HomeMy Public PortalAboutOfficial Statement Series 2020B $120MMNEW ISSUE Ratings
Book-Entry Only S&P: AAA
Fitch: AA+
See “RATINGS” herein
In the opinion of Gilmore & Bell, P.C. and White Coleman & Associates, LLC, Co-Bond Counsel to the District (as
defined herein), under existing law and assuming continued compliance with certain requirements of the Internal
Revenue Code of 1986, as amended (the “Code”), the interest on the Series 2020B Bonds (as defined herein) (1) is
excludable from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the
federal alternative minimum tax, and (2) is exempt from income taxation by the State of Missouri. The Series 2020B
Bonds have not been designated as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the
Code. See the section herein captioned “TAX MATTERS” and the form of opinion of Co-Bond Counsel attached hereto
as Appendix E.
$120,000,000
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Wastewater System Revenue Bonds
Series 2020B
Dated: Date of Delivery Due: As shown on the inside cover pages
The Wastewater System Revenue Bonds, Series 2020B (the “Series 2020B Bonds”) will be issued by The Metropolitan
St. Louis Sewer District (the “District”) to provide funds to (a) pay a portion of the costs of the Series 2020B Project (as
defined herein), and (b) pay the Costs of Issuance (as defined herein) of the Series 2020B Bonds. The Series 2020B Bonds
will be secured by a pledge of certain revenues of the District as further described herein under the section captioned
“SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2020B BONDS.”
The Series 2020B Bonds are issuable only as fully-registered bonds and when issued will be registered in the name
of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, NY. See the
section herein captioned “THE SERIES 2020B BONDS – Book-Entry Only System.” Principal of the Series 2020B
Bonds is payable to the registered owners of the Series 2020B Bonds as set forth on the inside cover pages of this Official
Statement. Interest on the Series 2020B Bonds is payable semiannually on May 1 and November 1 of each year, beginning
on May 1, 2021. UMB Bank, N.A. is serving as Bond Registrar and Paying Agent (each as defined herein).
The Series 2020B Bonds and the interest thereon are limited obligations of the District payable solely
from the Pledged Revenues, as defined herein, on a parity with the District’s Outstanding Prior Senior Bonds
(as defined herein). The Series 2020B Bonds and the interest thereon shall not constitute a general or moral
obligation of the District nor a debt, indebtedness or obligation of, or a pledge of the faith and credit of, the
District or the State of Missouri (the “State” or “Missouri”) or any political subdivision thereof, within the
meaning of any constitutional, statutory or charter provision whatsoever. Neither the faith and credit nor
the taxing power of the District, the State or any political subdivision thereof is pledged to the payment of
the principal of, premium, if any, or interest on the Series 2020B Bonds or other costs incident thereto. The
District has no authority to levy any taxes to pay the Series 2020B Bonds. Neither the members of the Board
of Trustees of the District nor any person executing the Series 2020B Bonds shall be personally liable on the
Series 2020B Bonds by reason of the issuance thereof.
The Series 2020B Bonds are subject to optional and mandatory redemption as described herein. See the section herein
captioned “THE SERIES 2020B BONDS – Redemption Provisions.”
Maturities, Principal Amounts, Interest Rates, Yields, Prices and CUSIP Numbers are shown on the inside cover pages
This cover page contains certain information for quick reference only and is not a summary of the issue.
Investors must read this entire Official Statement, including the appendices hereto, to obtain information
essential to the making of an informed investment decision. See “RISK FACTORS” herein for a discussion of
certain risks and other considerations associated with an investment in the Series 2020B Bonds.
The Series 2020B Bonds are offered when, as and if issued by the District and accepted by the Underwriter (as defined
herein), subject to prior placement, withdrawal or modification of the offer without notice and subject to the approval
of their validity by Gilmore & Bell, P.C., St. Louis, Missouri, and White Coleman & Associates, LLC, St. Louis, Missouri,
Co-Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed upon for the District by its
General Counsel. Armstrong Teasdale LLP, St. Louis, Missouri, Disclosure Counsel, will pass upon certain legal matters
relating to this Official Statement. It is expected that the Series 2020B Bonds will be available for delivery through the
facilities of DTC in New York, NY on or about December 17, 2020.
The date of this Official Statement is December 3, 2020.
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$120,000,000
The Metropolitan St. Louis Sewer District
Wastewater System Revenue Bonds
Series 2020B
MATURITY SCHEDULE
Series 2020B Serial Bonds
Maturity
(May 1)
Principal
Amount
Interest
Rate
Yield
Price
CUSIP1
2021 $ 1,945,000 5.000% 0.150% 101.803% 592481 NM3
2022 1,895,000 5.000 0.160 106.631 592481 NN1
2023 1,990,000 5.000 0.180 111.404 592481 NP6
2024 2,090,000 5.000 0.200 116.123 592481 NQ4
2025 2,195,000 5.000 0.230 120.738 592481 NR2
2026 2,300,000 5.000 0.320 124.906 592481 NS0
2027 2,420,000 5.000 0.400 128.912 592481 NT8
2028 2,540,000 5.000 0.530 132.275 592481 NU5
2029 2,665,000 5.000 0.650 135.389 592481 NV3
2030 2,800,000 5.000 0.730 138.612 592481 NW1
2031 2,940,000 5.000 0.820c 137.633 592481 NX9
2032 3,085,000 5.000 0.890c 136.877 592481 NY7
2033 3,240,000 5.000 0.940c 136.340 592481 NZ4
2034 3,400,000 5.000 1.000c 135.699 592481 PA7
2035 3,570,000 5.000 1.040c 135.274 592481 PB5
2036 3,750,000 5.000 1.080c 134.850 592481 PC3
2037 3,940,000 5.000 1.120c 134.428 592481 PD1
2038 4,135,000 5.000 1.160c 134.007 592481 PE9
2039 4,340,000 5.000 1.200c 133.588 592481 PF6
2040 4,560,000 5.000 1.240c 133.170 592481 PG4
2041 4,785,000 5.000 1.280c 132.754 592481 PH2
2042 5,025,000 5.000 1.320c 132.339 592481 PJ8
2043 5,275,000 5.000 1.350c 132.030 592481 PK5
2044 5,540,000 5.000 1.380c 131.720 592481 PL3
2045 5,820,000 5.000 1.410c 131.412 592481 PM1
2046 6,110,000 5.000 1.420c 131.310 592481 PN9
2047 6,415,000 5.000 1.430c 131.207 592481 PP4
2048 6,735,000 5.000 1.440c 131.105 592481 PQ2
2049 7,070,000 5.000 1.450c 131.003 592481 PR0
2050 7,425,000 5.000 1.460c 130.900 592481 PS8
_______________________________
c Yield to the first optional par call date of May 1, 2030.
1CUSIP is a registered trademark of The American Bankers Association. CUSIP data is provided by CUSIP Global Services, managed by S&P
Global Market Intelligence on behalf of the American Bankers Association, and are included solely for the convenience of the registered owners.
Neither the District nor J.P. Morgan Securities LLC, New York, New York (the “Underwriter”) nor the Co-Municipal Advisors shall be
responsible for the selection of CUSIP numbers nor do the District nor the Underwriter nor the Co-Municipal Advisors make any representation
as to the correctness of such numbers on the Series 2020B Bonds or as indicated herein.
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THE METROPOLITAN ST. LOUIS SEWER DISTRICT
BOARD OF TRUSTEES
Michael Yates, Chair
James I. Singer, Member
Amy Fehr, Member
Ret. Col. Richard Wilson, Member
Michael Evans, Member
ADMINISTRATION
Brian L. Hoelscher, P.E., Executive Director and Chief Executive Officer
Tim R. Snoke, Secretary-Treasurer
John Strahlman, Assistant Secretary-Treasurer
Susan M. Myers, General Counsel
Marion M. Gee, Director of Finance
Richard Unverferth, P.E., Director of Engineering
Tracey Coleman, Director of Human Resources
Bret A. Berthold, P.E., Director of Operations
Jonathon C. Sprague, P.E., Director of Information Systems
ADVISORS AND CONSULTANTS
Co-Bond Counsel
Gilmore & Bell, P.C. White Coleman & Associates, LLC
St. Louis, Missouri St. Louis, Missouri
Co-Municipal Advisors
PFM Financial Advisors LLC Independent Public Advisors, LLC
Cleveland, Ohio Kansas City, Missouri
Disclosure Counsel
Armstrong Teasdale LLP
St. Louis, Missouri
Financial Feasibility Consultant
Raftelis Financial Consultants, Inc.
Kansas City, Missouri
Underwriter
J.P. Morgan Securities LLC
New York, New York
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____________________________
REGARDING USE OF THIS OFFICIAL STATEMENT
____________________________
THE SERIES 2020B BONDS HAVE NEITHER BEEN REGISTERED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, NOR HAS ANY DOCUMENT BEEN QUALIFIED UNDER THE TRUST
INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN
SUCH ACTS. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR
OWN EXAMINATIONS OF THE DISTRICT AND THE TERMS OF THE OFFERING. THE SERIES
2020B BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A
CRIMINAL OFFENSE.
IN CONNECTION WITH THE OFFERING OF THE SERIES 2020B BONDS, THE
UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR
MAINTAIN THE MARKET PRICE OF THE SERIES 2020B BONDS AT A LEVEL ABOVE THAT
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No dealer, broker, salesman or other person has been authorized by the District, the Underwriter
or the Co-Municipal Advisors to give any information or to make any representations with respect to the
Series 2020B Bonds other than those contained in this Official Statement, and, if given or made, such
other information or representations must not be relied upon as having been authorized by any of the
foregoing. This Official Statement neither constitutes an offer to sell nor the solicitation of an offer to buy
nor shall there be any sale of the Series 2020B Bonds by any person in any jurisdiction in which it is
unlawful for such person to make such offer, solicitation or sale. The information set forth herein has
been furnished by the District and other sources which are believed to be reliable, but such information is
not guaranteed as to accuracy or completeness and is not to be construed as a representation by the
Co-Municipal Advisors or the Underwriter. Statements contained in this Official Statement which involve
estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended
solely as such and are not to be construed as a representation of fact. The information and expressions of
opinion herein are subject to change without notice and neither the delivery of this Official Statement nor
any sale made hereunder shall, under any circumstances, create any implication that the information
herein is correct as of any time subsequent to its date.
References to website addresses presented herein are for informational purposes only and may be
in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such websites
and the information or links contained therein are not incorporated into, and are not part of, this Official
Statement.
____________________________
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
STATEMENTS IN THIS OFFICIAL STATEMENT
____________________________
Certain statements included or incorporated by reference in this Official Statement constitute
“forward-looking statements” within the meaning of the United States Private Securities Litigation
Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and
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**DRAFT**v1
Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally
identifiable by the terminology used such as “plan,” “expect,” “estimate,” “anticipate,” “project,”
“budget” or other similar words.
Forward-looking statements include, but are not limited to, certain statements under the section in
this Official Statement captioned “RISK FACTORS” and certain statements contained in the Report on
the Financial Feasibility of The Metropolitan St. Louis Sewer District Wastewater System Revenue
Bonds, Series 2020B in Appendix D hereto.
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED
IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS,
PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM
ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY
SUCH FORWARD-LOOKING STATEMENTS. NEITHER THE DISTRICT NOR ANY OTHER
PARTY PLANS TO ISSUE ANY UPDATES OR REVISIONS TO THOSE FORWARD-LOOKING
STATEMENTS IF OR WHEN THEIR EXPECTATIONS, OR EVENTS, CONDITIONS OR
CIRCUMSTANCES UPON WHICH SUCH STATEMENTS ARE BASED OCCUR EXCEPT AS
DESCRIBED IN THE SECTION HEREIN CAPTIONED “CONTINUING DISCLOSURE.”
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i
TABLE OF CONTENTS
INTRODUCTION ..................................................... 1
Purpose of this Official Statement .......................................... 1
The District .............................................................................. 1
Purpose of and Authority for the Series 2020B
Bonds .............................................................................. 2
Security and Sources of Payment for the Series
2020B Bonds .................................................................. 2
Other Indebtedness .................................................................. 6
Continuing Disclosure Information ........................................ 6
Additional Information ........................................................... 6
THE SERIES 2020B BONDS ................................... 7
General .................................................................................... 7
Redemption Provisions ........................................................... 8
Effect of Notice of Redemption .............................................. 9
Book-Entry Only System ........................................................ 9
Registration, Transfer and Exchange of Series
2020B Bonds ................................................................ 11
Persons Deemed Owners of Series 2020B Bonds ................ 12
SECURITY AND SOURCES OF PAYMENT FOR
THE SERIES 2020B BONDS .......................... 12
General .................................................................................. 12
Pledged Revenues ................................................................. 12
Pro Forma Statement of Pledged Revenues and
Debt Service Coverage................................................. 15
Flow of Funds ....................................................................... 17
Rate Covenant ....................................................................... 20
Senior and Subordinate Bonds .............................................. 21
Other Indebtedness ................................................................ 21
PLAN OF FINANCE .............................................. 21
Purpose of and Authority for the Series 2020B
Bonds ............................................................................ 21
Estimated Sources and Uses of Funds .................................. 21
THE DISTRICT ...................................................... 24
General ................................................................. 24
Organization and Management ............................................. 25
Board of Trustees .................................................................. 26
Administration ....................................................................... 26
The System ............................................................................ 28
Employees and Employee Relations ..................................... 28
Economic Conditions in the District ..................................... 29
Security .................................................................................. 29
Insurance ............................................................................... 29
THE CIRP ............................................................... 30
General .................................................................................. 30
Historical Capital Improvement Expenditures ..................... 31
Financing Plans for the CIRP ............................................... 31
Total Capital Expenditures under CIRP ............................... 32
Capital Finance Plans Contemplated Under
Consent Decree ............................................................ 32
FINANCIAL OPERATIONS OF THE DISTRICT 33
General .................................................................................. 33
Budget and Appropriation Process ....................................... 34
Finance Department .............................................................. 34
Fund Structure ....................................................................... 34
Basis of Accounting .............................................................. 35
Financial Statements ............................................................. 35
Cash and Investments ............................................................ 35
MANAGEMENT’S DISCUSSION AND
ANALYSIS OVERVIEW ................................ 36
2020 Financial Audit ............................................................. 36
2019 Financial Audit ............................................................. 37
Sewer Rates and Revenues ................................................... 38
Other Sources of Revenue ..................................................... 38
Rate Commission and Rate Setting Process ......................... 39
Billing and Collections .......................................................... 41
Rate Increases ....................................................................... 41
Historical and Projected Sewer Rates and Charges .............. 42
Customer Accounts ............................................................... 45
Largest User Charge Customers ........................................... 45
User Charge Revenues .......................................................... 45
Outstanding Indebtedness ..................................................... 46
Employee Benefits ................................................................ 48
Other Post-Employment Benefits ......................................... 49
Tax Limitation Amendment – Hancock
Amendment .................................................................. 49
REGULATORY REQUIREMENTS ...................... 49
General .................................................................................. 49
Regulatory Matters – Consent Decree .................................. 50
RISK FACTORS ..................................................... 50
Factors Affecting the District ............................................... 51
Summary Financial Information ........................................... 52
Certain Bankruptcy Risks ..................................................... 52
Secondary Markets and Prices .............................................. 52
Risk of Taxability of Series 2020B Bonds ........................... 52
Risk of Audit of Series 2020B Bonds .................................. 52
Limited Obligations .............................................................. 53
Loss of Premium Upon Early Redemption .......................... 53
LITIGATION .......................................................... 54
TAX MATTERS ..................................................... 54
Opinion of Co-Bond Counsel ............................................... 54
Other Tax Consequences ...................................................... 55
LEGAL MATTERS ................................................ 56
RATINGS ................................................................ 56
CONTINUING DISCLOSURE ............................... 57
UNDERWRITING .................................................. 57
CERTAIN RELATIONSHIPS ................................ 58
FINANCIAL FEASIBILITY CONSULTANT ....... 58
CO-MUNICIPAL ADVISORS ............................... 58
INDEPENDENT AUDITORS ................................ 58
MISCELLANEOUS ................................................ 58
APPENDIX A Independent Auditors’ Report,
Management’s Discussion and Analysis and
Basic Financial Statements of The Metropolitan
St. Louis Sewer District for the Fiscal Years
ended June 30, 2020 and 2019
APPENDIX B Information Regarding the District’s
Service Area
APPENDIX C Definitions and Summaries of Certain
Provisions of the Bond Ordinance and the
Continuing Disclosure Agreement
APPENDIX D Report on the Financial Feasibility of
The Metropolitan St. Louis Sewer District
Wastewater System Revenue Bonds, Series
2020B
APPENDIX E Form of Opinion of Co-Bond
Counsel
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1
OFFICIAL STATEMENT
$120,000,000
The Metropolitan St. Louis Sewer District
Wastewater System Revenue Bonds
Series 2020B
INTRODUCTION
The following introductory information is not a summary of this Official Statement. It is only a
brief description of, and is qualified by and subject in all respects to more complete and detailed
information contained elsewhere in, this Official Statement, including the cover page and appendices
hereto and the documents described herein. The order and placement of materials in this Official
Statement, including the appendices hereto, are not to be deemed a determination of relevance,
materiality or relative importance. This Official Statement, including the cover page and appendices,
should be considered in its entirety. The offering of the Series 2020B Bonds to potential investors is made
only by means of the entire Official Statement. All capitalized terms used in this Official Statement and
not otherwise defined herein, including in Appendix C – “DEFINITIONS AND SUMMARIES OF
CERTAIN PROVISIONS OF THE BOND ORDINANCE AND THE CONTINUING DISCLOSURE
AGREEMENT”, have the meanings set forth in the Bond Ordinance, as defined below.
Purpose of this Official Statement
The purpose of this Official Statement is to set forth certain information concerning The
Metropolitan St. Louis Sewer District (the “District”), a body corporate, municipal corporation and
political subdivision organized and existing under the laws of the State of Missouri (the “State” or
“Missouri”), and the District’s Charter (Plan), approved by the voters of The City of St. Louis, Missouri
(the “City”) and St. Louis County, Missouri (the “County”) at a special election on February 9, 1954, as
amended, and approved by the voters of the City and the County at special elections on November 7,
2000 and June 5, 2012 (collectively and as amended, the “Charter”), and the $120,000,000 principal
amount of Wastewater System Revenue Bonds, Series 2020B (the “Series 2020B Bonds”) to be issued
by the District. See the sections herein captioned “THE DISTRICT” and “THE SERIES 2020B
BONDS.”
The District
The District was created in 1954 to provide a metropolitan-wide system of wastewater treatment
and sanitary sewerage facilities for the collection, treatment and disposal of sewage to serve the City and
most of the more heavily populated areas of the County. 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. The
District’s service area now encompasses approximately 520 square miles, including approximately all 66
square miles of the City and approximately 454 square miles (approximately 87%) of the County. The
current population served by the District is approximately 1.3 million. A map of the District’s service area
is included on the back cover hereof. See the sections herein captioned “THE DISTRICT”, “THE
CIRP”, “FINANCIAL OPERATIONS OF THE DISTRICT”, “MANAGEMENT’S DISCUSSION
AND ANALYSIS OVERVIEW” and “REGULATORY REQUIREMENTS”.
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2
Purpose of and Authority for the Series 2020B Bonds
At a special election held on April 5, 2016, District voters approved the issuance by the District
of $900,000,000 in sewer system revenue bonds (the “Current Authorization”). The Current
Authorization enables the District to comply with federal and State clean water requirements. The District
may use the proceeds of such sewer system revenue bonds for the purpose of designing, constructing,
improving, renovating, repairing, replacing and equipping new and existing District sewer and drainage
facilities and systems.
The District previously issued bonds in a par amount of $323,571,204 from the Current
Authorization, consisting of $152,500,000 of the Series 2017A Bonds representing a portion of the
project portion of the Series 2017A Bonds, $47,722,204 of the Series 2018A Bond (each as defined
herein), $25,267,000 of the District’s Subordinate Wastewater System Revenue Bonds (State of Missouri –
Direct Loan Program), Series 2018B, $23,952,000 of the District’s Subordinate Wastewater System
Revenue Bonds (State of Missouri – Direct Loan Program), Series 2019A, $52,130,000 of the Series
2019B Bonds (as defined herein), and $22,000,000 of the District’s Subordinate Wastewater System
Revenue Bonds (State of Missouri – Direct Loan Program), Series 2020A. After the issuance of the
Series 2020B Bonds, the remaining amount of the Current Authorization will be $456,428,796. No other
bonds have been issued from the Current Authorization.
The District will issue the Series 2020B Bonds pursuant to the Current Authorization and the
Master Bond Ordinance No. 11713 (the “Master Bond Ordinance”) that was adopted by the Board of
Trustees of the District (the “Board”) on April 22, 2004, as supplemented by Ordinance No. 15546
adopted on November 12, 2020 (the “2020B Ordinance”, together with the Master Bond Ordinance
being collectively referred to herein as, the “Bond Ordinance”). Pursuant to the Current Authorization
and the Master Bond Ordinance, as supplemented by the 2020B Ordinance, the District will issue the
Series 2020B Bonds to provide funds to (a) pay a portion of the costs of the Series 2020B Project (as
defined herein), and (b) pay the Costs of Issuance (as defined in Appendix C to this Official Statement)
of the Series 2020B Bonds. For more information, see the sections herein captioned “THE CIRP” and
“PLAN OF FINANCE - Purpose of and Authority for the Series 2020B Bonds”.
A description of the Series 2020B Bonds is contained in this Official Statement under the caption
“THE SERIES 2020B BONDS.” All references to the Series 2020B Bonds are qualified in their entirety
by the definitive form thereof and the provisions with respect thereto in the Bond Ordinance.
Security and Sources of Payment for the Series 2020B Bonds
General. The Series 2020B Bonds are sewer system revenue bonds secured by and payable from
certain revenues of the District received from operation of its sanitary sewer system (as further defined
herein, the “System”) on a parity with the prior outstanding series of bonds (the “Prior Senior Bonds”)
issued by the District as shown in the following table.
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3
Name of Issue
Series
Designation
Issue
Date
Original Principal
Amount
Outstanding
Principal
Amount as of
Oct. 1, 2020
Taxable Wastewater System
Revenue Bonds (Build
America Bonds – Direct
Pay), Series 2010B
(“Series 2010B Bonds”) 01/28/2010 $85,000,000 $85,000,000
Wastewater System Revenue
Bonds, Series 2011B
(“Series 2011B Bonds”) 12/22/2011 $52,250,000 $13,725,000
Wastewater System Revenue
Bonds, Series 2012A
(“Series 2012A Bonds”) 08/23/2012 $225,000,000 $45,620,000
Wastewater System
Refunding Revenue Bonds,
Series 2012B
(“Series 2012B Bonds”) 11/14/2012 $141,730,000 $41,525,000
Wastewater System Revenue
Bonds, Series 2013B
(“Series 2013B Bonds”) 12/18/2013 $150,000,000 $42,380,000
Wastewater System
Improvement and Refunding
Revenue Bonds, Series
2015B
(“Series 2015B Bonds”) 12/15/2015 $223,855,000 $168,950,000
Wastewater System Revenue
Bonds, Series 2016C
(“Series 2016C Bonds”) 12/20/2016 $150,000,000 $141,695,000
Wastewater System
Improvement and Refunding
Revenue Bonds, Series
2017A
(“Series 2017A Bonds”) 12/14/2017 $316,175,000 $309,240,000
Wastewater System Revenue
Bond (WIFIA - Deer Creek
Sanitary Tunnel Pump
Station and Sanitary Relief
Project), Series 2018A
(“Series 2018A Bond”) 12/19/2018 $47,722,204* $261,479.86
Wastewater System Revenue
Bonds, Series 2019B
(“Series 2019B Bonds”) 12/4/2019 $52,130,000 $52,130,000
Taxable Wastewater System
Refunding Revenue Bonds,
Series 2019C
(“Series 2019C Bonds”) 12/4/2019 $276,260,000 $276,260,000
______________________
* The Series 2018A Bond was issued in a principal amount of not to exceed $47,722,204 of which $261,479.86 has
been drawn and remains outstanding as of October 1, 2020.
Collectively, the Series 2020B Bonds, any Outstanding Prior Senior Bonds and any additional
Bonds then Outstanding issued with a right to payment and secured by a lien on a parity therewith are
9
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4
referred to herein as the “Senior Bonds.” The Senior Bonds are also secured by amounts in the Renewal
and Extension Fund (as defined herein). See the section herein captioned “SECURITY AND SOURCES
OF PAYMENT FOR THE SERIES 2020B BONDS.”
The District has authorized the issuance of $5,620,000 original principal amount of Wastewater
System Refunding Revenue Bonds, Series 2021A (the “Series 2021A Bonds”) to be issued on May 3,
2021. The Series 2021A Bonds were purchased by Morgan Stanley Municipal Funding, Inc. pursuant to
the Amended and Restated Forward Delivery Bond Purchase Agreement dated March 23, 2020. The
District plans to use the proceeds of the Series 2021A Bonds to refund a portion of the Series 2011B
Bonds, being those Series 2011B Bonds maturing on May 1 in the years 2030 through 2032, inclusive
(the “Series 2011B Redeemed Bonds”). The Series 2011B Redeemed Bonds will be called for
redemption at the option of the District on May 3, 2021, conditioned upon the receipt by the paying agent
for the Series 2011B Bonds, on or before the said redemption date, of sufficient funds to pay the
redemption price of the Series 2011B Redeemed Bonds.
The District has authorized the issuance of $39,845,000 original principal amount of Wastewater
System Refunding Revenue Bonds, Series 2022A (the “Series 2022A Bonds”) to be issued on May 3,
2022. The Series 2022A Bonds were purchased by Morgan Stanley Municipal Funding, Inc. pursuant to
the Amended and Restated Forward Delivery Bond Purchase Agreement dated March 23, 2020. The
District plans to use the proceeds of the Series 2022A Bonds to refund (1) a portion of the Series 2012A
Bonds, being those Series 2012A Bonds maturing on May 1, 2039 outstanding in the aggregate principal
amount of $31,345,000 (the “Series 2012A Redeemed Bonds”), and (b) a portion of the Series 2012B
Bonds, being those Series 2012B Bonds maturing on May 1 in the years 2025 through 2027, inclusive,
outstanding in the aggregate principal amount of $23,500,000 (the “Series 2012B Redeemed Bonds”).
The Series 2012A Redeemed Bonds and the Series 2012B Redeemed Bonds will be called for redemption
at the option of the District on May 3, 2022 conditioned upon the receipt by the paying agent for the
Series 2012A Bonds and the Series 2012B Bonds, on or before said redemption date, of sufficient funds
to pay the redemption price of the Series 2012A Redeemed Bonds and Series 2012B Redeemed Bonds.
The District has authorized the issuance of $23,040,000 original principal amount of Wastewater
System Refunding Revenue Bonds, Series 2023A (the “Series 2023A Bonds”) to be issued on May 1,
2023. The Series 2023A Bonds were purchased by Morgan Stanley Municipal Funding, Inc. pursuant to
the Amended and Restated Forward Delivery Bond Purchase Agreement dated March 23, 2020. The
District plans to use the proceeds of the Series 2023A Bonds to refund a portion of the Series 2013B
Bonds, being those Series 2013B Bonds maturing on May 1 in the years 2030, 2033, 2034, 2035 and
2039 outstanding in the aggregate principal amount of $31,775,000 (the “Series 2013B Redeemed
Bonds”). The Series 2013B Redeemed Bonds will be called for redemption at the option of the District
on May 1, 2023 conditioned upon the receipt by the paying agent for the Series 2013B Bonds, on or
before said redemption date, of sufficient funds to pay the redemption price of the Series 2013B
Redeemed Bonds.
The District has authorized the issuance of $133,560,000 original principal amount of Wastewater
System Refunding Revenue Bonds, Series 2025A (the “Series 2025A Bonds”) to be issued on May 1,
2025. The Series 2025A Bonds were purchased by Morgan Stanley Municipal Funding, Inc. pursuant to
the Amended and Restated Forward Delivery Bond Purchase Agreement dated March 23, 2020. The
District plans to use the proceeds of the Series 2025A Bonds to refund a portion of the Series 2015B
Bonds being those bonds maturing in the years 2030 through 2038, inclusive, outstanding in the aggregate
principal amount of $113,945,000, and $38,860,000 principal amount of the $57,260,000 original
principal amount of the Series 2015B Bonds scheduled to mature on May 1, 2045 (the “Series 2015B
Redeemed Bonds”). The Series 2015B Redeemed Bonds will be called for redemption at the option of
the District on May 1, 2025 conditioned upon the receipt by the paying agent for the Series 2015B Bonds,
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on or before said redemption date, of sufficient funds to pay the redemption price of the Series 2015B
Redeemed Bonds.
The Series 2020B Bonds and the interest thereon are limited obligations of the District, payable
solely from the Pledged Revenues, as defined herein, on a parity with the other Senior Bonds. The Series
2020B Bonds and the interest thereon shall not constitute a general or moral obligation of the District nor
a debt, indebtedness, or obligation of, or a pledge of the faith and credit of, the District, the State or any
political subdivision thereof, within the meaning of any constitutional, statutory or charter provision
whatsoever. Neither the faith and credit nor the taxing power of the District, the State, or any political
subdivision thereof is pledged to the payment of the Principal of, premium, if any, or interest on the
Series 2020B Bonds or other costs incident thereto. The District has no authority to levy any taxes to pay
the Series 2020B Bonds. Neither the members of the Board nor any person executing the Series 2020B
Bonds shall be liable personally on the Series 2020B Bonds by reason of the issuance thereof.
Pledged Revenues. The Series 2020B Bonds are sewer system revenue bonds secured by a pledge
of certain revenues of the System, referred to herein as “Pledged Revenues.” See the sections herein
captioned “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2020B BONDS –
Pledged Revenues” and “ – Flow of Funds” and “FINANCIAL OPERATIONS OF THE DISTRICT”
for further discussion of the specific District revenues constituting Pledged Revenues under the Bond
Ordinance.
Renewal and Extension Fund. The Bond Ordinance establishes a Renewal and Extension Fund
into which the District may deposit a portion of the Pledged Revenues. See “SECURITY AND
SOURCES OF PAYMENT FOR THE SERIES 2020B BONDS – Flow of Funds - Deposits to and
Uses of Moneys in the Renewal and Extension Fund.”
Series 2020B Bonds Not Secured by the Debt Service Reserve Account. The Bond Ordinance
also establishes a Debt Service Reserve Account for the Senior Bonds, excluding any Senior SRF Bonds
(as defined in Appendix C to this Official Statement) and Senior Uncovered Bonds. “Senior Uncovered
Bonds” means all series of Senior Bonds, other than Senior SRF Bonds, with respect to which the District
has specified pursuant to a Series Ordinance (as defined in Appendix C to this Official Statement) that
such series of Senior Bonds will not be secured by the Debt Service Reserve Account. The Series 2020B
Bonds are Senior Uncovered Bonds and therefore are not secured by the Debt Service Reserve Account.
See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2020B BONDS − Flow of
Funds − Deposits to and Uses of Moneys in the Debt Service Reserve Account.”
Additional Bonds. The Bond Ordinance authorizes the District to issue additional Bonds
thereunder which may be either “Senior Bonds” or “Subordinate Bonds,” subject to certain
requirements of the Bond Ordinance. The Bond Ordinance defines “Senior Bonds” as Bonds that have a
right to payment and are secured by a lien on a parity with the Outstanding Senior Bonds and any
additional Bonds issued on a parity (except with respect to any Credit Facility which may be available
only to one or more series of Senior Bonds and except that Senior SRF Bonds and Senior Uncovered
Bonds are not secured by the Debt Service Reserve Account) with respect to the Pledged Revenues. The
Master Bond Ordinance defines “Subordinate Bonds” as Bonds, including Subordinate SRF Bonds (as
defined in Appendix C to this Official Statement), issued with a right to payment from the Pledged
Revenues and secured by a lien on the Pledged Revenues expressly junior and subordinate to the Senior
Bonds. The Series 2020B Bonds and any other Senior Bonds or Subordinate Bonds issued by the District
previously or in the future under the Master Bond Ordinance are referred to herein collectively as the
“Bonds.” See “DEFINITIONS AND SUMMARIES OF CERTAIN PROVISIONS OF THE BOND
ORDINANCE AND THE CONTINUING DISCLOSURE AGREEMENT” in Appendix C hereto for
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a discussion of the requirements that must be satisfied under the Master Bond Ordinance prior to the
issuance of additional Bonds thereunder.
Other Indebtedness
There are twenty-seven series of Outstanding Bonds previously issued by the District (not
including the Series 2020B Bonds), which are payable from Pledged Revenues of the System for the
purpose of financing or refinancing the cost of designing, constructing, improving, renovating, repairing,
replacing and equipping new and existing District wastewater facilities. As of October 1, 2020, the
aggregate principal amount of Senior Bonds Outstanding is $1,176,786,480. In addition to the eleven
series of outstanding Senior Bonds (not including the Series 2020B Bonds), the District has five
additional series of outstanding Subordinate Bonds payable from Pledged Revenues on a subordinate
basis to the Senior Bonds outstanding in the aggregate principal amount of $99,890,000 that were
purchased by the State Environmental Improvement and Energy Resources Authority of the State of
Missouri (the “Authority”) through the Missouri State Revolving Fund Program (the “SRF Program”)
of the Authority and the Missouri Department of Natural Resources (“DNR”). The District also has
eleven additional series of Outstanding Bonds payable from Pledged Revenues on a subordinate basis to
the Senior Bonds, which are outstanding as of October 1, 2020 in the aggregate principal amount of
$282,353,195 under the State’s Direct Loan Program, which were issued as Subordinate Bonds under the
Master Bond Ordinance and the applicable Series Ordinances. For additional information on the fifteen
series of Subordinate Bonds (collectively, the “Subordinate SRF Bonds”), see the section herein
captioned “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2020B BONDS –
Other Indebtedness”.
Continuing Disclosure Information
At the time of issuance of the Series 2020B Bonds, the District will enter into a Disclosure
Dissemination Agent Agreement dated as of December 1, 2020 (the “Continuing Disclosure
Agreement”) with Digital Assurance Certification, L.L.C. (“DAC”), under which the District will
designate DAC as Disclosure Dissemination Agent (as defined in Appendix C to this Official Statement).
Pursuant to the Continuing Disclosure Agreement, the District will covenant to provide certain financial
and operating information with respect to the District on an on-going basis and notice of certain events in
accordance with Rule 15c2-12 promulgated by the United States Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time (“Rule 15c2-
12”). These covenants have been made in order to assist the Underwriter (as defined herein) in complying
with Rule 15c2-12. See the section herein captioned “CONTINUING DISCLOSURE” and
“DEFINITIONS AND SUMMARIES OF CERTAIN PROVISIONS OF THE BOND ORDINANCE
AND THE CONTINUING DISCLOSURE AGREEMENT” in Appendix C hereto.
Additional Information
Appendix A to this Official Statement contains the Independent Auditors’ Report, Management’s
Discussion and Analysis and Basic Financial Statements of the District for the Fiscal Years ended
June 30, 2020 and 2019. Appendix B to this Official Statement contains certain information regarding
the service area of the District. Appendix C to this Official Statement includes definitions of certain
capitalized terms used in this Official Statement and summaries of certain provisions of the Bond
Ordinance and the Continuing Disclosure Agreement. Appendix D to this Official Statement contains the
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Report on the Financial Feasibility of The Metropolitan St. Louis Sewer District Wastewater System
Revenue Bonds, Series 2020B prepared on behalf of the District with respect to the Series 2020B Bonds
(the “Feasibility Report”). Appendix E to this Official Statement contains the proposed forms of the
opinions that are anticipated to be rendered by Co-Bond Counsel at the time of delivery of the Series
2020B Bonds.
Brief descriptions of the Series 2020B Bonds, the Bond Ordinance and the District are included in
this Official Statement. Such descriptions, information and summaries provided herein do not purport to
be comprehensive or definitive. All references herein to any documents are qualified by the terms of such
documents in their entirety. Until the issuance and delivery of the Series 2020B Bonds, copies of the
documents described herein may be obtained from the District. After delivery of the Series 2020B Bonds,
copies of such documents will be available for inspection at the corporate trust office of UMB Bank, N.A.
in St. Louis, Missouri, as the Paying Agent under the Bond Ordinance (the “Paying Agent”).
THE SERIES 2020B BONDS
General
The Master Bond Ordinance authorizes the issuance of Bonds thereunder from time to time in
one or more series substantially in the form set forth in the related Series Ordinance. The 2020B
Ordinance further authorizes the execution, issuance and delivery of a series of Bonds thereunder and
under the Master Bond Ordinance to be designated as “The Metropolitan St. Louis Sewer District
Wastewater System Revenue Bonds, Series 2020B” in the aggregate principal amount of $120,000,000
which series of Bonds shall be executed, issued and delivered under, and secured by, the Master Bond
Ordinance and the 2020B Ordinance. Additional Senior Bonds and Subordinate Bonds may also be
issued from time to time as provided in, and subject to the limitations set forth in, the Master Bond
Ordinance and the 2020B Ordinance. See “DEFINITIONS AND SUMMARIES OF CERTAIN
PROVISIONS OF THE BOND ORDINANCE AND THE CONTINUING DISCLOSURE
AGREEMENT” in Appendix C hereto.
The Series 2020B Bonds shall be issued in fully registered form in the denomination of $5,000
each or integral multiples thereof and shall be dated the date of delivery thereof. Each Series 2020B
Bond shall be numbered in a convenient manner, established by UMB Bank, N.A. in St. Louis, Missouri
(the “Bond Registrar”), and shown on the Bond Register. The Series 2020B Bonds shall bear interest at
the rates per annum set forth on the inside cover pages hereof, computed on the basis of a 360-day year
consisting of twelve 30-day months, payable on May 1, 2021, and semiannually thereafter on May 1 and
November 1 of each year and shall mature in the principal amounts as set forth on the inside cover pages
hereof, unless earlier called for redemption.
So long as any of the Series 2020B Bonds are in book-entry form, the Principal, redemption
premium, if any, and interest on such Series 2020B Bonds are payable by check or draft mailed, or wire
transfer, to Cede & Co. as Registered Owner thereof and will be redistributed by DTC and the
participants as described below under “Book-Entry Only System.” So long as Cede & Co. is the
registered owner of the Series 2020B Bonds, as nominee of DTC, references herein to the Bondowners,
Owners or Registered Owners shall mean Cede & Co., as aforesaid, and shall not mean the Beneficial
Owners (herein defined) of the Bonds.
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Redemption Provisions
Optional Redemption of Series 2020B Bonds. At the District’s option, the Series 2020B Bonds
or portions thereof maturing on May 1, 2031 and thereafter may be called for redemption and payment
prior to their stated maturity on May 1, 2030, and thereafter, in whole or in part on any date in such order
of maturity as shall be determined by the District at the redemption price of 100% of the principal amount
thereof plus accrued interest thereon to the redemption date.
Selection of Bonds to be Redeemed; Redemption Among Series. If less than all of the Bonds of
like maturity of any series shall be called for redemption, the particular Bonds, or portions of Bonds, to be
redeemed shall be selected by the Paying Agent in such equitable manner as the Paying Agent may
determine. The portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the
Principal amount of $5,000 or an integral multiple thereof, and, in selecting portions of such Bonds for
redemption, the District shall treat each such Bond as representing that number of Bonds which is
obtained by dividing the Principal of such Bond to be redeemed in part by $5,000. Subject to the
redemption provisions of any Series Ordinance, the District in its discretion may redeem the Bonds of any
series, or a portion of the Bonds of any such series, before it redeems the Bonds of any other series.
Within any particular series, any redemption of Bonds shall be effected in the manner provided in the
Master Bond Ordinance and in any Series Ordinance.
Notice of Redemption. Unless waived by any registered owner of Bonds to be redeemed and
except as may be otherwise provided in a Series Ordinance, official notice of any such redemption shall
be given by the Bond Registrar on behalf of the District by mailing a copy of an official redemption
notice by first class mail, at least 30 days and not more than 60 days prior to the date fixed for redemption
to the registered owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register
or at such other address as is furnished in writing by such registered owner to the Bond Registrar.
All official notices of redemption shall be dated, shall contain the complete official name of the
Bond issue, and shall state: (1) the redemption date; (2) the redemption price; (3) the interest rate and
maturity date of the Bonds being redeemed; (4) if less than all the Outstanding Bonds are to be redeemed,
the Bond numbers, and, when part of the Bonds evidenced by one Bond certificate are being redeemed,
the respective Principal amounts of such Bonds to be redeemed; (5) that on the redemption date the
redemption price will become due and payable upon each such Bond or portion thereof called for
redemption and that interest thereon shall cease to accrue from and after such date; and (6) the place
where such Bonds are to be surrendered for payment of the redemption price (which place of payment
shall be the principal payment office of the Paying Agent or at such other office designated by the Paying
Agent for such purpose) and the name, address, and telephone number of a person or persons at the
Paying Agent who may be contacted with respect to the redemption.
Any notice of redemption of any Bonds may specify that the redemption is contingent upon the
deposit of moneys with the Paying Agent in an amount sufficient to pay the redemption price (which
price shall include the redemption premium, if any) of all the Bonds or portions of Bonds which are to be
redeemed on that date. Prior to any redemption date, the District shall deposit with the Paying Agent an
amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are
to be redeemed on that date.
For so long as DTC is effecting book-entry transfers of the Bonds, the Bond Registrar shall
provide the notices specified in the Bond Ordinance to DTC. It is expected that DTC shall, in turn, notify
its participants and that the participants, in turn, will notify or cause to be notified the Beneficial Owners.
Any failure on the part of DTC or a participant, or failure on the part of a nominee of a Beneficial Owner
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of a Bond (having been mailed notice from the Bond Registrar, a participant or otherwise) to notify the
Beneficial Owner of the Bond so affected, shall not affect the validity of the redemption of such Bond.
Any defect in any notice of redemption shall not affect the validity of proceedings for redemption
of the Bonds.
Effect of Notice of Redemption
Official notice of redemption having been given in the manner and under the conditions provided
in the Bond Ordinance and moneys for payment of the redemption price being held by the Paying Agent
as provided in the Bond Ordinance, the Bonds or portions of Bonds called for redemption shall, on the
redemption date designated in such notice, become and be due and payable at the redemption price
provided for redemption of such Bonds or portions of Bonds on such date, and from and after such date
interest on the Bonds or portions of Bonds called for redemption shall cease to accrue, such Bonds or
portions of Bonds shall cease to be entitled to any lien, benefit, or security under the Bond Ordinance, and
the owners of such Bonds or portions of Bonds shall have no rights in respect thereof except to receive
payment of the redemption price thereof. Upon surrender for partial redemption of any Bond, there shall
be prepared for and delivered to the registered owner a new Bond or Bonds of the same series, maturity,
and interest rate in the amount of the unpaid Principal.
Book-Entry Only System
The Series 2020B Bonds are available in book-entry only form. Purchasers of the Series 2020B
Bonds will not receive certificates representing their interests in the Series 2020B Bonds. Ownership
interests in the 2020B Bonds will be available to purchasers only through a book-entry system (the
“Book-Entry System”) maintained by DTC, New York, NY. The information provided immediately
below concerning DTC and the Book-Entry Only System, as it currently exists, has been obtained from
DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a
representation by, the District. The District makes no assurances that DTC, Direct Participants, Indirect
Participants or other nominees of the Beneficial Owners will act in accordance with the procedures
described herein or in a timely manner.
General. DTC, New York, NY, will act as securities depository for the Series 2020B Bonds. The
Series 2020B Bonds will be issued as fully-registered bonds registered in the name of Cede & Co.
(DTC’s partnership nominee) or such other name as may be requested by an authorized representative of
DTC. One fully-registered Series 2020B Bond certificate will be issued for each maturity of the Series
2020B Bonds, each in the aggregate principal amount of such maturity, and will be deposited with the
Paying Agent as DTC’s “FAST Agent.”
DTC and Participants. DTC, the world’s largest securities depository, is a limited-purpose trust
company organized under the New York Banking Law, a “banking organization” within the meaning of
the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within
the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to
the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset
servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt
issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct
Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in deposited securities, through electronic
computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the
need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S.
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securities brokers and dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation
(“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed
Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users
of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and
non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear
through or maintain a custodial relationship with a Direct Participant, either directly or indirectly
(“Indirect Participants”). DTC has an S&P Global Ratings’ rating of AA+. The DTC Rules applicable
to its Participants are on file with the Securities and Exchange Commission. More information about
DTC can be found at www.dtcc.com.
Purchases of Ownership Interests. Purchases of Series 2020B Bonds under the DTC system
must be made by or through Direct Participants, which will receive a credit for the Series 2020B Bonds
on DTC’s records. The ownership interest of each actual purchaser of each Series 2020B Bond
(“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial
Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are,
however, expected to receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial
Owner entered into the transaction. Transfers of ownership interests in the Series 2020B Bonds are to be
accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests
in the Series 2020B Bonds, except in the event that use of the Book-Entry System for the Series 2020B
Bonds is discontinued.
Transfers. To facilitate subsequent transfers, all Series 2020B Bonds deposited by Direct
Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such
other name as may be requested by an authorized representative of DTC. The deposit of Series 2020B
Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not
effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the
Series 2020B Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts
such Series 2020B Bonds are credited, which may or may not be the Beneficial Owners. The Direct and
Indirect Participants will remain responsible for keeping account of their holdings on behalf of their
customers.
Notices. Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. Beneficial Owners of the Series 2020B Bonds may
wish to take certain steps to augment the transmission to them of notices of significant events with respect
to the Series 2020B Bonds, such as redemptions, tenders, defaults and proposed amendments to the Series
2020B Bond documents. For example, Beneficial Owners of the Series 2020B Bonds may wish to
ascertain that the nominee holding the Series 2020B Bonds for their benefit has agreed to obtain and
transmit notice to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their
names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Series 2020B Bonds within an
issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
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Voting. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Series 2020B Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those
Direct Participants to whose accounts Series 2020B Bonds are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Payments of Principal, Redemption Price and Interest. Redemption proceeds, distributions, and
dividend payments on the Series 2020B Bonds will be made to Cede & Co., or such other nominee as
may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’
accounts, upon DTC’s receipt of funds and corresponding detail information from the District or the
Paying Agent on payable date in accordance with their respective holdings shown on DTC’s records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in bearer form or registered in
“street name,” and will be the responsibility of such Participant and not of DTC nor the Paying Agent, nor
the District, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of the District
or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct
and Indirect Participants.
Discontinuation of Book-Entry Only System. DTC may discontinue providing its services as
depository with respect to the Series 2020B Bonds at any time by giving reasonable notice to the Paying
Agent or the District. Under such circumstances, in the event that a successor depository is not obtained,
Series 2020B Bond certificates are required to be printed and delivered.
The Direct Participant holding a majority position in the Series 2020B Bonds may decide to
discontinue use of the system of book-entry transfer through DTC (or a successor securities depository).
In that event, Series 2020B Bond certificates will be printed and delivered to DTC.
The information above concerning DTC and DTC’s book-entry system has been obtained from
DTC and is not guaranteed as to accuracy or completeness by and is not to be construed as a
representation by the District. The District does not make any assurance that DTC, Direct Participants,
Indirect Participants or other nominees of the Beneficial Owners will act in accordance with the
procedures described above or in a timely manner.
Registration, Transfer and Exchange of Series 2020B Bonds
The Paying Agent has been appointed the Bond Registrar and as such shall maintain the Bond
Register for the registration and transfer of Series 2020B Bonds as provided in the Bond Ordinance.
Any Series 2020B Bond may be transferred only upon the books kept for the registration and
transfer of Series 2020B Bonds upon surrender thereof to the Paying Agent duly endorsed for transfer or
accompanied by a written instrument of transfer duly executed by the registered owner or his attorney or
legal representative in such form as shall be satisfactory to the Paying Agent. Upon any such transfer, the
District shall execute and the Paying Agent shall authenticate and deliver in exchange for such Series
2020B Bond a new fully registered Series 2020B Bond or Series 2020B Bonds, registered in the name of
the transferee, of any denomination or denominations authorized by the Bond Ordinance.
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Any Series 2020B Bond, upon surrender thereof at the principal corporate trust office of the
Paying Agent together with a written instrument of transfer duly executed by the registered owner or his
attorney or legal representative in such form as shall be satisfactory to the Paying Agent, may at the
option of the registered owner thereof, be exchanged for an equal aggregate principal amount of Series
2020B Bonds of the same series and maturity and bearing interest at the same rate.
In all cases in which Series 2020B Bonds shall be exchanged or transferred, the District shall
execute and the Paying Agent shall authenticate and deliver, at the earliest practicable time, Series 2020B
Bonds in accordance with the provisions of the Bond Ordinance. All Series 2020B Bonds surrendered in
any such exchange or transfer shall forthwith be cancelled by the Paying Agent. The District or the
Paying Agent may charge the Bondholder requesting the same for every such exchange or transfer of
Series 2020B Bonds sufficient to reimburse it for any tax or other governmental charge required to be
paid with respect to such exchange or transfer, and such charge shall be paid before any such new Series
2020B Bond shall be delivered.
Persons Deemed Owners of Series 2020B Bonds
The person in whose name any Series 2020B Bond shall be registered as shown on the Bond
Register required to be maintained by the Paying Agent shall be deemed and regarded as the absolute
owner thereof for all purposes, and payment of or on account of the principal of and redemption premium,
if any, and interest on any such Series 2020B Bond shall be made only to or upon the order of the
Registered Owner thereof or his legal representative. All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Series 2020B Bond, including the interest thereon, to the
extent of the sum or sums so paid.
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2020B BONDS
General
The Series 2020B Bonds are sewer system revenue bonds secured by and payable from Pledged
Revenues on a parity with the District’s Outstanding Senior Bonds and any other Senior Bonds issued
under the terms of the Master Bond Ordinance. The Senior Bonds are also secured by amounts on deposit
in the Renewal and Extension Fund and, except with respect to Senior Uncovered Bonds, the Debt
Service Reserve Account. The Series 2020B Bonds are Senior Uncovered Bonds and therefore are not
secured by the Debt Service Reserve Account.
The Series 2020B Bonds and the interest thereon are limited obligations of the District payable
solely from the Pledged Revenues on a parity with the other Senior Bonds. The Series 2020B Bonds and
the interest thereon shall not constitute a general or moral obligation of the District nor a debt,
indebtedness or obligation of, or a pledge of the faith and credit of, the District or the State or any
political subdivision thereof, within the meaning of any constitutional, statutory or charter provision
whatsoever. Neither the faith and credit nor the taxing power of the District, the State or any political
subdivision thereof is pledged to the payment of the Principal of, premium, if any, or interest on the
Series 2020B Bonds or other costs incident thereto. The District has no authority to levy any taxes to pay
the Series 2020B Bonds. Neither the members of the Board nor any person executing the Series 2020B
Bonds shall be liable personally on the Series 2020B Bonds by reason of the issuance thereof.
Pledged Revenues
Pursuant to the Master Bond Ordinance, the District has pledged all Pledged Revenues to the
payment of the Principal of, premium, if any, and interest on all Bonds issued thereunder. Such pledge is
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for the equal and proportionate benefit and security of the District’s Outstanding Senior Bonds and any
other Senior Bonds issued under the terms of the Master Bond Ordinance regardless of the time or times
of their issuance or maturity. In the Master Bond Ordinance, the District covenants that it will not issue
obligations of any kind or nature payable from, or with a lien on, the Pledged Revenues or any part
thereof having priority over or, except as permitted in the Master Bond Ordinance for the issuance of
Senior Bonds, on a parity with the Series 2020B Bonds. Notwithstanding the foregoing, the Master Bond
Ordinance permits the issuance of Subordinate Bonds secured by the Pledged Revenues on a subordinate
basis to the Senior Bonds.
“Pledged Revenues” means (a) Net Operating Revenues (as defined herein) of the System (as
defined in the directly below paragraph), (b) Investment Earnings (as defined in the Bond Ordinance as
all interest received on and profits derived from investments of moneys in all funds and accounts of the
District other than investments derived from or with respect to (i) stormwater revenues, as described
below, (ii) all funds and accounts established in connection with SRF Bonds and (iii) obligations issued
by the District on behalf of any of its subdistricts), (c) Hedge Receipts and (d) all moneys paid or required
to be paid into, and all moneys and securities on deposit from time to time in, the funds and accounts
specified in the Bond Ordinance, but excluding any amounts required in the Bond Ordinance to be set
aside pending, or used for, rebate to the United States of America government pursuant to Section 148(f)
of the Internal Revenue Code of 1986, as amended (the “Code”), including, but not limited to, amounts in
the Rebate Fund created in the Bond Ordinance.
The Bond Ordinance defines the “System” as the sanitary sewer system of the District, as it now
exists and as it may be added to, extended, improved and equipped, either from the proceeds of the Bonds
or from any other sources at any time, including without limitation, (a) all sanitary sewers, all combined
sewers, all pumping stations, all wastewater treatment plants, and all equipment used in connection
therewith, all facilities for the collection, treatment and disposal of sewage and wastewater, including
industrial wastes, and (b) all other facilities or property of any nature or description, real or personal,
tangible or intangible, owned or used by the District in the collection, treatment and disposal of sewage.
The Bond Ordinance defines “Net Operating Revenues” as all Operating Revenues, after
provision for payment of all Expenses of Operation and Maintenance. The Bond Ordinance defines
“Operating Revenues” as all income and revenue of any nature derived from the operation of the
System, including periodic wastewater billings, service charges, other charges for wastewater service and
the availability thereof (other than any special assessment proceeds), connection or tap fees (whether
accounted for as revenues or as contributed capital), net proceeds from business interruption insurance,
the principal of gifts, bequests, contributions, grants and donations available to pay debt service of Bonds,
and any amounts deposited in escrow in connection with the acquisition, construction, remodeling,
renovation and equipping of facilities to be applied during the period of determination to pay interest on
Bonds.
The Bond Ordinance expressly excludes the following from the definition of Operating
Revenues: (1) any profits or losses on the early extinguishment of debt or on the sale or other disposition,
not in the ordinary course of business, of investments or fixed or capital assets, and local, state or federal
grants or other moneys received for the payment of Expenses of Operation and Maintenance (See
Appendix C for definition of “Expenses of Operation and Maintenance”), (2) local, state, or federal
grants, loans (including Government Loans), capital improvement contract payments, or other moneys
received for capital improvements to the System, (3) Investment Earnings, (4) any stormwater charges
(referred to herein as the “Stormwater Service Charges”) and (5) any property tax revenues. Although
revenues from the Stormwater Service Charge are not included in Operating Revenues and thus are not
available for payment of debt service on any Bonds issued under the Bond Ordinance, including the
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Series 2020B Bonds, such revenues are accounted for and included in the amount of Operating Revenues
identified in the Independent Auditor’s Report and Financial Statements included as Appendix A to this
Official Statement.
The schedule of Pledged Revenues shown on the following page was prepared to show the
amount of Pledged Revenues available historically to pay debt service on the Bonds.
[Remainder of page intentionally left blank]
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WASTEWATER SEGMENT
SCHEDULE OF PLEDGED REVENUES
For the Fiscal Years Ended June 30, 2016 Through 20201
(In Thousands)
2016 2017 2018
2019
2020
Operating Revenues
Sewer service charges2 $304,685 $330,883 $364,171 $399,932 $430,400
Recovery (provision) of doubtful
sewer services charge account
(4,062)
(2,534)
(3,010)
(4,361)
(5,623)
Licenses, permits and other fees 3,620 4,036 3,777 3,063 3,012
Other 14,221 1,085 3,355 2,474 10,193
Total Operating Revenues $318,464 $333,470 $368,293 $401,109 $437,982
Nonoperating Revenues3
Investment income $3,894 $2,457 $6,356 $14,439 $14,211
Total Operating and
Nonoperating Revenues
$322,358
$335,926
$374,649
$415,548
$452,193
Operating Expenses
Pumping and treatment $59,100 $60,203 $60,735 $63,197 $62,030
Collection system maintenance 33,292 33,477 29,266 29,309 34,416
Engineering 3,523 4,722 2,840 1,153 938
General and administrative 51,744 51,256 54,588 58,699 59,813
Water backup claims 7,631 5,035 1,548 5,436 4,653
Asset Management 12,969 14,143 14,048 12,791 13,999
Total Operating Expenses $168,258 $168,836 $163,026 $170,585 $175,849
Total Expenses $168,259 $168,835 $163,026 $170,585 $175,849
Pledged Revenues $154,099 $167,091 $211,622 $244,963 $276,344
Senior Bond Debt Service $46,381 $58,182 $67,923 $77,941 $75,660
Subordinate Bond Debt Service 27,379 31,178 32,476 36,192 36,860
Total Debt Service2 $73,760 $89,361 $100,399 $114,133 $112,520
Senior Bond Debt Coverage Ratio
3.3x 2.9x 3.1x 3.1x 3.7x
Total Debt Service Coverage Ratio 2.1x 1.9x 2.1x 2.1x 2.5x
______________________
Source: District
1 For the purposes of this Official Statement figures have been rounded.
2 These numbers are based on the District’s year end audited financial statements and may differ from the historical numbers shown on Page
16 hereof and Table 9 of the Feasibility Report. These differences are due to presentation requirements for auditing purposes.
3 Audited figures exclude Build America Bond federal subsidy payments from non-operating revenues and reduce the total annual debt
service figure by the corresponding amount.
Pro Forma Statement of Pledged Revenues and Debt Service Coverage
The following table shows actual wastewater revenues and expenditures and debt service
coverage for Fiscal Year 2020 and pro forma statements(1) showing projected wastewater revenues and
expenditures and debt service coverage on existing and anticipated revenue bonds during the current
Fiscal Year and the next four Fiscal Years.
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COMPARISON OF PROJECTED PLEDGED REVENUES
AND PROJECTED DEBT SERVICE COVERAGE(1)(2)
FY 2020
Actual
FY 2021
Budget
FY 2022
Projected
FY 2023
Projected
FY 2024
Projected
User Charge
Revenue $ 423,689,470 $ 413,214,317 $ 437,488,330 $ 460,778,921 $ 478,188,109
Other
Miscellaneous
Revenue
Other Operating
Revenue(3) $ 13,435,545 $ 4,408,400 $ 4,752,684 $ 5,140,575 $ 5,576,552
Connection Fee
Revenue 857,069 1,201,000 1,213,010 1,225,140 1,237,392
Subtotal Other
Miscellaneous
Revenue $ 14,292,614 $ 5,609,400 $ 5,965,694 $ 6,365,715 $ 6,813,944
Interest Income –
Operating and
Capital 14,210,947 12,147,603
8,225,821 9,058,875 10,831,237
Total Wastewater
Revenue $ 452,193,031 $ 430,971,320 $ 451,679,845 $ 476,203,511 $ 495,833,289
Gen. Fund
Operating Expenses $ 162,079,634 $ 173,025,044 $ 177,992,379 $ 183,790,811 $ 188,406,825
Other Operating
Expenses 13,769,129 3,674,454 3,681,756 4,080,786 3,844,205
Subtotal Operating
Expenses $ 175,848,763 $ 176,699,498 $ 181,674,135 $ 187,871,597 $ 192,251,030
Net Revenue
Available for Debt
Service $ 276,344,268 $ 254,271,822 $ 270,005,710 $ 288,331,914 $ 303,582,259
Actual and
Projected Debt
Service (Payments
To Bondholders)
Senior Bonds $ 75,659,166 $ 81,602,810 $ 86,051,964 $ 93,596,957 $ 107,071,650
Subordinate SRF
Bonds 37,779,433 38,143,023 39,133,063 43,101,382 52,028,046
Total Projected
Debt Service $ 113,438,599 $ 119,745,832 $ 125,185,027 $ 136,698,339 $ 159,099,696
Total Projected
Senior Debt
Coverage 3.65x 3.12x 3.14x 3.08x 2.84x
Total Projected
Coverage for all
Debt 2.44x 2.12x 2.16x 2.11x 1.91x
_________
Source: Feasibility Report
(1) See Appendix D – Feasibility Report page D-33 for detailed discussion of principal assumptions upon which projections are based.
(2) For the purposes of this Official Statement figures have been rounded.
(3) Includes interest earned from the Missouri American Water Loan and City of Arnold, Missouri.
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Flow of Funds
Funds and Accounts. The Bond Ordinance establishes or ratifies the establishment of the
following funds and accounts and provides that the moneys deposited in such funds and accounts are held
by U.S. Bank, N.A., St. Louis, Missouri, as the depository (the “Depository”) for the account of the
District, in trust for the purposes set forth in the Bond Ordinance:
(1) The Metropolitan St. Louis Sewer District Wastewater Revenue Fund (the “Revenue
Fund”);
(2) The Metropolitan St. Louis Sewer District Wastewater Sinking Fund (the “Sinking
Fund”), and within such Sinking Fund a Payments Account and a Debt Service Reserve Account;
(3) The Metropolitan St. Louis Sewer District Wastewater Renewal and Extension Fund (the
“Renewal and Extension Fund”);
(4) The Metropolitan St. Louis Sewer District Wastewater Rebate Fund (the “Rebate
Fund”), and within such Rebate Fund a Series 2020B Rebate Account; and
(5) The Metropolitan St. Louis Sewer District Wastewater Project Fund (the “Project
Fund”), and within such Project Fund a Series 2020B Project Account and a Series 2020B Costs of
Issuance Account.
Deposits to and Uses of Moneys in the Revenue Fund. The Bond Ordinance requires that the
District deposit all Operating Revenues into the Revenue Fund from time to time as and when received.
The Bond Ordinance also requires that the District apply moneys in the Revenue Fund, prior to the
occurrence and continuation of an Event of Default under the Bond Ordinance, in the following order of
priority:
(1) to pay Expenses of Operation and Maintenance;
(2) to deposit into the Sinking Fund the amounts required by the Bond Ordinance, as
described below under the heading captioned “Deposits to and Uses of Money in the Sinking Fund”;
(3) to make Replenishment Payments (as defined herein) to the Debt Service Reserve
Account and to pay to any Credit Facility Provider any amounts due under any Credit Facility Agreement,
including Additional Interest;
(4) to deposit into the Rebate Fund the amounts required by the Bond Ordinance;
(5) to pay any amounts due any Reserve Account Credit Facility Provider pursuant to a
Reserve Account Credit Facility Agreement;
(6) to deposit the amounts required to be deposited into the funds and accounts created by
any Series Ordinance authorizing the issuance of Subordinate Bonds, for the purpose of paying Principal
of (whether at maturity, upon mandatory redemption or as otherwise required by a Series Ordinance
relating to Subordinate SRF Bonds) and interest on Subordinate Bonds, making Hedge Payments under
Subordinate Hedge Agreements, and accumulating reserves for such payments;
(7) to make Accumulation Payments to the Debt Service Reserve Account in accordance
with the Bond Ordinance; and
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(8) to pay any amounts required to be paid with respect to any Other System Obligations.
In addition to, and after, the deposits described above, the District may from time to time deposit
into the Renewal and Extension Fund any moneys and securities held in the Revenue Fund in excess of
45 days’ estimated Expenses of Operation and Maintenance.
If at any time the amounts in any account of the Sinking Fund are less than the amounts required
by the Bond Ordinance, and there are not on deposit in the Renewal and Extension Fund available
moneys sufficient to cure any such deficiency, as described herein under the subsection captioned
“Deposits to and Uses of Moneys in the Renewal and Extension Fund,” then the District shall
withdraw from the funds and accounts of the District relating to Subordinate Bonds which are not
Subordinate SRF Bonds and deposit in such account of the Sinking Fund, as the case may be, the amount
necessary (or all the moneys in such funds and accounts, if less than the amount required) to make up
such deficiency.
Deposits to and Uses of Moneys in the Sinking Fund. After the District deposits all Operating
Revenues into the Revenue Fund and applies such moneys to pay Expenses of Operation and
Maintenance, then the Master Bond Ordinance provides for deposits to and uses of moneys in the
accounts and subaccounts in the Sinking Fund as follows:
Payments Account – General. Sufficient moneys shall be paid in periodic installments from the
Revenue Fund into the Payments Account for the purpose of paying the Principal of and interest
(excluding Additional Interest) on the Senior Bonds as they become due and payable and for the purpose
of making Hedge Payments under Senior Hedge Agreements. Amounts held in the Payments Account
shall be used solely to pay interest (excluding Additional Interest) and Principal of the Senior Bonds as
the same become due and payable (whether at maturity or upon redemption) and to pay Hedge Payments
under Senior Hedge Agreements when due. As of the date of this Official Statement, there are no Senior
Hedge Agreements in effect.
Interest. Except as otherwise provided in any Series Ordinance authorizing Senior SRF Bonds, on
or before the 30th day preceding each Interest Payment Date for Senior Bonds (or, in the case of Senior
Bonds bearing interest at a Variable Rate, on or before the Business Day preceding each Interest Payment
Date), the District shall deposit in the Payments Account an amount which, together with any other
moneys already on deposit therein and available to make such payment and, in the case of Senior SRF
Bonds, anticipated investment earnings on reserve funds held by a bond trustee relating to such Senior
SRF Bonds, is not less than the interest (excluding Additional Interest) coming due on such Senior Bonds
on such Interest Payment Date. The District shall also deposit and continue to deposit all Hedge Receipts
under Senior Hedge Agreements in the Payments Account from time to time as and when received.
Principal. Except as otherwise provided in any Series Ordinance authorizing Senior SRF Bonds,
on or before the 30th day preceding each Principal Maturity Date for Senior Bonds, the District shall
deposit in the Payments Account an amount which, together with any other moneys already on deposit
therein and available to make such payment, is not less than the Principal coming due on such Senior
Bonds on such Principal Maturity Date.
Hedge Payments. On or before the 30th day preceding each payment date for Hedge Payments
under Senior Hedge Agreements, the District shall deposit in the Payments Account an amount which,
together with any other moneys already on deposit therein and available to make such payment, is not less
than such Hedge Payments coming due on such payment date.
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Application of Moneys in Payments Account. No further payments need be made into the
Payments Account whenever the amount available in the Payments Account, if added to the amount then
in the Debt Service Reserve Account (without taking into account any amount available to be drawn on
any Reserve Account Credit Facility), is sufficient to retire all Senior Bonds then Outstanding and to pay
all unpaid interest accrued and to accrue prior to such retirement. No moneys in the Payments Account
shall be used for or applied to the optional purchase or redemption of Senior Bonds prior to maturity
unless: (i) provision shall have been made for the payment of all the Senior Bonds; or (ii) such moneys
are applied to the purchase and cancellation of Senior Bonds which are subject to mandatory redemption
on the next mandatory redemption date, which falls due within 12 months, such Senior Bonds are
purchased at a price not more than would be required for mandatory redemption, and such Senior Bonds
are cancelled upon purchase; or (iii) such moneys are applied to the purchase and cancellation of Senior
Bonds at a price less than the amount of Principal which would be payable on such Senior Bonds,
together with interest accrued through the date of purchase, and such Senior Bonds are cancelled upon
purchase; or (iv) such moneys are in excess of the then required balance of the Payments Account and are
applied to redeem a part of the Senior Bonds Outstanding on the next succeeding redemption date for
which the required notice of redemption may be given.
Deposits to and Uses of Moneys in the Debt Service Reserve Account. The Bond Ordinance
provides that with respect to Senior Bonds which are not Senior Uncovered Bonds that the Debt Service
Reserve Account will be funded in an amount equal to the Debt Service Reserve Requirement for the
Senior Bonds which are not Senior Uncovered Bonds. The Bond Ordinance requires that the District
deposit into the Debt Service Reserve Account the amounts specified in the Series Ordinances with
respect to Senior Bonds. Notwithstanding the foregoing, there shall be no deposit into the Debt Service
Reserve Account with respect to any SRF Bonds or Senior Uncovered Bonds nor shall the Debt Service
Reserve Account secure any SRF Bonds or Senior Uncovered Bonds. The Series 2020B Bonds are
Senior Uncovered Bonds and therefore are not secured by the Debt Service Reserve Account.
Whenever for any reason the amount in the Payments Account is insufficient to pay all interest or
Principal becoming due on the Senior Bonds within the next seven days (or, in the case of Senior Bonds
bearing interest at a Variable Rate, on the next Business Day), the District shall make up any deficiency
by transfers first from the Renewal and Extension Fund and second from the funds and accounts of the
District relating to Subordinate Bonds which are not Subordinate SRF Bonds. Whenever, on the date that
such interest or Principal is due, there are insufficient moneys in the Payments Account available to make
such payment on Senior Bonds (except with respect to Senior SRF Bonds and Senior Uncovered Bonds
which are not secured by the Debt Service Reserve Account), the District shall, without further
instructions, apply so much as may be needed of the moneys in the Debt Service Reserve Account to
prevent default in the payment of such interest or Principal, with priority to interest payments. Whenever
by reason of any such application or otherwise (other than required Accumulation Payments, as required
in the Bond Ordinance) the amount remaining to the credit of the Debt Service Reserve Account is less
than the amount then required to be in the Debt Service Reserve Account, such deficiency shall be
remedied by monthly deposits (“Replenishment Payments”) from the Revenue Fund, to the extent funds
are available in the Revenue Fund for such purpose after all required transfers set forth above have been
made.
The District may elect to satisfy in whole or in part the Debt Service Reserve Requirement by
means of a Reserve Account Credit Facility, subject to certain requirements as set forth in the Bond
Ordinance. See “DEFINITIONS AND SUMMARIES OF CERTAIN PROVISIONS OF THE BOND
ORDINANCE AND THE CONTINUING DISCLOSURE AGREEMENT” in Appendix C hereto.
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Deposits to and Uses of Moneys in the Renewal and Extension Fund. All sums accumulated
and retained in the Renewal and Extension Fund shall be used first to prevent default in the payment of
interest on or Principal of the Senior Bonds when due and then shall be applied by the District from time
to time, as and when the District shall determine, to the following purposes and, prior to the occurrence
and continuation of an Event of Default, in the order of priority determined by the District in its sole
discretion: (a) for the purposes for which moneys held in the Revenue Fund may be applied pursuant to
the Bond Ordinance and as described above; (b) to pay any amounts which may then be due and owing
under any Hedge Agreement (including termination payments, fees, expenses, and indemnity payments);
(c) to pay any governmental charges and assessments against the System or any part thereof which may
then be due and owing; (d) to make acquisitions, betterments, extensions, repairs, or replacements or
other capital improvements (including the purchase of equipment) to the System deemed necessary by the
District (including payments under contracts with vendors, suppliers, and contractors for the foregoing
purposes); (e) to acquire Senior Bonds by redemption or by purchase in the open market at a price not
exceeding the callable price as provided and in accordance with the terms and conditions of the Bond
Ordinance, which Senior Bonds may be any of the Senior Bonds, prior to their respective maturities, and
when so used for such purposes the moneys shall be withdrawn from the Renewal and Extension Fund
and deposited into the Payments Account for the Senior Bonds to be so redeemed or purchased; and
(f) for any other purpose of the District.
Rate Covenant
The Bond Ordinance provides that the District shall continuously own, control, operate, and
maintain the System in an efficient and economical manner and on a revenue producing basis and shall at
all times prescribe, fix, maintain, and collect rates, fees, and other charges for the services, facilities, and
commodities furnished by the System fully sufficient at all times to:
(1) provide for 100% of the Expenses of Operation and Maintenance and for the
accumulation in the Revenue Fund of a reasonable reserve therefor; and
(2) produce Net Operating Revenues in each Fiscal Year which, together with Investment
Earnings:
(a) will equal at least 125% of the Debt Service Requirement on all Senior Bonds
then Outstanding for the year of computation and 115% of the Debt Service Requirement
on all Bonds then Outstanding for the year of computation;
(b) will enable the District to make all required payments, if any, into the Debt
Service Reserve Account and the Rebate Fund and to any Credit Facility Provider, any
Reserve Account Credit Facility Provider, and any Qualified Hedge Provider;
(c) will enable the District to accumulate an amount to be held in the Renewal and
Extension Fund which, in the judgment of the District, is adequate to meet the costs of
major renewals, replacements, repairs, additions, betterments, and improvements to the
System, necessary to keep the same in good operating condition or as is required by any
governmental agency having jurisdiction over the System; and
(d) will remedy all deficiencies in required payments into any of the funds and
accounts established under the Bond Ordinance from prior Fiscal Years.
If the District fails to prescribe, fix, maintain, and collect rates, fees, and other charges, or to
revise such rates, fees, and other charges, in accordance with these provisions of the Bond Ordinance, the
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owners of not less than 25% in aggregate Principal amount of the Bonds then Outstanding, without regard
to whether any Event of Default shall have occurred, may institute and prosecute in any court of
competent jurisdiction an appropriate action to compel the District to prescribe, fix, maintain, or collect
such rates, fees, and other charges, or to revise such rates, fees, and other charges, in accordance with the
requirements of the Bond Ordinance.
Senior and Subordinate Bonds
Upon satisfaction of certain conditions, the Bond Ordinance permits the District, for specified
purposes, to issue additional Senior Bonds without express limit as to principal amount, which will be
equally and ratably secured on a parity basis with the Series 2020B Bonds and Outstanding Prior Senior
Bonds under the Bond Ordinance. The Debt Service Requirement, as defined in the Bond Ordinance,
which is used in the calculation of the additional bonds test, allows the District to take into account the
anticipated receipt of U.S. Treasury Interest Subsidy payments to arrive at a net debt service figure with
respect to the Series 2010B Bonds issued as “Build America Bonds.” The District may issue additional
Senior Bonds in the future to finance part of the cost of capital improvements identified in the District’s
Capital Improvement & Replacement Program (the “CIRP”). See the section herein captioned “THE
CIRP.” The Bond Ordinance also permits the District to issue Subordinate Bonds which would be
secured by a lien on the Pledged Revenues that would be junior and subordinate to the Series 2020B
Bonds and any other Senior Bonds. See “DEFINITIONS AND SUMMARIES OF CERTAIN
PROVISIONS OF THE BOND ORDINANCE AND THE CONTINUING DISCLOSURE
AGREEMENT” in Appendix C hereto.
Other Indebtedness
The Series 2020B Bonds are sewer system revenue bonds secured by and payable from Pledged
Revenues on a parity with the Prior Senior Bonds. The District has also issued sixteen series of
outstanding Subordinate Bonds. See the section herein captioned “MANAGEMENT’S DISCUSSION
AND ANALYSIS OVERVIEW – Outstanding Indebtedness - Other Outstanding Debt” for a
summary of the outstanding long-term debt of the District. For more information on the District’s long-
term liabilities, see Note 6 in the District’s Notes to Financial Statements contained in Appendix A to this
Official Statement.
PLAN OF FINANCE
Purpose of and Authority for the Series 2020B Bonds
As previously discussed herein, at a special election held on April 5, 2016, voters within the
District approved the Current Authorization. The Current Authorization enables the District to comply
with federal and State clean water requirements. The District may use the proceeds of such sewer system
revenue bonds for the purpose of designing, constructing, improving, renovating, repairing, replacing and
equipping new and existing District wastewater facilities.
The District will issue the Series 2020B Bonds to (a) pay a portion of the costs of the Series
2020B Project as described below under the heading “THE CIRP − Capital Finance Plans
Contemplated Under Consent Decree”, and (b) pay the Costs of Issuance of the Series 2020B Bonds.
Estimated Sources and Uses of Funds
The following table summarizes the anticipated sources and uses of funds in connection with the
issuance of the Series 2020B Bonds:
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Sources of Funds
Par amount of Series 2020B Bonds $ 120,000,000.00
Plus Original Issue Premium 37,194,201.20
Total: $ 157,194,201.20
Uses of Funds
Deposit to Series 2020B Project Account $ 156,681,823.72
Costs of Issuance* 512,377.48
Total: $ 157,194,201.20
______________________________
*Includes Underwriter’s discount
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DEBT SERVICE SCHEDULE
The following table sets forth the debt service requirements for all Outstanding Prior Senior
Bonds, the Series 2020B Bonds, the Subordinate Bonds and total debt service on all System revenue
bonds.
Year
Ending
June 30
Debt Service on
Outstanding Prior
Senior Bonds(1)
Debt Service on
Series 2020B
Bonds
Debt Service on
Subordinate
Bonds(2)
Total
Debt
Service
2021 $ 77,504,515 $ 4,178,333 $ 37,952,319 $ 119,635,167
2022 76,931,547 7,797,750 38,815,542 123,544,839
2023 77,402,360 7,798,000 39,302,990 124,503,350
2024 77,586,074 7,798,500 40,521,291 125,905,865
2025 77,700,860 7,799,000 40,599,839 126,099,699
2026 80,877,337 7,794,250 37,245,934 125,917,521
2027 83,460,713 7,799,250 30,643,930 121,903,893
2028 84,255,183 7,798,250 26,973,522 119,026,955
2029 84,032,852 7,796,250 26,186,792 118,015,894
2030 86,488,237 7,798,000 23,809,668 118,095,905
2031 86,005,672 7,798,000 22,444,159 116,247,831
2032 85,797,087 7,796,000 19,863,210 113,456,297
2033 82,431,292 7,796,750 19,706,936 109,934,978
2034 82,232,279 7,794,750 19,800,960 109,827,989
2035 79,438,686 7,794,750 15,590,631 102,824,067
2036 79,246,380 7,796,250 8,961,796 96,004,426
2037 80,010,594 7,798,750 8,996,303 96,805,647
2038 80,071,684 7,796,750 5,384,523 93,252,957
2039 82,715,899 7,795,000 3,013,761 93,524,660
2040 84,304,314 7,798,000 3,023,092 95,125,406
2041 84,294,663 7,795,000 3,032,439 95,122,102
2042 84,300,482 7,795,750 1,480,263 93,576,495
2043 46,432,328 7,794,500 - 54,226,828
2044 36,428,232 7,795,750 - 44,223,982
2045 36,436,697 7,798,750 - 44,235,447
2046 30,379,719 7,797,750 - 38,177,469
2047 20,837,219 7,797,250 - 28,634,469
2048 7,687,219 7,796,500 - 15,483,719
2049 7,685,969 7,794,750 - 15,480,719
2050 4,241,969 7,796,250 - 12,038,219
2051 4,241,969 - - 4,241,969
2052 4,241,969 - - 4,241,969
2053 4,241,969 - - 4,241,969
Totals(3) $1,999,943,969 $230,284,833 $473,349,898 $2,703,578,702
_________________
(1) Debt service figures are reduced by a 33% federal interest rate subsidy on the District’s Series 2010B Bonds for the year 2021 through 2030
and by a 35% federal interest rate subsidy thereafter. Such subsidy may be changed or eliminated at any point in the future.
(2) Amounts are net of trustee fees, DNR fees and reserve fund earnings.
(3) For the purposes of this Official Statement figures have been rounded.
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THE DISTRICT
General
The District is organized pursuant to Article VI, Section 30 of the Missouri Constitution which
empowers the people of the County and the City “to establish a metropolitan district for functional
administration of services common to the area included therein.” The District is the only special district in
the State established pursuant to that section of the Missouri Constitution. The Charter established the
District. The District was created to provide a metropolitan-wide system of wastewater treatment and
sanitary sewerage facilities for the collection, treatment and disposal of sewage to serve the City and most
of the more heavily populated areas of the County. Before the District’s creation, the City, various
municipalities in the County 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 in 1956 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 in
the County. The District purchased the Fee Fee Trunk Sewer Company and the Missouri Bottoms Sewer
Company in 1978. The District has since acquired other investor-owned or municipally-operated systems.
The District operates the fourth largest wastewater treatment system in the United States of
America. The District’s service area now encompasses approximately 520 square miles including
approximately all 66 square miles of the City and approximately 454 square miles (approximately 87%)
of the County. Only the far western section of the County is not served by the District. The District
provides sanitary sewer collection and treatment and stormwater management to a current population of
approximately 1.3 million. As of June 30, 2020, the District served approximately 427,000 accounts,
including approximately 361,545 single-family residences, approximately 41,365 multi-family apartments
and condos, and approximately 24,066 commercial/industrial businesses. For further description of the
District’s service area, see the service area map located on the back cover of this Official Statement. For
certain economic and demographic information regarding the City and the County, see Appendix B to
this Official Statement.
The Charter describes the District as “a body corporate, a municipal corporation and a political
subdivision of the state.” The District’s Charter was amended in 2000 in order to update the District’s
procedures and improve its operations. The amendments provided additional flexibility and structure to
several aspects of District operations, including (1) establishment of an independent 15-member Rate
Commission to review adjustments to the District’s wastewater and stormwater charges before the Board
acts on them; (2) authorization for the District to issue revenue bonds on a District-wide basis and
lowering the margin required for passage of both revenue and general obligation bonds to be consistent
with the Missouri Constitution; (3) requiring a mandatory rotation of outside auditors every five years and
the appointment of an internal auditor; (4) requiring a periodic independent management audit; and
(5) permitting the investment of the District’s funds in the same manner as authorized by the Missouri
Constitution for the investment of State funds. Other amendments to the Charter include (1) limiting the
term of (a) Board trustees to two full consecutive terms plus any portion of an unexpired term (provided,
however, that a Board trustee shall serve until his/her successor shall be appointed and qualified), and
(b) commissioners on the three-member civil service commission (the “Civil Service Commission”) to
two terms plus any portion of an unexpired term (provided, however, that each commissioner shall serve
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until his/her successor shall be appointed and qualified), (2) requiring the publication of Board vacancies,
and (3) requiring the Board to make a written report to the Mayor and Board of Alderman of the City and
to the County Executive and County Council of the County on an annual basis.
Eight additional amendments to the Charter were approved by voters at the special election held
on June 5, 2012. The approved changes (1) remove the actual boundaries of the District from the Charter
so that boundary changes do not require Charter amendment and are kept by the Office of the
Secretary-Treasurer; (2) streamline the process of forming subdistricts; (3) more clearly delineate the
District’s responsibility for stormwater management; (4) allow use of electronic media, or such other
form of communication as may be required by Missouri law; (5) provide that the budget include a list of
capital projects to be undertaken; (6) allow the District to use the design-build approach for projects;
(7) provide that each Rate Commission representative organization shall serve until its successor shall be
appointed and qualified; and (8) support gender neutrality.
On November 12, 2020, the Board adopted an ordinance calling an election on April 6, 2021 for
voters to consider five propositions containing additional amendments to the Charter. The proposed
changes to be voted on broadly consist of (1) updating language of the Charter and removing obsolete
provisions, (2) rules governing the passage of ordinances, (3) the Rate Commission process, (4) increase
compensation for Board members and Civil Service Commission, and (5) the competitive bid process for
auditors.
The Charter requires the District to adopt a continuing five-year strategic and operating plan on
an annual basis. The strategic and operating plan states the District’s objectives for the succeeding five
years and includes objective targets against which the District’s performance in meeting these objectives
is measured.
The District is subject to the provisions of the Federal Water Pollution Control Act, as amended,
33 U.S.C. 1251 et seq. (commonly referred to and defined herein as the, “Clean Water Act”), the stated
objective of which is to restore and maintain the chemical, physical, and biological integrity of the
nation’s waters. The District is also subject to the Missouri Clean Water Law, Sections 644.006 through
644.141 of the Revised Statutes of Missouri, as amended (the “Missouri Clean Water Law”), and other
laws and regulations. The regulatory requirements are administered by the United States Environmental
Protection Agency (“EPA”) through the DNR. See the section herein captioned “REGULATORY
REQUIREMENTS”.
Organization and Management
General. The Charter established the Board as the governing body of the District. The Board is
composed of six members, with three members appointed by the Mayor of the City and three members
appointed by the County Executive of the County. No more than two trustees from each area can be of the
same political affiliation. According to the Charter, 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 officers. 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 Board’s standing committees include Audit, Finance,
Pension, Program Management and Stakeholder Relations.
Administration of district-wide operations is by the executive staff under the direct supervision of
the Executive Director. The Civil Service Commission serves in an advisory position regarding personnel
administration and civil service matters, and hears appeals of disciplinary actions. The 15-member Rate
Commission, an advisory body established pursuant to the amendments to the Charter adopted on
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November 7, 2000 (the “Rate Commission”) makes recommendations to the Board regarding all
proposed changes in wastewater rates, stormwater rates and tax rates or regarding changes in structure to
the foregoing. See the section herein captioned “MANAGEMENT’S DISCUSSION AND ANALYSIS
OVERVIEW – Rate Commission and Rate Setting Process”.
Board of Trustees
The current members of the Board are as stated below. Currently, there is one vacancy on the
Board, which vacancy is to be filled by an appointment by the Mayor of the City.
Name Current Term Expires
Michael Yates, Chair March 15, 2022
James I. Singer, Member March 15, 2021
Amy Fehr, Member March 15, 2024
Ret. Col. Richard Wilson, Member March 15, 2022
Michael Evans, Member March 15, 2025
Set forth below is certain biographical information on the members of the Board.
Michael Yates, Chair (St. Louis County). Mr. Yates recently retired as a business representative
for the Operating Engineers Local 148 and has served on the Board since January 17, 2012.
James I. Singer (St. Louis County). Mr. Singer is a partner in the law firm of Schuchat, Cook &
Werner. Mr. Singer has served on the Board since January 12, 2016.
Amy Fehr (St. Louis County). Ms. Fehr is an attorney with the law firm of Capes, Sokol,
Goodman & Sarachan, P.C. She has served on the Board since September 6, 2019.
Ret. Col. Richard Wilson (St. Louis City). Ret. Col. Wilson is a retired colonel in the United
States Army, and has served on the Board since February 10, 2020.
Michael Evans (St. Louis City). Mr. Evans is an attorney at the law firm of Hartnett Reyes-
Hones LLC. Mr. Evans has served on the Board since August 14, 2020.
Administration
Management of the District is provided by a management team that reports to the Board,
including an Executive Director, Secretary-Treasurer, Assistant Secretary-Treasurer, Internal Auditor,
General Counsel, and Directors of Finance, Engineering, Human Resources, Operations and Information
Systems. Set forth below is certain biographical information regarding selected members of the executive
management staff of the District.
Brian Hoelscher, P.E., Executive Director. Mr. Hoelscher served as the District’s Director of
Engineering for more than nine years before his appointment as Executive Director on March 27, 2013.
As the Director of Engineering, he was responsible for the delivery of the District’s CIRP as well as other
environmental and regulatory duties. Mr. Hoelscher held several other management positions in the
District’s engineering department prior to his tenure as Director of Engineering. Before joining the
District in May 1995, Mr. Hoelscher served as the St. Louis area office manager for consulting engineers
Consoer, Townsend, Envirodyne Engineers of Missouri, Inc. (now AECOM). Mr. Hoelscher has a
Bachelor of Science in Chemical Engineering from Washington University in St. Louis, and is licensed as
a professional engineer in Missouri and Illinois.
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Tim R. Snoke, Secretary-Treasurer. Mr. Snoke joined the District as Secretary-Treasurer in May
2014. Before becoming Secretary-Treasurer, he spent 21 years at the former Ralcorp Holdings, Inc. in
various finance and treasury management positions, most recently as Assistant Treasurer. Mr. Snoke
holds a Bachelor of Science degree in Business Administration from Valparaiso University and a Masters
of Business Administration from Saint Louis University.
John Strahlman, Assistant Secretary-Treasurer. Mr. Strahlman was hired by the District in
January 2015. His previous experience includes treasury management positions at Metropolitan Pier and
Exposition Authority in Illinois, and at the Cook County, Illinois Treasurer’s office. He holds a Bachelor
of Science degree in Public Finance from Indiana University and a Masters of Business Administration
from DePaul University.
Susan M. Myers, General Counsel. Ms. Myers has been employed by the District as in-house
counsel since 2001 and was promoted to General Counsel in 2011. Prior to joining the District, she served
as an environmental engineer for two years with EPA Region VII in RCRA Permitting and for nine years
on a billion dollar Department of Energy Superfund clean-up project. Ms. Myers earned her law degree
from the Saint Louis University School of Law and a Bachelor of Science in Geological Engineering from
the University of Missouri-Rolla (currently Missouri University of Science and Technology).
Marion M. Gee, Director of Finance. Mr. Gee was hired by the District in September 2015.
Mr. Gee most recently served as Assistant Finance Director for the City of San Antonio, Texas. He
previously served as the Finance Director for the Louisville Metropolitan Sewer District for 11 years.
Mr. Gee is a certified public accountant and has a Bachelor of Science in Business Administration and a
Masters of Business Administration, both from the University of Louisville.
Richard Unverferth, P.E., Director of Engineering. Mr. Unverferth has served as the District’s
Director of Engineering since May 2013. Prior to his current position, he held numerous positions in the
District’s Engineering and Operations departments. Mr. Unverferth has a Bachelor of Science in Civil
Engineering from the University of Missouri-Rolla (currently Missouri University of Science and
Technology), and is a licensed professional engineer in Missouri.
Tracey Coleman, Director of Human Resources. Ms. Coleman has served as the Director of
Human Resources at the District since 2018. Before her promotion to her current position, Ms. Coleman
was the Manager of Training and Organizational Development at the District. Before joining the District,
she held positions at Laclede Gas, Edward Jones, HealthLink and A.G. Edwards. Ms. Coleman received
her Master’s Degree from Webster University and a Chancellor’s Certification in Database Technology
from the University of Missouri-St. Louis.
Bret A. Berthold, P.E., Director of Operations. Mr. Berthold was named the District’s Director
of Operations in December 2018. Mr. Berthold joined the District in April 2009 as the Operation
Division Manager at the Bissell Point Wastewater Treatment Plant and transitioned to the Assistant
Director of Operations position in September 2011. Before joining the District, Mr. Berthold held several
positions at Spectrum Brands, Inc. Mr. Berthold received a Bachelor of Science in Mechanical
Engineering from Missouri University of Science and Technology (formerly, University of Missouri –
Rolla) and a Masters of Business Administration from Webster University.
Jonathon C. Sprague, P.E., Director of Information Systems. Mr. Sprague has been the Director
of Information Systems for the District since December 2018. Before his promotion to his current
position, he joined the District in May 2005 as Assistant Director of Operations and became the District’s
Director of Operations in 2007. Mr. Sprague has a Bachelor of Science in Electrical Engineering from
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The University of Akron and a Masters of Business Administration from the College of William and
Mary.
The System
The District owns and operates the System, which consists of sanitary, stormwater and combined
collection sewers, pumping stations, and wastewater treatment facilities in its service area. The District
provides sewer collection, pumping and treatment services within three major watersheds located within
the District’s service area, including the Mississippi River watershed, the Missouri River watershed and
the Meramec River watershed. In addition, the District provides a variety of other services, including
sanitary sewer maintenance, stormwater sewer maintenance, floodwater control, monitoring of industrial
waste, issuance of pretreatment discharge permits, engineering design and specification, construction of
sewer lines, plan review and approvals, issuance of connection permits, public education and customer
service.
Collection and Trunk Sewers. As of October 1, 2020, the District owns and maintains 9,347
miles of collection and trunk sewers and force mains, ranging in size from six inches to 29 feet in
diameter. They are classified as one of three types: wastewater, storm or combined. Sanitary sewers
accommodate household and industrial waste. Storm sewers carry rainwater and surface water runoff.
Combined sewers carry both types of waste. The System currently includes approximately 4,698 miles of
wastewater sewers and force mains, approximately 2,979 miles of stormwater sewers and force mains,
and approximately 1,670 miles of combined sewers that handle both wastewater and stormwater flows.
Maintenance of the System is controlled and conducted out of three regional facilities.
Pumping Stations and Force Mains. The District currently owns and maintains 279 pumping
stations and 134 miles of force mains (which are included in the sewer system totals above). Pump station
and force main support is divided into three geographic regions under a pump station manager. All pump
stations are maintained regularly and monitored continuously by telemetry. Of the 279 stations, 38 are
floodwall (overflow regulation and wet weather relief tank stations), 4 are stormwater and the remaining
237 are wastewater and combined sewage pump stations which move the flow of wastewater through the
wastewater system and into District treatment plants.
Wastewater Treatment Facilities. The District currently owns and operates seven wastewater
treatment facilities. These facilities treated an average flow of 340 million gallons of wastewater per day
for the District’s previous five Fiscal Years 2016 to 2020. The Bissell Point and Lemay wastewater
treatment plants are the District’s two largest plants. Both of these plants serve the Mississippi River
watershed. The Coldwater Creek and Missouri River wastewater treatment plants service the Missouri
River watershed. The remaining wastewater treatment plants serve the Meramec River watershed.
Employees and Employee Relations
The District had 1,026 budgeted positions for Fiscal Year 2021, of which 966 are filled.
Approximately 65% of the District’s employees within the Operations Department are represented by one
of five unions: American Federation of State, County and Municipal Employees; Bricklayers;
International Brotherhood of Electrical Workers; International Union of Operating Engineers; and Service
Employees International. The District has entered into new collective bargaining agreements with all of
its bargaining units in 2020, with contracts for each bargaining unit that extend through June 30,
2024. Salary increases between FY 2020 and FY 2024 average 3% annually. The District also retains
private companies and consultants from time to time to supplement and expand its existing staffing
resources.
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Economic Conditions in the District
Generally, the District’s major revenue sources do not fluctuate with the local and national
economies as much as local governments that depend on sales or income taxes for their major sources of
revenue. The District uses several measures to forecast economic development in the District. Such
factors are listed below for Fiscal Years 2016 through 2020:
2016 2017 2018 2019 2020
Sewer Plan Reviews:
Number of Plans Approved 613 524 673 514 435
Number of Miles of Sewers 38 34 49 46 41
Sewer Construction Permits:
Number of Permits Issued 4,546 4,523 3,769 3,792 2,277
Number of Miles of Sewers 30 23 25 24 23
Customer Connections:
Number of Connection
Permits Issued 2,165 2,490 2,178 2,384 1,742
Connection Fee Revenue $1,691,032 $2,076,413 $1,249,104 $922,979 $919,405
Value of Sewers Dedicated to the
District by Developers
$11,271,085
$6,807,147
$24,800,000
$16,600,000
$6,500,000
_________
Source: District
Over the years, the City and County’s economies have each undergone a transformation from
reliance on traditional manufacturing industries to those industries based on advanced technology and
service. The St. Louis area is a center for health care, banking, finance, transportation, tourism, and
education and has a strong and diverse manufacturing economy. The combined unemployment rate for
the City and County was 3.5% in June 2019, which was lower than the national unemployment rate of
3.7% for the same time period. In June 2020 during COVID-19 (as defined herein), the combined
unemployment rate for the City and County was 9.6%, which was lower than the national unemployment
rate of 11.1% for the same time period. For more information on economic and demographic trends in
the City and the County, see Appendix B hereto.
Security
The System is subject to safety and security inspections on a continuing basis by the District. All
treatment plants are maintained as secure facilities with fences, locked gates and electronic surveillance
equipment. The District does not represent that any existing or additional safety or security measures will
be adequate in the event that terrorist activities are directed at the System. Further, damage to components
of the System could have a material adverse impact on the District’s expenditures for repairs to the
System.
Insurance
The District maintains third-party commercial insurance coverage for various risks while self-
insuring for other risks and liabilities. Presently commercial insurance coverage is maintained for
officers’, directors’ and general liability, property, boiler and machinery, excess flood and earthquake,
combined liability, cyber liability, business auto liability, excess workers’ compensation, public entity
fiduciary liability, crime, contractors equipment (inland marine), major facility pollution liability,
employment practices liability, cleanup costs associated with the release of petroleum from covered
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storage tanks, and sewer backup (blocked line and overcharged line). Such policies contain liability
limits, deductions and retentions that management of the District believes to be customary for similar
enterprises. Total premiums for third-party insurance coverage for Fiscal Year 2020 were $4,174,971, an
approximately 9.48% increase from Fiscal Year 2019.
In addition, the District has established a risk management program and self-insures a portion of
the risk related to its obligation to provide workers’ compensation and medical and hospitalization
benefits to its employees and water backup claims of its customers. The estimated liabilities for payment
of incurred (both reported and unreported) but unpaid claims relating to these matters are included in the
District’s financial statements as a component of current deposits and accrued expenses. As of June 30,
2020 and 2019, these liabilities amounted to $4,755,168 and $7,920,684, respectively. 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. For more information regarding the District’s self-insurance program, see Note 10, Self-
Insurance Programs, to the District’s Notes to Financial Statements contained in Appendix A to this
Official Statement.
The District has taken several actions to mitigate cyber threats and the business disruptions
associated therewith, including enhancing the District’s security in relation to cyber threats. The District
has reorganized its Information Technology Department to include a security division with two full time
security specialists and has hired a Chief IT Security Officer that is shared with other government service
providers. The focus of these new hires is to improve the District’s cybersecurity tools, operating
procedures and incident response protocols. The District also included security and disaster recovery
initiatives to its Fiscal Year 2021 strategic plan. These actions provide for additional resources for
monitoring and provide for disaster recovery to help prevent and minimize the risk of a cybersecurity
incident.
THE CIRP
General
The District developed the CIRP in 2004 which identifies proposed expenditures by the District
for capital improvements to the District’s sewer facilities over the next several decades. The general
objectives of the CIRP are to meet federal and State requirements and District policy regarding water
pollution control, to provide a satisfactory level of service to users of the District’s sewer system,
including reduction of building back-ups, and to continue the District’s program to rehabilitate its
infrastructure system. The CIRP addresses the District’s infrastructure capital improvement projects
involving the construction, repair, replacement and upgrade of sanitary and combined sewers, force
mains, pump stations, tanks, tunnels, treatment plants, and stormwater sewers. The District has designated
the portion of the CIRP improvements agreed to under the Consent Decree (as defined herein), hereinafter
defined, as “Project Clear.” This multi-decade Project Clear effort is estimated to cost $6 billion dollars
(in 2018 dollars), with $1.7 billion dollars thereof being appropriated from Fiscal Year 2013 through the
end of Fiscal Year 2019. As of October 1, 2020, the District has met all requirements related to Project
Clear dictated by the Consent Decree within mandated deadlines and within budget.
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Historical Capital Improvement Expenditures
Before 2004, the District financed substantially all of the capital improvements to its facilities
from available revenues on a “pay-as-you-go” basis. Since Fiscal Year 2004 the District has paid for more
than $2.8 billion in capital improvements through a combination of debt financing and “pay-as-you-go”
financing. Since the District began implementation of the CIRP in 2004, the District has completed
project improvements in the following categories:
• increasing wastewater treatment capacity;
• increasing quality of treatment levels to meet new regulations;
• finishing construction of a new wastewater treatment plant;
• improving infrastructure to reduce combined sewer overflows;
• improving infrastructure to reduce and eliminate sanitary sewer
overflows; and
• rehabilitating and replacing aging infrastructure.
Financing Plans for the CIRP
There are two primary funding sources for financing the capital improvements identified in the
CIRP: (1) debt, including certain Bonds issued under the Bond Ordinance; and (2) available Operating
Revenues on a “pay-as-you-go” basis. The District will use the proceeds of previously issued Bonds, a
portion of the proceeds of the Series 2020B Bonds and any Bonds issued by the District in the future
under the Bond Ordinance to finance the infrastructure projects identified in the CIRP.
The voters approved the issuance of $1,720,000,000 of sewer system revenue bonds, all of which
have been issued in furtherance of the CIRP, at special elections held on February 3, 2004, August 5,
2008 and on June 5, 2012 (the “Prior Authorizations”, together with the Current Authorizations being
referred to herein as, the “Authorizations”). As previously discussed herein, at a special election held on
April 5, 2016, voters within the District approved the Current Authorization in furtherance of the CIRP.
After the issuance of the Series 2020B Bonds, the remaining amount of the Current Authorization will be
$456,428,796.
The following table sets forth voter approval percentages at the special election for each
Authorization.
Year of Election Percentage in Favor of Each Authorization
2004 68%
2008 75%
2012 85%
2016 76%
Some of the major projects constructed in part or in whole with proceeds of the Prior
Authorizations were the Lower Meramec Treatment Plant, $177,000,000; Deer Creek Sanitary Tunnel
(Clayton Road to RDP), $150,000,000; Maline Creek CSO BP 051 & 052 Local Storage Facility,
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$86,000,000; Coldwater Creek Treatment Plant Improvements, $61,000,000; Missouri River Treatment
Plant Rehab and Improvements, $52,000,000; Grand Glaize Plant Improvements, $35,000,000; CSO/SSO
Collection System Improvements, $80,000,000; Lemay Treatment Plant Improvements, $40,000,000;
Maline Creek CSO BP 051 & 052 Local Storage, $86,000,000; Lemay Pump Station No. 1 Redundant
Force Main, $25,000,000; Coldwater Sanitary Relief Section B, C, and D Wet Weather Storage Facility
Tank C, $20,000,000; Lemay WWTP Secondary Improvements, $15,000,000; Missouri River WWTP
Secondary Treatment Expansion and Disinfection, $20,000,000; Maplewood – Blendon Combined Sewer
Relief, $11,000,000; Bissell & Lemay WWTP Incinerator Scrubber Replacement, $8,000,000; and FF-11
Fee Fee Creek Sanitary Relief, $7,000,000.
Some of the major projects to be constructed in part or in whole with the proceeds of the Current
Authorization include: Jefferson Barracks Tunnel (Lemay WWTP to Martigney PS), $90,000,000; Bissell
Point WWTF Trickling Filter Media Replacement, $24,000,000; Caulks Creek Forcemain (River Valley
Rd to L-52), $15,900,000; Harlem Baden Relief Phase IV (Hebert) – Hamilton to Darver Trunk Sewer,
$9,300,000; and Watkins Creek Pump Station (P-101) Replacement, $9,000,000.
Total Capital Expenditures under CIRP
The following table sets forth the District’s historic capital improvement expenditures for
improvements to the System for Fiscal Years 2011 through 2020, including expenditures funded both by
Bond proceeds and on a “pay-as-you-go” basis:
Fiscal Year
Ending June 30
Capital Improvement
Expenditures
2011 $ 99,958,334
2012 134,909,742
2013 151,321,500
2014 158,323,507
2015 196,100,162
2016 216,933,464
2017 249,487,948
2018 225,481,370
2019 221,248,644
2020 265,681,966
Total: $1,919,446,637
___________________
Source: District
Capital Finance Plans Contemplated Under Consent Decree
The District is currently constructing a multi-billion dollar, multi-decade CIRP to update and
rehabilitate the District’s aging wastewater collection and treatment system. The Board has approved a
budget that identifies proposed appropriations by the District for wastewater capital improvements of
approximately $365 million during the District’s Fiscal Year ending June 30, 2021, for a portion of the
projects that are included in the CIRP. The District estimates that the cost of the CIRP for the period of
Fiscal Year 2021 through Fiscal Year 2023 will be approximately $1.1 billion.
Approximately 40% of the total major capital improvement expenditures for Fiscal Year 2021 to
Fiscal Year 2023 are anticipated to be funded from operating revenues and the drawdown of available
fund balances and the remaining approximately 60% is expected to be funded by the issuance of
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additional debt, including the Series 2020B Bonds, pursuant to the Current Authorization as further
described herein.
The District’s capital program in Fiscal Year 2021 includes more than 130 projects, a portion of
which will be financed with the proceeds of the Series 2020B Bonds (the “Series 2020B Project”),
“pay-as-you-go” revenues of the System and future financings under the Bond Ordinance. Among these
projects, some of which are multi-year efforts, are the following projects which are budgeted at $10
million or more in Fiscal Year 2021:
Project Name Task Description
Fiscal Year
2021 Budget
JEFFERSON BARRACKS TUNNEL (LEMAY WWTP TO
MARTIGNEY PS)
Construction (Supplemental
Appropriation) $55,000,000
LOWER MERAMEC RIVER SYSTEM IMPROVEMENTS -
BAUMGARTNER TO FENTON WWTF TUNNEL Construction $32,000,000
DEER CREEK SANITARY TUNNEL (CLAYTON RD TO RDP)
Construction (Supplemental
Appropriation) $15,000,000
CAULKS CREEK FORCEMAIN (RIVER VALLEY RD TO L-52) Construction $15,000,000
DC-02 & DC-03 SANITARY RELIEF (BRENTWOOD BLVD TO
CONWAY RD) PHASE III AND PHASE IV
Construction (Supplemental
Appropriation) $15,000,000
DEER CREEK SANITARY TUNNEL (CLAYTON RD TO RDP) -
PUMP STATION
Construction (Supplemental
Appropriation) $15,000,000
BISSELL POINT WWTF TRICKLING FILTER MEDIA
REPLACEMENT Construction $14,000,000
Source: District
Other planned CIRP improvements in Fiscal Years 2021 through 2023 expected to be included in
the approximately $1.1 billion of capital projects during this timeframe include:
• infrastructure improvements to reduce combined sewer overflows;
• infrastructure improvements to eliminate sanitary sewer overflows;
• collection systems renewal and replacement activity; and
• planning and capacity, management, operation and maintenance activity.
See Appendix D – “FEASIBILITY REPORT – CIRP Financing” for a summary of the
projected CIRP Financing Plan for Fiscal Years 2022 through 2024.
FINANCIAL OPERATIONS OF THE DISTRICT
General
The District is supported by various taxes and user charges imposed on taxpayers and users of its
facilities within its boundaries. The District has the power, subject to voter approval, to issue general
obligation bonds, District-wide revenue bonds, sub-district revenue bonds, or special assessment bonds.
The Executive Director is responsible for preparing the annual budget of the District and is
responsible for drawing warrants to meet the financial obligations of the District. The Executive Director
appoints the Director of Finance, who is responsible for assisting the Executive Director in preparing the
annual budget, maintaining the accounting records of the District, and certifying that all warrants are
proper and valid under the District’s Charter. The Secretary-Treasurer is appointed by the Board and is
responsible for custody of the funds of the District and investing the funds of the District pursuant to the
Charter of the District and State law.
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Budget and Appropriation Process
The Executive Director of the District is responsible for preparing the District’s annual budget.
Not later than the fifteenth day of March in each year, the Executive Director must submit to the Board a
budget for the ensuing year. The Charter requires that the Board adopt the budget no later than June 30. In
the event that the Board does not pass a new budget by June 30, the prior year’s budget continues in force
until the Board adopts a new budget. The proposed budget is available for public inspection and the
District conducts public hearings on the proposed budget prior to its adoption. On or before the thirtieth
day of June in each Fiscal Year the Board determines the amount of taxes that will be required during the
next succeeding Fiscal Year to pay the principal of and interest on general obligation bonds issued and
certain costs of operations, maintenance, construction and improvements. At this time, there are no
general obligation bonds outstanding. The budget provides a complete financial plan for the budget year
for all District funds. In no event can the total amount of expenditures for the budget year from any fund
exceed the estimated revenues to be actually received plus any unencumbered balance or less any deficit
estimated for the beginning of the budget year. After submittal of the budget to the Board, the Board must
hold a public hearing at least 21 days before adoption of the budget in order to obtain public comment on
the proposed budget.
The Board instituted “zero-based budgeting” in the development of the District’s annual budget.
This budgeting process breaks the District’s budget into two distinct sections: (i) a base budget
representing the cost to run basic operations and (ii) an incremental budget representing initiatives that are
tied directly to the District’s Strategic Business and Operating Plan. Both sections undergo multiple
reviews to ensure that planned expenditures are justified and appropriate for the supported business
activity. For the incremental budget, an expenditure cannot be justified solely by a like expenditure in a
previous year; the expenditure has to clearly support a business objective from the District’s Strategic
Business and Operating Plan. The use of zero-based budgeting has played a strong part in helping to keep
key areas of the District’s budget at or below the rate of annual inflation.
Finance Department
The Finance Department is enhancing its efforts to substantially reduce its portfolio of accounts
receivable, using a combination of internal collection efforts and liens. In addition, a portion of the
District’s past-due collections has been outsourced to several outside vendors (collection agencies and
law firms). These agencies and firms focus on collecting overdue sewer bills from rate payers and during
Fiscal Year 2020 they collected approximately $34.3 million on behalf of the District.
The Government Finance Officers Association of the United States of America and Canada has
honored the District for excellence in budgeting, financial accounting and full disclosure. In 2020, for the
33rd consecutive year, the District earned the Distinguished Budget Presentation Award, the highest form
of recognition in governmental budgeting. In 2020, for the 32nd consecutive year, the District also
received the Certificate of Achievement for Excellence in Financial Reporting, the highest recognition in
governmental accounting and financial reporting.
Fund Structure
The General Fund was established to provide for the ordinary operations of the District. Since
1978, all operation and maintenance has been funded out of the General Fund. The General Fund receives
revenues from ad valorem property taxes levied on all property, real and personal, within the District’s
boundaries based on assessed valuations established by the City and County assessors. Tax rates vary by
subdistrict and purpose, and are levied in accordance with the Charter of the District. The District
discontinued levying real and personal property taxes after Fiscal Year 2008 as a result of the impervious
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stormwater charge which it began collecting in March 2008. The District rescinded its stormwater
impervious charge as a result of a July 9, 2010 court decision which declared the charge unconstitutional.
Property taxes were reinstated effective December 31, 2010, to partially replace this stormwater funding.
On April 5, 2016, a special election was held in which 62% of voters in the District’s service area
approved Proposition S. The approval of Proposition S put all District customers under the same property
tax rates to pay for stormwater service and, in turn, all District customers would receive the same level of
stormwater service. This process occurred gradually throughout Fiscal Year 2017. Proposition S allows
the District to rollback and eliminate several existing taxes, eliminate the stormwater fee and, in lieu of
these funding mechanisms, institute or leave in place two taxing districts that cover the District’s entire
service area; however, stormwater revenues do not constitute Pledged Revenues securing and payable to
the Series 2020B Bonds. Currently, a main source of income for the General Fund is a wastewater user
charge. The General Fund also receives miscellaneous income from a number of sources, and
reimbursement of engineering services provides other non-operating funds.
The District’s Revenue Funds consist of the Wastewater Revenue Fund and the Stormwater
Revenue Fund. Wastewater user charge revenues are deposited into the Wastewater Revenue Fund and
revenues from the District’s stormwater service charge are deposited into the Stormwater Revenue Fund.
The District also maintains two emergency funds − the Wastewater Emergency Fund and the Stormwater
Emergency Fund. These funds were created for the purpose of providing funding for emergency work or
repairs requiring prompt attention in the operation and maintenance of the District. The work or repairs
are of such a nature as to be non-measurable in the budgeting and appropriation of annual revenues.
District policy requires minimum balances of $500,000 and $250,000 be maintained in the Wastewater
Emergency Fund and the Stormwater Emergency Fund, respectively. As of June 30, 2020, the
Wastewater Emergency Fund and the Stormwater Emergency Fund had fund balances of $3,218,857 and
$2,329,544, respectively.
Basis of Accounting
Throughout a Fiscal 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 District’s 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.
Financial Statements
The accounts of the District are audited annually by an independent firm of certified public
accountants. The accounting firm of CliftonLarsonAllen LLP served the District as auditor for the Fiscal
Year ended June 30, 2020. The District’s audited financial statements for the Fiscal Year ended June 30,
2020, which includes audited financial statements for the Fiscal Year ended June 30, 2019, are attached
hereto as Appendix A.
Cash and Investments
The following table shows the historic cash and investments for the previous five Fiscal Years.
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FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Unrestricted Cash &
Investments (Current)
$182,927,020
$286,332,159
$300,591,076
$241,181,876
$317,158,516
Total Unrestricted Cash &
Investments
$339,921,143
$347,607,159
$367,855,784
$409,831,492
$467,823,163
Days Cash on Hand (No
Long-Term Unrestricted) 397 619
673
516
679
Days Cash on Hand (Adds
Long-Term Unrestricted) 737 751
824
877
1001
MANAGEMENT’S DISCUSSION AND ANALYSIS OVERVIEW
For the Years Ended June 30, 2020 and 2019
The Comprehensive Annual Financial Report of 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 the 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 the
management’s knowledge of the transactions, events, and conditions reflected in the financial statements
and certain of the fiscal policies that govern the District’s operations.
2020 Financial Audit
The District’s financial position improved in Fiscal Year 2020, 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 Year 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 Year 2020 to partially advance refund certain debt. Current, restricted and other assets
decreased $34.0 million or 4.1% in Fiscal Year 2020. 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 Fiscal Year 2020 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.
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 other post-employment benefits (“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 Year 2021 senior and subordinate
debt payments reclassified to current liabilities, a net decrease in premiums received on debt issuances of
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$21.4 million due to premiums retired resulting from the Fiscal Year 2020 refunding exceeding the
premium on the Fiscal Year 2020 new debt and $6.6 million amortization of premiums, net of discount.
The District ended Fiscal Year 2020 with $97.1 million in cash and cash equivalents for an
increase of $40.4 million or 71.1% from Fiscal Year 2019. 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
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 Year 2020 compared to Fiscal Year 2019 as more investments matured than
were purchased in both years.
Total capital assets, net of accumulated depreciation, increased by $216.2 million or 6.0% from
Fiscal Year 2019. 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 Year 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 District’s Notes to Financial Statements contained in Appendix A to this Official
Statement. See also Appendix A for a more in-depth analysis of the District’s financial position.
2019 Financial Audit
The District’s financial position improved in Fiscal Year 2019, as evidenced by the increase in net
position of $129.2 million. The improvement is due primarily to an increase in net investment in capital
assets, debt service funds and unrestricted funds of $94.8 million, $2.9 million and $36.6 million,
respectively; offset by a decrease of $5.1 million in subdistrict construction and improvement funds. Net
capital assets increased $185.5 million while debt related to the capital assets increased $22.7 million and
when netted with the $109.4 million decrease in unspent cash proceeds received upon the issuance of
senior debt in Fiscal Year 2018, net debt decreased net investment in capital assets $86.7 million. The
increase in construction-related liabilities of $3.2 million and the amortization of the deferred loss of $0.8
million also decreased net investment in capital assets.
Current, restricted and other assets decreased $61.6 million or 7.0% in Fiscal Year 2019. 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 Fiscal Year 2019 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
Year 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.
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The District ended the Fiscal Year 2019 with $56.8 million in cash and cash equivalents for an
increase of $22.4 million or 65.0% from Fiscal Year 2018. 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 Year 2019 while the
opposite occurred in Fiscal Year 2018 – more investments were purchased than matured.
Total capital assets, net of accumulated depreciation, increased by $185.5 million or 5.4% over Fiscal
Year 2018. 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.
Sewer Rates and Revenues
The primary source of funding for the operation and maintenance of the System is a user charge.
The following table shows the typical bill amount for a single family residence per month with the rates
approved by the Board for the year indicated and the percentage increase in such charge over the prior
year.
Fiscal Year Monthly Rate Percentage Change
2017(1) $44.59 9.50%
2018(1) 49.31 10.59
2019(1) 54.63 10.79
2020(2) 55.57 1.72
2021(2) 56.40 1.50
________________________________
(1) For Fiscal Years 2017 through 2019, a single family residence bill was calculated based on a use of 7 centum cubic feet per month.
(2) Effective with Fiscal Year 2020, a single family residence bill was calculated based on a use of 6 centum cubic feet per month.
The District’s charges for residential wastewater service are tied to the amount of measured water
usage during a winter quarter. For residential properties without water meters, the charges are based on
housing attributes (such as the number of rooms, baths, and toilets) that correlate to water usage. That
methodology is the same billing methodology used by the City of St. Louis Water Division for its non-
metered properties. Multi-family residential and commercial and industrial rates are proportionate to the
single-family charge and are based on water consumption and the strength of the discharge.
Other Sources of Revenue
The District has other sources of revenue not securing and pledged to the repayment of the Series
2020B Bonds. Real and personal property taxes are levied by the District. The District discontinued
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levying real and personal property taxes after Fiscal Year 2008 as a result of the impervious stormwater
charge which it began collecting in March 2008; however, the District suspended collection of the
impervious stormwater charge and resumed collection of real and personal property taxes in Fiscal Year
2011 as a result of the July 9, 2010 court decision concerning the impervious stormwater charge in which
the court determined that the impervious stormwater charge was in violation of the Hancock Amendment.
In Fiscal Year 2020, the total real and personal property taxes levied for stormwater was $35 million. On
April 5, 2016, a special election was held in which 62% of voters in the District’s service area approved
Proposition S. The approval of Proposition S put all District customers under the same property tax rates
to pay for stormwater service and, in turn, all District customers would receive the same level of
stormwater service. This process occurred gradually throughout Fiscal Year 2017. Proposition S allows
the District to rollback and eliminate several existing taxes, eliminate the stormwater fee and, in lieu of
these funding mechanisms, institute or leave in place two taxing districts that cover the District’s entire
service area; however, stormwater revenues do not constitute Pledged Revenues securing and payable to
the Series 2020B Bonds.
The District 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 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 or revenue bonds. The issuance of general obligation bonds,
payable from a general tax levy on all taxable property within the District or a subdistrict, requires the
approval of either a four-sevenths or two-thirds majority of the voters voting at an election held in the
District or subdistrict, as the case may be. General obligation bonds outstanding cannot exceed five
percent of the assessed valuation of the area benefitted. At this time, there are no general obligation bonds
outstanding. Subdistricts may also issue revenue bonds, payable from user charges (which do not
constitute Pledged Revenues) after a similar procedure, but require only a simple majority vote.
Rate Commission and Rate Setting Process
General. The District’s Rate Commission reviews and makes recommendations to the Board
regarding all proposed changes in wastewater rates, stormwater rates and tax rates or change in the
structure of any of the foregoing. Upon receipt of a rate change notice from the District pursuant to the
Charter, the Rate Commission recommends changes in rates to the Board that will be necessary to pay
interest and principal falling due on bonds issued to finance assets of the District, the costs of operation
and maintenance and such amounts as may be required to cover emergencies and anticipated
delinquencies.
The Rate Commission has reviewed and recommended all rate increases that were approved by
the Board since August 2003. On March 4, 2019, the District submitted a rate change proposal for Fiscal
Years 2021-2024 to go through the Rate Commission review process. The rate change proposal included
recommended changes to the District’s revenues and expenses. The Board accepted the 2019 Rate
Commission’s recommendation report on October 10, 2019. On June 11, 2020, the Board adopted
Ordinance No. 15418, approving the rate for Fiscal Year 2021, which rates were effective as of October
1, 2020. The rates for Fiscal Years 2022, 2023 and 2024 have been accepted, but not yet approved by the
Board.
Membership. The Rate Commission consists of one representative from each of fifteen
organizations within the District, each of which have been identified and designated by the Board as a
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“Rate Commission Representative Organization.” The organizations selected by the Board are diverse
and represent residential customers, commercial and industrial customers, environmental interests, labor
interests, community and neighborhood organizations and nonprofit organizations. The previous Rate
Commission Representative Organizations were as follows:
Missouri Coalition for the Environment
Missouri Industrial Energy Consumers
North County Incorporated
St. Louis County Municipal League
Engineers Club of St. Louis
League of Women Voters of St. Louis
The Mound City Bar Association
Missouri Botanical Garden
Associated General Contractors of St. Louis
Education Plus
City of Ladue, Missouri
Home Builders Association
St. Louis Council of Construction Consumers
Greater St. Louis Labor Council
Lutheran Senior Services
Term of Membership. Pursuant to Section 7.240 of the Charter, each Rate Commission
Representative Organization selected by the Board shall have the right to designate a Rate Commission
Delegate to the Rate Commission for a term of six years or completion of any unexpired term. The Board
shall designate organizations within the District to succeed such Rate Commission Representative
Organization, provided, however, that each Rate Commission Representative Organization shall serve
until its successor shall be appointed and qualified. Nothing herein shall bar a Rate Commission
Representative Organization from being named to successive terms.
Rate Setting Process. Pursuant to the Charter, whenever the District proposes or recommends a
change in rates, it shall give written notice (“Rate Change Notice”) to the Board and the Rate
Commission. Upon receipt of a Rate Change Notice and after review of same, the Rate Commission shall
cause at least one public hearing to be held on the record regarding the proposed rate change. The Rate
Commission shall issue its rate recommendation report (“Rate Commission Report”) to the Board and to
the public no later than 120 days after receipt of a Rate Change Notice. If the Board accepts the Rate
Commission Report or if the Board is deemed to have accepted a Rate Commission Report as set forth in
the Charter, the Board enacts an ordinance consistent with the Rate Commission Report. The Board may
reject, or fail to accept, the Rate Commission Report only upon a finding that such report does not
conform to the requirements of the Charter. No ordinance to effect a change in rates shall be introduced
for adoption under the Charter prior to the earlier of 45 days after receipt of the Rate Commission Report
or 45 days after the date on which the Rate Commission Report is due.
Pursuant to the Charter, any change in a rate recommended to the Board by the Rate Commission
must be accompanied by a statement of the Rate Commission that the proposed rate change and all
portions thereof:
(1) is consistent with constitutional, statutory or common law as amended from time to time;
(2) enhances the District’s ability to provide adequate sewer and drainage systems and
facilities, or related services;
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(3) is consistent with and not in violation of any covenant or provision relating to any
outstanding bonds or indebtedness of the District;
(4) does not impair the ability of the District to comply with applicable Federal or State laws
or regulations as amended from time to time; and
(5) imposes a fair and reasonable burden on all classes of rate payers.
Billing and Collections
The District bills residential and commercial customers monthly for sewer service charges. As
previously described herein (See first paragraph under Sewer Rates and Revenues, above), sewer bills
are calculated upon several different bases, including the amount of water used each quarter, the winter
quarter usage only or, when water meters are not in use, the structure of the building. For customers
whose bills are based upon water usage, the District purchases data from the three water agencies serving
the metropolitan area: the St. Louis City Water Division, Missouri-American Water Company and
Kirkwood Water.
In the City, most single-family homes and smaller multi-unit buildings are not equipped with
water meters. There are also a small number of properties in the County that use well water. When no
water meter reading is available, the District calculates the bill based on the attributes of the structure,
including the number of rooms, toilets, baths and separate showers.
Single-family residential properties that have water meters are billed based on the winter quarter
water usage. The winter quarter is defined as the 3-month water meter reading taken in February, March
or April. With each July sewer bill the service charges are calculated on a 91-day prorated amount using
the previous winter quarter water meter reading. The monthly usage remains the same until the following
July, when the process is repeated. For single-family customers who have limited income, the District
offers a Customer Assistance program. For eligible customers, the monthly sewer bill is reduced by 50%
each month.
Commercial and multi-unit properties are billed based on the amount of water used each quarter
or, in a few cases, each month. The District’s monthly bill is based on one-third of the prior quarter’s
reading and remains the same amount for three months. The process is repeated for the next three months.
In the case of commercial properties, there is an additional compliance charge on each month’s bill and
the bill may include a surcharge for difficult to treat industrial waste or there may be a reduction factor,
based on water used in processing and not entering the sewer system. Multi-unit property owners also
have the option of being billed on the winter quarter reading or on each quarter reading.
Rate Increases
Pursuant to the rate review and setting procedures discussed under the caption “Rate
Commission and Rate Setting Process” above, the District submitted to the Rate Commission a request
to increase wastewater user charge rates. A Wastewater Rate Change (the “Rate Change”) was presented
to the Rate Commission on March 4, 2019. The Rate Commission then initiated proceedings to provide
for the submission of written testimony, technical conferences, discovery procedures, a public hearing and
post hearing briefs. Pursuant to the Charter, the Rate Commission is required to submit a rate
recommendation to the District’s Board of Trustees upon conclusion of its deliberations. On August 16,
2019, the Rate Commission submitted its recommendation to the Board. In that report the Rate
Commission found that the Rate Change is necessary to pay (i) interest and principal due on bonds issued
to finance assets of the District, (ii) the costs of operation and maintenance of the System, and (iii) such
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amounts as may be required to cover emergencies and anticipated delinquencies. The Rate Commission
recommended rates to the Board for Fiscal Years 2021, 2022, 2023, and 2024. The Board accepted the
Rate Commission’s recommendation on October 10, 2019. On June 11, 2020, the Board adopted
Ordinance No. 15418, approving the rate for Fiscal Year 2021, which rates were effective as of October
1, 2020.
Historical and Projected Sewer Rates and Charges
The following table sets forth the wastewater sewer user charge rates for Fiscal Years 2017
through 2021.
Effective Effective Effective Effective Effective
Type of Monthly Charge July 1, 2016
(FY 2017)
Actual
July 1, 2017
(FY 2018)
Actual
July 1, 2018
(FY 2019)
Actual
July 1, 2019
(FY 2020)
Actual
October 1,
2020
(FY 2021)
Current
Base Charge ($/Bill)
Billing & Collection Charge $ 5.44 $ 6.02 $ 6.67 $ 7.38 $ 5.11
System Availability Charge 14.02 15.50 17.16 18.97 21.29
Total Base Charge (Residential) $ 19.46 $ 21.52 $ 23.83 $ 26.35 $ 26.40
Compliance Charge ($/Bill)
Tier 1 $ 2.86 $ 2.95 $ 3.05 $ 3.14 $ 4.44
Tier 2 57.20 58.94 60.89 62.61 62.16
Tier 3 125.84 129.67 133.96 137.75 133.20
Tier 4 185.90 191.56 197.91 203.49 177.60
Tier 5 243.10 250.50 258.79 266.10 222.00
Total Non-Residential Service Charge $ 22.32 $ 24.47 $ 26.88 $ 29.49 $ 30.84
Volume Charge
Metered ($/Ccf) $ 3.59 $ 3.97 $ 4.40 $ 4.87 $ 5.00
Unmetered ($/Bill per fixture)
Per Room 2.12 2.35 2.61 2.89 2.95
Per Water Closet 7.92 8.76 9.70 10.72 11.02
Per Bath 6.60 7.30 8.08 8.93 9.19
Per Separate Shower 6.60 7.30 8.08 8.93 9.19
Extra Strength Surcharges ($/ton)
Suspended Solids over 300 mg/l $ 262.00 $ 269.07 $ 277.03 $ 283.87 $ 302.67
Biochemical Oxygen Demand
over 300 mg/l
$ 654.00 $ 671.63 $ 691.50 $ 708.56 $ 812.94
Chemical Oxygen Demand over
600 mg/l
$ 327.00 $ 335.82 $ 345.76 $ 354.30 $ 406.47
________________________
Source: Feasibility Report
Key: Ccf = hundred cubic feet (approx. 748 gallons); mg/l = milligram per liter
The Rate Commission recommended rates to the Board for Fiscal Years 2021, 2022, 2023, and
2024. The Board accepted the Rate Commission’s recommendation on October 10, 2019. On June 11,
2020, the Board adopted Ordinance No. 15418, approving the rates for Fiscal Year 2021, which rates
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were effective as of October 1, 2020. The following table shows the approved rates for Fiscal Year 2021,
and the accepted, but not yet approved, rates for Fiscal Years 2022, 2023 and 2024.
[Remainder of page intentionally left blank]
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Type of Monthly Charge
Effective
October 1, 2020
(FY 2021)
Current
Effective
July 1, 2021
(FY 2022)
Proposed
Effective
July 1, 2022
(FY 2023)
Proposed
Effective
July 1, 2023
(FY 2024)
Proposed
Base Charge ($/Bill)
Billing & Collection Charge $ 5.11 $ 5.29 $ 5.48 $ 5.68
System Availability Charge
21.29 22.02
22.78
23.61
Total Base Charge
$ 26.40 $ 27.31
$ 28.26
$ 29.29
Compliance Charge ($/Bill)
Tier 1 $ 4.44 $ 4.55 $ 4.71 $ 4.85
Tier 2 62.16 63.64 65.80 67.67
Tier 3 133.20 136.37 140.99 144.98
Tier 4 177.60 181.83 187.98 193.30
Tier 5 222.00 227.29 234.98 241.63
Volume Charge
Metered ($/Ccf) $ 5.00 $ 5.17 $ 5.35 $ 5.55
Unmetered ($/Bill)
Per Room $ 2.95 $ 3.06 $ 3.17 $ 3.29
Per Water Closet 11.02 11.40 11.80 12.23
Per Bath 9.19 9.51 9.84 10.20
Per Separate Shower 9.19 9.51 9.84 10.20
Extra Strength Surcharges
($/ton)
Suspended Solids over 300
mg/l
$ 302.67 $ 321.47
$ 332.35 $ 341.76
Biochemical Oxygen
Demand over 300 mg/l
812.94 917.32
948.34 975.18
Chemical Oxygen Demand
over 600 mg/l
406.47 458.66
474.17 487.59
_________
Source: Feasibility Report
Key: Ccf = hundred cubic feet (approx. 748 gallons); mg/l = milligram per liter
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Customer Accounts
The District imposes a user charge on all customers that use its system of sewers, treatment plants
and other facilities. The number of customers per category of accounts is as follows:
Number of Customers by Type
Last Ten Fiscal Years
Fiscal Year
Single
Family
Residential
Multi-
Family
Residential
Commercial/
Industrial
Total
Accounts1
2011 362,739 43,471 24,702 430,912
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: District’s Comprehensive Annual Financial Report Fiscal Years Ended June 30, 2020 and 2019 citing to the District’s Finance
Department
1 These numbers are based on the District’s year-end financial statements and may differ from the historical numbers shown on Table 4 of the
Feasibility Report. These differences are due to presentation requirements for auditing purposes.
Largest User Charge Customers
The following table lists the District’s ten largest wastewater user charge customers for the Fiscal
Year ended June 30, 2020:
Customer User Charges Percent of Total
InBev Anheuser-Busch $5,651,108 1.33%
Washington University 2,476,315 0.59%
The City of St. Louis, Missouri 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 Aeropsace 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%
__________________________
Source: District’s Comprehensive Annual Financial Report Fiscal Years Ended June 30, 2020 and 2019
User Charge Revenues
The following table shows the amount of wastewater user charge revenues which were billed and
collected by the District for the Fiscal Years ended June 30, 2011 through June 30, 2020:
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Collections as a
Fiscal Wastewater Wastewater % of Wastewater
Year Charges Billed Charges Collected 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%
__________________________
Source: District
Outstanding Indebtedness
General Obligation Indebtedness. As of the date of this Official Statement, the District has no
outstanding general obligation indebtedness on either a District-wide or subdistrict basis.
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Other Outstanding Debt. The District ended Fiscal Year 2020 with approximately $1.558 billion
in long-term sewer system revenue bond debt outstanding. The following table summarizes the
outstanding long-term debt for the District at the end of Fiscal Years 2018, 2019, and 2020:
Total Long-Term Debt
Outstanding (000s) 2018 2019 2020
Prior Senior Bonds:
Series 2010B $85,000 $85,000 $85,000
Series 2011B 18,055 15,945 13,725
Series 2012A 159,340 154,040 45,620
Series 2012B 131,935 128,840 41,525
Series 2013B 116,615 113,615 42,380
Series 2015B 192,810 190,135 168,950
Series 2016C 147,295 144,535 141,695
Series 2017A 316,175 312,760 309,240
Series 2018A1 - 261 261
Series 2019B - - 52,130
Series 2019C - - 276,260
Subordinate SRF Bonds:
Series 2004B 73,190 64,590 55,730
Series 2005A 3,465 3,120 2,765
Series 2006A 23,315 20,965 18,550
Series 2006B 8,140 7,400 6,650
Series 2008B 23,700 21,765 19,795
Series 2009A 15,342 14,218 13,068
Series 2010A 5,849 5,468 5,080
Series 2010C 26,656 24,906 23,111
Series 2011A 33,988 32,241 30,449
Series 2013A 45,596 43,349 41,044
Series 2015A2 69,246 65,902 62,478
Series 2016A3 3,094 13,129 17,158
Series 2016B4 27,418 45,583 61,285
Series 2018B5 - 2,880 18,228
Series 2019A6 - - 6,292
Series 2020A7 - - -
Non-Bond Related Debt:
Energy Loan Program 51 16 -
TOTALS: $1,526,275 $1,510,664 $1,558,470
_______________________________
Source: District
1 This series was issued in an original principal amount of not to exceed $47,722,204, of which $261,479.86 has been drawn and remains outstanding as of October
1, 2020.
2 This series was issued in an original principal amount of not to exceed $75,000,000, of which $75,000,000 has been drawn and $60,736,000 remains outstanding as
of October 1, 2020.
3 This series was issued in an original principal amount of not to exceed $20,000,000, of which $20,000,000 has been drawn and $17,443,000 remains outstanding as
of October 1, 2020.
4 This series was issued in an original principal amount of not to exceed $75,500,000, of which $72,198,552 has been drawn and $64,200,522 remains outstanding as
of October 1, 2020.
5 This series was issued in an original principal amount of not to exceed $25,267,000, of which $21,105,321 has been drawn and remains outstanding as of October
1, 2020.
6 This series was issued in an original principal amount of not to exceed $23,952,000, of which $9,738,521 has been drawn and remains outstanding as of October 1,
2020.
7 This series was issued in an original principal amount of not to exceed $22,000,000, of which $163,000 has been drawn and remains outstanding as of October 1,
2020.
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Employee Benefits
The District currently maintains three pension plans for its employees: (i) a noncontributory
single employer defined benefit plan (the “Defined Benefit Plan”) providing retirement benefits as well
as death and disability benefits to all full-time District employees commencing services prior to
December 31, 2010, (ii) a defined contribution plan (the “Defined Contribution Plan”) and (iii) a
deferred compensation plan (the “Deferred Compensation Plan”).
A Pension Committee (consisting of two members of the District’s Board, two elected employee
members and four members of the District’s management staff) administers the Defined Benefit Plan. The
Defined Benefit Plan is exempt from the requirements of the Employee Retirement Income Security Act
of 1974 (“ERISA”) and, as such, is not subject to ERISA’s reporting requirements. As a noncontributory
plan, the District’s employees do not contribute to the Defined Benefit Plan. Ordinances establishing the
Defined Benefit Plan provide for actuarially determined annual contributions, paid solely by the District,
that are sufficient to pay benefits when due. Contributions of $13,602,014 and $12,609,689, excluding
certain professional fees paid by the District, were made to the Defined Benefit Plan during the District’s
Fiscal Year ending 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. For 2020, the actuarially determined contribution consists of
(a) $4,902,474 normal cost plus (b) $7,719,224 amortization of the actuarial accrued assets in excess of
the actuarial accrued liability and prior changes (c) multiplied by an inflation factor of 2.50%, which
totals $12,725,462. For 2019, the actuarially determined contribution consists of (a) $5,238,812 normal
cost plus (b) $7,001,606 amortization of the actuarial accrued assets in excess of the actuarial accrued
liability and prior changes (c) multiplied by an inflation factor of 1.02%, which totals $12,493,916. In the
2020 valuation, the number of active members included in the valuation decreased from 545 to 493 and
the number of retirees and beneficiaries increased from 748 to 771. The Funded Ratio for December 31,
2019, is 82.2%, down 0.4% from the period ended December 31, 2018. The District provides certain
professional fees, office space, utilities, and other services to the Defined Benefit Plan at no cost. Other
costs of administering the Defined Benefit Plan are financed from plan net assets. For more information
regarding the District’s Defined Benefit Plan, see Note 7, Pension Plan, in the District’s Notes to
Financial Statements contained in Appendix A to this Official Statement.
Effective January 1, 2011, the District started the Defined Contribution Plan for all new hires.
Current employees with less than 10 years of service on December 31, 2010, could voluntarily elect to
transfer from the Defined Benefit Plan into the Defined Contribution Plan. The Defined Contribution Plan
provides a basic contribution of 7% of employee annual earnings and provides a matching contribution of
50% of the first 4% of earnings the employee defers into the Deferred Compensation Plan. (This is a
maximum matching contribution of 2% of earnings.) Employees decide upon the investment of these
contributions and investment earnings from funds offered by Vanguard. Initial participation consisted of
twenty-three employees who transferred balances totaling $70,869 from the Defined Benefit Plan. At
December 31, 2019, the Defined Contribution Plan consisted of 540 participants with account balances
just over $13 million in net position. For more information regarding the District’s Defined Contribution
Plan, see Note 8, Other Retirement Plans at Defined Contribution Plan, in the District’s Notes to Financial
Statements contained in Appendix A to this Official Statement.
The District also offers its employees the Deferred Compensation Plan created in accordance with
Internal Revenue Code Section 457. The Deferred Compensation Plan, available to all District employees,
permits them to defer a portion of their salary until future years. The deferred compensation is not
available to employees until separation from service, or in special approved circumstances due to
financial hardship as defined by the Deferred Compensation Plan. Plan assets are held in trust for the
exclusive benefit of participants and their beneficiaries. As a result, the assets and liabilities of the
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Deferred Compensation Plan are not included in the District’s financial statements. For more information
regarding the District’s Deferred Compensation Plan, see Note 8 in the District’s Notes to Financial
Statements contained in Appendix A to this Official Statement.
Other Post-Employment Benefits
The District pays 80% to 91% of the monthly group health insurance premium for the individual
until the retiree becomes eligible for Medicare. During Fiscal Years 2020 and 2019, expenses of
$2,266,677 and $2,586,148, respectively, were recognized for post-retirement health care premiums as
those premiums were paid. The District’s total OPEB liability at June 30, 2020 and 2019, respectively,
were $23,164,618 and $24,164,395. It is estimated that for the Fiscal Year ending June 30, 2020, the
District’s unfunded accrued liability will be approximately $23 million assuming a 2.74% return on
investment. For more information regarding the District’s OPEB plans, see Note 9 in the District’s Notes
to Financial Statements contained in Appendix A to this Official Statement. Also see the section herein
captioned “FINANCIAL OPERATIONS OF THE DISTRICT – Selected Financial Data of the
District.”
Tax Limitation Amendment – Hancock Amendment
An amendment to the Missouri Constitution (the “Hancock Amendment”) limits the rate of
increase and the total amount of taxes on property which may be imposed in any year, and the limit may
not be exceeded without voter approval. Provisions are included in the amendment for rolling back tax
rates to produce an amount of revenues equal to that of the previous year if the definition of the tax base
is changed or if property is reassessed. The tax levy on the assessed valuation of new construction is
exempt from this limitation.
The Hancock Amendment also requires a political subdivision of the State to seek voter approval
in order to increase any “tax, license or fee” over existing rates. A Missouri court has held that the
District’s current wastewater user charge structure does not constitute a “tax, license or fee” for purposes
of the Hancock Amendment’s voter approval requirements. Since the Series 2020B Bonds are approved
by the voters, the Hancock Amendment does not prohibit an increase in the District’s wastewater user
charges to pay debt service on the Series 2020B Bonds.
REGULATORY REQUIREMENTS
General
The District is subject to the provisions of the (a) Clean Water Act, the stated objective of which
is to restore and maintain the chemical, physical, and biological integrity of the nation’s waters, (b) the
Missouri Clean Water Law, and (c) other laws and regulations. The regulatory requirements are
administered by the EPA through DNR. The District is currently not subject to the federal Safe Drinking
Water Act, as amended, 42 U.S.C. 300f et seq., which is also administered by the EPA.
The Clean Water Act imposes several permit and regulatory requirements on wastewater
treatment systems. Public sewage treatment plant owners and operators such as the District are required to
provide secondary treatment as established by federal regulation for all wastewater discharge from
treatment plants into waters of the United States of America. Under the Clean Water Act, states also
establish water quality standards, classifying water body uses, and pollutant control criteria to protect
those uses. All sewage system discharges require National Pollutant Discharge Elimination System
(“NPDES”) permits specifying the permissible pollutant levels in wastewater effluent discharged from
the plants. In addition to secondary treatment requirements for publicly-owned treatment plants, all
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discharges from plants and combined sewer overflows (“CSO”) may be subject to additional stringent
controls (which are then incorporated into NPDES permits) if such discharges are required to achieve the
water quality standards established by the state pursuant to federal regulations. Under State law, the State
also requires treatment plants to obtain state surface water discharge permits, which, in the discretion of
EPA and DNR, may be issued jointly with the NPDES permit. Major wastewater treatment systems also
must adopt and enforce pretreatment regulations for industries and other non-domestic sources
discharging into sewers. Treatment plants are also subject to Clean Water Act and State regulations
governing sludge use and disposal.
The Clean Water Act is enforced by EPA through administrative orders and procedures.
Violations may be the basis for federal lawsuits brought on EPA’s behalf by the U.S. Department of
Justice or by private citizens.
Regulatory Matters – Consent Decree
In 2007, the Department of Justice filed suit on behalf of the EPA against the District for various
alleged violations of the Clean Water Act. The District had been the subject of several investigatory
actions by EPA over the prior several years. The District, EPA, DNR, represented by the Missouri
Attorney General, and an environmental group allowed to intervene in the lawsuit engaged in several
years of litigation. In 2011, the District and the EPA negotiated the Consent Decree (the “Consent
Decree”) that resulted in settlement and dismissal of the original lawsuit. See Note 12, Commitments and
Contingencies, in the District’s Notes to Financial Statements contained in Appendix A to this Official
Statement for additional information regarding this litigation.
The District’s Board adopted Ordinance No. 13277 at its June 29, 2011, meeting that authorized
the District’s Executive Director and General Counsel to sign the Consent Decree. Under the Consent
Decree, the District agreed to spend over $5 billion dollars over the next 23 years to implement various
system improvements and programs designed to eliminate or reduce overflows from the combined and
separate sewer system in order to improve water quality and protect human health and the environment.
Most of the improvements enumerated in the Consent Decree were already addressed in the District’s
long-term over $5 billion dollars CIRP. The State did not agree to sign the Consent Decree in its present
form. However, all parties, including the State, accepted language in a motion filed with the U.S. District
Court for the Eastern District of Missouri (the “Court”) in August 2011, which indicated that there were
no issues remaining to be resolved in the proceedings. On August 4, 2011, the Consent Decree was
lodged with the Court. An extended public comment period ended October 10, 2011. On April 27, 2012,
the Court entered the Consent Decree, thus concluding the litigation of this lawsuit. On that same day the
Court entered a Memorandum and Order which realigned the State as a defendant and reaffirmed a 2009
decision by the Eighth Circuit Court of Appeals that the State had waived its sovereign immunity.
Although this litigation matter has concluded, the District is working diligently to implement the Consent
Decree on schedule.
On June 22, 2018, the Court approved an amendment to the Consent Decree to extend it by five
years from a 23-year program to a 28-year program. This amendment to the Consent Decree allows the
District to deliver an accelerated schedule of regulatory required non-Consent Decree work without
placing an additional financial burden on the District’s ratepayers.
RISK FACTORS
The following is a discussion of certain risks and other considerations that should be considered
in conjunction with all other information contained in this Official Statement, including the Appendices
hereto, by prospective investors in evaluating the Series 2020B Bonds. Such discussion is not, and is not
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intended to be, exhaustive and should not be considered as a comprehensive or exhaustive discussion of
risks or other considerations which may be relevant to an investment in the Series 2020B Bonds. In
addition, the order in which the following information is presented is not intended to reflect the relative
importance of any such considerations. There can be no assurance that other risk factors not discussed
herein will not become material in the future.
Factors Affecting the District
One or more of the following factors or events, or the occurrence of other unanticipated factors or
events, could adversely affect the District’s operations and financial performance to an extent
indeterminable at this time.
Changes in Management or Policies. Changes in key management personnel or policies of the
District could adversely affect the financial performance of the District.
Future Economic Conditions. Increased unemployment or other adverse economic conditions or
changes in the demographics of the District; an inability to control expenses in periods of inflation and
difficulties in increasing charges could adversely affect the District’s financial performance. For more
information on the District’s rate setting process see “MANAGEMENT’S DISCUSSION AND
ANALYSIS OVERVIEW – Rate Commission and Rate Setting Process.”
Insurance Claims. Increases in the cost of the District’s insurance coverages and the amounts paid
in settlement of claims not covered by insurance could adversely affect the financial performance of the
District.
Organized Labor Efforts. Certain employees of the District’s Operations Department are
represented by collective bargaining units. Labor disputes with these collective bargaining units could
result in adverse labor actions or increased labor costs.
Environmental Regulation. Sewer utilities are subject to continuing environmental regulation.
Federal, state and local standards and procedures that regulate the environmental impact of water or sewer
utilities are subject to change. These changes may arise from continuing legislative, regulatory and
judicial action regarding such standards and procedures. Consequently, there is no assurance that facilities
in operation will remain subject to the regulations currently in effect, will always be in compliance with
further regulations or will always be able to obtain all required operating permits. An inability to comply
with environmental standards could result in reduced operating levels and fines. Legislative, regulatory,
administrative or enforcement actions involving environmental controls could also adversely affect the
operation of the System. For example, if property of the District is determined to be contaminated by
hazardous materials, the District could be liable for significant clean-up costs even if it were not
responsible for the contamination.
Natural Disasters/Climate. The occurrence of natural disasters, such as tornados, earthquakes,
floods or droughts, could damage the facilities of the District, interrupt services or otherwise impair
operations and the ability of the District to produce revenues.
Terrorist Attacks. Although potential terrorist attacks could temporarily disrupt wastewater
treatment service, the District has taken and continues to take precautions to minimize this risk, but does
not represent that any existing or additional safety or security measures will be adequate in the event that
terrorist activities are directed at the System.
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Miscellaneous Factors. The sewer industry in general has experienced, or may in the future
experience, problems including (a) the effects of inflation on the costs of operation of facilities,
(b) increased financing requirements coupled with the increased cost and uncertain availability of capital,
and (c) compliance with rapidly changing environmental, safety and licensing regulations and
requirements.
Summary Financial Information
Certain summarized historical financial information and certain projected revenues and
expenditures of the District are summarized in this Official Statement and its appendices. There can be
no assurance that the financial results achieved by the District in the future will be similar to historical
results or the projections contained herein. Such future results will vary from historical results, and actual
variations may be material. Information as to the projected figures and the assumptions upon which they
are based are contained in this Official Statement and its appendices. No assurance can be given that
assumptions used in preparing projected revenues are accurate including, but not limited to, those as to
water usage volume, operating and maintenance expenses, and the stability of the customer base.
Significant variations in such assumptions may affect the actual operating and financial results. Therefore,
the historical operating results of the District’s System contained in this Official Statement cannot be
viewed as a representation that the District will be able to generate sufficient revenues in the future to
make timely payment of principal of, redemption premium, if any, and interest on the Series 2020B
Bonds.
Certain Bankruptcy Risks
The remedies available to the owners of the Series 2020B Bonds upon an event of default under
the Bond Ordinance are in many respects dependent upon judicial actions that are often subject to
discretion and delay. Under existing constitutional and statutory law and judicial decisions, including
specifically the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq. the remedies provided in the
Bond Ordinance may not be readily available or may be limited. The various legal opinions to be
delivered concurrently with the delivery of the Series 2020B Bonds will be qualified as to the
enforceability of the various legal instruments by limitations imposed by general principles of equity and
by bankruptcy, reorganization, insolvency or other similar laws, affecting the rights of creditors generally.
Secondary Markets and Prices
The Underwriter will not be obligated to repurchase any of the Series 2020B Bonds and no
representation is made concerning the existence of any secondary market for the Series 2020B Bonds. No
assurance can be given that any secondary market will develop following the completion of the offering
of the Series 2020B Bonds, and no assurance can be given that the initial offering prices for the Series
2020B Bonds will continue for any time period.
Risk of Taxability of Series 2020B Bonds
For information with respect to events occurring subsequent to issuance of the Series 2020B
Bonds that may require that interest on such Series 2020B Bonds be included in gross income for
purposes of federal income taxation, see the caption “TAX MATTERS” in this Official Statement.
Risk of Audit of Series 2020B Bonds
The Internal Revenue Service (the “Service”) has established an ongoing program to audit
tax-exempt obligations to determine whether interest on such obligations should be included in gross
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income for federal income tax purposes. Owners of the Series 2020B Bonds are advised that, if the
Service does audit such Series 2020B Bonds, under current Service procedures, at least during the early
stages of an audit, the Service will treat the District as the taxpayer, and the owners of such Series 2020B
Bonds may have limited rights to participate in the audit. Public awareness of any audit could adversely
affect the market value and liquidity of Series 2020B Bonds during the pendency of the audit, regardless
of the ultimate outcome thereof.
Limited Obligations
The Series 2020B Bonds are limited obligations of the District, payable solely from the Pledged
Revenues generated from the operation of the System. The Series 2020B Bonds and the interest thereon
shall not constitute a general or moral obligation of the District nor a debt, indebtedness, or obligation of,
or a pledge of the faith and credit of, the District, the State or any political subdivision thereof, within the
meaning of any constitutional, statutory or charter provision whatsoever. The taxing power of the District,
the State or any political subdivision is not pledged to the payment of the Series 2020B Bonds or the
interest thereon. The District has no authority to levy any taxes to pay the Series 2020B Bonds.
Loss of Premium Upon Early Redemption
Purchasers of the Series 2020B Bonds at a price in excess of their principal amount should
consider the fact that the Series 2020B Bonds are subject to redemption at a redemption price equal to
their principal amount plus accrued interest under certain circumstances. See “THE SERIES 2020B
BONDS – Redemption Provisions.”
Potential Risks Relating to COVID-19
Beginning in December 2019, a novel strain of coronavirus (which leads to the disease known as
“COVID-19”), began spreading throughout the world and has been characterized by the World Health
Organization as a pandemic. The COVID-19 pandemic is expected to be broad-based and to negatively
impact national, state and local economies. In response to such expectations, the President of the United
States of America on March 13, 2020, declared a “national emergency,” which, among other effects,
allows the executive branch to disburse disaster relief funds to address the COVID-19 pandemic and
related economic dislocation.
On March 13, 2020, Missouri’s Governor signed an Executive Order declaring a state of
emergency in the State of Missouri (the “State” or “Missouri”) in response to COVID-19. On April 24,
2020, Missouri’s Governor signed another Executive Order extending the state of emergency in the State
through June 15, 2020. On June 11, 2020, Missouri’s Governor signed another Executive Order
extending the state of emergency in the State through December 30, 2020. The stated purpose of the
Executive Order is to allow more flexibility in utilizing resources and deploying them around the State
where they are most appropriate, including allowing Missouri’s Governor to waive certain State laws and
regulations where necessary. On April 3, 2020, Missouri’s Governor issued a “stay at home order” for all
Missouri residents, which began on April 6, 2020, and expired on May 4, 2020, requiring all Missourians
to avoid leaving their residences unless necessary and to practice social distancing when they need to
travel outside their homes to work, access foods, prescriptions, health care, and other necessities, or to
engage in an outdoor activity.
The proliferation of COVID-19 throughout the District and the surrounding region may adversely
impact the amount of Pledged Revenues the District generates from the operation of the System that are
pledged to pay debt service on the Series 2020B Bonds if the economic ramifications of the spread of
COVID-19 have a lasting impact on the economy in and around the District. Significant instances of late
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payment or nonpayment could result in Pledged Revenues that are insufficient to pay debt service on the
Series 2020B Bonds. Developments regarding COVID-19 continue to occur on a daily basis and the
extent to which COVID-19 will impact the general operations of the District, the operation of the System
and the ability of the District to generate sufficient Pledged Revenues from the operation of the System is
highly uncertain and cannot be predicted. The Series 2020B Bonds do not constitute a general or moral
obligation of the District and do not constitute an indebtedness of the District within the meaning of any
constitutional, statutory, or charter provision, limitation or restriction, and the taxing power of the District
is not pledged to the payment of the Series 2020B Bonds or the interest thereon. See the section
captioned “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2020B BONDS”.
LITIGATION
Except as described in the “REGULATORY REQUIREMENTS – Regulatory Matters –
Consent Decree” above, as of the date hereof, to the knowledge of the District there is no legal action,
suit, proceeding, inquiry or investigation at law or in equity before or by any court, public board or body
for which the District has been served with process or official notice or threatened against or affecting the
District or any reasonable basis therefor, wherein an unfavorable decision, ruling or finding would
adversely affect the transaction contemplated by this Official Statement or the validity of the Series
2020B Bonds, the Bond Ordinance, or any agreement or instrument to which the District is a party and
which is used or contemplated for use in the transactions contemplated by this Official Statement, and no
member, employee or agent of the District has been served with any legal process regarding such
litigation or other proceeding.
TAX MATTERS
The following is a summary of the material federal and State of Missouri income tax
consequences of holding and disposing of the Series 2020B Bonds. This summary is based upon laws,
regulations, rulings and judicial decisions now in effect, all of which are subject to change (possibly on a
retroactive basis). This summary does not discuss all aspects of federal income taxation that may be
relevant to investors in light of their personal investment circumstances or describe the tax consequences
to certain types of owners subject to special treatment under the federal income tax laws (for example,
dealers in securities or other persons who do not hold the Series 2020B Bonds as a capital asset, tax-
exempt organizations, individual retirement accounts and other tax deferred accounts and foreign
taxpayers) and, except for the income tax laws of the State of Missouri, does not discuss the consequences
to an owner under any state, local or foreign tax laws. The summary does not deal with the tax treatment
of persons who purchase the Series 2020B Bonds in the secondary market. Prospective investors are
advised to consult their own tax advisors regarding federal, state, local and other tax considerations of
holding and disposing of the Series 2020B Bonds.
Opinion of Co-Bond Counsel
In the opinion of Gilmore & Bell, P.C. and White Coleman & Associates, LLC, Co-Bond Counsel
to the District, under the law existing as of the issue date of the Series 2020B Bonds:
Federal and State of Missouri Tax Exemption. The interest on the Series 2020B Bonds is
excludable from gross income for federal income tax purposes and is exempt from income taxation by the
State of Missouri.
Alternative Minimum Tax. The interest on the Series 2020B Bonds is not an item of tax
preference for purposes of computing the federal alternative minimum tax.
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Bank Qualification. The Series 2020B Bonds have not been designated as “qualified tax-exempt
obligations” for purposes of Section 265(b)(3) of the Code.
Co-Bond Counsel’s opinions are provided as of the date of the original issue of the Series 2020B
Bonds, subject to the condition that the District comply with all requirements of the Code that must be
satisfied subsequent to the issuance of the Series 2020B Bonds in order that interest thereon be, or
continue to be, excludable from gross income for federal income tax purposes. The District has
covenanted to comply with all such requirements. Failure to comply with certain of such requirements
may cause the inclusion of interest on the Series 2020B Bonds in gross income for federal and State of
Missouri income tax purposes retroactive to the date of issuance of the Series 2020B Bonds. Co-Bond
Counsel is expressing no opinion regarding other federal, state or local tax consequences arising with
respect to the Series 2020B Bonds but has reviewed the discussion under the heading “TAX
MATTERS.”
Other Tax Consequences
Original Issue Premium. For federal income tax purposes, premium is the excess of the issue
price of a Series 2020B Bond over its stated redemption price at maturity. The issue price of a Series
2020B Bond is generally the first price at which a substantial amount of the Series 2020B Bonds of that
maturity have been sold to the public. Under Section 171 of the Code, premium on tax-exempt bonds
amortizes over the term of the Series 2020B Bond using constant yield principles, based on the
purchaser’s yield to maturity. As premium is amortized, the owner’s basis in the Series 2020B Bond and
the amount of tax-exempt interest received will be reduced by the amount of amortizable premium
properly allocable to the owner, which will result in an increase in the gain (or decrease in the loss) to be
recognized for federal income tax purposes on sale or disposition of the Series 2020B Bond prior to its
maturity. Even though the owner’s basis is reduced, no federal income tax deduction is allowed.
Prospective investors should consult their own tax advisors concerning the calculation and accrual of
bond premium.
Sale, Exchange or Retirement of Bonds. Upon the sale, exchange or retirement (including
redemption) of a Series 2020B Bond, an owner of the Series 2020B Bond generally will recognize gain or
loss in an amount equal to the difference between the amount of cash and the fair market value of any
property received on the sale, exchange or retirement of the Series 2020B Bond (other than in respect of
accrued and unpaid interest) and such owner’s adjusted tax basis in the Series 2020B Bond. To the extent
a Series 2020B Bond is held as a capital asset, such gain or loss will be capital gain or loss and will be
long-term capital gain or loss if the Series 2020B Bond has been held for more than 12 months at the time
of sale, exchange or retirement.
Reporting Requirements. In general, information reporting requirements will apply to certain
payments of principal, interest and premium paid on the Series 2020B Bonds and to the proceeds paid on
the sale of the Series 2020B Bonds, other than certain exempt recipients (such as corporations and foreign
entities). A backup withholding tax will apply to such payments if the owner fails to provide a taxpayer
identification number or certification of foreign or other exempt status or fails to report in full dividend
and interest income. The amount of any backup withholding from a payment to an owner will be allowed
as a credit against the owner’s federal income tax liability.
Collateral Federal Income Tax Consequences. Prospective purchasers of the Series 2020B
Bonds should be aware that ownership of the Series 2020B Bonds may result in collateral federal income
tax consequences to certain taxpayers, including, without limitation, financial institutions, property and
casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits,
certain S corporations with “excess net passive income,” foreign corporations subject to the branch profits
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tax, life insurance companies and taxpayers who may be deemed to have incurred or continued
indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Bonds. Co-
Bond Counsel expresses no opinion regarding these tax consequences. Purchasers of Series 2020B Bonds
should consult their tax advisors as to the applicability of these tax consequences and other federal
income tax consequences of the purchase, ownership and disposition of the Series 2020B Bonds,
including the possible application of state, local, foreign and other tax laws.
LEGAL MATTERS
Certain legal matters incident to the authorization, issuance, sale and delivery of the Series 2020B
Bonds are subject to the approval of Gilmore & Bell, P.C., St. Louis, Missouri, and White Coleman &
Associates, LLC, St. Louis, Missouri, Co-Bond Counsel, whose approving legal opinions will be
delivered with the Series 2020B Bonds in substantially the form of Appendix E hereto. Certain other
legal matters will be passed on for the District by its General Counsel. Certain legal matters relating to
this Official Statement will be passed upon by Armstrong Teasdale LLP, St. Louis, Missouri, as
Disclosure Counsel to the District.
The various legal opinions to be delivered concurrently with the delivery of the Series 2020B
Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues
explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or
guarantor of that expression of professional judgment, of the transaction opined upon, or of the future
performance of parties to such transaction, nor does the rendering of an opinion guarantee the outcome of
any legal dispute that may arise out of the transaction.
RATINGS
S&P Global Ratings, a Standard & Poor’s Financial Services LLC business and Fitch Ratings,
Inc. (collectively, the “Rating Agencies”) have assigned the Series 2020B Bonds the ratings of “AAA”
and “AA+,” respectively, based on each Rating Agency’s evaluation of the creditworthiness of the
District. Such ratings reflect only the views of the Rating Agencies at the time such ratings are given, and
the Underwriter, Co-Municipal Advisors and the District make no representation as to the appropriateness
of such ratings. An explanation of the significance of such ratings may be obtained only from the Rating
Agencies.
The District has furnished the Rating Agencies with certain information and materials relating to
the Series 2020B Bonds and the District that have not been included in this Official Statement. Generally,
rating agencies base their ratings on the information and materials so furnished and on investigations,
studies and assumptions by the rating agencies. There is no assurance that a particular rating will be
maintained for any given period of time or that it will not be lowered or withdrawn entirely if, in the
judgment of the agency originally establishing such rating, circumstances so warrant. Neither the District,
nor the Co-Municipal Advisors nor the Underwriter have undertaken any responsibility to bring to the
attention of the holders of the Series 2020B Bonds any proposed revision or withdrawal of a rating of the
Series 2020B Bonds, or to oppose any such proposed revision or withdrawal. Any revision or withdrawal
of a rating could have an adverse effect on the market price and marketability of the Series 2020B Bonds.
Securities ratings are not a recommendation to buy, sell or hold securities and may be subject to
revision or withdrawal at any time.
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CONTINUING DISCLOSURE
Pursuant to the Continuing Disclosure Agreement, under which the District has designated DAC
as Disclosure Dissemination Agent, the District has covenanted for the benefit of the holders and
beneficial owners of the Series 2020B Bonds to provide, or cause to be provided, certain financial
information and operating data relating to the District to certain parties by not later than 180 days
following the end of the District’s Fiscal Year (the “Annual Report”), commencing with the report for
the Fiscal Year ending June 30, 2021, and to provide notices of the occurrence of certain enumerated
events, if material. The Annual Report and any notices of material events will be submitted by the
Disclosure Dissemination Agent on behalf of the District with the Municipal Securities Rulemaking
Board (“MSRB”) through its Electronic Municipal Market Access system (“EMMA”) pursuant to Rule
15c2-12. EMMA is an internet-based, online portal for free investor access to municipal bond
information, including offering documents, material event notices, real-time municipal securities trade
prices and education resources available at www.emma.msrb.org. Nothing contained on EMMA relating
to the District or the Series 2020B Bonds is incorporated by reference in this Official Statement. These
covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12. The
specific nature of the information to be contained in the Annual Report and in the notices of material
events is summarized in “DEFINITIONS AND SUMMARIES OF CERTAIN PROVISIONS OF
THE BOND ORDINANCE AND THE CONTINUING DISCLOSURE AGREEMENT” in
Appendix C hereto.
During the previous five years, the District believes it has materially complied with its continuing
disclosure undertakings to provide financial and operating information required by Rule 15c2-12.
The Disclosure Dissemination Agent has only the duties specifically set forth in the Continuing
Disclosure Agreement. The Disclosure Dissemination Agent’s obligation to deliver the information at the
times and with the contents described in the Continuing Disclosure Agreement is limited to the extent that
the District has provided such information to the Disclosure Dissemination Agent as required by the
Continuing Disclosure Agreement. The Disclosure Dissemination Agent has no duty with respect to the
content of any disclosures or notice made pursuant to the terms of the Continuing Disclosure Agreement.
The Disclosure Dissemination Agent has no duty or obligation to review or verify any information in the
Annual Report, the District’s audited financial statements, a Notice Event (as defined in the Continuing
Disclosure Agreement), or any other information, disclosures or notices provided to it by the District and
shall not be deemed to be acting in any fiduciary capacity for the District, the holders of the Series 2020B
Bonds or any other party. The Disclosure Dissemination Agent has no responsibility for the District’s
failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the
materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for
failing to determine, whether the District has complied with the Continuing Disclosure Agreement. The
Disclosure Dissemination Agent may conclusively rely upon certifications of the District at all times.
UNDERWRITING
The Series 2020B Bonds are being purchased for reoffering by the Underwriter. The Underwriter
has agreed to purchase the Series 2020B Bonds at the aggregate purchase price of $157,106,423.72,
which amount is equal to the principal amount of the Series 2020B Bonds of $120,000,000, plus original
issue premium of $37,194,201.20, less the underwriter’s discount of 87,777.48.
The Underwriter may offer and sell the Series 2020B Bonds to certain dealers (including dealers
depositing the Series 2020B Bonds into investment trusts) and others at prices lower than the public
offering price stated on the inside cover pages hereof. The initial public offering price may be changed
from time to time by the Underwriter.
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CERTAIN RELATIONSHIPS
Armstrong Teasdale LLP represents the District in certain matters unrelated to the issuance of the
Series 2020B Bonds.
FINANCIAL FEASIBILITY CONSULTANT
The District has retained Raftelis Financial Consultants, Inc., to serve as the Financial Feasibility
Consultant to the District in connection with the issuance of the Series 2020B Bonds. See
Appendix D – “Report on the Financial Feasibility of The Metropolitan St. Louis Sewer District
Wastewater System Revenue Bonds, Series 2020B”.
CO-MUNICIPAL ADVISORS
PFM Financial Advisors LLC, Cleveland, Ohio, and Independent Public Advisors, LLC, Kansas
City, Missouri, have served as Co-Municipal Advisors to the District in connection with the Series 2020B
Bonds, relative to a plan of financing and assisting the District in drafting certain portions of this Official
Statement for the sale of the Series 2020B Bonds. The Co-Municipal Advisors have participated in the
compilation and editing of this Official Statement. The Co-Municipal Advisors have not, however,
independently verified the factual information contained in this Official Statement nor have they
conducted an investigation of the affairs of the District for the purpose of determining the accuracy or
completeness of any of the information contained herein. The Co-Municipal Advisors have relied on the
diligence and accuracy of the District which has certified that this Official Statement contains no material
misstatement or omission of information. PFM Financial Advisors, LL is an independent advisory firm
and is not engaged in the business of underwriting, trading, or distributing municipal securities or other
public securities.
INDEPENDENT AUDITORS
The Independent Auditors Report, Management’s Discussion and Analysis and Basic Financial
Statements of the District for the Fiscal Years ended June 30, 2020 and 2019 included in Appendix A of
this Official Statement has been audited by CliftonLarsonAllen LLP.
MISCELLANEOUS
The references, excerpts and summaries of all documents referred to herein do not purport to be
complete statements of the provisions of such documents, and reference is made to all such documents for
full and complete statements of all matters of fact relating to the Series 2020B Bonds, the security for the
payment of the Series 2020B Bonds and the rights of the owners thereof. During the period of the
offering, copies of drafts of such documents may be examined by requesting same from the Co-Municipal
Advisors; following delivery of the Series 2020B Bonds, copies of such documents may be examined at
the corporate trust office of the Paying Agent in St. Louis, Missouri. The information contained in this
Official Statement has been compiled from official and other sources deemed to be reliable, and while not
guaranteed as to completeness or accuracy, is believed to be correct as of this date.
It is anticipated that CUSIP identification numbers will be printed on the Series 2020B Bonds, but
neither the failure to print such numbers on any Series 2020B Bonds nor any error in printing of such
numbers will constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and
pay for any Series 2020B Bonds.
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The attached appendices are integral parts of this Official Statement and must be read together
with all of the foregoing statements.
The closing documents will include a certificate by the proper official or officer of the District
that, to the best of his knowledge and belief at the time of the acceptance of the delivery of the Series
2020B Bonds, this Official Statement and any information furnished by the District supplementary
thereto did not and do not contain any untrue statement of material fact or omit to state a material fact
necessary in order to make the statements made in light of the circumstances under which they were
made, not misleading in any material respect.
Any statement made in this Official Statement involving matters of opinion or of estimates,
whether or not expressly so stated, are set forth as such and not as representations of fact, and no
representation is made that any of the estimates will be realized. The information and expressions of
opinion herein are subject to change without notice and neither the delivery of this Official Statement nor
any sale made hereunder shall, under any circumstances, create any implication that there has been no
change in the information presented herein since the date hereof. This Official Statement is not to be
construed as a contract or agreement between the District, the Paying Agent, or the Underwriter and the
purchasers or Owners of any Series 2020B Bonds.
This Official Statement has been authorized and approved by the District. For purposes of
compliance with Rule 15c2-12, this Official Statement constitutes an official statement of the District that
has been deemed final by the District as of its date except for the omission of no more than the
information permitted by Rule 15c2-12. This Official Statement has been duly executed and delivered on
its behalf by the officials or officers signing below.
By: /s/ Brian L. Hoelscher, P.E.
Executive Director
By: /s/ Tim R. Snoke
Secretary-Treasurer
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APPENDIX A
Independent Auditors’ Report, Management’s Discussion and Analysis
and Basic Financial Statements of The Metropolitan St. Louis Sewer District
for the Fiscal Years ended June 30, 2020 and 2019
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COMPREHENSIVE ANNUAL
THE METROPOLITAN ST. LOUIS SEWER DISTRICT • ST. LOUIS, MISSOURI
FINANCIAL REPORT
FISCAL YEARS ENDED JUNE 30, 2020 AND 2019
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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
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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
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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.
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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
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The Board of Trustees
The Metropolitan St. Louis Sewer District
ii
Organization
MSD was created in 1954 to provide a metropolitan-wide sewer system to serve the City
of St. Louis and most of the more heavily populated areas of St. Louis County. Before
MSD’s creation, the City of St. Louis, various municipalities, and private sewer
companies provided sewer service that primarily included only collecting and
transporting sewage from small geographic areas to nearby rivers and streams with little
or no treatment. Most of the municipalities or private sewer companies serving the area
did not have the jurisdictional authority or financial resources needed to eliminate health
hazards from untreated sewage.
When the District began operations, it took over the publicly owned wastewater and
stormwater drainage facilities within its jurisdiction and began the construction of an
extensive system of collector and interceptor sewers and treatment facilities. In 1977,
voters approved the District’s annexation of a 270 square mile area of the lower Missouri
River and lower Meramec River watersheds. The District purchased the Fee Fee Trunk
Sewer Company and the Missouri Bottoms Sewer Company in 1978. MSD has since
acquired other investor-owned or municipally operated systems.
The District’s service area now encompasses 520 square miles including all 66 square
miles of the City of St. Louis and 454 square miles of St. Louis County. The current
population served by the District is approximately 1.3 million 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 Board of Trustees
The Metropolitan St. Louis Sewer District
iii
Unlike a corporation’s board of directors that is responsible solely to the stockholders who
choose to invest in the corporation, MSD’s Board members are trustees of public property
and public funds. They are responsible to all citizens within the District.
According to the Plan, the Board enacts District ordinances, determines policies, and
appoints the Executive Director, the Secretary-Treasurer, and the Internal Auditor. The
Executive Director appoints all other District officials. Among its duties, the Board makes
all appropriations, approves contracts for improvements, and engages an accounting firm
to perform the annual independent audit of the District.
The Plan prescribes other duties of the Board and grants numerous broad powers, subject
to federal and state laws, to the District and the Board of Trustees. Among other things,
the Plan outlines the following requirements or provisions:
Requires that MSD operate with a balanced budget;
Details how MSD can tax property and requires an annual public hearing
on all taxes levied by the District;
Details how MSD can establish user charges;
Requires MSD to establish civil service rules and regulations governed by a
Civil Service Commission;
Provides how the original boundaries of the District may be extended to
include any area in St. Louis County; and
Requires MSD to approve all plans and designs for proposed construction,
alteration, or reconstruction of sewer or drainage facilities within the
District’s boundaries.
The District is also governed by the Missouri State Constitution and various federal and
state laws that, among other requirements, mandate the following:
MSD must hold permits for all sanitary discharges. These permits require a
minimum of secondary treatment;
MSD must provide wastewater treatment in an area-wide manner to qualify
for federal and state grants;
MSD must operate, maintain, and replace facilities to provide proper
wastewater treatment or be subject to penalties and fines; and
MSD must set user charge rates in compliance with the Federal Clean Water
Act. These rates must be submitted to the Missouri Department of Natural
Resources to receive future construction grants and to avoid the possibility
of refunding past grants.
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 Board of Trustees
The Metropolitan St. Louis Sewer District
iv
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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The Board of Trustees
The Metropolitan St. Louis Sewer District
v
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 Board of Trustees
The Metropolitan St. Louis Sewer District
vi
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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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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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
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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.
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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
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Financial Section
METROPOLITAN ST. LOUIS SEWER DISTRICT
SERVICE AREAS
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(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.
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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
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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).
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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
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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.
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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.
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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.
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Management’s Discussion And Analysis (Continued)
Page 8
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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
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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
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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
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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.
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Long-Term Debt
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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;
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Management’s Discussion And Analysis (Continued)
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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 $2.0 billion of the total authorization. The District’s long-term
wastewater capital improvement program will continue to be funded through a
combination of additional bonds and wastewater rate increases.
Requests For Information
This financial report is designed to provide a general overview of the District’s finances
for all those with an interest in the District’s finances. Questions concerning any of the
information provided in this report or requests for additional financial information should
be addressed or e-mailed to:
Marion M. Gee, Director of Finance
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
314-768-6200
mgee@stlmsd.com
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See the accompanying notes to financial statements. Page 16
STATEMENTS OF NET POSITION
Continued on Next Page
June 30,
Assets 2020 2019
Current Assets
Unrestricted Current Assets
Cash and cash equivalents 67,802,872$ 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 $28,716 in 2019 1,389,975 1,355,724
Accrued income on investments 375,676 536,365
Total Restricted Non-Current Assets 148,490,994 248,695,551
Other Assets
Notes receivable 10,410,729 11,156,415
Long-term investments 158,130,241 177,405,293
Total Other Assets 168,540,970 188,561,708
Capital Assets
Depreciable:
Treatment and disposal plant and equipment 1,289,884,442 1,277,635,246
Collection and pumping plant 2,974,542,039 2,749,946,498
General plant and equipment 100,949,737 99,318,349
4,365,376,218 4,126,900,093
Less: Accumulated depreciation 1,608,746,607 1,525,779,330
Net depreciable assets 2,756,629,611 2,601,120,763
Non-depreciable:
Land 78,333,629 74,274,584
Construction in progress 1,012,925,929 956,321,065
Net Capital Assets 3,847,889,169 3,631,716,412
Total Non-Current Assets 4,164,921,133 4,068,973,671
Total Assets 4,634,932,057 4,452,745,929
Deferred Outflows of Resources
Bonds and notes payable-Deferred loss on refunding 5,888,796 11,342,745
Pension-related outflows 15,673,652 34,238,270
OPEB-related outflows 2,842,869 1,246,327
Total Deferred Outflows of Resources 24,405,317 46,827,342
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See the accompanying notes to financial statements. Page 17
STATEMENTS OF NET POSITION (Continued)
June 30,
Liabilities 2020 2019
Current Liabilities
Current Liabilities-Payable From Unrestricted Assets
Contracts and accounts payable 36,317,712$ 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$
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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,
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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,
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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,
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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.
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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.
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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:
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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.
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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:
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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.
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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$
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4. Capital Assets
The following is a summary of capital assets changes for the fiscal years ended
June 30, 2020 and 2019:
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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 $34,107,619, respectively.
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6. Long-Term Liabilities
The following is a summary of changes in the District’s long-term liabilities for the
year ended June 30, 2020:
Original Balance Balance
Issuance June 30,June 30, Current
Amounts 2019 Additions Retirements 2020 Portion
Bonds and Notes Payable:
Wastewater System Senior Revenue Bonds:
Series 2010B 85,000,000$ 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
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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
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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
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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
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Notes To Financial Statements (Continued)
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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
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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
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Notes To Financial Statements (Continued)
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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
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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.
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THE METROPOLITAN ST. LOUIS SEWER DISTRICT
Notes To Financial Statements (Continued)
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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
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Notes To Financial Statements (Continued)
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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.
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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
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Notes To Financial Statements (Continued)
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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,
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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.
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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
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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
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Notes To Financial Statements (Continued)
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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
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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
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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
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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.
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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.
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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.
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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.
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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,
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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
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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
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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
149
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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
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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$
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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.
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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.
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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
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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
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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
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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$
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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
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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
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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)$
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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$
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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.
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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
$69,150,974 are restricted due to enabling legislation, as of June 30, 2020 and
2019, respectively.
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14. Segment Information
The District issued wastewater revenue bonds to finance wastewater
infrastructure projects. The District accounts for both wastewater and stormwater
activities in a single enterprise fund, but investors in those bonds rely solely on the
revenue generated by the wastewater activities for repayment. Fiscal year 2020
and 2019 summary financial information for each business segment is presented
below.
A segment is an identifiable activity reported as a stand-alone entity for which one
or more revenue bonds are outstanding. A segment has a specifically identifiable
revenue stream pledged in support of the revenue bonds and has related expenses,
gains and losses and assets, deferred outflows, liabilities and deferred inflows that
are required by external parties to be accounted for separately. The wastewater
system is the only reportable segment that meets the requirements of GASB
Statement No. 34, Basic Financial Statements - and Management’s Discussion and
Analysis - for State and Local Governments. The stormwater system is reported on
for informational purposes only.
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Financial information as of and for the years ended June 30, 2020 and 2019 of the
District’s Wastewater Segment is as follows:
2020 2019
Assets
Current Assets
Unrestricted Current Assets
Cash and cash equivalents 65,310,175$ 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 $49,360 in 2019 5,168,412 5,331,693
Supplies inventory 8,013,597 8,306,515
Total Unrestricted Current Assets 432,947,515 354,423,861
Restricted Current Assets
Other receivables 48,273 115,556
Total Restricted Current Assets 48,273 115,556
Total Current Assets 432,995,788 354,539,417
Non-Current Assets
Restricted Assets
Cash and cash equivalents 22,700,689 19,561,186
Investments 75,085,334 133,552,809
Long-term investments 10,850,625 45,067,528
Property taxes receivable (17,972) (18,019)
Accrued income on investments 8,088 193,262
Total Restricted Non-Current Assets 108,626,764 198,356,766
Other Assets
Notes receivable 10,410,729 11,156,415
Long-term investments 150,664,647 168,649,616
Total Other Assets 161,075,376 179,806,031
Capital Assets
Depreciable:
Treatment and disposal plant and equipment 1,289,884,442 1,277,635,246
Collection and pumping plant 2,308,600,323 2,092,478,890
General plant and equipment 84,157,157 82,305,964
3,682,641,922 3,452,420,100
Less: Accumulated depreciation 1,382,418,916 1,309,151,371
Net depreciable assets 2,300,223,006 2,143,268,729
Non-depreciable:
Land 70,404,826 66,853,796
Construction in progress 981,883,959 931,353,208
Net Capital Assets 3,352,511,791 3,141,475,733
Total Non-Current Assets 3,622,213,931 3,519,638,530
Total Assets 4,055,209,719 3,874,177,947
Deferred Outflows of Resources:
Bonds and notes payable-Deferred loss on refunding 5,888,796 11,342,745
Pension-related outflows 13,677,832 28,929,459
OPEB-related outflows 2,451,365 1,075,940
Total Deferred Outflows of Resources 22,017,993 41,348,144
WASTEWATER SEGMENT
STATEMENTS OF NET POSITION
June 30,
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2020 2019
Liabilities
Current Liabilities-Payable From Unrestricted Assets
Contracts and accounts payable 36,287,980$ 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)
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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,
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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
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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 $28,716 in 2019 1,407,947 1,373,743
Accrued income on investments 367,588 343,103
Total Restricted Non-Current Assets 39,864,230 50,338,785
Other Assets
Long-term investments 7,465,594 8,755,677
Total Other Assets 7,465,594 8,755,677
Capital Assets
Depreciable:
Collection and pumping plant 665,941,716 657,467,608
General plant and equipment 16,792,580 17,012,385
682,734,296 674,479,993
Less: Accumulated depreciation 226,327,691 216,627,959
Net depreciable assets 456,406,605 457,852,034
Non-depreciable:
Land 7,928,803 7,420,788
Construction in progress 31,041,970 24,967,857
Net Capital Assets 495,377,378 490,240,679
Total Non-Current Assets 542,707,202 549,335,141
Total Assets 579,722,338 578,567,982
Deferred Outflows of Resources:
Pension-related outflows 1,995,820 5,308,811
OPEB-related outflows 391,504 170,387
Total Deferred Outflows of Resources 2,387,324 5,479,198
STORMWATER SEGMENT
STATEMENTS OF NET POSITION
June 30,
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2020 2019
Liabilities
Current Liabilities-Payable From Unrestricted Assets
Contracts and accounts payable 29,732$ 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)
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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,
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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
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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.
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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 H ills — — — 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
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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
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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
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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 $163,000. The
payment requirements to maturity will be determined after the debt is fully issued.
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REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN NET PENSION LIABILITY
AND RELATED RATIOS
June 30, 2020
Calendar Year Ending December 31,
2019 2018 2017 2016 2015 2014
Total Pension Liability
Service cost 4,902$ 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)
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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2350 MARKET STREET, ST. LOUIS, MISSOURI 63103
WWW.MSDPROJECTCLEAR.ORG • 314-768-6260
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APPENDIX B
Information Regarding the District’s Service Area
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INFORMATION REGARDING THE DISTRICT’S SERVICE AREA
The Series 2020B Bonds are special, limited obligations of The Metropolitan St. Louis Sewer
District (the “District”) and are not obligations of The City of St. Louis, Missouri (the “City”), St. Louis
County, Missouri (the “County”), the State of Missouri (the “State”), or any political subdivision of the
City, the County or the State. The Series 2020B Bonds are payable solely from the revenues described in
this Official Statement. As described elsewhere in this Official Statement, the service area of the District
consists of the City and most of the County. The following information regarding the City and the
County has been obtained from sources that the District believes to be reliable, but should not be
construed as an indication that the Series 2020B Bonds are payable from any source other than the
revenues of the District described in this Official Statement. See “SECURITY AND SOURCES OF
PAYMENT FOR THE SERIES 2020B BONDS,” “THE DISTRICT,” and “THE CIRP” in this
Official Statement. Such information is not guaranteed as to accuracy or completeness by the
Underwriters and is not to be construed as a representation by the Underwriters. The Underwriters have
not verified this information. No representation is made by the Underwriters as to the accuracy or
adequacy of such information or as to the absence of material adverse changes in such information
subsequent to the date as to which such information is provided.
The delivery of this Official Statement, including this Appendix B, is not intended to create any
implication that there has been no change in the affairs of the District, the City or the County since the
date hereof or that the information contained or incorporated by reference in this Appendix B is correct
as of any time subsequent to its date.
THE SERVICE AREA
As more fully described in this Official Statement under the caption “THE DISTRICT -
General”, the District was created in 1954 pursuant to Article VI, Section 30 of the State Constitution,
which empowers the people of the City and the County “to establish a metropolitan district or districts for
the functional administration of services common to the area included therein.” The District provides a
metropolitan-wide system of wastewater treatment and sanitary sewerage facilities for the collection,
treatment and disposal of sewage within the City and most of the more heavily populated areas of the
County. When the District began operations, it took over the publicly-owned wastewater and stormwater
drainage facilities within its then-existing jurisdiction and began the construction of an extensive system
of collector and interceptor sewers and treatment facilities. In subsequent years, voters have approved the
District’s annexation of a 270 square mile area of the lower Missouri River and lower Meramec River
watersheds in the County, and the District purchased various investor-owned or municipally-operated
systems serving areas of the County. The District’s service area now encompasses approximately 520
square miles, including all of the City’s approximately 66 square miles and approximately 454 square
miles (approximately 87%) of the County. A map showing the District’s current service area appears on
the back cover of this Official Statement. The current population served by the District is approximately
1.3 million.
The City of St. Louis, Missouri
The history of the City dates to 1764 when Pierre Laclède and Auguste Chouteau selected the site
as a fur trading post due in large part to its proximity to the confluence of the Mississippi and Missouri
Rivers. The City was incorporated in 1823, and its current boundaries were established in 1876, when
voters approved separation from the County and establishment of a home rule charter. The City is a
constitutional charter city not a part of any county, and exists under and pursuant to its Charter and the
laws of the State. The eastern boundary of the City is formed by the Mississippi River, and the City is
bordered on the north, west and south by the County. The City occupies approximately 66 square miles,
all of which lie within the service area of the District.
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St. Louis County, Missouri
The County was formed by a proclamation of Governor William Clark on October 1, 1812, nine
years before Missouri attained statehood in 1821. In 1876, by vote of the entire county (which at the time
included both City and County), the City separated itself from the County. The City of Clayton, Missouri
is the County seat and located in the east central part of the County. Approximately sixty-six percent of
the land area of the County is occupied by approximately 89 self-governing municipalities, containing
approximately two-thirds of the County’s population. The remaining unincorporated area comes under
the direct jurisdiction of the County government. The County is a constitutional charter county operating
and existing under its Charter and the laws of the State. The County covers an area of approximately 524
square miles, approximately 454 square miles of which lie within the service area of the District.
ECONOMIC AND DEMOGRAPHIC DATA
Population
The City and the County are a part of the St. Louis, Missouri-Illinois Metropolitan Statistical
Area (the “St. Louis MSA”), comprised of: the City, the County, and the counties of Franklin, Jefferson,
Lincoln, St. Charles, and Warren in Missouri; the counties of Bond, Calhoun, Clinton, Jersey, Macoupin,
Madison, Monroe and St. Clair in Illinois; and a portion of the City of Sullivan located in Crawford
County, Missouri.
According to the U.S. Census Bureau, the population patterns for the City, the County, and the
St. Louis MSA have been as stated directly below.
City County St. Louis MSA(1)
Percentage Percentage Percentage
Year Population Change(2) Population Change(2) Population Change(2)
2000 348,189 - 1,016,315 - 2,698,687 -
2010 319,294 -8.30% 999,954 -1.61% 2,787,701 +3.30%
2011 319,294 0.00 999,961 0.00 2,795,155 +0.27
2012 319,387 +0.03 1,000,742 +0.08 2,796,682 +0.05
2013 318,459 -0.29 1,000,471 -0.03 2,799,472 +0.10
2014 317,395 -0.33 1,000,588 +0.01 2,803,430 +0.14
2015 315,878 -0.48 1,001,213 +0.06 2,807,503 +0.15
2016 312,389 -1.10 998,025 -0.32 2,805,502 -0.07
2017 307,866 -1.45 996,648 -0.14 2,805,758 -0.01
2018 302,838 -1.63 996,945 +0.03 2,803,958 -0.06
2019 300,576 -0.75 994,205 -0.27 2,803,228 -0.03
_____________________
Source: U.S. Census Bureau Population for the years 2000 and 2010. Annual Estimates of the Resident
Population: April 1, 2010 to July 1, 2019 of the U.S. Census Bureau, Population Division for the years
2011 through 2019. Annual Estimates of the Resident Population for Metropolitan Statistical Areas in the
United States and Puerto Rico: April 1, 2010 to July 1, 2019.
(1) Washington County, Missouri was removed from the St. Louis MSA statistics effective retroactively to
the 2010 Census.
(2) Percentages are rounded to the nearest hundredth.
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The largest municipalities within the District’s service area are as follows:
Population Population Population
Municipality 2010 2000 1990
St. Louis (City) 319,294 348,189 396,685
Florissant 52,158 50,497 51,206
Chesterfield 47,484 46,802 37,991
University City 35,371 37,428 40,087
Ballwin 30,404 31,283 21,816
Kirkwood 27,540 27,324 27,291
Maryland Heights 27,472 25,756 25,407
Hazelwood 25,703 26,206 15,512
Webster Groves 22,995 23,230 23,097
Ferguson 21,203 22,406 22,286
______________
Source: Missouri Census Data Center
Employment
The below table sets forth information relating to the average composition of non-farm
employment in the City and the County for the years 1990, 2000, and 2010.
City
Employment
County
Employment
Private Employment: 1990 2000 2010 1990 2000 2010
Manufacturing 48,675 35,503 36,243 118,736 87,687 29,431
Agriculture 631 N/A N/A 5,072 6,931 279
Mining 234 N/A N/A 1,241 1,227 801
Construction 9,977 10,067 11,903 34,149 45,746 49,020
Transportation,
Communication and
Utilities
27,154 25,951 18,622 38,254 51,152 26,599
Wholesale Trade 19,399 15,224 15,691 42,228 46,961 28,334
Retail Trade 36,083 29,934 17,222 121,977 134,854 135,148
Finance, Insurance
and Real Estate
28,422 25,436 13,738 62,176 77,300 79,435
Services 99,547 109,830 134,345 215,147 279,413 342,429
Total Private
Employment
270,122 252,951 183,081 638,980 731,271 507,530
Governmental
Employment
51,100 47,092 32,051 53,783 59,826 55,402
Total 321,222 300,043 215,132 692,763 791,097 562,932
___________________
Source: U.S. Department of Commerce, Bureau of Economic Analysis; Missouri State Census Data
Center
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The below table sets forth the total labor force, number of employed and unemployed workers in
the City and the County, for 2010 through 2019.
City(1)
County(1)
Labor Force Labor Force
Year Employed Unemployed Total Employed Unemployed Total
2010 145,882 18,956 164,838 487,113 47,758 534,871
2011 147,357 16,983 164,340 492,327 41,897 534,224
2012 146,972 13,896 160,868 491,787 34,282 526,069
2013 146,058 13,330 159,388 490,219 32,633 522,852
2014 148,789 12,411 161,200 499,383 31,066 530,449
2015 151,051 9,726 160,777 512,366 24,754 537,120
2016 152,364 8,686 161,050 516,815 22,604 539,419
2017 147,475 6,866 154,341 508,197 18,113 526,310
2018 147,800 5,878 153,678 509,324 15,801 525,125
2019 147,111 5,955 153,066 516,722 16,363 533,085
_________________________________________
(1) Figures are annual averages based on estimates and are not seasonally adjusted.
Source: Missouri Local Area Unemployment Statistics (LAUS) as produced by Missouri Economic
Resource and Information Center (MERIC) in cooperation with the U.S. Department of Labor, Bureau of
Labor Statistics
The below table sets forth unemployment rates for the City, County, State and the United States
of America (the “Country”) for 2011 through 2020.
Unemployment Rates
Fiscal
Year City(1)
County(1) State (1) Country(2)
2011 11.8% 8.9% 9.0% 9.2%
2012 9.7 6.9 7.0 8.5
2013 10.5 7.3 7.1 7.7
2014 9.6 6.9 6.6 6.7
2015 7.1 5.5 5.8 5.6
2016 5.9 4.6 4.9 4.9
2017 4.7 3.7 4.9 4.6
2018 4.3 3.3 3.5 4.1
2019 4.3 3.3 3.3 3.7
2020 12.0 8.9 7.9 6.0
_______________________________________
(1) Source: District’s Comprehensive Annual Financial Report Fiscal Years Ended June 30, 2020 and 2019
(2) Source: United States Department of Labor, Bureau of Labor Statistics, Labor Force Statistics from the
Current Population Survey, Seasonally Adjusted as of June 30.
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Principal Employers
The below table sets forth the names and approximate number of employees of principal
employers within the St. Louis area as of June 2020.
St. Louis MSA
Principal Employers
Company
Nature of Business
Approximate Number
of Employees(1)
BJC HealthCare Healthcare 29,305
Mercy Healthcare 20,182
Washington University in St. Louis Education 17,688
Boeing Defense, Space & Security Manufacturing 14,566
SSM Health Healthcare 13,500
Scott Air Force Base Government 13,000
United States Postal Service Government 11,727
Schnuck Markets Inc. Retail 10,858
Archdiocese of St. Louis Religious 9,000
The City of St. Louis, Missouri Government 7,385
____________________
Source: District’s Comprehensive Annual Financial Report Fiscal Years Ended June 30, 2020 and 2019
(1) Employees are for the St. Louis area, which includes several counties not served by the District.
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Per Capita Personal Income
The below table presents per capita personal income for the District, the State and the Country for
the years 2011 through 2020, the latest date for which such information is available.
District(2) State(3) Country(4)
Year(1)
Per Capita Personal
Income
Per Capita Personal
Income
Per Capita Personal
Income
2011 $27,028 $38,335 $42,712
2012 29,490 40,122 44,587
2013 31,105 40,319 44,826
2014 29,728 41,767 47,049
2015 31,969 43,147 48,997
2016 32,482 44,308 50,004
2017 32,705 45,339 52,113
2018 33,897 47,102 54,600
2019 37,150 48,650 56,468
2020 37,159 51,300 59,668
_______________________________________
Source: District’s Comprehensive Annual Financial Report Fiscal Years Ended June 30, 2020 and
2019; and Federal Reserve Bank of St. Louis and U.S. Bureau of Economic Analysis, Per Capita
Personal Income in Missouri and Personal Income Per Capita, retrieved from FRED, Federal Reserve
Bank of St. Louis, October 22, 2020.
(1) Figures are presented on a fiscal-year basis for the District and on a calendar-year basis for the
State and the Country.
(2) In the District’s Comprehensive Annual Financial Report Fiscal Years Ended June 30, 2020 and
2019, the data in Fiscal Years 2011-2019 was restated to conform to the calculation used for Fiscal
Year 2020.
(3) Figures for 2011-2019 are based on the seasonally adjusted average annual rate, average annual
frequency. Figures for 2020 are based on the seasonally adjusted annual rate, average semiannual
frequency as of on or about September 24, 2020.
(4) Figures for 2011-2019 are based on the seasonally adjusted average annual rate, average annual
frequency. Figures for 2020 are based on the seasonally adjusted annual rate, average semiannual
frequency as of on or about September 30, 2020.
***
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APPENDIX C
Definitions and Summaries of Certain Provisions of the Bond Ordinance and the Continuing
Disclosure Agreement
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The following is a brief summary of certain provisions of the Master Bond Ordinance adopted by
the District on April 22, 2004, as supplemented by the Ordinance adopted by the District on November
12, 2020 authorizing the issuance of the Series 2020B Bonds (the “Bond Ordinance”). This summary is
not to be considered as a full statement of the provisions of such documents and is qualified by reference
to and is subject to the complete Bond Ordinance, copies of which may be obtained from PFM Financial
Advisors, LLC or Independent Public Advisors, LLC, as Co-Financial Advisors to the District. After
delivery of the Series 2020B Bonds, copies of such documents will be available for inspection at the
corporate trust office of the Paying Agent in St. Louis, Missouri or at such other office as shall be
designated by the Paying Agent.
DEFINITIONS
The definitions of certain words and terms used in this Official Statement with respect to the
Series 2020B Bonds are set forth below:
“Accumulation Payments” shall have the meaning ascribed therefor under the caption “Sinking
Fund – Debt Service Reserve Account” in this Appendix C.
“Additional Interest” means, for any period during which any Pledged Bonds are owned by a
Credit Facility Provider pursuant to a Credit Facility or Credit Facility Agreement, the amount of interest
accrued on such Pledged Bonds at the Pledged Bond Rate less the amount of interest which would have
accrued during such period on an equal Principal amount of Bonds at the Bond Rate.
“Annual Budget” means the annual budget of the District relating to the System (which shall
include all costs, obligations and expenses properly allocable to the System), as amended or supplemented
in accordance with established procedures of the District, adopted or in effect for a particular Fiscal Year.
“Bond Counsel” means any firm of nationally recognized bond counsel experienced in matters
relating to tax-exempt financing, appointed by the District.
“Bond Ordinance” means the Master Bond Ordinance adopted by the Board of Trustees of the
District on April 22, 2004 and the Ordinance adopted by the Board of Trustees of the District on
November 12, 2020 authorizing the issuance of the Series 2020B, as the same may from time to time be
modified, supplemented or amended by Supplemental Ordinances.
“Bond Rate” means the rate of interest per annum payable on specified Bonds other than
Pledged Bonds.
“Bond Register” means the books for the registration, transfer and exchange of Bonds
maintained by the Bond Registrar.
“Bond Registrar” means any bank or trust company designated as such by the District in the
Bond Ordinance with respect to any of the Bonds. Such Bond Registrar shall perform the duties required
of the Bond Registrar in the Bond Ordinance. UMB Bank, N.A. has been designated as Bond Registrar
for the Bonds; provided, however, that in connection with the issuance of any SRF Bonds, the District
shall appoint such separate Bond Registrar designated by the issuer of the SRF Bonds.
“Bondholder” means the registered owner of one or more Bonds.
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“Bonds” means any revenue bonds authorized by and authenticated and delivered pursuant to the
Bond Ordinance, including the Series 2020B Bonds, any other Senior Bonds, and any Subordinate Bonds.
“Business Day” means a day other than a Saturday, Sunday or holiday on which the Paying
Agent, Bond Registrar or applicable Credit Facility Provider is scheduled in the normal course of its
operations to be open to the public for conduct of its banking operations.
“Charter” means the District’s Charter (Plan) approved by the voters of the City of St. Louis,
Missouri and St. Louis County, Missouri on February 9, 1954 and amended on November 7, 2000 and on
June 5, 2012, and as further amended from time to time in accordance with its terms.
“Chief Financial Officer” means the individual presently holding the office of
Secretary-Treasurer of the District or the individual presently holding the office of Assistant
Secretary-Treasurer of the District, and any successors who might hereafter hold either such office, and
any individual, body or authority to whom or to which may hereafter be delegated by law the duties,
powers, authority, obligations or liabilities of either such office.
“Chief Officer” means the individual presently holding the office of Executive Director or
Acting Executive Director of the District as appointed by the Governing Body and any successor who
might hereafter hold such office, and any individual, body or authority to whom or which may hereafter
be delegated by law the duties, powers, authority, obligations or liabilities of such office.
“Code” means the Internal Revenue Code of 1986, as amended, and the applicable regulations of
the Treasury Department proposed or promulgated thereunder.
“Consultant” means an independent engineer or utility consultant or firm of independent
engineers or utility consultants experienced in the planning and management of wastewater systems and
having a nationally recognized reputation for such work.
“Continuing Disclosure Agreement” means (i) with respect to the Series 2020B Bonds, the
Disclosure Dissemination Agent Agreement dated as of December 1, 2020 between the District and
Digital Assurance Certification, L.L.C., as Dissemination Agent, as amended from time to time in
accordance with its terms, in substantially the form attached as an exhibit to the Bond Ordinance, and
(ii) with respect to any other series of Bonds, the continuing disclosure agreement relating to such series
of Bonds, as amended from time to time in accordance with its terms.
“Costs,” with respect to any Project, means the total cost, paid or incurred, to study, plan, design,
finance, acquire, construct, reconstruct, renovate, repair, replace, equip, install, or otherwise develop such
Project and shall include, but shall not be limited to, the following costs and expenses relating to such
Project and the reimbursement to the District for any such items previously paid by the District:
(i) the cost of all lands, real or personal properties, rights, easements, and franchises
acquired;
(ii) the cost of all machinery and equipment, financing charges, and interest prior to
and during construction and for six months after completion of construction;
(iii) the cost of the acquisition, construction, reconstruction or installation of such
Project;
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(iv) the cost of engineering, architectural, development and supervisory services,
fiscal agents’ and legal expenses, plans and specifications, and other expenses necessary or
incident to determining the feasibility or practicability of any Projects, administrative expenses,
and such other expenses as may be necessary or incident to any financing by Bonds;
(v) the cost of placing such Project in operation;
(vi) the cost of condemnation of property necessary for such construction and
operation;
(vii) Costs of Issuance; and
(viii) any other costs which may be incident to such Project.
“Costs of Issuance” means issuance costs with respect to the Bonds, including but not limited to
the following: underwriters’ spread (whether realized directly or derived through purchase of Bonds at a
discount below the price at which they are expected to be sold to the public), management fee and
expenses; Credit Facility fees and Reserve Account Credit Facility fees; counsel fees (including Bond
Counsel, underwriter’s counsel, District’s counsel, as well as any other specialized counsel fees incurred
in connection with the borrowing); financial advisor fees of any financial advisor to the District incurred
in connection with the issuance of the Bonds; rating agency fees; escrow agent and paying agent fees;
accountant fees and other expenses related to issuance of the Bonds; printing costs (for the Bonds and of
the preliminary and final official statement relating to the Bonds); and fees and expenses of the District
incurred in connection with the issuance of the Bonds.
“Credit Facility” means any letter of credit, insurance policy, guaranty, surety bond, standby
bond purchase agreement, line of credit, revolving credit agreement, or similar obligation, arrangement,
or instrument issued by a bank, insurance company, or other financial institution which is used by the
District to perform one or more of the following tasks: (i) enhancing the District’s credit by assuring
owners of any of the Bonds that Principal of and interest on such Bonds will be paid promptly when due;
(ii) providing liquidity for the owners of Bonds through undertaking to cause Bonds to be bought from the
owners thereof when submitted pursuant to an arrangement prescribed by a Series Ordinance; or
(iii) remarketing any Bonds so submitted to the Credit Facility Provider (whether or not the same Credit
Facility Provider is remarketing the Bonds). The term Credit Facility shall not include a Reserve Account
Credit Facility.
“Credit Facility Agreement” means an agreement between the District and a Credit Facility
Provider pursuant to which the Credit Facility Provider issues a Credit Facility and may include the
promissory note or other instrument evidencing the District’s obligations to a Credit Facility Provider
pursuant to a Credit Facility Agreement. The term Credit Facility Agreement shall not include a Reserve
Account Credit Facility Agreement.
“Credit Facility Provider” means any issuer of a Credit Facility then in effect for all or part of
the Bonds. The term Credit Facility Provider shall not include any Reserve Account Credit Facility
Provider. Whenever in the Bond Ordinance the consent of the Credit Facility Provider is required, such
consent shall only be required from the Credit Facility Provider whose Credit Facility is issued with
respect to the series of Bonds for which the consent is required.
“Debt Service Requirement” means the total Principal and interest coming due on Senior
Bonds, or all Bonds, as applicable, whether at maturity or upon mandatory redemption, in any specified
period; provided, however, that (i) Debt Service Requirement with respect to SRF Bonds shall mean the
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net amount of Principal and interest coming due on such SRF Bonds after taking into account any so-
called “SRF Subsidy” (i.e., the amount of anticipated investment earnings which will accrue on any
reserve account relating to the SRF Bonds and which will reduce the debt service payments of the District
with respect to such SRF Bonds), and (ii) Debt Service Requirement with respect to Bonds issued as
“build America bonds” shall mean the net amount of Principal and interest coming due on such Bonds
after taking into account the anticipated receipt of U.S. Treasury Interest Subsidy payments on such
Bonds. If any Bonds Outstanding or proposed to be issued shall bear interest at a Variable Rate, the
interest coming due in any specified future period shall be determined as if the Variable Rate in effect at
all times during such future period equaled the average of the BMA Municipal Bond Index (formerly PSA
Municipal Bond Index) for the prior 5 calendar years, or any successor index as certified by a Financial
Advisor. With respect to any Bonds secured by a Credit Facility, Debt Service Requirement shall include
(i) any upfront or periodic commission or commitment fee obligations with respect to such Credit
Facility, (ii) the outstanding amount of any Reimbursement Obligation owed to the applicable Credit
Facility Provider and interest thereon, (iii) any Additional Interest owed on Pledged Bonds to a Credit
Facility Provider, and (iv) any remarketing agent fees. With respect to any Hedged Bonds, the interest on
such Hedged Bonds during any Hedge Period and for so long as the provider of the related Hedge
Agreement has not defaulted on its payment obligations thereunder shall be calculated by adding (x) the
amount of interest payable by the District on such Hedged Bonds pursuant to their terms and (y) the
amount of Hedge Payments payable by the District under the related Hedge Agreement and subtracting
(z) the amount of Hedge Receipts payable by the provider of the related Hedge Agreement at the rate
specified in the related Hedge Agreement; provided, however, that to the extent that the provider of any
Hedge Agreement is in default thereunder, the amount of interest payable by the District on the related
Hedged Bonds shall be the interest calculated as if such Hedge Agreement had not been executed. In
determining the amount of Hedge Payments or Hedge Receipts payable or receivable for any future
period which are not fixed throughout the Hedge Period (i.e., which are variable), such Hedge Payments
or Hedge Receipts for any period of calculation (the “Determination Period”) shall be computed by
assuming that the variables comprising the calculation (e.g., indices) applicable to the Determination
Period are equal to the average of the actual variables which were in effect (weighted according to the
length of the period during which each such variable was in effect) for the most recent twelve-month
period immediately preceding the date of calculation for which such information is available (or shorter
period if such information is not available for a twelve-month period). The Principal of and interest on
Bonds and Hedge Payments shall be excluded from the determination of Debt Service Requirement to the
extent that (1) the same were or are expected to be paid with amounts on deposit on the date of calculation
(or Bond proceeds to be deposited on the date of issuance of proposed Bonds) in the Project Fund, the
Sinking Fund or a similar fund for Subordinate Bonds or (2) cash or non-callable Government Securities
are on deposit in an irrevocable escrow or trust account in accordance with the provisions of the Bond
Ordinance (or a similar escrow or trust account for Subordinate Bonds) and such amounts (including,
where appropriate, the earnings or other increment to accrue thereon) are required to be applied to pay
Principal or interest and are sufficient to pay such Principal or interest.
“Debt Service Reserve Account” means the account by that name within the Sinking Fund
established in the Bond Ordinance.
“Debt Service Reserve Requirement” means an amount determined from time to time by the
District as a reasonable reserve for the payment of Principal of and interest on Senior Bonds which are not
Senior SRF Bonds or Senior Uncovered Bonds. On the date of issue of a series of Senior Bonds, this
amount shall be the least of (a) 10% of the stated Outstanding Principal amount of the Senior Bonds
which are not Senior SRF Bonds or Senior Uncovered Bonds, (b) the maximum annual Principal and
interest requirements (taking into account the anticipated receipt of U.S. Treasury Interest Subsidy
payments on the Series 2010B Bonds) on the Senior Bonds which are not Senior SRF Bonds or Senior
Uncovered Bonds (determined as of the issue date of each series of Senior Bonds which are not Senior
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SRF Bonds or Senior Uncovered Bonds), or (c) 125% of the average annual Principal and interest
requirements (taking into account the anticipated receipt of U.S. Treasury Interest Subsidy payments on
the Series 2010B Bonds) on the Senior Bonds which are not Senior SRF Bonds or Senior Uncovered
Bonds (determined as of the issue date of each series of Senior Bonds which are not Senior SRF Bonds or
Senior Uncovered Bonds). The District may in its sole discretion change, reduce or increase this amount
from time to time by Supplemental Ordinance, but in no event may the District reduce this amount
(A) below the greater of (1) while the Series 2010B Bonds, the Series 2011B Bonds, the Series 2012A
Bonds, the Series 2012B Bonds or the Series 2013B Bonds are Outstanding, the least of (x) the aggregate
of 10% of the stated Outstanding Principal amounts of the Series 2010B Bonds, the Series 2011B Bonds,
the Series 2012A Bonds, the Series 2012B Bonds and the Series 2013B Bonds, (y) the aggregate of the
maximum annual Principal and interest requirements on the Series 2010B Bonds, the Series 2011B
Bonds, the Series 2012A Bonds, the Series 2012B Bonds and the Series 2013B Bonds (taking into
account the anticipated receipt of U.S. Treasury Interest Subsidy payments on the Series 2010B Bonds)
(determined as of their respective issue dates), or (z) the aggregate of 125% of the average annual
Principal and interest requirements on the Series 2010B Bonds, the Series 2011B Bonds, the
Series 2012A Bonds, the Series 2012B Bonds and the Series 2013B Bonds (taking into account the
anticipated receipt of U.S. Treasury Interest Subsidy payments on the Series 2010B Bonds) (determined
as of their respective issue dates), or (2) 50% of the average annual Debt Service Requirement with
respect to Senior Bonds (other than Senior SRF Bonds and Senior Uncovered Bonds) in the then current
or any succeeding Fiscal Year, and (B) unless each Rating Agency indicates in writing to the District that
such reduction will not, by itself, result in a reduction or withdrawal of its current Rating on the Senior
Bonds. If the aggregate initial offering price of a series of Bonds to the public is less than 98% or more
than 102% of par, such offering price shall be used in lieu of the stated Principal amount.
Notwithstanding anything in the Bond Ordinance to the contrary, (1) when all or a portion
(the “Refunding Portion”) of a series of Senior Bonds is issued to refund a portion of a series of
Outstanding Senior Bonds (the “Refunded Series”), the annual Principal and interest requirements to be
used for purposes of clauses (b), (c), (A)(1)(y) and (A)(1)(z) above shall not include both the Principal
and interest requirements of the Refunding Portion and the Refunded Series, but instead shall be, as
between the Refunding Portion and the Refunded Series, the one that, when added to the Principal and
interest requirements for all other Senior Bonds included in such computation, results in the greatest
aggregate amount; (2) in no event shall the deposit to the Debt Service Reserve Requirement for each
series of Senior Bonds exceed an amount permitted for a reasonably required reserve fund under the
Code; and (3) the Debt Service Reserve Requirement, if any, in connection with any Senior SRF Bonds or
any Subordinate Bonds, including Subordinate SRF Bonds, shall be as provided in the Series Ordinance
authorizing the issuance of such Senior SRF Bonds or such Subordinate Bonds.
“Depository” means the depository of each fund established under the Bond Ordinance, and any
successor depository of such fund hereafter designated by the District from time to time by Supplemental
Ordinance. The Depository for the Senior Bonds is U.S. Bank, N.A., St. Louis, Missouri.
“District” means The Metropolitan St. Louis Sewer District, a body corporate, a municipal
corporation and a political subdivision duly created and existing under the laws of the State, and any
successor thereto.
“DTC” means The Depository Trust Company, New York, New York, or its nominee, or its
successors and assigns, or any other depository performing similar functions under the Bond Ordinance.
“Event of Default” means any of the events defined as such in the Bond Ordinance.
“Expenses of Operation and Maintenance” means all expenses reasonably incurred in
connection with the operation, maintenance and repair of the System, including salaries, wages, the cost
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of materials and supplies, rentals of leased property, if any, management fees, payments to others for the
treatment and disposal of sewage, the cost of audits and periodic Consultant’s reports, Paying Agent’s and
Bond Registrar’s fees and expenses, payment of premiums for insurance required by the Bond Ordinance
and other insurance which the District deems prudent to carry on the System and its operations and
personnel, obligations (other than for borrowed money or for rents payable under capital leases) incurred
in the ordinary course of business, liabilities incurred by endorsement for collection or deposit of checks
or drafts received in the ordinary course of business, short-term obligations incurred and payable within a
particular Fiscal Year, other obligations or indebtedness incurred for the purpose of leasing (pursuant to a
true or operating lease) equipment, fixtures, inventory or other personal property, and, generally, all
expenses, exclusive of interest on the Bonds and depreciation or amortization, which under accounting
principles generally accepted for municipal utility purposes are properly allocable to operation and
maintenance; however, only such expenses as are reasonable and necessary or desirable for the proper
operation and maintenance of the System shall be included. “Expenses of Operation and Maintenance”
also includes the District’s obligations under any contract with any other political subdivision or public
agency or authority of one or more political subdivisions pursuant to which the District undertakes to
make payments measured by the expenses of operating and maintaining any facility which constitutes part
of the System and which is owned or operated in part by the District and in part by others.
“Financial Advisor” means an investment banking or financial advisory firm, commercial bank,
or any other Person who or which is appointed by the District for the purpose of passing on questions
relating to the availability and terms of specified types of Bonds and is actively engaged in and, in the
good faith opinion of the District, has a favorable reputation for skill and experience in underwriting or
providing financial advisory services in respect of similar types of securities.
“Fiscal Year” means the 12-month period used by the District for its general accounting
purposes, as it may be changed from time to time. The Fiscal Year at the time the Bond Ordinance was
adopted begins on July 1 and ends on June 30 of the immediately following calendar year.
“Fitch” means Fitch, Inc. or, if such corporation is dissolved or liquidated or otherwise ceases to
perform securities rating services, such other nationally recognized securities rating agency as may be
designated in writing by the District. At the time the Bond Ordinance was adopted, the notice address of
Fitch is One State Street Plaza, New York, New York 10004.
“Forecast Period” means a period of three consecutive Fiscal Years commencing with the Fiscal
Year in which any proposed Senior Bonds are to be issued.
“Governing Body” means the Board of Trustees of the District and any predecessor or successor
in office to such present body, and any Person to whom or which may hereafter be delegated by law the
duties, powers, authority, obligations, or liabilities of the present body, either in whole or in relation to the
System.
“Government Loans” means loans to the District by the government of the United States or the
State, or by any department, authority or agency of either, for the purpose of acquiring, constructing,
reconstructing, improving, bettering or extending any part of the System.
“Government Obligations” means (a) direct obligations of the United States of America for the
full and timely payment of which the full faith and credit of the United States of America is pledged or
(b) obligations issued by a person controlled or supervised by and acting as an instrumentality of the
United States of America, the full and timely payment of the principal of and the interest on which is fully
and unconditionally guaranteed as a full faith and credit obligation of the United States of America
(including any securities described in (a) or (b) issued or held in book-entry form on the books of the
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Department of the Treasury of the United States of America), which obligations, in either case, (i) are not
subject to redemption or prepayment prior to maturity except at the option of the holder of such
obligations and (ii) may include U.S. Treasury Trust Receipts.
“Hedge Agreement” means, without limitation, (i) any contract provided by a Qualified Hedge
Provider known as or referred to or which performs the function of an interest rate swap agreement,
currency swap agreement, forward payment conversion agreement, or futures contract; (ii) any contract
provided by a Qualified Hedge Provider providing for payments based on levels of, or changes or
differences in, interest rates, currency exchange rates, or stock or other indices; (iii) any contract provided
by a Qualified Hedge Provider to exchange cash flows or payments or series of payments; (iv) any type of
contract provided by a Qualified Hedge Provider called, or designed to perform the function of, interest
rate floors, collars, or caps, options, puts, or calls, to hedge or minimize any type of financial risk,
including, without limitation, payment, currency, rate, or other financial risk; and (v) any other type of
contract or arrangement provided by a Qualified Hedge Provider that the District determines is to be used,
or is intended to be used, to manage or reduce the cost of any Bonds, to convert any element of any Bonds
from one form to another, to maximize or increase investment return, to minimize investment return risk,
or to protect against any type of financial risk or uncertainty.
“Hedge Contingency Payments” means amounts payable by the District pursuant to any Hedge
Agreement as termination payments, fees, expenses and indemnity payments.
“Hedge Payments” means amounts payable by the District pursuant to any Hedge Agreement,
other than Hedge Contingency Payments.
“Hedge Period” means the period during which a Hedge Agreement is in effect.
“Hedge Receipts” means amounts payable by any provider of a Hedge Agreement pursuant to
such Hedge Agreement, other than termination payments, fees, expenses and indemnity payments.
“Hedged Bonds” means any Bonds for which the District shall have entered into a Hedge
Agreement.
“Independent Certified Public Accountant” means a certified public accountant, or a firm of
certified public accountants, who or which is “independent” as that term is defined in Rule 101 and
related interpretations of the Code of Professional Ethics of the American Institute of Certified Public
Accountants, of recognized standing, who or which does not devote his or its full time to the District (but
who or which may be regularly retained by the District).
“Interest Payment Date” means each date on which interest is to become due on any Bonds, as
established in the Series Ordinance for such Bonds, and with respect to the Series 2020B Bonds, shall be
as specified in the Bond Ordinance.
“Investment Earnings” means all interest received on and profits derived from investments of
moneys in all funds and accounts of the District other than investments derived from or with respect to
(a) stormwater revenues, (b) all funds and accounts established in connection with SRF Bonds and
(c) obligations issued by the District on behalf of any of its subdistricts.
“Maximum Annual Debt Service” means the maximum amount of Debt Service Requirements
as computed for the then current or any future Fiscal Year.
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“Net Operating Revenues” means Operating Revenues, after provision for payment of all
Expenses of Operation and Maintenance.
“Operating Revenues” means all income and revenue of any nature derived from the operation
of the System, including periodic wastewater billings, service charges, other charges for wastewater
service and the availability thereof (other than any special assessment proceeds), connection or tap fees
(whether accounted for as revenues or as contributed capital), net proceeds from business interruption
insurance, the principal of gifts, bequests, contributions, grants and donations available to pay debt
service of Bonds, and any amounts deposited in escrow in connection with the acquisition, construction,
remodeling, renovation and equipping of facilities to be applied during the period of determination to pay
interest on Bonds, but excluding (a) any profits or losses on the early extinguishment of debt or on the
sale or other disposition, not in the ordinary course of business, of investments or fixed or capital assets,
and local, state or federal grants or other moneys received for the payment of Expenses of Operation and
Maintenance, (b) local, state, or federal grants, loans (including Government Loans), capital improvement
contract payments, or other moneys received for capital improvements to the System, (c) Investment
Earnings, (d) any stormwater charges and (e) any property tax revenues.
“Other System Obligations” means obligations of any kind, including but not limited to,
Government Loans, general obligation bonds, revenue bonds, capital leases, installment purchase
agreements, or notes (but excluding Bonds and related obligations to Credit Facility Providers, Reserve
Account Credit Facility Providers and Qualified Hedge Providers), incurred or issued by the District to
finance or refinance the cost of acquiring, constructing, reconstructing, improving, equipping, bettering,
or extending any part of the System.
“Outstanding” means, when used in reference to Bonds, all Bonds which have been duly
authenticated and delivered under the Bond Ordinance, with the exception of (a) Bonds in lieu of which
other Bonds have been issued under agreement to replace lost, mutilated, stolen, or destroyed obligations,
(b) Bonds surrendered by the owners in exchange for other Bonds under the Bond Ordinance, and
(c) Bonds for the payment of which provision has been made in accordance with the Bond Ordinance.
“Paying Agent” means any bank or trust company, including any successors and assigns thereof,
authorized by the District in the Bond Ordinance to pay the Principal of, premium, if any, or interest on
any Bonds on behalf of the District. Such Paying Agent shall perform the duties required of the Paying
Agent in the Bond Ordinance. UMB Bank, N.A. is designated as Paying Agent for the Series 2010B
Bonds, the Series 2011B Bonds, the Series 2012A Bonds, the Series 2012B Bonds, the Series 2013B
Bonds, the Series 2015B Bonds, the Series 2016C Bonds, the Series 2017A Bonds, the Series 2019B
Bonds, the Series 2019C Bonds and the Series 2020B Bonds.
“Payments Account” means the account by that name within the Sinking Fund established in the
Bond Ordinance.
“Permitted Investments” means obligations in which the District is permitted to invest moneys
of the District pursuant to applicable law, which have (or are collateralized by obligations which have) a
Rating by any Rating Agency which is equal to or greater than the third highest long-term Rating of such
Rating Agency, or which bears (or are collateralized by obligations which bear) the second highest short-
term Rating of such Rating Agency. As of the date of adoption of the Master Bond Ordinance,
obligations in which the District is permitted to invest proceeds of Bonds are described in Section 7.020
of the Charter.
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“Person” or “person” means any individual, corporation, partnership, limited liability company,
joint venture, association, joint stock company, trust, unincorporated organization, body, authority,
government, or agency or political subdivision thereof.
“Pledged Bond” means any Bond purchased and held by a Credit Facility Provider pursuant to a
Credit Facility Agreement. A Bond shall be deemed a Pledged Bond only for the actual period during
which such Bond is owned by a Credit Facility Provider pursuant to a Credit Facility Agreement.
“Pledged Bond Rate” means the rate of interest payable on Pledged Bonds, as may be provided
in a Credit Facility or Credit Facility Agreement.
“Pledged Revenues” means Net Operating Revenues, Investment Earnings, Hedge Receipts, and
all moneys paid or required to be paid into, and all moneys and securities on deposit from time to time in,
the funds and accounts specified in the Bond Ordinance, but excluding any amounts required in the Bond
Ordinance to be set aside pending, or used for, rebate to the United States government pursuant to Section
148(f) of the Code, including, but not limited to, amounts in the Rebate Fund.
“Principal” means, with respect to a Current Interest Bond, the principal amount of such Bond.
“Principal Maturity Date” means each date on which Principal is to become due on any Bonds,
by maturity or mandatory sinking fund redemption, as established in the Series Ordinance for such Bonds.
“Project” means the acquisition, construction, reconstruction, improvement, betterment,
extension or equipping of the System, in whole or in part, with the proceeds of a series of Bonds,
including, but not limited to, the Series 2020B Project.
“Project Fund” means the fund by that name established in the Bond Ordinance.
“Qualified Hedge Provider” means an entity whose senior unsecured long term obligations,
financial program rating, counterparty rating, or claims paying ability, or whose payment obligations
under the related Hedge Agreement are absolutely and unconditionally guaranteed by an entity whose
senior unsecured long term obligations, financial program rating, counterparty rating, or claims paying
ability, are rated either (i) at least as high as the third highest Rating of each Rating Agency, but in no
event lower than any Rating on the related Hedged Bonds at the time of execution of the Hedge
Agreement, or (ii) in any such lower Rating which each Rating Agency indicates in writing to the District
will not, by itself, result in a reduction or withdrawal of its Rating on the related Hedged Bonds that is in
effect prior to entering into the Hedge Agreement. An entity’s status as a “Qualified Hedge Provider” is
determined only at the time the District enters into a Hedge Agreement with such entity and shall not be
redetermined with respect to that Hedge Agreement.
“Rating” means a rating in one of the categories by a Rating Agency, disregarding pluses,
minuses, and numerical gradations.
“Rating Agencies” or “Rating Agency” means Fitch and S&P or any successors thereto and any
other nationally recognized credit rating agency then maintaining a rating on any Bonds at the request of
the District. If at any time a particular Rating Agency does not have a rating outstanding with respect to
the relevant Bonds, then a reference to Rating Agency or Rating Agencies shall not include such Rating
Agency.
“Rebate Fund” means the fund by that name established in the Bond Ordinance.
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“Record Date” means, with respect to any semiannual Interest Payment Date, the 15th day of the
calendar month immediately preceding such Interest Payment Date, and any record dates designated by
the District in a Series Ordinance.
“Reimbursement Obligation” means the obligation of the District to directly reimburse any
Credit Facility Provider for amounts paid by such Credit Facility Provider under a Credit Facility,
whether or not such obligation to so reimburse is evidenced by a promissory note or other similar
instrument.
“Renewal and Extension Fund” means the fund by that name established in the Bond
Ordinance.
“Replenishment Payments” shall have the meaning ascribed therefor in under the caption
“Sinking Fund – Debt Service Reserve Account” in this Appendix C.
“Reserve Account Credit Facility” means any letter of credit, insurance policy, line of credit, or
surety bond, together with any substitute or replacement therefor, if any, complying with the provisions of
the Bond Ordinance, thereby fulfilling all or a portion of the Debt Service Reserve Requirement.
“Reserve Account Credit Facility Agreement” means any agreement between the District and a
Reserve Account Facility Provider relating to the issuance of a Reserve Account Credit Facility, as such
agreement may be amended from time to time.
“Reserve Account Credit Facility Provider” means any provider of a Reserve Account Credit
Facility.
“Revenue Fund” means the fund by that name established in the Bond Ordinance.
“Senior Bonds” means the Series 2010B Bonds, the Series 2011B Bonds, the Series 2012A
Bonds, the Series 2012B Bonds, the Series 2013B Bonds, the Series 2015B Bonds, the Series 2016C
Bonds, the Series 2017A Bonds, the Series 2018A Bond, the Series 2019B Bonds, the Series 2019C
Bonds, the Series 2020B Bonds and any Bonds, including Senior SRF Bonds and Senior Uncovered
Bonds, issued with a right to payment and secured by a lien on a parity with the Series 2010B Bonds, the
Series 2011B Bonds, the Series 2012A Bonds, the Series 2012B Bonds, the Series 2013B Bonds, the
Series 2015B Bonds, the Series 2016C Bonds, the Series 2017A Bonds, the Series 2018A Bond, the
Series 2019B Bonds, the Series 2019C Bonds and the Series 2020B Bonds (except with respect to any
Credit Facility which may be available only to one or more series of Senior Bonds and except that Senior
SRF Bonds and Senior Uncovered Bonds shall not be secured by the Debt Service Reserve Account)
pursuant to the Bond Ordinance.
“Senior Hedge Agreements” means Hedge Agreements relating to Hedged Bonds which are
Senior Bonds.
“Senior SRF Bonds” means SRF Bonds which are Senior Bonds.
“Senior Uncovered Bonds” means all series of Senior Bonds, other than Senior SRF Bonds,
with respect to which the District has specified pursuant to a Series Ordinance authorizing such series of
Senior Bonds that such series of Senior Bonds will not be secured by the Debt Service Reserve Account.
“Series 2020B Bonds” means the District’s Wastewater System Revenue Bonds, Series 2020B,
in the original aggregate Principal amount of $120,000,000 authorized under the Bond Ordinance.
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“Series 2020B Project” means the project as particularly described in plans and specifications on
file from time to time with the District.
“Series 2020B Project Account” means the account by that name within the Project Fund
established in the Bond Ordinance
“Series 2020B Rebate Account” means the account by that name within the Rebate Fund
established in the Bond Ordinance.
“Series 2020B Costs of Issuance Account” means the account by that name within the Project
Fund established in the Bond Ordinance.
“Series Ordinance” means a bond ordinance or bond ordinances of the District (which may be
supplemented by one or more bond ordinances) to be adopted prior to and authorizing the issuance and
delivery of any series of Bonds. The Master Bond Ordinance shall constitute a Master Bond Ordinance
for Senior Bonds and Subordinate Bonds. Such a bond ordinance as supplemented shall establish the date
or dates of the pertinent series of Bonds, the schedule of maturities of such Bonds, whether any such
Bonds will be capital appreciation bonds, the name of the purchaser(s) of such series of Bonds, the
purchase price thereof, the rate or rates of interest to be borne thereby, whether fixed or variable, the
interest payment dates for such Bonds, the terms and conditions, if any, under which such Bonds may be
made subject to redemption (mandatory or optional) prior to maturity, the form of such Bonds, and such
other details as the District may determine.
“Sinking Fund” means the fund by that name established in the Bond Ordinance.
“SRF Bonds” means such Bonds or other obligations issued in connection with the District’s
participation in the Missouri State Revolving Fund Program of the Missouri Department of Natural
Resources and the State Environmental Improvement and Energy Resources Authority, which SRF Bonds
may be Senior SRF Bonds or Subordinate SRF Bonds.
“Standard and Poor’s” or “S&P” means S&P Global Ratings, a division of S&P Global Inc.,
or, if such corporation is dissolved or liquidated or otherwise ceases to perform securities rating services,
such other nationally recognized securities rating agency as may be designated in writing by the District.
At the time the Master Bond Ordinance was adopted, the notice address of S&P is 25 Broadway, New
York, New York 10004.
“State” means the State of Missouri.
“Subordinate Bonds” means Bonds, including Subordinate SRF Bonds, issued with a right to
payment from the Pledged Revenues and secured by a lien on the Pledged Revenues expressly junior and
subordinate to the Senior Bonds.
“Subordinate Hedge Agreements” means Hedge Agreements relating to Hedged Bonds which
are Subordinate Bonds.
“Subordinate SRF Bonds” means SRF Bonds which are Subordinate Bonds.
“Supplemental Ordinance” means (a) any Series Ordinance and (b) any modification,
amendment, or supplement to the Master Bond Ordinance other than a Series Ordinance.
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“System” means the sanitary sewer system of the District, as it now exists and as it may be
hereafter added to, extended, improved and equipped, either from the proceeds of the Bonds or from any
other sources at any time hereafter, including, without limitation, (a) all sanitary sewers, all combined
sewers, all pumping stations, all wastewater treatment plants, and all equipment used in connection
therewith, all facilities for the collection, treatment and disposal of sewage and wastewater, including
industrial wastes, and (b) all other facilities or property of any nature or description, real or personal,
tangible or intangible, now or hereafter owned or used by the District in the collection, treatment and
disposal of sewage. The District may own a partial interest in any sanitary sewer facility, the remaining
interest in which may be owned by or on behalf of a political subdivision of the State or any agency or
authority thereof. In case of such ownership, the rights and interests possessed by the District in such
facility shall be included as part of the System.
“Tax-Exempt Bonds” means any Bonds the interest on which has been determined, in an
opinion of Bond Counsel, to be excludable from the gross income of the owners thereof for federal
income tax purposes.
“Underwriter” means (i) with respect to the Series 2020B Bonds, J.P. Morgan Securities LLC,
New York, New York, and (ii) with respect to any additional series of Bonds, the underwriter(s) specified
in the Series Ordinance authorizing such series of Bonds.
“U.S. Treasury Trust Receipts” means receipts or certificates which evidence an undivided
ownership interest in the right to the payment of portions of the principal of or interest on obligations
described in clauses (a) or (b) of the term Government Obligations, provided that such obligations are
held by a bank or trust company organized under the laws of the United States acting as custodian of such
obligations, in a special account separate from the general assets of such custodian.
“U.S. Treasury Interest Subsidy” means any interest subsidy paid by the United States
Treasury to the District.
“Variable Rate” means a rate of interest applicable to Bonds, other than a fixed rate of interest
which applies to a particular maturity of Bonds, so long as that maturity of Bonds remains Outstanding.
FUNDS AND ACCOUNTS
The District establishes or ratifies the establishment of the following funds and accounts, and the
moneys deposited in such funds and accounts shall be held in trust for the purposes set forth in the Bond
Ordinance:
(a) The Metropolitan St. Louis Sewer District Wastewater Revenue Fund
(the “Revenue Fund”), to be held by the Depository for the account of the District.
(b) The Metropolitan St. Louis Sewer District Wastewater Sinking Fund
(the “Sinking Fund”), to be held by the Depository for the account of the District, and within
said Sinking Fund a Payments Account and a Debt Service Reserve Account.
(c) The Metropolitan St. Louis Sewer District Wastewater Renewal and Extension
Fund (the “Renewal and Extension Fund”), to be held by the Depository for the account of the
District.
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(d) The Metropolitan St. Louis Sewer District Wastewater Rebate Fund
(the “Rebate Fund”), to be held by the Depository for the account of the District, and within said
Rebate Fund a Series 2020B Rebate Account.
(e) The Metropolitan St. Louis Sewer District Wastewater Project Fund
(the “Project Fund”), to be held by the Depository for the account of the District, and within
said Project Fund a Series 2020B Project Account and a Series 2020B Costs of Issuance Account.
Each account listed above shall be held within the fund under which it is created. The District
reserves the right, in its sole discretion, to create additional subaccounts or to abolish any subaccounts
within any account from time to time.
Revenue Fund
The District shall deposit and continue to deposit all Operating Revenues in the Revenue Fund
from time to time as and when received. Moneys in the Revenue Fund shall be applied by the District
from time to time to the following purposes and, prior to the occurrence and continuation of an Event of
Default, in the following order of priority: (1) to pay Expenses of Operation and Maintenance, (2) to
deposit into the Sinking Fund the amounts required by the Bond Ordinance and described below under
the caption “FUNDS AND ACCOUNTS – Sinking Fund,” (3) to make Replenishment Payments to the
Debt Service Reserve Account and to pay to any Credit Facility Provider any amounts due under a Credit
Facility Agreement, including Additional Interest, in accordance with the Bond Ordinance and described
below under the caption “FUNDS AND ACCOUNTS – Sinking Fund – Debt Service Reserve
Account,” (4) to deposit into the Rebate Fund the amounts required by the Bond Ordinance, (5) to pay
any amounts due any Reserve Account Credit Facility Provider pursuant to the Reserve Account Credit
Facility Agreement, (6) to deposit the amounts required to be deposited into the funds and accounts
created by any Series Ordinance authorizing the issuance of Subordinate Bonds, for the purpose of paying
Principal of (whether at maturity, upon mandatory redemption or as otherwise required by a Series
Ordinance relating to Subordinate SRF Bonds) and interest on Subordinate Bonds, making Hedge
Contingency Payments under Senior Hedge Agreements, making Contingency Payments under Senior
Hedge Agreements, making Hedge Payments and making Hedge Contingency Payments under
Subordinate Hedge Agreements, and accumulating reserves for such payments, (7) to make Accumulation
Payments to the Debt Service Reserve Account in accordance with the Bond Ordinance and described
below under the caption “FUNDS AND ACCOUNTS – Sinking Fund – Debt Service Reserve
Account,” and (8) to pay any amounts required to be paid with respect to any Other System Obligations.
In addition to, and after, the deposits described above, the District may from time to time deposit
into the Renewal and Extension Fund any moneys and securities held in the Revenue Fund in excess of
45 days’ estimated Expenses of Operation and Maintenance.
Any money withdrawn from the funds and accounts described in clause (6) above relating to
Subordinate Bonds for use in making payments described in said clause (6) shall be released from the lien
of the Bond Ordinance. If at any time the amounts in any account of the Sinking Fund are less than the
amounts required by the Bond Ordinance, and there are not on deposit in the Renewal and Extension
Fund available moneys sufficient to cure any such deficiency, then the District shall withdraw from the
funds and accounts of the District relating to Subordinate Bonds and deposit in such account of the
Sinking Fund, as the case may be, the amount necessary (or all the moneys in such funds and accounts, if
less than the amount required) to make up such deficiency.
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Sinking Fund
Payments Account-General. Sufficient moneys shall be paid in periodic installments from the
Revenue Fund into the Payments Account for the purpose of paying the Principal of and interest
(excluding Additional Interest) on the Senior Bonds as they become due and payable and for the purpose
of making Hedge Payments under Senior Hedge Agreements. Amounts held in the Payments Account
shall be used solely to pay interest (excluding Additional Interest) and Principal of the Senior Bonds as
the same become due and payable (whether at maturity or upon redemption) and to pay Hedge Payments
under Senior Hedge Agreements when due. Amounts held in the Payments Account shall not be used to
pay Additional Interest.
Interest. Except as otherwise provided in any Series Ordinance authorizing Senior SRF Bonds,
on or before the 30th day preceding each Interest Payment Date for Senior Bonds (or, in the case of
Senior Bonds bearing interest at a Variable Rate, on or before the Business Day preceding each Interest
Payment Date), the District shall deposit in the Payments Account an amount which, together with any
other moneys already on deposit therein and available to make such payment and, in the case of Senior
SRF Bonds, anticipated investment earnings on reserve funds held by a bond trustee relating to such
Senior SRF Bonds, is not less than the interest (excluding Additional Interest) coming due on such Senior
Bonds on such Interest Payment Date. The District shall also deposit and continue to deposit all Hedge
Receipts under Senior Hedge Agreements in the Payments Account from time to time as and when
received.
Principal. Except as otherwise provided in any Series Ordinance authorizing Senior SRF Bonds,
on or before the 30th day preceding each Principal Maturity Date for Senior Bonds, the District shall
deposit in the Payments Account an amount which, together with any other moneys already on deposit
therein and available to make such payment, is not less than the Principal coming due on such Senior
Bonds on such Principal Maturity Date.
Hedge Payments. On or before the 30th day preceding each payment date for Hedge Payments
under Senior Hedge Agreements, the District shall deposit in the Payments Account an amount which,
together with any other moneys already on deposit therein and available to make such payment, is not less
than such Hedge Payments coming due on such payment date.
Application of Moneys in Payments Account. No further payments need be made into the
Payments Account whenever the amount available in the Payments Account, if added to the amount then
in the Debt Service Reserve Account (without taking into account any amount available to be drawn on
any Reserve Account Credit Facility), is sufficient to retire all Senior Bonds then Outstanding and to pay
all unpaid interest accrued and to accrue prior to such retirement. No moneys in the Payments Account
shall be used or applied to the optional purchase or redemption of Senior Bonds prior to maturity unless:
(i) provision shall have been made for the payment of all of the Senior Bonds; or (ii) such moneys are
applied to the purchase and cancellation of Senior Bonds which are subject to mandatory redemption on
the next mandatory redemption date, which falls due within 12 months, such Senior Bonds are purchased
at a price not more than would be required for mandatory redemption, and such Senior Bonds are
cancelled upon purchase; or (iii) such moneys are applied to the purchase and cancellation of Senior
Bonds at a price less than the amount of Principal which would be payable on such Senior Bonds,
together with interest accrued through the date of purchase, and such Senior Bonds are cancelled upon
purchase; or (iv) such moneys are in excess of the then required balance of the Payments Account and are
applied to redeem a part of the Senior Bonds Outstanding on the next succeeding redemption date for
which the required notice of redemption may be given.
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Debt Service Reserve Account. With respect to Senior Bonds which are not Senior Uncovered
Bonds, there shall be deposited into the Debt Service Reserve Account the amounts specified in Series
Ordinances with respect to Senior Bonds. Notwithstanding the foregoing, there shall be no deposit into
the Debt Service Reserve Account with respect to any SRF Bonds or Senior Uncovered Bonds nor shall
the Debt Service Reserve Account secure any SRF Bonds or Senior Uncovered Bonds. After the issuance
of any Senior Bonds, the increase in the amount of the Debt Service Reserve Requirement resulting from
the issuance of such Senior Bonds shall be accumulated, to the extent not covered by deposits from Bond
proceeds or funds on hand, over a period not exceeding 61 months from the date of delivery of such
Senior Bonds in monthly deposits (“Accumulation Payments”), none of which is less than 1/60 of the
amount to be accumulated. The balance of the Debt Service Reserve Account shall be maintained at an
amount equal to the Debt Service Reserve Requirement (or such lesser amount that is required to be
accumulated in the Debt Service Reserve Account in connection with the periodic accumulation to the
Debt Service Reserve Requirement after the issuance of Senior Bonds or upon the failure of the District to
provide a substitute Reserve Account Credit Facility in certain events). There shall be transferred from
the Revenue Fund on a pro rata basis (1) to the Debt Service Reserve Account the amount necessary to
restore, as further described below, the amount of cash and securities in the Debt Service Reserve
Account to an amount equal to the difference between (a) the Debt Service Reserve Requirement (or such
lesser monthly amount that is required to be deposited into the Debt Service Reserve Account after the
issuance of Senior Bonds or upon the failure of the District to provide a substitute Reserve Account
Credit Facility in certain events) and (b) the portion of the required balance of the Debt Service Reserve
Account satisfied by means of a Reserve Account Credit Facility, and (2) to any Reserve Account Credit
Facility Provider the amount necessary to reinstate any Reserve Account Credit Facility which has been
drawn down. Whenever for any reason the amount in the Payments Account is insufficient to pay all
interest or Principal becoming due on the Senior Bonds within the next seven days (or, in the case of
Senior Bonds bearing interest at a Variable Rate, on the next Business Day), the District shall make up
any deficiency by transfers first from the Renewal and Extension Fund and second from the funds and
accounts of the District relating to Subordinate Bonds which are not Subordinate SRF Bonds. Whenever,
on the date that such interest or Principal is due, there are insufficient moneys in the Payments Account
available to make such payment, the District shall, without further instructions, apply so much as may be
needed of the moneys in the Debt Service Reserve Account to prevent default in the payment of such
interest or Principal, with priority to interest payments. Whenever by reason of any such application or
otherwise (other than required Accumulation Payments), the amount remaining to the credit of the Debt
Service Reserve Account is less than the amount then required to be in the Debt Service Reserve Account,
such deficiency shall be remedied by monthly deposits (“Replenishment Payments”) from the Revenue
Fund, to the extent funds are available in the Revenue Fund for such purpose after all required transfers
set forth above have been made.
The District may elect to satisfy in whole or in part the Debt Service Reserve Requirement by
means of a Reserve Account Credit Facility, subject to the following requirements: (A) the Reserve
Account Credit Facility Provider must have a credit rating issued by a Rating Agency not less than the
then current Rating on the related series of Senior Bonds (or, in the case of a series of Senior Bonds
supported by a Credit Facility, the underlying rating on such Senior Bonds); (B) the District shall not
secure any obligation to the Reserve Account Credit Facility Provider by a lien equal to or superior to the
lien granted to the related series of Senior Bonds; (C) each Reserve Account Credit Facility shall have a
term of at least one (1) year (or, if less, the remaining term of the related series of Senior Bonds) and shall
entitle the District to draw upon or demand payment and receive the amount so requested in immediately
available funds on the date of such draw or demand; (D) the Reserve Account Credit Facility shall permit
a drawing by the District for the full stated amount in the event (i) the Reserve Account Credit Facility
expires or terminates for any reason prior to the final maturity of the related series of Senior Bonds, and
(ii) the District fails to satisfy the Debt Service Reserve Requirement by the deposit to the Debt Service
Reserve Account of cash, obligations, a substitute Reserve Account Credit Facility, or any combination
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thereof, on or before the date of such expiration or termination; (E) if the Rating issued by the Rating
Agency to the Reserve Account Credit Facility Provider is withdrawn or reduced below the Rating
assigned to the related series of Senior Bonds immediately prior to such action by the Rating Agency, the
District shall provide a substitute Reserve Account Credit Facility within sixty (60) days after such rating
change, and, if no substitute Reserve Account Credit Facility is obtained by such date, shall fund the Debt
Service Reserve Requirement in not more than twenty-four (24) equal monthly deposits commencing not
later than the first day of the month immediately succeeding the date representing the end of such sixty
(60) day period; (F) if the Reserve Account Credit Facility Provider commences any insolvency
proceedings or is determined to be insolvent or fails to make payments when due on its obligations, the
District shall provide a substitute Reserve Account Credit Facility within sixty (60) days thereafter, and, if
no substitute Reserve Account Credit Facility is obtained by such date, shall fund the Debt Service
Reserve Requirement in not more than twenty-four (24) equal monthly deposits commencing not later
than the first day of the month immediately succeeding the date representing the end of such sixty (60)
day period; and (G) the prior written consent of the Credit Facility Provider, as to the provider and the
structure of the Reserve Account Credit Facility, shall be obtained by the District. If the events described
in either clauses (E) or (F) above occur, the District shall not relinquish the Reserve Account Credit
Facility at issue until after the Debt Service Reserve Requirement is fully satisfied by the provision of
cash, obligations, or a substitute Reserve Account Credit Facility or any combination thereof. Any
amount received from the Reserve Account Credit Facility shall be deposited directly into the Payments
Account, and such deposit shall constitute the application of amounts in the Debt Service Reserve
Account. Repayment of any draw-down on the Reserve Account Credit Facility (other than repayments
which reinstate the Reserve Account Credit Facility) and any interest or fees due the Reserve Account
Credit Facility Provider under such Reserve Account Credit Facility shall be secured by a lien on the
Pledged Revenues subordinate to payments into the Sinking Fund and the Rebate Fund and payments to
any Credit Facility Provider securing Senior Bonds.
Any such Reserve Account Credit Facility shall be pledged to the benefit of the owners of all of
the Senior Bonds. The District reserves the right, if it deems it necessary in order to acquire such a
Reserve Account Credit Facility, to amend the Bond Ordinance without the consent of any of the owners
of the Bonds in order to grant to the Reserve Account Credit Facility Provider such additional rights as it
may demand, provided that such amendment shall not, in the written opinion of Bond Counsel filed with
the District, impair or reduce the security granted to the owners of Senior Bonds or any of them.
The Series 2020B Bonds are Senior Uncovered Bonds and therefore are not secured by the
Debt Service Reserve Account.
Renewal and Extension Fund
In addition to the deposits to be made to the Renewal and Extension Fund pursuant to the Bond
Ordinance, the District shall deposit in the Renewal and Extension Fund all termination payments
received under any Hedge Agreements. All sums accumulated and retained in the Renewal and Extension
Fund shall be used first to prevent default in the payment of interest on or Principal of the Senior Bonds
when due and then shall be applied by the District from time to time, as and when the District shall
determine, to the following purposes and, prior to the occurrence and continuation of an Event of Default,
in the order of priority determined by the District in its sole discretion: (a) for the purposes for which
moneys held in the Revenue Fund may be applied under the Bond Ordinance, (b) to pay any amounts
which may then be due and owing under any Hedge Agreement (including termination payments, fees,
expenses, and indemnity payments), (c) to pay any governmental charges and assessments against the
System or any part thereof which may then be due and owing, (d) to make acquisitions, betterments,
extensions, repairs, or replacements or other capital improvements (including the purchase of equipment)
to the System deemed necessary by the District (including payments under contracts with vendors,
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suppliers, and contractors for the foregoing purposes), (e) to acquire Senior Bonds by redemption or by
purchase in the open market at a price not exceeding the callable price as provided and in accordance with
the terms and conditions of the Bond Ordinance, which Senior Bonds may be any of the Senior Bonds,
prior to their respective maturities, and when so used for such purposes the moneys shall be withdrawn
from the Renewal and Extension Fund and deposited into the Payments Account for the Senior Bonds to
be so redeemed or purchased and (f) for any other purpose of the District. Payments for the purposes set
forth in clause (e) of the preceding sentence are not “required payments” for purposes of the District’s
rate covenant set forth in the Bond Ordinance.
Rebate Fund
The District shall calculate, from time to time, as required in order to comply with the provisions
of Section 148(f) of the Code, the amounts required to be rebated (including penalties) to the United
States and shall deposit or cause to be deposited into the Rebate Fund any and all of such amounts
promptly following a determination of any such amount.
The District shall direct the Depository of the Rebate Fund to keep all moneys held therein
invested in Permitted Investments. To the extent and at the times required in order to comply with
Section 148(f) of the Code, the District may withdraw funds from the Rebate Fund for the purpose of
making rebate payments (including penalties) to the United States as required by Section 148(f) of the
Code. Except as otherwise specifically provided in the Bond Ordinance, moneys in the Rebate Fund may
not be withdrawn from the Rebate Fund for any other purpose.
All earnings on investments held in the Rebate Fund shall be retained in the Rebate Fund and
shall become part of the Rebate Fund. Moneys held in the Rebate Fund, including the Investment
Earnings thereon, if any, shall not be subject to a pledge in favor of the owners of the Bonds under the
Bond Ordinance and may not be used to pay amounts due on the Bonds or under any Credit Facility
Agreements or Hedge Agreements or amounts required for the operation, maintenance, enlargement, or
extension of the System.
Project Fund
The District shall establish within the Project Fund a separate account for each Project. Except as
may be otherwise provided in the Series Ordinance authorizing the issuance of SRF Bonds, moneys in the
Project Fund shall be held by the Depository, or such other bank as may from time to time be designated
by the District, and applied to the payment of the Costs of the Project, or for the repayment of advances
made for that purpose in accordance with and subject to the provisions and restrictions set forth in the
Bond Ordinance. The District covenants that it will not cause or permit to be paid from the Project Fund
any sums except in accordance with such provisions and restrictions; provided, however, that any moneys
in the Project Fund not presently needed for the payment of current obligations during the course of
construction may be invested in Permitted Investments maturing not later than (i) the date upon which
such moneys will be needed according to a schedule of anticipated payments from the Project Fund filed
with the District by the Consultant in charge of the Project or (ii) in the absence of such schedule, 36
months from the date of purchase, in either case upon written direction of the District. Any such
investments shall be held by the Depository, in trust, for the account of the Project Fund until maturity or
until sold, and at maturity or upon such sale the proceeds received therefrom including accrued interest
and premium, if any, shall be immediately deposited by the Depository in the Project Fund and shall be
disposed of in the manner and for the purposes provided in the Bond Ordinance.
At such time as the Depository is furnished with a certificate from the Chief Financial Officer
stating that all Costs of Issuance have been paid, and in any case not later than 6 months after the date of
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issuance of the Series 2020B Bonds, the Depository shall transfer any remaining proceeds of the Series
2020B Bonds in the Series 2020B Costs of Issuance Account to the Series 2020B Project Account of the
Project Fund.
Moneys in each separate account in the Project Fund shall be used for the payment or
reimbursement of the Costs of the Project for which such account was established as provided in the Bond
Ordinance.
All payments from the Project Fund shall be made upon draft except as provided in the Bond
Ordinance, signed by an officer of the District properly authorized to sign on its behalf, but before such
officer shall sign any such draft, there shall be filed with the Depository a requisition for such payment, in
substantially the form attached as an exhibit to the Bond Ordinance, stating each amount to be paid and
the name of the person to whom payment is due, and certifying:
(a) That an obligation in the stated amount has been incurred by the District and that
the same is a proper charge against the Project Fund and has not been paid and stating that the bill
or statement of account for such obligation, or a copy thereof, is on file in the office of the
District;
(b) That the signer has no notice of any vendor’s, mechanic’s, or other liens or rights
to liens, chattel mortgages, or conditional sales contracts which should be satisfied or discharged
before such payment is made; and
(c) That such requisition contains no item representing payment on account of any
retained percentages which the District is, at the date of any such certificate, entitled to retain.
In the event the United States government or government of the State, or any department,
authority, or agency of either, agrees to allocate moneys to be used to defray any part of the Cost of any
Project upon the condition that the District appropriate a designated amount of moneys for such purpose,
and it is required of the District that its share of such cost be deposited in a special account, the District
shall have the right to withdraw any sum so required from the Project Fund by appropriate transfer and
deposit the same in a special account for that particular Project; provided, however, that all payments
thereafter made from such special account shall be made only in accordance with the requirements set
forth in the Bond Ordinance.
Withdrawals for investment purposes only may be made by the Depository to comply with
written directions from the District without any requisition other than such direction.
For each series of Bonds, the District shall, when a Project has been completed, and may, when a
Project has been substantially completed, file with the Depository a certificate signed by the Chief
Financial Officer estimating what portion of the funds remaining in the separate account relating to such
Project will be required by the District for the payment or reimbursement of the Costs of such Project.
The Chief Financial Officer shall attach to his or her certificate a certificate of the supervising engineer
certifying that such Project has been completed or substantially completed, as the case may be, in
accordance with the plans and specifications therefor and approving the estimates of the Chief Financial
Officer with respect to the portion of funds in the account required for Costs of the Project. Such funds
that will not be used shall be (1) transferred to the Payments Account and used to redeem Bonds of the
related series on the next redemption date or to pay Principal of such Bonds on the next Principal
Maturity Date, or (2) transferred to the Payments Account and used to pay interest on Bonds of the related
series, provided that the District shall first obtain an opinion of Bond Counsel to the effect that, under
existing law, the application of such moneys to pay interest on such Bonds (a) is allowed under State law,
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and (b) if such Bonds are Tax-Exempt Bonds, will not, by itself and without more, adversely affect the
exclusion from gross income for federal income tax purposes of interest payable on such Bonds. When
all moneys have been withdrawn or transferred from any separate account within the Project Fund in
accordance with the provisions of the Bond Ordinance, such separate account shall terminate and cease to
exist.
DEPOSITS AND INVESTMENTS
All moneys in the funds and accounts established under the Bond Ordinance, except those funds
and accounts created by a Series Ordinance in connection with the issuance of SRF Bonds, shall be held
by the District in one or more Depositories qualified for use by the District. Uninvested moneys shall, at
least to the extent not guaranteed by the Federal Deposit Insurance Corporation, be secured to the fullest
extent required by the laws of the State for the security of public funds.
Moneys in the funds and accounts established under the Bond Ordinance, except those funds and
accounts created by a Series Ordinance in connection with the issuance of SRF Bonds, shall be invested
and reinvested in Permitted Investments bearing interest at the highest rates reasonably available (except
to the extent that a restricted yield is required or advisable under Section 148 of the Code) and containing
such maturities as are deemed suitable by the District; provided, however, that without the prior written
consent of the Credit Facility Provider, investments of moneys in the Debt Service Reserve Account shall
not have maturities extending beyond five years. Investment of moneys in funds and accounts created by
a Series Ordinance in connection with the issuance of SRF Bonds shall be as set forth in such Series
Ordinance.
Investment Earnings in each fund and account (except the Debt Service Reserve Account) shall
be retained therein. Investment Earnings from the investment of moneys in the Debt Service Reserve
Account shall be retained in the Debt Service Reserve Account at all times the balance is less than the
Debt Service Reserve Requirement; thereafter and at all times the balance of the Debt Service Reserve
Account is equal to or greater than the Debt Service Reserve Requirement, such Investment Earnings
shall be deposited in the Payments Account.
The Series Ordinance authorizing the issuance of any Subordinate Bonds shall specify any
maturity limitations and allocations of Investment Earnings on investments of moneys in the funds and
accounts relating to such Subordinate Bonds.
Moneys in each of such funds shall be accounted for as a separate and special fund apart from all
other District funds, provided that investments of moneys therein may be made in a pool of investments
together with other moneys of the District so long as sufficient Permitted Investments in such pool, not
allocated to other investments of contractually or legally limited duration, are available to meet the
requirements of the foregoing provisions.
All investments made under the Bond Ordinance shall, for purposes of the Bond Ordinance, be
valued at fair market value on the 45th day (or the next succeeding Business Day if such 45th day is not a
Business Day) prior to each Interest Payment Date. The valuation of the investment of moneys in funds
and accounts created by a Series Ordinance in connection with the issuance of SRF Bonds shall be as set
forth in such Series Ordinance.
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MAINTENANCE OF SYSTEM
The District covenants that it will enforce reasonable rules and regulations governing the System
and the operation thereof, that it will operate the System in an efficient and economical manner and will
at all times maintain the System in good repair and in sound operating condition, that it will make all
necessary repairs, renewals, and replacements to the System, and that it will comply with all valid acts,
rules, regulations, orders, and directions of any legislative, executive, administrative, or judicial body
applicable to the System and the District’s operation thereof.
RATE COVENANT
See the heading “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Rate
Covenant.”
INSURANCE
With respect to the System, the District will carry adequate public liability, fidelity and property
insurance, such as is maintained by similar utilities as the System.
The District shall indemnify itself against the usual hazards incident to the construction of any
Project, and without in any way limiting the generality of the above, shall: (a) require each construction
contractor and each subcontractor to furnish a bond, or bonds, of such type and in amounts adequate to
assure the faithful performance of their contracts and the payment of all bills and claims for labor and
material arising by virtue of such contracts; and (b) require each construction contractor or the
subcontractor to maintain at all times until the completion and acceptance of the Project adequate
compensation insurance for all of their employees and adequate public liability and property damage
insurance for the full and complete protection of the District from any and all claims of every kind and
character which may arise by virtue of the operations under their contracts, whether such operations be by
themselves or by anyone directly or indirectly for them, or under their control.
All such policies shall be for the benefit of and made payable to the District and shall be on
deposit with the District; provided, however, the District may elect to be a self-insurer with respect to any
risks for which insurance is required under the Bond Ordinance. The cost of such insurance may be paid
as an Expense of Operation and Maintenance.
All moneys received for losses under any such insurance policies, except public liability policies,
are pledged by the District as security for the Bonds until and unless such proceeds are paid out in making
good the loss or damage in respect of which such proceeds are received, either by repairing the property
damaged or replacing the property destroyed or by depositing the same in the Renewal and Extension
Fund. Adequate provision for making good such loss and damage shall be made within 120 days from
the date of the loss. Insurance proceeds not used in making such provision shall be deposited in the
Renewal and Extension Fund on the expiration of such 120-day period. Such insurance proceeds shall be
payable to the District by appropriate clause to be attached to or inserted in the policies.
NO SALE, LEASE OR ENCUMBRANCE; EXCEPTIONS
Except as expressly permitted in the Bond Ordinance, the District irrevocably covenants, binds,
and obligates itself not to sell, lease, encumber, or in any manner dispose of the System as a whole or in
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part until all of the Bonds and all interest thereon shall have been paid in full or provision for payment has
been made in accordance with the Bond Ordinance.
The District shall have and reserves the right to sell, lease, or otherwise dispose of any of the
property comprising a part of the System in the following manner, if any one of the following conditions
exists: (i) such property is not necessary for the operation of the System; (ii) such property is not useful
in the operation of the System; (iii) such property is not profitable in the operation of the System; or
(iv) the disposition of such property will be advantageous to the System and will not adversely affect the
security for the Bondholders. All proceeds of any such sale, lease or other disposition shall be deposited
in the Renewal and Extension Fund.
Prior to any such sale, lease or other disposition, there shall be filed with the District: (i) an
opinion of Bond Counsel to the effect that such sale, lease or other disposition will not adversely affect
the extent to which interest on any Tax-Exempt Bonds is excluded from gross income for federal income
tax purposes (provided that such opinion shall not be required if the Chief Financial Officer determines
that such portion of the System was not financed with the proceeds of any Tax-Exempt Bonds); and
(ii) an opinion of a Consultant expressing the view that such sale, lease or other disposition will not result
in any diminution of Net Operating Revenues to the extent that in any future Fiscal Year the Net
Operating Revenues and Investment Earnings will be less than (A) 125% of the Maximum Annual Debt
Service Requirement on all Senior Bonds to be Outstanding after such sale, lease or other disposition or
(B) 115% of the Maximum Annual Debt Service Requirement on all Bonds to be Outstanding after such
sale, lease or other disposition. In reaching this conclusion, the Consultant shall take into consideration
such factors as the Consultant may deem significant, including (i) anticipated diminution of Operating
Revenues, (ii) anticipated increase or decrease in Expenses of Operation and Maintenance attributable to
the sale, lease or other disposition, and (iii) reduction in the annual Debt Service Requirement attributable
to the application of the proceeds of such sale, lease or other disposition to the provision for payment of
Bonds theretofore Outstanding. Such sale, lease or other disposition may include a partial interest in a
sanitary sewer facility owned or to be owned in whole or in part by the District.
The District reserves the right to transfer the System as a whole to any political subdivision or
authority or agency of one or more political subdivisions of the State to which may be delegated the legal
authority to own and operate the System, or any portion thereof, on behalf of the public, and which
undertakes in writing, filed with the District, the District’s obligations under the Bond Ordinance,
provided that there shall be first filed with the District: (i) an opinion of Bond Counsel to the effect that
such sale will not adversely affect the extent to which interest on any Tax-Exempt Bonds is excluded
from gross income for federal income tax purposes; and (ii) an opinion of a Consultant expressing the
view that such transfer will not result in any diminution of Net Operating Revenues to the extent that in
any future Fiscal Year the Net Operating Revenues and Investment Earnings will be less than (A) 125%
of the Maximum Annual Debt Service Requirement on all Senior Bonds to be Outstanding after such
transfer or (B) 115% of the Maximum Annual Debt Service Requirement on all Bonds to be Outstanding
after such transfer. In reaching this conclusion, the Consultant shall take into consideration such factors
as the Consultant may deem significant, including any rate schedule adopted by the transferee political
subdivision, authority, or agency.
Upon receipt of an opinion of Bond Counsel to the effect that such action will not adversely
affect the extent to which interest on any Tax-Exempt Bonds is excluded from gross income for federal
income tax purposes, the District may enter into such management contracts and sale/leaseback
agreements as the District may deem appropriate, and such management contracts and sale/leaseback
agreements shall not constitute a sale, lease or other disposition within the meaning of the Bond
Ordinance.
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ENFORCEMENT OF CHARGES AND CONNECTIONS
Except as otherwise determined in accordance with District policy and provided that such action
or inaction will not materially impair the rights of the Bondholders, the District shall compel the prompt
payment of rates, fees, and charges imposed for service rendered on every lot or parcel connected with the
System, and to that end will vigorously enforce all of the provisions of any resolution or ordinance of the
District having to do with sanitary sewer connections and with sanitary sewer charges, and all of the
rights and remedies permitted the District under law. The District expressly covenants and agrees that
such charges will be enforced and promptly collected to the full extent permitted by law, including the
requirement for the making of reasonable deposits by customers of the System to the extent required by
the District and the securing of injunctions against the disposition of sewage or industrial waste into the
System by any premises delinquent in the payment of such charges.
None of the facilities or services afforded by the System will be furnished to any user without a
reasonable charge being made therefor.
ANNUAL BUDGET
The District agrees to adopt an Annual Budget for the System for each Fiscal Year in compliance
with the Charter and the rate covenants as stated in the Bond Ordinance.
BOOKS AND AUDITS
The District will install and maintain proper books, records and accounts for the System
according to standard accounting practices for the operation of facilities comparable to the System.
Annual audits will be made by a certified public accountant.
SENIOR AND SUBORDINATE LIEN BONDS
No Prior Lien Bonds nor Senior Bonds Except as Permitted in the Bond Ordinance
All Senior Bonds shall have complete parity of lien on the Pledged Revenues despite the fact that
any of the Senior Bonds may be delivered at an earlier date than any other of the Senior Bonds. The
District may issue Senior Bonds in accordance with the Bond Ordinance, but the District shall issue no
other obligations of any kind or nature payable from or enjoying a lien on the Pledged Revenues or any
part thereof having priority over or, except as permitted in the Bond Ordinance, on a parity with the
Senior Bonds.
Refunding Bonds
Any or all of the Senior Bonds may be refunded prior to maturity, upon redemption in accordance
with their terms, or with the consent of the owners of such Senior Bonds, and the refunding Bonds so
issued shall constitute Senior Bonds, if:
(a) The District shall have obtained a report from an Independent Certified Public
Accountant or a Financial Advisor demonstrating that the refunding will reduce the total debt
service payments on Outstanding Senior Bonds on a present value basis.
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(b) As an alternative to, and in lieu of, satisfying the requirements of paragraph
(a) above, all Outstanding Senior Bonds are being refunded under arrangements which
immediately result in making provision for the payment of the refunded Bonds.
(c) The requirements described in paragraphs (e) and (g) below under the caption
“SENIOR AND SUBORDINATE LIEN BONDS – Senior Bonds”) are met with respect to
such refunding Bonds.
Senior Bonds
Bonds (including refunding Bonds which do not meet the requirements of the Bond Ordinance
described above under the caption “SENIOR AND SUBORDINATE LIEN BONDS – Refunding
Bonds”) may also be issued on a parity with the Outstanding Senior Bonds and any Senior Bonds
hereafter issued pursuant to a Series Ordinance, and the Bonds so issued shall constitute Senior Bonds, if
all of the following conditions are satisfied:
(a) There shall have been filed with the District either:
(i) a report by an Independent Certified Public Accountant to the effect that
the historical Net Operating Revenues and Investment Earnings for a period of 12
consecutive months of the most recent 18 consecutive months prior to the issuance of the
proposed Senior Bonds were equal to at least (A) 125% of the Maximum Annual Debt
Service Requirement on all Senior Bonds which will be Outstanding immediately after
the issuance of the proposed Senior Bonds and (B) 115% of the Maximum Annual Debt
Service Requirement on all Bonds which will be Outstanding immediately after the
issuance of the proposed Senior Bonds, or
(ii) a report by a Consultant to the effect that the forecasted Net Operating
Revenues and Investment Earnings for each Fiscal Year in the Forecast Period are
expected to equal at least (A) 125% of the Maximum Annual Debt Service Requirement
on all Senior Bonds which will be Outstanding immediately after the issuance of the
proposed Senior Bonds and (B) 115% of the Maximum Annual Debt Service
Requirement on all Bonds which will be Outstanding immediately after the issuance of
the proposed Senior Bonds.
The report by the Independent Certified Public Accountant that is required by the Bond
Ordinance and described in subparagraph (i) above may contain pro forma adjustments to historical Net
Operating Revenues equal to 100% of the increased annual amount attributable to any revision in the
schedule of rates, fees, and charges for the services, facilities, and commodities furnished by the System,
adopted prior to the date of delivery of the proposed Senior Bonds and not fully reflected in the historical
Net Operating Revenues actually received during such 12-month period. Such pro forma adjustments
shall be based upon a report of a Consultant as to the amount of Operating Revenues which would have
been received during such 12-month period had the new rate schedule been in effect throughout such 12-
month period.
The report by the Consultant that is required by the Bond Ordinance and described in
subparagraph (ii) above may not take into consideration any rate schedule to be imposed in the future,
unless such rate schedule has been adopted by ordinance of the Governing Body. Such rate schedule
adopted by ordinance may contain, however, future effective dates.
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(b) The District shall have received, at or before issuance of the Senior Bonds, a
report from an Independent Certified Public Accountant to the effect that the payments required
to be made into each account of the Sinking Fund have been made and the balance in each
account of the Sinking Fund is not less than the balance required by the Bond Ordinance as of the
date of issuance of the proposed Senior Bonds.
(c) Except with respect to Senior SRF Bonds, the Series Ordinance authorizing the
proposed Senior Bonds must either (a) state that the proposed Senior Bonds are Senior
Uncovered Bonds and thus not secured by the Debt Service Reserve Account or (b) require (i)
that the amount to be accumulated and maintained in the Debt Service Reserve Account be
increased to not less than 100% of the Debt Service Reserve Requirement computed on a basis
which includes all Senior Bonds which will be Outstanding immediately after the issuance of the
proposed Senior Bonds and (ii) that the amount of such increase be deposited in such account on
or before the date and at least as fast as specified in the Bond Ordinance.
(d) The Series Ordinance authorizing the proposed Senior Bonds must require the
proceeds of such proposed Senior Bonds to be used solely to make capital improvements to the
System, to fund interest on the proposed Senior Bonds, to acquire existing or proposed sanitary
sewer utilities, to refund other obligations issued for such purposes (whether or not such
refunding Bonds satisfy the requirements of the Bond Ordinance described above under the
caption “SENIOR AND SUBORDINATE LIEN BONDS – Refunding Bonds”), and to pay
expenses incidental thereto and to the issuance of the proposed Senior Bonds.
(e) If any Senior Bonds would bear interest at a Variable Rate, the Series Ordinance
under which such Senior Bonds are issued shall provide a maximum rate of interest per annum
which such Senior Bonds may bear.
(f) The Chief Officer shall have certified, by written certificate dated as of the date
of issuance of the Senior Bonds, that the District is in compliance with all requirements of the
Bond Ordinance.
(g) The District shall have received an opinion of Bond Counsel, dated as of the date
of issuance of the Senior Bonds, to the effect that the Series Ordinance and any related
Supplemental Ordinance authorizing the issuance of Senior Bonds have been duly adopted by the
District.
Subordinate Bonds
Bonds may also be issued on a subordinate basis to the Outstanding Senior Bonds and any Senor
Bonds hereafter issued pursuant to a Series Ordinance, and the Bonds so issued shall constitute
Subordinate Bonds, if all of the following conditions are satisfied:
(a) There shall have been filed with the District either:
(i) a report by an Independent Certified Public Accountant to the effect that
the historical Net Operating Revenues and Investment Earnings for a period of 12
consecutive months of the most recent 18 consecutive months prior to the issuance of the
proposed Subordinate Bonds were equal to at least (A) 125% of the Maximum Annual
Debt Service Requirement on all Senior Bonds which will be Outstanding immediately
after the issuance of the proposed Subordinate Bonds and (B) 115% of the Maximum
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Annual Debt Service Requirement on all Bonds which will be Outstanding immediately
after the issuance of the proposed Subordinate Bonds, or
(ii) a report by a Consultant to the effect that the forecasted Net Operating
Revenues and Investment Earnings for each Fiscal Year in the Forecast Period are
expected to equal at least (A) 125% of the Maximum Annual Debt Service Requirement
on all Senior Bonds which will be Outstanding immediately after the issuance of the
proposed Subordinate Bonds and (B) 115% of the Maximum Annual Debt Service
Requirement on all Bonds which will be Outstanding immediately after the issuance of
the proposed Subordinate Bonds.
The report by the Independent Certified Public Accountant that is required by the Bond
Ordinance and described in subparagraph (i) above may contain pro forma adjustments to historical Net
Operating Revenues equal to 100% of the increased annual amount attributable to any revision in the
schedule of rates, fees, and charges for the services, facilities, and commodities furnished by the System,
adopted prior to the date of delivery of the proposed Subordinate Bonds and not fully reflected in the
historical Net Operating Revenues actually received during such 12-month period. Such pro forma
adjustments shall be based upon a report of a Consultant as to the amount of Operating Revenues which
would have been received during such 12-month period had the new rate schedule been in effect
throughout such 12-month period.
The report by the Consultant that is required by the Bond Ordinance and described in
subparagraph (ii) above may not take into consideration any rate schedule to be imposed in the future,
unless such rate schedule has been adopted by ordinance of the Governing Body. Such rate schedule
adopted by ordinance may contain, however, future effective dates.
(b) The Series Ordinance authorizing the Subordinate Bonds shall provide that such
Subordinate Bonds shall be junior and subordinate in lien and right of payment to all Senior
Bonds Outstanding at any time.
(c) The Series Ordinance authorizing the Subordinate Bonds shall establish funds
and accounts for the moneys to be used to pay debt service on the Subordinate Bonds, to pay
Hedge Payments under Subordinate Hedge Agreements, and to provide reserves therefor.
(d) The requirements of the Bond Ordinance described in paragraphs (d), (e) and (g)
above under the caption “SENIOR AND SUBORDINATE LIEN BONDS – Senior Bonds” are
met with respect to such Subordinate Bonds (as if such Bonds constituted Senior Bonds).
In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation,
reorganization, or other similar proceedings in connection therewith, relative to the District or to its
creditors, as such, or to its property, and in the event of any proceedings for voluntary liquidation,
dissolution, or other winding up of the District, whether or not involving insolvency or bankruptcy, the
owners of all Senior Bonds then Outstanding and related Qualified Hedge Providers shall be entitled to
receive payment in full of all Principal and interest due on all such Senior Bonds in accordance with the
provisions of the Bond Ordinance and related Hedge Payments in accordance with the provisions of the
Senior Hedge Agreements before the owners of the Subordinate Bonds or related Qualified Hedge
Providers are entitled to receive any payment from the Pledged Revenues or the amounts held in the funds
and accounts created under the Bond Ordinance on account of Principal of, premium, if any, or interest on
the Subordinate Bonds or Hedge Payments under Subordinate Hedge Agreements.
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In the event that any of the Subordinate Bonds are declared due and payable before their
expressed maturities because of the occurrence of an Event of Default (under circumstances when the
provisions of preceding paragraph are not be applicable), no owners of Subordinate Bonds or related
Qualified Hedge Providers may receive any accelerated payment from the Pledged Revenues or the
amounts held in the funds and accounts created under the Bond Ordinance of Principal of, premium, if
any, or interest on the Subordinate Bonds or Hedge Payments under Subordinate Hedge Agreements,
until the owners of all Senior Bonds Outstanding and related Qualified Hedge Providers have received
timely payment when due of all Principal of and interest on all such Senior Bonds and all Hedge
Payments under related Senior Hedge Agreements.
If any Event of Default shall have occurred and be continuing (under circumstances when the
provisions of second preceding paragraph are not applicable), the owners of all Senior Bonds then
Outstanding and related Qualified Hedge Providers shall be entitled to receive payment in full of all
Principal and interest then due on all such Senior Bonds and all Hedge Payments under related Senior
Hedge Agreements before the owners of the Subordinate Bonds or related Qualified Hedge Providers are
entitled to receive any Payment from the Pledged Revenues or the amounts held in the funds and accounts
created under the Bond Ordinance of Principal of, premium, if any, or interest on the Subordinate Bonds
or Hedge Payments under Subordinate Hedge Agreements.
The obligations of the District to pay to the owners of the Subordinate Bonds the Principal of,
premium, if any, and interest thereon in accordance with their terms and to pay Hedge Payments to
related Qualified Hedge Providers in accordance with the terms of the Subordinate Hedge Agreements
shall be unconditional and absolute. Nothing in the Bond Ordinance shall prevent the owners of the
Subordinate Bonds or related Qualified Hedge Providers from exercising all remedies otherwise permitted
by applicable law or under the Bond Ordinance or the Subordinate Hedge Agreements upon default
thereunder, subject to the rights contained in the Bond Ordinance of the owners of Senior Bonds and
related Qualified Hedge Providers to receive cash, property, or securities otherwise payable or deliverable
to the owners of the Subordinate Bonds and related Qualified Hedge Providers, and any Series Ordinance
authorizing Subordinate Bonds may provide that, insofar as a trustee or paying agent for the Subordinate
Bonds is concerned, the foregoing provisions shall not prevent the application by such trustee or paying
agent of any moneys deposited with such trustee or paying agent for the purpose of the payment of or on
account of the Principal of, premium, if any, and interest on such Subordinate Bonds and Hedge
Payments under Subordinate Hedge Agreements if such trustee or paying agent did not have knowledge
at the time of such application that such payment was prohibited by the foregoing provisions.
Any series of Subordinate Bonds and related Subordinate Hedge Agreements may have such rank
or priority with respect to any other series of Subordinate Bonds and related Subordinate Hedge
Agreements as may be provided in the Series Ordinance authorizing such series of Subordinate Bonds
and may contain such other provisions as are not in conflict with the provisions of the Bond Ordinance.
Accession of Subordinate Bonds and Related Subordinate Hedge Agreements to Senior Status
By proceedings authorizing all or any Subordinate Bonds, the District may provide for the
accession of such Subordinate Bonds and related Subordinate Hedge Agreements to the status of
complete parity with the Senior Bonds and related Senior Hedge Agreements if, as of the date of
accession, the conditions of the Bond Ordinance described in subparagraphs (a), (e) and (f) above under
the caption “SENIOR AND SUBORDINATE LIEN BONDS – Senior Bonds” are satisfied, on a basis
which includes all Outstanding Senior Bonds and such Subordinate Bonds, and if on the date of
accession:
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(a) the Debt Service Reserve Account contains an amount equal to the Debt Service
Reserve Requirement computed on a basis which includes all Outstanding Senior Bonds and such
Subordinate Bonds (but which excludes, in the case of both Outstanding Senior Bonds and such
Subordinate Bonds, any SRF Bonds and Senior Uncovered Bonds); and
(b) the Payments Account contains the amount which would have been required to
be accumulated therein on the date of accession if the Subordinate Bonds had originally been
issued as Senior Bonds.
Credit Facilities and Hedge Agreements
In connection with the issuance of any Bonds under the Bond Ordinance, the District may obtain
or cause to be obtained one or more Credit Facilities providing for payment of all or a portion of the
Principal of, premium, if any, or interest due or to become due on such Bonds, providing for the purchase
of such Bonds by the Credit Facility Provider, or providing funds for the purchase of such Bonds by the
District. In connection therewith the District shall enter into Credit Facility Agreements with such Credit
Facility Providers providing for, among other things, (i) the payment of fees and expenses to such Credit
Facility Providers for the issuance of such Credit Facilities; (ii) the terms and conditions of such Credit
Facilities and the Bonds affected thereby; and (iii) the security, if any, to be provided for the issuance of
such Credit Facilities. The District may secure any Credit Facility by an agreement providing for the
purchase of the Bonds secured thereby with such adjustments to the rate of interest, method of
determining interest, maturity, or redemption provisions as are specified by the District in the applicable
Series Ordinance. The District may in a Credit Facility Agreement agree to directly reimburse such
Credit Facility Provider for amounts paid under the terms of such Credit Facility, together with interest
thereon; provided, however, that no Reimbursement Obligation shall be created for purposes of the Bond
Ordinance until amounts are paid under such Credit Facility. Any such Reimbursement Obligation shall
be deemed to be a part of the Bonds to which the Credit Facility relates which gave rise to such
Reimbursement Obligation, and references to Principal and interest payments with respect to such Bonds
shall include Principal and interest (except for Additional Interest and Principal amortization requirements
with respect to the Reimbursement Obligation that are more accelerated than the amortization
requirements for the related Bonds, without acceleration) due on the Reimbursement Obligation incurred
as a result of payment of such Bonds with the Credit Facility. All other amounts payable under the Credit
Facility Agreement (including any Additional Interest and Principal amortization requirements with
respect to the Reimbursement obligation that are more accelerated than the amortization requirements for
the related Bonds, without acceleration) shall be fully subordinate to the payment of debt service on the
related class of Bonds. Any such Credit Facility shall be for the benefit of and secure such Bonds or
portion thereof as specified in the applicable Series Ordinance.
In connection with the issuance of any Bonds or at any time thereafter so long as such Bonds
remain Outstanding, the District may enter into Hedge Agreements with Qualified Hedge Providers, and
no other providers, with respect to any Bonds. The District shall authorize the execution, delivery, and
performance of each Hedge Agreement in a Supplemental Ordinance, in which it shall designate the
related Hedged Bonds. The District’s obligation to pay Hedge Payments may be secured by a pledge of,
and lien on, the Pledged Revenues on a parity with the lien created by the Bond Ordinance to secure the
related Hedged Bonds, or may be subordinated in lien and right of payment to the payment of the Bonds,
as determined by the District.
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Other Obligations
The District expressly reserves the right, at any time, to adopt one or more other bond ordinances
and reserves the right, at any time, to issue any other obligations not secured by the amounts pledged
under the Bond Ordinance.
DEFAULT AND ENFORCEMENT
Events of Default
An “Event of Default” shall mean the occurrence of any one or more of the following:
(a) failure to pay the Principal or redemption price of any Bond when the same shall become
due and payable, either at maturity or by proceedings for redemption or otherwise; or
(b) failure to pay any installment of interest on any Bond when and as such installment of
interest shall become due and payable; or
(c) default shall be made by the District in the performance of any obligation in respect to the
Debt Service Reserve Account and such default shall continue for 30 days thereafter; or
(d) the District shall (1) admit in writing its inability to pay its debts generally as they
become due, (2) file a petition in bankruptcy or take advantage of any insolvency act, (3) make an
assignment for the benefit of its creditors, (4) consent to the appointment of a receiver of itself or of the
whole or any substantial part of its property, or (5) be adjudicated a bankrupt; or
(e) a court of competent jurisdiction shall enter an order, judgment, or decree appointing a
receiver of the System or any of the funds or accounts established in the Bond Ordinance, or of the whole
or any substantial part of the District’s property, or approving a petition seeking reorganization of the
District under the federal bankruptcy laws or any other applicable law or statute of the United States of
America or the State, and such order, judgment, or decree shall not be vacated or set aside or stayed
within 60 days from the date of the entry thereof; or
(f) under the provisions of any other law for the relief or aid of debtors, any court of
competent jurisdiction shall assume custody or control of any of the funds or accounts established in the
Bond Ordinance, or of the whole or any substantial part of the District’s property, and such custody or
control shall not be terminated or stayed within 60 days from the date of assumption of such custody or
control; or
(g) the District shall fail to perform any of the other covenants, conditions, agreements, and
provisions contained in the Bonds or in the Bond Ordinance (other than the covenant in the Bond
Ordinance relating to continuing disclosure) on the part of the District to be performed, and such failure
shall continue for 90 days after written notice specifying such failure and requiring it to be remedied shall
have been given to the District by the owners of not less than, or a Credit Facility Provider securing not
less than, 25% in aggregate Principal of the Bonds then Outstanding; provided, however, if the failure
stated in such notice can be corrected, but not within such 90-day period, the District shall have 180 days
after such written notice to cure such default if corrective action is instituted by the District within such
90-day period and diligently pursued until the failure is corrected; or
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(h) (1) an Event of Default relating to the non-payment of the Principal or redemption price
or installment of interest shall occur under any Series Ordinance or (2) an Event of Default, other than as
described in clause (h)(1) shall occur under any Series Ordinance; or
(i) failure by any Credit Facility Provider to pay the purchase price of Bonds under any
Credit Facility then in effect; or
(j) delivery to the District by a Credit Facility Provider of written notice stating that an
“Event of Default” has occurred under any Credit Facility Agreement; or
(k) delivery to the District by a Qualified Hedge Provider of written notice stating that an
“event of default” has occurred under any Senior Hedge Agreement.
Remedies
Upon the happening and continuance of any Event of Default described in clauses (a), (b) and
(h)(1) above under the caption “Events of Default” as to any Senior Bond, then and in every such case,
upon the written declaration of the owners of more than 50% in aggregate Principal of all Senior Bonds
then Outstanding or upon the written demand of a Credit Facility Provider securing more than 50% in
aggregate Principal of the Senior Bonds then Outstanding, the Principal of all Senior Bonds then
Outstanding shall become due and payable immediately, together with the interest accrued thereon to the
date of such acceleration, at the place of payment provided therein, and interest on the Senior Bonds shall
cease to accrue after the date of such acceleration, anything in the Bond Ordinance or in the Senior Bonds
to the contrary notwithstanding. With respect to any Senior Bonds secured by a Credit Facility, only the
applicable Credit Facility Provider may give written demand to declare the Principal of and accrued
interest on such Senior Bonds to be immediately due and payable.
Upon the happening and continuance of any Event of Default described in clause (i) above under
the caption “Events of Default”, then and in every such case, upon the written declaration of the owners
of more than 50% in aggregate Principal of the Senior Bonds of the affected series then Outstanding, the
Principal of all Senior Bonds of the affected series then Outstanding shall become due and payable
immediately, together with the interest accrued thereon to the date of such acceleration, at the place of
payment provided therein, and interest on the Senior Bonds of the affected series shall cease to accrue
after the date of such acceleration, anything in the Bond Ordinance or in the Senior Bonds of the affected
series to the contrary notwithstanding.
Upon the happening and continuance of any Event of Default described in clause (k) above under
the caption “Events of Default”, then and in every such case, upon the written declaration of the owners
of more than 50% in aggregate Principal of the Senior Bonds of the affected series then Outstanding, the
Principal of all Senior Bonds of the affected series then Outstanding shall become due and payable
immediately, together with the interest accrued thereon to the date of such acceleration, at the place of
payment provided therein, and interest on the Senior Bonds of the affected series shall cease to accrue
after the date of such acceleration, anything in the Bond Ordinance or in the Senior Bonds of the affected
series to the contrary notwithstanding. Notwithstanding the foregoing, with respect to any Senior Bonds
secured by a Credit Facility, only the applicable Credit Facility Provider may give written demand to
declare the Principal of and accrued interest on such Senior Bonds to be immediately due and payable.
Upon any declaration of acceleration under the Bond Ordinance, the District shall immediately
draw under the applicable Credit Facility to the extent permitted by the terms thereof that amount which,
together with other amounts on deposit under the Bond Ordinance, shall be sufficient to pay the Principal
of and accrued interest on the related Senior Bonds so accelerated.
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The above provisions, however, are subject to the condition that if, after the Principal of the
Senior Bonds shall have been so accelerated, all arrears of interest upon such Bonds, and interest on
overdue installments of interest at the rate on such Bonds, shall have been paid by the District, the
Principal of such Bonds which has matured (except the Principal of any Bonds not then due by their terms
except as provided above) have been paid, and the District shall also have performed all other things in
respect to which it may have been in default under the Bond Ordinance, and, if applicable, each Credit
Facility Provider shall have reinstated the Credit Facility in the full amount available to be drawn
thereunder by written notice to the District, then, in every such case, the owners of more than 50% in
aggregate Principal of all Senior Bonds then Outstanding by written notice to the District, may waive
such default and its consequences and such waiver shall be binding upon the District and upon all owners
of the Bonds; but no such waiver shall extend to or affect any subsequent default or impair any right or
remedy consequent thereon. Notwithstanding the foregoing, as long as the applicable Credit Facility
Provider shall not then continue to dishonor draws under the Credit Facility, no Event of Default with
respect to the related Senior Bonds may be waived without the express written consent of such Credit
Facility Provider.
Upon the happening and continuance of any Event of Default, any owner of Senior Bonds then
Outstanding affected by the Event of Default or a duly authorized agent for such owner may proceed to
protect and enforce its rights and the rights of the owners of Senior Bonds by such of the following
remedies as it shall deem most effectual to protect and enforce such rights:
(1) by mandamus or other suit, action, or proceeding at law or in equity, enforce all
rights of the owners of Senior Bonds, including the right to require the appointment of a receiver
for the System or to exercise any other right or remedy provided by the Constitution and laws of
the State and the Charter and to require the District to perform any other covenant or agreement
contained in the Bond Ordinance;
(2) by action or suit in equity, require the District to account as if it were the trustee
of an express trust for the owners of the Senior Bonds;
(3) by action or suit in equity, enjoin any acts or things which may be unlawful or in
violation of the rights of the owners of the Senior Bonds; or
(4) by pursuing any other available remedy at law or in equity or by statute.
In the enforcement of any remedy under the Bond Ordinance, owners of Senior Bonds shall be
entitled to sue for, enforce payment on, and receive any and all amounts then or during any default
becoming, and at any time remaining, due from the District for Principal, redemption premium, interest,
or otherwise, under any provision of the Bond Ordinance or of the Senior Bonds, and unpaid, with
interest on overdue payments at the rate or rates of interest specified in such Senior Bonds, together with
any and all costs and expenses of collection and of all proceedings under the Bond Ordinance and under
such Senior Bonds, without prejudice to any other right or remedy of the owners of Senior Bonds, and to
recover and enforce a judgment or decree against the District for any portion of such amounts remaining
unpaid, with interest, costs, and expenses, and to collect from any moneys available for such purpose, in
any manner provided by law, the moneys adjudged or decreed to be payable.
If no Senior Bonds are then Outstanding or if no Event of Default with respect to any Senior
Bonds has then occurred and is continuing, in the enforcement of any remedy under the Bond Ordinance,
owners of Subordinate Bonds shall be entitled to sue for, enforce payment on, and receive any and all
amounts then or during any default becoming, and at any time remaining, due from the District for
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Principal, redemption premium, interest, or otherwise, under any provision of the Bond Ordinance or of
the Subordinate Bonds, and unpaid, with interest on overdue payments at the rate or rates of interest
specified in such Subordinate Bonds, together with any and all costs and expenses of collection and of all
proceedings under the Bond Ordinance and under such Subordinate Bonds, without prejudice to any other
right or remedy of the owners of Subordinate Bonds, and to recover and enforce a judgment or decree
against the District for any portion of such amounts remaining unpaid, with interest, costs, and expenses,
and to collect from any moneys available for such purpose, in any manner provided by law, the moneys
adjudged or decreed to be payable. Nothing in this paragraph is intended to diminish the rights of the
owners of Subordinate Bonds described in clauses (1) through (4) above.
No remedy conferred upon or reserved to the Bondholders is intended to be exclusive of any
other remedy or remedies, and each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under the Bond Ordinance or now or hereafter existing at law or in equity or by
statute.
Application of Moneys After Default
If an Event of Default occurs and shall not have been remedied, the District or a receiver
appointed for the purpose shall apply all Pledged Revenues (except with respect to the Debt Service
Reserve Account which does not secure Subordinate Bonds, Senior SRF Bonds and Senior Uncovered
Bonds) as follows and in the following order of priority:
(a) Expenses of Receiver and Paying Agent and Bond Registrar - to the payment of
the reasonable and proper charges, expenses, and liabilities of any receiver and the Paying Agent
and Bond Registrar under the Bond Ordinance;
(b) Expenses of Operation and Maintenance and Renewals and Replacements - to the
payment of all reasonable and necessary Expenses of Operation and Maintenance and major
renewals and replacements to the System;
(c) Principal or Redemption Price, Interest, and Hedge Payments Relating to Senior
Bonds - to the payment of the interest and Principal or redemption price then due on the Senior
Bonds and Hedge Payments then due under Senior Hedge Agreements, as follows:
(i) Unless the Principal of all the Senior Bonds shall have become due and
payable, all such moneys shall be applied as follows:
first: To the payment to the persons entitled thereto of all installments of
interest then due on the Senior Bonds, in the order of the maturity of such
installments (with interest on defaulted installments of interest at the rate or rates
borne by the Senior Bonds with respect to which such interest is due, but only to
the extent permitted by law), and, if the amount available shall not be sufficient
to pay in full any particular installment, then to the payment ratably, according to
the amounts due on such installment, to the persons entitled thereto, without any
discrimination or preference. If some of the Senior Bonds bear interest payable
at different intervals or upon different dates and if at any time moneys from the
Debt Service Reserve Account must be used to pay any such interest, the moneys
in the Debt Service Reserve Account shall be applied (to the extent necessary) to
the payment of all interest becoming due on the dates upon which such interest is
payable to and including the next succeeding semiannual Interest Payment Date
specified for the Senior Bonds. After such date, moneys in the Debt Service
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Reserve Account plus any other moneys available in the Payments Account shall
be set aside for the payment of interest on Senior Bonds of each class (a class
consisting of all Senior Bonds payable as to interest on the same dates) pro rata
among Senior Bonds of the various classes on a daily basis so that there shall
accrue to each owner of a Senior Bond throughout each Fiscal Year the same
proportion of the total interest payable to such owner of a Senior Bond as shall
so accrue to every other owner of a Senior Bond during such Fiscal Year.
second: To the payment of the Hedge Payments due under any Senior
Hedge Agreements pursuant to their terms.
third: To the payment to the persons entitled thereto of the unpaid
Principal of any of the Senior Bonds which shall have become due at maturity or
upon mandatory redemption prior to maturity (other than Senior Bonds called for
redemption for the payment of which moneys are held pursuant to the provisions
of the Bond Ordinance), in the order of their due dates, with interest upon such
Senior Bonds from the respective dates upon which they became due, and, if the
amount available shall not be sufficient to pay in full Senior Bonds due on any
particular date, together with such interest, then to the payment first of such
interest, ratably according to the amount of such interest due on such date, and
then to the payment of such Principal, ratably according to the amount of such
Principal due on such date, to the persons entitled thereto without any
discrimination or preference. If some of the Senior Bonds mature (including
mandatory redemption prior to maturity as a maturity) upon a different date or
dates, and if at any time moneys from the Debt Service Reserve Account must be
used to pay any such Principal becoming due, the moneys in the Debt Service
Reserve Account not required to pay interest under paragraph first above shall be
applied to the extent necessary to the payment of all Principal becoming due on
the dates upon which such Principal is payable to and including the final annual
Principal Maturity Date specified for the Senior Bonds. After such date, moneys
in the Debt Service Reserve Account not required to pay interest plus any other
moneys available in the Payments Account shall be set aside for the payment of
Principal of Senior Bonds of each class (a class consisting of all Senior Bonds
payable as to Principal on the same date) pro rata among Senior Bonds of the
various classes which mature or must be redeemed pursuant to mandatory
redemption prior to maturity throughout each Fiscal Year in such proportion of
the total Principal payable on each such Senior Bond as shall be equal among all
classes of Senior Bonds maturing or subject to mandatory redemption within
such Fiscal Year.
fourth: To the payment of the redemption premium on and the Principal
of any Senior Bonds called for optional redemption pursuant to their terms.
(ii) If the Principal of all the Senior Bonds shall have become due and payable, all
such moneys shall be applied to the payment of the Principal and interest then due and unpaid
upon the Senior Bonds, with interest thereon as aforesaid, and due and unpaid Hedge Payments
under Senior Hedge Agreements, without preference or priority of Principal over interest or
Hedge Payments or of interest over Principal or Hedge Payments, or of Hedge Payments over
Principal or interest, or of any installment of interest over any other installment of interest, or of
any Senior Bond over any other Senior Bonds, or of any such Hedge Payment over any other
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such Hedge Payment, ratably, according to the amounts due respectively for Principal, interest,
and Hedge Payments, to the persons entitled thereto without any discrimination or preference.
Rights of Credit Facility Provider
Notwithstanding any other provision of the Bond Ordinance, in the event that the District shall
draw under a Credit Facility any amount for the payment of Principal of or interest on any Bonds, then
upon such payment the related Credit Facility Provider shall succeed to and become subrogated to the
rights of the recipients of such payments and such Principal or interest shall be deemed to continue to be
unpaid and Outstanding for all purposes and shall continue to be fully secured by the Bond Ordinance
until the Credit Facility Provider, as successor and subrogee, has been paid all amounts owing in respect
of such subrogated payments of Principal and interest. Such rights shall be limited and evidenced by
having the District note the Credit Facility Provider’s rights as successor and subrogee on its records, and
the District shall, upon request, deliver to the Credit Facility Provider (i) in the case of interest on the
Bonds, an acknowledgment of the Credit Facility Provider’s ownership of interest to be paid on the Bonds
specifying the amount of interest owed, the period represented by such interest, and the CUSIP numbers
of the Bonds on which such interest is owed and (ii) in the case of Principal of the Bonds, either the
Bonds themselves duly assigned to the Credit Facility Provider or new Bonds registered in the name of
the Credit Facility Provider or in such other name as the Credit Facility Provider shall specify. Whenever
moneys become available for the payment of any interest then overdue, the Credit Facility Provider shall
be treated as to interest owed to it as and as if it had been the Bondholder of the Bonds upon which such
interest is payable on any special record date therefor.
No Obligation to Levy Taxes
Nothing contained in the Bond Ordinance shall be construed as imposing on the District any duty
or obligation to levy any taxes either to meet any obligation incurred in the Bond Ordinance or to pay the
Principal of or interest on the Bonds.
DEFEASANCE
Except as otherwise provided in any Series Ordinance with respect to Bonds secured by a Credit
Facility, Bonds for the payment or redemption of which sufficient moneys or sufficient Government
Obligations shall have been deposited with the Paying Agent or the Depository of the Sinking Fund
(whether upon or prior to the maturity or the redemption date of such Bonds) shall be deemed to be paid
and no longer Outstanding under the Bond Ordinance; provided, however, that if such Bonds are to be
redeemed prior to the maturity thereof, notice of such redemption shall have been duly given as provided
in the Bond Ordinance or firm and irrevocable arrangements shall have been made for the giving of such
notice; and, provided, further, that Bonds bearing interest at a Variable Rate shall not be deemed to have
been paid and discharged within the meaning of the Bond Ordinance unless the interest rate payable on
such Bonds is calculated at the maximum interest rate specified for such Bonds to the earlier of the first
tender or redemption date. Government Obligations shall be considered sufficient for purposes of the
Bond Ordinance only: (i) if such Government Obligations are not callable by the issuer of the
Government Obligations prior to their stated maturity; and (ii) if such Government Obligations fall due
and bear interest in such amounts and at such times as will assure sufficient cash to pay currently
maturing interest and to pay Principal and redemption premiums, if any, when due on the Bonds without
rendering the interest on any Tax-Exempt Bonds includable in gross income of any owner thereof for
federal income tax purposes.
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The District may at any time surrender to the Bond Registrar for cancellation by it any Bonds
previously authenticated and delivered under the Bond Ordinance which the District may have acquired in
any manner whatsoever. All such Bonds, upon such surrender and cancellation, shall be deemed to be
paid and retired.
SUPPLEMENTAL ORDINANCES
Supplemental Ordinances Not Requiring Consent of Bondholders
The District, from time to time and at any time, subject to the conditions and restrictions in the
Bond Ordinance, may adopt one or more Supplemental Ordinances which thereafter shall form a part of
the Bond Ordinance, for any one or more or all of the following purposes:
(a) To add to the covenants and agreements of the District in the Bond Ordinance
other covenants and agreements thereafter to be observed or to surrender, restrict, or limit any
right or power reserved in the Bond Ordinance to or conferred upon the District (including but
not limited to the right to issue Senior Bonds);
(b) To make such provisions for the purpose of curing any ambiguity, or of curing,
correcting, or supplementing any defective provision contained in the Bond Ordinance, or in
regard to matters or questions arising under the Bond Ordinance, as the District may deem
necessary or desirable and not inconsistent with the Bond Ordinance;
(c) To subject to the lien and pledge of the Bond Ordinance additional revenues,
receipts, properties, or other collateral;
(d) To evidence the appointment of successors to any Depository, Paying Agent, or
Bond Registrar;
(e) To modify, amend, or supplement the Bond Ordinance in such manner as to
permit the qualification of the Bond Ordinance under the Trust Indenture Act of 1939 or any
federal statute hereinafter in effect, and similarly to add to the Bond Ordinance such other terms,
conditions, and provisions as may be permitted or required by such Trust Indenture Act of 1939
or any similar federal statute;
(f) To make any modification or amendment of the Bond Ordinance required in
order to make any Bonds eligible for acceptance by DTC or any similar holding institution or to
permit the issuance of any Bonds or interests therein in book-entry form;
(g) To modify any of the provisions of the Bond Ordinance in any respect if such
modification shall not become effective until after the Bonds Outstanding immediately prior to
the effective date of such Supplemental Ordinance shall cease to be Outstanding and if any Bonds
issued contemporaneously with or after the effective date of such Supplemental Ordinance shall
contain a specific reference to the modifications contained in such subsequent proceedings;
(h) Subject to the provisions of the Bond Ordinance relating to the Project Fund, to
modify the provisions of the Bond Ordinance with respect to the disposition of any moneys
remaining in the Project Fund upon the completion of any Project;
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(i) To increase the size or scope of the System, to add other utilities to the System,
to create additional subaccounts or to abolish any subaccounts within any account, or to change
the amount of the Debt Service Reserve Requirement, but not below the amount specified in such
definition;
(j) To modify the Bond Ordinance to permit the qualification of any Bonds for offer
or sale under the securities laws of any state in the United States of America;
(k) To modify the Bond Ordinance to provide for the issuance of Senior Bonds or
Subordinate Bonds, and such modification may deal with any subjects and make any provisions
which the District deems necessary or desirable for that purpose;
(l) To make such modifications in the provisions of the Bond Ordinance as may be
deemed necessary by the District to accommodate the issuance of capital appreciation bonds or
Bonds which bear interest at a Variable Rate; and
(m) To modify any of the provisions of the Bond Ordinance in any respect (other than
a modification of the type described below under the caption “SUPPLEMENTAL
ORDINANCES – Supplemental Ordinances Requiring Consent of Bondholders”) requiring
the unanimous written consent of the Bondholders); provided that for (i) any Outstanding Bonds
which are assigned a Rating and which are not secured by a Credit Facility providing for the
payment of the full amount of Principal and interest to be paid thereon, each Rating Agency shall
have given written notification to the District that such modification will not cause the then
applicable Rating on any Bonds to be reduced or withdrawn, and (ii) any Outstanding Bonds
which are secured by Credit Facilities providing for the payment of the full amount of the
Principal and interest to be paid thereon, each Credit Facility Provider shall have consented in
writing to such modification.
Any Supplemental Ordinance of the District may modify the provisions of the Bond Ordinance in
such a manner, and to such extent and containing such provisions, as the District may deem necessary or
desirable to effect any of the purposes stated above.
As used in the Bond Ordinance, the term “modify” shall mean “modify, amend, or supplement”
and the term “modification” shall mean “modification, amendment, or supplement.”
Supplemental Ordinances Requiring Consent of Bondholders
With the consent (evidenced as provided in the Bond Ordinance) of the owners of not less than a
majority in aggregate Principal of the Outstanding Bonds of each class (senior and subordinate), voting
separately by class, the District may from time to time and at any time adopt a Supplemental Ordinance
for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Bond Ordinance or of any Supplemental Ordinance; provided, however, that no such
Supplemental Ordinance shall: (1) extend the maturity date or due date of any mandatory sinking fund
redemption with respect to any Bond Outstanding under the Bond Ordinance; (2) reduce or extend the
time for payment of Principal of, redemption premium, or interest on any Bond Outstanding under the
Bond Ordinance; (3) reduce any premium payable upon the redemption of any Bond under the Bond
Ordinance or advance the date upon which any Bond may first be called for redemption prior to its stated
maturity date; (4) give to any Senior Bond or Senior Bonds (or related Senior Hedge Agreements) a
preference over any other Senior Bond or Senior Bonds (or related Senior Hedge Agreements); (5) permit
the creation of any lien or any other encumbrance on the Pledged Revenues having a lien equal to or prior
to the lien created under the Bond Ordinance for the Senior Bonds; (6) reduce the percentage of owners of
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senior or subordinate classes of Bonds required to approve any such Supplemental Ordinance; or (7)
deprive the owners of the Bonds of the right to payment of the Bonds or from the Pledged Revenues
(except as otherwise provided herein with respect to the Debt Service Reserve Account), without, in each
case, the consent of the owners of all the affected Bonds then Outstanding. No amendment may be made
under the Bond Ordinance which affects the rights or duties of any Credit Facility Provider securing any
of the Bonds or any Qualified Hedge Provider under any Hedge Agreement without its written consent.
If the District intends to enter into or adopt any Supplemental Ordinance as described in this
caption, the District shall mail, by registered or certified mail, to the registered owners of the Bonds at
their addresses as shown on the Bond Register, a notice of such intention along with a description of such
Supplemental Ordinance not less than 30 days prior to the proposed effective date of such Supplemental
Ordinance. The consents of the registered owners of the Bonds need not approve the particular form of
wording of the proposed Supplemental Ordinance, but it shall be sufficient if such consents approve the
substance thereof. Failure of the owner of any Bond to receive the notice required in the Bond Ordinance
shall not affect the validity of any Supplemental Ordinance if the required number of owners of the Bonds
of each class shall provide their written consent to such Supplemental Ordinance.
Notwithstanding any provision of the Bond Ordinance to the contrary, upon the issuance of a
Credit Facility to secure any Bonds and for the period in which such Credit Facility is outstanding, the
Credit Facility Provider may have the consent rights of the owners of the Bonds which are secured by
such Credit Facility pertaining to some or all of the amendments or modifications of the Bond Ordinance,
to the extent provided in the applicable Series Ordinance. Notwithstanding the foregoing, if a Credit
Facility Provider is granted the consent rights of the owners of any Bonds in a Series Ordinance and
refuses to exercise such consent rights, either affirmatively or negatively, then the registered owners of
the Bonds secured by the related Credit Facility may exercise such consent rights.
Notice of Supplemental Ordinances
The District shall cause the Bond Registrar to mail a notice by registered or certified mail to the
registered owners of all Bonds Outstanding, at their addresses shown on the Bond Register or at such
other address as has been furnished in writing by such registered owner to the Bond Registrar, setting
forth in general terms the substance of any Supplemental Ordinance which has been adopted and
approved.
* * *
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SUMMARY OF THE CONTINUING DISCLOSURE AGREEMENT
The following is a summary of certain provisions and covenants contained in the Continuing
Disclosure Agreement. Such summary does not purport to be a complete statement of the terms of the
Continuing Disclosure Agreement and accordingly is qualified in its entirety by reference thereto and is
subject to the full text thereof.
Definitions
In addition to the definitions set forth in the Continuing Disclosure Agreement, the following
capitalized terms shall have the following meanings:
“Annual Filing Date” means the date, set in the Continuing Disclosure Agreement, by which the
Annual Report is to be filed with the MSRB.
“Annual Financial Information” means annual financial information as such term is used in
paragraph (b)(5)(i) of the Rule and specified in the Continuing Disclosure Agreement.
“Annual Report” means an Annual Report containing Annual Financial Information described
in and consistent with the Continuing Disclosure Agreement.
“Audited Financial Statements” means the annual financial statements (if any) of the District
for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally
accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i)(B) of the Rule
and as specified in the Continuing Disclosure Agreement.
“Certification” means a written certification of compliance signed by the Disclosure
Representative stating that the Annual Report, Audited Financial Statements, Notice Event notice, Failure
to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure delivered to the
Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Notice Event
notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure
required to be submitted to the MSRB under the Continuing Disclosure Agreement. A Certification shall
accompany each such document submitted to the Disclosure Dissemination Agent by the District and
shall include the full name of the Bonds and the 9-digit CUSIP numbers for all Bonds to which the
document applies.
“Disclosure Dissemination Agent” means Digital Assurance Certification, L.L.C., acting in its
capacity as Disclosure Dissemination Agent (“DAC”) under the Continuing Disclosure Agreement, or
any successor Disclosure Dissemination Agent designated in writing by the District pursuant to the
Continuing Disclosure Agreement.
“Disclosure Representative” means the Secretary-Treasurer of the District or his or her
designee, or such other person as the District shall designate in writing to the Disclosure Dissemination
Agent from time to time as the person responsible for providing Information to the Disclosure
Dissemination Agent.
“Failure to File Event” means the District’s failure to file an Annual Report on or before the
Annual Filing Date.
“Financial Obligation” as used in the Continuing Disclosure Agreement is defined in the Rule,
as may be amended, as (i) a debt obligation; (ii) derivative instrument entered into in connection with, or
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pledged as a security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee
of (i) or (ii). The term “Financial Obligation” shall not include municipal securities as to which a final
official statement has been provided to the MSRB consistent with the Rule.
“Force Majeure Event” means: (i) acts of God, war, or terrorist action; (ii) failure or shut-down
of the Electronic Municipal Market Access system maintained by the MSRB; or (iii) to the extent beyond
the Disclosure Dissemination Agent’s reasonable control, interruptions in telecommunications or utilities
services, failure, malfunction or error of any telecommunications, computer or other electrical,
mechanical or technological application, service or system, computer virus, interruptions in Internet
service or telephone service (including due to a virus, electrical delivery problem or similar occurrence)
that affect Internet users generally, or in the local area in which the Disclosure Dissemination Agent or
the MSRB is located, or acts of any government, regulatory or any other competent authority the effect of
which is to prohibit the Disclosure Dissemination Agent from performance of its obligations under this
Disclosure Agreement.
“Holder” means any person (a) having the power, directly or indirectly, to vote or consent with
respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees,
depositories or other intermediaries) or (b) treated as the owner of any Bonds for federal income tax
purposes.
“Information” means, collectively, the Annual Reports, the Audited Financial Statements, the
Notice Event notices, the Failure to File Event notices, the Voluntary Event Disclosures and the
Voluntary Financial Disclosures.
“MSRB” means the Municipal Securities Rulemaking Board, or any successor thereto,
established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934.
“Notice Event” means any of the events enumerated in paragraph (b)(5)(i)(C) of the Rule and
listed in the Continuing Disclosure Agreement.
“Obligated Person” means any person, including the District, who is either generally or through
an enterprise, fund, or account of such person committed by contract or other arrangement to support
payment of all, or part of the obligations on the Bonds (other than providers of municipal bond insurance,
letters of credit, or other liquidity facilities).
“Official Statement” means that Official Statement prepared by the District in connection with
the Bonds.
“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as the same may be amended from time to time.
“Voluntary Event Disclosure” means information of the category specified in any of
subsections (e)(vi)(1) through (e)(vi)(10) of Section 2 of the Continuing Disclosure Agreement that is
accompanied by a Certification of the Disclosure Representative containing the information prescribed by
Section 7(a) of the Continuing Disclosure Agreement.
“Voluntary Financial Disclosure” means information of the category specified in any of
subsections (e)(vii)(1) through (e)(vii)(9) of Section 2 of the Continuing Disclosure Agreement that is
accompanied by a Certification of the Disclosure Representative containing the information prescribed by
Section 7(b) of the Continuing Disclosure Agreement.
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Provision of Annual Reports
The District shall provide, annually, an electronic copy of the Annual Report and Certification to
the Disclosure Dissemination Agent, not later than the Annual Filing Date. Promptly upon receipt of an
electronic copy of the Annual Report and the Certification, the Disclosure Dissemination Agent shall
provide an Annual Report to the MSRB not later than 180 days after the end of each fiscal year of the
District, commencing with the fiscal year ending June 30, 2021. Such date and each anniversary thereof
is the Annual Filing Date. The Annual Report may be submitted as a single document or as separate
documents comprising a package, and may cross-reference other information as provided in the
Continuing Disclosure Agreement.
If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent
has not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall
contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the
District of its undertaking to provide the Annual Report. Upon such reminder, the Disclosure
Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the
Annual Report and the Certification) no later than two (2) business days prior to the Annual Filing Date,
or (ii) instruct the Disclosure Dissemination Agent in writing that the District will not be able to file the
Annual Report within the time required under the Continuing Disclosure Agreement, state the date by
which the Annual Report for such year will be provided and instruct the Disclosure Dissemination Agent
to immediately send a Failure to File Event notice to the MSRB in substantially the form specified in the
Continuing Disclosure Agreement.
If the Disclosure Dissemination Agent has not received an Annual Report and Certification by
10:00 a.m. Eastern time on the Annual Filing Date (or, if such Annual Filing Date falls on a Saturday,
Sunday or holiday, then the first business day thereafter) for the Annual Report, a Failure to File Event
shall have occurred and the Issuer irrevocably directs the Disclosure Dissemination Agent to immediately
send a Failure to File Event notice to the MSRB in substantially the form specified in the Continuing
Disclosure Agreement.
If Audited Financial Statements of the District are prepared but not available prior to the Annual
Filing Date, the District shall, when the Audited Financial Statements are available, provide at such time
an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certification for filing with
the MSRB.
The District may adjust the Annual Filing Date upon change of its fiscal year by providing
written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent,
Paying Agent (if any) and the MSRB, provided that the period between the existing Annual Filing Date
and new Annual Filing Date shall not exceed one year.
Content of Annual Reports
Each Annual Report shall contain Annual Financial Information with respect to the District,
including the information provided in the Official Statement under the headings: “MANAGEMENT’S
DISCUSSION AND ANALYSIS - Historical and Projected Sewer Rates and Charges,” “-
Customer Accounts,” “- Largest User Charge Customers,” and “ – User Charge Revenues.” Each
Annual Report shall include Audited Financial Statements prepared as described in the Official
Statement. If Audited Financial Statements are not available, then, unaudited financial statements,
prepared in accordance with generally accepted accounting principles or alternate accounting principles as
described in the Official Statement will be included in the Annual Report.
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Any or all of the items listed above may be included by specific reference from other documents,
including official statements of debt issues with respect to which the District is an Obligated Person (as
defined by the Rule), which have been previously filed with each of the Securities and Exchange
Commission or available on the MSRB Internet Website. If the document incorporated by reference is a
final official statement, it must be available from the MSRB. The District will clearly identify each such
document so incorporated by reference.
Reporting of Notice Events
The occurrence of any of the following events with respect to the Bonds constitutes a Notice
Event:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other
material notices or determinations with respect to the tax status of the Bonds, or other
material events affecting the tax status of the Bonds;
7. Modifications to rights of Bondholders, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds, if material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the Obligated Person;
For the purposes of the event described in this subsection, the event is considered to
occur when any of the following occur: the appointment of a receiver, fiscal agent or
similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code
or in any other proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or business of the
Obligated Person, or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and
orders of a court or governmental authority, or the entry of an order confirming a plan of
reorganization, arrangement or liquidation by a court or governmental authority having
supervision or jurisdiction over substantially all of the assets or business of the Obligated
Person.
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13. The consummation of a merger, consolidation, or acquisition involving an Obligated
Person or the sale of all or substantially all of the assets of the Obligated Person, other
than in the ordinary course of business, the entry into a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such actions,
other than pursuant to its terms, if material;
14. Appointment of a successor or additional trustee or the change of name of a trustee, if
material;
15. Incurrence of a Financial Obligation of an Obligated Person, if material, or agreement to
covenants, events of default, remedies, priority rights, or other similar terms of a
Financial Obligation of an Obligated Person, any of which affect security holders, if
material; and
16. Default, event of acceleration, termination event, modification of terms, or other similar
events under the terms of a Financial Obligation of an Obligated Person, any of which
reflect financial difficulties.
The District shall, in a timely manner not later than nine business days after its occurrence, notify
the Disclosure Dissemination Agent in writing of the occurrence of a Notice Event. Such notice shall
instruct the Disclosure Dissemination Agent to report the occurrence and shall be accompanied by a
Certification. Such notice or Certification shall identify the Notice Event that has occurred, include the
text of the disclosure that the District desires to make, contain the written authorization of the District for
the Disclosure Dissemination Agent to disseminate such information, and identify the date the District
desires for the Disclosure Dissemination Agent to disseminate the information (provided that such date is
not later than the tenth business day after the occurrence of the Notice Event).
The Disclosure Dissemination Agent is under no obligation to notify the District or the Disclosure
Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination
Agent so notifies the Disclosure Representative, the Disclosure Representative will within two business
days of receipt of such notice (but in any event not later than the tenth business day after the occurrence
of the Notice Event, if the District determines that a Notice Event has occurred), instruct the Disclosure
Dissemination Agent that either (i) a Notice Event has not occurred and no filing is to be made or (ii) a
Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to
the Continuing Disclosure Agreement, together with a Certification. Such Certification shall identify the
Notice Event that has occurred, include the text of the disclosure that the District desires to make, contain
the written authorization of the District for the Disclosure Dissemination Agent to disseminate such
information, and identify the date the District desires for the Disclosure Dissemination Agent to
disseminate the information (provided that such date is not later than the tenth business day after the
occurrence of the Notice Event).
If the Disclosure Dissemination Agent has been instructed by the District to report the occurrence
of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence
with the MSRB in accordance with the Continuing Disclosure Agreement.
Voluntary Filings
The District may instruct the Disclosure Dissemination Agent to file a Voluntary Event
Disclosure or a Voluntary Financial Disclosure with the MSRB, from time to time pursuant to a
Certification of the Disclosure Representative.
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Nothing in the Continuing Disclosure Agreement shall be deemed to prevent the District from
disseminating any other information through the Disclosure Dissemination Agent using the means of
dissemination set forth in the Continuing Disclosure Agreement or including any other information in any
Annual Report, Audited Financial Statement, Notice Event notice, Failure to File Event notice, Voluntary
Event Disclosure or Voluntary Financial Disclosure, in addition to that required by the Continuing
Disclosure Agreement. If the District chooses to include any information in any Annual Report, Audited
Financial Statement, Notice Event notice, Failure to File Event notice, Voluntary Event Disclosure or
Voluntary Financial Disclosure in addition to that which is specifically required by the Continuing
Disclosure Agreement, the District shall have no obligation under the Continuing Disclosure Agreement
to update such information or include it in any future Annual Report, Audited Financial Statement, Notice
Event notice, Failure to File Event notice, Voluntary Event Disclosure or Voluntary Financial Disclosure.
Termination of Reporting Obligation
The obligations of the District and the Disclosure Dissemination Agent under the Continuing
Disclosure Agreement shall terminate with respect to the Bonds upon the legal defeasance, prior
redemption or payment in full of all of the Bonds, when the District is no longer an Obligated Person, or
upon delivery by the Disclosure Representative to the Disclosure Dissemination Agent of an opinion of
counsel experienced in federal securities laws to the effect that continuing disclosure is no longer
required.
Disclosure Dissemination Agent
The District has appointed Digital Assurance Certification, L.L.C. (“DAC”) as exclusive
Disclosure Dissemination Agent under the Continuing Disclosure Agreement. The District may, upon
thirty days written notice to the Disclosure Dissemination Agent, replace or appoint a successor
Disclosure Dissemination Agent. Upon termination of DAC’s services as Disclosure Dissemination
Agent, whether by notice of the District or DAC, the District agrees to appoint a successor Disclosure
Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissemination
Agent under the Continuing Disclosure Agreement for the benefit of the Holders of the Bonds.
Notwithstanding any replacement or appointment of a successor, the District shall remain liable to the
Disclosure Dissemination Agent until payment in full for any and all sums owed and payable to the
Disclosure Dissemination Agent. The Disclosure Dissemination Agent may resign at any time by
providing thirty days’ prior written notice to the District.
Remedies in Event of Default
In the event of a failure of the District or the Disclosure Dissemination Agent to comply with any
provision of the Continuing Disclosure Agreement, the Holders’ rights to enforce the provisions of the
Continuing Disclosure Agreement shall be limited solely to a right, by action in mandamus or for specific
performance, to compel performance of the parties’ obligation under the Continuing Disclosure
Agreement. Any failure by a party to perform in accordance with the Continuing Disclosure Agreement
shall not constitute a default on the Bonds or under any other document relating to the Bonds, and all
rights and remedies shall be limited to those expressly stated in the Continuing Disclosure Agreement.
Amendment; Waiver
Notwithstanding any other provision of the Continuing Disclosure Agreement, the District and
the Disclosure Dissemination Agent may amend the Continuing Disclosure Agreement and any provision
of the Continuing Disclosure Agreement may be waived, if such amendment or waiver is supported by an
opinion of counsel expert in federal securities laws acceptable to both the District and the Disclosure
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Dissemination Agent to the effect that such amendment or waiver does not materially impair the interests
of Holders of the Bonds and would not, in and of itself, cause the undertakings in the Continuing
Disclosure Agreement to violate the Rule if such amendment or waiver had been effective on the date of
the Continuing Disclosure Agreement but taking into account any subsequent change in or official
interpretation of the Rule; provided neither the District or the Disclosure Dissemination Agent shall be
obligated to agree to any amendment modifying their respective duties or obligations without their
consent thereto.
Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the
right to adopt amendments to the Continuing Disclosure Agreement necessary to comply with
modifications to and interpretations of the provisions of the Rule as announced by the Securities and
Exchange Commission from time to time by giving not less than 20 days written notice of the intent to do
so together with a copy of the proposed amendment to the District. No such amendment shall become
effective if the District shall, within 10 days following the giving of such notice, send a notice to the
Disclosure Dissemination Agent in writing that it objects to such amendment.
* * *
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Appendix D
Report on the Financial Feasibility of
The Metropolitan St. Louis Sewer District
Wastewater System Revenue Bonds, Series 2020B
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3013 Main Street
Kansas City, MO 64108
www.raftelis.com
November 16, 2020
Board of Trustees
The Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103-2555
Raftelis Financial Consultants, Inc. (“Raftelis”) is submitting herewith the Report on the Financial
Feasibility of The Metropolitan St. Louis Sewer District Wastewater System Revenue Bonds,
Series 2020B prepared at the request of The Metropolitan St. Louis Sewer District (“District”) in
connection with the issuance of its Wastewater System Revenue Bonds, Series 2020B (the “Series
2020B Bonds”). The purpose of the report is to summarize findings of studies performed by
Raftelis related to the wastewater system of the District (“System”). The report provides a financial
feasibility analysis of the District’s Capital Improvement and Replacement Program (“CIRP”) as
it relates to the issuance of the Series 2020B Bonds. The report also addresses other technical and
financial issues that affect the operation of the System and the District’s ability to issue and repay
wastewater revenue bonds issued during the study period of fiscal years 2021 through 2024. The
District’s fiscal year ends on June 30 of each year.
In preparing the report, Raftelis has examined the financial operations of the District through
reviews of financial reports, operating and capital budgets, and other statistical and financial
information as well as through discussions with the District’s management and financial staff. We
have performed various financial tests and analyses necessary to support our findings and opinions.
In the development of the forecast of future financial operations summarized in the report, Raftelis
has made certain assumptions with respect to conditions, events, and circumstances which may
occur in the future. The methodologies utilized in performing our studies follow generally accepted
industry practice. While Raftelis believes such assumptions are reasonable and attainable for the
purpose of forecasting the District’s future operations, the actual results may differ materially from
the forecasts as influenced by the conditions, events, and circumstances which actually occur.
Subject to the limitations set forth herein, the report is based on information not within the control
of Raftelis. Raftelis has not been requested to make an independent analysis, to verify the accuracy
of information provided to us, or to render independent judgment of the validity of information
provided by others. As such, Raftelis cannot, and does not, guarantee the accuracy thereof to the
extent that such information, data, or opinions were based on information provided by others.
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November 16, 2020
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Use of the report, or any information contained therein, by a third party shall constitute a waiver
and release of Raftelis from and against all claims and liability, including, but not limited to,
liability for special, incidental, indirect, or consequential damages in connection with such use. In
addition, to the extent permitted by applicable law, use of the report, or any information contained
therein by a third party (other than the underwriters of the Series 2020B Bonds), shall constitute
an agreement to defend and indemnify Raftelis from and against any claims and liability,
including, but not limited to, liability for special, incidental, indirect, or consequential damages in
connection with such use. The benefit of such releases, waivers, or limitations of liability shall
extend to the related companies and subcontractors of any tier of Raftelis and the directors,
officers, partners, employees, and agents of all released or indemnified parties.
Raftelis shall have no liability to a third party for any losses or damages arising from or in any way
related to this report and/or the information contained therein. Such express waiver of liability by
the third party shall include all claims that the third party may allege in connection with Raftelis’
report including, but not limited to, breach of contract, breach of warranty, strict liability,
negligence, and/or negligent misrepresentation.
Our principal findings and opinions, which are discussed more fully in the report, are as follows:
Wastewater System Financing
The District has developed a detailed CIRP required to meet regulatory requirements, maintain
the integrity of the System, and continue to address water quality issues. During the four-year
study period (“study period”) the District plans to spend approximately $1.75 billion on major
capital improvements to the System.
As shown in Table 2 of the report, capital program requirements are projected to be funded
from a combination of available funds on hand, senior and subordinate revenue bond proceeds,
annual operating revenues, grants and contributions and interest income. Approximately 42
percent of total major capital improvement expenditures are anticipated to be funded from
operating revenues and the drawdown of available fund balances and approximately 55 percent
will be debt financed. Less than 3 percent of major capital improvements are anticipated to be
financed by grants and contributions and interest earned on construction funds.
The average number of wastewater customers served by the District during fiscal year 2020
was approximately 427,000. Slight increases in the number of customers are projected during
the study period based on analysis of historical trends.
District revenue is derived principally from charges for wastewater service. The existing
schedule of wastewater rates has been in effect since October 1, 2020. The Board adopted these
wastewater rates on June 11, 2020 by Ordinance 15418.
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November 16, 2020
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The District has eleven senior revenue bond issues currently outstanding (excluding the Series
2020B Bonds) and sixteen subordinate series of revenue bonds issued under the state’s
revolving fund program (“SRF”) and Department of Natural Resources Direct Loan program
currently outstanding. The eleven senior revenue bonds include a loan with the United States
Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act
(“WIFIA”) loan program in December 2018. The District’s previous bond authorizations from
elections on February 3, 2004 ($500 million), August 5, 2008 ($275 million), and June 5, 2012
($945 million) have been fully utilized. Six debt issues totaling $323.6 million have been made
from the District’s bond authorization of $900 million approved by voters on April 5, 2016
(excluding the Series 2020B Bonds). After issuance of the Series 2020B Bonds the District
will have $456.4 million of remaining bond authorization approved by voters on April 5, 2016.
The proceeds of the Series 2020B Bonds will be used to pay a portion of the costs of the
District’s CIRP and pay the costs of issuance of the 2020B Bonds.
The Master Bond Ordinance adopted by the Board on April 22, 2004, as supplemented and
amended by ordinances adopted by the Board for each bond issue, including the ordinance
adopted by the Board for the Series 2020B Bonds (the “Bond Ordinance”), establishes
covenants between the District and bondholders and various terms and conditions related to
the Bonds.
The cash flow analysis of projected wastewater utility revenue and revenue requirements
presented in Table 9 of the report shows that projected revenues, including projected revenue
increases, will be sufficient to fund the operation and maintenance of the System, provide debt
service coverage in excess of the requirements of the Bond Ordinance and continue full
funding of the CIRP.
Based on the financial projections and analyses presented in the report, it is our opinion that
the District will be able to adequately finance the CIRP, meet all known cash requirements of
the System, and comply with all Bond Ordinance financial and rate covenants during the study
period.
Bond Covenant Compliance
The adopted wastewater charges for fiscal year 2021 and the proposed charges for fiscal years
2022 through 2024 will allow the District to issue additional revenue bonds within the study
period as currently anticipated and make needed improvements and replacements of the
System.
Indicated debt service coverage levels are above the minimum Bond Ordinance requirements.
The additional bonds test required for the issuance of the Series 2020B Bonds has been met.
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Conclusion
Based on the financial study performed by Raftelis related to the System, we believe that the
District’s organizational structure, planned CIRP, and financing plans are sound for purposes
of supporting the Series 2020B Bonds and subsequent bonds required to support the full
implementation of the CIRP for the 2021 through 2024 fiscal years.
The summary statements presented in this letter do not address all of the issues examined and
described in the full report. Accordingly, the findings and conclusions presented herein should not
be considered complete except in the context of the detailed descriptions and information
contained in the report.
We appreciate the opportunity to be of service to the District in this important matter.
Very truly yours,
RAFTELIS FINANCIAL CONSULTANTS, INC.
Thomas A. Beckley
Vice President
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The Metropolitan St. Louis Sewer District Contents
D-5
Contents
Page
Introduction ........................................................................................................................... D-6
Purpose .............................................................................................................................. D-6
Scope ................................................................................................................................. D-6
Raftelis Financial Consultants' Qualifications .................................................................. D-7
Wastewater System Financing .............................................................................................. D-8
Capital Improvement and Replacement Program ............................................................. D-8
CIRP Financing ............................................................................................................... D-10
Wastewater Service Charges .......................................................................................... D-12
Wastewater Service Charge Components ................................................................... D-12
Other Charges and Fees .............................................................................................. D-14
Revenues ......................................................................................................................... D-15
Customer Growth ........................................................................................................ D-15
Wastewater Volumes .................................................................................................. D-16
Wastewater Revenues Under Projected Rates ............................................................ D-17
Other Operating Revenues .......................................................................................... D-18
Revenue Requirements ................................................................................................... D-20
Operation and Maintenance Expense .......................................................................... D-20
Routine Capital Improvements ................................................................................... D-21
Cash Financing of Capital Improvements ................................................................... D-21
Debt Service ................................................................................................................ D-21
Operating Reserve Allowance ........................................................................................ D-23
Financial Analysis ........................................................................................................... D-23
Wastewater Bill Comparison .......................................................................................... D-26
Bond Covenant Compliance ............................................................................................... D-28
Rate Covenants ............................................................................................................... D-28
Reasonable Charges ........................................................................................................ D-28
Adequate Maintenance ................................................................................................... D-29
Additional Bonds Tests ................................................................................................... D-29
Principal Assumptions ........................................................................................................ D-32
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The Metropolitan St. Louis Sewer District Wastewater System Financing
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Report on the Financial Feasibility of
The Metropolitan St. Louis Sewer District
Wastewater System
Revenue Bonds, Series 2020B
Introduction
The Metropolitan St. Louis Sewer District (“District”) is responsible for providing
wastewater and stormwater services for the City of St. Louis, Missouri (“City”) and most of
St. Louis County, Missouri (“County”). In order to continue to improve and expand its
wastewater system (“System”) and maintain compliance with state and federal regulations, the
District has developed a major capital improvement and replacement program (“CIRP”). In
order to provide for equitable recovery of capital financing costs from existing and future
wastewater customers, the District plans to partially finance System improvements through the
issuance of long-term debt. The remainder of the funds required to finance the CIRP will be
obtained from annual operating revenues, interest income, grants and contributions, and funds
on hand.
Revenue bonds are issued pursuant to the District’s Charter, which was approved by
the voters of the City and the County at a special election held on February 4, 1954 and
amended at special elections held on November 7, 2000 and June 5, 2012 (“Charter”). All
bonds are issued under the provisions of the Master Bond Ordinance adopted by the Board of
Trustees (“Board”) on April 22, 2004, as supplemented and amended by ordinances adopted
by the Board for each bond issue including the ordinance adopted by the Board on November
12, 2020 (the “Bond Ordinance”) for the Wastewater System Revenue Bonds, Series 2020B
(the “Series 2020B Bonds”).
Purpose
The purpose of this report is to summarize findings of the financial feasibility study
performed by Raftelis Financial Consultants, Inc. (“Raftelis”) related to the System and
independently assess the financial feasibility of the District’s issuance of the Series 2020B
Bonds. This report addresses financial issues that affect the operation of the System and the
District’s ability to issue and repay wastewater revenue bonds.
Scope
This report addresses the organization and management of the District. Also included
are the results of analyses related to existing and future financial requirements of the System
based on a review of financial reports, ordinances, budgets and other information. Information
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D-7
from these documents was supplemented through meetings and conversations with key District
representatives. Projections of revenue and revenue requirements of the System are shown in
this report for a study period that includes fiscal years 2021 through 2024.
Evaluation of the financial feasibility of the Series 2020B Bonds is based upon a review
of historical financial information provided by the District, an examination of revenue and
expenditure projections by District staff and Raftelis, and the preparation of cash flow analyses
examining projected System operation and capital programming financing through fiscal year
2024. The level of debt service coverage for the Series 2020B Bonds and subsequent bonds
projected to be issued through fiscal year 2024 is determined and compared with requirements
of the Bond Ordinance.
Raftelis Financial Consultants' Qualifications
Raftelis was founded in 1993 and has grown to become one of the largest and most
respected utility financial, rate, and management consulting firms in the nation. Raftelis has
experience providing these services to hundreds of utilities across the country and abroad.
Raftelis staff has provided bond feasibility reports for dozens of utilities throughout the United
States for billions of dollars in bonds. Raftelis currently has a professional staff of over 100
consultants located in seventeen offices throughout the United States providing financial and
management consulting services to municipal water and wastewater utilities. Raftelis is a
Registered Municipal Advisor with the Securities and Exchange Commission and the
Municipal Securities Rulemaking Board.
Raftelis began working with the District in 2007 as the Consultant to the Rate
Commission and was selected by the District in 2012 and 2017 to provide bond feasibility and
rate consulting services to the District for a five-year period.
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The Metropolitan St. Louis Sewer District Wastewater System Financing
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Wastewater System Financing
The general objectives of the District’s wastewater CIRP are to provide the facilities
necessary to meet federal and state requirements, maintain the integrity of the System, and
provide satisfactory levels of service and performance to customers. To accomplish these
objectives, the District must have sufficient operating revenues and adequate funding for CIRP
projects.
The District uses proceeds of revenue bonds along with wastewater service charge
revenues, grants, other revenues and available fund balances to meet the costs of the ongoing
CIRP.
Capital Improvement and Replacement Program
Table 1 presents a summary of the historical and projected CIRP for fiscal years 2020
through 2024. These costs were obtained from the District’s supplemental budget documents
and other data provided by District staff. The costs for projects benefiting special assessment
districts are not included in Table 1 since they are fully funded by subdistrict tax revenues and
thus do not impact the magnitude of the proposed bonds or required revenue increases.
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Metropolitan St. Louis Sewer District Wastewater System Financing D-9
Table 1: Capital Improvement & Replacement Program
Fiscal Year Ending June 30 2020 - 2024
Capital Improvement and Replacement Progam Needs FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Total
Actual Budget (1) Projected (1) Projected (1) Projected (1)
1. Asset Management - Capacity 17,196,000$ 119,919,192$ 129,196,385$ 88,302,254$ 100,565,089$ 455,178,920$
2. Asset Management - Renewal 40,316,000 36,967,427 27,748,666 23,505,472 37,469,847 166,007,411
3. Cityshed 6,250,000 15,309,122 23,855,120 24,554,015 12,685,743 82,654,000
4. Combined Sewer Overflow 27,190,000 25,554,670 14,531,259 52,555,017 59,933,177 179,764,123
5. Districtwide 11,050,000 14,635,798 16,622,444 22,184,873 19,533,644 84,026,759
6. Sanitary Sewer Overflow (2) 128,320,000 118,838,300 86,092,391 99,404,643 58,280,497 490,935,832
7. Treatment Plants (3) 24,536,000 30,639,042 72,671,052 170,112,507 248,073,521 546,032,122
8.Subtotal: CIRP 254,858,000$ 361,863,550$ 370,717,317$ 480,618,781$ 536,541,520$ 2,004,599,168$
9. Less: Capital Funded in O&M (Asset Management) (13,998,740) (9,535,754) (9,792,043) (10,654,366) (10,700,007) (54,680,911)
10. Less: Non-recurring Projects & Studies (8,887,933) (11,870,422) (10,259,652) (9,895,909) (8,466,607) (49,380,522)
11. Less: Project Liquidations (6,137,740) (23,494,967) (27,640,774) (22,156,554) (30,287,979) (109,718,014)
12. Plus: Capitalized Internal Labor 11,348,847 15,100,000 15,553,000 16,019,590 16,500,178 74,521,615
13.Total: CIRP Needs (4)237,182,434$ 332,062,407$ 338,577,847$ 453,931,542$ 503,587,104$ 1,865,341,335$
(1) Budgeted and Projected CIRP amounts are adjusted for historical levels of project delays and include 3.1% annual inflation from the estimated
costs in FY 2020 dollars.
(2) The investment is driven by Consent Decree requirements to eliminate at least 85% of all constructed SSO's by 12/31/2023.
(3) The investment is necessary to repair aging infrastructure and to meet regulatory requirements.
(4) CIRP costs for FY 2020 represent new appropriations approved in that year, and FY 2021 through FY 2024 represent estimated appropriations
adjusted for inflation and net of prior years’ unspent appropriations released for future use.
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Table 3 Capital Improvement and Replacement Program
The proposed CIRP is primarily focused on collection system improvement projects to meet
the District’s Consent Decree requirements that include an estimated $491 million to eliminate
sanitary sewer overflows and $180 million to reduce or eliminate combined sewer overflows.
About $788 million is earmarked for system improvements throughout the District that
includes asset management and collection system improvements. Improvements related to
existing treatment plants are expected to cost about $546 million during the five-year study
period.
CIRP Financing
Table 2 presents the proposed CIRP financing plan and summarizes the projected
source and application of funds over the four-year study period. This plan reflects the
recommendations of the Rate Commission and anticipates that proposed capital improvements
will be financed from a combination of bond proceeds, annual operating revenues, and interest
income.
Interest income earned on invested capital improvement funds is available to meet
capital improvement expenditures. Interest earnings recognize an assumed 2 percent average
annual interest rate on funds maintained in the construction account. Line 10 indicates the
estimated interest income earned on capital improvement program balances.
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D-11 Metropolitan St. Louis Sewer District Wastewater System Financingt
Table 2: Capital Improvement & Replacement Program Financing Plan
Fiscal Year Ending June 30 2020 - 2024
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Total
Actual Projected Projected Projected Projected
Sources of Funds
1. Beginning Year Balance (1) 189,978,208$ 188,141,132$ 198,255,117$ 146,730,215$ 95,075,314$ 189,978,208$
2. Revenue Bond Proceeds (2) 64,189,977 150,043,493 53,647,576 153,767,351 263,938,949 685,587,346
3. Cash Financing of Construction (PAYGO) 124,120,789 150,000,000 116,500,000 111,000,000 109,000,000 610,620,789
4. State Revolving Loan Proceeds (2) 23,952,000 22,000,000 95,000,000 115,000,000 55,000,000 310,952,000
5. WIFIA Loan - - - - - -
6. Capitalized Internal Labor 11,348,847 15,100,000 15,553,000 16,019,590 16,500,178 74,521,615
7. Commercial Paper - - - - - -
8. Line of Credit - - - - - -
9. Grants & Contributions (101,054) 685,899 716,027 747,480 780,317 2,828,670
10. Interest Income 12,365,681 5,690,000 6,700,000 7,920,000 9,570,000 42,245,681
11.Subtotal: Available Funds 425,854,448$ 531,660,524$ 486,371,720$ 551,184,636$ 549,864,758$ 1,916,734,308$
Uses of Funds
12. Major Capital Improvements (237,180,744)$ (332,062,407)$ (338,577,847)$ (453,931,542)$ (503,587,104)$ (1,865,339,645)$
13. Issuance Costs (532,572) (1,343,000) (1,063,658) (2,177,780) (2,812,903) (7,929,913)
14. Commercial Paper & Line of Credit Payments - - - - - -
15.Subtotal: Uses of Funds (237,713,316)$ (333,405,407)$ (339,641,505)$ (456,109,322)$ (506,400,007)$ (1,873,269,558)$
16.End of Year Balance 188,141,132$ 198,255,117$ 146,730,215$ 95,075,314$ 43,464,751$
(1) Includes balance in Sanitary Replacement Fund, Project Bond Funds, WW OMCI and Construction Funds,
Capital Improvement Surcharge Fund, and the Bond Place Special Taxing Subdistrict Fund.
(2) Issuance costs are included in the total proceeds shown.
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Wastewater Service Charges
Table 3 presents a summary of the District-wide charges imposed by the District since
the beginning of fiscal year 2015 as well as the proposed charges for the forecast period.
Wastewater Service Charge Components
The previous wastewater rates were adopted on June 9, 2016 and became effective on
July 1, 2016, with a schedule of rate increases to take effect on July 1 of 2016, 2017, 2018 and
2019. These rates are part of the fifth set of rates to go through the Rate Commission review
procedures mandated by the Charter. A new wastewater rate change proposal was submitted
to the Rate Commission on March 4, 2019. Under this proposal wastewater bills for typical
residential customers were projected to increase by about 3 percent per year in fiscal years
2021 through 2024. The Rate Commission completed its deliberations and submitted a Rate
Recommendation Report to the Board of Trustees on August 16, 2019. The Rate Commission
proposed changes to certain assumptions that impact revenues and operation and maintenance
expenditures and those changes have been incorporated into this feasibility report. The Board
approved the current four-year rate program on August 16, 2019. Due to COVID-19, the rate
increase proposed to go into effect on July 1, 2020 was postponed until October 1. This study
assumes that all future rate adjustments will be adopted on July 1 of each year.
The rates consist of a monthly base charge, a uniform volume charge, and extra strength
surcharges for biochemical oxygen demand (“BOD”) in excess of 300 milligrams per liter
(“mg/l”) or chemical oxygen demand (“COD”) in excess of 600 mg/l, and suspended solids
(“SS”) in excess of 300 mg/l. The base charge includes a billing and collection charge
component and a system availability charge component that are applicable to all customer
classes. A compliance charge is applied to non-residential customers, in addition to the base
charge, to recover monitoring and pretreatment program related costs. As a part of the 2011
Rate Commission proceedings, the District further differentiated the compliance charge into
tiers to better reflect the cost of providing these services to different non-residential customers
served by the District.
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D-13 Metropolitan St. Louis Sewer District Wastewater System FinancingTable 3. Historical and Projected Wastewater Rates
Fiscal Year Ending June 30
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Actual Actual Actual Actual Actual Current (1) Proposed Proposed Proposed
Base Charge ($/Bill)
Billing & Collection Charge 3.55$ 3.70$ 5.44$ 6.02$ 6.67$ 7.38$ 5.11$ 5.29$ 5.48$ 5.68$
System Availability Charge 12.70$ 14.55$ 14.02$ 15.50$ 17.16$ 18.97$ 21.29$ 22.02$ 22.78$ 23.61$
Total: Base Charge 16.25$ 18.25$ 19.46$ 21.52$ 23.83$ 26.35$ 26.40$ 27.31$ 28.26$ 29.29$
Compliance Charge ($/Bill) (b)
Tier 1 9.00$ 2.15$ 2.86$ 2.95$ 3.05$ 3.14$ 4.44$ 4.55$ 4.71$ 4.85$
Tier 2 43.55$ 44.50$ 57.20$ 58.94$ 60.89$ 62.61$ 62.16$ 63.64$ 65.80$ 67.67$
Tier 3 92.75$ 94.80$ 125.84$ 129.67$ 133.96$ 137.75$ 133.20$ 136.37$ 140.99$ 144.98$
Tier 4 136.00$ 139.00$ 185.90$ 191.56$ 197.91$ 203.49$ 177.60$ 181.83$ 187.98$ 193.30$
Tier 5 179.25$ 183.15$ 243.10$ 250.50$ 258.79$ 266.10$ 222.00$ 227.29$ 234.98$ 241.63$
Volume Charge
Metered ($/Ccf) 2.82$ 3.21$ 3.59$ 3.97$ 4.40$ 4.87$ 5.00$ 5.17$ 5.35$ 5.55$
Unmetered ($/Bill)
Per Room 1.83$ 2.09$ 2.12$ 2.35$ 2.61$ 2.89$ 2.95$ 3.06$ 3.17$ 3.29$
Per Water Closet 6.88$ 7.83$ 7.92$ 8.76$ 9.70$ 10.72$ 11.02$ 11.40$ 11.80$ 12.23$
Per Bath 5.73$ 6.53$ 6.60$ 7.30$ 8.08$ 8.93$ 9.19$ 9.51$ 9.84$ 10.20$
Per Separate Shower 5.73$ 6.53$ 6.60$ 7.30$ 8.08$ 8.93$ 9.19$ 9.51$ 9.84$ 10.20$
Extra Strength Surcharges ($/ton) (b)
Suspended Solids over 300 mg/l 244.03$ 251.88$ 262.00$ 269.07$ 277.03$ 283.87$ 302.67$ 321.47$ 332.35$ 341.76$
Biochemical Oxygen Demand over 300 mg/l 620.14$ 632.38$ 654.00$ 671.63$ 691.50$ 708.56$ 812.94$ 917.32$ 948.34$ 975.18$
Chemical Oxygen Demand over 600 mg/l 310.07$ 316.19$ 327.00$ 335.82$ 345.76$ 354.30$ 406.47$ 458.66$ 474.17$ 487.59$
(1) FY 2021 rates were adopted October 1, 2020.
Ccf = hundred cubic feet (approx. 748 gallons)
mg/l = milligram per liter
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Other Charges and Fees
In addition to the normal and excess strength wastewater service charges, the District
also imposes a number of other charges to meet cost related to growth and system operations.
The District imposes District-wide sewer system connection fees per Ordinance 14854 adopted
in 2018. Under this system of capital recovery charges, new customers buy into the wastewater
system so that they are on an equal equity basis with customers having similar service
requirements. The current charge is based on a unit equity value of $2.73 per gallon of
wastewater per day attributed to each new customer. For all single-family residential
customers, the sewer system connection fee is $1,126. For non-residential customers, the
charge varies from $1,126 for customers served by a 5/8 or 3/4-inch water meter to $65,493
for customers served by a 10-inch water meter.
A $0.08 per gallon charge for septage or other wastewater hauled to the Bissell
Wastewater Treatment Plant is imposed on all permitted waste haulers that serve customers
having septic tanks, cesspools, private treatment facilities, or customers otherwise not
connected to the District’s sewer system per Ordinance 12716, adopted on August 14, 2008.
Costs incurred for sampling and testing wastewater samples from industrial users are recovered
by a system of wastewater monitoring fees. These fees are typically published in ordinances
updating the wastewater service charges. A number of engineering and service fees are also
applied to reimburse the District for various services such as plan review, construction permits,
construction related inspections, machine taps, project bid fees, provision of blueprint and
microfilm copies, and permitting pretreatment customers.
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Revenues
District revenue is derived primarily from charges for wastewater service, including
revenues from extra strength surcharges. Other sources of income include dedicated subdistrict
assessments, connection fees, waste hauler permits, industrial monitoring charges, various
engineering fees, interest earnings, late charges and other operating income.
Customer Growth
Table 4 presents a summary of the historical and projected average number of
wastewater customers served by the District. All customer projections are based on an analysis
of historic growth patterns by customer class during the past five years. As indicated by Table
4, the number of metered customers is projected to increase from 349,300 in 2020 to 350,660
in 2024 and the number of unmetered customers is projected to increase from 77,400 in 2020
to 77,963 in 2024. The total number of customer accounts is expected to increase at an average
rate of 0.1 percent per year over the study period.
Table 4. Historical and Projected Average Customer Accounts
Fiscal Year Ending June 30
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Projected Projected Projected Projected
Metered Customers
1. Single Family 304,600 304,905 305,210 305,515 305,821
2. Multi-Family 20,600 20,682 20,765 20,848 20,931
3. Non-Residential 24,100 24,052 24,004 23,956 23,908
4.Subtotal: Metered Customers 349,300 349,639 349,979 350,319 350,660
Unmetered Customers
5. Single Family 56,600 56,657 56,714 56,771 56,828
6. Multi-Family 20,800 20,883 20,967 21,051 21,135
7. Non-Residential - - - - -
8.Subtotal: Unmetered Customers 77,400 77,540 77,681 77,822 77,963
Total Customer Accounts
9. Single Family 361,200 361,562 361,924 362,286 362,649
10. Multi-Family 41,400 41,565 41,732 41,899 42,066
11. Non-Residential 24,100 24,052 24,004 23,956 23,908
12.Total: Customer Accounts 426,700 427,179 427,660 428,141 428,623
13.% Change -0.1%0.1%0.1%0.1%0.1%
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Wastewater Volumes
Table 5 presents a summary of historical and projected contributed or billed wastewater
volumes. Billed wastewater volume is the amount of wastewater flow contributed to the
System by residential and non-residential customers. The determination of contributed
wastewater volume for unmetered residential customers is based on an analysis of customers
with similar characteristics using statistical methods and was updated in the past three years
for the most recent Rate Change Proposal. The indicated unit volumes which became effective
on July 1, 2016 are shown along with the current allowance below:
14.5 gallons per day (“gpd”) for each room
54.2 gpd for each water closet
45.2 gpd for each bath or separate shower
Billable wastewater volumes for all single-family customers with metered water
usage are determined on the basis of water billed during the period best equated to
contributed wastewater volume. For District customers, this period is from January 15
through March 30. Billed wastewater volume for non-residential customers is equal to actual
metered water usage less exemption allowances for any water that does not enter the sewer
system. Multifamily customers are either billed based on actual annual water usage or the
average annual water usage established during the best equated period for wastewater
contribution, depending on the billing method selected by each multifamily customer. The
selected billing basis is permanent and cannot be changed. Non-Residential billable volumes
are projected to sharply decline in FY 2021 due to the impact of COVID-19. The forecast
assumes that 50% of this volume will return in FY 2022 and the remainder in FY 2023. Other
projected volumes are based on the recognition of historical billing volumes and trends. Also
considered are projections of numbers of customers and average historic billed volume per
customer.
Table 7 Historical an
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Wastewater Revenues Under Projected Rates
A summary of historical revenues for fiscal year 2020 and projected wastewater
revenues under approved and recommended rates for fiscal years 2021 through 2024 is
presented in Table 6. Revenues for FY 2021 include the impact of the delayed rate increase
and decline of non-residential billed volume. Projected billed wastewater revenues do not
include allowances for bad debt, refunds or billing adjustments. These billing adjustments are
included with other operating revenues in Table 7.
Table 5. Historical and Projected Contributed Wastewater Volumes (Ccf)
Fiscal Year Ending June 30
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Projected Projected Projected Projected
Metered Customers
1. Single Family 19,919,794 19,545,718 19,213,441 18,886,813 18,565,737
2. Multi-Family 7,856,920 7,922,365 8,080,812 8,242,428 8,407,277
3. Non-Residential 20,193,079 16,836,714 18,514,897 20,193,079 20,435,396
4.Subtotal: Metered Customers 47,969,793 44,304,797 45,809,150 47,322,320 47,408,410
Unmetered Customers
5. Single Family 6,184,785 6,198,178 6,172,423 6,166,252 6,160,085
6. Multi-Family 4,011,801 4,017,382 3,979,771 3,963,851 3,947,997
7. Non-Residential - - - - -
8.Subtotal: Unmetered Customers 10,196,586 10,215,560 10,152,194 10,130,103 10,108,082
Total Contributed Wastewater Volume
9. Single Family 26,104,579 25,743,896 25,385,864 25,053,065 24,725,822
10. Multi-Family 11,868,721 11,939,747 12,060,583 12,206,279 12,355,274
11. Non-Residential 20,193,079 16,836,714 18,514,897 20,193,079 20,435,396
12.Total: Contributed Volumes 58,166,379 54,520,357 55,961,344 57,452,423 57,516,492
13.% Change -6.3% 2.6% 2.7% 0.1%
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Other Operating Revenues
Projected other wastewater utility revenues are presented in Table 7. These revenues
are grouped in the same manner as summarized in the District’s budget documents. All of these
revenues are used to offset operating costs.
The District anticipates receiving contributions from Missouri American Water for a
share of capacity in the Lower Meramec River Wastewater Treatment Plant. This revenue
averaged approximately $1.1 million in FY 2019 and FY 2020 and District staff estimates that
this revenue will average about $1.6 million per year for FY 2021-2024.
Table 8 Historical and Projected Billed Wastewater Service Revenue
Table 6. Historical and Projected Wastewater Revenues under Approved and Recommended Rates
Fiscal Year Ending June 30
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Projected Projected Projected Projected
Metered
1. Residential 257,778,494$ 238,711,381$ 247,071,569$ 254,918,296$ 263,613,383$
Non-Residential
2. Normal Strength 111,308,779 94,117,379 106,573,735 119,238,437 124,983,982
3. Extra Strength 5,529,206 6,115,097 6,897,564 7,045,199 7,157,842
4.Subtotal: Metered Customers 374,616,479$ 338,943,857$ 360,542,868$ 381,201,931$ 395,755,207$
Unmetered
5. Residential 49,072,991$ 74,270,460$ 76,945,462$ 79,576,989$ 82,432,902$
Total Wastewater Revenues
6. Residential 306,851,485$ 312,981,841$ 324,017,031$ 334,495,285$ 346,046,285$
7. Non-Residential 116,837,985 100,232,476 113,471,299 126,283,635 132,141,824
8.Total: Wastewater Revenues 423,689,470$ 413,214,317$ 437,488,330$ 460,778,921$ 478,188,109$
9.% Change - -2.5% 5.9% 5.3% 3.8%
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Table 7. Projected Other Wastewater Operating Revenues
Fiscal Year Ending June 30
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Budget Projected Projected Projected
Other Operating Revenue
1. Billing Adjustments (1) 5,438,213$ 4,720,200$ 5,143,539$ 5,604,871$ 6,107,606$
2. Bad Debt Provision (5,623,089) (5,768,400) (5,984,715) (6,209,142) (6,441,985)
Other Fees
3. Construction Inspection Fees 615,836$ 636,000$ 636,000$ 636,000$ 636,000$
4. Waste Hauler Fees 797,461 703,000 703,000 703,000 703,000
5. All Other Fees (2) 674,885 649,000 649,000 649,000 649,000
6.Subtotal: Other Fees 2,088,182$ 1,988,000$ 1,988,000$ 1,988,000$ 1,988,000$
7. Miscellaneous Revenues (3) 11,532,240 3,468,600 3,605,860 3,756,846 3,922,931
8.Subtotal: Other Operating Revenue 13,435,545$ 4,408,400$ 4,752,684$ 5,140,575$ 5,576,552$
9. Other Non-Operating Revenue (4) (479,715) 534,000 534,000 534,000 534,000
10. Connection Fee Revenue 857,069 1,201,000 1,213,010 1,225,140 1,237,392
11.Total: Other Miscellaneous Revenue 13,812,899$ 6,143,400$ 6,499,694$ 6,899,715$ 7,347,944$
% Change -55.5% 5.8% 6.2% 6.5%
(1) Includes late charges, refunds, adjustments, lien interest and fees, and other adjustments.
(2) Includes plan review fees, submittal fees, monitoring cost fees, pretreatment discharge permits, and all other fees.
(3) Includes reimbursements, reimbursable engineering and maintenance, Missouri American contributions, settlement
proceeds, and all other miscellaneous revenue.
(4) Includes rental income, clean water surcharge, and sale of fixed assets.
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Revenue Requirements
The revenue required to provide for the continued operation of the District must be
sufficient to meet the cash requirements for System operation. Revenue requirements include
(1) total System operation and maintenance expenses; (2) expenditures for routine and major
capital improvements met directly from revenues; (3) total System debt service (consisting of
principal and interest payments); and (4) provision for an adequate operating reserve.
Projections of the cash requirements to meet these System expenditures for the period of 2021
through 2024 from the rates approved by the Board for fiscal year 2021 and recommended to
the Board for fiscal years 2022 through 2024 are presented in this section.
Operation and Maintenance Expense
Operation and maintenance expense includes the total annual salaries and wages of
District personnel, costs for materials and supplies, fuel and electrical power costs and other
costs such as employee benefits, insurance, and contract services. Since these costs are an
ongoing annual obligation of the District, they are met from wastewater and stormwater
operating revenues as they are incurred. Wastewater related operation and maintenance
expense for fiscal year 2020 are actual results while fiscal years 2021 through 2024 are based
on the fiscal year 2021 budget using the escalation rates as documented in the most recent Rate
Change Proposal.
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Routine Capital Improvements
Expenditures for routine annual capital improvements
include those costs that tend to be routinely incurred each year for
normal replacements such as vehicles and office equipment, and
minor improvements or repairs. Since the costs of these
improvements are a continuing expense to be met each year, the
District appropriately finances these expenditures from current
wastewater revenues. These expenditures are included in the
District's annual budgets as Capital Outlay costs.
Cash Financing of Capital Improvements
In addition to cash financing routine capital
improvements, the District partially finances major capital
improvements on a cash or pay-as-you-go basis. The District is
expected to continue to cash finance all routine capital
improvements and a portion of the CIRP. The amount of projected
cash financing of the major capital improvement program was
previously identified on Line 3 of Table 2.
Debt Service
The District issued its first District-wide series of revenue
bonds in April 2004 and additional Senior Bonds were issued in
November 2006, November 2008, January 2010, December 2011,
August 2012, November 2012, December 2013, December 2015,
December 2016, December 2017, December 2018, and November
2019, with the 2010 issue being issued under the Build America
Bond federally subsidized program and the 2018A WIFIA loan
with the EPA that is on parity with the District’s Senior Bonds.
Total Parity Debt issued to date totals $1,985,122,204 as indicated
by the adjoining table. The District has also issued sixteen
subordinate series of revenue bonds through the Missouri State
Revolving Fund (“SRF”) and Department of Natural Resources
Direct Loan program. The total amount of Subordinate Bonds
issued to date is $666,469,000.
Additional revenue bonds are assumed to have 30-year
terms and with an assumed true interest rate of approximately 3.02
percent for issuances in fiscal year 2021, 3.32 percent in fiscal
year 2022, and 4.35 percent in fiscal years 2023 and 2024.
Series Amount
Revenue Bonds
2004A (1) (4) 175,000,000$
2006C (2) (4) 60,000,000
2008A (2) (4) 30,000,000
2010B 85,000,000
2011B (3) 52,250,000
2012A (3) 225,000,000
2012B (1) 141,730,000
2013B (3) 150,000,000
2015B (2) (3) 223,855,000
2016C 150,000,000
2017A (3) 316,175,000
2018A 47,722,204
2019B 52,130,000
2019C (5) 276,260,000
Total 1,985,122,204$
State Revolving Fund Loans
2004B 161,280,000$
2005A 6,800,000
2006A 42,715,000
2006B 14,205,000
2008B 40,000,000
2009A 23,000,000
2010A 7,980,700
2010C 37,000,000
2011A 39,769,300
2013A 52,000,000
2015A 75,000,000
2016A 20,000,000
2016B 75,500,000
2018B 25,267,000
2019A 23,952,000
2020A 22,000,000
Total 666,469,000$
(5) The Series 2019C Bonds
partially refunded the Series
2012A, 2012B, and 2015B Bonds.
Existing Debt Issues
(1) The Series 2012B Bonds
partially refunded the Series
2004A Bonds.
(2) The Series 2015B Bonds
refunded the Series 2006C and
2008A Bonds.
(3) The Series 2017A Bonds
partially refunded the 2011B,
2012A, 2013B, and 2015B bonds.
(4) The Series 2004A, 2006C, and
2008A have been fully paid.
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Additional revenue bonds issued as part of the SRF loan program are expected to have 20-year
terms and a net effective annual interest and administration cost of about 1.75 percent per year
to 2.25 percent per year. Table 8 presents debt service in two ways: by Payments to Sinking
Fund, which is used for modeling the District's cash flow in Table 9, and Payments to
Bondholders, which is used to determine coverage in accordance with the District's bond
covenants. The Payments to Bondholders for FY 2021 through FY 2024 shown in Table 8
was provided by the District's co-Financial Advisor, PFM Financial Advisors, LLC.
The scheduling of the proposed revenue bond issues and SRF loans reflects current
planning considerations, as recognized for purposes of this report. This is not intended to
preclude the possible modification or rescheduling of issues, if desirable, due to market
conditions, local financing policy, or other practical considerations.
Table 8. Projected Debt Service Requirements
Fiscal Year Ending June 30
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Budget Projected Projected Projected
Payments to Sinking Fund
Revenue Bonds
Existing 75,660,403$ 77,409,021$ 77,009,999$ 77,432,895$ 77,605,205$
Projected - 5,371,378 9,603,292 17,733,572 32,126,951
Subtotal: Revenue Bonds 75,660,403$ 82,780,398$ 86,613,291$ 95,166,468$ 109,732,156$
SRF Loans
Existing 36,859,804$ 38,410,226$ 39,717,794$ 40,764,602$ 41,901,331$
Projected - - 1,739,500 6,844,463 11,566,077
Subtotal: SRF Loans 36,859,804$ 38,410,226$ 41,457,294$ 47,609,065$ 53,467,407$
Total: Debt Service to Sinking Fund 112,520,207$ 121,190,625$ 128,070,585$ 142,775,532$ 163,199,563$
Payments to Bondholders
Revenue Bonds
Existing 75,659,166$ 77,504,515$ 76,931,547$ 77,402,260$ 77,586,074$
Projected - 4,098,294 9,120,417 16,194,697 29,485,576
Subtotal: Revenue Bonds 75,659,166$ 81,602,810$ 86,051,964$ 93,596,957$ 107,071,650$
SRF Loans
Existing 37,779,433$ 38,143,023$ 39,133,063$ 39,622,382$ 41,818,121$
Projected - - - 3,479,000 10,209,925
Subtotal: SRF Loans 37,779,433$ 38,143,023$ 39,133,063$ 43,101,382$ 52,028,046$
Total: Debt Service to Bondholders 113,438,599$ 119,745,832$ 125,185,027$ 136,698,339$ 159,099,696$
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Operating Reserve Allowance
The operating reserve allowance is a recommended balance to accommodate
fluctuations in annual revenues and expenditures. The existing revenue bond covenants require
the District to maintain a minimum balance equal to 45 days of operation and maintenance
expense. For this report, an operating reserve allowance equal to 60 days or about 16.4 percent
of annual operating expense is assumed to be maintained, as provided by the current budget.
Operating expense, as routinely presented in the District's annual budgets, is equal to the sum
of operation and maintenance expense and routine annual capital improvements. The operating
reserve for wastewater operations is projected to decrease to about $64 million in fiscal year
2024.
Financial Analysis
A pro forma cash flow statement showing projected wastewater revenues and revenue
requirements for the District during the study period is presented in Table 9. System revenues
must be at least sufficient to finance the costs of operation and maintenance expense, routine
annual capital improvements, and debt service costs on existing and proposed debt, while
maintaining adequate operating reserve funds and complying with all revenue bond debt
service coverage requirements. Annual revenues can also be used to finance a portion of the
major capital improvement program.
Table 9 presents annual wastewater revenues and expenditures under the District’s
approved or recommended rates for the study period. Line 1 of Table 9 shows projected
revenue under the approved or recommended rates for each year of the study period.
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Table 9. Comparison of Projected Wastewater Revenue with Projected Revenue Requirements
Fiscal Year Ending June 30
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Projected Projected Projected Projected
Wastewater Revenue
1 User Charge Revenue 423,689,470$ 413,214,317$ 437,488,330$ 460,778,921$ 478,188,109$
Other Miscellaneous Revenue
2. Other Operating Revenue (1) 13,435,545$ 4,408,400$ 4,752,684$ 5,140,575$ 5,576,552$
3. Connection Fee Revenue 857,069 1,201,000 1,213,010 1,225,140 1,237,392
4.Subtotal: Other Miscellaneous Revenue 14,292,614$ 5,609,400$ 5,965,694$ 6,365,715$ 6,813,944$
5. Interest Income - Operating and Capital 14,210,947 12,147,603 8,225,821 9,058,875 10,831,237
6.Total: Wastewater Revenue 452,193,031$ 430,971,320$ 451,679,845$ 476,203,511$ 495,833,289$
Operating Expenses
7. General Fund Operating Expenses 162,079,634$ 173,025,044$ 177,992,379$ 183,790,811$ 188,406,825$
8. Other Operating Expenses 13,769,129 3,674,454 3,681,756 4,080,786 3,844,205
9.Subtotal: Operating Expenses (O&M)175,848,763$ 176,699,498$ 181,674,135$ 187,871,597$ 192,251,030$
10.Net Revenue Available for Debt Service 276,344,268$ 254,271,822$ 270,005,710$ 288,331,914$ 303,582,259$
Debt Service (Payments to Sinking Fund)
Revenue Bonds
11. Existing 75,660,403$ 77,409,021$ 77,009,999$ 77,432,895$ 77,605,205$
12. Projected - 5,371,378 9,603,292 17,733,572 32,126,951
13.Subtotal: Revenue Bonds 75,660,403$ 82,780,398$ 86,613,291$ 95,166,468$ 109,732,156$
SRF Loans
14. Existing 36,859,804$ 38,410,226$ 39,717,794$ 40,764,602$ 41,901,331$
15. Projected - - 1,739,500 6,844,463 11,566,077
16.Subtotal: SRF Loans 36,859,804$ 38,410,226$ 41,457,294$ 47,609,065$ 53,467,407$
17.Total: Debt Service 112,520,207$ 121,190,625$ 128,070,585$ 142,775,532$ 163,199,563$
Other Revenues and Expenditures
18. Other Non-Operating Revenue (479,715)$ 534,000$ 534,000$ 534,000$ 534,000$
19. Routine Annual Capital Improvements (2,131,146) 6,807,948 6,950,915 7,096,884 7,245,919
20. Cash Financing of Capital Improvements (2) 136,486,470 155,690,000 123,200,000 118,920,000 118,570,000
21. Non-recurring Projects & Studies 8,887,933 11,870,422 10,259,652 9,895,909 8,466,607
22. Commercial Paper & Line of Credit Payments - - - - -
23.Subtotal: Other Expenditures 143,243,257$ 174,368,370$ 140,410,566$ 135,912,793$ 134,282,526$
24.Net Annual Balance (3) 20,101,088$ (40,753,172)$ 2,058,558$ 10,177,589$ 6,634,170$
25. Beginning Balance (4) 76,566,571$ 96,667,659$ 55,914,487$ 57,973,045$ 68,150,634$
26. Ending Balance (4) 96,667,659 55,914,487 57,973,045 68,150,634 74,784,804
Debt Service (Payments to Bondholders)
27. Revenue Bonds 75,659,166$ 81,602,810$ 86,051,964$ 93,596,957$ 107,071,650$
28. SRF Loans 37,779,433 38,143,023 39,133,063 43,101,382 52,028,046
29.Total: Debt Service 113,438,599$ 119,745,832$ 125,185,027$ 136,698,339$ 159,099,696$
Debt Service Coverage
30. Revenue Bonds 3.65 3.12 3.14 3.08 2.84
31. Total Debt 2.44 2.12 2.16 2.11 1.91
(1) Includes interest earned from the Missouri American Water Loan and City of Arnold.
(2) Includes return of interest to capital funds.
(3) Net Annual Balance is Net Revenue Available for Debt Service (Line 10) less Debt Service and Other Expenditures (Lines 17 and 23) plus Other
Non-Operating Revenue (Line 18)
(4) Includes funds set aside for a minimum operating reserve equal to 60 days of operating expenses.
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As indicated on Lines 2 and 3 of Table 9, other operating revenue and connection fee
revenue, previously projected in Table 7, are available for the wastewater system. Projected
revenue from District-wide connection fees are expended as part of the cash financing of major
improvements line item (Line 20), which is the sum of Line 3 and Line 10 of Table 2. Interest
income that is available from restricted or reserve funds for operating purposes is shown on
Line 5 of Table 9. Interest income is estimated based on a 2.0 percent annual interest rate
applied to the average beginning and end of year fund balances.
Total revenue available for wastewater utility operations is shown on Line 6 of Table
9. Total operation and maintenance expense for the wastewater system, is shown on Lines 7
and 8 of Table 9. Line 10 shows the estimated net revenue remaining after deducting total
projected operation and maintenance expense (Line 9) from total wastewater revenue (Line 6).
This net wastewater revenue is available or pledged for debt service coverage purposes.
Debt service requirements on existing and projected revenue bonds and SRF loans are
presented on Lines 11 through 17. This debt financing program will provide a mechanism to
spread the costs of major capital improvements over a portion of their useful lives and more
equitably recover these costs from both current and future users of the improvements.
Line 18 of Table 9 shows other non-operating revenue of the wastewater utility,
previously shown on Line 9 of Table 7. Line 19 of Table 9 shows the total amount of routine
annual improvements which are completely financed by annual revenues. Funds used to
finance a portion of the major capital improvement program are reported as a cost on Line 20
of Table 9 and as a source of funds on Line 3 of Table 2. The net annual balance of annual
revenues less expenditures is presented on Line 24. Lines 25 and 26 of Table 9 show the
projected combined beginning and ending cash balances of the wastewater utility for each year
of the study period exclusive of the targeted operating reserve balances. District staff provided
information regarding the unencumbered balance of funds available at the beginning of fiscal
year 2021.
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Wastewater Bill Comparison
Table 10 presents a comparison of typical wastewater service bills under approved and
recommended rates for fiscal years 2021 through 2024 for various billable wastewater volumes
and customer types. As indicated in the table, the monthly wastewater bill for the average
metered residential customer contributing 6 Ccf of wastewater per month will increase by 1
percent in 2021 with additional increases averaging 3.5 percent in FY 2022 through 2024.
T
Table 11 presents the results of a rate survey of the 50 largest U.S. cities based on
published rates as of October 2020. St. Louis’ rates have risen more quickly than some of the
other large cities in this survey, resulting in above average residential charges while the
commercial charges are still below average for the representative customers.
Table 10. Typical Bill Comparison
Fiscal Year Ending June 30
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Actual Proposed Proposed Proposed
Wastewater Bills
Single Family Residential (Metered)
1. 1 Ccf per month $ 31.22 $ 31.40 $ 32.48 $ 33.61 $ 34.84
2. 5 Ccf per month $ 50.70 $ 51.40 $ 53.16 $ 55.01 $ 57.04
3. 6 Ccf per month $ 55.57 $ 56.40 $ 58.33 $ 60.36 $ 62.59
4. 10 Ccf per month $ 75.05 $ 76.40 $ 79.01 $ 81.76 $ 84.79
5. 15 Ccf per month $ 99.40 $ 101.40 $ 104.86 $ 108.51 $ 112.54
6. 20 Ccf per month $ 123.75 $ 126.40 $ 130.71 $ 135.26 $ 140.29
Multi-Family Residential (Metered)
7. 20 Ccf per month $ 123.75 $ 126.40 $ 130.71 $ 135.26 $ 140.29
8. 40 Ccf per month $ 221.15 $ 226.40 $ 234.11 $ 242.26 $ 251.29
9. 60 Ccf per month $ 318.55 $ 326.40 $ 337.51 $ 349.26 $ 362.29
Non-Residential (Normal Strength Wastewater)
10. 70 Ccf per month $ 370.39 $ 380.84 $ 393.76 $ 407.47 $ 422.64
11. 100 Ccf per month $ 516.49 $ 530.84 $ 548.86 $ 567.97 $ 589.14
12. 160 Ccf per month $ 808.69 $ 830.84 $ 859.06 $ 888.97 $ 922.14
Non-Residential (Excess Strength Wastewater) (1)
13. 70 Ccf per month $ 579.43 $ 593.27 $ 618.49 $ 639.80 $ 661.54
14. 100 Ccf per month $ 750.34 $ 771.16 $ 804.56 $ 832.32 $ 860.96
15. 160 Ccf per month $ 1,067.35 $ 1,099.05 $ 1,145.73 $ 1,185.34 $ 1,226.89
(1) The 70, 100, and 160 Ccf bills assume excess strength of 150, 200, and 250 mg/l, respectively,
of suspended solids and BOD.
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Meter Size 5/8" 5/8" 3/4" 1" 2"
Gallons 4488 5984 11221 74805 7480500
Ccf 6.0 Rank 8.0 Rank 15.0 Rank 100.0 Rank 10000.0 Rank
Population Rank ($) ($) ($) ($) ($)
Albuquerque 32 NM 13.08 50 16.45 50 28.22 45 174.10 45 17,128.35 44
Arlington 49 TX 35.96 26 43.64 27 70.50 32 407.27 29 38,462.70 29
Atlanta 37 GA 76.70 3 108.08 3 217.91 31,551.56 2 156,882.56 1
Austin 11 TX 59.76 7 79.64 5 149.22 5679.80 11 66,960.78 12
Baltimore 30 MD 62.19 6 79.59 6 148.47 6909.93 4 87,159.69 5
Boston 21 MA 45.12 17 60.22 15 112.99 11 785.16 8 74,647.91 10
Charlotte 15 NC 44.06 18 54.44 19 90.77 17 544.98 22 51,969.63 21
Chicago 3 IL 18.31 48 24.41 45 45.78 40 305.20 36 30,520.44 36
Colorado Springs 39 CO 52.92 13 67.91 11 120.38 10 757.50 9 74,962.56 9
Columbus 14 OH 34.01 27 43.71 26 77.66 25 489.91 25 48,504.91 24
Dallas 9 TX 37.29 24 48.11 23 87.76 19 550.54 20 54,128.79 19
Denver 19 CO 33.86 28 40.87 29 71.86 31 382.86 32 35,186.11 32
Detroit 24 MI 28.20 36 36.41 33 66.93 35 419.21 28 41,051.78 28
El Paso 22 TX 30.13 33 34.45 36 71.90 30 300.06 37 21,705.77 42
Fort Worth 13 TX 31.87 29 40.21 30 69.70 33 248.60 42 23,633.75 40
Fresno 34 CA 25.75 41 25.75 43 25.75 46 197.30 44 19,730.00 43
Houston 4 TX 59.42 9 73.52 8 122.87 9653.63 13 64,312.84 14
Indianapolis 17 IN 41.85 20 49.55 21 76.51 27 276.44 39 25,492.33 38
Jacksonville 12 FL 45.96 16 56.58 16 98.27 14 566.25 19 53,212.80 20
Kansas City 38 MO 54.49 12 66.21 12 84.12 21 841.57 7 81,563.65 7
Las Vegas 27 NV 20.50 44 20.50 46 20.50 49 ‐ 50 ‐ 50
Long Beach 43 CA 20.50 44 20.50 46 20.50 49 37.87 2,751.00
Los Angeles 2 CA 30.66 32 40.88 28 76.65 26 511.00 24 51,100.00 22
Louisville 29 KY 46.66 14 56.32 17 90.13 18 593.50 18 58,181.01 18
Memphis 28 TN 10.17 51 13.57 51 25.44 48 169.58 46 16,958.29 46
Mesa 35 AZ 26.36 40 29.98 42 44.96 41 236.94 43 22,320.81 41
Miami 42 FL 23.23 43 35.89 34 80.20 24 617.61 17 63,284.61 16
Milwaukee 31 WI 25.60 42 38.26 32 82.57 23 622.94 16 80,754.86 8
Minneapolis 46 MN 26.68 39 33.47 38 60.39 36 355.36 33 34,011.87 34
Nashville 23 TN 43.24 19 54.94 18 123.75 8631.58 15 58,627.38 17
New Orleans 50 LA 59.51 8 76.83 7 147.98 7899.06 5 86,718.28 6
New York City 1 NY 38.04 23 50.72 20 95.10 15 634.00 14 63,400.00 15
Oakland 45 CA 15.22 49 17.86 49 25.55 47 139.00 47 13,177.30 47
Oklahoma City 25 OK 27.45 37 34.41 37 58.76 37 354.42 34 34,790.91 33
Omaha 40 NE 54.68 11 60.88 14 82.58 22 264.24 41 17,099.09 45
Philadelphia 6 PA 26.89 38 33.38 39 57.77 38 337.44 35 32,492.90 35
Phoenix 5 AZ 20.34 46 25.29 44 42.60 42 267.87 40 24,754.53 39
Portland 26 OR 62.64 5 83.52 4 156.60 41,068.77 3 103,672.37 3
Raleigh 41 NC 39.29 21 48.35 22 85.11 20 480.22 26 45,382.56 26
Sacramento 36 CA 19.85 47 19.85 48 19.85 51 ‐ ‐
San Antonio 7 TX 30.05 34 39.37 31 71.99 29 434.14 27 41,636.31 27
San Diego 8 CA 36.75 25 43.95 25 69.14 34 392.05 31 37,687.33 31
San Francisco 16 CA 92.94 2 122.72 2 226.95 2889.60 6 88,603.60 4
San Jose 10 CA 63.48 4 73.07 9 92.26 16 545.58 21 48,185.67 25
Seattle 18 WA 93.30 1 124.40 1 233.25 11,555.00 1 155,500.00 2
Tampa 48 FL 38.57 22 46.17 24 72.77 28 395.78 30 38,016.71 30
Tucson 33 AZ 29.29 35 34.72 35 53.72 39 284.47 38 27,159.73 37
Tulsa 47 OK 30.81 30 30.81 40 30.81 43 678.17 66,524.21
Virginia Beach 44 VA 30.81 30 30.81 40 30.81 43 39.32 48 117.98 49
Washington 20 DC 46.33 15 60.94 13 112.24 12 733.77 10 73,089.33 11
St. Louis MO 56.40 10 68.67 10 101.40 13 530.84 23 50,030.84 23
Median 35.96 43.71 76.65 480.22 45,382.56
Average 39.55 49.43 84.90 504.75 49,083.27
Table 11 ‐ Survey of Typical Monthly Wastewater Bill ‐ 50 Largest US Cities
Residential Non‐Residential
Small Medium Large Commercial Industrial
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Bond Covenant Compliance
Rate Covenants
The majority of all District wastewater and stormwater revenues are deposited into and
accounted for by separate wastewater and stormwater operating funds. Portions of these
revenues are transferred to the General Fund, as required, to pay each utility’s portion of
operation and maintenance expense and routine capital expenditures.
Section 6.1 of the Master Bond Ordinance requires the District to operate the System
on a revenue producing basis and at all times to prescribe, fix, maintain, and collect rates, fees,
and other charges for the services, facilities, and commodities
furnished by the System fully sufficient at all times to pay annual
operation and maintenance expense, provide a reasonable operating
reserve, produce net revenues in each fiscal year equal to at least 1.25
times the Debt Service Requirement on all Senior Bonds currently
outstanding and 1.15 times the Debt Service Requirement on all Bonds then outstanding and
accumulate sufficient funds to meet the costs of major renewals, replacements, repairs,
additions, betterments, and improvements to the System to keep it in good working condition.
In addition, Section 3.020(16) of the Charter requires the District to establish fair and
reasonable schedules of charges and Section 7.130 of the Charter requires a balanced budget.
Based on a detailed analysis of the System’s revenue and revenue requirements, as
presented in the Wastewater System Financing section of this report, the District will continue
to meet the rate covenant requirements after issuance of the Series 2020B Bonds. In addition,
the existing wastewater rates in effect for fiscal year 2021 and the rates recommended for fiscal
years 2022, 2023, and 2024 are projected to provide sufficient user charge revenues, together
with other available revenue sources, to meet all projected revenue requirements related to the
proposed CIRP and remain in compliance with the rate covenants throughout the study period.
Reasonable Charges
Section 6.7 of the Master Bond Ordinance requires that:
“None of the facilities or services afforded by the System will be furnished
to any user without a reasonable charge being made therefor.”
Current and future rates for the System are based on detailed cost of service analyses
to provide reasonable assurance that each customer class pays its proportionate share of the
costs required to provide utility service. All users of the System are required to pay their
proportionate share of operating and maintenance expenses in compliance with the Master
Capitalized terms
are defined in the
Bond Ordinance.
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Bond Ordinance requirement and Federal user charge requirements. No free service is being
provided by the District.
Adequate Maintenance
Section 6.2 of the Bond Ordinance requires the District to operate the System in an
efficient and economical manner and maintain the System at all times in good repair and sound
operating condition. The System has historically been adequately maintained and found to be
in good working order. Although costs are considered reasonable and result in rates
comparable to similar sized utilities, the District is continuously looking at ways to reduce
costs and keep utility rates as low as possible.
Additional Bonds Tests
In order to issue additional revenue bonds on parity with prior Senior Bonds, the
District must have sufficient revenues to meet either a preceding year or ensuing year
additional bonds coverage test. Section 5.3 of the Master Bond Ordinance requires historical
Net Operating Revenues and Investment Earnings (“net revenues”) for a period of 12
consecutive months of the most recent 18 consecutive months prior to the issuance of the
proposed Senior Bonds to be at least equal to (i) 1.25 times the Maximum Annual Debt Service
Requirement on all Senior Bonds which will be Outstanding immediately after the issuance of
the proposed Senior Bonds, and (ii) 1.15 times the Maximum Annual Debt Service
Requirement on all Bonds which will be Outstanding immediately after the issuance of the
proposed Senior Bonds.
For the ensuing year additional bonds test, the Master Bond Ordinance requires the
forecasted net revenues for each fiscal year in the Forecast Period (the three consecutive fiscal
years commencing with the fiscal year in which any proposed Senior Bonds are to be issued)
to be at least (i) 1.25 times the Maximum Annual Debt Service Requirement on all Senior
Bonds that will be Outstanding immediately after the issuance of the proposed Senior Bonds,
and (ii) 1.15 times the Maximum Annual Debt Service Requirement on all Bonds which will
be Outstanding immediately after the issuance of the proposed Senior Bonds.
Revenue adjustments are allowed for the preceding year test for any rate increase
enacted prior to the delivery date of the proposed Senior Bonds and not fully reflected in the
historical Net Operating Revenues actually received during the 12-month period. A similar
adjustment is allowed for the ensuing year test if the rates were actually adopted by ordinance
prior to issuance of the bonds. Without a future rate adjustment provision for the ensuing year
test, the normal inflationary increases in operation and maintenance expenses could outpace
the revenues obtained from a relatively stable customer base such that future net revenues and
ensuing year debt service coverage may significantly decrease towards the end of the Forecast
Period. This may require the District to enact multiple year rate increases prior to issuance of
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the bonds, set rates at a current year debt service coverage level of 1.50 times the Debt Service
Requirement or higher to account for the expected coverage deterioration, or only rely on the
historic year test to issue additional Senior Bonds.
The Master Bond Ordinance also specifies additional bond tests for the issuance of any
Subordinate Bonds. These tests are identical to the additional Senior Bond tests.
The District has never defaulted on any District-wide or subdistrict revenue bond
payment and is expected to be able to issue additional revenue bonds throughout the study
period. Table 12 presents the results of the rate covenant and additional bond coverage tests
during the study period and projects revenue based on the recommended rate increases through
2024. As indicated by Line 4 of Table 12, the indicated annual rate covenant coverage ranges
from 2.83 times annual debt service to 3.65 times annual senior lien debt service, exceeding
the 1.25 minimum requirement. Likewise, the additional bond coverage levels for Senior
Bonds, as shown on Lines 11 and 16 of Table 12, exceed their 1.25 minimum requirements
throughout the study period. Coverage indicated for total debt is also above the 1.15 minimum
requirement throughout the study period, as shown on Lines 12 and 17 of Table 12. Lines 19
and 20 present the ensuing year additional bonds test as calculated for the Series 2020B Bonds
and does not consider the potential impact of future rate increases or bond issues. The District
is in compliance with the ensuing year additional bonds test as the senior lien coverage exceed
1.25 times and total debt coverage exceed 1.15 times in each of the next three years.
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a
Table 12. Debt Service Coverage under Projected Revenue Levels
Fiscal Year Ending June 30
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Actual Projected Projected Projected Projected
Rate Covenant Coverage
1. Projected Net Revenue (1) 276,344,268$ 254,271,822$ 270,005,710$ 288,331,914$ 303,582,259$
Projected Debt Service to Bondholders (2)
2. Senior Lien Bonds 75,659,166$ 81,602,810$ 86,051,964$ 93,596,957$ 107,071,650$
3. Total Debt (3) 113,438,599$ 119,745,832$ 125,185,027$ 136,698,339$ 159,099,696$
Debt Service Coverage Levels
4. Senior Lien Bonds (4) 3.65 3.12 3.14 3.08 2.84
5.Total Debt (5) 2.442.122.162.111.91
Additional Parity Test Coverage
Projected Maximum Annual Debt Service (6)
6. Senior Lien Bonds 132,181,732$ 139,821,732$ 142,713,732$ 151,949,232$ 167,798,482$
7. Total Debt 136,493,645 144,133,145 147,024,645 162,028,421 185,028,661
Preceding Year Test
8. Net Revenue for Prior Fiscal Year 392,565,334$ 276,344,268$ 254,271,822$ 270,005,710$ 288,331,914$
9. Net Revenue Adjustment (7) 41,808,208 29,016,148 5,593,980 9,180,194 9,947,451
10. Adjusted Net Revenue 434,373,542$ 305,360,416$ 259,865,802$ 279,185,904$ 298,279,365$
Preceding Year Debt Service Coverage Levels
11. Senior Lien Bonds (8) 3.29 2.18 1.82 1.84 1.78
12. Total Debt (9) 3.18 2.12 1.77 1.72 1.61
Ensuing Year Test
13. Net Revenue for Ensuing Fiscal Year 254,271,822$ 270,005,710$ 288,331,914$ 303,582,259$ 343,982,148$
14. Net Revenue Adjustment (10) - - - - -
15. Adjusted Net Revenue 254,271,822$ 270,005,710$ 288,331,914$ 303,582,259$ 343,982,148$
Ensuing Year Debt Service Coverage Levels
16. Senior Lien Bonds (11) 1.92 1.93 2.02 2.00 2.05
17. Total Debt (12) 1.86 1.87 1.96 1.87 1.86
Ensuing Year Additional Bonds Test - Current Issue
18. Net Revenue for Ensuing Year (13) 196,455,018$ 230,249,990$ 270,374,331$
19. Senior Lien Bonds (13) 1.41 1.65 1.93
20. Total Debt (13) 1.36 1.60 1.88
(1) Net revenue as shown on Line 10 of Table 9. Includes the impact of approved rate increases each year.
(2) Projected actual payments to of principal and interest from the sinking fund to bondholders.
(3) Includes senior revenue bonds and subordinate debt obligations.
(4) Line 1 / Line 2. The Bond Ordinance requires net revenue to equal or exceed 1.25 times actual senior lien debt service.
(5) Line 1 / Line 3. The Bond Ordinance requires net revenue to equal or exceed 1.15 times actual total debt service.
(6) Maximum future debt service for all series of revenue bonds issued in previous years or during the current fiscal year.
(7) Adjustment for revenues increases to be fully operative July 1 of the current fiscal year as allowed by the Bond Ordinance.
(8) Line 10 / Line 6. The Bond Ordinance requires adjusted net revenue for the preceding fiscal year to equal or exceed 1.25 times
the maximum annual debt service on all then outstanding senior lien obligations.
(9) Line 10 / Line 7. The Bond Ordinance requires adjusted net revenue for the preceding fiscal year to equal or exceed 1.15 times
the maximum annual debt service on all then outstanding debt obligations.
(10) Adjustment for revenues increases not permitted for ensuing year coverage test unless already adopted by the Board.
(11) Line 15 / Line 6. The Bond Ordinance requires net revenue for the ensuing three fiscal years to equal or exceed 1.25 times
the maximum annual debt service on all then outstanding senior lien revenue bonds.
(12) Line 15 / Line 7. The Bond Ordinance requires net revenue for the ensuing three fiscal years to equal or exceed 1.15 times
the maximum annual debt service on all then outstanding bonds.
(13) The test for the currently proposed issue considers the next three fiscal years, with adjustments for future rate increases adopted
by the Board.
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The Metropolitan St. Louis Sewer District Principal Assumptions
D-32
Principal Assumptions
In conducting our analyses and in forming an opinion of future operations summarized
in this report, Raftelis has made certain assumptions with respect to conditions, events, and
circumstances that may occur in the future. The methodology utilized by Raftelis in performing
the analysis follows generally accepted practices for such projections. Such assumptions and
methodologies are summarized in this report and are reasonable and appropriate for the
purpose for which they are used. While we believe the assumptions are reasonable and the
projection methodology valid, actual results may differ materially from those projected, as
influenced by the conditions, events, and circumstances that actually occur. The principal
assumptions used in the forecast of future operations are as follows:
1. In preparation of this report, Raftelis has relied on certain historical, financial, and
statistical data supplied by District staff. While such data is considered reliable, Raftelis
has not independently verified the detailed accuracy of such data.
2. The District’s estimates of content, scheduling, and cost of the capital improvement
program present a reasonable projection of the future construction program and
complies with the initial terms of the Consent Decree.
3. Billed wastewater volume will continue to decrease but will level off towards the end
of the study period.
4. Debt service for the revenue bonds proposed to be issued, including the Series 2020B
Bonds, will be approximately as estimated as of the date of this report
5. The District will maintain a minimum operating reserve balance at all times that is at
least equal to 60 days of operating expenditures.
6. There will be no material changes in federal and state laws or regulations that would
adversely impact the District’s ability to secure tax-exempt financing for its System,
place more stringent limitations on wastewater effluent discharges, materially increase
the cost of constructing or operating the wastewater system, or otherwise adversely
impact operations of the System.
7. The general economy that impacts System costs and users’ capabilities to pay
wastewater service charges will remain relatively stable at current conditions.
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APPENDIX E
Form of Opinion of Co-Bond Counsel
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E-1
FORM OF OPINION OF CO-BOND COUNSEL
(SERIES 2020B BONDS)
Gilmore & Bell, P.C., St. Louis, Missouri, and White Coleman & Associates, LLC, St. Louis,
Missouri, Co-Bond Counsel, propose to issue their approving opinions upon the issuance of the
Series 2020B Bonds in substantially the following form:
The Metropolitan St. Louis Sewer District
St. Louis, Missouri
J.P. Morgan Securities LLC
New York, New York
Re: $120,000,000 The Metropolitan St. Louis Sewer District, Wastewater System Revenue
Bonds, Series 2020B
Ladies and Gentlemen:
We have acted as co-bond counsel in connection with the issuance by The Metropolitan St. Louis
Sewer District (the “District”), of the above-captioned bonds (the “Bonds”). In this capacity, we have
examined the District’s Charter, the law and the certified proceedings, certifications and other documents
that we deem necessary to render this opinion.
The Bonds are issued pursuant to Master Bond Ordinance No. 11713 adopted by the Board of
Trustees of the District on April 22, 2004, as supplemented by Ordinance No. 15546 adopted by the
Board of Trustees of the District on November 12, 2020 (collectively, the “Bond Ordinance”).
Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Bond Ordinance.
Regarding questions of fact material to our opinion, we have relied upon the certified proceedings
and other certifications of public officials furnished to us without undertaking to verify the same by
independent investigation.
Based on and subject to the foregoing, we are of the opinion, under existing law, as follows:
1. The Bonds have been duly authorized, executed and delivered by the District and are
valid and legally binding limited obligations of the District, payable solely from the Pledged Revenues of
the District’s sanitary sewer system, after providing for the costs of operation and maintenance thereof.
The Bonds do not constitute general obligations of the District nor do they constitute an indebtedness of
the District within the meaning of any constitutional, statutory or charter provision, limitation or
restriction, and the taxing power of the District is not pledged to the payment of the Bonds.
2. The Bond Ordinance has been duly adopted by the Board of Trustees of the District and
constitutes a valid and legally binding obligation of the District enforceable against the District. The
Bond Ordinance creates a valid lien on the revenues and other funds pledged by the Bond Ordinance for
the security of the Bonds on a parity with any Senior Bonds issued or to be issued as provided under the
Bond Ordinance.
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E-2
3. The interest on the Bonds (i) is excludable from gross income for federal income tax
purposes, (ii) is exempt from income taxation by the State of Missouri, and (iii) is not an item of tax
preference for purposes of computing the federal alternative minimum tax. The opinions set forth in this
paragraph are subject to the condition that the District complies with all requirements of the Internal
Revenue Code of 1986, as amended (the “Code”) that must be satisfied subsequent to the issuance of the
Bonds in order that interest thereon be, or continue to be, excludable from gross income for federal
income tax purposes. The District has covenanted to comply with all of these requirements. Failure to
comply with certain of these requirements may cause the interest on the Bonds to be included in gross
income for federal and State of Missouri income tax purposes retroactive to the date of issuance of the
Bonds. The Bonds have not been designated as “qualified tax-exempt obligations” for purposes of
Section 265(b) of the Code.
We express no opinion regarding the accuracy, completeness or sufficiency of the Official
Statement or other offering material relating to the Bonds (except to the extent, if any, stated in the
Official Statement). Further, we express no opinion regarding the perfection or priority of the lien on
revenues or other funds pledged under the Bond Ordinance or tax consequences arising with respect to the
Bonds other than as expressly set forth in this opinion.
The rights of the owners of the Bonds and the enforceability of the Bonds and the Bond
Ordinance may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors’ rights generally and by equitable principles, whether considered at law or in equity,
and their enforcement may be subject to the exercise of judicial discretion in appropriate cases.
This opinion is given as of its date, and we assume no obligation to revise or supplement this
opinion to reflect any facts or circumstances that may come to our attention or any changes in law that
may occur after the date of this opinion.
Very truly yours,
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THE METROPOLITAN ST. LOUIS SEWER DISTRICT • WasteWater system revenue Bonds, series 2020B!(
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MAN C H E S T E R
MANCHESTER
MO370
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MINTERT
SULPHUR
GRAND GLAIZE
Lemay
Fenton
Coldwater
Grand Glaize
Lower Meramec
Bissell Point
Missouri River
LEMAYLEMAY
MISSOURI RIVERMISSOURI RIVER
BISSELL POINTBISSELL POINT
COLDWATERCOLDWATER
LOWER MERAMECLOWER MERAMEC
¶
SERVICE AREAS
ST. CHARLES COUNTY
ST. CLAIR COUNTY
MADISON
COUNTY
LEGEND
#*TREATMENT PLANTS
!(MAINTENANCE YARDS
ST. LOUIS COUNTY
MSD BOUNDARY
BISSELL POINT
COLDWATER
LEMAY
MISSOURI RIVER
LOWER MERAMEC
The Metropolitan St. Louis Sewer District
JEFFERSON COUNTYFRANKLIN COUNTYMiles of Pipe & Force Mains:
(as of 06/30/2020)
Sanitary Sewers = 4,700 Miles
Storm Sewers = 3,000 Miles
Combined Sewers = 1,700 Miles
Total = 9,400 Miles
294
**DRAFT**v1