HomeMy Public PortalAboutFiscal Year 2017 Popular Annual Financial ReportPoPular annual Financial rePort
Fiscal Year Ending June 30, 2017
METROPOLITAN ST. LOUIS SEWER DISTRICTST. LOUIS, MISSOURI ONEYEARAGO–URBANHARVESTSTLF O O D R O O F FARM
INITIALPLANTING–URBANHARVESTST L F O O D RO OF FARM
AUGUST2017 –URBAN HARVEST STL FOOD ROOF FARM
MSD MISSION
MSD PROJECT CLEAR
“Toprotectthepublic’shealth,safety,
andwaterenvironment by responsiblyproviding
wastewaterandstormwatermanagement.”
MSDProjectClearisourinitiativetoimprovewaterqualityandalleviatemany
wastewaterconcernsintheSt.Louisregion.Itwillinvest billions of dollars overa
generationinplanning,designing,andbuildingcommunity rainscaping,system
improvements,andanambitiousprogramofmaintenanceandrepair.
Urban Harvest STL has been growing food in downtown St. Louis since 2012, helping tocombat food insecurity in the area. To serve more local families, the nonprofit, with thehelp of grant money from the MSD Project Clear Rainscaping Large Scale Grant Program,built the Urban Harvest STL FOOD ROOF Farm – a rooftop farm and rain garden atop adowntown building. MSD’s rainscaping program seeks to engage partners to identify jointopportunities to incorporate rainscaping techniques – like the example on the cover – intoongoing programs and future redevelopment projects. Each grant awarded allows MSDto create a public-private partnership that contributes to the environmental, social, andeconomic health of the St. Louis region.
ON THE COVER
TABLE OF CONTENTS
Directors’ Letter............................................................................................................3
December 2015 Flood v. April/May 2017 Flood..............................4-5
What We Do.....................................................................................................................6-7
MSD at Work in the Community...............................................................8-9
Year in Review.................................................................................................................10
Looking Ahead................................................................................................................11
Condensed Statement of Net Position...............................................12
MSD Assets and Long-Term Obligations...........................................13
Income Statement.......................................................................................................14
Revenues and Expenses..........................................................................................15
Cash Flow Statement.............................................................................................16
Performance Against Budget and Credit Rating....................17
POPULAR ANNUAL FINANCIAL REPORT FY 17 |1
2 |METROPOLITAN ST. LOUIS SEWER DISTRICT
“Government Finance Officers Association of the United States and Canada (GFOA) has givenan Award for Outstanding Achievement in Popular Annual Financial Reporting to the MetropolitanSt. Louis Sewer District for its Popular Annual Financial Report for the fiscal year ended June 30, 2016.The Award for Outstanding Achievement in Popular Annual Financial Reporting iss a restigiousnational award recognizing conformance with the highest standards for preparation of state andlocal government popular reports.In order to receive an Award for Outstanding Achievement in Popular Annual FinancialReporting, a government unit must publish a Popular Annual Financial Report, whose contentsconform to program standards of creativity, presentation, understandability, and reader appeal.We believe our current report continues to conform to the Popular Annual Financial Reportingrequirements, and we are submitting it to the GFOA to determine its eligibility for another Award.”
We appreciate your interest in the Metropolitan St. Louis Sewer District (MSD) and are honoredto present our Popular Annual Financial Report for the Fiscal Year 2017 (FY 17).MSD fulfills the daily needs of residents by providing basic sewer services, and it looks ahead intothe future by planning and implementing small- to large-scale improvements that will benefit theregion for years to come. In FY 17, MSD appropriated funds for 223 new or continuing wastewaterand stormwater projects that are scheduled for either design or construction.This annual report provides a non-technical overview of MSD’s work and a snapshot of ouractivities from the most recent fiscal year – July 1, 2016 to June 30, 2017. Within these pages, you’llfind information on how MSD carefully invests the funds it receives to manage and improve ourregion’s wastewater and stormwater systems.You’ll also find a summary of financial information for the past fiscal year. Please note that while the summary information uses principles and guidelines consistent with Generally Accepted AccountingPrinciples (GAAP), it has been simplified for general audiences and is not GAAP-compliant.A more in-depth financial review of MSD’s operations can be found in its Comprehensive AnnualFinancial Report. You can find this document, as well as this Popular Annual Financial Report, onlineat www.stlmsd.com/our-organization/fiscal-investor-relations/annual-reports. To request a printedcopy of this information, contact MSD at 314-768-6260 or send an email to: customersvc@stlmsd.com.We hope you find this report useful and informative. As always, comments and suggestions onhow we might improve future reports to better serve your interests and needs are welcome.
Respectfully submitted,
Brian Hoelscher, P.E.Marion Gee
Executive Director & CEO Director of Finance
DIRECTORS’ LETTER
POPULAR ANNUAL FINANCIAL REPORT FY 17 |3
Extreme rains in 2015 and the heavy downfalls in 2017 resulted in
major flooding along the Meramec River, impacting MSD’s Grand
Glaize and Fenton Wastewater Treatment Plants.
In December 2015, parts of the St. Louis region received more than 9 inches of rain in three days,causing the Meramec River to flood. It crested at more than 44 feet, which is the highest level onrecord. On December 28, the inflow at the Fenton Wastewater Treatment Plant exceeded the plant’scapacity, causing internal flooding. The decision was made to cut the electrical power in order tominimize additional damage to the plant. The following day, flash flooding caused the river level to overtop the levee that protected the plant. The facility had to be abandoned.The Grand Glaize Wastewater Treatment Plant was also threatened, but there was more time toreact. By December 29, MSD reviewed the plant’s topographical map and developed an emergencysandbagging plan, which was executed over the next two days with the help of crew members fromother treatment plants. The efforts were mostly successful; however, the Grand Glaize plant stillpartially flooded.The Fenton plant was back up and running after 91 days, at a cost of $8.15 million. The GrandGlaize plant was fully functional after nine days, at a cost of $3.3 million.Sixteen months later, in April 2017, St. Louis again experienced near historic levels of floodingalong the Meramec, but because the river did not rise as quickly, there was more time to prepare.Once the likelihood of flooding was announced, MSD quickly mobilized extra manpower and pumpsand installed a temporary block wall, along with secondary protection in case the new wall failed. Atthe Fenton plant, MSD also mobilized extra resources and built a sandbag wall on top of the levee foradditional protection.The spring 2017 rainfall caused the Meramec River to crest just inches below the 2015 flood level,but this time neither the Fenton nor Grand Glaize plants flooded, and both remained operational.Enhanced protection against flooding is planned at both plants, including building a new permanentflood wall at Grand Glaize and raising the levee at the Fenton plant.
DECEMBER 2015 FLOOD V. APRIL/MAY 2017 FLOOD
4 |METROPOLITAN ST. LOUIS SEWER DISTRICT
DECEMBER 2015 FLOODV. APRIL/MAY 2017 FLOOD
Regional Flooding
POPULAR ANNUAL FINANCIAL REPORT FY 17 |5
WHAT WE DO
MSD’sDualFunction
MSD’s service area encompasses approximately 520 square miles, including all 66 square miles
of St. Louis City and 454 square miles (87 percent) of St. Louis County. The current population
served by MSD is approximately 1.3 million, representing more than 426,000 accounts.
The Metropolitan St. Louis Sewer District owns, operates, and maintains a sewer system which
consists of wastewater, stormwater, and combined collection sewers – carrying both wastewater and
stormwater – pumping stations, and wastewater treatment facilities that have been incorporated
into one entity over the last 60-plus years. It is one of the largest and most complex systems in the
United States. MSD is two separate utilities within one organizational structure:
Wastewater –collect “used” water disposed of in
sinks, toilets, and floor drains by households and
businesses, and then treat it to regulatory standards
before returning it to the region’s waterways.
Stormwater – operate and maintain the public
storm sewer system and help coordinate
regional efforts to address pollution carried
in or caused by stormwater runoff.
6 |METROPOLITAN ST. LOUIS SEWER DISTRICT
ColdwaterWWTP
Grand GlaizeWWTP
FentonWWTP
MissouriRiverWWTP
LemayWWTP
Bissell PointWWTP
LowerMeramecWWTP
I-270
I-270
I-270
I-44
I-44
I-64
I-64
I-255
I-55
I-170
I-70
I-70
MSD Wastewater Treatment Plants (WWTP) Service Area Memphis Light, Gas and Water “2017 Utility Bill Comparisons” Survey
Rates as of January 1, 2017, based on 10 CCF
RESIDENTIALWASTEWATER
USERCHARGE
ST. LOUISANDOTHERMUNICIPALITIES
SURVEYAVERAGE NASHVILLEST.LOUISNEWORLEANSDETROITBOSTON
$0
$10
$20
$30
$40
$50
$60
$70
COLUMBUS SPRINGFIELD
MSD engages with the public at a variety of events throughout the year to inform and educate
residents about wastewater and stormwater issues, as well as MSD programs and services, including:
St. Louis Earth Day –Even frosty morning temperatures didn’t keep MSD volunteers from
handing out information about Project Clear, stormwater management, and flood zone awareness
to 2017 St. Louis Earth Day attendees. MSD’s involvement didn’t end there – MSD Project Clear also
sponsored the environmental-themed bus painting event. The theme was rain gardens, highlighting
the power of beautiful flowers and grasses coupled with an engineered drainage system to reduce
the amount of stormwater sent through our storm sewer system.
Green Homes Festival – MSD Project Clear sponsored the NatureScaping display at the 16th annual
Green Homes Festival at the Missouri Botanical Garden. This popular event is a celebration of
sustainable living and healthy lifestyles. MSD handed out reusable bags containing information on
MSD Project Clear and responsible stormwater management.
Sista Strut Walk
sm –MSD was a sponsor for the 7th Annual Sista Strut
SM Breast Cancer Walk, which
supports breast cancer awareness and provides information and resources, saving the lives of women of
color in the local community. This event is the largest of its kind in the nation – in 2016, 8,000 walkers
participated in St. Louis. Eight MSD employees volunteered to staff a table to provide information on
MSD Project Clear and the Customer Assistance Program. The latter offers a 50 percent rate reduction
to qualified low-income, elderly, and disabled customers.
St. Louis Auto Show –At the St. Louis Auto Show in January, MSD employees provided attendees with
information on MSD Project Clear and stormwater best practices.
MSD also participated in:
•Enterprise Holdings Employee Eco Fairs
•TEDxSTL events, and
•The Greater St. Louis Hispanic Festival
PublicEducationandCommunityOutreach
POPULAR ANNUAL FINANCIAL REPORT FY 17 |7
St.LouisEarthDay
St. Louis Auto Show Green Homes Festival
St. Louis Earth Day
MSD AT WORK IN THE COMMUNITY
8 |METROPOLITAN ST. LOUIS SEWER DISTRICT
Throughout MSD’s service area, thereare points where wastewater discharges intolocal waterways from the sewer system duringmoderate to heavy rainstorms – these seweroverflow points act as necessary relief valveswhen too much stormwater enters the wastewatersystem, saving the St. Louis community fromwidespread basement backups. Many of theseoverflow points are a product of the way theSt. Louis wastewater systems were first built,predating the District’s creation in 1954 butultimately falling under its jurisdiction today.In April 2012, a consent decree agreementbetween MSD, the Environmental ProtectionAgency, and the Missouri Coalition for theEnvironment was entered by the United States
District Court for the Eastern District of Missouri.
Prior to the consent decree, from 1992 to 2012,
MSD spent approximately $2.7 billion to remove
more than 350 overflows. The consent decree sets
a timetable for continued improvements to the
sewer system, including upgrades and
maintenance, and additional overflow removals.
As part of its consent decree work, MSD
Project Clear implemented an aggressive
cleaning and preventive maintenance program,
called Capacity, Management, Operations,
and Maintenance (CMOM). Recent additions
to the CMOM program include: the use of an
acoustic inspection device to provide sewer line
blockage assessment in less than five minutes;
the purchase of a second Rapid View 3D scanner
truck to support the stormwater inlet inspection
program made possible by the passage of
Proposition S in 2016; and the addition of
GPS capabilities on the rapid scan trucks.
The additional technologies allow for quicker,
more efficient, and cost-effective determination
if cleaning is required, precise system inspection,
and improvement to the overall accuracy of
system maps. These trucks are capable of a
combined 15,000 to 20,000 manhole/inlet
inspections annually.
ConsentDecreeUpdate
AcousticInspectionDevice RapidView3DScanner
In FY 17, MSD introduced an updated title
quote system to simplify the search process
for title companies.
Title companies perform a search and
contact MSD to finalize sewer billing for the
previous customer and to ensure there are no
outstanding MSD debts or liens on the property.
By requesting title quotes, buyers are protected
from unexpected expenses after closing and
unforeseen delays in taking ownership of the
new property.
Improvements to MSD’s title quote system
make the process easier and more efficient.Title companies can now access informationimmediately, whereas previously there was a 48-hour waiting period. Additional changes makethe system more accurate. A new account is nowonly created after a sale is finalized; this meansthat if a sale falls through, the potential buyerwon’t receive an MSD bill in error. The systemalso now calculates final bills based on usage,rather than calculating based on the last billamount, thus improving billing accuracy.
POPULAR ANNUAL FINANCIAL REPORT FY 17 |9
UpdatedTitleQuoteSystem
MSD’sUpdatedTitleQuoteSystem
Capital Improvement
MSD Project Clear made 223 appropriations
for new or continuing wastewater and
stormwater design and construction projects
in FY 17, totaling $287.9 million. These numbers
include $1.6 million appropriated for three
emerging repair projects.
Diversity
MSD understands the role of diversity
in creating a strong and vibrant St. Louis
community. Accordingly, it has had policies
in place for many years that help develop and
grow minority- and women-owned business
enterprises (MWBE). In recent years, MSD has
expanded its focus to ensure broader workforce
diversity for its capital construction projects.
In FY 17, minority-owned firms performed
$37,324,055 in capital work, representing 17.03
percent of the District’s capital program
spending for the time period. Women-owned
firms performed $6,490,358 in capital work,
representing 2.96 percent of the District’s capital
program spending.*
During that same timeframe, minority
workforce participation was 460,077 hours or
28.95 percent of total hours worked on capital
projects by contractors, and women participation
was 77,021 hours or 4.85 percent of total hours
worked on capital projects by contractors.*
*Numbers are as of September 14, 2017.
Please note, as project documentation is
finalized, precise numbers may fluctuate.
Peak Performance Award
In 2017, MSD was selected to receive
seven Peak Performance Awards, presented
by the National Association of Clean Water
Agencies (NACWA). The award recognizespublic wastewater treatment facilities for theiroutstanding compliance records with theirNational Pollution Discharge EliminationSystem (NPDES) permit, granted by the
Missouri Department of Natural Resourcesin the 2016 calendar year.The Lower Meramec and Fenton WastewaterTreatment Plants received Platinum Awards formaintaining a perfect compliance record for fiveconsecutive years. Gold Awards went to BissellPoint, Coldwater Creek, Grand Glaize, and theMissouri River Treatment Plants for achieving100 percent compliance with their NPDES permitfor an entire calendar year. The Lemay plant wasgiven the Silver Award, recognizing facilities thathave received no more than five NPDES permitviolations per calendar year.
Green City CoalitionMSD Project Clear is committed to spending$100 million in rainscaping features in thegreen infrastructure area of the Bissell Pointwatershed, covering the combined sewer areaof St. Louis City and some of northeasternSt. Louis County that drains to the MississippiRiver. By working with the Green City Coalition– a collaborative effort led by the MissouriDepartment of Conservation, the MissouriBotanical Garden, and the City of St. Louis toconvert vacant spaces to green places – MSD willhelp fund the demolition of vacant properties.This initiative creates more green space tomanage rain where it falls and avoid excessivestormwater entering into the system, while alsohelping the City accelerate the pace of derelictbuilding demolitions. This unique agreementallows MSD to provide benefits to the regionbeyond just new sewer improvements. The goalof the demolition program is to use $13.5 millionto fund the removal of approximately 1,000structures throughout the City, creating about 50acres of green space that can absorb stormwater.After the demolition, the City will maintain theproperties and work with outside organizationsto retain the pervious surface and utilize thespaces in ways that benefit the community.
YEAR IN REVIEW
10 |METROPOLITAN ST. LOUIS SEWER DISTRICT
Wastewater
In FY 18, MSD Project Clear has plans for 157
new, ongoing, or continued wastewater project
appropriations totaling $329.2 million. These
projects are funded primarily from the Sanitary
Replacement fund and represent $30.4 million in
continued projects and $298.8 million in new and
ongoing projects.
Stormwater
Currently, MSD performs three District-wide
stormwater services:
Service
MSD owns, operates, and maintains
stormwater infrastructure, including stormwater
sewers, inlets, improved channels, manholes, etc.
Management
MSD’s responsibilities include but are not
limited to:
• Enforcing rules and regulations for
stormwater improvements
• Investigating and evaluating stormwater
complaints
• Monitoring water quality of area creeks
and rivers
Compliance
MSD is a co-permittee with 59 municipalities,
St. Louis County, and Unincorporated St. Louis
County. MSD’s responsibilities include but are
not limited to:
• Ensuring regulatory compliance with the
state’s water quality standards
• Inspecting area creeks for illegal
discharges
• Providing public education
• Coordinating permit-related activities by
municipalities and St. Louis County
In addition to operating the existing
stormwater system, MSD Project Clear plans 16
stormwater design and construction projects in
FY 18, including continued projects from FY 17,
totaling $9.9 million.
The April 2016 voter approval of Proposition Sequalized stormwateroperationsandmaintenancethroughout the District. In addition to equalizingoperations and maintenance, Proposition S alsoprovided $67 million in remaining fund balancesto pay for a finite number of stormwater capitalprojects. As just noted, $67 million is a finiteamount – once it is spent, there is no otherfunding source for capital stormwater projects.There is no long-term funding solution forcapital improvements for localized flooding,erosion, and regional flooding.
The Future of Stormwater - Should MSDProvide Full Regional Stormwater Services?
MSD has identified approximately
$500 million in erosion and flooding issues
throughout its service area. MSD is not a flood-
control agency and does not own creeks and
streams. Though it cannot prevent localized
flooding and erosion, MSD could provide
projects that would mitigate the impacts of
future localized flooding and erosion. For
regional flooding, the only true answer is to
fund large-scale property buyouts.
During the first half of 2017, MSD held
public meetings and completed surveys to
seek public and municipal input on whether
additional funding for stormwater projects
should be secured. In the second half of 2017,
the information gathered from outreach was
used to develop a rate proposal for stormwater
funding that will be presented to MSD’s Rate
Commission in 2018. Additional public meetings
are planned to explain the rate proposal. If the
Rate Commission and the Board of Trustees
approve this expansion of services and the
corresponding funding, a ballot initiative would
be presented to area voters in 2019.
LOOKING AHEAD
POPULAR ANNUAL FINANCIAL REPORT FY 17 |11
FY 17 FY 16ASSETS:
Current, restricted, and other assets $ 743,571 $ 707,033
Capital assets (net of accumulated depreciation) 3,252,238 3,052,043Total Assets 3,995,810 3,759,076
DEFERRED OUTFLOW OF RESOURCES:
Bonds and notes payable-deferred loss on refunding 11,321 11,974
Pension-related outflows 37,666 31,144Total Deferred Outflow of Resources 48,987 43,118
LIABILITIES:
Current liabilities 133,679 125,284
Non-current liabilities 1,515,345 1,344,141Total Liabilities 1,649,024 1,469,425
DEFERRED INFLOW OF RESOURCES:
Pension-related inflows 4,605 5,712Total Deferred Inflow of Resources 4,605 5,712
NET POSITION:
Net investment in capital assets 1,876,249 1,809,386
Restricted 135,259 136,547
Unrestricted 379,660 381,124Total Net Position $ 2,391,168 $ 2,327,057
WHAT IT TELLS YOU:
A Statement of Net Position, also known as a balance sheet, is a financial statement that summarizes what
MSD owns and owes at a given point in time. It also shows our net worth at that specific point in time.
OUR FY 17 BALANCE SHEET SHOWS THAT:
•MSD’s assets and deferred outflows exceed liabilities and deferred inflows by $2.3 billion.
•Overwhelmingly, MSD’s assets are in the form of capital assets. The $3.3 billion in net capital
assets is split into the five categories.
•Of the $1.6 billion in liabilities, $1.5 billion are in the form of bonds and notes payable.
DEFINITIONS:
Current, restricted, and other assets: all assets other than
fixed assets that are owned or due to the District.
Capital assets (net of accumulated depreciation): thetotal value of all fixed assets, including all sanitaryinfrastructure, general plant and equipment, and land.
Deferred outflows:the use of resources that will be applied
to future periods.
Current liabilities: money owed by the District and duewithin 12 months.
Non-current liabilities: money owed by the District that isdue more than 12 months in the future.
Net investment in capital assets: the value or net worth
of all fixed assets after related liabilities are deducted.
Deferred inflows:the purchase of resources that will beapplied to future periods.
Restricted:the value or net worth of all assets designated
for specific purposes after related liabilities are deducted.
Unrestricted: the value or net worth of all remainingassets after remaining liabilities are deducted.
KEY FINANCIAL INFORMATION
CONDENSEDSTATEMENTOFNETPOSITION(inthousands)
12 |METROPOLITAN ST. LOUIS SEWER DISTRICT
KEYOther (see detail)Construction In ProgressTreatment, Disposal Plant,and EquipmentCollection and Pumping Plant
DetailLandGeneral Plant and Equipment
MILLIONSWHAT WE OWN: MSD ASSETS
WHAT WE OWE: MSD LONG-TERM OBLIGATIONS
CONDENSEDSTATEMENTOFCAPITALASSETSLESSNETOFDEPRECIATION(inmillions)
BONDSANDNOTESPAYABLE
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
POPULAR ANNUAL FINANCIAL REPORT FY 17 |13
NOTE:Revenue Bonds and Direct Loan balances only
$92 M
$71 M
$708 M
$736 M
$21 M
$1,716 M
14 |METROPOLITAN ST. LOUIS SEWER DISTRICT
FY 17 FY 16 FY 15 FY 14 FY 13OPERATING REVENUES:
Sewer service charges $330,873 $ 306,119 $ 284,367 $ 250,133 $ 238,635
Provision for doubtful sewer
service charge accounts (2,513) (4,107) (2,096) 7,210 (2,655)
Licenses, permits, and other fees 4,036 3,620 6,657 6,563 2,731
Other 1,095 14,226 1,460 1,867 3,235
Total Operating Revenues 333,491 319,858 290,388 265,773 241,946
NON-OPERATING REVENUES:
Property taxes levied by the district 32,458 25,671 24,764 27,450 26,016
Investment income 2,903 4,636 3,001 2,967 1,057
Rent and other income 106 103 37 303 293
Total Non-Operating Revenues 35,467 30,410 27,802 30,719 27,366
Total Revenues 368,958 350,268 318,190 296,492 269,312
OPERATING EXPENSES:
Pumping and treatment 60,203 59,100 60,766 54,126 54,526
Collection system maintenance 43,928 42,853 40,162 39,988 37,877
Engineering 11,290 10,998 10,954 12,184 12,020
General and administrative 58,535 55,315 48,551 45,661 41,485
Water backup claims 5,035 7,631 3,862 2,713 3,503
Depreciation 81,194 83,984 78,641 74,087 70,030
Asset management 14,893 13,215 13,586 12,539 10,717
Total Operating Expenses 275,078 273,096 256,522 241,298 230,158
NON-OPERATING EXPENSES:
Net (gain) loss on disposal and
sale of capital assets 673 325 1,421 5,248 796
Non-recurring projects and studies 7,459 11,000 12,317 3,493 4,676
Interest expenses 31,251 28,943 27,139 25,661 21,062
Total Non-Operating Expenses 39,383 40,268 40,877 34,402 26,534
Total Expenses 314,461 313,364 297,399 275,700 256,692
INCOME BEFORE CAPITALGRANTS AND CONTRIBUTION: 54,497 36,904 20,791 20,791 12,620
Capital grants and contributions 9,614 12,037 12,997 7,102 17,535
CHANGE IN NET POSITION: 64,111 48,941 33,788 27,894 30,155
Net position - beginning of year 2,327,057 2,278,116 2,267,952 2,240,058 2,209,903
Effect of adoption of GASB68 —— (23,623)——
NET POSITION – END OF YEAR $ 2,391,168 $ 2,327,057 $ 2,278,116 $ 2,267,952 $ 2,240,058
INCOME STATEMENT
STATEMENTOFREVENUES,EXPENSES,ANDCHANGESINNETPOSITION(inthousands)
The financial information included is derived from the CAFR and presented in conformity with the GAAP.
DEFINITIONS:Operating revenues:all income received from the District’s daily normal business activities.Operating expenses: all expenses related to the District’s daily normal business activities.Non-operating revenues: all income not related to the District’s daily normal business activities.Non-operating expenses: all expenses not related to the District’s daily normal business activities.
WHAT IT TELLS YOU:An income statement tells you where MSD gets its funds and how they are spent. It also shows how much money MSDmade or lost over a specific period of time.
OUR FY 17 INCOME STATEMENT SHOWS THAT:•Sewer service charge revenue increased as a result of the scheduled rate increase that occurred in FY 17.•Operating expenses increased due to changes in reporting requirements for pension plans, depreciation for assetadditions, and water backup claims related to excess rain.
$5,243
$7,459
$32,458
$34,691
$40,598
$16,771
$51,197
$81,194
$99,357
$673
$106
$14,454
$1,095
$3,293 $3,569
$2,903
$4,036
$31,251
$328,360
REVENUES
WHERETHEMONEYCOMESFROM(inthousands)
EXPENSES
WHERE THE MONEY GOES (in thousands)
KEYOther (see detail)Sewer Service Charges, Net
Detail
Rent and Other IncomeOther Operating RevenuesInvestment IncomeLicenses, Permits, and Other FeesProperty Taxes Leviedby the District
KEYOther (see detail)Employment CostsUtilitiesContracted ServicesDepreciationInterest Expense
DetailNet Loss on Sale of AssetsMaterials and SuppliesChemical SuppliesInsuranceOther Operating ExpensesNon-Recurring Projectsand Studies
POPULAR ANNUAL FINANCIAL REPORT FY 17 |15
FY 17 FY 16
Cash flows from operating activities $ 156,259 $ 127,665
Cash flows from non-capital financing activities 32,013 25,583
Cash flows from capital activities (154,634)(91,512)
Cash flows from investing activities (34,721)(74,347)
Net increase (decrease) in cash and cash equivalents (1,083)(12,611)
Cash and cash equivalents at beginning of year 49,196 61,807
Cash and Cash Equivalents at End of Year $ 48,113 $ 49,196
DEFINITIONS:Cash flows from operating activities: all cash received or spent related to MSD’s daily normal business activities.Cash flows from non-capital financing activities: all cash received related to taxes.Cash flows from capital and related financing activities: all cash received or spent related to construction of MSD’s
infrastructure.Cash flows from investing activities: all cash received or spent related to investing MSD’s cash reserves.
WHAT IT TELLS YOU:A cash flow statement summarizes both the cash and the net cash coming in and going out of MSD during a given period.
OUR FY 17 CASH FLOW STATEMENT SHOWS THAT:• Cash flows from operating activities increased due to increased receipts from customers.• Cash flows from non-capital financing activities increased due to more tax revenue collected.•Cash flows from capital and related financing activities increased as a result of additional payments for capital assetsduring FY 17.• Cash flows from investing activities decreased due to a decrease in the volume of maturities of investments.
CASH FLOW STATEMENT
CASH FLOWS COMPARISON
CONDENSEDSTATEMENTOFCASHFLOWS(inthousands)
-200000
-150000
-100000
-50000
0
50000
100000
150000
200000
Operating Activities
Non-CapitalFinancing Activities Capital Activities Investing Activities
FY 17 FY 16KEY
THOUSANDS16 |METROPOLITAN ST. LOUIS SEWER DISTRICT
$156,259
$32,013
($154,634)
$127,665
$25,583
($74,347)($91,512)
($34,721)
POPULAR ANNUAL FINANCIAL REPORT FY 17 |17
CREDIT RATING
WHAT IT TELLS YOU:
A credit rating provides an assessment of an organization’s credit worthiness, based on its history of borrowing and
repayment of funds, as well as its assets and liabilities. A poor credit rating makes it more difficult to find financing
and often results in higher interest rates.
As the chart below illustrates, MSD has premium credit, with consistent ratings at the top of each credit rating
agency’s scale. On a scale of AAA to D, MSD earned AAA and AA+ ratings from Standard & Poor’s and Fitch,
respectively. Similarly, on a scale of Aaa to C, MSD earned an Aa1 rating from Moody’s. MSD has demonstrated to
creditors and credit rating agencies its ability to manage large annual capital plans. The District’s solid financial
management, including close monitoring of its financial performance, strong debt coverage, and liquidity also
contribute to these ratings, which have remained constant the past three years.FY 17 FY 16 FY 15
Moody’s Aa1 Aa1 Aa1
Standard & Poor’s (S&P)AAA AAA AAA
Fitch AA+ AA+ AA+
PERFORMANCE AGAINST BUDGET
Budget Expenses Unspent
Budget
CapitalImprovementand ReplacementProgram (CIRP)
$378.5 M $268.8 M $109.7 M The largest contributing factor to underspending thisbudget line is postponed work. Postponements canoccur for various reasons including easement acquisitiondelays, scope revisions, and delays in choosingcontractors. These delays contributed $65 million to thevariance. The remainder of the savings was a result offavorable bids.
Operating $196.6 M $189.8 M $6.8 M Personnel Services, due in large part to vacancies,were $6.4 million under budget. Supply expenses werealso favorable by $4 million mostly due to savingsof approximately $1 million in Operations Support,Treatment Plants, and Maintenance Yards. Additionally,Pump Stations and Environmental Compliancecombined for another $0.7 million in savings onSupplies. Contractual Services and Capital Outlay offseta portion of these savings, with expenses exceedingthose budgets by nearly $4 million in total.
Debt Service $98.8 M $91.4 M $7.4 M Debt Service expenses were favorable for the new debtissued during FY 17. The District participated in two StateRevolving Fund bonds and budgeted $5.5 million fordebt service expenses, but no debt service was paid onthese new issuances in FY 17. Additionally, the Districtissued Senior Revenue Bonds for which $4.3 million wasbudgeted in debt service expenses. Of the $4.3 millionbudgeted, only $2.5 million was required in FY 17.
Total $673.8 M $549.9 M $123.9 M
WHAT IT TELLS YOU:In MSD’s case, it shows that MSD has been a good steward of the funds allocated to the District.
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