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HomeMy Public PortalAboutFY20 Budget - Finance Committee Presentation11Finance Committee MeetingFY20 Strategic Business and Operating Planand Preliminary Budget ReviewApril 9, 2019 22Finance Committee MeetingFY20 Strategic Business Operating Plan and Preliminary Budget ReviewI. Strategic Business and Operating Plan (SBOP)II. FY20 Preliminary BudgetIII. Preliminary Budget Compared to Rate ModelIV. Next Steps and Questions 33Strategic Business and Operating PlanPrepared in accordance with Section 5.110 of the Charter of the Metropolitan St. Louis Sewer DistrictFY20 – FY24 44VISION STATEMENTQuality Service Always Strategic Business and Operating PlanMISSION STATEMENTTo protect the public’s health, safety, and water environment by responsibly providing wastewater and stormwater management. 55Integrity– Acting ethically at all times, treating everyone with honesty, fairness and respect. Teamwork– Working together to accomplish our mission with open communication, trust respect and diversity.Innovation– Embracing continuous improvement and new solutions to achieve excellence. Employees– Developing successful, responsible and safety conscious employees and acknowledging their contributions.Customers– Building strong relationships by keeping our commitments, providing excellent service and being transparent in everything we do. Strategic Business and Operating PlanVALUES 6A. Deliver consistent, high quality customer service;B. Comply with all legal and regulatory requirements and schedules;C. Minimize customer rate increases; andD. Be accountable to the St. Louis community. GOALSStrategic Business and Operating Plan 7STRATEGIES1. Educate and partner with stakeholders to build support; 2. Manage the District’s costs and revenues to optimize financial impacts;3. Integrate and improve the District’s business processes;4. Promote appropriate standards through proactive regulatory and legislative involvement;5. Address customer and regulatory needs through a comprehensive infrastructure management program;6. Create a learning and business oriented culture based on competency and accountability.Strategic Business and Operating Plan 88FY20Preliminary Budget 99FY20 Preliminary Balanced Budget FY20 Total Revenue($$s in millions)Wastewater User Charges $437.1Stormwater User Charges 0.0Revenue Bonds 139.4Stormwater Taxes 33.8Investment and Other Income 10.4Use of Fund Balances 104.0Total District Revenue $724.7FY20 Total Expense($$s in millions)Operating Budget $215.8CIRP 390.2Debt Service 118.7Total District Expenses $724.7 1010FY20 Preliminary BudgetI. The General Fund budget includes:A. $1.6 million increase for Salaries & FICA –excluding incremental budgets (includes 3.07% avg. wage increase.) B. $1.4 million in incremental budgets tied to the SBOP, including 6 additional positions five of which are projected to save The District money by reducing Temporary Help costs.C. 2.6% or $5.4 million overall increase (including incremental budgets) from FY19II. Includes a Total CIRP budget of $390.2 million. III. Assumes the issuance of $139.4 million of additional bonds.IV. The budget was developed to align with the July 2015 Rate Commission Report.Key Points 1111FY20 Preliminary Budget - Revenue($$s in millions) 1212FY20 Budgeted Revenue by Major Category ($$s in millions)FY19 - $714.1FY20 - $724.7$10.6 M or 1.5% Increase$10.6 M or 1.5% Increase 1313Schedule ofResidential User RatesWastewaterFY19 FY20$ Change% ChangeEffective Date 7/1/18 7/1/1950.23$ 55.57$ 5.34$ 11%Typical Monthly Residential Bill (6 Ccf) 1414FY20 Preliminary Total Budget Expenses($$s in millions)Total = $724.7Total Operating Budget is $215.8, 30% of totalTotal CIRP Budget is $390.2, 54% of total 1515FY20 Budget – Operating Expense ComponentsWastewaterGeneral Fund 182,772,766                 Improvement Fund ‐                                   Wastewater Emergency Fund ‐                                   Water Backup Fund 4,419,700                      General Insurance Fund 6,495,900                      Construction Funds ‐                                   Total Wastewater 193,688,366                 StormwaterVarious SW Funds 22,120,749                   Total Operating Expenses 215,809,115                  1616($$s in millions)FY20 Budgeted Operating Expense by Major Category FY19 - $210.4FY20 - $215.8$5.4 M or 2.6% Increase 1717CHANGEFY20 FY19 $ % Civil Service Commission 10,000$ 10,000$ -$ 0.0%Rate Commission 110,850 595,508 (484,658) -81.4%Secretary-Treasurer (includes Board of Trustees)2,264,610 3,318,517 (1,053,907) -31.8%Executive Director 3,916,401 3,918,653 (2,252) -0.1%General Counsel 3,377,530 3,153,946 223,584 7.1%Human Resources 8,658,542 8,386,447 272,095 3.2%Finance 21,250,139 21,376,078 (125,939) -0.6%Information Systems 16,995,349 15,735,089 1,260,260 8.0%Engineering 27,596,009 27,350,871 245,138 0.9%Operations 118,765,379 115,552,604 3,212,775 2.8%Total Departments 202,944,809$ 199,397,713$ 3,547,098$ 1.8%Incrementals 1,441,081 0 1,441,081Total General Fund Operating Budget 204,385,890$ 199,397,713$ 4,988,179$ 2.5%Energy Loan Debt Service 16,400 36,000 (19,600)Total General 204,402,290$ 199,433,713$ 4,968,579$ 2.5%FY20 General Fund BudgetBy Department 1818FY20 Incremental Budget SummaryDepartment PurposeFTE ChangeBudgetInformation Systems1. Add Administrative Support Manager position (+$97,437) (+1 FTE);2. Hire long-term IT contract employees (-$129,960) (+5 FTE’s);3. Technology Hardware and Software Infrastructure Upgrades (+$643,021);4. Upgrade Hyperion and migrate to Cloud Service implementation (+$180,146)6 $790,643Engineering 1. Implement updated Laboratory Information Management System (+$400,000) 0 $400,000Finance 1. Upgrade Hyperion and migrate to Cloud Service implementation (+$250,438) 0 $250,438Total General Fund Incremental6 $1,441,081 1919FY20 District Funded Positions9698789819819369569639761,027 TotalFTE Change Position Title+1 Administrative Support Manager+2 Enterprise Application Lead+2 Desktop Support Analyst+1 I.T. Specialist I+6 Total Change 20 2121 2222Type of Project Number BudgetWastewater Construction 52 276,299,000Wastewater Engineering 73 61,076,000Stormwater Construction 22 11,571,000Stormwater Engineering 3 700,000New Project Appropriations Subtotal: 150 349,646,000Continued Wastewater 9 36,125,000Continued Stormwater 9 4,424,000Continued Project Appropriations Subtotal: 18 40,549,000PROJECT APPROPRIATION TOTALS: 168 390,195,000FY 2020 CIRP Program Summary 2323FY 2020 CIRP New Wastewater & Stormwater ProjectsTotal Budget $349.6 MTotal Number of New Projects 150Wastewater$337.4 M125 ProjectsStormwater $12.2 M25 Projects3%97% 2424FY 2020 CIRP New Wastewater Project FundingTotal Number of ProjectAppropriations 125Total Budget $337.3 M (90% is consent decree related)15% City/County31 Projects$50.4 M67% County73 Projects$225.2 M7% Treatment Plants8 Projects$24.8 M11% City13 Projects$36.9 M 2525FY 2020 CIRPFunding SourcesTotal Number of ProjectAppropriations 150Total Budget $349.6 MSanitary Replacement Fund:108 Projects$317.0 M90%General Fund:17 Projects$20.4 M6%4%Stormwater Funds:25 Projects$12.2 M 2626FY 2020 CIRP Engineering & Construction - NewTotal Number of ProjectAppropriations 150Total Budget $349.6 MConstruction74 Projects$287.9 M82%Engineering76 Projects$61.7 M18% 2727WastewaterCoordination with Others / Construction Phasing 6Easement Acquisition / Condemnation 0Projects in Design / Major Scope Changes 3StormwaterCoordination with Others 8Easement Acquisition / Condemnation 1Projects in Design / Major Scope Changes 0Total: 18FY 2020 CIRP Continued Projects 2828Type of ProjectNumberBudgetWastewater 14 54,782,000Stormwater 8 3,511,000Phased Funding 8 100,165,000Project Totals: 30 158,458,000FY 2020 CIRP Contingency Projects 2929Type of ProjectAsset Management RenewalCityshedCSOSSOTreatment PlantDistrictwideStormwaterFY 2020 CIRP New Project Types 3030FY 2020 CIRP Program HighlightsAsset Management Renewal – Renewal of existing District infrastructure (assets) such as sewer lines, manholes, and pump stations. Renewal is required because of deterioration due to aging infrastructure, and can take the form of partial repairs, rehabilitation, or full replacement depending on the condition of the asset.• CIPP (cured in place pipe) lining of 60,000 – 70,000 feet of sewer• 16 Projects - $44,953,000 3131FY 2020 CIRP Program HighlightsCityshed – Projects designed and constructed to mitigate the effects of wet weather surcharging and overland flooding of the combined sewer system. Primarily in the City of St. Louis. Types of projects include property buyouts, basin and relief sewer construction.• Begin construction of Baden Cityshed Mitigation Basins (Calvary, Frederik, Partridge, and Tillie)• 3 Projects - $10,700,000 3232FY 2020 CIRP Program HighlightsCSO – Projects in the combined sewer area that are intended to reduce or control Combined Sewer Overflow (CSO), a discharge from the combined sewer system at a point prior to the headworks of a wastewater treatment facility. The majority of MSD’s CSOs are along the River Des Peres and the Mississippi River.• Continue construction of the Maline Creek CSO Storage Facility project.• 13 Projects - $42,575,000 3333FY 2020 CIRP Program HighlightsSSO – Projects to reduce and eliminate Sanitary Sewer Overflow (SSO) in the separate sanitary sewer system. An SSO is any release of wastewater from the separate sewer collection system prior to a treatment facility. • Construct 64,000 feet of sanitary sewer, and 3,000 feet of storm sewer to facilitate the removal of private I/I.• Work will result in the removal of up to 10 constructed SSOs.• 62 Projects - $202,707,000 3434FY 2020 CIRP Program HighlightsTreatment Plant – Projects planned at one of the 7 existing wastewater treatment facilities within the District. Projects are required to renew aging infrastructure, improve safety or efficiency, or to improve treatment processes due to changing regulations or permit requirements.• Construction of a flood protection system at the Grand Glaize Wastewater Treatment Plant.• 8 Projects - $24,820,000 3535FY 2020 CIRP Program HighlightsDistrictwide – Projects are general projects that are required to deliver support activities for the CIRP and meet Consent Decree requirements. These projects are not site specific, and typically occur throughout the District.• CCTV inspection and physical inspection of 800,000 feet of sewers.• 23 Projects - $11,620,000 3636FY 2020 CIRP Program HighlightsStormwater – Projects that address localized structure and yard flooding and erosion issues driven by storm events throughout the District. Projects also provide for repairs and rehabilitation of the existing stormwater infrastructure within the District. Stormwater projects are a separate business line.• Construct improvements to reduce flooding at 16 structures, 2 streets, and 65 yard locations, and address erosion at 28 locations.• 25 Projects - $12,271,000 3737Type of Project Number Budget % of BudgetAsset Management Renewal 16 44,953,000 13Cityshed 3 10,700,000 3CSO 13 42,575,000 12SSO 62 202,707,000 58Treatment Plant 8 24,820,000 7Districtwide 23 11,620,000 3Stormwater 25 12,271,000 4TOTALS: 150 349,646,000 100FY 2020 CIRP New Project Allocations 3838FY20 SBOP and Preliminary Budget ReviewQ & A 3939FY20Next Steps 4040FY20 SBOP and Preliminary Budget Finance Committee MeetingReview (including CIRP) April 9, 2019; 9:00 a.m.• Publication of Public Hearing Notice April 18, 2019(The notice will be published in the St. Louis Post-Dispatch, St. Louis American, St. Louis Business Journal, and on the MSD Internet Site)•FY20 Budget Follow-up Discussion Finance Committee Meeting April 30, 2019; Time: TBD• Budget Introduction Board of Trustee Meeting May 9, 2019; 5:00 p.m.• Public Hearing After Board of Trustee Meeting(Finding of Fact Committee)May 9, 2019; 6:00 p.m.• Budget Adoption Board of Trustee MeetingJune 13, 2019; 5:00 p.m.* All meetings held at 2350 Market Street, Room 109FY20 Budget Meeting Schedule *