Water Service Area

Transmission & Distribution $436 Million

415 Miles (Avg. Age – 75 Years)

Dams & Reservoirs $331 Million

11 Dams (Average Age – 100 years)

Pumping & Storage Facilities $ 33 Million

Treatment Plants (7) $156 Million

Other (meters, O&M facilities) $ 20 Million

Total Replacement Value $976 Million

Dams (11) – 100 Years(1)

Treatment Plants (7) – 27 years

Tanks (15) – 32 years

Pump Stations (9) – 20 years Assessment – Because of recent capital investment ($200 million), water capacity facilities have been upgraded, but subject to ongoing renewal, technology upgrades and regulatory mandates. 1. All dams will be upgraded by 2022

Transmission Mains (130 mi.), 12”-24” Pipe – 49 years(1) (2)

(Note: 79 miles over 100 years old, 100% vertically pit cast iron pipe)

Distribution System (285 mi.), 4” – 12” Pipe– 90 years(2) (Note: 79 miles over 100 years old, 85% vertically pit or centrifugally cast iron pipe)

Assessment – Little capital investment since original construction other than periodic main break replacement & relining work. (1) Original City transmission mains constructed in 1885-1900; some replaced and renewed (cleaned/cement lined). Mill Run ductile iron mains constructed in 1955, 1968 & 1993. Homer Gap cast iron mains (Juniata system acquired 1929) constructed 1895 and upgraded in 1995 with ductile iron pipe. PRR transmission system (acquired in 1981) constructed in 1885 & 1904-5; most cast iron pipes have been renewed (cleaned/cement lined).

(2) Pipelines constructed before 1945-55 have pipe joints packed with oakum and sealed with poured lead or lead caulking (Leadite). Pipe prior to 1925 is pit cast; 1925-55 is centrifugally cast iron (unlined) and 1955-present is centrifugally cast ductile iron (cement lined).

Unaccounted-For-Water Increasing • Due to Leakage - Now 30% Hydraulic Capacity Problems • 50 Miles of 120 year old, undersized, cast iron pipe (4-inch dia.

and less); principally in Juniata and old Allegheny Water Company system

Reoccurring Main Breaks • Logan Boulevard, Grazierville, etc.

Production of Cast Iron Pipe in Vertical Casting Carousels

Rodding of Poured Metal in Vertical Pipe Mold

Production of Centrifugally Cast Iron Pipe (Circa 1920)

Modern Ductile Iron Pipe (Cement Lined, Push-on Joints & O-ring Gasket)

Poured Lead Pipe Joint (1890’s >) “Leadite” Sulfur-Based Joint Material (1910’s >) (Cracking – Differences in Thermal Expansion)

Split 24” Main Failure - Cause of 2015 Bradford, PA Water Emergency

Common Cast Iron Pipe Failures Split Pipe/Cracked Bell Joint

Cast Iron Pipe Corrosion Leak Failure Chicago Water System

Small Diameter Cast Iron Pipe Tuberculation (Unlined Pipe)

Sewage Collection System $122 Million

163 Miles (Avg. Age – 70 Years)

Combined Sewer System $122 Million

31 Miles (Avg. Age – 120 years)

Interceptor & Outfall Sewers $124 Million

46 Miles (Avg. Age – 45 years)

Pumping & CSO Storage Sys. $ 32 Million

Treatment Plants $256 Million

Other (O&M Facilities) $ 7 Million

Total Replacement Value $663 Million

Treatment Plants (2) – 5 years CSO Storage and Pumping Facilities (2) – 25 years (Note: Recently upgraded, subject to LTCP)

Assessment – Because of recent capital investment ($150 million), wastewater capacity facilities are considered in good condition.

Combined Sewers (32 Miles) – 125 years (1)

Interceptor and Outfall Sewers (17 miles) - 115 years (1)

Sanitary Sewers (186 miles) - 85 years (90% vitrified clay pipe) Assessment – Little or no capital investment made to sewer system since original construction; very old condition. (1) Recent capital improvements ($20 million) are related to hydraulic capacity. These include 2005/2015 Westerly interceptor sewer; late 1970’s/early 1980’s relief sewer construction and 1997 18th St. combined sewer replacement.

Televising of Sewer System Reveals Widespread Evidence of: - Collapsed and Cracked Pipe - Infiltration Through Broken Joints & Cracks - Alignment Problems - Root Intrusion

Capacity Problems Result: Basement Backups/System Flooding Combined Sewers – Subject to Future EPA/DEP Regulations

- Meanwhile Urgent Repairs are Needed - Brick Sewers Eroding at Flow Line - Separation of Arch Means Structural Problems - Most Combined Sewers are Undersized

Water Infiltration – VCP Pipe Joint Failure

Broad Avenue Combined Sewer Brick Sewer Invert Erosion Failure

Root Intrusion VCP Pipe Joint Failure

Broken Vitrified Clay Pipe (VCP) Structural Failure

Loose Brick & Separated Joints above Flow Line

4th District Sewer (Filled with Debris, Red Hill)

Erosion at Bottom of Brick Sewer

Broken Vitrified Clay Pipe (VCP) Structural Failure

TYPICALLY COMPRISED OF: • Vehicles, Tools & Equipment (50% or more)

• Software/Hardware , GIS & Instrumentation (20%)

• System Construction & Renewal (30%)

WASTEWATER CAPITAL BUDGET - $220,000/year(1)

WATER CAPITAL BUDGET - $1,117,000 per year(1)

(1) Average of 2012-2016 capital budgets

• 2012 AWWA Water and Wastewater Rate Survey • Class C Systems (less than 20 MGD meter consumption) –

110 Systems Surveyed

• AWA meets Criteria as an “Average” Class C System

Average (c)

Balance Sheet (d)

Annual

Capital Total Total Total

Needs Assets Debt Equity

($000) ($000) ($000) ($000)

$ 1,117 $ 111,908 $ 41,188 $ 64,585

$ 6,401 $ 103,125 $ 32,355 $ 65,726

$ 3,501 $ 83,846 $ 19,439 $ 52,196

Service Daily

Area (b)

Total Gallons Daily Max-Day

Population Number of Sold Capacity Production

Utility ($000) Accounts (MGD) (MGD) (MGD)

ALTOONA WATER AUTHORITY 70 22931 8.94 28.5 12.67

Average (f)

77 24,091 8.78 25 17

Median (f)

67 20,248 8.34 23 16

AWA ANNUAL CAPITAL BUDGET IS WELL BELOW NATIONAL AVERAGE FOR SIMILAR SYSTEMS

• Current AWA Capital Spending is 1% of Total System Assets • Water Annual Depreciation is $3.2 Million

Capital Budget Income Statement (d)

Balance Sheet (d)

220$ $ 9,351 $ 6,419 $ 129,680 $ 55,224 $ 72,092

9,448$ $ 13,602 $ 7,729 $ 124,349 $ 44,800 $ 78,979

5,048$ $ 11,006 $ 7,028 $ 92,340 $ 30,108 $ 58,338

Total

Equity

($000)

Average (c)

Annual Capital

Needs ($000)

Total

Annual

Revenues

($000)

Total

Annual

Operating

Expenses

($000)

Total

Assets

($000)

Total Long-

Term Debt

($000)

Monthly Service/Minimum Charge

5/8-inch (Residential)

City (a)

Altoona Water Authority

Average (g)

Median (g)

AWA ANNUAL CAPITAL BUDGET IS DRASTICALLY BELOW NATIONAL AVERAGE FOR SIMILAR SYSTEMS

• Current AWA Capital Spending is o.2% of Total Water System Assets • Wastewater Annual Depreciation is $4.3 Million

National Focus on Repair, Rehabilitation & Replacement (Source: AWWA 2016 Water & Wastewater Survey)

Westmoreland Water Authority (125,000 customers) • Annual Reinvestment Plan - $26 Million (50% for distribution) PA American Water Company (2,000,000 customers) • Proposed 2017 Capital Budget - $80 million (75% for distribution ) State College Borough Water Authority (15,000 customers) • Annual Capital Improvement Fund - $2.5 Million (cast iron pipe repl.) Morgantown (WV) Utility Board (25,000 customers) • Annual Water/Sewer System Replacement Fund - $4-5 Million

Flexible Plan • Responsive to system needs

Major Focus • Service improvements • Customer problems

Major Emphasis • low pressure and capacity • dirty water • inconvenience of system shutdowns • chronic leakage repairs • Eliminate backups; increase sewer capacity

AWA 20-Year Capital Needs Assessment

Water Projects: $88 Million

Wastewater Projects: $89 Million

Total: $177 Million

Projected Long Term Financing: $122 Million

Balance to be Financed: $55 Million ($3 Million/Year)

Source: AWA January 2016 Capital Program