HomeMy Public PortalAboutFiscal Year 2011 Annual Comprehensive Financial Report (ACFR)THE METROPOLITAN ST. LOUIS SEWER DISTRICT
St. Louis, Missouri
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For The Year Ended June 30, 2011
Report prepared and submitted by the
Department of Finance
Janice M. Zimmerman
Director of Finance
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Table of Contents
Page
Introductory Section:
Letter of Transmittal…………………………………………………………………………………………… 1
Organization Chart……………………………………………………………………………………………..10
Certificate of Achievement for Excellence in Financial Reporting……………………………………………11
Financial Section:
Independent Auditors’ Report…………………………………………………………………………………. 13
Management’s Discussion and Analysis………………………………………………………………………. 15
Basic Financial Statements
Statements of Net Assets…………………………………………………………………………………. 26
Statements of Revenues, Expenses and Changes in Net Assets………………………………………….. 28
Statements of Cash Flows………………………………………………………………………………… 30
Notes to Financial Statements……………………………………………………………………………. 32
Statistical Section:
Statistical Section Overview……..…………………………………………………………………………… 67
Net Assets by Component………………………………………………………………………..……………. 68
Changes in Net Assets……..………………………………………………………………………………….. 69
Operating Revenues by Source………………………………..………………………………………………. 70
Operating Expenses …………………………..……………………………………………………………..... 71
Non-operating Revenues and Expenses……………………………………………………………………... 72
User Charge Rates…………….……………………………………………………………………………….. 73
Sewer User Charges (Composite--Annual)…………………………………………………………………… 74
Number of Customers by Type……………………………..……………………………………………….… 75
Ten Largest Customers……………………………………..…………………………………………………. 76
Ratios of Outstanding Debt by Type…..……………………………………………………………………… 77
Computation of Overlapping Debt…………………………………………………………………………….. 78
Pledged Revenue Coverage……..…………………………………………………………………………….. 79
Demographic and Economic Statistics…..……………………………………………………………………. 80
Principal Employers (St. Louis Metropolitan Area)….……………………………………………………….. 81
Employment Level…………………………………………………………………………………………..… 82
Average Flow ……………..…………………………………………………………………………………... 83
Operating and Capital Indicators……………………………………………………………………………….84
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis MO 63103-2555
(314) 768-6200
November 8, 2011
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, 2011, 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 subdistricts 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, members of the
Civil Service Commission, management staff, and an organization chart as of June 30, 2011. 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.
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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 525 square miles including all 62 square miles of the City of St.
Louis and 462 square miles of St. Louis County. The current population served by the District is
approximately 1.4 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 Proposed Plan of MSD (the Plan), approved by voters in 1954 and amended in 2000, 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 (the 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 from each area can be of the same political affiliation.
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.
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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.
MSD must set user charge rates in compliance with the Federal Clean Water Act. These
rates must be approved by the Missouri Department of Natural Resources to receive future
construction grants and to avoid the possibility of refunding past grants.
During fiscal 2011, the primary source of funding for the operation and maintenance of MSD's sewerage
system was a user charge that is typically $333.60 per year or $27.60 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.
Beginning in March 2008, the District implemented a new stormwater user charge of 12¢ per 100 square feet
of impervious area. A second increase was implemented effective January 1, 2009. This increase resulted in
a user charge of 14¢ per 100 square feet resulting in an average residential stormwater bill of $3.50 per
month or $42 per year. The impervious area based stormwater service charge replaces the 24¢ flat fee and
property tax assessment previously charged for stormwater services. In July 2010 a judge ruled impervious
based stormwater billing unconstitutional. With that the District has suspended that method of billing and re-
implemented the assessment of property taxes, along with flat fee billing of 24¢ for residential and
commercial properties and 18¢ cents per unit for multi-unit properties.
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These revenues will fund subdistrict debt, construction and a portion of the District’s stormwater operating
expenses. 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. The outstanding bond
indebtedness of the District cannot exceed five percent of the assessed valuation of the area benefited.
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 9,900 miles of pipe and channel and grows larger every year due to new development. 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 7 wastewater treatment facilities. These facilities treated an average flow of 370.6
million gallons per day (MGD) in fiscal 2011 compared to 395.5 MGD in fiscal 2010. The design capacity
and average flow, by watershed, in MGD was as follows in fiscal 2011:
MAJOR
WATERSHED
LEVEL OF
TREATMENT
NUMBER OF
FACILITIES
DESIGN
CAPACITY
AVERAGE FLOW
FISCAL 2011
Mississippi River Secondary Two 417 281.5
Missouri River Secondary Two 68 56.7
Meramec River Secondary Three 42.75 32.4
Total Seven 527.75 370.6
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
employment level in the City of St. Louis and St. Louis County was 625,541 in June 2011. The combined
unemployment rate for the City of St. Louis and St. Louis County was 9.6 percent in June 2011 and that is
higher than the national unemployment rate of 9.3 percent for the same time period.
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MSD has its own internal barometers for measuring economic development within the District. These are
listed below for fiscal 2011 and 2010:
2011 2010
Sewer Plan Reviews:
Number of Plans Approved 754 458
Number of Miles of Sewers 21 22
Sewer Construction Permits:
Number of Permits Issued 1,865 2,406
Number of Miles of Sewers 22 28
Customer Connections:
Number of Connection Permits Issued 1,183 763
Connection Fee Revenue (in millions) $.8 $1.2
Value of Sewers Dedicated to
MSD by Developers (in millions) $7.6 $18.5
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
loss from operations of $25.1 million compared to a net operating income of $17.8 million the prior year.
The decrease is explained by a loss of stormwater sewer service charges and an increase in depreciation. The
management discussion and analysis section that appears later in this report provides a more in depth
analysis of the District’s financial position and the magnitude of the capital improvement and replacement
program (CIRP).
Budgetary Controls. The District's Plan 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 maintains an encumbrance accounting system as
one technique of accomplishing budgetary control. Certain encumbrances carry over from one year to the
next.
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Interim and year-end financial reports are prepared in accordance with U.S. 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 footnotes to the financial statements.
Cash Management. In compliance with its Plan, the District invests temporarily idle funds in cash
equivalents and investments such as collateralized certificates of deposit, collateralized repurchase
agreements, and United States Treasury bills and notes. The District utilizes competitive bidding for
investment purchases and monitors market conditions daily. MSD receives interest on certificates of deposit
monthly and reinvests it to improve yields.
Risk Management. In-house staff and consultants jointly conduct risk management activities. MSD has a
risk management program and retains certain risks related to officers’ and directors’ liability. 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 $1.4 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 two 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, performs preventative maintenance, and maintains excess liability coverage for sewage
backup damage to property.
MSD maintains automobile and general liability insurance. The District is self-insured for workers'
compensation and funds those costs through annual appropriations from the District's general 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 reevaluating medical care provided to injured employees. The
District also has programs to promote safety in the workplace.
The District provides group medical coverage for its employees and offers dependent medical coverage on a
contributory basis through a self-insured plan. At January 31, 2011, the District maintained stop loss
coverage for specific claims exceeding $125,000 per year and for total annual claims greater than 125
percent of the annual claims estimate. As of February 1, 2010, the District increased this limit to $150,000.
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 annually
to a vision care program for employees. 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.
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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 U.S. 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 internal audit department, and the District's independent
accountants. For additional information regarding the districts financials, please refer to the Management’s
Discussion and Analysis section.
MAJOR INITIATIVES AFFECTING THE FINANCIAL RESOURCES OF THE DISTRICT
The District’s Board of Trustees implemented an impervious based stormwater rate on March 1, 2008
replacing its prior funding mechanism of property taxes and user fees. The impervious based stormwater rate
was again increased on January 1, 2009. On July 9, 2010, a circuit court of St. Louis County found this
impervious rate to be unconstitutional under Missouri law. In response to this ruling, the Board suspended
the impervious based stormwater rate and reinstituted the District’s stormwater property taxes and user fees
previously rolled back on a voluntary basis as part of the stormwater rate plan. The court decision resulted in
the loss of $41 million in stormwater revenue expected in fiscal year 2011 to support stormwater services and
improvements to related infrastructure. As of the date of this audit, the District is appealing that ruling. A
subsequent court decision regarding a potential refund was received and indicated the District will not have
to refund any monies collected under the impervious based rate. The court decision to stop the impervious
based stormwater funding negates the culmination of a 20-year effort to adequately fund much needed
stormwater services for District ratepayers. The impact of this court decision has resulted in a dramatic
reduction in stormwater services across the District with many customers receiving little or no stormwater
services until an alternative funding source is identified.
The District continues its use of debt to fund its multi-billion dollar, multi-decade wastewater capital
improvement program. In February 2004, St. Louis voters approved a $500 million authorization allowing
the District to issue wastewater revenue bonds. Beginning in fiscal year 2004, the District issued $336
million in bonds. An additional $124 million was issued during fiscal year 2005 through 2007 with the
remaining $40 million issued in fiscal year 2009. On August 5, 2008, St. Louis voters authorized, by a
margin of 3 to 1, the issuance of an additional $275 million in wastewater revenue bonds. $183 million of
these bonds were issued in fiscal years 2009 through 2011. Issuance of the remaining $92 million bond
authorization is planned through fiscal year 2012. The long term wastewater capital improvement program
will be funded through a combination of additional bonds and wastewater rate increases.
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The District submitted a proposal to its Rate Commission on March 1, 2007. The Rate Commission delivered
its final Recommendation Report to the Board on April 1, 2008 in accordance with Charter. Based on the
Rate Commission recommendation, the Board approved a 5-year wastewater rate plan and a 7-year
impervious based stormwater rate plan. The initial wastewater rate increase took effect January 1, 2008.
Since that time subsequent wastewater rate increases have been implemented each July 1st for 2009 and 2010.
Per the Board’s approved plan, the last wastewater increase is scheduled to take effect July 1, 2011. In May
2011, MSD staff presented a proposal to our Rate Commission recommending customer wastewater rate
increases to help fund more than $1 billion in needed wastewater system improvements between Fiscal Years
2013 and 2016. This proposal is designed to provide funding to continue the District’s comprehensive
wastewater capital improvement program.
In addition to these major funding initiatives, the District implemented a comprehensive plan to increase
the collection of outstanding sewer service charge delinquencies. This enhanced effort includes the use
of additional collection agencies, law firms and pre-collection technology.
The District continues its comprehensive sewer cleaning program initiated in June 2008. This initial effort
addressed 17 million feet of sewer pipe and inspection of 80,000 manholes. The sewer cleaning program is
projected to clean 5 million feet of pipe and inspect 15,000 manholes each year. This effort continues to
reduce basement backups and overland flooding throughout the St. Louis metropolitan region.
The District is in the final phase of the implementation of a comprehensive multi-year, multi-million dollar
strategic technology plan. This plan is designed to dramatically improve connectivity and interaction
between District Departments, increase overall District efficiency and enhance customer service for all
District ratepayers. To date, this implementation is under budget with scheduled completion expected by the
summer of 2012.
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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 Schmersahl Treloar & Co.
Besides meeting the requirements set forth in the Plan, the annual audit is also designed to meet the
requirements of the 1996 amendments to the Federal Single Audit Act and the U.S. Office of Management
and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. A
Single Audit Report was issued as of June 30, 2011.
The financial statements of the Metropolitan St. Louis Sewer District's Employees' Pension Plan and the
District’s Deferred Compensation Plan are also audited annually. Those audited financial statements are also
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, 2010. 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-three consecutive years. We believe our current CAFR continues to conform to the Certificate of
Achievement program requirements, and we are submitting it to the GFOA again this year.
The District also received the GFOA's Distinguished Budget Presentation award for its fiscal 2010 annual
budget. The District has received this award for twenty-four consecutive years. The District's fiscal budget
document for 2010 was judged proficient in several categories including policy documentation, financial
planning, and organization.
Acknowledgments. I wish to express my thanks and appreciation to the members of the Finance Department
who diligently and faithfully contributed to the preparation of this report.
Janice M. Zimmerman
Director of Finance
10
ORGANIZATION
(As of June 30, 2011)
BOARD OF TRUSTEES
Bob Berry, Chair; James H. Buford, Vice Chair; John H. Goffstein;
David Visintainer; Gerald Feldhaus; Eddie Ross, Jr.
OFFICE OF INTERNAL AUDITOR
RATE COMMISSION
Leonard P. Toenjes, Chair
OFFICE OF SECRETARY TREASURER
Karl J. Tyminski
Secretary/Treasurer
CIVIL SERVICE COMMISSION
Valerie F. Patton, Vice-Chair;
William C. Duffe
Mavis T. Thompson
EXECUTIVE DIRECTOR
Jeffrey L. Theerman
FINANCE
Janice M. Zimmerman
Director
OFFICE OF GENERAL COUNSEL
Susan M. Myers
General Counsel
OPERATIONS
Jonathon C. Sprague
Director
ENGINEERING
Brian L. Hoelscher
Director
OFFICE OF HUMAN RESOURCES
Vicki L. Taylor Edwards
Director
INFORMATION SYSTEMS
Barbara E. Mohn
Director
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THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
15
The annual report of The Metropolitan St. Louis Sewer District (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.
2011 Financial Highlights
The District placed $300.9 million of capital assets into service during fiscal year 2011. This high
level of capitalization occurred to more precisely reflect the timing of placement into service of the
District’s plants and systems. These capitalized assets include:
o Treatment and disposal plant and equipment $ 236.9 million
o Collection and pumping plant $ 34.8 million
o General Plant and equipment $ 17.9 million
o Land $ 11.3 million
In conjunction with this capitalization of assets, the District increased accumulated depreciation by
$58.4 million.
Cash and investments decreased by $52.6 million since the District’s new debt was issued as a line of
credit requiring the District to spend down reserves. This line of credit structure reflects the State’s
change in the administration of its State Revolving Fund (SRF) program and does not impact the
District’s receipt of future State bond funding.
Contracts and accounts payable increased $23.7 million due to $4.3 million in water backup claims
from a failure of flood gates along the Mississippi River associated with a severe rain event in June.
New construction expenses incurred late in the fiscal year also contributed to this increase.
Operating revenue declined by $27.1 million and non-operating revenue increased by $25.2 million.
This resulted from the District’s rescinding of its impervious stormwater charge per a July 9, 2010
Court decision which declared the charge unconstitutional. Property taxes were reinstated to partially
replace this stormwater funding.
2010 Financial Highlights
The District placed $56.4 million of capital assets into service during fiscal year 2010. This
continued high level of expansion and updating of the District’s plant and system is related to the
Capital Improvement and Replacement Program (CIRP) required by regulations.
o Collection and pumping plant $ 43.7 million
o General plant and equipment $ 7.1 million
o Treatment and disposal plant and equipment $ 4.4 million
o Land $ 1.1 million
Interest expense increased $4.1 million compared to the prior year. This can be attributed to
additional bond issues in fiscal years 2009 and 2010.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
16
Investment income decreased $6.6 million as a result of a reduction in short term interest rates as
well as a decrease in investment balances.
The continued high level of expansion and updating of the District’s plant and system is the reason
for a $6.6 million increase in depreciation expense.
The District has determined that a material restatement of $25.7 million is required for prior year
financials due to management decisions regarding a number of construction in progress projects.
Since prior to 2004 and through 2009, $25.7 million in expenses related to a number of construction
in progress projects were capitalized. In 2010, management determined that the scope of these
projects was planning in nature and they were non-capital in nature. All expenses prior to 2010
would be recognized in the years they were incurred. This resulted in a restatement of the financials
for the following years with the following amounts:
2009 $ 7.2 million
2008 $ 7.7 million
2007 $ 1.2 million
2006 $ 2.2 million
2005 $ 4.5 million
2004 and prior $ 2.9 million
Required Financial Statements
The financial statements presented by the management of the District include the Statements of Net Assets;
Statements of Revenues, Expenses, and Changes in Net Assets; 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 expense 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 Statements of Net Assets 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 Assets provide a summary
of the District’s current, restricted, and non-current liabilities, including contracts and accounts payable,
deposits and accrued expenses, and bond and notes payable. The final section of the Statements of Net
Assets, the net assets section, contains earnings retained for use by the District. Increases or decreases in the
net assets 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 Assets summarize all of the years’ revenue and
expense. This statement indicates how successful the District was at maintaining expense 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
17
Financial Analysis
The District’s financial position declined slightly in the current year, as evidenced by the decrease in net
assets of $10.6 million. The main reason for the decline is the increase of $12.8 million in depreciation
expense, in connection with the extraordinary amount of capitalization previously mentioned. The District
continues capacity expansion and updating of the District’s plant and system. Plans for maintaining the
District’s ability to meet future spending needs are discussed in greater detail in the section of the MD&A
entitled “Decisions Impacting the Future.”
Condensed Financial Statements and Analysis
Increase Increase
(Decrease) 2009 (Decrease)
2011 2010 2011-2010 As Restated 2010-2009
Assets:
Current, restricted, and other assets $ 445,477 $ 469,003 $ (23,526) $ 469,124 $ (121)
Capital assets (net of accumulated
depreciation)2,469,496 2,411,877 57,619 2,292,596 119,281
Total Assets 2,914,973 2,880,880 34,093 2,761,720 119,160
Liabilities:
Current liabilities 101,710 75,512 26,198 82,961 (7,449)
Noncurrent liabilities 616,244 597,718 18,526 491,142 106,576
Total Liabilities 717,954 673,230 44,724 574,103 99,127
Net Assets:
Invested in capital assets, net of
related debt 1,915,233 1,868,974 46,259 1,798,914 70,060
Restricted 94,926 80,782 14,144 94,769 (13,987)
Unrestricted 186,860 257,894 (71,034) 293,934 (36,040)
Total Net Assets $ 2,197,019 $ 2,207,650 $ (10,629) $ 2,187,617 $ 20,033
The Metropolitan St. Louis Sewer District
Condensed Statements of Net Assets
(000s)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
18
2011 Analysis
Current restricted and other assets decreased by $23.5 million or 5.0% in the current year. This change is due
to the decrease in revenue from the suspension of the impervious fee.
Capital assets net of accumulated depreciation increased by $57.6 million or 2.4% overall as the result of new
projects in the current year.
Current liabilities increased by $26.2 million or 34.7% in the current year. The increase is due to $4.3 million
in liabilities for overland flooding resulting from a power outage, $4.8 million from stormwater litigation
costs and the remainder from increased payables in connection with capital projects.
Noncurrent liabilities increased by $18.5 million or 3.1% over the prior year as the District issued a $37
million dollar line of credit and paid down existing debt.
2010 Analysis
Total net assets increased $20.0 million, or 0.9%, above prior year. This change is principally the result of
utility plant contributions of $18.5 million, and results in an increase in total assets of $119.1 million
countered by an increase in liabilities of $99.1 million.
Current, restricted, and other assets decreased by $0.1 million, while capital assets, net of accumulated
depreciation, increased by $119.1 million. The increase in capital assets can be attributed to an increase in
construction in progress of $120.1 million, collection and pumping plant of $22.4 million, general plant and
equipment of $3.4 million, and land of $1.1 million. This was offset by a decrease in treatment and disposal
plant and equipment of $27.6 million. The slight decrease in current, restricted, and other assets is
attributable to the offsetting increase in current assets and the decrease in restricted assets.
The change in total liabilities breaks down to a decrease in current liabilities of $7.4 million and an increase in
non-current liabilities of $106.6 million. The increase in non-current liabilities is due to a substantial increase
in bonds and notes payable. The District issued new long-term debt in the amount of $122.1 million during
the 2010 fiscal year. Current liabilities are down due in part to a decrease in contracts and accounts payable
of $10.4 million. These were partially offset by an increase in the balance of deposits and accrued expenses
and the current portion of bonds and notes payable of $4.6 million and $0.8 million, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
19
Increase Increase
(Decrease) 2009 (Decrease)
2011 2010 2011-2010 As Restated 2010-2009
Operating Revenues:
Sewer service charges $ 223,276 $ 251,683 $ (28,407) $ 254,378 $ (2,695)
Provision for doubtful
sewer service charge accounts (6,249) (10,188) 3,939 (9,678) (510)
Provision for uncollected
stormwater charge accounts (2,374)- (2,374)- -
Licenses, permits, and other fees 2,976 3,085 (109) 3,475 (390)
Other 1,815 2,007 (192) 1,550 457
Total Operating Revenues 219,444 246,587 (27,143) 249,725 (3,138)
Non-operating Revenues:
Property taxes levied by the district 27,126 1,401 25,725 2,129 (728)
Investment income 3,847 6,554 (2,707) 13,116 (6,562)
Build America bond tax credits 2,023 450 1,573 - 450.06
Rent and other income 443 265 178 215 50
Total Non-operating Revenues 33,439 8,670 24,769 15,460 (6,790)
Total Revenues 252,883 255,257 (2,374) 265,185 (9,928)
Operating Expenses:
Pumping and treatment 50,532 47,266 3,266 44,746 2,520
Collection system maintenance 33,152 36,082 (2,930) 32,918 3,164
Engineering 12,486 15,773 (3,287) 13,736 2,037
General and administrative 36,075 39,237 (3,162) 37,922 1,315
Water backup claims 8,912 3,951 4,961 6,817 (2,866)
Depreciation 66,854 54,012 12,842 47,370 6,642
Asset management 36,492 32,458 4,034 28,669 3,789
Total Operating Expenses 244,503 228,779 15,724 212,178 16,601
Non-operating Expenses:
Net (gain) loss on disposal and sale of
capital assets 3,486 2,719 767 2,162 557
Non-recurring projects and studies 10,801 9,872 929 7,104 2,768
Legal Claims 4,829 - 4,829 - -
Interest expense 9,994 13,639 (3,645) 9,079 4,560
Total Non-operating Expenses 29,110 26,230 2,880 18,345 7,885
Total Expenses 273,613 255,009 18,605 230,523 24,486
Income Before Capital Contributions (20,730)248 (20,978) 34,662 (34,414)
Capital Contributions 10,099 19,785 (9,686) 26,993 (7,208)
Change in Net Assets (10,629) 20,033 (30,664) 61,655 (41,622)
Net Assets - Beginning of Year 2,207,650 2,187,617 20,033 2,125,962 61,655
The Metropolitan St. Louis Sewer District
Statements of Revenues, Expenses, and Changes in Net Assets
(000s)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
20
2011 Analysis
Net assets decreased by $10.6 million or $30.6 million less than the prior year. While revenue remained
relatively flat expenses grew, at a slower pace than the prior year.
Total revenue decreased by $2.3 million or 0.9%. While the reinstatement of taxes offset the decline in
operating revenue, investment income declined by $2.7 million over the prior year. The decline in investment
income is the result of low interest rates along with the decrease in funds available for investment.
Total Expenses increased for the year by $18.6 million or 7.3%. Total operating costs increased by 15.7
million or 6.9%, in large part due to claims for overland flooding and an increase of $12.8 million or 23.8% in
depreciation expense in connection with additional assets placed into service. Non-operating expenses
increased by $2.8 million or 11.0% due in part to a $4.8 million legal claim cost in connection with the
Districts impervious fee case.
2010 Analysis
Net assets increased $20.0 million or $41.6 million less than in the prior year. While revenue saw a
significant decrease, expense grew at a faster pace.
Total revenue decreased by $10.4 million largely due in part to a reduction in investment income and sewer
service charges of $6.6 million and $2.7 million, respectively. Property tax revenue continued to decrease by
$0.7 million as a result of reduction of the tax rate to 0.0% in 2007. The provision for doubtful sewer service
charge accounts increased $0.5 million while licenses, permits, and other fees were decreased by $0.4 million.
Other operating revenues amounted to a $0.5 million increase when compared to prior year.
Total expense ended the year up $24.0 million compared to 2009 due to increases in both operating and non-
operating expense. Total operating expense for 2010 increased $16.6 million. Increases in pumping and
treatment, collection system maintenance, engineering, and general and administrative expenses totaled $9.0
million. Depreciation expense increased by $6.6 million, mostly due to additional assets that were placed in
service. Other operating expense increased by $3.8 million. This was offset by water backup claims
decreasing by $2.9 million. Non-operating expenses experienced increases in the costs of net loss on disposal
and sale of capital assets, non-recurring projects as well as interest expense totaling $7.4 million.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
21
Increase Increase
(Decrease) 2009 (Decrease)
2011 2010 2011-2010 As Restated 2010-2009
Cash flows from operating
activities $ 56,676 $ 67,916 $ (11,240) $ 84,222 $ (16,306)
Cash flows from non-capital
financing activities 27,125 1,401 25,724 2,129 (728)
Cash flows from capital
and related financing
activities (141,136) (81,406)(59,730) (163,367)81,961
Cash flows from investing
activities 51,887 17,399 34,488 40,070 (22,671)
Net increase (decrease) in
cash and cash equivalents (5,448) 5,310 (10,758) (36,946)42,256
Cash and cash equivalents
at beginning of year 11,767 6,457 5,310 43,403 (36,946)
Cash and cash equivalents
at end of year $ 6,319 $ 11,767 $ (5,448) $ 6,457 $ 5,310
The Metropolitan St. Louis Sewer District
Condensed Statements of Cash Flows
(000s)
2011 Analysis
The District ended the year with $6.3 million in cash and cash equivalents or $5.4 million lower than the prior
year. This was due to a decline in cash received from customers of $24.5 million or 9.9% with the
elimination of the impervious fee; partially offset by a decrease in payments to suppliers of $17.4 million or
17.4%. Cash flow from non-capital financing activities increased by $25.7 million as the result of the
reinstatement of taxes to fund stormwater activities. Cash flow from capital and related financing activities
decreased by $59.7 million or 73%, because the State of Missouri Direct Loan Series Bond issuance for 2010
provides reimbursement of expenditures, not loan proceeds. Investing activity proceeds provided $34.5
million as investments were used to fund operating and capital activities.
2010 Analysis
The District ended the year with $11.8 million in cash and cash equivalents or $5.3 million higher than the
prior year. This was due primarily to cash flow from operating activities contributing a positive $67.9
million, which is a $16.3 million decrease from 2009. Cash flow from investing activities contributed a
positive $17.4 million or a $22.7 million decrease from the previous year. This change is due in part to the
District purchasing $287.4 million in investments compared to $297.6 million in proceeds from sale and
maturity of investments. Cash flow from non-capital financing activities contributed $1.4 million or a
decrease from the prior year due to the District suspending the collection of property taxes in 2007. All of this
was offset by cash outflow from capital and related financing activities of $81.4 million or $82.0 million less
than fiscal year 2009.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
22
Capital Assets
Increase Increase
(Decrease)2009 (Decrease)
2011 2010 2011-2010 As Restated 2010-2009
Land $ 36,924 $ 28,129 $ 8,795 $ 27,070 $ 1,059
Construction in progress 400,756 570,602 (169,846) 450,540 120,062
Treatment and disposal plant and equipment 597,316 394,826 202,490 422,413 (27,587)
Collection and pumping plant 1,393,394 1,393,152 242 1,370,782 22,370
General plant and equipment 41,106 25,168 15,938 21,790 3,378
Total $ 2,469,496 $ 2,411,877 $ 57,619 $ 2,292,595 $ 119,282
The Metropolitan St. Louis Sewer District
Condensed Statements of Capital Assets
Net of Depreciation (000s)
2011 Analysis
Total capital assets, net of depreciation, increased by $57.6 million over the prior year. Construction in
progress decreased by $169.8 million as $20.5 million in treatment and disposal plant projects were moved
into service. Land contributed $8.8 million to the increase from the completion of grading projects. General
Plant and equipment also increased by $15.9 million, partially as a result of the reclassification of office
building assets from treatment and disposal plant to general plant.
2010 Analysis
Total capital assets, net of depreciation, increased $119.3 million over prior year. Construction in progress
increased $120.1 million due primarily to the large capital improvement and replacement program currently
underway. Increases in collection and pumping of $22.4 million and general plant and equipment of $3.4
million are consistent with the increases seen in 2009. Land also contributed an additional $1.1 million to the
increase. All of this was offset by treatment and disposal decreasing $27.6 million. This is primarily due to
$16.3 million in deletions and reclassifications, only partially offset by additions of $4.4 million. 2010 also
recorded a net increase in accumulated depreciation of $15.6 million as 2010 realized a full year of
depreciation on $35.3 million in additions placed into service in 2009.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
23
Long-Term Debt
Increase Increase
(Decrease)(Decrease)
2011 2010 2011-2010 2009 2010-2009
Senior Revenue Bonds:
Series 2004A $ 165,590 $ 167,370 $ (1,780) $ 168,965 $ (1,595)
Series 2006C 60,000 60,000 - 60,000 -
Series 2008A 30,000 30,000 - 30,000 -
Series 2010B 85,000 85,000 - - 85,000
Subordinate Revenue:
Series 2004B 123,055 130,110 (7,055) 136,795 (6,685)
Series 2005A 5,370 5,665 (295) 5,955 (290)
Series 2006A 36,335 38,420 (2,085) 40,480 (2,060)
Series 2006B 12,285 12,935 (650) 13,575 (640)
Series 2008AB 35,610 37,375 (1,765) 39,128 (1,753)
Missouri DNR:
Series 2009A 22,053 23,000 (947)- 23,000
Series 2010A 7,981 7,981 - - 7,981
Series 2010C 37,000 - 37,000 - -
West Watson and Nanell - - - 100 (100)
Ozark and Tablerock - - - 68 (68)
Energy Loan Program 25 37 (12)48 (11)
Oracle/Blue Heron 6,096 7,264 (1,168) 4,130 3,134
Total $ 626,400 $ 605,157 $ 21,243 $ 499,244 $ 105,913
The Metropolitan St. Louis Sewer District
Condensed Statements of Long-Term Debt
(000s)
2011 Analysis
The District ended fiscal year 2011 with $607.0 million in long-term debt outstanding, consisting mainly of
revenue bonds. The District had one bond addition this year (Series 2010C) resulting in a minimal increase in
long-term debt.
2010 Analysis
The District ended fiscal year 2010 with $605.2 million in long-term debt outstanding, consisting mainly of
revenue bonds. The District had three bond additions this year (SRF 2009A, SRF 2010A, and Series 2010B)
resulting in the substantial increase in long-term debt.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
24
Decisions Impacting the Future
On July 7, 2011, the District entered into a Consent Decree (CD) with the U.S. Environment Protection
Agency and the Coalition for the Environment settling a lawsuit for alleged violations of the Clean Water Act.
Along with providing a schedule for implementation of various system improvements and programs, the
Consent Decree also addresses all allegations made by the Plaintiffs in this action. The public comment
period ended October 10, 2011. The CD does not become final until it is entered by the Federal Court. See
note 12 for additional information regarding this litigation.
The District continues to implement the second phase of its multi decade wastewater capital improvement
replacement program (CIRP) utilizing the proceeds of a $275.0 million bond authorization granted by St.
Louis voters in August 2008. The remainder of this phase of the CIRP includes the design and construction
of $131.0 million of capital improvements through 2012. These regulatory required projects include
completion of the Lemay Treatment Plant expansion, pump station improvements, and sewage collection
system replacement and rehabilitation. The next phase of the capital program is expected to reflect $1 billion
of projects through FY16 in order to comply with the CD.
On May 10, 2011, the District proposed a customer wastewater increase to the MSD Rate Commission. The
proposed rate increase is needed to address increasing fiscal demands related to the Consent Decree
addressing regulatory issues affecting collection and treatment systems. The Rate Commission is defined and
authorized in the District’s Charter and is required to review all proposed rate changes prior to the adoption
by the District’s Board of Trustees. The Rate Commission is comprised of 15 members representing various
commercial and residential customers and local environmental interests. The Rate Commission is required to
submit a rate recommendation to the District’s Board of Trustees upon conclusion of its deliberations. The
recommendation is due to the Board on October 21, 2011. Implementation of a rate increase is anticipated by
January 2012.
The District implemented an impervious area based stormwater rate in March 2008. In conjunction, the
District elected to discontinue the assessment of approximately $24.4 million per year in property taxes and
flat fees previously used for stormwater funding. The impervious stormwater rate structure in place
throughout the 2010 fiscal year generated $90.9 million in revenue for stormwater services across the St.
Louis region. On July 9, 2010, the Circuit Court of St. Louis County of Missouri ruled the impervious rate
unconstitutional. As a result, the District’s Board of Trustees rescinded the impervious based rate effective
August 1, 2010. The elimination of the rate has resulted in an estimated $48.3 million loss in revenue
anticipated to address stormwater issues throughout the St. Louis region. The District reinstated the property
taxes and flat fees previously discontinued in order to provide a base level of stormwater services as required
by the District’s Charter. Stormwater services have been drastically reduced in fiscal year 2011 and will
continue to be in future years. The potential reinstatement of the stormwater impervious based rate is pending
the District’s current appeal of the July 9, 2010 court decision.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion and Analysis for the years ended June 30, 2011 and 2010
25
Requests for Information
This financial report is designed to provide a general overview of the District’s finances for all those with an
interest in the District’s finances. Questions concerning any of the information provided in this report or
requests for additional financial information should be addressed or e-mailed to:
Janice M. Zimmerman, Director of Finance
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
314-768-6200
jzimmer@stlmsd.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
26 See the accompanying notes to the financial statements.
2011 2010
Current Assets:
Cash 6,229,447$ 11,438,945$
Pooled cash and investments 190,353,186 228,974,712
Investments 31,200,375 58,240,728
Sewer service charges receivable, less allowance of 35,300,022 35,333,663
$4,087,758 in 2011 and $4,055,258 in 2010
Unbilled sewer service charges receivable, less allowance of 16,338,975 20,379,759
$326,780 in 2011 and $421,210 in 2010
Accrued income on investments 759,812 1,206,821
SRF receivable 41,799,253 7,980,700
Other receivables 1,038,016 837,569
Supplies inventory 6,961,285 6,832,502
Total current assets 329,980,371$ 371,225,399$
Non-current Assets:
Restricted Assets:
Cash 89,487$ 327,864$
Pooled cash and investments 69,042,313 51,363,267
Investments 31,133,772 30,363,923
Accrued income on investments 466,800 403,372
100,732,372$ 82,458,426$
Other Assets:
Notes receivable 14,764,507$ 15,319,087$
Capital Assets:
Depreciable:
Treatment and disposal plant and equipment 979,444,620$ 750,240,748$
Collection and pumping plant 1,941,575,848 1,914,386,404
General plant and equipment 84,858,812 64,195,139
3,005,879,280$ 2,728,822,291$
Less: Accumulated depreciation 974,063,867 915,676,211
Net depreciable assets 2,031,815,413$ 1,813,146,080$
Non-depreciable:
Land 36,924,144$ 28,128,701$
Construction in progress 400,756,348 570,602,108
Net capital assets 2,469,495,905$ 2,411,876,889$
Total non-current assets 2,584,992,784$ 2,509,654,402$
Total Assets 2,914,973,155$ 2,880,879,801$
Years ended June 30,
Statements of Net Assets
for the years ended June 30, 2011 and 2010
ASSETS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to the financial statements. 27
2011 2010
Current Liabilities:
Contracts and accounts payable 45,410,443$ 25,962,579$
Deposits and accrued expenses 24,910,011 23,418,377
Retainage payable 6,199,009 8,263,134
Current portion of bonds and notes payable 19,383,825 16,192,133
95,903,288$ 73,836,223$
Current Liabilities-Payable From Restricted Assets
Contracts and accounts payable 5,602,225$ 1,341,043$
Retainage payable 204,166 334,577
5,806,391$ 1,675,620$
Total current liabilities 101,709,679$ 75,511,843$
Non-current Liabilities:
Deposits and accrued expenses 8,365,378$ 7,295,729$
Bonds and notes payable 607,878,962 590,421,835
Total non-current liabilities 616,244,340$ 597,717,564$
Total Liabilities 717,954,019$ 673,229,407$
Net Assets:
Invested in capital assets, net of related debt 1,915,232,838$ 1,868,973,772$
Restricted for:
Debt service 34,395,643 29,946,469
Subdistrict construction and improvement 60,530,338 50,836,337
Unrestricted 186,860,317 257,893,816
Total Net Assets 2,197,019,136$ 2,207,650,394$
NET ASSETS
Statements of Net Assets
for the years ended June 30, 2011 and 2010 (Continued)
Years ended June 30,
LIABILITIES
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
28 See the accompanying notes to the financial statements.
2011 2010
Operating Revenues:
Sewer service charges 223,275,722$ 251,682,865$
Provision for doubtful sewer service charge accounts (6,248,681) (10,187,508)
Provision for uncollected stormwater charge accounts (2,373,731) -
Licenses, permits, and other fees 2,976,253 3,084,552
Other 1,814,694 2,007,265
Total operating revenues 219,444,257$ 246,587,174$
Operating Expenses:
Pumping and treatment 50,532,451$ 47,266,420$
Collection system maintenance 33,152,223 36,081,992
Engineering 12,485,664 15,772,981
General and administrative 36,075,000 39,237,319
Water backup claims 8,911,970 3,950,797
Depreciation 66,854,265 54,011,776
Asset management 36,491,526 32,457,589
Total operating expenses 244,503,099$ 228,778,874$
Operating Income (25,058,842)$ 17,808,300$
Non-operating Revenues:
Property taxes levied by the District 27,125,451$ 1,401,100$
Investment income 3,847,324 6,553,760
Build America bonds tax credit 2,023,000 450,058
Rent and other income 442,968 265,004
Total non-operating revenues 33,438,743$ 8,669,922$
Non-operating Expenses:
Net loss on disposal and sale of capital assets 3,485,952$ 2,719,163$
Non-recurring projects and studies 10,800,843 9,872,088
Legal claims 4,828,828 -
Interest expense 9,994,088 13,639,341
Total non-operating expenses 29,109,711$ 26,230,592$
Income before Capital Contributions (20,729,810)$ 247,630$
Capital Contributions:
Utility plant contributed 7,571,714$ 18,544,232$
Grant revenue 2,526,838 1,241,780
Total capital contributions 10,098,552$ 19,786,012$
Change in Net Assets (10,631,258)$ 20,033,642$
Net Assets-Beginning of Year 2,207,650,394$ 2,187,616,752$
Net Assets-End of Year 2,197,019,136$ 2,207,650,394$
Statements of Revenues, Expenses and Changes in Net Assets
for the years ended June 30, 2011 and 2010
for years ended June 30,
29
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
30 See the accompanying notes to the financial statements.
2011 2010
Cash flows from operating activities:
Received from customers 224,448,633$ 248,973,260$
Paid to employees for services (85,069,139) (80,987,401)
Paid to suppliers for goods and services (82,703,832) (100,069,468)
Net cash provided by operating activities 56,675,662$ 67,916,392$
Cash flows provided from non-capital financing activities
Taxes levied and collected 27,125,451$ 1,401,100$
Cash flows from capital & related financing activities:
Proceeds from capital grants 2,533,168$ 1,228,764$
Proceeds from issuance of debt 4,539,018 112,193,376
Interest received on bond proceeds to be used for capital improvements 666,548 1,569,661
Principal paid on debt (17,515,733) (16,178,124)
Interest and fees paid on debt (22,386,543) (21,986,608)
Payments for capital assets (110,811,121) (158,560,144)
Proceeds from sale of capital assets 96,658 325,682
Build America bond tax credit 1,742,160 -
Net cash used in capital and related financing activities (141,135,845)$ (81,407,393)$
Cash flows from investing activities:
Purchase of investments (691,222,800)$ (287,432,264)$
Proceeds from sale and maturity of investments 737,182,632 297,567,050
Investment income 5,484,057 6,998,794
Proceeds from rents 442,968 265,004
Net cash provided by investing activities 51,886,857$ 17,398,584$
Net increase (decrease) in cash and cash equivalents (5,447,875)$ 5,308,683$
Cash and cash equivalents at beginning of year 11,766,809$ 6,458,126$
Cash and cash equivalents at end of year 6,318,934$ 11,766,809$
Non-cash capital and investing activities:
Portion of utility plant contributed represented by:
Utility plant contributed by other governments and developers 7,571,714$ 18,544,232$
Fair value investment adjustment gain 267,028$ 109,316$
Statements of Cash Flows
for the years ended June 30, 2011 and 2010
for years ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to the financial statements. 31
Statements of Cash Flows
for the years ended June 30, 2011 and 2010 (Continued)
2011 2010
Reconciliation of operating income to net cash flows provided
by operating activities
Operating income (25,058,842) 17,808,300
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation 66,854,265 54,011,776
Change in operating assets and liabilities:
Decrease in billed and unbilled sewer service
charges receivable 4,074,425 1,396,458
Decrease in other receivables 74,063 410,805
(Increase) decrease in supplies inventory (128,783) 323,495
Increase (decrease) in contracts and accounts payable 7,562,465 (10,388,998)
Increase in deposits and accrued expenses 3,298,069 4,354,556
Net Cash Provided by Operating Activities 56,675,662 67,916,392
for years ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
32
1. Organization and Summary of Significant Accounting Policies
Organization
The Metropolitan St. Louis Sewer District (the 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 are 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 (the 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.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Throughout the year, the District maintains its detailed accounting records on the 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.
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
33
1. Organization and Summary of Significant Accounting Policies (Continued)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
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, 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 Non-Exchange
Transactions (GASB 33), which establishes accounting and financial reporting standards for non-
exchange transactions involving financial or capital resources.
GASB 33 groups non-exchange transactions into the following four classes, based upon their principal
characteristics: derived tax revenues, imposed non-exchange revenues, government mandated non-
exchange transactions, and voluntary non-exchange transactions.
The District recognizes assets from imposed non-exchange 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 or 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 non-exchange
revenues also include licenses, permits, and other fees.
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
33, have been met. Any resources received before eligibility requirements are met are reported as
deferred 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.
The District follows all Governmental Accounting Standards Board (GASB) pronouncements as well as
all Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principle
Board Opinions, and Accounting Research Bulletins issued on or before November 30, 1989, unless
those pronouncements conflict with or contradict GASB pronouncements. In addition, the District also
applies all FASB Statements and Interpretations issued after November 30, 1989, except for those that
conflict with or contradict GASB pronouncements.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
34
1. Organization and Summary of Significant Accounting Policies (Continued)
Cash and Cash Equivalents and Investments
The District's "cash and cash equivalents" consist of all highly liquid investments (including restricted
assets) with maturity dates of 89 days or less from the date acquired by the District. "Investments"
consist of those investments with maturity dates 90 days or greater at the time of purchase by the
District. Investments are stated at fair value based upon quoted market prices.
The District’s investment disclosures follow GASB Statement No. 40, Deposit and Investment Risk
Disclosures, an Amendment of GASB Statement No. 3 (GASB 40). This standard’s disclosure
requirements address custodial credit risk, concentrations of credit risk, interest rate risk, and foreign
currency risk.
Capital Assets
Capital assets are valued at historical cost or estimated historical cost based in part upon a study
performed in 1981. 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 10 to 50 years
Collection and pumping plant 10 to 100 years
General plant and equipment 3 to 50 years
When designing 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. Previously, the District defined capital assets as assets with an initial,
individual cost of more than $1,000 and an estimated useful life in excess of three years. In April of
2010 the District updated this policy and as a result, an asset must now have an individual cost of more
than $5,000 to be considered a capital asset. This change in policy does not have a retroactive effect on
capital assets put in place before April 2010.
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 2011 and 2010, the District capitalized $11,738,283
and $8,203,731 of net interest expense, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
35
1. Organization and Summary of Significant Accounting Policies (Continued)
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 is stated at the lower of cost or market,
determined on the average cost method. Expenses are recognized when the inventory is consumed.
Net Assets
The invested in capital assets, net of related debt component of net assets consists of capital assets,
including restricted capital assets, net of accumulated depreciation and reduced by the outstanding debt
that is attributable to the acquisition, construction, or improvement of those assets.
The restricted component of net assets consists of constraints placed on net asset use through 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 subdistricts have
also been restricted for that use. Clean water capital improvement surcharges, sewer extension and
connection fees, grants, and other revenues received for construction within certain subdistricts have
been restricted for that use. In addition, a portion of sanitary sewer charges have been restricted for the
payment of principal and interest on certain debt of the District.
The unrestricted net assets component of net assets consists of net assets that do not meet the definition
of restricted or invested in capital assets, net of related debt.
Capital Contributions
Capital contributions to the District represent government grants and other aid used to fund capital
projects. In accordance with GASB 33, capital contributions are recognized as revenue when the
expenditure is made and the amount becomes subject to claim for reimbursement.
Bond Issuance Costs/Bond Premiums and Discounts
Bond issuance costs incurred, as well as bond premiums and discounts, are paid from the proceeds of
revenue bond issues and are deferred and amortized using the straight-line method over the term of the
bonds.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
36
1. Organization and Summary of Significant Accounting Policies (Continued)
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, who has unused
accrued sick leave remaining, will be compensated for that portion of unused accrued sick leave at
the rate of 1-1/4% for each year of District service. 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.
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.
Board Designated Funds
The Board has designated certain amounts for construction and improvement of the sewerage and
drainage collection systems and treatment facilities, and for real property improvement and alterations.
These amounts are included with unrestricted cash and investments. At June 30, 2011 and 2010,
designated funds were $202,947,325 and $277,997,841 respectively.
Reclassification
Certain amounts in prior year financial statements have been reclassified for comparative purposes to
conform with the presentation in the current year financial statements.
Subsequent Events
In preparing these financial statements, the District has evaluated events and transactions for potential
recognition or disclosure through November 8, 2011, the date the financial statements were available to
be issued. The subsequent event footnote below details all known events after June 30, 2011.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
37
2. Deposits and 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 rated in the three highest classifications, for terms specified in the
policy. At June 30, 2011 and 2010, all of the District’s investments were in compliance with the
District’s investment policy and charter.
In accordance with the District’s investment policy, the District also has the ability to invest in
mortgage-backed securities such as collateralized mortgage obligations. These securities are reported at
fair value and are based on the cash flow from interest payments by the underlying mortgages. As a
result, they are sensitive to prepayments by mortgagees, which may result from a decline in interest
rates. For example, if interest rates decline and homeowners refinance mortgages, thereby prepaying the
mortgages underlying these securities, the cash flow from interest payments is reduced and the value of
these securities declines. Likewise, if homeowners pay on mortgages longer than anticipated, the cash
flow is greater and the return on the initial investment would be higher than anticipated. For fiscal years
2011 and 2010, the District has not carried any investment balances in mortgage-backed securities
A summary of deposits and investments as of June 30, 2011 and 2010 is as follows:
Investment Type Cost Fair Value Cost Fair Value
Deposits $ 38,979,076 $ 38,979,076 $ 38,622,130 $38,622,130
U.S. Treasury and agency obligations 211,886,113 213,968,746 246,273,740 248,904,033
Commercial paper 67,890,245 67,909,740 73,440,879 73,463,049
Bankers’ acceptance notes 7,188,960 7,191,018 19,712,541 19,720,227
Total $ 325,944,394 $ 328,048,580 $ 378,049,290 $380,709,439
2011 2010
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
38
2. Deposits and Investments (Continued)
Interest Rate Risk
As of June 30, 2011 and 2010, the District had the following investments and maturities:
Weighted Weighted
Average Average
Maturity Maturity
Investment Type Fair Value (Years) Fair Value (Years)
Certificates of deposit 900,000$ 0.60 2,100,000$ 0.58
U.S. Treasury obligations 36,390,289 0.91 55,119,909 1.24
U.S. agency obligations 177,578,457 2.24 193,784,124 1.56
Commercial paper 67,909,741 0.10 73,463,049 0.12
Bankers’ acceptance notes 7,191,018 0.10 19,720,227 0.11
Total 289,969,505$ 1.51 344,187,309$ 1.11
2011 2010
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.
Custodial/Credit Risk
The District will minimize credit risk, 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, 2011
and 2010, the District’s investments in commercial paper were rated A1 by Standard & Poor’s and P-1
by Moody’s Investors Service. The District’s investments in repurchase agreements carry the explicit
guarantee of the U.S. Government. 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 Standard & Poor’s of
“AAA”. All cash deposits of the District were fully collateralized with securities held by a third party
financial institution in the District’s name.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
39
2. Deposits and Investments (Continued)
Concentration of Credit Risk
The District 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; and collateralized repurchase
agreements are limited to 50% of the portfolio. U.S. agency obligations, commercial paper, and bankers’
acceptances are limited to 30% of the portfolio, each. The following table lists investments in issuers that
represent 5% or more of total investments at June 30, 2011 and 2010:
Issuer 2011 2010
Federal Home Loan Bank
Federal National Mortgage Association 18.9 15.5
Federal Home Loan Mortgage Corporation 11.3 8.5
Percent of Total Investments
19.0%20.1%
3. Note Receivable
The District has a note receivable with the City of Arnold, Missouri (the “City”) bearing interest at
4.35% for its portion of the capital costs related to the Lower Meramec Wastewater Treatment Plant.
The current portion of this note is contained in the other receivables line on the balance sheet. The note
receivable will be paid over 30 years. At June 30, 2011, future payments are as follows:
For the Years
Ending June 30
2012 $ 1,100,499
2013 1,100,499
2014 1,100,499
2015 1,100,499
2016 1,100,499
2017-2021 5,502,494
2022-2026 5,502,494
2027-2031 5,502,494
2032 1,375,623
23,385,600
8,175,043
$ 15,210,557
$ 446,050
14,764,507
$ 15,210,557
Less: Amount representing interest
Total
Classification in Statement of Net Assets:
Current
Non-current
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
40
4. Change in Capital Assets
The following is a summary of capital assets changes for the fiscal years ended June 30, 2011 and 2010:
Balance Balance
June 30, 2010 June 30, 2011
Capital assets not being depreciated:
Land 28,128,701$ 11,342,554$ -$ 2,547,111$ 36,924,144$
Construction in progress 570,602,108 117,135,980 - 286,981,740 400,756,348
Total capital assets not being depreciated 598,730,809 128,478,534 - 289,528,851 437,680,492
Capital assets being depreciated:
Treatment and disposal plant
and equipment 750,240,748 236,903,865 (6,851,394) 848,599 979,444,620
Collection and pumping plant 1,914,386,404 34,816,152 - 7,626,708 1,941,575,848
General plant and equipment 64,195,139 17,922,435 6,851,394 4,110,156 84,858,812
Total capital assets being depreciated 2,728,822,291 289,642,452 - 12,585,463 3,005,879,280
Less: Accumulated depreciation:
Treatment and disposal plant
and equipment (355,414,815) (28,782,936) 1,679,361 (389,347) (382,129,043)
Collection and pumping plant (521,233,972) (31,129,153) - (4,181,443) (548,181,682)
General plant and equipment (39,027,424) (6,942,175) (1,679,361) (3,895,818) (43,753,142)
Total accumulated depreciation (915,676,211) (66,854,264) - (8,466,608) (974,063,867)
Total capital assets being depreciated, net 1,813,146,080 222,788,188 - 4,118,855 2,031,815,413
Total Capital Assets 2,411,876,889$ 351,266,722$ -$ 293,647,706$ 2,469,495,905$
For the Year Ended June 30, 2011
Additions Reclass Deletions
Balance
June 30, 2009 Balance
(As Restated)June 30, 2010
Capital assets not being depreciated:
Land 27,070,041$ 1,058,660$ -$ -$ 28,128,701$
Construction in progress 450,539,975 153,818,974 - 33,756,841 570,602,108
Total capital assets not being depreciated 477,610,016 154,877,634 - 33,756,841 598,730,809
Capital assets being depreciated:
Treatment and disposal plant
and equipment 762,219,595 4,360,055 (9,625,867) 6,713,035 750,240,748
Collection and pumping plant 1,861,695,362 43,669,661 9,625,867 604,486 1,914,386,404
General plant and equipment 60,326,121 7,186,774 - 3,317,756 64,195,139
Total capital assets being depreciated 2,684,241,078 55,216,490 - 10,635,277 2,728,822,291
Less: Accumulated depreciation:
Treatment and disposal plant
and equipment (339,806,176) (27,019,845) 7,315,692 (4,095,514) (355,414,815)
Collection and pumping plant (490,913,350) (23,256,637) (7,315,692) (251,707) (521,233,972)
General plant and equipment (38,535,541) (3,735,294) - (3,243,411) (39,027,424)
Total accumulated depreciation (869,255,067) (54,011,776) - (7,590,632) (915,676,211)
Total capital assets being depreciated, net 1,814,986,011 1,204,714 - 3,044,645 1,813,146,080
Total Capital Assets 2,292,596,027$ 156,082,348$ -$ 36,801,486$ 2,411,876,889$
For the Year Ended June 30, 2010
Additions Reclass Deletions
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
41
4. Change in Capital Assets (Continued)
In fiscal year 2007, the District created a treatment and disposal plant asset in order to represent a
portion of the Lower Meramec wastewater treatment plant. This was created in order to begin recording
depreciation expense for the assets that had been put into service. In fiscal year 2010, a portion of these
assets totaling $9,625,867 was reclassified from treatment and disposal to collection and pumping as a
result of more detailed information becoming available. This also resulted in a $7,315,692
reclassification of accumulated depreciation.
In fiscal year 2011, a review of fixed asset categories caused the District to reclassify capital assets
related to the District’s office building. This resulted in a $6,851,394 reclassification from treatment and
disposal to general plant and equipment. The accounting change also resulted in a $1,679,361
reclassification of accumulated depreciation.
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. Tax rates vary by sub-district and purpose. Taxes levied are used for
operations and stormwater maintenance, debt service, and construction. Taxes are recorded as non-
operating revenues. Property tax bills are 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 distributed to the District
monthly.
On June 12, 2008, pursuant to Ordinance 12661, the District set the property tax rate at zero and began
charging a stormwater service charge on March 1, 2008 based on the property’s impervious area. The
District continued to collect, and recognize as revenue, $1,401,100 in delinquent property taxes in fiscal
year 2010.
Only July 9, 2010, the court declared that the stormwater user charge was a tax that requires voter
approval under the Hancock Amendment I. In July, the District ceased charging customers for
stormwater usage and reenacted the property tax that was previously charged. In fiscal year 2011, the
District recorded $27,125,451 in revenue from property taxes.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
42
6. Long-Term Liabilities
The following is a summary of changes in the District’s long-term liabilities for the year ended June 30,
2011:
Original Balance Balance
Issuance June 30,June 30, Current
Amounts 2010 Additions Retirements 2011 Portion
Bonds and notes
payable:
Senior revenue bonds:
Series 2004A 175,000,000$ 167,370,000$ -$ 1,780,000$ 165,590,000$ 1,960,000$
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 -
Subordinate revenue - - - -
bonds:- - - -
Series 2004B 161,280,000 130,110,000 - 7,055,000 123,055,000 7,095,000
Series 2005A 6,800,000 5,665,000 - 295,000 5,370,000 315,000
Series 2006A 42,715,000 38,420,000 - 2,085,000 36,335,000 2,110,000
Series 2006B 14,205,000 12,935,000 - 650,000 12,285,000 665,000
Series 2008A/B 40,000,000 37,375,000 - 1,765,000 35,610,000 1,777,500
Missouri Department - - - -
of Natural Resources:- - - -
Energy Loan Program 98,595 36,671 - 11,420 25,251 11,783
Series 2009A 23,000,000 23,000,000 - 946,800 22,053,200 968,700
Series 2010A 7,980,700 7,980,700 - - 7,980,700 -
Series 2010C 37,000,000 - 37,000,000 - 37,000,000 1,481,000
Capital Lease:- - - -
Oracle/Blue Heron 12,000,000 7,263,687 1,759,808 2,927,513 6,095,982 2,999,842
695,079,295$ 605,156,058$ 38,759,808$ 17,515,733$ 626,400,133 19,383,825$
Add: Unamortized
premium, net 8,699,649
Less: Bond issue
costs, net (7,836,995)
Total 627,262,787$
Deposits and accrued
expenses:
Landfill closure and
postclosure costs 662,016$ 47,104$ -$ 709,120$ -$
Compensated
absences 6,279,402 860,880 538,336 6,601,946 1,650,487
Net OPEB obligation 1,924,162 2,162,237 1,381,600 2,704,799 -
Total 8,865,580$ 3,070,221$ 1,919,936$ 10,015,865$ 1,650,487$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
43
6. Long-Term Liabilities (Continued)
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.
From the total voter authorization of $775,000,000, $92,019,300 has not been issued as of June 30,
2011. These funds were sought to enable the District to comply with federal and state clean water
requirements.
In January 2010, the District issued $85,000,000 of Wastewater System Revenue Bonds 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. These senior bonds have an interest rate of 5.9% and are payable in semiannual installments at
varying amounts through May 1, 2039. 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.
In November 2008, the District issued $30,000,000 of Wastewater System Revenue Bonds Series 2008A
(Series 2008A) from the authorization for the purpose of providing funds to finance the capital
improvements and replacement program. These senior bonds have interest rates ranging from 5.1% to
5.3% and are payable in semiannual installments at varying amounts through May 1, 2038. 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.
In November 2006, the District authorized and issued $60,000,000 of Wastewater System Revenue Bonds
Series 2006C (Series 2006C) for the purpose of providing funds to finance the initial phase of its capital
improvements and replacement program, including constructing, repairing, and replacing new wastewater
facilities. These senior bonds have interest rates ranging from 4.1% to 5.0% and are payable in semiannual
installments at varying amounts through May 1, 2036. 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.
In May 2004, the District authorized and issued $175,000,000 of Wastewater System Revenue Bonds
Series 2004A (Series 2004A) for the purpose of providing funds to finance the initial phase of its capital
improvements and replacement program, including constructing, repairing, and replacing new wastewater
facilities. 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, 2034. 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.
The issuance of the revenue bonds does not obligate the District to levy any form of taxation therefore 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 scheduled payment of the principal of and
interest on the Series 2006C and 2004A Bonds are guaranteed under a financial guaranty insurance policy.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
44
6. Long-Term Liabilities (Continued)
Water Pollution Control and Drinking Water Revenue Bonds Payable
In October 2008, the State Environmental Improvement and Energy Resources Authority (the Authority)
authorized and issued $69,435,000 of Water Pollution Control and Drinking Water Revenue Bonds
(State Revolving Funds Programs) Series 2008A (Series 2008A). The Series 2008A bonds provided
funds to make loans to fourteen Missouri political subdivisions that will be used 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 in the aggregate principal amount of $40,000,000, the
proceeds of which will be used for constructing, repairing, and equipping new and existing wastewater
facilities. 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 make loans to seven Missouri
political subdivisions that will be used 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 in the aggregate principal amount of
$14,205,000, the proceeds of which will be used for constructing, repairing, and equipping new and
existing wastewater facilities. 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 make loans to thirteen
Missouri political subdivisions that will be used 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 in the aggregate principal
amount of $42,715,000, the proceeds of which will be used for constructing, repairing, and equipping
new and existing wastewater facilities. 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.
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 ten Missouri
political subdivisions and one Missouri non-profit corporation that will be 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 in the aggregate principal amount of $6,800,000, the proceeds of which will be used for
constructing, repairing, and equipping new and existing wastewater facilities. 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
45
6. Long-Term Liabilities (Continued)
Water Pollution Control and Drinking Water Revenue Bonds Payable (Continued)
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 seven Missouri
political subdivisions that will be 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 in the aggregate principal amount of
$161,280,000, the proceeds of which will be used to finance the District’s three water pollution control
construction projects outlined in the agreement. 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 bonds and the Series 2009A and 2010A direct
loans do not obligate the District to levy any form of taxation therefore 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, 2008A/B bonds, the District participates in the
State Revolving Loan Program established by the Missouri Department of Natural Resources (the DNR).
Monies from federal capitalization grants and state matching funds are used to fund a reserve account for
each participant.
As the District incurs approved capital expenses, the DNR reimburses the District for the expenses from
the bond proceeds account and deposits in a bond reserve fund in the District’s name an additional 60%
of the expenditure amount for the Series 2004B bonds or 70% for the Series 2005A, 2006A, 2006B
bonds or 100% for the Series 2008A/B bonds. Interest earned from this reserve fund 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 reserve account to the master trustee an amount equal to 60% of the principal payment
for the Series 2004B bonds or 70% for the Series 2005A, 2006A, 2006B bonds or 100% for the series
2008A/B bonds. The costs of operation and maintenance of the wastewater treatment and sewerage
facilities and the debt service is payable from wastewater revenues.
In accordance with the Series 2004A, 2004B, 2005A, 2006A, 2006B, 2008A/B bonds, 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 portion of principal and interest due on all
senior bonds and at least 115% of the current portion of principal and interest due on all bonds. At
June 30, 2011 and 2010, the District was in compliance with this covenant.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
46
6. Long-Term Liabilities (Continued)
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, 2011 are as follows:
Years ending June 30,Principal Interest Total
2012 13,922,500$ 23,213,859$ 37,136,359$
2013 14,257,500 27,591,971 41,849,471
2014 14,792,500 26,970,156 41,762,656
2015 15,175,000 26,320,999 41,495,999
2017 16,080,000 25,613,874 41,693,874
2017-2021 89,917,500 115,767,556 205,685,056
2022-2026 104,215,000 91,676,845 195,891,845
2027-2031 94,760,000 66,224,850 160,984,850
2032-2036 120,790,000 40,082,898 160,872,898
2037-2040 69,335,000 7,840,250 77,175,250
Total 553,245,000$ 451,303,258$ 1,004,548,258$
Wastewater System Revenue Bonds Payable/
Water Pollution Control and Drinking Water
Revenue Bonds Payable
West Watson and Nanell Loan Agreement
During fiscal year 2005, the DNR loaned $535,600 to the District. The West Watson and Nanell Loan
bears interest at a rate of 1.5% and is payable through November 1, 2014. The purpose of this note is to
finance the planning, acquisition, construction, improvement, repair, rehabilitation, and extension of the
sewer system of a certain regional subdistrict. This note is classified as special assessment debt by the
District; therefore, the principal and interest on this note will be repaid from additional tax assessments
on property values within the subdistrict. In April 2010, an additional payment was made to bring the
principal balance to zero.
Ozark and Table Rock Loan Agreement
During fiscal year 2004, the DNR loaned $374,680 to the District. The Ozark and Table Rock Loan
bears interest at a rate of 1.5% and is payable through November 1, 2013. The purpose of this note is to
finance the planning, acquisition, construction, improvement, repair, rehabilitation, and extension of the
sewer system of a certain regional subdistrict. This note is classified as special assessment debt by the
District; therefore, the principal and interest on this note will be repaid from additional tax assessments
on property values within the subdistrict. In April 2010, an additional payment was made to bring the
principal balance to zero.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
47
6. Long-Term Liabilities (Continued)
Energy Efficiency Leveraged Note Payable
In April 2004, the DNR loaned $98,595 to the District. The Energy Efficiency Leveraged Note Payable
bears interest at a rate of 3.2% per annum and is payable through August 1, 2013. The purpose of this
note is to finance the design, acquisition, installation, and implementation of energy conservation
measures. The principal and interest on this note is paid from wastewater revenues.
Principal and Interest Requirements on Energy Efficiency Leveraged Note Payable
The annual principal and interest requirements to maturity on the Energy Efficiency Leveraged Note
Payable outstanding as of June 30, 2011 are as follows:
Years ending June 30,Principal Interest Total
2012 11,783$ 703$ 12,486$
2013 12,157$ 329 12,486
2014 1,311$ 21 1,332
Total 25,251$ 1,053$ 26,304$
Energy Efficiency Leveraged Note Payable
State of Missouri Direct Loan Series 2009A
In October 2009, the DNR loaned $23,000,000 to the District. The State of Missouri Direct Loan
Series 2009A bears interest at a rate of 1.5% per annum and is payable through January 1, 2030.
The purpose of this note is to finance the designing, constructing, improving, renovating, repairing,
replacing and equipping new and existing sewer facilities within the District. The principal and
interest on the bonds are expected to be paid from future wastewater revenues.
In accordance with the Direct Loan Series 2009A, the District’s annual net operating revenues from
wastewater activities, as defined in the agreement, coupled with investments earnings must be at least
115% of the current portion of principal and interest due on all bonds. At June 30, 2011 and 2010, the
District was in compliance with this covenant.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
48
6. Long-Term Liabilities (Continued)
Principal and Interest Requirements on State of Missouri Direct Loan Series 2009A
The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series
2009A outstanding as of June 30, 2011 are as follows:
Years ending June 30,Principal Interest Total
2012 968,700$ $ 318,461 $ 1,287,161
2013 991,100 304,237 1,295,337
2014 1,014,000 289,684 1,303,684
2015 1,037,500 274,794 1,312,294
2016 1,061,500 259,560 1,321,060
2017-2021 5,687,100 1,056,663 6,743,763
2022-2026 6,376,000 619,348 6,995,348
2027-2030 4,917,300 145,226 5,062,526
Total 22,053,200$ $ 3,267,973 $ 25,321,173
State of Missouri Direct Loan Series 2009A
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 $7,980,700 for the construction, improvement, renovation, repair, replacement and equipping of
its wastewater system, under the authority of and in full compliance with the District’s Charter (Plan).
The District’s interest rate is 1.5% and is payable in semiannual installments at varying amounts through
July 1, 2031.
In accordance with the Direct Loan Series 2010A, the District’s annual net operating revenues from
wastewater activities, as defined in the agreement, coupled with investments earnings must be at least
115% of the current portion of principal and interest due on all bonds. At June 30, 2011 and 2010, the
District was in compliance with this covenant.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
49
6. Long-Term Liabilities (Continued)
Principal and Interest Requirements on State of Missouri Direct Loan Series 2010A
The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series
2010A outstanding as of June 30, 2011 are as follows:
Years ending June 30,Principal Interest Total
2012 -$ 118,114$ 118,114$
2013 337,700 116,871 454,571
2014 344,500 111,848 456,348
2015 351,500 106,724 458,224
2016 358,600 101,495 460,095
2017-2021 1,905,500 425,257 2,330,757
2022-2026 2,107,100 277,661 2,384,761
2027-2031 2,329,600 114,460 2,444,060
2032 246,200 1,822 248,022
Total 7,980,700$ 1,374,252$ 9,354,952$
State of Missouri Direct Loan Series 2010A
State of Missouri Direct Loan Series 2010C
In December 2010, the State of Missouri Direct Loan Program – ARRA 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. The District’s interest rate is 1.65% and is payable in
semiannual installments at varying amounts through January 1, 2031.
In accordance with the Direct Loan Series 2010C, 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 portion of principal and interest due on all bonds. At June 30, 2011 and 2010, the
District was in compliance with this covenant.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
50
6. Long-Term Liabilities (Continued)
Principal and Interest Requirements on State of Missouri Direct Loan Series 2010C
The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series
2010C outstanding as of June 30, 2011 are as follows:
Years ending June 30,Principal Interest Total
2012 $ 1,481,000 $ 604,428 $ 2,085,428
2013 1,520,000 579,835 2,099,835
2014 1,560,000 554,590 2,114,590
2015 1,600,000 528,685 2,128,685
2016 1,641,000 502,120 2,143,120
2017-2021 8,868,000 2,087,349 10,955,349
2022-2026 10,081,000 1,311,758 11,392,758
2027-2031 10,249,000 430,081 10,679,081
Total 37,000,000$ $ 6,598,846 $ 43,598,846
State of Missouri Direct Loan Series 2010C
Master Equipment Lease / Purchase Agreement
In June 2009, the District entered into a lease purchase agreement in which the District has received
proceeds in the total amount of $12,000,000 in monthly installments. These proceeds were used to lease
technology related to the District’s upgrade to a new enterprise system. The lease bears interest at a rate
of 3.2% and is payable through June 19, 2013, at which time the District has the option to purchase the
leased equipment.
Principal and Interest Requirements on Master Equipment Lease/Purchase Agreement
Years ending June 30,Principal Interest Total
2012 $ 2,999,842 $ 149,613 $ 3,149,455
2013 3,096,139 53,315 3,149,454
Total 6,095,981$ $ 202,928 $ 6,298,909
Master Equipment Lease / Purchase Agreement
Restricted Cash and Investments
The following trustee held 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 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
51
6. Long-Term Liabilities (Continued)
Restricted Cash and Investments (Continued)
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.
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 and 2010B bonds, monies in the Debt Service Reserve Fund
shall be disbursed and expensed 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, 2011 and 2010, cash and investments in the Debt Service Reserve Fund
totaled $31,223,261 and $30,691,786, respectively.
Special Participant Bond Reserve Account
For the Series 2004B, 2005A, 2006A, 2006B, 2008A/B, 2009A, 2010A and 2010C bonds, the
District shall deposit into the Special Participant Bond Reserve Account amounts in accordance with
the bond ordinance, if any, 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, 2011 and 2010, cash and investments in the Special
Participant Bond Reserve Account held on behalf of the District totaled $148,274,220 and
$153,013,769, respectively. Monies in this account are not considered to be District funds.
However, interest earnings on this account may be used by the District to reduce interest payments on
the bonds outstanding.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
52
6. Long-Term Liabilities (Continued)
Restricted Cash and Investments (Continued)
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, 2011 and 2010.
Project Fund
The Project Fund 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 and 2010B bonds, shall be deposited into the Project Fund. At June 30,
2011 and 2010, cash and investments in the Project Fund totaled $31,200,465 and $53,416,155,
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, 2011 and 2010, cash and investments in the
Rebate Fund totaled $236,676 and $237,585, 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 shall immediately withdraw the fee
amounts when due. Monies held in this account shall not be invested.
Fair Value of Financial Instruments
The value of the District’s long-term debt is estimated based on the current rates offered to the District
for debt of the same remaining maturities. The carrying amount and estimated fair value of the District’s
long-term debt as of June 30, 2011 was $626,400,132 and $657,967,027, respectively. The carrying
amount and estimated fair value of the District’s long-term debt as of June 30, 2010 was $605,156,058
and $631,821,339, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
53
7. Pension Plan
Plan Description
The Metropolitan St. Louis Sewer District Employees’ Pension Plan (the Plan) is a non-contributory
single employer defined benefit plan providing retirement benefits as well as death and disability
benefits to members. As a condition of employment, all full-time employees of the District commencing
service prior to December 31, 2010, are eligible to be covered by the Plan. The financial statements for
the Plan are produced using the accrual basis of accounting. Under the accrual basis of accounting,
revenues are recognized when earned and expenses are recognized when the related liability is incurred.
The 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.
The Plan, established on November 1, 1967, is amended from time to time by the District’s Board of
Trustees, primarily to improve benefits to members. The 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 Plan. A committee of the District’s Board of Trustees, with
the aid of an investment advisor, reviews and evaluates the Plan’s investments and the related rates of
return on a periodic basis. The Plan is exempt from the requirements of the Employee Retirement
Income Security Act of 1974 (the “Act”) and, as such, is not subject to the Act’s reporting requirements.
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 Plan permits early retirement with reduced
benefits beginning at age 55 if the member has completed 60 months of employment. A member whose
combined age and term of service is equal to 75 may retire early with unreduced benefits.
The annual benefit accrued by a member is equal to 1.5% 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. A survivor’s benefit for vested members who have not yet reached their normal
retirement date or earned 75 points is provided for. The survivor’s benefit is equal to the greater of 50.0% of the
member’s monthly-accrued retirement benefit as of the date of death, or 15.0% of the monthly earnings and the
member’s monthly-accrued retirement benefit actuarially reduced under the 100.0% joint and survivor annuity
option. Members are also able to select a Contingent Annuity Pop-Up option. This option allows the member
to elect a survivor annuity for life, with the provision that if the beneficiary should predecease the member, the
benefit shall increase to the amount payable had the survivor option not been selected.
Ordinance Number 10872, effective January 1, 2001, further amended the Plan to extend the cost of
living increases for retirees from a maximum of 30.0% to 45.0% of the original benefit.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
54
7. Pension Plan (Continued)
Plan Description (Continued)
Effective August 1, 2004, Ordinance No. 11781 amended the 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. Effective July 1, 2007, Ordinance No. 12395 amended the Plan for
members whose annual retirement benefit , as of July 1, 2007, is determined to be higher under the
formula using the definition of “Final Average Earnings” in effect prior to August 1, 2004. Under the
interim rule, if such a member retires on his normal retirement date of or after July 1, 2007 and/or before
June 1, 2009 (the “window period”), he may elect to have his benefit determined using the 1.5%/0.4% of
final average earnings formula including accrued sick leave or the 1.7%/0.4% of final average earnings
formula without using accrued sick leave. The interim rule will not apply if at any time during the
window period a member’s benefit is determined to be higher under the 1.7%/0.4% formula. Sick leave
is paid out at 1.3% per year of service times the amount of leave accrued not to exceed $50,000 unless
the employee accrued an amount greater than $50,000 as of July 1, 2004, and retires or dies while in
active service prior to July 1, 2007. Also, the 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 Plan.
The retirement benefit payable to a member who retires after his or her 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 4.0% 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.
Funding Policy
The District’s employees do not contribute to the Plan. Ordinances establishing the 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.
Annual Pension Cost
Contributions of $10,500, 769 and $9,583,137, excluding certain professional fees paid by the District,
were made to the Plan during the District’s fiscal years ended June 30, 2011 and 2010, respectively.
These contributions were made in accordance with actuarially determined contribution requirements
based on actuarial valuations performed at December 31, 2010 and 2009, respectively, and for 2010
consisted of a) $6,103,002 normal cost plus b) $3,484,662 amortization of the actuarial accrued assets in
excess of the unfunded actuarial accrued liability and prior changes c) multiplied by an interest factor of
1.075.
The District provides certain professional fees, office space, utilities, and other services to the Plan at no
cost. Other costs of administering the Plan are financed from plan net assets.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
55
7. Pension Plan (Continued)
Annual Pension Cost (Continued)
Significant actuarial assumptions used in the valuations are as follows:
Latest valuation date December 31, 2010
Actuarial cost method Entry Age Normal
Amortization method Level dollar closed
Amortization period 20-year period
Asset valuation method Three-year average of adjusted market values
Post-retirement benefit increases CPI with maximum per year of 3.0% of current benefit
up to $600, and lifetime maximum of 45% of the
original monthly benefit up to $9,000
Investment rate of return 7.5% per annum (1)
Projected salary increases 4.5% - 10.0% per annum (1)
Social Security wage base 4.0% per annum increase (1)
Includes inflation component of 3.0%
Historical trend information about the District’s participation in the Plan is presented below to help
readers assess the Plan’s funding status on a going-concern basis and assess progress being made in
accumulating assets to pay benefits when due.
Annual
Pension Percentage of Net Pension
Fiscal Year Cost (APC) APC Contributed Obligation
2011 10,500,769$ 100%--
2010 9,583,137 100%--
2009 8,142,569 100%--
Required Supplementary Information
in (000s)
Unfunded
Entry Age Actuarial UAAL as a
Actuarial Actuarial Accrued Annual 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)
12/31/2010 189,012$ 231,599$ (42,587)$ 51,703$
12/31/2009 185,753 223,063 (37,310) 83.3 52,267 71.4
12/31/2008 183,679 212,066 (28,387) 86.6 48,077 59.0
Schedule of Funding Progress
81.6%82.4%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
56
7. Pension Plan (Continued)
Effective January 1, 2011, the District started a Defined Contribution Plan for all new hires. This Plan is
intended to provide a means whereby the District may provide retirement benefits to eligible employees
and encourage employees to establish a regular method of savings, thereby providing a measure of
financial security for employees and their beneficiaries upon retirement or in the event of death or
disability.
Current employees with less than ten years of service on December 31, 2010, could voluntarily elect to
transfer from the Defined Benefit Plan into the Defined Contribution Plan. The Defined Contribution
Plan provides a basic employer contribution of seven percent of employee earnings. Also provided is an
additional matching contribution of 50% of the first four percent of earnings the employee defers into the
Defined Contribution Plan. Of the 404 District employees with less than ten years of service, 23 elected
to participate in the Defined Contribution Plan. At June 30, 2011, total plan participants and assets
totaled 39 and $96,111, respectively.
8. Deferred Compensation Plan
The District offers its employees a Deferred Compensation Plan created in accordance with Internal
Revenue Code Section 457. The Deferred Compensation Plan, available to all District employees,
permits them to defer a portion of their salary until future years. The deferred compensation is not
available to employees until termination, retirement, death, disability, or due to financial hardship as
defined by the Deferred Compensation Plan
The Deferred Compensation Plan was amended and restated to comply with the Economic Growth and
Tax Relief Reconciliation Act of 2001 (the Act). The Act made significant changes to Section 457(b) of
the Internal Revenue Code of 1986, as previously amended. The Deferred Compensation 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 Deferred
Compensation Plan are not included in the accompanying financial statements.
The Deferred Compensation 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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
57
9. Post-Employment Benefits Other than Pensions
Plan Description
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 provides a single-
employer defined benefit health care plan to employees who retire from the District on or after age 62
and with five years of service or whose age plus years of service equal 75 points (“Rule of 75”). The
District pays the monthly group health insurance premium for the individual until the retiree becomes
eligible for Medicare at age 65. In addition, there is a closed group of disabled former employees who
receive life insurance coverage from the District.
Cost Sharing Contributions for retirees are as follows:
Coverage Tier Monthly Premium
Retiree* $411.37
Retiree + Spouse $876.19
Retiree + Child $796.10
Family (1child) $1,214.35
* The District pays the retiree’s premium for a retiree who retires after age 62 or after attaining 75
points. Eventually, affected retirees will have to pay up to 10% of the above premium.
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 45 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
June 30, 2011 and 2010
58
9. Post-Employment Benefits Other than Pensions (Continued)
Plan Description (Continued)
The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost
each year and to amortize any unfunded actuarial liabilities. The District’s annual OPEB cost for the
current year and the related information are as follows:
Amortization of past service cost 850,300
Normal cost 1,199,400
Interest to end of fiscal year 92,300
Annual Required Contribution (ARC)2,142,000
Interest on net OPEB obligation 86,587
Adjustment to ARC (66,350)
Annual OPEB cost 2,162,237
Contributions made (1,381,600)
Increase in net OPEB obligation 780,637
Net OPEB obligation - beginning of year 1,924,162
Net OPEB obligation - end of year 2,704,799
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.
Required Supplementary Information
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)
7/1/2009 - 24,412$ 24,412$ 0% 50,230$
7/1/2007 - 21,938 21,938 0% 43,640 50.3
Schedule of Funding Progress
in (000s)
48.6%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
59
9. Post-Employment Benefits Other than Pensions (Continued)
Plan Description (Continued)
Annual
Required Interest on Percentage
Fiscal Contribution Net OPEB Adjustment Net OPEB Actual of ARC Net OPEB
Year (ARC) Obligation to the ARC Cost Contribution Contributed Obligation
2011 2,142,000$ 86,587$ 66,350$ 2,162,237$ 1,381,600$ 64.5% 2,704,799$
2010 2,103,700 45,663 33,824 2,115,539$ 1,206,100 57.3 1,924,162
2009 1,744,700 21,011 16,100 1,749,024 1,201,200 68.8 1,014,724
Schedule of Employer Contributions
Significant actuarial assumptions used in the valuation are as follows:
Latest valuation date July 1, 2009
Actuarial cost method Projected unit credit
Discount rate 4.5% per annum
Amortization method Level Percentage of payroll amount, open
Amortization period 30-year period
Inflation rate 3.0%
Investment Rate of Return 4.5% annual returns net of both administrative and
investment expenses
Health cost trend assumption Getzen Trend Model – 7.5% graded to 4.4% over 55
years
Medical trend:
Year Medical Year Medical
2009 2035
2010 7.5 2040 4.8
2011 6.4 2045 4.7
2012 5.7 2050 4.6
2013 5.7 2055 4.5
2014 5.6 2060 4.5
2015 5.6 2065 4.4
2016 5.6 2070 4.4
2020 5.5 2075 4.4
2025 5.4 4.42080+
8.4%5.0%
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
60
9. Post-Employment Benefits Other than Pensions (Continued)
Plan Description (Continued)
The healthcare trends used in this valuation are based on long term healthcare trends generated by the
Getzen Trend Model (the 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 4.5% per annum
Mortality 1983 Group Annuity Mortality Table, male rates,
set back 6 years for females
Years of Attained
Service Rate Age Rate
020
1 12.0 30 3.7
2 7.5 40 1.1
50+0.0
Select rates based on service
Ultimate rates based on attained age
Ultimate rates are from the Sarason T-1 Table above
Termination of Employment:
Ultimate Rates
(after 4 years of service)
20.0%5.5%
Select Rates
(0 to 4 years of service)
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
1.0%10.0%
Retirement - rates vary by age
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
61
9. Post-Employment Benefits Other than Pensions (Continued)
Plan Description (Continued)
Percent
Becoming
Age Disabled
20
30 0.064
40 0.102
50 0.311
0.056%
Disability
Future Retiree Coverage 90.0% of employees retiring prior to age 65 are
assumed to elect medical coverage
Future Dependent Care 25.0% elect spouse coverage
0.0% dependent children coverage
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 assets. At June 30,
2011 and 2010, these liabilities amounted to $5,557,000 and $4,713,013, respectively.
The claims liabilities reported are based on the requirements of GASB Statement No. 10, which requires that
a liability for claims be reported if information obtained prior to the issuance of the financial statements
indicates it is probable that a liability has been incurred and the amount of the liability can be reasonably
estimated. Changes in the balance of claims liabilities during fiscal 2011 and 2010 were as follows:
2011 2010
Liability, beginning of year 4,713,013$ 2,246,526$
Current year claims and changes in estimates 12,163,124 12,018,566
Claim payments (11,319,137) (9,552,079)
Liability, end of year 5,557,000$ 4,713,013$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
62
10. Self-Insurance Programs (Continued)
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 period based on
landfill capacity used as of the end of the fiscal year. The $709,120 and $662,018 reported as landfill
closure and post-closure care liabilities at June 30, 2011 and 2010, respectively, represent the cumulative
amounts reported at fiscal year-end based on the use of 94.0% and 88.0% of the estimated capacity of
the landfill for fiscal years ended 2011 and 2010, respectively. The District will recognize the remaining
estimated cost of closure and post-closure care of $47,102 at June 30, 2012 as the facility nears capacity.
These amounts are based on what it would cost to perform all closure and post-closure care in 2011.
A study recently completed by Black and Veatch estimated full capacity to be reached in another six
years; therefore, the District expects to close the landfill sometime in the year 2017. Final actual costs
will be higher due to inflation, changes in technology, and/or changes in regulations.
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 balance sheet will be adjusted accordingly.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
63
12. Commitments and Contingencies
US and State of Missouri v. Metropolitan St. Louis Sewer District; In the US 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 is 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
are other counts involving violations of permit conditions. The District has been the subject of several
investigatory actions by EPA over the past several years. Negotiations have been ongoing with the EPA
and the 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 alleges that the District does not
have an approved Long-Term Control Program (“LTCP”) for the combined system. The District has
been working on these issues for several decades and has asked voters to approve bonds and rate
increases to rehabilitate and maintain the collection system. As required by its Charter, the District has
increased rates which will continue 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. The 30 day public comment period has been extended until October
10, 2011. At the closing of the public comment period, the comments received will be responded to by
the Department of Justice. 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.
William Zweig et al. v. Metropolitan Sewer District. This case was filed on July 18, 2008 and, as
amended, contends that Metropolitan Sewer District Ordinances No. 12560 and No. 12789, which
enacted increases in the District’s stormwater user charge based on the amount of impervious area on the
customer’s property, are unconstitutional. The lawsuit claims the ordinances violate the so-called
Hancock Amendment, Mo. Const. art. X, § 22(a), because the stormwater user charge is in reality a tax
that requires voter approval. The District’s Board of Trustees passed the ordinances in December 2007
and December 2008, respectively, without submitting them to the voters. The District contends the
stormwater user charge is not a tax and, thus, not subject to voter approval. The original plaintiff is a
District stormwater customer who seeks to represent a class of all the District stormwater customers. In
July 2009, two more plaintiff class representatives were added to the lawsuit. The lawsuit seeks (1) a
declaration that the stormwater user charge is unconstitutional, (2) a refund of all stormwater user
charges collected, and (3) payment of the plaintiffs’ costs, including attorneys’ fees.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
64
12. Commitments and Contingencies (Continued)
Trial was held April 13, 2010 through April 16, 2010. On July 9, 2010, the court handed down Findings
of Fact, Conclusions of Law, Judgment and Decree in the first phase of the bifurcated trial. The Court
declared the Stormwater User Charge is a tax under the Hancock Amendment. The second phase of the
trial was heard on October 6, 2010, to determine the amount, if any, to be refunded. The amount of a
full refund would be approximately $87 million; a partial refund for the additional amount collected
under the user charge would amount to approximately $35 million. The judge ruled on November 29,
2010 that no refund would be issue by MSD. The third phase, to determine the amount of Plaintiffs’
counsel’s attorneys’ fees, to be paid by MSD was heard on January 18, 2011. On February 4, 2011, the
judge awarded Plaintiff’s counsel $4.8 million in attorney’s fees and expenses. The record on appeal
was filed July 20, 2011 with the Court of Appeals, Eastern District of Missouri. The attorney’s fees and
expenses were paid into escrow on September 9, 2011, and will remain in escrow pending finality of the
litigation. MSD’s appellate was filed September 16, 2011.
The District is the defendant in six (6) different flooding cases related to the September 14, 2008 rain
event precipitating from remnants of Hurricane Ike. Four (4) of the cases involve flooding of the River
Des Peres, they consist of two (2) property damage cases and two (2) wrongful death cases. The defense
costs associated with these cases are expected to be covered by the District’s insurance carrier. Of the
other two (2) cases, one (1) involves flooding of Maline Creek and the other involves flooding of Deer
Creek, they are both property damage cases. These cases are in various stages of discovery. The
estimated possible loss varies for each case and is dependent upon the value of the property. The
property value losses have not been determined at this time and no written demands have been received
at this time for the wrongful death cases.
The District has entered into construction and other contracts amounting to $226,105,854 and
$212,296,069 at June 30, 2011 and 2010, respectively. Grants to be received from various governmental
agencies and entities to partially offset the cost of the contract commitments amounted to $154,237 and
$2,693,317 at June 30, 2011 and 2010, respectively. As of June 30, 2011, the District had $92,000,000
in bonds authorized by the voters in August 2008, but unissued. These bonds will fund the second phase
of a multi decade wastewater capital improvement program.
The District is a defendant in various other matters of litigation. Of these matters, management and
District’s legal counsel do no anticipate any material effect on the June 30, 2011 and 2010 financial
statements.
13. Restricted Net Assets
The government-wide Statements of Net Assets reports $94,925,981 and $80,782,806 of restricted net
assets at June 30, 2011 and 2010, respectively, of which $60,530,338 and $50,836,337 are restricted due
to enabling legislation, as of June 30, 2011 and 2010, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes to Financial Statements
June 30, 2011 and 2010
65
14. Segment Information
The District issued wastewater revenue bonds to finance wastewater infrastructure projects. The District
accounts for both wastewater and stormwater activities in a single enterprise fund, but investors in those
bonds rely solely on the revenue generated by the wastewater activities for repayment. Fiscal Year 2011
summary financial information for each business segment is presented below.
Wastewater Stormwater
Condensed Statement of Net Assets
323,741,195$ 6,239,176$
46,036,519 54,695,853
14,764,507 -
2,001,899,133 467,596,772
2,386,441,354 528,531,801
95,855,094 48,194
85,769 5,720,622
616,244,340 -
712,185,203 5,768,816
Invested in capital assets, net of related debt 1,447,636,065 467,596,773
45,950,750 48,975,231
180,669,336 6,190,981
Total net assets 1,674,256,151$ 522,762,985$
Total current assets
Total restricted assets
Total other assets
Net capital assets
Total assets
Total current liabilities
Restricted net assets
Unrestricted net assets
Total current restricted liabilities
Total long-term liabilities
Total liabilities
Condensed Statement of Revenues,
Expenses, and Changes in Net Assets
217,011,360$ 2,432,897$
56,403,291 10,450,974
160,572,145 17,076,689
Operating income 35,924 (25,094,766)
Total nonoperating revenues 5,674,021 27,764,722
Total nonoperating expenses 22,058,529 7,051,182
Nonoperating income (16,384,508) 20,713,540
Capital contributions 5,342,555 4,755,997
Change in net assets (11,006,029) 374,771
Beginning net assets 1,685,262,180 522,388,214
Ending net assets 1,674,256,151$ 522,762,985$
Other operating expenses
Operating revenues
Depreciation expense
Condensed Statement of Cash Flows
Operating activities $ 64,382,661 (7,706,999)$
Noncapital financing activities 5,833 27,119,618
Capital and related financing activities (130,523,071) (10,612,774)
Investing 60,686,702 (8,799,845)
Increase in cash (5,447,875) -
Cash beginning 11,766,809 -
Cash Ending 6,318,934$ -$
66
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
67
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................................................................................................................................... 68
These schedules contain trend information to help the reader understand how the
District’s financial performance and well-being have changed over time.
Revenue Capacity................................................................................................................................. 70
These schedules contain information to help the reader assess the District’s most
significant local revenue source, the user charge.
Debt Capacity....................................................................................................................................... 77
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.
Demographic and Economic Information ............................................................................................ 80
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the District’s financial activities
take place.
Operating Information.......................................................................................................................... 83
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.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
68
2004 2005 2006
2002 2003 As Restated As Restated As Restated
Net Assets
Invested in capital assets,
net of related debt 1,481,382$ 1,548,524$ 1,586,704$ 1,618,219$ 1,651,792$
Restricted 38,417 34,723 44,329 47,584 66,973
Unrestricted 172,578 158,573 171,858 190,971 247,958
Total Net Assets 1,692,377$ 1,741,820$ 1,802,891$ 1,856,774$ 1,966,723$
2007 2008 2009
As Restated As Restated As Restated 2010 2011
Net Assets
Invested in capital assets,
net of related debt 1,682,063$ 1,704,322$ 1,798,914$ 1,868,974$ 1,915,233$
Restricted 85,447 97,422 94,769 80,782 94,926
Unrestricted 278,803 324,218 293,934 257,894 186,860
Total Net Assets 2,046,313$ 2,125,962$ 2,187,617$ 2,207,650$ 2,197,019$
Fiscal Year
Fiscal Year
Net Assets by Component
Last Ten Fiscal Years
(000's)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
69
Income/(Loss)Change
Fiscal Operating Operating Operating Non-operating before Capital Capital in Net
Year Revenues Expenses Income/(Loss) Income/(Loss) Contributions Contributions Assets
2002 139,638,405 142,392,092 (2,753,687) 28,397,233 25,643,546 19,904,597 45,548,143
2003 129,469,562 144,277,411 (14,807,849) 28,392,581 13,584,732 28,410,813 41,995,545
2004 As Restated 157,970,382 150,592,370 7,378,012 18,445,656 25,823,668 35,246,721 61,070,389
2005 As Restated 188,993,673 162,373,895 26,619,778 4,678,347 31,298,125 22,585,702 53,883,827
2006 As Restated 206,803,022 175,889,536 30,913,486 25,966,334 56,879,820 53,069,364 109,949,184
2007 As Restated 202,205,532 183,810,507 18,395,025 36,885,268 55,280,293 24,309,430 79,589,723
2008 As Restated 221,925,048 225,145,882 (3,220,834) 37,259,517 34,038,683 45,609,805 79,648,488
2009 As Restated 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)
Changes in Net Assets
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
70
Total
Fiscal Sewer Service Licenses, Permits, Operating
Year Charges, Net and Other Fees Other Revenues
2002 120,500,816 5,706,843 2,232,268 128,439,927
2003 120,994,703 5,435,878 3,038,981 129,469,562
2004 150,903,248 6,297,166 769,968 157,970,382
2005 181,966,427 6,549,221 478,025 188,993,673
2006 200,719,348 5,210,321 873,353 206,803,022
2007 194,798,878 6,030,583 1,376,071 202,205,532
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
Operating Revenues by Source
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
71
Fiscal Employment Materials and Contracted Chemical
Year Costs Utilities Supplies Services Supplies
2002 51,765,551 10,025,931 9,851,643 20,956,310 759,712
2003 52,536,992 10,341,674 9,686,572 20,841,068 919,906
2004 54,259,559 10,321,708 9,453,919 21,148,553 843,259
2005 52,656,509 11,244,255 7,231,297 30,424,935 946,182
2006 56,817,238 11,963,002 11,602,773 38,472,414 1,089,564
2007 58,731,260 11,362,805 12,335,366 40,879,286 1,260,789
2008 As Restated 60,787,548 12,837,998 14,081,785 64,192,143 1,387,122
2009 As Restated 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
Subtotal,
Expenses Total
Fiscal before Operating
Year Insurance Other Depreciation Depreciation Expenses
2002 1,581,623 5,510,335 100,451,105 41,940,987 142,392,092
2003 2,689,408 5,349,920 102,365,540 41,911,871 144,277,411
2004 2,837,587 9,135,915 108,000,500 42,591,870 150,592,370
2005 2,968,245 12,459,569 117,930,992 44,442,903 162,373,895
2006 2,816,795 9,147,931 131,909,717 43,979,819 175,889,536
2007 2,915,236 10,604,787 138,089,529 45,720,978 183,810,507
2008 As Restated 2,939,390 13,986,037 170,212,023 54,933,859 225,145,882
2009 As Restated 2,746,119 13,769,203 164,807,399 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
Operating Expenses
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
72
2004 2005 2006
2002 2003 As Restated As Restated As Restated
Non-operating revenues
Property taxes levied by the District 23,451,036$ 21,101,265$ 21,743,767$ 22,015,870$ 23,210,982$
Investment income 9,622,027 6,790,455 2,060,259 5,501,708 7,610,461
Recovery of doubtful Clean Water
Improvement Surcharge accounts 233,006 139,675 115,763 - -
Build America Bonds tax credit - - - - -
Rent and other income 3,319,269 1,124,569 1,010,125 1,038,074 1,026,547
Total non-operating revenues 36,625,338$ 29,155,964$ 24,929,914$ 28,555,652$ 31,847,990$
Non-operating expenses
Interest expense 213,376 - - - -
Clean Water Capital Improvement
refund - - - 5,667,330 95,372
Net (gain) loss on disposal and sale
of capital assets 299,720 (3,565,868) 548,133 3,138,531 95,064
Non-recurring projects and studies 2,997,263 4,328,951 6,935,332 8,837,532 5,563,301
Legal claims - - - - -
Other 42,116 - 183,773 - -
Total non-operating expenses 3,552,475$ 763,083$ 7,667,238$ 17,643,393$ 5,753,737$
Net non-operating revenue (expense) 33,072,863$ 28,392,881$ 17,262,676$ 10,912,259$ 26,094,253$
2007 2008 2009
As Restated As Restated As Restated 2010 2011
Non-operating revenues
Property taxes levied by the District 24,401,167$ 27,512,070$ 2,129,475 1,401,100 27,125,451
Investment income 16,946,145 17,476,621 13,115,519 6,553,760 3,847,324
Recovery of doubtful Clean Water
Improvement Surcharge accounts - - - - -
Build America Bonds tax credit - - - 450,058 2,023,000
Rent and other income 878,319 529,983 214,674 265,004 442,968
Total non-operating revenues 42,225,631$ 45,518,674$ 15,459,668 8,669,922 33,438,743
Non-operating expenses
Interest expense - 4,313,973 9,079,269 13,639,341 9,994,088
Clean Water Capital Improvement
refund 15,000 - - - -
Net (gain) loss on disposal and sale
of capital assets 96,630 686,459 2,161,862 2,719,163 3,485,952
Non-recurring projects and studies 5,228,733 3,258,725 7,104,496 9,872,088 10,800,843
Legal claims - - - - 4,828,828
Other - - - - -
Fiscal Year
Fiscal Year
Non-operating Revenues and Expenses
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
73
Type of Monthly Charge Unmetered c Residential c Non-Residential
Wastewater User Charge
Base Charge 11.40 11.40 11.40
Compliance Charge a - - 30.85
Volume Charges
per Ccf b - 2.02 2.02
per room 1.32 - -
per water closet 4.93 - -
per bath 4.11 - -
per separate shower 4.11 - -
Extra Strength Surcharges a
SS over 300 ppm per ton - - 222.62
BOD over 300 ppm per ton - - 596.72
COD over 600 ppm per ton - - 298.36
Stormwater Service Charge
per account: single residential unit 0.24 0.24 0.24
per account: multi-residential unit 0.18 0.18 0.18
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
Metered
User Charge Rates
As of June 30, 2011
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
74
2002 2003 2004 b 2005 c 2006 d
Residential:
Single Family/Unit a 170.52$ 170.52$ 205.32$ 249.84$ 271.44$
Multi-Family/Unit a 145.32 145.32 173.16 210.00 228.00
Commercial/Industrial:
Service Charge/Unit 172.44 172.44 218.28 236.28 248.28
Sanitary Sewer Usage Charge/100 CCF 1.05 1.05 1.34 1.66 1.81
Storm Sewer Usage Charge/100
sq. feet of impervious area - - - - -
Extra Strength Surcharges:
Suspended Solids over 300
parts per million/ton 87.20 87.20 162.88 200.15 218.90
Biological Oxygen Demand
(BOD's) over 300
parts per million/ton 217.90 217.90 319.24 412.58 461.44
Chemical Oxygen Demand
(COD's) over 600
parts per million/ton 108.95 108.95 159.62 206.29 230.72
2007 2008 e 2009 2010 f 2011 g
Residential:
Single Family/Unit a 271.44$ 344.88$ 1 344.88$ 1 351.12$ 1 333.60$
Multi-Family/Unit a 228.00 299.76 299.76 305.04 285.12
Commercial/Industrial:
Service Charge/Unit 248.28 457.20 457.20 486.60 507.00
Sanitary Sewer Usage Charge/100 CCF 1.81 1.88 1.88 1.92 2.02
Storm Sewer Usage Charge/100
sq. feet of impervious area - 0.12 0.12 0.14 -
Extra Strength Surcharges:
Suspended Solids over 300
parts per million/ton 218.90 218.90 218.90 218.90 222.62
Biological Oxygen Demand
(BOD's) over 300
parts per million/ton 461.44 529.90 529.56 551.52 596.72
Chemical Oxygen Demand
(COD's) over 600
parts per million/ton 230.72 264.85 264.78 275.76 298.36
Notes:
1 Years 2008-2010 saw an impervious rate charge that averaged $36 per year per customer. This was discontinued in 2011.a The above rates are based on actual rates and budgeted units.
b Ordinance 11553, effective August 1, 2003, changed all rates. It also changed the level of suspended solids and
chemical oxygen demand at which extra strength surcharges are incurred from 350 to 300 and 300 to 600
parts per million/ton, respectively.c Ordinance 11692, effective July 1, 2004, changed wastewater rates.
d Ordinance 12019, effective July 1, 2005, changed wastewater rates.
e Ordinance 12561, effective January 1, 2008, changed wastewater rates. Ordinance 12560, effective March 1, 2008, changed stormwater rates.
f Ordinance 12754, effective July 1, 2009, changed wastewater rates.g Ordinance 13021, effective July 1, 2010, changed wastewater rates.
Source: Finance Department
Fiscal Year
Fiscal Year
Sewer User Charges (Composite--Annual)
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
75
Single Multi-
Fiscal Family Family Non-Total
Year Residential Residential Residential Accounts
2002 353,166 44,581 25,664 423,411
2003 353,935 44,632 25,672 424,239
2004 356,069 44,969 25,806 426,844
2005 360,104 44,506 25,758 430,368
2006 362,043 44,700 25,700 432,443
2007 362,569 44,875 25,647 433,091
2008 391,181 54,862 32,336 478,379 a
2009 388,791 51,441 32,161 472,393 a
2010 387,670 50,867 31,939 470,476 a
2011 356,946 34,740 23,226 414,912
Source: Finance Department
a Due to the implementation of the impervious area charge in 2008,
approximately 46,000 additional stormwater only accounts are
billed each month. This charge was challenged and a court
decision was entered on 7/9/10. Based on that decision the
46,000 accounts will not be billed an impervious charge in FY '11.
Number of Customers by Type
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
76
Customer Amount %
Anheuser-Busch 4,935,239$ 2.30%
Washington University 1,268,801 0.59%
Mallinckrodt 1,048,204 0.49%
Cott Beverages 805,108 0.38%
City of St. Louis 787,548 0.37%
Zoological Gardens 710,365 0.33%
Sigma-Aldrich 595,897 0.28%
Boeing 593,991 0.28%
BJC Health Systems 481,937 0.22%
Sensient 474,099 0.22%
Subtotal (10 largest)11,701,189$ 5.45%
Balance from other customers 202,952,121$ 94.55%
Grand totals 214,653,310$ 100.00%
Customer Amount %
Anheuser-Busch 4,389,043$ 3.64%
Mallinckrodt, Inc 1,039,555 0.86%
DaimlerChrysler Group 956,673 0.79%
Washington University 686,701 0.57%
BJC Health Systems 542,731 0.45%
Boeing Company 504,575 0.42%
ASTARIS 490,781 0.41%
Coca-Cola Bottling Co.304,385 0.25%
Laporte Pigments 292,774 0.24%
Ford Motor Company 287,320 0.24%
Subtotal (10 largest)9,494,538$ 7.88%
Balance from other customers 111,006,278$ 92.12%
Grand totals 120,500,816$ 100.00%
Source: Finance Department
Fiscal Year 2002
User Charges
Ten Largest Customers
Current Year and Nine Years Ago
User Charges
Fiscal Year 2011
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
77
As a Share
Fiscal Subordinate of Personal
Year Senior Subordinate Direct Loans Capital Lease Amount Per Capita Income
2002 - - - - - - -
2003 - - - - - - -
2004 175,000,000 161,280,000 473,275 - 336,753,275 248 0.35
2005 175,000,000 166,952,500 771,099 - 342,723,599 253 0.35
2006 173,500,000 205,760,000 680,538 - 379,940,538 282 0.37
2007 231,995,000 213,652,500 337,730 - 445,985,230 330 0.42
2008 230,485,000 206,522,500 269,299 - 437,276,799 324 0.67
2009 258,965,000 235,932,500 215,790 4,130,000 499,243,290 373 0.81
2010 342,370,000 224,505,000 31,017,371 7,263,687 605,156,058 446 1.00
2011 340,590,000 212,655,000 67,059,152 6,095,981 626,400,133 462 1.04
Notes:
Calculation of "Per Capita" for 2011 is based on estimated population levels.
Calculation of "As a Share of Personal Income" for 2011 is based on estimated income levels.
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
78
Amount of Debt Percentage of Debt
Governmental Unit Debt Outstanding within District Boundary within District Boundary
City of St. Louis 42,685,000$ 42,685,000$ 100.0%
St. Louis County 26,085,000 25,876,320 99.2
Municipalities 98,278,406 98,233,406 100.0
City of St. Louis School District 238,180,000 238,180,000 100.0
St. Louis County School Districts 1,342,655,532 1,322,531,692 98.5
Fire Districts 90,320,545 85,973,420 95.2
1,838,204,483$ 1,813,479,838$ 98.7%
Sources:
City of St. Louis, Office of Comptroller
St. Louis County, Department of Revenue
Missouri Department of Education, School Finance
Polled Governments
Computation of Overlapping Debt
As of June 30, 2011
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
79
Less:
Operating
Non- Expenses Less: Net
Fiscal Operating operating Gross (excluding Agency Available
Year Revenues Revenues Revenues depreciation) Fees Revenues
2002 As Restated 128,439,927 7,948,275 136,388,202 100,451,107 - 35,937,095
2003 As Restated 128,243,045 5,657,225 133,900,270 102,570,323 - 31,329,947
2004 As Restated 156,739,527 1,745,978 158,485,505 108,000,500 - 50,485,005
2005 As Restated 187,759,272 4,356,643 192,115,915 117,930,992 - 74,184,923
2006 As Restated 205,554,460 6,135,347 211,689,807 131,909,717 220,139 79,559,951
2007 As Restated 200,963,085 13,501,751 214,464,836 138,089,529 777,387 75,597,920
2008 As Restated 208,981,377 13,281,919 222,263,296 142,725,186 916,483 78,621,627
2009 As Restated 209,972,662 10,283,104 220,255,766 138,971,881 1,248,647 80,035,238
2010 As Restated 204,697,929 5,358,354 210,056,283 145,598,505 1,012,477 63,445,301
2011 217,011,360 5,225,219 222,236,579 160,572,145 1,718,885 59,945,549
Pledged Revenue Coverage
Last Ten Fiscal Years
Fiscal Coverage
Year Principal Interest Total Ratio
2002 N/A N/A N/A N/A
2003 N/A N/A N/A N/A
2004 - 924,164 924,164 54.6
2005 6,800,000 14,799,402 21,599,402 3.4
2006 5,407,500 13,615,193 19,022,693 4.2
2007 7,817,500 15,735,042 23,552,542 3.2
2008 8,640,000 16,778,308 25,418,308 3.1
2009 12,110,000 16,255,245 28,365,245 2.8
2010 13,022,500 19,624,732 32,647,232 1.9
2011 14,576,800 20,444,136 35,020,936 1.7
Subordinate and Senior Debt Service
Fiscal Coverage
Year Principal Interest Total Ratio
2002 N/A N/A N/A N/A
2003 N/A N/A N/A N/A
2004 N/A N/A N/A N/A
2005 - 8,052,321 8,052,321 9.2
2006 1,500,000 8,165,734 9,665,734 8.2
2007 1,505,000 9,369,084 10,874,084 7.0
2008 1,510,000 11,067,634 12,577,634 6.3
2009 1,520,000 11,677,272 13,197,272 6.1
2010 1,595,000 13,846,399 15,441,399 4.1
2011 1,780,000 17,490,269 19,270,269 3.1
Senior Debt Service
Note: The methodology used to calculate the net available revenues and the coverage ratio was adjusted during fiscal year 2011 and all previous years
were restated for comparative purposes. The changes in methodology consisted of removing agency fees, previously combined with interest, from the
debt service section and more appropriately reflecting those fees as a reduction to net available revenues. Additionally, certain non-operating expenses
previously considered as reductions to net available revenues have been eliminated from the calculation.
This schedule complies with the procedures associated with the continuing disclosure requirements of the 2004 through 2011 revenue bonds
and, therefore, does not include all the revenues and expenses of the District. In order for the District to be in compliance with the debt
covenant, coverage ratios must be at least 1.25 for combined senior and subordinate bonds and 1.15 for senior bonds.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
80
Per
Personal Capita Total
Fiscal Income Personal Labor Number of
Year Populations (millions) Income City County State Force Households (1)
2002 1,363,245 51,465 37,752 9.0 5.4 5.8 740,371 551,388
2003 1,359,820 53,070 39,027 10.0 6.0 6.4 732,905 551,388
2004 1,358,428 54,886 40,404 9.6 5.9 6.3 728,014 551,388
2005 1,354,830 55,841 41,216 8.8 5.5 5.7 726,390 551,388
2006 1,347,691 57,660 42,784 7.5 5.1 5.0 723,627 551,388
2007 1,349,778 59,200 43,859 7.5 5.1 5.0 723,627 551,388
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
Notes:
(1) The number of households was taken from http://quickfacts.census.gov/qfd/states/29000.html. The 2011 figure
is based on the on the 2010 census. Information for other 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
Unemployment Rate
Saint Louis
Demographic and Economic Statistics
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
81
Percentage Percentage
Employer Employees (1)of Total Rank
Employees (1)of Total Rank
BJC HealthCare 24,044 4% 1 19,033 3% 1
Boeing, Integrated Defense Systems 15,000 2% 2 16,400 2% 2
Scott Air Force Base 13,249 2% 3 13,000 2% 3
Washington University in St. Louis 13,208 2% 4 10,255 1% 9
SSM Healthcare 11,194 2% 5 10,664 2% 7
Schnuck Markets, Inc.10,985 2% 6 12,393 2% 4
United States Postal Service 10,400 2% 7
Wal-Mart Stores Inc.10,300 2% 8 10,800 2% 6
St. John's Mercy Health Care 9,639 2% 9
AT&T 8,847 1% 10
Southwestern Bell 10,632 2% 8
Unity Health System 10,066 1% 10
McDonald's Restaurants of St. Louis 11,000 2% 5
126,866 20%124,243 18%
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 2011
St. Louis Business Journal's Book of Lists 2002
Fiscal Year 2002Fiscal Year 2011
Principal Employers (St. Louis Metropolitan Area)
Current Year and Nine Years Ago
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
82
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Administrative 140 155 111 122 118 125 131 133 131 124
Office/Clerical 84 108 81 76 88 86 92 94 89 84
Plant Operation & Laboratory 234 221 231 231 233 234 239 237 249 241
Engineering & Technical 110 115 117 114 119 122 133 144 151 147
Sewer Construction
& Maintenance 273 302 259 258 258 271 276 301 315 296
Total Employees 841 901 799 801 816 838 871 909 935 892
Source: Human Resources Department
Employment Level
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
83
Average Sewage
Fiscal Treatment in Millions
Year of Gallons per Day
2002 319.8
2003 302.8
2004 342.3
2005 348.7
2006 291.3
2007 313.4
2008 363.7
2009 394.7
2010 395.5
2011 370.6
Source: Operations Department
Average Flow
Last Ten Fiscal Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
84
2002 2003 2004 2005 2006
Miles of sewers 8,800 8,959 9,200 9,568 9,630
Number of treatment plants 9 8 8 8 8
Treatment capacity (MGD) a 413 413 413 413 413
Annual engineering maximum plant capacity
(millions of gallons)150,745 150,745 150,745 150,745 150,745
Amount treated annually (millions of gallons) 116,727 116,800 124,940 127,276 106,339
Unused capacity (millions of gallons)34,018 33,945 25,805 23,469 44,406
Percentage of capacity utilized 77% 77% 83% 84% 71%
2007 2008 2009 2010 2011
Miles of sewers 9,764 9,723 9,812 9,900 9,843
Number of treatment plants 8 7 7 7 7
Treatment capacity (MGD) a 426 428 423 423 528
Annual engineering maximum plant capacity
(millions of gallons)155,490 154,395 154,395 154,395 192,629
Amount treated annually (millions of gallons) 114,391 132,751 144,066 144,358 135,298
Unused capacity (millions of gallons)41,099 21,644 10,329 10,037 57,331
Percentage of capacity utilized 74% 86% 93% 93% 70%
Sources: Operations Department and Engineering Department
Note:a Million gallons per day.
Fiscal Year
Fiscal Year
Operating and Capital Indicators
Last Ten Fiscal Years