A company is only as efficient as the laws that govern it. That’s why we have a Board of Directors in place to set policies that keep our operations running smoothly. The Directors that make up our ﬁve-member Board are prominent men and women with business expertise in a plethora of areas, appointed by our local city council to serve our public and our water utility. Our Board works closely with our executive staff to ensure the policies we set are inline with company goals, demonstrate our dedication to addressing community interests and support management recommendations. Our Board worked to complete two bond issues totaling more than $258 million last year, nearly twice as much as the $125-130 million that is normally secured every two years. The bonds secured money to fund capital improvement projects, on which BWWB normally spends about $5 million per month. $70 million was budgeted for 2011. Because of our Board’s support of our management’s ﬁnancial goals and our commitment to ﬁnancial stability, Moody’s Investor Service upgraded our bonds to Aa2. This upgrade helped us to secure better interest rates on bonds and reduced the overall cost of funding our debt service by more than $6 million. Ultimately, our customers are the beneﬁciaries of these savings.
While 2011 was a record year for us ﬁnancially, our Board was still challenged with setting policies to help overcome some serious obstacles. Last year, on April 27, some of the worst tornadoes in U.S. history ripped through our area causing death and widespread devastation. The western portion of our service area was impacted, as booster stations were ﬂooded and some pump stations were left without power. Our management ensured crews immediately went into action to keep water service ﬂowing to customers. After viewing the devastation, our Board initiated an action plan with some of our industrial customers, Coca-Cola Bottling Company, Buffalo Rock and Barber’s Dairy to make sure our customers had bottled drinking water within 24 hours of the storm. The Board also ensured through smart insurance planning that our company was not ﬁnancially impacted by the storms. In the coming months, our Board contracted with a local engineering ﬁrm to investigate proposals for disaster assistance services to cover costs and damages incurred as a result of the tornadoes. Our county’s sewer system, Jefferson County Sewer, ﬁled the largest municipal bankruptcy in history in 2011. They strongly considered paying off some $3.2 billion in debt by increasing rates to customers. Because BWWB collects sewer bills for Jefferson County Sewer in combination with our water bills, this increase posed a threat to our own customers’ ability to pay the combined bills to prevent their water service from being interrupted. Not only did our Board spring into action to meet with the receiver to try to negotiate ways to lessen the impact, but the Board also veriﬁed that funding was available in its Help 2 Others, or H2O Foundation, fund to pay both water and sewer bills for elderly indigent customers.
Our Board approved about $10.7 million for pipeline replacement projects last year, helping support management’s goals to increase system efﬁciency. The Board also passed a new policy that allowed a vulnerability assessment to be done on the company to outline the ways in which the company needs to work to prepare for any type of system failure, ensuring that operations would continue to run efficiently.
A major change in regulatory requirements called for us to monitor or remove more than 100 additional contaminants from the drinking water supply. Meeting this mandatory compliance costs us some $69 million per year. Our Board responded with an evaluation of capital projects and approving the purchase of new equipment to effectively and efficiently treat water while keeping costs down. In fact, our Board approved a much-needed upgrade and expansion of the EnviroLab, our water quality testing headquarters.
In 2011, our Board worked hard to secure funding for our projects, even venturing as far as traveling to Capitol Hill to meet with the Alabama Congressional Delegation to discuss our capital plan, including a plan to secure an additional water source to meet future demand. Ofﬁcials pledged support in assisting us with incorporating legislative language in the upcoming Water Resources Development Act, which included the new water source project in a key section of the major authorization bill. These are just a few examples of the hard work we put in to set policies and approve projects last year. After dedicating more than 100 hours to meetings and strategic planning sessions, we are very proud of the results of our 2011 year – both ﬁnancially and policy-wise. We were able to set comprehensive policies that could be built upon, paving the way for the implementation of new policies that will help us operate more efficiently in the future. The years ahead are ﬁlled with nothing but plans for growth, expansion and learning – all of which will be challenges that we look forward to meeting head-on.