HomeMy Public PortalAboutFY2022 Finance Committee Budget PresentationFinance Committee MeetingFY22 Strategic Business and Operating Planand Preliminary Budget ReviewMarch 25, 2021
Finance Committee MeetingI. Strategic Business and Operating Plan (SBOP)II.FY22 Preliminary BudgetIII.Next Steps and QuestionsFY22 Strategic Business Operating Plan and Preliminary Budget Review2
FY22 – FY26Strategic Business and Operating PlanPrepared in accordance with Section 5.110 of the Charter of the Metropolitan St. Louis Sewer District
Strategic Business and Operating PlanA. Deliver consistent, high quality customer service;B. Comply with all legal and regulatory requirements and schedules;C. Minimize customer rate increases; andD. Be accountable to the St. Louis community. GOALS4
1. Inform, educate and partner to build stakeholder understanding; 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.Strategic Business and Operating PlanSTRATEGIES5
FY22Preliminary Budget
FY22 Preliminary Balanced Budget FY22 Total Revenue($$s in millions)Wastewater User Charges $436.9Revenue Bonds 119.0Stormwater Taxes 35.2OMIC Taxes 7.8Investment and Other Income 10.4Use of Fund Balances 106.4Total District Revenue $715.7FY22 Total Expense($$s in millions)Operating Budget $224.3CIRP 364.1Debt Service 127.3Total District Expenses$715.77Note the Preliminary Book shows $715.9Summary of changes provided.
Summary of Changes from Preliminary Budget Book Preliminary Budget Book Net Change After Planned Changes FY22 Total Revenue:Wastewater User Charges 436.9$ ‐$ 436.9$ Revenue Bonds 119.0 ‐ 119.0 Taxes 43.0 ‐ 43.0 Investment and Other Income 10.4 ‐ 10.4 Use of Fund Balances106.6 (0.2) 106.4 Total District Revenue 715.9$ (0.2)$ 715.7$ FY22 Total Expense:Operating Budget 230.9$ (6.6)$ 224.3$ CIRP 357.7 6.4 364.1 Debt Service 127.3 ‐ 127.3 Total District Expenses 715.9$ (0.2)$ 715.7$ Shown in Millions of Dollars 8The $6.4 million change in the operating budget consisted primarily of the Oracle System Project ($3.5M) being moved to the Capital Budget and a reduction of $1.8M in Pension Contributions
FY22 Preliminary BudgetI. The General Fund budget includes:A. $2.2 million, 3% increase for Salaries & FICA –excluding incremental budgets from FY21.B. $0.8 million in incremental budgets tied to the SBOP.C. 7% or $1.2 million increase in Supplies (including incremental budgets) from FY21D. 1% or $2.0 million overall increase (including incremental budgets) from FY21.II. Includes a Total CIRP budget of $364.1 million including $339.1 million Wastewater CIRP, 18.6 million Stormwater CIRP and $6.4 million Oracle Project.III. Assumes the issuance of $119 million of additional bonds, IV. The budget was developed to align with the March 2019 Rate Commission Report.Key Points9
Total = $715.7FY22 Preliminary Budget Revenue($’s in millions)10$436.9, 61%$119.0, 17%$35.2, 5%$7.8, 1%$10.4, 1%$106.4, 15%Wastewater User ChargesRevenue BondsTaxes ‐ StormwaterTaxes ‐ OMCIInvestment Income & Other Use of Fund Balances
Schedule ofResidential User Rates11Wastewater Successful VoteFY21 FY22% ChangeEffective Date 7/1/20 7/1/21Rate: Base Charge 26.40 27.31 3.4% Volume Charge per ccf 5.00 5.17 3.4%Typical Monthly Residential Bill (6 Ccf) 56.40$ 58.33$ 3.4%Wastewater Unsuccessful VoteFY21 FY22% ChangeEffective Date 7/1/20 7/1/21Rate: Base Charge 26.40 30.45 15.3% Volume Charge per ccf 5.00 5.77 15.4%Typical Monthly Residential Bill (6 Ccf) 56.40$ 65.07$ 15.4%
FY22 Preliminary TotalBudget Expenses($’s in millions)12Wastewater CIRP, $339.1, 47%Stormwater CIRP, $18.6, 3%General Fund CIRP, $6.4, 1%Debt Service, $127.3, 18%Wastewater Operating, $201.7, 28%Stormwater Operating, $22.6, 3%Total CIRP Budget =364.1, 51% Total OperatingBudget =224.3, 31% Total Budget = $715.7
FY22 General Fund BudgetBy Department Comparison13FY22 FY21 $% Civil Service Commission 11,500 10,000 1,500 15.0%Board of Trustees 9,700 6,127 3,573 58.3%Secretary Treasurer 2,504,079 3,820,608 (1,316,529) -34.5%Executive Director 3,649,928 4,080,886 (430,958) -10.6%General Counsel 3,412,292 3,379,539 32,753 1.0%Human Resources 9,292,845 8,855,846 436,999 4.9%Finance 24,094,378 21,619,131 2,475,247 11.4% Information Technology 16,500,722 17,611,499 (1,110,777) -6.3%Engineering 27,714,682 27,671,491 43,191 0.2%Operations 122,542,013 121,511,778 1,030,235 0.8%Total Departments 209,732,139 208,566,905 1,165,234 0.6%Incrementals 789,296 - 789,296 Total General Fund Operating Budget 210,521,435 208,566,905 1,954,530 0.9%CHANGE
FY22 District Funded PositionsFTE change in FY22 is reduced by nine resulting from reduction of seven in Engineering and three Operations offset by increase in Information Technology.14 1,000 1,005 1,010 1,015 1,020 1,025 1,030FY18 FY19 FY20 FY21 FY221,011 1,021 1,027 1,026 1,017
FY22 SBOPandPreliminary BudgetReviewQ & A
CIRP
TYPE OF PROJECTNUMBER OF PROJECTSPROJECT COSTWastewater Engineering 65 $47,611,000 Wastewater Construction 56 $281,988,000 Stormwater Engineering 4 $1,430,000 Stormwater Construction 18 $16,386,522 TOTAL:143 $347,415,522 Wastewater Continued 3 $9,521,000 Stormwater Continued 2 $799,000 TOTAL:5 $10,320,000 GRAND TOTAL:148 $357,735,522 FY22 CIRP – Program SummaryIn addition, a General Fund ‐ Corporate Business Case for the Oracle Project amounting to $6,400,000 (Capital $5,900,000 and Non‐Recurring $500,000) brings the total CIRP to $364,135,522
FY22 CIRP – New Projects95% Wastewater121 Projects$329.6 M5% Stormwater22 Projects$17.8 MTotal Budget $347.4 MTotal Number of New Projects 143
FY22 CIRP – New WastewaterTotal Number of Project Appropriations Total Budget $ 329.6 M (88% is CD related)72% County79 Appropriations$ 237.5 M4% Districtwide23 Appropriations$13.7 M20% Treatment Plants11 Appropriations$ 64.7 M4% City8 Appropriations$13.7 M
FY22 CIRP – Funding SourcesTotal Number of Project Appropriations 143Total Budget $347.4 M90% Sanitary Replacement Fund:103 Appropriations$ 311.0 M3% Stormwater Funds:13 Appropriations$11.5 M5% General Fund:15 Appropriations$ 18.2 M2% OMCI Funds:12 Appropriations$ 6.7 M
FY22 CIRP – OMCI FundingTotal OMCI Revenue Generated $ 8.2 M Total Grant Funding Available $ 3.8 MOMCITax Rate($)Total Revenue ($)Grant Available ($)Coldwater Creek 0.09 2,153,038 1,076,519Deer Creek 0.073 3,916,328 1,958,164Maline Creek 0.091 680,844 ---Seminary Branch of RDP 0.061 248,584 124,292Sugar Creek 0.056 298,996 149,498University City Branch of RDP 0.083 990,098 495,049
FY22 CIRP – Engineering & Construction 86% Construction74 Appropriations$ 298.4 M14% Engineering 69 Appropriations$ 49.0 MTotal Number of Project Appropriations 143Total Budget $347.4 M
FY22 CIRP – Continued ProjectsWastewaterCoordination with Others / Construction Phasing 3Easement Acquisition / Condemnation 0Projects in Design / Major Scope Changes 0StormwaterCoordination with Others 2Easement Acquisition / Condemnation 0Projects in Design / Major Scope Changes 0Total: 5
FY22 CIRP – Contingency ProjectsType of ProjectNumberBudgetWastewater 12 117,598,000Stormwater 4 7,845,000Phased Funding 5 87,530,000Project Totals: 21 212,973,000
FY22 CIRP – New Project TypesType of Project Number Budget % of BudgetAsset Management Renewal15 24,488,000 7Cityshed 5 11,480,000 3CSO 8 11,745,000 3SSO 59 203,498,000 59Treatment Plant 11 64,723,000 19Districtwide 23 13,665,000 4Stormwater 22 17,816,522 5TOTALS: 143 347,415,522 100
FY22 Capital Improvement and Replacement ProgramQuestions and Answers
FY22 Next Steps
FY22 Budget Meeting ScheduleFY22 SBOP and Preliminary Budget Finance Committee MeetingReview (including CIRP) March 30, 2021; 8:00 a.m.• Publication of Public Hearing Notice April 19, 2021(The notice will be published in the St. Louis Post-Dispatch, St. Louis American, St. Louis Business Journal, and on the MSD Internet Site)•FY22 Budget Follow-up Discussion Finance Committee Meeting May 04, 2021; Time: TBD• Budget Introduction Board of Trustee Meeting May 13, 2021; 5:00 p.m.• Public Hearing After Board of Trustee Meeting(Finding of Fact Committee)May 13, 2021; 6:00 p.m.• Budget Adoption Board of Trustee MeetingJune 10, 2021; 5:00 p.m.* All meetings held Virtual or at 2350 Market Street, Room 109.28
FY22 – FY26Strategic Business and Operating Plan(Additional Detail)Prepared in accordance with Section 5.110 of the Charter of the Metropolitan St. Louis Sewer District
Strategic Business and Operating PlanMISSION STATEMENTTo protect the public’s health, safety, and water environment by responsibly providing wastewater and stormwater management.VISION STATEMENTQuality Service Always 30
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 and sustainability. 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 PlanVALUES31
FY22Preliminary Budget(Additional Details)
FY22 Budget RevenueBy Major Category ComparedTo FY21 Budget($’s in millions)33Wastewater UserChargesRevenue BondsTaxes ‐StormwaterTaxes ‐ OMCIInvestmentIncome & Other Use of FundBalancesFY21$433.3 $165.7 $34.6 $8.1 $12.3 $80.0FY22$436.9 $119.0 $35.2 $7.8 $10.4 $106.4$0.0$50.0$100.0$150.0$200.0$250.0$300.0$350.0$400.0$450.0$500.0FY21 = $734.0FY22 = $715.7$(18.3) Mor (2.5)% DecreaseChange$(46.7)Change$(0.3)Change$(1.9)Change$26.4Change$0.6Change$3.6
FY22 Budget Operating Expense Components34WastewaterGeneral Fund 188,429,249$ Improvement Fund ‐ Wastewater Emergency Fund ‐ Water Backup Fund 5,000,000 General Insurance Fund 8,173,513 Construction Funds ‐ Total Wastewater 201,602,762$ StormwaterVarious SW Funds 22,737,273$ Total Operating Expenses 224,340,035$
FY22 Budget Operating ExpenseBy Major Category ComparedTo FY21 Budget($’s in millions)35Personnel Supplies Utilities Contracted Services Capital OutlayFY21$116.8 $17.8 $17.1 $62.5 $6.8FY22$117.9 $19.0 $16.9 $64.7 $5.8$0.0$20.0$40.0$60.0$80.0$100.0$120.0$140.0FY22 = $224.3FY21 = $220.7$3.3 M or 1.5% IncreaseChange$1.2Change($0.2Change$2.2Change($1.0)Change$1.2Change$1.1
FY22 Incremental Budget SummaryDepartment PurposeFTE ChangeBudgetHuman Resources 1. Increase preventative measures for the safety of our Field Utility Crews with private contracted law enforcement security services, while performing services to communities in high‐risk areas of crime.0 $475,000Information Technology1. Master Data Management(+$195,000)2. Technical Cyber Security Framework (+119,096);Total Incremental Operating Expense1 $314,096$789,296CIRP (Information Technology)1. Oracle Project – Non‐Recurring (+$500,000);2. Oracle Project ‐ Capital (+$5,900,000).0 $6,400,000Total Incremental1 $7,189,29636
Wastewater Service Charges ‐ Due to COVID‐19 billed volumes are declining much faster than anticipated in the Rate Report, especially for commercial accounts. Taxes– Property taxes are lower than anticipated due to assessed values being lower than anticipated.Other–Interest on investments increased about $9M due to increase fund balances and positive rates. The remaining difference is from lower‐than‐expected Miscellaneous Revenue and Connection Fee revenue.Operating Expenses and Routine Capital – Personnel Services for the District are anticipated to be $37.4 million lower than the rate model due mostly to vacancies. Supplies are projected to be $9.0 million over rate model levels. Utilities are projected to finish $8.0 million less than the rate model, and Contractual Services are projected to be $27 million over rate model predictions. Capital Outlay is running $4.1 million under the rate model. Debt Service Expense– Borrowing through FY24 is anticipated to be $66 million less than presented in the Rate Proposal. Lower than anticipated rates also contribute to this variance.Wastewater CIRP– Most of the projected savings can be attributed to favorable bids and project delay on a few large projects.Stormwater and Other CIRP– Project costs projected in the rate proposal were lower than actual bids.Bond Proceeds– Due to lower CIRP expenditures less bond proceeds are required.37