HomeMy Public PortalAbout724671 March 13, 2014 Board of Trustees Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, MO 63103 Dear Trustees: The mission of the Metropolitan St. Louis Sewer District (MSD) is to protect the public’s health and safety, and the region’s water environment, by responsibly providing wastewater and stormwater management. In fulfilling our mission, we focus on delivering sound fiscal management and fostering a business-focused culture throughout the organization. As we build upon our progress over the past several years and move into fiscal year (FY) 2015, MSD will focus on several key areas of its overall operations: STRATEGIC BUSINESS AND OPERATING PLAN – MSD’s management is committed to running this utility like a business. A key aspect of this effort is MSD’s Strategic Business and Operating Plan (SBOP). The FY 2015 SBOP is a business-focused blueprint for serving our customers now and into the future. It is a plan that puts the customers and the St. Louis community first. The SBOP goals are clear: Deliver consistent, high quality customer service; Comply with all legal and regulatory requirements and schedules; Be accountable to the St. Louis community The SBOP is tied to the budgeting process to ensure that initiatives are properly funded. Each department prepares a base budget that covers funding for its day-to-day operations, and an incremental budget for strategic activities that are to be implemented throughout the budget year. A detailed budget review process ensures an in-depth review of all budgetary requests. If fiscal constraints require reduced funding, the costs of strategic objectives are identified so that proper decisions can be made. WASTEWATER PROJECTS – Perhaps the most important part of MSD’s mission today is the execution of the Capital Improvement and Replacement Program (CIRP). The long-term goals of the CIRP are to protect the health and safety of our St. Louis community through the renewal and improvement of MSD’s existing wastewater collection and treatment capabilities. As we continue our progress on this important program, more and more work will be done on the collection system itself. In FY 2015, MSD plans 74 new or continuing wastewater projects, located throughout MSD’s service area, totaling $213.0 million. These projects are funded primarily from the Sanitary Replacement Fund, and represent $31.4 million in continued projects and $181.6 million in new projects. STORMWATER – The Missouri Department of Natural Resources has issued a Phase II Stormwater permit to MSD, St. Louis County, and 58 county municipalities. Under the provisions of this permit, MSD is the St. Louis Coordinating Authority for our separate municipal stormwater sewer system. St. Louis County and the municipalities are co-permittees. 1
Per the Phase II Storm Water Management Plan, MSD has again committed significant resources to this important effort. Not only does this work help us meet MSD’s legal obligations as a stormwater permit holder and as the St. Louis Coordinating Authority, but it significantly reduces the overall compliance burden incurred by our co-permittees. Such an approach allows for a comprehensive and meaningful direction to our community’s Phase II Stormwater efforts. In FY 2015, MSD tentatively plans 25 stormwater projects, including continuing projects from FY 2014, totaling $6.4 million. In 2008, MSD implemented an impervious stormwater fee to provide more robust and equitable stormwater services for all MSD customers. However, MSD was sued over the validity of this fee and reverted back to the previous tax-based funding method in 2010. In November 2013, the Missouri Supreme Court ruled that this fee was, in fact, a tax and not permissible. As the funding and resulting service challenges remain, an extensive outreach effort is planned to engage the public and our various stakeholders to guide our efforts going forward on this important matter. PROJECT CLEAR – In 2007, the State of Missouri and the United States Environmental Protection Agency filed a lawsuit against MSD regarding overflows. The Missouri Coalition for the Environment later joined the lawsuit as an intervener. Throughout MSD’s service area, there are hundreds of points where a combination of rainwater and wastewater discharges into local waterways from the sewer system during moderate to heavy rainstorms. These sewer overflow points act as relief valves when too much rainwater enters the sewer system, and without them, communities could experience thousands of basement backups and/or extensive street flooding. In April 2012, the United States Federal Court approved an agreement known as a Consent Decree bringing the lawsuit to a close. The agreement calls for $4.7 billion in improvements the wastewater system over 23 years. The FY 2015 budget continues MSD’s ongoing execution of the Consent Decree. Knowing that robust and simplified communications would be critical to the success of the Consent Decree, MSD launched Project Clear. Project Clear is the name MSD has given to all Consent Decree activities and resulting communications with stakeholders. Therefore, Project Clear is MSD’s $4.7 billion, 23-year initiative to plan, design, and build system-wide improvements to address water quality and alleviate many wastewater concerns in the St. Louis region. Project Clear will focus on system-wide improvements across the St. Louis area to get the rain out, repair and maintain, and build system improvements. Projects range in scale from massive underground tunnels to carry the volume of stormwater needed in a growing region with more paved surfaces, to the disconnection of residential downspouts from the sanitary sewer line, and rainscaping improvements to manage stormwater as close as possible to where it falls. RAINSCAPING/ GREEN INFRASTRUCTURE – As part of Project Clear, $100.0 million will be allocated to implement a rainscaping (green infrastructure) program that includes a five-year pilot program meant to help understand the regulatory, logistical, financial, and educational challenges that will need to be managed as green infrastructure is utilized to address sewer overflows. The program includes an agreement between MSD and the City of St. Louis’ Land Reutilization Authority (LRA) for a $3.0 million pilot program in the combined sewer portion of MSD’s service area. Additional efforts include an early-action program for large-scale site developers and, planned for FY 2015, smaller projects with homeowners and neighborhood organizations. 2
DIVERSITY – MSD has had a well-recognized diversity program in place for several years, marked by its success in helping build minority and women owned businesses in our St. Louis community. Minority/Women Business Enterprise (MWBE) firms have had extensive participation in MSD's Capital Improvement and Replacement Program (CIRP). In FY 2013, MWBE participation in construction projects was 18.82%, MWBE participation in professional services projects was 30.33%, and MWBE participation in other capital vendor services was 18.80%. As evidenced by these numbers, MWBE participation in the CIRP has been an important part of our diversity efforts. In addition, MWBE participation in general purchasing transactions was 19.27%. These expenditures resulted in a cumulative MWBE utilization percentage of 22.04%. As MSD continues the important work we are doing to protect our environment, we will continue our efforts to ensure MSD staff and our service providers are reflective of the diverse community we serve. One example of that commitment is the signed Community Benefits Agreement (CBA), a formal agreement between MSD and community organizations that establishes a framework for addressing issues in workforce training, business development, and other areas that often act as obstacles in developing a diverse labor pool and contracting community. BUDGET SUMMARY – As the Executive Director of MSD, I affirm that rates and charges as currently implemented will generate sufficient revenues to meet all expenditures as proposed in the FY 2015 budget and will provide adequate operating liquidity as directed in MSD's Debt Management Policy. Furthermore, current rates and charges are adequate to ensure MSD’s compliance with all obligations as provided in the Master Bond Ordinance, adopted by the Trustees on April 22, 2004. The proposed FY 2015 operating budget includes $182.8 million for day-to-day operations, reflecting a $16.0 million or 10% increase over the FY 2014 budget. The total District budget for FY 2015 is $565.6 million. Proposed expenditures for the FY 2015 are summarized as follows: Operations $204.1 million CIRP 294.8 million Debt Service 66.7 million TOTAL EXPENSE BUDGET $565.6 million Versus costs presented to and approved by the Rate Commission, the Operations budget for FY 2013 through FY 2016 is projected to be 1.09% less than originally planned; the CIRP budget FY 2013 through FY 2016 is projected to be 0.77% less than originally planned. In FY 2015, we pledge to continue to scrutinize our business practices, deliver sound fiscal management, and be fully accountable to the public for the ways in which we spend their money. We will continue to improve our customer service levels and our efforts to inform the community of our operations and needs. We will persist in addressing the health, safety, and environmental needs of our St. Louis community. In short, we will work to prepare MSD, its customers, and our community for the challenges of the future. Sincerely, Brian Hoelscher, Executive Director, P.E. 3
Metropolitan St. Louis Sewer District Governing Body Voters in 1954 established a six member Board of Trustees (Board) to be the governing body of the Metropolitan St. Louis Sewer District. Three members are appointed by the Mayor of the City of St. Louis and three members are appointed by the St. Louis County Executive. MSD’s Board members are trustees of public property and public funds and are responsible to the customers they serve. Management Staff Brian Hoelscher ........................................................................ Executive Director Susan Myers ............................................................................. General Counsel Temporarily Vacant ............................................................... Secretary-Treasurer Jonathan Sprague .............................................................. Director of Operations Richard Unverferth ............................................................ Director of Engineering Janice M. Zimmerman ............................................................ Director of Finance Barbara Mohn ...................................................... Director of Information Systems Vicki Taylor Edwards .............................................. Director of Human Resources St. Louis City Trustees Term Expires James H. Buford, Chair 03/15/14 Annette Mandel 03/15/16 James Faul 03/15/17 St. Louis County Trustees Term Expires Michael Yates, Vice Chair 03/14/14 Robert Berry 03/14/16 Valerie Patton 03/14/17 Francis G. Slay Mayor - City of St. Louis Charlie A. Dooley County Executive - St. Louis County 4
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Fiscal Year 2015 BUDGET6