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52014AnnualReportMESSAGEFROMTHEGMCEOJerryN.JohnsonGeneralManagerCEODearCustomersandOtherStakeholdersItsthereinthemorningwhenyouwakeupmakeyourcoffeeandbrushyourteeth.Thewasteisflushedawaywithoutasecondthought.IfyoureinMontgomeryCountyorPrinceGeorgesCountyitsmostlikelyWSSCismakingthesethingshappen.Weprovidewaterandwastewaterservicesforthemajorityofthe1.8millionpeopleinthesecounties.Cleanwaterandproperdisposalofwastewaterarethefirstlinesofdefenseagainstdiseaseandareimperativeforeconomicgrowthandwell-being.WSSCisagovernmentagencywithanannualbudgetapproaching1.4billion.Morethan95percentofthisbudgetcomesfromourratepayersthepeopleofthecommunitiesweserve.WSSCcontinuallylooksforandemploysinnovativecommonsenseandcost-effectivesolutionstomeetthechallengesfacingouragingsystemsowecancontinuetoprovidecleanreliablewatertothecommunity.Thisincludesinvestingintheinfrastructurethattreatsanddeliverswatertoourcustomers.Approximately10yearsagotheCommissiontookonadifficultbutimportanttasktoreplaceandrepairouraginginfrastructureinparticular5600milesofundergroundwaterpipes.By202550percentofthesepipeswillreachtheendoftheirusefullifespanevidencedbyanincreasingnumberofwatermainbreaksandleaks.ToaddressthissituationinthelastdecadeWSSChasexecutedastrategicplanthathasincreasedthemilesofreplacedwatermainseachyearfromahandfultoourcurrenttargetof55mileseveryyearfortheforeseeablefuture.ParalleltothiswaterstrategyaConsentDecreeledtoa12-yearsewersystemenhancementsimilartomanyundertakenbyutilitiesacrossthecountrywheresewersystemshavebeenneglectedfordecades.WSSCsvigorousapproachhasresultedinmajorimprovementstothesystemaswellasimproveddisposalproceduresforfatsoilsandgreasefromfoodserviceestablishments.Thetotalcostforthisprogramaloneisexpectedtoreach1.4billion.TofinancethesemonumentalinitiativesWSSChasworkedtogainthesupportofkeystakeholdersandbusinessleaderscountyexecutivesandcountycouncils.Perhapsmostimportantlywealsoactivelyengagedourcustomersindiscussionstoexplaintheneed.Thislong-termandongoingcommunicationwithstakeholdersandcustomershashelpedtobuildstakeholderunderstandingandbuy-inofthesemajorinfrastructureinvestments.TheseinvestmentsrequiredWSSCtoimplementsubstantialrateincreasesmorethan50percentoveraten-yearperiod81percentifcompounded.Weappreciatethesupportofallofourstakeholdersespeciallyourcustomerswhounderstandthenecessityasthealternativewouldbeanendlessstreamofpipebreakscausingmajorinconveniencesanddisruptions.TominimizethefinancialburdenonourcustomersWSSCcontinuestolookforwaystocontrolcosts.TheBi-CountyInfrastructureFundingWorkingGroupmadeupofCommissionersofficialsfrombothcountiesandWSSCstaffrecommendedstrategiestohelpreducetheburdenofthesecostlyinitiatives.Oneoftheserecommendationswasrecentlyimplementedlongertermbondfinancingwhichshaved2percentofftherateincreaseinFY14.AnotherareaofprogressisdrivenbyourprocurementgoalswhereWSSChasworkedtoexpandourvendorbasesothatitmoreaccuratelyreflectsthediversityofourcommunityandprovidessmalllocalwomen-andminority-ownedbusinesseswithopportunitiestopartnerwithus.InFY14WSSCpaidwomenandminorityownedbusinesses99.9million20percentofallpaymentsandawardedover228.5million42.3millionmorethanFY13.WSSCalsolaunchedanewprocurementstrategySupplyChainManagementinamajorefforttostreamlinepurchasingandcontractingtolowerourcosts.EverydayasWSSCtakesonnewchallengesweremaintruetoourmissiontoprovidecleanreliablewatertoourcustomersreturnitsafelytotheearthandprotecttheenvironmentbyusingrenewableenergyandadoptingothergreenpractices.Allofthisisundertakeninacost-effectiveresponsiblemanner.AsIlookbackat2014Ibelieveitsevidentthatthemanyinitiativeswelaunchedcontinuedorcompleteddemonstrateourcontinuingcommitmenttoourvaluedcustomers.SincerelyJerryN.JohnsonGeneralManagerCEOJerryN.Johnson