2023 Annual Report G E O R G I A E N V I R O N M E N T A L F I N A N C E A U T20H19 OANNRUIALTRYEPORT | 1 2 002233 AANNNNU AULA LR ERP EOPR OT R T Our Mission To Conserve and Improve Georgia's Energy, Land, and Water Resources. Founded in 1985, the Georgia Environmental Finance Authority (GEFA) directs programs that improve Georgia's environment, protect natural resources, and promote economic development. GEFA provides loans for water, wastewater, and solid waste infrastructure; manages energy efficiency and renewable energy programs; administers land conservation loans; and monitors state-owned fuel storage tanks. TABLE OF CONTENTS 3 Executive Director's Report 4 Accomplishments 6 Energy Resources 8 Water Resources 10 Financial Highlights 11 Net Position 12 Statement of Net Position 13 Statement and Activities 14 Revenues and Expenses 15 Division Summaries 15 Board of Directors 15 Senior Staff GEORGIA ENVIRONMENTAL FINANCE AUTHORITY 3 Executive Director's Report To the Governor, Members of the General Assembly, and Georgia Citizens: I am pleased to present the fiscal year 2023 (FY2023) annual report. Thanks to our dedicated and hardworking team, GEFA had a productive and busy year. Having received an influx of federal funding, GEFA has put those resources to work for Georgians. Specifically, we have prioritized funding for communities with limited access to financial markets for the purpose of upgrading water and sewer infrastructure. Additionally, we worked closely with the Georgia Environmental Protection Division (EPD) to implement the federal mandate to inventory and replace lead service lines across the state. The state of Georgia is required to submit the initial statewide inventory on October 16, 2024. To date, GEFA has provided almost $6 billion in low-interest loans to cities, counties, and infrastructure authorities, which has supported more than 2,100 water, wastewater, solid waste, and land conservation projects across Georgia. In FY2023, there were 49 new loans with $84.1 million in debt service savings. GEFA understands it can be challenging for some communities to invest in infrastructure. Through an affordability scoring system, we help these communities receive financing by awarding principal forgiveness based on the affordability score. Two examples are the city of Lavonia and the city of Wrightsville. The city of Lavonia was awarded a $2.5 million Drinking Water State Revolving Fund loan to upgrade its water system. An interconnection with the city of Monroe will also serve as an emergency water supply for the city. This project will increase system pressure and improve the efficiency of the water system. The city will receive $900,000 in principal forgiveness for this project based on the affordability score. The city of Wrightsville was awarded a $7.1 million Clean Water State Revolving Fund loan to upgrade its water pollution control plant that had reached the end of its useful life. The city will receive $1.1 million in principal forgiveness for this project based on the affordability score. GEFA also promotes energy efficiency and the use of renewable energy sources through several energy programs. In June 2023, the Energy Resources Division hosted an energy assurance tabletop exercise. The event brought together local, state, national, and industry partners to discuss statewide response and coordination efforts to energy security incidents. The feedback from this exercise was very informative in updating the State Energy Security Plan and to further strengthen public-private partnerships in the state. The Weatherization Assistance Program provides free energy efficiency measures to the homes of low-income households in the state of Georgia. In FY2023, GEFA weatherized 692 homes positively impacting 1,189 Georgians. In the next few years, GEFA will receive even more federal funds for energy and water projects. We are committed to working with federal, state, and local leaders to ensure these funds will be allocated to the communities that want and need them the most. GEFA has made great strides in program growth and development, which will have a long-term, positive impact on the state of Georgia. Our work would not be possible without the support of Governor Kemp, the General Assembly, and many state agencies. We appreciate their support and look forward to continuing our work to protect Georgia's energy, land, and water resources. Sincerely, Hunter Hill, Executive Director 2 002233 AANNNNU AULA LR ERP EOPR OT R T Accomplishments Fiscal Year 2023 GEFA increases the capacity and quality of Georgia's water supply, supports the protection and preservation of Georgia's land resources, and promotes conservation and advancement of Georgia's energy resources. GEFA continues to build on this success through its commitment to protecting Georgia's natural resources and supporting economic development. GEORGIA ENVIRONMENTAL FINANCE AUTHORITY 5 Conserving Georgia's Energy Resources Forty-one K-12 and higher education building operators received Building Operator Certification training. The Weatherization Assistance Program (WAP) weatherized 692 homes positively impacting 1,189 Georgians with an estimated energy savings of 20,276 MBtu The Bipartisan Infrastructure Law provided almost $2 million in WAP funding. The Fuel Storage Tank Program provided maintenance and compliance assistance to 638 fuel storage tanks for 24 state agencies and departments. GEFA helped its agency partners pass 64 fuel storage tank site compliance inspections. GEFA completed the annual registration for 322 state-owned underground fuel storage tanks. Improving Georgia's Water Resources Projects financed by GEFA provided reliable water, wastewater, and solid waste service to more than 900,000 Georgians. The Clean Water State Revolving Fund awarded 23 loans totaling $309.4 million. The Drinking Water State Revolving Fund awarded 18 loans totaling $91.1 million. The Bipartisan Infrastructure Law provided $42.5 million in supplemental and base annual funding. The Georgia Fund awarded seven loans totaling $70.2 million. The Georgia Reservoir Fund awarded one loan totaling $328,000. GEFA provided financing to 49 communities with $84.1 million in debt service savings. 2 002233 AANNNNU AULA LR ERP EOPR OT R T Energy Resources The Energy Resources Division promotes energy efficiency, renewable energy, and energy assurance programs to improve environmental quality and stimulate sustainable economic development. The State Energy Program provides financial assistance and technical support for energy efficiency and renewable energy programs. The Weatherization Assistance Program provides energy efficiency measures to low-income households. Energy Performance Contracting allows the state to finance building improvements guaranteed to lower energy and water consumption. The Energy Assurance Program works closely with the Georgia Emergency Management Agency, other state agencies, and private sector stakeholders to develop energy emergency planning resources and to lead exercises designed to ensure better emergency coordination. The Fuel Storage Tank Program serves as the central management office for state agencies and institutions with fuel storage tanks. GEORGIA ENVIRONMENTAL FINANCE AUTHORITY 7 GEFA's Energy Assurance Tabletop Exercise In recent years, emergencies and other threats impacting energy supply have become more frequent and costly. The Georgia Environmental Finance Authority (GEFA) recognizes these changes, and as part of its resiliency efforts, GEFA hosted a one-and-a-half-day energy emergency tabletop exercise. During this event, there were discussion panels, a working lunch, and a tabletop exercise based on fictitious emergency events. Discussion panelists presented relevant topics concerning the national and state-level energy sector and included topics on Georgia's current energy preparedness initiatives, energy security at the regional and national level, energy interdependencies, and local impacts from extended outages. The working lunch focused on impacts to critical infrastructure and energy restoration efforts that have been problematic across the country. The tabletop exercise scenario consisted of three modules based on events following a natural hazard event. The modules included physical attacks on substations, cybersecurity attacks on natural gas utilities, and restoration and recovery implications. During the tabletop exercise, participating partners and government agencies demonstrated a strong understanding of energy and cybersecurity emergency preparedness by referencing their actions and plans when responding to the fictitious scenario. These agencies highlighted the importance of educational training to stay ahead of future incidents and demonstrated the importance of response expectations, communication, and coordination between government agencies and the energy sector partners. Recovery and restoration efforts were demonstrated during the event by identifying the appropriate mutual assistance and aid agreements between impacted and unimpacted energy and regional partners. Energy Partners American Petroleum Institute Colonial Pipeline Georgia Power Georgia Systems Operations Georgia Transmission Corporation Oglethorpe Power Southern Company Gas Regional and Federal Partners Tennessee Department of Environment and Conservation Florida Department of Agriculture and Customer Services Office of Energy National Association of State Energy Officials U.S. Department of Energy Office of Cybersecurity, Energy Security, and Emergency Response U.S. Department of Transportation State and Local Partners Fulton County Emergency Management Agency Georgia Department of Agriculture Georgia Department of Human Services Georgia Department of Natural Resources Georgia Department of Transportation Georgia Emergency Management Agency Georgia Environmental Finance Authority Georgia Rural Water Association Georgia Technology Authority 2 002233 AANNNNU AULA LR ERP EOPR OT R T Water Resources The Water Resources Division supports the development of water, wastewater, and solid waste infrastructure projects, which help protect the environment, facilitate economic development, accommodate population growth, and safeguard public health. The Georgia Fund is a state loan program for water, wastewater, and solid waste infrastructure. The Georgia Reservoir Fund is a state loan program for reservoir and water supply infrastructure. The Clean Water State Revolving Fund is a federal loan program for water quality and wastewater treatment infrastructure. The Drinking Water State Revolving Fund is a federal loan program for drinking water infrastructure. The WaterFirst Program recognizes a local government's commitment to responsible water stewardship for environmental and economic benefits. GEORGIA ENVIRONMENTAL FINANCE AUTHORITY 9 GEFA and Bryan County A Historic Partnership In May 2022, Governor Kemp and Hyundai Motor Group announced an investment of $5.4 billion to build Hyundai's first fully dedicated electric vehicle (EV) and battery manufacturing facility at the Bryan County megasite. Construction on this 2,923-acre site is in full swing. When complete by late 2025, the site will have 11 buildings totaling more than 16 million square feet. Creating jobs is one of the state's top priorities Economic development affords Georgia citizens the opportunity to provide for themselves, their families, and to improve their quality of life. An integral part of keeping Georgia the No. 1 state for business is investing in critical infrastructure. new water and sewer infrastructure to serve anticipated industrial, commercial, and residential developments related to this facility. Bryan County also received $135 million in American Rescue Plan funds through the state and a $15 million match from local governments in the region and the Savannah Harbor-Interstate 16 Corridor Joint Development Authority. Batteries for the Hyundai EVs will be manufactured at the site through a partnership with LG Energy Solution. Together, the two companies plan to invest a total of $7.59 billion. The facility will create 8,500 new jobs and manufacture 300,000 vehicles a year. The Georgia Environmental Finance Authority provided a $37.1 million Georgia Fund loan to Bryan County to install To date, this is the largest economic development project in Georgia history. 2 002233 AANNNNU AULA LR ERP EOPR OT R T FISCAL YEAR 2023 Financial Highlights The narrative overview and analysis of the financial activities for the fiscal year ended June 30, 2023, provides additional detail on GEFA's financial performance. Total assets and deferred outflows of resources Total governmental revenues decreased by $4.4 exceeded its liabilities and deferred inflows of million from 2022. The decrease in revenue is mostly resources at the close of the fiscal year by more attributable to a decrease in operating grants and than $2.8 billion (net position). Of this amount, contributions due to a reporting entity change moving $57.5 million was from governmental activities and certain financial activities into proprietary fund types. $2.8 billion was from business-type activities. Operating grants and contributions within business- GEFA's total net position increased by $157.6 million. type activities increased by $81.1 million. This increase The net position in governmental activities increased is mostly due to additional revenue from funding by $1.3 million while the net position of business-type provided under the Bipartisan Infrastructure Law. activities increased by $156.3 million. GEORGIA ENVIRONMENTAL FINANCE AUTHORITY 11 FINANCIAL HIGHLIGHTS FY2023 Net Position PRIMARY GOVERNMENT Current and other assets Capital assets Total assets Deferred outflows of resources Long-term liabilities outstanding Other liabilities Total liabilities Deferred inflows of resources Net position: Investment in capital assets Restricted Unrestricted Total net position GOVERNMENTAL ACTIVITIES 2023 2022 $ 65,116,798 1,416,292 66,533,090 63,437,103 1,617,478 65,054,581 3,266,535 1,675,859 7,356,396 3,217,685 4,288,255 3,780,580 11,644,651 6,998,265 630,036 3,548,984 BUSINESS-TYPE ACTIVITIES 2023 2022 2,790,548,092 -- 2,790,548,092 2,631,421,392 -- 2,631,421,392 -- -- -- -- 5,121,834 2,285,295 5,121,834 2,285,295 -- -- 1,416,292 47,919,147 8,189,499 $ 57,524,938 1,617,478 46,476,561 8,089,152 56,183,191 -- 2,176,359,032 609,067,196 2,785,426,228 -- 2,033,027,210 596,108,887 2,629,136,097 The complete audited information is available at gefa.georgia.gov. TOTAL 2023 2022 2,845,664,890 1,416,292 2,847,081,182 2,694,858,495 1,617,478 2,696,475,973 3,266,535 1,675,859 7,356,396 3,217,685 7,356,396 3,217,685 16,766,485 9,283,560 630,036 3,548,984 1,416,292 2,224,278,179 617,256,695 2,842,951,166 1,617,478 2,079,503,771 604,198,039 2,685,319,288 INCREASE (DECREASE) % 5.6% (12.4%) 5.6% 94.9% 128.6% 128.6% 80.6% (82.2%) (12.4%) 7.0% 2.2% 5.9% 2 002233 AANNNNU AULA LR ERP EOPR OT R T FINANCIAL HIGHLIGHTS FY2023 Statement of Net Position ASSETS Cash Investments Due from other governments Internal balances Accrued interest receivable Loans receivable Other assets Net OPEB asset Capital assets, net of accumulated depreciation Total assets PRIMARY GOVERNMENT GOVERNMENTAL ACTIVITIES $ 805,174 55,004,998 8,439,576 384,613 -- -- 7,250 475,187 1,416,292 66,533,090 BUSINESS-TYPE ACTIVITIES 8,776,924 1,061,360,274 6,030,850 (384,613) 5,398,924 1,709,365,703 -- -- -- 2,790,548,062 DEFERRED OUTFLOWS OF RESOURCES Related to other postemployment benefits Related to pensions Total deferred outflows of resources 445,369 -- 2,821,166 -- 3,266,535 -- LIABILITIES Accounts payable and accrued liabilities Accrued payroll Due to other governments Unearned revenue Long-term liabilities: Compensated absences, current Compensated absences, noncurrent Net OPEB liability Net pension liability Total liabilities 2,946,467 1,687 -- 1,340,101 115,399 346,198 347,165 6,547,634 11,644,651 5,120,234 -- 1,600 -- -- -- -- -- 5,121,834 DEFERRED INFLOWS OF RESOURCES Related to other postemployment benefits Related to pensions Total deferred inflows of resources 468,044 -- 161,992 -- 630,036 -- NET POSITION Investment in capital assets Restricted for: Grant programs Loan programs Unrestricted Total net position 1,416,292 2,746,164 45,172,983 8,189,499 $ 57,524,938 The complete audited information is available at gefa.georgia.gov. -- -- 2,176,359,032 609,067,196 2,785,426,228 TOTAL 9,582,098 1,116,365,272 14,470,426 -- 5,398,924 1,709,365,703 7,250 475,187 1,416,292 2,857,081,152 COMPONENT UNIT GA. ENVIRON. LOAN ACQ. CORP 3,831 73,041,366 -- -- 46,546 12,963,793 -- -- -- 86,055,536 445,369 -- 2,821,166 -- 3,266,535 -- 8,066,701 1,687 1,600 1,340,101 115,399 346,198 347,165 6,547,634 16,766,485 9,500 -- 11,674 -- -- -- -- -- 21,174 468,044 -- 161,992 -- 630,036 -- 1,416,292 2,746,164 2,221,532,015 617,256,695 2,842,951,166 -- -- -- 86,034,362 86,034,362 GEORGIA ENVIRONMENTAL FINANCE AUTHORITY 13 FINANCIAL HIGHLIGHTS FY2023 Statement of Activities FUNCTIONS/PROGRAMS: GOVERNMENTAL ACTIVITIES: General government Water and wastewater Energy and environment Total governmental activities EXPENSES PROGRAM REVENUES NET (EXPENSE) REVENUE AND CHANGES IN NET POSITION CHARGES FOR SERVICE OPERATING CAPITAL GRANTS AND GRANTS AND CONTRIBUTIONS CONTRIBUTIONS GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES TOTAL COMPONENT UNIT $ 7,104,565 5,854,717 11,222,986 24,182,268 -- 4,307,299 -- 4,307,299 13,738,914 1,774,572 11,317,430 26,830,916 -- 6,634,349 -- 227,154 -- 94,444 -- 6,955,947 -- 6,634,349 -- 227,154 -- 94,444 -- 6,955,947 BUSINESS-TYPE ACTIVITIES: Water and wastewater 17,430,275 -- 17,430,275 -- -- -- -- Storage tank maintenance 862,673 1,036,800 16,357 -- -- 190,484 190,484 Outdoor stewardship and land conservation 18,796,868 -- 29,106,365 -- -- 10,309,497 10,309,497 General and administrative 400,682 30,254,078 107,744,888 -- -- 137,598,284 137,598,284 Total business-type activities $ 37,490,498 31,290,878 154,297,885 -- -- 148,098,265 148,098,265 Total primary government COMPONENT UNIT: Georgia Environmental Loan Acquisition Corporation Total component units $ 61,672,766 61,672,766 181,128,801 $ 36,567 $ 36,567 551,389 551,389 2,524,397 2,524,397 -- 6,955,947 148,098,265 155,054,212 -- -- 3,039,219 -- -- GENERAL REVENUES: Unrestricted investment earnings Miscellaneous Transfers Total general revenues and transfers Changes in net position Net position July 1 Net position June 30 The complete audited information is available at gefa.georgia.gov. $ 2,121,560 452,966 (8,188,726) -- 3,140 8,188,726 2,121,560 456,106 -- (5,614,200) 8,191,866 2,577,666 $ 1,341,747 56,183,191 $57,524,938 156,290,131 2,629,136,097 2,785,426,228 157,631,878 2,685,319,288 2,842,951,166 -- 13,969 -- 3,053,188 3,053,188 82,981,174 86,034,362 2 002233 AANNNNU AULA LR ERP EOPR OT R T FINANCIAL HIGHLIGHTS 2023 Revenues and Expenses 83% 16% 1% Fiscal Year 2023 Revenues Operating Grants and Contributions $181,128,801 83% Charges for Services and Other Revenue* $36,054,283 16% Investment earnings, unrestricted $2,121,560 1% Total Revenues $219,304,644 100% * Includes restricted investment earnings 2% 0% 12% 18% 38% 30% Fiscal Year 2023 Expenses Water and Wastewater Outdoor stewardship and land conservation Energy and Environment General Government Storage Tank Maintenance General and administrative Total Expenses $23,284,992 38% $18,796,868 30% $11,222,986 18% $7,104,565 12% $862,673 2% $400,682 0% $61,672,766 100% GEORGIA ENVIRONMENTAL FINANCE AUTHORITY 15 ADMINISTRATION The Administration Division provides administrative support to staff, customers, and the board of directors; oversees office operations; and maintains the file management system for GEFA. HUMAN RESOURCES The Human Resources Division supports GEFA's workforce development by developing, maintaining, and communicating office policies, employee benefits and compensation, and training and awards programs. LEGAL SERVICES The Legal Services Division functions as legal advisor to GEFA's business and personnel matters, including contracts, agreements, environmental and job safety standards, litigation, open records requests, and tax code requirements. FINANCIAL SERVICES INFORMATION TECHNOLOGY PUBLIC AFFAIRS The Financial Services Division provides financial underwriting and loan servicing for Georgia communities. The division also ensures compliance with state and federal accounting policies by preparing and submitting financial reports, monitoring division accounts, and managing GEFA's budget. The Information Technology Division develops GEFA's internal and external technical architecture, facilitates secure electronic access to information and services, and protects information systems and data. The Public Affairs Division educates internal and external stakeholders about GEFA's infrastructure and financing programs, and state energy, land, and water conservation initiatives and policies. BOARD OF DIRECTORS Commissioner Scott Orenstein Chairman Lowndes County Mayor Mike Young Vice Chairman City of McRae-Helena Greg Griffin Secretary State Auditor Mayor Jimmy Andrews City of Sandersville Commissioner Eugene Cason Dooly County Councilmember Christopher Hightower City of Barnesville Commissioner Christopher Nunn Georgia Department of Community Affairs Chairman Ted Rumley Dade County Board of Commissioners Rick Story At-Large Member Travis Turner At-Large Member Commissioner Pat Wilson Georgia Department of Economic Development *As of June 2023 SENIOR STAFF Hunter Hill Executive Director Kristofor Anderson Director of Energy Resources Tammi Fuller Director of Legal Services David Gipson Director of Water Resources Jammie Harden Director of Financial Services Shane Hix Director of Public Affairs and Information Technology Glendale Jones Director of Human Resources Susan Lucki Director of Administration GEORGIA ENVIRONMENTAL FINANCE AUTHORITY Annual Report 2023 GEFA.GEORGIA.GOV O: 404-584-1000 | F: 404-584-1069 47 Trinity Ave SW, 2F0if1t9hAFNloNoUrA, AL tRlaEPnOtaR,TGA|3013634