HomeMy Public PortalAboutFiscal Year 2019 Popular Annual Financial ReportPOPULAR ANNUAL FINANCIAL REPORT
Fiscal Year Ending June 30, 2019
METROPOLITAN ST. LOUIS SEWER DISTRICT
ST. LOUIS, MISSOURI
MSD PROJECT CLEAR
MSD Project Clear (MSDPC) is two utilities in one—responsible for approximately
7,000 miles of public wastewater and stormwater sewer systems in the St. Louis
region. MSDPC is investing billions of dollars over a generation to improve water
quality and minimize wastewater and stormwater issues by monitoring regulatory
compliance, planning, designing, and building community rainscaping, system
improvements, and performing an ambitious program of maintenance and repair.
MSD MISSION
To protect the public’s health, safety, and water environment by
responsibly providing wastewater and stormwater management.
ON THE COVER
Pictured on the cover is the Maline Creek Storage Facility with SAK Construction workers.
This project will be completed in 2022. MSD Project Clear has several underground tunnel and storage
facilities dedicated to reduce sewer overflows and improve the entire system for MSD customers.
PHOTO CREDIT: SAK CONSTRUCTION
TABLE OF CONTENTS
Directors’ Letter .....................................................................................3
2019 Excessive Rain and Flood Event ....................................4–5
What We Do ............................................................................................6
Consent Decree Amendment .......................................................7
Public Education and Community Outreach ..................8–9
Year in Review ......................................................................................10
Looking Ahead .......................................................................................11
Balance Sheet .......................................................................................12
MSD Assets and Long-Term Obligations ...............................13
Income Statement.............................................................................14
Revenues and Expenses ..................................................................15
Cash Flow Statement ........................................................................16
Cash Flows Activities Comparison ............................................16
Performance Against Budget and Credit Rating .............17
| METROPOLITAN ST. LOUIS SEWER DISTRICT2
Government Finance Officers Association of
the United States and Canada (GFOA) has
given an Award for Outstanding Achievement
in Popular Annual Financial Reporting to the
Metropolitan St. Louis Sewer District for its
Popular Annual Financial Report for the fiscal
year that ended June 30, 2018. The Award for
Outstanding Achievement in Popular Annual
Financial Reporting is a prestigious national
award recognizing conformance with the
highest standards for preparation of state
and local government popular reports.
In order to receive an Award for Outstanding
Achievement in Popular Annual Financial
Reporting, a government unit must publish a
Popular Annual Financial Report, the contents
of which conform to program standards of
creativity, presentation, understandability,
and reader appeal.
An Award for Outstanding Achievement in
Popular Annual Financial Reporting is valid for
a period of one year only. Metropolitan St. Louis
Sewer District has received a Popular Award
for the last seven consecutive years (fiscal
years ended 2012–2018). We believe our current
report continues to conform to the Popular
Annual Financial Reporting requirements, and
we are submitting it to GFOA to determine its
eligibility for another Award.
“
”
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 3
We appreciate your interest in the Metropolitan St. Louis Sewer District (MSD) and are pleased to
present our Popular Annual Financial Report for the Fiscal Year 2019 (FY 19).
MSD is committed to ensuring improved water quality and alleviating many wastewater concerns
in our region. In FY19, MSD appropriated funds for 195 new or continuing wastewater and
stormwater design and construction projects.
This annual report provides a non-technical overview of MSD’s work and a snapshot of our most
recent fiscal year — July 1, 2018 to June 30, 2019. Within this report, you will learn how we are
carefully investing the funds we receive to maintain and improve our region’s wastewater and
stormwater systems.
Additionally, you will find financial information for the past fiscal year that summarizes the more
in-depth financial review provided in our Comprehensive Annual Financial Report. Please note
that while the summary information provided here uses principles and guidelines consistent with
Generally Accepted Accounting Principles (GAAP), it has been simplified for general audiences, and
it is not GAAP-compliant. Both reports are available online at www.msdprojectclear.org/PAFR.
To request a printed copy of this information, contact MSD at 314-768-6260 or send an email to
customersvc@stlmsd.com.
The purpose of this report is to be informative and useful. As always, we welcome any comments
or suggestions on how we might improve future reports to serve your interests and needs better.
Respectfully submitted,
Brian Hoelscher, P.E. Marion Gee
Executive Director & CEO Director of Finance
DIRECTORS’ LETTER
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 3
| METROPOLITAN ST. LOUIS SEWER DISTRICT4
2019 EXCESSIVE RAIN
AND FLOOD EVENT
MSD’s Pump Station Division goes into flood duty when
the Mississippi River hits 27 feet at the St. Louis gauge.
The pump stations along the floodwall downtown are
staffed 24 hours, seven days a week until the river drops
below 27 feet.
MSD stays prepared to handle extreme weather events.
All three of the maintenance yards are placed on standby
before any forecasted event, allowing for rapid response
by MSD crews if needed. Additionally, back up teams
are notified should the need for more support become
necessary. If one part of the District is hit particularly hard,
crews from other yards are dispatched to assist.
MSD’s three maintenance yards have identified protocols
to respond to flood events on the Mississippi and
Meramec Rivers based on river levels. For example, when
the Mississippi reaches a level of 38 feet as measured at
the St. Louis gauge, crews will start plugging street inlets
along Germania (and other low-lying streets prone to
flooding), which is adjacent to the River Des Peres in the
City of St. Louis.
On June 8, 2019, the second highest river level was
recorded: 45.93 feet.
As a result of the excessive rain and flood event, MSD
did experience a few project delays, mainly those located
near the Missouri River, Mississippi River, and one of
their tributaries due to the high groundwater levels.
MSD is currently working on getting caught up on the
preventative maintenance activities that were put on
hold during the extra flood staffing. Teams anticipate
being back on regular maintenance schedules by the
end of 2019.
On March 16, 2019,
MSD entered “flood duty”
operations and
remained in that
capacity for 128 days.
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 5
Customers can help to reduce these
types of occurrences by making sure
their sewer lateral is in good working
condition by ensuring their downspouts,
exterior drains, and sump pumps are not
connected to their lateral line.
Additionally, properly dispose of fats,
oils, and grease (FOG) and never pour
these items down the sink drains.
Finally, MSD encourages customers to
“Know Your Zone” and determine if
they need flood insurance.
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 5
MSD crews worked more than 100,000 hours during the flood event.
| METROPOLITAN ST. LOUIS SEWER DISTRICT6
ColdwaterWWTP
Grand GlaizeWWTP
FentonWWTP
MissouriRiverWWTP
LemayWWTP
LowerMeramecWWTP
I-270
I-270
I-270
I-44
I-44
I-64
I-64
I-255
I-55
I-170
I-70
I-70
Bissell PointWWTP
MSD Wastewater Treatment
Plants (WWTP)
Service Area
SOURCE: American Water Works Association “2019 Water and Wastewater Rate Survey”
and information provided by KCWater (Rates based on 10 CCF)
The Metropolitan St. Louis Sewer District owns, operates,
and maintains a sewer system which consists of wastewater,
stormwater, and combined collection sewers—carrying both
wastewater and stormwater—pumping stations, and wastewater
treatment facilities that have been incorporated into one entity
over the last 60-plus years.
MSD provides a variety of additional services, including monitoring
of industrial waste, issuance of pretreatment discharge permits,
plan review and approvals, issuance of connection permits,
public education, and customer service. It is one of the largest
and most complex systems in the United States. MSD is two
separate utilities within one organizational structure:
WHAT WE DO
MSD’s Dual Function
Residential Wastewater User Charge
Baltimore
Cleveland
Kansas City
St. Louis
Survey Average
San Diego
Nashville
San Antonio
$84.56
$51.31
$81.65
$45.54
$73.45
$37.16
$61.22
$56.03
St. Louis and Other Municipalities
454 sq. miles of St. Louis County (87%)
66 sq. miles of St. Louis City(100%)
1.3 MILLION SERVED
520 SQUARE MILE SERVICE AREA
427,000 accounts
Wastewater — collect “used”
water disposed of in sinks,
toilets, and floor drains by
households and businesses,
and then treat it to regulatory
standards before returning it to
the region’s waterways.
Stormwater — operate
and maintain the public
storm sewer system and
help coordinate regional
efforts to address pollution
carried in or caused by
stormwater runoff.
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 7
CONSENT DECREE
AMENDMENT
In April 2012, the consent decree between MSD, the
Environmental Protection Agency (EPA), and the Missouri
Coalition for the Environment went into effect. The initial
consent decree required MSD to spend a minimum of
$4.7 billion over the next 23 years to address the issue of
sewer overflows and other sewer system improvements.
On June 22, 2018, an amendment to the consent
decree extended the program by five years to a
28-year program.
The new amendment will allow MSD to accelerate
new regulatory requirements for non-consent decree
work in a fiscally responsible way and manage future
ratepayer increases. MSD requested the amendment
to the consent decree to address the following:
— In 2016, the EPA issued new regulations, the impact
of which compels MSD to accelerate the sewage sludge
incineration (SSI) unit replacement schedule by five years
with construction beginning in 2021.
— To deliver the accelerated schedule of non-consent decree
work without placing an additional financial burden on
MSD’s ratepayers.
As a result of the consent decree amendment, some
tunnel work scheduled to start in 2021 will now begin in
2026. Tunnels affected by the amendment include the
Upper River Des Peres Storage Tunnel, the River Des Peres
Tributaries Storage Tunnel, and the Lower and Middle River
Des Peres Storage Tunnel. Additionally, these tunnels are
part of the Long-Term Control Plan to reduce combined
sewer overflows in the River Des Peres watershed.
Green infrastructure, or rainscaping, is another critical
component of the consent decree amendment order.
Rainscaping captures stormwater runoff and manages it
where it falls, reducing the amount of untreated overflow
into rivers and streams. MSD has agreed to invest at least
$20 million in green infrastructure/rainscaping in the
Lemay Service Area/River Des Peres Watershed. Ultimately,
this will reduce the combined sewer overflows and
improve water quality.
$4.7 BILLION,
23-year effort extended by
5 YEARS
ADDITIONAL $20 MILLION+
green infrastructure/
rainscaping commitment
RESCHEDULED TUNNELS
Upper River Des Peres Storage Tunnel
River Des Peres Tributaries Storage Tunnel
Lower and Middle River Des Peres Storage Tunnel
START DATE
2021 2026
in the Lemay Service Area/
River Des Peres Watershed
| METROPOLITAN ST. LOUIS SEWER DISTRICT8
PUBLIC EDUCATION AND
COMMUNITY OUTREACH
2018 Operation Clean Stream Cleanup
On Saturday, August 25th, MSD employees took part
in the 51st Annual Operation Clean Stream event on
the Meramec River. This event draws more than 2,000
volunteers per year who help improve over 500 miles
of stream in the Meramec River Watershed. Operation
Clean Stream is one of the largest and longest ongoing
river restoration projects of its kind in America today.
Special thanks to all the MSD employees and their family
members who volunteered to help make this event a
huge success.
St. Louis Earth Day Festival
At the 2019 festival, MSD distributed 3,500 reusable
bags filled with educational materials to attendees
covering MSD Project Clear, Know Your Zone, and
stormwater management. MSD is a proud sponsor of
the Reduce, Reuse, Recycle experience area of St. Louis
Earth Day Festival.
The Greater St. Louis Hispanic Festival
MSD is a consistent supporter of the Greater St. Louis
Hispanic Festival. The mission of the festival is to help
increase regional awareness of the cultural contributions
made by Hispanic musicians, dancers, artisans, and chefs.
Home and Garden Show
The Builders of St. Louis Home and Garden Show is one
of the largest quality consumer home shows in North
America. MSD distributed educational materials and
reusable bags to over 3,000 attendees.
Part of MSD’s mission is
to inform and educate
residents about wastewater
and stormwater issues,
as well as its programs
and services. MSD engages
with the public at a variety
of local events each year,
including:
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 9POPULAR ANNUAL FINANCIAL REPORT FY 2019 | 9
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2
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MSD also participated in:
— Missouri History Museum Twilight Tuesdays
— St. Louis Association of Community Organizations
Conference (SLACO)
— Enterprise Holdings Employee Eco Fairs
— TEDxGatewayArch events
2018 Operation Clean
Stream Cleanup
St. Louis Earth Day Festival
The Greater St. Louis
Hispanic Festival
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2
3
| METROPOLITAN ST. LOUIS SEWER DISTRICT10
YEAR IN REVIEW
Capital Improvement
MSD Project Clear made 195 appropriations for
new or continuing wastewater and stormwater
design and construction projects in FY19, totaling
$311.8 million.
Diversity
In FY19, minority-owned firms performed
$36,653,112 on capital construction projects,
representing 21.3 percent of the District’s capital
program spending for the fiscal year. Women-
owned firms performed $14,183,523 in capital
construction work, representing 8.2 percent of
the District’s capital construction program
spending. Minority-owned design firms
(professional services) accounted for $11,777,262,
or 30.2 percent of payments made to design
firms. Women-owned design firms were paid
$3,864,540, or 9.8 percent of payments made to
design firms in FY19.*
During that same timeframe, minority workforce
participation on capital construction projects
was 663,448 hours, or 29.7 percent, and women
participation was 158,056 hours, or 7 percent
of total hours worked on capital construction
projects by contractors. Design firms with
workforce participation goals represented 16.5
percent of minority and 37 percent of women
in the design team’s workforce.* To learn more
about MSD’s diversity-related initiatives, visit
www.msdprojectclear.org/diversityreports.
*Numbers are as of August 2019. Please note, as project
documentation is finalized, precise numbers may fluctuate.
Peak Performance Award
In 2019, MSD was awarded top environmental
honors from the National Association of Clean
Water Agencies (NACWA), which recognized
all seven MSD treatment plants with Peak
Performance Awards for excellence in
compliance with National Pollutant Discharge
Elimination System (NPDES) permit limits in the
2019 calendar year. Three MSD treatment plants,
Missouri River, Fenton, and Lower Meramec,
received the Platinum Peak Performance
Award, which honors treatment plants that
have completed at least five consecutive years
of 100 percent NPDES permit compliance. In
addition, two treatment plants, Grand Glaize
and Lemay, received the Gold Peak Performance
Award, honoring plants that have achieved 100
percent compliance with the NPDES permit in
the previous calendar year. The Bissell Point and
Coldwater treatment plants received the Silver
Peak Performance Award for having no more
than five NPDES permit violations in the 2018
calendar year.
Stormwater Capital Rate Vote
In April 2019, MSD presented a ballot initiative
to voters who reside within MSD’s service area.
Proposition S, the Stormwater Capital Rate
Proposal, would address erosion and local/
regional flooding. The measure failed by a margin
of 53 percent, no, and 47 percent in favor. MSD
has identified more than 500 stormwater capital
projects that need additional funds to address
erosion and flooding.
2019 Wastewater Capital Rate
In March 2019, the Rate Commission received
a wastewater rate proposal from staff. The
wastewater proposal seeks to fund a four-year,
$1.58 billion capital improvement program to
meet regulatory and system improvements
needs. After a series of public hearings to
garner ratepayers’ feedback on proposed rates,
the Commission approved a resolution and
submitted its Rate Recommendation Report to
the Board of Trustees with proposed increases
for fiscal years 2021–2024 with or without $500M
in bonding. The Board of Trustees approved
the recommendation and voters will decide on
bonding or no bonding in April 2020.
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 11
LOOKING AHEAD
MSD Project Clear
In FY20, MSD has plans for 123 new, ongoing, or
continued wastewater project appropriations totaling
$335.1 million. These projects are funded primarily from
the Sanitary Replacement fund and represent $20.0
million in continued projects from the previous fiscal
year, and $315.1 million in new and ongoing projects.
In addition to operating the existing stormwater system,
MSD Project Clear plans 30 stormwater design and
construction projects in FY20, including continued
projects from FY19, totaling $15.1 million.
New Website Launch
Coming in early 2020, MSD will launch a new customer-
focused website, msdprojectclear.org, updating the
current version launched five years ago. The website
will feature a clean and fresh look that will be more
interactive. It will combine the two existing sites
stlmsd.com and projectclearstl.org.
Disparity Study Update
In early 2019, MSD announced it would conduct an
update to its 2012 Disparity Study. The initial study,
which was completed a little over five years ago,
became the catalyst for the expansive offering of
initiatives now in place. The innovative programs and
current policies include more inclusive contractor goals,
worksite inspectors, on-the-job training, internships,
community partnerships, and other programs.
The 2019 update will analyze MSD’s current diversity
programs, practices, and results. The update will
measure inclusion and availability as well as determine
what advancements MSD has accomplished on projects
in terms of workforce.
113 applications received in FY19
98 GRANTS FUNDED
TOTALING NEARLY $420K
Anticipating funding for FY20
$520K
Small Grants Program
Expands Districtwide in FY20
MSD announces the expansion
of its green infrastructure Small
Grants Program (also called
rainscaping) from the current
Mississippi and River Des Peres
watersheds to the entire District.
| METROPOLITAN ST. LOUIS SEWER DISTRICT12
FY19 FY18 FY17
ASSETS
Current, restricted, and other assets $821,030 $882,667 $743,572
Capital assets (net of accumulated depreciation) 3,631,716 3,446,232 3,252,238
Total Assets 4,452,746 4,328,899 3,995,810
DEFERRED OUTFLOWS OF RESOURCESBonds and notes payable-deferred loss on refunding 11,343 12,099 11,321Pension-related outflows 34,238 17,333 37,666OPEB-related outflows 1,246 1,278 —
Total Deferred Outflows of Resources 46,827 30,710 48,987
LIABILITIESCurrent liabilities 149,991 140,082 133,679 Non-current liabilities 1,723,830 1,722,146 1,515,345
Total Liabilities 1,873,821 1,862,228 1,649,024
DEFERRED INFLOWS OF RESOURCES
Pension-related inflows 4,341 6,065 4,605
OPEB-related inflows 887 — —
Total Deferred Inflows of Resources 5,228 6,065 4,605
NET POSITION
Net investment in capital assets 2,063,519 1,968,740 1,876,249
Restricted 127,414 129,579 135,259
Unrestricted 429,591 392,997 379,660
Total Net Position $ 2,620,524 $ 2,491,316 $2,391,168
Definitions
Current, restricted, and other assets: all assets other than capital assets that are owned or due to the District.
Capital assets (net of accumulated depreciation): the total value of all capital assets including all sanitary infrastructure,
general plant and equipment, and land.
Deferred outflows of resources: the use of resources that will be applied to future periods.
Current liabilities: money owed by the District and due within 12 months.
Non-current liabilities: money owed by the District that is due more than 12 months in the future.
Deferred inflows of resources: the purchase of resources that will be applied to future periods.
Net investment in capital assets: the value or net worth of all capital assets after related liabilities are deducted.
Restricted: the value or net worth of all assets designated for specific purposes after related liabilities are deducted.
Unrestricted: the value or net worth of all remaining assets after remaining liabilities are deducted.
What it tells you
A Statement of Net Position, also known as a Balance Sheet, is a financial statement that summarizes what
MSD owns and owes at a given point in time. It also shows our net worth at that specific point in time.
Our FY19 Balance Sheet shows that:
• MSD’s assets and deferred outflows exceed liabilities and deferred inflows by $2.6 billion.
• Overwhelmingly, MSD’s assets are in the form of capital assets. The $3.6 billion in net capital assets
is split into the five categories, shown on page 13.
• Of the $1.9 billion in liabilities, $1.7 billion are in the form of bonds and notes payable.
BALANCE SHEET
Condensed Statements of Net Position (dollars in thousands)
The financial information included is derived from the CAFR and presented in conformity with GAAP.
Financials
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 13
Financials
MSD ASSETS
Condensed Statements of Capital Assets Net of Depreciation (dollars in millions)
What We Own
(in millions)
MSD LONG-TERM OBLIGATIONS
Bonds and Notes Payable (Revenue Bonds and Direct Loan Balances Only)
What We Owe
53%
26%
18%Collection and Pumping Plant $1,917
Construction in Progress 956
Treatment, Disposal Plant and Equipment 661
Land 74
General Plant and Equipment 23
TOTAL FY19 ASSETS $3,631
<1%
<2%
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2018 201920102011201220132014201520162017
| METROPOLITAN ST. LOUIS SEWER DISTRICT14
FY19 FY18 FY17 FY16 FY15 OPERATING REVENUESSewer service charges $399,929 $364,165 $330,873 $306,119 $284,367 Recovery (Provision) for doubtful (4,349) (2,990) (2,513) (4,107) (2,096) sewer service charge accounts Licenses, permits, and other fees 3,063 3,777 4,036 3,620 6,657 Other 2,478 3,359 1,095 14,226 1,460
Total Operating Revenues 401,121 368,311 333,491 319,858 290,388
NON-OPERATING REVENUESProperty taxes levied by the District 34,108 33,749 32,458 25,671 24,764 Investment income 16,699 7,406 2,903 4,636 3,001 Rent and other income 301 254 106 103 37
Total Non-Operating Revenues 51,108 41,409 35,467 30,410 27,802 Total Revenues 452,229 409,720 368,958 350,268 318,190
OPERATING EXPENSES
Pumping and treatment 63,197 60,735 60,203 59,100 60,766
Collection system maintenance 45,617 44,786 43,928 42,853 40,162
Engineering 11,447 11,218 11,290 10,998 10,954
General and administrative 67,462 59,012 58,535 55,315 48,551
Water backup claims 5,600 1,557 5,035 7,631 3,862
Depreciation 83,640 81,326 81,194 83,984 78,641
Asset management 13,755 15,131 14,893 13,215 13,586
Total Operating Expenses 290,718 273,765 275,078 273,096 256,522
NON-OPERATING EXPENSES
Net loss on disposal and 971 1,834 673 325 1,421
sale of capital assets
Non-recurring projects and studies 15,628 9,296 7,459 11,000 12,317
Interest expense 33,082 36,695 31,251 28,943 27,139
Total Non-Operating Expenses 49,681 47,825 39,383 40,268 40,877
Total Expenses 340,399 321,590 314,461 313,364 297,399
INCOME BEFORE CAPITAL 111,830 88,130 54,497 36,904 20,791 GRANTS AND CONTRIBUTION Capital grants and contributions 17,378 26,077 9,614 12,037 12,997
CHANGE IN NET POSITION 129,208 114,207 64,111 48,941 33,788
Net position – beginning of year 2,491,316 2,391,168 2,327,057 2,278,116 2,267,952
Effect of adoption of GASB 68 — — — — (23,624)
Effect of adoption of GASB 75 — (14,059) — — —
NET POSITION – END OF YEAR $2,620,524 $2,491,316 $2,391,168 $2,327,057 $2,278,116
INCOME STATEMENT
Condensed Statements of Revenues, Expenses, and Changes in Net Position (dollars in thousands)
Financials
Definitions
Operating revenues and expenses: all income and expenses received from the District’s daily normal business.
Non-operating revenues and expenses: all income and expenses not related to the District’s daily normal business.
What it tells you
A Statement of Revenues, Expenses, and Changes in Net Position, also known as an Income Statement,
tells you where MSD gets its funds and how they are spent. It also shows how much money MSD made or
lost over a specific period of time.
Our FY19 Income Statement shows that:
• Sewer service charge revenue increased as a result of the scheduled rate increase that occurred in FY19.
• Operating expenses increased due to higher pension expense, costs related to systems upgrades and
water backup claims due to spring flooding and pump station failures.
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 15
FY19 EXPENSES
Year ended June 30, 2019 (dollars in thousands)
Where The Money Goes
Financials
FY19 REVENUE
Year ended June 30, 2019 (dollars in thousands)
Where The Money Comes From
Sewer Service Charges, Net $395,580
Other (in Detail)
Property Taxes Levied by the District (7.3%) 34,108
Capital Grants and Contributions (3.7%) 17,378
Investment Income (3.6%) 16,699
Licenses, Permits, and Other Fees (.7%) 3,063
Other Operating Revenues (.5%) 2,478
Rent and Other Income (.1%) 301
TOTAL REVENUE $469,607
Employment Costs $114,570
Depreciation 83,640
Contracted Services 52,497
Interest Expense 33,082
Other (in Detail)
Utilities (5%) 16,896
Non-recurring Projects and Studies (4.6%) 15,628
Materials and Supplies (3.7%) 12,446
Insurance (1.1%) 3,820
Chemical Supplies (1.1%) 3,667
Other Operating Expenses (.9%) 3,182
Net Loss on Disposal and Sale of Capital Assets (.3%) 971
TOTAL EXPENSES $340,399
16%
34%
24%
84%
17%
15%
10%
| METROPOLITAN ST. LOUIS SEWER DISTRICT16
-300,000
-200,000
-100,000
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100,000
200,000
300,000
Operating Activities Non-Capital Financing Activities Capital Activities Investing Activities
FY19 FY18 FY17
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CASH FLOW STATEMENT
Condensed Statements of Cash Flows (dollars in thousands)
CASH FLOW ACTIVITIES COMPARISON
(dollars in thousands)
Financials
FY19 FY18 FY17
Cash flows from operating activities $185,226 $160,989 $148,108 Cash flows from non-capital financing activities 33,850 33,181 32,013 Cash flows from capital and related financing activities (310,046) (72,534) (146,484) Cash flows from investing activities 113,338 (135,363) (34,720)
Net increase (decrease) in cash and cash equivalents 22,368 (13,727) (1,083)
Cash and cash equivalents at beginning of year 34,386 48,113 49,196
CASH AND CASH EQUIVALENTS AT END OF YEAR $56,754 $34,386 $48,113
Definitions
Cash flows from operating activities: all cash received or spent related to MSD’s daily normal business activities.
Cash flows from non-capital financing activities: all cash received or spent related to taxes.
Cash flows from capital and related financing activities: cash received or spent related to construction of MSD’s infrastructure.
Cash flows from investing activities: cash received or spent related to investing MSD’s cash reserves.
What it tells you
A Cash Flow Statement summarizes both the cash and the net cash coming in and going out of MSD
during a given period.
Our FY19 Cash Flow Statement compared to the prior year shows that:
• Cash flows from operating activities increased due to increased receipts from customers.
• Cash flows from non-capital financing activities increased due to more tax revenue collected.
• Cash flows from capital and related financing activities decreased as a result of less bond proceeds
and premiums received during FY19.
• Cash flows from investing activities increased due to an increase in the volume of maturities
of investments.
POPULAR ANNUAL FINANCIAL REPORT FY2019 | 17
What it tells you
A credit rating provides an assessment of an organization’s credit worthiness, based on its history of
borrowing and repayment of funds, as well as its assets and liabilities. A poor credit rating makes it more
difficult to find financing and often results in higher interest rates.
As the chart below illustrates, MSD has premium credit, with consistent ratings at the top of each credit
rating agency’s scale. On a scale of Aaa to C, MSD earned an Aa1 rating from Moody’s. Similarly, on a scale
of AAA to D, MSD earned AAA and AA+ ratings from Standard & Poor’s and Fitch, respectively. MSD has
demonstrated to creditors and credit rating agencies its ability to manage large annual capital plans. The
District’s solid financial management, including close monitoring of its financial performance, strong debt
coverage, and liquidity also contribute to these ratings, which have remained constant the past three years.
What it tells you
In MSD’s case, it shows that MSD has been a good steward of the funds allocated to the District.
FY19 FY18 FY17
Moody’s Aa1 Aa1 Aa1
Standard & Poor’s (S&P) AAA AAA AAA
Fitch AA+ AA+ AA+
ExpenseCategory
Budget
Expenses
UnspentBudget
Variance Explanation
Capital Improvement
and Replacement
Program (CIRP)
$381.6M
267.9M 113.7M
CIRP came in under budget
for FY19. The primary factor
is a result of work that was
postponed. These delays
contributed $43M to the
variance. In addition, $3M
of the savings resulted from
either cancelled projects or
completed projects coming
in under budget at which
point the unused budget
dollars on a completed
project reduce expenses
in the year the project is
finalized. The remaining
savings is the result of
projects being under budget
either from good bids or
reduced scope.
Debt Service
$122.1M
114.6M
7.5M
Debt Service expenses were
favorable for the District in
FY19. The savings relative to
budget came from direct
loans that were not fully
utilized during FY19,
resulting in less interest
expense along with
favorable interest rates
on the 2018A Water
Infrastructure Finance and
Innovation Act Loan and
2018B Revenue Bonds
issued during FY19.
Operating
$210.5M
205.3M
5.2M
Operating expenses came
in under budget for FY19.
The largest of the variances
was in Personnel Services of
$7.3 million primarily due to
vacancies. Supply expenses
were also favorable by $1.1
million with Chemical Supplies
making up almost half of that
savings. Utilities contributed
to the District’s favorable
expense variance by finishing
under budget by $0.7 million.
Contractual Services and
Capital Outlay offset a portion
of these savings, with expenses
exceeding the budget by $3.9
million primarily for Structural
Improvements and Processing
Equipment at the treatment
plants and pump stations.
TOTAL
$714.2M
587.8M
126.4M
CREDIT RATING
Financials
PERFORMANCE AGAINST BUDGET
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Metropolitan St. Louis Sewer District
Metropolitan St. Louis Sewer District
2350 MARKET STREET, ST. LOUIS, MO 63103