Annual report, 2019

Georgia Environmental Finance Authority
Annual Report
2019

2019 ANNUAL REPORT | 1

2

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.
To date, GEFA has provided more than $4.5 billion in low-interest loans to cities, counties, and infrastructure authorities for more than 1,600 projects that improve water, wastewater, stormwater, and solid waste systems.

TABLE OF CONTENTS
3 Executive Director's Report 4 Accomplishments 6 Energy Resources 8 Land Resources 10 Water Resources 12 Financial Highlights 13 Net Position 14 Statement of Net Position 15 Statement of Activities 16 Revenues 17 Expenses 18 Division Summaries 19 Board of Directors 19 Senior Staff

Executive Director's Report

2019 ANNUAL REPORT | 3

TO THE GOVERNOR, MEMBERS OF THE GENERAL ASSEMBLY, AND GEORGIA CITIZENS:

The Georgia Environmental Finance Authority (GEFA) has a responsibility to help conserve and improve Georgia's natural resources. To date, GEFA has provided more than $4.5 billion in low-interest loans for improvements to the water, wastewater, and solid waste systems of cities, counties, and infrastructure authorities across Georgia.
One of GEFA's main priorities is to help smaller communities in dire need of assistance. For the fiscal year (FY) 2019 solicitation for the Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF), we partnered with the Environmental Finance Center at the University of North Carolina to develop affordability criteria to identify communities with the greatest need for financial assistance. Using data on median household income, unemployment rate, and population trend from the U.S. Census Bureau's American Community Survey, we can now award principal forgiveness to Georgia's most disadvantaged communities.
In FY2019, GEFA assumed responsibility for the WaterFirst Program. This program rewards communities for being committed to excellence in watershed assessment, stormwater master planning, wastewater treatment and management, water supply planning and protection, water conservation, and water reclamation and reuse. We had the opportunity to designate the city of Dallas and Hall County as the newest WaterFirst Communities.

This educational program provides technical college students with the opportunity to enter the workforce specializing in electrical applications for installing, inspecting, and repairing solar panels. Students used this knowledge to install solar projects on campus.
Beyond helping to provide clean drinking water, conserve land to protect a water source, or increase the energy efficiency of a home, GEFA is focused on our role in emergency response and the resilience of our operations. During natural or humanmade disasters, GEFA's Energy Resources Division and the Georgia Emergency Management Agency work closely with energy stakeholders to respond to electrical outages and fuel shortages and to provide situational awareness to local, state, and federal leadership. GEFA's Information Technology Division has taken a proactive approach in educating our staff on the importance of cybersecurity to protect our financial systems and data. The Information Technology Division also initiated on-site and cloud data backups and developed disaster recovery systems.
GEFA's work highlighted in the 2019 Annual Report shows how we strive to meet the ongoing needs of the state and to ensure a prosperous future for all Georgians.
Sincerely,

The Solar for Schools Program awarded a $55,000 matching grant to Ogeechee Technical College.

Kevin Clark, Executive Director

4 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY
Accomplishments
FISCAL YEAR 2019
GEFA increases the capacity and quality of Georgia's water supply, coordinates the protection and preservation of Georgia's land resources, and promotes conservation and advancement of Georgia's energy resources. The agency continues to build on this success through its commitment to protecting Georgia's natural resources and supporting economic development.

IMPROVING GEORGIA'S ENERGY RESOURCES

2019 ANNUAL REPORT | 5

GEFA directed emergency support function #12 (ESF-12) during activities of the State Operations Center for Hurricanes Florence and Michael.
Forty K-12 and higher education building operators received Building Operator Certification training.
Four Georgia Solar contracts totaling $150,000 were executed to install smallscale solar photovoltaic systems and to increase renewable energy education.
One Solar for Schools contract was executed for $55,000 for students to install a 20 kW solar ground mount array and two solar covered tables with electrical connections and to provide student scholarships.
The Weatherization Assistance Program weatherized 641 homes positively impacting 878 Georgians with an estimated energy savings of 19,550 MBtu.

IMPROVING GEORGIA'S LAND RESOURCES
Since 2006, the Georgia Conservation Tax Credit Program facilitated 558 conservation easement donations protecting 246,601 acres of land.
The Fuel Storage Tank Program provided oversight and monitoring services for 639 fuel storage tanks at 23 state agencies and departments.
GEFA helped its agency partners pass 50 fuel storage tank site compliance inspections.
GEFA completed the annual registration for 334 state-owned underground fuel storage tanks.

IMPROVING GEORGIA'S WATER RESOURCES
Projects financed by GEFA provided reliable water, wastewater, and solid waste services to more than 1.8 million Georgians.
The Clean Water State Revolving Fund awarded 29 loans totaling $154.9 million. The Drinking Water State Revolving Fund awarded 21 loans totaling $85.5 million. The Georgia Fund awarded five loans totaling $8.1 million. GEFA provided financing to 48 communities, which saved $46 million in interest
costs over an average 20-year loan. The DWSRF provided $51.2 million to small systems servicing fewer than
10,000 customers. Two communities received WaterFirst designationscity of Dallas and Hall County. Georgia's most disadvantaged communities received $7.9 million in principal
forgiveness.

6 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY

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 conservation measures to incomeeligible households.
The Georgia Energy Challenge helps state agencies reach the program's 15 percent energy conservation goal.
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.

WEATHERIZATION SAVES MONEY AND LIVES
Every night after dinner, Eugene and Betty Jones from Waynesboro, Georgia, would fall asleep watching television without realizing carbon monoxide might be contributing to their drowsiness. Over many years, the couple had grown accustomed to their house being unbearably hot during the summer and very cold during the winter. They would use their oven to try and heat the house because their gas heater was not enough to keep them warm.
The experience of the Jones family is not an uncommon one. According to the U.S. Office of Energy Efficiency and Renewable Energy, the U.S. loses more than $82 billion a year as a result of inefficient and unhealthy housing. Low-income, elderly, and disabled Americans can reduce their energy bills and improve their health by taking advantage of the Weatherization Assistance Program (WAP).
The Central Savannah River Area Economic Opportunity Authority Inc.--the local weatherization agency--inspected the Joneses' home. The energy auditor discovered a significant gas leak and a fire in the attic.

2019 ANNUAL REPORT | 7

After making sure the family was safely out of the home, the energy auditor called the fire department to put out the electrical fire in the attic. The WAP replaced the gas lines to seal up the leak, which made the home safe again. After repairing the leak, the WAP performed other measures on the home. They installed smoke and carbon monoxide alarms throughout the house; insulated the attic and attic hatch; air sealed doors, windows, and plumbing penetrations; and secured and sealed the window air conditioning unit.
The WAP reduces energy costs by increasing energy efficiency while improving health and safety measures. The WAP uses Whole House Weatherization, which treats the house as a single energy-consuming system. It requires advanced diagnostic skills and cost-effective measure selection and installation. It helps provide a safe home environment, increased financial independence, and enhanced quality of life. Weatherization creates an average energy savings of $350 or more per year and reduces a home's annual gas heating consumption by 32 percent. In fiscal year 2019, the Georgia WAP assisted 878 people and weatherized 641 homes with an estimated energy savings of 19,550 MBtu.

Before the weatherization of their home, the Joneses' electric bill was about $240 a month. Their highest bill since weatherization has been $126. Overall, the most important benefit was the health and safety of the Jones family. Eugene had breathing issues they believe were the result of the gas leak. After the repairs were complete, his breathing improved. They are now living in a healthier, safer, and happier home environment while saving money on their utility bills.
For every $1 invested in weatherization, $1.72 is generated in energy benefits and $2.78 in health and safety benefits. However, the real benefit of weatherization cannot be quantified in dollars but in human lives. The Jones family experienced this firsthand.

8 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY

LAND RESOURCES

The Georgia Land Conservation Program (GLCP), which ended at the close of FY2019, offered grants and low-interest loans for fee title or conservation easement purchases from the Georgia Land Conservation Trust Fund and Revolving Loan Fund. It also operated the Georgia Conservation Tax Credit Program.
The GLCP was administered under the guidance of the Land Conservation Council. The GLCP was replaced by the Georgia Outdoor Stewardship Program, which is managed by the Georgia Department of Natural Resources.

The Fuel Storage Tank Program (FSTP) is responsible for upgrading, replacing, or closing state-owned fuel storage tanks. The FSTP serves as the centralized management and monitoring office for fuel storage tanks owned by state agencies and institutions throughout Georgia.
The FSTP also: Conducts environmental cleanup, Facilitates fuel storage tank preventative
maintenance and repair, and Manages annual maintenance inspections
conducted by private contractors.

2019 ANNUAL REPORT | 9
Acres Protected by GLCP In FY2019, the GLCP conserved approximately 4,422 acres of land, bringing the total number of acres conserved to 393,703 since 2005.
400,000 350,000 300,000 250,000 200,000 150,000 100,000
50,000 0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

10 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY

WAT E R 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.

GEFA partners with local governments by providing loans for water, wastewater, stormwater, and solid waste infrastructure. The Water Resources Division also assists local governments with the development of reservoir and water supply projects.

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.

2019 ANNUAL REPORT | 11

LOCAL GOVERNMENTS RECOGNIZED FOR ACHIEVING EXCELLENCE

When you enter many communities across the state there is a road sign greeting you that says "WaterFirst: Caring for our Water Resources." Most people are unaware of what it means.

1, 2018, it was moved to GEFA. Since then, the city of Dallas and Hall County have both received this honor, which brings the total to 33 WaterFirst Communities across the state.

Having a clean, reliable source of water is important for our health and the economy. The WaterFirst Program is a way for communities to be rewarded for their proactive approach to water resources that emphasizes the connection between land use and water quality and quantity.
WaterFirst is a voluntary partnership between local governments, state agencies, and other organizations working together to increase quality of life in communities through wise management and protection of water resources.
Through the WaterFirst application and the WaterFirst class, a team of water professionals audits the local government's programs. The audit documents how well the community is achieving environmental excellence and how it's managing and protecting water resources.
For 15 years, the Georgia Department of Community Affairs (DCA) oversaw the program. However, on July

Becoming a WaterFirst Community demonstrates a local government's commitment to responsible watershed assessment, stormwater master planning, wastewater treatment and management, water supply planning and protection, water conservation, water reclamation and reuse, educational outreach, and regional water planning.
WaterFirst Communities are recognized statewide and are eligible for financial and other benefits from the state. The benefits include a 1 percent interest rate reduction on GEFA loans, eligibility for waterrelated Community Development Block Grants administered by DCA, and priority status for the 319 Grant Program administered by the Georgia Environmental Protection Division.
The WaterFirst sign welcoming you is a reminder of the important steps communities are taking to protect our valuable water resources for both environmental and economic benefits.

12 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY
Financial Highlights
FISCAL YEAR 2019 The narrative overview and analysis of the agency's financial activities for the fiscal year ended June 30, 2019, provides additional detail on GEFA's financial performance. Total assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $2.4 billion (net position). Of this amount, $47.3 million was from governmental activities and $2.4 billion was from business-type activities. Total long-term liabilities experienced a net decrease of $1.7 million during 2019, all within governmental activities. The decrease was mostly attributable to the changes in GEFA's proportionate shares of Net OPEB and Net Pension Liabilities. GEFA's total net position increased by $107.5 million. The net position in governmental activities increased by $5.7 million and the net position of business-type activities increased $101.9 million, resulting in an overall $21.8 million increase over the increase experienced in 2018. Total governmental revenues increased by $3.9 million from 2018. The increased revenue is mostly attributed to an increase in operating grants and contributions because of increased grant funding for program operations. Charges for services within business-type activities continued to experience a decline, albeit not as substantial as previous years declining only by approximately $159,000. The reduction in income loss is due partly to a slight interest rate increase implemented mid-year.

FY2019 NET POSITION

2019 ANNUAL REPORT | 13

PRIMARY GOVERNMENT

GOVERNMENTAL ACTIVITIES

2019

2018

BUSINESS-TYPE ACTIVITIES

2019

2018

TOTAL

2019

2018

INCREASE (DECREASE)
%

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

$ 57,043,023 216,060
57,259,083 1,457,741 7,109,104 2,556,171 9,665,275 1,793,136
216,060 41,709,504 5,332,849 $ 47,258,413

51,790,435 287,852
52,078,287 1,199,341 8,782,591 1,857,141
10,639,732 1,040,092
287,852 37,160,595
4,149,357 41,597,804

2,389,574,849 --
2,389,574,849 -- --
2,496,696 2,496,696
--

2,287,106,493 --
2,287,106,493 -- --
1,915,669 1,915,669
--

2,446,617,872 2,338,896,928

216,060

287,852

2,446,833,932 2,339,184,780

1,457,741

1,199,341

7,109,104

8,782,591

5,052,867

3,772,810

12,161,971 12,555,401

1,793,136

1,040,092

4.6% (24.9%)
4.6% 21.5% (19.1%) 33.9% (3.1%) 72.4%

-- 1,803,070,372
584,007,781 2,387,078,153

-- 1,717,827,489 567,363,335 2285190824

216,060 1,844,779,876 589,340,630 2,434,336,566

287,852 1,754,988,084
571,512,692 2,326,788,628

(24.9%) 5.1% 3.1% 4.6%

Copies of the complete audited financial statements are available at gefa.georgia.gov

14 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY

FY2019 STATEMENT OF NET POSITION

Assets Cash Cash with fiscal agent Investments Investments with fiscal agent Due from other governments Internal balances Accrued interest receivable Loans receivable Other assets Net OPEB asset Capital assets, net of accumulated depreciation
Total assets

GOVERNMENTAL ACTIVITIES
$ 564,612 --
50,301,405 --
4,054,148 1,779,699
-- -- 20 343,139 216,060 57,259,083

Deferred Outflows of Resources Related to other postemployment benefits Related to pensions
Total deferred outflows of resources

486,423 971,318 1,457,741

Liabilities Accounts payable and accrued liabilities Accrued payroll Due to other governments Accrued interest payable Retainage payable Compensated absences, current Securitization bonds payable, current Long-term liabilities:
Compensated absences, net of current portion Net OPEB liability Net pension liability Securitization bonds payable, net of current portion
and unamortized bond discount Total liabilities

2,553,037 904
2,230 -- --
101,288 --
303,863 2,264,366 4,439,587
-- 9,665,275

Deferred Inflows of Resources Related to other postemployment benefits Related to pensions
Total deferred inflows of resources

1,413,877 379,259 1,793,136

Net Position Investment in capital assets Restricted for:
Debt service Grant programs Loan programs Unrestricted
Total net position

216,060
-- 4,727,010 36,982,494 5,332,849 $ 47,258,413

PRIMARY GOVERNMENT
BUSINESS-TYPE ACTIVITIES
3,625,665 --
947,541,783 --
1,981,186 (1,779,699) 3,222,554 1,434,983,360
-- -- -- 2,389,574,849
-- -- --
1,408,158 --
3,075 --
1,085,463 -- --
-- -- --
-- 2,496,696
-- -- --
--
-- -- 1,803,070,372 584,007,781 2,387,078,153

TOTAL
4,190,277 --
997,843,188 --
6,035,334 --
3,222,554 1,434,983,360
20 343,139 216,060 2,446,833,932
486,423 971,318 1,457,741
3,961,195 904
5,305 --
1,085,463 101,288 --
303,863 2,264,366 4,439,587
-- 12,161,971
1,413,877 379,259 1,793,136
216,060
-- 4,727,010 1,840,052,866 589,340,630 2,434,336,566

COMPONENT UNIT
GA. ENVIRON. LOAN ACQ. CORP.
111,544 1,072,342 68,954,712 4,924,589
-- -- 176,636 38,406,022 -- -- -- 113,645,845
-- -- --
10,328 -- --
69,070 -- --
2,025,000
-- -- --
30,215,366 32,319,764
-- -- --
--
81,326,081 -- -- --
81,326,081

2019 ANNUAL REPORT | 15

FY2019 STATEMENT OF ACTIVITIES

PROGRAM REVENUES

NET (EXPENSE) REVENUE AND CHANGES IN NET POSITION

EXPENSES

Functions/Programs

Governmental activities:

General government

$ 5,262,199

Water and wastewater

8,319,314

Land conservation

29,391

Energy and environment

7,585,937

Total governmental activities 21,196,841

Business-type activities:

Water and wastewater

22,094,234

Storage tank maintenance

731,863

General and administrative

91,712

Total business-type activities 22,917,809

Total primary government $ 44,114,650

CHARGES FOR SERVICES
-- 2,537,389
-- -- 2,537,389
-- 1,097,275 29,033,604 30,130,879 32,668,268

OPERATING

CAPITAL

GRANTS AND GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

11,170,444 -- 6,577,943 --
61,248 -- 7,609,679 -- 25,419,314 --

22,094,234 -- 28,708 --
70,190,168 -- 92,313,110 -- 117,732,424 --

GOVERNMENTAL ACTIVITIES
5,908,245 796,018 31,857 23,742
6,759,862
-- -- -- -- 6,759,862

BUSINESS-TYPE ACTIVITIES

TOTAL

COMPONENT UNIT

--

5,908,245

--

796,018

--

31,857

--

23,742

--

6,759,862

-- 394,120 99,132,060 99,526,180 99,526,180

-- 394,120 99,132,060 99,526,180 106,286,042

Component Unit

Georgia Environmental Loan Acquisition

Corporation

$

Total component units

$

1,924,380 1,924,380

1,564,334 1,564,334

1,851,379 -- 1,851,379 --

1,491,333

General Revenues Unrestricted investment earnings Miscellaneous Transfers Total general revenues and transfers
Change in net position Net position July 1 Net position June 30

$ 1,138,063 122,086
(2,359,402) (1,099,253) $ 5,660,609 41,597,804 $ 47,258,413

-- 1,747 2,359,402 2,361,149 101,887,329 2,285,190,824 2,387,078,153

1,138,063 123,833 --
1,261,896 107,547,938 2,326,788,628 2,434,336,566

-- 5,677
-- 1,497,010 1,497,010 79,829,071 81,326,081

16 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY
FISCAL YEAR 2019 REVENUES
78% REVENUES

22% 1%

Charges for services and other revenue* $32,792,101

22%

Investment earnings, unrestricted

$1,138,063

1%

Operating grants and contributions

$117,732,424

78%

Total Revenues

$151,662,588

100%



* Includes restricted investment earnings

FISCAL YEAR 2019 EXPENSES
2% 12%
17%

2019 ANNUAL REPORT | 17

EXPENSES 69%

General government Water and wastewater Land conservation Energy and environment Storage tank maintenance General and administrative
Total Expenses

$5,262,199 $30,413,548
$29,391 $7,585,937
$731,863 $91,712
$44,114,650

12% 69%
0% 17% 2% 0%
100%

18 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY
FISCAL SERVICES The Fiscal Services Division provides accounting, underwriting, and loan servicing for GEFA programs. It ensures compliance with agency, state, and federal fiscal policies and procedures, and it reviews and recommends loan awards for the Water Resources Division. The division performs credit analyses; provides reimbursements for loan project expenses; processes loan payments; calculates loan repayment figures and accrued constructionperiod loan interest; monitors borrowers for debt service coverage; and reviews compliance limits for GEFA customers. Team members provide consultations to communities on underwriting; prepare and submit financial reports to state and federal authorities; process invoices; monitor division accounts; and manage the agency's budget.
HUMAN RESOURCES Human Resources facilitates the general administration of the agency through developing, maintaining, and communicating office policy. Key responsibilities include developing and implementing hiring and recruiting policies, compensation and salary administration, conducting employee relations, developing official documentation on workplace ethics/code of conduct, employee handbooks, employee training programs, and award programs.
PUBLIC AFFAIRS 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.
INFORMATION TECHNOLOGY The Information Technology Division develops GEFA's internal and external technical architecture; facilitates electronic access to agency information and services; and protects information systems and data.

19

BOARD OF DIRECTORS
Commissioner Travis Turner Chairman White County Board of Commissioners
George McIntosh Vice Chairman At-Large Member
Greg Griffin Secretary State Auditor
Mayor Jimmy Andrews City of Sandersville
Mayor Boyd L. Austin City of Dallas
Stephen Gray At-Large Member
Commissioner Christopher Nunn Georgia Department of Community Affairs
Commissioner Grady Thompson Tift County Board of Commissioners
Commissioner Pat Wilson Georgia Department of Economic Development
Commissioner Jason Winters Chattooga County Sole Commissioner
*as of June 2019

SENIOR STAFF
Kevin Clark Executive Director
Martha Douglas Director of Water Resources
David Gipson Director of Energy Resources
Jammie Harden Director of Fiscal Services
Shane Hix Director of Public Affairs and Information Technology
Glendale Jones Director of Human Resources
Susan Lucki Director of Administration

20 | GEORGIA ENVIRONMENTAL FINANCE AUTHORITY
GEORGIA ENVIRONMENTAL FINANCE AUTHORITY gefa.georgia.gov | 404-584 -1000 main | 404-584-1069 fax 233 Peachtree St NE, Ste 900, Atlanta, GA 30303