2019 Comprehensive Annual Financial Report
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BJWSA implemented solar arrays at the Port Royal Island and St. Helena Island water reclamation facilities in 2018. Lifetime to date, they have produced more than two million kilowatts of electricity, generating in excess of $300,000 in revenue via power bill offsets. BJWSA has reduced its carbon footprint to the equivalent of planting 40,000 trees and are on track for the solar arrays to pay for themselves between years nine and ten of operation, summer of 2027. 2019 Comprehensive BEAUFORT-JASPER WATER AND SEWER AUTHORITY Annual Financial Report For fiscal years June 30, 2019 and 2018 843-987-9292 | 6 SNAKE ROAD | OKATIE, SOUTH CAROLINA 29909 BEAUFORT-JASPER WATER & SEWER AUTHORITY www.bjswa.org Okatie, South Carolina 2019_ COVER_BJWSA_CAFR vertical view - back pic.indd 1 10/1/2019 3:01:59 PM Beaufort-Jasper Water & Sewer Authority Comprehensive Annual Financial Report For the Fiscal Years Ended June 30, 2019 and 2018 Prepared by: Finance Department Th is page intentionally left blank. Beaufort-Jasper Water & Sewer Authority Comprehensive Annual Financial Report For the Fiscal Years Ended June 30, 2019 and 2018 TABLE OF CONTENTS Introductory Section Letter of Transmittal 4 GFOA Certifi cate of Achievement 8 Board of Directors 9 Organizational Chart 10 Financial Section Report of Independent Auditor 12 Management’s Discussion and Analysis 14 Financial Statements 24-27 Statements of Net Position for June 30, 2019 and 2018 24 Statements of Revenues, Expenses, and Changes in Net Positions for June 30, 2019 and 2018 26 Statements of Cash Flows for June 30, 2019 and 2018 27 Notes to Financial Statements 28 Required Supplementary Information 55 Schedule of the Authority’s Proportionate Share of the Net Pension Liability 55 Schedule of the Authority’s Contributions to the South Carolina Retirement System – Last Ten Fiscal Years 55 Schedule of Changes in the Authority’s Total OPEB Liability and Related Ratios 56 Supplementary Financial Data 57 Budgetary Comparison Schedule for June 30, 2019 57 Budgetary Comparison Schedule by Functional Classifi cation for June 30, 2019 58 Schedule of Expenses by Natural Classifi cation-Budget and Actual for June 30, 2019 60 Schedule of Net Earnings for Debt Service and Debt Coverage for June 30, 2019 and 2018 60 Statistical Section Statistical Contents 62 Financial Trends and Debt Capacity 63–66 Schedule of Changes in Revenues and Expenses, and Debt Service Coverage – Last Ten Fiscal Years 63 Schedule of Changes in Net Position – Last Ten Fiscal Years 64 TABLE OF CONTENTS 1 Statistical Section Net Position at End of Year Graph 64 —continued Net Position by Component – Last Ten Fiscal Years 65 Ratio Analysis 65 Ratio of Outstanding Debt by Type 66 Debt Service Coverage Analysis 66 Capital Assets 67 Detailed Schedule of Changes in Capital Assets – 67 Last Ten Fiscal Years Schedule of Total Capital Assets – 67 Last Ten Fiscal Years Revenue Capacity 68-74 Wholesale and Retail Water Sales Volume Historical 68 Data – Last Ten Fiscal Years Retail Water Sales Volume Historical Data – 68 Last Ten Fiscal Years Wholesale Water Revenues by Area and Average Revenue 69 per Th ousand Gallons (kgal) – Last Ten Fiscal Years Wholesale Customer Sales to Total Billings – 70 Last Ten Fiscal Years Retail Water Revenues by Area and Average Revenue 71 per Th ousand Gallons (kgal) – Last Ten Fiscal Years Wastewater Flows and Capacities by Plant – 72 Last Ten Fiscal Years Wastewater Customer Base by Plant – Last Ten Fiscal Years 73 Wastewater Revenues by Area and Average Revenue 74 per Th ousand Gallons (kgal) – Last Ten Fiscal Years Demographic and Economic Information 75–80 Customer Statistics at Fiscal Year-End from 2005 75 Billings at Fiscal Year-End from 2005 75 Water Sales & Customer History Graph 76 Wastewater Sales & Customer History Graph 76 Water and Wastewater Ten-Year Rate Comparisons and Graph 77 Wholesale Water Rates by Area and Comparison Graph 78 Population/Per Capita Income 79 Wage/Salary Employment 79 Unemployment Rate 79 Principal Employers 80 Other Operational Information 81–83 Full-time Equivalent Employees by Function 81 Ten Largest Wastewater Users 81 Ten Largest Water Users 82 Insurance in Force 83 Independent Report on Internal Control Over Financial Reporting and 86 on Compliance and Other Matters Based on an Audit of Auditor’s Other Financial Statements Performed in Accordance with Reports Section Government Auditing Standards 2 BJWSA COMPREHENSIVE ANNUAL FINANCIAL REPORT 2019 Introductory Section 6 SNAKE ROAD, OKATIE, SC 29909-3937 Phone 843.987.8100 Fax 843.548.0096 Customer Service 843.987.9200 Operations & Maintenance 843.987.8046 Engineering 843.987.8065 www.bjwsa.org Inspire trust and enhance public health JOE MANTUA, PE, GENERAL MANAGER 843.987.8044 (o) | 843.540.4002 (c) October 4, 2019 To Beaufort-Jasper Water and Sewer Authority Board of Directors and Stakeholders: Th e management and staff of Beaufort-Jasper Water and Sewer Authority (the Authority) are pleased to present the Comprehensive Annual Financial Report (CAFR) for the fi scal year ended June 30, 2019. Th e Authority is required to publish a complete set of audited fi nancial statements. Th is report fulfi lls that requirement for the fi scal year ended June 30, 2019. Th e Authority’s management assumes full responsibility for the completeness and reliability of the information contained in this report, based on a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefi ts, the objective is to provide reasonable, rather than absolute, assurance that the fi nancial statements are free of any material misstatements. Carr, Riggs & Ingram, Certifi ed Public Accountants, has issued an unmodifi ed (“clean”) opinion on the Authority’s fi nancial statements for the year ended June 30, 2019. Th e independent auditors report is located at the front of the nancialfi section of this report. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditors report and provides a narrative introduction, overview, and analysis of the basic fi nancial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. PROFILE OF BEAUFORT-JASPER WATER AND SEWER AUTHORITY Th e Authority was created under provisions of Act No. 784 - enacted during the 1954 Session of the General Assembly of the State of South Carolina - as a public, nonprofi t corporation to acquire and distribute supplies of fresh water for industrial and domestic purposes within its service area. During its 1969 Session, the General Assembly enacted Act No. 598, which enlarged the functions and powers of the Authority to include the construction of facilities that provide for the collection, treatment, and disposal of wastewater in thickly populated areas of Beaufort County. In 1971, the General Assembly created the Jasper County Water and Sewer Authority to provide an entity capable of providing water and wastewater service in Jasper County for areas not served by municipal governments. In 1983, the Authority and the Jasper County Water and Sewer Authority were consolidated into the entity now called the Beaufort-Jasper Water and Sewer Authority. Th e Authority was governed by a Board that consisted of nine members appointed by the Governor of South Carolina, upon recommendation of the legislative delegations for Beaufort County and Jasper County. In May 2009, the South Carolina Legislature passed Act S793, which consolidated all past enabling legislation amendments relating to the powers, service area and membership of the Authority and adjusted its powers and duties to recognize the changed environment of the 21st century. As part of the Act, the Board membership was expanded from nine to eleven members. Th e two additional members are recommended to the Governor by the Jasper County Delegation. Th e Authority provides direct services to the citizens in the incorporated areas of the City of Beaufort, the Town of Blufft on, the City of Hardeeville, the Town of Port Royal, as well as to areas of unincorporated Beaufort and Jasper counties. Additionally, the Authority indirectly serves thousands of additional citizens in the Beaufort and Hilton Head Island areas through wholesale services provided to other water and sewer utilities. Th e Authority’s customer base as of June 30, 2019 was 58,834 retail water accounts and the following seven wholesale water customers: Military installations – Naval Hospital, Parris Island Recruit Depot, Marine Corps Air Station Beaufort, Laurel Bay Housing Facility; Utilities – Hilton Head Island PSD, Fripp Island PSD, Harbor Island Utilities, Callawassie/CUC, Inc., Moss Creek/Water Oak Utility, and Warsaw Eustis 4 BJWSA COMPREHENSIVE ANNUAL FINANCIAL REPORT 2019 Oaks Water Company. Th ese wholesale customers resell and/or redistribute the Authority’s water to their residents, resulting in total customers directly and indirectly serviced by the Authority in excess of 180,000. Th e Authority’s headquarters are located on Highway 170, approximately thirteen miles south of the City of Beaufort. Th e Authority provides reliable high quality supplies of potable water used for drinking, irrigation, fi re protection, and other purposes. Th e Chelsea Water Treatment Plant, located on Highway 170 at the Authority’s headquarters, and the Purrysburg Water Treatment Plant, located near the Savannah River north of the City of Hardeeville in Jasper County, are the principal treatment facilities, both utilizing the Savannah River as their source. Ground water systems supplement the main system during peak demand periods and also provide water to Point South and Palm Key in Jasper County. Th e wastewater system serves 40,697 retail customers and two bulk/wholesale customers. Th e wastewater collection systems consist of gravity pipelines, lift stations, and force mains conveying wastewater to eight (8) treatment plants. Th e three largest wastewater treatment plants are Cherry Point Water Reclamation Facility, Port Royal Island Water Reclamation Facility, and the Hardeeville Wastewater Treatment Plant, with respective capacities of 7.5, 7.5, and 2.7 MGD (millions of gallons per day).