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COMPREHENSIVE ANNUALFINANCIAL REPORTFISCAL YEARS ENDED JUNE 30, 2017 and 2016
THE METROPOLITANST. LOUISSEWER DISTRICT
ST. LOUIS, MISSOURI
THE METROPOLITAN ST. LOUIS
SEWER DISTRICT
ST. LOUIS, MISSOURI
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEARS ENDED JUNE 30, 2017 AND 2016
Report Prepared And Submitted By The
Department of Finance
Marion M. Gee
Director Of Finance
Contents
Page
Part I – Introductory Section:
Letter Of Transmittal ...................................................................................................................i
Organization Chart ....................................................................................................................xii
Certificate Of Achievement For Excellence In Financial Reporting......................................xiii
Part II –Financial Section:
Independent Auditors’ Report .....................................................................................................1
Management’s Discussion And Analysis ....................................................................................3
Basic Financial Statements
Statements Of Net Position..................................................................................................16
Statements Of Revenues, Expenses, And Changes In Net Position..................................18
Statements Of Cash Flows ...................................................................................................19
Notes To Financial Statements............................................................................................21
Required Supplementary Information
Schedule Of Changes In Net Pension Liability And Related Ratios .................................87
Schedule Of Employer Contributions – Employees’ Pension Plan ....................................88
Schedule Of Funding Progress – Other Post-Employment Benefit Plan..........................88
Part III – Statistical Section:
Net Position By Component........................................................................................................89
Changes In Net Position.............................................................................................................90
Operating Revenues By Source..................................................................................................91
Operating Expenses ....................................................................................................................92
Non-Operating Revenues And Expenses...................................................................................93
User Charge Rates ......................................................................................................................94
User Charge Revenues................................................................................................................95
Sewer User Charges (Composite-Annual) .................................................................................96
Number Of Customers By Type .................................................................................................97
Ten Largest Customers...............................................................................................................98
Ratios of Outstanding Debt By Type .........................................................................................99
Computation Of Overlapping Debt ..........................................................................................100
Pledged Revenue Coverage.......................................................................................................101
Demographic And Economic Statistics....................................................................................102
Principal Employers (St. Louis Metropolitan Area)................................................................103
Employment Level.....................................................................................................................104
Average Flow.............................................................................................................................105
Operating And Capital Indicators............................................................................................106
Introductory Section
Vision Statement
Quality Service Always
Mission Statement
To protect the public’s health, safety, and water
environment by responsibly providing wastewater
and stormwater management
Values
Integrity
Teamwork
Excellence and Innovation
The District Employees
Customer Satisfaction
Mission, Vision, Value statements are important elements of a
strategic business plan. The Mission statement keeps the
District focused on its essential activity, the Vision statement
points to its ideal purpose, and the Value statement conveys the
principles that must shape our actions.
i
October 17, 2017
The Board of Trustees
The Metropolitan St. Louis Sewer District
The Comprehensive Annual Financial Report (“CAFR”) of The Metropolitan St. Louis
Sewer District (“MSD” or the “District”) for the fiscal year ended June 30, 2017, is
submitted herewith. The District’s Finance Department prepared this report. The
District is responsible for the accuracy of the data and the completeness and fairness of
the presentation of the financial statements and other information presented herein.
We believe the presentation is accurate in all material respects and includes all
disclosures necessary to enable the reader to gain a reasonable understanding of the
District’s financial activities. In the CAFR, the District’s financial activities are
measured on a single enterprise fund basis where all funds of the District and its sub-
districts are consolidated.
The District’s CAFR includes an Introductory Section, a Financial Section, and a
Statistical Section. The Introductory Section includes this transmittal letter, lists of the
District’s Board of Trustees, Rate Commission Chair, members of the Civil Service
Commission, management staff, and an organization chart as of June 30, 2017. The
Financial Section includes the independent auditors’ report, management’s discussion
and analysis, and the District’s basic financial statements. The Statistical Section
includes financial, economic, and demographic information, generally presented on a
multi-year basis.
The CAFR includes all funds of the District. The operations of these funds, as reflected
in the financial statements, are under the control of the District’s governing body. The
District has determined there were no other agencies or entities that met the
established criteria for inclusion in the reporting entity.
The Board of Trustees
The Metropolitan St. Louis Sewer District
ii
Organization
MSD was created in 1954 to provide a metropolitan-wide sewer system to serve the City
of St. Louis and most of the more heavily populated areas of St. Louis County. Before
MSD’s creation, the City of St. Louis, various municipalities, and private sewer
companies provided sewer service that primarily included only collecting and
transporting sewage from small geographic areas to nearby rivers and streams with
little or no treatment. Most of the municipalities or private sewer companies serving the
area did not have the jurisdictional authority or financial resources needed to eliminate
health hazards from untreated sewage.
When the District began operations, it took over the publicly owned wastewater and
stormwater drainage facilities within its jurisdiction and began the construction of an
extensive system of collector and interceptor sewers and treatment facilities. In 1977,
voters approved the District’s annexation of a 270 square mile area of the lower
Missouri River and lower Meramec River watersheds. The District purchased the
Fee Fee Trunk Sewer Company and the Missouri Bottoms Sewer Company in 1978.
MSD has since acquired other investor-owned or municipally operated systems.
The District’s service area now encompasses 520 square miles including all 66 square
miles of the City of St. Louis and 454 square miles of St. Louis County. The current
population served by the District is approximately 1.3 million.
MSD is organized pursuant to Article VI, Section 30 of the Missouri State Constitution
that empowers the people of St. Louis County and the City of St. Louis “to establish a
metropolitan district for functional administration of services common to the area.”
MSD is the only district established pursuant to that section of the Missouri State
Constitution.
The Charter of MSD (“Plan”), approved by voters in 1954 and amended in 2000 and
2012, established the District. The Plan describes the District as “a body corporate, a
municipal corporation, and a political subdivision of the state.” As a political
subdivision of the state, MSD is comparable to a county or city, such as St. Louis
County or the City of St. Louis.
The Plan established the governing body of the District as a six-member Board of
Trustees (“Board”) with three members appointed by the Mayor of St. Louis and three
members appointed by the St. Louis County Executive. No more than two trustees
appointed from the City or County can be affiliated with the same political party.
The Board of Trustees
The Metropolitan St. Louis Sewer District
iii
Unlike a corporation’s board of directors that is responsible solely to the stockholders
who choose to invest in the corporation, MSD’s Board members are trustees of public
property and public funds. They are responsible to all citizens within the District.
According to the Plan, the Board enacts District ordinances, determines policies, and
appoints the Executive Director, the Secretary-Treasurer, and the Internal Auditor. The
Executive Director appoints all other District officials. Among its duties, the Board
makes all appropriations, approves contracts for improvements, and engages an
accounting firm to perform the annual independent audit of the District.
The Plan prescribes other duties of the Board and grants numerous broad powers,
subject to federal and state laws, to the District and the Board of Trustees. Among other
things, the Plan outlines the following requirements or provisions:
!Requires that MSD operate with a balanced budget;
!Details how MSD can tax property and requires an annual public hearing
on all taxes levied by the District;
!Details how MSD can establish user charges;
!Requires MSD to establish civil service rules and regulations governed by
a Civil Service Commission;
!Provides how the original boundaries of the District may be extended to
include any area in St. Louis County; and
!Requires MSD to approve all plans and designs for proposed construction,
alteration, or reconstruction of sewer or drainage facilities within the
District’s boundaries.
The District is also governed by the Missouri State Constitution and various federal and
state laws that among other requirements mandate the following:
!MSD must hold permits for all sanitary discharges. These permits require
a minimum of secondary treatment;
!MSD must provide wastewater treatment in an area-wide manner to
qualify for federal and state grants;
!MSD must operate, maintain, and replace facilities to provide proper
wastewater treatment or be subject to penalties and fines; and
!MSD must set user charge rates in compliance with the Federal Clean
Water Act. These rates must be submitted to the Missouri Department of
Natural Resources to receive future construction grants and to avoid the
possibility of refunding past grants.
The Board of Trustees
The Metropolitan St. Louis Sewer District
iv
During fiscal 2017 the primary source of funding for the operation and maintenance of
MSD’s wastewater system was a user charge averaging $535.08 per year or $44.59 per
month for a single-family residence. The District’s charges for residential wastewater
service are tied to the amount of measured water usage during a winter quarter. For
residential properties without water meters, the charges are based on housing
attributes (such as the number of rooms, baths, and toilets) that correlate to water
usage. That methodology is the same billing methodology used by the City of St. Louis
Water Division for their non-metered properties. Multi-family residential and non-
residential rates are proportionate to the single-family charge and are based on water
consumption and the strength of the discharge.
Prior to fiscal year 2017, the operation and maintenance of the District’s stormwater
system was funded by a combination of property taxes and flat fee billing of 24¢ per
month for residential and commercial properties and 18¢ per month per unit for multi-
unit properties. On April 5, 2016, 62% of voters in MSD’s service area approved
Proposition S which placed all MSD customers under the same property tax rates to
fund stormwater services. The flat fee billings were eliminated.
MSD also receives some federal, state, and local grants to help defray the cost of
constructing sewage treatment and drainage facilities and improvements. The District
also charges fees for plan review, permits, construction inspection of new system
development, and special discharges. The District charges a uniform connection fee in
all service areas.
The District, itself, may issue general obligation bonds and revenue bonds to finance the
cost of improvements and extensions to the sewer system. The District also may issue,
on behalf of each of its subdistricts, general obligation bonds, revenue bonds, or special
assessment bonds.
Major Initiatives Affecting The Financial Resources Of The District
In June 2007 the District was sued by the Department of Justice on behalf of the
United States Environmental Protection Agency (“EPA”) and the Missouri Department
of Natural Resources (“DNR”) for various alleged violations of the Clean Water Act. The
Missouri Coalition for the Environment joined the suit as an intervener in August 2007.
After a lengthy mediation, a Consent Decree (“CD”) was entered by the Federal Court
on April 27, 2012. This entry resolved all alleged violations. Compliance with the CD
requires the District to implement a multi-decade, multi-billion dollar capital
improvement program and rehabilitate significant portions of the existing wastewater
sewer system. This effort will continue to be funded by a combination of rate increases
and issuance of additional debt based on the completion of milestones defined in
the CD.
The Board of Trustees
The Metropolitan St. Louis Sewer District
v
Integral to helping MSD’s rate payers understand the Consent Decree is MSD’s
initiation of Project Clear. MSD Project Clear is a long-term effort by MSD, undertaken
as part of the Consent Decree agreement with the U.S. Environmental Protection
Agency and the Missouri Coalition for the Environment. Project Clear’s aims are to:
!Improve water quality for everyone;
!Solve problems for some of our customers created by the very nature and design
of St. Louis’ wastewater system, and
!Provide clear, up-to-date information to the public about Consent Decree
activities.
MSD Project Clear focuses on three categories of work: Get the rain out; Repair and
maintain; and Build system improvements. Get the rain out focuses on preventing
excess stormwater from entering the sewer system through a variety of project types,
including downspout disconnections, and rainscaping. Repair and maintain continues
the work MSD has done to repair, maintain, and renew the existing sewer system, on a
faster timeline. Build system improvements involves new construction of wastewater
management structures, including deep underground tunnels and above-ground
storage tanks.
In late April 2017 and continuing into the first week of May, the District received up to
11 inches of rain in portions of its service area. The Missouri and Mississippi Rivers
reached major flood levels; however, neither river exceeded the protection levels
provided by levees or flood walls. The Meramec River also experienced record flooding
which caused water levels to exceed levee heights. The District’s wastewater treatment
plants sustained minor damages during this rain event; however, sixteen pump stations
were damaged. MSD received 1,750 customer calls resulting in approximately 800
water backup claims with a reserve of approximately $1.3 million. Total costs to protect
the District’s facilities during the rain event or to make repairs afterwards are
estimated at approximately $1.5 million. The District has submitted applications to the
Federal Emergency Management Agency to recover a portion of this cost.
The Rate Commission was established in the District’s Plan by amendment in 2000.
Beginning in 2002, the District began submitting rate increase proposals to the MSD
Rate Commission to fund its operations and multi-decade capital infrastructure
improvement program. The District submits rate increase proposals to the Rate
Commission as needed in accordance with the Plan.
The Board of Trustees
The Metropolitan St. Louis Sewer District
vi
The District submitted a rate change proposal to the MSD Rate Commission on
February 26, 2015. The proposal recommended an increase in MSD’s wastewater rates
in order to adequately fund the work required by the Consent Decree. The proposal set
rates for the District for a four-year period which covered fiscal year 2017 through fiscal
year 2020. The proposal also recommended the establishment of the aforementioned
District-wide tax structure to replace the multi-layered taxes previously assessed on the
real estate value of our customers’ property. These taxes have traditionally been used to
fund stormwater services, including operations, maintenance, very limited capital
projects, and regulatory compliance. The Rate Commission’s recommendation to the
District’s proposal was received by the Board on August 5, 2015. On October 8, 2015,
the Rate Commission’s recommendation was adopted by the Board of Trustees.
Since February 2004, the voters of St. Louis have authorized the District to issue a total
of $2.6 billion in wastewater revenue bonds. As of June 30, 2017, the District has issued
$1.7 billion of the total authorization. The District’s long-term wastewater capital
improvement program will continue to be funded through a combination of additional
bonds and wastewater rate increases.
In 2013, MSD completed a Disparity Study to identify any disparities in the District’s
expenditure of public funds when compared to the availability of minority and women
owned firms. The study also examined the number of minorities and women working on
MSD projects compared to the racial and gender composition of workers available to
work on MSD projects. Procurement and contractual changes based on the study’s
findings were put into place in August 2013.
The Disparity Study also made recommendations for other activities the District should
consider as part of a successful Diversity Program.
To help implement some of the recommendations, MSD developed a Community
Benefits Agreement (“CBA”). A CBA is 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. (In short, it’s one thing to
have inclusion goals, but it’s another to have a program that helps develop the capacity
to meet those goals.) The CBA will support the development of initiatives that address
these issues, both in terms of workforce and business ownership. To our knowledge, the
CBA is the only one of its kind in the St. Louis region.
The Board of Trustees
The Metropolitan St. Louis Sewer District
vii
Operations
The Executive Director and his staff administer the operation and maintenance of the
District’s collection and treatment systems. The District’s sanitary, stormwater, and
combined sewer collection system includes more than 9,400 miles of pipe and channel
and will grow larger over the long term due to new development. Some years may
actually see a reduction in total miles of pipe. This is due to the replacement of
inefficiently placed pipe with shorter, more direct lines of pipe. The District’s
responsibilities for stormwater drainage range from cleaning and maintaining street
inlets to operating and maintaining the floodwall pump stations along the
Mississippi River.
MSD currently operates seven wastewater treatment facilities. These facilities treated
an average flow of 328.9 million gallons per day (“MGD”) in fiscal 2017 compared to
335.2 MGD in fiscal 2016. The design capacity and average flow, by watershed, in MGD
was as follows in fiscal 2017:
MAJOR
WATERSHED
LEVEL OF
TREATMENT
NUMBER
OF
FACILITIES
DESIGN
CAPACITY
(MGD)
AVERAGE FLOW
FISCAL 2017
(MGD)
Mississippi River Secondary Two 472.00 245.4
Missouri River Secondary Two 78.00 50.7
Meramec River Secondary Three 42.75 32.8
Total Seven 592.75 328.9
In addition to construction initiated by the District to protect the public’s health and
property from raw sewage and flooding, the District also provides various engineering-
related design review and inspection services for the construction of sanitary and
stormwater sewers by individuals, businesses, and municipalities in the community.
Economic Conditions In The St. Louis Metropolitan Area
As a rule, the District’s major revenue sources do not fluctuate with the local and
national economy as much as local governments that depend on sales or income taxes
for their major sources of revenue. The combined unemployment rate for the City of
St. Louis and St. Louis County was 3.9 percent in June 2017 and lower than the
national unemployment rate of 4.4 percent for the same time period.
The Board of Trustees
The Metropolitan St. Louis Sewer District
viii
MSD has its own internal barometers for measuring economic development within the
District. These are listed below for fiscal 2017 and 2016:
2017 2016
Sewer Plan Reviews:
Number of Plans Approved 523 613
Number of Miles of Sewers 34 38
Sewer Construction Permits:
Number of Permits Issued 3,740 4,546
Number of Miles of Sewers 24 30
Customer Connections:
Number of Connection Permits Issued 1,891 2,165
Connection Fee Revenue (in millions) $2.0 $1.7
Value of Sewers Dedicated to
MSD by Developers (in millions)$6.8 $11.3
Over the years, the St. Louis economy has undergone a transformation from reliance on
traditional manufacturing industries to those industries based on advanced technology
and services. The St. Louis area is a center for health care, biotechnology, banking,
finance, transportation, tourism, and education and has a strong and diverse
manufacturing economy. The area has an abundance of energy, water, and sewerage
facilities and can sustain future economic growth.
Financial Information
Proprietary Operations. The current financial condition of MSD remains stable. The
District realized a net operating income of $58.4 million in fiscal 2017 compared to a net
operating income of $46.8 million the prior year. The increase in operating revenues of
$11.6 million is explained by an increase in sewer service revenue as a result of rate
increases, in conjunction with a lower provision for doubtful sewer service charges (bad
debt), offset by a reduction related to the insurance recoveries recorded in fiscal 2016.
Operating expenses increased $2.0 million due to an increase in annual pension
expense offset by a reduction in water backup claims primarily related to the flood that
occurred in fiscal 2016. A more in-depth analysis of the District’s financial position and
the magnitude of the capital improvement and replacement program (“CIRP”) is
provided in the Management’s Discussion and Analysis section that appears later in
this report.
The Board of Trustees
The Metropolitan St. Louis Sewer District
ix
Budgetary Controls. The District’s Plan requires MSD to submit a proposed budget to
the Board by March 15th each year. After Board review, a final budget is approved in
June. The District’s Plan also requires MSD to maintain budgetary controls and to
adopt a balanced budget. The objective of these budgetary controls is to ensure
compliance with legal provisions embodied in the appropriation process approved by the
Board. The annual appropriated budget includes activities of the District’s operating
and debt service funds. The Board adopts ordinances to appropriate funds for capital
improvement expenditures at the time of the contract award and acceptance of any
grant offers.
Budgetary control is by Division and major expenditure category within the General
Fund, each Debt Service Fund, and each capital improvement contract. The District
utilizes an encumbrance accounting system in conjunction with internal variance and
projection analysis to maintain budgetary control. Certain encumbrances carry over
from one year to the next as approved by the Board during the budget process.
Monthly and year-end financial reports are prepared in accordance with United States
generally accepted accounting principles for Enterprise Funds. Adjustments are made
to the accounting records, where necessary, to reflect the full accrual method of
accounting. Under the full accrual method of accounting, revenues are recognized when
earned and expenses are recorded as liabilities when incurred. Encumbrances and
unearned capital and operating grants are eliminated under the full accrual method of
accounting. These amounts are disclosed as commitments in the notes to financial
statements.
Cash Management.In compliance with its Plan, the District invests temporarily idle
funds in cash, cash equivalents and investments such as collateralized certificates of
deposit, collateralized repurchase agreements, obligations of any agency of the United
States, and United States Treasury instruments. The District utilizes competitive
bidding for investment purchases and monitors market conditions daily.
Risk Management.In-house staff and consultants jointly conduct risk management
activities. MSD maintains third-party commercial insurance coverage for various risks
while self-insuring for other risks and liabilities at levels customary for similar
enterprises. The District maintains replacement cost property and casualty insurance
with a policy limit of $1.25 billion on certain facilities and equipment that have an
estimated replacement cost of $1.5 billion. The District assumes the risk of loss
(including payment of water backup claims to its customers) on the majority of its
underground pumping facilities and collection system. MSD is one of the few sewer
districts in the country known to provide water backup claim coverage to its customers.
The underground pumping facility and collection system assets have an estimated
replacement cost of $9.9 billion. To minimize exposure to loss, the District inspects its
facilities regularly and performs preventative maintenance on them.
The Board of Trustees
The Metropolitan St. Louis Sewer District
x
MSD maintains automobile, general liability and excess liability insurance. The District
is self-insured for workers’ compensation and funds those costs through annual
appropriations from the District’s general insurance fund. The District maintains
reinsurance for workers’ compensation liabilities in excess of specified limits up to the
statutory limit. Risk control activities include using a third-party claims administrator,
maintaining a computerized claim tracking system, and annually reevaluating medical
insurance claims and health benefit costs. The District also has programs designed to
promote safety in the workplace and employee wellness.
The District provides group medical coverage for its employees and offers dependent
medical coverage on a contributory basis through a self-insured plan. Effective
February 1, 2014, the District maintained stop loss coverage for specific claims
exceeding $175,000 per year and for total annual claims greater than 125 percent of the
annual claims estimate. The District provides its employees with contributory group
dental insurance coverage and non-contributory life insurance and contributory
optional life insurance coverage. The District also contributes $100 every fiscal year, up
to a maximum of $300, to a vision care program for employees. Effective July 1, 2013,
spouses were eligible to use the benefits; effective July 1, 2016, dependent children up
to age 26 were eligible to use the benefits; however, the amount could not exceed the
maximum amount of $300. The District reevaluates insurance coverage and providers
annually.
For most construction projects, insurance is obtained by the individual contractor and
included in the contract price.
Internal Controls.District Management is responsible for designing, establishing, and
maintaining an internal control system that protects District assets from loss, theft, or
misuse and ensures that adequate accounting data is compiled to prepare financial
statements in conformity with United States generally accepted accounting principles.
Internal control systems are designed to provide reasonable, but not absolute,
assurance that these objectives are met. The concept of reasonable assurance recognizes
that the cost of a control should not exceed the benefits likely to be derived and that the
evaluation of costs and benefits requires estimates and judgments by management. The
District’s internal control system is subject to periodic evaluation by Management, the
Board and the District’s independent accountants.
Other Information
Audit Requirements. The District’s Plan requires an annual audit by independent
certified public accountants. The District’s CAFR includes a report on the District’s
financial statements by the accounting firm of CliftonLarsonAllen LLP.
The Board of Trustees
The Metropolitan St. Louis Sewer District
xi
Besides meeting the requirements set forth in the Plan, the annual audit is also
designed to meet the requirements of the 2013 Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) that
was issued by the Office of Management and Budget (“OMB”). A Single Audit Report
will be issued for the year ended June 30, 2017.
The financial statements of The Metropolitan St. Louis Sewer District Employees’
Pension Plan, The Metropolitan St. Louis Sewer District Deferred Compensation Plan
and Trust and The Metropolitan St. Louis Sewer District Defined Contribution Plan are
also audited annually. These audit reports were issued for the periods ended
December 31, 2016 and 2015 and are available to interested parties upon request.
Awards. The Government Finance Officers Association of the United States and Canada
(“GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to
MSD for its CAFR for the fiscal year ended June 30, 2016. The Certificate of
Achievement is a prestigious national award that recognizes conformance with the
highest standards for preparation of state and local government financial reports.
To be awarded the Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized CAFR, the contents of which conform to
program standards. The CAFR must satisfy both U.S. generally accepted accounting
principles and applicable legal requirements. A Certificate of Achievement is valid for
one year only. The District has received a Certificate of Achievement for the last
twenty-nine consecutive years. We believe the current CAFR continues to conform to
the GFOA’s high standards, as reflected in the Certificate of Achievement program
requirements, and are submitting it again this year for consideration.
The District also received the GFOA’s Distinguished Budget Presentation award for its
fiscal 2017 annual budget. The District has received this award for thirty consecutive
years. We believe the fiscal year 2018 budget presentation continues to meet the
GFOA’s high standards and submitted it on July 25, 2017, for consideration.
Marion M. Gee
Director of Finance
xii
ORGANIZATION
(As of June 30, 2017)
BOARD OF TRUSTEES
James Faul, Chair; Rev. Ronald Bobo, Vice Chair;
Ruby Bonner; Annette Mandel; James I. Singer; Michael Yates
OFFICE OF INTERNAL AUDITOR RATE COMMISSION
Leonard P. Toenjes, Chair
OFFICE OF SECRETARY
TREASURER
Tim R. Snoke
Secretary/Treasurer
CIVIL SERVICE COMMISSION
Tara Buckner
Annette Adams
Daniel Gonzales
EXECUTIVE DIRECTOR
Brian L. Hoelscher/CEO
FINANCEMarion M. Gee
Director
OFFICE OF GENERAL COUNSEL
Susan M. MyersGeneral Counsel
OPERATIONS
Jonathon C. SpragueDirector
ENGINEERING
Rich Unverferth
Director
OFFICE OF HUMAN RESOURCES
Vicki L. Taylor Edwards
Director
INFORMATION SYSTEMS
Barbara E. Mohn
Director
xiii
Government Finance Officers Association
Certificate Of
Achievement
For Excellence
In Financial
Reporting
Presented to
Metropolitan St. Louis Sewer District
Missouri
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2016
Executive Directors/CEO
Financial Section
METROPOLITAN ST. LOUIS SEWER DISTRICT
SERVICE AREAS
CliftonLarsonAllen LLP
CLAconnect.com
(1)
INDEPENDENT AUDITORS’ REPORT
Board of Trustees
The Metropolitan St. Louis Sewer District
St. Louis, Missouri
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activity of The
Metropolitan St. Louis Sewer District, as of and for the year ended June 30, 2017, and the related notes
to the financial statements, which collectively comprise the District’s financial statements as listed in the
table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud
or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors’ judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the business-type activities of The Metropolitan St. Louis Sewer District
as of June 30, 2017, and the changes in financial position and cash flows thereof for the year then
ended in accordance with accounting principles generally accepted in the United States of America.
Board of Trustees
The Metropolitan St. Louis Sewer District
(2)
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's
Discussion and Analysis, Schedule of Changes in Net Pension Liability and Related Ratios for the
Employees' Pension Plan, Employees' Pension Plan Schedule of Employer Contributions and Schedule
of Funding Progress for the Other Post-Employment Benefit Plan, as listed in the table of contents, be
presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by the Governmental Accounting Standards Board who considers
it to be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or
provide any assurance.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that
collectively comprise The Metropolitan St. Louis Sewer District’s basic financial statements. The
introductory section and statistical section are presented for purposes of additional analysis and are not
a required part of the basic financial statements. These sections have not been subjected to the
auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not
express an opinion or provide any assurance on them.
The 2016 financial statements of The Metropolitan St. Louis Sewer District were audited by other
auditors whose report dated October 17, 2016, expressed an unmodified opinion on those statements.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 17,
2017, on our consideration of The Metropolitan St. Louis Sewer District's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and
grant agreements and other matters. The purpose of that report is solely to describe the scope of our
testing of internal control over financial reporting and compliance and the result of that testing, and not
to provide an opinion on the effectiveness of Metropolitan St. Louis Sewer District’s internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance
with Government Auditing Standards in considering Metropolitan St. Louis Sewer District’s internal
control over financial reporting and compliance.
!
CliftonLarsonAllen LLP
St Louis, Missouri
October 17, 2017
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 3
MANAGEMENT’S DISCUSSION AND ANALYSIS
For The Years Ended June 30, 2017 And 2016
The annual report of The Metropolitan St. Louis Sewer District (“MSD” or the
“District”) includes the independent auditors’ report, management’s discussion and
analysis (“MD&A”), and the financial statements accompanied by notes essential to the
user’s understanding of the financial statements.
Management of the District has provided this MD&A to be used in combination with
the District’s financial statements. This narrative is intended to provide the reader with
more insight into management’s knowledge of the transactions, events, and conditions
reflected in the accompanying financial statements and the fiscal policies that govern
the District’s operations.
2017 Financial Highlights
The District increased capital assets by $200.2 million as a result of increases in
construction in progress ($177.0 million), land ($1.0 million) and depreciable
capital assets net of depreciation ($22.2 million).
The District placed $105.3 million of capital assets into service during fiscal year
2017. The continued high level of capitalization reflects the District’s work to
meet long-term plans. Capitalized assets included:
Collection and pumping plant $60.7 million
Treatment and disposal plant and equipment $39.6 millionLand $1.0 million
General plant and equipment $4.0 million
In conjunction with the recording of additional depreciation relating to new assets, the
net increase to accumulated depreciation was $75.4 million.
During the year, the District implemented Governmental Accounting Standards Board
(“GASB”) Statement No. 77, Tax Abatement Disclosures. This Statement requires
disclosure of tax abatement information about (1) the District’s own tax abatement
agreements and (2) those that are entered into by other governments and that reduce
the District’s tax revenues. The requirements of this Statement improve financial
reporting by giving users of financial statements essential information that has not
been consistently or comprehensively reported to the public. In summary, the District
has no direct tax abatement agreements but the effect of those entered into by the
county and municipalities within the District’s boundary decreases the District’s tax
revenues by $1,326,394.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 4
2016 Financial Highlights
The District increased capital assets by $160.5 million as a result of increases in
construction in progress ($122.3 million), land ($13.2 million) and depreciable
capital assets net of depreciation ($25.0 million).
The District placed $123.6 million of capital assets into service during fiscal year
2016. The continued high level of capitalization reflects the District’s work to
meet long-term plans. Capitalized assets included:
Collection and pumping plant $80.0 million
Treatment and disposal plant and equipment $25.9 million
Land $13.3 million
General plant and equipment $4.4 million
In conjunction with the recording of additional depreciation relating to new assets, the
net increase to accumulated depreciation was $79.3 million.
During the year, the District implemented Governmental Accounting Standards Board
(“GASB”) Statement No. 72, Fair Value Measurement and Application. The primary
objective of this Statement is to improve financial reporting by state and local
governments by clarifying the definition of fair value for financial reporting purposes,
establishing general principles for measuring fair value, providing additional fair value
application guidance, and enhancing disclosures about fair value measurements. The
impact of adopting GASB Statement No. 72 is minimal as all material investments have
been and are valued at fair value. No restatement is required as no changes were made
to the prior year financial statements in order to comply with the new Statement.
Required Financial Statements
The financial statements presented by the management of the District include the
Statements of Net Position; Statements of Revenues, Expenses, and Changes in Net
Position; and Statements of Cash Flows. These statements are prepared using the
accrual basis of accounting. This method of accounting recognizes revenue at the time it
is earned and expenses when the related liability occurs. As a result of using this
method of accounting, the District’s performance over the time period being reported is
more easily determinable.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 5
The Statements of Net Position provide a report of the District’s current, restricted, and
other non-current assets such as cash, investments, receivables, and property. Also, the
Statements of Net Position provide a summary of the District’s current, restricted, and
non-current liabilities, including contracts and accounts payable, deposits and accrued
expenses, and bonds and notes payable. Deferred outflows and inflows, where
applicable, are also included. The final section of the Statements of Net Position, the net
position section, contains earnings retained for use by the District. Increases or
decreases in the net position section may be indicative of an improving or declining
financial position. This statement provides the basis for computing rate of return,
evaluating the capital structure of the District, and assessing the liquidity and financial
flexibility of the District.
The Statements of Revenues, Expenses, and Changes in Net Position summarize all of
the year’s revenue and expense. These statements indicate how successful the District
was at maintaining expenses below the level of revenue earned.
The Statements of Cash Flows account for the net change in cash and cash equivalents
by summarizing cash receipts and cash disbursements resulting from operating
activities, non-capital financing activities, capital and related financing activities, and
investing activities. These statements assist the user in determining the sources of cash
coming into the District, the items for which cash was expended, and the beginning and
ending cash balance.
Financial Analysis
The District’s financial position improved in the current year, as evidenced by the
increase in net position of $64.1 million. The improvement is due primarily to an
increase in net investment in capital assets of $66.9 million. Net capital assets
increased $200.2 million while debt related to the capital assets, net of the $27.7 million
increase in unspent cash received upon the issuance of new senior debt (“Series
2016C”), only increased $132.8 million. The decrease in construction-related liabilities
of $0.2 million increased net investment in capital assets while the increase in debt of
$132.8 million and the amortization of the deferred losses recognized upon refundings of
$0.7 million decreased net investment in capital assets. The net investment in capital
asset increase was offset by a decrease in unrestricted and restricted funds of $1.5
million and $1.3 million, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 6
Condensed Financial Statements and Analysis
2017 Analysis
Current, restricted and other assets increased $36.5 million or 5.2% in the current year.
The increase is predominately due to an increase in cash and investments due to higher
sewer rates charged with increased collections and due to the unspent cash received on
the senior debt issued in fiscal 2017.
Capital assets net of accumulated depreciation increased by $200.2 million or 6.6% in
the current year as the result of continued high levels of construction and acquisition of
assets by the District.
Current liabilities increased by $8.4 million or 6.7% due primarily to an increase in the
current portion of bonds and notes payable and retainage held on capital projects which
correlates with the increase in construction.
Increase Increase
June 30, June 30, (Decrease) June 30, (Decrease)
2017 2016 2017-2016 2015 2016-2015
Assets: Current, restricted, and other assets 743,572$ 707,033$ 36,539$ 628,246$ 78,787$
Capital assets (net of accumulated
depreciation)3,252,238 3,052,043 200,195 2,891,569 160,474
Total Assets 3,995,810 3,759,076 236,734 3,519,815 239,261
Deferred Outflow of Resources:
NNN Bonds and Notes Payable-Deferred Loss 11,321 11,974 (653) 9,599 2,375
NNN Pension-related Outflows 37,666 31,144 6,522 19,210 11,934
BBBBBBBBB Total Deferred Outflow of Resources 48,987 43,118 5,869 28,809 14,309
Liabilities: Current liabilities 133,679 125,284 8,395 109,153 16,131
Non-current liabilities 1,515,345 1,344,141 171,204 1,158,445 185,696
Total Liabilities 1,649,024 1,469,425 179,599 1,267,598 201,827
Deferred Inflow of Resources:
NNN Pension-related Inflows 4,605 5,712 (1,107) 2,910 2,802
BBBBBBBBB Total Deferred Inflow of Resources 4,605 5,712 (1,107)2,910 2,802
Net Position: Net investment in capital assets 1,876,249 1,809,386 66,863 1,805,453 3,933
Restricted 135,259 136,547 (1,288)142,445 (5,898)
Unrestricted 379,660 381,124 (1,464)330,218 50,906
Total Net Position 2,391,168$ 2,327,057$ 64,111$ 2,278,116$ 48,941$
Condensed Statements of Net Position
(000's)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 7
Non-current liabilities increased by $171.2 million or 12.7% primarily due to $203.8
million relating to the senior and subordinate debt issued in fiscal 2017 offset by $42.7
million for fiscal 2018 senior debt payments reclassified to current liabilities and $5.3
million for premium amortization and $14.4 million pertaining to the increase in the
District’s net pension liability.
Net deferred outflows and inflows increased $7.0 million or 18.6% due primarily to
updates to various information provided by the District’s actuary such as
economic/demographic gains or losses, assumption changes or inputs, and investment
gains or losses.
2016 Analysis
Current, restricted and other assets increased $78.8 million or 12.5% in the current
year. The increase is predominately due to an increase in cash and investments due to
higher sewer rates charged and collected and due to the unspent cash received on the
senior debt issued in fiscal 2016. In addition, receivables recorded for insurance
recoveries due to the December 2015 rain event increased current, restricted and other
assets. The St. Louis area received a range of 6 to 12 inches of precipitation, with an
average of 9 inches of rain falling over three days in December 2015. This rainfall
impacted area rivers, causing flooding and damage at three MSD treatment plants.
Capital assets net of accumulated depreciation increased by $160.5 million or 5.5% as
the result of continued high levels of construction and acquisition of assets by
the District.
Current liabilities increased by $16.1 million or 14.8% due to an increase in the current
portion of bonds and notes payable, contracts and accounts payable and retainage held
on capital projects.
Non-current liabilities increased by $185.7 million or 16.0% due to the senior and
subordinate debt issued in fiscal 2016, offset partially by the advance refunding of
existing debt, and an increase in the District’s net pension liability.
Net deferred outflows and inflows increased $11.5 million or 44.4% due primarily to
updates to various information provided by the District’s actuary such as
economic/demographic gains or losses, assumption changes or inputs, and investment
gains or losses related to the pension.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 8
For the Fiscal For the Fiscal Increase For the Fiscal Increase
Year Ended Year Ended (Decrease) Year Ended (Decrease)
June 30, 2017 June 30, 2016 2017-2016 June 30, 2015 2016-2015
Operating Revenues:
Sewer service charges 330,873$ 306,119$ 24,754$ 284,367$ 21,752$
Recovery (provision) for doubtful
sewer service charge accounts (2,513) (4,107) 1,594 (2,096) (2,011)
Licenses, permits, and other fees 4,036 3,620 416 6,657 (3,037)
Other 1,095 14,226 (13,131) 1,460 12,766
Total Operating Revenues 333,491 319,858 13,633 290,388 29,470
Non-operating Revenues:
Property taxes levied by the district 32,458 25,671 6,787 24,764 907
Investment income 2,903 4,636 (1,733) 3,001 1,635
Rent and other income 106 103 3 37 66
Total Non-operating Revenues 35,467 30,410 5,057 27,802 2,608
Total Revenues 368,958 350,268 18,690 318,190 32,078
Operating Expenses:
Pumping and treatment 60,203 59,100 1,103 60,766 (1,666)
Collection system maintenance 43,928 42,853 1,075 40,162 2,691
Engineering 11,290 10,998 292 10,954 44
General and administrative 58,535 55,315 3,220 48,551 6,764
Water backup claims 5,035 7,631 (2,596) 3,862 3,769
Depreciation 81,194 83,984 (2,790) 78,641 5,343
Asset management 14,893 13,215 1,678 13,586 (371)
Total Operating Expenses 275,078 273,096 1,982 256,522 16,574
Non-operating Expenses:
Net loss on disposal and sale of
capital assets 673 325 348 1,421 (1,096)
Non-recurring projects and studies 7,459 11,000 (3,541) 12,317 (1,317)
Interest expense 31,251 28,943 2,308 27,139 1,804
Total Non-operating Expenses 39,383 40,268 (885) 40,877 (609)
Total Expenses 314,461 313,364 1,097 297,399 15,965
Income Before Capital
Grants And Contributions 54,497 36,904 17,593 20,791 16,113
Capital Grants And Contributions 9,614 12,037 (2,423) 12,997 (960)
Change in Net Position 64,111 48,941 15,170 33,788 15,153
Net Position - Beginning of Year 2,327,057 2,278,116 48,941 2,267,952 10,164
Effect of Adoption of GASB 68 — — — (23,624) 23,624
Net Position - Beginning of Year, As Restated 2,327,057 2,278,116 48,941 2,244,328 33,788
Net Position - End of Year 2,391,168$ 2,327,057$ 64,111$ 2,278,116$ 48,941$
Statements of Revenues, Expenses, and Changes in Net Position
(000's)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 9
2017 Analysis
Net position increased $64.1 million or 2.8% over the prior year. Sewer service revenue
increased as a result of rate increases. Non-operating property taxes levied by the
District also increased due to the establishment of one new taxing district covering the
District’s entire service area which increased tax revenue.
Total revenue increased by $18.7 million or 5.3%. Sewer service charges increased $24.8
million or 8.1% with the provision for doubtful accounts decreasing by $1.6 million or
38.8% due to increased collections. Other operating revenue decreased $13.1 million or
92.3% due to insurance recoveries in fiscal 2016 related to the December 2015 rain
event not repeated in fiscal 2017. Non-operating property taxes increased $6.8 million
or 26.4% as a result of the new taxing district referenced above.
Total expenses increased slightly by $1.1 million or 0.4% with operating expenses
increasing $2.0 million or 0.7% and non-operating expenses decreasing by $0.9 million
or 2.2%. The largest operating expense increase was a $3.2 million or 5.8% increase in
general and administrative costs primarily related to an increase in pension expense.
2016 Analysis
Net position increased $48.9 million or 2.1% over the prior year. Sewer service revenue
increased as a result of rate increases. Other operating revenue increased due to the
insurance recoveries recorded related to the December 2015 rain event. Operating
expenses also increased primarily from various increases in operating costs, costs
related to the December 2015 rain event, pension expense and depreciation.
Total revenue increased by $32.1 million or 10.1%. Sewer service charges increased
$21.8 million or 7.6% with the provision for doubtful accounts increasing by $2.0 million
or 95.9% due to increased receivables. Other operating revenue increased $12.8 million
or 874.4% as explained above.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 10
Total expenses increased by $16.0 million or 5.4%.
Operating expenses increased by $16.6 million or 6.5%. This increase was primarily the
result of the following:
!$6.8 million or 13.9% increase in general and administrative costs primarily
related to an increase in pension expense. In addition, costs incurred by the
District related to the December 2015 rain event are recorded in the General
Insurance Fund in the general and administrative operating expense line;
!$5.3 million or 6.8% increase in additional depreciation due to new asset
capitalization;
!$3.8 million or 97.6% increase in water backup costs resulting from the historic
flooding in December 2015.
Non-operating expenses decreased by $0.6 million or 1.5%.
For the Fiscal For the Fiscal Increase For the Fiscal Increase
Year Ended Year Ended (Decrease) Year Ended (Decrease)
June 30, 2017 June 30, 2016 2017-2016 June 30, 2015 2016-2015
Cash flows from operating
activities 156,259$ 127,665$ 28,594$ 116,430$ 11,235$
Cash flows from non-capital
financing activities 32,013 25,583 6,430 25,824 (241)
Cash flows from capital
and related financing
activities (154,634) (91,512) (63,122) (225,778) 134,266
Cash flows from investing
activities (34,721) (74,347) 39,626 86,331 (160,678)
Net increase (decrease) in
cash and cash equivalents (1,083) (12,611) 11,528 2,807 (15,418)
Cash and cash equivalents
at beginning of year 49,196 61,807 (12,611) 59,000 2,807
Cash And Cash Equivalents
At End Of Year 48,113$ 49,196$ (1,083)$ 61,807$ (12,611)$
Condensed Statements of Cash Flows
(000's)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 11
2017 Analysis
The District ended the year with $48.1 million in cash and cash equivalents or a
decrease of $1.1 million or 2.2% from the prior year. Cash flows from operating
activities increased by $28.6 million or 22.4% as a result of increased receipts from
customers. Cash flows from non-capital financing activities increased by $6.4 million or
25.1% due to the new District-wide tax levy. Cash flow from capital and related
financing activities decreased by $63.1 million or 69.0% due to increased spending for
capital assets, decreased bond proceeds and premiums received in fiscal year 2017
compared to fiscal year 2016 and increased interest and fees paid on bonds. Cash flows
from investing activities increased by $39.6 million. The increase primarily stems from
a greater increase in proceeds from sale and maturity of investments than in purchase
of investments from fiscal 2016 to fiscal 2017.
2016 Analysis
The District ended the year with $49.2 million in cash and cash equivalents or a
decrease of $12.6 million from the prior year. Cash flows from operating activities
increased by $11.2 million or 9.6% as a result of increased receipts from customers.
Cash flows from non-capital financing activities decreased by $0.2 million or 0.9% due
to less tax revenue collected. Cash flow from capital and related financing activities
increased by $134.3 million or 59.5% as the result of increased bond proceeds and
premiums received in fiscal year 2016 compared to fiscal year 2015. Cash flows from
investing activities decreased by $160.7 million or 186.1%. The decrease primarily
stems from a net outflow of cash related to purchases and proceeds in investments in
fiscal year 2016, whereas fiscal year 2015 had a net inflow.
During fiscal year 2016, the District changed its reporting methodology so that
investments with an original maturity of greater than 90 days remain as investments
until they mature and the cash is received. As a result, cash and cash equivalents
include only investments with original maturities less than 91 days. The retroactive
change resulted in $90.1 million, $87.7 million and $120.0 million being reclassified
from cash and cash equivalents to investments in fiscal year 2016, 2015, and 2014,
respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 12
Capital Assets
2017 Analysis
Total capital assets, net of accumulated depreciation, increased by $200.2 million or
6.6% over the prior year. Construction in progress contained the majority of the
increase with net additions of $177.0 million or 33.4% consisting of $269.3 million in
additions offset by $92.3 million of assets placed into service. The net increase in
collection and pumping plant assets was $18.2 million or 1.1%, primarily for
capitalization of assets including new and improved sewers, dedicated assets and
infrastructure repairs. Net treatment and disposal plant and equipment increased $6.5
million or 0.9%, including costs incurred to replace incinerator scrubbers to meet new
regulatory emission standards and to capitalize assets destroyed in the December 2015
flood. Land increased $1.0 million or 1.4% due to the acquisition of easements and other
land. General plant and equipment decreased $2.5 million or 10.4% primarily due to
depreciation of existing assets. For more detailed information, see Note 4, Capital
Assets, in the accompanying notes to the financial statements.
2016 Analysis
Total capital assets, net of accumulated depreciation, increased by $160.5 million or
5.5% over the prior year. Construction in progress contained the majority of the
increase with net additions of $122.3 million or 29.9% consisting of $231.8 million in
additions offset by $109.5 million of assets placed into service. Collection and pumping
plant assets increased $38.5 million or 2.3% primarily due to the capitalization of assets
including dedicated assets and infrastructure repairs. Land increased $13.2 million or
23.3% including a $12.4 million land reclassification from the Lower Meramec
treatment plant asset in February 2016 and $0.8 million from the acquisition of
easements and other land.
Increase Increase
June 30, June 30, (Decrease) June 30, (Decrease)
2017 2016 2017-2016 2015 2016-2015
Land 70,695$ 69,702$ 993$ 56,521$ 13,181$
Construction in progress 707,739 530,734 177,005 408,464 122,270
Treatment and disposal plant
and equipment 736,367 729,884 6,483 739,563 (9,679)
Collection and pumping plant 1,716,004 1,697,795 18,209 1,659,321 38,474
General plant and equipment 21,433 23,928 (2,495) 27,700 (3,772)
Total 3,252,238$ 3,052,043$ 200,195$ 2,891,569$ 160,474$
Condensed Statements of Capital Assets
(000's)
Net of Depreciation
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 13
Treatment and disposal plant and equipment decreased a net $9.7 million or 1.3% with
a net $25.5 million increase in additions offset by $35.2 million in additional
depreciation. The $25.5 million net increase includes a $12.4 million decrease due to the
land reclassification referenced above and the $3.2 million depreciation impact of the
reclassification is included in the $35.2 million additional depreciation. General plant
and equipment decreased $3.8 million or 13.6% primarily due to depreciation of existing
assets. For more detailed information, see Note 4, Capital Assets, in the accompanying
notes to the financial statements.
Long-Term Debt
Increase Increase
June 30, June 30, (Decrease) June 30, (Decrease)
2017 2016 2017-2016 2015 2016-2015
Senior Revenue Bonds:
Series 2006C —$ —$ —$ 60,000$ (60,000)$
Series 2008A — — — 30,000 (30,000)
Series 2010B 85,000 85,000 — 85,000 —
Series 2011B 43,410 45,325 (1,915) 47,170 (1,845)
Series 2012A 214,700 220,000 (5,300) 225,000 (5,000)
Series 2012B 134,710 137,280 (2,570) 139,605 (2,325)
Series 2013B 146,000 149,000 (3,000) 150,000 (1,000)
Series 2015B 221,355 223,855 (2,500) — 223,855
Series 2016C 150,000 — 150,000 — —
Subordinate Revenue Bonds:
Series 2004B 81,545 89,650 (8,105) 97,520 (7,870)
Series 2005A 3,800 4,125 (325) 4,440 (315)
Series 2006A 25,600 27,950 (2,350) 29,915 (1,965)
Series 2006B 8,860 9,565 (705) 10,260 (695)
Series 2008AB 25,605 27,475 (1,870) 29,320 (1,845)
Missouri DNR:
Series 2009A 16,441 17,514 (1,073) 18,564 (1,050)
Series 2010A 6,222 6,588 (366) 6,947 (359)
Series 2010C 28,361 30,024 (1,663) 31,644 (1,620)
Series 2011A 35,692 37,354 (1,662) 38,974 (1,620)
Series 2013A 47,786 49,920 (2,134) 52,000 (2,080)
Series 2015A 67,149 42,623 24,526 — 42,623
Series 2016A 147 — 147 — —
Series 2016B 8,986 — 8,986 — —
Energy Loan Program 68 118 (50) 151 (33)
Total 1,351,437$ 1,203,366$ 148,071$ 1,056,510$ 146,856$
Condensed Statements of Long-Term Debt
(000's)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 14
2017 Analysis
The District ended fiscal year 2017 with $1.4 billion in long-term debt outstanding. The
District had one senior revenue bond addition this year (“Series 2016C”) for $150.0
million. In addition, the District added two new State Revolving Fund (“SRF”) bonds
(“Series 2016A” and “Series 2016B”) totaling $9.1 million and withdrew $27.0 million in
proceeds from the Series 2015A SRF bond. For more detailed information, see Note 6,
Long-Term Liabilities, in the accompanying notes to the financial statements.
2016 Analysis
The District ended fiscal year 2016 with $1.2 billion in long-term debt outstanding. The
District had one senior revenue bond addition this year (“Series 2015B”) for a total of
$223.9 million of which $73.9 million was used to partially advance refund the Series
2006C and the Series 2008A debt. Premium received on the new Series 2015B and
excess funds in the bond reserve account were used to advance refund the remaining
principal and interest on the Series 2006C and the Series 2008A debt. In addition, the
District added a new State Revolving Fund (“SRF”) bond (“Series 2015A”) totaling $42.6
million. For more detailed information, see Note 6, Long-Term Liabilities, in the
accompanying notes to the financial statements.
Decisions Impacting the Future
Integral to helping MSD’s rate payers understand the Consent Decree (“CD”) with the
U.S. Environmental Protection Agency and the Missouri Coalition for the Environment,
which settled a lawsuit for alleged violations of the Clean Water Act, was the initiation
of Project Clear. See Note 12, Commitments And Contingencies, for additional
information regarding this litigation. The goal of Project Clear is to help MSD’s rate
payers have a clear understanding of MSD’s goals and objectives. Project Clear consists
of three main components:
!Getting The Rain Out which is focused on reducing excess stormwater from
entering the sewer system infrastructure to help reduce basement back-ups and
overflows;
!Performing Repair and Maintenance to the existing infrastructure to ensure it
operates as well as possible for as long as possible, and
!Building System Improvements where needed to increase the capacity of
the system.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 15
Project Clear will greatly affect the daily lives of many of our rate payers. Project Clear
is needed to help the rate payer understand the individual and regional, as well as the
immediate and long-term, benefits of the program.
Since February 2004, the voters of St. Louis have authorized the District to issue a total
of $2.6 billion in wastewater revenue bonds. As of June 30, 2017, the District has issued
$1.7 billion of the total authorization. The District’s long-term wastewater capital
improvement program will continue to be funded through a combination of additional
bonds and wastewater rate increases.
Requests For Information
This financial report is designed to provide a general overview of the District’s finances
for all those with an interest in the District’s finances. Questions concerning any of the
information provided in this report or requests for additional financial information
should be addressed or e-mailed to:
Marion M. Gee, Director of Finance
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
314-768-6200
mgee@stlmsd.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 16
STATEMENTS OF NET POSITION
June 30,
Assets 2017 2016
Current Assets
Unrestricted Current Assets
Cash and cash equivalentsN 23,095,871$ 26,934,021$
InvestmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 280,288,468 166,147,564
Sewer service charges receivable, less allowance of NNNNNNNNNNNNNNNNN
$56,654,014 in 2017 and $55,728,507 in 2016 53,641,066 50,025,233
Unbilled sewer service charges receivable 26,513,717 24,728,826
Property taxes receivable, less allowance of
$25,280 in 2017 and $39,127 in 2016 835,213 1,265,106
Accrued income on investmentsNNNNNNNNNNNNNNNNNNNNNNN 1,016,453 805,879
Other receivables, less allowance of $119,264 in 2017 NNNNNNNNNNNNNNNNNNNNNN
and $98,460 in 2016 4,707,358 10,184,895
Supplies inventoryNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 7,671,206 7,088,804
BBBBBBBBB Total Unrestricted Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 397,769,352 287,180,328
Restricted Current Assets
Cash and cash equivalents 2,171,935 2,065,003
InvestmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 29,674,144 13,393,010
BBBBBBBBB Total Restricted Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 31,846,079 15,458,013
BBBBBBBBB Total Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 429,615,431 302,638,341
Non-Current Assets
Restricted Assets
Cash and cash equivalentsN 22,845,206 20,197,452
InvestmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 157,273,177 134,209,021
Long-term investmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 54,726,378 69,479,563
Property taxes receivable, less allowance of
$32,041 in 2017 and $22,419 in 2016 1,139,195 724,886
Accrued income on investments 361,052 300,628
Other receivablesNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 69,694 —
BBBBBBBBB Total Restricted Non-Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 236,414,702 224,911,550
Other Assets
Notes receivableNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 12,425,336 12,999,370
Long-term investmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 65,116,013 166,483,086
Total Other AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 77,541,349 179,482,456
Capital Assets
Depreciable:
NNNNNN Treatment and disposal plant and equipmentNNNNNNNNNN 1,279,143,367 1,239,993,981
NNNNNN Collection and pumping plantNNNNNNNNNNNNNNNNNNNNNNNN 2,475,709,689 2,419,647,020
NNNNNN General plant and equipmentNNNNNNNNNNNNNNNNNNNNNNNNN 94,793,873 92,393,025
NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 3,849,646,929 3,752,034,026
NNNNNN Less:N Accumulated depreciationNNNNNNNNNNNNNNNNNNNNN 1,375,842,413 1,300,427,525
NNNNNN Net depreciable assetsNNNNNN 2,473,804,516 2,451,606,501
Non-depreciable:
NNNNNN LandNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 70,695,016 69,702,470
NNNNNN Construction in progressNNNNNNNNNNNNNNNNNNNNNNNNNNNN 707,738,709 530,734,241
Net Capital AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 3,252,238,241 3,052,043,212
NNNNNN
Total Non-Current AssetsBBBBBBBBBBBBBBBBBBBBBBBB 3,566,194,292 3,456,437,218
NNNNNN
Total AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 3,995,809,723 3,759,075,559
Deferred Outflows of Resources
NNN Bonds and notes payable-Deferred loss on refunding 11,320,670 11,973,700
N NN Pension-related outflows 37,665,786 31,144,263
Total Deferred Outflows of ResourcesBBBBBBBBBBBBBBBBBBBBBBBBBBB 48,986,456 43,117,963
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 17
STATEMENTS OF NET POSITION (Continued)
June 30,
Liabilities 2017 2016
Current Liabilities-Payable From Unrestricted Assets
NNNNNN Contracts and accounts payableNNNNNNNNNNNNNNNNNNNNNN 37,800,519$ 37,420,758$
NNNNNN Deposits and accrued expensesNNNNNNNNNNNNNNNNNNNNNNN 39,646,015 38,958,762
NNNNNN Retainage payableNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 11,486,551 9,119,490
NNNNNN Current portion of bonds and notes payableNNNNNNNNNN 42,733,909 38,059,873
B Total Current Liabilities-Payable From Unrestricted Assets 131,666,994 123,558,883
Current Liabilities-Payable From Restricted Assets
NNNNNN Contracts and accounts payableNNNNNNNNNNNNNNNNNNNNNN 1,264,997 1,286,539
NNNNNN RetainageNpayableNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 746,642 438,547
B Total Current Liabilities-Payable From Restricted Assets 2,011,639 1,725,086
BBBBBBBBBBB Total Current LiabilitiesBBBBBBBBBBBBBBBBBBBBBB 133,678,633 125,283,969
NNNNNN
Non-Current Liabilities
NNNNNN Deposits and accrued expensesNNNNNNNNNNNNNNNNNNNNNNN 15,137,690 14,198,048
NNNNNN Net pension liability 67,039,185 52,600,003
NNNNNN Bonds and notes payableNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 1,433,168,099 1,277,342,521
BBBBBBBBBBB Total Non-Current LiabilitiesBBBBBBBBBBBBBBBBBBBBBB 1,515,344,974 1,344,140,572
NNNNNN
BBBBBBBBBBBBBBBBBBBBB Total LiabilitiesBBBBBBBBBBBBBBBBBBBB 1,649,023,607 1,469,424,541
Deferred Inflow of Resources
NNN Pension-related inflows 4,604,518 5,711,868
BBBBBBBBBBB Total Deferred Inflow of Resources 4,604,518 5,711,868
Net Position
NNNNNN Net investment in capital assets 1,876,248,859 1,809,386,175
NNNNNN Restricted for:
NNNNNNNN Debt serviceNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 55,319,023 55,364,013
NNNNNNNN Subdistrict construction and improvementNNNNNNNNNN 79,940,036 81,182,753
NNNNNN UnrestrictedNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 379,660,136 381,124,172
Total Net Position 2,391,168,054$ 2,327,057,113$ N
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 18
STATEMENTS OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION
2017 2016
B Operating Revenues
NNN Sewer service chargesNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 330,873,269$ 306,118,545$
NNN Provision for doubtful sewer service charge accounts (2,513,743) (4,106,652)
NNN Licenses, permits and other feesNNNNNNNNNNNNNNNNNNNNNN 4,036,362 3,620,240
NNN OtherNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 1,095,101 14,225,598
BBB Total Operating RevenuesBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 333,490,989 319,857,731
NNNNNN
B Operating Expenses
NNN Pumping and treatmentNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 60,203,037 59,099,820
NNN Collection system maintenanceNNNNNNNNNNNNNNNNNNNNNNNNNN 43,928,161 42,853,337
NNN EngineeringNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 11,289,906 10,997,619
NNN General and administrativeNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 58,534,411 55,315,372
NNN Water backup claimsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 5,035,020 7,631,197
NNN DepreciationNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 81,194,391 83,983,749
NNN Asset managementNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 14,892,749 13,214,611
BBB Total Operating ExpensesBBBBBBBBBBBBBBBBBBBBBBBBBBBB 275,077,675 273,095,705
NNNNNN
B Operating IncomeBBBBBBBB 58,413,314 46,762,026
NNNNNN
B Non-Operating Revenues
NNN Property taxes levied by the DistrictNNNNNNNNNNNNNNNNNN 32,458,054 25,671,058
NNN Investment incomeNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 2,902,624 4,635,866
NNN Rent and other incomeNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 106,562 102,865
BBB Total Non-Operating RevenuesBBBBBBBBBBBBBBBBBBBBBBBBB 35,467,240 30,409,789
NNNNNN
B Non-Operating Expenses
NNN Net loss on disposal and sale of capital assetsNNNNNNNN 673,044 324,513
NNN Non-recurring projects and studiesNNNNNNNNNNNNNNNNNNNNNN 7,459,538 11,000,403
NNN Interest expenseNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 31,250,777 28,943,200
BBB Total Non-Operating ExpensesBBBBBBBBBBBBBBBBBBBBBBBBB 39,383,359 40,268,116
NNNNNN
B Income Before Capital Grants And ContributionsBBBBBBBBBBBBBBBBBBBBBB 54,497,195 36,903,699
NNNNNN
B Capital Grants And Contributions
NNN Utility plant contributedNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 6,807,147 11,271,085
NNN Grant revenueNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 2,806,599 765,699
BBB Total Capital Grants And ContributionsBBBBBBBBBBBBBBBBBBBBBBBBB 9,613,746 12,036,784
NNNNNN
B Change In Net Position 64,110,941 48,940,483
B Net Position - Beginning Of Year 2,327,057,113 2,278,116,630
NNNNNN
B Net Position - End Of YearBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 2,391,168,054$ 2,327,057,113$
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 19
STATEMENTS OF CASH FLOWS
Continued on Next Page
2017 2016
Cash Flows From Operating Activities
Received from customers 341,958,578$ 307,087,452$
Paid to employees for services (94,528,620) (94,386,428)
Paid to suppliers for goods and services (91,171,051) (85,035,869)
Net Cash Provided By Operating Activities 156,258,907 127,665,155
Cash Flows Provided By Non-Capital Financing Activities
Taxes levied and collected 32,013,277 25,583,025
Cash Flows From Capital And Related Financing Activities
Proceeds from capital grants 100,283 22,649
Proceeds from issuance of debt 185,520,681 192,622,808
Premium on sale of bonds 17,678,054 26,727,475
Interest received on bond proceeds to be used for capital improvements — —
Principal paid on debt (38,076,770) (38,565,916)
Interest and fees paid on debt (54,306,129) (47,582,180)
Payments for capital assets (267,222,460) (227,194,869)
Proceeds from sale of capital assets 48,920 834,701
Build America bond tax credit 1,622,822 1,623,694
Net Cash Provided By (Used In) Capital And Related
Financing Activities (154,634,599) (91,511,638)
Cash Flows From Investing Activities
Purchase of investments (524,918,096) (414,418,954)
Proceeds from sale and maturity of investments 483,199,458 333,435,010
Investment income 6,891,027 6,533,672
Proceeds from rents 106,562 102,865
Net Cash Provided By (Used In) Investing Activities (34,721,049) (74,347,407)
Net Decrease In Cash And Cash Equivalents (1,083,464) (12,610,865)
Cash And Cash Equivalents At Beginning Of Year 49,196,476 61,807,341
Cash And Cash Equivalents At End Of Year 48,113,012$ 49,196,476$
Non-Cash Capital And Investing Activities
Proceeds from debt issuance placed into escrow to refund bonds —$ 73,855,000
Principal amount reduced and placed in escrow less reserve funds — (81,054,443)
Capital asset additions included in accounts payable 18,417,813 24,337,151
Utility plant contributed by other governments and developers 6,807,147 11,271,085
Fair value investment adjustment gain 1,847,824 1,763,059
Grant revenueNN 2,706,316 743,050
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 20
STATEMENTS OF CASH FLOWS (Continued)
2017 2016
Reconciliation Of Operating Income To Net Cash Flows
Provided By Operating Activities
Operating Income 58,413,314$ 46,762,026$
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation 81,194,391 83,983,749
Change in operating assets and liabilities:
(Increase) in billed and unbilled sewer service
charges receivable (5,400,724) (2,609,800)
(Increase) decrease in other receivables 8,636,127 (7,749,740)
(Increase) in supplies inventory (582,402) (728,265)
Increase in contracts and accounts payable 5,810,997 2,564,950
Increase in deposits and accrued expenses 1,376,895 1,870,437
Increase in net pension liability 14,439,182 12,704,012
(Decrease) increase in pension-related inflows (1,107,350) 2,801,726
(Increase) in pension-related outflows (6,521,523) (11,933,940)
Net Cash Provided By Operating Activities 156,258,907$ 127,665,155$
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 21
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2017 AND 2016
1. Organization And Summary Of Significant Accounting Policies
Organization
The Metropolitan St. Louis Sewer District (“District”) was authorized by the
voters, established and chartered under the provisions of the Constitution of
Missouri as a municipal corporation and a political subdivision of the State of
Missouri. Upon creation in 1954, the District assumed responsibilities to provide
for the construction, operation, and maintenance of the sewer facilities within its
defined boundaries. The District’s service area now comprises all of the City of St.
Louis and most of St. Louis County. Subdistricts within the District’s total
service area represent separate geographic areas within which specific taxes can
be levied for the retirement of indebtedness issued to finance construction of
sanitary or stormwater facilities within the area or to operate, maintain, or
construct improvements within the subdistrict. The District also maintains all of
the publicly owned stormwater sewers within its original boundaries and is
continuing to accept maintenance of the stormwater sewers in the remainder of
its service area.
Pursuant to provisions of its Charter and subject to limitations imposed by the
Constitution of Missouri, all powers of the District are vested in a six-member
Board of Trustees (“Board”), three of whom are appointed by the Mayor of the
City of St. Louis and three of whom are appointed by the County Executive of
St. Louis County.
Reporting Entity
The District defines its financial reporting entity to include all component units
for which the District’s governing body is financially accountable. To be
considered financially accountable, the component unit must be fiscally
dependent on the District and the District must either 1) be able to impose its
will on the component unit or 2) the relationship must have the potential for
creating a financial benefit or imposing a financial burden on the District.
Based on the foregoing, the District’s financial statements include all funds that
are established under the authority of the District’s charter. There are no
agencies, boards, commissions, or authorities that are controlled by or dependent
on the District.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 22
Measurement Focus, Basis Of Accounting And Financial Statement
Presentation
Throughout the year, the District maintains its detailed accounting records on a
modified accrual basis of accounting. In order to account for the transactions
related to certain subdistricts and restricted resources, separate fund accounting
records are maintained. For financial reporting purposes, the District reports its
operations as a single enterprise fund. Accordingly, the accounting records are
converted to the accrual basis of accounting and all interfund transactions are
eliminated. Under the accrual basis of accounting, revenues are recognized when
earned and expenses are recognized when the related liability is incurred. The
District’s measurement focus is on the flow of economic resources.
Revenues and expenses are divided into operating and non-operating items.
Operating revenues generally result from providing services in connection with
the District’s principal ongoing operations. The principal operating revenues of
the District are user fees, licenses, and permits for wastewater treatment
services. Operating expenses include the costs associated with the conveyance
and treatment of wastewater and stormwater, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting these
definitions are reported as non-operating revenues and expenses.
The District follows GASB Statement No. 33, Accounting and Financial
Reporting for Nonexchange Transactions, which establishes accounting and
financial reporting standards for nonexchange transactions involving financial or
capital resources.
GASB Statement No. 33 groups nonexchange transactions into the following four
classes, based upon their principal characteristics: derived tax revenues, imposed
nonexchange revenues, government-mandated nonexchange transactions, and
voluntary nonexchange transactions.
The District recognizes assets from imposed nonexchange revenue transactions in
the period when an enforceable legal claim to the assets arises or when the
resources are received, whichever occurs first. Revenues are recognized in the period
when the resources are required to be used for the first period that use is permitted.
The District recognizes revenues from property taxes, net of estimated refunds and
estimated uncollectible amounts, in the period for which the taxes are levied.
Imposed nonexchange revenues also include licenses, permits, and other fees.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 23
Intergovernmental revenues, representing grants and assistance received from
other governmental units, are generally recognized as revenues in the period
when all eligibility requirements, as defined by GASB Statement No. 33, have
been met. Any resources received where all requirements are met with the
exception of the time requirement are recorded as deferred inflows. All other
resources received before any other eligibility requirements are met are reported
as unearned revenues.
When both restricted and unrestricted resources are available for use, it is the
District’s policy to use restricted resources first, and then unrestricted resources
as they are needed.
Cash And Cash Equivalents
The District considers highly liquid investments that have original maturity of
less than 91 days to the District to be Cash Equivalents.
Investments
The District accounts for its investments at fair value. The District categorizes its
fair value measurements within the fair value hierarchy established by generally
accepted accounting principles pursuant to GASB Statement No. 72. The
hierarchy is based on the valuation inputs used to measure the fair value of the
asset. Level 1 inputs are quoted prices in active markets for identical assets;
Level 2 inputs are significant other observable inputs; Level 3 inputs are
significant unobservable inputs. Changes in unrealized gain (loss) on the
carrying value of investments are reported as a component of investment income
in the Statements of Revenues, Expenses and Changes in Net Position.
Restricted Cash, Cash Equivalents And Investments
Cash, cash equivalents and investments that are externally restricted are
classified as restricted assets. These assets are used to make debt service
payments, maintain sinking or reserve funds, purchase or construct capital or
other non-current assets or for other restricted purposes.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 24
Accounts Receivable
Accounts receivable is composed primarily of charges to customers for
wastewater and stormwater services. In fiscal year 2016 the stormwater sewer
service charge was $.24 per month for a single residential unit and $.18 per
month per unit for multi-residential units. Beginning in fiscal year 2017, with the
voter approval of one taxing district covering the entire MSD service area, these
stormwater sewer service charges were eliminated. Receivables are reported at
their gross values net of an allowance for uncollectible amounts. Unbilled sewer
service charge revenues are accrued by the District based on estimated billings
for services provided through the end of the current fiscal year.
Capital Assets
In order to measure long-term assets such as capital assets, including
infrastructure, a study was performed in 1981 to value existing assets at
historical cost or estimated historical cost. Capital assets acquired since that
historical study are recorded at historical cost on the acquisition date. In
accordance with GASB Statement No. 72, donated capital assets are recorded at
acquisition value at the time the asset is considered operational. Interest cost is
capitalized as part of the historical cost of acquiring certain assets when the
effect of such capitalization is material to the financial statements. Interest is not
capitalized on assets constructed with contributions from other governmental
sources. Depreciation is calculated on a straight-line basis over the following
estimated useful lives:
Treatment and disposal plant and
equipment 3 to 100 years
Collection and pumping plant 7 to 100 years
General plant and equipment 3 to 12 years
When developing user charge rates, the District includes funding for replacement
cost of assets, which may differ from depreciation expense recorded for financial
reporting purposes.
Normal maintenance and repairs that do not add to the value of the asset or
materially extend asset lives are not capitalized. Betterments are capitalized and
depreciated over the remaining useful lives of the related assets, as applicable.
The District defines capital assets as assets with an initial, individual cost of
more than $5,000 and an estimated useful life in excess of three years.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 25
Capitalization Of Interest
Interest costs are capitalized as part of the costs of capital assets during the
period of construction based on the related weighted average net borrowing costs
incurred. Interest earned on temporary investments acquired with the proceeds
of such borrowed funds from the date of the borrowing until the assets are ready
for their intended use is used to reduce the interest costs capitalized on the
constructed assets. Interest is not capitalized for outlays financed by capital
grants (or other outside parties) externally restricted for the acquisition of
specified assets. In 2017 and 2016, the District’s total net interest cost incurred
on tax-exempt borrowings during the fiscal year was $44,057,337 and
$37,475,123, respectively. Of this net interest cost, $18,040,989 and $14,733,405
was capitalized and $26,016,348 and $22,741,718 was expensed in 2017 and
2016, respectively.
Supplies Inventory
Supplies inventory consists of parts and supplies to be used to operate and
maintain treatment facilities and various treatment-related equipment at the
District. This inventory figure is netted against those materials and supplies
deemed to be obsolete. All inventory is stated at weighted average cost and
expenses are recognized when the inventory is consumed.
Net Position
One component of the District’s net position is the net investment in capital
assets which consists of capital assets, including restricted capital assets, net of
accumulated depreciation, reduced by the net outstanding debt and construction-
related liabilities, including premiums and discounts on such debt, which is
attributable to the acquisition, construction, or improvement of those assets. The
outstanding debt is net of the cash and investments from the debt that has not
yet been expended. Deferred losses on refundings are also included in the net
investment in capital assets net position.
The restricted component of net position consists of assets and liabilities
regulated by external constraints imposed by creditors, grantors, contributors,
laws, or regulations of other governments or constraints imposed by law through
constitutional provisions or enabling legislation. Property taxes levied by the
various subdistricts and other revenues received for construction in those sub-
districts have also been restricted for that use. Sewer extension and connection
fees, grants, and other revenues received for construction within certain sub-
districts have been restricted for that use. In addition, a portion of sanitary sewer
charges have been restricted for the payment of principal and interest, including
accrued interest, on certain debt of the District.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 26
The unrestricted net position component of net position consists of net position
that does not meet the definition of restricted or net investment in capital assets.
The District first applies restricted resources when an expense is incurred for
purposes for which both restricted and unrestricted net position is available.
The net position components in the 2016 financial statements have been
reclassified to conform to the 2017 presentation. These reclassifications do not
affect total net position as previously reported.
Deferred Outflow Of Resources And Deferred Inflow Of Resources
In addition to assets, financial statements may report a separate section for
deferred outflows of resources. Deferred outflows of resources consists of the
consumption of net position that is applicable to a future reporting period and so
will not be recognized as an outflow of resources until then. Deferred outflows of
resources related to refunding long-term debt is reported in the Statement of Net
Position. A deferred bond refunding amount results from the difference in the
carrying value of refunded debt and its reacquisition price, and is amortized over
the shorter of the life of the refunded or refunding debt. The pension related
deferred outflows of resources represent contributions made to the plan between
the measurement date of the pension obligations and the end of the fiscal year as
well as certain actuarial differences and changes that are amortized over
future periods.
In addition to liabilities, financial statements may report a separate section for
deferred inflows of resources. Deferred inflows of resources consists of the
acquisition of net position that is applicable to a future reporting period and so
will not be recognized as an inflow of resources until then. The District’s deferred
inflows of resources relate to certain changes in pension obligations that are
amortized over future periods.
Capital Contributions
Capital contributions to the District represent government grants and other aid
used to fund capital projects. In accordance with GASB Statement No. 33, capital
contributions are recognized as revenue when the expenditure is made and the
amount becomes subject to claim for reimbursement.
Bond Premiums, Discounts And Issuance Costs
In the District’s financial statements, bond premiums and discounts are
amortized over the life of the bonds using the effective interest method. Bond
issuance costs are expensed when incurred. Bonds and notes payable are
reported net of the applicable bond premium or discount.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 27
Compensated Absences
Vacation
Under the terms of the District’s personnel policies, employees are allowed to
carry a maximum of 30 to 45 days of vacation (depending on length of service)
from one calendar year to the next. Since vacation accrued at year-end is
expected to be used by the employee during the following fiscal year, the accrual
is reported as a component of current deposits and accrued expenses payable.
Sick Leave
Employees earn sick pay benefits at accrual rates ranging from 10 days per year
to 12 days per year (depending on length of service). Unused sick leave can be
carried over at year-end without limitation. An employee retiring from the
District with five or more years of service will be compensated for any unused
accrued sick leave at the rate of 1.25% for each year of District service multiplied
by the unused accrued sick leave remaining at the employee’s current rate of pay
up to a maximum of $50,000. The District has recorded a liability which has been
actuarially determined to be equal to the accumulated expense charge that will
amortize the employees’ benefits over their period of District service. The
liability, included in current deposits and accrued expenses payable, includes
vested accumulated rights to receive sick leave benefits estimated to be paid
within one year. The portion of sick leave expected to be paid after one year is
recorded as a component of non-current deposits and accrued expenses payable.
Pensions
For purposes of measuring the net pension liability, deferred outflows of
resources and deferred inflows of resources related to pensions, and pension
expense, the fiduciary net position of The Metropolitan St. Louis Sewer District
Employees’ Pension Plan (“Plan”) and additions to/deductions from the Plan’s
fiduciary net position have been determined on the same basis as they are
reported by the Plan, which has a December 31 reporting period. For this
purpose, benefit payments are recognized when due and payable in accordance
with the benefit terms. Investments are reported at fair value.
Use Of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in the financial statements. Actual
results could differ from those estimates.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 28
Adoption Of New Accounting Standards
During fiscal year 2017, the District implemented GASB Statement No. 77, Tax
Abatement Disclosures. This Statement requires disclosure of tax abatement
information about (1) the District’s own tax abatement agreements and (2) those
that are entered into by other governments and that reduce the District’s tax
revenues. The requirements of this Statement improve financial reporting by
giving users of financial statements essential information that has not been
consistently or comprehensively reported to the public. Disclosure of information
about the nature and magnitude of tax abatements will make these transactions
more transparent to financial statement users and as a result, users will be
better equipped to understand (1) how tax abatements affect the District’s ability
to raise resources and meet its financial obligations and (2) the impact those
abatements have on the District’s financial position and economic condition. The
disclosures required by this Statement are presented in Footnote 15,
Tax Abatements.
During fiscal year 2016, the District implemented GASB Statement No. 72, Fair
Value Measurement and Application. This Statement superseded selected
paragraphs and footnotes and amended selected paragraphs in various
Statements of the Governmental Accounting Standards Board. The primary
objective of this Statement is to improve financial reporting by state and local
governments by clarifying the definition of fair value for financial reporting
purposes, establishing general principles for measuring fair value, providing
additional fair value application guidance, and enhancing disclosures about fair
value measurements. The District accounts for investments at fair value by using
quoted market prices which materially matches GASB Statement No. 72. The
disclosures required by this Statement are presented in Footnote 2, Deposits
and Investments.
2. Deposits and Investments
Deposits
At June 30, 2017 the reported amount of the District’s deposits was $31,610,342
and the bank balance was $34,222,886. Of the bank balance, $1,003,427 was
covered by federal depository insurance; $33,179,256 was collateralized with
securities held by a third party financial institution in the District’s name. In
addition, the District has money market mutual funds of $16,502,670 held in a
trusted escrow account for the State that will be used to make future
bond payments.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 29
At June 30, 2016 the reported amount of the District’s deposits was $33,734,360
and the bank balance was $37,603,299. Of the bank balance, $865,854 was
covered by federal depository insurance; $36,653,652 was collateralized with
securities held by a third party financial institution in the District’s name. In
addition, the District has money market mutual funds of $15,462,116 held in a
trusted escrow account for the State that will be used to make future bond
payments.
Custodial credit risk for deposits is the risk that, in the event of bank failure, the
District’s deposits may not be returned to the District. The District’s investment
policy complies with the provisions of state laws and requires collateralization on
repurchase agreements, time certificates of deposit and deposits with banking
institutions with a fair value of 103%.
Deposits in each bank are insured by the Federal Deposit Insurance Corporation
(“FDIC”) in the amount of $250,000 for interest bearing accounts and noninterest
bearing accounts.
Investments
With the approval of the District’s Board of Trustees, the Secretary-Treasurer is
authorized to invest excess cash in any investment authorized by the District’s
Charter. The District’s investment policy conforms to the investment policy
guidelines for the State of Missouri. The District’s investment policy authorizes
the District to invest in the following instruments: U.S. Treasury obligations,
certificates of deposit, obligations of any agency or instrumentality of the U.S.,
repurchase agreements, bankers’ acceptances, and commercial paper, all
according to terms specified in the policy. The District also has investments in
money market mutual funds that hold securities approved by the District’s
investment policy. At June 30, 2017 and 2016, all of the District’s investments
were in compliance with the District’s investment policy and charter.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 30
A summary of deposits and investments as of June 30, 2017 and 2016 is
as follows:
Reconciliation to the financial statements:
Investment Type Cost Fair Value Cost Fair Value
Deposits 31,610,342$ 31,610,342$ 33,734,360$ 33,734,360$
Money Market Mutual Funds 16,502,670 16,502,670 15,462,116 15,462,116
Certificates of Deposit — — 100,000 100,000
U.S. Treasury and Agency
Obligations 488,079,396 486,365,173 495,637,069 496,034,377
Commercial Paper 100,349,746 100,713,007 53,478,311 53,577,867
Total 636,542,154$ 635,191,192$ 598,411,856$ 598,908,720$
2017 2016
2017 2016
Cash and Cash Equivalents
Unrestricted Current 23,095,871$ 26,934,021$
Restricted Current 2,171,935 2,065,003
Restricted Non-Current 22,845,206 20,197,452
Investments
Unrestricted Current 280,288,468 166,147,564
Restricted Current 29,674,144 13,393,010
Restricted Non-Current 157,273,177 134,209,021
Long-Term Investments
Restricted Non-Current 54,726,378 69,479,563
Other 65,116,013 166,483,086
635,191,192$ 598,908,720$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 31
Interest Rate Risk
As of June 30, 2017 and 2016, the District had the following investments and
maturities:
In accordance with the District’s investment policy, the District will minimize the
risk that the fair value of debt securities in the portfolio will fall due to increases
in general interest rates by:
1. Structuring the investment portfolio so that securities mature to meet cash
requirements for ongoing operations, thereby avoiding the need to sell
securities on the open market prior to maturity.
2. Investing operating funds primarily in short-term securities.
3. State law limits the maximum stated maturities to five years on any
investment from the date of purchase.
Long-Term Investments
While the majority of the District’s portfolio is made up of short-term
investments, the District also categorizes a sizeable amount as long-term under
the categories discussed in Note 1, Organization and Summary of Significant
Accounting Policies. The District is allowed to purchase long-term callable
securities. These callable securities give the issuer the right to redeem at
predetermined prices at a specific time prior to maturity. When a security is
called, the District reflects an immediate reclassification from long-term
investment to cash.
Weighted Weighted
Average Average
Maturity Maturity
Investment Type Fair Value (Years) Fair Value (Years)
Certificates of Deposit —$ — 100,000$ 0.72
U.S. Treasury Obligations 189,636,435 0.19 252,489,204 0.39
U.S. Agency Obligations 296,728,738 0.67 243,545,173 0.73
Commercial Paper 100,713,007 0.19 53,577,867 0.24
Total 587,078,180$ 0.43 549,712,244$ 0.53
2017 2016
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 32
Custodial/Credit Risk
The District will minimize credit risk for investments, the risk of loss due to
failure of the security issuer or backer, by:
1. Prequalifying the financial institutions, broker/dealers, intermediaries,
and advisors with which the District will do business.
2. Diversifying the portfolio so that potential losses on individual securities
will be minimized.
In accordance with its investment policy, the District limits its investments in
these investment types to the top rating issued by Nationally Recognized
Statistical Rating Organizations. As of June 30, 2017 and 2016, the District’s
investments in commercial paper were rated A-1 by Standard & Poor’s (“S&P”)
and P-1 by Moody’s Investors Service (“Moody’s”). The District’s investments in
U.S. agency obligations that do not carry the explicit guarantee of the U.S.
Government all carry a rating assigned by S&P of AA+ or higher. Money market
investments are rated as AAAm and Aaa-mf by S&P and Moody’s, respectively.
Concentration of Credit Risk
The District’s investment policy places no limit on the amount the District may
invest in any one issuer with respect to U.S. Treasury obligations and
collateralized time and demand deposits. U.S. agency obligations and
government-sponsored enterprises are limited to 60% of the portfolio, with no
more than 30% of the total portfolio invested in securities of any one agency; and
collateralized repurchase agreements are limited to 50% of the portfolio. U.S.
agency callable securities are limited to 30% of the portfolio, and commercial
paper and bankers’ acceptances are limited to 25% each, with no more than 5% of
the total portfolio invested in any one issuer at the time of purchase. The
following table lists investments in issuers that represent 5% or more of total
investments at June 30, 2017 and 2016:
Issuer 2017 2016
Treasury Notes 32.3 45.9
Federal Home Loan Bank 19.0 20.5
Federal National Mortgage Association 12.2 10.4
Federal Home Loan Mortgage Corporation 11.7 11.3
Bank of Tokyo - Mitsubishi UFJ 5.5 2.7
Percent Of
Total Investments
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 33
Fair Value Measurement and Application
The District categorizes its fair value measurements within the fair value
hierarchy established by generally accepted accounting principles pursuant to
GASB Statement No. 72. The hierarchy is based on the valuation inputs used to
measure the fair value of the asset. Level 1 inputs are quoted prices in active
markets for identical assets; Level 2 inputs are significant other observable
inputs; Level 3 inputs are significant unobservable inputs.
The District has the following recurring fair value measurements as of
June 30, 2017:
!Money Market Mutual Funds of $16.5 million are valued using a
market approach to measuring fair value prices that considers
relevant information generated by market transactions involving
identical or similar assets or groups of assets. (Level 2 inputs)
!U.S. Treasury and Agency Obligations of $486.4 million are valued
using a market approach to measuring fair value prices that
considers relevant information generated by market transactions
involving identical or similar assets or groups of assets. (Level 2
inputs)
!Commercial Paper of $100.7 million is valued using a market
approach to measuring fair value prices that considers relevant
information generated by market transactions involving identical or
similar assets or group of assets. (Level 2 inputs)
3. Notes Receivable
The District has a note receivable with Missouri American Water Company
(“MOAM”) for its portion of the capital costs related to the Lower Meramec
Wastewater Treatment Plant. The original loan bears interest at 4.35%, while
the two loans added during fiscal year 2013 bear interest at 4.50% and 3.52%.
The current portion of this note is contained in the Unrestricted Other
Receivables line on the Statements of Net Position. The note receivable will
mature in fiscal year 2033.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 34
At June 30, 2017, future payments are as follows:
The District also has a note receivable due to its participation in the Contractor
Loan Fund, a consortium of local organizations desiring to pool bank loans,
private investment, and new market tax credits to provide access to capital for
Minority and Women-owned Business Enterprise companies that are certified
through a City of St. Louis agency. At June 30, 2017, MSD’s note receivable
related to the Contractor Loan Fund is $42,270.
2018 1,154,696$
2019 1,154,696
2020 1,154,696
2021 1,154,696
2022 1,154,696
2023-2027 5,773,479
2028-2032 5,773,479
2033 563,798
17,884,236
Less: Amount representing interest 4,898,251
12,985,985$
Classification in Statement of Net Position:
Current 602,919$
Non-current 12,383,066
Total 12,985,985$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 35
4. Capital Assets
The following is a summary of capital assets changes for the fiscal years ended
June 30, 2017 and 2016:
Balance Balance
June 30, 2016 June 30, 2017
Capital assets not being depreciated:
Land 69,702,470$ 1,022,893$ 30,347$ 70,695,016$
Construction in progress 530,734,241 269,349,532 92,345,064 707,738,709
Total capital assets not being depreciated 600,436,711 270,372,425 92,375,411 778,433,725
Capital assets being depreciated:
Treatment and disposal plant
and equipment 1,239,993,981 39,643,299 493,913 1,279,143,367
Collection and pumping plant 2,419,647,020 60,677,011 4,614,342 2,475,709,689
General plant and equipment 92,393,025 4,016,633 1,615,785 94,793,873
Total capital assets being depreciated 3,752,034,026 104,336,943 6,724,040 3,849,646,929
Less: Accumulated depreciation:
Treatment and disposal plant
and equipment (510,110,382) (32,926,833) (261,039) (542,776,176)
Collection and pumping plant (721,852,339) (41,808,127) (3,954,691) (759,705,775)
General plant and equipment (68,464,804) (6,459,431) (1,563,773) (73,360,462)
Total accumulated depreciation (1,300,427,525) (81,194,391) (5,779,503) (1,375,842,413)
Total capital assets being depreciated, net 2,451,606,501 23,142,552 944,537 2,473,804,516
Total Capital Assets 3,052,043,212$ 293,514,977$ 93,319,948$ 3,252,238,241$
Additions Deletions
Balance Balance
June 30, 2015 June 30, 2016
Capital assets not being depreciated:
Land 56,520,708$ 13,261,762$ 80,000$ 69,702,470$
Construction in progress 408,463,554 231,846,711 109,576,024 530,734,241
Total capital assets not being depreciated 464,984,262 245,108,473 109,656,024 600,436,711
Capital assets being depreciated:
Treatment and disposal plant
and equipment 1,214,483,762 25,920,470 410,251 1,239,993,981
Collection and pumping plant 2,341,025,509 80,022,507 1,400,996 2,419,647,020
General plant and equipment 92,198,891 4,374,910 4,180,776 92,393,025
Total capital assets being depreciated 3,647,708,162 110,317,887 5,992,023 3,752,034,026
Less: Accumulated depreciation:
Treatment and disposal plant
and equipment (474,920,704) (35,577,561) (387,883) (510,110,382)
Collection and pumping plant (681,703,916) (40,728,438) (580,015) (721,852,339)
General plant and equipment (64,498,493) (7,677,750) (3,711,439) (68,464,804)
Total accumulated depreciation (1,221,123,113) (83,983,749) (4,679,337) (1,300,427,525)
Total capital assets being depreciated, net 2,426,585,049 26,334,138 1,312,686 2,451,606,501
Total Capital Assets 2,891,569,311$ 271,442,611$ 110,968,710$ 3,052,043,212$
Additions Deletions
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 36
5. Property Tax
On or before October 1 of each year, the District levies ad valorem taxes on all
taxable tangible property, real and personal, within its boundaries based on
assessed valuations established by the City of St. Louis and St. Louis County
Assessors. Taxes levied are used for operations and stormwater maintenance,
debt service, and construction. Taxes are recorded as non-operating revenues.
Property tax bills are typically mailed in October. They become delinquent and
represent a lien on the related property if not paid by December 31. All property
taxes are billed and collected by the City of St. Louis and St. Louis County
Collectors’ of Revenue and are remitted to the District monthly.
On April 5, 2016, MSD customers voted to approve a stormwater service
proposition whereby effective July 1, 2016, MSD roll backed and eliminated
several existing taxes, eliminated the stormwater fee and, in lieu of these funding
mechanisms, instituted or left in place two taxing districts that covered MSD’s
entire service area. The overriding benefit of the stormwater proposition is that
customers will be treated equally under the new system, meaning that all
customers are subject to the same tax rates and all customers receive the same
level of stormwater services.
In fiscal years 2017 and 2016, the District recorded revenue from property taxes
in the amount of $32,458,054 and $25,671,058, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 37
6. Long-Term Liabilities
The following is a summary of changes in the District’s long-term liabilities for
the year ended June 30, 2017:
Original Balance Balance
Issuance June 30, June 30, Current
Amounts 2016 Additions Retirements 2017 Portion
Bonds and Notes Payable:
Wastewater System Senior Revenue Bonds:
Series 2010B 85,000,000$ 85,000,000$ —$ —$ 85,000,000$ —$
Series 2011B 52,250,000 45,325,000 — 1,915,000 43,410,000 2,010,000
Series 2012A 225,000,000 220,000,000 — 5,300,000 214,700,000 5,300,000
Series 2012B 141,730,000 137,280,000 — 2,570,000 134,710,000 2,775,000
Series 2013B 150,000,000 149,000,000 — 3,000,000 146,000,000 3,000,000
Series 2015B 223,855,000 223,855,000 — 2,500,000 221,355,000 2,575,000
Series 2016C 150,000,000 — 150,000,000 — 150,000,000 2,705,000
Water Pollution Control and Drinking Water Subordinate Revenue Bonds (State Revolving Funds Program):
Series 2004B 161,280,000 89,650,000 — 8,105,000 81,545,000 8,355,000
Series 2005A 6,800,000 4,125,000 — 325,000 3,800,000 335,000
Series 2006A 42,715,000 27,950,000 — 2,350,000 25,600,000 2,285,000
Series 2006B 14,205,000 9,565,000 — 705,000 8,860,000 720,000
Series 2008A/B 40,000,000 27,475,000 — 1,870,000 25,605,000 1,905,000
Missouri Department of Natural Resources:
Energy Loan Program 223,793 118,206 — 50,071 68,135 17,109
Series 2009A 23,000,000 17,514,200 — 1,073,700 16,440,500 1,098,500
Series 2010A 7,980,700 6,588,400 — 366,000 6,222,400 373,300
Series 2010C 37,000,000 30,024,000 — 1,663,000 28,361,000 1,705,000
Series 2011A 39,769,300 37,354,300 — 1,662,000 35,692,300 1,704,000
Series 2013A 52,000,000 49,920,000 — 2,134,000 47,786,000 2,190,000
Series 2015A 75,000,000 42,622,810 27,013,924 2,488,000 67,148,734 3,266,000
Series 2016A 20,000,000 — 146,500 — 146,500 415,000
Series 2016B 75,500,000 — 8,986,258 — 8,986,258 —
1,623,308,793$ 1,203,366,916$ 186,146,682$ 38,076,771$ 1,351,436,827 42,733,909$
Add:
Unamortized premium, net of discount 124,465,181
Total Bonds and Notes Payable 1,475,902,008$
Current Portion of Bonds and Notes Payable 42,733,909$
Non-Current Bonds and Notes Payable 1,433,168,099
Total Bonds and Notes Payable 1,475,902,008$
Net Pension Liability 52,600,003$ 14,439,182$ —$ 67,039,185$ —$
Deposits and Accrued Expenses
Landfill closure and
postclosure costs 821,732$ (313,310)$ —$ 508,422$ —$
Compensated absences 8,497,114 812,994 555,192 8,754,916 2,188,729
Net OPEB obligation 7,003,477 2,576,404 1,516,800 8,063,081 —
Total Deposits and Accrued Expenses 16,322,323$ 3,076,088$ 2,071,992$ 17,326,419$ 2,188,729$
Current Portion (Compensated absences) in Current Deposits and Accrued Expenses 2,188,729$
Non-Current Deposits and Accrued Expenses 15,137,690
Total Deposits and Accrued Expenses 17,326,419$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 38
The following is a summary of changes in the District’s long-term liabilities for
the year ended June 30, 2016:
Original Balance Balance
Issuance June 30, June 30, Current
Amounts 2015 Additions Retirements 2016 Portion
Bonds and Notes Payable:
Wastewater System Senior Revenue Bonds:
Series 2006C 60,000,000$ 60,000,000$ —$ 60,000,000$ —$ —$
Series 2008A 30,000,000 30,000,000 — 30,000,000 — —
Series 2010B 85,000,000 85,000,000 — — 85,000,000 —
Series 2011B 52,250,000 47,170,000 — 1,845,000 45,325,000 1,915,000
Series 2012A 225,000,000 225,000,000 — 5,000,000 220,000,000 5,300,000
Series 2012B 141,730,000 139,605,000 — 2,325,000 137,280,000 2,570,000
Series 2013B 150,000,000 150,000,000 — 1,000,000 149,000,000 3,000,000
Series 2015B 223,855,000 — 223,855,000 — 223,855,000 2,500,000
Water Pollution Control and Drinking Water Subordinate Revenue Bonds (State Revolving Funds Program):
Series 2004B 161,280,000 97,520,000 — 7,870,000 89,650,000 8,105,000
Series 2005A 6,800,000 4,440,000 — 315,000 4,125,000 325,000
Series 2006A 42,715,000 29,915,000 — 1,965,000 27,950,000 2,350,000
Series 2006B 14,205,000 10,260,000 — 695,000 9,565,000 705,000
Series 2008A/B 40,000,000 29,320,000 — 1,845,000 27,475,000 1,870,000
Missouri Department of Natural Resources:
Energy Loan Program 223,793 150,565 — 32,359 118,206 33,173
Series 2009A 23,000,000 18,563,600 — 1,049,400 17,514,200 1,073,700
Series 2010A 7,980,700 6,947,000 — 358,600 6,588,400 366,000
Series 2010C 37,000,000 31,644,000 — 1,620,000 30,024,000 1,663,000
Series 2011A 39,769,300 38,974,300 — 1,620,000 37,354,300 1,662,000
Series 2013A 52,000,000 52,000,000 — 2,080,000 49,920,000 2,134,000
Series 2015A 75,000,000 — 42,622,810 — 42,622,810 2,488,000
1,467,808,793$ 1,056,509,465$ 266,477,810$ 119,620,359$ 1,203,366,916 38,059,873$
Add:
Unamortized premium, net of discount 112,035,478
Total Bonds and Notes Payable 1,315,402,394$
Current Portion of Bonds and Notes Payable 38,059,873$
Non-Current Bonds and Notes Payable 1,277,342,521
Total Bonds and Notes Payable 1,315,402,394$
Net Pension Liability 39,895,991$ 12,704,012$ —$ 52,600,003$ —$
Deposits and Accrued Expenses
Landfill closure and
post-closure costs 783,473$ 38,259$ —$ 821,732$ —$
Compensated absences 8,421,028 825,228 749,142 8,497,114 2,124,275
Net OPEB obligation 5,968,543 2,554,734 1,519,800 7,003,477 —
Total Deposits and Accrued Expenses 15,173,044$ 3,418,221$ 2,268,942$ 16,322,323$ 2,124,275$
Current Portion (Compensated absences) in Current Deposits and Accrued Expenses 2,124,275$ Non-Current Deposits and Accrued Expenses 14,198,048
Total Deposits and Accrued Expenses 16,322,323$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 39
Wastewater System Revenue Bonds Payable
In February 2004, the District received voter authorization for $500,000,000 of
revenue bonds. In August 2008, the District received voter authorization for an
additional $275,000,000 of revenue bonds. In June 2012, the District received
voter authorization for another $945,000,000 of revenue bonds. In April 2016, the
District received voter authorization for another $900,000,000 of revenue bonds.
From the total voter authorization of $2,620,000,000, $947,500,000 has not been
issued as of June 30, 2017. These funds were sought to enable the District to
comply with federal and state clean water requirements.
In December 2016, the District issued $150,000,000 of Wastewater System
Revenue Bonds Series 2016C (“Series 2016C”). These bonds were issued pursuant
to the June 2012 authorization; in this case for the purpose of construction,
repairing, replacing, and equipping new and existing District wastewater
facilities and as of June 30, 2017 $46,235,069 has been expended. A premium of
$17,678,054 was received on the issuance of Series 2016C. These 2016C senior
bonds have interest rates ranging from 2.0% to 5.0% and are payable in
semiannual installments at varying amounts through May 1, 2046.
In December 2015, the District issued $223,855,000 of Wastewater System
Revenue Bonds Series 2015B (“Series 2015B”). These bonds were issued for two
purposes: $73,855,000 was issued to advance refund the Series 2006C and Series
2008A bonds and $150,000,000 was issued pursuant to the June 2012
authorization; in this case for the purpose of constructing, repairing, replacing,
and equipping new and existing District wastewater facilities and as of June 30,
2017, the $150,000,000 has been expended. A premium of $26,727,475 was
received on the $150,000,000 portion of Series 2015B. These 2015B senior bonds
have interest rates ranging from 3.0% to 5.0% and are payable in semiannual
installments at varying amounts through May 1, 2045.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 40
The Series 2015B refunding net proceeds of $86,848,034 (including a premium of
$13,623,487 and after payments of $337,848 in underwriting fees and $292,605 in
issuance costs) and the $8,945,557 in excess debt reserves the District
contributed were used to purchase U.S. government securities. These securities
were deposited in an irrevocable trust with an escrow agent to provide for all
future debt service payments on the Series 2006C and Series 2008A bonds. The
sum of the $95,793,591 deposited into escrow and the earnings on the U.S.
government securities funded the $90 million in principal payments and
$4,534,435 in interest paid in fiscal 2017 relating to the Series 2006C and Series
2008A bonds. As a result of placing the cash with an escrow agent in a trust,
Series 2006C and Series 2008A bonds were defeased and the liability for those
bonds were removed from the financial statements. This refunding decreased
total debt service payments over the next 22 years by $33,032,176, resulting in
an economic gain (difference between the present values of the debt service
requirements on the old and new debt adjusted for additional cash paid)
of $14,544,866.
In December 2013, the District issued $150,000,000 of Wastewater System
Revenue Bonds Series 2013B (“Series 2013B”). These bonds were issued pursuant
to the June 2012 authorization; in this case for the purpose of constructing,
repairing, replacing, and equipping new and existing District wastewater
facilities. All funds from this issuance have been expended. These senior bonds
have interest rates ranging from 2.0% to 5.0% and are payable in semiannual
installments at varying amounts through May 1, 2043.
In November 2012, the District issued $141,730,000 of Wastewater System
Refunding Bonds Series 2012B (“Series 2012B”). These bonds were issued to
advance refund the Series 2004A bonds maturing in fiscal years 2015 and
thereafter. These 2012B senior bonds have interest rates ranging from 1.3% to
5.0% and are payable in semiannual installments at varying amounts through
May 1, 2034. The Series 2012B’s net proceeds of $169,991,297 (including a
premium of $29,613,138 and after payments of $761,593 in underwriting fees and
$590,247 in issuance costs) were used to purchase U.S. government securities.
These securities were deposited in an irrevocable trust with an escrow agent to
provide for all future debt service payments on the bonds. As a result, Series
2004A bonds were partially defeased and the liability for those bonds related to a
date after May 1, 2014 were removed from the financial statements. This
refunding decreased total debt service payments over the next 22 years by
$28,601,189, resulting in an economic gain (difference between the present values
of the debt service requirements on the old and new debt) of $22,439,375.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 41
In August 2012, the District issued $225,000,000 of Wastewater System Revenue
Bonds Series 2012A (“Series 2012A”). These bonds were issued pursuant to the
June 2012 authorization; in this case for the purpose of constructing, repairing,
replacing, and equipping new and existing District wastewater facilities. All
funds from this issuance have been expended. These senior bonds have interest
rates ranging from 2.5% to 5.3% and are payable in semiannual installments at
varying amounts through May 1, 2042.
In December 2011, the District issued $52,250,000 of Wastewater System
Revenue Bonds Series 2011B (“Series 2011B”). These bonds were issued pursuant
to the August 2008 authorization; in this case for the purpose of constructing,
repairing, replacing, and equipping new and existing District wastewater
facilities. All funds from this issuance have been expended. These senior bonds
have interest rates ranging from 3.0% to 5.0% and are payable in semiannual
installments at varying amounts through May 1, 2032.
In January 2010, the District issued $85,000,000 of Taxable Wastewater System
Revenue Bonds (Build America Bonds – Direct Pay) Series 2010B (“Series
2010B”). These bonds were issued pursuant to the August 2008 authorization; in
this case for the purpose of constructing, repairing, replacing, and equipping new
and existing District wastewater facilities. All funds from this issuance have been
expended. These senior bonds have an interest rate of 5.9% and are payable in
semiannual installments at varying amounts through May 1, 2039. As Build
America Bonds under The American Recovery and Reinvestment Act (“ARRA”) of
2009, the District receives a subsidy payment from the Federal government equal
to a percentage of the interest paid. In fiscal years 2013 and prior, the rate was
35%. Beginning with refund payments processed on March 1, 2013 and annually
beginning on October 1, 2013, the IRS has adjusted this rate as part of the
sequestration. In both fiscal years 2017 and 2016, the subsidy percentage was
32.6%. In fiscal year 2018 the subsidy percentage is expected to be 32.7%.
In November 2008, the District issued $30,000,000 of Wastewater System
Revenue Bonds Series 2008A (“Series 2008A”) from the August 2008
authorization for the purpose of providing funds to finance the capital
improvement and replacement program. All funds from this issuance have been
expended. These senior bonds had interest rates ranging from 5.1% to 5.3% and
were payable in semiannual installments at varying amounts through May 1,
2038; however, in December 2015, there was an advance refunding of the Series
2008A bonds. As a result of this refunding, Series 2008A bonds are considered to
be defeased. See the explanation for Series 2015B above for further information.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 42
In November 2006, the District authorized and issued $60,000,000 of Wastewater
System Revenue Bonds Series 2006C (“Series 2006C”) from the February 2004
authorization for the purpose of providing funds to finance the initial phase of its
capital improvement and replacement program, including constructing,
repairing, and replacing new wastewater facilities. All funds from this issuance
have been expended. These senior bonds had interest rates ranging from 4.1% to
5.0% and were payable in semiannual installments at varying amounts through
May 1, 2036; however, in December 2015, there was an advance refunding of the
Series 2006C bonds. As a result of this refunding, Series 2006C bonds are
considered to be defeased. See the explanation for Series 2015B above for further
information.
In May 2004, the District authorized and issued $175,000,000 of Wastewater
System Revenue Bonds Series 2004A (“Series 2004A”) from the February 2004
authorization for the purpose of providing funds to finance the initial phase of its
capital improvement and replacement program, including constructing,
repairing, and replacing new wastewater facilities. All funds from this issuance
have been expended. These senior bonds had interest rates ranging from 2.0% to
5.0% and were payable in semiannual installments at varying amounts through
May 1, 2034; however, in November 2012, there was a partial refunding of the
Series 2004A bonds. As a result of this refunding, Series 2004A bonds were
considered to be partially defeased and the semiannual installments were paid
through May 1, 2014. The liability related to Series 2004A after May 1, 2014 has
been paid. See the explanation for Series 2012B above for further information.
The revenue bonds do not constitute a legal debt or liability for the District, the
State of Missouri, or for any political subdivision thereof and do not constitute
indebtedness within the meaning of any constitutional or statutory debt
limitation or restriction. Revenue derived from the operations of the Wastewater
System is pledged for the retirement of the outstanding Wastewater System
Revenue Bonds listed above. Under the provisions of the bond indentures, the
District covenants to establish rates for the services of the Wastewater System
sufficient to fund operations, maintain reserves, and provide revenues to apply
principal and interest on these bonds.
The issuance of the revenue bonds does not obligate the District to levy any form
of taxation or to make any appropriation for their payments in any fiscal year.
The principal and interest on the bonds are expected to be paid from future
wastewater revenues.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 43
Water Pollution Control And Drinking Water Revenue Bonds Payable
In October 2008, the State Environmental Improvement and Energy Resources
Authority (“Authority”) authorized and issued $69,435,000 of Water Pollution
Control and Drinking Water Revenue Bonds (State Revolving Funds Programs)
Series 2008A/B (“Series 2008A/B”). The Series 2008A/B bonds provided funds to
issue loans to 14 Missouri political subdivisions that used the funds to finance
water pollution control and drinking water projects. A portion of the proceeds of
the Series 2008A/B bonds issued by the Authority were used to purchase
subordinate Participant Revenue Bonds (“Participant Bonds”) authorized and
issued by the District from the February 2004 authorization in the aggregate
principal amount of $40,000,000, the proceeds of which were used for
constructing, repairing, and equipping new and existing wastewater facilities. All
funds from this issuance have been expended. The District’s Participant Bonds
have interest rates ranging from 4.0% to 5.7% and are payable in semiannual
installments at varying amounts through January 1, 2029.
In November 2006, the Authority authorized and issued $22,105,000 of State
Revolving Funds Programs Series 2006B (“Series 2006B”). The Series 2006B
bonds provided funds to issue loans to 7 Missouri political subdivisions that used
the funds to finance water pollution control and drinking water projects. A
portion of the proceeds of the Series 2006B bonds issued by the Authority were
used to purchase Participant Bonds authorized and issued by the District from
the February 2004 authorization in the aggregate principal amount of
$14,205,000, the proceeds of which were used for constructing, repairing, and
equipping new and existing wastewater facilities. All funds from this issuance
have been expended. The District’s Participant Bonds have interest rates ranging
from 4.0% to 5.0% and are payable in semiannual installments at varying
amounts through July 1, 2027.
In May 2006, the Authority authorized and issued $87,505,000 of State Revolving
Funds Programs Series 2006A (“Series 2006A”). The Series 2006A bonds
provided funds to issue loans to 13 Missouri political subdivisions that used the
funds to finance water pollution control and drinking water projects. A portion of
the proceeds of the Series 2006A bonds issued by the Authority were used to
purchase subordinate Participant Bonds authorized and issued by the District
from the February 2004 authorization in the aggregate principal amount of
$42,715,000, the proceeds of which were used for constructing, repairing, and
equipping new and existing wastewater facilities. All funds from this issuance
have been expended. The District’s Participant Bonds have interest rates ranging
from 3.5% to 4.5% and are payable in semiannual installments at varying
amounts through July 1, 2026.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 44
In May 2005, the Authority authorized and issued $53,060,000 of State Revolving
Funds Programs Series 2005A (“Series 2005A”). The Series 2005A bonds
provided funds to make loans to 10 Missouri political subdivisions and one
Missouri non-profit corporation that were used to finance water pollution control
and drinking water projects. A portion of the proceeds of the Series 2005A bonds
issued by the Authority were used to purchase subordinate Participant Bonds
authorized and issued by the District from the February 2004 authorization in
the aggregate principal amount of $6,800,000, the proceeds of which were used
for constructing, repairing, and equipping new and existing wastewater facilities.
All funds from this issuance have been expended. The District’s Participant
Bonds have interest rates ranging from 3.0% to 5.0% and are payable in
semiannual installments at varying amounts through July 1, 2026.
In May 2004, the Authority authorized and issued $179,780,000 of State
Revolving Funds Programs Series 2004B (“Series 2004B”). The Series 2004B
bonds provided funds to make loans to 7 Missouri political subdivisions that were
used to finance water pollution control projects. A portion of the proceeds of the
Series 2004B bonds issued by the Authority were used to purchase subordinate
Participant Bonds authorized and issued by the District from the February 2004
authorization in the aggregate principal amount of $161,280,000, the proceeds of
which were used to finance the District’s three water pollution control
construction projects outlined in the agreement. All funds from this issuance
have been expended. The District’s Participant Bonds have interest rates ranging
from 2.0% to 5.3% and are payable in semiannual installments at varying
amounts through January 1, 2027.
The Series 2004B, 2005A, 2006A, 2006B, and 2008A/B bonds do not constitute a
legal debt or liability for the District, the State of Missouri, or for any political
subdivision thereof and do not constitute indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction. The issuance of the
Series 2004B, 2005A, 2006A, 2006B, and 2008A/B bonds and the Series 2009A,
2010A, 2010C, 2011A, 2013A, 2015A, 2016A, and 2016B direct loans (pages 46
through 52) do not obligate the District to levy any form of taxation or to make
any appropriation for their payments in any fiscal year. The principal and
interest on the bonds are expected to be paid from future wastewater revenues.
In connection with the District’s issuance of the Participant Bonds, which were
purchased with the proceeds of the Series 2004B, 2005A, 2006A, 2006B, and
2008A/B bonds, the District participates in the State Revolving Loan Program
established by the Missouri Department of Natural Resources (“DNR”). Monies
from federal capitalization grants and state matching funds are used to fund a
bond reserve account for the participants.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 45
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account and deposited in a
bond reserve account, in the District’s name, an additional 60% of the
expenditure amount for the Series 2004B bonds and 70% for the Series 2005A,
2006A, and 2006B bonds. For the Series 2008A/B bonds, 70% of the entire
anticipated borrowed amount was deposited into this bond reserve account at the
beginning of the loan versus as the expenditures were reimbursed. Interest
earned from this bond reserve account can be used by the District to fund interest
payments on the bonds.
On the date of each payment of the principal amount of the District’s Participant
Bonds, the trustee transfers from this bond reserve account to the master trustee
account an amount equal to 60% of the principal payment for the Series 2004B
bonds and 70% for the Series 2005A, 2006A, 2006B and 2008A/B bonds.
In accordance with the Master Bond Ordinance and the Series 2004B, 2005A,
2006A, 2006B, and 2008A/B bonds’ ordinances, the District’s annual net
operating revenues from wastewater activities, as defined in the agreement,
coupled with investments earnings, must be at least 125% of the current year’s
principal and interest due on all senior bonds and at least 115% of the current
year’s principal and interest due on all bonds. At June 30, 2017 and 2016, the
District was in compliance with this covenant.
Principal And Interest Requirements On Revenue Bonds Payable
The annual principal and interest requirements to maturity on revenue bonds
payable outstanding as of June 30, 2017 are as follows:
Years ending June 30, Principal Interest Total
2018 31,965,000$ 49,529,044$ 81,494,044$
2019 32,910,000 48,659,417 81,569,417
2020 34,135,000 47,623,606 81,758,606
2021 35,330,000 46,402,605 81,732,605
2022 36,730,000 45,237,980 81,967,980
2023-2027 198,650,000 205,143,637 403,793,637
2028-2032 203,690,000 163,065,487 366,755,487
2033-2037 219,875,000 112,776,211 332,651,211
2038-2042 276,975,000 58,758,239 335,733,239
2043-2046 70,325,000 7,549,250 77,874,250
Total 1,140,585,000$ 784,745,476$ 1,925,330,476$
Wastewater System Revenue Bonds Payable/
Water Pollution Control and Drinking Water
Revenue Bonds Payable
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 46
Energy Efficiency Leveraged Note Payable
In February 2012, the DNR loaned $223,793 to the District. The Energy
Efficiency Leveraged Note Payable bears interest at a rate of 2.5% per annum
and is payable through February 1, 2020. The purpose of this note was to finance
the design, acquisition, installation, and implementation of energy conservation
measures. The principal and interest on this note will be paid from the energy
savings from the projects or avoided costs resulting from the projects.
Principal And Interest Requirements On Energy Efficiency Leveraged
Note Payable
The annual principal and interest requirements to maturity on the Energy
Efficiency Leveraged Note Payable outstanding as of June 30, 2017 are
as follows:
State Of Missouri Direct Loan Series 2016B
In December 2016, the State of Missouri Direct Loan Program issued to the
District an amount totaling $75,500,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future
wastewater revenues and the bonds are issued from the June 2012 authorization.
The District’s interest rate is 1.2% and is payable in semiannual installments at
varying amounts through July 1, 2037.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2016B
As the District incurs approved capital expenditures, the DNR reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 1.2% based on the amount that has been borrowed.
As of June 30, 2017 the outstanding loan balance was $8,986,258. The payment
requirements to maturity will be determined after the debt is fully issued.
Years ending June 30, Principal Interest Total
2018 17,109$ 852$ 17,961$
2019 34,863 1,059 35,922
2020 16,163 202 16,365
Total 68,135$ 2,113$ 70,248$
Energy Efficiency Leveraged Note Payable
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 47
State Of Missouri Direct Loan Series 2016A
In December 2016, the State of Missouri Direct Loan Program issued to the
District an amount totaling $20,000,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future
wastewater revenues and the bonds are issued from the June 2012 authorization.
The District’s interest rate is 1.2% and is payable in semiannual installments at
varying amounts through January 1, 2037.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2016A
As the District incurs approved capital expenditures, the DNR reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 1.2% based on the amount that has been borrowed.
As of June 30, 2017 the outstanding loan balance was $146,500. The payment
requirements to maturity will be determined after the debt is fully issued.
State Of Missouri Direct Loan Series 2015A
In August 2015, the State of Missouri Direct Loan Program issued to the District
an amount totaling $75,000,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future
wastewater revenues and the bonds are issued from the June 2012 authorization.
The District’s interest rate is 1.2% and is payable in semiannual installments at
varying amounts through January 1, 2035.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2015A
As the District incurs approved capital expenditures, the DNR reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 1.2% based on the amount that has been borrowed.
As of June 30, 2017 the outstanding loan balance was $ 67,148,734. After taking
into consideration the $2,488,000 principal paid in fiscal 2017, the balance to be
borrowed is $5,363,266. The payment requirements to maturity will be
determined after the debt is fully issued.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 48
State Of Missouri Direct Loan Series 2013A
In October 2013, the State of Missouri Direct Loan Program issued to the District
an amount totaling $52,000,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future
wastewater revenues and the bonds were issued from the June 2012
authorization. The District’s interest rate is 1.6% and is payable in semiannual
installments at varying amounts through July 1, 2034.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2013A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2013A outstanding as of June 30, 2017 are
as follows:
State Of Missouri Direct Loan Series 2011A
In November 2011, the State of Missouri Direct Loan Program issued to the
District an amount totaling $39,769,300 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future
wastewater revenues and the bonds were issued from the August 2008
authorization. The District’s interest rate is 1.5% and is payable in semiannual
installments at varying amounts through January 1, 2034.
Years ending June 30, Principal Interest Total
2018 2,190,000$ 732,251$ 2,922,251$
2019 2,247,000 698,089 2,945,089
2020 2,305,000 663,036 2,968,036
2021 2,365,000 627,076 2,992,076
2022 2,427,000 590,178 3,017,178
2023-2027 13,118,000 2,362,843 15,480,843
2028-2032 14,920,000 1,284,857 16,204,857
2033-2035 8,214,000 192,665 8,406,665
Total 47,786,000$ 7,150,995$ 54,936,995$
State of Missouri Direct Loan Series 2013A
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 49
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2011A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2011A outstanding as of June 30, 2017 are
as follows:
State Of Missouri Direct Loan Series 2010C
In December 2010, the State of Missouri Direct Loan Program issued to the
District an amount totaling $37,000,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future
wastewater revenues and the bonds were issued from the August 2008
authorization. The District’s interest rate is 1.7% and is payable in semiannual
installments at varying amounts through January 1, 2031.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2010C
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
Years ending June 30, Principal Interest Total
2018 1,704,000$ 536,086$ 2,240,086$
2019 1,747,000 510,025 2,257,025
2020 1,792,000 483,304 2,275,304
2021 1,838,000 455,891 2,293,891
2022 1,884,000 427,778 2,311,778
2023-2027 10,166,000 1,691,600 11,857,600
2028-2032 11,528,000 873,491 12,401,491
2033-2034 5,033,300 96,233 5,129,533
Total 35,692,300$ 5,074,408$ 40,766,708$
State of Missouri Direct Loan Series 2011A
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 50
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2010C outstanding as of June 30, 2017 are
as follows:
State Of Missouri Direct Loan Series 2010A
In January 2010, the State of Missouri’s Direct Loan Program - ARRA issued to
the District an amount totaling $7,980,700 for the construction, improvement,
renovation, repair, replacement and equipping of its wastewater system, under
the authority of and in full compliance with the District’s Charter (“Plan”) and
the bonds were issued from the August 2008 authorization. The District’s interest
rate is 1.5% and is payable in semiannual installments at varying amounts
through July 1, 2031.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2010A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
Years ending June 30, Principal Interest Total
2018 1,705,000$ 460,969$ 2,165,969$
2019 1,750,000 432,655 2,182,655
2020 1,795,000 403,590 2,198,590
2021 1,842,000 373,783 2,215,783
2022 1,890,000 343,192 2,233,192
2023-2027 10,211,000 1,228,590 11,439,590
2028-2031 9,168,000 345,527 9,513,527
Total 28,361,000$ 3,588,306$ 31,949,306$
State of Missouri Direct Loan Series 2010C
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 51
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2010A outstanding as of June 30, 2017 are
as follows:
State Of Missouri Direct Loan Series 2009A
In October 2009, the DNR loaned $23,000,000 to the District. The State of
Missouri Direct Loan Series 2009A note bears interest at a rate of 1.5% per
annum and is payable through January 1, 2030. The purpose of this note was to
finance the designing, constructing, improving, renovating, repairing, replacing
and equipping of new and existing sewer facilities within the District. The
principal and interest on the note are expected to be paid from future wastewater
revenues and the note was issued from the August 2008 authorization.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2009A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
Years ending June 30, Principal Interest Total
2018 373,300$ 90,717$ 464,017$
2019 380,900 85,164 466,064
2020 388,700 79,498 468,198
2021 396,600 73,717 470,317
2022 404,600 67,817 472,417
2023-2027 2,149,900 246,319 2,396,219
2028-2032 2,128,400 79,808 2,208,208
Total 6,222,400$ 723,040$ 6,945,440$
State of Missouri Direct Loan Series 2010A
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 52
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2009A outstanding as of June 30, 2017 are
as follows:
In accordance with the Direct Loan Series 2009A, 2010A, 2010C, 2011A, 2013A,
2015A, 2016A, and 2016B ordinances, the District’s annual net operating
revenues from wastewater activities, as defined in the agreement, coupled with
investments earnings must be at least 115% of the current year’s principal and
interest due on all bonds. At June 30, 2017 and 2016, the District was in
compliance with this covenant.
Wastewater System Cash And Investments
The following accounts have been established in accordance with bond ordinances
and financing agreements that require receipts generated from operations be
segregated and certain reserve accounts be established:
Revenue Fund
The Revenue Fund will be used for the purpose of depositing wastewater and
stormwater operating revenues, providing funds to pay for expenses related to
the operation and maintenance of the District, and fulfilling Sinking Fund
requirements in accordance with the bond ordinances.
Sinking Fund
The bond ordinances provide for deposits to and the use of monies in the Sinking
Fund to be used for the sole purpose of principal and interest payments on the
bonds. Sufficient monies shall be paid in periodic installments from the
Revenue Fund.
Years ending June 30, Principal Interest Total
2018 1,098,500$ 236,045$ 1,334,545$
2019 1,123,900 219,915 1,343,815
2020 1,149,900 203,411 1,353,311
2021 1,176,500 186,526 1,363,026
2022 1,203,700 169,251 1,372,951
2023-2027 6,449,300 572,803 7,022,103
2028-2030 4,238,700 109,330 4,348,030
Total 16,440,500$ 1,697,281$ 18,137,781$
State of Missouri Direct Loan Series 2009A
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 53
Debt Service Fund
The Debt Service Fund shall be used by the Trustee for the sole purpose of
paying the principal and interest on the bonds, as and when the same
become due.
Debt Service Reserve Fund
After initial deposit of the amount required pursuant to the bond ordinances and
financing agreements of the Series 2004A, 2006C, 2008A, 2010B, 2011B, 2012A,
and 2013B bonds, monies in the Debt Service Reserve Fund shall be disbursed
and expended by the District solely for the payment of the principal and interest
on the bonds and notes to the extent of any deficiency in the Debt Service Fund
for such purpose. The District may disburse and expend monies from the Debt
Service Reserve Fund for such purpose immediately. As of June 30, 2017 and
2016, cash and investments in the Debt Service Reserve Fund totaled
$49,413,496 and $49,575,170, respectively.
Series 2016C was issued without a debt service requirement.
Series 2015B was issued without a debt service requirement and at that time
$8,945,557 in excess debt reserves along with part of the Series 2015B proceeds
were used to advance refund Series 2006C and Series 2008A.
Special Participant Bond Reserve Account
For the Series 2004B, 2005A, 2006A, 2006B, and 2008A/B bonds, the DNR
deposited into the Special Participant Bond Reserve Account, amounts in
accordance with the bond ordinances, which shall be disbursed and expensed by
the District solely for the payment of the principal and interest on the
Participant Bonds to the extent of any deficiency in the Sinking Fund for such
purpose. At June 30, 2017 and 2016, cash and investments in the Special
Participant Bond Reserve Account held on behalf of the District totaled
$95,878,616 and $104,751,185, respectively. Monies in this account are not
considered to be District funds. However, interest earnings on this account are
used by the District to reduce interest payments on the bonds outstanding.
Renewal And Extension Fund
All sums accumulated and retained in the Renewal and Extension Fund shall be
first used to prevent default in the payment of principal and interest on the
bonds when due and shall then be applied by the District for purposes pursuant
to the trust indenture. No monies have been deposited into this account at
June 30, 2017.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 54
Project Fund
The Project Funds for all bond issuances outstanding will be used for the purpose
of providing monies to pay project costs. The proceeds from the bonds and notes,
after a deposit into the Debt Service Reserve Fund for the amounts required
pursuant to the bond ordinances and note agreements of Series 2004A, 2006C,
2008A, 2010B, 2011B, 2012A, and 2013B bonds, shall be deposited into the
Project Fund. At June 30, 2017 and 2016, cash and investments in the Project
Fund totaled $120,226,233 and $92,563,751, respectively.
Rebate Fund
The bond ordinances provide for the creation of a Rebate Fund into which shall
be deposited such amounts as are required to be deposited therein pursuant to
the arbitrage instructions regarding the calculation and payment of rebate
amounts due. The District does not have any rights in or claims to such money;
provided, however, any funds remaining in the Rebate Fund after redemption
and payment of all bonds and payment of any rebatable arbitrage amount, or
provision having been made therefore, shall be remitted to the District. At
June 30, 2017 and 2016, cash and investments in the Rebate Fund totaled
$227,320 and $228,797, respectively.
Administrative Fee Fund
The Administrative Fee Fund will be used for the payment of the Trustee’s fees
and other administrative fees pursuant to the note agreement. The Trustee has
the ability to immediately withdraw the fee amounts when due. Monies held in
this account shall not be invested.
Pledged Revenues
The District pledges revenues to ensure the repayment of all outstanding revenue
bonds. These bonds’ proceeds are used for the District’s capital improvement and
replacement program and their repayment comes from, and is collateralized by,
the District’s wastewater revenues. These revenues are pledged through 2046 at
an approximate amount of $1.9 billion. The proportion of future pledged revenues
to future wastewater revenues is not estimable as annual total revenues
fluctuate. Principal and interest paid out during fiscal year 2017 was $89.4
million with pledged revenues of $167.1 million. This provided a coverage ratio of
1.9 and represented 50.1% of all net operating revenues.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 55
7. Pension Plan
General Information About The Pension Plan
Pension Plan Description. The Metropolitan St. Louis Sewer District Employees’
Pension Plan (“Pension Plan”) is a noncontributory single employer defined
benefit plan providing retirement benefits as well as death and disability
benefits. As a condition of employment, all full-time employees of the District
commencing service prior to January 1, 2011, were eligible to be covered by the
Pension Plan. As of January 1, 2011, the Pension Plan was frozen to new
employees. Instead, new employees of the District may participate in The
Metropolitan St. Louis Sewer District Defined Contribution Plan (“DC Plan”)
and/or The Metropolitan St. Louis Sewer District Deferred Compensation Plan
and Trust. Current employees with less than ten years of service on January 1,
2011 could also voluntarily elect to transfer from the Pension Plan and enter the
DC Plan.
Benefits Provided. All benefits vest after five years of credited service. Members
retiring at or after age 65 with five or more years credited service are entitled to
a pension benefit. The Pension Plan permits early retirement with reduced
benefits beginning at age 55 if the member has completed five years of
employment. Ordinance No. 10664 provides for unreduced retirement benefits to
any member whose combined age and term of service is equal to 75.
Effective August 1, 2004, Ordinance No. 11781 amended the Pension Plan to
change the benefit formula to 1.7% of final average earnings plus 0.4% of final
average earnings that are in excess of covered earnings multiplied by the period
of years and months of credited service not to exceed 35 years without including
accrued sick leave. For vested employees, sick leave is paid out at 1.25% per year
of service multiplied by the amount of the unused accrued sick leave remaining
at the employee’s current rate of pay, up to a maximum of $50,000. Also, the
Pension Plan was amended to provide the retiring member with a 10% partial
lump sum payment option. The balance of the distribution will be paid in
accordance with any one of the other payment options available under the
Pension Plan.
The retirement benefit payable to a member who retires after the normal
retirement date is the greater of a) the benefit that would have been payable on
the normal retirement date plus a special annual retirement benefit provided by
the accumulated value, at 4% per annum interest, of the monthly benefit that
would have been received prior to the postponed retirement date or b) the benefit
determined as of the postponed retirement date under the normal formula.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 56
Effective August 27, 2011, Ordinance No. 13288 amended the Pension Plan to
include the following: “Upon termination or complete discontinuance of
contributions under the Plan, the rights of all Members to benefits accrued to the
date of such termination or discontinuance shall be non-forfeitable, to the extent
then funded.”
Amounts in participants’ accounts are distributed upon retirement, death,
disability, or termination of employment. The normal form of retirement benefit
is either a lump sum payment or equal monthly installments.
The Pension Plan reports financial data on a calendar year basis and issues a
publicly available financial report that includes financial statements and
required supplementary information. That report may be obtained by writing:
The Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO
63103-2555.
Employees Covered by Benefit Terms. At December 31, 2016 and 2015, the
financial reporting period of the Pension Plan, the following employees were
covered by the benefit terms:
Required Employer Contributions. The District’s employees do not contribute to
the Pension Plan. Ordinances establishing the Pension Plan provide for
actuarially determined annual contributions, paid solely by the District, that are
sufficient to pay benefits when due. The Entry Age Normal actuarial funding
method is used to determine contributions.
Contributions of $11,236,828 and $10,096,075, excluding certain professional fees
paid by the District, were made to the Pension Plan during the District’s fiscal
years ended June 30, 2017 and 2016, respectively. These contributions were
made in accordance with actuarially determined contribution requirements based
on actuarial valuations performed at December 31, 2016 and 2015, respectively.
Increase
2016 2015 (Decrease)
Active plan members 626 665 (39)
Retirees and beneficiaries currently receiving benefits 717 691 26
Terminated members entitled to receive benefits 174 175 (1)
Total 1,517 1,531 (14)
For the Years Ended
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 57
Net Pension Liability
The net pension liability was measured as of December 31, 2016 and 2015 and
the total pension liability used to calculate the net pension liability was
determined by an actuarial valuation as of that date.
Actuarial Assumptions. The total pension liability in the December 31, 2016 and
2015 actuarial valuations were determined using the following actuarial
assumptions, applied to all periods included in the measurement:
Effective December 31, 2016, for current employees, mortality rates were based
on the RP-2014 Employees Mortality Table, male and female rates, with
generational projection from 2006 based on the MP-2016 improvement scale. For
the December 31, 2015 valuation, the assumption was the RP-2000 Employees
Mortality Table, male and female rates, projected five years from the valuation
date using Scale AA. For retirees, the RP-2014 Healthy Annuitant Mortality
Table, male and female rates, with generational projection from 2006 based on
the MP-2016 improvement scale was assumed for the December 31, 2016
valuation while the RP-2000 Healthy Annuitant Mortality Table, male and
female rates, projected five years from the valuation date using Scale AA was
assumed for December 31, 2015. For disabled lives, the RP-2014 Disabled
Mortality Table, male and female rates, was utilized for the current valuation
and the RP-2000 Disabled Mortality Table, male and female rates, was the
assumption in the previous valuation.
The actuarial assumptions are based on prior and current year experiences.
Inflation 2.50 percent
Salary Increases 4.25 percent, average, including inflation
Investment Rate of Return 7.00 percent, net of pension plan investment expense,
including inflation
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 58
Long-Term Expected Rate of Return. The long-term expected rate of return is
determined by adding expected inflation to expected long-term real returns and
reflecting expected volatility and correlation. The capital market assumptions at
December 31, 2016 and 2015 are as follows:
Long-Term
Expected
Arithmetic
Target Real Rate
Asset Class Allocation of Return
Large Cap US Equity 20.0% 5.1%
Small Cap US Equity 6.0% 6.3%
Developed International Equity 10.0% 5.5%
Emerging Markets Equity 4.0% 7.0%
Domestic Core Plus Fixed Income 26.0% 1.0%
Global Fixed Income 9.0% 0.7%
Absolute Return/HFOF 15.0% 2.8%
Real Estate 10.0% 4.3%
Total 100.0%
Long-Term
Expected
Arithmetic
Target Real Rate
Asset Class Allocation of Return
Large Cap US Equity 20.0% 7.1%
Small Cap US Equity 6.0% 8.1%
Developed International Equity 10.0% 7.7%
Emerging Markets Equity 4.0% 9.9%
Domestic Core Plus Fixed Income 26.0% 1.2%
Global Fixed Income 9.0% 1.3%
Absolute Return/HFOF 15.0% 3.2%
Real Estate 5.0% 5.4%
Real Assets 5.0% 3.5%
Total 100.0%
December 31, 2015
December 31, 2016
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 59
Discount Rate.The discount rate used to measure the total pension liability at
December 31, 2016 and 2015, was 7.00 percent. The Pension Plan’s fiduciary net
position was projected to be available to make all projected future benefit
payments of current active and inactive employees. Therefore, the discount rate
for calculating the total pension liability is equal to the long-term expected rate
of return.
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
Changes in Net Pension Liability (a) (b) (a) - (b)
Balances as of December 31, 2015 296,812,242$ 244,212,239$ 52,600,003$
Changes for the year:
Service cost 5,106,625 — 5,106,625
Interest 20,609,223 — 20,609,223
Effect of economic/demographic gains or losses (882,851) — (882,851)
Effect of assumptions changes or inputs 11,664,881 — 11,664,881
Benefit payments (15,260,904) (15,260,904) —
Employer contributions — 10,145,562 (10,145,562)
Net investment income — 11,913,134 (11,913,134)
Balances as of December 31, 2016 318,049,216$ 251,010,031$ 67,039,185$
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
Changes in Net Pension Liability (a) (b) (a) - (b)
Balances as of December 31, 2014 290,411,812$ 250,515,821$ 39,895,991$
Changes for the year:
Service cost 5,253,091 — 5,253,091
Interest 20,198,502 — 20,198,502
Effect of economic/demographic gains or losses (4,576,597) — (4,576,597)
Benefit payments (14,474,566) (14,474,566) —
Employer contributions — 10,059,004 (10,059,004)
Net investment income — (1,888,020) 1,888,020
Balances as of December 31, 2015 296,812,242$ 244,212,239$ 52,600,003$
Changes in Net Pension Liability for the Year Ending December 31, 2015
Changes in Net Pension Liability for the Year Ending December 31, 2016
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 60
Sensitivity of the Net Pension Liability to Changes in the Discount Rate.The
following presents the net pension liability calculated using the 7.00 percent
discount rate, as well as what the District’s net pension liability would be if it
were calculated using a discount rate that is 1-percentage-point lower (6.00
percent) or 1-percentage-point higher (8.00 percent) than the current rate:
Pension Plan Fiduciary Net Position.Fiduciary net position is the market value
of all plan assets. Net pension liability is the plan’s total pension liability less its
fiduciary net position, i.e., the plan’s unfunded accrued liability.
Pension Expense And Deferred Outflows Of Resources And Deferred
Inflows Of Resources Related To Pensions
For the years ended June 30, 2017 and 2016, the District recognized pension
expense of $6,810,309 and $3,571,798, respectively, after accounting for all
deferred outflows and inflows of resources. The District reported deferred
outflows of resources and deferred inflows of resources related to pensions from
the following sources:
1% Current 1%
Decrease Discount Rate Increase
(6.00%) (7.00%) (8.00%)
Net Pension Liability 103,919,255$ 67,039,185$ 35,785,992$
1% Current 1%
Decrease Discount Rate Increase
(6.00%) (7.00%) (8.00%)
Net Pension Liability 85,662,163$ 52,600,003$ 24,315,305$
December 31, 2015
December 31, 2016
Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Differences between expected and actual experience —$ 4,604,518$ —$ 5,711,868$
Changes of assumptions 11,290,949 — 3,814,183 —
Net difference between projected and actual earnings 19,776,909 — 21,823,418 —
Contributions made subsequent to measurement date 6,597,928 — 5,506,662 —
Total 37,665,786$ 4,604,518$ 31,144,263$ 5,711,868$
June 30, 2016June 30, 2017
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 61
In the years ending June 30, 2017 and 2016, amounts currently reported as
deferred outflows of resources, $6,597,928 and $5,506,662, respectively, related to
the District’s contributions subsequent to the measurement date will be
recognized as a reduction of the net pension liability in the years ended June 30,
2018 and 2017, respectively.
Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Payable To The Pension Plan
At June 30, 2017 and 2016, the District did not have outstanding required
contributions to the pension plan.
8. Other Retirement Plans
Deferred Compensation Plan and Trust
The District offers its employees a deferred compensation plan created in
accordance with Internal Revenue Code Section 457. The Metropolitan St. Louis
Sewer District Deferred Compensation Plan and Trust (“Plan”), available to all
District employees, permits them to defer a portion of their salary up to Internal
Revenue Code limits. The District does not contribute to the Plan except where
mandated by the Internal Revenue Service to compensate participants for lost
deferral contributions. The deferred compensation is not available to employees
until termination, retirement, death, disability or due to financial hardship as
defined by the Plan.
Net Deferrals of
Resources
Year ended June 30,:
2018 9,176,693$
2019 9,083,063
2020 6,954,152
2021 1,249,432
26,463,340$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 62
The Plan was amended and restated to comply with the Economic Growth and
Tax Relief Reconciliation Act of 2001 (“Act”). The Act made significant changes to
Section 457(b) of the Internal Revenue Code of 1986, as previously amended. The
Plan assets are held in trust for the exclusive benefit of participants and their
beneficiaries under Section 1448 of the Small Business Job Protection Act of
1996. As a result, the assets and liabilities of the Plan are not included in the
accompanying financial statements.
The Metropolitan St. Louis Sewer District Deferred Compensation Plan and Trust
issues a publicly available financial report that includes financial statements and
required supplementary information. That report may be obtained by writing: The
Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO
63103-2555.
Defined Contribution Plan
The Metropolitan St. Louis Sewer District Defined Contribution Plan (“DC Plan”)
was established by the District’s Board of Trustees, through Ordinance 13180,
which became effective January 1, 2011. The following full time employees are
eligible to participate in the DC Plan: (i) employees first hired on or after
January 1, 2011, and (ii) employees hired prior to January 1, 2011 who elected to
terminate participation in The Metropolitan St. Louis Sewer District Employees’
Pension Plan (“Pension Plan”), effective as of April 1, 2011, in accordance with
the provisions of such Pension Plan, and (iii) employees rehired on or after
January 1, 2011 who are not eligible to accrue benefits under the Pension Plan.
An employee shall become a participant in the DC Plan on the first day on which
he or she performs an hour of service for the District.
The District’s Board of Trustees, primarily to improve benefits to members,
amends the DC Plan in all its respects. A pension committee consisting of two
members of the District’s Board of Trustees, two elected employee members and
four members of the District’s management staff administer the DC Plan. A
committee of the District’s Board of Trustees, with the aid of an investment
advisor, reviews and evaluates the DC Plan’s investments and the related rates
of return on a periodic basis.
This DC Plan is intended to provide a means whereby the District may provide
retirement benefits to eligible employees and encourage such employees to
establish a regular method of savings, thereby providing a measure of financial
security for such employees and their beneficiaries upon retirement or in the
event of death or disability.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 63
Employer Basic Contributions: For each payroll period, the District contributes
an amount equal to 7% of the covered compensation earned during such period by
each participant entitled to an allocation of such contribution.
Employer Matching Contributions: For each payroll period, the District
contributes an amount equal to 50% of the covered compensation of such
participant withholding as an annual deferral (as defined in The Metropolitan
St. Louis Sewer District Deferred Compensation Plan and Trust) pursuant to The
Metropolitan St. Louis Sewer District Deferred Compensation Plan and Trust;
provided that, before-tax contributions in excess of 4% of the covered
compensation of the participant for the payroll period shall not be considered for
purposes of Employer Matching Contributions. Employer Matching
Contributions shall be up to the maximum amount of compensation that may be
taken into account for the DC Plan year.
In no event shall the sum of the employer contributions and employee
contributions allocated to the account of a participant for the DC Plan year
exceed the lesser of:
(a) The amount specified in the applicable Internal Revenue Code, as
adjusted annually for any applicable increases in the cost of living.
(b) 100% of the participant’s compensation for such year.
The compensation limit referred to in (b) shall not apply to any contribution from
medical benefits after separation from service.
The District’s contributions to the DC Plan amounted to $1,392,919 and
$1,291,061 for the years ended June 30, 2017 and 2016, respectively. Forfeitures
were $76,516 and $45,621, for the years ended June 30, 2017 and 2016,
respectively, and there were $31,512 and $22,655 of liabilities outstanding as of
June 30, 2017 and 2016, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 64
Vesting: As of any time before the normal retirement age of a participant, the
first day of the month coinciding with or next following a person’s sixty-fifth
birthday and completion of sixty months of continuous service (other than upon
death or permanent disability), the vested percentage of the amounts credited to
the participant’s employer basic contributions account shall be determined in
accordance with the following schedule:
Months Of
Continuous Service
Vested(Non-
Forfeitable)
Percentage
Less than 12 0%
12 but less than 24 20%
24 but less than 36 40%
36 but less than 48 60%
48 but less than 60 80%
60 100%
The Metropolitan St. Louis Sewer District Defined Contribution Plan issues a
publicly available financial report that includes financial statements and
required supplementary information. That report may be obtained by writing:
The Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO
63103-2555.
9. Post-Employment Benefits Other Than Pensions
Plan Description
The District’s only post-employment benefit provides a single-employer defined
benefit health care plan (“Plan”) to employees who retire from the District on or
after age 62 with five years of service or whose age plus years of service equal 75
points (“Rule of 75”) as part of a total compensation package effective August 1,
2004 for general employees and, with respect for union members, the later of
August 1, 2004 or the date of union ratification of a Memorandum of
Understanding with respect to this Plan modification. The District offers two
medical plan options, a traditional open access plan and a high deductible health
plan, and both plans offer wellness rates for those employees who qualify.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 65
The District pays the same amount of the monthly group health insurance
premium for the qualified retiree as it would for an active employee qualifying for
the wellness rates until the retiree becomes eligible for Medicare at age 65. In
fiscal year 2017 the amount the District paid was 85% to 91% of the retiree only
premium depending on the plan selected by the retiree. In addition, there is a
closed group of disabled former employees who receive life insurance coverage
from the District.
The District periodically contracts for an actuarial valuation of the Plan and the
latest actuarial valuation was performed as of July 1, 2015. While the actuarial
report has the February 2015 monthly medical premium rates, updated rates
received from the Human Resources Department for retirees, which are the same
rates for active employees, beginning February 2017 are as follows:
Premiums for retirees selecting the traditional plan are as follows:
Coverage Tier Monthly Premium
Retiree* $684.69
Retiree + Spouse $1,458.58
Retiree + Child(ren) $1,325.27
Family $2,021.51
*The District pays approximately 85% to 91% of the retiree’s premium for a retiree who retires
after age 62 with five years of service or after attaining 75 points. The retiree pays the remaining
percentage of the individual retiree premium above plus 100% of the spousal, children or family
premium incremental increases.
The District’s annual other post-employment benefit (“OPEB”) cost (expense) is
calculated based on the annual required contribution (“ARC”) of the employer, an
amount actuarially determined in accordance with the parameters of GASB
Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefits Other Than Pensions, and in conjunction with Plan
benefits currently in force. The actuarial valuations have been determined using
estimated data provided by the District in combination with assumptions on the
probability of future events, while also keeping an eye on long-term viability.
These valuations are subject to continual revision as future actuarial
measurements may differ significantly from current measurements due to the
realization of new estimates and factors.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 66
The ARC represents a level of funding that, if paid on an ongoing basis, is
projected to cover normal cost each year and the amortization of any unfunded
actuarial accrued liabilities. The District’s annual OPEB cost for fiscal year 2017
and 2016 and the related information are as follows:
The Plan was established by District Ordinance which assigned the authority to
establish and amend Plan benefit provisions to the District.
The contribution requirements of the District and Plan members are established
and may be amended by the District. The Plan does not issue a publicly
available report.
Trend Information:
2017 2016
Amortization of Past Service Cost 963,300$ 935,300$
Normal Cost 1,524,000 1,524,000
Interest to End of Fiscal Year 93,300 92,200
Annual Required Contribution ("ARC")2,580,600 2,551,500
Interest on Net OPEB Obligation 262,630 223,820
Adjustment to ARC (266,826) (220,586)
Net Annual OPEB Cost 2,576,404 2,554,734
Actual Contribution (1,516,800) (1,519,800)
Increase in Net OPEB Obligation 1,059,604 1,034,934
Net OPEB Obligation - Beginning of Year 7,003,477 5,968,543
Net OPEB Obligation - End of Year 8,063,081$ 7,003,477$
Percentage of
Net Annual
Fiscal Net Annual Actual OPEB Cost Net OPEB
Year OPEB Cost Contribution Contributed Obligation
2017 2,576,404$ 1,516,800$ 58.9 8,063,081$
2016 2,554,734 1,519,800 59.5 7,003,477
2015 2,474,689 1,573,400 63.6 5,968,543
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 67
As of June 30, 2017 and 2016, the Plan was not funded. The actuarial accrued
liability for benefits as of July 1, 2015, the latest actuarial valuation, was
approximately $25,308,300, and there were no assets, resulting in an unfunded
actuarial accrued liability (“UAAL”) of approximately $25,308,300. The covered
payroll (annual payroll of active employees covered by the Plan) in 2015 was
approximately $66,958,077, and the ratio of the UAAL to covered payroll
was 37.8%.
The Schedule of Funding Progress, presented as required supplementary
information following these notes to financial statements, presents trend
information about whether the actuarial accrued liability for benefits is
increasing or decreasing over time.
Actuarial funding calculations of the Plan reflect a long-term perspective. The
Plan’s actuarial valuations involve estimates of the value of reported amounts
and assumptions about the probability of events far into the future. Determined
amounts are subject to continual revision as results are compared to past
expectations and new estimates are made about the future.
Significant actuarial assumptions used in the valuation are as follows:
Latest Valuation Date: July 1, 2015
Actuarial Cost Method: Projected Unit Credit
Discount Rate: 3.75% per annum
Amortization Method: Level Percentage of Payroll Amount, Open
Amortization Period: 30 years
Inflation Rate: 2.50%
Payroll Growth Rate: 3.00%
Investment Rate of Return: 3.75% annual returns, net of both administrative
and related investment expenses
Health Cost Trend Assumption: Getzen Trend Model – 6.90% graded to 4.50% over
67 years
Medical Trend:
Year Medical Year Medical
2015 2045
2016 6.40 2050 5.80
2017 5.60 2055 5.60
2018 5.30 2060 5.50
2019 5.30 2065 5.10
2020 5.30 2070 4.60
2025 5.30 2075 4.60
2030 6.80 2080 4.60
2035 6.80 2082+ 4.50
2040 6.20
6.90% 5.90%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 68
The healthcare trends used in the valuation are based on long-term healthcare
trends generated by the Getzen Trend Model (“Model”). The Model is the result of
research sponsored by the Society of Actuaries and completed by a committee of
economists and actuaries. This Model is the current industry standard for
projecting long-term medical trends. Inputs to the Model are consistent with the
assumptions used in deriving the discount rate used in the valuation.
Payroll Inflation 3.00% per annum
Healthy Mortality RP 2000 Mortality Table (employee and healthy
annuitant tables), projected 5 years from the
valuation date using Scale AA.
Disabled Mortality RP 2000 Disabled Mortality Table
Years Of Attained
Service Rate Age Rate
020
1 12.00 30 3.70
27.50 40 1.10
50+ 0.00
Select Rates based on years of service.
Ultimate Rates based on attained age.
Ultimate Rates are from the Sarason T-1 Table.
Termination Of Employment:
Select Rates Ultimate Rates
(0 to 4 years of service) (after 4 years of service)
20.00% 5.50%
Age Before 75 Points After 75 Points
55
56 2.0 10.0
57 2.0 10.0
58 2.0 10.0
59 3.0 10.0
60 4.0 15.0
61 5.0 15.0
62 20.0 35.0
63 10.0 25.0
64 20.0 25.0
65 100.0 100.0
Retirement - Rates Vary By Age
1.0% 10.0%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 69
Future Retiree Coverage: 90% of eligible employees retiring prior to age 65 are assumed to elect medical coverage under the Plan.
Future Dependent Coverage: 25% elect spouse coverage and it is assumed that no dependent
children are covered in retirement.
10. Self-Insurance Programs
The District is exposed to various risks of loss related to torts; theft of, damage
to, and destruction of assets; errors and omissions; injuries to employees; and
natural disasters. The District has established a risk management program and
retains the risk related to its obligation to provide workers' compensation and
medical and hospitalization benefits to its employees; and to pay water backup
claims to its customers. The estimated liabilities for payment of incurred (both
reported and unreported) but unpaid claims relating to these matters are
included as a component of current deposits and accrued expenses, and as such
are expected to be paid within one year of the date of the Statement of Net
Position. At June 30, 2017 and 2016, these liabilities amounted to $4,461,069 and
$4,076,994, respectively.
The claims liabilities reported are based on the requirements of GASB Statement
No. 10, Accounting and Financial Reporting for Risk Financing and Related
Insurance Issues, which requires that a liability for claims be reported if
information obtained prior to the issuance of the financial statements indicates it
is probable that a liability has been incurred and the amount of the liability can
be reasonably estimated. Changes in the balance of claims liabilities during fiscal
2017 and 2016 were as follows:
Percent
Becoming
Age Disabled
20
30 0.064
40 0.102
50 0.311
Disability
0.056%
2017 2016 2015
Liability - Beginning of Year 4,076,994$ 4,317,384$ 2,923,884$
Current year claims and changes in estimates 17,648,177 21,213,424 15,852,729
Claim payments (17,264,102) (21,453,814) (14,459,229)
Liability - End of Year 4,461,069$ 4,076,994$ 4,317,384$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 70
The District obtains periodic funding valuations from the third-party
administrators managing the self-insurance programs and adjusts the charges as
required to maintain the appropriate level of estimated claims liability. The
District also maintains excess liability insurance coverage for workers’
compensation and medical and hospitalization claims; general liability; and
water backup damage to customers’ property.
The District purchases commercial insurance for all other risks of loss. Settled
claims have not exceeded this commercial coverage in any of the past three years.
11. Closure And Post-Closure Care Costs
State and federal laws and regulations require the District to place a final cover
on its Prospect Hill Reclamation Project landfill site when it stops accepting
waste and to perform certain maintenance and monitoring functions at the site
for 30 years after closure. Although closure and post-closure care costs will be
paid only near or after the date that the landfill stops accepting waste, the
District reports a portion of these closure and post-closure care costs as an
operating expense in each fiscal year. The $508,422 and $821,732 reported as
landfill closure and post-closure care liabilities at June 30, 2017 and 2016,
respectively, represent the cumulative amounts reported at fiscal year-end and
represent 60.9% and 100% of the estimated closure and post-closure care costs of
the landfill for fiscal years ended June 30, 2017 and 2016, respectively. These
amounts are based on what it would cost to perform all closure and post-closure
care in 2017 and 2016, respectively.
The remaining disposal life estimate was calculated in 2009 and was estimated
at eight years factoring in a future annual average disposal rate of 96,500 cubic
yards. It was noted in the 2009 Black and Veatch study that this life could be
extended further if the actual disposal rate is less than projected or alternative
uses and off-site beneficial options for the incinerator ash are later developed.
Since the actual average disposal rate has been less than 96,500 cubic yards, the
landfill is not at capacity and MSD expects the landfill to be in use for another
10-15 years and the total capacity of the landfill and the available space was
adjusted in 2017. The District will continue to accrue the remaining estimated
cost of closure and post-closure care annually.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 71
The District is required to demonstrate that it has the financial capability to
close the landfill to the State of Missouri through the use of a financial test as
specified in 10 CSR 80-2.030(4)(D)6 of the Missouri Solid Waste Management
Rules. The District has complied with the State’s requirement. The District
recognizes that estimates of closure costs may change as a result of inflation,
deflation, and/or changes in technology and applicable laws and regulations. If
closure cost estimates change, the liability currently reported on the Statement of
Net Position will be adjusted accordingly.
12. Commitments And Contingencies
United States And State Of Missouri V. Metropolitan St. Louis Sewer
District; In The United States District Court For The Eastern District Of
Missouri; Case No. 07-1120.
A lawsuit was filed by the Department of Justice on behalf of the United States
Environmental Protection Agency (“EPA”) for various alleged violations of the
Clean Water Act. The suit was based on violations of the Clean Water Act as a
result of overflows in the combined and sanitary sewer systems causing
pollutants to reach waters of the United States. There were other counts
involving violations of permit conditions. The District had been the subject of
several investigatory actions by EPA over the past several years. Negotiations
had been ongoing with the EPA and the Missouri Department of Natural
Resources (“DNR”) regarding the sewer collection system, both the combined
system and the sanitary system, for several years. The Missouri Coalition for the
Environment (“MCE”) gave Notice of Intent to Sue the District under the citizen
suit provisions of the Clean Water Act. EPA and the DNR then brought the suit
in June 2007, and MCE moved to intervene. Intervention was granted in August
2007. In October 2007, the Court granted the District’s motion to dismiss all of
the plaintiffs’ claims for civil penalties attributable to any and all of the District’s
alleged violations of the Clean Water Act that occurred before June 11, 2002.
Also, the suit alleged that the District did not have an approved Long-Term
Control Program (“LTCP”) for the combined system. The District had been
working on these issues for several decades and had asked voters to approve
bonds and rate increases to rehabilitate and maintain the collection system. As
required by its Charter, the District had increased rates which continued to fund
the improvements sought by the EPA and the DNR. In September 2008, the
Judge put in place a Stay while the parties mediated the issues. Pursuant to
MSD Ordinance No. 13277, MSD executed the Consent Decree (“CD”) on July 15,
2011. The CD was lodged with the court on August 4, 2011. An extended public
comment period ended October 10, 2011.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 72
On April 27, 2012, the Court approved and entered the decree, thus concluding
the litigation of this lawsuit. Although this litigation matter has concluded, MSD
continues to work diligently to implement the CD.
The CD requires the District to spend approximately $4.7 billion, in 2010 dollars,
over a 23-year implementation period. Throughout this period improvements will
be made to the District’s separate sewer system, combined sewer system, and
wastewater treatment plants. The District continues to comply with the CD. On
June 1, 2011, the State of Missouri approved Chapter 11, Chapter 12, and
Appendix Q of the District’s Combined Sewer Overflow Long-Term Control Plan
Updated Report, dated February 2011.
Flooding Cases
The remaining flooding cases related to the September 14, 2008 rain event are being
covered by the District’s insurance carrier, with a reservation of rights. These cases
appear to have a very low risk of liability to the District.
Other Commitments and Contingencies
The District is a defendant in various other matters of litigation. Of these
matters, management and District’s legal counsel do not anticipate any material
effect on the June 30, 2017 and 2016 financial statements.
The District has entered into construction and other contracts amounting to
approximately $488,000,000 at June 30, 2017, and through the audit report date.
The District had $947,500,000 in revenue bonds authorized by the voters but
unissued as of June 30, 2017. These funds were sought to enable the District to
comply with federal and state clean water requirements.
13. Restricted Net Position
The Statements of Net Position report $135,259,059 and $136,546,766 of
restricted net position at June 30, 2017 and 2016, respectively, of which
$79,940,036 and $81,182,753 are restricted due to enabling legislation, as of
June 30, 2017 and 2016, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 73
14. Segment Information
The District issued wastewater revenue bonds to finance wastewater
infrastructure projects. The District accounts for both wastewater and
stormwater activities in a single enterprise fund, but investors in those bonds
rely solely on the revenue generated by the wastewater activities for repayment.
Fiscal year 2017 and 2016 summary financial information for each business
segment is presented below.
A segment is an identifiable activity reported as a stand-alone entity for which
one or more revenue bonds are outstanding. A segment has a specifically
identifiable revenue stream pledged in support of the revenue bonds and has
related expenses, gains and losses, assets and liabilities, and deferred inflows
and outflows of resources that are required by external parties to be accounted
for separately. The wastewater system is the only reportable segment that meets
the requirements of GASB Statement No. 34, Basic Financial Statements - and
Management’s Discussion and Analysis - for State and Local Governments.The
stormwater system is reported on for informational purposes only.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 74
Financial information as of and for the years ended June 30, 2017 and 2016 of
the District’s Wastewater Segment is as follows:
Assets 2017 2016
Current Assets
Unrestricted Current Assets
Cash and cash equivalentsN 21,932,648$ 25,577,264$
InvestmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 264,399,511 157,349,756
Sewer service charges receivable, less allowance of NNNNNNNNNNNNNNNNN
$56,490,989 in 2017 and $55,537,161 in 2016 53,517,987 49,733,852
Unbilled sewer service charges receivable 26,514,670 24,607,682
Property taxes receivable (27,512) —
Accrued income on investmentsNNNNNNNNNNNNNNNNNNNNNNN 989,538 780,051
Other receivables, less allowance of $119,264 in 2017NNNNNNNNNNNNNNNNNNNNNNNNNNNNN
and $98,460 in 2016 4,707,358 10,184,895
Supplies inventoryNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 7,671,206 7,088,804
BBBBBBBBB Total Unrestricted Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 379,705,406 275,322,304
Non-Current Assets
Restricted Assets
Cash and cash equivalentsN 20,865,810 17,009,874
InvestmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 130,230,174 113,535,586
Long-term investmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 41,015,517 32,736,862
Property taxes receivable, less allowance ofN$137 in 2017NNNNN
and $164 in 2016 (5,266) 5,318
Accrued income on investmentsNNNNNNNNNNNNNNNNNNNNNNN 192,210 144,289
Other receivablesNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 69,694 —
BBBBBBBTotal Restricted Non-Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 192,368,139 163,431,929
Other Assets
NNN Notes receivableNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 12,425,336 12,999,370
Long-term investmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 61,275,000 156,994,123
BBBBBBBBBBB Total Other AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 73,700,336 169,993,493
Capital Assets
NNN Depreciable:
NNNNNN Treatment and disposal plant and equipmentNNNNNNNNNN 1,279,143,367 1,239,993,981
NNNNNN Collection and pumping plantNNNNNNNNNNNNNNNNNNNNNNNN 1,843,121,463 1,798,181,091
NNNNNN General plant and equipmentNNNNNNNNNNNNNNNNNNNNNNNNN 77,576,050 75,752,926
NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 3,199,840,880 3,113,927,998
NNNNNN Less:N Accumulated depreciationNNNNNNNNNNNNNNNNNNNNN 1,177,505,880 1,111,825,269
NNNNNN Net depreciable assetsNNNNNN 2,022,335,000 2,002,102,729
NNNNNN
NNN Non-depreciable:
NNNNNN LandNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 64,121,437 63,374,303
NNNNNN Construction in progressNNNNNNNNNNNNNNNNNNNNNNNNNNNN 691,631,657 519,044,798
BBBBBBBBB Net Capital AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 2,778,088,094 2,584,521,830
BBBBBB
BBBBBBBBBBB Total Non-Current AssetsBBBBBBBBBBBBBBBBBBBBBBBB 3,044,156,569 2,917,947,252
BBBBBBBBBBBBBBBB Total AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 3,423,861,975 3,193,269,556
Deferred Outflows of Resources:
NNNNNN Bonds and notes payable-Deferred loss on refundingNNNNNNNNNNNNNNNNNNNNNNNNNN 11,320,670 11,973,700
NNNNNN Pension-related outflowsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 32,297,785 26,520,052
BBBBBBBBBBBBBBBB Total Deferred Outflows of ResourcesBBBBBBBBBBBBBBBBBBBBBBB 43,618,455 38,493,752
WASTEWATER SEGMENT
STATEMENTS OF NET POSITION
June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 75
Liabilities 2017 2016
Current Liabilities-Payable From Unrestricted Assets
Contracts and accounts payableN 37,780,519$ 37,396,996$
Deposits and accrued expenses 30,405,764 29,325,752
Retainage payableN 11,486,006 9,118,945
Current portion of bonds and notes payableN 42,733,909 38,059,873
Total Current Liabilities-Payable From Unrestricted Assets 122,406,198 113,901,566
Current Liabilities-Payable From Restricted Assets
Contracts and accounts payableN 28,257 36,495
Retainage payableN 181,642 156,537
Total Current Liabilities-Payable From Restricted Assets 209,899 193,032
BBBBBBBBBBB Total Current LiabilitiesBBBBBBBBBBBBBBBBBBBBBB 122,616,097 114,094,598
Non-Current Liabilities
Deposits and accrued expenses 15,137,690 14,198,048
Net pension liability 57,524,378 44,732,007
Bonds and notes payableN 1,433,168,099 1,277,342,521
BBBBBBBBBBB Total Non-Current LiabilitiesBBBBBBBBBBBBBBBBBBBBBB 1,505,830,167 1,336,272,576
BBBBBB
BBBBBBBBBBBBBBBB Total LiabilitiesBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1,628,446,264 1,450,367,174
Deferred Inflow of Resources:
NNNNNN Pension-related inflowsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 3,887,511 4,868,566
BBBBBBBBBBBBBBBB Total Deferred Inflow of ResourcesBBBBBBBBBBBBBBBBBBBBBBB 3,887,511 4,868,566
Net Position
Net investment in capital assets 1,403,740,624 1,343,078,478
Restricted for:
NNNNNNDebt serviceNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 55,319,023 55,364,013
NNNNNNSubdistrict construction and improvementNNNNNNNNNN 4,207,767 4,564,033
Unrestricted 371,879,241 373,521,044
BBBBBBBBBBBBBBBB Total Net PositionBBBBBBBBBBBBBB 1,835,146,655$ 1,776,527,568$
June 30,
WASTEWATER SEGMENT
STATEMENTS OF NET POSITION (Continued)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 76
2017 2016
B Operating Revenues
NNN Sewer service chargesNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 330,883,493$ 304,684,984$
NNN Recovery of (provision for) doubtful sewer service charge accounts (2,534,814) (4,062,990)
NNN Licenses, permits, and other feesNNNNNNNNNNNNNNNNNNNNNN 4,036,362 3,620,240
NNN OtherNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 1,084,636 14,221,063
BBB Total Operating RevenuesBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 333,469,677 318,463,297
NNNNNN
B Operating Expenses
NNN Pumping and treatmentNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 60,203,037 59,099,820
NNN Collection system maintenanceNNNNNNNNNNNNNNNNNNNNNNNNNN 33,476,510 33,291,567
NNN EngineeringNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 4,722,263 3,523,227
NNN General and administrativeNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 57,289,501 54,802,220
NNN Water backup claimsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 5,035,020 7,631,197
NNN DepreciationNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 71,128,893 73,782,843
NNN Asset managementNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 14,142,928 12,968,747
BBB Total Operating ExpensesBBBBBBBBBBBBBBBBBBBBBBBBBBBB 245,998,152 245,099,621
NNNNNN
B Operating IncomeBBBBBBBBBBBBBBBBBBB 87,471,525 73,363,676
NNNNNN
B Non-Operating Revenues
NNN Property taxes levied by the DistrictNNNNNNNNNNNNNNNNNN 28,555 (17,525)
NNN Investment incomeNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 2,456,677 3,894,305
NNN Rent and other incomeNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 106,562 102,865
BBB Total Non-Operating RevenuesBBBBBBBBBBBBBBBBBBBBBBBBB 2,591,794 3,979,645
NNNNNN
B Non-Operating Expenses
NNN Net loss on disposal and sale of capital assetsNNNNNNNN 622,841 309,877
NNN Non-recurring projects and studiesNNNNNNNNNNNNNNNNNNNNNN 5,886,163 9,342,338
NNN Interest expenseNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 31,250,777 28,943,200
BBB Total Non-Operating ExpensesBBBBBBBBBBBBBBBBBBBBBBBBB 37,759,781 38,595,415
NNNNNN
B Income Before Capital Grants And ContributionsBBBBBBBBBBBBBBBBBBBBBB 52,303,538 38,747,906
NNNNNN
B Capital Grants And Contributions
NNN Utility plant contributedNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 3,508,950 7,036,329
NNN Grant revenueNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 2,806,599 765,699
BBB Total Capital Grants And ContributionsBBBBBBBBBBBBBBBBBBBBBBBBB 6,315,549 7,802,028
B Change In Net Position 58,619,087 46,549,934
B Net Position - Beginning Of Year 1,776,527,568 1,729,977,634
NNNNNN
B Net Position - End Of YearBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1,835,146,655$ 1,776,527,568$
WASTEWATER SEGMENT
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 77
2017 2016
Cash Flows From Operating Activities
Received from customers 338,695,092$ 304,602,849$
Paid to employees for services (94,528,620) (94,386,428)
Paid to suppliers for goods and services (70,142,894) (70,500,534)
Net Cash Provided By Operating Activities 174,023,578 139,715,887
Cash Flows Provided By (Used In) Non-Capital Financing Activities
Taxes levied and collected 74,474 (86,140)
Cash Flows From Capital And Related Financing Activities
Proceeds from capital grants 100,283 22,649
Proceeds from issuance of debt 185,520,681 192,622,808
Premium and (discounts) on sale of bonds 17,678,054 26,727,475
Principal paid on debt (38,076,770) (38,565,916)
Interest and fees paid on debt (54,306,129) (47,582,180)
Payments for capital assets (252,375,421) (216,933,464)
Proceeds from sale of capital assets 41,093 681,101
Build America bond tax credit 1,622,822 1,623,694
Net Cash Provided By (Used In) Capital And Related
Financing Activities (139,795,387) (81,403,833)
Cash Flows From Investing Activities
Purchase of investments (452,346,122) (360,630,035)
Proceeds from sale and maturity of investments 412,301,563 285,557,144
Investment income 5,846,652 5,530,955
Proceeds from rents 106,562 102,865
Net Cash Provided By (Used In) Investing Activities (34,091,345) (69,439,071)
Net Increase (Decrease) In Cash And Cash Equivalents 211,320 (11,213,157)
Cash And Cash Equivalents At Beginning Of Year 42,587,138 53,800,295
Cash And Cash Equivalents At End Of Year 42,798,458$ 42,587,138$
Ended June 30,
WASTEWATER SEGMENT
STATEMENTS OF CASH FLOWS
For The Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 78
Financial information as of and for the years ended June 30, 2017 and 2016 of
the District’s Stormwater Segment is as follows:
Assets 2017 2016
Current Assets
Unrestricted Current Assets
Cash and cash equivalentsN 1,163,223$ 1,356,757$
InvestmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 15,888,957 8,797,808
Sewer service charges receivable, less allowance of NNNNNNNNNNNNNNNNN
$163,024 in 2017 and $191,346 in 2016 123,079 291,381
Unbilled sewer service charges receivable (953) 121,144
Property taxes receivable, less allowance of $25,280 in 2017NNNNNNNNNNNNNN
and $39,127 in 2016 862,725 1,265,106
Accrued income on investmentsNNNNNNNNNNNNNNNNNNNNNNN 26,915 25,828
BBBBBBBTotal Unrestricted Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 18,063,946 11,858,024
Restricted Current Assets
Cash and cash equivalents 2,171,935 2,065,003
InvestmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 29,674,144 13,393,010
BBBBBBBTotal Restricted Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 31,846,079 15,458,013
BTotal Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 49,910,025 27,316,037
Non-Current Assets
Restricted Assets
Cash and cash equivalentsN 1,979,396 3,187,578
InvestmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 27,043,003 20,673,435
Long-term investmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 13,710,861 36,742,701
Property taxes receivable, less allowance of $31,904 in 2017
and $22,255 in 2016 1,144,461 719,568
Accrued income on investmentsNNNNNNNNNNNNNNNNNNNNNNN 168,842 156,339
BBBBBBBTotal Restricted Non-Current AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 44,046,563 61,479,621
Other Assets
Long-term investmentsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 3,841,013 9,488,963
BBBBBBBBBBB Total Other AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBB 3,841,013 9,488,963
Capital Assets
NNN Depreciable:
NNNNNN Collection and pumping plantNNNNNNNNNNNNNNNNNNNNNNNN 632,588,226 621,465,929
NNNNNN General plant and equipmentNNNNNNNNNNNNNNNNNNNNNNNNN 17,217,823 16,640,099
NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 649,806,049 638,106,028
NNNNNN Less:N Accumulated depreciationNNNNNNNNNNNNNNNNNNNNN 198,336,533 188,602,256
NNNNNN Net depreciable assetsNNNNNN 451,469,516 449,503,772
NNN Non-depreciable:
NNNNNN LandNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 6,573,579 6,328,167
NNNNNN Construction in progressNNNNNNNNNNNNNNNNNNNNNNNNNNNN 16,107,052 11,689,443
BBBBBBBBB Net Capital AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 474,150,147 467,521,382
NNNNNN
BBBBBBBBBBB Total Non-Current AssetsBBBBBBBBBBBBBBBBBBBBBBBB 522,037,723 538,489,966
NNNNNN
BBBBBBBBBBBBBBBB Total AssetsBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 571,947,748 565,806,003
Deferred Outflow of Resources:
NNNNNN Pension-related outflowsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 5,368,001 4,624,211
BBBBBBBBBBBBBBBB Total Deferred Outflow of ResourcesBBBBBBBBBBBBBBBBBBBBBBB 5,368,001 4,624,211
STORMWATER SEGMENT
STATEMENTS OF NET POSITION
June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 79
Liabilities 2017 2016
Current Liabilities-Payable From Unrestricted Assets
Contracts and accounts payableN 20,000$ 23,762$
Deposits and accrued expensesN 9,240,251 9,633,010
Retainage payableN 545 545
Total Current Liabilities-Payable From Unrestricted Assets 9,260,796 9,657,317
Current Liabilities-Payable From Restricted Assets
Contracts and accounts payableN 1,236,740 1,250,044
Retainage payableN 565,000 282,010
Total Current Liabilities-Payable From Restricted Assets 1,801,740 1,532,054
BBBBBBBBBBB Total Current LiabilitiesBBBBBBBBBBBBBBBBBBBBBB 11,062,536 11,189,371
NNNNNN
Non-Current Liabilities
NNNNNN Net pension liabilityNNNNNNNNNNNNNNNNNN 9,514,807 7,867,996
BBBBBBBBBBB Total Non-Current LiabilitiesBBBBBBBBBBBBBBBBBBBBBB 9,514,807 7,867,996
BBBBBB
BBBBBBBBBBBBBBBBBBTotal LiabilitiesBBBBBBBBBBBBBBBBBBBB 20,577,343 19,057,367
Deferred Inflow of Resources:
NNNNNN Pension-related inflowsNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 717,007 843,302
BBBBBBBBBBBBBBBB Total Deferred Inflow of ResourcesBBBBBBBBBBBBBBBBBBBBBBB 717,007 843,302
Net Position
Net investment in capital assets 472,508,235 466,307,697
Restricted for:
NNNNNNSubdistrict construction and improvementNNNNNNNNNN 75,732,269 76,618,720
Unrestricted 7,780,895 7,603,128
BBBBBBBBBBBBBBBBB Total Net Position 556,021,399$ 550,529,545$ N
June 30,
STORMWATER SEGMENT
STATEMENTS OF NET POSITION (Continued)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 80
2017 2016
B Operating Revenues
NNN Sewer service chargesNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN (10,224)$ 1,433,561$
NNN Recovery of (provision for) doubtful sewer service charge accounts 21,071 (43,662)
NNN OtherNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 10,465 4,535
BBB Total Operating RevenuesBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 21,312 1,394,434
B Operating Expenses
NNN Collection system maintenanceNNNNNNNNNNNNNNNNNNNNNNNNNN 10,451,651 9,561,770
NNN EngineeringNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 6,567,643 7,474,392
NNN General and administrativeNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 1,244,910 513,152
NNN DepreciationNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 10,065,498 10,200,906
NNN Asset managementNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 749,821 245,864
BBB Total Operating ExpensesBBBBBBBBBBBBBBBBBBBBBBBBBBBB 29,079,523 27,996,084
B Operating IncomeB(Loss)BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB (29,058,211) (26,601,650)
NNNNNN
B Non-Operating Revenues
NNN Property taxes levied by the DistrictNNNNNNNNNNNNNNNNNN 32,429,499 25,688,583
NNN Investment incomeNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 445,947 741,561
BBB Total Non-Operating RevenuesBBBBBBBBBBBBBBBBBBBBBBBBB 32,875,446 26,430,144
B Non-Operating Expenses
NNN Net loss on disposal and sale of capital assetsNNNNNNNN 50,203 14,636
NNN Non-recurring projects and studiesNNNNNNNNNNNNNNNNNNNNNN 1,573,375 1,658,065
BBB Total Non-Operating ExpensesBBBBBBBBBBBBBBBBBBBBBBBBB 1,623,578 1,672,701
B Income (Loss) Before Capital ContributionsBBBBBBBBBBBBBBBBBBBBBB 2,193,657 (1,844,207)
B Capital Contributions
NNN Utility plant contributedNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN 3,298,197 4,234,756
BBB Total Capital ContributionsBBBBBBBBBBBBBBBBBBBBBBBBB 3,298,197 4,234,756
B Change In Net Position 5,491,854 2,390,549
B Net Position - Beginning Of Year 550,529,545 548,138,996
B Net Position - End Of YearBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 556,021,399$ 550,529,545$
STORMWATER SEGMENT
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 81
2017 2016
Cash Flows From Operating Activities
Received from customers 3,263,486$ 2,484,603$
Paid to suppliers for goods and services (21,028,157) (14,535,335)
Net Cash Provided By (Used In) Operating Activities (17,764,671) (12,050,732)
Cash Flows Provided By Non-Capital Financing Activities
Taxes levied and collected 31,938,803 25,669,165
Cash Flows From Capital And Related Financing Activities
Payments for capital assets (14,847,039) (10,261,405)
Proceeds from sale of capital assets 7,827 153,600
Net Cash Provided By (Used In) Capital And Related
Financing Activities (14,839,212) (10,107,805)
Cash Flows From Investing Activities
Purchase of investments (72,571,974) (53,788,919)
Proceeds from sale and maturity of investments 70,897,895 47,877,866
Investment income 1,044,375 1,002,717
Net Cash Provided By (Used In) Investing Activities (629,704) (4,908,336)
Net Increase (Decrease) In Cash And Cash Equivalents (1,294,784) (1,397,708)
Cash And Cash Equivalents At Beginning Of Year 6,609,338 8,007,046
Cash And Cash Equivalents At End Of Year 5,314,554$ 6,609,338$
Ended June 30,
STORMWATER SEGMENT
STATEMENTS OF CASH FLOWS
For The Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 82
15. Tax Abatements
Tax abatements, as defined by Governmental Accounting Standards Board
(“GASB”) Statement No. 77, Tax Abatement Disclosures (“GASB 77”), are
agreements between a government and an individual or entity in which the
government promises to forgo tax revenues and the individual or entity promises
to subsequently take a specific action that contributes to economic development
or otherwise benefits the government or its citizens. This Statement requires
disclosure of tax abatement information about (1) a reporting government’s own
tax abatement agreements and (2) those that are entered into by other
governments and that reduce the reporting government’s tax revenues.
Since the District does not and has not entered into tax abatement agreements
directly with any individuals or entities, the following estimates are from tax
abatements entered into by other governments, specifically the county and
municipalities within the District’s boundary, that have reduced the District’s tax
revenues.
Tax Abatements Entered Into By St. Louis County and Cities Located In St.
Louis County
The District’s property tax revenues were reduced through four programs that
are utilized by cities located in St. Louis County and the County itself.
Summaries of these four programs are as follows:
Enhanced Enterprise Zone: provides real property tax abatements to new
or expanding businesses in certain specified geographic areas designated
by local governments and certified by the Missouri Department of
Economic Development.
Industrial Development Bonds: finances industrial development projects
for private corporations, partnerships and individuals.
Land Clearance Redevelopment Authority: assists with the redevelopment
of blighted or insanitary areas for residential, recreational, commercial,
industrial or public uses.
Urban Redevelopment Corporations: provides real property tax
abatements to encourage the redevelopment of blighted areas by an
eligible city or county.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 83
The amount of the District’s tax revenues that were abated by the county and
cities initiating the programs are reported in the following table. For disclosure
purposes, since the data is not available from St. Louis County for the District’s
fiscal year 2016, the amount for fiscal year 2017 is estimated to also be the
amount for fiscal year 2016.
Tax Abatements Entered Into By St. Louis City
The City of St. Louis offers a real estate tax abatement program as a
development tool designed to assist developers, businesses and individuals with
renovation and new construction projects. The tax abatement freezes the tax
assessment in improvements to property at the pre-development level. To be
eligible for tax abatement, a significant investment must be made in the
property; generally either new construction on vacant land or gut rehabilitation
of an existing building. The application must be made before construction begins
and the usual term for tax abatement is five to ten years.
The amount of the District’s tax revenues calculated at the District’s tax rate of
$.119 per $100 of assessed value that were abated by St. Louis City are reported
in the following table. For disclosure purposes, since the data is not available
from St. Louis City for the District’s fiscal year 2016, the amount for fiscal year
2017 is estimated to also be the amount for fiscal year 2016.
Land
Enhanced Industrial Clearance for Urban
St. Louis County Enterprise Development Redevelopment Redevelopment Total Tax
or City Zones Bonds Authority Corporations Abatements
St Louis County —$ 113,907$ —$ 25,167$ 139,074$
Bellerive — 21,873 — — 21,873
Berkeley 402 — — — 402
Brentwood — — — 12,657 12,657
Clayton — 21,527 — — 21,527
Edmundson — — — 9,416 9,416
Eureka — 195 — — 195
Ferguson — 3,637 — 509 4,146
Hazelwood 4,269 — — — 4,269
Jennings — 399 — — 399
Maryland Heights — — — 283 283
Normandy — — — 862 862
Overland — — — 4,637 4,637
Richmond Heights — — — 2,755 2,755
Rock Hill — — — 3,075 3,075
Sunset Hills — — — 1,140 1,140
University City — — 6,436 108 6,544
Wellston — — — 484 484
Total Tax Abatements 4,671$ 161,538$ 6,436$ 61,093$ 233,738$
For the Years Ended June 30, 2017 and 2016
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 84
Tax Increment Financing Utilized By St. Louis County, Cities Located in St.
Louis County and St. Louis City
Missouri’s Real Property Tax Increment Allocation Redevelopment Act enables
cities to finance certain redevelopment costs with the revenue generated from (i)
payments in lieu of real estate taxes, as measured by the net increase in assessed
valuation resulting from redevelopment and (ii) a portion of the increase in other
local tax revenue associated with new economic activity. When a tax increment
financing (“TIF”) plan is adopted, real estate taxes in the redevelopment are
frozen at their current level. By applying the real estate tax rate of all taxing
districts having taxing power within the redevelopment area to the increased
assessed valuation resulting from redevelopment, a tax “increment” is produced.
The real estate tax increments are referred to as payments in lieu of taxes, or
“PILOTs”, and are deposited in a special allocation fund.
Reduced
Unabated Tax Abated Tax Tax
St. Louis City Values Revenue Values Revenue Revenue
Residential 127,828,700$ 152,116$ 38,634,150$ 45,975$ 106,141$
Commercial 300,655,380 357,780 139,647,230 166,180 191,600
Total 428,484,080$ 509,896$ 178,281,380$ 212,155$ 297,741$
For the Years Ended June 30, 2017 and 2016
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 85
The estimated TIF incremental values and the District’s net reduced tax revenue
resulting from the TIFs adopted in St. Louis County and the cities located in the
County and adopted in the City of St. Louis are as follows:
In summary, the District’s total tax revenues reduced during fiscal 2017 and
2016 as a result of the programs of other governments are as follows:
TIF TIF
Incremental Reduced Incremental Reduced
St. Louis County or City Values Tax Revenues Values Tax Revenues
St. Louis County and Cities Located
in St. Louis County 433,333,020$ 518,266$ 401,072,910$ 380,751$
St. Louis County PILOTs Received — (13,569) — (10,396)
St. Louis City 755,714,993 291,862 751,214,993 195,346
St. Louis City PILOTs Received — (1,644) — (313)
Total 1,189,048,013$ 794,915$ 1,152,287,903$ 565,388$
June 30, 2017
For the Years Ended
June 30, 2016
Reduced Reduced
St. Louis County or City Tax Revenues Tax Revenues
St. Louis County and Cities Located
in St. Louis County - Tax Abatements 233,738$ 233,738$
St. Louis City - Tax Abatements 297,741 297,741
St. Louis County and Cities Located
in St. Louis County - TIFs 504,697 370,355
St. Louis City - TIFs 290,218 195,033
Total Reduced Tax Revenues 1,326,394$ 1,096,867$
For the Years Ended
June 30, 2017 June 30, 2016
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 86
16. Subsequent Events
In preparing these financial statements, the District has evaluated events and
transactions for potential recognition or disclosure through October 17, 2017, the
date the financial statements were available to be issued.
On August 2, 2017, the IRS announced a decrease in the sequestration rate for
refundable credit amounts submitted on IRS Form 8038-CP for qualified bonds
from 6.9% to 6.6%. This will be effective for all refund payments processed from
October 1, 2017 to September 30, 2018. Since the District participates in Build
America Bonds, the District will receive 93.4% of the amount requested during
its fiscal year 2018. The District received 93.1% of the amount requested during
fiscal year 2017.
In April 2017 the Missouri Clean Water Commission voted to approve setting the
clean water SRF annual loan administrative fee to one-half percent (.5%)
effective April 5, 2017 for all new direct loans and effective January 1, 2018 for
all existing direct loans currently paying one percent (1.0%). This change impacts
six of the District’s existing SRF direct loans – Series 2010C, Series 2011A,
Series 2013A, Series 2015A, Series 2016A and Series 2016B. The District’s Series
2009A and Series 2010A were currently paying one-half percent. The District’s
Board of Trustees on September 14, 2017 approved ordinances to amend the
definition of “Administrative Fee” in the previous ordinances that authorized the
impacted SRF direct loans to incorporate the reduction in the annual loan
administrative fee. The change in the loan administrative fee to one-half percent
from one percent will reduce financing costs.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 87
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN NET PENSION LIABILITY
AND RELATED RATIOS
June 30, 2017
Schedule of Changes in Net Pension Liability and Related Ratios
In (000's)
2016 2015 2014
Total Pension Liability
Service cost 5,107$ 5,253$ 5,409$
Interest on total pension liability 20,609 20,199 19,901
Effect of plan changes — — —
Effect of economic/demographic gains or (losses) (883) (4,577) (3,668)
Effect of assumption changes or inputs 11,665 — 6,500
Benefit payments (15,261) (14,475) (13,387)
Net Change in Total Pension Liability 21,237 6,400 14,755
Total Pension Liability - Beginning 296,812 290,412 275,657
Total Pension Liability - Ending (a)318,049 296,812 290,412
Fiduciary Net Position
Employer contributions 10,146 10,059 10,676
Member contributions — — —
Investment income net of investment expenses 11,913 (1,888) 6,980
Benefit payments (15,261) (14,475) (13,387)
Administrative expenses — — —
Net Change in Plan Fiduciary Net Position 6,798 (6,304) 4,269
Fiduciary Net Position - Beginning 244,212 250,516 246,247
Fiduciary Net Position - Ending (b) 251,010 244,212 250,516
Net Pension Liability - Ending = (a) - (b)67,039$ 52,600$ 39,896$
Fiduciary Net Position as a % of Total Pension Liability 78.92% 82.28% 86.26%
Covered Payroll 42,055$ 43,345$ 44,664$
Net Pension Liability as a % of Covered Payroll 159.41% 121.35% 89.32%
Notes to Schedule:
1. Changes of Assumptions. In 2016, amount reported as change of assumptions resulted from changing to
RP-2014 Mortality for Employees and Healthy Annuitants and Disabled Mortality tables, while the 2014
change resulted primarily from adjustments to the discount rate and employee rate increases.
2. This schedule will ultimately present ten years of information when available.
Calendar Year Ending December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 88
REQUIRED SUPPLEMENTARY INFORMATION (Continued)
EMPLOYEES’ PENSION PLAN AND POST-EMPLOYMENT BENEFIT PLAN
June 30, 2017
Employees' Pension Plan
Schedule of Employer Contributions
Fiscal Year Actuarially Contribution Contribution
Ending Determined Annual Deficiency Covered as a % of
June 30, Contribution Contribution (Excess) Payroll* Covered Payroll
2015 10,359,139$ 10,359,139$ —$ 44,004,199$ 23.54%
2016 10,096,075 10,096,075 — 42,699,659 23.64%
2017 11,236,828 11,236,828 — 41,402,545 27.14%
* Estimated payroll from July 1 through June 30 based on calendar year covered payroll.
Notes to Schedule:
1. This schedule will ultimately present ten years of information when available.
2. Valuation Date: Actuarially determined contribution rates are calculated as of January 1 of the fiscal year in which
the contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial Cost Method: Entry Age Normal
Amortization Method: Level dollar layered, 20 year periods
Asset Valuation Method: 3-year smoothing period
Inflation: 2.50%
Salary Increases: 4.25%, average, including inflation
Investment Rate of Return: 7.00%, net of pension plan investment expense, including inflation
Mortality: In the 2017 actuarial valuation, assumed life expectancies were
calculated using the RP-2014 Employee and Healthy Annuitant
Mortality Table and the RP-2014 Disabled Mortality Table.
In the 2016 and 2015 actuarial valuations, assumed life expectancies
were calculated using the RP-2000 Healthy Annuitant Mortality
Table and the RP-2000 Disabled Mortality Table.
Other Post-Employment Benefit Plan
Schedule of Funding Progress
In (000's)
Unfunded
Actuarial UAAL As A
Actuarial Actuarial Accrued Percentage
Actuarial Value Accrued Liability Funded Covered Of Covered
Valuation Of Assets Liability (UAAL) Ratio Payroll Payroll
Date (1) (2) (1)-(2) (1)/(2) (3) (1)-(2)/(3)
7/1/2015 —$ 25,308$ 25,308$ 0% 66,958$ 37.8 %
7/1/2013 — 26,264 26,264 0% 60,238 43.6
7/1/2011 — 24,103 24,103 0% 52,649 45.8
7/1/2009 — 24,412 24,412 0% 50,230 48.6
7/1/2007 — 21,938 21,938 0% 43,640 50.3
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
The Metropolitan St. Louis Sewer District
Statistical Section
This part of the District’s comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about the
District’s overall financial health.
Contents
Page
Financial Trends
These schedules contain trend information to help the
reader understand how the District’s financial
performance and well-being have changed over time..........................................89 – 90
Revenue Capacity
These schedules contain information to help the reader
assess the District’s most significant local revenue
sources, the user charge........................................................................................91 – 98
Debt Capacity
These schedules present information to help the reader
assess the affordability of the District’s current levels of
outstanding debt and the District’s ability to issue
additional debt in the future...............................................................................99 – 101
Demographic And Economic Information
These schedules offer demographic and economic
indicators to help the reader understand the
environment within which the District’s financial
activities take place...........................................................................................102 – 104
Operating Information
These schedules contain service and infrastructure data
to help the reader understand how the information in the
District’s financial report relates to the services the
District provides and the activities it performs ...............................................105 – 106
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 89
2008 b 2009 b 2010 b 2011 b 2012 b
Net Position
Net investment in
capital assets 1,704,322$ 1,798,914$ 1,868,974$ 1,915,233$ 1,928,200$
Restricted 97,422 94,769 80,782 94,926 106,693
Unrestricted 324,218 293,934 257,894 186,860 175,010
Total Net Position 2,125,962$ 2,187,617$ 2,207,650$ 2,197,019$ 2,209,903$
2013 b 2014 b 2015 a 2016 a 2017 a
Net Position
Net investment in
capital assets 1,877,692$ 1,845,394$ 1,805,453$ 1,809,386$ 1,876,249$
Restricted 111,066 142,764 142,445 136,547 135,259
Unrestricted 251,300 279,794 330,218 381,124 379,660
Total Net Position 2,240,058$ 2,267,952$ 2,278,116$ 2,327,057$ 2,391,168$
a Years 2015 to current include a change in the calculation of the net position components which is
not reflected in years prior.
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(000's)
Fiscal Year
Fiscal Year
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 90
Non-operating Income/(Loss) Change
Fiscal Operating Operating Operating Revenue/ before Capital Capital in Net
Year Revenues Expenses Income/(Loss) (Expenses) Contributions Contributions Position
2008 221,925,048$ 225,145,882$ (3,220,834)$ 37,259,517$ 34,038,683$ 45,609,805$ 79,648,488$
2009 249,725,358 212,177,779 37,547,579 (2,885,959) 34,661,620 26,993,385 61,655,005
2010 246,587,174 228,778,874 17,808,300 (17,560,670) 247,630 19,786,012 20,033,642
2011 219,444,257 244,503,099 (25,058,842) 4,329,032 (20,729,810) 10,098,552 (10,631,258)
2012 225,999,720 216,307,965 9,691,755 1,370,329 11,062,084 9,658,857 20,720,941
2013 241,946,337 230,158,434 11,787,903 832,056 12,619,959 17,534,919 30,154,878
2014 265,772,853 241,297,635 24,475,218 (3,682,863) 20,792,355 7,102,480 27,894,835
2015 290,386,589 256,521,148 33,865,441 (13,074,700) 20,790,741 12,996,754 33,787,495
2016 319,857,731 273,095,705 46,762,026 (9,858,327) 36,903,699 12,036,784 48,940,483
2017 333,490,989 275,077,675 58,413,314 (3,916,119) 54,497,195 9,613,746 64,110,941
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 91
Licenses,
Fiscal Sewer Service Permits, and
Year Charges, Net Other Fees Other
2008 216,618,417$ 4,345,961$ 960,670$ 221,925,048$
2009 244,699,964 3,475,283 1,550,111 249,725,358
2010 241,495,357 3,084,552 2,007,265 246,587,174
2011 214,653,310 2,976,253 1,814,694 219,444,257
2012 220,765,581 2,683,823 2,550,316 225,999,720
2013 235,980,065 2,731,497 3,234,775 241,946,337
2014 257,343,344 6,562,607 1,866,902 265,772,853
2015 282,270,193 6,656,831 1,459,565 290,386,589
2016 302,011,893 3,620,240 14,225,598 319,857,731
2017 328,359,526 4,036,362 1,095,101 333,490,989
OPERATING REVENUES BY SOURCE
LAST TEN FISCAL YEARS
Total Operating
Revenues
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 92
Fiscal Employment Materials and Contracted Chemical
Year Costs Utilities Supplies Services Supplies
2008 60,787,548$ 12,837,998$ 14,081,785$ 64,192,143$ 1,387,122$
2009 70,475,293 12,587,699 14,855,989 48,783,447 1,589,650
2010 85,030,456 12,355,232 13,297,892 39,561,050 1,478,605
2011 84,264,583 14,170,680 11,010,962 42,854,613 1,415,826
2012 87,148,397 12,612,858 13,942,690 29,585,028 1,355,113
2013 91,939,437 14,533,557 10,355,992 31,133,523 1,455,725
2014 93,634,080 14,986,388 11,835,900 40,148,088 2,440,843
2015 96,832,265 16,500,052 17,596,766 46,020,308 3,964,165
2016 99,162,132 16,624,607 16,202,414 49,782,063 3,498,796
2017 99,357,213 16,771,366 14,453,871 51,197,293 3,569,449
Fiscal
Year Insurance Other
2008 2,939,390$ 13,986,037$ 170,212,023$ 54,933,859$ 225,145,882$
2009 2,746,119 13,769,203 164,807,400 47,370,379 212,177,779
2010 3,062,439 19,981,424 174,767,098 54,011,776 228,778,874
2011 2,578,316 21,353,854 177,648,834 66,854,265 244,503,099
2012 2,470,343 2,451,472 149,565,901 66,742,064 216,307,965
2013 2,696,416 8,013,944 160,128,594 70,029,840 230,158,434
2014 2,737,491 1,427,638 167,210,428 74,087,207 241,297,635
2015 2,791,622 (5,825,289) 177,879,889 78,641,259 256,521,148
2016 3,218,041 623,903 189,111,956 83,983,749 273,095,705
2017 3,293,267 5,240,825 193,883,284 81,194,391 275,077,675
OPERATING EXPENSES
LAST TEN FISCAL YEARS
Subtotal,
Expenses
before
Depreciation Depreciation
Total Operating
Expenses
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 93
2008 2009 2010 2011 2012
Non-operating revenues
Property taxes levied by the District 27,512,070$ 2,129,475$ 1,401,100$ 27,125,451$ 24,604,173$
Investment income 17,476,621 13,115,519 6,553,760 3,847,324 2,407,485
Rent and other income 529,983 214,674 265,004 442,968 294,591
Total non-operating revenues 45,518,674 15,459,668 8,219,864 31,415,743 27,306,249
Non-operating expenses
Interest expense — 9,079,269 13,189,283 7,971,088 16,365,309
Clean Water Capital Improvement refund 4,313,973 — — — —
Net loss on disposal and sale
of capital assets 686,459 2,161,862 2,719,163 3,485,952 3,162,723
Non-recurring projects and studies 3,258,725 7,104,496 9,872,088 10,800,843 6,402,888
Legal claims — — — 4,828,828 5,000
Total non-operating expenses 8,259,157 18,345,627 25,780,534 27,086,711 25,935,920
Net non-operating revenue (expense) 37,259,517$ (2,885,959)$ (17,560,670)$ 4,329,032$ 1,370,329$
2013 2014 2015 2016 2017
Non-operating revenues
Property taxes levied by the District 26,016,135$ 27,450,319$ 24,764,324$ 25,671,058$ 32,458,054$
Investment income 1,056,966 2,966,549 3,000,591 4,635,866 2,902,624
Rent and other income 293,159 302,506 37,321 102,865 106,562
Total non-operating revenues 27,366,260 30,719,374 27,802,236 30,409,789 35,467,240
Non-operating expenses
Interest expense 21,062,474 25,661,127 27,138,546 28,943,200 31,250,777
Net loss on disposal and sale
of capital assets 795,527 5,248,443 1,420,902 324,513 673,044
Non-recurring projects and studies 4,676,203 3,492,667 12,317,488 11,000,403 7,459,538
Total non-operating expenses 26,534,204 34,402,237 40,876,936 40,268,116 39,383,359
Net non-operating revenue (expense) 832,056$ (3,682,863)$ (13,074,700)$ (9,858,327)$ (3,916,119)$
Fiscal Year
NON-OPERATING REVENUES AND EXPENSES
LAST TEN FISCAL YEARS
Fiscal Year
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 94
Type of Monthly Charge Unmetered c Residential c Non-Residential
Wastewater User Charge
Base Charge 19.46$ 19.46$ 19.46$
Compliance Charge a
Tier 1 — — 2.86
Tier 2 — — 57.20
Tier 3 — — 125.84
Tier 4 — — 185.90
Tier 5 — — 243.10
Volume Charges
per Ccf b — 3.59 3.59
per room 2.12 — —
per water closet 7.92 — —
per bath 6.60 — —
per separate shower 6.60 — —
Extra Strength Surcharges a
SS over 300 ppm per ton — — 262.00
BOD over 300 ppm per ton — — 654.00
COD over 600 ppm per ton — — 327.00
Notes:
a Applicable only to non-residential customers.
b Ccf = Hundred cubic feet.
c User charges for certain low income residential users will be
50 percent of the regular user charge.
Source: Finance Department
USER CHARGE RATES
As Of June 30, 2017
Metered
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 95
Fiscal
Year
Wastewater
Charges Billed1
Wastewater
Charges Collected2
Collections as a %
of Wastewater
Charges Billed
2008 203,646,332$ 195,452,994$ 95.98%
2009 207,801,047 197,892,342 95.23%
2010 204,248,506 198,138,619 97.01%
2011 213,503,732 203,520,769 95.32%
2012 222,425,957 217,396,623 97.74%
2013 233,882,795 233,877,875 99.99%
2014 245,555,628 241,549,548 98.37%
2015 279,555,881 275,049,684 98.39%
2016 300,803,084 299,932,808 99.71%
2017 326,663,167 322,829,334 98.83%
Note: The table shows the amount of wastewater user charge revenues which were
billed and collected by the District for the last ten fiscal years.
1 Wastewater Charges Billed includes wastewater user charge revenues billed and
accrued for the year.
2 Wastewater Charges Collected includes wastewater user charge revenues collected
for the current year and previous years billings.
USER CHARGE REVENUES
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 96
2008 a 2009 2010 b 2011 c 2012
Residential:
Single Family/Unit a 344.88$ 344.88$ 1 351.12$ 1 333.60$ 1 347.64$
Multi-Family/Unit a 299.76 299.76 305.04 285.12 296.28
Commercial/Industrial:
Service Charge/Unit 2 457.20 457.20 486.60 507.00 525.60
Sanitary Sewer Usage Charge per Ccf 1.88 1.88 1.92 2.02 2.11
Storm Sewer Usage Charge/100 sq. feet of impervious area — 0.12 0.14 — —
Extra Strength Surcharges:
Suspended Solids ("SS") over 300 parts per million/ton 218.90 218.90 218.90 222.62 231.35
Biochemical Oxygen Demand ("BOD") over 300 parts per million/ton 529.90 529.56 551.52 596.72 620.14
Chemical Oxygen Demand ("COD") over 600 parts per million/ton 264.85 264.78 275.76 298.36 310.07
2013 d 2014 2015 2016 2017 e
Residential:
Single Family/Unit a 379.56$ 421.08$ 434.76$ 491.52$ 535.08$
Multi-Family/Unit a 324.12 360.36 434.04 490.80 535.08
Commercial/Industrial:
Service Charge/Unit 2 478.56 412.56 348.12 296.80 336.69
Sanitary Sewer Usage Charge per Ccf 2.28 2.50 2.82 3.21 3.59
Storm Sewer Usage Charge/100 sq. feet of impervious area — — — — —
Extra Strength Surcharges:
Suspended Solids ("SS") over 300 parts per million/ton 231.35 231.35 244.03 251.88 262.00
Biochemical Oxygen Demand ("BOD") over 300 parts per million/ton 620.14 620.14 620.14 632.38 654.00
Chemical Oxygen Demand ("COD") over 600 parts per million/ton 310.07 310.07 310.07 316.19 327.00
Notes:1 Years 2008-2010 saw an impervious rate charge that averaged $36 per year per customer. This was discontinued in 2011.
2 Service Charge/Unit for Commercial/Industrial is calculated by using the sum of annualized base charge and compliance charge.
Starting FY 2013, MSD implemented 5-tier Compliance Charge Rate Model, so the Service Charge/Unit is based on calculated weighted
average compliance charge. FY 2013, FY 2014 & FY 2015 Service Charge/Unit were adjusted to reflect the weighted average compliance
charge calculations. Prior to FY 2013, there was only one tier compliance charge.
a Ordinance 12561, effective January 1, 2008, changed wastewater rates. Ordinance 12560, changed stormwater rates, effective March 1, 2008.
b Ordinance 12754, effective July 1, 2009, changed wastewater rates.
c Ordinance 13021, effective July 1, 2010, changed wastewater rates through FY 2012.
d Ordinance 13402, effective July 1, 2012, changed wastewater rates through FY 2016.e Ordinance 14395, effective July 1, 2016, changed wastewater rates through FY 2020.
Source: Finance Department
Fiscal Year
Fiscal Year
SEWER USER CHARGES (COMPOSITE-ANNUAL)
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 97
Single Multi-
Fiscal Family Family Non- Total
Year Residential Residential Residential Accounts
2008 391,181 54,862 32,336 478,379 a
2009 388,791 51,441 32,161 472,393 a
2010 387,670 50,867 31,939 470,476 a
2011 362,739 43,471 24,702 430,912 b
2012 360,354 41,648 24,568 426,570
2013 359,243 41,117 24,441 424,801
2014 358,928 40,951 24,297 424,176
2015 359,317 41,131 24,389 424,837
2016 356,926 41,585 24,001 422,512
2017 360,534 41,697 24,253 426,484
Source: Finance Department
a Due to the implementation of the impervious area charge in 2008, approximately
46,000 additional stormwater only accounts were billed each month. This charge
was challenged and a court decision was entered on 7/9/10. Based on that decision
the impervious charge was discontinued in FY 2011.
b The number of accounts were revised as stormwater accounts were underreported.
NUMBER OF CUSTOMERS BY TYPE
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 98
Customer Amount %
InBev Anheuser-Busch 5,165,348$ 1.57%
City of St. Louis 2,320,129 0.71%
Washington Unversity 2,042,936 0.62%
Sigma-Aldrich 1,214,683 0.37%
St Louis University 1,102,130 0.34%
BJC HealthCare 941,584 0.29%
Hermann Oak Leather 899,699 0.27%
GKN Aerospace 844,002 0.26%
The Boeing Company 809,434 0.25%
Mallinckrodt 802,947 0.24%
Subtotal (10 largest) 16,142,892 4.92%
Balance from other customers 312,216,634 95.08%
Grand totals 328,359,526$ 100.00%
Customer Amount %
Anheuser-Busch 7,029,150$ 3.24%
Mallinckrodt Inc. 1,685,617 0.78%
Washington University 994,016 0.46%
City Of St. Louis 811,893 0.37%
Chrysler Corporation 811,706 0.37%
Zoological Gardens 784,423 0.36%
Sigma-Aldrich 674,920 0.31%
Rockwood Pigments Na Inc. 624,807 0.29%
St. Louis Coca-Cola Bottling Co. 536,315 0.25%
Sensient Colors Inc. 532,339 0.25%
Subtotal (10 largest) 14,485,186 6.68%
Balance from other customers 202,133,231 93.32%
Grand totals 216,618,417$ 100.00%
Source: Budget Division
Fiscal Year 2008
User Charges
TEN LARGEST CUSTOMERS
CURRENT YEAR AND NINE YEARS AGO
User Charges
Fiscal Year 2017
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 99
Unamortized As a Share
Fiscal Subordinate Capital Premium, Net of Personal
Year Senior Subordinate Direct Loans Lease of Discount Amount Per Capita Income
2008 230,485,000$ 206,522,500$ 269,299$ —$ 3,974,435$ 441,251,234$ 324$ 0.67
2009 258,965,000 235,932,500 215,790 4,130,000 2,640,838 501,884,128 373 0.81
2010 342,370,000 224,505,000 31,017,371 7,263,687 1,457,910 606,613,968 446 1.00
2011 340,590,000 212,655,000 25,259,899 6,095,981 862,654 585,463,534 431 0.97
2012 390,880,000 200,692,500 63,727,722 3,096,139 5,805,206 664,201,567 484 1.09
2013 594,715,000 188,600,000 93,751,658 — 56,252,401 933,319,059 660 1.45
2014 740,655,000 184,075,000 116,090,820 — 82,274,845 1,123,095,665 852 1.86
2015 736,775,000 171,455,000 148,279,465 — 78,591,961 1,135,101,426 860 1.83
2016 860,460,000 158,765,000 184,141,916 — 112,035,478 1,315,402,394 997 2.09
2017 995,175,000 145,410,000 210,851,827 — 124,465,181 1,475,902,008 1,127 2.33
Notes:
Calculation of "Per Capita" for 2011 through 2013 is based on estimated population levels.
Calculation of "As a Share of Personal Income" for 2011 through 2013 is based on estimated income levels.
In FY 2012, a decision was made to discontinue considering SRF receivable amounts as liabilities. The liability is now recorded when the funds are received.
Sources: Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce, and the U.S. Census Bureau
LAST TEN FISCAL YEARS
Revenue Bonds
Total
RATIOS OF OUTSTANDING DEBT BY TYPE
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 100
Amount of Debt Percentage of Debt
Governmental Unit Debt Outstanding within District Boundary within District Boundary
City of St. Louis 37,345,000$ 37,345,000$ 100.0%
St. Louis County 96,850,000 96,075,200 99.2
Municipalities 122,514,491 119,459,491 97.5
City of St. Louis School District 277,879,000 277,879,000 100.0
St. Louis County School Districts 1,422,120,584 1,407,479,144 99.0
Fire Districts 103,382,568 96,395,273 93.2
2,060,091,643$ 2,034,633,108 98.8%
Total Direct Debt 1,475,902,008
Total Direct and Overlapping Debt 3,510,535,116$
Sources:
City of St. Louis, Office of Comptroller
St. Louis County, Department of Revenue
St. Louis Public Schools, Financial/Treasurer Office
Missouri Department of Education, School Finance
Polled Governments
Polled Fire Districts
Note: Although the District comprises all of the St. Louis City and most of St. Louis County, it does not entirely match the County's
boundaries. The calculation of overlapping debt is based on the percentage that a political jurisdiction's territory lies within the District's
territory. These percentages are weighted against the debt outstanding thus providing the amount of debt within District Boundary.
COMPUTATION OF OVERLAPPING DEBT
As Of June 30, 2017
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 101
Less:
Operating
Expenses
(excluding
Non- depreciation Net
Fiscal Operating operating Gross & GASB 68 Available
Year Revenues Revenues Revenues pension exp) Revenues
2008 208,981,377$ 13,281,919$ 222,263,296$ 142,725,186$ 79,538,110$
2009 209,972,662 10,283,104 220,255,766 138,971,881 81,283,885
2010 204,697,929 4,908,296 209,606,225 145,598,505 64,007,720
2011 217,011,360 3,202,219 220,213,579 160,572,145 59,641,434
2012 224,882,086 2,058,300 226,940,386 135,232,302 91,708,084
2013 240,597,715 956,664 241,554,379 146,372,419 95,181,960
2014 264,422,401 2,670,333 267,092,734 153,221,914 113,870,820
2015 288,835,877 2,555,654 291,391,531 163,311,194 128,080,337
2016 318,463,297 3,894,305 322,357,602 168,258,133 154,099,469
2017 333,469,677 2,456,677 335,926,354 168,835,676 167,090,678
Fiscal Coverage
Year Principal Interest Total Ratio
2008 8,640,000$ 17,694,791$ 26,334,791$ 3.0
2009 12,110,000 17,503,892 29,613,892 2.7
2010 13,022,500 20,187,151 33,209,651 1.9
2011 14,576,800 20,140,021 34,716,821 1.7
2012 16,540,200 22,517,473 39,057,673 2.3
2013 18,749,700 31,191,190 49,940,890 1.9
2014 10,037,200 34,399,261 44,436,461 2.6
2015 20,252,200 41,596,192 61,848,392 2.1
2016 29,588,000 44,171,592 73,759,592 2.1
2017 38,026,700 51,333,869 89,360,569 1.9
Fiscal Coverage
Year Principal Interest Total Ratio
2008 1,510,000$ 11,067,634$ 12,577,634$ 6.3
2009 1,520,000 11,677,272 13,197,272 6.2
2010 1,595,000 13,396,341 14,991,341 4.3
2011 1,780,000 15,467,269 17,247,269 3.5
2012 1,960,000 16,488,587 18,448,587 5.0
2013 3,805,000 24,451,656 28,256,656 3.4
2014 4,060,000 30,161,408 34,221,408 3.3
2015 3,880,000 34,472,415 38,352,415 3.3
2016 10,170,000 36,211,319 46,381,319 3.3
2017 15,285,000 42,897,077 58,182,077 2.9
Note: The methodology used to calculate the net available revenues and the coverage ratio was adjusted during fiscal
year 2013 and all previous years were restated for comparative purposes. The 2013 change in methodology consisted of
removing agency fees, previously reflected as a deduction from net available revenues, and now combining them with
interest in the debt service section. Additionally, in fiscal years 2010 and 2011, the change in methodology consisted of
removing the Build America Bond Tax Credit from the pledged revenue section and reapplying the credit to interest
expense in the debt service section. This was made to ensure consistency with fiscal years 2012 and 2013. In fiscal 2017
the methodology was changed to exclude GASB non-cash transactions from the debt service coverage calculation. Fiscal
years 2015 and 2016 have been adjusted to also exclude the GASB 68 non-cash pension expense.
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
Senior and Subordinate Debt Service
Senior Debt Service
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 102
Per
Personal Capita Total
Fiscal Income Personal Labor Number of
Year Populations (millions) Income City County State Force Households (1)
2008 1,348,462 62,135$ 46,079$ 7.9 5.9 6.0 690,006 551,388
2009 1,339,011 61,947 46,263 11.5 9.7 9.5 681,801 551,388
2010 1,356,289 60,792 44,822 12.3 9.4 9.3 682,165 551,388
2011 1,357,035 60,420 44,523 11.8 8.9 9.0 692,071 546,744
2012 1,360,085 60,283 44,323 9.7 6.9 7.0 672,945 546,744
2013 1,328,610 60,399 45,460 10.5 7.3 7.1 665,086 543,851
2014 1,318,610 60,968 46,237 9.6 6.9 6.6 666,200 543,991
2015 1,319,295 61,910 46,926 7.1 5.5 5.8 703,317 543,945
2016 1,319,047 62,983 47,749 6.0 4.7 4.9 709,825 542,223
2017 1,309,985 63,322 48,338 4.7 3.7 4.9 692,644 541,394
Notes:
(1) The number of households was taken from http://www.census.gov/quickfacts/fact/table/US-MO. The 2017 figure is based on
2011-2015 data. The 2016 figure (2010-2014). The 2015 figure is based on 2013 data. The 2011-2012 figures are based on the 2010.
census. Information for prior years is unavailable; therefore, the 2000 census information is used for the other years in this table.
Sources: Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce,
and Missouri Economic Resource and Information Center (MERIC)
Footnotes- http://www.bea.gov/regional/reis/scb.cfm
http://www.missourieconomy.org/indicators/LAUS/default.aspx
KWWS TXLFNIDFWVFHQVXVJRYTIGVWDWHV KWPO
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Unemployment Rate
Saint Louis
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 103
Percentage Percentage
Employer Employees (1)of Total Rank Employees (1)of Total Rank
BJC HealthCare 28,351 4% 1 23,378 4% 1
Wal-Mart Stores Inc. 22,290 3% 2 13,400 2% 4
Washington University in St. Louis 15,818 2% 3 12,390 2% 6
SSM Healthcare 14,926 2% 4 12,102 2% 7
Mercy 14,195 2% 5
Boeing Defense, Space & Security 14,000 2% 6 16,000 2% 2
Scott Air Force Base 13,000 2% 7 13,433 2% 3
Schnuck Markets Inc. 9,956 1% 8 11,000 2% 8
AT & T 9,000 1% 9 8,990 1% 9
Archdiocese of St. Louis 8,780 1% 10
United States Postal Service 12,700 2% 5
St. John's Mercy Health Care 8,876 1% 10
150,316 20% 132,269 20%
Notes:
(1) Employees are for the St. Louis area which includes several counties not served by the District.
Sources:
St. Louis Business Journal's Book of Lists 2017 (as of May 2017)
St. Louis Business Journal's Book of Lists 2008
Fiscal Year 2008Fiscal Year 2017
PRINCIPAL EMPLOYERS (ST. LOUIS METROPOLITAN AREA)
CURRENT YEAR AND NINE YEARS AGO
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 104
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Administrative 131 133 131 124 129 124 122 129 126 131
Office/Clerical 92 94 89 84 85 86 82 84 82 82
Plant Operation & Laboratory 239 237 249 241 244 249 252 236 226 227
Engineering & Technical 133 144 151 147 153 148 151 155 152 151
Sewer Construction
& Maintenance 276 301 315 296 311 324 328 345 358 360
Total Employees 871 909 935 892 922 931 935 949 944 951
Source: Human Resources Department
EMPLOYMENT LEVEL
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 105
Average Sewage
Fiscal Treatment in Millions
Year of Gallons per Day
2008 363.7
2009 394.7
2010 395.5
2011 370.6
2012 300.0
2013 326.7
2014 273.8
2015 327.5
2016 335.2
2017 328.9
Source: Operations Department
AVERAGE FLOW
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 106
2008 2009 2010 2011 2012
Miles of sewers 9,723 9,812 9,900 9,843 9,738
Number of treatment plants 7 7 7 7 7
Treatment capacity (MGD) a 428 423 423 528 528
Annual engineering maximum plant capacity
(millions of gallons) 154,395 154,395 154,395 192,629 192,629
Amount treated annually (millions of gallons) 132,751 144,066 144,358 135,269 109,518
Unused capacity (millions of gallons) 21,644 10,329 10,037 57,360 83,111
Percentage of capacity utilized 86% 93% 93% 70% 57%
2013 2014 2015 2016 2017
Miles of sewers 9,578 9,563 9,531 9,700 9,400
Number of treatment plants 7 7 7 7 7
Treatment capacity (MGD) a 528 533 538 538 593
Annual engineering maximum plant capacity
(millions of gallons) 192,629 194,454 196,279 196,279 216,354
Amount treated annually (millions of gallons) 119,253 99,945 119,547 122,366 120,033
Unused capacity (millions of gallons) 73,376 94,509 76,732 73,913 96,321
Percentage of capacity utilized 62% 51% 61% 62% 55%
Sources: Operations Department and Engineering Department
Note:a Million gallons per day.
Fiscal Year
Fiscal Year
OPERATING AND CAPITAL INDICATORS
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT2350 MARKET STREET, ST. LOUIS, MO 63103WWW.STLMSD.COM - 314-768-6260