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92014AnnualReportFINANCIALSTABILITYCommittedtoSmartSpendingAtWSSCweknowthatitsimportantnotonlytodeliverqualitywaterandwastewatertreatmentservicestoourcustomersitsalsoimportanttodoitatareasonablecostwithaffordablerates.AfewfinancialhighlightsfromthisyearincludeeWereceivedacleanauditfromexternalauditors.eWecreatedthebudget-in-briefsummarytoimprovetransparencyandunderstandingofourfinances.eWefollowedtherecommendationoftheBi-CountyInfrastructureFundingWorkingGrouptochangefromissuing20-yeardebtto30-yeardebt.WSSCissued150millionof30-yearbondsinAprilatatrueinterestcostof3.31percent.ThischangeinlengthofmaturitiesisestimatedtohavesavedCommissionratepayers2percentonwaterandsewerratesinFY14.ADDRESSINGCHALLENGESIn2011WSSCformedtheBi-CountyInfrastructureFundingWorkingGrouptoexamineoptionsandmakerecommendationsonhowtopayfornecessaryinfrastructurerenewalwithoutoverburdeningourratepayers.TheWorkingGroupwhichincludedrepresentativesfromtheWSSCCommissionerstheGeneralManagerCEOrepresentativesofthePrinceGeorgesCountyandMontgomeryCountylegislativeandexecutivebranchesaswellasWSSCmanagementstaffdelvedintotheoperatingbudgetprocessthecapitalbudgetprocessandtheCommissionsfinancialpoliciesandpractices.Allofthiswasconsideredinthecontextoftheneedtofundnecessaryinfrastructurerenewaleffortsoverthelongterm.Wehavealreadyimplementedsomeoftherecommendationssuchasextendingthelengthofourbondsfrom20to30years.Nextwellexploreoptionstorestructurecustomerbillstoshowtheamountgoingtowardinfrastructurerenewaleffortsandestablishamorerobustandcomprehensiveprogramtoassistlowerincomecustomerswithpayingtheirwaterbills.Theseinitiativeswillensurethatwecancontinuetofinancecriticalinfrastructureupdatesandmaintenancerequiredforustocontinuetoprovidecleanreliablewaterforyearstocome.WSSCsAAAbondissuewasreaffirmedbyFitchRatingsMoodysInvestorsServiceandStandardPoorsRatingsServices.ThisisthehighestbondratingandrepresentsthecreditworthinessofWSSCbondsi.e.howlikelytheyaretoberepaid.WSSCearnedtheGovernmentFinanceOfficersAssociationGFOADistinguishedBudgetPresentationAwardforthe19thconsecutiveyear.ThisawardrecognizesWSSCforexceedingtheminimumrequirementsforfinancialreportinganddisclosureswhichenhancestransparencyforthepublic.FY14OverallBudgetCapitalandOperatingFY14OperatingBudgetOverviewWaterSewerandBondDebtServiceCapitalExpendituresbyCategorySystemImprovementsEnvironmentalRegulationsGrowthCapitalExpenses742.2millionOperatingExpenses698.8millionWater280.2millionSewer378.3millionBondDebtService40.4millionSystemImprovements1.4billionGrowth270.6millionEnvironmentalRegulations331.7million