annual report - monroe county water authority

In alignment with our commitment to “green” operations and as a service to our readers, we again are pleased to provide the enclosed CD-ROM. It contains the Monroe County Water Authority’s Audited

Financial Statements, a PDF file of this report, and historical operating statistics. As in the past, providing this information on CD-ROM, rather than in printed form, saves many thousands of sheets of paper.

Responsible Use of Resources

60WATER@WORK

Fueling Monroe County’s Economy with H2O

MOnROE COunty WAtER AutHORIty

AnnuAl REPORt 2012

475 norris DriveRochester, new york 14610-0999

REtuRn SERvICE REquEStED


WATER@WORK

• uses 166 million gallons of water a year.

• Has more than half a million gallons of water in its two on-campus swimming pools.

• Relies on water every day to support its sophisticated processing labs.

Rochester Institute of Technology

• Depends on MCWA’s water to make its high-quality food and beverages.

• Added more than 300 local jobs when it opened its lee Road facility a few years ago.

• Every day receives 8 railroad cars full of tomatoes and tomato paste for processing.

LiDestri Food & Beverage:

• Converts 5 million gallons of water into 318 tons of ice every day in the peak season.

• Has had clean testing samples for more than 20 straight years.

• Ships ice all over Western new york and into parts of Pennsylvania.

Arctic Glacier:

BOARD OF DIRECtORS

Anthony J. quattroneClyde O. BenoyJoseph R. Rulisonlarry M. MagguilliWendy Bleier-MervisRobert W. HurlbutJames nobles

MAnAgEMEnt tEAM

nicholas A. noce Executive Director

William A. Carpenter Deputy Executive Director

Richard J. Metzger, P.E. Chief Engineer

Raymond W. Benshoff Director of Operations, Facilities & Fleet Maintenance

Stephen M. Savage, P.E. Director of Engineering

Kevin M. Finnerty Director of Finance & Business Services

Christian E. King, P.E. Director of Production & transmission

BOARD OF DIRECtORS

Anthony J. quattroneClyde O. BenoyJoseph R. Rulisonlarry M. MagguilliWendy Bleier-MervisRobert W. HurlbutJames nobles

MAnAgEMEnt tEAM

nicholas A. noce Executive Director

William A. Carpenter Deputy Executive Director

Richard J. Metzger, P.E. Chief Engineer

Raymond W. Benshoff Director of Operations, Facilities & Fleet Maintenance

Stephen M. Savage, P.E. Director of Engineering

Kevin M. Finnerty Director of Finance & Business Services

Christian E. King, P.E. Director of Production & transmission

The Monroe County Water

Authority is a not-for-profit

public benefit corporation

that reliably provides quality,

affordable water to Monroe

County and area communities

who request service.

Each year, we select a central theme for the Monroe County Water Authority annual report. In so doing, we not only provide updates and performance measures for all areas of our operations, but we also take time to focus on a singular aspect of our endeavors.

This edition includes many highlights and metrics achieved in 2012. As a special feature, however, we have chosen to look at MCWA’s role as a positive force in the economic vitality of the region we serve.

On pages 6-7, you will find quotes from several area business and institutional leaders attesting to the importance of MCWA as a partner in success. We are most proud to be held in this regard—by those featured in this report, and by many others who have expressed similar comments over the years.

Ironically, perhaps, our Mission Statement (at top right of page) does not specifically identify “supporting the area’s economy” as an objective. And yet, upon closer review, maybe it actually does.

We suggest that three particular words in the Mission Statement provide the cornerstone of support for businesses and, in turn, for the area economy. Those words are “reliably,” “quality” and “affordable.”

As you read the testimonials in the featured section, notice how often these characteristics are referred to in specific terms. But these same qualities, of course, are also critically important to the satisfaction of our thousands of residential customers.

To us, that is extremely gratifying. It means that our position as an economic driver could almost be defined as a highly beneficial byproduct of fulfilling and living our Mission Statement. For all customers. All the time.

Anthony J. Quattrone, Chairman Nicholas A. Noce, Executive Director

2348

CD

TABLE OF CONTENTS

Performance Metrics

Financial Highlights

Water@Work

2012 Accomplishments

Digital Annual Report Audited Financial Statements & Operating Statistics

MONROE COUNTY WATER AUTHORITY

ANNUAL REPORT 2012

1

RATE STABILITY THROUGH RESPONSIBLE PRACTICESIn 2012, we reinforced our commitment to an efficient and effective workforce, dedication to proactive financial practices and attention to green initiatives. These efforts are designed to build a sound foundation to support rate stability and generate a bright future for the Water Authority and the communities we serve.

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18

19

20

21

22

23

24

$25

02 03 04 05 06 07 08 09 10 11 12

$21.67 Monthly cost of water with actual MCWA rate increases

$22.62

Monthly cost of water if it had increased by a rate equal to the CPI

32

Providing excellent service to our customers begins with maintaining high standards of operational performance. We are again proud to report top percentile rankings in our performance as measured against national benchmarks for system integrity, labor efficiency, operations costs and affordability.

Performance Metrics Financial Highlights

PERFORMANCE INDICATORSAmerican Water Works Association (AWWA) Benchmarking

MONTHLY COST OF WATER COMPARISON 2012Monthly Cost of Water for a Typical Customer

National Top Quartile

Monroe County W.A.

Erie County W.A.

National – Median

City of Syracuse

Onondaga County W.A.

City of Rochester

0 5 10 15 20 25 30

$21.73

$21.67

$19.80

$25.94

$26.73

$27.45

$23.90

Northeast – Top Quartile

MCWA

National – Median

Northeast – Median

0.00 0.05 0.10 0.15 0.20 0.25 0.30

0.29

0.24

0.23

0.27

Millions of Gallons Per Day (MGD) Delivered per Employee

MCWA


National – Median

0 5 10 15 20 25 30 35

21.7

17.6

34.3

System Integrity–Breaks Per 100 Miles of Water Main

Population >500k – Top Quartile

MCWA


Population >500k – Median

National – Median

0 100 200 300 400 500 600 700 800

794

667

653

456

730

Customer Accounts Per Employee

Increase 2012 Metered (Decrease) Consumption From 2011

Residential & Commercial 13,453.7 317.3

Industrial 2,530.7 (14.4)

Water Districts 1,848.7 32.6

City of Rochester 3,517.3 986.2

Total 21,350.4 1,321.7

WATER SALES (gallons In millions)

Increase 2012 (Decrease) Amount From 2011

Residential & Commercial $44,374.7 $2,686.1

Industrial 5,184.2 20.0

Water Districts 3,553.9 72.1

Fire Services 793.2 129.2

Other 3,426.4 154.0

Total $57,332.4 $3,061.4

OPERATING REVENUES (dollars in thousands)

Increase 2012 (Decrease) Actual From 2011

Operating Departments

Administration $ 4,908.5 $ 4,152.4

Production/Transmission 13,685.8 990.7

Engineering 2,406.8 (354.4)

Facilities, Fleet & Operations 11,715.6 206.3

Finance & Business Services 5,258.5 (3,705.1)

Total $37,975.2 $ 1,289.9

OPERATING EXPENSES (dollars in thousands)

n Residential & Commercial

n Industrial

n Water Districts

n City of Rochester

63%12%

9%

16%

WATER SALES

A primary mission of the Greater Rochester Enterprise (GRE) is to attract new companies to our region, thereby creating jobs and further stimulating the economy in a multitude of ways. It’s an important and serious task, but GRE president and CEO Mark Peterson will tell you there’s one part of the recruiting process that always makes him smile.

“The availability of water is a huge factor in many industries today,” Peterson says, ”whether a company is using it for cooling or as part of their processes. I can’t tell you how many times I’ve been talking to a company that’s considering moving to our area and one of their first questions concerns our water supply.

“When I tell them about the vast availability of high quality water—and then I mention Monroe County Water Authority’s very competitive rates—well, they often find it hard to believe. That scenario always makes me feel good.”

Peterson admits that other regions of the country have advantages over New York State in some ways, but that MCWA’s ability to reliably supply ample quantities of clean, affordable water “helps to level the playing field.”

“For example,” he says, “we may be competing for a company that is also considering a location in the southeast United States. The southern place might have lower utility rates than our area. But, they can’t compete with us in terms of a skilled workforce, and they certainly can’t compete with us in terms of water.”

Peterson and GRE leave little room for doubt. “Whether we are talking about a company already in our region expanding its business and employment, or whether we are talking about a company moving into our area, the service provided by MCWA is a tremendously positive factor in the work that we do to sustain and invigorate the local economy.”

54

WATER@WORKFueling Monroe County’s Economy with H2O

PHOTOS:

A diver plunges into 490,000 gallons of clean water at the Rochester Institute of Technology pool.

Water from a newly installed 10” water main at LiDestri Food & Beverage cools jars of spaghetti sauce.

Workers package 318 tons of ice every summer day at the Arctic Glacier plant in Fairport.

“I can’t tell you how many

times I’ve been talking to a

company that’s considering

moving to our area and

one of their first questions

concerns our water

supply,” Peterson says.

The Rochester community is blessed with a number of excellent colleges and universities, all dependent on a reliable water supply to carry on their educational missions.

Rochester Institute of Technology’s 1,300-acre campus, for example, is a bustling site whose water usage compares favorably with many small towns or villages.

Some 5,000 of RIT’s 18,000 students live on campus, while the others commute many times a week. Add to that faculty and staff numbers totaling 3,700, and it’s easy to see why a disruption of water service or a problem with quality water would be of real concern.

“We use about 166 million gallons of water a year,” said John Moore, assistant vice-president for Utilities Management Services. “Certainly, clean, safe, high-quality water is very important to our resident students and to those who visit and work on campus every day. For example, we have 490,000 gallons of water in our competition swimming pool and another 82,000 gallons in our leisure pool.

“A reliable supply of water isn’t just for drinking and recreation, of course. It’s also a necessity for our many operations, such as our microelectronics and other processing labs,” he said. “Basically, it’s critical to our business.

“MCWA has provided that good and reliable source for many years, and has consistently and continually met our needs as we have grown significantly.”

In 2009, when LiDestri Food & Beverage acquired a former Eastman Kodak building on Lee Road, it had some 385 employees in Monroe County, all at its headquarters and manufacturing facility in Fairport.

Today, after renovating the facility, moving production operations from New Jersey, and expanding capacity in beverages and spirits, LiDestri’s Monroe County employment exceeds 700.

According to Dave Stoklosa, LiDestri’s director of business development, a key factor in retrofitting the former Kodak plant into a state-of-the-art food and beverage processing facility was the knowledge that MCWA would supply the water, as it has for years at the Fairport location.

“Without a reliable, clean water supply, you can’t make high-quality food and beverages,” Stoklosa says. “In addition to the water that actually goes into the products, we convert water to steam for pasteurization, cooking, sterilization of jars and caps, and for all the equipment-cleaning processes. All of that is critical to our operations, and we use well over a million gallons of MCWA water a day.”

When LiDestri acquired the Kodak plant, a two-inch diameter water line brought MCWA water into the facility. One of LiDestri’s first actions was to install a 10-inch main, which Stoklosa says “provides all the clean water we could want for this 625,000-square-foot operation.”

Monroe County residents can now be proud to be home to the “tomato-processing capital of America.”

“We produce more tomato-based products than anywhere else in the United States,” Stoklosa says. “Every day we bring in from California eight railroad cars full of tomatoes and tomato paste. LiDestri is the premier manufacturer of sauces, dips and salsas in the US, and our production and packaging of beverages and spirits continues to grow.

“Suffice it to say that our successful operations would not be possible without the clean and reliable supply of water from MCWA.”

A huge, 10-inch water main provides an ample supply of clean water for LiDestri’s

625,000-square-foot facility on Lee Road.

A lot of factors are involved in a successful ice-making business, from the production of ice to storage and distribution—and a special emphasis on customer service.

But Harvey Fleming, plant manager at the Arctic Glacier ice facility in Fairport, will tell you with a smile that the recipe for the product, itself, is pretty basic.

“You just need two things to make ice,” Fleming says. “A refrigeration system and a supply of good, clean water.”

Arctic Glacier is the premier ice-making operation in Western New York, distributing its product to Niagara Falls and Erie, PA, to the west, Utica and Rome to the east, Watertown and Ft. Drum to the north, and Sayre, PA to the south.

In the peak summer season, the Fairport Arctic Glacier facility makes 318 tons of ice every day. That translates to more than five million gallons of water supplied by MCWA. The quality of the water must meet stringent standards, and Fleming says it always has.

“We take the clean water coming into the plant and run it through an ultraviolet purification process required by the Food and Drug Administration,” Fleming says.

The water is then tested once a month by the Monroe County Department of Health. In addition, an environmental consulting service accredited by the New York State Department of Health tests the ice once a week and the potable water once a month.

“That’s over half a dozen tests a month,” Fleming says. “I’ve witnessed the testing for 20 years, and I have never once seen a bad sample. The quality of the water is excellent, and so is the reliability of the supply. We’ve never had a problem.”


Arctic Glacier

“A reliable supply of water

isn’t just for drinking and

recreation, of course. It’s also

a necessity for our many

operations,” said Moore.

“You just need two things to

make ice, ”Fleming says.

“A refrigeration system and

a supply of good, clean water.”

“Without a reliable, clean

water supply, you can’t

make high-quality food and

beverages,” Stoklosa says.

LiDestri Food & Beverage

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8

We took a positive step in 2012 toward optimizing water quality treatment by installing new analytical capabilities in our in-house testing laboratory. With this equipment, we can more quickly and inexpensively detect and manage trace amounts of regulated contaminants, and we can more readily respond to changing conditions. In the past, water samples were sent to a lab in California. Now the turnaround for test results has dropped from about one month to less than one day.

A key piece of our Southeast System Reliability Project came on line with installation of a 300-kilowatt generator at our Kreag Road Booster Pump Station, which serves some 70,000 customers in several towns in the southeast part of the County. The new generator turns on automatically in case of a power failure.

Reliability also means preservation of our extensive production and distribution infrastructure for production up to date and running.

For example, we rehabilitated more than two miles of water mains in Irondequoit and Summerville using an innovative lining methodology, a procedure that is efficient, effective and much less invasive to the neighborhoods than replacing a line. Basically, a lining with structural integrity is injected into and adhered to the main, so that the existing pipe essentially becomes a structural form with a new pipe inside it.

We continue an aggressive leak detection program for our many valves and hydrants, using sophisticated monitoring instruments to identify potential problems before they would ever become visible to an inspector.

From an affordability standpoint, a major initiative focuses on reducing the cost of energy needed to treat and to pump water. In 2012, MCWA—and in turn, our customers—benefited from incentive payments from New York State’s peak load-shedding program when we voluntarily turned off pumps for a short period of time.

Also on the energy cost-reduction front, the Lee Road Pumping Station project, supported by a grant from the New York State Energy Resource and Development Agency (NYSERDA) made improvements that will save some 55,000 kilowatt hours of energy a month, an equivalent of about $40,000 to $50,000 a year.

We also have maintained outstanding and stable bond ratings, which provide us favorable interest rates to support our projects.

In terms of expanding MCWA services, we began providing full retail services in 2012 at the request of the Town of West Bloomfield, adding some 350 customers. We also assisted with the extension of public water service to all residents in the Town of Riga with the addition of 138,000 feet of water mains.

The year 2012 also marked a continuation of the program to replace traditional direct read residential water meters as we replaced 10,000 with new units that can be read remotely with a laptop computer.

Highlights of 2012 Accomplishments

Every action we take

in any given year is

designed to align with

our Mission Statement

by contributing to the

affordability, reliability or

high quality of the water

that we produce and

supply from the abundant

resource of Lake Ontario.




60WATER@WORK



AnnuAl REPORt 2012

475 norris DriveRochester, new york 14610-0999

REtuRn SERvICE REquEStED


WATER@WORK

• uses 166 million gallons of water a year.





• Added more than 300 local jobs when it opened its lee Road facility a few years ago.





• Ships ice all over Western new york and into parts of Pennsylvania.

Arctic Glacier:




60WATER@WORK



ANNUAL REPORT 2012

475 Norris DriveRochester, New York 14610-0999

RETURN SERVICE REQUESTED


WATER@WORK

• Uses 166 million gallons of water a year.





• Added more than 300 local jobs when it opened its Lee Road facility a few years ago.





• Ships ice all over Western New York and into parts of Pennsylvania.

Arctic Glacier:

annual report - monroe county water authority

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