.DOC III I I I I I I I I I I I I I I I I I I I 1.0 Introduction 1.1 Authorization and Purpose CH2M HILL was retained to prepare this Engineer's Report ("the Report") as an analysis of the feasibility of the issuance of $98,900,000 Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2000 (the "Series 2000 bonds"). CH2M HILL has served as the overall program manager for the $42 million water and wastewater capital improvement program in Augusta-Richmond County (the "County") funded by the 1996 bond issue. CH2M HILL also completed the Augusta Master Plan 2000, approved by the Augusta-Richmond County Commission July 19, 2000, which will serve as a basis for the current capital improvement plan (CIP). The proceeds of the Series 2000 Bonds will be applied to: $ 88,011,062 - (combined with interest earnings) will finance improvements to the water and sewerage system of the County in the amount of $90,127,000 (adjusted for inflation, $94,021,372); $ 910,465 - costs of issuance (includes underwriter's discount, legal fees, rating fees, and other miscellaneous costs associated with the issuance of the Series 2000 Bonds) ; $ 2,058,606 - original issue discount; $ 733,247 - pay the premium fora debt service reserve surety bond and bond insurance; $ 6,663,896 - capitalized interest through October I, 2001; and $ 522,724 - contingency associated with the preliminary sizing of the Series 2000 Bonds. "The System" is defined as the water and sewerage facilities that are owned and operated by Augusta, Georgia (" Augusta") together with all water and sewerage facilities acquired or used by Augusta in furni~hing water and sewerage services. This Report contains the following sections: · Section 1- Introduction - outlines authorization and purpose of the Report, study references and assumptions. · Section 2 - System History and Organization, and County Growth - provides an overview of the System's history, organization and management, and County population trends. · Section 3 - Water System - describes the current Water System service area, facilities, operations and assets. · Section 4 - Sewerage System - describes the current Sewerage System's service area, facilities, operations and assets. G:\PUBLlCA TIONSIENGI NEERSREPORT. DOC 1.1 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 1.2 References CH2M HILL reviewed and relied upon informa tion provided by the Augusta Utilities Department ("the Department"). While CH2M HILL has not independently verified this information and offers no assl.lTances regarding it, CH2M HILL has no reason to believe that the information is invalid for the purposes of this Report. Information used to complete this Report included: · Interviews with the Augusta Utilities Department staff · Preliminary Official Statement, Augusta, Georgia Water and Sewerage Revenue Bonds, Series 2000, dated August, 2000. · Augusta Utilities Department, 2001 Budget Workbook · AUGUSTA-RICHMOND COUNTY, GEORGIA, Annual Financial Statements, December 31,1995 to December 31,1999 · AUGUSTA-RICHMOND COUNTY UTILITIES, Financial Statements and Accompanying Information for the year ended December 31,1999 · City of Augusta, Georgia and Richmond County, Georgia, Combined Water and Sewerage Funds, Combined Balance Sheets, 1995. · Augusta-Richmond County Utilities, Miscellaneous Statistical Data for the year ended December 31,1999 (prepared by Augusta Utilities Department) o Augusta Canal Power Utilization an~ Raw Water Pumping Engineering Study, prepared by ZEL Engineers, July 6, 1998. · Augusta-Richmond County Comprehensive Land Use Plan (prepared by Augusta-Richmond County Planning Commission) · .The Regional Economic Forecast of Population and Employment Comprehensive Study, volume II. prepared by DRI/McGraw-Hill for the Georgia Department of Natural Resources (GDNR), September 1996. · Georgia Office of Planning and Budget projection- The Georgia County Guide, Eighteenth. Edition 1999. Center for Agribusiness and Economic Development. Ed. Boatright, Susan R. Bachtel and Douglas C. Bachtel. 1999. · Master Plan 2000 for the Augusta Utilities Department, Technical Memorandum 1.2: Population Distribution and Water and Wastewater Flow Projections, 1999 (prepared by Diane Reilly, CH2M HILL) · Master Plan 2000 for the Augusta Utilities Department, Technical Memorandum 2.1: Water System Regulatory Compliance Review, October 4,1999 (prepared by Ed Minchew, CH2M HILL) · Master Plan 2000 for the Augusta Utilities Department, Technical Memorandum 2.2: Wastewater Treatment Regulatory Review, January 2000 (prepared by CH2M HILL) G:\PUBLlCATIONSIENGINEERSREPORT.DOC 1.2 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 · Master Plan 2000 for the Augusta Utilities Department, Technical Memorandum 4.2: Highland Avenue Filtration PlantEvaluation, December 18, 1999 (prepared by CH2M HILL) . · Master Plan 2000 for the Augusta Utilities Department, Technical Memorandum 4.3: Distribution System Improvements, January 31, 1999 (prepared by CH2M HILL) · Master Plan 2000 for the Augusta Utilities Department, Technical Memorandum 5.1: James B. Messerly WWTP Evaluation, January 21, 2000 (prepared by CH2M HILL) · Master Plan 2000 for the Augusta Utilities Department, Technical Memorandum 5.2: Augusta-Richmond County Wastewater Conveyance System Evaluation, April 2000 (prepared by CH2M HILL) · Master Plan 2000 for the Augusta Utilities Department, Technical Memorandum 6.1: Needs Assessment for Computerized Maintenance Management System, February 7, 2000 (prepared by CH2M HILL) · Master Plan 2000 for the Augusta Utilities Department, Summary of Recommendations for Expansions and Improvements, February 4, 2000 (prepared by CH2M HILL) 1.3 Assumptions CH2M HILL also made certain assumptions about future conditions with regard to the System. While these assumptions are reasonable for the purposes of this Report, actual conditions may differ from those assumed. To the extent that future conditions differ from those assumed, results will vary from those forecast. CH2M HILL's principal assumptions regarding future conditions are: · The County's population will increase from the 1998 level of 191,329 to 242,150 by 2020 according to the Augusta:'Richmond CounhJ Comprehensive Land Use Plan. In addition, many areas of the County are under new development as a result of a shift in growth patterns. This growing, shifting population will require the Department to expand service to new areas to provide water and wastewater utility service to new customers. · System water consumption and wastewater flows will increase in proportion to the forecasted increases in the number of water and sewer accounts and per capita flows. . The Augusta-Richmond County Commission will adopt the rate increases necessary to implement the financial plan outlined in Section 5. Additional assumptions used in the preparation of the CIP are described in Section 5. G:\PUBLlCA TIONSIENGINEERSREPORT. DOC 1-3 I I I I I I I I I I I I I I I I I I I 2.0 System History and Organization, and County Growth Augusta, Georgia (Augusta) is a political subdivision of the State of Georgia, created on January 1,1996 pursuant to Acts of the General Assembly of the State of Georgia which authorized the consolidation of the municipal corporation known as "The City Council of Augusta" and the political subdivision known as "Richmond County, Georgia" (the "Consolidation Charter"). See Figure 2-1 for the COlmty's location in Georgia. Augusta owns the water supply, treatment, and distribution system and sanitary sewer collection and treatment system. The Augusta Utilities Department (the "Department") is responsible for the operation and maintenance of the water treatment and distribution facilities (the "Water System") and the wastewater conveyance and treatment facilities (the "Sewerage System") that serves Augusta's service area. In addition, the Department provides customer service functions including meter reading and customer billing, revenue collections, and inspection of new construction. 2.1 Organizational Structure 2.1.1 Augusta On January 1, 1996, Augusta was created as a consolidated city-county government, whose territorial jurisdiction extends to all of what was formerly Richmond County. Blythe and Hephzibah, small municipalities with populations of approximately 400 and 2600, respectively, still hold their own municipal charters within the consolidated territory. The relationship between Augusta and Blythe and Hephzibah is similar to that of counties to municipalities located within the territorial limits of such counties. As a result of consolidation, Augusta is able to provide, under one management, public services throughout its territorial limits. Augusta has a municipal form of government. Under the Consolidation Charter, the governing authority of Augusta is a board of commissioners designated as the Augusta- Richmond County Commission (the "Commission"). The Commission consists of a Mayor, who is the chief executive officer of the Commission, and ten commissioners. 2.1.2 System Management The System is managed by Augusta through the Department. The Administrator of Augusta, who is appointed by the Commission upon recommendation of the Mayor, oversees the management and coordination of the operations and activities of the Department. The chief managerial officer of the Department is the Director, who is appointed by the Commission. Charles R. Oliver, c.P.A., P.E. has been the Administrator of Augusta since December 1, 1996. Prom 1991 to 1996, Mr. Oliver was the Assistant County Manager/ Assistant for Special Projects of Polk County, Florida. From 1988 to 1991, he was the Special Assistant to G:IPUBlICA TIONSIENGINEERSREPORT.DOC 2.1 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 the County Administrator of Lee County, Florida, and from 1984 to 1988, he was the Director of Program Support for a political subdivision of the City of Richmond, Virginia. Mr. Oliver received a B.s. degree in 1972 from Clemson University, an M.S. degree in 1977 from Massachusetts Institute of Technology, and an M.s. degree in 1981 from Frostburg State College. Mr. Oliver is a Certified Public Accountant and a Registered Professional Engineer. Lon W. Morrey, c.P.A. has been the Comptroller of Augusta since September 28,1998. From 1993 to 1998, Mr. Morrey was a shareholder in a Washington-based accounting firm providing accounting and auditing services to federal and state agencies including the District of Columbia. From 1988 to 1993, Mr. Morrey was the senior manager for a large regional accounting firm. Mr. Morrey. also has served as the Supervisor of Special Reporting for Fairfax County, Virginia, and as Director of Finance of a medium-sized, municipally- owned utility system providing electric, gas, water, and sewer service. Mr. Morrey received a B.A. degree in Business from Lake Forest University, and Mr. Morrey is a Certified Public Accountant. N. Max Hicks, P.E. has been the Director of the Department since June 4,1996. From 1991 to 1996, Mr. Hicks was the General Superintendent and the Assistant General Superintendent, respectively, of the City's Waterworks Operations. From 1989 to 1991, Mr. Hicks was Public Works Director for the City of Toccoa, Georgia. Prior to that he was a partner, director, and vice president of the consulting engineering firm of Zimmerman, Evans, and Leopold, Inc., Augusta, Georgia. He is a licensed professional engineer in Georgia and South Carolina. Mr. Hicks studied Engineering and English at Charlotte College (now University of North Carolina at Charlotte), Charlotte, North Carolina, and Economics and Accounting at the University of South Carolina at Aiken, South Carolina. The Commission is currently interviewing candidates for the position of Assistant Director. Mary H. Williams, c.P.A. has been the Finance Director of the Department since November, 1998. From January, 1997 until November, 1998, she was the Administrative and Finance Manager for Bush Field Airport and from May, 1996 until January, 1997, she was the Finance Officer for Housing and Neighborhood Development, both departments of Augusta. Prior to joining Augusta, she was a Senior Auditor for Cherry, Bekaert & Holland, L.L.c., from 1992 until 1996. Ms. Williams is a licensed certified public accountant and is a member of the AICP A, the Georgia Society of CPA's and the Georgia Government Finance Officer's Association. Ms. Williams received a BBA degree in 1992 from Augusta State University. Robin Austin McMillon, P,E. has been the Engineering Services Manager for the Department since January, 1999. Ms. McMillon received a BS degree in Civil Engineering from North Carolina State University in May, 1993. She worked as a Project Engineer for the Government Services Division of-Law Engineering and Environmental Services, Inc. in Kennesaw, Georgia from July, 1993 until September, 1996. She worked as a design engineer, techniCal writer, and manager for several small firms in West Palm Beach, Florida from 1996 until the end of 1998. Ms. McMillon is professionally licensed in Civil Engineering in both Georgia and Florida. Alma Stephenson has been the Superintendent of Sales, Collections, and Customer Service of the Department since June4, 1996. Ms. Stephenson has been employed by the City for 27 G:\PUBLlCATIONSIENGINEERSREPORT.DOC 2-2 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 years and was appointed Director/Manager of the Waterworks Office and Sales in June 1995, after serving for 8 years as the Assistant Manager of the Waterworks Office and Sales. The Department has 215 full-time equivalent positions authorized in its FY 1999-2000 budget and had 24 vacancies as of June 30, 2000. No employees of the System are represented by labor organizations or are covered by collective bargaining agreements, and the Commission is not aware of any union organizing efforts at the present time. The System's plant operators and maintenance and repair personnel are required to be to meet the mandated certification levels prescribed by the State of Georgia Board of Certification of Water and Wastewater Operators. Augusta pays for continuing education programs to ensure that System personnel are qualified and maintain or achieve certification. The System's operators meet or exceed the minimum credentials required by the State of Georgia. Additionally, all field employees must attend safety meetings and participate in Safety Training Programs; these cover shoring and trenching, confined space entry,lock-out/tag- out, and other safety topics. 2.2 Augusta-Richmond County Population Trends From 1980 to 1990, the total population of the County grew by 4.5 percent, from 181,629 to 189,719 according to the US bureau of the Census. Since 1990, the population has increased by 1,610 persons (0.8 percent) according to the US Bureau of the Census. Over the 1997 to 1998 period, the Bureau of the Census estimated that the County lost 433 persons. Despite the slowing growth, the County ranks seventh in the State in terms of total population, behind five Metropolitan Atlanta counties (Fulton, DeKalb, Cobb, Gwinnett, and Clayton) and Savannah's Chatham County. While the growth rate of the County as a whole has slowed significantly, previously undeveloped areas of the County have experienced population growth as the in-County population has shifted. The shift of population within the County from developed areas, which have the infrastructure in place to support the water and wastewater demands of the population, to undeveloped areas, which previously had limited services or were unserved, will require the Department to expand the capacity of the System in the growth areas. Appendix B shows population growth by Census Tract, illustrating the recent growth (in positive percent change) within the County occurring in the less developed areas of the County (measured by 1990 Density). The Department retained CH2M HILL to prepare the Master Plan 2000 for Water and Sewer to meet the needs of its shifting population efficiently and cost-effectively. Several population projections have been developed for the County, and are presented in Table 2-1. The projections used by CH2M HILL in forecasting water and wastewater flows (see Sections 3.8 and 4.5), are based on the high forecast presented in the Augusta-Richmond County Comprehensive Land Use Plan. This forecast is an estimate by the Augusta-Richmond County Planning Commission of population by traffic zones (sub-areas of Census tracts) developed from building permit activity, the percentage of units occupied, and number of G:\PUBLlCATIONSIENGINEERSREPORT.DOC 2.3 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 persons per occupied dwelling-unit as of the 1990 Census. The resulting population share was used to allocate the 1998 Census estimate (see Appendix B) to County tracts. The 2020 projection is extrapolated based on the expected percentage change between 2000 and 2010 as shown in Figure 2-2. These projections reflect the Planning Commission's own vision and, based on the 2000 estimate, appears to provide a balance between the 1998 building permit estimate and Census estimate. While growth is affected by factors that Augusta cannot directly control, such as growth in adjacent counties and the health of the MSA's economy, the pattern of population distribution that ultimately occurs will be heavily influenced by the vision of the local government. The population distribution projections are intended to help the Department to make informed choices when deciding how to better serve the community's citizens. TABLE 2-1 Population Forecasts Augusta-Richmond County, 1990 (estimate) through 2020 Forecast Augusta-Richmond County Planning Projection used for this Analysis Percent Change Augusta-Richmond County Planning Commission 1 Low 189,719 Percent Change Moderate Percent Change High Percent Change "Building Permit" Projection2 Percent Change Regional Economic Forecase Percent Change Georgia Office of Planning and Budget4 Percent Change Sources: 1 Augusta-Richmond County Comprehensive Land Use Plan, prepared by Augusta-Richmond County Planning Commission) 2 The Building Permit Projection uses the August-Richmond Planning Commission's 1998 population estimate, based on building permit activity, as a starting point and then applies the moderate projection's growth rate [from the Comprehensive Land Use Plan] 3The Regional Economic Forecast of Population and Employment Comprehensive Study, volume II. prepared by DRI/McGraw-HiII for the Georgia Department of Natural Resources (GDNR), September 1996. 4Georgia Office of Planning and Budget projection- The Georgia County Guide, Eighteenth Edition 1999. Center for Agribusiness and Economic Development. Ed. Boatright, Susan R. and Douglas C. Bachtel. 1999. 1990 (estimate) 189,719 2000 (projected) . 204,439 7.8% 196,465 3.6% 189,719 199,990 5.4% 189,719 204,439 7.8% 189,719 208,022 9.6% 189,719 207,261 9.2% 189,719 211,688 11.6% G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 2010 (projected) 222,497 2020 (projected) 242,150 .8.8% 8.8% 203,450 3.6% 213,826 6.9% 222,497 8.8% 222,414 233,745 6.9% 5.1% 230,423 260,904 11.2% 13.2% 234,582 10.8% 2.4 ..... a. I 'CO N~ ~c: ~ 0 C).- I u:~ 0 ...J I I I I I CO .- 0> I L... 0 Q) I (!) - CO +oJ I en ::J 0> I ::J <( I s I C) a:: 0 I UJ (!) Z~ I ...J ...J - I I :E N I 2: U I et I I I I I I I I I I ~ m ~ c: Q) ~.~ >0:: m en I I I I I I I I Q) Q) u. o o o CD ~ o o o CO o o o o CO l!! 'E Q) ... .e Q):>' ::::l III mE > III ~8 E1i 'x c 0.- ~l IllB "i~c -g Q).~ 1J1Il1ll .5 [> oQ)m...; ~ i~ ~ ~O .~ <3 .. 6 .2' Q).- III 1:: '0 5J' Q) &z....c N e-o 'O~~ N.- (.)0 Q) g'eN :s a:: I- L: C) l/J C) .- >-::J ::J u..cl/Je L:eL: ~Q)- ~uo ~eO C>o~ e c.. Q) o:JC) ~'O5 - Q) ,.. ::J n. L: Comu ~e?.e o ~ ~ o a. ~ o co -- C) ~ o Q) (!) .. co +-I en ::J C) ::J <( z~ ...J ...J - J: :i N 2: U .t I I I I I I I I I I I I I I I I I I I 3.0 Water System 3.1 Overview of Potable Water System Augusta owns and operates a potable water system serving 58,473 residential and 6,415 commercial and industrial customers as of June 30, 2000. The System's surface water supply is the Savannah River, supplemented by groundwater wells throughout the County. Water from the Savannah River is treated at the Highland Avenue Water Treatment Plant (WTP). Water from the wells is treated at one of two ground water treatment plants (GWTP). A third GWTP is under construction. Water transmission and distribution facilities convey the water from the treatment plants throughout the 210 square mile water service area. 3.2 Water Service Area The System supplies water to residential, commercial, and industrial customers located within the County. The system supplies water to a geographic area of approximately 210 square miles (which constitutes approximatelYi88% of the land area of the County exclusive of Fort Gordon) containing an estimated population in excess of 180,000. The water systems of Fort Gordon and the Cities of Blythe and Hephzibah provide water service within those jurisdictions in the County. Figure 3-1 presents the areas currently served by the Water System with overlays of existing major water distribution lines. Generally, the service area can be characterized as having complete water service coverage for potential customers who WIsh to connect to the System. Projects defined in Section 5 as part of the CIP will further enhance the System's ability to serve this area. 3.3 Water Supply The System's primary source of raw water is the Augusta Canal. The System has four raw water intakes on the canal, two primary and two secondary. In addition, there is a diesel . engine driven standby raw water pump. The raw water supply is pumped from the System's raw water facilities located on the Augusta Canal to the System's Highland Avenue Water Treatment Plant through a system of parallel raw water lines. There are four pipe lines: 30 inch diameter cast iron, 36 inch steel, 60 inch ductile iron and a currently inactive 42 inch pre-stressed concrete cylinder pipe. The Augusta Canal is fed by, and runs parallel to, the Savannah River; therefore the source of raw water is still considered as coming from the river. The standby raw water supply facility is at the same general location as the primary facility but pumps water directly from the Savannah River to the Highland Avenue Water Treatment Plant through the same system of raw water supply pipelines. The Georgia Water Quality Control Act authorizes the State of Georgia Department of Natural Resources, Environmental Protection Division (EPD) to regulate the withdrawal of G:\PUBLlCA TlONSIENGINEERSREPORT.DOC 3-1 I I -I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 water from lakes, streams and aquifers in Georgia. Augusta holds permits for raw water sources as noted below in Table 3-1. TABLE 3.1 Water-Use Permits Raw Water Source Permitted Withdrawal (- mgd) Monthly Average 24 hour Max. Day Surface Water: Primary Source: Savannah River/ - Augusta Canal 60.0 EPD Permit No. 121-0191-06 60.0 North Location: Savannah River EPD Permit No. 15.0 121-0191-09(currently unused) Ground Water: Monthly Average 27 Active Wells -located at GWTP No.1, GWTP 18.4 No.2, and four individual sites (Rural Chlorination Sys.) EPD Permit No. 121-0007 18.5 Annual Average 17.4 In 1991 EPD issued to the former the County a permit for withdrawal of raw water from the Savannah River of 30 million gallons per day (mgd) monthly average and 37 mgd max daily located just north of Interstate 20 where a new water treatment plant was to be constructed (EPD Permit No. 121-0191-09). This plant was not constructed. After the consolidation of the former City of Augusta and Richmond County, all permits were also consolidated. In June 2000 EPD approved transfer of 15 mgd monthly average and 37 mgd max daily capacity to the current secondary raw water intake allowing the monthly average withdrawal capacity from the Savannah River to be 60 mgd. The remaining 15 mgd capacity will be dedicated to the new w,ater treatment p1cint and intake discussed in Section 5. In addition, Augusta is permitted to withdraw supplemental raw water from the Tuscaloosa Formation aquifer through 28 wells, 27 actively producing and one deactivated. The System is currently permitted to use groundwater under EPD Permit No. 121-0007 to pump 18.4 mgd max month average; 17.4 mgdmax annual average. An additional well field and treatment plant (GWTP No.3) is under construction scheduled for completion in the first quarter of 2001. This facility will be rated at 5 mgd and receive raw water from four new wells and one existing well currently using the Rural Chlorination System. When these wells become active approximately 4 mgd capacity of the older wells will be reduced maintaining the net capacity at current levels. The oldest wells will be taken off line. See Figure 3-2 for the location of the wells and new WTPs in the Department's service area. 3.3.1 Raw Water Pumping Withdrawal of raw water from Augusta's primary raw water supply is accomplished via a raw water pump station which has an aggregate pump capacity of 88 mgd and is located at the System's water intake on the Augusta Canal. Raw water pumping is accomplished G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 3-2 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT . AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 primarily with two pumps, Units 1 and 4, with capacities of 20 mgd and 30 mgd, respectively. Units 1 and 4 are powered by water driven turbines; originally constructed in 1952 and 1975, respectively, and improved in 1993 and 1999. Unit 1 is a two-stage centrifugal pump and Unit 4 is a single-stage centrifugal pump. Units 2 and 3 are older pumps, each with a capacity of 9.0 mgd, which are used less frequently. These pumps were originally constructed in 1898, were improved in 1939 and received major upgrading in 1999. A fifth unit, Unit 5, is a standby diesel engine-driven raw water pump, with a water intake which can be used in the Augusta Canal or the Savannah River, and a raw water pumping capacity of 20 mgd. This standby auxiliary system was originally constructed in 1975 and is housed in the same building as Unit 4 which received major upgrading in 1999. See Table 3- 2 below for details of the five raw water pumps. TABLE 3-2 Existing Equipment at the Raw Water Pump Station Pump No. Flow Capacity (- Turbine Flow (cfs) Installed Capacity Comments mgd) NO.1 20 550 1,650 hp Good condition No.2 9 250 750 hp Fair condition NO.3 9 250 750 hp Fair condition NO.4 30 814 2,500 hp Good condition NO.5 20 (17 if o (Diesel-driven) 2,000 hp Good condition withdrawing water directly from the rive r) Source: Technical Memorandum 4.2: Highland Avenue Filtration Plant Evaluation, December 18,1999 3.3.2 Raw Water Transmission and Storage Transmission lines for raw water from the existing pump station to the raw.water reservoirs at the Highland Avenue WTP is currently accomplished via three pipelines, older 30-inch ductile iron (DI) and 36-inch steel pipes and a recently completed 60-inch DI transmission line. (An existing 42-inch concrete pipeline has been taken out of service to be evaluated for possible use as a backup supply line). The pipelines have a total capacity range of 102.15 to 163.40 mgd (or a firm carrying capacity with the 60-inch out of service of 38.7 to 61.88 mgd) at typical velocity ranges of 5 to 8 feet per second (fps) for pumped flow, respectively. Augusta has raw water storage capacity of approximately 379 acre-feet or 124 million gallons at two raw water storage reservoirs which serve the System. They provide pre- settling of suspended matter in the raw water as well as storage during times of low river or canal flows. Water flows by gravity from these reservoirs to the WTP. G:\PUBLlCATIONSIENGINEERSREPORT.DOC 3-3 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 3.4 Water Treatment Facilities Augusta owns three water treatment plants and a rural chlorination system, as illustrated in Table 3-3. TABLE 3-3 Water Treatment Plants and Chlorination System Rated Capacity 1999 Production of Date of for Treatment of Treated Water Original Dates of Plant Raw Water (maximum day) Construction Improvements Highland Avenue WTP 60.0 mgd 43.1 mgd 1939 1949, 1954, 1987, Permitted to 60 mgd (EPD 1994,2000 Permit No. CS2450000) but improvements are necessary before plant can sustain that production level. Peach Orchard (GWTP No.1) 10.0 mgd 9.0 mgd 1966 1969, 1996 Highway 56 Loop (GWTP No.2) 10.0 mgd 8.9 mgd 1979 1985,1992,1996 Rural Chlorination System 3.7 mgd 2.9 mgd 1972 Each year since 1981 Totals 83.7 mgd 63.9 The rural chlorination system is served by four wells identified as Brown Road, Plantation Road, Old Waynesboro Road and Kimberly-Clarke Wells; at each well there is a chlorine solution feed system for disinfection, a caustic soda solution feed system for pH adjustment, and fluoridation via addition of hydrofluosilicic acid. Augusta is currently constructing an additional ground water treatment plant (GWTP No.3) with a rated capacity of 5.0 mgd to be complete and operational March 2001. Raw water for this new plant will be supplied by four new wells and one of the existing Rural Chlorination System wells. The current chemical treatment at this existing well will be removed. GWTP No. :?, when placed in service, will allow the Department to remove the oldest wells serving GWTP No. 1 from primary service. Section 5 outlines the capital improvements planned for the water treatment facilities. 3.4.1 Highland Avenue WTP System Processes Pre-Flash Mixing and Flow Splitting: Pre-treatment chemicals are added just downstream of the raw water venturi meter and control valve. These chemicals include chlorine, lime and alum. (Polymer, when added, is injected upstream of the flow meter.) Flocculation: Flocculation is provided through six flocculation basins - the effluents from the first two are combined and split among sedimentation basins 1,2 and 3. Each of the remaining four sedimentation basins has its own flocculation basin. Sedimentation Basins: Flow into sedimentation basins 1, 2 and 3 is through a series of 12 inlets for each basin. Settled water from these first three basins enters a settled water flume which is separate from the one serving the other basins. The two settled water flumes combine in the filter influent flume. . G:\PUBLlCA TIONSIENGINEERSREPORT. DOC 3-4 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 Sedimentation basins 4, 5, 6 and 7 each receive flow from their respective flocculation basin. Influent into the basin is through a series of ten openings in the bottom of the respective inlet flume. The effluent from basins 4, 5,6 and 7 combines in a single settled water flume, which flows to the filter influent flume. Backwash troughs are cast-in-place concrete. Rotary surface wash arms with nozzles are included for cleaning of the expanded media during backwashing. Filter effluent piping includes a rate-of-flow controller for each filter. Filtration: From the sedimentation basins, settled water flows through two separate channels (one from sedimentation basins 1 through 3; the second from sedimentation basins 4 through 7) to the filter influent flume. The Highland Avenue Filtration Plant includes ten dual-media, two-celled filters, each with a surface area of approximately 1050 fe. At the current rated capacity of 60 mgd, the filtration rate is 4.0 gpm/te with all filters in service. Each filter includes Leopold underdrains,8 inches of gravel, 9 inches of sand, and 20 inches of anthracite. Post Flash Mixing: The post flash mixer basin is a two-compartment basin, with each compartment having a pitched blade turbine mixer. Post-treatment chemicals (fluoride, lime, phosphate, and chlorine solution) are added as the filtered water enters the basin in the transition piece from a 60-inch pipe to a 6-foot by 4-foot rectangular opening. 3.5 Finished Water Storage, Chemical Feed Systems, and High Service Pumping 3.5.1 Finished Water Storage The Highland finished water storage supplies the lower pressure zones directly by gravity while the remainder is pumped to the System's storage facilities located in various pressure zones. The treated water is then fed by gravity or pumped throughout the System's water distribution network. There are five finished water storage tanks (clearwells) at the Highland Avenue WTP, with a total storage capacity of 15.45 MG: · Clearwell No.1 - 1.25 MG . Clearwell No.2 - 3.0 MG · Clearwell No.3 - 5.0 MG · Clearwell No.4 - 1.6 MG . Clearwell No.5 - 4.6 MG Clearwell No.2 was recently modified to add baffling for disinfection concentration multiplied by time (CT). The current modifications will result in all treated water being directed through Clearwell No.2. Two additional30-inch influent pipes are being added from the post flash mix basin into this clearwell. From Clearwell No.2, several pipes connect this clearwell with the four remaining finished water clearwells. 3.5.2 Chemical Feed Systems The chemical feed system at the Highland Avenue WTP includes: a liquid lime system which includes two bulk tanks and three lime slurry feed pumps; a dry lime system used as G:IPUBLlCA TIONSIENGINEERSREPORT.DOC 3-5 I I I I I I I I I I I I I I I I I I I 'I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 a backup to the liquid feed system: a chlorination system with five chlorine containers on- line and five that serve on a standby basis; A Polymer feed system used when required by high turbidity levels; a Powdered Activated Carbon (PAC) when required for taste and odor problems; and a phosphate feed system. 3.5.3 High Service Pumping There are three sets of high service pumps at the Highland Avenue WTP: the generator building pumps (also identified as the old Fort Gordon High Service pumps), the filter gallery pumps, and the auxiliary pumps plus the Central Avenue Booster Station. An additional set of high service pumps are located at the Wrightsboro Road Booster Station. Table 3-4 lists each system's pumping capacities in gallons per minute (gpm), elevation of the pressure zone served (nominal mean sea level, feet) and the difference in elevation the pumps must pump against (Head, feet). The pressure zone is designated in terms of the mean sea level (MSL) elevation of the water surface in storage tanks serving the area when the water is at the full tank level. TABLE 3.4 S~mmary of High Service Pumping Location From To Head (ft) Flow Elevation Elevation Total Dynamic gpm MSL MSL Head (TDH) Central Avenue Booster Station 433 420 66 3,000 .~------------------------------------------------------------------------------------------------------------------------------------------------------------ Aux. High Service Pump 433 564 173 8,100 Aux. High Service Pump - Diesel 433 564 173 8,100 .-------------------------------------------------------------------------------------------------------------------------------------------------------------------- High Service Pump - Diesel 433 564 160 2,000 High Service Pump 433 564 160 5,600 High Service Pump - Backup 433 564 160 2,000 High Service Pump 433 564 160 3,500 ._-------------------------------------------------------------------------------------------------------------------------------------------------------------------- Fort Gordon Pump 433 630 or 598* 310 1,250 Fort Gordon Pump 433 630 or 598* 300 2,500 Fort Gordon Pump 433 630 or 598* 300 2,500 Fort Gordon Pump 433 630 or 598* 300 1 ,250 Wrightsboro Road Pump (Existing) 564 630 100 700 Wrightsboro Road Pump (New) 564 630 100 900 Wrightsboro Road Pump (New) 564 630 100 900 *This station can pump to either pressure zone. Section 5 outlines the capital improvements planned for the High Service Pumps. 3.6 Water Distribution System The System's water distribution consists of approximately l,010rniles of pipelines, ranging in size from 6 inches to 24 inches in diameter. Most of the pipelines are made of cast iron or ductile iron. Approximately 20% of these pipelines have been in service for 50 years or more, with the oldest pipelines installed approximately 136 years ago. I G:\PUBLlCATIONSIENGINEERSREPORT.DOC 3-6 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 Finished water is distributed from the Highland Avenue WTP by gravity and by pumping. Finished water is pumped using the High Service Pump station and Fort Gordon Pump Stations. Gravity flow is used to supply the 417 ft MSL gradient (Intermediate) and the 310 ft MSL gradients (Low). High Service PS is used to supply the northern part of the system which has pressure zone elevations of 564 ft. MSL and 500 ft. MSL. The Fort Gordon PS is used to supply the western part of the System and can supply either the 598 ft. MSL system or the 630 ft. MSL system. The Wrightsboro Road PS has been recently refurbished to supply the 630 ft. MSL pressure zone. Finished water is pumped from GWTP No.1 and No.2 into the intermediate pressure gradient (417 ft. MSL). Distribution system pump stations situated at various locations are used to feed isolated higher pressure zones. See Figure 3-3 for the locations of the pump stations. Water levels in the finished water clearwells at the Highland Avenue WTP and system pressure requirement at the 417 ft. MSL gradient limits gravity flow from the clearwells into the 417 ft. MSL pressure zone. Areas in the 417 ft. MSL pressure zone not served from the Highland Avenue WTP are supplied from GWTP No. 1. In addition to the pressure zones listed above, the distribution system contains several pressure zones that are fed using individual wells, booster pump stations or pressure reducing valves. Some of the existing pressure zones consist of small areas with limited volume of storage. In addition, the difference in the hydraulic elevation of some pressure zones is relatively small. A summary of pressure zones is presented in Table 3-5. TABLE 3-5 Pressure Gradient Summary System Overflow Elevation (ft) Water Source Surface Water Plant Pressure Zones Super High High Adjusted High 630 564 500 Fort Gordon PS High Service and Auxiliary HS PS Pressure Reducing Valve (PRV) from the High System Gravity for the Plant's Clearwell PRVs from the Intermediate System Intermediate Low Ground Water Plant Pressure Zones High Pine Hill High Pine Hill Water Plant 433 310 598 521 457 437/417 BPS from 417 feet BPS from 457 at Brown Road Pine Hill Wells 1, 2, and 3 GW Plants NO.1 and No.2 In addition, the distribution system is equipped with several storage tanks and booster pumping stations. Summaries of distribution system storage and pumping facilities for the surface and ground water plants are presented in Tables 3-6 and 3-7. , G:IPUBLlCA TIO NSIENGINEE RSREPORT. DOC 3-7 I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 I I TABLE 3-6 Surface Water Storage and Pumping Facilities I I Pressure Systems Served Highland Ave WTP Clearwell1 433 1,250,000 Highland Ave WTP Clearwell 2 433 3,000,000 Highland Ave WTP Clearwell 3 433 5,000,000 Highland Ave WTP Clearwell 4 433 1,600,000 Highland Ave WTP Clearwell 5 433 4,600,000 --------------------------------.-------------------------.------------------------------------------------------------- Total Clearwells 433 All 15,450,000 Berkman's Road 418 420 500,000 Highland Ave WTP Tank 564 564 500,000 Highpoint Tank 564 564 1,000,000 Walton Way Extension 501 500 750,000 Belair Road 630 630 1,000,000 Total Elevated Storage 3,750,000 Location Location Elevation Gallons Capacity I I I I Location From To Head (ft) gpm I' Summary of Surface Water System Pumping Central Avenue Booster Station 433 420 66 3,000 .----------------------------------------------------------------------------------------------------------------------------------------------------------------------. Aux. High Service Pump 433 564 173 8,100 Aux. High Service Pump - Future 433 564 0 Aux. High Service Pump - Future 433 564 0 Aux. High Service Pump - Diesel 433 564 173 8,100 ----------._--------------------------------------------------------------------------------------------------------------------------------------.-.--. High Service Pump - Diesel 433 564 160 2,000 High Service Pump 433 564 160 5,600 High Service Pump - Backup 433 564 160 2,000 High Service Pump 433 564 160 3,500 ---------------------------------------------------------------------------------------------------------------------------------------------------------------- Fort Gordon Pump 433 630 or 598 310 1,250 Fort Gordon Pump 433 630 or 598 300 2,500 Fort Gordon Pump 433 630 or 598 300 2,500 Fort Gordon Pump 433 630 or 598 300 1,250 .__._-------------------------------------------------------------------------------------------------------------------------------------------------------------------- Wrightsboro Road Booster (new) 564 630 100 900 Wrightsboro Road Booster (new) 564 630 100 900 Wrightsboro Road Booster (Existing) 564 630 100 700 Total Pumping 42,300 I I I I I I I TABLE 3.7 Ground Water Storage and Pumping Facilities Location Summary of Ground Water System Storage GWTP No.1 Clearwell Elevation System Gallons I 162 All 500,000 I G:\PUBLlCA TIONSIENGINEERSREPORT. DOC 3-8 ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 128 All 1,000,000 436 417 5,000,000 417 417 500,000 417 417 500,000 417 417 500,000 417 417 250,000 417 417 2,000,000 417 598 5,000,000 417 417 1,000,000 457 521 300,000 521 521 150,000 457 457 300,000 457 417 500,000 598 598 500,000 598 598 250,000 598 598 500,000 598 598 250,000 521 521 500,000 412 417 2,000,000 598 598 500,000 22,000,000 From To Head (ft) Gpm I I GWTP No.2 Clearwell Faircrest Avenue Faircrest Avenue Windsor Spring Road Richmond Hill Road Golden Camp Road Morgan Road Tabacco/Morgan Rd (placed in operation Aug 2000) Brown Road Pine Hill Pine Hill Wallie Drive Highway 56 Tobacco Road Fairington Drive Georgetown Lumpkin Road Old Waynesboro Road Rose Hill Greenland Road Total I I I I I I I Location Summary of Ground Water System Pumping GWTPNo.1-Pump1 162 417 310 1,400 GWTPNo.1-Pump2 162 417 310 1,400 GWTPNo.1-Pump3 162 417 310 1,400 GWTP NO.1 - Pump 4 162 417 310 1,400 GWTPNo.1-Pump5 162 417 310 1,400 -------------------------------------------------------------------------------------------------------------------------------------------------------- GWTP No.2 - Pump 1 128 417 352 1,800 GWTP No.2 - Pump 2 128 417 352 1,800 GWTP No.2 - Pump 3 128 417 352 1,800 GWTP No.2 - Pump 4 128 417 352 1,800 GWTP No.2 - Pump 5 '128 417 352 1,800 --------------------------------------------------------------------------------------------------------------------------------------------------- Tobacco/Morgan Rd Booster (Aug. 2000) 417 598 280 . Tobacco Rei/Morgan Rd Booster (Aug. 2000) 417 598 280 Highway 56 Booster (inactive) 417 457 153 Highway 56 Booster (inactive) 417 457 153 Brown's Road Booster (inactive) 417 417 124 Brown's Road Booster (inactive) 417 417 124 Faircrest Booster Station 417 598 285 Faircrest Booster Station 417 598 285 Faircrest Booster Station 417 598 285 Richmond Hill Booster Station 417 598 280 Richmond Hill Booster Station 417 598 280 Richmond Hill Booster Station 417 598 280 I I' I I I I I I I I G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 1,400 1 ,400 1 ,400 1 ,400 1,050 1,050 1,050 1,060 1,060 1,060 3--9 I I I I I I I .1 I I I I I ,I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 Location Summary of Ground Water System Pumping Norton Road Booster Station Norton Road Booster Station Norton Road Booster Station Golden Camp Booster - Vertical Golden Camp Booster Station Golden Camp Booster Station (spare) Golden Camp Booster Station (spare) From To Head (ft) Gpm 417 417 417 417 417 417 417 417 417 417 598 598 598 598 59 59 52 285 236 1,360 1,360 2,350 1,050 1,100 700 700 The meters at each connection are read once per month for billing purposes. The 1999 ratio of non-billed water to purchased water or unaccounted for water (representing water that was lost because of unmetered usage and/ or leaks), was approximately 8 percent. 3.7 Water Quality As a retail water system, Augusta is required to conduct testing of distribution system water quality. The System's program is in compliance with regulatory criteria. Raw water from the Augusta Canal and Savannah River is of good quality, ideal for surface water supply. See section 3.9 on regulation impacts for further discussion of water quality requirements., 3.8 Projected Water Demand TABLE 3-8 Water Demand 1999 Actual 1999 water consumption Water Demand Average Daily (mgd) Maximum Daily (mgd) 39.2 59.7 Number of Water Connections Residential Commercial and Industrial Total 58,042 6,355 64,397 During 1999, Augusta billed customers for approximately 143,080 million gallons. See Table 3-8 for the number of customers by class and average daily water consumption. The total revenue of the 10 largest customers represented 12.94 percent of 1999 sales. The ten largest water customers of the Syste~ are presented in Table 3-9. No independent investigation has been made of, and consequently no representation can be made as to, the stability or financial condition of any of the customers listed in Table 3-9 or that such customers will continue to maintain their status as major customers of Augusta. G:\PUBLlCATIONSIENGINEERSREPORT.DOC 3-10 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT . AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 TABLE 3.9 The Ten Largest Water Customers (for the 12-month period ending December 31, 1999) Thousand Gallons Customer Metered % of Total Water Annual Billing Revenues $ 587,561 3.67 285,180 1.78 152,584 .95 156,070 .97 148,982 .93 145,054 .90 133,918 .83 220,205 1.37 180,620 1.13 112,917 .70 $2,123,091 12.94% Nutra Sweet 582,765 Proctor & Gamble 277,576 Searle 150,189 Kendall 154,108 Castleberry Food Co. 147,052 Avondale Sibley Mill 142,549 Spartan Mills 130,510 MCG Complex 191,260 Huron Tech 178,452 University Hospital 104,848 Total of 10 Largest Water 2,059,309 Customers Augusta's projection of future water production needs is based on the County's anticipated total population, excluding Fort Gordon. The geographical distribution of population is not a factor in the plant-level planning, but is important with respect to water transmission as part of the hydraulic distribution of water to customers. The EPD mandates that utility systems achieve some measure of water conservation and Augusta continues to practice passive conservation rather than a more aggressive conservation program. With the currentlevel of conservation, Augusta is expected to experience a small increase in per capita use over the next few years. The Technical Memorandum prepared to analyze the projected water demand (TM 1.2, Population Distribution and Water and Wastewater Flow Projections, dated December 2, 1999), estimates that the System will experience a 2 percent (0.09 percent per year) increase in per capita water usage. Table 3-10 presents Augusta's 1998 and projected per capita water usage in terms of gallons per day. This usage rate is determined by total water produced divided by population. This rate then includes both customer billed usage plus unaccounted for water. The per capita needs include residential and commercial usage. Industrial needs are presented separately, since they are not expected to be directly linked to population growth. The projected annual average production in million gallons per day (mgd) and maximum day production are intended to be planning-level estimates of the Department's future needs. G:\PUBLlCATIONSIENGINEERSREPORT.DOC 3-11 I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 I I TABLE 3-10 Projected Water Consumption 1998 to 2020 1998 2000 2010 2020 Total Population 191,329 204,439 222,497 242,150 Per capita Water Usage, gpd (commercial and 151 151 153 154 residential) Industrial Usage, mgd 10.2 10.3 10.5 10.7 Annual Avg. Water Usage, mgd 39.2 41.2 44.5 48.1 Max. Day Water Usage, mgd 57.7 61.1 * 71.2 77.0 I I I I 'Although the system did record one day of 63.2 within the first 6 months of 2000, the annual maximum day is expected to be 61.1 mgd. I While the Department can take actions to encourage conservation, it should be noted that the development style, or population distribution, can also affect the level of water consumption. This would affect both per capita water usage and the peaking of the maximum day production, factors which are held constant in these projections. Residential and commercial water usage is projected to be directly related to the growth in population. Industrial needs, however, are developed independently of population growth. It is assumed that industrial water usage, exclusive of conservation, will increase by 5 percent over the planning period. Table 3-11 presents water usage by customer class. I I TABLE 3.11 Projected Water Usage by Customer Class, Recommended Projection 1998 to 2020 I I I I Class 1998 2000 2010 2020 Residential Avg. Annual Water Usage 17.4 18.6 20.4 22.4 Max. Day Water Usage 35.8 36.0 44.4 48.3 (Peaking factor: varies) Commercial Avg. Annual Water Usage 11.6 12.4 13.6 14.9 Max. Day Water Usage 12.6 14.8 16.3 17.9 (Peaking factor: 1.2) Industrial Avg. Annual Water Usage 10.2 10.3 10.5 10.7 Max. Day Water Usage 10.2 10.3 10.5 10.7 (Peaking factor: 1.0) Total Avg. Annual Water Usage 39.2 41.2 44.5 48.1 Max. Day Water Usage 57.7 61.1 71.2 77.0 Source: Technical Memorandum 1.2, Population Distribution and Water and Wastewater Flow Projections, dated December 2, 1999. I I I I I G:IPUBLlCATIONSIENGINEERSREPORT.DOC 3-12 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 The peaking factor as defined in Technical Memorandum 1.2, Population Distribution and Water and Wastewater Flow Projections, for industrial usage is assumed to be 1.0; in other words, maximum day and average annual needs would be roughly the same. Commercial consumption is expected to have a maximum day peaking factor of 1.2 times average day demand. All additional peak day needs are assumed to be associated with residential consumption. System-wide maximum day needs are currently 1.47 times average annual usage. By 2010, the system-wide peaking factor is expected to increase to 1.6, as additional water becomes available for irrigation which tends to have a significant impact on peak demands. To meet projected demands the Department will need to upgrade the Highland Avenue WTP and build a new surface water treatment plant. The currentwithdrawal permits for raw water from the Savannah River will be sufficient to meet surface water supply needs for both facilities discussed in Section 5. 3.9 Regulatory Impacts 3.9.1 Summary The Department has responded to the challenges of the 1996 Amendments to the Safe Drinking. Water Act (SDW A) to produce drinking water that is in compliance with all applicable rules and regulations and should remain in compliance with anticipated regulations through 2001. However, the recently proposed SDW A regulations may have a significant impact on the Department. Contaminant levels and goals continue to be proposed and promulgated for specific contaminants, and additional compounds are being added to the list of those already being regulated. Although the Department is currently in compliance with all of the primary and secondary standards as promulgated by the SDW A, the Department will continue its proactive strategy of planning for treatment system improvements in order to be prepared to meet new treatment challenges resulting from the SDW A regulations. Regulatory issues affecting the water service are described below. 3.9.2 State of Georgia Regulations The Georgia EPD has issued rules (Rules and Regulations of the State of Georgia DNR, Chapter 391-3-5- Safe Drinking Water) to establish policies, procedures, requirements, and standards for implementing the Georgia Safe Drinking Water Act of 1977 (and its amendments) and the Federal Safe Drinking Water Act. The EPD recently revised its rules regarding initial permitting of water treatment facilities. New facilities are granted an initial permitted capacity of up to 4 gallons per minute per square foot (GPM/Fe) of filter area to ensure that safe drinking water regulations 'are met. The Total Coliform Rule was promulgated on June 29, 1989. Total coliforms include both fecal coliforms and E. coli. The System has always been in compliance with the total coliform rule. It will need to continue its current practices of maintaining the distribution system by providing an adequate disinfectant residual and frequent flushing of low flow areas. The Department also continues to collect samples to determine pH, alkalinity, temperature,Ca hardness, and the Langlier Index throughout the system. G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 3-13 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT . AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 The initial list of 83 contaminants that the EP A is required to regulate include IOCs, and VOCs (including phase II, phase V, and phase VI.) These contaminants do not occur at concentrations of concern in most surface waters that are not subject to contamination. Surface water used by Augusta, from, the Savannah River, have concentrations of regulated contaminants well below EP A prescribed limits. On-site reservoirs act to dampen any spikes in turbidity which occasionally occur in the river. Some monitoring will be required. Strict watershed protection is recommended to prevent these contaminants from being introduced into the watershed and to maintain the quality of source water. 3.9.3 Surface Water Treatment Rule and Interim Enhanced Surface Water Treatment Rule The SWTR establishes treatment techniques instead of MCLs for the control of Giardia, viruses, heterotrophic plate count (HPC) bacteria, and Legionella. The Highland A venue WTP is providing the required 2.5 log removal of cyst-sized particles through chemical treatment and filtration. However, the depth and condition of the filter media are currently of concern and may need to be brought up to standards to continue receiving full credit for the filtration process. In addition~ current hydraulic restrictions through the post chlorine contact basin are forcing the operations staff to pre-chlorinate in order to achieve the necessary disinfection contact time through the treatment plant. This practice could have a negative impact on the System's ability to meet the limitations of the Disinfectants/Disinfectants Byproducts (D/DBP) Rule. All of these conditions will be addressed as part of the planned improvements discussed in Section 5. 3.9.4 Disinfectants and Disinfection Byproducts Rule This rule establishes MCLs of 0.080 milligrams per liter (mg/L) for total trihalomethanes (TTHMs) and 0.060 mg/L for thehaloacetic acids. Based on average values, the finished water from the Highland Avenue plant meets the Stage I requirements. However, as noted previously, the current hydraulic restrictions at the WTP are forcing the operations group to pre-chlorinate the water in order to achieve the required disinfection credit. This step of pre- chlorination can impact the overall production of DBPs. It is uncertain at this time whether or not the DBPs limitations are being violated by this pre-chlorination strategy, continued monitoring throughout the distribution system will be necessary to make this determina tion. Anoth~r provision of the D /DBP Rule is the requirement for enhanced coagulation based upon the total organic carbon (TOC) in the raw water. The System's raw water quality would indicate that enhanced coagulation should be practiced. To accomplish this, modifications will be required to the sedimentation basins to alleviate hydraulic restrictions. One way to increase the capacity of the sedimentation basins to address this regulatory requirement would be to add tube or plate settlers. Improvements to address this concern are part of Highland Avenue WTP Improvements discussed in Section 5. 3.9.5 Lead and Copper Rule On June 7, 1991, the EP A published MCLGs and national primary drinking water regulations for lead and copper. This regulation required lead and copper to be monitored at consumers' taps every 6 months. Water samples at the customer's tap are required to be G:\PUBlICA TlONSIENGINEERSREPORT.DOC 3-14 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT , AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 taken at high-risk locations, which are homes with lead solder installed after 1982, lead service lines, and lead interior piping. The Department currently controls the corrosivity'of its finished water by the addition of a phosphate-based corrosion inhibitor. The System has continuously been in compliance with the lead and copper action levels. If future testing shows results higher than the prescribed action levels, then the requirement of lead and copper compliance would be mandated. 3.9.6 Arsenic New lower limitations for arsenic in drinking water have recently been proposed. Despite the new, lower limit, it is not anticipated that the arsenic regulations will have an impact on the Department. Arsenic is not expected to occur in the surface water supply at concentrations of concern. 3.9.7 Risk Management Plans (RMPs) The EP A set a deadline of June 21, 1999 for all utilities that store hazardous chemicals (including chlorine gas) above a specified threshold limit, to prepare a risk management plan (RMP). The regulation outlines requirements for preventing or minimizing the consequences of catastrophic releases of toxic, reactive, flammable, or explosive chemicals. The threshold level for chlorine is 2,500 pounds. The RMP must contain extensive evaluations of buildings and equipment to protect the safety of workers around chlorine facilities and to develop an emergency response plan if a leak occurs. Key information developed will be submitted to the EP A and posted on the internet for public access. The Department has prepared an RMP for the Highland Avenue WTP. Any future improvements to the chlorine facilities will be designed with the appropriate safeguards for minimizing the impact of a chlorine gas release, which may include enclosing the chlorine storage facility and providing a chlorine scrubber or possibly switching from chlorine gas to a hypochlorite solution. In addition, the Department is improving the existing safety program that provides guidance to operators on correct chlorine operations and maintenance procedures and the emergency response plan to be used if there is a leak. 3.9.8 Residuals Management The State of Georgia currently disallows the direct discharge of water treatment residuals to a receiving stream. A National Pollutant Discharge Elimination System (NPDES) permit is required which specifies an acceptable pH and total suspended solids concentration for the discharge of decant water produced from the sludge. As a result of this discharge permit, it is necessary for utilities to develop alternative means of disposing water treatment residuals, such as transfer to landfills, land application, soil amendment, or other applications. The Highland Avenue WTP is currently discharging all WTP residuals to Turknett Pond, along with the filter backwash water. As long as the discharge from this pond continues to meet the NPDES permit requirements, this practice will most likely be allowed to continue. G:\PUBLlCA TIONSIENGINEERSREPORT. DOC 3-15 I .........cn I 0 (I) M...... ca c ~~:.:J ~'tJC I .2lC.Q u..ca- caE CD.c <]i I (1)0 .~ .... ~.$ (l)ca I (/)~ .... CD - ca ~ I I I m -- I C) s.... 0 Q) I (!) .. m I +oJ en ::J C) I ::J <( I Q) I c:: ~ ~ Iii 0 (!) I 1:: ~ - z< CD I CD o.r:: u. J c~ 0 ...J ~'N 0 0 ..J B o.r:: co I 'OQ. ..... - .~ f/l CUCD J: CDJ: 0 ~Q) <c- o :i c: 0 .e::::i 0 ClO III ... ~'E N I ~~ .- 0 ~C) :c ~~s CD 0 (l)t:= U ~.~ 3l 0 ~1Il-= Su. 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N ::c u et I I I I I I I I I I I I I I I I I I I 4.0 Sewerage System 4.1 Overview of Sewerage System The Sewerage System serves approximately 44,210 residential and 4,841 commercial and industrial customers, as of June 30,1999. 4.2 Sewerage Service Area The System provides sewer services to a geographic area of approximately 135 square miles containing an estimated population in excess of 150,000. Figure 4-1 presents the areas currently served by the Sewerage System with overlays of existing sewerage lines and location of treatment plants. The currently sewered population is estimated to be 156,217 (see Table 4-3). Augusta has the non-exclusive right to provide water and sewer service within the County. The sewer systems of Fort Gordon and the Cities of Blythe and Hephzibah provide sewer service within those jurisdictions in the County. The Department's service area generally includes eight drainage basins shown in Figure 4-2. 4.3 Wastewater Collection and Conveyance Augusta's sewer system dates from storm water drains constructed in downtown Augusta prior to 1900. Over time, sanitary sewage was diverted into the storm sewers, and Augusta's downtown storm sewers evolved into a combined storm and sanitary sewer system. Until 1968, the outfall sewers emptied into the Savannah River without treatment. In the 1980's and early 1990's, Augusta intercepted all known combined sewers by constructing trunk mains to separate sanitary sewage from storm water. It is possible that some unknown interconnections of the two systems were not discovered and still remain so the Department recently implemented a program to verify complete separation over the next 2years. Augusta's wastewater collection and conveyance system consists of 8 drainage basins, 28 wastewater pumping stations, and approximately 850 miles of collection sewers which transport primarily sanitary sewage. Approximately 80 percent of the sewer system is drained by gravity; the remainder requires pumping at least once. The collection and conveyance system includes sewers ranging in size from 8-inch to 72-inch diameters, most made of vitrified clay. Approximately 20% of the sewers have been in service for 50 years or more. The collection and conveyance system has standby pumps and a standby power system. The conveyance system piping includes a wide variety of materials including clay, brick, concrete, and PVC which creates significant problems for maintenance of the System. In a recent system evaluation of the Spirit, Butler, and Rocky Creek Basins major infiltration and G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 4-1 I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 inflow (1/1) has been identified. The CIP (Section 5) discusses corrections to the problems encountered in the System's basins. 4.4 Wastewater Treatment Facilities Augusta owns two wastewater treatment plants as detailed in Table 4-1 below. TABLE 4.1 Wastewater Treatment Plants I I I I I I I I Date of 1999 Treated Rated Treatment Original Wastewater Dates of Receiving Plant Capacity Construction (Maximum Day) Improvements Stream James B. Messerly (also known 46.1 mgd 1968 52.1 mgd* 1975, 1988, Butler Creek as the Butler Creek WWTP) 1995, 1996 Spirit Creek 2.24 mgd 1988 4.5 mgd* 1995 Spirit Creek Totals 48.34 mgd 56.6 mgd *Excessive flows resulted from major infiltration and inflow into collection systems following significant rainfall. I I I I The J. B. Messerly Wastewater Treatment Plant (WWTP) has two separate treatment trains, the North Plant and the South Plant. The North Plant, constructed in 1976, was originally designed to provide only primary treatment.1 Later, an oxidation ditch was constructed to provide secondary treatment capacity of approximately 17.8 million gallons per day (mgd). In 1984, the South Plant was constructed with a design capacity of about 28.4 mgd. Flow equalization basins were added in 1995. In 1997, the first stage of a wetlands system was constructed to provide additional ammonia-nitrogen removal. Effluent flows from the wetlands to the Savannah River. The J. B. Messerly WWTP receives domestic wastewater from the surrounding community as well as a significant load (1.865. million gallons in 1999) from several major industrial contributors. The J. B. Messerly WWTP was originally rated, based on "normal strength" wastewater, to have a treatment capacity of 46 mgd, and currently has a permitted capacity of 46.1 mgd. The influent strength of the wastewater has increased over the years as result of additional industrial contribution and reduction in collection system infiltration and inflow however has reduced that capacity. Improvements discussed in Section 5 will restore the full. capacity as needed. As of January, 2000, several improvement projects have been initiated or completed. The projects are: . New Influent Lift Pump Station . North Plant Aeration Piping !lnd Diffuser Replacement . North Plant Secondary Clarifier Launder Modification . Chlorination System Modifications . Digester Rehabilitation and Modifications I I 1 The primary treatment system includes the primary clarifiers, primary sludge pumps and scum pumps. This system removes settleable solids from the screened and degritted wastewater, The secondary treatment system includes the aeration basins, aeration blower systems, and secondary clarification. G:\PUBLlCATIONSIENGINEERSREPORT.DOC 4.2 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 Augusta plans to implement improvements to the wastewater treatment system are expected to maximize use of existing plant components and increase the level of reliability in meeting stringent effluent limits. See Section 5 for a description of the capital improvements. The J. B. Messerly WWTP discharges under NPDES permit GA0037621, issued in 1996. Table 4-2 presents the plant's permit information. It is anticipated that a new NPDES permit will be issued in January 2001 when the treatment wetlands become operational. It is also anticipated that the new permit will decrease the allowable monthly average for ammonia from 1.5 to 1.0 mg/L. TABLE 4-2 Effluent Limitations Discharge Limitations mg/L (kg/day) unless otherwise specified Parameter Flow - m3/day (mgd) BOD (5-day) Total Suspended Solids Ammonia as N Fecal Coliform Bacteria Total Residual Chlorine Cyanide, Total Monthly Average 174,488 (46.1) 10(1,747) 20 (3,494) 1.5 (262) 200/100 mL 0.023- 0.0063'. (1.1) Weekly Average 218,016 (57.6) .15 (2,184) 30 (4,367) 2.25 (328) 400/100 mL 0.023. 0.0063" (1.1) . .. ";'3/d ml mg/I kg/day These are daily maximum limitations. cubic meters per day milliliters milligrams per liter kilograms per day 4.5 Projected Wastewater Flows To project future wastewater flows, the projected population and proportion of water accounts connected to the wastewater system in each WWTP's service area were considered. WWTP service area population projections were constructed through an allocation of 1990 census population by tract, and Uniform application of the growth rate required to account for current total population estimates. Wastewater flows were projected based on the estimated proportion of households connected to the System, using the 1990 Census as a basis. This proportion is expected to change over time as new residents and businesses, as well as some portion of the existing residents who are not served currently, connect to the System. His assumed that residential and commercial wastewater flows will grow proportionately with the growth in the sewered population. However, if Augusta implements a successful infiltration and inflow (III) reduction program, a reduction in future per capita wastewater flows of 2 percent may be achieved by 2020. Table 4-3 presents the sewered population and percentage change in sewered population in each WWTP's service area as well as projected annual average flows and maximum month flows. The maximum month flow was calculated as 120 percent of the annual average flow. G:\PUBLlCA TlONSIENGINEERSREPORT. DOC 4-3 I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 I I I I I I TABLE 4-3 Wastewater Flows, by Plant (mgd), 1998 to 2020 Plant 1998 Spirit Creek WWTP (Capacity: 3 mgd) Sewered Population 9,585 Percent change Average Annual Flow 3,0 Max, Month Flow (a) 3.6 2000 2010 2020 10,275 21 ,436 30,214 7.2% 108.6% 41.0% 3.2 6.2 8.6 3.8 7.5 10.3 J. B. Messerly WWTP (Capacity: 46.1 mgd) Sewered Population 135,848 Percent change. I I I I I I I I I I I I Average Annual Flow Max. Month Flow (a) 30.7 36.8 145,943 165,752 176,984 7.4% 13.6% 6.8% 32.7 36.6 38.9 39.2 44.0 46.7 Total WWTP Flows (Capacity: 49.1 mgd) . Sewered Population 145,433 Percent change Average Annual Flow Max. Month Flow (a) 33.7 40.4 156,217 187,188 207,198 7.4% 19.8% 10.7% 35.9 42.9 47.5 43.0 51.4 57.0 (a) The maximum day flows are 120 percent of the annual average flows based on historical relationships. . As part of the 2000 Series Bonds the collection system serving the Spirit Creek WWTP will undergo major infiltration/inflow improvements that will significantly reduce flows. Assuming the WWTP service area remains the same; however, the Spirit Creek WWTP will need to be significantly expanded in the near future to meet the demands of the growing population in the southern Census Tracts. This expansion will be funded in future years, see Section 5. The J. B. Messerly WWTP is the larger of the two plants in the wastewater system. Increases in wastewater flows to this plant are the result of expanding service areas, as well as a growing population. Based on current service areas, however, the Messerly WWTP does have sufficient capacity to treat maximum month wastewater flows. The combined volume of the 10 largest customers represented 17.39 percent of 1999 sales. The ten largest wastewater customers of the System are presented in Table 4-4. No independent investigation has been made of, and consequently no representation can be ^ made as to, the stability or financial condition of any of the customers listed in Table 4-4 or that such customers will continue to maintain their status as major customers of Augusta. G:\PUBLlCA TIONSIENGINEERSREPORT ,DOC 4-4 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 TABLE 4.4 The Ten Largest Wastewater Customers (for the 12-month period ending December 31, 1999) Annual Billing (based upon water consumption plus % of Total Thousand Gallons additional sewer Sewer Customer Metered surcharges) Revenues Nutra Sweet 582,765 $1,112,003 7.06 Proctor & Gamble 198,065 230,907 1.46 Kendall 154,108 289,801 1.84 Searle 150,189 199,276 1.26 Castleberry Food Co. 147,052 148,982 .94 Avondale Sibley Mill 142,549 220,682 1.40 Amoco 138,652 242,569 1.54 Spartan Mills 130,510 162,094 1.03 MCG Complex 123,756 171,140 1.08 Ponderosa Georgia 97,723 208,048 1.32 Total of 10 Largest 1,865,369 $2,985,502 17 .39% Wastewater Customers 4.6 Regulatory Impacts Regulatory issues affecting the sewerage area include: 4.6.1 Watershed Management The EPD has formulated a policy to mandate watershed assessments for non-point pollution sources and water supply protection. Since EPD does not have direct authority over land use, the strategy has been to couple watershed management goals to NPDES permits for total pollutant loading. Augusta will be conducting a watershed assessment for the entire County area that flows into the Savannah River Basin. This is being funded as a part of this program as noted in Section 5. The next cycle of NPDES permit renewal will likely require watershed management implementation bench.rilarks. 4.6.2 TMDL Development The Clean Water Act (CW A) provides for a trigger mechanism for requiring development of total maximum daily loads (TMDLs) when a water body does not meet water quality standards. When setting a TMDL, the regulatory agency must consider the uses of the water body, water quality standards, various pollutant sources, and the ability of the water body to assimilate pollutants. The State of Georgia has court-mandated TMDL deadlines. G:\PUBLlCATIONSIENGINEERSREPORT.DOC 4-5 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 4.6.3 NPDES Permitting and Nutrient Management The NPDES is a federal program for regulating the discharge of pollutants to the waters of the United States. In Georgia, the EPDhas been delegated the authority to administer the program. EPD has adopted a "zero tolerance" policy for permit violations and is imposing penalties or issuing Consent Orders specifying responses that the permittee must accomplish when violations occur. Augusta facilities were not designed with a "zero tolerance" perspective, and therefore do not have the level of redundancy that would be included in a facility designed today. Although operational excursions and facility bypasses are expected to be infrequent, Augusta's infrastruchlre will be evaluated for modifications that would prevent overflows and bypasses, retain pollutants, or upgrade treatment capabilities to enhance the ability to achieve 100 percent compliance with permit conditions. As a result of interstate discussions on water resources, EPD decided to mandate maximum retention of a community's water consumption to minimize the amount of water lost to the resource. EPD expects to be working on the implementation strategy and policy in the next year. Permit conditions may change to restrict the consumptive retention of water, which may necessitate the elimination of onsite septage systems where feasible, and a revision to the water pricing structure. 4.6.4 Onsite Septage Systems The design of septage systemsis regulated by the Georgia Department of Health (Georgia Code Chapter 290-5-26. Local jurisdictions establish minimum lot requirements for septage systems and requirements for connection to a central sewerage collection system. With the increasing emphasis on minimizing water consumption and water quality issues in watershed management, it will be necessary to evaluate policies related to septage systems and prepare for an expanded role for central sewerage systems in the future. \ 4.6.5 Residuals Management and 503 Regulations The u.s. Environmental Protection Agency (EP A) mandates that wastewater residuals must be managed in compliance with its 503 regulations. Since 1993, these regulations have required that utilities obtain 503 permits and provide annual documentation of compliance with regulatory requirements. The 503 regulations identify different classes of sludge and mandate minimum practices for treatment, handling, and disposal for each class of sludge. 4.6.6 Spill Prevention, Control, and Countermeasures Plan The EP A, through 40 CFR Part 112, mandates that a Spill Prevention, Control, and Countermeasures Plan (SPCCP) must be prepared for any facility or location where one of several threshold oil-based material storage triggers are exceeded: any tank of 660-gallon capacity or greater; l,320-gallons total onsite storage; or a 20,OOO-gallon underground tank of petroleum-based product. An SPCCP provides documentation on oil-based products and specifies reporting and documentation of BMPs. Augusta does not have an SPCCP for any of its facilities. Augusta plans to conduct a formal inspection of all system facilities and document the tanks and quantities of oil-based products stored onsite. This review will provide legal protection if no SPCCP is required or will identify those locations that need an SPCCP. G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 4-6 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 4.6.7 Storm Water Management Plans As part of the NPDES Permit program, the EP A mandates that certain in,dustrial activities require obtaining an NPDES permit for storm water. Georgia EPD has issued a general storm water permit that can be used by any location wishing to conform to the permit conditions, as opposed to applying for a site-specific permit. An important aspect of the permit requires that the applicant prepare a Storm Water Pollution Prevention Plan (SWPPP) which identifies BMPs for that facility and the required documentation of compliance. During the original round of storm water issuance, the Department complied with the general conditions for its storm water permitting. In 1998, the EPD issued a new general permit, GAROOOOOO, and mandated that any entity with an intent to use that general permit would have to update its plans and conform to the new requirements of the permit. Augusta plans to update and modify all SWPPPs to conform to the additional conditions in the 1998 storm water permit, and identify new locations which might be subject to a storm water plan. G:\PUBLlCATIONSIENGINEERSREPORT.DOC 4-7 ,,""'01: I r::: tU ~tU- CDtUa. 5 CD 1: .Q) < CD LLCDE 0- ._ tU ~~ CDI- 00... CD's C)tU ~~ CD CD ~1ii CDtU oo~ en -- 0) L- a (]) (!) .. en +-' en ~ 0) ~ <( Q) z< Q) u. ~ 0 8 ..!ll 0 ..J .~ Q. 0 ..J c CD J! ..... - Q) :r Q) .s 0 Cl ~ 0 ~ e ~ 0 Q) C ~ co ~:::J ... N en t ~ % l'II J!l I 0 1!1 i u cl en en 3: 0 et D<<~ 0 0 co I t G) Q) u. o o ~ I I ..... C\Irn Ie v"ii) ~~ ~Q) .- 0) LLCO e 'e c ... CO +-' en :::J C) :::J <( z-<: -J -J - ::c :! N ::t U et I .Ii I I I, I I I I I, I I I I' I I: I' I I 5.0 Proposed System CIP Proceeds of the Series 2000 Bonds will be used to fund a three-year Capital Improvement Plan (CIP) that will assist in eliminating current System deficiencies, meeting current and future regulatory requirements and accommodating future demands related to system growth. It is anticipated that construction of the CIP will be completed by 2003. 5.1 Planning Criteria and Assumptions The Department's Master Plan 2000, which includes the CIP for the next three years, employs a number of planning criteria for determining the facilities necessary for the System. The Master Plan includes Technical Memoranda that document a baseline approach to evaluating the System facilities with respect to water demands, wastewater conveyance needs and treatment requirements. The planning criteria and assumptions used for . development of the CIP include: · Population in Augusta-Richmond County is shifting within the County from developed areas, to undeveloped areas, which were previously unserved. · Water and Wastewater System demand is projected to increase as the population is projected to grow in Augusta. Projected water demands for the design year of 2020 are for average' day demand of approximately 50 mgd ~d maximum day demand of 80 mgd. Wastewater demand projections are for an average day flow of 47.5 mgd and a maximum day flow of 57 mgd. · Water and wastewater treatment improvements and expansions must be planned for compliance with all current regulatory requirements, and changes to these requirements anticipated in the next three years. 5.2 Summary of Capital Improvements The three-year CIP is summarized in Table 5-1 and further described in the following sections. It will provide for upgrades and development of the water treatment and distribution system, wastewater conveyance, and wastewater treatment facilities. For the Water System, the CIP provides for significant improvements to the existing Highland Avenue Water Treatment Plant, improvements to the water distribution system, and pre- construction activities for anew water treatment plant, including siting, permitting, and design improvements. For the Wastewater System, the CIP provides for significant improvements to the J.B. Messerly WWTP and expansions and extensions to the wastewater conveyance system. G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 5-1 I I I I I I I .1, I I I I I I I I I' I, I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 TABLE 5-1 Series 2000 Bond Projects-Summary of Estimated Costs Water Treatment Facilities (Section 5.2.1) $28,655,000 Water Distribution System (Section 5.2.2) 19,789,000 Wastewater Treatment Plants (Section 5.2.3) 9,322,000 Wastewater Conveyance System (Section 5.2.4) 26,466,000 System-Wide Projects (Section 5.2.5) 5,895,000 TOT AL SYSTEM $ 90,127,000 A description of the Series 2000 Bonds Projects follows. Planning-level cost estimates have been developed from available information for guidance in project evaluation. Final project costs will depend on actual labor and material costs, competitive market conditions, actual site conditions, implementation schedules, and other variables. Detailed engineering plans have not yet been developed for these projects but will be funded by the proceeds of the Series 2000 Bonds. Conceptual layouts, however, have been considered. An allowance has been added to all construction costs to cover legal, administrative, financial, engineering and program management costs. The construction costs are based on Augusta and Atlanta- area market conditions, as of the first-quarter of 2000. . 5.2.1 Water Treatment The existing Highland Avenue Water Treatment Plant has a rated capacity of 60 mgd and the two existing Ground Water Treatment Plants (GWTP) No.1 (located at Peach Orchard) and No.2 (located at the Highway 56 Loop) together add 20 mgd. Well field No.1 will be phased out and replaced by two new groundwater treatment plants and well fields. The new well fields, GWTP No.3 (currently under construction) and GWTP No.4 (to be funded from the Series 2000 Bonds), will replace the 10 mgd lost when GWTP No.1 is taken off line. The strategy for meeting the 2020 water needs defined in Master Plan 2000 for the Augusta Utilities Department recommends surface water as the primary water source. This will require expansion and modification of the Highland Avenue Water Treatment Plant to increase reliability, efficiency, and sustain operation capacity of 60 mgd. In addition, construction of a new 20 mgd Surface Water Treatment Plant (SWTP) will be required to meet additional demand and minimize reliance upon groundwater supply. This new SWTP will be built in two 10 mgd stages. Upon completion of the first 10 mgd unit, the remaining wells serving GWTP No.1 and half of the wells serving GWTP No.2 will be taken off line. When the SWTP is completed as a full 20 mgd facility, the System will have a total production capability of 80 mgd from surface water supply only to meet the projected 77 mgd maximum day demand. The additional reserve capacity of 10 mgd from the GWTPs will bring that total capacity to 90 mgd. Full implementation of this strategy begins with improvements and upgrade of the Highland Avenue Water Treatment Plant, construction of GWTP No.4, and initial permitting and design work for the first stage of the new SWTP with a 10 mgd capacity. G:\PUBLlCA TlONSIENGINEERSREPORT. DOC 5-2 I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 ,I, . . I 5.2.1.1 Improvements to the Water Treatment Plant Improvements to the water treatment system to be funded by the Series 2000 Bonds are shown in Table 5-2. I. I TABLE 5.2 Series 2000 Bond Projects-Summary of Estimated Water Treatment Costs Recommended Improvements Note: All estimated costs in 2000 dollars Estimated Costs Hiqhland Avenue WTP I .1 Filter Improvements High Service Pumping Rapid Mix System Flocculation Basins Sedimentation Basins Chlorination System Upgrade Raw Water Pumping $7,450,000 1,630,000 470,000 255,000 2,300,000 200,000 5,400,000 .1 \1 I TOTAL HIGHLAND WTP IMPROVEMENTS $17,705,000 Supplemental GW Supplv Ground Water Well Field and Treatment Plant No.4 Ground Water Systems stand-by generators (equipment installation) $3,850,000 $600,000 I .1 I, 'I New Surface Water Treatment Plant (SWTP) WTP Siting Evaluation/Acquisition Raw Water Intake Prop Acquisition RW Line easements Raw Water Intake: PermiVDesign New WTP: PermiVDesign $1,300,000 200,000 500,000 1,500,000 3,000,000 TOTAL NEW WTF AND INTAKE $6,500,000 Total Water Treatment System $28,655,000 I, Augusta has been instructed by EPD to !!love toward use of surface water supply as its primary water supply source and away from groundwater due to the shallow depths of its older well fields No. 1 and 2, the reduction of aquifer recharge areas from development activity, and the EPD policy of minimizing groundwater reliance if quality surface water is available. In order to meet projected water demands and commit Augusta to surface water as its primary supply source (with use of groundwater as supplemental source) an additional source of water supply is required. Augusta plans to construct a new surface water treatment facility on the Savannah River. The recommended capacity is based on use of GWTPs No.3 and No.4 as primary water sources until the second stage of the new plant is completed. GWTPs No.1 and No.2 well I I Ii I G:\PUBLlCA T10NSIENGINE ERSREPORT. DOC 5-3 I I I I I I ,I ,I, I I ,I' .1 ,I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 fields and treatment facilities will be taken off line although the pumping systems will be used as re-pumping stations (distribution system booster pumps). Development of a new plant will require selection of another raw water withdrawal location along the Savannah River as well as a treatment plant location. Augusta currently has two permits for withdrawing water from the Savannah River, one on the Augusta Canal for the Highland Avenue WTP at 60 mgd (EPD Permit No. 121-0191-06) and another on the Savannah River for 15 mgd (EPD Permit No. 121-0191-09) to be assigned to the new SWTP intake location when determined. 5.2.2 Water Distribution System Table 5-3 is a summary of water distribution system improvements to be funded by the . Bonds. TABLE 5-3 Series 2000 Bonds Projects-Summary of Estimated Water Distribution Costs Recommended Improvements Note: All estimated costs in 2000 dollars Estimated Costs PRIMARY SUPPLY SYSTEM Tobacco Rd.16" Water Line & 2 MG. Elevated Tank $3,235,000 Central Connector 18" Conversion of RWL To Finished Water & 16" Connector @ Riverwatch & Claussen $3,275,000 $550,000 GWTP #3 - 20" Transmission Line GWTP #4 - 20" Transmission Line Undesignated Distribution System Expansion / Interconnection $130,000 $190,000 $3,000,000 OTHER SYSTEM IMPROVEMENTS $9,409,000 Total Water Distribution System $19,789,000 5.2.2.1 Primary Supply System Improvements The Master Plan identified several distribution system improvements that will be completed as part of a program to maintain adequate system pressure and improve reliability and operating conditions. The following list identifies the most critical projects from Table 5-3 providing major improvements to be completed within the next three years. These projects will strengthen delivery capability throughout the System. · Provision of an additional 16-inch waterline supply capacity and 2 mgd elevated tank to the Tobacco Road area from the Faircrest Storage and Pump Station. As one of the most rapidly growing commercial and residential areas, this project is necessary to complete integration of a recently completed prrrnary connector line from the Highland Avenue Water Treatment Plant to a 5 million gallon ground storage tank in this area. · The Central Connector will improve hydraulic capacity from Highland Avenue Filtration Plant to GWTP No.1 and the 417 ft service area: the GWTP No.1 high service pumps will serve as a booster station after the well field is taken out of service. G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 5-4 I ,I, I I I I I ,I J .1, I '".. I ,I. I I. .- ,I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 · Convert an existing 18 inch raw waterline to finished water distribution significantly improving the supply capacity to the 500 ft. MSL and 417 ft. MSL pressure zone areas to be created along Washington Road and in the northwestern area near the Columbia County line. Although the area is built out, low pressure has been a significant problem. Using this abandoned raw water supply line will save construction costs and allow relatively fast implementation of.this plan to improve pressure. · The rapidly growing southern water service area of Augusta will be further served by expanding the distribution system supplied by the new GWTPs No.3 and No.4. These lines will stabilize pressures throughout the area once there is sufficient supply available. Undesignated Expansion and Interconnection project funding provides an allowance to various projects that are to be finalized when the hydraulic water model of the System is completed. Although the general location and configuration of these improvements have been determined, exact sizing and routing has yet to be determined. 5.2.2.2 Other System Improvements Other system improvements include multiple water distribution line improvements listed in the Master Plan to complete pressure distribution, strengthen supply, and support fire protection in the city. These include the following: State highway improvements that require the Department to replace water lines prior to roadway improvements. This is an advantage to the System allowing improvements to the water system as needed and relocation away from roadways where repair and maintenance can be costly. The projects to be built are: SR4/US1 Roadway Improvements 1-520 @ SR 56 Intersection Peach Orchard Rd. (SR 121/US 25) $490,000 180,000 380,000 Total Highway Projects: $1,050,000 Miscellaneous projects identified by Augusta to enhance the System's performance include raw water supply pump station improvements, line extensions to serve additional customers (Horseshoe Rd. and US Hwy 1), elevated storage tanks to enhance supply reliability (Brown Rd. and Dennis Rd tanks), and older line replacement to meet growing demands and eliminate problem lines (Peach Orchard Rd.). These projects are: Raw Water Pump Station Bypass Valve Pit Horseshoe Rd. 12" Water Line US Hwy 1/Bath-Edie 12" Water Brown Road 1 MG Elev. Tank (includes demolition of existing Tank) Dennis Rd 1 MG Elevated Tank Peach Orchard Rd. 12in line replacement Total Miscellaneous Improvements $367,000 300,000 600,000 1,090,000 1,150,000 440,000 $3,947,000 Special Projects address several unique needs of the System. The Alexander Drive and Etterly Drive projects will provide water line improvements as part of a combined water G:\PUBLlCA TlONSIENGINEERSREPORT. DOC 5-5 I ,I I I, I 1 I I I .1 I ,I I I I. .0 I I, I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2000 and sewer project. The Turknett Springs project will dredge the Highland A venue WTP sludge pond (Turknett Springs). Expansion of the System's SCADA will improve operations. Refitting and replacing all water meters with meters fitted for radio-read will improve meter reading and billing efficiency and replace older meters that are no longer reliable. Two key pump stations, Hwy 25 PS and Auxiliary HS PS, will be refurbished to enhance efficiency and reliability. Finally, the Water System hydraulic model will be updated and calibrated for ongoing analysis of system performance. Alexander Drive Water & Sewer Etterly Drive Water Lines Turknett Springs Retention Pond Dredging SCADA system additions Meter Replacement Program Hwy 25 PS and Auxiliary HS PS refurbishing Water System Hydraulic Model Update $460,000 350,000 600,000 200,000 2,400,000 252,000 150,000 Total Special Projects $4,412,000 5.2.3 Wastewater Treatment Planned improvements to the J.B. Messerly Wastewater Treatment Plant (WWTP) will maximize treatment capacity and reliability in meeting fuhlre effluent limits. The prioritized projects summarized in Table 5-4 address components of the J. B. Messerly facility with the greatest potential for failure and which pose limitations to future growth and development. These projects also include appropriate initial steps for implementation of improvements planned for later years. . TABLE 5-4 Series 2000 Bonds Projects-Summary of Estimated Wastewater Treatment Costs Recommended Improvements Estimated Costs Note: All estimated costs in 2000 dollars Messerlv WWTP Secondary Treatment System Primary Treatment Electrical and Control Systems Miscellaneous Improvements Wetland Treatment Area Industrial Samplers TOTAL MESSERLY WWTP $4,316,000 2,136,000 450,000 180,000 2,000,000 240,000 $9,322,000 The secondary treatment system includes the aeration basins, aeration blower systems, RAS /W AS pumping, and secondary clarification at both North and South Plants. Projects to be completed in the three-year CIP include the upgrading of existing aeration basins, design for replacement of aeration blowers, and secondary clarifier mechanisms at both the North and South plants. The primary treatment system includes the primary clarifiers, primary sludge pumps and the scum pumps at both North and South Plants. All of the equipment at the South Plant primary clarifiers is near the end, or has exceeded, its expected useful life. The equipment at G:\PUBLlCA nONSIENGINEERSREPORT.DOC 5-6 I. ,I, I: I, I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 the North Plant is also approaching the end of its useful life. Planned projects in the three- year CIP are as follows: · Replace primary clarifier collector drives, and mechanisms. Replace primary sludge pumps; repair significant deterioration and leaking of construction joints. . Repair primary sludge box (valves and drainage). · Replace key laboratory equipment including the laboratory fume hood and walk-in incubator. I ,I .1 I I, I I · Replace existing outside motor control centers (MCCs) with new indoor MCCs. · Conclude the ongoing improvement to the wetlands system (underway for the last three years) with the second stage of the system constructed to provide additional ammonia- nitrogen removal required by permit discharge limitations. 5.2.4 Wastewater Conveyance Table 5-5 is a summary of wastewater conveyance system improvements funded by the Series 2000 Bonds. . Recommended Improvements Note: All estimated costs in 2000 dollars Estimated Costs Plan n ing/Operations/Mon itoring Interceptor Upgrades Infiltration/Inflow Reduction Unsewered Pockets Expansions/Extensions Pump Sta. Evaluation/Special Projects $1,730,000 4,220,000 1,235,000 9,445,000 6,316,000 3,520,000 Total Conveyance System $26,466,000 I 5.2.4.1 Planning/Operations/Monitoring The Series 2000 Bond program includes initial P 101M projects that will provide immediate benefit through identification of previously undetected problems and development of baseline information upon which to base the Department's system-wide hydraulic capacity management plan. Projects to be funded by the Series 2000 Bond program include: I Determine design basin event and standardize evaluation/analysis/reporting System Re- calibration for Spirit Creek basin Risk Management Audit Maintenance system development Interceptor right-of-way clearing and survey: all basins Flow monitoring: Rae, Rock, Oats, and Butler Creek Basins 'Columbia County monitoring station $90,000 250,000 90,000 100,000 580,000 300,000 320,000 I. o I I I Total Plann inglOperations/Monitoring $1,730,00 o G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 5-7 I I. I I ,I I, .1 .1 J I, , I .1 I I ,I. " I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 5.2.4.2 Interceptor Upgrades The Butler Creek and Rae's Creek interceptors will be upgraded with new lines to replace or supplement current pipes. The required areas have been defined by previous studies. Butler Creek Rae's Creek Relief Sewer Mid-City (Main) $1,820,000 2,000,000 400,000 Total Interceptor Upgrades 5.2.4.3 Infiltration/Inflow Reduction The collection systems in the following basins will have ongoing infiltration/inflow reduction projects funded by this program. The result will be reduced external flow allowing for more wastewater flow and fewer maintenance problems. The allocation among basins is estimated to be as follows: $4,220,000 Rae's Creek Butler Creek Rocky Creek Spirit Creek $35,000 600,000 200,000 400,000 Total Infiltration/Inflow Reduction $1,235,000 5.2.4.4 Pocketed Sewers Throughout the existing collection system there are various "pockets" of unsewered areas. These are locations ranging in size from one block long to entire subdivisions that were bypassed when sewers were first built in a neighborhood and are now surrounded by sewered areas. Projects in the following pockets have been identified for this Series 2000 Bond: Alexander Dr Colony Park/National Hills Sherwood Kemp Dr Skinner Mill Rd Berckman Rd Skinner RD Kissingbower Rd; Ph 4&5 Avondale Hts Farrington Boykin Rd Pineview Jamestown $262,500 1,200,000 275,000 220,000 218,750 1 ,155,000 1,006,250 910,000 87,500 160,000 2,350,000 450,000 1,150,000 Total Pockets $9,445,000 5.2.4.5 Expansions and Extensions Expansion is defined as providing sewer service to basins not currently having access to sewer systems. Extensions are defined as existing lines being extended beyond their current point of terminus to unsewered areas. These projects will enhance environmental protection G:IPUBLlCATIONSIENGINEERSREPORT.DOC 5-8 I I I I I 1 I ENGINEER'S REPORT AUGUSTA UTIlITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 through reduced reliance on septic systems and provide additional connections to the System. The proposed areas for sewer expansion and extensions are listed below: Glass Factory Sewer Butler Ck Interceptor Ext Butler Ck Collector Ext (BelAir area) Horsepen Trunk Sewer US 25 Extension $626,000 1,800,000 750,000 1,540,000 1,600,000 Total Expansion/Extension Projects $6,316,000 5.2.4.6 Pump Station Evaluation/Special Projects Several Pump Stations will be upgraded to correct current operation problems and SCADA added to improve monitoring of operations. Special projects will h-tclude an allowance for extensions that have not been defined at this time, an additional lift station and force main to serve an industrial site, and roadway improvement related sewer work. These are listed as follows: I Extensions (generic) International Blvd LS/FM Bungalow Rd Improvements SCADA Installation (Pump Stations) Pump Station Reliability Upgrade $1,000,000 1,000,000 170,000 350,000 1,000,000 I I I I Total PS/Special Projects $3,520,000 5.2.5 System-wide improvements System-wide Proiects I. New Utility Administrative/Maintenance Facility Billing/Accounts Receivable system Watershed Assessment" Source Water Assessment" 1,600,000 900,000 1,200,000 240,000 I Operation and Maintenance Manuals/Standard Operating Procedures" Technical and Operations Evaluations" Business Plan" Computerized Maintenance Management Sys (FY2001 includes $135,000 for FY2000) System-wide Base Maps 110,000 I 115,000 140,000 330,000 1,260,000 I II .....~. SYSTEM-WIDE PROJECTS 5,895,000 · A new Utility Administration/Maintenance Building will also be constnicted to relieve space constraints for administrative operations and meet the Department's growing needs. I I G:\PUBLlCA TIONSIENGINEERSREPORT.DOC 5-9 I I I' ,I I I I I I , I I I I I I " I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 . The existing billing/ accounts receivable system is cumbersome and does not have the capability to produce consumption and billing reports for the different classes of users. A new system will provide needed billing and reporting functions and enhance customer service efficiency. . Augusta will complete a Source Water Assessment Plan and Watershed Assessment Plan to address service area non-point source water pollution and comply with requirements discussed in Section 4.6. These planning studies will include a careful review of basin-wide impacts on the city's surface water supply. · Implementation and management of the Master Plan 2000 capital program will be enhanced through several key management planning tools including a financial policy and rate study, an Operation and Maintenance manual, Operating Procedures guidelines, a technical and operations evaluation, and development of the Department's Business Plan. . After consolidation of the two systems (City and County), a single preventive maintenance system was not implemented. The Computerized Maintenance Management System (CMMS) for both water and sewer systems will provide this capability and greatly enhance system maintenance. · Development of complete system-wide base maps of the water and sewer systems to be placed on the Augusta Geographic Information System (GIS) will facilitate effective management of the system. . 5.2.6 System Enhancement Projects The projects described in Sections 5.2.1 through 5.2.5 have been developed based upon the Master Plan 2000 and its specific recommendations for system expansion and improvement. In addition, system enhancement projects will also be required to address factors such as critical stress on older segments of the System. They are estimated to require $2,000,000 per year beginning in 2003 after initial implementation of the Master Plan 2000 capital program. Costs will be funded by scheduled debt issues in 2002, 2004, and 2006 (see Appendix C). These funds will give the Department the ability to make necessary improvements and extend the useful life of improved segffients without impacting scheduled implementation of the Master Plan 2000 projects" 5.3 Anticipated Future Work The System will require a substantial investment to meet projected demands throughout the service area, address regulatory requirements, and continue to deliver quality services. Much of the work involves replacement of equipment and facilities that have met or exceeded their useful life because of the age of the System. Priority capital improvement funding needed to meet projected demands and address system deficiencies are summarized in Appendix C, Table C-1. Projects funded by the Series 2000 Bonds address facilities with the greatest potential for failure, those that will alleviate potential limitations to future growth and development, and projects that will provide service to areas that need water and sewer infrastructure immediately. Improvements planned for later years will continue strengthening and expanding the water distribution and sewer collection network as well as completing projects initiated with funds from the G:\PUBLlCA TIONSIENGINEERSREPORT. DOC 5-10 I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 I Series 2000 Bonds such as the nevV WTP and upgrades to the Highland Avenue WTP, the Messerly WWTF and the Spirit Creek WWTF. I I, I 1 I I ., I I I I I I I I' I I G:IPUBLlCATIONSIENGINEERSREPORT.DOC 5-11 I I I I I I I I I I I I I I I I " I o 6.0 Financial Performance This section presents an overview and evaluation of the historical and projected financial performance of the System for the study period 2000 through 2009. 6.1 Historical Performance Table 6-1 presents the financial performance of the Department for the past five years. System revenues increased from $31.0 to $33.5 million during this period, an increase of 8.1 percent. Operations and maintenance expenses have increased 63.2 percent, from $17.1 million to $27.9 million. After deducting depreciation and other expenses, net revenues available to pay debt service totaled between $17.4 and $26.3 million. Over the five year period the Department has received sales tax proceeds of approximately $18 million. (The Department will not receive tax proceeds in future years). During that same time, the Department has made transfers to Augusta's General Fund totaling $41.4 million. The Department's minimum parity debt service coverage requirement is 1.25. Actual debt service coverage has exceeded the minimum requirement in each of the last five years, ranging between 4.01 and 6.38 over the five year period. 6.2 Water and Sewer Rates The Department's current water rate structure consists of a monthly base charge and a two- tiered volume charge. For residential customers with metered consumption exceeding 3,000 gallons per month, the current monthly base charge is $5.91. The volume charge is $0.81 per thousand gallons for the first 3,000 gallons and $0.91 for each additional thousand gallons. For customers using less than 3,000 gallons per month, a $8.53 base charge applies with no volumetric charges. The Department's current sewer rate structure is based on monthly gallons of water used and also consists of a monthly base charge and volume charge. For residential customers with metered water consumption exceeding 3,000 gallons per month, the current monthly base charge is $10.75 and the volume charge is $0.99 per thousand gallons. For customers using less than 3,000 gallons per month, a $7.66 base charge applies with no volumetric charges. Rates and surcharges for both residential and non-residential customers are shown in Table 6-2. The current monthly water bill for a typical residential water customer is $13.802, and the residential sewer bill is $19.66.2A comparison of typical residential monthly water and sewer bills for customers of various systems throughout Georgia is presented in Table 6-3. This table indicates that Augusta's existing water and sewer rates are relatively low compared to other Georgia communities. 2 Based on average consumption of 9,000 gallons per month. G:IPUBLlCATIONSIENGINEERSREPORT.DOC 6-1 I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2000 I I I TABLE 6-2 Current Water and Sewer Rates RESIDENTIAL RATES Meter Size Kgals Metered Water Base Surcharge Sewer Base Surcharge Charge (Per Kgal) Charge (Per Kgal) All Meters Less than 3 $8.53 NA $7.66 NA All Meters Greater than 3 $5.91 $0.81,0.91' $10.75 $0.99 NON-RESIDENTIAL RATES Meter Size Kgals Metered Water Base Surcharge Sewer Base Surcharge. Charge (Per Kgal) Charge (Per Kgal) 5/8" & 3,4" NA $6.41 $1.04,1.14' $11.32 $1.25 1" NA $9.08 Same $16.18 Same 1-1/4" & 1-1/2" NA $15.05 Same $27.04 Same 2" NA $21.62 Same $39.05 Same 3" NA $36.18 Same $65.74 Same 4" NA $52.41 Same $95.24 Same 6" NA $88.38 Same $160.97 Same 8" NA $128.20 Same $233.70 Same 10" NA $171.22 Same $312.40 Same 12" NA $222~ 19 Same $395.64 Same * The first charge is applied to each of the first 3 kgals of metered consumption, the second charge is applied to each additional kgal. I I I I I I I 'I I I I o I' I I G:\PUBLlCATIONSIENGINEERSREPORT.DOC 6-3 I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 TABLE 6.3 Comparison of Typical Monthly Residential Customer Bills Monthly Billing Local Jurisdiction Water* Sewer* Total Augusta $ 13.80 $ 19.66 $ 33.46 Cherokee County 31.50 31.50 63.00 Clayton County 18.00 18.90 36.90 City of Cumming (inside City limits) 18.60 19.50 38.10 Dawson County (Etowah Water) 33.75 0.00 33.75 Douglas County 29.44 27.94 57.38 Fayette County 35.60 31.50 67.10 Forsyth County 33.24 43.56 76.80 Fulton County 22.50 42.75 65.25 City of Gainesville 18.32 33.03 51.35 Gwinnett County 31.96 29.43 61.39 Henry County 30.21 30.21 60.42 City of Lawrenceville 12.78 30.19 42.97 Paulding County 38.25 38.25 76.50 Rockdale County 14.38 40.55 54.93 City of Roswell 26.70 42.75 69.45 I I I I .1 I I I -Based on average consumption of 9,000 gallons per month. Data source: Forsyth County Official Statement, June 1, 2000. . I I I I I' I I For purposes of this analysis, equal percentage water and sewer rate increases are projected and are assumed to be applied uniforinly across customer c1asses3. Subject to approval by the Commission, 11 percent per annum increases are scheduled in 2001 through 2007 followed by 3 percent per annum increases in 2008 and 2009. These planned rate increases will increase the typical residential customer's monthly water bill to $30.40 ($23.30 in 2000 dollars) and monthly sewer bill to $43.30 (or $33.19 in 2000 dollars). While this represents a total increase of 114% in combined monthly bills over the 10 year forecast period, the combined monthly bill in current dollars ($56.49) is below the median of the range of typical monthly bills presented in Table 6-3, without accounting for prospective increases in these communities' water and sewer rates. 3 The Department established a uniform water and sewer rate schedule for the System effective April 1, 1996. G:\PUBlICATIONSIENGINEERSREPORT.DOC 6-4 I I I I I I I I I I I I I I I~ I" I I' I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS. SERIES 2000 Water and sewer tap fees are $350 per service for residential connections4. Under I . conservative assumptions, tap fees charged to new customers connecting to the system are assumed to remain constant throughout the forecast period. 6.3 Financial Policies The Department uses a system of fund accounting to track water and sewer system revenues and expenditures. There are three funds: the Operating Fund, the Renewal Fund, and the Sinking Fund. With the exception of sales tax proceeds, all revenues are deposited into the Operating Fund. Operating Fund expenses include all operation and maintenance expenses, transfers to the Renewal Fund for capital projects, and transfers to the Bond Fund for capital projects funded through debt proceeds. Bond proceeds are deposited into the Construction Fund, a restricted asset of the Operating Fund. The projected Operating Cash balance as of January 1, 2000 was $9,478,263. As indicated in the Bond Resolution, the Department is required to maintain a minimum balance in the Operating Fund of the lessor of $2,500,000 or 5% of the preceding fiscal year's operating revenues. This analysis assumes interest revenue is earned on bond proceeds in the Construction Fund. Under conservative assumptions, interest revenue is not assumed to accrue on Operating Fund balances. In the past, the Department has made transfers from the Operating Fund to Augusta's General Fund. In 1997, 1998, and 1999 these transfers totaled approximately $5.2 million, $3.7 million, and $2.5 million, respectively. Conversely, over the same period, the Department has received sales tax revenues totaling approximately $18 million. To ensure financial integrity and self-sufficiency, the Bond Resolution contemplates, and this analysis assumes, that the Department will not make transfers to Augusta's General Fund nor receive sales tax revenue in the future, 6.4 Projected Operating Results Table 6-4 presents projected operating results for the System, including projected revenues, expenses, debt service, and debt service coverage through 2009. 6.4.1 Revenues Projections of system growth are used to forecast water and sewer sales revenues, and operating expenses. As of December 31, 1999, the System provided service to 64,397 active water accounts and 48,699 active sewer accounts. Account growth is based on population 4 Tap fees vary depending on water meter and tap sizes. Cost does not include additional fees assessed for road crossing or sidewalk replacement. G:\PUBLlCATIONSIENGINEERSREPORT.DOC 6-5 - m I I I I m I I I I I I I I o o o 2 N "S (/) (1) c::: en <:: ~ Q) a. o E (1) en >- en Q) :;;: (1) en ..,. "'C ~ ffi ..J Q) aJ ro ~ 5: I I I I "I Q) o o N '* o co M o o N ~ ~ ..... ~ o ~ o N '* C! CD ~ o ~ o N '* C! U) ~ o ~ o N '* C! 'It ~ o ~ o N '* C! M ~ o ~ o N '* C! N ~ o ~ o N '# C! .... ~ o ~ o N ~ o o M 11l 0) 11l CIl 0) <:> c 0) ro 0:: "0 0) "S "0 0) .<:: o (/) 00 M 00 ci <0 <0 ci M Ol 10 00 ~ M ..... e>> N 10 00 .....- ''It M 00 a:i N ~ ~ ci :; cD N 0> <0 <0 ...: 00 ~ ~ N ~ Q) Il"i 00 o N N 00 ..... o ~ <0 ~ ci N N ..... 00 cD o v a:i ~ 0> co M ci o 00 cD ~ o <0 ~ M M Il"i ~ 0) ~ c 0) > 0) 0:: 11l 0) m (/) Cii ro 3: V N M Il"i ..... v ;i ..... M 10 M ..... M M M 0> o Ol M o M N M 10 00 10 N M 10 e>> N 0> 0> 10 e>> v 0> cD N ..... N ~ ~ ~ N M N o M 10 o. 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N <0 ~ ...: 00 N Il"i N U) N.. 10 q N ..... ''It. ~ N CD "l; u; <0 cD ..... ''It ci N N ~ 00 <0 <0 e>> o ..... Il"i ~ CD "'! ..... 0> N. o N. <0 ~ CD "': M N <0 ...: 00 ..... e>> ~ 0> <0 cO 0> ..... cri N CD N 10 ~ ~ ...... N ..... ~ 'It ..... N () o Cl ~ N co Ii: o a.. w c.: en c.: w w z c:5 z ':Ol a.. ::;: w ':: en s: o o z ~ o 11l "0 r:: o CO Q) ~ r:: 0) > 0) 0:: r:: o Q) o .~ 0) en - .c Q) o o .. l'll 0:: 0) C> CIl .. Q) > o t) Q) o .~ 0) (/) E 0) o I I I I I I I I I I I I I I I I projections and planned expansion of the service area. Consistent with historical data, annual water system growth is expected to range between .85% and 1.24%-an increase of between 600 and 800 new water accounts per year. Total water accounts are expected to increase 9.8 percent over the 10-year study period5. Annual sewer growth is expected to fluctuate over the forecast period reaching a peak in 2003 of 3.82% as transmission lines are extended to new sewer customers. New sewer accolmts number between 600 and 1,980 annually. Total sewer accounts are projected to increase 19.2 percent over the forecast period6. Annual water sales revenues are forecast to increase from $15.3 to $30.7 million and sewer sales and industrial surcharge revenues from $16.0 to $34.5 million. Water and sewer tap fees are projected based on new accounts resulting from system growth and expansion. These fees are expected to generate $6.2 million between 2000 and 2009. Cut-on fees, set to recover administrative costs associated with new accounts, and other miscellaneous revenues are assumed to increase 3 percent per annum. In 2009, total revenues of $66.9 million are projected to be comprised of water sales (45.9 percent), sewer sales (51.6 percent), other revenues (2.1 percent), and water and sewer tap fees (less than one percent). Total revenues are expected to grow 113 percent from $31.4 million in 2000 to $66.9 million in 2009. Of the $35.5 million differential, nearly $29.4 million is attributed to water and sewer rate increases (82.8 percent) and $6.1 million to system growth and expansion (17.2 percent). 6.4.2 Expenses Total system operation and maintenance expenses for 1999 were $27.9 millio:p. and are projected to be $30.6 million in 2000. System operating expenses are stated in nine expense categories: Administration (includes payments to the General Fund in lieu of Franchise Fees and Taxes), Customer Service, Construction and Maintenance, Raw Water, Surface Water Treatment, Groundwater, Messerly Treatment Plant, New Water Treatment Plant, and Depreciation. The escalation rate for these categories is computed as the annual rate of inflation (3%) plus half the rate of annual population growth; for water-related categories, 3.43 percent, for sewer-related categories, 4.03 percent? Operating capital, excluded from the debt service coverage calculation, is expected to total $1.5 million in 2000 and is escalated at 3.73 percent per annum throughout the forecast period. Additional O&M expenses attributed to the capital improvement program are included in the fiscal year 2001 budget and include additional staffing expenses and recurring costs related to process changes, system expansions, and other circumstances. Two significant aspects of the revenue and expense projections are: · Fiscal year 2000 and 2001 budgeted revenues, adjusted for account growth and rate . increases, are used as the basis for revenue projections throughout the forecast period. I I I 5As indicated in Table 2-1, population growth in the service area over the ten year period is projected to be 8.8%. 6As indicated in Table 4-3, sewered population growth in the service area over the ten year period is projected to be 19.8%. 7 For categories such as administration and customer service. 3.73 percent is used-an average of the two escalation rates. G:IPUBLlCA TIONSIENGINEERSREPORT.DOC6-7 I I I I I I I I I I I I I I I I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 · Interest revenue is assumed to accrue only in the Construction Fund at an earnings rate of 5.5 percent; under conservative assumptions, no interest revenue is assumed to accrue on Opera ting Flmd balances. 6.4.3 Debt Service Projected debt service includes debt service for both existing and proposed revenue bond issues. Currently, the Department is repaying three revenue bond issues: Series 1996A Bonds, Series 1996B Bonds, and Series 1997 Bonds. The combined annual principal and interest payment for the three bonds is approximately $4.7 million per year8. The 1996B Bonds will be retired in 2002, the 1997 Bonds in 2021, and the 1996A Bonds in 2028. The Department is also repaying three loans issued by the Georgia Environmental Facilities Authority. These loans do not have coverage requirements and are therefore not included in debt service coverage calculations. Proposed bond amounts were selected to fund the capital program, maintain appropriate Operating Fund reserves, meet debt service coverage criteria, and minimize rate impacts. In addition to existing debt service and the projected debt service schedule for the Series 2000 Bonds, annual debt service includes payments associated with scheduled debt issues in 2002,2004, and 2006. All future debt issues assume a 30 year term, an interest rate of 6.5 percent, an issuance cost of $750,000, and an underwriter's discount equal to 0.5 percent of the par amount. Future debt issues also assume a debt service surety bond premium equal to 2.5% of debt service requirements and a bond insurance cost equal to 20 basis points of total debt service. Capitalized interest on the Series 2000 Bonds and subsequent issues in 2002 and 2004 totals $13.2 million. Annual debt service costs are budgeted at $4.7 million in 2000. Future annual debt service costs are projected to increase to $27.7 million in 2009 under the proposed bond issuance schedule. 6.4.4 Debt Service Coverage Debt service coverage is evaluated in terms of the System as a whole (combined water and sewer). The System has a minimum parity coverage requirement of 1.25 times annual debt service. System debt service coverage is estimated to be 2.74 in 2000 and projected to range from 1.25 to 2.74 over the study period as shown in Table 6-4. As indicated in Table 6-5, under rate projections established in the Bond Resolution for the Series 2000 Bonds and upon completion of the construction period, the System will generate net revenues available for debt service in excess of maximum annual debt service requirements in ratios ranging from 1.53 to 2.57, and above Bond Resolution requirements of 1.25 for Additional Bonds. 8 Debt service payments for previous revenue bonds are structured so that the combined payment remains relatively constant. G:\PUBLlCA nONSIENGINEE RSREPORT. DOC 6-ll .. I I m I - m I I I I I I I I I I' I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 TABLE 6.5 Additional Bonds Test' 2004 2005 2006 2007 2008 Net Revenues Available 17,802,006 18,366,669 18,660,058 18,089,653 18,518,364 Maximum Debt Service 12,826.875 12,826.875 12,826,875 12,826,875 12,826,875 Debt Service Coverage 1.39 1.43 1.45 1.41 1.44 *The Additional Bonds test shows debt service coverage ratios for the forecast period foHowing completion of construction using the maximum annual debt service payment. 6.4.5 Operating Fund Balances Operating Fund cash flows are presented in Table 6-6. Scheduled rate increases provide for compliance with the Bond Resolution requirement to maintain Operating Fund balances equal to the lesser of $2.5 million or 5 percent of the preceding fiscal year's operating revenues. Operating fund balances range from $1.8 million to $11.3 million over the forecast period and reflect the effect of debt service payments inclusive of Georgia Environmental Facilities Authority loans as well as projected debt issues. 6.5 Capital Financing The CIP will require approximately $312.2 million ($278.1 million in 2000 dollars) in total funding over the ten year period, as discussed in Section 5 and shown in Table 6-7. Two sources of funds will be used to fund the capital program: bond proceeds (94.5 percent) and interest in the Construction Fund (5.6 percent). $295 million in bond proceeds will be generated by separate issues in 2000 ($88.0 million), 2002 ($87.1 million), 2004 ($55.2 million), and 2006 ($64.7 million). Interest in the Construction Fund is expected to total $17.2 million over the 10-year period. Proposed water and sewer rate increases are projected to generate nearly $150.8 million in additional revenues over the forecast period; tap fees, $6.2 million. Use of these revenues provide an appropriate matching of revenues to capital expenses (including debt service payments) planned to accommodate growth. In the event that actual growth in the Department's water and sewer systems is less than projected, project deferrals may be employed without degradation of services to ensure adequate matching of system revenues and projected capital expenditures. 6.6 Series 2000 Bonds Analysis This financial analysis has presented projections of revenues, expenses, debt service, and debt service coverage to indicate financial feasibility of the 10-year capital plan, including projects identified in the Master Plan as well as system enhancement projects. The financial feasibility of the Series 2000 Bonds is demonstr'ated through an evaluation of required rate increases to achieve adequate debt service coverage and fund balances in the absence of future capital expenditures and debt issues beyond that contemplated for the Series 2000 Bonds financing. C:\WINDOWS\TEMPIENGINEERSREPORT822.DOC 6-9 I I I I I I I I I I I I I I - I I I I ENGINEER'S REPORT AUGUSTA UTILITIES DEPARTMENT WATER AND SEWERAGE REVENUE BONDS, SERIES 2000 Table 6-8 presents Operating Results related solely to the feasibility of the Series 2000 Bonds, and is comparable to Table 6-4. Fe~sibility of the 2000 Series Bonds will require 11 percent rate increases in 2001 and 2002, followed by 3 percent per annum rate increases in all subsequent years of the forecast period to achieve required debt service coverage and fund - balances. This compares to 11 percent per annum increases in 2001-2007, followed by 3 percent increases in 2008 and 2009, forthe contemplated 10-year capital program financing presented in previous sections. 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It) ~ o o ..... -.i C"l ..... ..... ..... ~ "': o co C"l M N ,... -.i N CD N LO ..... ..... r-: N ,... -.i ~ ,... N u o o ~ '" co l- e<: o Cl. UJ e<: '" e<: UJ UJ z <3 z UJ a:: :::;; UJ t:: '" 3: o o z ~ o '" "'C c:: o CO QI ::l c:: QI > QI 0:: c:: o Ql o .~ QI en - .c QI o .2 ni 0:: QI CI l"!! QI > o <-> Ql U .~ Ql en - .c QI o I I I I I I I I I I I I I I I I I I I 6.7 Conclusions CH2M HILL's projection of the financial performance of the System for the 10-year period 2000 through 2009 is summarized hs follows: . Total revenues are projected to increase 113 percent over the 10-year period. Operating expenses, including expenses attributable to planned capital expenditures, are projected to increase by 39.2 percent over the 10-year forecast period. . Projects identified in the Department's 10-year CIP reflect priority needs of the system and, after adjusting for inflation, are expected to total $312.2 million. These expenditures will be primarily funded througha combination of debt issues in 2000,2002,2004, and 2006 ($295.0 million) and interest on the Construction Fund ($17.2 million). . Financing of the planned 10-year capital program will require system-wide water and sewer rate increases of 11 percent per annum from 2001 through 2007, and 3 percent in 2008 and 2009. Typical residential bills, for both water and sewer service, are projected to increase 114 percent over the forecast period as a result of these rate increases. However, projected residential bills are expected to remain comparable to, and competitive with, other Georgia communities. . Net revenues of the System will be sufficient to meet projected debt service obligations on the Series 2000 Bonds and planned 2002, 2004, and 2006 bonds if scheduled water and sewer rate increases are implemented. . Net revenues of the System will be sufficient to meet projected debt service obligations on the Series 2000 Bonds if scheduled rate increases of 11 percent per annum are implemented in 2001 and 2002, and rates are increased at 3 percent per annum, equivalent to projected inflation, over the remainder of the forecast period. G:\PUBLlCATIONSIENGINEERSREPORT.DOC 6-14 I I I I I I I I I I I I I I I I I I I Appendix A Acronyms BPS CIP DI D/DBP DNR EPA EPD FM FPS GPM/Fe GPD GWTP 1/1 LAS MCC MCL(G) MG mgd MSL NPDES PS PSI PVC RMP SDWA SWTR TTHM WTP WWTP booster pump station Capital Improvement Plan ductile iron Disinfectants/Disinfectants Byproducts Rule Department of Natural Resources United States Environmental Protection Agency State of Georgia, Department of Natural Resources, Environmental Protection Division force main feet per second gallons per minute per square foot gallons per day ground water treatment plant infiltration and inflow land application system motor control center maximum contaminant level (goal) million gallon million gallons per day mean sea level National Pollutant Discharge Elimination System pump station per square inch polyvinyl chloride risk management plan Safe Drinking Water Act Surface Water Treatment Rule total trihalomethanes water treatment plant wastewater treatment plant G:\PUBLlCATlONSIENGINEERSREPORT.DOC A-l I I Appendix B I Estimated Growth within 'Census Tracts I Estimated Growth within Census Tracts I Augusta-Richmond County, 1990 to 1998 Census Acres 1990 1990 1990 Density 1998 Adjusted 1998 1998 Change, Tract Census Population (persons per Building Permit Population Density 1990 to population Share acre) Estimate Share 1998 I 1 1,152 4,672 2.6% 4.06 4,256 2.3% 3.68 -9.2% 2 640 3,260 1.8% 5.09 3,000 1.6% 4.67 -8.3% 3 320 1,963 1.1% 6.13 1,771 1.0% 5.52 -10.1% I 4 384 783 0.4% 2.04 727 0.4% 1.89 -7.5% 6 512 2,691 1.5% 5.26 2,388 1.3% 4.65 -11.6% 7 320 1,837 1.0% 5.74 1,470 0.8% 4.58 -20.2% 8 384 1,022 0.6% 2.66 999 0.5% 2.59 -2.6% I 9 320 3,394 1.9% 10.61 3,041 1.7% 9.47 -10.7% 10 512 3,311 1.8% 6.47 2,884 1.6% 5.61 -13.2% 11 512 1,753 1.0% 3.42 1,774 1.0% 3.45 0.8% 12 960 4,808 2.7% 5.01 4,479 2.4% 4.65 -7.2% I 13 448 1,748 1.0% 3.90 1,640 0.9% 3.65 -6.5% 14 384 2,755 1.5% 7.17 2,408 1.3% 6.25 -12.9% 15 320 2,411 1.3% 7.53 1,998 1.1% 6.22 -17.4% 16 2,112 8,876 4.9% 4.20. 8,523 4.7% 4.02 -4.3% I 101.01 1,280 3,994 2.2% 3.12 3,798 2.1% 2.96 -5.3% 101.02 1,984 6,274 3.5% 3.16 6,708 3.7% 3.37 6.5% 101.04 1,920 3,466 1.9% 1.81 3,607 2.0% 1.87 3.7% 101.05 1,216 5,654 3.1% 4.65 6,002 .3.3% 4.92 5.8% I 102.01 1,472 5,356 3.0% 3.64 5,125 2.8% 3.47 -4.7% 102.03 1,216 4,014 2.2% 3.30 3,697 2.0% 3.03 -8.2% 102.04 8,000 4,480 2.5% 0.56 5,975 3.3% 0.74 32.9% 103 1,280 5,899 3.3% 4.61 5,457 3.0% 4.25 -7.8% I 104 1,216 4,987 2.8% 4.10 4,559 2.5% 3.74 -8.9% 105.04 3,136 7,541 4.2% 2.40 6,901 3.8% 2.19 -8.8% 105.05 2,368 8,126 4.5% 3.43 8,444 4:6% 3.55 3.5% 105.06 1,280 5,282 2.9% 4.13 4,797 2.6% 3.73 -9.5% I 105.07 1,728 6,701 3.7% 3.88 6,261 3.4% 3.61 -6.9% 105.08 768 3,844 2.1% 5.01 3,580 2.0% 4.64 -7.2% 105.09 1,024 4,602 2.5% 4.49 4,281 2.3% 4.17 -7.3% 105.1 1,344 5,456 3.0% 4.06 5,119 2.8% 3.79 -6.5% I 105.11 1,792 3,796 2.1% 2.12 3,492 1.9% 1.94 -8.3% 106 17,856 6,512 3.6% 0.36 6,259 3.4% 0.35 -4.2% 107.03 3,008 8,210 4.5% 2.73 8,752 4.8% 2.90 6.2% 107.04 5,504 6,859 3.8% 1.25 8,866 4.8% 1.61 28.8% I 107.05 4,032 7,363 4.1% 1.83 9,061 5.0% 2.24 22.6% 107.06 7,616 3,548 2.0% 0.47 4,046 2.2% 0.53 13.6% 109.01 37,824 5,508 3.1% 0.15 6,780 3.7% 0.18 22.7% 109.02 44,800 7,823 4.3% 0.17 9,919 5.4% 0.22 26.3% I Total (a) 207,167 180,579 100% 1.11 190,850 100% 1.12 0.9% (a) Excludes Census Tract 108 (Fort Gordon), which had an estimated 9,140 persons in 1990. I I I G:\PUBLlCATIONSIENGINEERSREPORT.DOC B.1 I I I I I I I I I I. I I. I I. I I I I I Appendix C 10 year CapitallQ1'provement PI~n 7 10 Year Capital Improvement Plan Note: All estimated costs in 2000 dollars. ;'f~."""""-,,"''-:','" .' ,.COSTe>; r.;i.:-::~q.~J..;:::: ":~.90ST .". "'ESTIMATE:;,; t=.~j:lr~'!.~:F~4;eSTIMATt= 2Q02FUNriS:2004".EORQ~ 2.0P9:FUNDS ~'-,"'~ -:",., ..;"'~",.,.l"-,:-c-- ....,_..d_:_.._-"_....."'"'-v,..._ ~'"{:''''''''''-.-:.''... .. ,', ~.. .... ~. .. ,', .'. _,' . '-c' '~'~r"","",- ::.; RECOMMENDEDIMPROVEMENT.S:..:::: .~;~~'r:':::'J,.-'?'r'~' ..~.~:....,. ,::. .....: ':~~:?,?:~-~~~';:':"i~'~;~~':'?"':~::'~t --.~ ,'"'" .. -",_ .c."'....'.. "., . 'W ..,"~M..~....~, ',_<<,,,,,,,@'ij. ^ WATER TREATMENT FACILITIES WATER DISTRIBUTION SYSTEM WASTEWATER TREATMENT PLANTS WASTEWATER CONVEYANCE SYSTEM SYSTEM-WIDE PROJECTS MASTER PLAN 2000 PROJECTS 28,655,000 25,640,000 14,400,000 7,000,000 19,789,000 14,705,480 10,940,000 9,810,000 9,322,000 19,848,000 10,416,000 17,166,000 26,466,000 29,222,000 10,005,000 4,600,000 5,895,000 200,000 50,000 90,127,000 89,615,480 45,811,000 38,576,000 4,000,000 4,000,000 6,000,000 SYSTEM ENHANCEMENT PROJECTS* 10 YEAR CAPITAL IMPROVEMENT PLAN 90,127,000 93,615,480 49,811,000 44,576,000 *System Enhancement Projects: The capital improvement projects funded over the next 10 years have been developed based upon the Master Plan 2000 and its specific recommendations for system expansion and improvement. In future years (beginning in 2004) some limited additional system enhancement projects may be required to address critical stress on some older segments of the System that were not defined in the Master Plan 2000. These are estimated torequire $2,000,000 per year. G:\PUBLlCATIONSIENGINEERSREPORT.DOC C,1