HomeMy Public PortalAboutFiscal Year 2020 Annual Comprehensive Financial Report (ACFR)COMPREHENSIVE ANNUAL
THE METROPOLITAN ST. LOUIS SEWER DISTRICT • ST. LOUIS, MISSOURI
FINANCIAL REPORT
FISCAL YEARS ENDED JUNE 30, 2020 AND 2019
THE METROPOLITAN ST. LOUIS
SEWER DISTRICT
ST. LOUIS, MISSOURI
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEARS ENDED JUNE 30, 2020 AND 2019
Report Prepared And Submitted By The
Department of Finance
Marion M. Gee
Director Of Finance
Contents
Page
Part I – Introductory Section:
Letter of Transmittal .................................................................................................................... i
Organization Chart .................................................................................................................... xii
Certificate Of Achievement For Excellence In Financial Reporting ...................................... xiii
Part II – Financial Section:
Independent Auditors’ Report ..................................................................................................... 1
Management’s Discussion And Analysis .................................................................................... 3
Basic Financial Statements
Statements Of Net Position ................................................................................................. 16
Statements Of Revenues, Expenses, And Changes In Net Position ................................. 18
Statements Of Cash Flows .................................................................................................. 19
Notes To Financial Statements ........................................................................................... 21
Required Supplementary Information
Schedule Of Changes In Net Pension Liability And Related Ratios ................................ 92
Schedule Of Employer Contributions – Employees’ Pension Plan ................................... 93
Schedule Of Changes in Total OPEB Liability .................................................................. 94
Part III – Statistical Section:
Net Position By Component ....................................................................................................... 95
Changes In Net Position ............................................................................................................ 96
Operating Revenues By Source ................................................................................................. 97
Operating Expenses ................................................................................................................... 98
Non-Operating Revenues And Expenses .................................................................................. 99
User Charge Rates ................................................................................................................... 100
User Charge Revenues ............................................................................................................. 101
Sewer User Charges (Composite-Annual) .............................................................................. 102
Number Of Customers By Type .............................................................................................. 103
Ten Largest Customers ............................................................................................................ 104
Ratios of Outstanding Debt By Type ...................................................................................... 105
Computation Of Overlapping Debt ......................................................................................... 106
Pledged Revenue Coverage ...................................................................................................... 107
Demographic And Economic Statistics ................................................................................... 108
Principal Employers (St. Louis Metropolitan Area)............................................................... 109
Employment Level .................................................................................................................... 110
Average Flow ............................................................................................................................ 111
Operating And Capital Indicators ........................................................................................... 112
Introductory Section
Vision Statement
Quality Service Always
Mission Statement
To protect the public’s health, safety, and water
environment by responsibly providing wastewater
and stormwater management
Values
Integrity
Teamwork
Excellence and Innovation
The District Employees
Customer Satisfaction
Mission, Vision, Value statements are important elements of a
strategic business plan. The Mission statement keeps the
District focused on its essential activity, the Vision statement
points to its ideal purpose, and the Value statement conveys the
principles that must shape our actions.
i
October 13, 2020
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, 2020 is
submitted herewith. The District’s Finance Department prepared this report. The
District is responsible for the accuracy of the data and the completeness and fairness of
the presentation of the financial statements and other information presented herein. We
believe the presentation is accurate in all material respects and includes all disclosures
necessary to enable the reader to gain a reasonable understanding of the District’s
financial activities. In the CAFR, the District’s financial activities are measured on a
single enterprise fund basis where all funds of the District and its sub-districts are
consolidated.
The District’s CAFR includes an Introductory Section, a Financial Section, and a
Statistical Section. The Introductory Section includes this transmittal letter, an
organization chart as of June 30, 2020 which lists the District’s Board of Trustees, Rate
Commission Chair, members of the Civil Service Commission, and management staff and
the Government Finance Officers Association’s Certificate of Achievement For Excellence
In Financial Reporting presented to the District for its Comprehensive Annual Financial
Report for the fiscal year ended June 30, 2019. 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.
Metropolitan St. Louis
Sewer District
2350 Market Street
St. Louis, MO 63103-2555
314-768-6200
www.msdprojectclear.org
The Board of Trustees
The Metropolitan St. Louis Sewer District
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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 520 square miles including all 66 square
miles of the City of St. Louis and 454 square miles of St. Louis County. The current
population served by the District is approximately 1.3 million representing
approximately 427,000 accounts.
MSD is organized pursuant to Article VI, Section 30 of the Missouri State Constitution
that empowers the people of St. Louis County and the City of St. Louis “to establish a
metropolitan district for functional administration of services common to the area.” MSD
is the only district established pursuant to that section of the Missouri State Constitution.
The Charter of MSD (“Plan”), approved by voters in 1954 and amended in 2000 and 2012,
established the District. The Plan describes the District as “a body corporate, a municipal
corporation, and a political subdivision of the state.” As a political subdivision of the
state, MSD is comparable to a county or city, such as St. Louis County or the City of St.
Louis.
The Plan established the governing body of the District as a six-member Board of
Trustees (“Board”) with three members appointed by the Mayor of St. Louis and three
members appointed by the St. Louis County Executive. Each Trustee shall be appointed
for a term of four years. No Trustee shall serve more than two full consecutive terms plus
any portion of an unexpired term. Provided, however, that each Trustee shall serve until
his/her successor shall be appointed and qualified. No more than two trustees appointed
from the City or County can be affiliated with the same political party.
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The Metropolitan St. Louis Sewer District
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Unlike a corporation’s board of directors that is responsible solely to the stockholders who
choose to invest in the corporation, MSD’s Board members are trustees of public property
and public funds. They are responsible to all citizens within the District.
According to the Plan, the Board enacts District ordinances, determines policies, and
appoints the Executive Director, the Secretary-Treasurer, and the Internal Auditor. The
Executive Director appoints all other District officials. Among its duties, the Board makes
all appropriations, approves contracts for improvements, and engages an accounting firm
to perform the annual independent audit of the District.
The Plan prescribes other duties of the Board and grants numerous broad powers, subject
to federal and state laws, to the District and the Board of Trustees. Among other things,
the Plan outlines the following requirements or provisions:
Requires that MSD operate with a balanced budget;
Details how MSD can tax property and requires an annual public hearing
on all taxes levied by the District;
Details how MSD can establish user charges;
Requires MSD to establish civil service rules and regulations governed by a
Civil Service Commission;
Provides how the original boundaries of the District may be extended to
include any area in St. Louis County; and
Requires MSD to approve all plans and designs for proposed construction,
alteration, or reconstruction of sewer or drainage facilities within the
District’s boundaries.
The District is also governed by the Missouri State Constitution and various federal and
state laws that, among other requirements, mandate the following:
MSD must hold permits for all sanitary discharges. These permits require a
minimum of secondary treatment;
MSD must provide wastewater treatment in an area-wide manner to qualify
for federal and state grants;
MSD must operate, maintain, and replace facilities to provide proper
wastewater treatment or be subject to penalties and fines; and
MSD must set user charge rates in compliance with the Federal Clean Water
Act. These rates must be submitted to the Missouri Department of Natural
Resources to receive future construction grants and to avoid the possibility
of refunding past grants.
During fiscal 2020 the primary source of funding for the operation and maintenance of
MSD’s wastewater system was a user charge averaging $666.84 per year or $55.57 per
month for a single-family residence. The District’s charges for residential wastewater
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The Metropolitan St. Louis Sewer District
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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. During the last quarter of fiscal year 2020, District personnel
closely monitored the impact of COVID-19 on our revenue streams, particularly volume-
based wastewater charges related to commercial customers, and made the needed
adjustments such as reducing discretionary spending to ensure that District expenditures
were supported by the reductions in revenues. Similar efforts will occur in fiscal year
2021.
During fiscal 2020 the District’s stormwater system was funded through property taxes
of 1.8¢ per one hundred dollars assessed valuation for stormwater regulatory activities
and 9.0¢ per one hundred dollars assessed valuation for operations and maintenance of
the District’s stormwater utility. The District also performs limited capital improvements
with the revenues generated by the 9.0¢ tax.
Prior to fiscal year 2017, the operation and maintenance of the District’s stormwater
system was funded by a combination of property taxes and flat fee billing of 24¢ per month
for residential and commercial properties and 18¢ per month per unit for multi-unit
properties. On April 5, 2016, over 62% of voters in MSD’s service area approved
Proposition S which placed all MSD customers under the same property tax rates to fund
stormwater services. The flat fee billings were eliminated.
MSD also receives some federal, state, and local grants to help defray the cost of
constructing sewage treatment and drainage facilities and improvements. The District
also charges fees for plan review, permits, construction inspection of new system
development, and special discharges. The District charges a uniform connection fee in all
service areas.
The District, itself, may issue general obligation bonds and revenue bonds to finance the
cost of improvements and extensions to the sewer system. The District also may issue, on
behalf of each of its subdistricts, general obligation bonds, revenue bonds, or special
assessment bonds.
Major Initiatives Affecting The Financial Resources Of The District
Throughout MSD’s service area, there are hundreds of points where a combination of
rainwater and wastewater discharges into local waterways from the wastewater sewer
system during moderate to heavy rainstorms. These sewer overflow points act as relief
valves when too much rainwater enters the sewer system, and without them, our
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community could experience thousands of basement backups and/or extensive street
flooding. (Even with these overflows points, basement backups can easily number in the
dozens or hundreds during particularly heavy rains). Depending on where sewer
overflows are located within MSD’s system, they are classified as combined sewer
overflows --or-- constructed separate sewer overflows. Many of these overflows are a
legacy of the way our wastewater systems were first built. Though most overflows predate
the District’s creation in 1954, they are still MSD’s responsibility and efforts to address
the problem must continue.
Sewer overflows have been a significant focus of MSD’s work for many years. From 1992
to 2012, MSD spent approximately $2.7 billion to eliminate over 380 overflows. Today,
our work to address sewer overflows and improve water quality continues through a
Consent Decree that stems from a lawsuit filed against MSD by the State of Missouri and
the United States Environmental Protection Agency (“EPA”) in June 2007. The State of
Missouri and the EPA were later joined in the lawsuit by the Missouri Coalition for the
Environment.
After lengthy mediation, the EPA announced a settlement agreement in August 2011. On
April 27, 2012, the United States District Court for The Eastern District of Missouri
entered a Consent Decree, thus concluding the litigation. The Consent Decree calls for $6
billion in upgrades to the existing wastewater sewer system (in 2018 dollars). Also known
as MSD Project Clear, this work was originally scheduled to take place over 23 years and
addresses our community’s wastewater collection and treatment capabilities on a system-
wide basis. The work is a mammoth undertaking that will benefit St. Louisans – and our
environment – for generations to come.
On June 22, 2018, a United States District Judge approved an amendment to the Consent
Decree that extends the schedule from 23 years to 28 years. (Necessary approvals were
also received from the State of Missouri on August 13, 2018.) The motivation behind the
amendment is regulatory changes that compel MSD to accelerate certain projects that do
not fall within the scope of the Consent Decree. The time extension will allow MSD to
address new regulatory requirements in a fiscally responsible way, while better
projecting and controlling needed rate increases.
MSD submits rate proposals to an independent Rate Commission. The Rate Commission
was established in 2000 through voter approved amendments to MSD’s Charter. The
commission is composed of 15 member organizations representing a broad cross-section
of MSD customers and is meant to provide the public with a formal role in MSD’s rate
setting process.
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The Metropolitan St. Louis Sewer District
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The Rate Commission chair briefed the Board of Trustees on fiscal years 2021 – 2024
Rate Recommendation Report in September 2019. The wastewater rate proposal seeks to
fund a four-year, $1.58 billion capital improvement program to meet regulatory and
system improvement needs.
The Board of Trustees accepted the Rate Commission’s recommendations via a resolution
in October 2019, which would have resulted in voters deciding on bonding options in April
2020. During 2020, the United States was impacted by the worldwide pandemic of
coronavirus disease (“COVID-19”). Due to COVID-19, the vote has been delayed until at
least April 2021. The fiscal year 2021 increase of 1.5% (with or without bond
authorization), would have been effective July 1, 2020. MSD has postponed the increase
until October 1, 2020. As depicted below, the cash funded rates for fiscal years 2022
through 2024 would be significantly more than those proposed if bonding authorization
is granted to fund MSD’s capital program.
Increase with Bond Authorization
(Projects Are Funded With Cash and Debt)
FY 21 FY 22 FY 23 FY 24
Rate Commission Proposal 1.5% 3.4% 3.5% 3.7%
Increase without Bond Authorization
(Projects Are Funded With Cash)
FY 21 FY 22 FY 23 FY 24
Rate Commission Proposal 1.5% 15.4% 17.1% 13.0%
Combined with similar bond elections held in 2004, 2008, 2012 and 2016, voters residing
within MSD’s service area have authorized a total issuance of $2.6 billion in wastewater
revenue bonds. As of June 30, 2020, MSD has issued $2.0 billion of the total authorization.
Consistent with past financing strategies, MSD anticipates funding future Consent
Decree and other work related to the wastewater collection and treatment system through
a combination of rate increases and voter approved bond issuances.
Even through a pandemic, the Essential Work at MSD must go on. The commitment to
our employees and our community required us to make some coronavirus-related changes
to ensure everyone’s safety. MSD took a proactive approach to employee communications
in early-March, as the situation became apparent. A special web page was created to
house all employee communications, which in the beginning were rapidly changing, but
have since slowed to a consistent weekly update. Steps were taken to reduce the density
of employees in the building. The District added additional sanitizer stations and
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Personal Protective Equipment (“PPE”) were made available to employees. High-touch
surfaces, such as elevator buttons, door push bars, etc. were replaced or covered with
Nano-Septic coverings to protect from the virus. Enhanced cleaning protocols were
implemented by the District’s janitorial services. All employee work-related travel, in-
person meetings, and public outreach has been restricted until at least the beginning of
2021. Face-to-face internal meetings are kept to a minimum, and social distancing and
masks are required throughout all of MSD facilities.
Due to the vigilance and commitment to keeping our employees and our community
healthy and safe, MSD has helped to curb the spread of COVID-19.
Operations
The Executive Director and his staff administer the operation and maintenance of the
District’s collection and treatment systems. The District’s wastewater, stormwater, and
combined sewer collection system includes approximately 9,400 miles of pipe and channel
and will grow larger over the long term due to new development. Some years may see a
reduction in total miles of pipe. This is due to the replacement of inefficiently placed pipe
with shorter, more direct lines of pipe. The District’s responsibilities for stormwater
drainage range from cleaning and maintaining street inlets to operating and maintaining
the floodwall pump stations along the Mississippi River.
MSD currently operates seven wastewater treatment facilities. These facilities treated
an average flow of 367.5 million gallons per day (“MGD”) in fiscal 2020 compared to 396.4
MGD in fiscal 2019. Flows were lower in fiscal year 2020 due to significant rain events
that occurred in fiscal 2019. The design capacity and average flow, by watershed, in MGD
was as follows in fiscal 2020:
MAJOR
WATERSHED
LEVEL OF
TREATMENT
NUMBER
OF
FACILITIES
DESIGN
CAPACITY
(MGD)
AVERAGE FLOW
FISCAL 2020
(MGD)
Mississippi River Secondary Two 472.00 278.70
Missouri River Secondary Two 78.00 55.40
Meramec River Secondary Three 42.75 33.40
Total Seven 592.75 367.50
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 wastewater and
stormwater sewers by individuals, businesses, and municipalities in the community.
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The Metropolitan St. Louis Sewer District
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Economic Conditions In The St. Louis Metropolitan Area
As a rule, the District’s major revenue sources do not fluctuate with the local and national
economy as much as local governments that depend on sales or income taxes for their
major sources of revenue. The combined unemployment rate for the City of St. Louis and
St. Louis County was 9.6 percent in June 2020 and lower than the national
unemployment rate of 11.1 percent for the same time period. The June 2020
unemployment rate is higher than the June 2019 rate of 3.5 percent due to the impact of
the COVID-19 pandemic.
MSD has its own internal barometers for measuring economic development within the
District. These are listed below for fiscal 2020 and 2019:
2020 2019
Sewer Plan Reviews:
Number of Plans Approved
435
514
Number of Miles of Sewers 41 46
Sewer Construction Permits:
Number of Permits Issued
2,277
3,792
Number of Miles of Sewers 23 24
Customer Connections:
Number of Connection Permits Issued 1,742 2,384
Connection Fee Revenue (in millions) $0.9 $0.9
Value of Sewers Dedicated to
MSD by Developers (in millions) $6.5 $16.6
Over the years, the St. Louis economy has undergone a transformation from reliance on
traditional manufacturing industries to those industries based on advanced technology
and services. The St. Louis area is a center for health care, biotechnology, banking,
finance, transportation, tourism, and education and has a strong and diverse
manufacturing economy. The area has an abundance of energy, water, and sewerage
facilities and can sustain future economic growth.
Financial Information
Proprietary Operations. The current financial condition of MSD remains stable. The
District realized a net operating income of $141.2 million in fiscal 2020 compared to a net
operating income of $110.4 million the prior year. The increase in operating revenues of
$36.9 million is explained by an increase in sewer service revenue as a result of rate
increases. Operating expenses increased $6.0 million due primarily to increases in the
recording of additional depreciation expense and asset management expenses such as
flow metering and monitoring along with CCTV system inspections. A more in-depth
analysis of the District’s financial position and the magnitude of the capital improvement
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The Metropolitan St. Louis Sewer District
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and replacement program (“CIRP”) is provided in the Management’s Discussion and
Analysis section that appears later in this report.
Budgetary Controls. The District’s Plan requires MSD to submit a proposed budget to the
Board by March 15th each year. After Board review, a final budget is approved in June.
The District’s Plan also requires MSD to maintain budgetary controls and to adopt a
balanced budget. The objective of these budgetary controls is to ensure compliance with
legal provisions embodied in the appropriation process approved by the Board. The
annual appropriated budget includes activities of the District’s operating and debt service
funds. The Board adopts ordinances to appropriate funds for capital improvement
expenditures at the time of the contract award and acceptance of any grant offers.
Budgetary control is by Division and major expenditure category within the General
Fund, each Debt Service Fund, and each capital improvement contract. The District
utilizes an encumbrance accounting system in conjunction with internal variance and
projection analysis to maintain budgetary control. Certain encumbrances carry over from
one year to the next as approved by the Board during the budget process.
Monthly and year-end financial reports are prepared in accordance with United States
generally accepted accounting principles for Enterprise Funds. Adjustments are made to
the accounting records, where necessary, to reflect the full accrual method of accounting.
Under the full accrual method of accounting, revenues are recognized when earned and
expenses are recorded as liabilities when incurred. Encumbrances and unearned capital
and operating grants are eliminated under the full accrual method of accounting. These
amounts are disclosed as commitments in the notes to financial statements.
Cash Management. In compliance with its Plan, the District invests temporarily idle
funds in cash, cash equivalents and investments such as collateralized certificates of
deposit, collateralized repurchase agreements, obligations of any agency of the United
States, and United States Treasury instruments. The District utilizes competitive
bidding for investment purchases and monitors market conditions daily.
Risk Management. In-house staff and consultants jointly conduct risk management
activities. MSD maintains third-party commercial insurance coverage for various risks
while self-insuring for other risks and liabilities at levels customary for similar
enterprises. The District maintains replacement cost property and casualty insurance
with a policy limit of $1.0 billion on certain facilities and equipment that have an
estimated replacement cost of $929 million. The District assumes the risk of loss
(including payment of water backup claims to its customers) on most of its underground
pumping facilities and collection system. MSD is one of the few sewer districts in the
country known to provide water backup claim coverage to its customers. To minimize
exposure to loss, the District inspects its facilities regularly and performs preventative
maintenance on them.
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MSD maintains automobile, general liability and excess liability insurance. The District
is self-insured for workers’ compensation and funds those costs through annual
appropriations from the District’s general insurance fund. The District maintains
reinsurance for workers’ compensation liabilities in excess of specified limits up to the
statutory limit. Risk control activities include using a third-party claims administrator,
maintaining a computerized claim tracking system, and annually reevaluating workers’
compensation cost. The District also has programs designed to promote safety in the
workplace and employee wellness.
The District provides group medical coverage for its employees and offers dependent
medical coverage on a contributory basis through a self-insured plan. Effective February
1, 2014, the District maintained stop loss coverage for specific claims exceeding $175,000
per year and for total annual claims greater than 125 percent of the annual claims
estimate. The District provides its employees with contributory group dental insurance
coverage and non-contributory life insurance and contributory optional life insurance
coverage. The District also contributes $100 every fiscal year, up to a maximum of $300,
to a vision care program for employees. Effective July 1, 2013, spouses were eligible to use
the benefits; effective July 1, 2016, dependent children up to age 26 were eligible to use
the benefits; however, the amount could not exceed the maximum amount of $300. The
District reevaluates insurance coverage and providers annually by reevaluating medical
insurance claims and health benefit costs.
For most construction projects, insurance is obtained by the individual contractor and
included in the contract price.
Internal Controls. District Management is responsible for designing, establishing, and
maintaining an internal control system that protects District assets from loss, theft, or
misuse and ensures that adequate accounting data is compiled to prepare financial
statements in conformity with United States generally accepted accounting principles.
Internal control systems are designed to provide reasonable, but not absolute, assurance
that these objectives are met. The concept of reasonable assurance recognizes that the
cost of a control should not exceed the benefits likely to be derived and that the evaluation
of costs and benefits requires estimates and judgments by management. The District’s
internal control system is subject to periodic evaluation by Management, the Board and
the District’s independent accountants.
Other Information
Audit Requirements. The District’s Plan requires an annual audit by independent
certified public accountants. The District’s CAFR includes a report on the District’s
financial statements by the accounting firm of CliftonLarsonAllen LLP.
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Besides meeting the requirements set forth in the Plan, the annual audit is also designed
to meet the requirements of the 2013 Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”) that was
issued by the Office of Management and Budget (“OMB”). A Single Audit Report will be
issued for the year ended June 30, 2020.
The financial statements of The Metropolitan St. Louis Sewer District Employees’
Pension Plan, The Metropolitan St. Louis Sewer District Deferred Compensation Plan
and Trust and The Metropolitan St. Louis Sewer District Defined Contribution Plan are
also audited annually. These audit reports were issued for the periods ending December
31, 2019 and 2018 and are available to interested parties upon request.
Awards. The Government Finance Officers Association of the United States and Canada
(“GFOA”) awarded a Certificate of Achievement for Excellence in Financial Reporting to
MSD for its CAFR for the fiscal year ended June 30, 2019. 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 thirty-two consecutive
years. We believe the current CAFR continues to conform to the GFOA’s high standards,
as reflected in the Certificate of Achievement program requirements, and are submitting
it again this year for consideration. The District also received the GFOA’s Distinguished
Budget Presentation award for its fiscal 2020 annual budget. The District has received
this award for thirty-three consecutive years. We believe the fiscal year 2021 budget
presentation continues to meet the GFOA’s high standards and submitted it on July 28,
2020, for consideration.
Marion M. Gee
Director of Finance
xii
ORGANIZATION
(As of June 30, 2020)
BOARD OF TRUSTEES
Michael Yates, Chair; James Faul (1), Vice Chair;
James I. Singer; Amy Fehr; Richard Wilson; 1 vacant position
OFFICE OF INTERNAL AUDITOR
RATE COMMISSION
Leonard P. Toenjes, Chair
OFFICE OF SECRETARY
TREASURER
Tim R. Snoke
Secretary/Treasurer
CIVIL SERVICE COMMISSION
Annette Adams
Daniel Gonzales (2)
Rev. Michael F. Jones, Sr.
EXECUTIVE DIRECTOR
Brian L. Hoelscher/CEO
FINANCE
Marion M. Gee
Director
OFFICE OF GENERAL COUNSEL
Susan M. Myers
General Counsel
OPERATIONS
Bret A. Berthold
Director
ENGINEERING
Rich Unverferth
Director
OFFICE OF HUMAN RESOURCES
Tracey Coleman
Director
INFORMATION SYSTEMS
Jonathon C. Sprague
Director
(1) Michael Evans was appointed to the Board of
Trustees on 8-14-2020 replacing James Faul.
(2) Daniel Gonzales resigned on 9-8-2020 and was
replaced by Michael Harvey on 9/29/20.
xiii
Government Finance Officers Association
Certificate Of
Achievement
For Excellence
In Financial
Reporting
Presented to
Metropolitan St. Louis Sewer District
Missouri
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2019
Executive Directors/CEO
Financial Section
METROPOLITAN ST. LOUIS SEWER DISTRICT
SERVICE AREAS
(1)
INDEPENDENT AUDITORS’ REPORT
Board of Trustees
The Metropolitan St. Louis Sewer District
St. Louis, Missouri
Report on the Financial Statements
We have audited the accompanying financial statements of the business-type activity of The
Metropolitan St. Louis Sewer District (the District), as of and for the years ended June 30, 2020 and
2019, and the related notes to the financial statements, which collectively comprise the District’s
financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditors’ judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Board of Trustees
The Metropolitan St. Louis Sewer District
(2)
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the business-type activity of the District as of June 30, 2020 and 2019, and the
changes in its financial position and its cash flows for the years then ended in accordance with
accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management’s Discussion and Analysis, Schedule of Changes in Net Pension Liability and Related
Ratios for the Employees’ Pension Plan, Schedule of Employer Contributions to Employees’ Pension
Plan and Schedule of Changes in Total OPEB Liability, as listed in the table of contents, be presented
to supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an opinion or
provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the District’s basic financial statements. The introductory section and statistical
section are presented for purposes of additional analysis and are not a required part of the basic
financial statements. These sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 13,
2020, on our consideration of the District’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the District’s internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering
the District’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
St. Louis, Missouri
October 13, 2020
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 3
MANAGEMENT’S DISCUSSION AND ANALYSIS
For The Years Ended June 30, 2020 And 2019
The annual report of The Metropolitan St. Louis Sewer District (“MSD” or the “District”)
includes the independent auditors’ report, management’s discussion and analysis
(“MD&A”), and the financial statements accompanied by notes essential to the user’s
understanding of the financial statements.
Management of the District has provided this MD&A to be used in combination with the
District’s financial statements. This narrative is intended to provide the reader with more
insight into management’s knowledge of the transactions, events, and conditions
reflected in the accompanying financial statements and the fiscal policies that govern the
District’s operations.
2020 Financial Highlights
The District increased capital assets by $216.2 million as a result of increases in
construction in progress ($56.6 million), land ($4.1 million) and depreciable capital
assets net of depreciation ($155.5 million).
The District placed $248.3 million of capital assets into service during fiscal year
2020. The continued high level of capitalization reflects the District’s work to meet
long-term plans. Capitalized assets included:
Collection and pumping plant $225.8 million
Treatment and disposal plant and equipment $13.9 million
General plant and equipment $4.5 million
Land $4.1 million
The net increase to accumulated depreciation was $83.0 million which takes into
consideration the recording of depreciation relating to new assets in addition to
depreciation on existing assets, offset by the accumulated depreciation relieved for assets
retired during the year.
During the 2020 fiscal year the District did not implement any Governmental Accounting
Standards Board Statements.
2019 Financial Highlights
The District increased capital assets by $185.5 million as a result of increases in
construction in progress ($120.2 million), land ($1.0 million) and depreciable
capital assets net of depreciation ($64.3 million).
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 4
The District placed $150.2 million of capital assets into service during fiscal year
2019. The continued high level of capitalization reflects the District’s work to meet
long-term plans. Capitalized assets included:
Collection and pumping plant $140.6 million
General plant and equipment $6.9 million
Treatment and disposal plant and equipment $1.7 million
Land $1.0 million
The net increase to accumulated depreciation was $76.6 million which takes into
consideration the recording of depreciation relating to new assets in addition to
depreciation on existing assets, offset by the accumulated depreciation relieved for assets
retired during the year.
During the 2019 fiscal year the District implemented Governmental Accounting
Standards Board Statement No. 88, Certain Disclosures Related to Debt, Including Direct
Borrowing and Direct Placements (“GASB Statement No. 88”). This Statement amends
Statement No. 34, Basic Financial Statements—and Management’s Discussion and
Analysis—for State and Local Governments, paragraph 119 and Statement No. 38,
Certain Financial Statement Note Disclosures, paragraphs 10 and 12. The primary
objective of this Statement is to improve the information that is disclosed in notes to
government financial statements related to debt, including direct borrowings and direct
placements. The requirements of this Statement will improve financial reporting by
providing users of financial statements with essential information that currently is not
consistently provided.
Required Financial Statements
The financial statements presented by the management of the District include the
Statements of Net Position; Statements of Revenues, Expenses, and Changes in Net
Position; and Statements of Cash Flows. These statements are prepared using the accrual
basis of accounting. This method of accounting recognizes revenue at the time it is earned
and expenses when the related liability occurs. As a result of using this method of
accounting, the District’s performance over the time period being reported is more easily
determinable.
The Statements of Net Position provide a report of the District’s current, restricted, and
other non-current assets such as cash, investments, receivables, and capital assets. Also,
the Statements of Net Position provide a summary of the District’s current, restricted,
and non-current liabilities, including contracts and accounts payable, deposits and
accrued expenses, pension and OPEB liabilities and bonds and notes payable. Deferred
outflows and inflows of resources, where applicable, are also included. The final section
of the Statements of Net Position, the net position section, contains earnings retained for
use by the District. Increases or decreases in the net position section may be indicative of
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 5
an improving or declining financial position. These statements provide the basis for
computing rate of return, evaluating the capital structure of the District, and assessing
the liquidity and financial flexibility of the District.
The Statements of Revenues, Expenses, and Changes in Net Position summarize all of
the year’s revenue and expense. These statements indicate how successful the District
was at maintaining expenses below the level of revenue earned.
The Statements of Cash Flows account for the net change in cash and cash equivalents
by summarizing cash receipts and cash disbursements resulting from operating
activities, non-capital financing activities, capital and related financing activities, and
investing activities. These statements assist the user in determining the sources of cash
coming into the District, the items for which cash was expended, and the beginning and
ending cash balances.
Financial Analysis
The District’s financial position improved in the current year, as evidenced by the
increase in net position of $150.1 million. The improvement is due primarily to an
increase in net investment in capital assets and unrestricted funds of $121.2 million and
$59.3 million, respectively, offset by a decrease in debt service funds and subdistrict
construction and improvement funds of $24.4 million and $6.0 million, respectively. Net
capital assets increased $216.2 million offset by a $19.8 million increase in debt related
to the capital assets and $65.7 million decrease in unspent bond issuance cash proceeds
resulting in an overall $85.5 million decrease to net investment in capital assets. The
increase in construction-related liabilities of $2.6 million, the retirement of previously
recorded deferred loss on debt refunding due to the fiscal 2020 refunding debt, net of
amortization, of $5.5 million, and the recognition of a deferred gain on debt refunding,
net of amortization and related deferred loss retirement, of $1.4 million also decreased
net investment in capital assets. The $24.4 million decrease in the debt service funds net
position is due primarily to the $26.0 million cash reserves deposited into an escrow
account in fiscal 2020 to partially advance refund certain debt.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 6
Condensed Financial Statements and Analysis
2020 Analysis
Current, restricted and other assets decreased $34.0 million or 4.1% in the current year.
The decrease is predominately due to a decrease in investments offset by an increase in
cash due to higher sewer rates charged and maturity of investments.
Capital assets net of accumulated depreciation increased by $216.2 million or 6.0% in the
current year as the result of continued high levels of construction and acquisition of assets
by the District.
Current liabilities increased by $3.6 million or 2.4% due primarily to an increase in
current portion of bond and notes payable and retainage held on capital projects, offset
by a decrease in deposits and accrued expenses.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 7
Non-current liabilities decreased by $1.6 million or 0.1% primarily due to a $17.6 million
decrease in net pension liability and total OPEB liability, offset by $15.8 million net
increase in bonds and notes payable. The net increase in bonds and notes payable is
related to the $373.8 million new senior and subordinate debt issued in fiscal year 2020,
offset by $273.4 million advance refunding of existing debt, $56.6 million for fiscal 2021
senior and subordinate debt payments reclassified to current liabilities, a net decrease in
premiums received on debt issuances of $21.4 million due to premiums retired resulting
from the fiscal 2020 refunding exceeding the premium on the fiscal 2020 new debt and
$6.6 million amortization of premiums, net of discount.
Net deferred outflows and inflows of resources decreased $30.1 million or 72.3% due
primarily to updates to various information provided by the District’s actuary such as
economic/demographic gains or losses, assumption changes or inputs, and investment
gains or losses related to the District’s net pension liability or total OPEB liability.
2019 Analysis
Current, restricted and other assets decreased $61.6 million or 7.0% in the current year.
The decrease is predominately due to a decrease in investments offset by an increase in
cash due to higher sewer rates charged and maturity of investments.
Capital assets net of accumulated depreciation increased by $185.5 million or 5.4% in the
current year as the result of continued high levels of construction and acquisition of assets
by the District.
Current liabilities increased by $9.9 million or 7.1% due primarily to an increase in
deposits and accrued expenses and retainage held on capital projects which correlate with
the increase in construction.
Non-current liabilities increased by $1.7 million or 0.1% primarily due to a $26.0 million
increase in net pension liability, offset by $24.3 million net decrease in bonds and notes
payable. The net decrease in bonds and notes payable is comprised of a $52.6 million
decrease for fiscal 2020 senior and subordinate debt payments reclassified to current
liabilities and a $7.0 million decrease in unamortized premium net of discount offset by
a $35.3 million increase in new debt.
Net deferred outflows and inflows of resources increased $17.0 million or 68.8% due
primarily to updates to various information provided by the District’s actuary such as
economic/demographic gains or losses, assumption changes or inputs, and investment
gains or losses related to the District’s net pension liability.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 8
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 9
2020 Analysis
Net position increased $150.1 million or 5.7% over the prior year which was a $20.9
million or 16.2% increase over last year’s net position increase. The largest impact to net
position was the increase in sewer service charges revenue which increased due to rate
increases.
Total revenue increased by $37.8 million or 8.3%. Sewer service charges increased $30.5
million or 7.6% and the provision for doubtful accounts increased correspondingly by $1.3
million or 29.0%. Property taxes increased $1.3 million or 3.9% due primarily to higher
property valuation assessments. Other operating revenue increased $7.7 million or
311.3% primarily due to a lawsuit settlement received on a sewer construction project.
Investment income decreased $0.4 million or 2.6% due to the decrease in unrealized gain,
offset by an increase in purchased interest and less interest revenue capitalized in fiscal
2020.
Total expenses increased by $5.9 million or 1.7% resulting primarily from the increase in
operating expenses. Operating expenses increased $6.0 million or 2.1% with the largest
increases in depreciation of $4.0 million or 4.8% and asset management of $3.4 million or
25.0% due to increased sewer inspection costs. Non-operating expenses decreased $0.1
million or 0.3% due to a large decrease in non-recurring projects and studies of $3.1
million or 20.3%, offset by a large increase in interest expense of $3.0 million or 9.2% due
to more projects being capitalized thereby reducing capitalized interest.
Capital grants and contributions decreased $11.0 million or 63.2% with the majority of
the decrease resulting from capital contributions as the value of capital projects
contributed to the District decreased significantly in fiscal 2020.
2019 Analysis
Net position increased $129.2 million or 5.2% over the prior year. The largest impact to
net position was the increase in sewer service charges revenue which increased due to
rate increases.
Total revenue increased by $42.5 million or 10.4%. Sewer service charges increased $35.8
million or 9.8% and the provision for doubtful accounts increased correspondingly by $1.4
million or 45.5%. Other operating revenue decreased $0.9 million or 26.2% due to a
reduction in forfeited construction deposits. Investment income increased $9.3 million or
125.5% due to the increase in unrealized gain and purchase interest gain.
Total expenses increased by $18.8 million or 5.8% resulting primarily from the increase
in operating expenses. Operating expenses increased $17.0 million or 6.2% with the
largest increase in general and administrative expense of $8.5 million or 14.3% due to
higher pension expense and costs related to systems upgrades and water backup claims
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 10
of $4.0 million or 259.7% due to spring flooding and pump station failures. Non-operating
expenses increased $1.9 million or 3.9% with a large increase in non-recurring projects
and studies of $6.3 million or 68.1% due primarily to the increase in green infrastructure
expenditures and treatment plant concrete repairs offset by interest expense decrease of
$3.6 million or 9.8% due to more interest capitalized to large capital projects.
Capital grants and contributions decreased $8.7 million or 33.4% with the majority of the
decrease resulting from capital contributions as the number of capital projects
contributed to the District decreased significantly in fiscal 2019.
2020 Analysis
The District ended the year with $97.1 million in cash and cash equivalents for an
increase of $40.4 million or 71.1% from the prior year. Cash flows from operating
activities increased by $32.6 million or 17.6% as a result of increased receipts from
customers and decreased payments to suppliers for goods and services, offset by an
increase in payments to employees. Cash flows from non-capital financing activities
increased by $1.1 million or 3.3%. Cash flows from capital and related financing activities
increased by $3.8 million or 1.2% due primarily to $74.8 million increase in bond proceeds
and premiums received in fiscal year 2020 compared to fiscal year 2019, offset by $25.2
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 11
million increase in principal, interest and fees paid on bonds and $46.5 million increase
in spending for capital assets. Cash flows from investing activities decreased by $19.5
million or 17.3%. The decrease primarily stems from the fact that the difference between
investments maturing and investments purchased was less in fiscal 2020 compared to
fiscal year 2019 as more investments matured than were purchased in both years.
2019 Analysis
The District ended the year with $56.8 million in cash and cash equivalents for an
increase of $22.4 million or 65.0% from the prior year. Cash flows from operating
activities increased by $24.2 million or 15.1% as a result of increased receipts from
customers offset by an increase in payments to suppliers for goods and services and an
increase in payments to employees. Cash flows from non-capital financing activities
increased by $0.7 million or 2.0%. Cash flow from capital and related financing activities
decreased by $237.5 million or 327.4% due primarily to $229.8 million decrease in bond
proceeds and premiums received in fiscal year 2019 compared to fiscal year 2018 and
$11.8 million increase in principal, interest and fees paid on bonds, offset by $5.4 million
decrease in spending for capital assets. Cash flows from investing activities increased by
$248.7 million or 183.7%. The increase primarily stems from more investments maturing
than purchased in fiscal 2019 while the opposite occurred in fiscal 2018 – more
investments were purchased than matured.
Capital Assets
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 12
2020 Analysis
Total capital assets, net of accumulated depreciation, increased by $216.2 million or 6.0%
over the prior year. Collection and pumping plant assets contained the majority of the
increase with net additions of $177.9 million or 9.3%, primarily for capitalization of assets
including new and improved sewers, dedicated assets and infrastructure repairs.
Construction in progress increased $56.6 million or 5.9% consisting of $289.3 million in
additions offset by $232.7 million of assets placed into service. Land increased $4.1
million or 5.5% due to the acquisition of easements and other land. These increases are
offset by net treatment and disposal plant and equipment decrease of $22.0 million or
3.3% due to no large projects being capitalized in fiscal 2020 to offset the depreciation
charge for the year and general plant and equipment decrease of $0.4 million or 1.6%.
For more detailed information, see Note 4, Capital Assets, in the accompanying notes to
the financial statements.
2019 Analysis
Total capital assets, net of accumulated depreciation, increased by $185.5 million or 5.4%
over the prior year. Construction in progress contained the majority of the increase with
net additions of $120.2 million or 14.4% consisting of $244.0 million in additions offset by
$123.8 million of assets placed into service. The net increase in collection and pumping
plant assets was $95.6 million or 5.3%, primarily for capitalization of assets including
new and improved sewers, dedicated assets and infrastructure repairs. Land increased
$1.0 million or 1.4% due to the acquisition of easements and other land. General plant
and equipment increased $2.3 million or 10.7% primarily due to fleet replacements and
plant upgrades. These increases are offset by net treatment and disposal plant and
equipment decrease of $33.7 million or 4.8% due to no large projects being capitalized in
fiscal 2019 to offset the depreciation charge for the year. For more detailed information,
see Note 4, Capital Assets, in the accompanying notes to the financial statements.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 13
Long-Term Debt
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 14
2020 Analysis
The District ended fiscal year 2020 with $1.6 billion in long-term debt outstanding. The
District had one tax-exempt senior revenue bond addition this year, Series 2019B,
totaling $52.1 million and one taxable senior revenue bond addition, Series 2019C,
totaling $276.3 million which was used to partially advance refund $273.4 million of the
Series 2012A, Series 2012B, Series 2013B and Series 2015B senior revenue bonds. In
addition, the District added one new Missouri Department of Natural Resources bond,
Series 2019A, totaling $6.3 million and the District received $4.9 million, $18.9 million,
and $15.3 million in loan proceeds from the Series 2016A, Series 2016B, and Series 2018B
Missouri Department of Natural Resources bonds, respectively. These amounts represent
new borrowings and do not reflect the principal payments made in fiscal 2020 on Series
2016A and Series 2016B. Total principal payments, excluding the refunding referenced
above, of $52.6 million reduced outstanding debt in fiscal year 2020. For more detailed
information, see Note 6, Long-Term Liabilities, in the accompanying notes to the financial
statements.
2019 Analysis
The District ended fiscal year 2019 with $1.5 billion in long-term debt outstanding. The
District added one new Water Infrastructure Finance and Innovation Act (WIFIA) bond,
Series 2018A, totaling $0.3 million. In addition, the District added one new Missouri
Department of Natural Resources bond, Series 2018B, totaling $2.9 million and the
District received $10.9 million and $21.3 million in loan proceeds from the Series 2016A
and Series 2016B Missouri Department of Natural Resources bonds, respectively. These
amounts represent new borrowings and do not reflect the principal payments made in
fiscal 2019 on Series 2016A and Series 2016B. Total principal payments of $51.0 million
reduced outstanding debt in fiscal 2019. For more detailed information, see Note 6, Long-
Term Liabilities, in the accompanying notes to the financial statements.
Decisions Impacting the Future
Integral to helping MSD’s rate payers understand the District’s Consent Decree (“CD”)
with the U.S. Environmental Protection Agency, the State of Missouri, and the Missouri
Coalition for the Environment, which settled a lawsuit for alleged violations of the Clean
Water Act, was the initiation of MSD Project Clear. See Note 12, Commitments And
Contingencies, for additional information regarding this litigation. The goal of MSD
Project Clear is to help MSD’s rate payers have a clear understanding of MSD’s goals and
objectives. MSD Project Clear consists of three main components:
Getting The Rain Out which is focused on reducing excess stormwater from
entering the sewer system infrastructure to help reduce basement back-ups and
overflows;
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Management’s Discussion And Analysis (Continued)
Page 15
Performing Repair and Maintenance to the existing infrastructure to ensure it
operates as well as possible for as long as possible; and
Building System Improvements where needed to increase the capacity of
the system.
MSD Project Clear will greatly affect the daily lives of many of our rate payers and is
needed to help the rate payer understand the individual and regional, as well as the
immediate and long-term, benefits of the program.
Since February 2004, the voters in the District’s service area have authorized the District
to issue a total of $2.6 billion in wastewater revenue bonds. As of June 30, 2020, the
District has issued $2.0 billion of the total authorization. The District’s long-term
wastewater capital improvement program will continue to be funded through a
combination of additional bonds and wastewater rate increases.
Requests For Information
This financial report is designed to provide a general overview of the District’s finances
for all those with an interest in the District’s finances. Questions concerning any of the
information provided in this report or requests for additional financial information should
be addressed or e-mailed to:
Marion M. Gee, Director of Finance
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
314-768-6200
mgee@stlmsd.com
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 16
STATEMENTS OF NET POSITION
Continued on Next Page
June 30,
Assets 2020 2019
Current Assets
Unrestricted Current Assets
Cash and cash equivalents 67,802,872$ 33,303,010$
Investments 264,322,528 219,636,085
Sewer service charges receivable, less allowance of $66,061,154 in 2020 and
$61,739,562 in 2019 67,498,533 66,032,777
Unbilled sewer service charges receivable 33,342,430 31,773,136
Property taxes receivable, less allowance of $8,604 in 2020 and $9,806 in 2019 421,059 479,914
Accrued income on investments 1,891,034 1,927,804
Other receivables, less allowance of $58,209 in 2020 and $49,360 in 2019 5,168,412 5,331,693
Supplies inventory 8,013,597 8,306,515
Total Unrestricted Current Assets 448,460,465 366,790,934
Restricted Current Assets
Cash and cash equivalents 3,580,818 1,747,847
Investments 17,921,368 15,117,921
Other receivables 48,273 115,556
Total Restricted Current Assets 21,550,459 16,981,324
Total Current Assets 470,010,924 383,772,258
Non-Current Assets
Restricted Assets
Cash and cash equivalents 25,741,021 21,703,207
Investments 90,301,459 152,079,763
Long-term investments 30,682,863 73,020,492
Property taxes receivable, less allowance of $29,497 in 2020 and $28,716 in 2019 1,389,975 1,355,724
Accrued income on investments 375,676 536,365
Total Restricted Non-Current Assets 148,490,994 248,695,551
Other Assets
Notes receivable 10,410,729 11,156,415
Long-term investments 158,130,241 177,405,293
Total Other Assets 168,540,970 188,561,708
Capital Assets
Depreciable:
Treatment and disposal plant and equipment 1,289,884,442 1,277,635,246
Collection and pumping plant 2,974,542,039 2,749,946,498
General plant and equipment 100,949,737 99,318,349
4,365,376,218 4,126,900,093
Less: Accumulated depreciation 1,608,746,607 1,525,779,330
Net depreciable assets 2,756,629,611 2,601,120,763
Non-depreciable:
Land 78,333,629 74,274,584
Construction in progress 1,012,925,929 956,321,065
Net Capital Assets 3,847,889,169 3,631,716,412
Total Non-Current Assets 4,164,921,133 4,068,973,671
Total Assets 4,634,932,057 4,452,745,929
Deferred Outflows of Resources
Bonds and notes payable-Deferred loss on refunding 5,888,796 11,342,745
Pension-related outflows 15,673,652 34,238,270
OPEB-related outflows 2,842,869 1,246,327
Total Deferred Outflows of Resources 24,405,317 46,827,342
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 17
STATEMENTS OF NET POSITION (Continued)
June 30,
Liabilities 2020 2019
Current Liabilities
Current Liabilities-Payable From Unrestricted Assets
Contracts and accounts payable 36,317,712$ 36,098,219$
Deposits and accrued expenses 42,172,527 43,703,869
Retainage payable 16,736,184 15,855,232
Current portion of bonds and notes payable 56,629,100 52,603,763
Total Current Liabilities-Payable From Unrestricted Assets 151,855,523 148,261,083
Current Liabilities-Payable From Restricted Assets
Contracts and accounts payable 912,704 801,529
Retainage payable 843,548 928,645
Total Current Liabilities-Payable From Restricted Assets 1,756,252 1,730,174
Total Current Liabilities 153,611,775 149,991,257
Non-Current Liabilities
Deposits and accrued expenses 7,559,792 7,352,522
Net pension liability 57,792,913 74,396,737
Total OPEB liability 23,164,618 24,164,395
Bonds and notes payable 1,633,705,811 1,617,916,402
Total Non-Current Liabilities 1,722,223,134 1,723,830,056
Total Liabilities 1,875,834,909 1,873,821,313
Deferred Inflows of Resources
Bonds and notes payable-Deferred gain on refunding 1,393,209 —
Pension-related inflows 7,149,698 4,341,116
OPEB-related inflows 4,330,667 886,686
Total Deferred Inflows of Resources 12,873,574 5,227,802
Net Position
Net investment in capital assets 2,184,736,432 2,063,518,988
Restricted for:
Debt service 33,856,568 58,262,631
Subdistrict construction and improvement 63,177,454 69,150,974
Unrestricted 488,858,437 429,591,563
Total Net Position 2,770,628,891$ 2,620,524,156$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 18
STATEMENTS OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION
2020 2019
Operating Revenues
Sewer service charges 430,398,092$ 399,929,150$
Provision for doubtful sewer service charge accounts (5,611,549) (4,349,247)
Licenses, permits and other fees 3,012,368 3,063,458
Other 10,193,128 2,477,778
Total Operating Revenues 437,992,039 401,121,139
Operating Expenses
Pumping and treatment 62,030,454 63,197,081
Collection system maintenance 47,652,258 45,616,891
Engineering 11,628,086 11,446,900
General and administrative 65,946,684 67,461,720
Water backup claims 4,653,281 5,600,419
Depreciation 87,633,312 83,639,843
Asset management 17,195,321 13,754,655
Total Operating Expenses 296,739,396 290,717,509
Operating Income 141,252,643 110,403,630
Non-Operating Revenues
Property taxes levied by the District 35,439,441 34,107,619
Investment income 16,259,182 16,699,153
Rent and other income 301,631 301,446
Total Non-Operating Revenues 52,000,254 51,108,218
Non-Operating Expenses
Net loss on disposal and sale of capital assets 961,476 970,825
Non-recurring projects and studies 12,458,231 15,628,590
Interest expense 36,119,362 33,082,384
Total Non-Operating Expenses 49,539,069 49,681,799
Income Before Capital Grants And Contributions 143,713,828 111,830,049
Capital Grants And Contributions
Capital assets contributed 6,491,961 16,635,468
Grant revenue (101,054) 742,451
Total Capital Grants And Contributions 6,390,907 17,377,919
Change In Net Position 150,104,735 129,207,968
Net Position - Beginning Of Year 2,620,524,156 2,491,316,188
Net Position - End Of Year 2,770,628,891$ 2,620,524,156$
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 19
STATEMENTS OF CASH FLOWS
Continued on Next Page
2020 2019
Cash Flows From Operating Activities
Received from customers 430,358,284$ 395,246,801$
Paid to employees for services (104,218,386) (101,374,404)
Paid to suppliers for goods and services (108,311,248) (108,646,478)
Net Cash Provided By Operating Activities 217,828,650 185,225,919
Cash Flows Provided By Non-Capital Financing Activities
Taxes levied and collected 34,983,525 33,850,110
Cash Flows From Capital And Related Financing Activities
Proceeds from capital grants 1,099,045 130,670
Proceeds from issuance of debt 97,928,346 35,149,238
Premium on sale of bonds 12,059,976 —
Principal paid on debt (52,603,763) (50,942,662)
Interest and fees paid on debt (88,654,756) (65,117,717)
Payments for capital assets (277,790,939) (231,228,233)
Proceeds from sale of capital assets 105,228 331,346
Build America Bond tax credit 1,636,759 1,630,662
Net Cash Provided By (Used In) Capital And Related
Financing Activities (306,220,104) (310,046,696)
Cash Flows From Investing Activities
Purchase of investments (593,156,734) (649,590,176)
Proceeds from sale and maturity of investments 675,698,385 752,424,000
Investment incom e 10,995,758 10,275,355
Proceeds from rents 241,167 229,231
Net Cash Provided By (Used In) Investing Activities 93,778,576 113,338,410
Net Increase In Cash And Cash Equivalents 40,370,647 22,367,743
Cash And Cash Equivalents At Beginning Of Year 56,754,064 34,386,321
Cash And Cash Equivalents At End Of Year 97,124,711$ 56,754,064$
Statements of Net Position Classification
Current Assets - Unrestricted Cash and cash equivalents 67,802,872$ 33,303,010$
Current Assets - Restricted Cash and cash equivalents 3,580,818 1,747,847
Non-Current Assets - Restricted Cash and cash equivalents 25,741,021 21,703,207
Statements of Net Position Total Cash And Cash Equivalents 97,124,711$ 56,754,064$
Non-Cash Capital And Investing Activities
Net proceeds from debt issuance placed into escrow to refund bonds 275,196,961$ —$
Principal amount reduced and placed in escrow and related deferred loss (274,475,707) —
Capital asset additions included in accounts payable 20,074,250 18,871,621
Capital assets contributed by other governments and developers 6,491,961 16,635,468
Fair value investment adjustment (gain)(1,626,865) (6,621,441)
Grant revenue (101,054) 742,451
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
See the accompanying notes to financial statements. Page 20
STATEMENTS OF CASH FLOWS (Continued)
2020 2019
Reconciliation Of Operating Income To Net Cash Flows
Provided By Operating Activities
Operating Income 141,252,643$ 110,403,630$
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation 87,633,312 83,639,843
Non-recurring projects and studies (12,458,231) (15,628,590)
Change in operating assets and liabilities:
(Increase) in billed and unbilled sewer service
charges receivable (3,035,050) (8,120,614)
Decrease in other receivables 97,828 954,005
Decrease (increase) in supplies inventory 292,918 (196,637)
Decrease (increase) in pension-related outflows 18,564,618 (16,905,413)
Decrease (increase) in OPEB-related outflows (1,596,542) 32,110
(Decrease) increase in contracts and accounts payable (1,396,073) 382,247
(Decrease) increase in deposits and accrued expenses (175,735) 5,524,299
(Decrease) increase in net pension liability (16,603,824) 26,007,799
(Decrease) in total OPEB liability (999,777) (29,577)
(Decrease) increase in pension-related inflows 2,808,582 (1,723,869)
Increase in OPEB-related inflows 3,443,981 886,686
Net Cash Provided By Operating Activities 217,828,650$ 185,225,919$
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 21
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020 AND 2019
1. Organization And Summary Of Significant Accounting Policies
Organization
The Metropolitan St. Louis Sewer District (“District”) was authorized by the
voters, established and chartered under the provisions of the Constitution of
Missouri as a municipal corporation and a political subdivision of the State of
Missouri. Upon creation in 1954, the District assumed responsibilities to provide
for the construction, operation, and maintenance of the sewer facilities within its
defined boundaries. The District’s service area now comprises all of the City of St.
Louis and most of St. Louis County. Subdistricts within the District’s total service
area represent separate geographic areas within which specific taxes can be levied
to operate and maintain wastewater or stormwater facilities within the area or
construct improvements within the subdistrict. The District also maintains all of
the publicly owned stormwater sewers within its original boundaries and is
continuing to accept maintenance of the stormwater sewers in the remainder of its
service area.
Pursuant to provisions of its Charter and subject to limitations imposed by the
Constitution of Missouri, all powers of the District are vested in a six-member
Board of Trustees (“Board”), three of whom are appointed by the Mayor of the City
of St. Louis and three of whom are appointed by the County Executive of St. Louis
County. Not more than two Trustees appointed from said City or County, as the
case may be, shall be affiliated with the same political party.
Reporting Entity
The District defines its financial reporting entity to include all component units
for which the District’s governing body is financially accountable. To be considered
financially accountable, the component unit must be fiscally dependent on the
District and the District must either 1) be able to impose its will on the component
unit or 2) the relationship must have the potential for creating a financial benefit
or imposing a financial burden on the District.
Based on the foregoing, the District’s financial statements include all funds that
are established under the authority of the District’s charter. There are no agencies,
boards, commissions, or authorities that are controlled by or dependent on the
District.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 22
Measurement Focus, Basis Of Accounting And Financial Statement
Presentation
The Governmental Accounting Standards Board (“GASB”) is the accepted
standard-setting body for establishing accounting and financial reporting
standards for U.S. state and local governments that follow generally accepted
accounting principles (“GAAP”). As a political subdivision of the State of Missouri,
the District follows GASB Pronouncements as codified under GASB Statement No.
62, Codification of Accounting and Financial Reporting Guidance Contained in
Pre-November 30, 1989 FASB and AICPA Pronouncements.
Throughout the year, the District maintains its detailed accounting records on a
modified accrual basis of accounting. In order to account for the transactions
related to certain subdistricts and restricted resources, separate fund accounting
records are maintained. For financial reporting purposes, the District reports its
operations as a single enterprise fund and the financial statements are prepared
in conformity with accounting principles generally accepted in the United States
of America as applied to government units. Accordingly, the accounting records are
converted to the accrual basis of accounting and all interfund transactions are
eliminated. Under the accrual basis of accounting, revenues are recognized when
earned and expenses are recognized when the related liability is incurred. The
District’s measurement focus is on the flow of economic resources.
Revenues and expenses are divided into operating and non-operating items.
Operating revenues generally result from providing services in connection with the
District’s principal ongoing operations. The principal operating revenues of the
District are user fees, licenses, and permits for wastewater treatment services.
Operating expenses include the costs associated with the conveyance and
treatment of wastewater and stormwater, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting these
definitions are reported as non-operating revenues and expenses. Non-recurring
projects and studies (shown as non-operating expenses) consist of expenses related
to unusual charges or losses that are unlikely to occur again in the formal course
of business such as work related to federally declared disasters, projects originally
intended to be capitalized that changed scope when a decision was made to no
longer build an asset, and any non-reimbursed work performed on assets not
owned or maintained by the District but is necessary to protect District owned
assets or to mitigate a threat to the health and safety of the general public.
The District follows GASB Statement No. 33, Accounting and Financial Reporting
for Nonexchange Transactions, which establishes accounting and financial
reporting standards for nonexchange transactions involving financial or capital
resources.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 23
GASB Statement No. 33 groups nonexchange transactions into the following four
classes, based upon their principal characteristics: derived tax revenues, imposed
nonexchange revenues, government-mandated nonexchange transactions, and
voluntary nonexchange transactions.
The District recognizes assets from imposed nonexchange revenue transactions in the
period when an enforceable legal claim to the assets arises or when the resources are
received, whichever occurs first. Revenues are recognized in the period when the
resources are required to be used for the first period that use is permitted. The District
recognizes revenues from property taxes, net of estimated refunds and estimated
uncollectible amounts, in the period for which the taxes are levied. Imposed
nonexchange revenues also include licenses, permits, and other fees.
Intergovernmental revenues, representing grants and assistance received from
other governmental units, are generally recognized as revenues in the period when
all eligibility requirements, as defined by GASB Statement No. 33, have been met.
Any resources received where all requirements are met with the exception of the
time requirement are recorded as deferred inflows. All other resources received
before any other eligibility requirements are met are reported as unearned
revenues.
Cash And Cash Equivalents
The District considers highly liquid investments that have original maturity of less
than 91 days to the District to be Cash Equivalents.
Investments
The District accounts for its investments at fair value. The District categorizes its
fair value measurements within the fair value hierarchy established by generally
accepted accounting principles pursuant to GASB Statement No. 72, Fair Value
Measurement and Application. The hierarchy is based on the valuation inputs used
to measure the fair value of the asset. Level 1 inputs are quoted prices in active
markets for identical assets; Level 2 inputs are significant other observable inputs;
Level 3 inputs are significant unobservable inputs. Changes in unrealized gain
(loss) on the carrying value of investments are reported as a component of
investment income in the Statements of Revenues, Expenses and Changes in Net
Position.
Restricted Cash, Cash Equivalents And Investments
Cash, cash equivalents and investments that are externally restricted are
classified as restricted assets. These assets are used to make debt service
payments, maintain sinking or reserve funds, purchase or construct capital or
other non-current assets or for other restricted purposes.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 24
Accounts Receivable
Accounts receivable is composed primarily of charges to customers for wastewater
services. Accounts are considered past due 30 days from the invoice date.
Receivables are reported at their gross values net of an allowance for uncollectible
amounts. This allowance for uncollectible amounts is based on historical collection
experience. Unbilled sewer service charge revenues are accrued by the District
based on estimated billings for services provided through the end of the current
fiscal year.
Capital Assets
Acquired capital assets are recorded at historical cost on the acquisition date. In
accordance with GASB Statement No. 72, donated capital assets are recorded at
acquisition value at the time the asset is considered operational. Interest cost is
capitalized as part of the historical cost of acquiring certain assets when the effect
of such capitalization is material to the financial statements. Interest is not
capitalized on assets constructed with contributions from other governmental
sources. Depreciation is calculated on a straight-line basis over the following
estimated useful lives:
Treatment and disposal plant and
equipment 3 to 100 years
Collection and pumping plant 7 to 100 years
General plant and equipment 3 to 12 years
When developing user charge rates, the District includes funding for replacement
cost of assets, which may differ from depreciation expense recorded for financial
reporting purposes.
Normal maintenance and repairs that do not add to the value of the asset or
materially extend asset lives are not capitalized. Betterments are capitalized and
depreciated over the remaining useful lives of the related assets, as applicable. The
District defines capital assets as assets with an initial, individual cost between
$5,000 and $15,000, depending on the asset category, and an estimated useful life
in excess of three years.
Costs incurred for capital construction and acquisition are carried in construction
in progress until completion of the related projects. The major components of
construction in progress are the costs incurred to construct new tunnels, storage
facilities and sewer lines, rehabilitate and separate existing sewer lines, and to
make improvements to pump stations and treatment plants. Costs related to
projects not pursued are expensed when terminated.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 25
Capitalization Of Interest
Interest costs are capitalized as part of the costs of capital assets during the period
of construction based on the related weighted average net borrowing costs
incurred. Interest earned on temporary investments acquired with the proceeds of
such borrowed funds, from the date of the borrowing until the assets are ready for
their intended use, is used to reduce the interest costs capitalized on the
constructed assets. Interest is not capitalized for outlays financed by capital grants
(or other outside parties) externally restricted for the acquisition of specified
assets. In fiscal 2020 and 2019, the District’s total net interest cost incurred on
borrowings during the fiscal year was $47,213,483 and $47,228,368, respectively,
and of the fiscal 2020 total, $42,440,055 was incurred on tax-exempt borrowings
and $4,773,428 was incurred on taxable borrowings whereas all borrowings in
fiscal 2019 were tax-exempt. Of this total net interest cost, $17,616,000 and
$19,476,685 was capitalized and $29,597,483 and $27,751,683 was expensed in
fiscal 2020 and 2019, respectively.
Supplies Inventory
Supplies inventory consists of parts and supplies to be used to operate and
maintain treatment facilities and various treatment-related equipment at the
District. This inventory figure is netted against those materials and supplies
deemed to be obsolete. All inventory is stated at weighted average cost and
expenses are recognized when the inventory is consumed.
Net Position
One component of the District’s net position is the net investment in capital assets
which consists of capital assets, including restricted capital assets, net of
accumulated depreciation, reduced by the net outstanding debt and construction-
related liabilities, including premiums and discounts on such debt, which is
attributable to the acquisition, construction, or improvement of those assets. The
outstanding debt is net of the cash and investments from the debt that has not yet
been expended. Deferred gains and losses on refundings are also included in the
net investment in capital assets net position.
The restricted component of net position consists of assets and liabilities regulated
by external constraints imposed by creditors, grantors, contributors, laws, or
regulations of other governments or constraints imposed by law through
constitutional provisions or enabling legislation. Property taxes levied by the
various subdistricts and other revenues received for construction in those sub-
districts have also been restricted for that use. Sewer extension and connection
fees, grants, and other revenues received for construction within certain sub-
districts have been restricted for that use. In addition, a portion of wastewater
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 26
sewer charges have been restricted for the payment of principal and interest,
including accrued interest, on certain debt of the District.
The unrestricted net position component of net position consists of net position that
does not meet the definition of restricted or net investment in capital assets. The
District first applies restricted resources when an expense is incurred for purposes
for which both restricted and unrestricted net position is available.
Deferred Outflows Of Resources And Deferred Inflows Of Resources
In addition to assets, financial statements may report a separate section for
deferred outflows of resources. Deferred outflows of resources consist of the
consumption of net position that is applicable to a future reporting period and so
will not be recognized as an outflow of resources until then. Deferred outflows of
resources related to refunding long-term debt is reported in the Statements of Net
Position. A deferred bond refunding amount results from the difference in the
carrying value of refunded debt and its reacquisition price, and is amortized over
the shorter of the life of the refunded or refunding debt. The pension related
deferred outflows of resources represent contributions made to the plan between
the measurement date of the pension liability and the beginning of the next fiscal
year as well as certain actuarial differences and changes that are amortized over
future periods. The other postemployment benefit (“OPEB”) related deferred
outflows of resources represent benefit payments made between the measurement
date of the total OPEB liability and the beginning of the fiscal year following the
measurement date and certain actuarial differences and changes that are
amortized over future periods.
In addition to liabilities, financial statements may report a separate section for
deferred inflows of resources. Deferred inflows of resources consist of the
acquisition of net position that is applicable to a future reporting period and so will
not be recognized as an inflow of resources until then. Deferred inflows of resources
related to refunding long-term debt is also reported in the Statements of Net
Position due to the recognition of a deferred gain resulting from the difference in
the carrying value of refunded debt and its reacquisition price and this gain is
amortized over the shorter of the life of the refunded or refunding debt. The District
also has deferred inflows of resources related to certain changes in pension and
OPEB obligations that are amortized over future periods.
Capital Contributions
Capital contributions to the District represent government grants and other aid
used to fund capital projects. In accordance with GASB Statement No. 33, capital
contributions are recognized as revenue when the expenditure is made and the
amount becomes subject to claim for reimbursement.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 27
Bonds, Bond Premiums, Discounts And Issuance Costs
Bonds and notes payable are recorded at the principal amount outstanding and
are reported net of any applicable bond premium or discount. In the District’s
financial statements, bond premiums and discounts are amortized over the life of
the bonds using the effective interest method. Bond issuance costs are expensed
when incurred pursuant to GASB Statement No. 65, Items Previously Reported as
Assets and Liabilities.
Bonds which have been advance refunded and in substance defeased, are not
included in long-term debt and the related assets deposited in an irrevocable trust
with an escrow agent to provide for all future debt service payments on the
refunded debt are not included in investments.
Compensated Absences
Vacation
Under the terms of the District’s personnel policies, employees are allowed to carry
a maximum of 30 to 45 days of vacation (depending on length of service) from one
calendar year to the next. Since vacation accrued at year-end is expected to be used
by the employee during the following fiscal year, the accrual is reported as a
component of current deposits and accrued expenses payable.
Sick Leave
Employees earn sick pay benefits at accrual rates ranging from 10 days per year
to 12 days per year (depending on length of service). Unused sick leave can be
carried over at year-end without limitation. An employee retiring from the District
with five or more years of service will be compensated for any unused accrued sick
leave at the rate of 1.25% for each year of District service multiplied by the unused
accrued sick leave remaining at the employee’s current rate of pay up to a
maximum of $50,000. The District has recorded a liability which has been
actuarially determined to be equal to the accumulated expense charge that will
amortize the employees’ benefits over their period of District service. The liability,
included in current deposits and accrued expenses payable, includes vested
accumulated rights to receive sick leave benefits estimated to be paid within one
year. The portion of sick leave expected to be paid after one year is recorded as a
component of non-current deposits and accrued expenses payable.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 28
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources
and deferred inflows of resources related to pensions, and pension expense, the
fiduciary net position of The Metropolitan St. Louis Sewer District Employees’
Pension Plan (“Plan”) and additions to/deductions from the Plan’s fiduciary net
position have been determined on the same basis as they are reported by the Plan,
which has a December 31 reporting period. For this purpose, benefit payments are
recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
Use Of Estimates
The preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts in the financial statements. Actual results could
differ from those estimates.
Income Tax Status
The District is exempt from federal income tax under the Internal Revenue Code
as a political subdivision of the State of Missouri.
Adoption Of New Accounting Standards
During fiscal year 2020 the District did not implement any new GASB Statements.
During fiscal year 2019, the District implemented GASB Statement No. 88,
Certain Disclosures Related to Debt, Including Direct Borrowing and Direct
Placements (“GASB Statement No. 88”). This Statement amends Statement No.
34, Basic Financial Statements—and Management’s Discussion and Analysis—for
State and Local Governments, paragraph 119 and Statement No. 38, Certain
Financial Statement Note Disclosures, paragraphs 10 and 12. The primary
objective of this Statement is to improve the information that is disclosed in notes
to government financial statements related to debt, including direct borrowings
and direct placements. The requirements of this Statement will improve financial
reporting by providing users of financial statements with essential information
that currently is not consistently provided. This Statement requires that
additional essential information related to debt be disclosed in notes to financial
statements, including unused lines of credit; assets pledged as collateral for the
debt; and terms specified in debt agreements related to significant events of default
with finance-related consequences, significant termination events with finance-
related consequences, and significant subjective acceleration clauses. The
disclosures required by this Statement are presented in Note 6, Long-Term
Liabilities.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 29
The following GASB Statement which became effective during fiscal year 2019 is
not applicable to the District and there is no implementation impact on the
District’s financial reporting at this time.
• Statement No. 83, Certain Asset Retirement Obligations
Recent Accounting Standards
GASB has issued additional guidance that is not yet effective. In addition, GASB
Statement No. 95, Postponement of the Effective Dates of Certain Authoritative
Guidance, was issued in May 2020 which postponed several of the GASB
Statements listed below. The new effective dates are indicated below. The District
is currently reviewing the provisions of the following GASB Statements to
determine the impact of implementation in future periods.
• Statement No. 84, Fiduciary Activities (fiscal 2021)
• Statement No. 87, Leases (fiscal 2022)
• Statement No. 89, Accounting for Interest Cost Incurred Before the End
of a Construction Period (fiscal 2022)
• Statement No. 90, Majority Equity Interests, an amendment of GASB
Statements No. 14 and No. 61 (fiscal 2021)
• Statement No. 91, Conduit Debt Obligations (fiscal 2023)
• Statement No. 92, Omnibus 2020 (fiscal 2022)
• Statement No. 93, Replacement of Interbank Offered Rates (fiscal 2022)
• Statement No. 94, Public-Private and Public-Public Partnerships and
Availability Payment Arrangements (fiscal 2023)
• Statement No. 96, Subscription-Based Information Technology
Arrangements (fiscal 2023)
• Statement No. 97, Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred
Compensation Plans (fiscal 2022)
Reclassifications
Prior period financial statement amounts may have been reclassified to conform to
current period presentation. These reclassifications, if any, had no effect on the
changes in net position or total net position.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 30
2. Deposits and Investments
Deposits
At June 30, 2020 the reported amount of the District’s deposits was $75,013,119
and the bank balance was $80,405,147. Of the bank balance, $873,413 was covered
by the Federal Deposit Insurance Corporation (“FDIC”); $79,531,734 was
collateralized with securities held by a third-party financial institution in the
District’s name. In addition, the District has money market mutual funds of
$19,589,363 held in a trusted escrow account for the State that will be used to
make future bond payments.
At June 30, 2019 the reported amount of the District’s deposits was $26,062,172
and the bank balance was $32,463,138. Of the bank balance, $1,060,057 was
covered by the Federal Deposit Insurance Corporation (“FDIC”); $31,403,081 was
collateralized with securities held by a third-party financial institution in the
District’s name. In addition, the District has money market mutual funds of
$19,225,251 held in a trusted escrow account for the State that will be used to
make future bond payments.
Custodial credit risk for deposits is the risk that, in the event of bank failure, the
District’s deposits may not be returned to the District. Deposits in each bank are
insured by the FDIC in the amount of $250,000 for interest bearing accounts and
noninterest bearing accounts. The District’s investment policy complies with the
provisions of state laws and requires collateralization on repurchase agreements,
time certificates of deposit and deposits with banking institutions, not covered by
the FDIC, and the collateralization level shall be 103% and shall be based on the
fair value of the pledged collateral.
Investments
The Secretary-Treasurer is authorized to invest, with the approval of the Board,
funds not immediately needed for the purpose to which said funds are applicable,
in the same manner as the state treasurer may invest funds of the State of
Missouri pursuant to Section 15, Article IV of the Constitution of Missouri, as
amended from time to time. The District’s investment policy conforms to the
investment policy guidelines for the State of Missouri. The District’s investment
policy authorizes the District to invest in the following instruments: U.S. Treasury
obligations, certificates of deposit, obligations of any agency or instrumentality of
the U.S., repurchase agreements, bankers’ acceptances, and commercial paper, all
according to terms specified in the policy. The District also has investments in
money market mutual funds that hold securities approved by the District’s
investment policy. At June 30, 2020 and June 30, 2019, all of the District’s
investments were in compliance with the District’s investment policy and charter.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 31
A summary of deposits and investments as of June 30, 2020 and June 30, 2019 is
as follows:
A reconciliation to the Statements of Net Position is as follows:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 32
Interest Rate Risk
As of June 30, 2020 and 2019, the District had the following investments and
maturities:
In accordance with the District’s investment policy, the District will minimize the
risk that the fair value of debt securities in the portfolio will fall due to increases
in general interest rates by:
1. Structuring the investment portfolio so that securities mature to meet cash
requirements for ongoing operations, thereby avoiding the need to sell
securities on the open market prior to maturity;
2. Investing operating funds primarily in short-term securities;
3. State law limits the maximum stated maturities to five years on any
investment from the date of purchase.
Long-Term Investments
While the majority of the District’s portfolio is made up of short-term investments,
the District also categorizes a sizeable amount as long-term under the categories
discussed in Note 1, Organization and Summary of Significant Accounting Policies.
The District is allowed to purchase long-term callable securities. These callable
securities give the issuer the right to redeem at predetermined prices at a specific
time prior to maturity. When a security is called, the District reflects an immediate
reclassification from long-term investment to cash.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 33
Custodial/Credit Risk
The District will minimize credit risk for investments, the risk of loss due to failure
of the security issuer or backer, by:
1. Prequalifying the financial institutions, broker/dealers, intermediaries, and
advisors with which the District will do business;
2. Diversifying the portfolio so that potential losses on individual securities
will be minimized.
In accordance with its investment policy, the District limits its investments in
these investment types to those investments with the top rating issued by
Nationally Recognized Statistical Rating Organizations. As of June 30, 2020 and
June 30, 2019, the District’s investments in commercial paper were rated A-1 by
Standard & Poor’s (“S&P”) and P-1 by Moody’s Investors Service (“Moody’s”). The
District’s investments in U.S. Agency obligations that do not carry the explicit
guarantee of the U.S. Government all carry a rating assigned by S&P of AA+ or
higher. Money market investments are rated as AAAm and Aaa-mf by S&P and
Moody’s, respectively.
Concentration of Credit Risk
The District’s investment policy places no limit on the amount the District may
invest in any one issuer with respect to collateralized time and demand deposits.
U.S. Treasury obligations are not limited. U.S. Agency obligations and
government-sponsored enterprises are limited to 60% of the portfolio, with no more
than 30% of the total portfolio invested in securities of any one agency; and
collateralized repurchase agreements are limited to 50% of the portfolio. U.S.
Agency callable securities are limited to 30% of the portfolio, and commercial paper
and bankers’ acceptances are limited to 25% each, with no more than 5% of the
total portfolio invested in any one issuer. The following table lists investments in
issuers that represent 5% or more of total investments at either June 30, 2020 or
June 30, 2019:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 34
Fair Value Measurement and Application
The District categorizes its fair value measurements within the fair value
hierarchy established by generally accepted accounting principles pursuant to
GASB Statement No. 72, Fair Value Measurement and Application. The hierarchy
is based on the valuation inputs used to measure the fair value of the asset. Level
1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are
significant other observable inputs; Level 3 inputs are significant unobservable
inputs.
The District has the following recurring fair value measurements as of June 30,
2020 and June 30, 2019:
Money Market Mutual Funds of $19.6 million and $19.2 million,
respectively, are valued using a market approach to measuring fair
value prices that considers relevant information generated by market
transactions involving identical or similar assets or groups of assets.
(Level 2 inputs)
U.S. Treasury and Agency Obligations of $513.3 million and $504.0
million, respectively, are valued using a market approach to
measuring fair value prices that considers relevant information
generated by market transactions involving identical or similar
assets or groups of assets. (Level 2 inputs)
Commercial Paper of $50.6 million and $144.7 million, respectively,
is valued using a market approach to measuring fair value prices that
considers relevant information generated by market transactions
involving identical or similar assets or group of assets. (Level 2
inputs)
3. Notes Receivable
The District has a note receivable with Missouri American Water Company
(“MOAM”) for its portion of the capital costs related to the Lower Meramec
Wastewater Treatment Plant. The original loan bears interest at 4.35%, while the
two loans added during fiscal year 2013 bear interest at 4.50% and 3.52%. The
current portion of this note is included in the Unrestricted Other Receivables line
on the Statements of Net Position. The note receivable will mature in fiscal year
2033.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 35
At June 30, 2020, future payments are as follows:
At June 30, 2019, future payments were as follows:
The District also had a note receivable due to its participation in the Contractor
Loan Fund, a consortium of local organizations desiring to pool bank loans, private
investment, and new market tax credits to provide access to capital for Minority
and Women-owned Business Enterprise companies that are certified through a
City of St. Louis agency. In fiscal 2020, the Contractor Loan Fund consortium
elected to transfer the existing loans and future responsibility to a successor entity.
The District’s remaining cash balance in the Contractor Loan Fund of $123,413
will be conveyed to the successor entity in fiscal 2021. At June 30, 2020 and 2019,
MSD’s note receivable related to the Contractor Loan Fund is $0 and $59,786,
respectively.
2021 1,154,696$
2022 1,154,696
2023 1,154,696
2024 1,154,696
2025 1,154,696
2026-2030 5,773,479
2031-2033 2,873,190
14,420,149
Less: Amount representing interest 3,323,520
Total Notes Receivable 11,096,629$
Classification in Statement of Net Position:
Current - Other receivables 685,900$
Non-current - Notes receivable 10,410,729
Total Notes Receivable 11,096,629$
2020 1,154,696$
2021 1,154,696
2022 1,154,696
2023 1,154,696
2024 1,154,696
2025-2029 5,773,479
2030-2033 4,027,886
15,574,845
Less: Amount representing interest 3,821,176
Total Notes Receivable 11,753,669$
Classification in Statement of Net Position:
Current - Other receivables 657,040$
Non-current - Notes receivable 11,096,629
Total Notes Receivable 11,753,669$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 36
4. Capital Assets
The following is a summary of capital assets changes for the fiscal years ended
June 30, 2020 and 2019:
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 37
5. Property Tax
On or before October 1 of each year, the District levies ad valorem taxes on all
taxable tangible property, real and personal, within its boundaries based on
assessed valuations established by the City of St. Louis and St. Louis County
Assessors. Taxes levied are used for stormwater operations, maintenance, and
construction. Taxes are recorded as non-operating revenues and recognized, net of
estimated refunds and estimated uncollectible amounts, in the period for which
the taxes are levied. Property tax bills are typically mailed in October. They
become delinquent and represent a lien on the related property if not paid by
December 31. All property taxes are billed and collected by the City of St. Louis
and St. Louis County Collectors of Revenue and are remitted to the District
monthly.
In fiscal years 2020 and 2019, the District recorded revenue from property taxes
in the amount of $35,439,441 and $34,107,619, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 38
6. Long-Term Liabilities
The following is a summary of changes in the District’s long-term liabilities for the
year ended June 30, 2020:
Original Balance Balance
Issuance June 30,June 30, Current
Amounts 2019 Additions Retirements 2020 Portion
Bonds and Notes Payable:
Wastewater System Senior Revenue Bonds:
Series 2010B 85,000,000$ 85,000,000$ —$ —$ 85,000,000$ —$
Series 2011B 52,250,000 15,945,000 — (2,220,000) 13,725,000 2,330,000
Series 2012A 225,000,000 154,040,000 — (108,420,000) 45,620,000 5,300,000
Series 2012B 141,730,000 128,840,000 — (87,315,000) 41,525,000 3,725,000
Series 2013B 150,000,000 113,615,000 — (71,235,000) 42,380,000 3,390,000
Series 2015B 223,855,000 190,135,000 — (21,185,000) 168,950,000 2,920,000
Series 2016C 150,000,000 144,535,000 — (2,840,000) 141,695,000 2,955,000
Series 2017A 316,175,000 312,760,000 — (3,520,000) 309,240,000 3,660,000
Series 2019B 52,130,000 — 52,130,000 — 52,130,000 835,000
Series 2019C (Taxable) 276,260,000 — 276,260,000 — 276,260,000 1,515,000
Water Infrastructure Finance and Innovation Act (WIFIA) Bonds:
Series 2018A 47,722,204 261,480 — — 261,480 —
Water Pollution Control and Drinking Water Subordinate Revenue Bonds (State Revolving Funds Program):
Series 2004B 161,280,000 64,590,000 — (8,860,000) 55,730,000 9,105,000
Series 2005A 6,800,000 3,120,000 — (355,000) 2,765,000 365,000
Series 2006A 42,715,000 20,965,000 — (2,415,000) 18,550,000 2,475,000
Series 2006B 14,205,000 7,400,000 — (750,000) 6,650,000 760,000
Series 2008A/B 40,000,000 21,765,000 — (1,970,000) 19,795,000 2,005,000
Missouri Department of Natural Resources:
Energy Loan Program 223,793 16,163 — (16,163) — —
Series 2009A 23,000,000 14,218,100 — (1,149,900) 13,068,200 1,176,500
Series 2010A 7,980,700 5,468,200 — (388,700) 5,079,500 396,600
Series 2010C 37,000,000 24,906,000 — (1,795,000) 23,111,000 1,842,000
Series 2011A 39,769,300 32,241,300 — (1,792,000) 30,449,300 1,838,000
Series 2013A 52,000,000 43,349,000 — (2,305,000) 41,044,000 2,365,000
Series 2015A 75,000,000 65,902,000 — (3,424,000) 62,478,000 3,505,000
Series 2016A 20,000,000 13,129,064 4,890,366 (861,000) 17,158,430 880,000
Series 2016B 75,500,000 45,582,626 18,919,459 (3,217,000) 61,285,085 3,286,000
Series 2018B 25,267,000 2,880,349 15,348,039 — 18,228,388 —
Series 2019A 23,952,000 — 6,291,992 — 6,291,992 —
2,364,814,997$ 1,510,664,282$ 373,839,856$ (326,033,763)$ 1,558,470,375$ 56,629,100$
Add:
Unamortized premium, net of discount 131,864,536
Total Bonds and Notes Payable 1,690,334,911$
Current Portion of Bonds and Notes Payable 56,629,100$
Non-Current Bonds and Notes Payable 1,633,705,811
Total Bonds and Notes Payable 1,690,334,911$
Net Pension Liability 74,396,737$ (16,603,824)$ —$ 57,792,913$ —$
Total OPEB Liability 24,164,395$ (999,777)$ —$ 23,164,618$ —$
Deposits and Accrued Expenses
619,384$ 3,529$ —$ 622,913$ —$
Compensated absences 8,977,517 788,826 (517,171) 9,249,172 2,312,293
Total Deposits and Accrued Expenses 9,596,901$ 792,355$ (517,171)$ 9,872,085$ 2,312,293$
Current Portion (Compensated absences) in Current Deposits and Accrued Expenses 2,312,293$
Non-Current Deposits and Accrued Expenses 7,559,792
Total Deposits and Accrued Expenses 9,872,085$
Landfill closure and postclosure costs
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 39
The following is a summary of changes in the District’s long-term liabilities for the
year ended June 30, 2019:
Original Balance Balance
Issuance June 30,June 30, Current
Amounts 2018 Additions Retirements 2019 Portion
Bonds and Notes Payable:
Wastewater System Senior Revenue Bonds:
Series 2010B 85,000,000$ 85,000,000$ —$ —$ 85,000,000$ —$
Series 2011B 52,250,000 18,055,000 — (2,110,000) 15,945,000 2,220,000
Series 2012A 225,000,000 159,340,000 — (5,300,000) 154,040,000 5,300,000
Series 2012B 141,730,000 131,935,000 — (3,095,000) 128,840,000 3,390,000
Series 2013B 150,000,000 116,615,000 — (3,000,000) 113,615,000 3,250,000
Series 2015B 223,855,000 192,810,000 — (2,675,000) 190,135,000 2,785,000
Series 2016C 150,000,000 147,295,000 — (2,760,000) 144,535,000 2,840,000
Series 2017A 316,175,000 316,175,000 — (3,415,000) 312,760,000 3,520,000
Water Infrastructure Finance and Innovation Act (WIFIA) Bonds:
Series 2018A 47,722,204 — 261,480 — 261,480 —
Water Pollution Control and Drinking Water Subordinate Revenue Bonds (State Revolving Funds Program):
Series 2004B 161,280,000 73,190,000 — (8,600,000) 64,590,000 8,860,000
Series 2005A 6,800,000 3,465,000 — (345,000) 3,120,000 355,000
Series 2006A 42,715,000 23,315,000 — (2,350,000) 20,965,000 2,415,000
Series 2006B 14,205,000 8,140,000 — (740,000) 7,400,000 750,000
Series 2008A/B 40,000,000 23,700,000 — (1,935,000) 21,765,000 1,970,000
Missouri Department of Natural Resources:
Energy Loan Program 223,793 51,025 — (34,863) 16,163 16,163
Series 2009A 23,000,000 15,342,000 — (1,123,900) 14,218,100 1,149,900
S eries 2010A 7,980,700 5,849,100 — (380,900) 5,468,200 388,700
Series 2010C 37,000,000 26,656,000 — (1,750,000) 24,906,000 1,795,000
Series 2011A 39,769,300 33,988,300 — (1,747,000) 32,241,300 1,792,000
Series 2013A 52,000,000 45,596,000 — (2,247,000) 43,349,000 2,305,000
Series 2015A 75,000,000 69,246,000 — (3,344,000) 65,902,000 3,424,000
Series 2016A 20,000,000 3,093,765 10,878,299 (843,000) 13,129,064 861,000
Series 2016B 75,500,000 27,417,916 21,311,710 (3,147,000) 45,582,626 3,217,000
Series 2018B 25,267,000 — 2,880,349 — 2,880,349 —
2,012,472,997$ 1,526,275,106$ 35,331,838$ (50,942,663)$ 1,510,664,282 52,603,763$
Add:
Unamortized premium, net of discount 159,855,883
Total Bonds and Notes Payable 1,670,520,165$
Current Portion of Bonds and Notes Payable 52,603,763$
Non-Current Bonds and Notes Payable 1,617,916,402
Total Bonds and Notes Payable 1,670,520,165$
Net Pension Liability 48,388,938$ 26,007,799$ —$ 74,396,737$ —$
Total OPEB Liability 24,193,972$ (29,577)$ —$ 24,164,395$ —$
Deposits and Accrued Expenses
565,493$ 53,891$ —$ 619,384$ —$
Compensated absences 9,019,323 808,146 849,952 8,977,517 2,244,379
Total Deposits and Accrued Expenses 9,584,816$ 862,037$ 849,952$ 9,596,901$ 2,244,379$
Current Portion (Compensated absences) in Current Deposits and Accrued Expenses 2,244,379$
Non-Current Deposits and Accrued Expenses 7,352,522
Total Deposits and Accrued Expenses 9,596,901$
Landfill closure and postclosure costs
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 40
Wastewater System Revenue Bonds Payable
In February 2004, the District received voter authorization for $500,000,000 of
revenue bonds. In August 2008, the District received voter authorization for an
additional $275,000,000 of revenue bonds. In June 2012, the District received voter
authorization for another $945,000,000 of revenue bonds and finally, in April 2016,
the District received voter authorization for another $900,000,000 of revenue
bonds. From the total voter authorization of $2,620,000,000, $598,428,796 has not
been issued as of June 30, 2020. These funds were sought to enable the District to
comply with federal and state clean water requirements.
In December 2019, the District issued $52,130,000 of Wastewater System Revenue
Bonds Series 2019B (“Series 2019B”). These bonds were issued pursuant to the
April 2016 authorization; in this case for the purpose of constructing, repairing,
replacing, and equipping new and existing District wastewater facilities and as of
June 30, 2020, $20,316,635 has been expended. A premium of $12,059,977 was
received on the issuance of Series 2019B. The 2019B senior bonds have an interest
rate of 5.0% and are payable in semiannual installments at varying amounts
through May 1, 2049.
In December 2019, the District issued $276,260,000 of Taxable Wastewater System
Refunding Revenue Bonds Series 2019C (“Series 2019C”). These bonds were issued
to partially advance refund the Series 2012A bonds maturing in fiscal years 2040
through 2042 totaling $103,120,000, the Series 2012B bonds maturing in fiscal
years 2028 through 2034 totaling $83,925,000 (excludes $940,000 of the May 2031
principal payment due), the Series 2013B bonds maturing in fiscal years 2031 and
2032, 2036 through 2038, and 2040 through 2043 totaling $67,985,000 and the
Series 2015B bonds maturing in fiscal years 2044 through 2045 totaling
$18,400,000.
The Series 2019C refunding net proceeds of $274,474,218 (after payments of
$1,063,039 in underwriter fees and $722,743 in issuance costs) and the
$26,045,142 in excess debt service reserves the District contributed were used to
purchase U.S. government securities. These securities were deposited in an
irrevocable trust with an escrow agent to provide for the future debt service
payments defined above on the Series 2012A, Series 2012B, Series 2013B and
Series 2015B bonds. The sum of the $300,519,360 deposited into escrow and the
earnings on the U.S. government securities will fund the $273,430,000 advanced
refunded principal payments on their call dates (May 1, 2022 for Series 2012A and
Series 2012B, May 1, 2023 for Series 2013B and May 1, 2025 for Series 2015B) and
the interest thereon. Interest only payments of $6,835,750 were made from the
escrow account in fiscal year 2020. All $273,430,000 debt defeased in substance to
be paid from the escrow account remains outstanding as of June 30, 2020. As a
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 41
result of placing the cash with an escrow agent in a trust, Series 2012A, Series
2012B, Series 2013B, and Series 2015B bonds were partially defeased and the
related liability for those bonds were removed from the District’s financial
statements in fiscal 2020. This advance refunding decreased total debt service
payments over the next 25 years by $98,737,402, resulting in an economic gain
(difference between the present values of the debt service requirements on the old
and new debt adjusted for the additional cash paid) of $42,691,317. The 2019C
senior bonds have interest rates ranging from 1.824% to 3.259% and are payable
in semiannual installments at varying amounts through May 1, 2045.
In December 2017, the District issued $316,175,000 of Wastewater System
Revenue Bonds Series 2017A (“Series 2017A”). These bonds were issued for two
purposes: $116,175,000 was issued to partially advance refund the Series 2011B
bonds maturing in fiscal years 2022 through 2029 totaling $23,345,000, the Series
2012A bonds maturing in fiscal years 2023 through 2032 totaling $50,060,000
(excludes $240,000 of the May 2030 principal payment due), the Series 2013B
bonds maturing in fiscal years 2024 through 2029 totaling $26,385,000, and the
Series 2015B bonds maturing in fiscal years 2026 through 2029 totaling
$25,970,000. The remaining $200,000,000 was issued for the purpose of
constructing, repairing, replacing, and equipping new and existing District
wastewater facilities and as of June 30, 2020, $226,851,242 has been expended.
Approximately $47,500,000 was issued pursuant to the June 2012 authorization
and $152,500,000 was issued pursuant to the April 2016 authorization. A premium
of $37,823,556 was received on the $200,000,000 portion of the Series 2017A. The
2017A senior bonds have interest rates ranging from 2.0% to 5.0% and are payable
in semiannual installments at varying amounts through May 1, 2047.
The Series 2017A refunding net proceeds of $141,343,662 (including a premium of
$25,967,878 and additional proceeds of $1,220 and after payments of $428,483 in
underwriting fees and $371,953 in issuance costs) and the $934,325 in excess debt
service reserves the District contributed were used to purchase U.S. government
securities. These securities were deposited in an irrevocable trust with an escrow
agent to provide for the future debt service payments defined above on the Series
2011B, Series 2012A, Series 2013B, and Series 2015B bonds. The sum of the
$142,277,987 deposited into escrow and the earnings on the U.S. government
securities will fund the $125,760,000 advanced refunded principal payments on
their call dates (May 1, 2021 for Series 2011B, May 1, 2022 for Series 2012A, May
1, 2023 for Series 2013B, and May 1, 2025 for Series 2015B) and the interest
thereon. Interest only payments of $6,017,025 were made from the escrow account
in fiscal year 2020. All $125,760,000 debt defeased in substance to be paid from
the escrow account remains outstanding as of June 30, 2020. As a result of placing
the cash with an escrow agent in a trust, Series 2011B, Series 2012A, Series 2013B,
and Series 2015B bonds were partially defeased and the related liability for those
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 42
bonds were removed from the District’s financial statements in fiscal 2018. This
advance refunding decreased total debt service payments over the next 14 years
by $12,623,385, resulting in an economic gain (difference between the present
values of the debt service requirements on the old and new debt adjusted for the
additional cash paid) of $9,481,147.
In December 2016, the District issued $150,000,000 of Wastewater System
Revenue Bonds Series 2016C (“Series 2016C”). These bonds were issued pursuant
to the June 2012 authorization; in this case for the purpose of construction,
repairing, replacing, and equipping new and existing District wastewater facilities.
All funds from this issuance have been expended. A premium of $17,678,054 was
received on the issuance of Series 2016C. These 2016C senior bonds have interest
rates ranging from 2.0% to 5.0% and are payable in semiannual installments at
varying amounts through May 1, 2046.
In December 2015, the District issued $223,855,000 of Wastewater System
Revenue Bonds Series 2015B (“Series 2015B”). These bonds were issued for two
purposes: $73,855,000 was issued to advance refund the Series 2006C and Series
2008A bonds and $150,000,000 was issued pursuant to the June 2012
authorization; in this case for the purpose of constructing, repairing, replacing, and
equipping new and existing District wastewater facilities. All funds from this
issuance have been expended. These 2015B senior bonds have interest rates
ranging from 3.0% to 5.0% and are payable in semiannual installments at varying
amounts through May 1, 2045; however, in December 2017, there was an advance
refunding of the non-refunding Series 2015B bonds for the years 2026 through
2029 totaling $25,970,000. As a result of this advance refunding, Series 2015B
bonds are considered partially defeased. See the explanation for Series 2017A
above for further information. In December 2019, there was a taxable advance
refunding of the Series 2015B bonds for the years 2044 through 2045 totaling
$18,400,000. As a result of this advance refunding, Series 2015B bonds are
considered partially defeased. See the explanation for Series 2019C above for
further information.
The Series 2015B refunding net proceeds of $86,848,034 (including a premium of
$13,623,487 and after payments of $337,848 in underwriting fees and $292,605 in
issuance costs) and the $8,945,557 in excess debt service reserves the District
contributed were used to purchase U.S. government securities. These securities
were deposited in an irrevocable trust with an escrow agent to provide for all future
debt service payments on the Series 2006C and Series 2008A bonds. All principal
and interest payments on the advance refunded Series 2006C and Series 2008A
bonds have been paid from escrow and no amounts remain outstanding on these
bonds. As a result of placing the cash with an escrow agent in a trust, Series 2006C
and Series 2008A bonds were defeased and the liability for those bonds were
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 43
removed from the District’s financial statements in fiscal 2016. The original
$60,000,000 2006C bonds were issued pursuant to the February 2004
authorization and the original $30,000,000 2008A bonds were issued pursuant to
the August 2008 authorization. This refunding decreased total debt service
payments over the next 22 years by $33,032,176, resulting in an economic gain
(difference between the present values of the debt service requirements on the old
and new debt adjusted for additional cash paid) of $14,544,866.
In December 2013, the District issued $150,000,000 of Wastewater System
Revenue Bonds Series 2013B (“Series 2013B”). These bonds were issued pursuant
to the June 2012 authorization; in this case for the purpose of constructing,
repairing, replacing, and equipping new and existing District wastewater facilities.
All funds from this issuance have been expended. These senior bonds have interest
rates ranging from 2.0% to 5.0% and are payable in semiannual installments at
varying amounts through May 1, 2043; however, in December 2017, there was an
advance refunding of the Series 2013B bonds for the years 2024 through 2029
totaling $26,385,000. As a result of this advance refunding, Series 2013B bonds
are considered partially defeased. See the explanation for Series 2017A above for
further information. In December 2019, there was a taxable advance refunding of
the Series 2013B bonds for nine years spanning within 2031 through 2043 totaling
$67,985,000. As a result of this advance refunding, Series 2013B bonds are
considered partially defeased. See the explanation for Series 2019C above for
further information.
In November 2012, the District issued $141,730,000 of Wastewater System
Refunding Bonds Series 2012B (“Series 2012B”). These bonds were issued to
advance refund the Series 2004A bonds maturing in fiscal years 2015 and
thereafter. These 2012B senior bonds have interest rates ranging from 1.3% to
5.0% and are payable in semiannual installments at varying amounts through May
1, 2034. The Series 2012B’s net proceeds of $169,991,298 (including a premium of
$29,613,138 and after payments of $761,593 in underwriting fees and $590,247 in
issuance costs) were used to purchase U.S. government securities. These securities
were deposited in an irrevocable trust with an escrow agent to provide for all future
debt service payments on the bonds. All principal and interest payments on the
advance refunded Series 2004A bonds have been paid from escrow and no amounts
remain outstanding on these bonds. As a result of placing the cash with an escrow
agent in a trust, Series 2004A bonds were partially defeased and the liability for
those bonds related to a date after May 1, 2014 were removed from the District’s
financial statements in fiscal 2013. The original $175,000,000 2004A bonds were
issued pursuant to the February 2004 authorization. This refunding decreased
total debt service payments over the next 22 years by $28,601,189, resulting in an
economic gain (difference between the present values of the debt service
requirements on the old and new debt) of $22,439,375. In December 2019, there
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 44
was a taxable advance refunding of the Series 2012B bonds for the years 2028
through 2034 totaling $83,925,000 (excludes $940,000 of the May 2031 principal
payment due). As a result of this advance refunding, Series 2012B bonds are
considered partially defeased. See the explanation for Series 2019C above for
further information.
In August 2012, the District issued $225,000,000 of Wastewater System Revenue
Bonds Series 2012A (“Series 2012A”). These bonds were issued pursuant to the
June 2012 authorization; in this case for the purpose of constructing, repairing,
replacing, and equipping new and existing District wastewater facilities. All funds
from this issuance have been expended. These senior bonds have interest rates
ranging from 2.5% to 5.3% and are payable in semiannual installments at varying
amounts through May 1, 2042; however, in December 2017, there was an advance
refunding of the Series 2012A bonds for the years 2023 through 2032 totaling
$50,060,000 (excludes $240,000 of the May 2030 principal payment due). As a
result of this advance refunding, Series 2012A bonds are considered partially
defeased. See the explanation for Series 2017A above for further information. In
December 2019, there was a taxable advance refunding of the Series 2012A bonds
for the years 2040 through 2042 totaling $103,120,000. As a result of this advance
refunding, Series 2012A bonds are considered partially defeased. See the
explanation for Series 2019C above for further information.
In December 2011, the District issued $52,250,000 of Wastewater System Revenue
Bonds Series 2011B (“Series 2011B”). These bonds were issued pursuant to the
August 2008 authorization; in this case for the purpose of constructing, repairing,
replacing, and equipping new and existing District wastewater facilities. All funds
from this issuance have been expended. These senior bonds have interest rates
ranging from 3.0% to 5.0% and are payable in semiannual installments at varying
amounts through May 1, 2032; however, in December 2017, there was an advance
refunding of the Series 2011B bonds for the years 2022 through 2029 totaling
$23,345,000. As a result of this advance refunding, Series 2011B bonds are
considered partially defeased. See the explanation for Series 2017A above for
further information.
In January 2010, the District issued $85,000,000 of Taxable Wastewater System
Revenue Bonds (Build America Bonds – Direct Pay) Series 2010B (“Series 2010B”).
These bonds were issued pursuant to the August 2008 authorization; in this case
for the purpose of constructing, repairing, replacing, and equipping new and
existing District wastewater facilities. All funds from this issuance have been
expended. These senior bonds have an interest rate of 5.9% and are payable in
semiannual installments at varying amounts through May 1, 2039. As Build
America Bonds under The American Recovery and Reinvestment Act (“ARRA”) of
2009, the District receives a subsidy payment from the Federal government equal
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 45
to a percentage of the interest paid. In fiscal years 2013 and prior, the rate was
35.0%. Beginning with refund payments processed on March 1, 2013 and annually
beginning on October 1, 2013, the IRS has adjusted this rate as part of the
sequestration. In fiscal year 2020 the subsidy percentage was 32.9% while for 2019
the subsidy percentage was 32.8%. In fiscal year 2021 the subsidy percentage is
expected to be 33.0%.
The revenue bonds do not constitute a legal debt or liability for the District, the
State of Missouri, or for any political subdivision thereof and do not constitute
indebtedness within the meaning of any constitutional or statutory debt limitation
or restriction. Revenue derived from the operations of the Wastewater System is
pledged for the retirement of the outstanding Wastewater System Revenue Bonds
listed above. Under the provisions of the bond indentures, the District covenants
to establish rates for the services of the Wastewater System sufficient to fund
operations, maintain reserves, and provide revenues to apply principal and
interest on these bonds.
The issuance of the revenue bonds does not obligate the District to levy any form
of taxation or to make any appropriation for their payments in any fiscal year. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues.
Water Pollution Control And Drinking Water Revenue Bonds Payable
In October 2008, the State Environmental Improvement and Energy Resources
Authority (“Authority”) authorized and issued $69,435,000 of Water Pollution
Control and Drinking Water Revenue Bonds (State Revolving Funds Programs)
Series 2008A/B (“Series 2008A/B”). The Series 2008A/B bonds provided funds to
issue loans to 14 Missouri political subdivisions that used the funds to finance
water pollution control and drinking water projects. A portion of the proceeds of
the Series 2008A/B bonds issued by the Authority were used to purchase
subordinate Participant Revenue Bonds (“Participant Bonds”) authorized and
issued by the District from the February 2004 authorization in the aggregate
principal amount of $40,000,000, the proceeds of which were used for constructing,
repairing, and equipping new and existing wastewater facilities. All funds from
this issuance have been expended. The District’s Participant Bonds have interest
rates ranging from 4.0% to 5.7% and are payable in semiannual installments at
varying amounts through January 1, 2029.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 46
In November 2006, the Authority authorized and issued $22,105,000 of State
Revolving Funds Programs Series 2006B (“Series 2006B”). The Series 2006B bonds
provided funds to issue loans to seven Missouri political subdivisions that used the
funds to finance water pollution control and drinking water projects. A portion of
the proceeds of the Series 2006B bonds issued by the Authority were used to
purchase Participant Bonds authorized and issued by the District from the
February 2004 authorization in the aggregate principal amount of $14,205,000,
the proceeds of which were used for constructing, repairing, and equipping new
and existing wastewater facilities. All funds from this issuance have been
expended. The District’s Participant Bonds have interest rates ranging from 4.0%
to 5.0% and are payable in semiannual installments at varying amounts through
July 1, 2027.
In May 2006, the Authority authorized and issued $87,505,000 of State Revolving
Funds Programs Series 2006A (“Series 2006A”). The Series 2006A bonds provided
funds to issue loans to 13 Missouri political subdivisions that used the funds to
finance water pollution control and drinking water projects. A portion of the
proceeds of the Series 2006A bonds issued by the Authority were used to purchase
subordinate Participant Bonds authorized and issued by the District from the
February 2004 authorization in the aggregate principal amount of $42,715,000,
the proceeds of which were used for constructing, repairing, and equipping new
and existing wastewater facilities. All funds from this issuance have been
expended. The District’s Participant Bonds have interest rates ranging from 3.5%
to 4.5% and are payable in semiannual installments at varying amounts through
July 1, 2026.
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 issue loans to 10 Missouri political subdivisions and one Missouri non-
profit corporation that were used to finance water pollution control and drinking
water projects. A portion of the proceeds of the Series 2005A bonds issued by the
Authority were used to purchase subordinate Participant Bonds authorized and
issued by the District from the February 2004 authorization in the aggregate
principal amount of $6,800,000, the proceeds of which were used for constructing,
repairing, and equipping new and existing wastewater facilities. All funds from
this issuance have been expended. The District’s Participant Bonds have interest
rates ranging from 3.0% to 5.0% and are payable in semiannual installments at
varying amounts through July 1, 2026.
In May 2004, the Authority authorized and issued $179,780,000 of State Revolving
Funds Programs Series 2004B (“Series 2004B”). The Series 2004B bonds provided
funds to issue loans to seven Missouri political subdivisions that were used to
finance water pollution control projects. A portion of the proceeds of the Series
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 47
2004B bonds issued by the Authority were used to purchase subordinate
Participant Bonds authorized and issued by the District from the February 2004
authorization in the aggregate principal amount of $161,280,000, the proceeds of
which were used to finance the District’s three water pollution control construction
projects outlined in the agreement. All funds from this issuance have been
expended. The District’s Participant Bonds have interest rates ranging from 2.0%
to 5.3% and are payable in semiannual installments at varying amounts through
January 1, 2027.
The Series 2004B, 2005A, 2006A, 2006B, and 2008A/B bonds do not constitute a
legal debt or liability for the District, the State of Missouri, or for any political
subdivision thereof and do not constitute indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction. The issuance of the Series
2004B, 2005A, 2006A, 2006B, and 2008A/B bonds and the Series 2009A, 2010A,
2010C, 2011A, 2013A, 2015A, 2016A, 2016B, 2018B and 2019A direct loans (pages
49-55) do not obligate the District to levy any form of taxation or to make any
appropriation for their payments in any fiscal year. The principal and interest on
the bonds are expected to be paid from future wastewater revenues.
In connection with the District’s issuance of the Participant Bonds, which were
purchased with the proceeds of the Series 2004B, 2005A, 2006A, 2006B, and
2008A/B bonds, the District participates in the State Revolving Loan Program
established by the Missouri Department of Natural Resources (“DNR”). Monies
from federal capitalization grants and state matching funds are used to fund a
bond reserve account for the participants.
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account and deposited in a
bond reserve account, in the District’s name, an additional 60% of the expenditure
amount for the Series 2004B bonds and 70% for the Series 2005A, 2006A, and
2006B bonds. For the Series 2008A/B bonds, 70% of the entire anticipated
borrowed amount was deposited into this bond reserve account at the beginning of
the loan versus as the expenditures were reimbursed. Interest earned from this
bond reserve account can be used by the District to fund interest payments on the
bonds.
On the date of each payment of the principal amount of the District’s Participant
Bonds, the trustee transfers from this bond reserve account to the master trustee
account an amount equal to 60% of the principal payment for the Series 2004B
bonds and 70% for the Series 2005A, 2006A, 2006B and 2008A/B bonds.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 48
In accordance with the District’s Master Bond Ordinance No. 11713, adopted April
22, 2004, the District’s annual net operating revenues from wastewater activities,
as defined in the agreement, coupled with investments earnings, must be at least
125% of the current year’s principal and interest due on all senior bonds and at
least 115% of the current year’s principal and interest due on all bonds. At June 30,
2020 and 2019, the District was in compliance with this covenant.
Principal And Interest Requirements On Revenue Bonds Payable
The annual principal and interest requirements to maturity on revenue bonds
payable outstanding as of June 30, 2020 are as follows:
Water Infrastructure Finance and Innovation Act (WIFIA) Series 2018A
In December 2018, the Environmental Protection Agency (“EPA”) issued to the
District an amount totaling $47,722,204 for the purpose of constructing the Deer
Creek Sanitary Tunnel Pump Station and Sanitary Sewers Project. The principal
and interest on the bonds are expected to be paid from future wastewater revenues
and the bonds are issued from the April 2016 authorization. The Series 2018A
bonds are not subordinated. The District’s interest rate is 3.06% and is payable in
semiannual installments at varying amounts through May 1, 2053.
Principal And Interest Requirements on Water Infrastructure Finance
and Innovation Act Series 2018A
As the District incurs approved capital expenditures, the EPA reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 3.06% based on the amount that has been borrowed.
Years ending June 30, Principal Interest Total
2021 41,340,000$ 52,851,655$ 94,191,655$
2022 42,200,000 51,485,236 93,685,236
2023 43,570,000 49,919,686 93,489,686
2024 44,870,000 48,367,394 93,237,394
2025 46,600,000 46,719,533 93,319,533
2026-2030 233,145,000 205,311,844 438,456,844
2031-2035 253,580,000 155,537,456 409,117,456
2036-2040 298,605,000 97,894,092 396,499,092
2041-2045 230,350,000 36,332,555 266,682,555
2046-2049 45,755,000 3,867,250 49,622,250
Total 1,280,015,000$ 748,286,701$ 2,028,301,701$
Wastewater System Revenue Bonds Payable/
Water Pollution Control and Drinking Water
Revenue Bonds Payable
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 49
As of June 30, 2020, the outstanding loan balance was $261,480. The payment
requirements to maturity will be determined after the debt is fully issued.
State Of Missouri Direct Loan Series 2019A
In September 2019, the State of Missouri Direct Loan Program issued to the
District an amount totaling $23,952,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues and the bonds are issued from the April 2016 authorization. The
District’s interest rate is 0.98% and is payable in semiannual installments at
varying amounts through July 1, 2042.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2019A
As the District incurs approved capital expenditures, the DNR reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 0.98% based on the amount that has been borrowed.
As of June 30, 2020, the outstanding loan balance was $6,291,992. The payment
requirements to maturity will be determined after the debt is fully issued.
State Of Missouri Direct Loan Series 2018B
In December 2018, the State of Missouri Direct Loan Program issued to the District
an amount totaling $25,267,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues and the bonds are issued from the April 2016 authorization. The
District’s interest rate is 1.38% and is payable in semiannual installments at
varying amounts through January 1, 2041.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2018B
As the District incurs approved capital expenditures, the DNR reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 1.38% based on the amount that has been borrowed.
As of June 30, 2020, the outstanding loan balance was $18,228,388. The payment
requirements to maturity will be determined after the debt is fully issued.
State Of Missouri Direct Loan Series 2016B
In December 2016, the State of Missouri Direct Loan Program issued to the District
an amount totaling $75,500,000 for the purpose of improving, renovating,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 50
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues and the bonds are issued from the June 2012 authorization. The District’s
interest rate is 1.2% and is payable in semiannual installments at varying amounts
through July 1, 2037.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2016B
As the District incurs approved capital expenditures, the DNR reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 1.2% based on the amount that has been borrowed.
As of June 30, 2020, the outstanding loan balance was $61,285,085. After taking
into consideration the $6,364,000 principal paid in fiscal 2019 and 2020, the
balance to be borrowed is $7,850,915. The payment requirements to maturity will
be determined after the debt is fully issued.
State Of Missouri Direct Loan Series 2016A
In December 2016, the State of Missouri Direct Loan Program issued to the District
an amount totaling $20,000,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues and the bonds are issued from the June 2012 authorization. The District’s
interest rate is 1.2% and is payable in semiannual installments at varying amounts
through January 1, 2037.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2016A
As the District incurs approved capital expenditures, the DNR reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 1.2% based on the amount that has been borrowed.
As of June 30, 2020, the outstanding loan balance was $17,158,430. After taking
into consideration the $2,119,000 paid in fiscal 2018 through 2020, the balance to
be borrowed is $722,570. The payment requirements to maturity will be
determined after the debt is fully issued.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 51
State Of Missouri Direct Loan Series 2015A
In August 2015, the State of Missouri Direct Loan Program issued to the District
an amount totaling $75,000,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues and the bonds are issued from the June 2012 authorization. The District’s
interest rate is 1.2% and is payable in semiannual installments at varying amounts
through January 1, 2035.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2015A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2015A outstanding as of June 30, 2020 are as follows:
State Of Missouri Direct Loan Series 2013A
In October 2013, the State of Missouri Direct Loan Program issued to the District
an amount totaling $52,000,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues and the bonds were issued from the June 2012 authorization. The
District’s interest rate is 1.6% and is payable in semiannual installments at
varying amounts through July 1, 2034.
Years ending June 30, Principal Interest Total
2021 3,505,000$ 747,138$ 4,252,138$
2022 3,589,000 708,588 4,297,588
2023 3,674,000 664,546 4,338,546
2024 3,762,000 619,455 4,381,455
2025 3,852,000 573,284 4,425,284
2026-2030 20,722,000 2,134,061 22,856,061
2031-2035 23,374,000 797,947 24,171,947
Total 62,478,000$ 6,245,019$ 68,723,019$
State of Missouri Direct Loan Series 2015A
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 52
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2013A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2013A outstanding as of June 30, 2020 are as follows:
State Of Missouri Direct Loan Series 2011A
In November 2011, the State of Missouri Direct Loan Program issued to the
District an amount totaling $39,769,300 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues and the bonds were issued from the August 2008 authorization. The
District’s interest rate is 1.5% and is payable in semiannual installments at
varying amounts through January 1, 2034.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2011A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
Years ending June 30, Principal Interest Total
2021 2,365,000$ 623,932$ 2,988,932$
2022 2,427,000 590,178 3,017,178
2023 2,490,000 552,319 3,042,319
2024 2,555,000 513,476 3,068,476
2025 2,622,000 473,610 3,095,610
2026-2030 14,171,000 1,732,761 15,903,761
2031-2035 14,414,000 568,200 14,982,200
Total 41,044,000$ 5,054,476$ 46,098,476$
State of Missouri Direct Loan Series 2013A
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 53
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2011A outstanding as of June 30, 2020 are as follows:
State Of Missouri Direct Loan Series 2010C
In December 2010, the State of Missouri Direct Loan Program issued to the District
an amount totaling $37,000,000 for the purpose of improving, renovating,
repairing, replacing and equipping the District’s Wastewater System. The
principal and interest on the bonds are expected to be paid from future wastewater
revenues and the bonds were issued from the August 2008 authorization. The
District’s interest rate is 1.7% and is payable in semiannual installments at
varying amounts through January 1, 2031.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2010C
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2010C outstanding as of June 30, 2020 are as follows:
Years ending June 30, Principal Interest Total
2021 1,838,000$ 453,555$ 2,291,555$
2022 1,884,000 427,778 2,311,778
2023 1,932,000 398,959 2,330,959
2024 1,982,000 369,403 2,351,403
2025 2,032,000 339,086 2,371,086
2026-2030 10,962,000 1,213,127 12,175,127
2031-2034 9,819,300 340,749 10,160,049
Total 30,449,300$ 3,542,657$ 33,991,957$
State of Missouri Direct Loan Series 2011A
Years ending June 30, Principal Interest Total
2021 1,842,000$ 371,527$ 2,213,527$
2022 1,890,000 343,192 2,233,192
2023 1,939,000 311,809 2,250,809
2024 1,989,000 279,609 2,268,609
2025 2,041,000 246,576 2,287,576
2026-2030 11,027,000 706,563 11,733,563
2031 2,383,000 29,560 2,412,560
Total 23,111,000$ 2,288,836$ 25,399,836$
State of Missouri Direct Loan Series 2010C
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 54
State Of Missouri Direct Loan Series 2010A
In January 2010, the State of Missouri’s Direct Loan Program - ARRA issued to
the District an amount totaling $7,980,700 for the construction, improvement,
renovation, repair, replacement and equipping of its Wastewater System, under
the authority of and in full compliance with the District’s Charter (“Plan”) and the
bonds were issued from the August 2008 authorization. The District’s interest rate
is 1.5% and is payable in semiannual installments at varying amounts through
July 1, 2031.
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2010A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2010A outstanding as of June 30, 2020 are as follows:
State Of Missouri Direct Loan Series 2009A
In October 2009, the DNR loaned $23,000,000 to the District. The State of Missouri
Direct Loan Series 2009A note bears interest at a rate of 1.5% per annum and is
payable through January 1, 2030. The purpose of this note was to finance the
designing, constructing, improving, renovating, repairing, replacing and equipping
of new and existing sewer facilities within the District. The principal and interest
on the note are expected to be paid from future wastewater revenues and the note
was issued from the August 2008 authorization.
Years ending June 30, Principal Interest Total
2021 396,600$ 73,237$ 469,837$
2022 404,600 67,817 472,417
2023 412,900 61,799 474,699
2024 421,300 55,657 476,957
2025 429,800 49,391 479,191
2026-2030 2,283,300 148,424 2,431,724
2031-2032 731,000 10,855 741,855
Total 5,079,500$ 467,180$ 5,546,680$
State of Missouri Direct Loan Series 2010A
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 55
Principal And Interest Requirements On State Of Missouri Direct Loan
Series 2009A
As the District incurred approved capital expenditures, the DNR reimbursed the
District for the expenditures from the bond proceeds account. All funds have been
drawn on this loan.
The annual principal and interest requirements to maturity on the State of
Missouri Direct Loan Series 2009A outstanding as of June 30, 2020 are as follows:
In accordance with the Direct Loan Series 2009A, 2010A, 2010C, 2011A, 2013A,
2015A, 2016A, 2016B, 2018B and 2019A ordinances, the District’s annual net
operating revenues from wastewater activities, as defined in the agreement,
coupled with investments earnings must be at least 115% of the current year’s
principal and interest due on all bonds. At June 30, 2020 and 2019, the District
was in compliance with this covenant.
Wastewater System Cash And Investments
The following accounts have been established in accordance with bond ordinances
and financing agreements that require receipts generated from operations be
segregated and certain reserve accounts be established:
Revenue Fund
The Revenue Fund will be used for the purpose of depositing wastewater and
stormwater operating revenues, providing funds to pay for expenses related to the
operation and maintenance of the District, and fulfilling Sinking Fund
requirements in accordance with the bond ordinances.
Sinking Fund
The bond ordinances provide for deposits to and the use of monies in the Sinking
Fund to be used for the sole purpose of principal and interest payments on the
bonds. Sufficient monies shall be paid in periodic installments from the Revenue
Fund.
Years ending June 30, Principal Interest Total
2021 1,176,500$ 184,760$ 1,361,260$
2022 1,203,700 169,251 1,372,951
2023 1,231,600 151,575 1,383,175
2024 1,260,000 133,491 1,393,491
2025 1,289,200 114,989 1,404,189
2026-2030 6,907,200 282,078 7,189,278
Total 13,068,200$ 1,036,144$ 14,104,344$
State of Missouri Direct Loan Series 2009A
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 56
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 2010B, 2011B, 2012A, 2012B and 2013B bonds,
monies in the Debt Service Reserve Fund shall be disbursed and expended by the
District solely for the payment of the principal and interest on the bonds and notes
to the extent of any deficiency in the Debt Service Fund for such purpose. The
District may disburse and expend monies from the Debt Service Reserve Fund for
such purpose immediately. As of June 30, 2020 and 2019, cash and investments in
the Debt Service Reserve Fund totaled $25,000,722 and $50,460,508, respectively.
Series 2015B was issued without a debt service reserve fund requirement and at
that time $8,945,557 in excess debt service reserves along with part of the Series
2015B proceeds were used to advance refund Series 2006C and Series 2008A
bonds.
Series 2016C was issued without a debt service reserve fund requirement.
Series 2017A was issued without a debt service reserve fund requirement and at
that time $934,325 in excess debt service reserves along with part of the Series
2017A proceeds were used to partially advance refund Series 2011B, Series 2012A,
Series 2013B and Series 2015B.
Series 2018A was issued without a debt service reserve fund requirement.
Series 2019B was issued without a debt service reserve fund requirement.
Series 2019C was issued without a debt service reserve fund requirement and at
that time $26,045,142 in excess debt service reserves along with the Series 2019C
proceeds were used to partially advance refund Series 2012A, Series 2012B, Series
2013B and Series 2015B.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 57
Special Participant Bond Reserve Account
For the Series 2004B, 2005A, 2006A, 2006B, and 2008A/B bonds, the DNR
deposited into the Special Participant Bond Reserve Account, amounts in
accordance with the bond ordinances, which shall be disbursed and expensed by
the District solely for the payment of the principal and interest on the Participant
Bonds to the extent of any deficiency in the Sinking Fund for such purpose. At
June 30, 2020 and 2019, cash and investments in the Special Participant Bond
Reserve Account held on behalf of the District totaled $67,598,530 and
$77,260,600, respectively. Monies in this account are not considered to be District
funds. However, interest earnings on this account are used by the District to reduce
interest payments on the bonds outstanding.
Renewal And Extension Fund
All sums accumulated and retained in the Renewal and Extension Fund shall be
first used to prevent default in the payment of principal and interest on the bonds
when due and shall then be applied by the District for purposes pursuant to the
trust indenture. No monies have been deposited into this account at June 30, 2020.
Project Fund
The Project Funds for all bond issuances outstanding will be used for the purpose
of providing monies to pay project costs. The proceeds from the bonds and notes,
after a deposit into the Debt Service Reserve Fund for the amounts required
pursuant to the bond ordinances and note agreements of Series 2010B, 2011B,
2012A, 2012B and 2013B bonds, shall be deposited into the Project Fund. At June
30, 2020 and 2019, cash and investments in the Project Funds totaled $60,765,125
and $126,410,864, 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, 2020 and 2019,
cash and investments in the Rebate Fund totaled $229,909 and $229,164,
respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 58
Administrative Fee Fund
The Administrative Fee Fund will be used for the payment of the Trustee’s fees
and other administrative fees pursuant to the note agreement. The Trustee has
the ability to immediately withdraw the fee amounts when due. Monies held in
this account shall not be invested.
Pledged Revenues
The District pledges revenues to ensure the repayment of all outstanding revenue
bonds. These bonds’ proceeds are used for the District’s capital improvement and
replacement program and their repayment comes from, and is collateralized by,
the District’s wastewater revenues. These revenues are pledged through 2049 at
an approximate amount of $2.0 billion. The proportion of future pledged revenues
to future wastewater revenues is not estimable as annual total revenues fluctuate.
Principal and interest paid out during fiscal year 2020 was $112.5 million with
pledged revenues of $276.3 million. This provided a coverage ratio of 2.5 and
pledged revenues represented 63.1% of all net operating revenues.
Direct Borrowings and Direct Placements
The District did not have any bonds and notes from direct borrowings or direct
placements in the fiscal years ending June 30, 2020 and 2019. In addition, the
District had no unused lines of credit and had no assets pledged as collateral for
notes from direct borrowings and direct placements in the fiscal years ending June
30, 2020 and 2019.
The District has authorized the issuance of Wastewater System Refunding
Revenue Bonds, Series 2021A, Series 2022A, Series 2023A, and Series 2025A, to
be issued on May 3, 2021; May 3, 2022; May 1, 2023; and May 1, 2025, respectively.
The par amount of the bonds will total $202,065,000 and the bonds will be
purchased by Morgan Stanley Municipal Funding, Inc. pursuant to the Amended
and Restated Forward Delivery Bond Purchase Agreement dated March 23, 2020.
Upon issuance, the District plans to use the proceeds of the bonds to refund a
portion of the outstanding Wastewater System Revenue Bonds, Series 2011B,
Series 2012B, Series 2013B, and Series 2015B.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 59
7. Pension Plan
General Information About The Pension Plan
Pension Plan Description. The Metropolitan St. Louis Sewer District Employees’
Pension Plan (“Pension Plan”) is a noncontributory single employer defined benefit
plan providing retirement benefits as well as death and disability benefits. As a
condition of employment, all full-time employees of the District commencing
service prior to January 1, 2011, were eligible to be covered by the Pension Plan.
As of January 1, 2011, the Pension Plan was frozen to new employees. Instead,
new employees of the District may participate in The Metropolitan St. Louis Sewer
District Defined Contribution Plan (“DC Plan”) and/or The Metropolitan St. Louis
Sewer District Deferred Compensation Plan and Trust. Current employees with
less than ten years of service on January 1, 2011 could also voluntarily elect to
transfer from the Pension Plan and enter the DC Plan.
Benefits Provided. All benefits vest after five years of credited service. Members
retiring at or after age 65 with five or more years credited service are entitled to a
pension benefit. The Pension Plan permits early retirement with reduced benefits
beginning at age 55 if the member has completed five years of employment.
Ordinance No. 10664 provides for unreduced retirement benefits to any member
whose combined age and term of service is equal to 75.
Effective August 1, 2004, Ordinance No. 11781 amended the Pension Plan to
change the benefit formula to 1.7% of final average earnings plus 0.4% of final
average earnings that are in excess of covered earnings multiplied by the period of
years and months of credited service not to exceed 35 years without including
accrued sick leave. For vested employees who retire or die while in active service,
sick leave is paid out at 1.25% per year of service multiplied by the amount of the
unused accrued sick leave remaining at the employee’s current rate of pay, up to a
maximum of $50,000. Also, the Pension Plan was amended to provide the retiring
member with a 10% partial lump sum payment option. The balance of the
distribution will be paid in accordance with any one of the other payment options
available under the Pension Plan.
The retirement benefit payable to a member who retires after the normal
retirement date is the greater of a) the benefit that would have been payable on
the normal retirement date plus a special annual retirement benefit provided by
the accumulated value, at 4% per annum interest, of the monthly benefit that
would have been received prior to the postponed retirement date or b) the benefit
determined as of the postponed retirement date under the normal formula.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 60
Effective August 27, 2011, Ordinance No. 13288 amended the Pension Plan to
include the following: “Upon termination or complete discontinuance of
contributions under the Plan, the rights of all Members to benefits accrued to the
date of such termination or discontinuance shall be non-forfeitable, to the extent
then funded.”
Amounts in participants’ accounts are distributed upon retirement, death,
disability, or termination of employment. The normal form of retirement benefit is
either a lump sum payment or equal monthly installments.
The Pension Plan reports financial data on a calendar year basis and issues a
publicly available financial report that includes financial statements and required
supplementary information. That report may be obtained by writing: The
Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO 63103-
2555.
Employees Covered by Benefit Terms. At December 31, 2019 and 2018, the financial
reporting period of the Pension Plan, the following employees were covered by the
benefit terms:
Required Employer Contributions. The District’s employees do not contribute to
the Pension Plan. Ordinances establishing the Pension Plan provide for actuarially
determined annual contributions, paid solely by the District, that are sufficient to
pay benefits when due. The Entry Age Normal actuarial funding method is used
to determine contributions.
Contributions of $13,062,014 and $12,609,689, excluding certain professional fees
paid by the District, were made to the Pension Plan during the District’s fiscal
years ended June 30, 2020 and 2019, respectively. These contributions were made
in accordance with actuarially determined contribution requirements based on
actuarial valuations performed at December 31, 2019 and 2018, respectively.
Increase
2019 2018 (Decrease)
Active plan members 493 545 (52)
Retirees and beneficiaries currently receiving benefits 771 748 23
Terminated members entitled to receive benefits 180 181 (1)
Total 1,444 1,474 (30)
For the Years Ended
December 31,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 61
Net Pension Liability
The net pension liability was measured as of December 31, 2019 and 2018 and the
total pension liability used to calculate the net pension liability was determined by
an actuarial valuation as of that date.
Actuarial Assumptions. The total pension liability in the December 31, 2019 and
2018 actuarial valuations were determined using the following actuarial
assumptions, applied to all periods included in the measurement:
Effective December 31, 2019, for current employees, healthy retirees, disabled
retirees and contingent survivors, mortality rates were based on the Pub-2010
General Amount-Weighted Mortality Tables, male and female rates, with
generational projection from 2010 using MP-2019 improvement scale
(improvement scale updates published annually). Mortality rates for the December
31, 2018 valuation for current employees were based on the RP-2014 Employees
Mortality Table, male and female rates, with generational projection from 2006
based on the MP-2018 improvement scale. For retirees, the RP-2014 Healthy
Annuitant Mortality Table, male and female rates, with generational projection
from 2006 based on the MP-2018 improvement scale was assumed for the
December 31, 2018 valuation. For disabled lives, the RP-2014 Disabled Mortality
Table, male and female rates, was utilized for the December 31, 2018 valuation.
The actuarial assumptions are based on prior and current year experiences.
Inflation 2.50 percent
Salary Increases 4.25 percent, average, including inflation
Investment Rate of Return 6.75 and 6.90 percent, net of pension plan investment expense,
including inflation for December 31, 2019 and 2018, respectively
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 62
Long-Term Expected Rate of Return. The long-term expected rate of return is
determined by adding expected inflation to expected long-term real returns and
reflecting expected volatility and correlation. The capital market assumptions at
December 31, 2019 and 2018 are as follows:
Discount Rate. The discount rate used to measure the total pension liability at
December 31, 2019 and 2018, was 6.75 and 6.90 percent, respectively. The Pension
Plan’s fiduciary net position was projected to be available to make all projected
future benefit payments of current active and inactive employees. Therefore, the
discount rate for calculating the total pension liability is equal to the long-term
expected rate of return.
Long-Term
Expected
Arithmetic
Target Real Rate
Asset Class Allocation of Return
Domestic Fixed Income 27.0% **
Large Cap US Equity 25.0% 4.2%
Developed International Equity 12.0% 5.0%
Real Estate 12.0% 3.4%
Small Cap US Equity 10.0% 4.7%
Global Fixed Income 8.0% 2.9%
Emerging Markets Equity 6.0% 5.6%
Total 100.0%
** Expected to earn less than inflation
December 31, 2019
Long-Term
Expected
Arithmetic
Target Real Rate
Asset Class Allocation of Return
Domestic Fixed Income 27.0% 1.2%
Large Cap US Equity 25.0% 4.0%
Developed International Equity 12.0% 5.0%
Real Estate 12.0% 3.0%
Small Cap US Equity 10.0% 4.5%
Global Fixed Income 8.0% 4.3%
Emerging Markets Equity 6.0% 5.7%
Total 100.0%
December 31, 2018
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 63
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
Changes in Net Pension Liability (a)(b)(a) - (b)
Balances as of December 31, 2018 334,957,313$ 260,560,576$ 74,396,737$
Changes for the year:
Service cost 4,902,474 — 4,902,474
Interest 22,818,417 — 22,818,417
Effect of economic/demographic gains or losses (1,966,640)— (1,966,640)
Effect of assumptions changes or inputs 11,910,886 — 11,910,886
Benefit payments (18,626,890) (18,626,890)—
Employer contributions — 12,725,462 (12,725,462)
Net investment income — 41,543,499 (41,543,499)
Balances as of December 31, 2019 353,995,560$ 296,202,647$ 57,792,913$
Changes in Net Pension Liability for the Year Ending December 31, 2019
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
Changes in Net Pension Liability (a)(b)(a) - (b)
Balances as of December 31, 2017 326,365,153$ 277,976,215$ 48,388,938$
Changes for the year:
Service cost 5,238,812 — 5,238,812
Interest 22,306,950 — 22,306,950
Effect of economic/demographic gains or losses (2,041,843)— (2,041,843)
Effect of assumptions changes or inputs — — —
Benefit payments (16,911,759) (16,911,759)—
Employer contributions — 12,493,916 (12,493,916)
Net investment income — (12,997,796) 12,997,796
Balances as of December 31, 2018 334,957,313$ 260,560,576$ 74,396,737$
Changes in Net Pension Liability for the Year Ending December 31, 2018
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 64
Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The
following presents the net pension liability calculated using the 6.75 and 6.90
percent discount rate for December 31, 2019 and December 31, 2018, respectively,
as well as what the District’s net pension liability would be if it were calculated
using a discount rate that is 1-percentage-point lower or 1-percentage-point higher
than the current rate for each year:
Pension Plan Fiduciary Net Position. Fiduciary net position is the fair value of all
plan assets. Net pension liability is the plan’s total pension liability less its
fiduciary net position, i.e., the plan’s unfunded accrued liability.
Pension Expense And Deferred Outflows Of Resources And Deferred
Inflows Of Resources Related To Pensions
For the years ended June 30, 2020 and 2019, the District recognized pension
expense of $17,831,390 and $19,988,206, respectively, after accounting for all
deferred outflows and inflows of resources. The District reported pension-related
deferred outflows of resources and deferred inflows of resources from the following
sources:
1% Current 1%
Decrease Discount Rate Increase
(5.75%) (6.75%) (7.75%)
Net Pension Liability 97,289,377$ 57,792,913$ 24,254,799$
December 31, 2019
1% Current 1%
Decrease Discount Rate Increase
(5.90%) (6.90%) (7.90%)
Net Pension Liability 111,394,809$ 74,396,737$ 42,914,274$
December 31, 2018
Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources
Differences between expected and actual experience —$ 3,031,605$ —$ 4,341,116$
Changes of assumptions 8,540,488 — 3,895,543 —
Net difference between projected and actual earnings — 4,118,093 23,546,115 —
Contributions made subsequent to measurement date 7,133,164 — 6,796,612 —
Total 15,673,652$ 7,149,698$ 34,238,270$ 4,341,116$
June 30, 2020 June 30, 2019
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 65
In the years ending June 30, 2020 and 2019, amounts currently reported as
deferred outflows of resources, $7,133,164 and $6,796,612, respectively, related to
the District’s contributions subsequent to the measurement date will be recognized
as a reduction of the net pension liability in the years ended June 30, 2021 and
2020, respectively.
Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Payable To The Pension Plan
At June 30, 2020 and 2019, the District did not have outstanding required
contributions to the pension plan.
8. Other Retirement Plans
Deferred Compensation Plan and Trust
The District offers its employees a deferred compensation plan created in
accordance with Internal Revenue Code Section 457. The Metropolitan St. Louis
Sewer District Deferred Compensation Plan and Trust (“Plan”), available to all
District employees, permits them to defer a portion of their salary up to Internal
Revenue Code limits. The District does not contribute to the Plan except where
mandated by the Internal Revenue Service to compensate participants for lost
deferral contributions. The deferred compensation is not available to employees
until termination, retirement, death, disability or due to financial hardship as
defined by the Plan.
At June 30, 2020 and 2019, the District had outstanding liabilities owed to the
Plan of $150,307 and $124,996, respectively.
Net Deferrals of
Resources
Year ended June 30,:
2021 2,380,384$
2022 2,143,301
2023 1,630,533
2024 (4,763,428)
1,390,790$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 66
The Plan was amended and restated to comply with the Economic Growth and Tax
Relief Reconciliation Act of 2001 (“Act”). The Act made significant changes to
Section 457(b) of the Internal Revenue Code of 1986, as previously amended. The
Plan assets are held in trust for the exclusive benefit of participants and their
beneficiaries under Section 1448 of the Small Business Job Protection Act of 1996.
As a result, the assets and liabilities of the Plan are not included in the
accompanying financial statements.
The Metropolitan St. Louis Sewer District Deferred Compensation Plan and Trust
issues a publicly available financial report that includes financial statements and
supplementary information. That report may be obtained by writing: The
Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO 63103-
2555.
Defined Contribution Plan
The Metropolitan St. Louis Sewer District Defined Contribution Plan (“DC Plan”)
was established by the District’s Board of Trustees, through Ordinance 13180,
which became effective January 1, 2011. The following full time employees are
eligible to participate in the DC Plan: (i) employees first hired on or after January
1, 2011, and (ii) employees hired prior to January 1, 2011 who elected to terminate
participation in The Metropolitan St. Louis Sewer District Employees’ Pension
Plan (“Pension Plan”), effective as of April 1, 2011, in accordance with the
provisions of such Pension Plan, and (iii) employees rehired on or after January 1,
2011 who are not eligible to accrue benefits under the Pension Plan. An employee
shall become a participant in the DC Plan on the first day on which he or she
performs an hour of service for the District.
The District’s Board of Trustees, primarily to improve benefits to members,
amends the DC Plan in all its respects. A pension committee consisting of two
members of the District’s Board of Trustees, two elected employee members and
four members of the District’s management staff administer the DC Plan. A
committee of the District’s Board of Trustees, with the aid of an investment
advisor, reviews and evaluates the DC Plan’s investment options and the related
rates of return on a periodic basis.
This DC Plan is intended to provide a means whereby the District may provide
retirement benefits to eligible employees and encourage such employees to
establish a regular method of savings, thereby providing a measure of financial
security for such employees and their beneficiaries upon retirement or in the event
of death or disability. All assets of the DC Plan are the sole property of the DC Plan
and are not subject to the claims of creditors of the District and the assets and
liabilities of the DC Plan are not included in the accompanying financial
statements.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 67
Employer Basic Contributions: For each payroll period, the District contributes an
amount equal to 7% of the covered compensation earned during such period by
each participant entitled to an allocation of such contribution. Upon a participant’s
severance from service, the unvested amount credited to his/her individual account
shall be forfeited and credited to the Employer Basic Contributions account and
shall be used to reduce future Employer Basic Contributions. If a participant is
rehired before incurring two consecutive years break in service, the amount
previously forfeited will be restored. If rehired after two consecutive years of break
in service, the amounts previously forfeited will not be restored.
Employer Matching Contributions: For each payroll period, the District
contributes an amount equal to 50% of the covered compensation of such
participant withholding as an annual deferral (as defined in The Metropolitan
St. Louis Sewer District Deferred Compensation Plan and Trust) pursuant to The
Metropolitan St. Louis Sewer District Deferred Compensation Plan and Trust;
provided that, before-tax contributions in excess of 4% of the covered compensation
of the participant for the payroll period shall not be considered for purposes of
Employer Matching Contributions. Employer Matching Contributions shall be up
to the maximum amount of compensation that may be taken into account for the
DC Plan year and the amount credited to the participant’s Employer Matching
Contributions Account shall be fully vested at all times.
In no event shall the sum of the employer contributions and employee
contributions allocated to the account of a participant for the DC Plan year exceed
the lesser of:
(a) The amount specified in the applicable Internal Revenue Code, as
adjusted annually for any applicable increases in the cost of living;
(b) 100% of the participant’s compensation for such year.
The compensation limit referred to in (b) shall not apply to any contribution from
medical benefits after separation from service.
The District’s contributions to the DC Plan amounted to $2,483,566 and $2,069,859
for the years ended June 30, 2020 and 2019, respectively. Forfeitures were $61,807
and $46,347, for the years ended June 30, 2020 and 2019, respectively, and the
balances in the prepaid forfeitures account as of June 30, 2020 and 2019 were
$4,073 and $13, respectively. At June 30, 2020 and 2019, the District had
outstanding liabilities owed to the DC Plan of $81,163 and $56,997, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 68
Vesting: As of any time before the normal retirement age of a participant, the first
day of the month coinciding with or next following a person’s sixty-fifth birthday
and completion of sixty months of continuous service (other than upon death or
permanent disability), the vested percentage of the amounts credited to the
participant’s Employer Basic Contributions account shall be determined in
accordance with the following schedule:
The Metropolitan St. Louis Sewer District Defined Contribution Plan issues a
publicly available financial report that includes financial statements and
supplementary information. That report may be obtained by writing: The
Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO 63103-
2555.
9. Postemployment Benefits Other Than Pensions (“OPEB”)
General Information About The OPEB Plan
Plan Description. The District’s defined benefit OPEB plan, The Metropolitan St.
Louis Sewer District Retiree Medical Coverage Plan (“Plan”), provides OPEB for
all permanent full-time employees who retire from the District on or after age 62
with five years of service or whose age plus years of service equal 75 points (“Rule
of 75”) as part of a total compensation package effective August 1, 2004 for general
employees and, with respect for union members, the later of August 1, 2004 or the
date of union ratification of a Memorandum of Understanding with respect to this
Plan modification. The Plan is a single employer defined benefit OPEB plan
administered by the District. The Plan was established by Ordinance No. 9826 and
became effective January 1, 1996. This ordinance has been repealed and new
ordinances enacted in lieu thereof with Ordinance No. 15109 covering defined
contribution retirees and Ordinance No. 15110 covering defined benefit retirees,
both of which were adopted on February 14, 2019, being the most current
ordinances covering the Plan in its entirety. The District offers two medical plan
options, a traditional open access plan and a high deductible health plan, and both
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 69
plans offer wellness rates for those employees who qualify. No assets are
accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement
No. 75, Accounting and Financial Reporting for Postemployment Benefits Other
Than Pension (“GASB Statement No. 75”).
Benefits Provided. The Plan provides healthcare for qualified retirees and their
dependents. The District pays the same amount of the monthly group health
insurance premium for the qualified retiree as it would for an active single
employee until the retiree becomes eligible for Medicare at age 65. In fiscal year
2020 and 2019 the monthly amount the District paid towards the retiree’s
premium was $580.25 for retirees qualifying for the wellness incentive. The
$580.25 paid by the District equates to 85% of the traditional plan’s premium and
91% of the high deductible plan’s premium. For retirees not qualifying for the
wellness incentive, the District pays $547.75 of the premium which equates to 80%
for the traditional plan and 86% for the high deductible plan. The retiree pays
100% of the spousal, children or family premium incremental increases in addition
to the remaining 9-20% of the retiree’s total monthly premium. The Plan also
provides life insurance coverage for a very small closed group of disabled former
employees.
The monthly premiums for both plans and coverage tiers are as follows:
Total Retiree OPEB Benefit Net Cost
Coverage Tier Premium Paid by District to Retiree
Traditional Plan with wellness incentive
Retiree 684.69$ 580.25$ 104.44$
Retiree + Spouse 1,458.58 580.25 878.33
Retiree + Child(ren)1,325.27 580.25 745.02
Retiree + Family 2,021.51 580.25 1,441.26
Traditional Plan with no wellness incentive
Retiree 684.69 547.75 136.94
Retiree + Spouse 1,458.58 547.75 910.83
Retiree + Child(ren)1,325.27 547.75 777.52
Retiree + Family 2,021.51 547.75 1,473.76
High Deductible Plan with wellness incentive
Retiree 637.05 580.25 56.80
Retiree + Spouse 1,357.08 580.25 776.83
Retiree + Child(ren)1,233.05 580.25 652.80
Retiree + Family 1,880.84 580.25 1,300.59
High Deductible Plan with no wellness incentive
Retiree 637.05 547.75 89.30
Retiree + Spouse 1,357.08 547.75 809.33
Retiree + Child(ren)1,233.05 547.75 685.30
Retiree + Family 1,880.84 547.75 1,333.09
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 70
The ordinance establishing the Plan assigned the authority to establish and amend
Plan benefit provisions to the District. The contribution requirements of the
District and Plan members are established by the District and may be amended by
the District. The Plan does not issue a publicly available report.
Employees Covered by Benefit Terms. At June 30, 2020 and 2019, the following
employees were covered by the benefit terms:
Total OPEB Liability
The District’s total OPEB liability, measured as of December 31, 2019 and
December 31, 2018 was $23,164,618 and $24,164,395, respectively. The District’s
total OPEB liabilities were determined by an actuarial valuation as of the
valuation dates, June 30, 2019 and June 30, 2017, respectively, and were
calculated based on the discount rate and actuarial assumptions below and were
then projected forward to the measurement dates. There have been no significant
changes between the valuation dates of June 30, 2019 and June 30, 2017,
respectively, and the reporting fiscal year end dates of June 30, 2020 and June 30,
2019.
Actuarial Assumptions and Other Inputs. The total OPEB liabilities based on the
June 30, 2019 and June 30, 2017 actuarial valuations were determined using the
following actuarial assumptions and other inputs, applied to all periods included
in the measurement, unless otherwise specified:
June 30, 2020 June 30, 2019
Inactive employees or beneficiaries currently receiving benefit payments 122 120
Inactive employees entitled to but not yet receiving benefit payments — —
Active employees 955 935
Total 1,077 1,055
Inflation 2.50 percent
Healthcare cost trend
rates
6.40 percent for 2019, gradually decreasing to an ultimate rate of 3.70
percent for 2075 and beyond
5.90 percent for 2018, gradually decreasing to an ultimate rate of 4.00
percent for 2091 and beyond
Salary increases 4.25 percent, average, including inflation
Retiree's share of benefit-
related costs
9-20 percent of projected health insurance premiums for retirees
depending on plan selected (traditional or high deductible) and wellness
Discount rate 2.74 percent for December 31, 2019 measurement date
4.10 percent for December 31, 2018 measurement date
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 71
The discount rate was based on the 20 Year Bond General Obligation Index.
Mortality rates were based on the Pub-2010 General Amount-Weighted Mortality
Tables for Employees, Healthy Retirees, Disabled Retirees and Contingent
Survivors, male and female rates, with generational projection from 2010 using
the MP-2019 scale for the measurement date of December 31, 2019. The rates for
the measurement date December 31, 2018 were based on the RP-2014 Mortality
Table for Employees and Healthy Annuitants, with generational projection using
the MP-2018 scale and the RP-2014 Disabled Mortality Table, male and female
rates, for Disabled Retirees.
The actuarial assumptions are based on prior and current year experiences. The
plan has not had a formal actuarial experience study performed.
Changes in the Total OPEB Liability
The Plan change reflected in the June 30, 2019 valuation is due to providing a
$5,000 death benefit to defined contribution retirees. For defined benefit retirees,
this benefit is paid by the Pension Plan.
The economic/demographic gains reflected in the June 30, 2019 valuation are due
to the repeal of the Affordable Care Act excise tax for high cost health plans and
removal of the Health Insurer Fee beginning in 2021, both resulting from the
Further Consolidated Appropriations Act, 2020 which became law on December
20, 2019 and a large experience gain primarily due to medical claims and
premiums staying relatively level since the June 30, 2017 valuation.
Changes in the Total OPEB Liability for the Years Ending
Increase (Decrease)
December 31, 2019 December 31, 2018
Total OPEB Liability Beginning Balance 24,164,395$ 24,193,972$
Changes for the year:
Service cost 1,396,832 1,780,999
Interest on total OPEB liability 1,016,787 864,738
Effect of plan changes 85,519 —
Effect of economic/demographic gains or losses (3,886,563) —
Changes of assumptions or other inputs 1,926,188 (986,538)
Benefit payments (1,538,540) (1,688,776)
Net changes (999,777) (29,577)
Total OPEB Liability Ending Balance 23,164,618$ 24,164,395$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 72
Changes of assumptions or other inputs reflect a change in the discount rate from
4.10 percent in 2018 to 2.74 percent in 2019 and the change in mortality
assumptions referenced above.
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate. The
following presents the total OPEB liability of the District as of December 31, 2019,
calculated using the discount rate of 2.74%, as well as what the District’s total
OPEB liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (1.74%) or 1-percentage-point higher (3.74%) than the
current discount rate.
The following presents the total OPEB liability of the District as of December 31,
2018, calculated using the discount rate of 4.10%, as well as what the District’s
total OPEB liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (3.10%) or 1-percentage-point higher (5.10%) than the
current discount rate.
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend
Rates. The following presents the total OPEB liability of the District as of
December 31, 2019, calculated using the current range of healthcare cost trend
rates, as well as what the District’s total OPEB liability would be if it were
calculated using the range of healthcare cost trend rates that were 1-percentage-
point lower (5.40% decreasing to 2.70%) or 1-percentage-point higher (7.40%
decreasing to 4.70%) than the current range of healthcare cost trend rates of 6.40%
decreasing to 3.70%.
1%Current 1%
Decrease Discount Rate Increase
(1.74%)(2.74%) (3.74%)
Total OPEB Liability 24,549,392$ 23,164,618$ 21,837,336$
December 31, 2019
1%Current 1%
Decrease Discount Rate Increase
(3.10%)(4.10%) (5.10%)
Total OPEB Liability 25,636,528$ 24,164,395$ 22,759,445$
December 31, 2018
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 73
The following presents the total OPEB liability of the District as of December 31,
2018, calculated using the current range of healthcare cost trend rates, as well as
what the District’s total OPEB liability would be if it were calculated using the
range of healthcare cost trend rates that were 1-percentage-point lower (4.90%
decreasing to 3.00%) or 1-percentage-point higher (6.90% decreasing to 5.00%)
than the current range of healthcare cost trend rates of 5.90% decreasing to 4.00%.
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows
of Resources Related to OPEB
For the years ended June 30, 2020 and 2019, the District recognized OPEB expense
of $2,266,677 and $2,586,148, respectively. At June 30, 2020 and 2019, the District
reported deferred outflows of resources and deferred inflows of resources related
to OPEB from the following sources:
Current
Healthcare
Cost Trend
1% Decrease Rates 1% Increase
(5.40% (6.40% (7.40%
decreasing decreasing decreasing
to 2.70%) to 3.70%) to 4.70%)
Total OPEB Liability 20,892,086$ 23,164,618$ 25,844,165$
December 31, 2019
Current
Healthcare
Cost Trend
1% Decrease Rates 1% Increase
(4.9% (5.9% (6.9%
decreasing decreasing decreasing
to 3.00%) to 4.00%) to 5.00%)
Total OPEB Liability 21,668,741$ 24,164,395$ 27,109,050$
December 31, 2018
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 74
In the years ending June 30, 2020 and 2019, amounts currently reported as
deferred outflows of resources, $769,270 and $888,795, respectively, related to the
District’s benefit payments subsequent to the measurement date will be recognized
as a reduction of the total OPEB liability in the years ended June 30, 2021 and
2020, respectively.
Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to OPEB will be recognized in OPEB expense as follows:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences between expected and actual experience —$ 3,543,833$
Changes of assumptions or other inputs 2,073,599 786,834
Benefit payments made subsequent to measurement date 769,270 —
Total 2,842,869$ 4,330,667$
Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes of assumptions or other inputs 357,532$ 886,686$
Benefit payments made subsequent to measurement date 888,795 —
Total 1,246,327$ 886,686$
June 30, 2020
June 30, 2019
Net Deferrals of
Resources
Year ended June 30,:
2021 (232,461)$
2022 (232,461)
2023 (232,461)
2024 (232,461)
2025 (232,461)
Thereafter (1,094,763)
(2,257,068)$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 75
10. Self-Insurance Programs
The District is exposed to various risks of loss related to torts; theft of, damage to,
and destruction of assets; errors and omissions; injuries to employees; and natural
disasters. The District has established a risk management program and retains
the risk related to its obligation to provide workers' compensation and medical and
hospitalization benefits to its employees; and to pay water backup claims to its
customers. The estimated liabilities for payment of incurred (both reported and
unreported) but unpaid claims relating to these matters are included as a
component of current deposits and accrued expenses, and as such, are expected to
be paid within one year of the date of the Statement of Net Position. At June 30,
2020 and 2019, these liabilities amounted to $4,755,168 and $7,920,684,
respectively.
The claims liabilities reported are based on the requirements of GASB Statement
No. 10, Accounting and Financial Reporting for Risk Financing and Related
Insurance Issues, which requires that a liability for claims be reported if
information obtained prior to the issuance of the financial statements indicates it
is probable that a liability has been incurred and the amount of the liability can be
reasonably estimated. Changes in the balance of claims liabilities during fiscal
2020, 2019, and 2018 were as follows:
The District obtains periodic funding valuations from the third-party
administrators managing the self-insurance programs and adjusts the charges as
required to maintain the appropriate level of estimated claims liability. The
District also maintains excess liability insurance coverage for workers'
compensation and medical and hospitalization claims; general liability; and water
backup damage to customers’ property.
The District purchases commercial insurance for all other risks of loss. Settled
claims have not exceeded this commercial coverage in any of the past three years.
2020 2019 2018
Liability - Beginning of Year 7,920,684$ 4,026,003$ 4,461,069$
Current year claims and changes in estimates 18,916,140 19,320,396 15,939,863
Claim payments (22,081,656) (15,425,715) (16,374,929)
Liability - End of Year 4,755,168$ 7,920,684$ 4,026,003$
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 76
11. Closure And Post-Closure Care Costs
State and federal laws and regulations require the District to place a final cover
on its Prospect Hill Reclamation Project landfill site when it stops accepting waste
and to perform certain maintenance and monitoring functions at the site for 30
years after closure. Although closure and post-closure care costs will be paid only
near or after the date that the landfill stops accepting waste, the District reports
a portion of these closure and post-closure care costs as an operating expense in
each fiscal year. The $622,913 and $619,384 reported as landfill closure and post-
closure care liabilities at June 30, 2020 and 2019, respectively, represent the
cumulative amounts reported at fiscal year-end and represent 71.2% of the
estimated closure and post-closure care costs of the landfill for fiscal years ended
June 30, 2020 and 2019. These amounts are based on what it would cost to perform
all closure and post-closure care in 2020 and 2019, respectively.
The remaining disposal life estimate was calculated in 2009 and was estimated at
eight years factoring in a future annual average disposal rate of 96,500 cubic yards.
It was noted in the 2009 Black and Veatch study that this life could be extended
further if the actual disposal rate is less than projected or alternative uses and off-
site beneficial options for the incinerator ash are later developed. Since the actual
average disposal rate has been less than 96,500 cubic yards, the landfill is not at
capacity and MSD expects the landfill to be in use for another 9-11 years and the
total capacity of the landfill and the available space as of 2017 was adjusted in
2017. In addition, a new survey of the landfill was performed in December of 2017
which increased the remaining capacity due to settlement and minor vehicle
compaction. The District will continue to accrue the remaining estimated cost of
closure and post-closure care annually.
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 Statements of Net
Position will be adjusted accordingly.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 77
12. Commitments And Contingencies
United States And State Of Missouri V. Metropolitan St. Louis Sewer
District; In The United States District Court For The Eastern District Of
Missouri; Case No. 07-1120.
On April 27, 2012, the Court entered the consent decree (“CD”) involving the
Environmental Protection Agency, Missouri Department of Natural Resources,
Missouri Coalition for the Environment and The Metropolitan St. Louis Sewer
District (“MSD”). The CD required the District to spend approximately $4.7 billion,
in 2010 dollars, over a 23-year implementation period. Throughout this period
improvements will be made to the District’s separate sewer system, combined
sewer system, and wastewater treatment plants. 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.
On June 22, 2018, a United States District Judge approved an amendment to the
CD to extend it by five years from a 23-year program to a 28-year program. Recent
regulatory changes have compelled MSD to accelerate certain non-consent decree
work. This amendment will allow MSD to meet these new regulatory requirements
in a fiscally responsible way while better controlling rate increases over the coming
years. The District continues to comply with the CD.
Other Commitments and Contingencies
The District is a defendant in various other matters of litigation. Of these matters,
management and District’s legal counsel do not anticipate any material effect on
the June 30, 2020 and 2019 financial statements.
The District has entered into construction and other contracts amounting to
approximately $521,000,000 at June 30, 2020, and through the audit report date.
The District had $598,428,796 in revenue bonds authorized by the voters but
unissued as of June 30, 2020. These funds were sought to enable the District to
comply with federal and state clean water requirements.
13. Restricted Net Position
The Statements of Net Position report $97,034,022 and $127,413,605 of restricted
net position at June 30, 2020 and 2019, respectively, of which $63,177,454 and
$69,150,974 are restricted due to enabling legislation, as of June 30, 2020 and
2019, respectively.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 78
14. Segment Information
The District issued wastewater revenue bonds to finance wastewater
infrastructure projects. The District accounts for both wastewater and stormwater
activities in a single enterprise fund, but investors in those bonds rely solely on the
revenue generated by the wastewater activities for repayment. Fiscal year 2020
and 2019 summary financial information for each business segment is presented
below.
A segment is an identifiable activity reported as a stand-alone entity for which one
or more revenue bonds are outstanding. A segment has a specifically identifiable
revenue stream pledged in support of the revenue bonds and has related expenses,
gains and losses and assets, deferred outflows, liabilities and deferred inflows that
are required by external parties to be accounted for separately. The wastewater
system is the only reportable segment that meets the requirements of GASB
Statement No. 34, Basic Financial Statements - and Management’s Discussion and
Analysis - for State and Local Governments. The stormwater system is reported on
for informational purposes only.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 79
Financial information as of and for the years ended June 30, 2020 and 2019 of the
District’s Wastewater Segment is as follows:
2020 2019
Assets
Current Assets
Unrestricted Current Assets
Cash and cash equivalents 65,310,175$ 32,084,339$
Investments 251,848,341 209,097,537
Sewer service charges receivable, less allowance of
$65,949,200 in 2020 and $61,613,442 in 2019 67,437,606 65,960,589
Unbilled sewer service charges receivable 33,342,430 31,773,363
Accrued income on investments 1,826,954 1,869,825
Other receivables, less allowance of $58,209 in 2020
and $49,360 in 2019 5,168,412 5,331,693
Supplies inventory 8,013,597 8,306,515
Total Unrestricted Current Assets 432,947,515 354,423,861
Restricted Current Assets
Other receivables 48,273 115,556
Total Restricted Current Assets 48,273 115,556
Total Current Assets 432,995,788 354,539,417
Non-Current Assets
Restricted Assets
Cash and cash equivalents 22,700,689 19,561,186
Investments 75,085,334 133,552,809
Long-term investments 10,850,625 45,067,528
Property taxes receivable (17,972) (18,019)
Accrued income on investments 8,088 193,262
Total Restricted Non-Current Assets 108,626,764 198,356,766
Other Assets
Notes receivable 10,410,729 11,156,415
Long-term investments 150,664,647 168,649,616
Total Other Assets 161,075,376 179,806,031
Capital Assets
Depreciable:
Treatment and disposal plant and equipment 1,289,884,442 1,277,635,246
Collection and pumping plant 2,308,600,323 2,092,478,890
General plant and equipment 84,157,157 82,305,964
3,682,641,922 3,452,420,100
Less: Accumulated depreciation 1,382,418,916 1,309,151,371
Net depreciable assets 2,300,223,006 2,143,268,729
Non-depreciable:
Land 70,404,826 66,853,796
Construction in progress 981,883,959 931,353,208
Net Capital Assets 3,352,511,791 3,141,475,733
Total Non-Current Assets 3,622,213,931 3,519,638,530
Total Assets 4,055,209,719 3,874,177,947
Deferred Outflows of Resources:
Bonds and notes payable-Deferred loss on refunding 5,888,796 11,342,745
Pension-related outflows 13,677,832 28,929,459
OPEB-related outflows 2,451,365 1,075,940
Total Deferred Outflows of Resources 22,017,993 41,348,144
WASTEWATER SEGMENT
STATEMENTS OF NET POSITION
June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 80
2020 2019
Liabilities
Current Liabilities-Payable From Unrestricted Assets
Contracts and accounts payable 36,287,980$ 36,091,535$
Deposits and accrued expenses 32,216,981 35,444,449
Retainage payable 16,728,922 15,855,232
Current portion of bonds and notes payable 56,629,100 52,603,763
Total Current Liabilities-Payable From Unrestricted Assets 141,862,983 139,994,979
Current Liabilities-Payable From Restricted Assets
Retainage payable — 237,442
Total Current Liabilities-Payable From Restricted Assets — 237,442
Total Current Liabilities 141,862,983 140,232,421
Non-Current Liabilities
Deposits and accrued expenses 7,559,792 7,352,522
Net pension liability 48,934,083 63,238,325
Total OPEB liability 19,985,093 20,846,404
Bonds and notes payable 1,633,705,811 1,617,916,402
Total Non-Current Liabilities 1,710,184,779 1,709,353,653
Total Liabilities 1,852,047,762 1,849,586,074
Deferred Inflows of Resources:
Bonds and Notes payable - Deferred gain on refunding 1,393,209 —
Pension-related inflows 6,863,696 3,702,250
OPEB-related inflows 3,710,324 743,324
Total Deferred Inflows of Resources 11,967,229 4,445,574
Net Position
Net investment in capital assets 1,690,960,722 1,574,725,932
Restricted for:
Debt service 33,856,568 58,262,631
Subdistrict construction and improvement 1,965,621 1,991,530
Unrestricted 486,429,810 426,514,350
Total Net Position 2,213,212,721$ 2,061,494,443$
June 30,
WASTEWATER SEGMENT
STATEMENTS OF NET POSITION (Continued)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 81
2020 2019
Operating Revenues
Sewer service charges 430,399,893$ 399,932,002$
Recovery of (provision for) doubtful sewer service charge accounts (5,623,090) (4,360,646)
Licenses, permits, and other fees 3,012,368 3,063,458
Other 10,192,865 2,474,310
Total Operating Revenues 437,982,036 401,109,124
Operating Expenses
Pumping and treatment 62,030,454 63,197,081
Collection system maintenance 34,416,498 29,309,082
Engineering 937,892 1,153,099
General and administrative 64,650,994 65,630,150
Water backup claims 4,653,281 5,435,759
Depreciation 77,279,885 73,522,926
Asset management 13,998,739 12,790,959
Total Operating Expenses 257,967,743 251,039,056
Operating Income 180,014,293 150,070,068
Non-Operating Revenues
Property taxes levied by the District 47 (1,857)
Investment income 14,210,947 14,438,669
Rent and other income 301,631 301,446
Total Non-Operating Revenues 14,512,625 14,738,258
Non-Operating Expenses
Net loss on disposal and sale of capital assets 781,346 869,490
Non-recurring projects and studies 8,887,933 14,095,510
Interest expense 36,119,362 33,082,384
Total Non-Operating Expenses 45,788,641 48,047,384
Income Before Capital Grants And Contributions 148,738,277 116,760,942
Capital Grants And Contributions
Capital assets contributed 3,081,055 9,924,920
Grant revenue (101,054) 742,451
Total Capital Grants And Contributions 2,980,001 10,667,371
Change In Net Position 151,718,278 127,428,313
Net Position - Beginning Of Year 2,061,494,443 1,934,066,130
Net Position - End Of Year 2,213,212,721$ 2,061,494,443$
WASTEWATER SEGMENT
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 82
2020 2019
Cash Flows From Operating Activities
Received from customers 428,641,239$ 394,747,976$
Paid to employees for services (104,218,386) (101,374,404)
Paid to suppliers for goods and services (77,739,887) (79,155,315)
Net Cash Provided By Operating Activities 246,682,966 214,218,257
Cash Flows Provided By Non-Capital Financing Activities
Taxes levied and collected 37,227 3,942
Cash Flows From Capital And Related Financing Activities
Proceeds from capital grants 1,099,045 130,670
Proceeds from issuance of debt 97,928,346 35,149,238
Premium on sale of bonds 12,059,976 —
Principal paid on debt (52,603,763) (50,942,662)
Interest and fees paid on debt (88,654,756) (65,117,717)
Payments for capital assets (265,681,966) (221,248,644)
Proceeds from sale of capital assets 83,130 279,867
Build America Bond tax credit 1,636,759 1,630,662
Net Cash (Used In) Capital And Related Financing Activities (294,133,229) (300,118,586)
Cash Flows From Investing Activities
Purchase of investments (526,749,101) (551,116,152)
Proceeds from sale and maturity of investments 600,558,868 647,477,312
Investment income 9,727,441 9,214,193
Proceeds from rents 241,167 229,231
Net Cash Provided By Investing Activities 83,778,375 105,804,584
Net Increase In Cash And Cash Equivalents 36,365,339 19,908,197
Cash And Cash Equivalents At Beginning Of Year 51,645,525 31,737,328
Cash And Cash Equivalents At End Of Year 88,010,864$ 51,645,525$
Ended June 30,
WASTEWATER SEGMENT
STATEMENTS OF CASH FLOWS
For The Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 83
Financial information as of and for the years ended June 30, 2020 and 2019 of the
District’s Stormwater Segment is as follows:
2020 2019
Assets
Current Assets
Unrestricted Current Assets
Cash and cash equivalents 2,492,697$ 1,218,671$
Investments 12,474,187 10,538,548
Sewer service charges receivable, less allowance of
$111,954 in 2020 and $126,120 in 2019 60,927 72,188
Unbilled sewer service charges receivable — (227)
Property taxes receivable, less allowance of $8,604 in 2020
and $9,806 in 2019 421,059 479,914
Accrued income on investments 64,080 57,979
Total Unrestricted Current Assets 15,512,950 12,367,073
Restricted Current Assets
Cash and cash equivalents 3,580,818 1,747,847
Investments 17,921,368 15,117,921
Total Restricted Current Assets 21,502,186 16,865,768
Total Current Assets 37,015,136 29,232,841
Non-Current Assets
Restricted Assets
Cash and cash equivalents 3,040,332 2,142,021
Investments 15,216,125 18,526,954
Long-term investments 19,832,238 27,952,964
Property taxes receivable, less allowance of $29,497 in 2020
and $28,716 in 2019 1,407,947 1,373,743
Accrued income on investments 367,588 343,103
Total Restricted Non-Current Assets 39,864,230 50,338,785
Other Assets
Long-term investments 7,465,594 8,755,677
Total Other Assets 7,465,594 8,755,677
Capital Assets
Depreciable:
Collection and pumping plant 665,941,716 657,467,608
General plant and equipment 16,792,580 17,012,385
682,734,296 674,479,993
Less: Accumulated depreciation 226,327,691 216,627,959
Net depreciable assets 456,406,605 457,852,034
Non-depreciable:
Land 7,928,803 7,420,788
Construction in progress 31,041,970 24,967,857
Net Capital Assets 495,377,378 490,240,679
Total Non-Current Assets 542,707,202 549,335,141
Total Assets 579,722,338 578,567,982
Deferred Outflows of Resources:
Pension-related outflows 1,995,820 5,308,811
OPEB-related outflows 391,504 170,387
Total Deferred Outflows of Resources 2,387,324 5,479,198
STORMWATER SEGMENT
STATEMENTS OF NET POSITION
June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 84
2020 2019
Liabilities
Current Liabilities-Payable From Unrestricted Assets
Contracts and accounts payable 29,732$ 6,684$
Deposits and accrued expenses 9,955,546 8,259,420
Retainage payable 7,262 —
Total Current Liabilities-Payable From Unrestricted Assets 9,992,540 8,266,104
Current Liabilities-Payable From Restricted Assets
Contracts and accounts payable 912,704 801,529
Retainage payable 843,548 691,203
Total Current Liabilities-Payable From Restricted Assets 1,756,252 1,492,732
Total Current Liabilities 11,748,792 9,758,836
Non-Current Liabilities
Net pension liability 8,858,830 11,158,412
Total OPEB liability 3,179,525 3,317,991
Total Non-Current Liabilities 12,038,355 14,476,403
Total Liabilities 23,787,147 24,235,239
Deferred Inflows of Resources:
Pension-related inflows 286,002 638,866
OPEB-related inflows 620,343 143,362
Total Deferred Inflows of Resources 906,345 782,228
Net Position
Net investment in capital assets 493,775,710 488,793,056
Restricted for:
Subdistrict construction and improvement 61,211,833 67,159,444
Unrestricted 2,428,627 3,077,213
Total Net Position 557,416,170$ 559,029,713$
June 30,
STORMWATER SEGMENT
STATEMENTS OF NET POSITION (Continued)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 85
2020 2019
Operating Revenues
Sewer service charges (1,801)$ (2,852)$
Recovery of (provision for) doubtful sewer service charge accounts 11,541 11,399
Other 263 3,468
Total Operating Revenues 10,003 12,015
Operating Expenses
Collection system maintenance 13,235,760 16,307,809
Engineering 10,690,194 10,293,801
General and administrative 1,295,690 1,831,570
Water backup claims — 164,660
Depreciation 10,353,427 10,116,917
Asset management 3,196,582 963,696
Total Operating Expenses 38,771,653 39,678,453
Operating (Loss) (38,761,650) (39,666,438)
Non-Operating Revenues
Property taxes levied by the District 35,439,394 34,109,476
Investment income 2,048,235 2,260,484
Total Non-Operating Revenues 37,487,629 36,369,960
Non-Operating Expenses
Net loss on disposal and sale of capital assets 180,130 101,335
Non-recurring projects and studies 3,570,298 1,533,080
Total Non-Operating Expenses 3,750,428 1,634,415
(Loss) Before Capital Contributions (5,024,449) (4,930,893)
Capital Contributions
Capital assets contributed 3,410,906 6,710,548
Total Capital Contributions 3,410,906 6,710,548
Change In Net Position (1,613,543) 1,779,655
Net Position - Beginning Of Year 559,029,713 557,250,058
Net Position - End Of Year 557,416,170$ 559,029,713$
STORMWATER SEGMENT
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
For The Years
Ended June 30,
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 86
2020 2019
Cash Flows From Operating Activities
Received from customers 1,717,045$ 498,825$
Paid to suppliers for goods and services (30,571,361) (29,491,163)
Net Cash (Used In) Operating Activities (28,854,316) (28,992,338)
Cash Flows Provided By Non-Capital Financing Activities
Taxes levied and collected 34,946,298 33,846,168
Cash Flows From Capital And Related Financing Activities
Payments for capital assets (12,108,973) (9,979,589)
Proceeds from sale of capital assets 22,098 51,479
Net Cash (Used In) Capital And Related Financing Activities (12,086,875) (9,928,110)
Cash Flows From Investing Activities
Purchase of investments (66,407,633) (98,474,024)
Proceeds from sale and maturity of investments 75,139,517 104,946,688
Investment income 1,268,317 1,061,162
Net Cash Provided By Investing Activities 10,000,201 7,533,826
Net Increase In Cash And Cash Equivalents 4,005,308 2,459,546
Cash And Cash Equivalents At Beginning Of Year 5,108,539 2,648,993
Cash And Cash Equivalents At End Of Year 9,113,847$ 5,108,539$
Ended June 30,
STORMWATER SEGMENT
STATEMENTS OF CASH FLOWS
For The Years
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 87
15. Tax Abatements
Tax abatements, as defined by Governmental Accounting Standards Board
(“GASB”) Statement No. 77, Tax Abatement Disclosures (“GASB Statement No.
77”), are agreements between a government and an individual or entity in which
the government promises to forgo tax revenues and the individual or entity
promises to subsequently take a specific action that contributes to economic
development or otherwise benefits the government or its citizens. This Statement
requires disclosure of tax abatement information about (1) a reporting
government’s own tax abatement agreements and (2) those that are entered into
by other governments and that reduce the reporting government’s tax revenues.
Since the District does not and has not entered into tax abatement agreements
directly with any individuals or entities, the following estimates are from tax
abatements entered into by other governments, specifically the county and
municipalities within the District’s boundary, that have reduced the District’s tax
revenues.
Tax Abatements Entered Into By St. Louis County and Cities Located In St. Louis
County
The District’s property tax revenues were reduced through four programs that are
utilized by cities located in St. Louis County and the County itself. Summaries of
these four programs are as follows:
Enhanced Enterprise Zone: provides real property tax abatements to new or
expanding businesses in certain specified geographic areas designated by
local governments and certified by the Missouri Department of Economic
Development.
Industrial Development Bonds: finances industrial development projects for
private corporations, partnerships and individuals.
Land Clearance for Redevelopment Authority: assists with the
redevelopment of blighted or insanitary areas for residential, recreational,
commercial, industrial or public uses.
Urban Redevelopment Corporations: provides real property tax abatements
to encourage the redevelopment of blighted areas by an eligible city or
county.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 88
The amount of the District’s tax revenues that were abated by the county and cities
initiating the programs are reported in the following tables.
Land
Enhanced Industrial Clearance for Urban
St. Louis County Enterprise Development Redevelopment Redevelopment Total Tax
or City Zones Bonds Authority Corporations Abatements
St Louis County —$ 155,197$ —$ 3,545$ 158,742$
Bellerive — 1,898 — — 1,898
Berkeley 398 — — — 398
Brentwood — — — 10,770 10,770
Bridgeton — 718 — 3,627 4,345
Clayton — 21,357 — 2,352 23,709
Edmundson — — — 9,723 9,723
Eureka — 320 — — 320
Ferguson — 3,756 — 614 4,370
Hazelwood 4,848 24,107 — 72,066 101,021
Kinloch — — — 26,858 26,858
Jennings — 153 — — 153
Maplewood — — — 7,092 7,092
Maryland Heights — 406 — 7,470 7,876
Normandy — — — 3,022 3,022
Overland — — — 5,165 5,165
Richmond Heights — — — 11,463 11,463
Rock Hill — — — 3,219 3,219
Sunset Hills — — — 494 494
University City — — 5,397 216 5,613
Wellston — — — 551 551
Total Tax Abatements 5,246$ 207,912$ 5,397$ 168,247$ 386,802$
For the Year Ended June 30, 2020
Land
Enhanced Industrial Clearance for Urban
St. Louis County Enterprise Development Redevelopment Redevelopment Total Tax
or City Zones Bonds Authority Corporations Abatements
St Louis County —$ 121,961$ —$ 3,176$ 125,137$
Bellerive — 7,094 — — 7,094
Brentwood — — — 7,652 7,652
Bridgeton — 768 — — 768
Clayton — 21,044 — — 21,044
Edmundson — — — 9,752 9,752
Eureka — 198 — — 198
Ferguson — 3,673 — 587 4,260
Hazelwood 2,264 947 — 40,501 43,712
Kinloch 17,022 — — 24,092 41,114
Jennings — 274 — — 274
Maplewood — — — 8,349 8,349
Maryland Heights — — — 3,818 3,818
Normandy — — — 3,008 3,008
Overland — — — 4,631 4,631
Richmond Heights — — — 4,928 4,928
Rock Hill — — — 2,658 2,658
Sunset Hills — — — 551 551
University City — — 6,827 112 6,939
Wellston — — — 505 505
Total Tax Abatements 19,286$ 155,959$ 6,827$ 114,320$ 296,392$
For the Year Ended June 30, 2019
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 89
Tax Abatements Entered Into By St. Louis City
The City of St. Louis offers a real estate tax abatement program as a development
tool designed to assist developers, businesses and individuals with renovation and
new construction projects. The tax abatement freezes the tax assessment in
improvements to property at the pre-development level. To be eligible for tax
abatement, a significant investment must be made in the property; generally
either new construction on vacant land or gut rehabilitation of an existing building.
The application must be made before construction begins and the usual term for
tax abatement is five to ten years.
The amount of the District’s tax revenues calculated at the District’s tax rates of
$.1077 and $.1170 per $100 of assessed value for fiscal 2020 and 2019, respectively,
that were abated by St. Louis City are reported in the following tables.
Tax Increment Financing Utilized By St. Louis County, Cities Located in St. Louis
County and St. Louis City
Missouri’s Real Property Tax Increment Allocation Redevelopment Act enables
cities to finance certain redevelopment costs with the revenue generated from (i)
payments in lieu of real estate taxes, as measured by the net increase in assessed
valuation resulting from redevelopment and (ii) a portion of the increase in other
local tax revenue associated with new economic activity. When a tax increment
financing (“TIF”) plan is adopted, real estate taxes in the redevelopment are frozen
at their current level. By applying the real estate tax rate of all taxing districts
Reduced
Unabated Tax Abated Tax Tax
St. Louis City Values Revenue Values Revenue Revenue
Residential 178,760,490$ 192,525$ 35,055,120$ 37,754$ 154,771$
Commercial 292,550,470 315,077 127,193,830 136,988 178,089
Total 471,310,960$ 507,602$ 162,248,950$ 174,742$ 332,860$
For the Year Ended June 30, 2020
Reduced
Unabated Tax Abated Tax Tax
St. Louis City Values Revenue Values Revenue Revenue
Residential 170,087,710$ 199,003$ 35,565,190$ 41,611$ 157,392$
Commercial 331,824,840 388,235 126,055,310 147,485 240,750
Total 501,912,550$ 587,238$ 161,620,500$ 189,096$ 398,142$
For the Year Ended June 30, 2019
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 90
having taxing power within the redevelopment area to the increased assessed
valuation resulting from redevelopment, a tax “increment” is produced. The real
estate tax increments are referred to as payments in lieu of taxes, or “PILOTs”,
and are deposited in a special allocation fund.
The estimated TIF incremental values and the District’s net reduced tax revenue
resulting from the TIFs adopted in St. Louis County and the cities located in the
County and adopted in the City of St. Louis are as follows:
In summary, the District’s total tax revenues reduced during fiscal 2020 and
2019 as a result of the programs of other governments are as follows:
TIF TIF
Incremental Reduced Incremental Reduced
St. Louis County or City Values Tax Revenues Values Tax Revenues
St. Louis County and Cities Located
in St. Louis County 580,156,870$ 624,829$ 480,084,710$ 561,699$
St. Louis County PILOTs Received — (34,565) — (5,307)
St. Louis City 1,308,525,243 334,873 1,308,525,243 325,396
St. Louis City PILOTs Received — (42,175) — (83,074)
Total 1,888,682,113$ 882,962$ 1,788,609,953$ 798,714$
June 30, 2020
For the Years Ended
June 30, 2019
Reduced Reduced
St. Louis County or City Tax Revenues Tax Revenues
St. Louis County and Cities Located
in St. Louis County - Tax Abatements 386,802$ 296,392$
St. Louis City - Tax Abatements 332,860 398,142
St. Louis County and Cities Located
in St. Louis County - TIFs 590,264 556,392
St. Louis City - TIFs 292,698 242,322
Total Reduced Tax Revenues 1,602,624$ 1,493,248$
For the Years Ended
June 30, 2020 June 30, 2019
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
Page 91
16. Subsequent Events
In preparing these financial statements, the District has evaluated events and
transactions for potential recognition or disclosure through October 13, 2020, the
date the financial statements were available to be issued.
On August 22, 2020, the IRS announced a decrease in the sequestration rate for
refundable credit amounts submitted on IRS Form 8038-CP for qualified bonds
from 5.9% to 5.7%. This will be effective for all refund payments processed from
October 1, 2020 to September 30, 2030. Since the District participates in Build
America Bonds, the District will receive 94.3% of the amount requested during its
fiscal year 2021. The District received 94.1% of the amount requested during fiscal
year 2020.
On September 16, 2020, the State of Missouri Direct Loan Program issued to the
District an amount totaling $22,000,000 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 0.80% and is payable in semiannual
installments at varying amounts through July 1, 2042.
As the District incurs approved capital expenditures, the DNR reimburses the
District for the expenditures from the bond proceeds account. The District repays
the loan at an interest rate of 0.80% based on the amount that has been borrowed.
As of the date of this report, the outstanding loan balance was $163,000. The
payment requirements to maturity will be determined after the debt is fully issued.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 92
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN NET PENSION LIABILITY
AND RELATED RATIOS
June 30, 2020
Calendar Year Ending December 31,
2019 2018 2017 2016 2015 2014
Total Pension Liability
Service cost 4,902$ 5,239$ 5,157$ 5,107$ 5,253$ 5,409$
Interest on total pension liability 22,818 22,307 22,079 20,609 20,199 19,901
Effect of plan changes — — — — — —
Effect of economic/demographic gains or (losses)(1,967) (2,042) (4,729)(883) (4,577) (3,668)
Effect of assumption changes or inputs 11,911 — 1,667 11,665 — 6,500
Benefit payments (18,627) (16,912) (15,858) (15,261) (14,475) (13,387)
Net Change in Total Pension Liability 19,037 8,592 8,316 21,237 6,400 14,755
Total Pension Liability - Beginning 334,957 326,365 318,049 296,812 290,412 275,657
Total Pension Liability - Ending (a)353,994 334,957 326,365 318,049 296,812 290,412
Plan Fiduciary Net Position
Employer contributions 12,725 12,494 12,328 10,146 10,059 10,676
Member contributions — — — — — —
Investment income net of investment expenses 41,543 (12,998) 30,496 11,913 (1,888) 6,980
Benefit payments (18,627) (16,912) (15,858) (15,261) (14,475) (13,387)
Administrative expenses — — — — — —
Net Change in Plan Fiduciary Net Position 35,641 (17,416) 26,966 6,798 (6,304) 4,269
Plan Fiduciary Net Position - Beginning 260,560 277,976 251,010 244,212 250,516 246,247
Plan Fiduciary Net Position - Ending (b)296,201 260,560 277,976 251,010 244,212 250,516
Net Pension Liability - Ending = (a) - (b)57,793$ 74,397$ 48,389$ 67,039$ 52,600$ 39,896$
Fiduciary Net Position as a % of Total Pension Liability 83.67% 77.79% 85.17% 78.92% 82.28% 86.26%
Covered Payroll 36,793$ 39,437$ 41,869$ 42,055$ 43,345$ 44,664$
Net Pension Liability as a % of Covered Payroll 157.08% 188.65% 115.57% 159.41% 121.35% 89.32%
Notes to Schedule:
1. Changes of Assumptions. The actuarial discount rate and the long-term expected rate of return were both reduced to 6.75% in 2019. Both rates were
changed to 6.90% in 2017 and both rates were 7.00% in 2016 and all prior years. The mortality tables utilized were changed in 2019 to the Pub-2010
General Amount-Weighted Mortality Tables and the effect is also reflected in the assumption changes. In 2016, the amount reported as change of
assumptions resulted from changing to the RP-2014 Mortality for Employees and Healthy Annuitants and Disabled Mortality tables, while the 2014
change resulted primarily from adjustments to the discount rate and employee rate increases.
2. This schedule will ultimately present ten years of information when available.
Schedule of Changes in Net Pension Liability and Related Ratios
In (000's)
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 93
REQUIRED SUPPLEMENTARY INFORMATION (Continued)
SCHEDULE OF EMPLOYER CONTRIBUTIONS TO EMPLOYEES’ PENSION
PLAN
June 30, 2020
Schedule of Employer Contributions
To Employees' Pension Plan
Fiscal Year Actuarially Contribution Contribution
Ending Determined Annual Deficiency Covered as a % of
June 30,Contribution Contribution (Excess)Payroll Covered Payroll
2015 10,359,139$ 10,359,139$ —$ 46,584,987$ 22.24%
2016 10,096,075 10,096,075 — 44,996,070 22.44%
2017 11,236,828 11,236,828 — 43,818,487 25.64%
2018 12,411,005 12,411,005 — 42,751,918 29.03%
2019 12,609,689 12,609,689 — 38,166,848 33.04%
2020 13,062,014 13,062,014 — 37,757,169 34.59%
Notes to Schedule:
1. This schedule will ultimately present ten years of information when available.
2. Valuation Date: Actuarially determined contribution rates are calculated as of January 1 of the fiscal year in which
the contributions are reported.
Methods and assumptions used to determine contribution rates:
Actuarial Cost Method:Entry Age Normal
Amortization Method:Level dollar layered, 20 year periods
Asset Valuation Method:3-year smoothing period
Inflation:2.50%
Salary Increases:4.25%, average, including inflation
Investment Rate of Return:6.75%, net of pension plan investment expense, including inflation for 2020
6.90%, net of pension plan investment expense, including inflation for 2018 and 2019
7.00%, net of pension plan investment expense, including inflation for all years prior
to 2018
Mortality:In the 2020 actuarial valuation, assumed life expectancies were calculated using the
Pub-2010 General Amount-Weighted Mortality Tables with generational projection
based on Scale MP-2019. In the 2019, 2018 and 2017 actuarial valuations, assumed
life expectancies were calculated using the RP-2014 Employee and Healthy Annuitant
Mortality Table (with generational projections from 2006 based on the most current
MP improvement scale which is updated annually) and the RP-2014 Disabled Mortality
Table. In the 2016 and 2015 actuarial valuations, assumed life expectancies were
calculated using the RP-2000 Healthy Annuitant Mortality Table and the RP-2000
Disabled Mortality Table.
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 94
REQUIRED SUPPLEMENTARY INFORMATION (Continued)
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY
June 30, 2020
Calendar Year Ending December 31,
2019 2018 2017
Total OPEB Liability
Service cost 1,397$ 1,781$ 1,622$
Interest on total OPEB liability 1,017 865 895
Effect of plan changes 86 — —
Effect of economic/demographic gains or (losses) (3,887) — —
Changes of assumptions or other inputs 1,926 (987) 438
Benefit payments (1,539) (1,689) (1,600)
Net change in total OPEB liability (1,000) (30) 1,355
Total OPEB Liability - Beginning 24,164 24,194 22,839
Total OPEB Liability - Ending 23,165$ 24,164$ 24,194$
Notes to Schedule:
1. Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period.
The following are the discount rates used in each period:
2019 2.74%
2018 4.10%
2017 3.44%
2016 3.78%
2. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75
to pay related benefits.
3. This schedule will ultimately present ten years of information when available.
4. Contributions to the OPEB plan are not based on a measure of pay so accordingly, no measure of payroll
is presented.
In (000's)
Schedule of Changes in Total OPEB Liability
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year.
The Metropolitan St. Louis Sewer District
Statistical Section
This part of the District’s comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial
statements, note disclosures, and required supplementary information says about the
District’s overall financial health.
Contents
Page
Financial Trends
These schedules contain trend information to help the
reader understand how the District’s financial
performance and well-being have changed over time .......................................... 95 – 96
Revenue Capacity
These schedules contain information to help the reader
assess the District’s most significant local revenue
sources, the user charge ...................................................................................... 97 – 104
Debt Capacity
These schedules present information to help the reader
assess the affordability of the District’s current levels of
outstanding debt and the District’s ability to issue
additional debt in the future ............................................................................. 105 – 107
Demographic And Economic Information
These schedules offer demographic and economic
indicators to help the reader understand the
environment within which the District’s financial
activities take place ........................................................................................... 108 – 109
Operating Information
These schedules contain service and infrastructure data
to help the reader understand how the information in the
District’s financial report relates to the services the
District provides and the activities it performs ............................................... 110 – 112
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 95
2011 2012 2013 2014 2015 a
Net Position
Net investment in
capital assets 1,915,233$ 1,928,200$ 1,877,692$ 1,845,394$ 1,805,453$
Restricted 94,926 106,693 111,066 142,764 142,445
Unrestricted 186,860 175,010 251,300 279,794 330,218
Total Net Position 2,197,019$ 2,209,903$ 2,240,058$ 2,267,952$ 2,278,116$
2016 a 2017 a 2018 a 2019 a 2020 a
Net Position
Net investment in
capital assets 1,809,386$ 1,876,249$ 1,968,740$ 2,063,519$ 2,184,736$
Restricted 136,547 135,259 129,579 127,414 97,034
Unrestricted 381,124 379,660 392,997 429,591 488,859
Total Net Position 2,327,057$ 2,391,168$ 2,491,316$ 2,620,524$ 2,770,629$
a Years 2015 to current include a change in the calculation of the net position components which is
not reflected in years prior.
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(000's)
Fiscal Year
Fiscal Year
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 96
Non-operating Income/(Loss) Capital Change
Fiscal Operating Operating Operating Revenue/ before Capital Grants and in Net
Year Revenues Expenses Income/(Loss) (Expenses) Contributions Contributions Position
2011 219,444,257$ 244,503,099$ (25,058,842)$ 4,329,032$ (20,729,810)$ 10,098,552$ (10,631,258)$
2012 225,999,720 216,307,965 9,691,755 1,370,329 11,062,084 9,658,857 20,720,941
2013 241,946,337 230,158,434 11,787,903 832,056 12,619,959 17,534,919 30,154,878
2014 265,772,853 241,297,635 24,475,218 (3,682,863) 20,792,355 7,102,480 27,894,835
2015 290,386,589 256,521,148 33,865,441 (13,074,700) 20,790,741 12,996,754 33,787,495
2016 319,857,731 273,095,705 46,762,026 (9,858,327) 36,903,699 12,036,784 48,940,483
2017 333,490,989 275,077,675 58,413,314 (3,916,119) 54,497,195 9,613,746 64,110,941
2018 368,311,477 273,765,206 94,546,271 (6,416,661) 88,129,610 26,077,674 114,207,284
2019 401,121,139 290,717,509 110,403,630 1,426,419 111,830,049 17,377,919 129,207,968
2020 437,992,039 296,739,396 141,252,643 2,461,185 143,713,828 6,390,907 150,104,735
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 97
OPERATING REVENUES BY SOURCE
LAST TEN FISCAL YEARS
Licenses,
Fiscal Sewer Service Permits, and
Year Charges, Net Other Fees Other
2011 214,653,310$ 2,976,253$ 1,814,694$ 219,444,257$
2012 220,765,581 2,683,823 2,550,316 225,999,720
2013 235,980,065 2,731,497 3,234,775 241,946,337
2014 257,343,344 6,562,607 1,866,902 265,772,853
2015 282,270,193 6,656,831 1,459,565 290,386,589
2016 302,011,893 3,620,240 14,225,598 319,857,731
2017 328,359,526 4,036,362 1,095,101 333,490,989
2018 361,175,224 3,777,200 3,359,053 368,311,477
2019 395,579,903 3,063,458 2,477,778 401,121,139
2020 424,786,543 3,012,368 10,193,128 437,992,039
Total
Operating
Revenues
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 98
Fiscal Employment Materials and Contracted Chemical
Year Costs Utilities Supplies Services Supplies
2011 84,284,762$ 14,148,746$ 11,329,023$ 44,011,352$ 1,415,826$
2012 87,098,037 12,634,274 12,737,240 26,056,481 1,355,113
2013 91,960,314 14,534,075 12,249,397 33,670,887 1,455,725
2014 93,542,222 14,986,387 11,097,857 36,875,093 2,440,843
2015 96,759,245 16,499,964 12,651,008 41,500,864 3,964,165
2016 102,458,574 16,624,434 11,838,551 48,450,272 3,498,796
2017 106,441,619 16,783,922 12,170,738 46,502,512 3,569,449
2018 105,555,411 16,154,516 11,005,087 48,390,986 2,501,712
2019 114,570,104 16,896,093 12,446,227 52,496,518 3,667,207
2020 115,575,521 15,770,882 12,045,016 52,776,346 3,123,434
Fiscal
Year Insurance Other
2011 2,557,850$ 19,901,275$ 177,648,834$ 66,854,265$ 244,503,099$
2012 2,470,343 7,214,413 149,565,901 66,742,064 216,307,965
2013 2,696,416 3,561,780 160,128,594 70,029,840 230,158,434
2014 2,737,491 5,530,535 167,210,428 74,087,207 241,297,635
2015 2,791,622 3,713,021 177,879,889 78,641,259 256,521,148
2016 3,218,041 3,023,288 189,111,956 83,983,749 273,095,705
2017 3,293,267 5,121,777 193,883,284 81,194,391 275,077,675
2018 3,371,910 5,459,242 192,438,864 81,326,342 273,765,206
2019 3,819,449 3,182,068 207,077,666 83,639,843 290,717,509
2020 4,158,280 5,656,605 209,106,084 87,633,312 296,739,396
Note: Balances in all years have been restated to accurately reflect expenses in the appropriate
category. The majority of the changes are increases to Employment Costs and Other and decreases to
Materials and Supplies and Contracted Services.
OPERATING EXPENSES
LAST TEN FISCAL YEARS
Subtotal,
Expenses
before
Depreciation
Total
Operating
ExpensesDepreciation
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 99
2011 2012 2013 2014 2015
Non-operating revenues
Property taxes levied by the District 27,125,451$ 24,604,173$ 26,016,135$ 27,450,319$ 24,764,324$
Investment income 3,847,324 2,407,485 1,056,966 2,966,549 3,000,591
Rent and other income 442,968 294,591 293,159 302,506 37,321
Total non-operating revenues 31,415,743 27,306,249 27,366,260 30,719,374 27,802,236
Non-operating expenses
Interest expense 7,971,088 16,365,309 21,062,474 25,661,127 27,138,546
Net loss on disposal and sale
of capital assets 3,485,952 3,162,723 795,527 5,248,443 1,420,902
Non-recurring projects and studies 10,800,843 6,402,888 4,676,203 3,492,667 12,317,488
Legal claims 4,828,828 5,000 — — —
Total non-operating expenses 27,086,711 25,935,920 26,534,204 34,402,237 40,876,936
Net non-operating revenue (expense)4,329,032$ 1,370,329$ 832,056$ (3,682,863)$ (13,074,700)$
2016 2017 2018 2019 2020
Non-operating revenues
Property taxes levied by the District 25,671,058$ 32,458,054$ 33,748,932$ 34,107,619$ 35,439,441$
Investment income 4,635,866 2,902,624 7,405,957 16,699,153 16,259,182
Rent and other income 102,865 106,562 253,799 301,446 301,631
Total non-operating revenues 30,409,789 35,467,240 41,408,688 51,108,218 52,000,254
Non-operating expenses
Interest expense 28,943,200 31,250,777 36,695,083 33,082,384 36,119,362
Net loss on disposal and sale
of capital assets 324,513 673,044 1,833,908 970,825 961,476
Non-recurring projects and studies 11,000,403 7,459,538 9,296,358 15,628,590 12,458,231
Total non-operating expenses 40,268,116 39,383,359 47,825,349 49,681,799 49,539,069
Net non-operating revenue (expense)(9,858,327)$ (3,916,119)$ (6,416,661)$ 1,426,419$ 2,461,185$
NON-OPERATING REVENUES AND EXPENSES
LAST TEN FISCAL YEARS
Fiscal Year
Fiscal Year
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 100
Type of Monthly Charge Unmetered c Residential c Non-Residential
Wastewater User Charge
Base Charge 26.35$ 26.35$ 26.35$
Compliance Charge a
Tier 1 — — 3.14
Tier 2 — — 62.61
Tier 3 — — 137.75
Tier 4 — — 203.49
Tier 5 — — 266.10
Volume Charges
per Ccf b — 4.87 4.87
per room 2.89 — —
per water closet 10.72 — —
per bath 8.93 — —
per separate shower 8.93 — —
Extra Strength Surcharges a
Suspended Solids ("SS") over 300 milligrams per liter — — 283.87
Biochemical Oxygen Demand ("BOD") over 300 — — 708.56
milligrams per liter
Chemical Oxygen Demand ("COD") over 600 milligrams — — 354.30
per liter
Notes:
a Applicable only to non-residential customers, Extra Strength Surcharges priced per ton
b Ccf = Hundred cubic feet
c User charges for certain low income residential users will be 50 percent of the regular user charge
Source: Finance Department
USER CHARGE RATES
As Of June 30, 2020
Metered
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 101
Fiscal
Year
Wastewater
Charges Billed1
Wastewater
Charges Collected2
Collections as a %
of Wastewater
Charges Billed
2011 213,503,732$ 203,520,769$ 95.32%
2012 222,425,957 217,396,623 97.74%
2013 233,882,795 233,877,875 99.99%
2014 245,555,628 241,549,548 98.37%
2015 279,555,881 275,049,684 98.39%
2016 300,803,084 299,932,808 99.71%
2017 326,663,167 322,829,334 98.83%
2018 359,628,200 351,107,233 97.63%
2019 394,518,583 386,033,225 97.85%
2020 425,147,702 419,918,978 98.77%
Note: The table shows the amount of wastewater user charge revenues which were
billed and collected by the District for the last ten fiscal years.
1 Wastewater Charges Billed includes wastewater user charge revenues billed and
accrued for the year.
2 Wastewater Charges Collected includes wastewater user charge revenues collected
for the current year and previous years billings.
USER CHARGE REVENUES
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 102
2011 a 2012 2013 b 2014 2015
Residential:
Single-Family/Unit 2 333.60$ 347.64$ 379.56$ 421.08$ 434.76$
Multi-Family/Unit 285.12 296.28 324.12 360.36 434.04
Commercial/Industrial:
Service Charge/Unit 1 507.00 525.60 478.56 412.56 348.12
Sanitary Sewer Usage Charge per Ccf 2.02 2.11 2.28 2.50 2.82
Extra Strength Surcharges:
SS over 300 milligrams per liter (price per ton)222.62 231.35 231.35 231.35 244.03
BOD over 300 milligrams per liter (price per ton)596.72 620.14 620.14 620.14 620.14
COD over 600 milligrams per liter (price per ton)298.36 310.07 310.07 310.07 310.07
2016 2017 c 2018 2019 2020
Residential:
Single-Family/Unit 2 491.52$ 535.08$ 591.72$ 602.76$ 666.84$
Multi-Family/Unit 490.80 492.00 544.08 602.76 666.84
Commercial/Industrial:
Service Charge/Unit 1 296.80 336.69 363.53 395.42 428.90
Sanitary Sewer Usage Charge per Ccf 3.21 3.59 3.97 4.40 4.87
Extra Strength Surcharges:
SS over 300 milligrams per liter (price per ton)251.88 262.00 269.07 277.03 283.87
BOD over 300 milligrams per liter (price per ton)632.38 654.00 671.63 691.50 708.56
COD over 600 milligrams per liter (price per ton)316.19 327.00 335.82 345.76 354.30
Notes:
1 Service Charge/Unit for Commercial/Industrial is calculated by using the sum of annualized base charge and compliance charge.
Starting FY 2013, MSD implemented 5-tier Compliance Charge Rate Model, so the Service Charge/Unit is based on calculated weighted
average compliance charge. FY 2013, FY 2014 & FY 2015 Service Charge/Unit were adjusted to reflect the weighted average com pliance
charge calculations. Prior to FY 2013, there was only one tier compliance charge.
2 Based on average usage of a typical single-family during the fiscal year listed.
a Ordinance 13021, effective July 1, 2010, changed wastewater rates through FY 2012.
b Ordinance 13402, effective July 1, 2012, changed wastewater rates through FY 2016.
c Ordinance 14395, effective July 1, 2016, changed wastewater rates through FY 2020.
Source: Finance Department
SEWER USER CHARGES (COMPOSITE-ANNUAL)
LAST TEN FISCAL YEARS
Fiscal Year
Fiscal Year
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 103
Single-Multi-
Fiscal Family Family Non-Total
Year Residential Residential Residential Accounts
2011 362,739 43,471 24,702 430,912 a
2012 360,354 41,648 24,568 426,570
2013 359,243 41,117 24,441 424,801
2014 358,928 40,951 24,297 424,176
2015 359,317 41,131 24,389 424,837
2016 356,926 41,585 24,001 422,512
2017 360,534 41,697 24,253 426,484
2018 360,957 41,355 24,296 426,608
2019 361,288 41,288 24,095 426,671
2020 361,545 41,365 24,066 426,976
Source: Finance Department
a The number of accounts were revised as stormwater accounts were underreported.
Note: Total accounts listed above are as of June 30 for each fiscal year listed.
NUMBER OF CUSTOMERS BY TYPE
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 104
Customer Amount %
InBev Anheuser-Busch 5,651,108$ 1.33%
Washington Unversity 2,476,315 0.59%
City of St. Louis 2,408,502 0.57%
Sigma-Aldrich 1,660,289 0.39%
Sensient Colors Inc.1,197,204 0.28%
BJC Health System 1,195,080 0.28%
Missouri-American Water Co.1,181,175 0.28%
Jost Real Estate LLC 1,125,016 0.26%
The Boeing Company 1,089,987 0.26%
GKN Aerospace N America Inc.1,080,998 0.25%
Subtotal (10 largest)19,065,674 4.49%
Balance from other customers 405,720,869 95.51%
Grand totals 424,786,543$ 100.00%
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 0.37%
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%
User Charges
TEN LARGEST CUSTOMERS
CURRENT YEAR AND NINE YEARS AGO
Fiscal Year 2020
User Charges
Fiscal Year 2011
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 105
Unamortized
Fiscal Subordinate Capital Premium, Net
Year Senior Subordinate Direct Loans Lease of Discount Amount Per Capita
2011 340,590,000$ 212,655,000$ 25,259,899$ 6,095,981$ 862,654$ 585,463,534$ 431$ 1.63
2012 390,880,000 200,692,500 63,727,722 3,096,139 5,805,206 664,201,567 488 1.66
2013 594,715,000 188,600,000 93,751,658 — 56,252,401 933,319,059 702 2.26
2014 740,655,000 184,075,000 116,090,820 — 82,274,845 1,123,095,665 852 2.84
2015 736,775,000 171,455,000 148,279,465 — 78,591,961 1,135,101,426 860 2.69
2016 860,460,000 158,765,000 184,141,916 — 112,035,478 1,315,402,394 997 3.71
2017 995,175,000 145,410,000 210,851,827 — 124,465,181 1,475,902,008 1,127 3.44
2018 1,167,225,000 131,810,000 227,240,106 — 166,900,626 1,693,175,732 1,297 3.83
2019 1,145,131,480 117,840,000 247,692,802 — 159,855,883 1,670,520,165 1,285 3.46
2020 1,176,786,480 103,490,000 278,193,895 — 131,864,536 1,690,334,911 1,305 3.51
Notes:
Calculation of "Per Capita" for 2011 through 2013 is based on estimated population levels.
Calculation of "As a Share of Personal Income" for 2011 through 2013 is based on estimated income levels.
Fiscal years 2011 through 2019 "Per Capita" and "As a Share of Personal Income (%)" were restated to conform to the caluclation used for fiscal year 2020.
In FY 2012, a decision was made to discontinue considering SRF receivable amounts as liabilities. The liability is now recorded when the funds are received.
Sources: Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce, and the U.S. Census Bureau
Income (%)
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Total
Revenue Bonds As a Share
of Personal
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 106
Amount of Debt Percentage of Debt
within within
Governmental Unit Debt Outstanding District Boundary District Boundary
City of St. Louis 74,535,000$ 74,535,000$ 100.0%
St. Louis County 82,330,000 81,671,360 99.2
Municipalities 124,379,235 121,804,235 97.9
City of St. Louis School District 258,829,000 258,829,000 100.0
St. Louis County School Districts 1,461,439,770 1,444,334,330 98.8
Fire Districts 137,500,143 128,797,314 93.7
2,139,013,148$ 2,109,971,239 98.6%
Total Direct Debt 1,690,334,911
Total Direct and Overlapping Debt 3,800,306,150$
Sources:
City of St. Louis, Office of Comptroller
St. Louis County, Department of Revenue
St. Louis Public Schools, Financial/Treasurer Office
Missouri Department of Education, School Finance
Polled Governments
Polled Fire Districts
Note: Although the District comprises all of the St. Louis City and most of St. Louis County, it does not entirely
match the County's boundaries. The calculation of overlapping debt is based on the percentage that a political
jurisdiction's territory lies within the District's territory. These percentages are weighted against the debt
outstanding thus providing the amount of debt within District Boundary.
COMPUTATION OF OVERLAPPING DEBT
As Of June 30, 2020
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 107
Less:
Operating
Expenses
(excluding
Non- depreciation, Net
Fiscal Operating operating Gross GASB 68 & Available
Year Revenues Revenues Revenues GASB 75) Revenues
2011 217,011,360$ 3,202,219$ 220,213,579$ 160,572,145$ 59,641,434$
2012 224,882,086 2,058,300 226,940,386 135,232,302 91,708,084
2013 240,597,715 956,664 241,554,379 146,372,419 95,181,960
2014 264,422,401 2,670,333 267,092,734 153,221,914 113,870,820
2015 288,835,877 2,555,654 291,391,531 163,311,194 128,080,337
2016 318,463,297 3,894,305 322,357,602 168,258,133 154,099,469
2017 333,469,677 2,456,677 335,926,354 168,835,676 167,090,678
2018 368,292,762 6,356,029 374,648,791 163,026,313 211,622,478
2019 401,109,124 14,438,669 415,547,793 170,585,143 244,962,650
2020 437,982,036 14,210,947 452,192,983 175,848,764 276,344,219
Fiscal Coverage
Year Principal Interest Total Ratio
2011 14,576,800$ 20,140,021$ 34,716,821$ 1.7
2012 16,540,200 22,517,473 39,057,673 2.3
2013 18,749,700 31,191,190 49,940,890 1.9
2014 10,037,200 34,399,261 44,436,461 2.6
2015 20,252,200 41,596,192 61,848,392 2.1
2016 29,588,000 44,171,592 73,759,592 2.1
2017 38,026,700 51,333,869 89,360,569 1.9
2018 42,716,800 57,682,698 100,399,498 2.1
2019 50,907,800 63,224,915 114,132,715 2.1
2020 52,587,600 59,932,607 112,520,207 2.5
Fiscal Coverage
Year Principal Interest Total Ratio
2011 1,780,000$ 15,467,269$ 17,247,269$ 3.5
2012 1,960,000 16,488,587 18,448,587 5.0
2013 3,805,000 24,451,656 28,256,656 3.4
2014 4,060,000 30,161,408 34,221,408 3.3
2015 3,880,000 34,472,415 38,352,415 3.3
2016 10,170,000 36,211,319 46,381,319 3.3
2017 15,285,000 42,897,077 58,182,077 2.9
2018 18,365,000 49,558,285 67,923,285 3.1
2019 22,355,000 55,586,363 77,941,363 3.1
2020 23,305,000 52,355,403 75,660,403 3.7
Note: The methodology used to calculate the net available revenues and the coverage ratio was adjusted during fiscal
year 2013 and all previous years were restated for comparative purposes. The 2013 change in methodology consisted of
removing agency fees, previously reflected as a deduction from net available revenues, and now combining them with
interest in the debt service section. Additionally, in fiscal years 2010 and 2011, the change in methodology consisted of
removing the Build America Bond Tax Credit from the pledged revenue section and reapplying the credit to interest
expense in the debt service section. This was made to ensure consistency with fiscal years 2012 and 2013. In fiscal year
2017 the methodology was changed to exclude GASB non-cash transactions from the debt service coverage calculation.
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
Senior and Subordinate Debt Service
Senior Debt Service
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 108
Per
Personal Capita Total Median
Fiscal Income Personal Number of Household Labor
Year Populations
(millions) 2 Income 2 Households 1 Income 3 City County State Force
2011 1,357,035 35,998 27,028 546,744 48,836 11.8 8.9 9.0 692,071
2012 1,360,085 40,109 29,490 546,744 51,402 9.7 6.9 7.0 672,945
2013 1,328,610 41,365 31,105 543,851 52,407 10.5 7.3 7.1 665,086
2014 1,318,610 39,593 29,728 543,991 55,573 9.6 6.9 6.6 666,200
2015 1,319,295 42,176 31,969 543,945 52,619 7.1 5.5 5.8 703,317
2016 1,319,047 42,845 32,482 542,223 53,156 5.9 4.6 4.9 718,821
2017 1,309,985 42,844 32,705 541,394 53,528 4.7 3.7 4.9 692,644
2018 1,305,352 44,248 33,897 541,832 54,821 4.3 3.3 3.5 699,882
2019 1,299,783 48,287 37,150 542,048 59,063 4.3 3.3 3.3 699,494
2020 1,294,781 48,113 37,159 544,002 59,054 12.0 8.9 7.9 677,261
Notes:
1 The number of households was taken from http://www.census.gov/quickfacts/fact/table/US-MO: 2020 figure is based
on 2013-2018 data; 2019 is based on 2013-2017 data; 2018 is based on 2012-2016 data; 2017 is based on 2011-2015 data;
2016 is based on 2010-2014; 2015 is based on 2013 data; 2014 is based on 2012 data; 2011-2013 are based on 2010 census.
2 The data in fiscal years 2011-2019 were restated to conform to the calculation used for fiscal year 2020.
3 Median Household Income added to this schedule in fiscal year 2020 and all prior years updated to include this data.
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.meric.mo.gov/regional-profiles/st-louis
https://www.census.gov/quickfacts/fact/table/US/PST045217
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Unemployment Rate
Saint Louis
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 109
Percentage Percentage
Employer Employees (1)of Total Rank
Employees (1)of Total Rank
BJC HealthCare 29,305 5% 1 24,044 4% 1
Mercy 20,182 3% 2 9,639 2% 9
Washington University in St. Louis 17,688 3% 3 13,208 2% 4
Boeing Defense, Space & Security 14,566 2% 4 15,000 2% 2
SSM Health 13,500 2% 5 11,194 2% 5
Scott Air Force Base 13,000 2% 6 13,249 2% 3
United States Postal Service 11,727 2% 7 10,400 2% 7
Schnuck Markets Inc. 10,858 2% 8 10,985 2% 6
Archdiocese of St. Louis 9,000 2% 9 N/A N/A
City of St. Louis 7,385 1% 10 N/A N/A
Wal-Mart Stores Inc N/A N/A 10,300 1% 8
AT&T N/A N/A 8,847 1% 10
147,211 24% 126,866 20%
Total Employment 612,393 100% 625,541 100%
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 2020 as of June 2020
St. Louis Business Journal's Book of Lists 2011
PRINCIPAL EMPLOYERS (ST. LOUIS METROPOLITAN AREA)
CURRENT YEAR AND NINE YEARS AGO
Fiscal Year 2020 Fiscal Year 2011
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 110
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Administrative 124 129 124 122 129 126 131 129 127 117
Office/Clerical 84 85 86 82 84 82 82 75 73 84
Plant Operation & Laboratory 241 244 249 252 236 226 227 222 228 231
Engineering & Technical 147 153 148 151 155 152 151 150 166 174
Sewer Construction
& Maintenance 296 311 324 328 345 358 360 365 341 349
Total Employees 892 922 931 935 949 944 951 941 935 955
Notes:
The total employees listed above are as of June 30 for each respective year.
Source: Human Resources Department
EMPLOYMENT LEVEL
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 111
Average Sewage
Fiscal Treatment in Millions
Year of Gallons per Day
2011 370.6
2012 300.0
2013 326.7
2014 273.8
2015 327.5
2016 335.2
2017 328.9
2018 270.1
2019 396.4
2020 367.5
Source: Operations Department
AVERAGE FLOW
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Page 112
2011 2012 2013 2014 2015
Miles of sewers 9,843 9,738 9,578 9,563 9,531
Number of treatment plants 7 7 7 7 7
Treatment capacity (MGD) a 528 528 528 533 538
Annual engineering maximum plant capacity
(millions of gallons)192,629 192,629 192,629 194,454 196,279
Amount treated annually (millions of gallons)135,269 109,518 119,253 99,945 119,547
Unused capacity (millions of gallons)57,360 83,111 73,376 94,509 76,732
Percentage of capacity utilized 70% 57% 62% 51% 61%
2016 2017 2018 2019 2020
Miles of sewers 9,700 9,400 9,400 9,400 9,400
Number of treatment plants 7 7 7 7 7
Treatment capacity (MGD) a 538 593 593 593 593
Annual engineering maximum plant capacity
(millions of gallons)196,279 216,354 216,354 216,354 216,354
Amount treated annually (millions of gallons)122,366 120,033 96,534 144,754 134,502
Unused capacity (millions of gallons)73,913 96,321 119,820 71,600 81,852
Percentage of capacity utilized 62% 55% 45%67% 62%
Sources: Operations Department and Engineering Department
Note:
a Million gallons per day.
Fiscal Year
Fiscal Year
OPERATING AND CAPITAL INDICATORS
LAST TEN FISCAL YEARS
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
2350 MARKET STREET, ST. LOUIS, MISSOURI 63103
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