HomeMy Public PortalAboutFiscal Year 2014-2015 Presentation 4-1-2014Finance Committee Meeting
FY15 Strategic Business and Operating Plan
and
Preliminary Budget Review
April 1, 2014
Finance Committee Meeting
FY15 Strategic Business Operation Plan and
Preliminary Budget Review
I.Strategic Business and Operating Plan (SBOP)
II.FY15 Preliminary Budget
III.Trends FY12-FY16
IV.Preliminary Budget Compared to Rate Commission Report
V.Next Steps and Questions
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Strategic Business and Operating Plan
3
Prepared in accordance with Section 5.110 of the
Charter of the Metropolitan St. Louis Sewer District
FY15
VISION STATEMENT
Quality Service Always
Strategic Business and Operating Plan
4
MISSION STATEMENT
To protect the public’s health, safety, and water environment by
responsibly providing wastewater and stormwater management.
Integrity – Acting ethically at all times, treating everyone with honesty, fairness and respect.
Teamwork – Working together to accomplish our mission with open communication, trust
respect and diversity
Innovation – Embracing continuous improvement and new solutions to achieve excellence.
Employees – Developing successful, responsible and safety conscious employees and
acknowledging their contributions.
Customers – Building strong relationships by keeping our commitments, providing
excellent service and being transparent in everything we do.
Strategic Business and Operating Plan
5
VALUES
A.Deliver consistent, high quality customer
service;
B.Comply with all legal and regulatory
requirements and schedules;
C.Minimize customer rate increases; and
D.Be accountable to the St. Louis community.
GOALS
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Strategic Business and Operating Plan
STRATEGIES
1.Educate and partner with stakeholders to build support;
2.Manage the District’s costs and revenues to optimize financial impacts;
3.Integrate and improve the District’s business processes;
4.Promote appropriate standards through proactive regulatory and legislative
involvement;
5.Address customer and regulatory needs through a comprehensive
infrastructure management program;
6. Create a learning and business oriented culture based on competency and
accountability.
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Strategic Business and Operating Plan
FY15
Preliminary Budget
8
9
FY15 Preliminary Balanced Budget
FY15 Total Revenue
($$s in millions)
Wastewater User Charges $278.0
Stormwater User Charges 1.2
Revenue Bonds 166.9
Stormwater Taxes 24.0
Investment and Other Income 24.8
Use of Fund Balances 70.7
Total District Revenue $565.6
FY15 Total Operating Expense
($$s in millions)
Operating Budget $204.1
CIRP 294.8
Debt Service 66.7
Total District Expenses $565.6
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FY15 Preliminary Budget
1.The FY15 General Fund budget includes:
a.2.6% average Salary/Wage increase.
b.$4.9 million in incremental budgets tied to the SBOP, including a net
increase of 11 positions.
c.$2.9 million for Vertex billing system upgrade.
2.Includes a Total Capital Improvement and Replacement Program (CIRP)
budget of $294.8 million.
3.Assumes the issuance of an additional bonds with a par value of $165
million and approximately $2 million in premiums net of costs of issuance.
4.The budget was developed to align with the October 2011 Rate
Commission Report through FY16.
Key Points
FY15 Incremental Budget Summary
11
Department Purpose FTE Change Budget
Executive Director Community outreach 1 $195,038
Finance Market Street refurbishment 557,800
Information System Minor system upgrade 645,000
Information System Data center location
reorganization
517,500
Operations Asset management 1 1,144,914
Operations Regulatory requirements 5 1,488,673
Engineering Construction management 6 352,966
Total General Fund Incremental 13 $4,901,891
Information Systems Vacant positions eliminated -2
Net position changes 11
12
FY15 Preliminary Budget - Revenue
WW User Charges
$278.0
49%
SW User Charges
$1.2
0%
Revenue Bonds
$166.9
30%
Stormwater
Taxes
$24.0
4%
Investment and
Other Income
$24.8
4%
Use of Fund
Balance
$70.7
13%
WW User Charges
SW User Charges
Revenue Bonds
Taxes
Investment and Other Income
Use of Fund Balance
Total = $565.6
($$s in millions)
FY15 to FY14 Budgeted Revenue
13
FY15
$166.9
FY15
$279.2
FY15
$24.0
FY15
$70.7
FY15
$24.8
FY14
$125.0
FY14
$260.9
FY14
$24.1
FY14
$60.2
FY14
$23.3
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
Change
$10.5
Change
($0.1)
Change
$1.5
Change
$41.9
Change
$18.3
($$s in millions)
FY15 - $565.6
FY14 - $493.5
Schedule of
Residential User Rates
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Wastewater FY14 FY15
%
Change FY16
Effective Date 7/1/13 7/1/14 7/1/15
34.85$ 38.81$ 11%43.93$
Stormwater
Effective Date 8/1/10 8/1/10 8/1/10
Single Family & Commercial per Month 0.24$ 0.24$ 0.24$
Multi-Family-Charge per Unit per Month 0.18$ 0.18$ 0.18$
Average Monthly Residential Bill
15
FY15 Preliminary Total Budget Expenses
($$s in millions)
Operating Budget
$187.9
33%
Stormwater O&M
$16.2
3%
CIRP
$288.4
51%
Stormwater CIRP
$6.4
1%
Debt Service
$66.7
12%
Operating Budget
Stormwater O&M
CIRP
Stormwater CIRP
Debt Service
Total = $565.6
Total
Operating
Budget is
$204.1,
36% of total
Total
CIRP
Budget is
$294.8,
52% of total
16
FY15
$99.3
FY15
$18.1 FY15
$16.2
FY15
$50.4
FY15
$3.8
FY15
$16.2
FY14
$96.4
FY14
$15.3
FY14
$15.3
FY14
$42.2
FY14
$3.0
FY14
$15.8
$-
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
Change
$0.8
Change
$0.9
Change
$2.8
Change
$8.2
Change
$0.4
Change
$2.9
($$s in millions)
FY15 to FY14 Budgeted Operating Expense
Operating Budget FY15 - $204.0
Operating Budget FY14 - $188.0
FY14 FY15 $%
Civil Service Commission 20,000$ 10,000$ (10,000)$ -50.0%
Rate Commission 0 512,200 512,200 N/A
Secretary-Treasurer 1,690,025 1,650,422 (39,603)-2.3%
Executive Director (1)1,182,755 1,096,279 (86,476)-7.3%
General Counsel 3,043,794 2,558,204 (485,590)-16.0%
Human Resources 11,509,593 12,850,462 1,340,869 11.7%
Finance 19,550,659 21,979,650 2,428,991 12.4%
Information Systems 11,796,768 12,086,038 289,270 2.5%
Engineering 23,752,832 23,789,400 36,568 0.2%
Operations 94,598,768 101,345,855 6,747,087 7.1%
167,145,194$ 177,878,509$ 10,733,318$ 6.4%
4,901,155 4,901,155
167,145,194$ 182,779,664$ 15,634,473$ 9.4%
Non-operating Other 38,232$ 560,000$
Total 167,183,426$ 183,339,664$ 16,156,238$ 9.7%
(1)Includes Board of Trustees
CHANGE
Total Departments
Incrementals
Total General Fund
Operating Budget
FY15 General Fund Budget
By Department
17
18
FY15
$20.3
FY15
$44.3
FY15
$2.2
FY14
$19.2
FY14
$37.2
FY14
$1.1
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
$50.0
Change
1.1
Change
$7.1
Change
$1.1
($$s in millions)
FY15 to FY14 Budgeted Debt Service & CIRP
Debt Service FY15 - $66.8
Debt Service FY14 - $57.5 CIRP
FY15
$294.8
FY14
$247.6
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
Change
$47.2
FY15 District Funded Positions
19
969
878
981 981
936 956 963 976
500
600
700
800
900
1000
1100
FY10 FY11 FY12 FY13 FY14 FY15
981 936 956 963 976 987
Financial Trends and
Rate Commission Report
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21
FY2012 FY2013 FY2014 FY2015 FY2016
Revenue Bonds $92.2 M $225.0 M $227.9 M $166.9 M $217.1 M
User Charges $220.8 M $236.0 M $254.8 M $279.2 M $314.8 M
Taxes $24.6 M $26.0 M $23.3 M $24.0 M $24.0 M
All Other Revenue $21.6 M $21.3 M $27.3 M $24.8 M $23.5 M
$0.0 M
$100.0 M
$200.0 M
$300.0 M
$400.0 M
$500.0 M
$600.0 M
$700.0 M
User charge revenues increase gradually along with rates.
Bond revenue fluctuation tied to CIRP needs.
Revenue Trend FY12-FY16
22
FY2012 FY2013 FY2014 FY2015 FY2016
Debt Service and Other $37.1 M $20.1 M $56.3 M $67.5 M $85.8 M
Construction and Engineering $123.2 M $177.6 M $212.0 M $294.8 M $312.5 M
Operating Expenses $162.5 M $170.2 M $188.0 M $203.9 M $207.3 M
$0.0 M
$100.0 M
$200.0 M
$300.0 M
$400.0 M
$500.0 M
$600.0 M
$700.0 M
Pace of operating expense is slower than anticipated in rate case.
Debt service expenses increase as use of bonds
continue to support the CIRP.
Expense Trend FY12-FY16
23
Fund Balance Trend FY12-FY16
FY2012 FY2013 FY2014 FY2015 FY2016
Beginning Fund Balance $144.5 M $181.0 M $321.3 M $398.4 M $327.2 M
Ending Fund Balance $181.0 M $321.3 M $398.4 M $327.2 M $301.1 M
$0.0 M
$50.0 M
$100.0 M
$150.0 M
$200.0 M
$250.0 M
$300.0 M
$350.0 M
$400.0 M
$450.0 M
Total Fund Balance
Inflow of bond proceeds
Spend down of bonds for CIRP.
Current Projection to Rate Report
($$s in thousands)
24
$716,128
$971,015
$708,315
$963,517
$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000
Total FY13-FY16 Operating Expense
Total FY13-FY16 WW CIRP Current
Projection
Rate Report
0.77% Under
1.09% Under
Current Projection Rate Report Variance
Revenue:
Service Charge Wastewater Revenue 1,101,150$ 1,095,071$ 6,079$
Bonds 836,910 895,000 (58,090)
Taxes and Other 131,748 121,581 10,167
Total Revenue 2,069,808$ 2,111,652$ (41,844)$
Expense:
Total Operating Budget 708,315$ 716,128$ (7,813)$
Debt Service 260,505$ 311,779$ (51,274)$
WW CIRP and Expense Projects 963,517 971,015 (7,498)
996,932$ 983,329$ 13,603$
Total Expense 1,965,752$ 2,011,236$ (45,484)$
(25,245)$ (40,429)$ 15,184$
Non WW CIRP Projects
Bad Debt Provision
Fiscal Years 13 - 16
FY15
Next Steps and Questions
25
��F Y 1 5 S B O P a n d P r e l i m i n a r y B u d g e t S p e c i a l F i n a n c e C o m m i t t e e M e e t i n g
R e v i e w A p r i l 1 , 2 0 1 4 ; 8 : 3 0 a . m .
" F Y 1 5 C I R P B u d g e t P r e s e n t a t i o n S p e c i a l F i n a n c e C o m m i t t e e M e e t i n g
A p r i l 3 , 2 0 1 4 ; 8 : 3 0 a . m .
" F Y 1 5 B u d g e t F o l l o w - u p D i s c u s s i o n F i n a n c e C o m m i t t e e M e e t i n g
A p r i l 8 , 2 0 1 4 ; 8 : 0 0 a . m .
" B u d g e t I n t r o d u c t i o n B o a r d o f T r u s t e e M e e t i n g
M a y 8 , 2 0 1 4 ; 5 : 0 0 p . m .
" P u b l i c H e a r i n g A f t e r B o a r d o f T r u s t e e M e e t i n g
( F i n d i n g o f F a c t C o m m i t t e e )
M a y 8 , 2 0 1 4 ; 6 : 0 0 p . m .
" B u d g e t A d o p t i o n B o a r d o f T r u s t e e M e e t i n g
J u n e 1 2 , 2 0 1 4 ; 5 : 0 0 p . m .
* A l l m e e t i n g s h e l d a t 2 3 5 0 M a r k e t S t r e e t , R o o m 1 0 9
2 6
F Y 1 5 B u d g e t M e e t i n g S c h e d u l e *
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Public Hearing Notice
Notice of the May 8, 2014, Budget Public
Hearing will be published in the following:
Post Dispatch
St. Louis American
St. Louis Business Journal
MSD Internet
FY15 SBOP and Preliminary
Budget Review
Q & A
28