Loading...
HomeMy Public PortalAboutFiscal Year 2021 Annual Comprehensive Financial Report (ACFR)THE METROPOLITAN ST. LOUIS SEWER DISTRICT • ST. LOUIS, MISSOURI ANNUAL COMPREHENSIVEFINANCIAL REPORT FISCAL YEARS ENDED JUNE 30, 2021 AND 2020 D e e r C r e e k T u n n el Inspection and Tour J e ff e r s o n B a r r a c k s Tunnel Void Location Deer C r e e k T u n n e l M a n Basket Deer Creek Tunnel Reflection THE METROPOLITAN ST. LOUIS SEWER DISTRICT ST. LOUIS, MISSOURI ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEARS ENDED JUNE 30, 2021 AND 2020 Report Prepared And Submitted By The Department of Finance Marion M. Gee Director Of Finance 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 .................................................................................................18 Statements Of Revenues, Expenses, And Changes In Net Position .................................20 Statements Of Cash Flows ..................................................................................................21 Statements of Fiduciary Net Position .................................................................................23 Statements of Changes in Fiduciary Net Position .............................................................24 Notes To Financial Statements ...........................................................................................25 Required Supplementary Information Schedule Of Changes In Net Pension Liability And Related Ratios ..............................110 Schedule Of Employer Contributions –Employees’ Pension Plan .................................111 Schedule Of Changes in Total OPEB Liability ................................................................112 Part III – Statistical Section: Net Position By Component .....................................................................................................113 Changes In Net Position ..........................................................................................................114 Operating Revenues By Source ...............................................................................................115 Operating Expenses .................................................................................................................116 Non-Operating Revenues And Expenses ................................................................................117 User Charge Rates ...................................................................................................................118 User Charge Revenues .............................................................................................................119 Sewer User Charges (Composite-Annual)..............................................................................120 Number Of Customers By Type...............................................................................................121 Ten Largest Customers ............................................................................................................122 Ratios of Outstanding Debt By Type.......................................................................................123 Computation Of Overlapping Debt .........................................................................................124 Pledged Revenue Coverage ......................................................................................................125 Demographic And Economic Statistics ...................................................................................126 Principal Employers (St. Louis Metropolitan Area)...............................................................127 Employment Level....................................................................................................................128 Average Flow ............................................................................................................................129 Operating And Capital Indicators ...........................................................................................130 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. i October 21, 2021 The Board of Trustees The Metropolitan St. Louis Sewer District The Annual Comprehensive Financial Report (“ACFR”) of The Metropolitan St. Louis Sewer District (“MSD” or the “District”) for the fiscal year (“FY”)ended June 30, 2021 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 ACFR, 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 ACFR 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, 2021 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 Annual Comprehensive Financial Report for the fiscal year ended June 30, 2020. The Financial Section includes the independent auditors’ report, management’s discussion and analysis, the District’s basic financial statements and required supplementary information. The Statistical Section includes financial, economic, and demographic information, generally presented on a multi-year basis. The ACFR 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. Separate from the District’s enterprise financial statements, the District’s fiduciary component unit’s financial statements for The Metropolitan St. Louis Sewer District Employees’ Pension Plan are also included in the ACFR. Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, MO 63103-2555 314-768-6200 www.msdprojectclear.org 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 428,000 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 ofthe Missouri State Constitution. The Charter of MSD (“Plan”),approved by voters in 1954 and amended in 2000, 2012 and 2021, 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 shall be a member of the same political party. 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 2021 the primary source of funding for the operation and maintenance of MSD’s wastewater system was a user charge averaging $674.31 per year or $56.20 per month for a single-family residence. The District’s charges for residential wastewater 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 fiscal year 2021, District personnel continued to closely monitor 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 reduced revenues.Similar efforts will occur again in fiscal year 2022. During fiscal 2021 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 a 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 community could experience thousands of basement backups and/or extensive street The Board of Trustees The Metropolitan St. Louis Sewer District v flooding. (Even with these overflow 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 more than $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. On April 6, 2021, voters in St. Louis City and St. Louis County overwhelmingly approved Proposition Y—81.6% —to fund MSD’s four-year, $1.58 billion capital improvement program to meet regulatory and system improvement needs. By approving Proposition Y, voters are allowing MSD to borrow $500 million in bonds to design and build nearly 300 The Board of Trustees The Metropolitan St. Louis Sewer District vi projects over the next three years to improve the wastewater system by eliminating overflows, reduce basement backups, repair and rehabilitate the system, make upgrades at the Bissell Point and Lemay Wastewater Treatment Plants, and retire the Fenton Wastewater Treatment Plant. Wastewater rates will increase 3.4% in FY 2022, 3.5% in FY 2023, and 3.7% in FY 2024. 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 $3.12 billion in wastewater revenue bonds. As of June 30, 2021, MSD has issued $2.27 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. As the pandemic continues, our vigilance and commitment to our employees and our community has helped to curb the spread of COVID-19. We continued weekly employee communications, with additional updates as needed. Reduced density of employees in the building continued. The District added additional sanitizer stations and high-touch surfaces remain covered with Nano-Septic coverings. Face-to-face internal meetings are kept to a minimum, and social distancing and masks are required throughout all of MSD facilities, according to local laws. In-person community outreach was no longer possible, so MSD shifted to virtual spaces to continue communication with stakeholders. Project meetings and outreach to municipal partners and contractors are now all done virtually. Plans to remain virtual will continue until it is once again safe to return to in-person meetings. 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 300.6 million gallons per day (“MGD”)in fiscal 2021 compared to 367.5 MGD in fiscal 2020. Flows were lower in fiscal year 2021 due to fewer rain events than occurred in fiscal 2020. The design capacity and average flow, by watershed, in MGD was as follows in fiscal 2021: The Board of Trustees The Metropolitan St. Louis Sewer District vii MAJOR WATERSHED LEVEL OF TREATMENT NUMBER OF FACILITIES DESIGN CAPACITY (MGD) AVERAGE FLOW FISCAL 2021 (MGD) Mississippi River Secondary Two 472.00 222.00 Missouri River Secondary Two 78.00 50.60 Meramec River Secondary Three 42.75 28.00 Total Seven 592.75 300.60 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. 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 5.8 percent in June 2021 and lower than the national unemployment rate of 5.9 percent for the same time period.The June 2021 unemployment rate of 5.8 percent is lower than the June 2020 rate of 9.6 percent due to the diminishing 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 2021 and 2020: 2021 2020 Sewer Plan Reviews: Number of Plans Approved 525 435 Number of Miles of Sewers 44 41 Sewer Construction Permits: Number of Permits Issued 2,130 2,277 Number of Miles of Sewers 21 23 Customer Connections: Number of Connection Permits Issued 1,621 1,742 Connection Fee Revenue (in millions)$1.6 $0.9 Value of Sewers Dedicated to MSD by Developers (in millions) $12.9 $6.5 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 The Board of Trustees The Metropolitan St. Louis Sewer District viii 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 $136.7 million in fiscal 2021 compared to a net operating income of $141.2 million the prior year. The decrease in net operating income was driven by a decline in other income of $6.7 million. O ther income in FY 2020 included $6.6 million received as a result of a lawsuit settlement. Operating expenses decreased $6.3 million due primarily to a $10.9 million decrease in general and administrative expenses which consisted of a $12.3 million decline in Governmental Accounting Standards Board Statement No.68 related pension expense and a reduction of $2.4 million in litigation and claim expenses; offset by a $3.8 million increase in other administrative expenses such as benefits and compensation and property insurance. A more in-depth analysis of the District’s financial position and the magnitude ofthe capital improvement 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. The Board of Trustees The Metropolitan St. Louis Sewer District ix 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 $935 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. 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 $125 every fiscal year, up to a maximum of $500, 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 $500. 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. The Board of Trustees The Metropolitan St. Louis Sewer District x 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 ACFR includes a report on the District’s financial statements by the accounting firm of CliftonLarsonAllen LLP. 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 30,2021. 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, 2020 and 2019 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 ACFR for the fiscal year ended June 30, 2020. 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 ACFR, the contents of which conform to program standards. The ACFR 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-three consecutive years. We believe the current ACFR 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 The Board of Trustees The Metropolitan St. Louis Sewer District xi Distinguished Budget Presentation award for its fiscal 2021 annual budget. The District has received this award for thirty-four consecutive years. We believe the fiscal year 2022 budget presentation continues to meet the GFOA’s high standards and have submitted it for consideration. The District also received the GFOA’s Award for Outstanding Achievement in Popular Annual Financial Reporting (“PAFR”) for its fiscal year 2020 PAFR. W e have received this award for every year since the publication of our first PAFR for FY 2012 and intend to submit the FY 2021 PAFR for consideration. Marion M. Gee Director of Finance xii ORGANIZATION (As of June 30, 2021) BOARD OF TRUSTEES Michael Evans, Chair; Amy Fehr, Vice Chair; Ret. Col. Richard Wilson; Greg Nicozisin; Brian K. Watson; Brian Wahby OFFICE OF INTERNAL AUDITOR RATE COMMISSION Leonard P. Toenjes, Chair OFFICE OF SECRETARY TREASURER Tim R. Snoke Secretary/Treasurer CIVIL SERVICE COMMISSION Rev. Michael F. Jones Marylynn Sims Michael Harvey 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 TECHNOLOGY Jonathon C. Sprague Director 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, 2020 Executive Director/CEO Financial Section METROPOLITAN ST. LOUIS SEWER DISTRICT SERVICE AREAS CLA is an independent member of Nexia International, a leading, global network of independent accounting and consulting firms. See nexia.com/member-firm-disclaimer for details. CliftonLarsonAllen LLP CLAconnect.com (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 activities and the aggregate remaining fund information of The Metropolitan St. Louis Sewer District (the District), as of and for the years ended June 30, 2021 and 2020, 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 opinions 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. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the business-type activities and the aggregate remaining fund information of the District as of June 30, 2021 and 2020, and the respective changes in its financial position and, where applicable, its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Board of Trustees The Metropolitan St. Louis Sewer District (2) Emphasis of Matter During fiscal year ended June 30, 2021, the District adopted GASB Statement No. 84, Fiduciary Activities. As a result of the implementation of this standard and the change in accounting principle (see Note 1), the District added new fiduciary financial statements. In addition, the District adopted GASB Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period (see Note 1). Our auditors’ opinions were not modified with respect to these matters. 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 21, 2021, 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 21, 2021 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 3 MANAGEMENT’S DISCUSSION AND ANALYSIS For the Years Ended June 30, 2021 and 2020 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. 2021 Financial Highlights The District increased capital assets by $230.5 million as a result of increases in construction in progress ($181.1 million), land ($1.2 million)and depreciable capital assets net of depreciation ($48.1 million). The District placed $141.8 million of capital assets into service during fiscal year 2021. The continued high level of capitalization reflects the District’s work to meet long-term plans. Capitalized assets included: Collection and pumping plant $120.3 million Treatment and disposal plant and equipment $14.2 million General plant and equipment $6.1 million Land $1.2 million The net increase to accumulated depreciation was $86.7 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 2021 fiscal year the District implemented three Governmental Accounting Standards Board (“GASB”) Statements and two Implementation Guides. See Note 1, Summary of Significant Accounting Policies, in the accompanying notes to the financial statements for more detailed information. 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 METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 4 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. Required Financial Statements The basic financial statements presented by the management of the District include the Statements of Net Position; Statements of Revenues, Expenses,and Changes in Net Position; Statements of Cash Flows; Statements of Fiduciary Net Position; and Statements of Changes in Fiduciary Net Position. These statements are prepared using the accrual basis of accounting in conformity with generally accepted accounting principles in the United States of America as applied to government units. 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 District’s basic financial statements also include the Notes to the Financial Statements and Required Supplementary Information. In addition, certain statistical supplementary information is presented for additional analysis but is not a required part of the basic financial statements. The District implemented GASB Statement No. 84, Fiduciary Activities (“GASB Statement No. 84”) in fiscal 2021 and included the financial statements of the District’s fiduciary activities in conformity with generally accepted accounting principles in the United States of America. The fiduciary activities of the District include The Metropolitan St. Louis Sewer District Employees’ Pension Plan (“Pension Plan”). 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 5 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 an improving or declining financial position. This statement provides 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 the years’revenues and expenses. 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. The Notes to the Financial Statements provide additional information that is essential to obtain a full understanding of the data provided in the basic financial statements, such as the District’s significant accounting policies, investment instruments, outstanding debt, employee benefit plans, segment information and subsequent events to name a few. The Required Supplementary Information section provides detail in support of the changes in the net pension liability and the total other postemployment benefits (“OPEB”) liability and information pertaining to the District’s actuarially determined contributions to the Pension Plan. The Statistical Section provides significant data that afford the reader a better historical perspective and assist in assessing the current financial status and trends of the District for which ten years of data is generally provided. Financial Analysis The District’s financial position improved in the current year, as evidenced by the increase in net position of $127.3 million. The improvement is due primarily to an increase in net investment in capital assets, subdistrict construction and improvement funds, and unrestricted funds of $114.6 million, $5.0 million, and $11.8 million, respectively; offset by a decrease in debt service funds of $4.1 million. The increase in net investment in capital assets net position is comprised of a $230.5 million increase in net capital assets and a $31.6 million increase in unspent bond proceeds and is decreased by a $139.6 million increase in debt related to capital assets.In addition to these changes to net investment in capital assets net position, the increase in construction-related THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 6 liabilities of $6.1 million, the recognition of a deferred gain on debt refunding (net of amortization) of $1.4 million and the $0.4 million amortization of deferred losses decreased net investment in capital assets. The sum of these six components nets to the $114.6 million increase in net investment in capital assets net position. The $4.1 million decrease in the debt service funds net position is due primarily to the $4.0 million cash reserves paid out in fiscal 2021 to current refund certain debt. Condensed Financial Statements and Analysis 2021 Analysis Current,non-current,restricted, and other assets increased $40.6 million or 5.2% in the current year. The increase is predominately due to an increase in investments and cash due to increased unspent bond proceeds and more taxes levied and collected. Increa se Increase June 30,June 30,(Decrease)Ju ne 30,(Decrease) 2021 2020 2021-2020 2019 2020-2019 As sets: Curre nt, non-current, re stricte d, an d o the r asse ts 827,663$ 787,043$ 40,620$ 821,030$ (33,987)$ Capital asse ts (net of accumulated de preciatio n)4,078,342 3,847,889 230,453 3,631,716 216,173 Total Assets 4,906,005 4,634,932 271,073 4,452,746 182,186 Defer red Ou tflows of Res ources : Bonds an d n otes payable -Deferred lo ss o n re fundin g 5,469 5,889 (420)11,343 (5,454) Pensio n-relate d o utflows 10,476 15,673 (5,197) 34,238 (18,565) OPEB-relate d o utflows 3,537 2,843 694 1,246 1,597           Total Deferred Ou tflows of Res ources 19,482 24,405 (4,923)46,827 (22,422) Liabilities : Current liabilitie s 165,821 153,611 12,210 149,991 3,620 Non-current liabilitie s 1,832,387 1,722,223 110,164 1,723,830 (1,607) Total Liabilities 1,998,208 1,875,834 122,374 1,873,821 2,013 Defer red Inflows of Res ources : Bonds an d n otes payable -Deferred gain o n refundin g 2,793 1,393 1,400 —1,393 Pensio n-relate d inflows 22,671 7,150 15,521 4,341 2,809 OPEB-re late d inflows 3,888 4,331 (443)887 3,444           Tot al Deferred In fl ows of R es ources 29,352 12,874 16,478 5,228 7,646 Net Po sition: Ne t investm ent in capital asse ts 2,299,308 2,184,736 114,572 2,063,519 121,217 Restr ic te d 97,920 97,034 886 127,414 (30,380) Un re stricte d 500,699 488,859 11,840 429,591 59,268 Tot al Net Po sition 2,897,927$ 2,770,629$ 127,298$ 2,620,524$ 150,105$ Co nden sed St atements of Net Po sition (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 7 Capital assets net of accumulated depreciation increased by $230.5 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 $12.2 million or 7.9% due primarily to an increase in contracts and accounts payable, current portion of bond and notes payable and retainage held on capital projects. Non-current liabilities increased by $110.2 million or 6.4% primarily due to net increases in bonds and notes payable, total OPEB liability and deposits and accrued expenses of $135.1 million, $1.8 million, and $1.6 million, respectively; offset by a decrease in net pension liability of $28.3 million. The net increase in bonds and notes payable is related to the $178.6 million new senior and subordinate debt issued in fiscal year 2021 and a net increase in premiums received on debt issuances of $37.4 million due to premiums on the fiscal 2021 new debt exceeding the premium retired resulting from the fiscal 2021 direct placement refunding;offset by $61.2 million for fiscal 2022 senior and subordinate debt payments reclassified to current liabilities, $11.4 million current refunding of existing debt,$6.4 million amortization of premiums, net of discount, and $1.9 million for fiscal 2021 senior debt payment reclassified to current liabilities payable on new fiscal 2021 debt. Net deferred outflows and inflows decreased $21.4 million or 185.6% 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. 2020 Analysis Current, non-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 OPEB liability; offset by $15.8 million net increase in bonds and notes payable. The net increase in bonds and notes payable is THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 8 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 decreased $30.1 million or 72.3% due primarily to updates to various information provided by the District’s actuary such as economic/demographic gains or losses, assumption changes or inputs, and investment gains or losses related to the District’s net pension liability or total OPEB liability. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 9 For the Fiscal For the Fiscal Increase For the Fiscal Incr ea se Year En ded Year Ended (Decrease)Year Ended (Decrease) Ju ne 30, 2021 June 30, 2020 2021-2020 Ju ne 30, 2019 2020-2019 Oper ating Revenues: Sewer service charges 425,248$ 430,398$ (5,150)$ 399,929$ 30,469$ Provisio n for doubtful sewer service charge acco unts (5,347) (5,612) 265 (4,349) (1,263) Licenses, permits, and other fees 3,754 3,012 742 3,063 (51) Oth er 3,497 10,193 (6,696) 2,478 7,715 Total Operating Revenues 427,152 437,991 (10,839) 401,121 36,870 Non-operating Revenues: Prope rty taxe s levied by the District 43,624 35,439 8,185 34,108 1,331 Investm ent income 1,392 16,259 (14,867) 16,699 (440) Re nt and o ther income 324 302 22 301 1 Total Non-operating Revenues 45,340 52,000 (6,660) 51,108 892 Total Revenues 472,492 489,991 (17,499) 452,229 37,762 Operating Expen ses: Pumpin g and treatment 64,475 62,030 2,445 63,197 (1,167) Co lle ction system mainte nance 48,113 47,652 461 45,617 2,035 Engineering 11,501 11,628 (127)11,447 181 General and administrative 55,011 65,947 (10,936) 67,462 (1,515) Water backup claims 3,985 4,653 (668)5,600 (947) Depreciation 91,352 87,633 3,719 83,640 3,993 Asse t management 16,024 17,195 (1,171) 13,755 3,440 Total Operating Expen ses 290,461 296,738 (6,277) 290,718 6,020 Non-operating Expen ses: Net lo ss on dispo sal and sale of capital asse ts 990 962 28 971 (9) Non-recurring projects and studie s 11,828 12,458 (630)15,628 (3,170) Inte rest expense 56,616 36,119 20,497 33,082 3,037 Total Non-operating Expenses 69,434 49,539 19,895 49,681 (142) Total Expen ses 359,895 346,277 13,618 340,399 5,878 Income B efo re Capital Grants An d Contribu tions 112,597 143,714 (31,117) 111,830 31,884 Capital G rants And Contributio ns 14,701 6,391 8,310 17,378 (10,987) Ch ange in Net Position 127,298 150,105 (22,807) 129,208 20,897 Net Positio n - Beginning of Year 2,770,629 2,620,524 150,105 2,491,316 129,208 Net Po sition - En d o f Yea r 2,897,927$ 2,770,629$ 127,298$ 2,620,524$ 150,105$ St atements of Rev en ues, Expen ses, a nd Changes in Net Position (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 10 2021 Analysis Net position increased $127.3 million or 4.6% over the prior year which was a $22.8 million or 15.2% decrease from last year’s net position increase. The largest impacts to net position were the decrease in investment income and the increase in interest expense. Total revenue decreased by $17.5 million or 3.6%resulting primarily from the decrease in investment income. Sewer service charges decreased $5.2 million or 1.2%due to the impact of the COVID 19 pandemic on commercial customers’ charges.Other operating revenue decreased $6.7 million or 65.7% primarily due to a lawsuit settlement received on a sewer construction project in fiscal year 2020. Property taxes increased $8.2 million or 23.1% due primarily to higher property valuation assessments and re-instatement of tax rates for several of the stormwater subdistricts. Investment income decreased $14.9 million or 91.4% due to an unrealized loss on investments recorded in fiscal 2021 compared to an unrealized gain recognized in fiscal 2020. Total expenses increased by $13.6 million or 3.9% resulting primarily from the increase in interest expense. Operating expenses decreased $6.3 million or 2.1% with decreases in general and administrative, asset management and water backup claims of $10.9 million, $1.2 million, and $0.7 million, respectively; offset by increases in depreciation expense of $3.7 million or 4.2% and pumping and treatment expenses of $2.4 million or 3.9%. General and administrative decreased primarily due to a decrease in net pension expense based on the actuarial calculation resulting from favorable market values for pension assets. Non-operating expenses increased $19.9 million or 40.2% due to a large increase in interest expense of $20.5 million or 56.7%due to the early implementation in fiscal 2021 of GASB Statement No.89, Accounting for Interest Cost Incurred Before the End of a Construction Period (“GASB Statement No. 89”) which discontinued the practice of considering interest costs as one of the ancillary charges necessary to place assets into their intended location and condition for use. Early implementation of GASB Statement No. 89 resulted in 100 percent of the interest costs being expensed in fiscal year 2021 compared to approximately 63 percent being expensed in fiscal year 2020. Capital grants and contributions increased $8.3 million or 130.0% with the majority of the increase resulting from capital contributions as the value of capital projects contributed to the District increased in fiscal 2021. 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 fiscal year 2019’s net position increase. The largest impact to net position was the increase in sewer service charges revenue which increased due to rate increases. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 11 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 $11.0 million or 63.2% with the majority of the decrease resulting from capital contributions as the value of capital projects contributed to the District decreased significantly in fiscal 2020. For the F isc al For the F isc al Inc rease For the F isc al Inc rease Year End ed Year Ended (Decrease)Year Ended (Decrease) June 3 0, 2 021 June 30, 2020 2021-2020 June 3 0, 2019 2020-2019 Cash flows from operating a ctivities 210,674$ 216,970$ (6,2 96)$ 185,226$ 31,744$ Cash flows from non-ca pital financi ng a ctivities 42,689 34,983 7,706 33,850 1,133 Cash flows from ca pital a nd rela ted fina ncing a ctivities (211,637)(305,361)93,724 (3 10,046)4,685 Cash flows from i nves ting a ctivities (1 6,586)93,779 (110,365) 113,338 (19,559) Net i ncre ase (decrease) in ca sh a nd ca sh e quivalents 25,140 40,371 (15,231)22,368 18,003 Cash a nd ca sh eq uivalent s a t begi nni ng of year 97,125 56,754 40,371 34,386 22,368 Cas h And Cash Equivalents At End Of Y ear 122,265$ 97,125$ 25,140$ 56,754$ 40,371$ Conde nsed Statements of Cash F low s (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 12 2021 Analysis The District ended the year with $122.3 million in cash and cash equivalents for an increase of $25.1 million or 25.9% from the prior year.Cash flows from operating activities decreased by $6.3 million or 2.9% as a result of decreased receipts from customers and increased payments to employees for services and to suppliers for goods and services.Cash flows from non-capital financing activities increased by $7.7 million or 22.0%due to higher taxes receipts. Cash flows from capital and related financing activities increased by $93.7 million or 30.7% due primarily to a $99.2 million increase in bond proceeds and premiums received in fiscal year 2021 compared to fiscal year 2020, a decrease of $16.2 million in principal, interest and fees paid on bonds due primarily to the $26.0 million debt service reserves paid out to advance refund debt in fiscal 2020 compared to the $4.0 million paid out in fiscal 2021 to current refund debt, and increases of $2.4 million in capital grant proceeds and $1.1 million in insurance proceeds; offset by a $25.2 million increase in spending for capital assets. Cash flows from investing activities decreased by $110.4 million or 117.7%. The decrease primarily stems from the fact that the difference between investments maturing decreased $69.1 million while investments purchased increased $40.5 million in fiscal 2021 compared to fiscal year 2020. 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 $31.7 million or 17.1% 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 $4.7 million or 1.5% due primarily to a $74.8 million increase in bond proceeds and premiums received in fiscal year 2020 compared to fiscal year 2019;offset by a $25.2 million increase in principal, interest and fees paid on bonds and a $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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 13 Capital Assets 2021 Analysis Total capital assets, net of accumulated depreciation, increased by $230.5 million or 6.0% over the prior year.Construction in progress contained the majority of the increase of $181.1 million or 17.9% consisting of $299.6 million in additions offset by $118.5 million of assets placed into service.Collection and pumping plant assets increased with net additions of $68.5 million or 3.3%, primarily for capitalization of assets including new and improved sewers, dedicated assets, and infrastructure repairs. Land increased $1.2 million or 1.6% due to the acquisition of easements and other land and general plant and equipment increased $1.1 million or 5.0%. These increases are offset by net treatment and disposal plant and equipment decrease of $21.5 million or 3.4% due to no large projects being capitalized in fiscal 2021 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. 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 $4.1 million or 5.5% due to the acquisition of easements and other land. These increases are Inc rease Inc re ase June 3 0,June 30,(Decrease)June 3 0,(Decrease) 2021 2020 2021-2020 2019 2020-2019 Land 79,569$ 78,334$ 1,235$ 74,274$ 4,060$ Construct ion i n p ro gres s 1,194,033 1,012,926 181,107 956,321 56,605 Treatment and disposal plant and equi pment 617,238 638,730 (21,492) 660,732 (22,002) Collection a nd p um ping p lant 2,163,327 2,094,866 68,461 1,916,993 177,873 Gene ra l plant and equipment 24,175 23,033 1,142 23,396 (363) T otal 4,078,342$3,847,889$230,453$ 3,631,716$216,173$ Conde nsed Statem ents of Capit al As sets Net of Depreciation (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 14 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 $0.4 million or 1.6%. For more detailed information, see Note 4, Capital Assets, in the accompanying notes to the financial statements. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 15 Long-Term Debt Inc rease Inc rease June 3 0,June 3 0,(Decrease)June 3 0,(Decrease) 2021 2020 2021-2020 2019 2020-2019 Senior Revenue Bonds: S eries 2010B 85,000$ 85,000$ —$ 85,000$ —$ S eries 2011B —13,725 (13,725) 15,945 (2,220) S eries 2012A 40,320 45,620 (5,300) 154,040 (108,420) S eries 2012B 37,800 41,525 (3,725) 128,840 (87,315) S eries 2013B 38,990 42,380 (3,390) 113,615 (71,235) S eries 2015B 166,030 168,950 (2,920) 190,135 (21,185) S eries 2016C 138,740 141,695 (2,955) 144,535 (2,840) S eries 2017A 305,580 309,240 (3,660) 312,760 (3,520) S eries 2019B 51,295 52,130 (835)—52,130 S eries 2019C (Taxa ble)274,745 276,260 (1,515) —276,260 S eries 2020B 118,055 —118,055 —— Water Infrastructure F inanc e & Innovation Ac t (WIFIA) Senior Bonds: S eries 2018A 262 262 —262 — Senior Refunding R evenue Bonds, Direct Placement: S eries 2021C 5,620 —5,620 —— Subordinate R evenue Bonds (State Revolving Funds Program): S eries 2004B 46,625 55,730 (9,105) 64,590 (8,860) S eries 2005A 2,400 2,765 (365)3,120 (355) S eries 2006A 16,075 18,550 (2,475) 20,965 (2,415) S eries 2006B 5,890 6,650 (760)7,400 (750) S eries 2008AB 17,790 19,795 (2,005) 21,765 (1,970) Missouri Department of Natural Resources: Energy Loan Program ———16 (16) S eries 2009A 11,892 13,068 (1,176) 14,218 (1,150) S eries 2010A 4,683 5,080 (397)5,468 (388) S eries 2010C 21,269 23,111 (1,842) 24,906 (1,795) S eries 2011A 28,611 30,449 (1,838) 32,241 (1,792) S eries 2013A 38,679 41,044 (2,365) 43,349 (2,305) S eries 2015A 58,973 62,478 (3,505) 65,902 (3,424) S eries 2016A 17,001 17,158 (157)13,129 4,029 S eries 2016B 65,850 61,285 4,565 45,583 15,702 S eries 2018B 24,303 18,228 6,075 2,880 15,348 S eries 2019A 22,012 6,292 15,720 —6,292 S eries 2020A 9,983 —9,983 —— S eries 2021A 5,333 —5,333 —— S eries 2021B 7,260 —7,260 —— T otal 1,667,066$ 1,558,470$ 108,596$ 1,510,664$ 47,806$ Condensed Statem ents of L ong-Term Debt (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 16 2021 Analysis The District ended fiscal year 2021 with $1.7 billion in long-term debt outstanding. The District had one senior revenue bond addition this year,Series 2020B, totaling $120.0 million and one senior refunding revenue bond direct placement addition,Series 2021C, totaling $5.6 million which was used to refund $11.4 million of the Series 2011B senior revenue bond. These amounts represent new borrowings and do not reflect the principal payment made in fiscal 2021 on Series 2020B. In addition, the District added three new Missouri Department of Natural Resources bonds,Series 2020A, 2021A and 2021B, totaling $10.0 million, $5.3 million and $7.3 million, respectively. The District also received $0.7 million, $7.9 million,$6.1 million,and $15.7 million in loan proceeds from the Series 2016A, Series 2016B,Series 2018B, and Series 2019A Missouri Department of Natural Resources bonds,respectively.These amounts represent new borrowings and do not reflect the principal payments made in fiscal 2021 on Series 2016A and Series 2016B. Total principal payments of $58.6 million, excluding the refunding referenced above, reduced outstanding debt in fiscal year 2021.For more detailed information, see Note 6, Long-Term Liabilities, in the accompanying notes to the financial statements. 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 of $52.6 million, excluding the refunding referenced above, 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. 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 17 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; 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 $3.1 billion in wastewater revenue bonds. As of June 30, 2021, the District has issued $2.3 billion of the total authorization. The District’s long-term wastewater capital improvement program will continue to be funded through a combination of additional bonds and wastewater rate increases. Requests for Information This financial report is designed to provide a general overview of the District’s finances for all those with an interest in the District’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed or e-mailed to: Marion M. Gee, Director of Finance The Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, MO 63103-2555 314-768-6200 mgee@stlmsd.com THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements.Page 18 STATEMENTS OF NET POSITION Continued on Next Page Ju ne 30, As sets 2021 2020 Cu rrent As sets Unrestricted Cu rrent As sets Cash and cash equivale nts  91,337,843$ 67,802,872$ Investments 210,940,744 264,322,528 Se wer se rvice charges receivable, less allo wance of $70,666,088 in 2021 and $66,061,154 in 2020 66,387,300 67,498,533 Unbille d se wer service charges rece iv able 34,970,247 33,342,430 Prope rty taxe s re ceivable , le ss allo wance of $7,430 in 2021 and $8,604 in 2020 363,496 421,059 Accrued income on investm ents 1,434,887 1,891,034 Other re ceivables, less allo wance of $60,373 in 2021 an d $58,209 in 2020 2,340,234 5,168,412 Supplie s inventory 8,475,419 8,013,597 To tal Unrestrict ed Cu rrent As sets 416,250,170 448,460,465 Res tricted Cu rrent As sets Cash and cash equivale nts 4,629,689 3,580,818 Investments 12,587,475 17,921,368 Other re ceivables 43,590 48,273 To tal Restricted Cu rrent As sets 17,260,754 21,550,459 Total Cu rrent As sets 433,510,924 470,010,924 Non-Current As sets Res tricted As sets Cash and cash equivale nts  26,297,303 25,741,021 Investments 125,637,074 90,301,459 Long-term investments 32,199,117 30,682,863 Prope rty taxe s re ceivable , le ss allo wance of $36,447 in 2021 and $29,497 in 2020 1,750,616 1,389,975 Accrued income on investm ents 169,177 375,676 To tal Restricted Non-Cu rrent As sets 186,053,287 148,490,994 Other As sets Note s re ce iv able 9,694,702 10,410,729 Long-term investments 198,404,102 158,130,241 To tal Other Assets 208,098,804 168,540,970 Capital Assets Depreciable:        Treatment and dispo sal plant an d e quipm ent           1,303,648,712 1,289,884,442        Co lle ction and pu mping plan t 3,093,068,764 2,974,542,039        General plant an d equipment 103,516,644 100,949,737 4,500,234,120 4,365,376,218        Le ss:  Accumulate d de pr eciatio n 1,695,494,536 1,608,746,607        Net de preciable assets       2,804,739,584 2,756,629,611        Non-depreciable:        Land 79,569,310 78,333,629        Co nstruction in pro gress 1,194,033,441 1,012,925,929 Net Capital As sets 4,078,342,335 3,847,889,169 Total Non-Current As sets 4,472,494,426 4,164,921,133 Tot al As sets 4,906,005,350 4,634,932,057 Defer red Ou tflows of Res ources Bonds and note s payable-De ferred loss o n refundin g 5,469,323 5,888,796 Pensio n-related o utflows 10,476,420 15,673,652 OPEB-relate d o utflows 3,536,916 2,842,869 Tot al Defer red Ou tflows of Resources 19,482,659 24,405,317 THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements.Page 19 STATEMENTS OF NET POSITION (Continued) Ju ne 30, Liabilities 2021 2020 Cu rrent Liabilities Current Liabilities -Payable From Un restricted As sets Co ntracts and acco unts payable 40,797,422$ 36,317,712$ Deposits an d ac crued expenses 42,276,571 42,172,527 Re tain age payable 20,326,492 16,736,184 Current portio n of bo nds and notes payable 61,157,300 56,629,100 Total Cu rrent Liabilities-Payable Fr om Un restrict ed As sets 164,557,785 151,855,523 Current Liabilities -Payable From Restrict ed As sets Co ntracts and acco unts payable 702,175 912,704 Re tain age payable 561,310 843,548 Total Cu rrent Liabilities-Payable Fr om Restricted As sets 1,263,485 1,756,252 Total Cu rrent Liabilities 165,821,270 153,611,775 No n-Current Liabilities Deposits an d ac crued expenses 9,202,567 7,559,792 Ne t pe nsio n liability 29,495,178 57,792,913 To tal OPEB liability 24,920,628 23,164,618 Bo nds and notes payable 1,768,769,051 1,633,705,811 Total Non-Current Liabilities 1,832,387,424 1,722,223,134 Total Liabilities 1,998,208,694 1,875,834,909 Deferred Inflows of Resources Bo nds and notes payable-Deferred gain on refundin g 2,793,162 1,393,209 Pe nsion-relate d in flows 22,671,398 7,149,698 O PEB-rela te d in flows 3,888,085 4,330,667 Total Defer red I nflows of Res ources 29,352,645 12,873,574 Net Po sition Ne t in vestment in capital asse ts 2,299,307,589 2,184,736,432 Re stricte d for:        Debt se rvice 29,706,793 33,856,568        Subdistrict constr uctio n and improve ment 68,212,821 63,177,454 Unrestricted            500,699,467 488,858,437 Total Net Position 2,897,926,670$ 2,770,628,891$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements.Page 20 STATEMENTS OF REVENUES, EXPENSES,AND CHANGES IN NET POSITION 2021 2020   Operating Revenues     Se wer se rvice charge s 425,247,783$ 430,398,092$     Provision for doubtful se wer service charge acco unts (5,347,419)(5,611,549)     Licenses, pe rmits and other fe es 3,753,797 3,012,368     O th er 3,497,401 10,193,128     To tal Oper ating Rev en ues 427,151,562 437,992,039   Operating Ex pen ses     Pumpin g and tre atm ent 64,475,064 62,030,454     Colle ctio n system maintenance   48,112,996 47,652,258     Engine ering 11,500,796 11,628,086     G eneral and adm in istrative 55,011,533 65,946,684     Wate r backup claims 3,984,849 4,653,281     Depre ciatio n 91,352,269 87,633,312     Asse t m an age ment 16,023,983 17,195,321     To tal Oper ating Ex pen ses 290,461,490 296,739,396   Operating Inco me         136,690,072 141,252,643   No n-Operating Revenues     Property taxes levied by the Dis tric t 43,624,302 35,439,441     Investment income 1,392,278 16,259,182     Rent and othe r income 323,662 301,631     To tal Non-Oper ating Revenues 45,340,242 52,000,254   No n-Operating Ex pen ses     Net lo ss on dispo sal and sale of capital asse ts         990,108 961,476     Non-recurring projects an d stu die s 11,827,723 12,458,231     Interest expense 56,615,868 36,119,362     To tal Non-Oper ating Ex pen ses 69,433,699 49,539,069   In come Befo re Capit al Gr ants An d Co ntributions 112,596,615 143,713,828   Capital Grants An d Contribu tions     Capital asse ts co ntributed 12,943,095 6,491,961     G rant re venue 1,758,069 (101,054)     To tal Ca pi tal Gr ants An d Co ntribu tions 14,701,164 6,390,907   Change In Net Po sition 127,297,779 150,104,735   Net Po sition - Beginning Of Year 2,770,628,891 2,620,524,156   Net Po sition - En d Of Year 2,897,926,670$ 2,770,628,891$ For Th e Years En ded Ju ne 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements.Page 21 STATEMENTS OF CASH FLOWS Continued on Next Page 2021 2020 Cash F low s F rom O perating Ac tivities Received from cus tomers 425,929,012$ 429,203,588$ Paid to employees for s ervices (105,930,520) (104,218,386) Paid to suppliers for go ods a nd s ervi ce s (109,324,477) (108,014,954) Net Cas h Provide d By O perating Ac tivities 210,674,015 216,970,248 Cash F low s Provided By Non-Capital F inanc ing Activities Taxes levied and collected 42,688,546 34,983,525 Cash F low s From Capital And Related Financing Ac tivities Proceeds from ca pital gra nt s 3,537,577 1,099,045 Proceeds from i ssuance of debt 172,012,156 97,928,346 Premium on s ale of bonds 37,194,201 12,059,976 Principa l paid on d ebt (62,599,880) (5 2,603,763) Interest and fees paid on debt (62,785,703) (8 8,951,050) Payments for ca pital assets (303,040,026) (277,790,939) Proceeds from s ale of capital assets 158,652 105,228 Proceeds received from other organi zation for their cont ribution t o construct ion of treatment plant 1,154,696 1,154,696 Proceeds from i ns urance on des troyed capital assets 1,088,835 — Build America B ond t ax credit 1,642,857 1,636,759 Net Cas h (Used In) Capital And Related Financ ing Ac tivitie s (211,636,635) (305,361,702) Cash F low s F rom Investing Ac tivities Purcha se of investment s (633,675,492) (593,156,734) Proceeds from s ale and maturi ty of investment s 606,554,500 675,698,385 Investment i ncome 10,297,068 10,995,758 Proceeds from rent s 238,122 241,167 Net Cas h Provide d By (Used In) Investing Activities (16,585,802) 93,778,576 Ne t Inc re ase In Cash And Cash Eq uivalents 25,140,124 40,370,647 Cash And Cas h Eq uivale nts At Beginning Of Y ear 97,124,711 56,754,064 Cash And Cash Equivalents At End Of Year 122,264,835$ 97,124,711$ Statem ents of N et Position Classific at ion C urrent A ssets - Unres tricted Cash and cash equivalents 91,337,843$ 67,802,872$ C urrent A ssets - Restricted Cash a nd cash equivalent s 4,629,689 3,580,818 N on-Current A ssets - Restricted Cash and ca sh equiva lent s 26,297,303 25,741,021 Statements of Net Position T otal Cash And Cash Equivalents 122,264,835$ 97,124,711$ Non-Cash Capital And Investing Activities Net proceeds f rom debt issuance placed into escrow to refund b onds 7,371,752$ 275,196,961$ Principa l amount reduced and placed in escrow a nd related deferred loss/ga in and premium (7,371,752) (300,519,359) Proceeds from d ebt issuance us ed to pay underwri ters directly 932,589 374,256 Capital asset additions included in account s payable 23,958,166 20,074,250 Capital assets co nt ributed by ot her governments and developers 12,943,095 6,491,961 Fair va lue investment adjus tment (gain) los s 7,406,329 (7,431,145) Grant revenue (expense)288,446 (1 78,002) For The Y ears Ended June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements.Page 22 STATEMENTS OF CASH FLOWS (Continued) 2021 2020 Reconciliation Of Operating Income To Net Cash Flows Provided By Operating Activities Operating Income 136,690,072$ 141,252,643$ Adjustments to reconcile oper ating incom e to net cash provided by operating activities: Depr ec iation 91,352,269 87,633,312 Non-recurring projects and studies (11,827,723)(12,458,231) Tax commission fees 637,362 507,762 Change in oper ating assets and liabilities: (Increase) in billed and unbilled sewer service charges receivable (516,584)(3,035,050) Dec rease in other receivables 75,499 97,828 Dec rease (increase) in supplies inventory (461,822)292,918 Dec rease in pension-related outflows 5,197,232 18,564,618 (Increase) in OPEB-related outflows (694,047)(1,596,542) (Decrease) increase in contracts and accounts payable 693,426 (1,099,779) (Decrease) increase in deposits and accrued expen ses 990,938 (1,838,193) (Decrease) in net pen sion liability (28,297,735)(16,603,824) (Decrease) increase in total OPEB liability 1,756,010 (999,777) Increase in pen sion-related inflows 15,521,700 2,808,582 (Decrease) increase in OPEB-r elated inflows (442,582)3,443,981 Net Cash Provided By Operating Activities 210,674,015$ 216,970,248$ For The Years En ded June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements.Page 23 STATEMENTS OF FIDUCIARY NET POSITION EMPLOYEES’PENSION PLAN 2020 2019 Assets In ves tment s at Fair V alue: Collective Inve stment Funds 171,767,753$ 136,062,084$ Mutual Funds 60,179,174 70,580,513 Real Es tate Investment s 30,265,219 32,566,168 Corporate Ob ligations 27,630,867 21,981,050 Dom estic C ommon S tocks 18,552,256 14,868,772 US Treasury a nd A gency Ob ligations 13,994,724 16,428,797 Money M arket Funds 3,237,837 3,110,257 Muni ci pal Ob ligations 1,292,527 554,136 Total In ve stment s 326,920,357 296,151,777 Receiva bles Interest and Divi dends Receiva ble 236,729 333,726 Total Receivables 236,729 333,726 Total Assets 327,157,086 296,485,503 Liab ilitie s Accrued Exp enses 244,402 282,856 Total Liabilities 244,402 282,856 Fuduciary Net Position Restricted for Pension Benef its 326,912,684$ 296,202,647$ December 3 1, THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements.Page 24 STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION EMPLOYEES’PENSION PLAN 2020 2019 Additions to F iduciary Net Position Attrib uted to: In ves tment Incom e: Net Appreci ation i n Fair V alue of Inves tment s 32,083,437$ 38,919,875$ Interest and Divi dends 5,514,283 3,542,825 Total In ve stment Income 37,597,720 42,462,700 Les s - Investment M anagers ' a nd Advisors ' F ees 922,422 831,216 Net Inves tment Incom e 36,675,298 41,631,484 Em ployer C ont ri butions 13,416,065 12,740,406 Total Additions 50,091,363 54,371,890 Deductions from F iduc iary Net Position Attrib uted to: Benefits Paid to Retirees a nd B eneficiaries 19,273,097 18,626,890 Administrative Exp ens es 108,229 102,929 Total Ded uct ions 19,381,326 18,729,819 Net Inc re ase 30,710,037 35,642,071 Fiduc iary N et Position Restricted for Pension Bene fits, January 1 296,202,647 260,560,576 Fiduc iary N et Position Restricted for Pension Bene fits, Dec em ber 31 326,912,684$ 296,202,647$ For the Y ears Ended December 31, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 25 NOTES TO FINANCIAL STATEMENTS June 30, 2021 AND 2020 1.Summary of Significant Accounting Policies Organization The Metropolitan St. Louis Sewer District (“District”) was authorized by the voters, established and chartered under Article VI, Section 30 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 a member of 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 26 The District sponsors a single employer defined benefit pension plan and trust for which the District contributes the actuarially determined contribution each year. Pursuant to the adoption in fiscal year 2021 of Statement No. 84 of the Governmental Accounting Standards Board, Fiduciary Activities, it was determined that the defined benefit pension plan and trust qualifies as a fiduciary component unit that meets the criteria of a fiduciary activity and the Statements of Fiduciary Net Position and the Statements of Changes in Fiduciary Net Position for The Metropolitan St. Louis Sewer District Employees’ Pension Plan are presented following the District’s basic financial statements. The District issues a publicly available report for the defined benefit pension plan and trust with audited financial statements that is available upon request and is also available on the District’s msdprojectclear.org website. While included in the separately issued report, the Cash and Investments and the Fair Value Measurement and Application note disclosures for the fiduciary activity are presented herein as Notes 16 and 17. 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. 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. 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. The District’s fiduciary financial statements are also presented in conformity with accounting principles generally accepted in the United States of America on an accrual basis of accounting. 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 for both the basic THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 27 financial statements and the financial statements of the District’s fiduciary activity 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. 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 28 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. 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. Throughout the fiscal year unbilled sewer service charge revenues are accrued by the District based on estimated billings for services provided and then actual unbilled sewer service charge revenue is accrued at the end of the fiscal year as all ratepayers are billed in the following month for the previous calendar month’s services with the billings spread over twenty-three different billing cycles. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 29 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 their estimated acquisition value at the acquisition date. Depreciation is calculated on a straight-line basis over the following estimated useful lives: 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 a minimum initial, individual cost between $5,000 and $15,000, depending on the class of assets as detailed above, and an estimated useful life of at least three years. At the time of retirement or disposal of capital assets, the related cost and accumulated depreciation are removed from the accounts and the resulting net gain or loss on disposal and sale of capital assets is reflected in non-operating expenses. A portion of the prior fiscal years’ interest on debt was capitalized as part of the costs of capital assets during construction based on the related weighted average net borrowing costs incurred. In fiscal year 2021 the District early implemented GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, resulting in all interest cost incurred in fiscal year 2021 being charged to interest expense in the period in which it was incurred. The amount of interest cost incurred in 2021 totaled $53,151,605 of which $44,846,148 was incurred on tax-exempt borrowings and $8,305,457 was incurred on taxable borrowings. This $53,151,605 excludes debt issuance cost, agent fees and amortization of deferred gains and losses of $3,464,263. In fiscal year 2020, the District’s total interest cost incurred on borrowings during the fiscal year was $50,688,152 and of the fiscal year 2020 total, $45,917,407 was incurred on tax- exempt borrowings and $4,770,745 was incurred on taxable borrowings. Of this total interest cost, $19,252,310 was capitalized and $31,435,842 was expensed in Cl ass of Assets Useful Life in years Buildings (rec or ded within other categories)20 to 50 Collection System 20 to 100 Pumping System 5 to 50 Treatmen t & Dispos al Plant 5 to 50 Vehicles 7 to 10 Gener al Suppor t Equipm ent & Furniture 3 to 10 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 30 fiscal 2020. This $31,435,842 excludes debt issuance cost, agent fees and amortization of deferred gains and losses of $4,683,520. T o offset the interest costs capitalized in fiscal year 2020, interest revenue on unspent bond proceeds of $1,636,310 was netted with the interest expense resulting in a net capitalized interest of $17,616,000 in fiscal year 2020. 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. 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 potentially 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, 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 sewer charges have been restricted for the payment of principal and interest, including accrued interest,on outstanding debt of the District. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 31 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 which 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 and are reported at their estimated acquisition value. 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 32 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 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 33 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 (“Pension Plan”) and additions to/deductions from the Pension Plan’s fiduciary net position have been determined on the same basis as they are reported by the Pension 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 2021 the District implemented GASB Statement No. 84, Fiduciary Activities (“GASB Statement No. 84”), originally effective for reporting periods beginning after December 15, 2018. GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance (“GASB Statement No. 95”), postponed the effective date to reporting periods beginning after December 15, 2019. GASB Statement No. 84 describes four fiduciary funds that should be reported, if applicable: (1) pension (and other employee benefit) trust funds;(2) investment trust funds;(3) private-purpose trust funds;and (4) custodial funds. The criteria for identifying fiduciary activities are established and the focus for the criteria is on (1) whether a government is controlling the assets of the activity and (2) the beneficiaries with whom a fiduciary relationship exists. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. After adoption of GASB Statement No. 84, the District began reporting the fiduciary activities of The Metropolitan St. Louis Sewer District Employees’ Pension Plan in the financial statements. The District early implemented GASB Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period (“GASB Statement No. 89”), originally effective for reporting periods beginning after December 15, 2019,and THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 34 subsequently postponed to reporting periods beginning after December 15, 2020, by GASB Statement No. 95. The requirements of this Statement are applied prospectively and discontinue the practice of considering interest costs as one of the ancillary charges necessary to place the asset into its intended location and condition for use. This authoritative guidance states that decisions regarding how to finance the acquisition of capital assets do not impact the service capacity of those assets and the requirements of this Statement will improve financial reporting by providing more relevant information about capital assets and the cost of borrowing for a reporting period and simplify accounting for interest cost incurred before the end of a construction period. In financial statements prepared using the economic resources measurement focus, which is the District’s measurement focus, interest cost incurred before the end of a construction period should be recognized as an expense in the period in which the cost is incurred and should not be capitalized as part of the historical cost of a capital asset. In fiscal year 2021 interest during construction is now expensed whereas interest costs related to the construction of capital assets incurred prior to fiscal year 2021 were included as a cost of those assets and will be capitalized when construction is completed and the assets are placed in service. During fiscal year 2021 the District reviewed GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans –An Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32 (“GASB Statement No. 97), for which certain requirements were effective immediately while other requirements were effective for fiscal years and reporting periods beginning after June 15, 2021,(earlier application of these requirements was encouraged and permitted by requirement as specified within this Statement). The primary objectives of this Statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency and comparability of the accounting and financial reporting for Internal Revenue Code Section 457 deferred compensation plans (“Section 457 plan”) that meet the definition of a pension plan and for benefits provided through those plans. Based on the requirements in this Statement, the District’s defined contribution plan and Section 457 plan do not qualify as fiduciary activities and their financial statements are not required to be reported with the District’s basic financial statements. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 35 During fiscal year 2021 the District implemented all applicable and relevant sections of Implementation Guide No. 2019-1, Implementation Guidance Update- 2019, for which the objective is to provide guidance that clarifies, explains, or elaborates on various GASB Statements and Implementation Guide No. 2019-2, Fiduciary Activities, for which the objective is to provide guidance that clarifies, explains, or elaborates on the requirements of Statement No. 84, Fiduciary Activities. During fiscal year 2020 the District did not implement any new GASB Statements. The following GASB Statements which became effective during fiscal year 2021 and 2020 are not applicable to the District and there is no implementation impact on the District’s financial reporting at this time. •Statement No. 90, Majority Equity Interests, an amendment of GASB Statements No. 14 and No. 61 (fiscal 2021) •Statement No. 83, Certain Asset Retirement Obligations (fiscal 2020) 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. 87, Leases (fiscal 2022) •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) • Implementation Guide No. 2019-3, Leases (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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 36 2.Deposits and Investments Deposits At June 30, 2021,the reported amount of the District’s deposits was $97,274,120 and the bank balance was $104,666,278. Of the bank balance, $935,107 was covered by the Federal Deposit Insurance Corporation (“FDIC”); $103,731,171 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 $19,990,860 held in a trusted escrow account for the State that will be used to make future bond payments. At June 30, 2020,the reported amount of the District’s deposits was $75,013,119 and the bank balance was $80,405,147. O f 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. 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 $250,000 for interest bearing accounts and noninterest bearing accounts. The District’s investment policy complies with the provisions of state laws and requires collateralization on repurchase agreements, time certificates of deposit and deposits with banking institutions that are not covered by the FDIC, and the collateralization level shall be 103% and shall be based on the fair value of the pledged collateral. Investments The Secretary-Treasurer is authorized to invest, with the approval of the Board, funds not immediately needed for the purpose to which said funds are applicable, in the same manner as the state treasurer may invest funds of the State of Missouri pursuant to Section 15, Article IV of the Constitution of Missouri,as amended from time to time. The District’s investment policy conforms to the investment policy guidelines for the State of Missouri. The District’s investment policy authorizes the District to invest in the following instruments: U .S. Treasury obligations, certificates of deposit, obligations of any agency or instrumentality of the U.S., repurchase agreements, bankers’ acceptances, and commercial paper, all according to terms specified in the policy.The District also has investments in money market mutual funds that hold securities approved by the District’s investment policy. At June 30, 2021,and June 30, 2020, all of the District’s investments were in compliance with the District’s investment policy and Charter. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 37 A summary of deposits and investments as of June 30, 2021,and June 30, 2020 is as follows: A reconciliation to the Statements of Net Position is as follows: Investment Type Cost Fair Value Cost Fair Value Deposits 97,274,120$ 97,274,120$ 75,013,119$ 75,013,119$ Money M arket Mutual Funds 19,990,860 19,990,860 19,589,363 19,589,363 U.S. Treasury a nd A gency Ob ligations 539,097,325 538,632,467 506,727,851 513,292,985 Commercial Paper 46,126,622 46,135,900 50,443,589 50,587,703 Total 702,488,927$ 702,033,347$ 651,773,922$ 658,483,170$ 2021 2020 2021 2020 Cash and C ash Equivalent s Unrestricted Current 91,337,843$ 67,802,872$ Restricted Current 4,629,689 3,580,818 Restricted Non-Current 26,297,303 25,741,021 In vestments Unrestricted Current 210,940,744 264,322,528 Restricted Current 12,587,475 17,921,368 Restricted Non-Current 125,637,074 90,301,459 Long-Term Inve stment s Restricted Non-Current 32,199,117 30,682,863 Ot he r 198,404,102 158,130,241 Total 702,033,347$ 658,483,170$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 38 Interest Rate Risk As of June 30, 2021,and 2020, 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.Complying with state law which 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, 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. Weighted Weighted Average Average Maturity Maturity Inve stment Type Fair Value (Years)Fair Value (Years) U.S. Treasury Ob ligations 338,993,883$ 1.16 157,710,696$ 1.58 U.S. A gency Ob ligations 199,638,584 1.13 355,582,289 0.86 Commerci al Paper 46,135,900 0.24 50,587,703 0.13 Total 584,768,367$ 1.07 563,880,688$ 1.00 2021 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 39 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, 2021,and June 30, 2020, 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, 2021, or June 30, 2020: Is suer 2021 2020 Treasury Notes 58.0 28.0 Federal Home Loan B ank 13.3 19.3 Federal Farm C re dit Funding C orp 10.7 14.0 Federal Home Loan B ank Discount Note 2.7 7.7 Federal Agricul ture M ort gage A ssoci ation 1.4 7.5 Tennes see Valley A ssoci ation 0.0 6.4 Total Investm ents Percent Of THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 40 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. T he 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, 2021, and June 30, 2020: Money Market Mutual Funds of $20.0 million and $19.6 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 $538.6 million and $513.3 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 $46.1 million and $50.6 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) See Notes 16 and 17 for information regarding the cash and investments held by the Fiduciary Pension Trust Fund. 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 established in fiscal year 2008 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 41 At June 30, 2021, future payments are as follows: At June 30, 2020, 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 was conveyed to the successor entity in fiscal 2021. At June 30, 2021 and 2020, MSD’s note receivable related to the Contractor Loan Fund was $0 for both fiscal years. 2022 1,154,696$ 2023 1,154,696 2024 1,154,696 2025 1,154,696 2026 1,154,696 2027-2031 5,773,479 2032-2033 1,718,494 13,265,453 Less: Amount repr es en ting interest 2,854,724 Total Notes Rec ei vable 10,410,729$ Cl assification in Statement of Net Position: Current - Other receivables 716,027$ Non-current - Notes receivable 9,694,702 Total Notes Rec eivable 10,410,729$ 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 repr es en ting interest 3,323,520 Total Notes Rec ei vable 11,096,629$ Cl assification in Statement of Net Position: Current - Other receivables 685,900$ Non-current - Notes receivable 10,410,729 Total Notes Rec eivable 11,096,629$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 42 4.Capital Assets The following is a summary of capital assets changes for the fiscal years ended June 30, 2021 and 2020: Balance Balance June 30, 2020 Ju ne 30, 2021 Capital assets not being depr ec iated: Land 78,333,629$ 1,235,681$ —$ 79,569,310$ Construction in progress 1,012,925,929 299,650,837 (118,543,325) 1,194,033,441 Total capital assets not being depr ec iated 1,091,259,558 300,886,518 (118,543,325) 1,273,602,751 Capital assets being depr ec iated: Treatm ent and disposal plant and equipment 1,289,884,442 14,244,282 (480,012) 1,303,648,712 Collection and pum ping plant 2,974,542,039 120,283,066 (1,756,341) 3,093,068,764 Gener al plant and equipment 100,949,737 6,083,654 (3,516,747) 103,516,644 Total capital assets being depr ec iated 4,365,376,218 140,611,002 (5,753,100) 4,500,234,120 Less: Accumulated depreciation: Treatm ent and disposal pl an t and equipm en t (651,154,735) (35,699,307) 443,044 (686,410,998) Collection and pumping pl an t (879,675,620) (50,729,803) 663,491 (929,741,932) Gener al plant an d equipment (77,916,252) (4,923,159) 3,497,805 (79,341,606) Total ac cumulated depr ec iation (1,608,746,607) (91,352,269) 4,604,340 (1,695,494,536) Total capital assets being depr ec iated, net 2,756,629,611 49,258,733 (1,148,760) 2,804,739,584 Tot al Capit al Assets 3,847,889,169$ 350,145,251$ (119,692,085)$ 4,078,342,335$ Addi tions Deletions Balance Balance June 30, 2019 Ju ne 30, 2020 Capital assets not being depr ec iated: Land 74,274,584$ 4,059,045$ —$ 78,333,629$ Construction in progress 956,321,065 289,293,915 (232,689,051) 1,012,925,929 Total capital assets not being depr ec iated 1,030,595,649 293,352,960 (232,689,051) 1,091,259,558 Capital assets being depr ec iated: Treatm ent an d di sposal plant and equipment 1,277,635,246 13,871,749 (1,622,553) 1,289,884,442 Collection and pum ping plant 2,749,946,498 225,843,281 (1,247,740) 2,974,542,039 Gener al plant and equipment 99,318,349 4,493,834 (2,862,446) 100,949,737 Total capital assets being depr ec iated 4,126,900,093 244,208,864 (5,732,739) 4,365,376,218 Less: Accumulated deprec iation: Treatm ent and disposal pl an t and equipm en t (616,903,498) (35,588,610) 1,337,373 (651,154,735) Collection and pumping pl an t (832,953,875) (47,278,724) 556,979 (879,675,620) Gener al plant an d eq uipment (75,921,957) (4,765,978) 2,771,683 (77,916,252) Total ac cumulated depr ec iation (1,525,779,330) (87,633,312) 4,666,035 (1,608,746,607) Total capital assets being depr ec iated, net 2,601,120,763 156,575,552 (1,066,704) 2,756,629,611 Tot al Capit al Assets 3,631,716,412$ 449,928,512$ (233,755,755)$ 3,847,889,169$ Addi tions Deletions THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 43 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. T axes 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 2021 and 2020, the District recorded revenue from property taxes in the amount of $43,624,302 and $35,439,441,respectively. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 44 6.Long-Term Liabilities The following is a summary of changes in the District’s long-term liabilities for the year ended June 30, 2021: Original Balance Balance Issuance June 30,June 30,Current Amounts 2020 Additions Retirements 2021 Portion Bonds and Notes Payable: W astewater Sys tem Senior Revenue Bonds: S eries 2010B 85,000,000$ 85,000,000$ —$ —$ 85,000,000$ —$ S eries 2011B 52,250,000 13,725,000 —(13,725,000)—— S eries 2012A 225,000,000 45,620,000 —(5,300,000)40,320,000 5,300,000 S eries 2012B 141,730,000 41,525,000 —(3,725,000)37,800,000 4,050,000 S eries 2013B 150,000,000 42,380,000 —(3,390,000)38,990,000 3,520,000 S eries 2015B 223,855,000 168,950,000 —(2,920,000)166,030,000 3,070,000 S eries 2016C 150,000,000 141,695,000 —(2,955,000)138,740,000 3,070,000 S eries 2017A 316,175,000 309,240,000 —(3,660,000)305,580,000 5,490,000 S eries 2019B 52,130,000 52,130,000 —(835,000)51,295,000 880,000 S eries 2019C (Taxable)276,260,000 276,260,000 —(1,515,000)274,745,000 1,545,000 S eries 2020B 120,000,000 —120,000,000 (1,945,000)118,055,000 1,895,000 W ater Infrastructure Finance and Innovation Act (WIFIA) Senior Bonds: S eries 2018A 47,722,204 261,480 — — 261,480 — Wastewater System Senior Refunding Revenue Bonds, Direct Placement: S eries 2021C 5,620,000 — 5,620,000 — 5,620,000 — Water Pollution Control and Drinking Water Subordinate Revenue Bonds (State Revolvi ng Funds Program): S eries 2004B 161,280,000 55,730,000 —(9,105,000)46,625,000 9,540,000 S eries 2005A 6,800,000 2,765,000 —(365,000)2,400,000 375,000 S eries 2006A 42,715,000 18,550,000 —(2,475,000)16,075,000 2,530,000 S eries 2006B 14,205,000 6,650,000 —(760,000)5,890,000 780,000 S eries 2008A/B 40,000,000 19,795,000 —(2,005,000)17,790,000 2,050,000 M issouri Department of Natural Resources: S eries 2009A 23,000,000 13,068,200 —(1,176,500)11,891,700 1,203,700 S eries 2010A 7,980,700 5,079,500 —(396,600)4,682,900 404,600 S eries 2010C 37,000,000 23,111,000 —(1,842,000)21,269,000 1,890,000 S eries 2011A 39,769,300 30,449,300 —(1,838,000)28,611,300 1,884,000 S eries 2013A 52,000,000 41,044,000 —(2,365,000)38,679,000 2,427,000 S eries 2015A 75,000,000 62,478,000 —(3,505,000)58,973,000 3,589,000 S eries 2016A 20,000,000 17,158,430 722,570 (880,000)17,001,000 899,000 S eries 2016B 75,500,000 61,285,085 7,850,915 (3,286,000)65,850,000 3,358,000 S eries 2018B 25,267,000 18,228,388 6,074,524 —24,302,912 533,000 S eries 2019A 23,952,000 6,291,992 15,719,694 —22,011,686 — S eries 2020A 22,000,000 —9,983,418 —9,983,418 — S eries 2021A 63,101,000 —5,333,065 —5,333,065 — S eries 2021B 40,201,000 —7,260,558 —7,260,558 874,000 2,615,513,204$ 1,558,470,375$ 178,564,744$ (69,969,100)$ 1,667,066,019$ 61,157,300$ Add: Unamortized premium, net of discount 162,860,332 Total Bonds and Notes Payable 1,829,926,351$ Current Portion of Bonds and Notes Payable 61,157,300$ Non-Current Bonds and Notes Payable 1,768,769,051 Total Bonds and Notes Payable 1,829,926,351$ Net Pension Liability 57,792,913$ (28,297,735)$ —$ 29,495,178$ —$ Total OPEB Liability 23,164,618$ 1,756,010$ —$ 24,920,628$ —$ Deposits and Accrued Expenses 622,913$ 64,055$ —$ 686,968$ —$ Compensated absences 9,249,172 799,410 (586,805) 9,461,777 946,178 Total Deposits and Accrued Expenses 9,872,085$ 863,465$ (586,805)$ 10,148,745$ 946,178$ Current Portion (Compensated absences) in Current Deposits and Accrued Expenses 946,178$ Non-Current Deposits and Accrued Expenses 9,202,567 Total Deposits and Accrued Expenses 10,148,745$ Landfill closure and postclosure costs THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 45 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 Am ounts 2019 Additions Retirements 2020 Portion Bonds and Notes Payable: Wa stewater Sys tem Senior Revenue B onds: S eries 2010B 85,000,000$ 85,000,000$ —$ —$ 85,000,000$ —$ S eries 2011B 52,250,000 15,945,000 —(2 ,2 20,000)13,725,000 2,330,000 S eries 2012A 225,000,000 154,040,000 —(108,420,000)45,620,000 5,300,000 S eries 2012B 141,730,000 128,840,000 —(87,315,000)41,525,000 3,725,000 S eries 2013B 150,000,000 113,615,000 —(71,235,000)42,380,000 3,390,000 S eries 2015B 223,855,000 190,135,000 —(21,185,000)168,950,000 2,920,000 S eries 2016C 150,000,000 144,535,000 —(2 ,8 40,000)141,695,000 2,955,000 S eries 2017A 316,175,000 312,760,000 —(3 ,5 20,000)309,240,000 3,660,000 S eries 2019B 52,130,000 —52,130,000 —52,130,000 835,000 S eries 2019C (Taxable)276,260,000 —276,260,000 —276,260,000 1,515,000 Wa ter Infra structure Finance and Innovation A ct (WIFIA) Senior Bonds: S eries 2018A 47,722,204 261,480 — — 261,480 — Water Pollution Control and Drinking Wa ter Sub ordinate Revenue Bonds (S tate Revolving Funds Program): S eries 2004B 161,280,000 64,590,000 —(8 ,8 60,000)55,730,000 9,105,000 S eries 2005A 6,800,000 3,120,000 —(355,000)2,765,000 365,000 S eries 2006A 42,715,000 20,965,000 —(2 ,4 15,000)18,550,000 2,475,000 S eries 2006B 14,205,000 7,400,000 —(750,000)6,650,000 760,000 S eries 2008A/B 40,000,000 21,765,000 —(1 ,9 70,000)19,795,000 2,005,000 M issouri Department of Natura l Resources: Energy Loan Program 223,793 16,163 —(16,163)—— S eries 2009A 23,000,000 14,218,100 —(1 ,1 49,900)13,068,200 1,176,500 S eries 2010A 7,980,700 5,468,200 —(388,700)5,079,500 396,600 S eries 2010C 37,000,000 24,906,000 —(1 ,7 95,000)23,111,000 1,842,000 S eries 2011A 39,769,300 32,241,300 —(1 ,7 92,000)30,449,300 1,838,000 S eries 2013A 52,000,000 43,349,000 —(2 ,3 05,000)41,044,000 2,365,000 S eries 2015A 75,000,000 65,902,000 —(3 ,4 24,000)62,478,000 3,505,000 S eries 2016A 20,000,000 13,129,064 4,890,366 (861,000)17,158,430 880,000 S eries 2016B 75,500,000 45,582,626 18,919,459 (3 ,2 17,000)61,285,085 3,286,000 S eries 2018B 25,267,000 2,880,349 15,348,039 —18,228,388 — S eries 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$ A dd: Una mortized 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 L iabilit y 74,396,737$ (1 6,603,824)$ —$ 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 Ac crued 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 cos ts THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 46 Voter Approved Bond Authorizations The District has received voter authorization for revenue bonds on the dates and in the amounts presented below. These funds were sought to enable the District to comply with federal and state clean water requirements. Only new bond issuances count against these authorizations while none of the refunding issuances count against them. From the total voter authorization of $3,120,000,000, $853,126,796 has not been issued as of June 30, 2021. Wastewater System Senior Refunding Revenue Bonds Payable, Direct Placement In March 2020, the District entered into a forward-delivery direct purchase agreement to issue $5,620,000 of Wastewater System Senior Refunding Revenue Bonds Series 2021C (“Series 2021C”) which closed in May 2021 to coincide with the call date of the outstanding Series 2011B bonds. These Series 2021C bonds, which were previously identified as Series 2021A but were subsequently renamed due to the timing of their issuance, were issued to refund the Series 2011B bonds maturing in fiscal years 2030 through 2032 totaling $11,395,000. Proceeds of $7,371,752, including a premium of $1,751,752, and $4,025,780 in excess debt service reserves the District contributed were used to refund all the remaining outstanding Series 2011B bonds and the $2,532 interest accrued thereon. The related liability for the Series 2011B bonds refunded were removed from the District’s financial statements in fiscal 2021. This direct placement refunding decreased total debt service payments over the next 11 years by $7,527,111, 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 $2,553,241. These Series 2021C senior direct placement bonds have interest rates of 5.00% and are payable in semiannual installments at varying amounts through May 1, 2032. Date of Authorization Voter Authorized Am ount February 2 004 500,000,000$ Augus t 2008 275,000,000 June 2 012 945,000,000 April 2016 900,000,000 April 2021 500,000,000 Total 3,120,000,000$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 47 Principal and Interest Requirements on Senior Refunding Revenue Bonds Payable, Direct Placement The annual principal and interest requirements to maturity on direct placement senior refunding revenue bonds payable outstanding as of June 30, 2021, are as follows: Wastewater System Revenue Bonds Payable In December 2020, the District issued $120,000,000 of Wastewater System Senior Revenue Bonds Series 2020B (“Series 2020B”). T hese 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, 2021, $64,112,703 has been expended. A premium of $37,194,201 was received on the issuance of Series 2020B. These Series 2020B senior bonds have an interest rate of 5.0%and are payable in semiannual installments at varying amounts through June 1, 2050. In December 2019, the District issued $52,130,000 of Wastewater System Senior 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. All funds from this issuance have been expended. A premium of $12,059,977 was received on the issuance of Series 2019B. These Series 2019B senior bonds have an interest rate of 5.0% and are payable in semiannual installments at varying amounts through May 1, 2049. Years ending J une 3 0,Princ ipal Interest Total 2022 —$ 279,439$ 279,439$ 2023 —281,000 281,000 2024 —281,000 281,000 2025 —281,000 281,000 2026 —281,000 281,000 2027-2031 3,625,000 1,317,500 4,942,500 2032 1,995,000 99,750 2,094,750 Total 5,620,000$ 2,820,689$ 8,440,689$ Direc t Plac ement 2021C Wastew ater System Senior R ef unding Revenue Bonds Payab le THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 48 In December 2019, the District issued $276,260,000 of Taxable Wastewater System Senior 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 $13,671,500 were made from the escrow account in fiscal year 2021. All $273,430,000 debt defeased in substance to be paid from the escrow account remains outstanding as of June 30, 2021. As a 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 year 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. These Series 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 Senior 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 49 wastewater facilities. All funds from this issuance have 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. These Series 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 payments of $6,017,025 and principal payments of $23,345,000 were made from the escrow account in fiscal year 2021. Of the $125,760,000 debt defeased in substance to be paid from the escrow account, $102,415,000 remains outstanding as of June 30, 2021. 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 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 Senior Revenue Bonds Series 2016C (“Series 2016C”). T hese 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 Series 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 Senior 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 50 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 Series 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 fiscal 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 fiscal 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 removed from the District’s financial statements in fiscal 2016. The original $60,000,000 Series 2006C bonds were issued pursuant to the February 2004 authorization and the original $30,000,000 Series 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 Senior 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 Series 2013B 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 fiscal 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 51 advance refunding of the Series 2013B bonds for nine years within a span of 12 years from 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 Senior Refunding Bonds Series 2012B (“Series 2012B”). These bonds were issued to advance refund the Series 2004A bonds maturing in fiscal years 2015 and thereafter. T hese Series 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 Series 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 was a taxable advance refunding of the Series 2012B bonds for the fiscal 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 Senior Revenue Bonds Series 2012A (“Series 2012A”). T hese 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 Series 2012A 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 fiscal 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 fiscal years 2040 through 2042 totaling THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 52 $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 Senior Revenue Bonds Series 2011B (“Series 2011B”). T hese 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 Series 2011B 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 fiscal years 2022 through 2029 totaling $23,345,000. See the explanation for Series 2017A above for further information. In May 2021 there were direct placement senior refunding revenue bonds issued to refund the remaining fiscal years 2030 through 2032 totaling $11,395,000. See the explanation for Series 2021C above for further information. As a result of the advance refunding and direct placement, Series 2011B bonds are considered fully defeased. In January 2010, the District issued $85,000,000 of Taxable Wastewater System Senior 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 Series 2010B 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 to a percentage of the interest paid. In fiscal years 2013 and prior the rate was 35%. 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 2021 the subsidy percentage was 33.0% while for 2020 the subsidy percentage was 32.9%. In fiscal year 2022 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 Senior 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 53 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 Series 2008A/B Participant Bonds originally had interest rates ranging from 4.0% to 5.7% but effective April 1, 2021, the District’s interest rate on all outstanding principal was modified to 0.83% but are still payable in semiannual installments at varying amounts through January 1, 2029. 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 Series 2006B 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 54 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 Series 2006A 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 Series 2005A 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 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 Series 2004B 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, 2019A, 2020A, 2021A, and 2021B direct loans (pages 56-65) do not obligate the District to levy any form of THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 55 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. 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. On June 30, 2021 and 2020, the District was in compliance with this covenant. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 56 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, 2021,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 (WIFIA) 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. As of June 30, 2021, 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 2021B In January 2021, the State of Missouri Direct Loan Program issued to the District an amount totaling $40,201,000 for the purpose of improving, renovating, repairing, replacing, and equipping the District’s Wastewater System. The Years e nding J une 30,Princ ip al Intere st Total 2022 44,095,000$ 56,752,922$ 100,847,922$ 2023 45,560,000 55,024,170 100,584,170 2024 46,960,000 53,403,686 100,363,686 2025 48,795,000 51,683,990 100,478,990 2026 50,490,000 49,836,979 100,326,979 2027-2031 240,315,000 218,854,834 459,169,834 2032-2036 270,650,000 166,519,042 437,169,042 2037-2041 335,055,000 102,605,928 437,660,928 2042-2046 213,865,000 37,885,111 251,750,111 2047-2050 49,550,000 5,119,250 54,669,250 Total 1,345,335,000$ 797,685,912$ 2,143,020,912$ Wastewater System R evenue Bonds Payab le/ Water Pollution Control and Drinking W ater Revenue Bonds Payab le THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 57 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 0.78%and is payable in semiannual installments at varying amounts through January 1, 2041. Principal and Interest Requirements on State of Missouri Direct Loan Series 2021B 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 0.78%based on the amount that has been borrowed. As of June 30, 2021, the outstanding loan balance was $7,260,558. The payment requirements to maturity will be determined after the debt is fully issued. State of Missouri Direct Loan Series 2021A In January 2021, the State of Missouri Direct Loan Program issued to the District an amount totaling $63,101,000 for the purpose of constructing the Lower Meramec Tunnel. 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 0.78%and is payable in semiannual installments at varying amounts through July 1, 2044. Principal and Interest Requirements on State of Missouri Direct Loan Series 2021A 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 0.78%based on the amount that has been borrowed. As of June 30, 2021, the outstanding loan balance was $5,333,065. The payment requirements to maturity will be determined after the debt is fully issued. State of Missouri Direct Loan Series 2020A In September 2020, the State of Missouri Direct Loan Program issued to the District an amount totaling $22,000,000 for the purpose of constructing the Deer Creek Tunnel Pump Stations. 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 0.80%and is payable in semiannual installments at varying amounts through July 1, 2042. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 58 Principal and Interest Requirements on State of Missouri Direct Loan Series 2020A 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 June 30, 2021, the outstanding loan balance was $9,983,418. 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, 2021, the outstanding loan balance was $22,011,686. 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, 2021,the outstanding loan balance was $24,302,912. The payment requirements to maturity will be determined after the debt is fully issued. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 59 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, 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 1.2% 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 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 2016B outstanding as of June 30, 2021, are as follows: State of Missouri Direct Loan Series 2016A In December 2016, the State of Missouri Direct Loan Program issued to the District an amount totaling $20,000,000 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds are issued from the June 2012 authorization. The District’s interest rate is 1.2% and is payable in semiannual installments at varying amounts through January 1, 2037. Years ending J une 3 0,Princ ipal Interest Total 2022 3,358,000$ 780,180$ 4,138,180$ 2023 3,432,000 739,662 4,171,662 2024 3,507,000 698,256 4,205,256 2025 3,583,000 655,944 4,238,944 2026 3,661,000 612,714 4,273,714 2027-2031 19,540,000 2,381,382 21,921,382 2032-2036 21,766,000 1,150,080 22,916,080 2037-2038 7,003,000 84,342 7,087,342 Total 65,850,000$ 7,102,560$ 72,952,560$ State of M issouri Dire ct L oan Serie s 2016B THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 60 Principal and Interest Requirements on State of Missouri Direct Loan Series 2016A 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 2016A outstanding as of June 30, 2021, are as follows: State of Missouri Direct Loan Series 2015A In August 2015, the State of Missouri Direct Loan Program issued to the District an amount totaling $75,000,000 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds were issued from the June 2012 authorization. The District’s interest rate is 1.2% and is payable in semiannual installments at varying amounts through January 1, 2035. Principal and Interest Requirements on State of Missouri Direct Loan Series 2015A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. Years ending J une 3 0,Princ ipal Interest Total 2022 899,000$ 201,330$ 1,100,330$ 2023 919,000 190,482 1,109,482 2024 939,000 179,394 1,118,394 2025 959,000 168,066 1,127,066 2026 981,000 156,492 1,137,492 2027-2031 5,233,000 599,736 5,832,736 2032-2036 5,829,000 270,012 6,099,012 2037 1,242,000 11,196 1,253,196 Total 17,001,000$ 1,776,708$ 18,777,708$ State of M issouri Dire ct L oan Serie s 2016A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 61 The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2015A outstanding as of June 30, 2021, 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 $52,000,000 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds were issued from the June 2012 authorization. Effective April 1, 2021, the District’s interest rate on all outstanding principal was modified to 0.83% from 1.6% but is still payable in semiannual installments at varying amounts through July 1, 2034. Principal and Interest Requirements on State of Missouri Direct Loan Series 2013A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. Years ending J une 3 0,Princ ipal Interest Total 2022 3,589,000$ 708,502$ 4,297,502$ 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 3,943,000 526,015 4,469,015 2027-2031 21,237,000 1,879,691 23,116,691 2032-2035 18,916,000 526,302 19,442,302 Total 58,973,000$ 5,497,795$ 64,470,795$ State of M issouri Dire ct L oan Serie s 2015A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 62 The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2013A outstanding as of June 30, 2021, 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 $39,769,300 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds were issued from the August 2008 authorization. The District’s interest rate is 1.5% and is payable in semiannual installments at varying amounts through January 1, 2034. Principal and Interest Requirements on State of Missouri Direct Loan Series 2011A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2011A outstanding as of June 30, 2021, are as follows: Years ending J une 3 0,Princ ipal Interest Total 2022 2,427,000$ 385,592$ 2,812,592$ 2023 2,490,000 295,758 2,785,758 2024 2,555,000 274,958 2,829,958 2025 2,622,000 253,611 2,875,611 2026 2,691,000 231,707 2,922,707 2027-2031 14,540,000 809,487 15,349,487 2032-2035 11,354,000 190,933 11,544,933 Total 38,679,000$ 2,442,046$ 41,121,046$ State of M issouri Dire ct L oan Serie s 2013A Years ending J une 3 0,Princ ipal Interest Total 2022 1,884,000$ 427,758$ 2,311,758$ 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 2,083,000 308,010 2,391,010 2027-2031 11,242,000 1,045,448 12,287,448 2032-2034 7,456,300 200,418 7,656,718 Total 28,611,300$ 3,089,082$ 31,700,382$ State of M issouri Dire ct L oan Serie s 2011A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 63 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, 2021, are as follows: 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 $7,980,700 for the construction, improvement, renovation, repair, replacement and equipping of its Wastewater System, under the authority of and in full compliance with the District’s Charter (“Plan”)and the bonds were issued from the August 2008 authorization. T he District’s interest rate is 1.5% and is payable in semiannual installments at varying amounts through July 1, 2031. Years ending J une 3 0,Princ ipal Interest Total 2022 1,890,000$ 343,172$ 2,233,172$ 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 2,094,000 212,685 2,306,685 2027-2031 11,316,000 523,438 11,839,438 Total 21,269,000$ 1,917,289$ 23,186,289$ State of M issouri Dire ct L oan Serie s 2010C THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 64 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, 2021, are as follows: State of Missouri Direct Loan Series 2009A In October 2009, the DNR loaned $23,000,000 to the District. The State of Missouri Direct Loan Series 2009A note bears interest at a rate of 1.5% per annum and is payable through January 1, 2030. The purpose of this note was to finance the designing, constructing, improving, renovating, repairing, replacing and equipping of new and existing sewer facilities within the District. The principal and interest on the note are expected to be paid from future wastewater revenues and the note was issued from the August 2008 authorization. Principal and Interest Requirements on State of Missouri Direct Loan Series 2009A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account.All funds have been drawn on this loan. Years ending J une 3 0,Princ ipal Interest Total 2022 404,600$ 67,814$ 472,414$ 2023 412,900 61,799 474,699 2024 421,300 55,657 476,957 2025 429,800 49,391 479,191 2026 438,500 42,998 481,498 2027-2031 2,329,600 114,460 2,444,060 2032 246,200 1,822 248,022 Total 4,682,900$ 393,941$ 5,076,841$ State of M issouri Dire ct L oan Serie s 2010A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 65 The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2009A outstanding as of June 30, 2021, are as follows: In accordance with the Direct Loan Series 2009A, 2010A, 2010C, 2011A, 2013A, 2015A, 2016A, 2016B, 2018B, 2019A, 2020A, 2021A, and 2021B 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, 2021 and 2020, 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. 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. Years ending June 30, Principal Interest Total 2022 1,203,700$ 169,216$ 1,372,916$ 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 1,319,000 96,059 1,415,059 2027-2030 5,588,200 186,020 5,774,220 Total 11,891,700$ 851,350$ 12,743,050$ State of Missouri Direct Loan Series 2009A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 66 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, 2021, and 2020, cash and investments in the Debt Service Reserve Fund totaled $21,045,454 and $25,000,722, 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. Series 2020B was issued without a debt service reserve fund requirement. Series 2021C was issued without a debt service reserve fund requirement and at that time $4,025,780 in excess debt service reserves along with the Series 2021C proceeds were used in a current refunding of Series 2011B. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 67 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, 2021 and 2020, cash and investments in the Special Participant Bond Reserve Account held on behalf of the District totaled $58,050,189 and $67,598,530, 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, 2021. 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, 2021 and 2020, cash and investments in the Project Funds totaled $92,415,533 and $60,765,125, 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, 2021 and 2020, cash and investments in the Rebate Fund totaled $228,349 and $229,909, respectively. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 68 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 2050 at an approximate amount of $2.2 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 2021 was $119.3 million with pledged revenues of $252.0 million. This provided a coverage ratio of 2.1 and pledged revenues represented 59.0%of all net operating revenues. Direct Borrowings and Direct Placements The District did not have any bonds and notes from direct borrowings in the fiscal years ending June 30, 2021 and 2020. As stated previously, the District had direct placement bonds of $5,620,000 and $0 in the fiscal years ending June 30, 2021 and 2020, respectively. In addition, the District had no unused lines of credit and had no assets pledged as collateral for bonds from direct placements in the fiscal years ending June 30, 2021 and 2020. The District has authorized the issuance of Wastewater System Senior Refunding Revenue Bonds,Direct Placement Series 2022A,Series 2023A and Series 2025A to be issued on May 3, 2022, May 1, 2023,and May 1, 2025, respectively.The par amount of the bonds will total $196,445,000 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 Senior Revenue Bonds Series 2012B, Series 2013B, and Series 2015B. Wastewater System Senior Refunding Revenue Bonds, Direct Placement Series 2021A, renamed Series 2021C due to the timing of their issuance, was included in the original authorization, and was issued on May 3, 2021,and the $5,620,000 proceeds were used to refund the outstanding Wastewater System Senior Revenue Bonds Series 2011B. See the explanation for Series 2021C above for further information. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 69 The Amended and Restated Forward Delivery Bond Purchase Agreement for the Series 2022A, Series 2023A, and Series 2025A Bonds contains terms regarding events of default between closing and settlement with finance-related consequences that are classified as (1) an event of default under other debt instruments, (2) repudiation of the District’s obligations under the Agreement, (3) dissolution, (4) bankruptcy, (5) consolidation or merger into another entity resulting in materially weaker creditworthiness, (6) misrepresentation, (7) significant rating downgrade or rating withdrawal or (8) refusal or inability of bond counsel to deliver an opinion that the interest on the Bonds is excludable from gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended, and is exempt from income taxation by the State of Missouri. Upon the occurrence of an event of default the District may be required to make a termination payment to the purchaser of the Bonds equal to fees and expenses, and on demand of the purchaser, a make-whole termination payment. 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 70 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. Effective August 27, 2011, Ordinance No. 13288 amended the Pension Plan to include the following: “Upon termination or complete discontinuance of contributions under the Pension 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.” Effective September 14, 2017, Ordinance No. 14776 amended the Pension Plan to require enrollment in Medicare Parts A and B when Members first become eligible for such Medicare programs due to disability in order to receive, or continue to receive, retiree medical benefits under the Pension Plan and to clarify that any retiree medical benefits under the Pension Plan will be secondary to Medicare disability benefits in accordance with the Medicare secondary payor rules. Effective February 14, 2019, Ordinance No. 15110 amended the Pension Plan to update the language of Pension Plan benefits for death of a member after retirement and retiree medical coverage. 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 METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 71 The Pension Plan reports financial data on a calendar year basis and issues a publicly available financial report that includes audited financial statements and required supplementary information. That report is available on the District’s website at msdprojectclear.org and 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, 2020, and 2019, 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 $12,771,525 and $13,062,014, excluding certain professional fees paid by the District, were made to the Pension Plan during the District’s fiscal years ended June 30, 2021, and 2020, respectively. These contributions were made in accordance with actuarially determined contribution requirements based on actuarial valuations performed at December 31, 2020, and 2019, respectively. Net Pension Liability The net pension liability was measured as of December 31, 2020, and 2019 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. Increase 2020 2019 (Decrease) Active plan members 450 493 (43) Retirees and beneficiaries currently receiving benefits 800 771 29 Terminated members entitled to receive benefits 172 180 (8) Total 1,422 1,444 (22) As of December 31, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 72 Actuarial Assumptions. The total pension liability in the December 31, 2020, and 2019 actuarial valuations were determined using the following actuarial assumptions, applied to all periods included in the measurement: Effective December 31, 2020, and 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-2020 and MP-2019 improvement scale (improvement scale updates published annually), respectively. The actuarial assumptions are based on prior and current year experiences. 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, 2020, and 2019 are as follows: Inflation 2.50 percent Salary Increases 4.25 percent, average, including inflation Investment Rate of Return 6.75 percent, net of pension plan investment expense, including inflation for years ended December 31, 2020 and 2019 Long-Term Expected Arithmetic Target Real Rate Asset Class Allocation of Return Large Cap US Equity 25.0% 4.2% Domestic Core Bonds 14.0% 0.1% Core "Plus" Bonds 13.0% 0.7% Real Estate 12.0% 2.9% Developed International Equity 12.0% 5.0% Small Cap US Equity 10.0% 4.7% Global Fixed Income 8.0% 3.5% Emerging Markets Equity 6.0% 5.2% Total 100.0% December 31, 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 73 Discount Rate. The discount rate used to measure the total pension liability at December 31, 2020,and 2019, was 6.75 percent. 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. Lon g-Term Expe cted Arithme tic Target Real Rate Asset Class Allocation of Return Domestic Fixe d Income 27.0% ** Lar ge Cap US Equity 25.0%4.2% Develo ped Internat io nal Equit y 12.0%5.0% Re al Estate 12.0%3.4% Small Cap US Equit y 10.0%4.7% Glo bal Fixe d Income 8.0%2.9% Emerging Markets Equit y 6.0%5.6% To tal 100.0% ** Expected to earn less than inf latio n December 31, 2019 Increase (Decrease) Total Pension Plan Fidu ciary Net Pension Liability Net Position Liability Ch ange s in Net Pension Liability (a)(b)(a) - (b) Balanc es as of December 31, 2019 353,995,560$ 296,202,647$ 57,792,913$ Change s for the year: Servic e cost 4,832,125 —4,832,125 Interest 23,581,022 —23,581,022 Effect of economic /demographic gains or losses (6,727,748)—(6,727,748) Effect of assumptions changes or inputs ——— Be ne fit payme nt s (19,273,097)(19,273,097)— Emplo yer contribut io ns —13,398,565 (13,398,565) Net inve stment inc ome —36,584,569 (36,584,569) Balanc es as of December 31, 2020 356,407,862$ 326,912,684$ 29,495,178$ Changes in Net Pens ion Liability for th e Year Ending December 31, 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 74 Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability calculated using the 6.75 percent discount rate for December 31, 2020,and December 31, 2019, 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. Increase (Decrease) Total Pension Plan Fidu ciary Net Pension Liability Net Position Liability Ch ange s in Net Pension Liability (a)(b)(a) - (b) Balanc es as of Decembe r 31, 2018 334,957,313$ 260,560,576$ 74,396,737$ Change s 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 change s or input s 11,910,886 —11,910,886 Be nefit payments (18,626,890)(18,626,890)— Emplo yer contributio ns —12,725,462 (12,725,462) Net inve stment inc ome —41,543,499 (41,543,499) Balanc es as of Decembe r 31, 2019 353,995,560$ 296,202,647$ 57,792,913$ Changes in Net Pension Liability for the Year Ending December 31, 2019 1%Cu rrent 1% Decrease Discou nt Rate Increase (5.75%)(6.75%)(7.75%) Net Pension Liabilit y 68,384,716$ 29,495,178$ (3,623,239)$ December 31, 2020 1%Cu rrent 1% Decrease Discou nt Rate Increase (5.75%)(6.75%)(7.75%) Net Pension Liabilit y 97,289,377$ 57,792,913$ 24,254,799$ December 31, 2019 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 75 Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the years ended June 30, 2021,and 2020, the District recognized pension expense of $5,192,722 and $17,831,390, 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: In the years ending June 30, 2021,and 2020, amounts currently reported as deferred outflows of resources, $6,506,124 and $7,133,164, respectively, related to the District’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the years ended June 30, 2022,and 2021, respectively. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Payable to The Pension Plan At June 30, 2021,and 2020, the District did not have outstanding required contributions to the Pension Plan. Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Dif ferences between expected and actual experience —$ 5,077,158$ —$ 3,031,605$ Changes of assumptions 3,970,296 —8,540,488 — Net difference between projected and actual earnings —17,594,240 —4,118,093 Contribut io ns made subsequent to measurement date 6,506,124 —7,133,164 — Total 10,476,420$ 22,671,398$ 15,673,652$ 7,149,698$ June 30, 2021 June 30, 2020 Net Deferrals of Resources Year ended June 30,: 2022 (3,717,338)$ 2023 (3,482,577) 2024 (8,132,308) 2025 (3,368,879) (18,701,102)$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 76 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 (“DF Plan”), available to all District employees, permits them to defer a portion of their salary up to Internal Revenue Code limits. T he District does not contribute to the DF 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 DF Plan. At June 30, 2021,and 2020, the District had outstanding liabilities owed to the DF Plan of $176,954 and $150,307, respectively. The DF 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 DF 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 DF 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 audited financial statements and supplementary information. That report is available on the District’s website at msdprojectclear.org and 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 METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 77 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. 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 78 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 $2,816,157 and $2,483,566 for the years ended June 30, 2021, and 2020, respectively. Forfeitures were $99,855 and $61,807, for the years ended June 30, 2021, and 2020, respectively, and the balances in the prepaid forfeitures account as of June 30, 2021, and 2020 were $6,097 and $4,073, respectively. At June 30, 2021, and 2020, the District had outstanding liabilities owed to the DC Plan of $101,147 and $81,163, respectively. 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: Months Of Continuous Service Vested (Non- Forfeitable) Percentage Less than 12 0% 12 but less than 24 20% 24 but less than 36 40% 36 but less than 48 60% 48 but less than 60 80% 60 100% The Metropolitan St. Louis Sewer District Defined Contribution Plan issues a publicly available financial report that includes audited financial statements and supplementary information. That report is available on the District’s website at msdprojectclear.org and may be obtained by writing: The Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO 63103-2555. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 79 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 (“OPEB Plan”), provides retiree medical coverage 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 OPEB Plan is a single employer defined benefit OPEB plan administered by the District. The OPEB 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 OPEB Plan in its entirety. The District offers two medical plan options, a traditional open access plan and a high deductible health plan, and both 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 OPEB 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 the last six months of fiscal year 2021 the monthly amount the District paid towards the retiree’s premium was $610.52 for retirees qualifying for the wellness incentive ($621.36 for retirees with wellness qualified spouse). The $610.52 paid by the District equates to 86% of the traditional plan’s premium and 93% of the high deductible plan’s premium. For retirees not qualifying for the wellness incentive, the District paid $567.19 of the premium which equates to 80% for the traditional plan and 86% for the high deductible plan. The retiree paid 100% of the spousal, children or family premium incremental increases in addition to the remaining 7-20% of the retiree’s total monthly premium. The OPEB Plan also provided life insurance coverage for a very small closed group of disabled former employees. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 80 The monthly premiums for calendar year 2021 plans and coverage tiers are as follows: In fiscal year 2020, and in the first six months of fiscal year 2021,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 paid $547.75 of the premium which equates to 80% for the traditional plan and 86% for the high deductible plan. The retiree paid 100% of the spousal, children or family premium incremental increases in addition to the remaining 9-20% of the retiree’s total monthly premium. The OPEB Plan also provided life insurance coverage for a very small closed group of disabled former employees. Total Retiree OPEB Benefit Net Cos t Coverage Tier Premium Paid by Dis trict to Retiree Tr ad itio nal Plan wi th wellne ss inc entive Retiree 708.99$ 610.52$ 98.47$ Retiree + Spouse 1,510.35 621.36 888.99 Retiree + Child (ren)1,372.31 610.52 761.79 Retiree + Family 2,093.26 621.36 1,471.90 Tr ad itio nal Plan wi th no wellne ss inc entive Retiree 708.99 567.19 141.80 Retiree + Spouse 1,510.35 567.19 943.16 Retiree + Child (ren)1,372.31 567.19 805.12 Retiree + Family 2,093.26 567.19 1,526.07 High Deductible Plan with wellne ss inc entive Retiree 659.68 610.52 49.16 Retiree + Spouse 1,405.26 621.36 783.90 Retiree + Child (ren)1,276.83 610.52 666.31 Retiree + Family 1,947.61 621.36 1,326.25 High Deductible Plan with no we llne ss inc entive Retiree 659.68 567.19 92.49 Retiree + Spouse 1,405.26 567.19 838.07 Retiree + Child (ren)1,276.83 567.19 709.64 Retiree + Family 1,947.61 567.19 1,380.42 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 81 The monthly premiums for calendar year 2020 plans and coverage tiers are as follows: The ordinance establishing the OPEB 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 OPEB Plan does not issue a publicly available report. Employees Covered by Benefit Terms. At June 30, 2021 and 2020, the following employees were covered by the benefit terms: Total Retiree OPEB Benefit Net Cost Coverage Tier Premium Paid by District to Retiree Tr aditional Plan wi th wellne ss ince ntive 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 Tr aditional Plan wi th no wellness inc entive 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 De ductible Plan wi th 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 De ductible Plan wi th no wellne ss inc entive 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 Ju ne 30, 2021 Ju ne 30, 2020 Inactive employees or ben eficiaries currently receiving benefit paym en ts 117 122 Ac tive employees 956 955 Tot al 1,073 1,077 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 82 Total OPEB Liability The District’s total OPEB liability measured as of December 31, 2020,and December 31, 2019,was $24,920,628 and $23,164,618, respectively. The District’s total OPEB liabilities for both years were determined based on an actuarial valuation as of June 30, 2019,and both were calculated based on the discount rates and actuarial assumptions below and were then projected forward to the measurement dates. There have been no significant changes between the valuation date of June 30, 2019,and the reporting fiscal year end dates of June 30, 2021,and June 30, 2020. Actuarial Assumptions and Other Inputs. The total OPEB liabilities based on the June 30, 2019 actuarial valuation were determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: 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-2020 scale for the measurement date of December 31, 2020,and using the MP-2019 scale for the measurement date of December 31, 2019. The actuarial assumptions are based on prior and current year experiences. The plan has not had a formal actuarial experience study performed. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 83 Changes in the Total OPEB Liability The plan change reflected in the calculation of the December 31, 2019 total OPEB liability 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. Likewise, the economic/demographic gains reflected in the calculation of the December 31, 2019,total OPEB liability 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 of assumptions or other inputs reflect a change in the discount rate from 2.74 percent in 2019 to 2.12 percent in 2020 and from 4.10 percent in 2018 to 2.74 percent in 2019 and the change in mortality assumptions referenced above. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 84 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, 2020, calculated using the discount rate of 2.12%, 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 (1.12%) or 1-percentage-point higher (3.12%) than the current 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. 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, 2020, 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 (3.90% decreasing to 2.70%) or 1-percentage-point higher (5.90% decreasing to 4.70%) than the current range of healthcare cost trend rates of 4.90% decreasing to 3.70%. Current Healthcare Cos t Trend 1% Decrease Rates 1% Increa se (3.90% (4.90% (5.90% decreasing decreasing decreasing to 2.70%)to 3.70%)to 4.70%) Total OPEB Liability 22,177,915$ 24,920,628$ 28,178,622$ December 31, 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 85 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%. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the years ended June 30, 2021 and 2020, the District recognized OPEB expense of $2,343,501 and $2,266,677,respectively. A t June 30, 2021 and 2020, the District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: In the years ending June 30, 2021 and 2020, amounts currently reported as deferred outflows of resources, $862,060 and $769,270, respectively, related to the District’s benefit payments subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the years ended June 30, 2022 and 2021, respectively. Current Healthcare Cos t Trend 1% Decrease Rates 1% Increa se (5.40% (6.40% (7.40% decreasing decreasing decreasing to 2.70%)to 3.70%)to 4.70%) Total OPEB Liability 20,892,086$ 23,164,618$ 25,844,165$ December 31, 2019 Deferred Deferred Deferred Defer red Outflows of In flows of Outflows of In flows of Resources Resources Resources Resources Differences between expected and actual experience —$ 3,201,103$ —$ 3,543,833$ Changes of assumptions or other inputs 2,674,856 686,982 2,073,599 786,834 Benefit paym ents made subsequent to measurement date 862,060 — 769,270 — Total 3,536,916$ 3,888,085$ 2,842,869$ 4,330,667$ June 30, 2021 June 30, 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 86 Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: 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, 2021 and 2020, these liabilities amounted to $5,148,770 and $4,755,168, respectively. The claims liabilities reported are based on the requirements of GASB Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, which requires that a liability for claims be reported if information obtained prior to the issuance of the financial statements indicates it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Changes in the balance of claims liabilities during fiscal 2021, 2020,and 2019 were as follows: 2021 2020 2019 Liability - Beginning of Year 4,755,168$ 7,920,684$ 4,026,003$ Cu rrent year claims and changes in estimates 17,588,499 18,916,140 19,320,396 Cl aim paymen ts (17,194,897)(22,081,656)(15,425,715) Liability - End of Year 5,148,770$ 4,755,168$ 7,920,684$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 87 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. 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 $686,968 and $622,913 reported as landfill closure and post- closure care liabilities at June 30, 2021 and 2020, respectively, represent the cumulative amounts reported at fiscal year-end and represent 75.5%and 71.2%of the estimated closure and post-closure care costs of the landfill for fiscal years ended June 30, 2021 and 2020, respectively, and the financial assurance requirements will be paid from unrestricted net position. T hese amounts are based on what it would cost to perform all closure and post-closure care in 2021 and 2020, 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 8-11 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 annually the remaining $222,963 and $251,537 of estimated cost of closure and post-closure care as of June 30, 2021 and 2020, respectively, based on capacity used in future years. The landfill THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 88 capacity used to date for fiscal years ended June 30, 2021 and 2020 are 75.5% and 71.2%, respectively. 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. 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”). At the time the District entered into the CD, 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. The amount the District is required to spend in 2018 dollars pursuant to the CD is $6 billion. 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, 2021 and 2020 financial statements. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 89 The District has entered into construction and other contracts amounting to approximately $470,000,000 and $521,000,000 at June 30, 2021 and 2020, respectively, and through the respective audit report date. The District had $853,126,796 and $598,428,796 in revenue bonds authorized by the voters but unissued as of June 30, 2021 and 2020, respectively. The voters authorized an additional $500,000,000 in revenue bonds in April 2021 and like the four preceding authorizations, 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 $97,919,614 and $97,034,022 of restricted net position at June 30, 2021 and 2020, respectively, of which $68,212,821 and $63,177,454 are restricted due to enabling legislation, as of June 30, 2021 and 2020, respectively. 14.Segment Information The District issued wastewater revenue bonds to finance wastewater infrastructure projects. T he District accounts for both wastewater and stormwater activities in a single enterprise fund, but investors in those bonds rely solely on the revenue generated by the wastewater activities for repayment. Fiscal year 2021 and 2020 summary financial information for each business segment is presented below. A segment is an identifiable activity reported as a stand-alone entity for which one or more revenue bonds are outstanding. A segment has a specifically identifiable revenue stream pledged in support of the revenue bonds and has related expenses, gains and losses and assets, deferred outflows,liabilities and deferred inflows that are required by external parties to be accounted for separately. The wastewater system is the only reportable segment that meets the requirements of GASB Statement No. 34, Basic Financial Statements -and Management’s Discussion and Analysis -for State and Local Governments. The stormwater system is reported on for informational purposes only. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 90 Financial information as of and for the years ended June 30, 2021 and 2020 of the District’s Wastewater Segment is as follows: 2021 2020 Assets Cu rrent As sets Un restricted Cu rrent As sets Cash and cash equivalents  88,014,051$ 65,310,175$ In vestme nts                                          201,964,355 251,848,341 Se wer se rvice charges re ceivable, less allo wance of $70,561,791 in 2021 and $65,949,200 in 2020 66,333,963 67,437,606 Unbille d se wer service charges receivable 34,970,247 33,342,430 Accrued income on in vestments                        1,386,438 1,826,954 O th er receivables, less allo wance of  $60,373 in 2021 and $58,209 in 2020   2,340,234 5,168,412 Supplie s inventory 8,475,419 8,013,597 Total Un restricted Cu rrent Assets 403,484,707 432,947,515        Restricted Cu rrent As sets O th er receivables 43,590 48,273 Total Res tricted Cu rrent Assets 43,590 48,273 Total Current Assets 403,528,297 432,995,788 No n-Cu rrent As sets Restricted As sets Cash and cash equivalents  20,680,722 22,700,689 In vestments                                          110,366,490 75,085,334 Lo ng-term in vestments 5,996,719 10,850,625 Pr operty taxes re ceivable (17,971)(17,972) Accrued in co me on investments (120,562)8,088        Total Restricted Non-Current Assets 136,905,398 108,626,764 Other As sets     Notes receivable 9,694,702 10,410,729 Lo ng-term in vestments 189,961,198 150,664,647             Total Other As sets 199,655,900 161,075,376        Capital As sets     Depreciable:        Treatment and dispo sal plan t and e quipment           1,303,648,712 1,289,884,442        Co lle ction and pumpin g plant                         2,411,802,786 2,308,600,323        G eneral plant and e quipm ent 86,303,314 84,157,157 3,801,754,812 3,682,641,922        Less:  Accumulate d de pre ciation 1,459,412,219 1,382,418,916        Net de pre ciable assets       2,342,342,593 2,300,223,006     Non-depreciable:        Land                                                 71,102,122 70,404,826        Co nstruction in progress 1,163,985,241 981,883,959           Net Capital Assets 3,577,429,956 3,352,511,791 Total Non-Current As sets 3,913,991,254 3,622,213,931 Total As sets 4,317,519,551 4,055,209,719 Deferred Ou tflows of Resources :        Bo nds and notes payable-Deferred loss on refundin g        5,469,323 5,888,796        Pensio n-relate d o utflows 9,199,570 13,677,832        O PEB-re late d o utflows 3,049,400 2,451,365 Total Defer red Outflows of Res ources 17,718,293 22,017,993 WASTEWATER SEGMENT STATEM ENTS OF NET POSITION June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 91 2021 2020 Li abilities Current Liabilities-Payable From Unrestricted Assets Contracts and accounts payable  40,758,309$ 36,287,980$ Deposits and accrued expenses 33,961,774 32,216,981 Retainage payable  20,326,492 16,728,922 Current por tion of bonds and notes payable  61,157,300 56,629,100 Total Current Liabilities-Payable From Unrestricted Assets 156,203,875 141,862,983 Current Liabilities-Payable From Restricted Assets Contracts and accounts payable  510 — Total Current Liabilities-Payable From Restricted Assets 510 — Total Current Liabilities 156,204,385 141,862,983        Non-Current Liabilities Deposits and accrued expenses 9,202,567 7,559,792 Net pension liability 24,550,973 48,934,083 Total OPEB liability 21,498,182 19,985,093 Bonds and notes payable  1,768,769,051 1,633,705,811 Total Non-Current Liabilities 1,824,020,773 1,710,184,779 Total Liab ilities 1,980,225,158 1,852,047,762 Deferred Infl ows of Resources :     Bon ds and Notes payable - Defer red gain on refunding 2,793,162 1,393,209        Pension-related inflows 20,238,170 6,863,696        OPEB-r elated inflows  3,328,967 3,710,324 Total Deferred In flows of Resources 26,360,299 11,967,229 Net Position Net investment in capital assets 1,799,548,193 1,690,960,722 Restricted for:       Debt service 29,706,793 33,856,568       Subdistrict construction and improvement           1,957,758 1,965,621 Unrestricted 497,439,643 486,429,810 Total Net Position 2,328,652,387$ 2,213,212,721$ June 30, WASTEW ATER SEGMENT STATEMEN TS OF NET POSITION (Continued) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 92 2021 2020   Operating Revenues     Sewer service charges                                   425,250,174$ 430,399,893$     Recovery of (provision for) doubtful sewer service charge accounts (5,353,771) (5,623,090)     Licenses, per mits, and other fees                       3,753,797 3,012,368     Other                                                   3,495,172 10,192,865     Total Operating Revenues                              427,145,372 437,982,036          Operating Exp enses     Pumping and treatment                                   64,475,064 62,030,454     Collection system maintenance                           35,006,085 34,416,498     Engineer ing                                             902,282 937,892     General and adm inistrative                              55,337,571 64,650,994     Water backup claims                                     3,984,849 4,653,281     Depr ec iation                                            80,604,140 77,279,885     Asset management                                               15,141,153 13,998,739     Total Operating Exp ens es                              255,451,144 257,967,743          Operating Income                    171,694,228 180,014,293          Non-Operating Revenues     Property taxes levied by the District                   — 47     Investment income                                       1,304,545 14,210,947     Rent and other income                                   323,662 301,631     Total Non-Operating Revenues                          1,628,207 14,512,625          Non-Operating Exp enses     Net loss on disposal and sale of capital assets         608,073 781,346     Non-recurring projects and studies                       10,555,396 8,887,933     Interest expen se                                        56,615,868 36,119,362     Total Non-Operating Exp enses                          67,779,337 45,788,641          Income Before Capital Grants And Contributions                       105,543,098 148,738,277          Capital Grants And Contributions     Capital assets contributed                               8,608,123 3,081,055     Grant revenue                                           1,288,445 (101,054)     Total Capital Grants And Contributions                          9,896,568 2,980,001   Change In Net Position 115,439,666 151,718,278   Net Position - Begi nning Of Year 2,213,212,721 2,061,494,443   Net Position - End Of Year                                     2,328,652,387$ 2,213,212,721$ WASTEW ATER SEGMENT STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIO N For The Yea rs En ded June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 93 2021 2020 Cash Flows From Operating Activities Received from customers 427,556,320$ 427,486,543$ Paid to employees for services (105,930,520) (104,218,386) Paid to suppliers for goods and services (83,426,791) (77,443,593) Net Cash Provided By Operating Activities 238,199,009 245,824,564 Cash Flows Provided By Non-Capital Financing Activities Taxes levied and collected 4,032 37,227 Cash Flows From Capital And Related Financing Activities Proceeds from capital grants 3,067,953 1,099,045 Proceeds from issuance of debt 172,012,156 97,928,346 Premium on sale of bonds 37,194,202 12,059,976 Principal paid on debt (62,599,880) (52,603,763) Interest and fees paid on debt (62,785,704) (88,951,050) Payments for capital assets (290,256,122) (265,681,966) Proceeds from sale of capital assets 158,652 83,130 Proceeds from note receivable for other organization's contribution to — — construction of treatment plant 1,154,696 1,154,696 Proceeds from insurance on destroyed capital assets 1,088,835 — Build America Bond tax credit 1,642,857 1,636,759 Net Cash (Used In) Capital And Related Financing Activities (199,322,355) (293,274,827) Cash Flows From Investing Activities Purchase of investments (557,806,139) (526,749,101) Proceeds from sale and maturity of investments 530,033,856 600,558,868 Investment income 9,337,384 9,727,441 Proceeds from rents 238,122 241,167 Net Cash (Used In) Provided By Investing Activities (18,196,777) 83,778,375 Net Increase In Cash And Cash Equivalents 20,683,909 36,365,339 Cash And Cash Equivalents At Beginning Of Year 88,010,864 51,645,525 Cash And Cash Equivalents At End Of Year 108,694,773$ 88,010,864$ Ended June 30, WASTEWATER SEGMENT STATEMENTS OF CASH FLOWS For The Years THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 94 Financial information as of and for the years ended June 30, 2021 and 2020 of the District’s Stormwater Segment is as follows: 2021 2020 Assets Current Assets Unrestricted Current Assets Cash and cash equivalents   3,323,792$ 2,492,697$ Investments 8,976,389 12,474,187 Sewer service charges receivable, less allowance of $104,297 in 2021 and $111,954 in 2020 53,337 60,927 Proper ty taxes receivable, les s allowance of $7,430 in 2021 and $8,604 in 2020  363,496 421,059 Accrued income on investments 48,449 64,080        Total Unrestricted Current Assets 12,765,463 15,512,950        Restricted Current Assets Cash and cash equivalents 4,629,689 3,580,818 Investments 12,587,475 17,921,368        Total Restricted Current Assets 17,217,164 21,502,186 Total Current Assets 29,982,627 37,015,136 Non-Current Assets Restricted Assets Cash and cash equivalents   5,616,581 3,040,332 Investments 15,270,584 15,216,125 Long-term investments 26,202,398 19,832,238 Property taxes receivable, less allowance of $36,447 in 2021 and $29,497 in 2020 1,768,587 1,407,947 Ac crued income on investments 289,739 367,588        Total Restricted Non-Current Assets 49,147,889 39,864,230 Other Assets Long-term investments 8,442,904 7,465,594             Total Other Assets 8,442,904 7,465,594 Capital Assets     Deprec iable:        Collection and pumping plant 681,265,978 665,941,716        General plant and equipm ent 17,213,330 16,792,580 698,479,308 682,734,296        Less:  Accumulated depr eciation 236,082,317 226,327,691        Net depr ec iable assets       462,396,991 456,406,605     Non-depr ec iable:        Land 8,467,188 7,928,803        Construction in progress 30,048,200 31,041,970           Net Capital Assets 500,912,379 495,377,378 Total Non-Current Assets 558,503,172 542,707,202 Total Assets 588,485,799 579,722,338        Defer red Out flows of Resources :        Pension-related outflows 1,276,850 1,995,820        OPEB-related outflows 487,516 391,504 Total Deferred Outflows of Resources 1,764,366 2,387,324 STORMWATER SEGMENT STATEMENTS OF NET POSITION June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 95 2021 2020 Li abilities Current Liabilities-Payable From Unrestricted Assets Contracts and accounts payable  39,113$ 29,732$ Deposits and accrued expenses  8,314,797 9,955,546 Retainage payable  — 7,262 Total Current Liab ilities-Payable From Unrestricted Assets 8,353,910 9,992,540 Current Liabilities-Payable From Restricted Assets Contracts and accounts payable  701,665 912,704 Retainage payable  561,310 843,548 Total Current Liab ilities-Payable From Restricted Assets 1,262,975 1,756,252             Total Current Liab ilities                       9,616,885 11,748,792        Non-Current Liabilities        Net pension liability                   4,944,205 8,858,830        Total OPEB liability                   3,422,446 3,179,525             Total Non-Current Liabilities                       8,366,651 12,038,355                          Total Liabilit ies                     17,983,536 23,787,147 Defer red Inflows of Resources :        Pension-r elated inflows                                              2,433,228 286,002        OPEB-r el ated inflows                                         559,118 620,343                  Total Deferred Inflows of Resources                         2,992,346 906,345 Net Position Net investment in capital assets 499,759,396 493,775,710 Res tricted for:       Subdistrict construction and im provement           66,255,063 61,211,833 Unrestricted 3,259,824 2,428,627                   Total Net Position 569,274,283$ 557,416,170$   June 30, STORMWATER SEGMENT STATEM EN TS OF NET POSITION (Con tinued) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 96 2021 2020   Operating Revenues     Sewer service charges (2,391)$ (1,801)$     Rec over y of (provision for)doubtful sewer service charge accounts 6,352 11,541     Other 2,229 263     Total Operating Revenues 6,190 10,003          Operating Exp en ses     Collection system maintenance 13,106,911 13,235,760     En gineer ing 10,598,514 10,690,194     Gener al and administrative (326,038)1,295,690     Depr ec iation 10,748,129 10,353,427     Asset managem ent 882,830 3,196,582     To tal Operating Exp en ses 35,010,346 38,771,653          Operating (Loss)(35,004,156)(38,761,650)          Non-Operating Revenues     Property taxes levied by the District 43,624,302 35,439,394     Investment income 87,733 2,048,235     To tal Non-Operating Revenues 43,712,035 37,487,629          Non-Operating Exp enses     Net loss on disposal and sale of capital assets         382,035 180,130     Non-recurring projects and studies 1,272,327 3,570,298     Total Non-Operating Exp enses 1,654,362 3,750,428          In come (Loss)Before Capital Contributions 7,053,517 (5,024,449)          Capital Contributions     Capital assets contributed 4,334,972 3,410,906     Grant revenue 469,624 —     To tal Capital Contributions 4,804,596 3,410,906   Change In Net Position 11,858,113 (1,613,543)   Net Position - Beginning Of Year 557,416,170 559,029,713          Net Position - En d Of Year 569,274,283$ 557,416,170$ STORMWATER SEGMENT STATEM EN TS OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For The Years Ended June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 97 2021 2020 Cash Flows From Operating Activities Rec eived from customers (1,627,308)$ 1,717,045$ Paid to suppl ier s for goods and ser vices (25,897,686) (30,571,361) Net Cash (Us ed In ) Operating Activities (27,524,994) (28,854,316) Cash Flows Provided By Non-Capital Financing Activities Taxes levied and collected 42,684,514 34,946,298 Cash Flows From Capital And Related Fi nancing Activities Proceeds from capi tal grants 469,624 — Paymen ts for capi tal assets (12,783,904) (12,108,973) Proceeds from sale of capital assets —22,098 Net Cash (Us ed In ) Capital And Related Fi nancing Activities (12,314,280) (12,086,875) Cash Flows From Investing Activities Purchase of investments (75,869,353) (66,407,633) Proceeds from sale and maturity of investments 76,520,644 75,139,517 Investment income 959,684 1,268,317 Net Cash Provided By Investing Act ivities 1,610,975 10,000,201 Net Increase In Cash And Cash Equi valents 4,456,215 4,005,308 Cash And Cash Equivalent s At Begi nning Of Yea r 9,113,847 5,108,539 Cash And Cash Equivalent s At End Of Year 13,570,062$ 9,113,847$ En ded June 30, STORMWATER SEGMENT STATEMENTS OF CASH FLO WS For The Yea rs THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 98 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 99 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 Developm ent Redevelopment Redevelopment Total Tax or City Zones Bonds Authority Corporation s Abate me nts St Louis County —$188,439$—$13,375$201,814$ Bellerive —3,239 ——3,239 Berkeley 692 ———692 Brentwood ———17,459 17,459 Bridgeton —549 —5,934 6,483 Clayton —38,950 —3,844 42,794 Edmundson ———23,493 23,493 Eureka —309 ——309 Ferguson —6,357 —1,047 7,404 Frontenac ———8,780 8,780 Hazelwood 8,287 39,089 —99,767 147,143 Kinloch ———45,862 45,862 Je nnings —151 ——151 Map lewood ———13,617 13,617 Maryland Heights —404 —7,406 7,810 Normand y ———3,025 3,025 Olivette ———2,566 2,566 Ove rland ———9,067 9,067 Richmond Heights ———18,263 18,263 Rock Hill ———2,749 2,749 St . Ann —700 ——700 Su nset Hills ———495 495 University City ——10,276 —10,276 Wellston ———713 713 Woodson Terrace ———199 199 Total Tax Abatements 8,979$278,187$10,276$277,661$575,103$ For the Year Ended June 30, 2021 Land Enhanced Industrial Clearance for Urban St. Louis County Enterprise Developm ent 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 Je nnings —153 ——153 Map lewood ———7,092 7,092 Maryland Heights —406 —7,470 7,876 Normand y ———3,022 3,022 Ove rland ———5,165 5,165 Richmond Heights ———11,463 11,463 Rock Hill ———3,219 3,219 Su nset 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 100 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 $.1078 and $.1077 per $100 of assessed value for fiscal 2021 and 2020, respectively, that were abated by St. Louis City are reported in the following tables. Tax Increment Financing utilized by St. Louis County, Cities located in St. Louis County and St. Louis City Missouri’s Real Property Tax Increment Allocation Redevelopment Act enables cities to finance certain redevelopment costs with the revenue generated from (i) payments in lieu of real estate taxes, as measured by the net increase in assessed valuation resulting from redevelopment and (ii) a portion of the increase in other local tax revenue associated with new economic activity. When a tax increment financing (“TIF”) plan is adopted, real estate taxes in the redevelopment are frozen at their current level. By applying the real estate tax rate of all taxing districts Reduced Unabated Tax Abated Tax Tax St. Louis City Values Revenue Values Revenue Revenue Residential 147,239,040$ 158,724$ 110,822,179$ 22,706$ 136,018$ Comme rcial 190,333,200 205,179 148,956,196 51,336 153,843 Total 337,572,240$ 363,903$ 259,778,375$ 74,042$ 289,861$ For th e Year Ended June 30, 2021 Reduced Un abate d Tax Abated Tax Tax St. Lou is City Values Revenue Values Revenue Revenue Residential 178,760,490$ 192,525$ 35,055,120$ 37,754$ 154,771$ Comme rcial 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 101 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 2021and 2020 as a result of the programs of other governments are as follows: TI F TIF Incremental Reduced Incremental Reduced St. Louis County or City Values Tax Revenues Values Tax Revenues St . Louis County and Citie s Located in St. Louis County 541,545,970$ 583,787$ 580,156,870$ 624,829$ St . Louis County PILOTs Received —(55,007)—(34,565) St . Louis City 1,309,205,243 401,965 1,308,525,243 334,873 St . Louis City PILOTs Received —(44,808)—(42,175) Total 1,850,751,213$ 885,937$ 1,888,682,113$ 882,962$ June 30, 2021 For the Years Ended June 30, 2020 Reduced Reduced St. Louis County or City Tax Revenues Tax Revenues St . Lo uis County and Cities Located in St. Louis Co unty - Tax Abate me nts 575,103$ 386,802$ St . Lo uis City - Tax Abate me nts 289,861 332,860 St . Lo uis County and Cities Located in St. Louis Co unty - TIFs 528,780 590,264 St . Lo uis City - TIFs 357,157 292,698 Total Reduced Tax Revenues 1,750,901$ 1,602,624$ For the Years Ended June 30, 2021 June 30, 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 102 16.Fiduciary Pension Trust Fund Cash and Investments The Metropolitan St. Louis Sewer District Employees’ Pension Plan (“Pension Plan”) is reported as a Fiduciary Pension Trust Fund. The Pension Plan reports financial data on a calendar year basis and issues a publicly available financial report with audited financial statements which can be found on the District’s www.msdprojectclear.org website or may be obtained by writing: The Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO 63103- 2555. The cash and investment information for this plan is included below and the fair value measurement and application is included in Note 17. Categories of Asset Risk Concentration of credit risk is the risk of loss attributed to the magnitude of the Pension Plan’s investment in a single issuer. Pursuant to Resolution 3597, the Pension Plan is authorized to invest in the following; Equity Investments: Common stocks of corporations, mutual funds, or co- mingled equity funds (Domestic and International, target range 6% to 25%, allowable range 2% to 30% ). Fixed Income Investments: U.S. government and agency securities, corporate bonds, debentures, notes, or other evidence of indebtedness assumed or guaranteed by corporations (Domestic and International, target range 8% to 14%, allowable range 3% to 19%). Short-term Securities: Commercial paper, treasury bills, certificates of deposit, and/or money market funds. Real Estate Investments: R eal estate investment trusts and multi-employer property trusts (Target range 12%, allowable range 0% to 15%). Hedge Funds, Global Tactical, Real Assets, Market Neutral, and Absolute Return Investments; these investment strategies help diversify the investment portfolio. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 103 The fair value of investments managed consisted of the following: Interest Rate Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Pension Plan does not have a formal investment policy that limits investment maturities as a means of managing its exposure to interest rates. The Pension Plan had the following debt securities and maturities: As of December 31, 2020 2019 Investm ents, at F air Value Collective In ve stment Funds 171,767,753$ 136,062,084$ Mutual Funds 60,179,174 70,580,513 Real Es tate Investment s 30,265,219 32,566,168 Corp ora te Ob ligations 27,630,867 21,981,050 Domestic C om mon S tocks 18,552,256 14,868,772 US Treasury a nd A gency Ob ligations 13,994,724 16,428,797 Money M arket Funds 3,237,837 3,110,257 Municipal Ob ligations 1,292,527 554,136 Total Investments 326,920,357$ 296,151,777$ As of D ecember 3 1, 2 020 Weighted Average Maturity Inve stm ent Type Fair Value (in Y ears) Corporate Obligations 27,630,867$3.92 U.S. Treasury and A gency Obligations 13,994,724 5.46 Municipal Obligations 1,292,527 3.57 Total 42,918,118$ Portf olio Weighted Average M aturity in Y ears 4.42 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 104 The Pension Plan will minimize the risk that the market value of securities in the portfolio will fall due to changes in general interest rates by: Structuring the investment portfolio so that securities mature to meet cash requirements for benefit payments, thereby avoiding the need to sell securities on the open market prior to maturity; and Monitoring fixed income investment managers’ performances to be sure the fixed income portion of the investment portfolio is managed to predetermined indexes. Credit Risk Investment credit risk is the risk that the issuer or other counterparty to an investment will not fulfill its obligations. The Pension Plan does not have a formal credit risk policy. The Pension Plan will minimize credit risk by: Pre-qualifying the financial institutions, broker/dealers, intermediaries, and advisors with which the Pension Plan will do business; and Diversifying the portfolio so that potential losses on individual securities will be minimized. As of D ecember 3 1, 2 019 Weighted Average Maturity Investment Type Fair Value (in Y ears) Corporate Obligations 21,981,050$3.67 U.S. Treasury and A gency Obligations 16,428,797 5.34 Municipal Obligations 554,136 2.72 Total 38,963,983$ Portf olio Weighted Average M aturity in Y ears 4.36 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 105 The following tables provide information on the credit ratings associated with the Pension Plan’s investments in debt securities: U.S. Treasury S & P & Agenc y Munic ipal Corporate Rating Obligations Obligations Obligations Total AAA —$ —$ 3,328,025$ 3,328,025$ AA 13,994,724 1,039,765 876,954 15,911,443 A —221,605 5,645,923 5,867,528 BBB —31,157 12,531,702 12,562,859 BB ——221,720 221,720 Not Rated ——5,026,543 5,026,543 Total 13,994,724$ 1,292,527$ 27,630,867$ 42,918,118$ Credit R ating b y Inve stm ent as of D ecember 3 1, 2 020 U.S. Treasury S & P & Agenc y Munic ipal Corporate Rating Obligations Obligations Obligations Total AAA —$ —$ 3,322,315$ 3,322,315$ AA 16,428,797 524,046 795,055 17,747,898 A ——4,013,879 4,013,879 BBB —30,090 9,862,765 9,892,855 Not Rated ——3,987,036 3,987,036 Total 16,428,797$ 554,136$ 21,981,050$ 38,963,983$ Credit R ating b y Inve stm ent as of D ecember 3 1, 2 019 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 106 Investments Greater Than 5% of Net Position Restricted for Pension Benefits or Total Investments Investments that exceed 5% of net position restricted for pension benefits or total investments at December 31, 2020 or 2019 are as follows: 2020 %2019 % BlackRock R us sell 1000 In dex Fund N on-Lending 83,783,652$ 26%73,563,571$ 25% Prudential Core Plus B ond Fund 40,461,722 12%36,944,488 12% Morga n S tanley Int erna tional Eq ui ty Fund I 40,216,372 12%35,694,985 12% UBS Trumbull Property Fund 30,265,219 9%32,566,282 11% Brandywine Global Bond Opportuni stic Fixed Incom e 27,297,538 8%24,337,678 8% Morga n S tanley Emergi ng M arkets Fund I 19,962,802 6%18,621,570 6% TimesSquare Small Cap Growth Fund 19,005,439 6%16,325,240 6% Ke nnedy M id Cap V alue 18,571,060 6%14,892,847 5% December 3 1, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 107 17.Fiduciary Pension Trust Fund Fair Value Measurement and Application The Pension Plan categorizes its fair value measurements within the fair value hierarchy established by U.S. generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset and give the highest priority to unadjusted quoted process in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The Pension Plan had the following fair value measurements of invested assets as of December 31, 2020 and December 31, 2019: In vestments Measured at Fair Value Fair Value Measurements Using Quoted Prices in Active Significant Market s for Other Significant Identical Observable Unobservab le Assets In puts In puts In vestments by Fair Value Lev el 12/31/2020 (Lev el 1)(Level 2)(Level 3) Debt Securities: Cor porate Obligations 27,630,867$ —$ 27,630,867$ —$ US Treasury Notes and Bonds 8,491,150 8,491,150 —— US Gover nment Agency Obligations 5,503,574 —5,503,574 — Municipal Obligations 1,292,527 —1,292,527 — Total Debt Securities 42,918,118 8,491,150 34,426,968 — Equ ity Securities: Dom estic Equities 18,552,256 18,552,256 —— International Equities 40,216,372 —40,216,372 — Emerging Markets Fund 19,962,802 —19,962,802 — Total Equity Securities 78,731,430 18,552,256 60,179,174 — Total Investm en ts by Fair Value Level 121,649,548 27,043,406$ 94,606,142$ —$ Unfunded Redem ption Redem ption In vestments Measured at the Net Asset Value (NAV)Com mitments Frequency Notice Period Domestic Equities (1)102,789,091 —Daily Varies Core Plus Bond Commingled Trust Fund (2)40,461,722 —Daily 5 Days Real Estate Funds (3)30,265,219 —Quarterly 60 Days Global Fixed Income Collective Trust Fund (4)27,297,538 —Daily 10 Days Diversified Hedg e Fund of Fund (5)1,219,402 —Quarterly 90 Days Total Investm en ts Measured at the Net Asset Value 202,032,972 Money Market at Amor tized Cost 3,237,837 Total Investm en ts at Fair Value 326,920,357$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 108 (1)Domestic Equities –These funds seek long-term capital appreciation through passive or active management of equity securities listed on U.S. stock exchanges. Redemption is daily and the notice period is two days or less. (2)Core Plus Bond Commingled Trust Fund –Seeks to outperform the Barclays Capital U.S. Aggregate Bond Index by investing primarily in fixed income securities in the U.S. investment grade sectors, as well as U.S. fixed income securities below investment grade, the debt of developed international markets, and the debt of emerging markets. Redemption is daily with a 1-day notice. (3)Real Estate Funds –The portfolio assets in this investment consist primarily of high-quality real estate investments located in major markets throughout the U.S. and are diversified by property type, geographic region and economic sector. The majority of the investments are stable, primarily income-oriented properties. The fair values of the investments in this type have In vestments Measured at Fair Value Fair Value Measurements Using Quoted Prices in Active Significant Market s for Other Significant Identical Observable Unobservab le Assets In puts In puts In vestments by Fair Value Lev el 12/31/2019 (Lev el 1)(Level 2)(Level 3) Debt Securities: Cor porate Obligations 21,981,050$ —$ 21,981,050$ —$ US Treasury Notes and Bonds 13,242,420 13,242,420 —— US Gover nment Agency Obligations 3,186,377 —3,186,377 — Municipal Obligations 554,136 —554,136 — Total Debt Securities 38,963,983 13,242,420 25,721,563 — Equ ity Securities: Dom estic Equities 31,132,731 14,868,772 16,263,959 — International Equities 35,694,984 —35,694,983 — Emerging Markets Fund 18,621,570 —18,621,570 — Total Equity Securities 85,449,285 14,868,772 70,580,512 — Total Investm en ts by Fair Value Level 124,413,267 28,111,192$ 96,302,075$ —$ Unfunded Redem ption Redem ption In vestments Measured at the Net Asset Value (NAV)Com mitments Frequency Notice Period Domestic Equities (1)73,563,551 —Daily Varies Core Plus Bond Commingled Trust Fund (2)36,944,488 —Daily 5 Days Real Estate Funds (3)32,566,168 —Quarterly 60 Days Global Fixed Income Collective Trust Fund (4)24,337,678 —Daily 10 Days Diversified Hedg e Fund of Fund (5)1,216,368 —Quarterly 90 Days Total Investm en ts Measured at the Net Asset Value 168,628,253 Money Market at Amor tized Cost 3,110,257 Total Investm en ts at Fair Value 296,151,777$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 109 been determined using the NAV per share (or its equivalent) of the investments. The District has elected to liquidate holdings in the UBS Trumbull Property Fund. Redemption requests from fund investors currently exceed the amount available for redemption. Redemptions are calculated on a pro rata basis according to the ratio of the requesting investor's units to the total of all investors then requesting redemptions. Any redemption request that is not fully honored will be deemed effective in following quarters until completed. (4)Global Fixed Income Collective Trust Fund –This fund invests in sovereign debt and currencies of countries in its benchmark index, the investment-grade corporate bond and mortgage-backed securities markets in those countries, as well as, to limited degrees, emerging market, high yield debt, and securities of countries rated A or better by a nationally recognized statistical rating organization. Redemption is daily with a 10-day notice. (5)Diversified Hedge Fund of Fund –Seeks return, long-term capital growth and diversification through a combination of Managers trading a range of strategies, including, but not limited to, hedging, distressed securities, arbitrage and special situations. The fair values of the investments in this type have been determined using the NAV per share (or its equivalent) of the investments. The District’s remaining investment in this fund is limited to its pro rata interest in Peruvian sovereign bonds held through an investment in the Fund, whose advisor has endeavored to sell said interest, on a best efforts’ basis, and distribute any proceeds to shareholders. 18.Subsequent Events In preparing these financial statements the District has evaluated events and transactions for potential recognition or disclosure through October 21, 2021, the date the financial statements were available to be issued. The District has authorized the issuance of Wastewater System Refunding Revenue Bonds, Series 2026A to be issued on May 1, 2026. The par amount of the bonds will total $106,930,000 and the bonds will be purchased by Barclays Capital Inc. pursuant to the Forward Delivery Bond Purchase Agreement dated October 6, 2021. Upon issuance, the District plans to use the proceeds of the bonds to refund the outstanding Wastewater System Revenue Bonds, Series 2016C. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 110 REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS June 30, 2021 Ca l e n d a r Y e a r E n d i n g D e c e m b e r 3 1 , 20 2 0 20 1 9 20 1 8 20 1 7 20 1 6 20 1 5 20 1 4 To t a l P e n s i o n L i a b i l i t y Se r v i c e c o s t 4, 8 3 2 $ 4, 9 0 2 $ 5, 2 3 9 $ 5, 1 5 7 $ 5, 1 0 7 $ 5, 2 5 3 $ 5, 4 0 9 $ In t e r e s t o n t o t a l p e n s i o n l i a b i l i t y 23 , 5 8 1 2 2 , 8 1 8 2 2 , 3 0 7 2 2 , 0 7 9 2 0 , 6 0 9 2 0 , 1 9 9 1 9 , 9 0 1 Ef f e c t o f p l a n c h a n g e s — — — — — — — Ef f e c t o f e c o n o m i c / d e m o g r a p h i c g a i n s o r ( l o s s e s ) (6 , 7 2 7 ) ( 1 , 9 6 7 ) ( 2 , 0 4 2 ) ( 4 , 7 2 9 ) (8 8 3 ) ( 4 , 5 7 7 ) ( 3 , 6 6 8 ) Ef f e c t o f a s s u m p t i o n c h a n g e s o r i n p u t s — 11 , 9 1 1 — 1, 6 6 7 11 , 6 6 5 — 6, 5 0 0 Be n e f i t p a y m e n t s (1 9 , 2 7 3 ) ( 1 8 , 6 2 7 ) ( 1 6 , 9 1 2 ) ( 1 5 , 8 5 8 ) ( 1 5 , 2 6 1 ) ( 1 4 , 4 7 5 ) ( 1 3 , 3 8 7 ) Ne t C h a n g e i n T o t a l P e n s i o n L i a b i l i t y 2, 4 1 3 1 9 , 0 3 7 8, 5 9 2 8, 3 1 6 2 1 , 2 3 7 6, 4 0 0 1 4 , 7 5 5 To t a l P e n s i o n L i a b i l i t y - B e g i n n i n g 35 3 , 9 9 4 3 3 4 , 9 5 7 3 2 6 , 3 6 5 3 1 8 , 0 4 9 2 9 6 , 8 1 2 2 9 0 , 4 1 2 2 7 5 , 6 5 7 To t a l P e n s i o n L i a b i l i t y - E n d i n g ( a ) 35 6 , 4 0 7 3 5 3 , 9 9 4 3 3 4 , 9 5 7 3 2 6 , 3 6 5 3 1 8 , 0 4 9 2 9 6 , 8 1 2 2 9 0 , 4 1 2 Pl a n F i d u c i a r y N e t P o s i t i o n Em p l o y e r c o n t r i b u t i o n s 13 , 3 9 9 1 2 , 7 2 5 1 2 , 4 9 4 1 2 , 3 2 8 1 0 , 1 4 6 1 0 , 0 5 9 1 0 , 6 7 6 M e m b e r c o n t r i b u t i o n s — — — — — — — In v e s t m e n t i n c o m e n e t o f i n v e s t m e n t e x p e n s e s 36 , 5 8 5 4 1 , 5 4 3 ( 1 2 , 9 9 8 ) 3 0 , 4 9 6 1 1 , 9 1 3 ( 1 , 8 8 8 ) 6 , 9 8 0 Be n e f i t p a y m e n t s (1 9 , 2 7 3 ) ( 1 8 , 6 2 7 ) ( 1 6 , 9 1 2 ) ( 1 5 , 8 5 8 ) ( 1 5 , 2 6 1 ) ( 1 4 , 4 7 5 ) ( 1 3 , 3 8 7 ) Ad m i n i s t r a t i v e e x p e n s e s — — — — — — — Ne t C h a n g e i n P l a n F i d u c i a r y N e t P o s i t i o n 30 , 7 1 1 3 5 , 6 4 1 ( 1 7 , 4 1 6 ) 2 6 , 9 6 6 6, 7 9 8 ( 6 , 3 0 4 ) 4 , 2 6 9 Pl a n F i d u c i a r y N e t P o s i t i o n - B e g i n n i n g 29 6 , 2 0 1 2 6 0 , 5 6 0 2 7 7 , 9 7 6 2 5 1 , 0 1 0 2 4 4 , 2 1 2 2 5 0 , 5 1 6 2 4 6 , 2 4 7 Pl a n F i d u c i a r y N e t P o s i t i o n - E n d i n g ( b ) 32 6 , 9 1 2 2 9 6 , 2 0 1 2 6 0 , 5 6 0 2 7 7 , 9 7 6 2 5 1 , 0 1 0 2 4 4 , 2 1 2 2 5 0 , 5 1 6 Ne t P e n s i o n L i a b i l i t y - E n d i n g = ( a ) - ( b ) 29 , 4 9 5 $ 57 , 7 9 3 $ 74 , 3 9 7 $ 48 , 3 8 9 $ 67 , 0 3 9 $ 52 , 6 0 0 $ 39 , 8 9 6 $ Fi d u c i a r y N e t P o s i t i o n a s a % o f T o t a l P e n s i o n L i a b i l i t y 9 1 . 7 2 % 8 3 . 6 7 % 7 7 . 7 9 % 8 5 . 1 7 % 7 8 . 9 2 % 8 2 . 2 8 % 8 6 . 2 6 % Co v e r e d P a y r o l l 34 , 3 9 1 $ 36 , 7 9 3 $ 39 , 4 3 7 $ 41 , 8 6 9 $ 42 , 0 5 5 $ 43 , 3 4 5 $ 44 , 6 6 4 $ Ne t P e n s i o n L i a b i l i t y a s a % o f C o v e r e d P a y r o l l 85 . 7 6 % 1 5 7 . 0 8 % 1 8 8 . 6 5 % 1 1 5 . 5 7 % 1 5 9 . 4 1 % 1 2 1 . 3 5 % 8 9 . 3 2 % No t e s t o S c h e d u l e : 1. C h a n g e s o f A s s u m p t i o n s . T h e a c t u a r i a l d i s c o u n t r a t e a n d t h e l o n g - t e r m e x p e c t e d r a t e o f r e t u r n w e r e b o t h r e d u c e d t o 6 . 7 5 % i n 2 0 1 9 . B o t h r a t e s w e r e c h a n g e d t o 6 . 9 0 % i n 2 0 1 7 a n d b o t h r a t e s w e r e 7 . 0 0 % i n 2 0 1 6 a n d a l l p r i o r y e a r s . T h e m o r t a l i t y t a b l e s u t i l i z e d w e r e c h a n g e d i n 2 0 1 9 t o t h e P u b - 2 0 1 0 G e n e r a l A m o u n t - W e i g h t e d M o r t a l i t y T a b l e s a n d t h e e f f e c t i s a l s o r e f l e c t e d i n t h e a s s u m p t i o n c h a n g e s . I n 2 0 1 6 , t h e a m o u n t r e p o r t e d a s c h a n g e o f a s s u m p t i o n s r e s u l t e d f r o m c h a n g i n g t o t h e R P - 2 0 1 4 M o r t a l i t y f o r E m p l o y e e s a n d H e a l t h y A n n u i t a n t s a n d D i s a b l e d M o r t a l i t y t a b l e s , w h i l e t h e 2 0 1 4 c h a n g e r e s u l t e d p r i m a r i l y f r o m a d j u s t m e n t s t o t h e d i s c o u n t r a t e a n d e m p l o y e e r a t e i n c r e a s e s . 2. T h i s s c h e d u l e w i l l u l t i m a t e l y p r e s e n t t e n y e a r s o f i n f o r m a t i o n w h e n a v a i l a b l e . Sc h e d u l e o f C h a n g e s i n N e t P e n s i o n L i a b i l i t y a n d R e l a t e d R a t i o s In ( 0 0 0 ' s ) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 111 REQUIRED SUPPLEMENTARY INFORMATION (Continued) SCHEDULE OF EMPLOYER CONTRIBUTIONS TO EMPLOYEES’ PENSION PLAN June 30, 2021 Schedule of Em ployer Contributions To E mployees' Pension Plan Fiscal Y ear 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% 2021 12,771,525 12,771,525 —35,509,063 35.97% Notes to Schedule: 1.This schedule will ultimately present ten ye ars of inform ation when a va ilable. 2.V aluation Da te: A ct ua ri ally determined contribution rates are ca lculated as of January 1 of the fiscal year i n whi ch the cont ributions are reported. M ethods and assumptions us ed to determine contri bution ra tes: A ctua rial Cost Method:Entry A ge Normal A mortization M ethod:Level dollar layered, 20 ye ar periods A sset Valuation M ethod:3-year s moothing p eriod Inflation:2.50% S alary Increa ses:4.25%, a ve ra ge, including inflation Inves tment Rate of Return:6.75%, net of pens ion p lan inves tment expens e, incl uding i nflation for 2020 and 2 021 6.90%, net of pens ion p lan inves tment expens e, incl uding i nflation for 2018 and 2 019 7.00%, net of pens ion p lan inves tment expens e, incl uding i nflation for all years prior to 2018 M ortality:In the 2 021 and 2 020 actuarial va luations, a ssumed life expectanci es were ca lculated us ing the Pub-2010 Genera l Amount -Weight ed M ortality T ables wi th genera tional projection based on S cale M P-2020 and 2019, res pectively. In t he 2019, 2018 and 2017 actuarial valuations , assumed life expectancies were calculated us ing t he R P-2014 Em ployee and Healthy A nnuitant Mortality Table (with genera tional proj ect ions from 2006 based on the most current M P improvem ent scale which i s updated annua lly) and t he R P-2014 Di sabled Mort ality Table. In t he 2 016 and 2015 actuarial va luations, a ssumed life expectancies were ca lculated us ing t he RP-2000 Healthy A nnuitant Mort ality Table and t he R P-2000 Disabled Mort ality Ta ble. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 112 REQUIRED SUPPLEMENTARY INFORMATION (Continued) SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY June 30, 2021 2020 2019 2018 2017 Total OPEB Liab ility Servi ce cost 1,827$ 1,397$ 1,781$ 1,622$ Interest on total OPEB l iability 663 1,017 865 895 Ef fect of plan changes — 86 — — Ef fect of econom ic/demogra phic ga ins or (losses)— (3,887) — — Changes of assumptions or other inp uts 898 1,926 (987)438 Benefit paym ents (1,6 31)(1,539)(1,689)(1,600) Net cha nge in total OPEB liability 1,757 (1,000)(30)1,355 Total OPEB Liability - Beginning 23,165 24,164 24,194 22,839 Total OPEB Liability - End ing 24,921$ 23,165$ 24,164$ 24,194$ Notes to Schedule: 1.C ha nges of a ssumptions and other input s reflect t he effects of changes in the discount ra te each p eriod. The following a re the discount ra tes us ed in each period: 2020 2.12% 2019 2.74% 2018 4.10% 2017 3.44% 2016 3.78% 2.N o assets are accumul ated in a trus t that meets t he criteria in paragraph 4 of GA SB Statement N o. 7 5 t o pay related benefits. 3.Thi s schedul e wi ll ul timately pres ent ten years of information when a va ilable. 4.C ontributions to the OPEB plan a re not b ased on a m easure of pa y s o accordingl y, no measure of payroll i s pres ented. Calendar Year Ending Dec ember 31, Schedule of Changes in T otal OPEB Liab ility In (000's) Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. Statistical Section METROPOLITAN ST. LOUIS SEWER DISTRICT This part of the District’s annual comprehensive 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 ......................................113 –114 Revenue Capacity These schedules contain information to help the reader assess the District’s most significant local revenue source, the user charge ......................................................................................115 – 122 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 .............................................................................123 – 125 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 ...........................................................................................126 – 128 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 ...............................................129 –130 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 113 2012 2013 2014 2015 a 2016 a Net Position Net investmen t in capi tal assets 1,928,200$ 1,877,692$ 1,845,394$ 1,805,453$ 1,809,386$ Restricted 106,693 111,066 142,764 142,445 136,547 Unrestricted 175,010 251,300 279,794 330,218 381,124 Total Net Position 2,209,903$ 2,240,058$ 2,267,952$ 2,278,116$ 2,327,057$ 2017 a 2018 a 2019 a 2020 a 2021 a Net Position Net investmen t in capi tal assets 1,876,249$ 1,968,740$ 2,063,519$ 2,184,736$ 2,299,308$ Restricted 135,259 129,579 127,414 97,034 97,920 Unrestricted 379,660 392,997 429,591 488,859 500,699 Total Net Position 2,391,168$ 2,491,316$ 2,620,524$ 2,770,629$ 2,897,927$ a Years 2015 to current include a change in the calculation of the net pos ition componen ts which is not reflected in years prior. NET POS IT ION BY COM PONENT LAST TEN FISCAL YEARS (000's) Fiscal Year Fiscal Year THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 114 In come before Non-operating Capital Capital Change Fiscal Operat ing Operat ing Operat ing Revenue/Grants and Grants and in Net Year Revenues Exp ens es In come (Exp ens es )Contributions Contributions Pos ition 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 2021 427,151,562 290,461,490 136,690,072 (24,093,457) 112,596,615 14,701,164 127,297,779 CHANGES IN NET POSITION LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 115 OPERATING REVENUES BY SOURCE LAST TEN FISCAL YEARS Li censes, Fi scal Sewer Service Permits, and Yea r Ch arges , Net Other Fees Ot her 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 2021 419,900,364 3,753,797 3,497,401 427,151,562 Total Operating Revenues THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 116 Fi scal Em ployment Materials and Contracted Chemical Year Costs Utilities Supplies Services Supplies 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 2021 106,790,672 14,948,574 13,089,179 51,735,701 2,793,263 Fi scal Year In surance Other 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 2021 4,410,048 5,341,784 199,109,221 91,352,269 290,461,490 Note: Balances in FY18 and prior were restated in FY19 to accurately reflect expen ses in the appropr iate category. The majority of the changes were increases to Employment Cos ts and Other and decreases to Materials and Supplies and Con tracted Ser vices. OPERATING EX PENS ES LAST TEN FISCAL YEARS Subtotal, Exp enses before Depreciation Total Operating Exp en sesDepreciation THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 117 2012 2013 2014 2015 2016 Non-oper ating revenues Property taxes levied by the District 24,604,173$ 26,016,135$ 27,450,319$ 24,764,324$ 25,671,058$ Investment income 2,407,485 1,056,966 2,966,549 3,000,591 4,635,866 Rent and ot her income 294,591 293,159 302,506 37,321 102,865 Total non-oper ating revenues 27,306,249 27,366,260 30,719,374 27,802,236 30,409,789 Non-operating expenses Interest expense 16,365,309 21,062,474 25,661,127 27,138,546 28,943,200 Net loss on disposal and sale of capital assets 3,162,723 795,527 5,248,443 1,420,902 324,513 Non-recurring projects and studies 6,402,888 4,676,203 3,492,667 12,317,488 11,000,403 Legal claims 5,000 — — — — Total non-oper ating expenses 25,935,920 26,534,204 34,402,237 40,876,936 40,268,116 Net non-operating revenue (expense)1,370,329$ 832,056$ (3,682,863)$ (13,074,700)$ (9,858,327)$ 2017 2018 2019 2020 2021 Non-operating revenues Property taxes levied by the District 32,458,054$ 33,748,932$ 34,107,619$ 35,439,441$ 43,624,302$ Investment income 2,902,624 7,405,957 16,699,153 16,259,182 1,392,278 Rent and ot her income 106,562 253,799 301,446 301,631 323,662 Total non-oper ating revenues 35,467,240 41,408,688 51,108,218 52,000,254 45,340,242 Non-operating expenses Interest expense 31,250,777 36,695,083 33,082,384 36,119,362 56,615,868 Net loss on disposal and sale of capital assets 673,044 1,833,908 970,825 961,476 990,108 Non-recurring projects and studies 7,459,538 9,296,358 15,628,590 12,458,231 11,827,723 Total non-oper ating expenses 39,383,359 47,825,349 49,681,799 49,539,069 69,433,699 Net non-operating revenue (expense)(3,916,119)$ (6,416,661)$ 1,426,419$ 2,461,185$ (24,093,457)$ NON-OPERAT ING REVENUES AND EXPENSES LAST TEN FISCAL YEARS Fiscal Year Fiscal Year Note: Interest expense increased in FY21 due to the implementation of GASB Statement No. 89, Accountin g for Interest Cost Incurred Be fo re the End of a Construction Period , resulting in all interest cost incurred in FY21 being charged to interest expense in the period in which it was incurred. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 118 Ty pe of Monthly Charge Unmeter ed c Residential c Non-Residential Wastewater User Charge Base Charge 26.40$ 26.40$ 26.40$ Com pliance Charge a Tier 1 ——4.44 Tier 2 ——62.16 Tier 3 ——133.20 Tier 4 ——177.60 Tier 5 ——222.00 Vol ume Char ges per Ccf b —5.00 5.00 per room 2.95 —— per water closet 11.02 —— per bath 9.19 —— per separate shower 9.19 —— Extra Strength Surcharges a Suspen ded Solids ("SS") over 300 milligram s per liter ——302.67 Biochemical Oxygen Dem and ("BOD") over 300 ——812.94 milligrams per liter Chemical Oxygen Demand ("COD") ov er 600 milligrams ——406.47 per liter Notes: a Applicable only to non-residential customers, Extra Stren gth Surcharges pr iced per ton b Ccf = Hundred cubic feet c User charges for certain low income residen tial users will be 50 per cent of the regular user charge Source: Finance Departmen t US ER CHARGE RAT ES As of June 30, 2021 Metered THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 119 Fi scal Yea r Wastewater Charges Billed1 Wastewater Charges Collect ed2 Collect ions as a % of Wastewater Charges Billed 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% 2021 420,781,206 417,788,153 99.29% 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. US ER CH ARGE REVENUES LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 120 2012 a 2013 b 2014 2015 2016 Residential: Single-Family/Unit 1 347.64$ 379.56$ 421.08$ 434.76$ 491.52$ Multi-Family/U nit 296.28 324.12 360.36 434.04 490.80 Commercial/Industrial: Ser vice Charge/Unit 2 525.60 478.56 412.56 348.12 296.80 Sanitary Sewer Usage Charge per Ccf 2.11 2.28 2.50 2.82 3.21 Extra Str en gth Surcharges: SS ov er 300 milligrams per liter (pr ice per ton)231.35 231.35 231.35 244.03 251.88 BOD over 300 milligrams per liter (pr ice per ton)620.14 620.14 620.14 620.14 632.38 COD over 600 milligrams per liter (pr ice per ton)310.07 310.07 310.07 310.07 316.19 2017 c 2018 2019 2020 2021 d,e Residential: Single-Family/Unit 1 535.08$ 591.72$ 602.76$ 666.84$ 674.31$ Multi-Family/U nit 492.00 544.08 602.76 666.84 674.31 Commercial/Industrial: Ser vice Charge/Unit 2 336.69 363.53 395.42 428.90 435.83 Sanitary Sewer Usage Charge per Ccf 3.59 3.97 4.40 4.87 4.97 Extra Str en gth Surcharges: SS ov er 300 milligrams per liter (pr ice per ton)262.00 269.07 277.03 283.87 297.97 BOD over 300 milligrams per liter (pr ice per ton)654.00 671.63 691.50 708.56 786.85 COD over 600 milligrams per liter (pr ice per ton)327.00 335.82 345.76 354.30 393.43 Notes: 1 Based on average usage of a typical single-fam ily during the fiscal year listed. 2 Service Charge/Unit for Commercial/Industrial is calculated by using the sum of annualized base charge and compliance charge. Starting FY 2013, MSD im plem ented 5-tier Compliance Charge Rate Model, so the Service Charge/Unit is based on calculated weighted average com pliance charge. FY 2013, FY 2014 & FY 2015 Service Charge/Unit were adj usted to reflect the weighted average compliance charge calculations. Prior to FY 2013, there was on ly one tier compliance charge. 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. d Ordinance 15418, effective October 1, 2020, changed wastewater rates through June 30, 2021. The FY21 rates are blen ded rates du e to the Board approving a delay fr om July to October for the FY21 rate increase due to the COVID-19 pandemic. e Ordinance 15669, effective July 1, 2021, changed wastewater rates through FY 2024. Source: Finance Departmen t SEWER USER CHARGES (COM POSITE-ANNUAL) LAST TEN FISCAL YEARS Fiscal Year Fiscal Year THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 121 Single-Multi- Fi scal Family Family Non-Total Year Residen tial Residential Residential Account s 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 2021 362,803 41,533 23,960 428,296 Source: Finance Depar tm en t Note: Total ac counts listed above are as of June 30 for eac h fisc al year listed. NUM BER OF CUS TOMERS BY TYPE LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 122 Cus tomer Am ount % InBev Anheuser-Busch 5,329,515$ 1.25% City of St. Louis 2,088,772 0.49% Sigm a-Aldrich 1,839,263 0.43% Missouri-Am er ican Water Co.1,728,302 0.41% Washington University 1,688,185 0.40% GKN Aeros pac e N America Inc.1,064,644 0.25% Jost Real Estate LLC 1,064,622 0.25% The Boei ng Com pany 1,051,546 0.25% BJC Health System 1,034,101 0.24% St Louis University 948,931 0.22% Subtotal (10 largest)17,837,881 4.19% Balance fr om other customers 407,409,902 95.81% Gr and totals 425,247,783$ 100.00% Cus tomer Am ount % An heuser-Bu sch 4,142,554$ 1.82% Washington University 1,384,757 0.61% Mallinck rodt 1,117,808 0.49% City of St. Louis 811,729 0.36% Cott Bev er ages 744,933 0.33% Zoolog ical Gardens 727,895 0.32% Boeing 693,364 0.30% The Dial Cor por ation 546,024 0.24% Sigm a-Aldrich 540,757 0.24% BJC Health Systems 528,696 0.23% Subtotal (10 largest)11,238,517 4.94% Balance fr om other customers 216,438,913 95.06% Gr and totals 227,677,430$ 100.00% User Charges TEN LARGEST CUS TOMERS CUR RENT YEAR AND NINE YEARS AGO Fi scal Year 2021 User Charges Fi scal Year 2012 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 123 Unamortized Fi scal Subordinate Capital Premium, Net Year Senior Subordinate Direct Loans Lease of Discount Amount Per Capita 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 3.07 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 2021 1,262,436,480 88,780,000 315,849,539 — 162,860,332 1,829,926,351 1,417 3.64 Notes: Calculation of "Per Capita" for 2012 through 2013 is based on estimated popu lation levels. Calculation of "As a Share of Personal Income (%)" for 2012 through 2013 is based on estimated income levels. Fiscal years 2012 through 2019 "Per Capita" and "As a Share of Personal Income (%)" were restated to conform to the calculation used for fiscal year 2020. In FY 2012, a dec ision was made to discontinue consider ing SRF receivable amounts as liabilities. The liability is now recorded when the funds are received. Sources: Regional Economic Infor mation System, Bureau of Econom ic 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 124 Amount of Debt Percentage of Debt within within Governmental Unit Debt Outstanding District Boundary District Boundary City of St. Louis 74,895,000$ 74,895,000$ 100.0% St. Louis Cou nty 68,775,000 68,224,800 99.2 Municipalities 127,401,115 124,996,115 98.1 City of St. Louis School District 210,359,000 210,359,000 100.0 St. Louis Cou nty School Districts 1,675,769,095 1,660,594,375 99.1 Fire Districts 151,258,773 143,182,290 94.7 2,308,457,983$ 2,282,251,580 98.9% Total Dir ec t Debt 1,829,926,351 Total Dir ec t and Overlapping Debt 4,112,177,931$ Sou rces: City of St. Louis, Office of Com ptr ol ler St. Louis Cou nty, Depar tm en t of Rev en ue St. Louis Public Schools, Financ ial/Treasurer Offic e Missouri Depar tm en t of Edu cation, School Finance Polled Governments Polled Fire Districts Note: Although the District comprises all of the St. Louis City and most of St. Louis Cou nty, it does not en tirely match the Cou nty's boundaries. The calculation of over lapping debt is based on the per centage that a political jurisdiction's territory lies within the District's territory. These per centages are weighted against the debt ou tstanding thus pr ov iding the amount of debt within District Bou ndary. COM PUT AT ION OF OVERL APPING DEBT As Of June 30, 2021 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 125 Les s: Operating Exp en ses (exc luding Non-dep reciation,Net Fi scal Operating operating Gross GASB 68 &Available Year Revenues Revenues Revenues GASB 75)Revenues 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 2021 427,145,372 5,740,323 432,885,695 180,843,680 252,042,015 Fi scal Coverage Year Principal In terest Total Ratio 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 2021 58,574,100 60,727,474 119,301,574 2.1 Fi scal Coverage Year Principal In terest Total Ratio 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 2021 28,575,000 53,110,268 81,685,268 3.1 PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS Senior and Subordinate Debt Service Senior Debt Service Note: The methodology used to calculate the net available reve nues and the coverage ratio was adjusted during fiscal ye ar 2013 and all previo us years were re state d for comparative purposes. The 2013 change in methodology consiste d of removing agency fees, previously reflected as a deduction from net available reve nues, and now combining them with in te rest in the de bt service section. In fiscal year 2017 th e methodology was changed to exclude GASB non-cash transactions from the debt se rvice co ve rage calculatio n. Fiscal years 2015 and 2016 have be en adjusted to also exclude the GASB 68 non-cash pensio n expe nse. In fiscal year 2021 the methodology was changed to exclude non-cash unrealized gain/loss o n investments from the de bt se rvice co verage calc ulatio n. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 126 Per Personal Capita Total Medi an Fiscal In come Personal Number of Househ old Labor Year Populations (millions)1 In come 1 Households 2 In come 3 City County State Force 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 30,026 543,991 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 2021 1,291,665 50,269 38,918 547,936 61,326 7.4 5.3 5.1 687,043 Notes: 1The data in fiscal years 2012-2019 were restated to conform to the calculation used for fiscal year 2020. 2 The number of households was taken from http://www.census.gov/quickfacts/fact/table/US-MO: 2021 figure is based on 2015-2019 data; 2020 figure is based on 2014-2018 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 data; 2015 is based on 2013 data; 2014 is based on 2012 data; 2012-2013 are based on 2010 census. 3 Median Household Income added to this schedu le in fiscal year 2020 and all prior years updated to include this data. Sources: Regional Econom ic Information System, Bureau of Econom ic An alysis, U.S. Depar tment of Com merce, and Missouri Economic Resource and Information Cen ter (MERIC) http://www.bea.gov/regional/reis/scb.cfm Footnot es-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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 127 Percentage Percentage Em ployer Em ployees of Total Rank Em ployees of Total Rank BJC HealthCare 29,660 5%1 24,882 4%1 Washington University in St. Louis 18,488 3%2 13,483 2%3 Mercy 15,587 2%3 8,926 1%8 Boeing Defense, Spac e & Sec urity 15,418 2%4 15,600 3%2 Scott Air Force Base 13,000 2%5 12,344 2%5 SSM Health 11,446 2%6 12,548 2%4 Schnuck Mar kets Inc 9,576 1%7 10,951 2%6 Saint Louis University 6,636 1%8 N/A N/A City of St. Louis 6,625 1%9 N/A N/A Spec ial School District of St. Louis Cou nty 6,151 1%10 N/A N/A Wal-Mart Stores Inc.N/A N/A 10,800 2%7 AT &T N/A N/A 8,900 1%9 United Postal Ser vice N/A N/A 7,872 1%10 132,587 20%126,306 20% Total Em ploymen t 647,437 100%622,629 100% Note: Employees are for the St. Louis area which includes several counties not ser ved by the District. Sources: St. Louis Business Journal's Bo ok of Lists 2021 as of June 2021 St. Louis Business Journal's Bo ok of Lists 2012 PRINCIPAL EMPLOYERS (ST. LOUIS METROPOL ITAN AREA) CURRENT YEAR AND NINE YEARS AGO Fi scal Yea r 2021 Fiscal Year 2012 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 128 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Adm inistrative 129 124 122 129 126 131 129 127 117 121 Offic e/Cler ical 85 86 82 84 82 82 75 73 84 78 Plant Operation & Laboratory 244 249 252 236 226 227 222 228 231 237 Engineer ing & Technical 153 148 151 155 152 151 150 166 174 176 Sewer Con struction & Maintenance 311 324 328 345 358 360 365 341 349 344 Total Em pl oyees 922 931 935 949 944 951 941 935 955 956 Note: The total em ployees listed above ar e as of June 30 for eac h respec tive year. Sour ce: Human Resources Depar tm en t EMPL OY MENT LEVEL LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 129 Average Sewage Fi scal Tr ea tment in Millions Yea r of Gal lons per Day 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 2021 300.6 Source: Oper ations Depar tm ent AVERAGE FLOW LA ST TEN FIS CAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 130 2012 2013 2014 2015 2016 Miles of sewers 9,738 9,578 9,563 9,531 9,700 Number of treatment plants 7 7 7 7 7 Treatment capacity (MGD) a 528 528 533 538 538 Annual engineer ing maxim um plant capac ity (millions of gallons)192,629 192,629 194,454 196,279 196,279 Am ount treated annually (millions of gallons)109,518 119,253 99,945 119,547 122,366 Unused capacity (m illions of gallons)83,111 73,376 94,509 76,732 73,913 Percentage of capacity utilized 57% 62% 51% 61% 62% 2017 2018 2019 2020 2021 Miles of sewers 9,400 9,400 9,400 9,400 9,400 Number of treatment plants 7 7 7 7 7 Treatment capacity (MGD) a 593 593 593 593 811 Annual engineer ing maxim um plant capac ity (millions of gallons)216,354 216,354 216,354 216,354 216,354 Am ount treated annually (millions of gallons)120,033 96,534 144,754 134,502 109,195 Unused capacity (m illions of gallons)96,321 119,820 71,600 81,852 107,159 Percentage of capacity utilized 55% 45%67% 62% 50% Sources: Oper ations Depar tm en t and En gineer ing Department Note: a Million gallons per day - treatment capacity changed in fiscal year 2021 to reflec t pr imar y treatment capacity. Prior years reflect per mitted secondary aver age treatment capac ity. Fiscal Year Fiscal Year OPERAT ING AND CAPITAL INDICAT ORS LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT2350 MARKET STREET, ST. LOUIS, MISSOURI 63103WWW.MSDPROJECTCLEAR.ORG • 314-768-6200