HomeMy Public PortalAboutFiscal Year 2015 Popular Annual Financial ReportPo Pular annual Financial re P ort
Fiscal Year Ending June 30, 2015
METROPOLITAN ST. LOUIS SEWER DISTRICT
ST. LOUIS, MISSOURI One year ago – Cortex In n o v a t i o n C ommunity Rain Garden
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MSD MISSION
“To protect the public’s health, safety,
and water environment by responsibly providing
wastewater and stormwater management.”
MSD provided grant funding to the Cortex Innovation Community for construction
of several rainscaping Best Management Practices (BMPs) as a control measure for reducing storm flow to the combined sewer system, thereby reducing combined sewer overflows to the Mississippi River. The photos on the cover show how, in one year’s time, the rain garden plantings have matured and blossomed, adding landscaping with depth and variety to the emerging entrepreneurial zone in the heart of St. Louis.
ON THE COVER: 2015
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TABLE OF CONTENTS
Directors’ Letter ............................................................................................................3
Rate Commission Process & Rate Recommendations ............4-5
What We Do .....................................................................................................................6-7
MSD at Work in the Community ...............................................................8-9
Year in Review .................................................................................................................10
Looking Ahead ................................................................................................................11
Condensed Statement of Net Position ...............................................12
MSD Assets and Long-Term Obligations ...........................................13
Income Statement .......................................................................................................14
Revenues and Expenses ..........................................................................................15
Cash Flow Statement .............................................................................................16
Performance Against Budget and Credit Rating ....................17
POPULAR ANNUAL FINANCIAL REPORT FY 15 | 1
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T h e G o v e r n m e n t F i n a n c i a l O f f i c e r s A s s o c i a t i o n o f t h e U n i t e d S t a t e s a n d C a n a d a ( G F O A )
h a s g i v e n a n A w a r d f o r O u t s t a n d i n g A c h i e v e m e n t i n P o p u l a r A n n u a l F i n a n c i a l R e p o r t i n g t o t h e M e t r o p o l i t a n S t . L o u i s S e w e r D i s t r i c t f o r i t s P o p u l a r A n n u a l F i n a n c i a l R e p o r t f o r t h e f i s c a l y e a r t h a t e n d e d J u n e 3 0 , 2 0 1 4 . T h e A w a r d f o r O u t s t a n d i n g A c h i e v e m e n t i n P o p u l a r A n n u a l F i n a n c i a l R e p o r t i n g i s a p r e s t i g i o u s n a t i o n a l a w a r d r e c o g n i z i n g c o n f o r m a n c e w i t h t h e h i g h e s t s t a n d a r d s f o r p r e p a r a t i o n o f s t a t e a n d l o c a l g o v e r n m e n t p o p u l a r r e p o r t s .
I n o r d e r t o r e c e i v e a n A w a r d f o r O u t s t a n d i n g A c h i e v e m e n t i n P o p u l a r A n n u a l F i n a n c i a l R e p o r t i n g ,
a g o v e r n m e n t u n i t m u s t p u b l i s h a P o p u l a r A n n u a l F i n a n c i a l R e p o r t , t h e c o n t e n t s o f w h i c h c o n f o r m
t o p r o g r a m s t a n d a r d s o f c r e a t i v i t y , p r e s e n t a t i o n , u n d e r s t a n d a b i l i t y a n d r e a d e r a p p e a l .
W e b e l i e v e o u r c u r r e n t r e p o r t c o n t i n u e s t o c o n f o r m t o t h e P o p u l a r A n n u a l F i n a n c i a l R e p o r t i n g r e q u i r e m e n t s , a n d w e a r e s u b m i t t i n g i t t o t h e G F O A .
2 | M E T R O P O L I T A N S T . L O U I S S E W E R D I S T R I C T
m s d - a n n u a l - 2 0 1 5 . i n d d 2 1 2 / 1 1 / 1 5 1 2 : 1 0 P M
Welcome. We appreciate your interest in the St. Louis Metropolitan Sewer District (MSD) and are pleased to share with you the Fiscal Year 2015 (FY 15) Popular Annual Financial Report.
The work of the District includes both meeting the day-to-day needs of residents through basic
sewer services, while also planning for and implementing large-scale improvements that benefit
the region in the long term. In FY 15 alone, MSD appropriated funds for 168 new or continuing
wastewater and stormwater design and construction projects.
While our work is multifaceted, it is also singular in focus: to protect the public’s health, safety, and water environment through responsible wastewater and stormwater management.
This annual report is designed to offer an overview of MSD’s work. Using non-technical language, it
provides a snapshot of our activities from our most recent fiscal year, July 1, 2014 to June 30, 2015. As
you read it, you will learn how we are carefully investing the funds we receive to improve and manage
our region’s wastewater and stormwater systems.
This report also contains financial information for this past fiscal year that summarizes the much more detailed information found in our Comprehensive Annual Financial Report (CAFR). While the summary information you will find here uses principles and guidelines consistent with Generally Accepted Accounting Principles (GAAP), it has been simplified for general audiences and is not a GAAP-compliant publication.
A more in-depth financial review of our operations can be found in the Comprehensive Annual
Financial Report and audited financial statements, available online at www.stlmsd.com/our-
organization/fiscal-investor-relations/annual-reports. You may also request a printed copy of this
information by contacting MSD at 314-768-6260.
We hope you find the information contained in the following pages useful. We welcome your comments and suggestions on how we might improve future reports to better serve your interests and needs.
Respectfully submitted,
Brian Hoelscher, P.E. Marion Gee
Executive Director & CEO Director of Finance
DIRECTORS’ LETTER
POPULAR ANNUAL FINANCIAL REPORT FY 15 | 3
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The Metropolitan St. Louis Sewer District (MSD)
is both a wastewater and a stormwater utility, and funds must be accounted for separately. In February 2015, MSD submitted a rate proposal to its Rate Commission for both wastewater rates and stormwater revenues for fiscal years 2017 through 2020 (July 1, 2016 to June 30, 2020). These proposed changes would apply to all MSD customers.
The Rate Commission: Who, What & How
The Rate Commission, established in 2000 through
voter approved amendments to the MSD Charter, provides public input into how MSD sets its rates. Composed of 15 member organizations representing a broad cross-section of MSD customers and the community we serve, the commission is required by charter to review all rate proposals, seek public feedback, and submit a recommendation to MSD’s Board of Trustees before any rate changes occur.
Why are Changes Needed? Wastewater Rates and Stormwater Revenues
The wastewater rate proposal seeks to fund a four-
year, $1.5 billion capital improvement program to meet regulatory and system improvement needs. With these essential improvements, MSD would continue to eliminate wastewater sewer overflows from sewer pipes; reduce combined sewer overflows (where wastewater and stormwater share a pipe); prevent building backups; repair and rehabilitate an aging system; and increase wastewater treatment plant capacity.
RATE COMMISSION PROCESS & RATE RECOMMENDATIONS
4 | METROPOLITAN ST. LOUIS SEWER DISTRICT
Miles of Storage & Conveyance Tunnels Designed
Wastewater Planning, Design, & ConstructionProjects
Sanitary Sewer Overflows Removed
Miles of Sewer Inspected with CCTV
Wastewater Construction Projects
Manhole Rehabilitations
Miles of Sewer Rehabilitation
Miles of Sewer Cleaned
24
598
39
1,600
226
6,000
360
3,814
Proposed Improvements
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The stormwater revenue proposal resolves years
of unequal service across the MSD service area and seeks to comply with regulatory demands and infrastructure needs in the future. Within this program, MSD would ensure compliance with all local, state, and federal stormwater regulations; address impacts of stormwater runoff on water quality of receiving streams; and fund complete operations and maintenance of public storm sewer systems.
Rate Commission Process
MSD submitted a rate proposal to its Rate
Commission for both wastewater and stormwater on February 26, 2015. The Rate Commission process includes reviewing the staff proposal, holding multiple public hearings throughout the MSD service area where customers had an opportunity to provide feedback on the rate proposal, and submitting a recommendation to the MSD Board of Trustees.
MSD’s Proposal Included: Proposed Wastewater Rates
MSD proposed the use of a combination of issuing
additional revenue bonds and increasing wastewater user charges to fund this four-year capital program. The proposal also provides a 100 percent user charge (PayAsYouGo) scenario as an alternative, resulting in sharper rate increases if additional bonds are not approved.
Proposed Stormwater Funding
MSD proposed the use of a District-wide tax
structure to replace the flat rate charge and the multi-layered taxes now assessed on its customers’ real estate and personal property, providing revenues to fund a 4-year operations and maintenance budget and a 6-year capital program. The Rate Commission considered MSD’s proposal and presented a Recommendation to the MSD Board of Trustees on August 13, 2015. The MSD Board accepted the Rate Commission’s recommendations on October 8, 2015.
RATE COMMISSION PROCESS & RATE RECOMMENDATIONS
Wastewater project: Cured-In-Place-Pipe (CIPP) trenchless technology. Stormwater project: Magnolia & Waverton Creek Bank Stabilization.
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WHAT WE DO
MSD’s Dual Function
MSD owns, operates, and maintains the St. Louis region’s public sewer systems, which consist of wastewater, stormwater, and combined collection sewers, pumping stations, and wastewater treatment facilities. Wastewater sewers accommodate household and commercial waste. Storm sewers carry stormwater and surface water runoff. Combined sewers carry both wastewater and stormwater.
Additionally, MSD is responsible for monitoring of industrial wastewater quality, rehabilitation of sewer
lines, plan review and approvals, and issuance of connection permits.
MSD’s service area encompasses approximately 525 square miles, including all 62 square miles of the City of St. Louis and 463 square miles – 90 percent – of St. Louis County. The current population served by MSD is approximately 1.3 million, representing more than 424,000 accounts.
Wastewater – collect “used” water disposed of in sinks, toilets, and floor drains by households and businesses, and then treat it to high standards before returning it to the region’s waterways.
Stormwater – operate and maintain the public storm sewer system and helps to coordinate regional efforts to address pollution carried in or caused by stormwater runoff.
6 | METROPOLITAN ST. LOUIS SEWER DISTRICT
Coldwater
Grand Glaize
Fenton
Missouri River
Lemay
Bissell Point
Lower Meramec
I-270
I-270
I-270
I-44
I-44
I-64
I-64
I-255
I-55
I-170
I-70
I-70
MSD Wastewater Treatment Plants Service Area
MSD has 6,550 miles of wastewater sewers, which is the equivalent of flying from St. Louis to Juneau, Alaska, and back.
Fun Fact
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MSD has several public outreach initiatives to inform and educate residents about wastewater and
stormwater issues, as well as MSD programs and services, some of which are:
St. Louis Earth Day – During the 2015 St. Louis Earth Day Festival in Forest Park, MSD staff helped
festival-goers transform a Metro bus into a beautiful work of art with a message, in addition to passing out
environment-friendly bags with information on protecting our waterways.
St. Louis Auto Show – MSD employees at the St. Louis Auto Show in January provided attendees with
information on Project Clear and stormwater best practices.
Stream and Neighborhood Cleanups – In conjunction with local community and environmental groups,
MSD sponsors neighborhood, river and stream cleanup programs and events, including the River des Peres
Trash Bash, Confluence Trash Bash, and Operation Clean Stream, all held annually.
Social Media/Online Presence – At the beginning of FY 15, MSD launched a revamped website, attracting
227,000+ new users, compiling more than 1.7 million page views by new and returning visitors by the end of
FY 15. MSD continues to expand its online presence by adding Instagram and Google+ accounts in FY 15,
while increasing use of existing social media channels. By the end of the fiscal year, MSD had over 1,700
Twitter followers and nearly 300 Facebook likes. The YouTube and Flickr audiences also continue to grow.
Public Education and Community Outreach
POPULAR ANNUAL FINANCIAL REPORT FY 15 | 7
What is Project Clear?
MSD’s initiative to improve water quality and alleviate many wastewater concerns in the St. Louis region. It will invest billions of dollars over a generation in planning, designing, and building community rainscaping, system improvements, and an ambitious program of maintenance and repair.
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MSD AT WORK IN THE COMMUNITY
Rainscaping Small Grants Program: Clyde C. Miller Career Academy. Students assisted with the installation of this rain garden to reduce stormwater runoff.
8 | METROPOLITAN ST. LOUIS SEWER DISTRICT
MSD Project Clear Rainscaping
Small Grants Program encourages the public to use simple rainscaping techniques on its properties to reduce the impact of stormwater on the sewer system. Rainscaping is any combination of plantings, water features, catch basins, permeable pavement, and other activities that manage stormwater as close as possible to where it falls, rather than moving it someplace else. Layered systems below ground level store and filter stormwater, allowing the soil
to slowly absorb it over time. Above ground level, native plants, basins, and water features create public green spaces that also help store water. Used effectively, rainscaping can reclaim stormwater naturally, reduce sewer overflows, and minimize basement backups.
In FY 15, MSD awarded 51 grants
up to $3,000 each, to property
landowners in the Bissell Watershed
area, as part of MSD Project Clear’s
$100 million investment
in rainscaping projects.
Rainscaping Small Grants Program
* MSD Comprehensive Annual Financial Report, fiscal year ending June 30, 2015.
average number
of gallons of
wastewater
treated every day
by MSD in FY 15*
327 million+
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As part of the rainscaping program of MSD
Project Clear, MSD is seeking to build partnerships with municipalities, local government agencies, schools, non-profit organizations, community development organizations, business owners, and private developers, to identify joint opportunities to incorporate rainscaping into ongoing programs and future redevelopment projects with cost-sharing opportunities. The most recent application period ended in October 2015. Applicants will be notified by March 1, 2016, with project construction beginning prior to September 1, 2016.
The Cortex Innovation Community photo on the
front cover is an example of MSD’s Early Action
Grant Program.
POPULAR ANNUAL FINANCIAL REPORT FY 15 | 9
Some of the Large Capital Projects Initiated or Continued in FY 15 Totalling Nearly $44M:
Early Action Grant Program
Bissell & Lemay WWTP Incinerator Scrubber Replacement
Bissell - Coldwater - Missouri - Meramec Public I/I Reduction (2015) Contract G
FF-11 Fee Fee Creek Sanitary Relief
FF-15 McKelvey/R.R. To Adie Sanitary Relief Phase III
UR-10 Mendell And Wolter Sanitary Relief
Early Action Project: North Sarah Phase II.
Early Action Project: Urban Harvest STL Food Roof Farm.
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Capital Improvement
MSD appropriated funds for 168 new or continuing
wastewater and stormwater design and construction projects in FY 15, totaling $253.6 million.These numbers include $1.2 million appropriated on four emergency repair projects.
Major Capital Projects Completed in FY 15:• Missouri River WWTP Secondary Treatment Expansion and Disinfection Facilities
• Missouri River WWTP Secondary Treatment
Expansion (Digester Rehabilitation)
• Lemay Pump Station No. 1 Redundant Force Main
Diversity
MSD has had a well-recognized diversity program
in place for several years, marked by its success in helping build minority- and women-owned businesses in our St. Louis community. Minority/Women Business Enterprise (MWBE) firms have had extensive participation in MSD’s Capital Improvement and Replacement Program (CIRP). In FY 15, MWBE participation in construction projects was 21.94 percent; MWBE participation in professional services projects was 45.66 percent; and MWBE participation in other capital vendor services was 45.51 percent. As evidenced by these numbers, MWBE participation in the CIRP has been an important part of our diversity efforts. In addition, MWBE participation in general purchasing transactions was 18.67 percent. These expenditures resulted in a cumulative MWBE utilization percentage of 32.95.
Stream and Neighborhood Cleanups
MSD continued to partner with community groups
and volunteers to make stream and neighborhood cleanups successful events. In FY 15, partners and volunteers conducted 79 events, resulting in the collection of approximately 85 tons of trash, 5 tons of recycled metal, and more than 1,600 tires.
Peak Performance Awards
In 2015, MSD was selected to receive seven Peak
Performance Awards, presented by the National Association of Clean Water Agencies (NACWA). The award recognizes public wastewater treatment facilities for their outstanding compliance records with their National Pollution Discharge Elimination System (NPDES) permit, granted by the Missouri Department of Natural Resource (MDNR), in the 2014 calendar year.The Lower Meramec and Fenton wastewater treatment plants received Platinum Awards for maintaining a perfect compliance record for seven consecutive years. Gold Awards went to Missouri River and Coldwater treatment plants for achieving 100 percent compliance with their NPDES permit for an entire calendar year. The District’s Lemay, Bissell, and Grand Glaize treatment plants were presented Silver Awards, which recognize facilities that have received no more than five NPDES permit violations per calendar year.
Excellence in Management Award
MSD was selected to receive a Gold Excellence in
Management Recognition Award from NACWA. The award recognizes agencies that have implemented and sustained, for a continuous three-year period, successful programs that address the range of management challenges faced by public clean water utilities in today’s competitive environment. NACWA is committed to clean water and a healthy environment and strives to help ensure that member agencies have the tools they need to meet these objectives. MSD fulfills this commitment to clean water through its significant efforts over the past several years to maximize efficiency during an era of rising costs and ever expanding water quality challenges.
YEAR IN REVIEW
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LOOKING AHEAD
MSD Project Clear
MSD Project Clear will continue its work across the St. Louis area to get the rain out, repair and maintain, and build system-wide improvements. Future projects range in scale from massive storage tunnels to retain stormwater during heavy rain, to the disconnection of residential downspouts from wastewater sewer lines, and rainscaping improvements to manage stormwater.
In FY 16, MSD has plans for 162 new, ongoing,
or continued wastewater projects totaling $289.3
million. These projects are funded primarily from
the Sanitary Replacement Fund and represent $24.7
million in continued projects and $264.6 million in
new and ongoing projects.
Stormwater
MSD, St. Louis County, and 58 municipalities
within St. Louis County are regulated under a
Missouri Department of Natural Resources Phase
II Stormwater permit. Under the provisions of this
permit, MSD is the St. Louis Coordinating Authority
for the small municipal separate storm sewer system.
In addition to the regulatory permit function, MSD plans 37 stormwater projects in FY 16 within specific taxing districts, including continued projects from FY 15, totaling $8.7 million.
Storm Drain Art Education ProgramMSD’s Storm Sewer Drain Inlet Art Education Program was developed to provide a visible reminder of the consequences of improper waste disposal in storm drains. The program focuses on reducing pollution in storm drains, which are direct conduits that can carry improper waste such as motor oil, pesticides, street litter, yard debris, pet waste, etc. into our rivers and streams.
The program will be implemented in FY 16 with
the help of partners and stormwater co-permitees,
including St. Louis County, Great Rivers Greenway,
St. Louis ArtWorks, Boys & Girls Clubs of Greater St.
Louis, and many municipalities throughout the MSD
service area.
Capacity, Management, Operations & Maintenance Program (CMOM)MSD focuses on a comprehensive infrastructure management program, designed to maintain and improve the sewer system. This program will continue in 2016 and includes documenting and tracking:• Sewer cleaning goals - MSD cleans at least 10 percent of wastewater sewers in the system each year, helping to prevent building backups.
• Closed-circuit TV cameras (CCTV) to assess sewer
conditions - MSD inspects over 300 miles of sewers
and force mains to proactively identify needed repairs.
• Manhole inspections to evaluate conditions - 15,000 manholes are inspected each year.
• Rehab and repair sewers and manholes - About
1,500 manholes are rehabbed per year.
Some of the Large Capital Projects Initiated or Continuing in FY 16 Totaling More Than $87M:
• Coldwater Sanitary Relief Section B, C, & D –
Wet Weather Storage Facility Tank C
• Deer Creek Sanitary Tunnel
• Upper Maline Trunk Sanitary Relief Phase IV
Section A
• Caulks Creek Force Main (River Valley Rd To L-52)
• DC-02 & DC-03 Sanitary Relief (Brentwood Blvd To
Conway Rd) Phase I
• Maline Creek CSO BP 051 & 052 Local Storage Facility (Chain Of Rocks Dr. To Church Dr.)
ECIS New Billing FormatIn September, MSD customers began receiving a full-page, comprehensive billing statement each month. The new bill format offers customers greater account detail – including previous balances and current charges – along with billing explanations and descriptions. The changes were made after customer feedback revealed customers wanted clearer and more detailed information, and better readability.
POPULAR ANNUAL FINANCIAL REPORT FY 15 | 11
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FY 15 FY 14ASSETS:
Current, restricted, and other assets $ 628,247 $ 704,266Capital assets (net of accumulated depreciation) 2,891,569 2,763,413Total Assets 3,519,816 3,467,679
DEFERRED OUTFLOW OF RESOURCES:Bonds and Notes Payable-Deferred Loss on Refunding 9,599 10,108
Pension-related Outflows 19,210 –
Total Deferred Outflow of Resources 28,809 10,108
LIABILITIES:
Current liabilities 109,153 95,196
Non-current liabilities 1,158,445 1,114,639 Total Liabilities 1,267,598 1,209,835
DEFERRED INFLOW OF RESOURCES:
Pension-related Inflows 2,910 –Total Deferred Inflow of Resources 2,910 –
NET POSITION:
Net investment in capital assets 1,829,395 1,845,394
Restricted 151,292 142,764
Unrestricted 297,430 279,794 Total Net Position $ 2,278,117 $ 2,267,952
WHAT IT TELLS YOUA Statement of Net Position, also known as a balance sheet, is a financial statement that summarizes what MSD owns and owes at a given point in time. It also shows our net worth at that specific point in time.
OUR FY 15 BALANCE SHEET SHOWS THAT:• MSD’s assets and deferred outflows exceed liabilities and deferred inflows by $2.3 billion.• Overwhelmingly, MSD’s assets are in the form of capital assets. The $2.9 billion in net capital assets is split into the five categories depicted in the pie chart (page 13).• Of the $1.3 billion in liabilities, $1.1 billion are in the form of bonds and notes payable. A historic depiction of MSD’s debt level is below.
HISTORIC DEBT LEVELFISCAL YEAR ................................AMOUNT
2006 ........................................................................................$ 381,538,522
2007 ..........................................................................................$ 450,175,158
2008 ........................................................................................$ 441,251,234
2009 ........................................................................................$ 501,884,128
2010 .........................................................................................$ 606,613,968
FISCAL YEAR ................................AMOUNT
2011 .........................................................................................$ 585,463,534
2012 .........................................................................................$ 664,201,567
2013 .........................................................................................$ 933,319,059
2014 ....................................................................................$ 1,123,095,665
2015 ....................................................................................$ 1,135,101,426
Definitions:Current, restricted, and other assets: all assets other than fixed assets, that are owned or due to the District.Capital assets (net of accumulated depreciation): the total value of all fixed assets, including all sanitary infrastructure, general plant and equipment, and land.Deferred Outflows: the use of resources that will be applied to future periods.Current liabilities: money owed by the District and due within 12 months.
Non-current liabilities: money owed by the District that is due more than 12 months in the future.Net investment in capital assets: the value or net worth of all fixed assets after related liabilities are deducted.Deferred Inflows: the purchase of resources that will be applied to future periods.Restricted: the value or net worth of all assets designated for specific purposes after related liabilities are deducted.Unrestricted: the value or net worth of all remaining assets after remaining liabilities are deducted.
KEY FINANCIAL INFORMATION
CONDENSED STATEMENT OF NET POSITION (in thousands)
12 | METROPOLITAN ST. LOUIS SEWER DISTRICT
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KEY Other (see detail) Construction In Progress Treatment, Disposal Plant and Equipment Collection and Pumping Plant
Detail Land General Plant and Equipment
MILLIONSWHAT WE OWN: MSD ASSETS
WHAT WE OWE: MSD LONG-TERM OBLIGATIONS
CONDENSED STATEMENT OF CAPITAL ASSETS LESS NET OF DEPRECIATION (in millions)
BONDS AND NOTES PAYABLE
POPULAR ANNUAL FINANCIAL REPORT FY 15 | 13
NOTE: Revenue Bonds and Direct Loan balances only
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FY 15 FY 14 FY 13 FY 12 FY 11 OPERATING REVENUES:Sewer service charges $ 284,366 $ 250,133 $ 238,635 $ 227,677 $ 223,276 Provision for doubtful sewer service charge accounts (2,096) 7,210 (2,655) (6,911) (6,249) Provision for uncollected stormwater charge accounts — — — — (2,374) Licenses, permits, and other fees 6,657 6,563 2,731 2,684 2,976 Other 1,460 1,867 3,235 2,550 1,815 Total Operating Revenues 290,387 265,773 241,946 226,000 219,444
NON-OPERATING REVENUES:Property taxes levied by the district 24,764 27,450 26,016 24,604 27,126 Investment income 3,001 2,967 1,057 2,407 3,847 Rent and other income 36 302 293 295 443 Total Non-Operating Revenues 27,801 30,719 27,366 27,306 31,416 Total Revenues 318,188 296,492 269,312 253,306 250,860
OPERATING EXPENSES:Pumping and treatment 60,766 54,126 54,526 49,005 50,532 Collection system maintenance 40,160 39,988 37,877 36,695 33,152 Engineering 10,954 12,184 12,020 8,544 12,486 General and administrative 48,551 45,661 41,485 33,180 36,078 Water backup claims 3,862 2,713 3,503 2,050 8,912 Depreciation 78,641 74,087 70,030 66,742 66,854 Asset management 13,586 12,539 10,717 20,092 36,492 Total Operating Expenses 256,520 241,298 230,158 216,308 244,503
NON-OPERATING EXPENSES:Net (gain) loss on disposal and sale of capital assets 1,421 5,248 796 3,163 3,486 Non-recurring projects and studies 12,317 3,493 4,676 6,403 10,801 Legal claims — — — 5 4,829 Interest expense 27,139 25,661 21,062 16,365 7,971 Total Non-Operating Expenses 40,877 34,402 26,534 25,936 27,087 Total Expenses 297,397 275,700 256,692 242,244 271,590
INCOME BEFORE CAPITAL GRANTS AND CONTRIBUTION 20,791 20,792 12,620 11,062 (20,730)
Capital grants and contributions 12,997 7,102 17,535 9,659 10,099
CHANGE IN NET POSITION 33,788 27,894 30,155 20,721 (10,631)
Net position - beginning of year 2,267,952 2,240,058 2,209,903 2,189,182 2,207,650
Effect of Adoption of GASB68 (23,623) — — — —
NET POSITION – END OF YEAR $ 2,278,117 $ 2,267,952 $ 2,240,058 $ 2,209,903 $ 2,197,019
INCOME STATEMENT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION (in thousands)
Definitions:Operating revenues: all income received from the District’s daily normal business.Operating expenses: all expenses related to the District’s daily normal business.Non-operating revenues: all income not related to the District’s daily normal business.Non-operating expenses: all expenses not related to the District’s daily normal business.
WHAT IT TELLS YOUAn income statement tells you where MSD gets its funds and how they are spent. It also shows how much money MSD made or lost over a specific period of time.
OUR FY 15 INCOME STATEMENT SHOWS THAT:• Sewer service charge revenue increased as a result of the scheduled rate increase that occurred in FY 15. • Operating expenses increased due to higher pumping and treatment costs and water backup claims related to excess rain. In addition, costs increased due to upgrading the billing and collection system.• Non-recurring projects and studies expense increased due to green infrastructure projects.
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REVENUES
WHERE THE MONEY COMES FROM (in thousands)
EXPENSES
WHERE THE MONEY GOES (in thousands)
KEY Other (see detail) Sewer Service Charges, Net
Detail Investment Income Other Operating Revenues Licenses, Permits, and Other Fees Property Taxes Levied by the District Rent and Other Income
KEY Other (see detail) Employment Costs Utilities Materials and Supplies Contracted Services Depreciation
Detail Net Loss on Sale of Assets Chemical Supplies Insurance Other Operating Expenses Non-Recurring Projects and Studies
POPULAR ANNUAL FINANCIAL REPORT FY 15 | 15
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FY 15 FY 14
Cash flows from operating activities $ 116,430 $ 81,864
Cash flows from non-capital financing activities 25,824 27,468
Cash flows from capital activities (225,778) (25,597)
Cash flows from investing activities 53,980 (86,487)Net increase (decrease) in cash and cash equivalents (29,544) (2,752)
Cash and cash equivalents at beginning of year 179,003 181,755
Cash and Cash Equivalents at End of Year $ 149,459 $ 179,003
Definitions:Cash flows from operating activities: all cash received or spent related to MSD’s daily normal business activities.Cash flows from non-capital financing activities: all cash received related to taxes.Cash flows from capital and related financing activities: cash received or spent related to construction of MSD’s infrastructure.Cash flows from investing activities: cash received or spent related to investing MSD’s cash reserves.
WHAT IT TELLS YOUA cash flow statement summarizes both the cash and the net cash coming in and going out of MSD during a given period.
OUR FY 15 CASH FLOW STATEMENT SHOWS THAT:• Cash flows from operating activities increased due to increased receipts from customers. • Cash flows from non-capital financing activities decreased due to less tax revenue collected. • Cash flows from capital and related financing activities decreased as a result of fewer bond proceeds and premiums received during FY 15.• Cash flows from investing activities increased due to an increase in the volume of maturities of investments.
CASH FLOW STATEMENT
OPERATING ACTIVITIES COMPARISON
CONDENSED STATEMENT OF CASH FLOWS (in thousands)
KEY FY 15 FY 14 Thousands16 | METROPOLITAN ST. LOUIS SEWER DISTRICT
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PERFORMANCE AGAINST BUDGET
CREDIT RATING
WHAT IT TELLS YOUA credit rating provides an assessment of an organization’s credit worthiness, based on its history of borrowing and repayment of funds, as well as its assets and liabilities. A poor credit rating makes it more difficult to find financing and often results in higher interest rates.
As the chart below illustrates, MSD has premium credit. We have demonstrated to creditors and credit rating agencies our ability to manage large annual capital plans. Our solid financial management, including close monitoring of our financial performance, strong debt coverage, and liquidity also contribute to these ratings, which have remained constant the past two years.
FY 15 FY 14 FY 13Moody’s Aa1 Aa1 Aa1Standard & Poors (S&P) AAA AAA AAA
Fitch AA+ AA+ AA+
MOODYS S&P FITCH
Aaa AAA AAA
Aa1 AA+AA+
Aa2 AA AA
Aa3 AA-AA-
A1 A+A+
A2 A A
A3 A-A-
Baa1 BBB+BBB+
Baa2 BBB BBB
Baa3 BBB-BBB-
Ba1 BB+BB+
Ba2 BB BB
Ba3 BB-BB-
B1 B+B+
B2 B B
B3 B-B-
Caa1 CCC+CCC+
Caa2 CCC CCC
Caa3 CCC-CCC-
Ca CC CC
C C
C RD DDD
/SD DD
/D D
Credit Rating Scale
POPULAR ANNUAL FINANCIAL REPORT FY 15 | 17
WHAT IT TELLS YOUA performance against budget statement shows the link between the funds used to serve the public and the outcomes of those services. In our case, it shows that MSD has been good stewards of the funds allocated to us.
Budget Expenses Unspent Budget
Capital Improvement and Replacement Program (CIRP)
$ 284.2 M $ 246.0 M $ 38.2 M Approximately $26 million in projects were delayed, and will be
funded in the FY 16 Budget. The rest of the savings came from
favorable bids or canceled projects.
Operating 204.0 M 198.3 M 5.7 M Approximately $2.5 million of savings came from Personnel Services due in large part to vacancies. Stormwater Operating Expenses finished $1.8 million below budget in the Operations Department, and use of Contractual Services fell $1.6 million below budget. Net other Operating Expenses were over budget approximately $0.2 million.
Debt Service 66.8 M 61.9 M 4.9 M The delays and savings in the CIRP program allowed the
District to push back new debt issuances by a year. The decision
to not issue new debt in FY 15 reduced Debt Service expenses.
Total $ 555.0 M $ 506.2 M $ 48.8 M
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METROPOLITAN ST. LOUIS SEWER DISTRICT
ST. LOUIS, MISSOURI
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