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Home My Public Portal AboutExhibit MSD 66 - State Direct Loan Due Diligence Request Form - MSD Response 090513Exhibit MSD 66 I. General Information 1. Legal Name of Participant: The Metropolitan St. Louis Sewer District Nature of governmental entity of the Participant (county, city, village, public water district, public sewer district, or combination): public sewer district Authorized Representative/Daily Contact Person: Brenda A. Schaefer Address: 2350 Market Street St. Louis, MO 63103 Phone #: 314-768-6222 E-mail: bschaefer@stlmsd.com Fax #: 314-768-2701 2. Does any member of the Participant's governing body or any of its key administrative personnel have a potential conflict of interest regarding the project to be financed with the Direct Loan by reason of such membership or position? ❑ Yes II No If yes, state whom and the nature of such conflict. 3. Date of Participant's fiscal year end: June 30. 4. Participant's Taxpayer Identification Number: 43-6011991 5. Has the Participant ever defaulted on a bond issue? ❑ Yes 22 No If yes, please describe: 6. Does the Participant's last annual audit include a finding that the Participant is in non-compliance with any bond covenants contained in any bond ordinances or resolutions? ❑ Yes 111 No If yes, please describe: 7. Has the Participant ever failed to comply with any of the informational reporting responsibilities contained in any financing document or instrument intended to comply with the requirements of Rule 15c2-12 of the Securities and Exchange Commission (regarding municipal securities disclosure)? ❑ Yes No If yes, please describe: 07/24/2012 2 8. Participant's local bond counsel: Name: Gilmore & Bell, P.C. Address: One Metropolitan Square 211 N. Broadway, Suite 2350 St. Louis, MO 63102 Phone #: 314-436-1000 E-mail: rballsrudAgilmorebell.com jterry@gilmorebell.com 9. Participant's financial advisor, if any: Name: Public Financial Management Address: 801 Grand Avenue, Suite 3300 Des Moines, IA 50312 Phone #: 612-338-3738(MPLS) 515-243-2600 (DSM) E-mail: vandaj@pfm.com pughb@pfm.com Name: White Coleman Address: 500 North Broadway, Suite 1300 St. Louis, MO 63102-2110 Phone #: 314-621-7676 Fax#: 314-621-0959 E-mail: whitecoleman@whitecoleman.net II. Debt and Authorizing Information Fax #: 314-436-1166 1. What is the source of repayment of the Participant's bonds securing the direct loan: ❑ Combined Waterworks and Sewerage System Revenues ❑ Waterworks System Revenues Sewerage System Revenues ❑ Unlimited Property Tax Revenues (General Obligation) ❑ Capital Improvement Sales Tax Revenues (Bonds) ❑ Capital Improvement Sales Tax Revenues (annual appropriation) [note — must also check another box] ❑ Other (describe): 2. Is there a limitation on the final maturity date for the Participant's bonds imposed by election or ordinance? 0 Yes • No If yes, please describe: 3. Please attach a list of the Participant's outstanding bonds that are secured by the same source of revenues that will secure repayment of the direct loan indicated in II-1 above, showing outstanding balance, source of payment, and principal and interest payable by fiscal year. 07/24/2012 3 Original Outstanding True Interest Net Interest All -in Average Average Call Type of Issue Pa Par Cgs,1 Cost TIC Coil Life Date Insured? W1 Authorization Senior Revenue Bonds Wastewater System Revenue Bonds, Series 2004A 175,000,000 4,540.000 4.8421% 4.8552% 4.9127% 4.8281 % 22.012 5/1/2014 Yes Negotiated 500,000,000 Wastewater System Revenue Bonds, Series 2006C 60,000,000 60,000,000 4.5326% 4.6541 % 4.5621% 4.8526% 25.769 5/1/2016 Yes Negotiated 500,000,000 Wastewater System Revenue Bonds, Series 2008A 30,000,000 30,000,000 5.5273% 5.5054% 5.5807% 5.4665 % 25.966 5/1/2017 No Negotiated 275.000.000 Taxable Wastewater System Revenue Bonds(BABs), Series 2010B 85,000,000 85,000,000 3.8445% 5.8792% 3.8720% 5.8560% 27.529 MWCtn No Negotiated 275,000,000 Wastewater System Revenue Bonds, Series 2011E 52,250,000 52,250,000 3.5503% 3.2636% 3.1366% 4.1785% 12.431 5/1/2021 No Competitive 275,000,000 Wastewater System Revenue Bonds, Series 2012A 225,000,000 225,000,000 3.6717% 4.0537% 3.7024% 4.7597% 21.431 5/1/2022 No Negotiated 945,000,000 Wastewater System Revenue Bonds. Series 2012B 141.730,000 141,730,000 3.1717% 3.5789% 3.2029% 4.9140% 15.248 5/1/2022 No Negotiated 500,000,000 Subordinate SRF Bonds Subordinate Wastewater System Revenue Bonds (SRF), Series 2004B 161,280,000 119,515,000 4.6747% N/A 4.7604% 4.5627% 12.29 7/1/2014 No Negotiated 500,000,000 Subordinate Wastewater System Revenue Bonds (SRF), Series 2005A 6,800,000 5,055,000 4.1678% N/A 4.3154% 4.4683% 12.39 7/1/2015 No Negotiated 500,000,000 Subordinate Wastewater System Revenue Bonds (SRF), Series 2006A 42,715,000 34,225.000 4.0750% N/A 4.5366% 4.4722% 12.19 7/1/2016 NoNegotiated 500,000,000 Subordinate Wastewater System Revenue Bonds (SRF), Series 2006E 14,205;000 11,620,000 4.1879% N/A 4.3853% 4.4899% 12.23 7/1/2016 No Negotiated 500,000,000 Subordinate Wastewater System Revenue Bonds (SRF), Series 2008A 40,000,000 34,725,000 5.4245% N/A 5.5440% 5.3914% 11.26 7/1/2019 No Negotiated 500,000,000 Subordinate Wastewater System Revenue Bonds, Series 2009A 23,000,000 21,084,500 1.4600% 1.4600% 1.5515% 1.4600% 11.41 N/A No N/A 275.000,000 Subordinate Wastewater System Revenue Bonds, Series 2010A 7,980,700 7,643,000 1.4800% 1.4800% 1.5719% 1.4800% 12.56 N/A No N/A 275,000,000 Subordinate Wastewater System Revenue Bonds, Series 2010C 37,000,000 35,519,000 1.6499% 1.6500% 1.7386% 1.6500% 11.33 N/A No N/A 275.000,000 Subordinate Wastewater System Revenue Bonds. Series 2011 A 39,769.300 39.769.300 1.5199% 1.5200% 1.5971% 1.5200% 13.37 N/A No N/A 275,000,000 Leases ESRP Oracle Lease 12,000,000 9,023,494 N/A N/A N/A 4.36% 2.527 N/A No N/A Energy Lease#1 2004 98,595 7,437 N/A N/A N/A 3.15% 4.857 N/A No N/A Energy Lease #2 2012 242,627 223,793 N/A N/A N/A 2.50% 4.366 N/A No N/A 4. Describe the amount and type of any authorized but unissued bond debt for the type of bonds secured by the same source of revenues that will secure repayment of the direct loan, including the bonds to be issued in connection with this financing. See Chart above (Section II Question 3.) 5. If sales tax is an anticipated source of repayment for the direct loan, list and describe all sales taxes imposed by the Participant (including the sales tax described above as a source of repayment for this financing): N/A Please provide a copy of the ballot authorizing such sales tax(es) and ordinance(s) establishing the sales tax(es). N/A 6. Does the Participant anticipate issuing any bonds simultaneously with or within one year after the bonds to be issued by the Participant in connection with this direct loan? Yes ❑ No If yes, please describe and provide an official statement, if available: 07/24/2012 4 III. Project and Finance Structure Information 1. Expected Project Sources and Uses: Description MO River Direct Public I/I Direct Total Loan- Phase III Loan — Phase I Land and easement acquisition Planning and design Refinancing outstanding debt $0 Construction111 16,869,274.90 34,729,725.10 51,599,000 Contingency Capitalized interestE2 $0 Subtotal Construction Costs 16,869,274.90 34,729,725.10 51,599,000 Local bond counsel 7,987 16,513 24,500 Local financial advisor 18,745 38,755 57,500 Paying/Escrow Agent 325.10 674.90 1,000 Master Trust Bond Expense[33 101,712 210,288 312,000 Program bond counse1141 1,956 4,044 6,000 Subtotal Financing Costs 130,725.10 270,274.90 401,000 TOTAL 17,000,000 35,000,000 52,000,000 t Participant funds or other financing source (e.g. DNR rural sewer grant) [1] Includes construction engineering [2] Non-standard — requires justification in 2. below [33 0.6% of Direct Loan Total [41 Available from DNR Project Coordinator 2. Structure for Participant bonds: Amortization Method: II Standard - Level debt. ❑ Non-standard: Provide proposed amortization and justification. Are revenues available to pay interest on the Participant's bonds from date of issuance? f Yes ❑ No If no, please describe special circumstances: Will this fmancing utilize all remaining voter authorization? ❑ Yes No 07/24/2012 5 3. Anticipated Project Schedule: Please provide a separate project schedule for each project that will be completed pursuant to a separate construction contract. Mo River WWTP Secondary Treatment Expansion C295023-35: Event Projected Date (month/year) Contract 1 Advertising for Bids 10/26/10 Bid Opening 12/07/10 Construction Contract Award 02/24/11 Initiation of Operations* 01/20/14 Construction Completion 10/17/14 Project Completion 01/17/15 * "Initiation of operations" is not Project completion. It is the date upon which operations commence or beneficial occupancy is achieved under a construction contract awarded in connection with this financing. Please add an additional page if the above table does not contain sufficient columns for the separate projects to be financed by this direct loan. See Exhibit labeled MSD Public I/I Reduction Program — Phase I C295023-33 4. Estimated Construction Draw Schedule. Note: Construction draws should equal the fmancial assistance requested as shown in the Expected Sources and Uses (Construction Subtotal) (III.1. above). Please provide a separate draw schedule for each of the contracts identified above. MO River WWTP Secondary Treatment Expansion C295023-35: Month/Year SRF/DNR Sources Other Sourcest Total October, 2013 700,000 November, 2013 1,900,000 December, 2013 2,800,000 January, 2014 1,300,000 February, 2014 1,100,000 March, 2014 2,800,000 April, 2014 800,000 May, 2014 800,000 June, 2014 800,000 July, 2014 1,000,000 August, 2014 1,200,000 September, 2014 1,800,000 Total 17,000,000 fi Excludes DNR grants See Exhibit labeled MSD Public I/I Reduction Program — Phase I C295023-33 5. Are sales tax revenues an anticipated source of repayment? ❑ Yes • No 07/24/2012 6 If yes, please furnish the following information: Is there a tax increment financing district within the district/city that would capture a portion of the sales tax revenues that are anticipated to be a source of repayment for the participant's bonds? No. Collection data for the past five (5) fiscal years (and collections for current fiscal -year-to-date) for those sales tax revenues available to pay debt service on the Participant's bonds: 20_ $N/A (fiscal -year-to-date) 20_ $N/A 20_ $N/A 20_ $N/A 20_ $N/A 20_ $N/A Rate of sales tax available: N/A Permissible uses for the sales tax: N/A Restrictions on the use of sales tax: N/A Sunset date for sales tax, if any: N/A 6. Note: Question 6 is applicable only if the Participant is refinancing outstanding notes/bonds with the direct loan. Does the project include a refinancing of outstanding notes or bonds? ❑ Yes • No If yes, please describe the bonds or notes to be refinanced, the amount of the proceeds that have been spent, the amount of bonds or notes outstanding and the call date: Are there any unexpended proceeds from the bonds or notes being refinanced? ❑ Yes No If yes, please provide an expected disbursement schedule. (Include the last date on which any remaining proceeds from the bonds or notes to be refmanced may be disbursed.) Has DNR reviewed expenditures of the proceeds of the bonds or notes to be refinanced to determine if such expenditures qualify as "eligible costs?" ❑Yes No Were these projects covered under a FNSI or a categorical exclusion? ❑ Yes iNo If financing is being requested for the purpose of refunding outstanding notes or bonds, please provide a copy of the resolution or ordinance authorizing the issuance of the bonds or notes to be refunded. 7. Are there any proposed leases or management contracts with or occupancy by nongovernmental entities (other than contracts for janitorial, office equipment repair, billing or other services that are solely incidental to the primary governmental function(s)) of the project fmanced with the proceeds of the direct loan? ❑ Yes No 07/24/2012 7 If yes, briefly describe: 8. Will a nongovernmental entity use more than 5% of the project financed with the proceeds of the direct loan? ❑ Yes 'No If so, will such user receive treatment different than that afforded to a member of the general public, or is the project designed in any way to accommodate the needs of such user? For this purpose, the term "use" may include, among other things, ownership or the actual or beneficial use of property pursuant to any number of other arrangements, such as a lease, a management, service or incentive payment contract, a research agreement or certain other arrangements, such as a take or pay or other output -type contract. ❑ Yes Iio If yes, briefly describe the arrangements concerning such user. Include any special fee(s) to be charged to such user that are outside the approved user charge ordinance: IV. System Information and Revenues 1. Other than the project being financed with this direct loan, describe generally any plans to expand, improve or equip the system within the next two years: Over the next two years, the District will issue approximately $500 Million in contracts to improve its wastewater system. Work will include design and construction of projects to remove system overflows, reduce building backups, rehabilitate aging infrastructure, and improve treatment facilities. Construction will include new sewer construction, replacement of sewers, public and private inflow and infiltration removal, cured in place pipe rehabilitation, green infrastructure, and treatment facility incinerator scrubber replacement. All work is being done to comply with current regulatory requirements, and to preserve system assets. 2. Provide actual operating expenses of the system for the previous two (2) years and projected operating expenses of the system for the current year and the next (4) fiscal years. Please do not include current or anticipated debt service payments. Denote the year in which new project is to come on line. Year Operating Expenses FYI1 (previous) 160,572,145 FY12 (previous) 135,232,302 FY13 (current) 145,625,138 FY14* 156,323,712 FY 15 * 164,531,307 FY16* 167,840,815 FY17* N/A *From FY14 Budget: Personnel Services + Supplies + Utilities + Contractual Services + Capital Outlay — Stormwater O&M Expense 07/24/2012 8 3. If system revenues are an anticipated source of repayment of the bonds securing the direct loan, please provide the following information in connection with the Participant's system (or the portion of the system from which the Participant anticipates drawing revenues to repay the direct loan): Last five (5) fiscal years 2009 2010 2011 2012 2013* System Revenue 204,947,268 200,471,089 212,220,413 219,647,947 234,659,981 Investment Income 10,283,104 4,908,296 3,202,219 2,058,300 956,664 Other Income 5,025,394 4,226,840 4,790,947 5,234,139 5,937,734 Total Revenue 220,255,766 209,606,225 220,213,579 226,940,386 241,554,379 Operating Expenses (excl. depreciation) 138,971,881 145,598,505 160,572,145 135,232,302 146,372,418 Net Revenues available for DS 81,283,885 64,007,720 59,641,434 91,708,084 95,181,961 Annual Debt Service (existing) 29,613,892 33,209,651 34,716,821 39,496,566 50,186,695 Debt Service Coverage 2.74 1.93 1.72 2.32 1.90 *FY13 contains unaudited figures as of June 30, 2013. Existing debt coverage required, if any: $1.15 4. Ten (10) largest users and % of system use. User % of System Use % of System Revenues InBev Anheuser-Busch 2.0% 2.42% Washington University 2.0% 0.62% Mallincicrodt 2.1% 0.59% City of St. Louis 2.1% 0.44% St. Louis University Hospital 2.1% 0.43% Sigma -Aldrich 0.1% 0.31 % Boeing Company 2.2% 0.30% Sensient Colors Inc. 0.3% 0.30% St. Louis Zoo 0.4% 0.28% Prairie Farms Dairy 0.5% 0.25% Has there been a 5% or greater change in the number of system users during the past two-year period? ❑ Yes II No If so, please explain. 07/24/2012 9 5. Identify system use (gallons per day) for billing purposes, actual billings, and collections for each of last five (5) years. If the system is a combined waterworks and sewerage system, please provide the following information separately for the waterworks and sewerage components of the combined system. Year System Use (gal.) Billings ($) Collections ($) 2009 55,187,068,244 183,512,398 177,872,543 2010 52,984,361,584 203,649,824 198,413,235 2011 51,838,569,200 213,503,730 203,520,767 2012 51,568,734,935 222,439,860 217,410,526 2013 50,751,764,844 233,882,795 234,237,689 *Represents gallons per fiscal year. 6. Current and Proposed Rate Structure. Please provide the Participant's current rate structure and its effective date and any proposed new rate structure and date of adoption for the same. If the Participant has a combined waterworks and sewer system, the rate structure for both water and sewer users should be included. See Exhibit labeled IV6. Current Rate Proposed Rate Schedule Effective Date Structure Date of Adoption Residential users Commercial users Industrial users Please provide a copy of the ordinance imposing the most recent rate increase in connection with the current SRF financing. See Ordinance 13402. 7. Please provide information on previous rate increases and effective dates within the last five (5) years. See Final OS 2012B 10-30-2012 Table 4 Historical and Projected Wastewater Rates Feasibility Study D-39 8. Does the Participant's investment policy relative to funds of the system or otherwise securing the direct loan comply with the State Treasurer's model investment policy and any other state law requirements (see www.treasurer.mo.gov/invest/policy2.doc model policy)? Yes 9. Please provide a certificate or other evidence of insurance coverage against the risks of property and casualty loss, public liability, and any other insurance maintained by the Participant, including type of coverage, amount of coverage, annual premiums, name of insurer, and term. See Exhibit IV9. V. Litigation and Other Proceedings 1. Provide a description of all contracts and commitments of the Participant under which any default has occurred or is claimed to have occurred. We are not aware of any contracts under which default has occurred or is claimed to have occurred. 2. Describe (1) any pending or possible litigation and contractual disputes and (2) any consent decrees, prospective judgments, writs, injunctions, court orders, settlement agreements or judgments, or 07/24/2012 10 correspondence regarding the same, to which the Participant either is or has been a party within the past three (3) years or that are threatened against the Participant. Supply copies of all letters concerning any litigation against the Participant that have been provided by all legal counsel to the Participant's independent public accountants in connection with audit opinions for the last three (3) fiscal years. See Exhibits labeled V2. 3. Has the Missouri Department of Natural Resources initiated or threatened any enforcement action a ainst the Participant with regard to the system? Yes ❑ No If yes, please describe. US & State of Missouri v MSD Case# 4:07-cv-1120-JCH Allege Clean Water Violations The MDNR will occasionally issue a Letter of Warning or Notice of Violation when there is a Sanitary Sewer Overflow from the MSD collection system. We also received a Notice of Violation from MDNR for an Excess Emission for one of MSD's Sewage Sludge Incinerators and a Notice of Violation for Restriction of Emission Odors from MSD's collection system. 4. Is the Participant under an administrative or judicial compliance order? 111 Yes ❑ No If yes, please describe. Consent Decree Entered April 27, 2012 as settlement for the case US & State of Missouri v MSD, Case # 4:07-cv-1120-JCH 5. Please provide any report or investigation made by any governmental agency or administrative regulatory body concerning the Participant within the last five (5) years. See Exhibits labeled V5. VI. Requested Documents Please provide a copy of the following: 1. All annual reports or audited financial statements and auditor's reports, including any management letters, for the Participant, and for the Participant's system, if available, for the last two (2) fiscal years (if available on a website, please indicate so and provide a web address). http://www.stlmsd.com/aboutmsd/fiscal/fiscaloverview; also attached CAFR 2. Any bond ordinances or resolutions adopted in connection with outstanding system revenue bonds or any other document that contains restrictions on the use of system revenues. See Ordinances: 11713, 11736, 11986, 12179, 12332, 12343, 12755, 12771, 12937, 13024, 13025, 13183,13327, 13344, 13465, 13521 07/24/2012 11 3. All reports prepared by or for the Participant (including reports by inside or independent consultants) that describe or evaluate the Participant or its system. Include all reports that detail future operating costs of the system for the next five (5) years, such as any recent rate studies or operating budget or engineering reports. (Type of Monthly Charge Base Charge - S/Bill 1 Baling & Collection Charge 2 System Availability Charge 3 Total Base (Residential) Service Charge 4 Compliance Charge - 5/B itl Non -Tiered (2012 and earlier) Ter 1 Tier 2 Tier 3 Tier 4 Tier 5 Table 4 Historical and Projected Wastewater Rates Fiscal Year ending June 30. 2007 I 2008 I 2009 I 2010 I 2011 I 2012 l 2013 I 2014 l 2015 I 2016 5 0.85 5 2.30 5 230 $ 2.30 S 2.60 $ 2.65 $ 3.25 5 3.45 5 3.55 $ 3.70 $ 7.05 $ 8.40 $ 8.40 $ 8.60 $ 8.80 $ 9.20 5 9.90 5 11.40 5 1270 $ 14.55 $ 7.90 5 10.70 5 10.70 $ 10.90 $ 11.40 $ 11.85 $ 13.15 $ 14.85 5 16.25 $ 1825 5 12.55 $ 27.40 S 27.40 $ 29.65 $ 30.85 $ 31.95 5 23.00 $ 16.00 $ 9.00 $ 2.15 5 39.80 $ 41.85 $ 43.55 $ 44.50 $ 84.75 $ 89.15 5 9275 $ 94.80 S 124.25 5130.70 5136.00 5139.00 $163.75 $172.25 5179.25 $183.15 5 Total Non -Residential Service Charge (Tier 1) $ 20.45 5 38.10 5 38.10 $ 40.55 $ 4225 $ 43.80 5 36.15 $ 30.85 5 25.25 5 20.40 Vok.ime Charge 6 Metered -$Ccf $ 1.81 S 1.88 S 1.88 5 1.92 5 2.02 $ 2.11 5 2.28 $ 250 5 282 $ 321 Unmetered - Sail] 7 Each Room 8 Each Water Closet 9 Each Bath 10 Each Separate Shower $ 1.18 5 1.23 5 1.23 $ 1.25 $ 1.32 $ 1.38 5 1.48 $ 1.63 5 1.83 $ 2.09 5 4.42 $ 4.59 5 4.59 $ 4.69 5 4.93 $ 5.15 5 5.56 $ 6.10 5 6.88 $ 7.83 5 3.69 $ 3.83 $ 3.83 $ 3.91 $ 4.11 $ 4.30 $ 4.64 5 5.08 5 5.73 $ 6.53 $ 3.69 5 3.83 $ 3.83 5 3.91 $ 4.11 $ 4.30 5 4.64 5 5.08 $ 5.73 $ 6.53 Extra Strength Surcharges - $Ron 11 Suspended Solids over 300 m grt 5218.90 $218.90 S 218.90 $ 218.90 $222.62 $231.35 $ 231.35 $ 231.35 $ 244.03 $ 251.88 12 Biochemical Oxygen Demand over 300mgll $461.44 $529.56 $529.56 $551.52 $596.72 $620.14 $620.14 $620.14 $620.14 $632.38 13 Chemical Oxygen Demand over 600mg/I $230.72 $264.78 $264.78 $275.76 $298.36 5310.07 $310.07 $310.07 $310.07 5316.19 Ccf- hundred cubic feet mg6 - milligrams per liter 4. Any agreements relating to any grants and/or loans to the Participant relating to its system, including any USDA Rural Development loans/grants and/or HUD Community Development Block Grants. See Exhibit labeled Energize MO Water Loan Agreement. 5. The most recent official statement, if any, regarding a bond issue or other financing. a. August 23, 2012 - 2012A $225,000,000, The first issuance of $945,000,000 authorized vote June 5, 2012 See Exhibit Final OS 2012A $225,000,000.00 08-23-2012 b. November 14, 2012 - 2012B $141,730,000 Refunding of 2004A Bonds See Exhibit Final OS 2012B $141,730,000.00 11-28-2012 07/24/2012 12 6. One copy of this completed form, including supporting documentation, on a compact disk (CD) in Acrobat Adobe (pdf) format. Executed this 5th day of September, 2013. Metropolitan St. Louis Sewer District Name: Brenda A. Schaefer Title: Secretary -Treasurer 07/24/2012 13