Audited Financial Statement - Springfield Water and Sewer

Transcription

S p r i n g f i e lD
Massachusetts
SpringfieLd
Water
and
Se wer
Commission
Annual R eport
2011
Joseph J. Superneau
1947-2012
• In Memoriam •
Joe Superneau, Executive Director of the Springfield
Water and Sewer Commission passed away on
January 3, 2012. Joe was employed in public works
for many years including 20 years at the Springfield
Department of Public Works, and as Deputy Chief
Engineer at the Massachusetts Highway Department
before joining the Commission in 1999. Joe had
numerous achievements during his tenure at the
Commission; most notably he was awarded the
American Public Works Association’s Top Ten
Public Works Official of the Year for 2009.
Joe was best known by his colleagues for his work
ethic, dedication and character which made him
a respected mentor to the many people he served.
He will be missed by all.
Table of Contents
The Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Tornado Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Energy Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Education Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Economic Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Water Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Capital Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Watershed Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Engineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Water Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Maintaining Water Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Wastewater Collection System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Combined Sewer Overflows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Wastewater Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Financial Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Mission Statement
Our mission is to provide an adequate
uninterrupted, high-quality supply of water
to our customers, to collect and treat
wastewater, and return clean water to
the environment.
While fulfilling our mission we strive to:
 Conserve and protect our reliable,
high-quality water supply for present
and future generations
 Meet or surpass public health standards,
environmental standards, and support
fire protection
 Operate, maintain, improve and manage our
water and wastewater infrastructure in a
cost-efficient manner
 Manage finances to support Commission
needs and maintain reasonable water
and wastewater rates
 Maintain an adequate, safe and
professional workforce
 Understand and respond to customers’
expectations for service
The Commission
Dear Mayor and City Council Members:
The Springfield Water and Sewer Commission is pleased to submit the Fiscal Year
2011 Annual Report. The report presents statistical and narrative information related
to daily operations, capital improvement projects and accomplishments. This report
describes the water and wastewater systems and our commitment to support the
public health, safety and economic interests of the community by providing quality
drinking water and wastewater services in a responsible, efficient and sustainable
manner.
This year presented many challenges for the Commission, especially with regard to
the weather. Record snowfalls in the early part of the year were followed by a rare
and destructive tornado in June; an earthquake and a hurricane in August; and an
early Nor’easter in October. These disasters left many of our customers homeless,
streets impassable and our employees and facilities without power for up to a
week. The Commission was fortunate that we experienced minimal damage to our
infrastructure, did what was necessary to operate our facilities and responded quickly
to assist with the needs of the community. Many employees worked long hours in the
field, as well as behind the scenes, to support the field crews. We kept the drinking
water flowing and the wastewater collected 24-hours a day, 7-days a week while these
emergencies were ongoing.
Also this year, while operations and support personnel maintained the day-to-day
running of our utility, we achieved many accomplishments in the areas of Capital
Projects, Combined Sewer Overflows (CSO’s), and continual improvements to our
water and wastewater systems.
At our drinking water treatment plant the Commission continued a pilot study on
coagulants with the University of Massachusetts. The study will help the Commission
comply with future DEP regulations for disinfection by-products. Large structural
improvement projects included the rehabilitation of Provin Mountain Reservoir
Tank 2 and construction to replace the Connecticut River Transmission Main near
the South End Bridge.
To comply with U.S. EPA Consent Orders, CSO projects in Springfield’s Brightwood
section were completed on time. Those projects resulted in eliminating approximately
30 million gallons of sewage from spilling into the Connecticut River each year.
2 SWSC11
In addition, we continue
to meet milestones for the
CSO Long Term Control
Plan. A new Fats, Oils and
Grease (FOG) education
program began this year
Seated on the Springfield Water and Sewer Commission are Daniel
with a goal of teaching
Rodriguez, Carmen Serrano-Gerena and William Leonard (L-R).
residents and businesses
about proper disposal of FOG.
Day to day commission staff responds to main breaks, valves, hydrant and water
service repairs and replacements. We exercise valves and flush many miles of pipe.
Hundreds of large and small meters are installed and hundreds of thousands of meter
readings are taken. We continue to bill our 43,500 customers monthly and quarterly;
collect payments and assist with customer concerns. While all of this is happening,
the lab collects over 50,000 samples, inspectors mark the streets, work orders are
processed and we host more than 27,000 visitors at the Ludlow Reservoir.
The Commission is committed to maintaining the lowest possible rates while meeting
our responsibility to invest in our infrastructure and comply with environmental
laws and regulations. Looking forward, the Commission is committed to providing
the uninterrupted water and wastewater services that the City of Springfield and
surrounding communities have come to rely on, for years to come.
If you have any questions related to this report please contact the Springfield Water
and Sewer Commission at 413-787-6256.
Sincerely,
Daniel Rodriguez
Chairman
Carmen Serrano-Gerena
Commissioner
Springfield Water and Sewer Commission
William Leonard
Commissioner
Tornado Response
On June 1, 2011 Western Massachusetts was hit by an
EF-3 tornado, with winds of 160 mph. Employees at
the Commission’s Administration Building on Bondi’s
Island were wrapping up the day’s work when they
noticed a spiraling twister and heavy winds from the
front window of the building. As a tornado raged over
the Connecticut River and tore a path through the South
End of Springfield, cell phone lines were out of service
and access roads to Route 5 became impassable because
of downed trees. Employees waited out the storm until
approximately 6 p.m. when roads were cleared of debris
and they were able to return home. The Commission set
Dust devil, whirl wind, twister. No matter what you choose to call it,
the devastation by this violent rotating column of air is devastating.
up a Command Center
to deal with the tornado
disaster. Initially, the
response was to shut-off
water service to homes
that were condemned due
to damage caused by the
storm. Within the next
Commission crews shutting down water services to condemned buildings.
few days 140 services
In addition, the Commission participated in the daily
were shut off as a result of the disaster. Another problem “Mayor’s Briefings” which was a group of Federal, State,
to address was the electricity outage that affected two
and City Departments, utilities, aid agencies and civic
booster stations in the water distribution system. The
associations that met to discuss the day-to-day tornado
response was to acquire and install two large generators cleanup progress and operations.
to ensure fire protection in the neighborhoods served by
those stations. Within hours the booster station on East
In order to assist with rebuilding, the Commission
Allen Ridge was up and running. A second generator
offered eligible homeowners free water and sewer use
was set in place at the Catalina station but never used
for temporary trailers from the time the trailer was
because electricity service was restored. At the same
placed on the lot and the temporary water and sewer
time, the sewer pumping stations were being assessed
services were turned on until the trailer is removed or
by United Water. It was found that six sewer pump
up until June 30, 2012. In addition, water turn-on and
stations were without power and United Water provided shut-off fees, normally $75 each, were waived during the
emergency services to keep those stations running
rebuilding period.
until the power was restored on Friday, June 3rd. Sewer
collection services remained intact throughout the
disaster and there were no sewer backups reported. In
the days following, three sewer services were reported
as being damaged because of tree roots from fallen
trees.
In the week following the tornado the City of Springfield
requested assistance from the Water and Sewer
Commission to remove debris and trees from various
streets in the storm path. Field Service crews were
dispatched to assist and, in total, 518 hours of work and
31 vehicles were assigned to tornado cleanup activities.
Commission crews assist with debris removal after the tornado.
ANNUAL report 3
Energy Efficiency
Energy Upgrades
The Commission partnered with Western Mass Electric
(WMECo) and M.L. Schmitt electrical contractors to
perform upgrades and replacement of lighting systems
at the Colton Street field office in January 2011.
Hybrid Vehicles
kWhs in electricity per year. That is an estimated
lifetime savings of 5,073,794 kWhs. The project cost was
$141,498 and received 50% matching funds of $70,749
from Western Massachusetts Electric Company.
The Commission
purchased two new fuel
efficient vehicles for our
fleet in December 2010.
The 2010 Toyota Prius
replaced a Ford Fusion
Toyota Prius
in the meter reading
division and increased
fuel efficiency from 24 mpg to 51 mpg. In addition,
a 2009 Ford Escape Hybrid replaced a Ford Taurus X
that is used for Emergency Response. The new Escape
is 19 mpg more fuel efficient than the Taurus X.
Colton Street stockroom lights.
The project is estimated to save 21,707 Kilowatt hours
(kWhs) of electricity per year, which is estimated
to save the equivalent of 25,289 lbs/year of carbon
dioxide and other “greenhouse gases” from entering
the atmosphere. In addition, the savings on our electric
bill is estimated to be $1800—$2000 per year. WMECo
paid 100% of the cost of the lighting survey and 70% of
the cost of the upgrades at the facility. The Commission and United Water, wastewater
contractor, successfully implemented a lighting retrofit
of the Wastewater Treatment Plant at Bondi’s Island
in December 2011. By replacing inefficient lighting
fixtures, the Commission is estimated to save 400,466
4 SWSC11
WWTP hallway lights before (above) and after (below).
Ford Escape
Education Programs
Fats, Oils and Grease (FOG)
The World is Our Classroom
Fats, Oils and Grease (FOG) is a leading
cause of sewer backups into basements.
FOG occurs when cooking fats are
dispersed down the drain and coat the
inside of the pipes, eventually forming
Example of
a blockage. In response to the number
a grease
clogged pipe
of blockages caused by grease and in
order to maintain compliance with
U.S. EPA regulations, the Commission began a Fats,
Oils and Grease Program
to educate residential
customers on the hazards
of grease clogs in the sewer
systems. The educational
program called “Cease
the Grease Springfield” is
comprised of informational
A FOG logo was designed for the
fliers, posters and on-site
Commission
presentations at civic
association meetings;
condominium, rental and housing associations; and
other public forums throughout the city. The goal of the
program is to educate residents to understand that the
proper disposal of grease and other FOG forming foods
is in the garbage, rather than in the sink or toilet. In the
future, the program will expand to include restaurants
and food service establishments.
Over forty 7th grade classrooms from Springfield Schools
made the trip to Cobble Mountain and West Parish
Filters during the second year of “A Day at Cobble
Mountain”. The field trip consisted of a tour with a stop
at a watershed stream to collect and view organisms,
tour of the water treatment plant, and a microscope
activity in the lobby. The tours were structured around
the 7th grade science and technology curriculum
and instructors from World is Our Classroom and
Commission staff coordinated the program. This is the
second year of this successful education collaborative
aimed at enhancing scientific concepts while educating
students about the water they use for drinking and
everyday use.
Seventh grade students from Springfield Public Schools learn
about water treatment and watersheds during their ‘Day at Cobble
Mountain’ field trip.
Students use microscopes in the facility's lobby.
ANNUAL report 5
Economic Development
The Commission’s engineering group reviews new development and redevelopment
projects submitted for connection to the water and sewer systems. In order to
protect the integrity of the water and sewer systems, projects must comply with the
Commission’s Rules and Regulations. Each year, over 100 development projects are
reviewed, ranging from large-scale redevelopment to small single-family homes.
The following is a list of some of the major projects reviewed and approved in
Fiscal Year 2011:
Daisy Lane Extension, Ludlow – Staff completed water main extension review for
four new buildings lots.
Westwood Drive – Staff completed water and sewer main extension reviews for a new
subdivision with eight building lots off Kent Road in Springfield.
Marshall Roy Field – The Springfield Parks Department and Department of Capitol
Asset Construction received grant money from the Urban Self-Help Program of the
Commonwealth’s Division of Conservation Services for a renovation of the existing
park. Improvements included four new ball fields, a new restroom facility, a new
playground, and expanded parking lot. A new handicap accessible bituminous path
was installed from the parking lot to the restrooms. Installation of trees, fencing,
irrigation, and renovations to the grass areas were completed along with new
backstops, player benches, safety fencing for the player benches, and new trash
receptacles. The Commission assisted with the review of water/sewer service to the
bathrooms and irrigation systems.
Rebecca Johnson Park – Springfield Parks Department and the Department of
Capitol Asset Construction received a state Parkland Acquisitions and Renovations for
Communities (PARC) grant for renovations to the new park land, and a Community
Development Block Grant for renovations at both the new park land and the courtyard
at Rebecca Johnson School. Renovations will include a ball field, the installation of
new play structures, a new outdoor classroom with a 50 seat amphitheater, raised
garden beds to be used in the school curriculum, fitness equipment, benches,
trash receptacles, landscape work, a water splash pad, and walking/jogging track
for community use. The Commission assisted with review of new water and sewer
services to accommodate the renovations.
6 SWSC11
Former Westinghouse Site at Page Boulevard and Stevens Avenue – The
Commission assisted with research of an extensive network of existing water and
sewer services which required discontinuance for demolition and future development
of the 41-acre Westinghouse site that was closed several decades ago.
Brookings School Temporary Building – New water and sewer services were
configured for temporary school buildings after the June 1 tornado closed the
permanent structure at Elias Brookings School.
603 & 683 East Columbus Avenue – New water and sewer services were reviewed for
the Balise Hyundai and Ready Credit auto dealerships.
Caring Health Center 1051-1055 Main Street – New water and sewer services were
reviewed for a new Caring Health Center office. The center provides wellness services
to residents in the South End.
Victoria Marie Lane – The Commission
reviewed plans for the construction of new
water and sewer mains and house connections
for a three-lot subdivision off Forest Hills Road
in Springfield.
New construction on Victoria Maria Lane in
Springfield.
MDOT Funded Roadway Improvements
– The Massachusetts Department of
Transportation is working on future roadway
improvement projects for Boston Road from
Fieldston Street to the Wilbraham town line
and in Ludlow on Center Street from
Langevins Street to Chapin Street.
June 1, 2011 Tornado Damaged Properties – The Commission assisted with the
research for emergency demolitions, and the processing of service replacement
applications for new water and sewer services to facilitate rebuilding of homes.
Water Distribution
The Water System
Water flows from the
Cobble Mountain
Reservoir to the West
Parish Water Filtration
Plant in Westfield. After
treatment and filtration,
the water flows to four
large storage tanks at
Provin Mountain, and
then by gravity to the
service areas.
Retail Customers
Littleville
Reservoir
Wholesale Customers
Partial, Emergency and
Peak Demand Customers
Springfield
Reservoir
Cobble
Mountain
Reservoir
LUDLOW
CHICOPEE
WESTFIELD
Watercolor of Cobble Mountain
Reservoir
WEST
SPRINGFIELD
SPRINGFIELD
West Parish
Water Filtration Plant
WILBRAHAM
Provin Mountain Storage Tanks
SOUTHWICK
EAST
LONGMEADOW
AGAWAM
LONGMEADOW
ANNUAL report 7
Water Distribution
Pipe Size
Pipe Installed
Pipe Type
Pipe Removed
(Length in Feet)
173
27
Aug
200
21
Sept
168
30
Oct
161
14
Dwight Street
10
Ductile Iron
56
56
Nov
144
28
Dwight Street
8
Ductile Iron
29
217
Dec
83
22
Main Street
16
Ductile Iron
14
14
Jan
29
63
Feb
12
37
Rita Street
8
Ductile Iron
15
3
Mar
144
74
April
198
23
Chapin Street
10
Ductile Iron
403
–
May
205
32
Chapin Street
6
Ductile Iron
7
–
June
149
56
Chapin Street
8
Ductile Iron
10
–
1,666
427
Chapin Street
12
Ductile Iron
6
–
5
Iria Lane
8
Ductile Iron
6
–
Replacement Hydrants
46
Iria Lane
6
Ductile Iron
206
–
New Valves Installed
68
Daisy Lane
8
Ductile Iron
3
–
Valves Replaced
35
Daisy Lane
8
Ductile Iron
152
410
2,223
2,030
2011
2010
Year
Emergency
(Length in Feet)
Routine
(Inches)
July
The Commission provides routine and emergency pipe location
services for excavations.
Water Distribution System Updates
New Hydrants
Totals
Springfield
Bond Street
8
Ductile Iron
68
68
Brightwood Street
8
Ductile Iron
327
327
Chestnut Street
12
Ductile Iron
73
73
Cumberland Street
8
Ductile Iron
848
844
Ludlow
Totals
Total feet of new pipe added
to the system = 193
Key Statistics – FY 2011
8 SWSC11
2011
Water Mains Installed
Month
Dig Safe
Total feet of replacement pipe
added to the system = 2,030
Retail Water Accounts
43,500
Miles of Water Pipe
600
Cross Connection Devices
Fire Hydrants
6,000
Double Check Assembly Devices
6
812
Gallons of Water Supplied
12.9 billion
Reduced Pressure Devices
96
1,632
Water Treatment Plant
1
Back Flow Devices
–
2,342
Added in 2011
In System
Water Consumption
Cobble Mountain Reservoir
FY 11
10 Year Average
100
n
n
n
n
n
n
Total Gallons:
12,925,366,000
40
20
0
June 11
n
9,885,721,000
1,471,568,000
729,012,000
723,694,000
57,453,000
30,137,000
16,009,000
6,818,000
4,954,000
Jan 11
n
Springfield/Ludlow
Agawam
East Longmeadow
Longmeadow
Southwick
West Springfield
Westfield
Wilbraham
Chicopee
60
July 10
n
Percent Capacity
80
ANNUAL report 9
Engineering and Capital Projects
South Transmission Main Connecticut River Crossing
The final design and funding application for the rehabilitation of the South
Transmission Main Connecticut River Crossing was prepared in the spring of 2011.
The design called for slip lining the twin circa-1928 steel mains with HDPE pipe.
Recent pipe failures and leak detection tests indicated that the 83-year-old steel pipe
system had met its useful life and needed total replacement or rehabilitation. The
design also incorporated the replacement of gate valves in chambers on both the west
and east sides of the Connecticut River.
The project was awarded on June 12, 2011 for a cost not to exceed $6.5 million. The
project was funded through the state revolving fund loan program and is anticipated
to be completed in 2012.
Construction of the South Transmission Main repair on the
Connecticut River.
10 SWSC11
Engineering and Capital Projects
The Cobble Mountain Hydro-Power Plant
Water that flows from the Cobble Mountain Reservoir to the West Parish Filtration
Plant is utilized to generate electricity at the Cobble Mountain Hydro-Power Plant.
The generated power is then transmitted to the ISO New England’s electricity market.
An audit in March 2011 showed that the plant has a full capacity to generate 33.4
Megawatts. Total output for fiscal year 2011 is approximately 14,740 MWhs. Power
generation sales net revenues totaled $1.57 Million. Power production and revenues
were less than typical due to a six month shutdown of the plant in 2010 to replace the
Surge Tank. The plant continues to be operated by Holyoke Gas & Electric (HG&E)
under a five year contract and continues to provide sustainable power generation.
Provin Mountain Reservoir No. 2 Structural Rehabilitation
and Improvements
The Commission began rehabilitation work for Reservoir No. 2 in May 2011. The
work included installing two new added reinforced concrete walls to strengthen the
under-reinforced 1930s vintage walls, grouting of floor and ceiling, rehabilitation of
the old aeration basin, and adding of an outside diaphragm wall to strengthen the
tank’s frame structure. The project goal is to extend the service life of the tank, meet
the latest seismic code and elevate the tank’s strength to withstand seismic events.
The project is scheduled for completion in August 2012.
West Parish Water Filters Disinfection Facility
In 2011, the Commission replaced the aging chlorine gas and water service piping
inside the chlorine building. The project included demolition of all old piping, valves,
and educators; installation of new piping with new valves and educators in a new
layout for improved access to the valves and redundancy; and new pavement for
improved vehicle access to the building. During construction, a mobile chemical feed
facility was utilized to provide chlorine disinfection while the existing facility was
shut down. Construction began in November 2010 and was completed in April 2011.
Above, a crane is positioned to deliver the concrete for
the pouring of the reinforced walls (left).
Dams and Reservoirs
The Commission continues to focus on dams and
reservoirs monitoring, maintenance and improvements
by updating the operation & maintenance (O&M)
manuals, conducting vegetation control and tree cutting
off slopes and spillways. The Commission also completed
the MADCR required Phase I Dam Inspections in 2011.
Quarterly inspections of 10 of the Commission's dams
were conducted to monitor for safety and reliability.
Borden Brook Dam (left)
Crews prepare the rebar before
the concrete is poured to create
reinforced walls.
ANNUAL report 11
Watershed Protection
Watershed Management
The Little River watershed provides the source of our
drinking water. The watershed encompasses 48.3 square
miles including portions of Becket, Blandford, Granville,
Otis, Russell, Southwick, Tolland and Westfield. The
Commission protects the watershed through land
ownership, land management, public outreach,
conservation restrictions and partnerships with the
local communities. The Source Water Protection Plan
for the Little River watershed was updated in FY 2010
and is used as a resource protection guide for the
watershed. As a result of these efforts, the Massachusetts
Department of Environmental Protection (DEP)
consistently allows regulatory credit to the Commission
under the Surface Water Treatment Rule.
BECKET
BLANDFORD
OTIS
The Commission
continues to conduct
research in partnership
with local universities. A
study with the University
of Massachusetts
(UMass) Amherst on
the nature of organic
matter in various forested
streams and their role in
disinfection by-product
formation potential
Students from UMass collect
has been completed.
water quality samples at the
Results show that
Intake Dam.
downstream locations,
especially wetland areas, show a significant increase in
production of organic matter resulting in higher levels
of disinfection by-product formation potential. Another
study to evaluate where organic matter is gained or lost
along various water transmission pathways is underway
and the Commission continues to measure and monitor
stream flow from select streams that flow into the
drinking water reservoir.
90 miles of cross-country property lines with abutting
land owners, and over 40 miles of posted road frontage.
Maintenance of these lands provides for the long-term
protection of the drinking water supply.
Sheppard Hill Right of Way Improvement
During FY 2011, the Commission improved a 1,900
foot long forest skid road, located within the 50 foot
wide Sheppard Hill right of way, in Blandford. Drainage
was improved along the length of the forest skid road,
using broad base swales to enable cross-drainage of
water to lateral ditches. The road was seeded with a
conservation-grade grass seed mix and mulched with
hay. The road will be left in a natural state and mowed
on a three to five year rotation, so that it can be opened
for vehicle use with minimal preparation.
Land Management
RUSSELL
WESTFIELD
TOLLAND
GRANVILLE
SOUTHWICK
The Little River Watershed
12 SWSC11
The Commission’s land management activities
include maintenance of over 15,500 acres of land, and
monitoring Conservation Restrictions on another 2,500
acres of private land. Public access for passive recreation
is permitted on 1,136 acres of Commission land. The
Commission’s property boundaries are marked with
blue blazing on trees and with metal boundary placards.
Some Commission lands are closed to public access
and are posted against trespassing along public ways
and boundary lines. The Commission maintains over
Roadway under construction
Ludlow Reservoir
Off-Highway–Vehicle Control:
Tolland and Blandford, MA
Public Access Attendance
July 10
3,505
August
3,455
September
2,770
October
2,575
November
1,730
December
1,090
January 11
1,050
February
1,055
March
April
Total
Visitors
2,160
2,650
May
June
28,365
3,940
2,875
The Commission partnered with the Department of
Conservation and Recreation (DCR), and property
owners in the area around Tolland State Forest, to
control Off-Highway-Vehicle (OHV) trespassing on
private property. OHV traffic on private property has
caused damage to stream banks, wetlands, forest
soils, and standing timber. The Commission and
private property owners worked with the DCR to close
unauthorized OHV trails and reroute OHV traffic to
authorized trails. Large segments of the unauthorized
OHV trails were restored using brush and downed
woody material. The trails will be monitored to
determine the effectiveness of the closures.
Land Surveys
The Commission hired a Massachusetts Registered Land
Surveyor to perform a boundary survey of the former
Barnes Farm (50 Acres +/-) on Borden Brook Road in
Granville and the former Bramble and Wyman parcels
(320 Acres +/-), on the west side of Beech Hill Road
in Blandford. The Bramble-Wyman survey is one of
several surveys that have been conducted to establish a
permanent record of the Commission’s property lines
and continuation of its watershed protection program.
ANNUAL report 13
HADLEY
WESTHAMPTON
Littleville
Reservoir
BECKET
Protected Land
NORTHAMPTON
Commission-owned Property
HUNTINGTON
CHESTER
EASTHAMPTON
BELCHERTOWN
GRANBY
SOUTH
HADLEY
SOUTHAMPTON
BLANDFORD
Springfield
Reservoir
MONTGOMERY
HOLYOKE
OTIS
Cobble
Mountain
Reservoir
LUDLOW
CHICOPEE
RUSSELL
WESTFIELD
West Parish
Water Filtration Plant
WEST
SPRINGFIELD
SPRINGFIELD
WILBRAHAM
Customer Service
Field Office
TOLLAND
SOUTHWICK
GRANVILLE
The Commission owns approximately 15,500 acres
Springfield Regional
Wastewater Treatment
Facility
AGAWAM
in the Little River
Watershed that serves and
EAST
HAMPDEN
LONGMEADOW
LONGMEADOW
protects the Commission’s primary water supply
– Cobble Mountain Reservoir. In addition, the
Commission owns approximately 2,000 acres
in Ludlow and approximately 500 acres in the
Jabish Brook Watershed in Belchertown, which
serves and protects the Springfield Reservoir.
14 SWSC11
Water Treatment
The Water Treatment Process
The Commission’s primary water source is the Little River in western Massachusetts,
with water storage at Borden Brook and Cobble Mountain reservoirs. Back-up
supplies are available through the Littleville Reservoir and the Springfield (Ludlow)
Reservoir. The water supply is filtered at the West Parish Filtration Plant, either
through the 40 million gallon per day (mgd) slow sand filters or the 60-mgd dualmedia rapid filtration plant.
At the plant, water is filtered and treated to protect the public health. The filtration
process removes particles and impurities from the water. Then pH is adjusted and
corrosion inhibitors are added to protect home plumbing. Finally, chlorine is added
for disinfection purposes and the water flows to the distribution system for delivery
to our customers.
In September 2007, the Commission initiated a research project with the Department
of Civil and Environmental Engineering at the University of Massachusetts (UMass)
Amherst. The study investigates alternative coagulation strategies to remove a greater
percentage of organic matter from the source water. This research will assist the
Commission with compliance requirements for the U.S. EPA Stage 2 Disinfection
By-Products Rule (DBP), which begins in the spring of 2012.
The first phase of this project was completed in May 2009, when a student from
UMass conducted a bench scale, pilot plant trial to determine the most appropriate
coagulation chemical. The second phase involved gathering information on the
possible effects these coagulants might have on filter performance, backwashing and
residuals handling.
Phase III of the study entailed a full-scale trial with the rapid sand filters using these
coagulants. Half of the filters received varying doses of the test coagulant while the
other half, acting as a control, did not. Several one-to-two week trials were conducted
to evaluate the operational effectiveness of the coagulants in both warm and cold
water as well as varying flow rates. The Phase III coagulant testing was completed
in 2011.
Laboratory and
Regulatory
The Commission’s State
Certified Drinking Water
Laboratory conducted
more than 50,000 water
quality tests in fiscal
year 2011. Water quality
tests are performed daily
on water entering and
leaving each treatment
process at the plant
and throughout the
Commission’s distribution
system. In addition, the
laboratory performs
bacteria testing on new
water mains, water
main extensions and
replacement water main
projects.
All state and federal
regulatory requirements
were met during Fiscal Year 2011, including the Total Coliform Rule, the Lead and
Copper Rule, the Interim Enhanced Surface Water Treatment Rule, the Stage 1
Disinfectants/Disinfection By-products Rule and the Consumer Confidence Reporting
Rule. The laboratory is preparing for early state implementation of the revised Total
Coliform Rule and the third Unregulated Contaminant Monitoring Rule. The next
round of Lead and Copper tap water sampling will be performed in the spring of 2012.
ANNUAL report 15
Maintaining Water Quality
Operations & Maintenance Expense Breakdown
The Commission’s Water Quality Group was formed
in 2005 to develop a Unidirectional Flushing (UDF)
program and to perform maintenance on valves,
hydrants, and water mains in the distribution system.
In 2011, the Water Quality Group continued the
UDF Program in Springfield and Ludlow along with
developing a Modified Unidirectional Flushing Program
(Soft Swabbing). A significant effort was dedicated to a
pilot program to develop a Soft Swabbing technique that
met the department goals. Utilizing department staff,
two specialized equipment trailers were designed and
built for the program. The Swabbing procedure utilizes
water pressure in the system to force a polyurethane
foam cylinder through the main. This process is more
aggressive than conventional UDF, removing the biofilm
layer and softer tuberculation layers that accumulate
over time. The cleaning process improves hydraulic
capacity, fire flow values and water quality. In 2011,
Water Quality Statistics
Year
2011
Total
since program
began (2006)
Hydrants Inspected
3,579
11,192
Hydrants Painted
1,051
4,765
Hydrants Rebuilt
1,039
2,316
Valves Exercised
3,126
16,872
Pipe Flushed (miles)
57.2
419.2
Pipe Swabbed (miles)
9.6
21
16 SWSC11
The Commission’s newly designed Swabbing Trailer
n Sewer Treatment
11,746,277
n Water Distribution
6,235,495
n Sewer Collection
5,015,062
n Water Filtration
3,810,002
n Engineering
3,750,225
n Administration
3,692,310
n Reservoirs
2,564,331
n Metering
1,643,774
n Transmission
Cost:
9.6 miles of pipe were swabbed. The Water Quality
Group will continue flushing the distribution system on
a three- to five-year cycle using a combination of UDF
and modified UDF.
In 2011, we continued to rebuild hydrants using
in-house staff. 1,039 hydrants were rebuilt for a total
of 2,316 hydrants rebuilt since the program started.
Rebuilt hydrants are easier to operate, are more reliable
during the freezing winter conditions, and save about
$2,300 per hydrant compared to the cost of installing a
new hydrant. This is a potential savings of $2.4M
in 2011.
60,705
$38,518,181
Wastewater Collection System
Wastewater Collection System
Regulatory
Approximately 36,400 sewer accounts are serviced in Springfield. The sewer collection
system consists of 138 miles of combined sewer; 312 miles of separated sewer;
23 combined sewer overflow outfalls; 12,000 manholes; and 33 pumping stations.
Wastewater is conveyed to the Springfield Regional Wastewater Treatment Facility
(SRWTF) located along Route 5 in Agawam. The SRWTF has a design capacity to treat
67 million gallons per day of sewage. Pursuant to U.S. EPA mandates, the Commission continued to advance its Capacity,
Management, Operation, and Maintenance (CMOM) Program for the collection
system. Due to expanded cleaning and maintenance programs, reportable sewer
overflows decreased 22.5% in 2011 from 98% to 76%. Updated records management
and improvements in asset management allowed the Commission to better track
and trend problem areas and has helped to establish a more effective maintenance
program. The Commission completed and submitted a Three Year CMOM Status
Report to the U.S. EPA as part of maintaining compliance with the mandated
requirements.
Sewer Statistics
The Commission has four primary responsibilities with respect to the collection
system:
Operation and Maintenance n Engineering/Technology n Construction
Regulatory Compliance
Operation and Maintenance
The Commission provides reliable sanitary sewer service to its customers through
a combination of maintenance programs. This is achieved by effectively using
Commission staff and equipment in conjunction with contracted services to perform
inspections, cleaning, repairs, and other related maintenance functions. Additionally,
the Commission’s contract operator, United Water, LLC, maintains and operates
sewage and flood control pumping stations and appurtenances, intercepting sewers,
and combined sewer overflow regulating structures.
Engineering/Technology
Sewer Group FY 2010
Sewer Mains Jetted
315,358 ft.
Service Connections Rodded
360
Complaints Responded to
365
Sanitary System Repairs
44
House Connection Repairs
75
Standing Mains Cleared
154
Manholes Washed and Cleaned
1,044
Cave-ins Repaired
1
Syphons Checked
237
Syphons Cleared
43
In 2011, the Commission hired a consulting engineering firm to support the
wastewater collection system functions. The consultant assisted with advancing new
technology that will improve the accuracy of sewer mapping and record-keeping. The
information is being used to aid in the operation and maintenance of the collection
system as well as for the development of future engineering and construction projects.
The Commission completed scanning more than 20,000 engineering plans and
records into a digital archive in 2011. Indexing and linking of the documents to the
assets in the GIS system will be completed in 2012.
ANNUAL report 17
Combined Sewer Overflows
Combined Sewer Overflow (CSO)
Construction
In FY 2011, the Commission completed construction
on Contract I and Contract II of the Phase I
Connecticut River CSO Control Program. Construction
and engineering costs for Phase I of the program
are approximately $23 million over the multi-year
project. In the average year the program will remove
approximately 30 million gallons of combined sewer
overflow from entering the Connecticut River. CSO Construction
18 SWSC11
CSO Compliance Program
In 2011, the Commission in conjunction with our
contract engineer advanced the completion of the
Long Term CSO Control Plan (LTCP). Completion
of the LTCP document is mandated by the U.S. EPA
in order to define a strategy for CSO compliance
with federal Clean Water Act requirements. Critical
components of the LTCP will involve the development of
a comprehensive CSO alternatives analysis, a long-term
Capital Improvement Plan for wastewater functions,
and an affordability analysis that will determine
implementation scheduling. Work performed in 2011
to support this effort included a field program with
comprehensive flow metering, a focused cleaning and
inspection program with a records research component,
and development of an updated baseline hydraulic
model of the collection system. The LTCP program also
included a sophisticated modeling effort for system
hydraulics, infrastructure risk assessment, and CSO
alternatives analysis. Completion and submittal of the
LTCP is planned for May 2012.
The Springfield Regional Wastewater Treatment Facility
(SRWTF) treats wastewater from the households,
businesses, and industries within Springfield and
surrounding member communities, including Agawam,
East Longmeadow, Longmeadow, Ludlow, Wilbraham,
West Springfield and part of Chicopee. The SRWTF
is one of the largest facilities in New England and is
designed to treat up to 67 million gallons of wastewater
per day; currently, a daily average of 47 million gallons
(mgd) of wastewater is cleaned, treated and returned to
the Connecticut River.
United Water
United Water completed the 11th year of a 20-year
service agreement to operate the Springfield Regional
Wastewater Treatment Facility (SRWTF) and associated
sewage and flood control pumping stations. Facility
operations were conducted in compliance with federal
National Pollutant Discharge Elimination System
(NPDES) permit requirements. Capital improvements
completed during the year included an energy saving
lighting retrofit throughout the facility. An incentive
grant was provided by WMECO to assist in the
funding of this improvement. In addition, structural
improvements and a new roof were completed at the
Phelps Flood Control Pump Station.
During the October 30th 2011 snowstorm most of
the 23 sewage pumping stations in Springfield were
without power for up to week. United Water crews were
able to prevent sewage backups by utilizing portable
generators, pumps and vacuum trucks until power was
restored.
Springfield Regional Wastewater Treatment Facility
Industrial Pretreatment Program
The Industrial Pretreatment Program (IPP) protects
the integrity of the sewer collection system by
preventing harmful pollutants from entering into the
treatment system. The IPP conducts routine audits and
inspections at industries to monitor compliance with
the pretreatment standards.
Industrial Pretreatment Program Statistics
Installation of sewer siphon structure
Significant Industrial Users
53
Industrial Wastewater Discharge Permits
59
Inspections Completed
290
Wastewater Samples Collected
232
Registered Sewer Users – Wet
198
Registered Sewer Users – Dry
353
Violations Issued
14
ANNUAL report 19
Retail – Wastewater Collection and Treatment
LUDLOW
Wholesale – Wastewater Treatment Only
WEST SPRINGFIELD
WILBRAHAM
SPRINGFIELD
Springfield Regional
Wastewater Treatment Plant
AGAWAM
EAST LONGMEADOW
LONGMEADOW
20 SWSC11
2011 Total Suspended Solids (TSS) & Biological Oxygen Demand (BOD)
50
Average Monthy BOD = 9 mg/L
40
Percent Removed %
mg/L
BOD
Average Monthy TSS = 9 mg/L
NPDES Permit Limit
30
20
10
2011 Total Suspended Solids (TSS) & Biological Oxygen Demand (BOD) Removal
100
95
90
TSS
Average Monthy TSS = 94.1%
BOD
TSS
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
80
Dec
2011 Average Monthly Wastewater Treated
2500
Jan
4000
1500
3000
Tons
2000
1000
2000
500
1000
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Feb
Mar
Oct
Nov
Dec
0
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Nov
Dec
2011 Average Monthly Sludge Produced
5000
Average Monthy Flow = 1443.927 MG
Million Gallons
Average Monthy BOD = 94.4%
85
Wet Tons
Total Wet Tons = 40857
Dry Tons
Total Dry Tons = 10120
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
ANNUAL report 21
Audited Financial Statement
Fiscal Year 2011 Audited Financial Statement by Melanson, Heath and Company, P.C.
22 SWSC11
Independent Auditor’s Report
To the Commissioners, Springfield Water and Sewer Commission,
Springfield, Massachusetts
We have audited the accompanying statements of net assets of the Springfield Water
and Sewer Commission, as of June 30, 2011 and the related statements of activities
and changes in net assets and cash flows for the year then ended. These financial
statements are the responsibility of the Springfield Water and Sewer Commission’s
management. Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of the Springfield Water and Sewer Commission as of
June 30, 2011, and the changes in financial position and cash flows, for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.
The management’s discussion and analysis, appearing on the following pages is not
a required part of the basic financial statements but is supplementary information
required by accounting principles generally accepted in the United States of America.
We have applied certain limited procedures, which consisted principally of inquiries
of management regarding the methods of measurement and presentation of the
required supplementary information. However, we did not audit the information and
express no opinion on it.
The supplementary information presented on pages 25 - 26 is presented for the
purpose of additional analysis and is not a required part of the basic financial state-
ments. This information has been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, is fairly presented in all
material respects in relation to the basic financial statements taken as a whole.
Greenfield, Massachusetts
November 1, 2011
Requests for Information
This financial report is designed to provide a general overview of the
Springfield Water and Sewer Commission’s finances for all those with an interest
in the government’s finances. Questions concerning any of the information
provided in this report, or requests for additional financial information, should
be addressed to:
Public Communications Director
P.O. Box 995
Springfield, MA 01101-0995
ANNUAL report 23
Management Discussion and Analysis
As management of the Springfield Water and Sewer Commission, we offer readers this
narrative overview and analysis of the financial activities of the Springfield Water and
Sewer Commission for the fiscal year ended June 30, 2011.
Overview of the Financial Statements
The basic financial statements include (1) the statement of net assets, (2) the
statement of revenues, expenses and changes in fund net assets, (3) the statement of
cash flows, and (4) notes to the financial statements.
The Statement of Net Assets is designed to indicate our financial position as of a
specific point in time. At June 30, 2011, it shows our net worth of $108,632,334, which
is comprised of $87,291,111 invested in capital assets,
$29,910,286 restricted for other purposes, namely restricted cash and inventory, and
$(8,569,063) unrestricted.
The Statement of Activities and Changes in Fund Net Assets summarizes our
operating results. As discussed in more detail below, our change in net assets for the
year ended June 30, 2011 was an increase of $4,324,647.
Summary of Net Assets (in dollars)
Year
2011
2010 (as restated)
Current Assets
$ 87,456,260
$ 55,393,875
Noncurrent Assets
205,740,562
197,871,305
Total Assets
293,196,822
253,265,180
Current Liabilities
21,685,267
10,364,522
Noncurrent Liabilities
162,879,221
138,592,971
Total Liabilities
184,564,488
148,957,493
Invested in Capital Assets,
Net of Related Debt
87,291,111
103,114,792
Restricted–
other purposes
29,910,286
24,025,690
Unrestricted
(8,569,063)
(22,832,795)
Net Assets
The Statement of Cash Flows provides information about the cash receipts and cash
payments during the accounting period. It also provides information about the
investing and financing activities for the same period.
Total Net Assets
$ 108,632,334
$ 104,307,687
Operating Revenues
$ 57,132,068
$ 52,315,230
Financial Highlights
Operating Expenses
(46,240,800)
(47,056,907)
Operating Income
10,891,268
5,258,323
Nonoperating Revenues
(Expenses)
(3,570,300)
(523,289)
Special Items
(2,996,321)
(4,949,004)
4,324,647
(213,970)
Beginning Net Assets
104,307,687
104,521,657
Ending Net Assets
$ 108,632,334
$ 104,307,687
The Commission ended the year with operating income approximately $10.9 million.
The following paragraphs give an overview of the year’s activities.
It has been the practice of the Commission to establish its rates and charges for water
and wastewater services at levels sufficient to produce revenues adequate to defray
all operation and maintenance expenses, debt service and reserve deposits projected
by the Commission’s Consulting Engineers and to maintain net revenues available for
debt service in excess of the coverage requirements mandated by the General Bond
Resolution. Until fiscal year 2010, the Commission had historically adjusted its rates
and charges for water and wastewater services on a basis which stabilized rates and
24 SWSC11
Increase (Decrease) in Net Assets
charges over a multi-year period. Beginning in fiscal year 2011, the Commission has
adopted single-year rate schedules to more closely match revenues to expenditures.
In fiscal year 2011, increased collection efforts and other factors resulted in user charges
revenue being approximately $730,000 more than budget. Wholesale water costs were
less than anticipated and as a result, revenue was also under budget by (334,000). Power
generation revenue, however, exceeded estimates by almost $900,000. In addition, costs
to provide wastewater regional services decreased, resulting in decreased member
assessment revenue of approximately $(2) million. All of these factors resulted in total
operating revenue of approximately $57 million in fiscal year 2011, approximately
$(825,000) under budget, and $2.4 million more than the prior year.
Operating expenses were less than budget by approximately $4.3 million, primarily as
a result of vacant positions, conservatively budgeting for general operational costs and
energy savings resulting from a change in certain processes.
In fiscal year 2011, we continued receiving proceeds of a loan through the
Massachusetts Water Pollution Abatement Trust (the Trust), which was partially
subsidized by Federal Recovery Act funds. In accordance with Trust guidelines, the
grant revenue was recognized with the first proceeds and is reflected as nonoperating
revenue of $220,000 on the Statement of Activities and Changes in Net Assets.
Additional grant revenue will be recognized in fiscal year 2012 as the project continues.
Also in fiscal year 2011, we implemented FASC 980, Accounting for the Effects of
Certain Types of Regulation, which essentially adjusts for differences between how
revenue / rates are budgeted and how they are accounted for on a GAAP basis. In the
Commission’s case, revenue intended to fund capital asset acquisitions is set aside,
(deferred) and is recognized equal to the annual depreciation expense on those
assets; depreciation expense on assets funded in other ways (such as through bonds)
is removed from the income statement because those costs are not factored into
the budget process; conversely, because principal debt repayment costs are funded
through the budget, those costs are reflected in the income statement as a reduction
to net assets. The net effect of these adjustments are reported under the line “Excess
revenues to fund deferrals” on the Statement of Activities, which was a decrease of
$(2,996,321) for fiscal year 2011.
As a result of the key elements described above the activities for the year resulted in
an increase in net assets of $4,324,647.
Capital Asset and Debt Administration
Total investment in capital assets at year end amounted to $198,597,231 (net of
accumulated depreciation), an increase of almost $8.2 million from the prior year.
This investment in capital assets includes land, buildings and improvements,
machinery and equipment, and infrastructure.
Major capital asset events during the current fiscal year included the following:
Depreciation expense of $(6.9 million).
$9.1 million addition under the Chicopee and Connecticut Rivers and other CSO
relief projects.
$379,000 in various sewer and wastewater treatment improvements and projects.
$100,000 in pipe replacement and hydrant projects.
$240,000 in Colton Street site and structural improvements.
$1.2 million in power tunnel fill valve and trash rack.
$374,000 in large and small meters.
$254,000 in Provin Mountain tank and rehab.
$1.8 million in surge tank renovations, design and installation.
$1.3 million in various transmission main replacement work.
New vehicles and equipment purchased of $271,000.
Computer software and equipment purchases of $105,000.
Various general building improvements of $17,000.
Net loss on the sale and/or disposition of assets of $(10,000).
Long-term debt
At the end of the current fiscal year, total bonded debt outstanding was $116,833,740,
of which approximately $1.8 million was issued through the City of Springfield and
$115 million was issued under revenue bonds backed by dedicated revenues of the
Commission.
Additional information on capital assets and long-term debt can be found in the
footnotes to the financial statements.
ANNUAL report 25
Statement of Net Assets
June 30, 2011
Assets: Current
Cash
Restricted cash
User charges receivable, net of allowance for uncollectibles
Intergovernmental receivable
Total current assets
Liabilities: Noncurrent
$ 36,167,810
37,610,968
6,864,135
6,813,347
87,456,260
Assets: Noncurrent
Intergovernmental receivable, net of current portion
Inventory net of allowance
Inventory held by others
Deferred charges
Health insurance deposit
Land and construction in progress
Capital assets, net of accumulated depreciation
Total noncurrent assets
Total Assets
1,989,216
955,561
1,022,136
2,681,191
495,227
49,400,872
149,196,359
205,740,562
293,196,822
Liabilities: Current
Accounts Payable
Accrued payroll and withholdings
Accrued interest payable
Bond anticipation note payable
Unamoritized bond premium
Current portion of loans payable
Current portion of loans payable (through City of Springfield)
Unamortized effect of advance refunding of debt
Total current liabilities
26 SWSC11
1,924,719
223,191
1,294,161
9,899,088
2,649,191
5,230,410
474,150
(9,643)
21,685,267
(continued)
Deferred credits
Loans payable, net of current portion
Loans payable (through City of Springfield), net of current portion
Unamortized effect of advance refunding of debt, net of current portion
Accrued compensated absences
Other accrued liabilities
Total noncurrent liabilities
Total Liabilities
50,078,400
109,806,299
1,322,881
(86,786)
1,508,841
249,586
162,879,221
184,564,488
Net Assets
Invested in capital assets, net of related debt
Restricted–other purposes
Unrestricted
Total Net Assets
See notes to financial statements
87,291,111
29,910,286
(8,569,063)
$ 108,632,334
Statement of Revenues, Expenses Statement of Cash Flows
and Changes in Fund Net Assets
Cash Flows From Operating Activities
for the year ended June 30, 2011
Operating Revenues
Water and sewer usage
Other
Total Operating Revenues
$ 56,924,065
208,003
57,132,068
Operating Expenses
Receipts from customers and users
Payments to vendors and employees
$ 60,302,421
(42,138,508)
Net Cash Provided By Operating Activities
18,163,913
Cash Flows from Noncapital Financing Activities
Intergovernmental reimbursements
208,004
Cash Flows from Capital and Related Financing Activities
Salaries and wages
Employee benefits
Operations
Intergovernmental
Capital outlay
Depreciation and amortization
Other
Total Operating Expenses
12,487,566
4,790,965
20,022,498
500,914
1,039,339
7,044,059
355,459
46,240,800
Operating Income
10,891,268
Nonoperating Revenues (Expenses)
30,006
(3,972,515)
362,428
9,781
Change in Net Assets
4,324,647
Net Assets at Beginning of Year,
as restated
104,307,687
Net Assets at End of Year
$ 108,632,334
(3,570,300)
7,320,968
(2,996,321)
Proceeds from sale of assets
Acquisition and construction of capital assets
Proceeds from intergovernmental loans and grants
Proceeds from bonds
Proceeds of bond premium
Principal payments on bonds and loans
Payments of interest
18,450
(15,137,534)
7,020,906
27,300,000
2,257,646
(3,798,495)
(3,929,942)
Net Cash Provided by Capital and Related Financing Activities
13,731,031
Cash Flows from Investing Activities
Receipt of investment income
30,006
Net Change in Cash and Short-Term Investments
32,132,954
Cash and Short-Term Investments, Beginning of year
41,645,824
Cash and Short-Term Investments, End of Year
$ 73,778,778
Reconciliation of Operating Income to Net Cash Provided by (Used For) Operating Activities
Operating income
Adjustments to reconcile operating income to net cash provided by (used for) operating activities
Changes in assets and liabilities:
User fees
Inventory
Accounts payable and accrued payroll
Accrued compensated absence
Other liabilities
$ 10,891,268
Net Cash Provided By Operating Activities
$ 18,163,913
7,044,059
3,170,353
(9,207)
(2,767,745)
3,259
(168,074)
Interest income
Interest expense
Grant reimbursement revenue
Other nonoperating revenue (expense), net
Total Nonoperating Revenues
(expenses), net
Excess revenues before deferral
adjustments
Excess revenues used to fund deferrals
for the year ended June 30, 2011
ANNUAL report 27
Notes to Financial Statements
1. Summary of Significant Accounting Policies
The accounting policies of the Springfield Water and Sewer Commission
(the Commission) conform to generally accepted accounting principles (GAAP)
as applicable to governmental units. The following is a summary of the more
significant policies:
A. Business Entity
The Commission has the responsibility to provide water and wastewater services on
a fair and equitable basis to the City of Springfield (the City) and to provide wholesale
water and regional wastewater services to other participating communities.
B. Regulation and Basis of Accounting
The Springfield Water and Sewer Commission (the Commission) was created in July
1996 under Massachusetts General Laws Chapter 40N; however, the Commission did
not become a separate accounting entity until July 1997. Under Massachusetts General
Laws Chapter 40N, the Board of Commissioners, appointed by the Mayor of the City of
Springfield, establishes policies for accounting and other matters. The Board regulates
the rates that the Commission can charge its customers for water and sewer usage.
The rates charged to customers are based on the cash required for the Commission’s
operations, debt service and reserve contributions.
To comply with the external financial reporting requirements of the Board, the
accompanying financial statements are presented on a basis that is consistent with
generally accepted accounting principles (GAAP) for proprietary (enterprise) funds.
Proprietary funds distinguish operating revenues and expenses from nonoperating
items. Operating revenues and expenses generally result from providing services and
producing and delivering goods, in connection with a proprietary fund’s principal
on-going operations. The principal operating revenues of the enterprise fund are
charges to customers for sales and services. Operating expenses for enterprise funds
include the cost of sales and services, administrative expenses and depreciation on
capital assets.
All revenues and expenses not meeting this definition are reported as nonoperating
revenues and expenses.
28 SWSC11
Private-sector standards of accounting and financial reporting issued prior to
December 1, 1989, are generally followed to the extent that those standards do not
conflict with or contradict guidance of the Governmental Accounting Standards
Board. Governments also have the option of following subsequent private-sector
guidance for their business-type activities and enterprise funds, subject to this same
limitation. The government has elected not to follow subsequent private-sector
guidance.
C. Cash and Short-Term Investments
For purposes of the statement of cash flows, the proprietary funds consider
investments with original maturities of three months or less to be cash equivalents.
These are reflected in the following accounts reported on the statement of net assets:
unrestricted cash and restricted cash.
D. Inventory for Consumption
Gasoline and diesel fuel purchased and unused at year end is stated at cost, and
materials inventory is stated at average cost.
E. Inventory Held by Others
Under the terms of a privatization agreement with United Water Environmental
Services, Inc., the Commission transferred custody of certain inventory to United
Water. The value stated was a negotiated value, which will be replaced by United Water
at the expiration of the privatization contract in October 2020.
F. Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets
are defined by the government as assets with an initial individual cost of more than
$5,000 (for land, vehicles and equipment), $10,000 (for buildings and improvements),
$20,000 (for infrastructure) and an estimated useful life in excess of two years. Such
assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at estimated fair market value at the
date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset
or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest incurred during the construction phase of capital assets of
business-type activities would be included as part of the capitalized value of the assets
constructed.
Assets
Property, plant and equipment are
depreciated using the straight-line
method over the following estimated
useful lives:
Buildings and Improvements
Water / Sewer Infrastructure
Vehicles
Office and Computer Equipment
Years
20 – 50
50 – 100
5 – 15
5 – 10
G. Compensated Absences
It is the Commission’s policy to permit employees to accumulate earned but unused
vacation and sick pay benefits. All vested sick and vacation pay is accrued when incurred. Sick pay benefits are payable upon death or retirement, with certain limits,
for all employees employed over six months.
H. Use of Estimates
The preparation of basic financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures for contingent
assets and liabilities at the date of the basic financial statements, and the reported
amounts of the revenues and expenditures/expenses during the fiscal year. Actual
results could vary from estimates that were used.
2. Stewardship, Compliance and Accountability
Budgetary Information
At the June meeting of the Commission, the Commissioners review and approve an
operating and capital budget for the proposed expenditures of the fiscal year commencing the following July 1. The original budget may be amended during the fiscal
year at Commission meetings as required by changing conditions.
At year end, appropriation balances lapse, except for certain unexpended capital items
which will be honored during the subsequent year.
A budget and actual comparison of operating expenditures is presented as a
supplementary schedule.
3. Cash and Short-Term Investments
Custodial Credit Risk - Deposits. Custodial credit risk, as defined under GASB Statement No. 40, is the risk that in the event of a bank failure, the Commission’s deposits may
not be returned to it. As of June 30, 2011, $1,145,884 of the Commission’s bank balance
of $74,201,443 was exposed to custodial credit risk as uninsured, uncollateralized, and
collateral held by the pledging bank’s trust department not in the Commission’s name.
Massachusetts General Law Chapter 44, Section 55 limits deposits “in a bank or trust
company or banking company to an amount not exceeding sixty per cent of the capital
and surplus of such bank or trust company or banking company, unless satisfactory
security is given to it by such bank or trust company or banking company for such
excess. The Commission’s deposits are within this limitation.
4. Restricted Cash
The Commission issues debt under a General Bond Resolution which requires cash
reserves to be maintained. These reserves are reported as restricted cash.
The reserves include an Operating Reserve Fund (equal to 1/6 of the Commission’s
annual operating budget), a Renewal/Replacement Fund ($1 million), a Debt Service
Fund (equal to principal and interest, payable on an accrual basis at June 30), and
a Debt Service Reserve Fund (equal to the highest principal and interest due in any
subsequent year). In addition, the Bond Resolution establishes several other reserves
which may be activated in future years.
The restricted cash balance
reported in the financial
statements comprises the
following at June 30, 2011.
Reserve Funds
Operating Reserve Fund
Renewal / Replacement Fund
Debt Service Fund
Debt Service Reserve Fund
$ 7,317,719
1,000,000
9,767,292
9,767,292
Other Funds
Project Accounts
Scholarship Trust Fund
Total
9,678,379
80,286
$ 37,610,968
ANNUAL report 29
5. Accounts
Receivable
Accounts receivable
consist of the following at
June 30, 2011 at right.
8. Deferred Charges and Credits
Customer Accounts
Billed water, sewer and wastewater regional
Less allowances
$ 5,468,424
(1,370,288)
Total billed
4,098,136
Unbilled water (including power generation
and wholesale water charges) and sewer
5,722,713
Adjustment to wastewater regional and
sewer pump station for actual usage
through June 30, 2010
(2,956,714)
Total Customer Accounts
$ 6,864,135
6. Intergovernmental Receivables
The balance in this account represents the following:
Current
Massachusetts Water Pollution Abatement Trust loan funds
not yet requested (or expended on project cost) as of
June 30, 2011. These funds are expected to be drawn down
as project costs are incurred in fiscal year 2012
$ 6,698,221
Non-Current
–
Amount due from Town of Wilbraham under an agreement
signed in June 2007, whereby the Town agrees to
reimburse the Commission a portion of the costs/debt incurred
to enable the Town to enter the sewage disposal system.
Future amounts to be paid by the Town are
anticipated to coincide with certain debt issued by the
Commission, which mature in fiscal years 2026 through 2038
115,126
1,989,216
Total Balance 6/30/11
$ 6,813,347
$ 1,989,216
7. Inventory for
Consumption
This inventory balance at
June 30, 2011 consists of
the following, at right.
30 SWSC11
To accommodate the rate-making process, the Commission follows the accounting
standards set forth in Financial Accounting Standards Codification Section 980
(FASC 980), Accounting for the Effects of Certain Types of Regulation. FASC 980 allows
certain board approved (a) revenues provided for future allowable costs to be deferred
until the costs are actually incurred (deferred credits) and (b) costs incurred to be
capitalized if future recovery is reasonably assured (deferred charges).
Deferred Charges
Deferred charges consist of costs incurred to privatize and upgrade the wastewater
regional plant facility, accrued sick, vacation and other compensated absences and
accrued workers compensation costs. The privatization costs will be funded through
adjustments to regional wastewater member town assessments over the life of the
privatization contract, which ends in fiscal year 2021. Other costs will be recovered
through future rates or matched against credits related to the specific costs in the future.
Deferred Credits
Amounts raised through rates specifically earmarked for capital improvements and
debt repayment are recorded as deferred credits and will be reversed through the
statement of activities over the depreciable life of the asset and related debt repayment.
The application of FASC 980 results in certain revenues and expenses being removed
from the statement of activities and reflected in the statement of net assets as deferred
charges or deferred credits. The revenues and expenses that have been removed from
the statement of activities and added to the statement of net assets appear in the line
“Excess revenues used to fund deferrals” on the statement of activities. The detail of
changes to and components of these amounts are as follows:
Deferred Charges
6/30/10
Increase
(Decrease)
6/30/11
410,422
1,505,582
1,022,523
$ 2,938,527
(160,836)
3,259
(99,759)
$ (257,336)
249,586
1,508,841
922,764
$ 2,681,191
28,000,463
18,743,966
495,227
$ 47,239,656
(959,751)
3,798,495
–
$ 2,838,744
27,040,712
22,542,461
495,227
$ 50,078,400
Fuel inventory (gasoline and diesel)
$ 95,583
Materials inventory (parts and supplies)
1,236,571
Accrued workers compensation expense
Compensated absences
Privatization costs
Total deferred charges
Less adjustment for obsolete and
slow moving materials inventory
(376,593)
Deferred Credits
Total
$ 955,561
Consumables
Capital improvements net of depreciation
Principal debt payments
Group insurance deposit
Total deferred credits
9. Health Insurance Deposit
In January 2007, the Commission terminated its health insurance coverage with the
City of Springfield and joined the Hampshire County Group Insurance Trust (HCGIT).
The HCGIT required the Commission to place on deposit the equivalent of 3 months
(estimated) claims expense. This deposit reserve affords the Commission voting rights
in the HCGIT and would only be used to fund the residual claims in the event the
Commission withdraws from the Trust.
10. Capital Assets
Capital asset activity for the year ended
June 30, 2011 was as follows (in thousands):
Beginning Balance
Increase
Decreases
Convert to
Capital Assets
Ending Balance
Capital assets, being depreciated
Furniture and fixtures
Vehicles and equipment
Buildings and improvements
Infrastructure
$ 3,786
6,858
5,900
200,965
–
–
–
–
–
(45)
–
–
$ 1,715
275
–
45,689
$ 5,501
7,088
5,900
246,654
Total capital assets, being depreciated
217,509
–
(45)
47,679
265,143
Furniture and fixtures
Vehicles and equipment
Buildings and improvements
Infrastructure
(1,493)
(4,685)
(832)
(102,028)
(555)
(832)
(155)
(5,402)
–
35
–
–
–
–
–
–
(2,048)
(5,482)
(987)
(107,430)
Total accumulated depreciation
(109,038)
(6,944)
35
–
(115,947)
Total capital assets, being depreciated, net
108,471
(6,944)
(10)
47,679
149,196
Land
Construction in progress
5,103
76,838
–
15,139
–
–
–
(47,679)
5,103
44,298
Total capital assets, not being depreciated
81,941
15,139
–
(47,679)
49,401
Capital assets, net
$ 190,412
$ 8,195
(10)
–
198,597
Less accumulated depreciation for
Capital assets, not being depreciated
ANNUAL report 31
11. Note Payable
The note payable balance of $9,899,088 represents a bond anticipation loan issued
through the Massachusetts Water Pollution Abatement Trust, the proceeds of which
are being used for a sewer overflow project. The loan was issued on December 16,
2010, with a due date of December 31, 2011 and at an interest rate of 0.37%. The loan
is expected to be converted to permanent debt in November 2011.
Subsequent Debt
In July 2011, the Commission issued another anticipation note through the Trust for
$ 3,176,651. The note is due December 31, 2012 and carries an interest rate of 0.24%.
12. Long-Term Debt
A. Debt Issued through the City of Springfield
At the time of its creation, the Commission assumed general obligation certificates
of indebtedness and State revolving loans of the City pertaining to the water and
sewer systems. Payments of principal and interest are made directly to the City in
accordance with the original maturity and interest schedules.
B. Revenue Bonds:
Certain debt issued after separating from the City has been issued as Revenue
Bonds. Under the terms of these loans, all operating revenues of the Commission
are deposited in a dedicated operating reserve account and from which prescribed
reserves are established (see restricted cash footnote). In addition, all bond proceeds
have been deposited in separate project accounts that are under the lender’s controls.
These project accounts may be accessed only to fund project-related costs.
A summary of the long-term debt
outstanding as of June 30, 2011.
Serial
Maturities
Through
Interest
Rate(s)
%
Amount
Outstanding
as of 6/30/11
Sewer bond
01/15/13
4.25 – 6.00
$259,000
Sewer bond (MWPAT 91-59)
02/01/15
1.00 – 2.75
439,050
Sewer bond (MWPAT 94-24)
02/01/15
1.00 – 2.75
1,098,981
Issued Through City of Springfield
Total issued through City
32 SWSC11
1,797,031
Serial
Maturities
Through
Interest
Rate(s)
%
Amount
Outstanding
as of 6/30/11
Issued Through Water and Sewer Commission
Revenue bonds (non refunded)
11/01/12
3.50 – 5.00
1,110,000
Sewer (MWPAT 94-24 / 95-07 / 98-133)
08/01/20
1.00 – 2.75
3,701,372
Sewer (United Water)
10/01/20
Various
870,296
Revenue bonds (refunding)
11/01/21
4.0 – 5.0
6,4880,000
Sewer CSO (MWPAT CW-01-39)
08/01/22
1.00 – 2.75
2,310,169
Revenue bonds
07/01/23
2.0 – 5.0
6,885,000
Revenue bonds
07/15/26
4.25 – 5.0
16,365,000
Revenue bonds
10/15/28
4.0 – 5.75
13,210,000
07/15/37
2.41
27,060,767
07/15/30
2.00
9,744,105
Revenue bonds
11/15/30
3.00–5.0
27,300,000
Total issued through Water and Sewer Commission
Total Long-Term Debt
115,036,709
$ 116,833,740
C. State Revolving Loan
The U.S. EPA sponsors a low interest rate loan program. The loans are administered by
the States and are used by local communities to improve their sewer systems.
The Commission’s loans are administered through the Massachusetts Water Pollution
Abatement Trust (MWPAT) Revolving Loan Program. The following is a summary of
MWPAT loan balances at June 30, 2011.
Issue
Date
Original
Loan Balance
Principal
Subsidy
Balance
June 30, 2010
91-59
06/01/95
$ 1,513,116
$ (114,381)
$ 439,050
94-24 (Part II)/ 95-07/98-133
11/01/00
6,572,640
(1,262,515)
3,701,372
CW-01-39
11/26/02
3,704,546
(660,576)
2,310,169
Loan Number
D. Future Debt Service
The annual principal payments to retire all general obligation long-term debt,
outstanding as of June 30, 2011, are as follows:
Governmental
Principal
Interest
Total
2012
$ 5,704,560
$ 4,375,012
$ 10,079,572
2013
5,882,280
4,159,243
10,041,523
2014
5,909,111
3,952,802
9,860,913
2015
6,063,172
3,746,611
9,809,783
2016
5,798,320
3,544,451
9,342,772
2017 – 2021
31,455,397
14,280,468
45,735,865
2022 – 2026
27,741,506
7,921,205
35,662,721
Thereafter
28,279,394
3,533,741
31,813,135
$ 116,833,740
$ 45,512,533
$ 162,346,273
Total
E. Long-Term Debt Activity
2011 summary of
activity in long-term Balance
07/01/10
obligations:
Increase
Decrease
Balance
06/30/11
Less
Current
Portion
Equals
Long-Term
Portion
Long-Term Debt (in thousands)
Issued through
Commission
$ 91,080
$ 27,300
$ (3,343)
$ 115,037
$ (5,231)
$ 109,806
Issued through City
Unamortized effect of
advance refunding
2,252
–
(455)
1,797
(474)
1,323
(106)
–
10
(96)
10
(86)
Compensated absences
1,506
3
–
1,509
–
1,509
Workers compensation
410
–
(160)
250
–
250
Total
$ 95,142
$ 27,303
$ (3,948)
$ 118,497
$ (5,695)
$ 112,802
Other
F. Bond Covenants
The Commission’s General Bond Resolution contains various restrictive covenants
including, among other things, restrictions on incurring both short-term and long
term debt in certain circumstances and restrictions on selling, mortgaging, leasing
or otherwise disposing of any part of the system. The Bond Resolution requires
the Commission to establish water and sewer rates at least sufficient to pay current
expenses, pay principal and interest of indebtedness, create and maintain reserves
required by bond resolutions, and pay the cost of all necessary repairs, replacements,
and renewals of the system. They also require certain accounts to be established and
maintained (Note 4), the balances of which are restricted to various operating, debt
service, capital expenditure, and renewal and replacement purposes. The Commission
has pledged all cash accounts and revenues as collateral for the debt.
In addition the Commission is required to comply with certain bond covenants which
require that “net revenues” as defined in the General Resolution, for each fiscal year
shall equal at least 125% of the Debt Service Requirement.
The Commission was in compliance with all bond covenants year ending June 30, 2011.
ANNUAL report 33
G. Advance Refunding – Prior Year
In fiscal year 2007, the Commission defeased a portion of the 2001 Revenue Bond
issue by creating a separate irrevocable trust fund. The proceeds from the new
issuance of bonds were used to purchase U.S. government securities, and those
securities were deposited in an irrevocable trust with an escrow agent to provide
interest payments until the refunded bonds mature in November 2011. For
financial reporting purposes, the debt has been considered defeased and therefore
removed as a liability from the Commission’s statement of net assets. As of June
30, 2011, the amount of defeased debt outstanding but removed was $6,390,000.
As a result of the advance refunding, while the Commission reduced its total
future debt service payments of principal and interest, it increased its total
principal debt outstanding by $135,000. The increase is being amortized as
interest expense over the life of the refunding bonds. The annual amortization is
$9,643 and the remaining unamortized balance at June 30, 2011 was $96,429.
13. Restricted Net Assets
The balance in restricted net assets of $29,910,286 represents the restricted cash
balance for required reserves and scholarships of $27,932,589 and the total value of
inventory of $1,977,697.
14. Commitments and Contingencies
Grants – Amounts received or receivable from grantor agencies are subject to
audit and adjustment by grantor agencies, principally the federal government. Any
disallowed claims, including amounts already collected, may constitute a liability
of the applicable funds. The amount of expenditures which may be disallowed by
the grantor cannot be determined at this time, although the Commission expects
such amounts, if any, to be immaterial.
Sewer Overflow – The Commission has been under an administrative consent
order (ACO) from the Environmental Protection Agency to abate the discharge
of pollutants from overflow into the Connecticut River. The ACO will require the
Commission to perform testing and construct devices/facilities to meet certain
environmental standards. The scope of the ACO has been modified at least twice
since it was originally issued in the late 1990s. In July 2004, the Commission
34 SWSC11
received the latest revision to this ACO, which contains deadlines for various phases,
ranging from 2006 to 2011.
In September 2008, the Commission received an additional ACO, related to sewer
collection system Capacity, Management, Operation and Maintenance (CMOM)
program. Under the ACO, the Commission is required to establish a CMOM program
to assess and monitor the entire system; identify and prioritize system deficiencies;
and ultimately design plans and construction drawings for eliminating overflows.
The original deadline for completion of this ACO was September 30, 2011, which was
extended to May 2012. The Commission has met or is currently on schedule to meet
the time requirements contained in both the 2004 and 2008 ACOs.
Compliance with the ACO will result in major expansion, improvement and/or
construction of new and existing facilities (pump stations and related infrastructure).
As a result, costs for the three major projects currently identified, estimated at $87
million ($83 million of which has been incurred as of June 30, 2011) has or will
be capitalized as incurred. The Commission intends to fund these costs through a
combination of grants, reduced rate (State) loans, bonds and retained earnings.
Water Transmission Main Replacement – In 2011, the Commission received an
ACO from the EPA for the rehabilitation or replacement of two large water mains. The
project is expected to be completed by the end of December 2011, at an estimated cost
of $7.5 million. With the issuance of the ACO, the project became eligible for financing
through the State’s reduced rate loan program and the Commission was approved for a
loan equal to the estimated costs.
Workers Compensation Liability – The financial statements include an estimate of future benefit costs/settlements for employees currently receiving workers
compensation benefits.
Self-Insurance – The Commission participates in the Hampshire County Group
Insurance Trust to provide health insurance coverage to its employees. The Trust
is funded by member assessments, which are calculated in a manner similar to
commercial insurance premiums. The Trust contracts with an insurance carrier for
excess liability coverage which takes effect when an individual claim exceeds $150,000.
If the Trust were to experience a cash deficit, each member would be required to
contribute additional funds. At March 31, 2011, according to the Trust's unaudited
financial statements, after accruing an estimated liability for incurred but
unreported claims of approximately $3 million, the Trust was in a surplus position of
approximately $11.5 million.
15. Post-Employment Health Care and Life Insurance Benefits
Under Massachusetts General Law Chapter 40N, Commission employees become
City of Springfield employees upon retirement. Consequently, all benefits paid after
retirement are liabilities of the City and not the Commission. Therefore, GASB
Statement 45, Accounting and Financial Reporting by Employers for Post-Employment
Benefits Other Than Pensions does not apply to the Commission.
16. Pension Plan
The Commission follows the provisions of GASB Statement No. 27, Accounting for
Pensions for State and Local Government Employees (as amended by GASB 50), with
respect to the employees’ retirement funds.
$2,528,939, $2,437,671 and $2,140,530, respectively, which were equal to its annual
required contributions for each of these years.
C. Funding Status
The annual required contribution for the current year was determined as part of an
actuarial valuation using the entry age normal actuarial cost method. The actuarially
accrued liability for the City of Springfield as of January 1, 2008 was $699 million.
The City’s assets available for benefits on that date (at market value) was $296.5
million, leaving an unfunded actuarially accrued liability of $402.5 million. The
percentage attributable to each participating entity was not available. The actuarial
value of assets is determined by projecting the market value of assets as of the
beginning of the prior plan year with the assumed rate of return during that year
(8.5%) and accounting for deposits and disbursements with interest at the assumed
rate of return. The unfunded actuarially accrued liability is being amortized as a level
percentage of payroll on a closed basis. The remaining amortization period at January
1, 2008 was 20 years, with payments increasing at 4% per year.
17. Transactions with City of Springfield
A. Plan Description
Substantially all full time employees participate in the City of Springfield Contributory
Retirement System (the “System”), a cost-sharing, multiple-employer, defined benefit
pension plan administered by the City of Springfield Retirement Board. The System
provides retirement, disability and death benefits to plan members and beneficiaries.
Chapter 32 of the Massachusetts General Laws assigns the System the authority to
establish and amend benefit provisions of the plan, and grant cost-of-living increases.
The System issues a publicly available financial report which can be obtained through
the City of Springfield Retirement System, Court Square, Springfield MA 01104.
Other than the retirement system contribution noted above, the Commission’s fiscal
year 2011 transactions with the City consist of payments for Police Department
services of $466,529 and other City department services and fees totaling $20,264.
B. Funding Policy
Plan members are required to contribute to the System at rates ranging from 5% to
11% of annual covered compensation. The Commission is required to pay into the
System its share of the remaining system-wide actuarially determined contribution
plus administration costs which are apportioned among the employers based on
active covered payroll. The contributions of plan members and the Commission
are governed by Chapter 32 of the Massachusetts General Laws. The Commission’s
contributions to the System for the years ended June 30, 2011, 2010, and 2009 were
All assets remain the property of the Commission.
18. Wastewater Regional Operations Management
In August 2000, the Commission entered into an agreement with United Water,
Springfield LLC (now United Water Environmental Services, Inc.) to operate the
Commission’s wastewater regional operations effective October 1, 2000 and for a term
of 20 years. The pertinent conditions of the agreement are as follows:
Equipment/inventory used over the 20-year term is to be replaced/ reimbursed by
United Water.
The Commission continues to control the customer billing process.
The Commission agreed to incur a maximum of $ 10.3 million for the initial capital improvements to the facility. These improvements became the property of the
Commission upon acceptance of the work performed.
ANNUAL report 35
United Water bills the Commission monthly for the
cost of providing service and an administrative fee.
The monthly cost as of June 2011 was approximately
$850,000.
In September 2000, United Water reimbursed the
Commission for approximately $1.9 million of costs
incurred in the privatization process. The Commission is repaying this amount through the monthly
billing process.
Under the contract, United Water must provide a
guaranteed letter of credit to the Commission as
security for operating performance and capital asset
management. The letter of credit is adjusted annually to maintain a value equal to 150% of the contract
value, which changes based on a number of factors.
At June 30, 2011, the letter of credit was approximately $19.2 million.
19. Beginning Net Asset Restatement
The beginning (July 1, 2010) net assets have been
restated (decreased) by $(45,323,652) to reflect the
implementation of FASC 980, Accounting for the Effects
of Certain Types of Regulation, in fiscal year 2011.
This decreased the total net assets from $149,631,339
(previously stated) to $104,307,687 (restated).
Statement of Operating Expenditures Budget and Actual
Springfield Water and Sewer Commission for the year ended June 30, 2011
Original Budget
Final Budget
Actual
Variance
Favorable
(Unfavorable)
Salaries and wages
$ 13,250,810
$ 13,250,810
$ 12,426,989
$ 823,821
Employee benefits
5,409,670
5,409,670
4,951,801
457,869
Administrative overhead
245,000
245,000
–
245,000
Operations
22,168,775
22,243,775
20,017,807
2,225,968
Intergovernmental
509,748
509,748
500,914
8,834
Capital outlay
402,050
402,050
324,748
77,302
7,017,646
7,017,646
7,044,059
(26,413)
Interest
4,120,121
4,120,121
3,708,401
411,720
Other
515,184
440,184
355,459
84,725
Total Expenditures
$ 53,639,004
$ 53,639,004
49,330,178
$ 4,308,826
Expenditures and Other Uses
Notes to Supplemental
Schedule–
Schedule of Operating
Expenditures–
Budget and Actual
36 SWSC11
Budgetary Basis
The appropriation appearing on page 25 of the financial statements represents the
operating budget of the Commission that was originally authorized in June 2010.
Budget/GAAP Reconciliation
The budgetary data is based upon accounting principles that differ from generally
accepted accounting principles (GAAP). Therefore, in addition to the GAAP basis
financial statements, the results of operations are presented in accordance with
budgetary accounting principles to provide a meaningful comparison with budgetary
data.
The following is a summary of adjustments made to the
actual expenditures to conform to the budgetary basis
of accounting.
Operating Expenditures (GAAP basis)
$ 46,240,800
Non-operating Expenditures (GAAP basis)
3,972,515
Reverse capital expenditures
appropriated in a prior fiscal year
(714,591)
Reverse the effect of prior year and
current year GAAP accruals of
Interest on long-term debt
(264,114)
Accounts payable and accrued payroll
(62,009)
Compensated absence liability
(3,259)
Workers compensation liability
160,836
Budgetary basis
$ 49,330,178
ANNUAL report 37
annual report
Springfield
water and se wer
commission
po box 99 5
springfield, massachusetts
01101-099 5

Audited Financial Statement - Springfield Water and Sewer

Transcription

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