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HomeMy Public PortalAboutFiscal Year 2022 Annual Comprehensive Financial Report (ACFR)THE METROPOLITAN ST. LOUIS SEWER DISTRICT • ST. LOUIS, MISSOURI ANNUAL COMPREHENSIVEFINANCIAL REPORT FISCAL YEARS ENDED JUNE 30, 2022 AND 2021 THE METROPOLITAN ST. LOUIS SEWER DISTRICT ST. LOUIS, MISSOURI ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEARS ENDED JUNE 30, 2022 AND 2021 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 .................................................................................... 4  Basic Financial Statements  Statements Of Net Position ................................................................................................. 19  Statements Of Revenues, Expenses, And Changes In Net Position ................................. 21  Statements Of Cash Flows .................................................................................................. 22  Statements of Fiduciary Net Position ................................................................................. 24  Statements of Changes in Fiduciary Net Position ............................................................. 25  Notes To Financial Statements ........................................................................................... 26  Required Supplementary Information  Schedule Of Changes In Net Pension Liability And Related Ratios .............................. 117  Schedule Of Employer Contributions – Employees’ Pension Plan ................................. 118  Schedule Of Changes in Total OPEB Liability ................................................................ 119  Part III – Statistical Section:  Net Position By Component ..................................................................................................... 120  Changes In Net Position .......................................................................................................... 121  Operating Revenues By Source ............................................................................................... 122  Operating Expenses ................................................................................................................. 123  Non-Operating Revenues And Expenses ................................................................................ 124  User Charge Rates ................................................................................................................... 126  User Charge Revenues ............................................................................................................. 127  Sewer User Charges (Composite-Annual) .............................................................................. 128  Number Of Customers By Type .............................................................................................. 129  Ten Largest Customers ............................................................................................................ 130  Ratios of Outstanding Debt By Type ...................................................................................... 131  Computation Of Overlapping Debt ......................................................................................... 132  Pledged Revenue Coverage ...................................................................................................... 133  Demographic And Economic Statistics ................................................................................... 134  Principal Employers (St. Louis Metropolitan Area)............................................................... 135  Employment Level .................................................................................................................... 136  Average Flow ............................................................................................................................ 137  Operating And Capital Indicators ........................................................................................... 138  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     November 1, 2022 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, 2022 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, 2022 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, 2021. 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 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 429,000 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 of the 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 2022 the primary source of funding for the operation and maintenance of MSD’s wastewater system was a user charge averaging $699.96 per year or $58.33 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 2022, District personnel continued to closely monitor the impact of COVID-19 on our revenue streams, particularly volume-based wastewater charges related to commercial customers. Fiscal year 2022 volume based billing units measured in ccf’s (one hundred cubic feet of water) were approximately 98.5% and 94.4%, respectively, of the amount billed at the end of the District’s fiscal year 2020 and fiscal year 2019. In fiscal year 2022, volume based billing units were 4.3% higher than fiscal year 2021 levels. This trend indicates that this revenue source is returning to pre-pandemic levels. During fiscal 2022 the District’s stormwater system was funded through property taxes of 1.7¢ 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 The Board of Trustees The Metropolitan St. Louis Sewer District v 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 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. MSD is about 10 years into the project, a massive effort to upgrade the city’s aging sewer system by separating areas with combined sewer and stormwater pipes that lead to discharges of sewage into the Mississippi River and its tributaries. In the 10 years since the project commenced, MSD has accomplished the following:  Spent $60.8 million on the Cityshed Mitigation Program to mitigate backups in the sewer system that lead to basement backups and overland flooding.  Spent $30.5 million on a Green Infrastructure Program, which has resulted in the reduction of an estimated 35.77 million gallons of combined sewer and stormwater discharges into the Mississippi River watershed.  Continued construction of Maline Creek, Deer Creek, Gravois Creek, and Jefferson Barracks storage tunnels/facilities; continued planning of Upper River Des Peres and River Des Peres tributaries storage tunnels; and final engineering of the Lower and Middle Des Peres storage tunnel. The Board of Trustees The Metropolitan St. Louis Sewer District vi  Completed the Coldwater Sanitary Relief storage facility.  Completed the Lemay Treatment Plant primary and secondary treatment capacity, with additional expansions in progress at the Lower Meramec Wastewater Treatment Facility.  Eliminated 76 Sanitary Sewer Overflows, areas in the sewer system designed to discharge combined sewer and stormwater during high rain events.  Spent $1.6 million on closures of unauthorized sewer connections and septic tanks. 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. In fiscal year 2022, MSD proposed a modification to the project include replacing two wastewater storage tunnels (Upper River Des Peres Storage Tunnel and River Des Peres Tributaries Storage Tunnel) with a single storage tunnel (Upper River Des Peres and River Des Peres Tributaries Storage Tunnel). This modification will lessen traffic and reduce construction impacts in the Richmond Heights area, a community already disproportionately affected by heavy traffic and pollution exposure. The revision will also reduce the need for purchasing residential properties and easement acquisition, as well as allowing for easier access in and out of construction areas. The new single tunnel is anticipated to be fully operational by December 31, 2037. The proposed modification to the Upper River Des Peres and River Des Peres Tributaries Storage Tunnel represents good engineering practice. The single tunnel limits the impact on nearby communities, further improves the environmental benefit, and allows MSD to maintain an acceptable financial burden for its ratepayers. The U.S. Environmental Protection Agency must approve the proposed modification. Section 208 of the Clean Water Act, which was created to meet State water quality standards throughout the St. Louis area, originally identified the Meramec River as the region’s number one priority river, deserving protection as a drinking water source and because it is biologically diverse and contains important habitat. In fiscal year 2022, MSD amended the 208 Plan to bring it in alignment with the current situation in the Lower Meramec Basin. The analyses justify the following amendments:  It is more cost-effective to maintain existing facilities ($182M) within the Lower Meramec System than to construct a single regional Wastewater The Board of Trustees The Metropolitan St. Louis Sewer District vii Treatment Facility (WWTF) ($476M). A single regional WWTF is not necessary to meet state water quality standards. Therefore, the Lower Meramec system should instead be served by four WWTFs: Lower Meramec WWTF, Grand Glaize WWTF, Saline Creek Regional WWTF, and Kimmswick WWTF.  It is not feasible for the Lower Meramec WWTF to serve as a regional sludge processing center. The plan now recognizes that sludge processing for MSD facilities in the Lower Meramec System will be handled at Bissell Point or Lemay WWTFs; the Northwest Public Sewer District and Rock Creek Public Sewer District will continue their management activities. 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 289.5 million gallons per day (“MGD”) in fiscal 2022 compared to 300.6 MGD in fiscal 2021. Flows were lower in fiscal year 2022 due to fewer rain events than occurred in fiscal 2021. The design capacity and average flow, by watershed, in MGD was as follows in fiscal 2022: MAJOR WATERSHED LEVEL OF TREATMENT NUMBER OF FACILITIES DESIGN CAPACITY (MGD) AVERAGE FLOW FISCAL 2022 (MGD) Mississippi River Secondary Two 472.00 214.90 Missouri River Secondary Two 78.00 47.10 Meramec River Secondary Three 42.75 27.50 Total Seven 592.75 289.50 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. The Board of Trustees The Metropolitan St. Louis Sewer District viii 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 2.5 percent in June 2022 and lower than the national unemployment rate of 3.6 percent for the same time period. The June 2022 unemployment rate of 2.5 percent is lower than the June 2021 rate of 5.8 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 2022 and 2021: 2022 2021 Sewer Plan Reviews: Number of Plans Approved 446 525 Number of Miles of Sewers 52 44 Sewer Construction Permits: Number of Permits Issued 2,125 2,130 Number of Miles of Sewers 18 21 Customer Connections: Number of Connection Permits Issued 1,919 1,621 Connection Fee Revenue (in millions) $1.3 $1.6 Value of Sewers Dedicated to MSD by Developers (in millions) $13.3 $12.9 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 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 $159.6 million in fiscal 2022 compared to a net operating income of $136.7 million the prior year. The increase in net operating income was driven by a $27.4 million increase in sewer service charges. Sewer charge revenues grew due to a rate increase that was effective on July 1, 2021 and an increase in customer usage. Operating expenses increased $8.2 million due primarily to a $4.2 million increase in general and administrative expenses which consisted of a $3.1 million increase in The Board of Trustees The Metropolitan St. Louis Sewer District ix Governmental Accounting Standards Board (GASB) Statement No. 68 related pension expense and a $0.7 million increase in GASB Statement No. 75 Other Post-Employment Benefits. General and administration expenses were also impacted by an increase in depreciation expenses of $4.1 million due to additional assets being capitalized. A more in-depth analysis of the District’s financial position and the magnitude of the 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. 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 $934.4 million. The District assumes the risk of loss The Board of Trustees The Metropolitan St. Louis Sewer District x (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. 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. The Board of Trustees The Metropolitan St. Louis Sewer District xi 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, 2022. 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, 2021 and 2020 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, 2021. 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-four 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 Distinguished Budget Presentation award for its fiscal 2022 annual budget. The District has received this award for thirty-five consecutive years. We believe the fiscal year 2023 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 2021 PAFR. We have received this award for every year since the publication of our first PAFR for fiscal year 2012 and intend to submit the fiscal year 2022 PAFR for consideration. Marion M. Gee Director of Finance Page xii ORGANIZATION (As of June 30, 2022) 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 Page xiii Government Finance Officers Association Certificate Of Achievement For Excellence In Financial Reporting Presented to Metropolitan St. Louis Sewer District Missouri For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2021 Executive Director/CEO Financial Section METROPOLITAN ST. LOUIS SEWER DISTRICT SERVICE AREAS CliftonLarsonAllen LLP  CLAconnect.com  INDEPENDENT AUDITORS’ REPORT Board of Trustees The Metropolitan St. Louis Sewer District St. Louis, Missouri Report on the Audit of the Financial Statements Opinions 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, 2022 and 2021 (except for the aggregate remaining fund information, which is as of and for the years ended December 31, 2021 and 2020), and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the aggregate remaining fund information of The Metropolitan St. Louis Sewer District, as of June 30, 2022 and 2021 (except for the aggregate remaining fund information, which is as of and for the years ended December 31, 2021 and 2020), and the respective changes in financial position, and, where applicable, cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 1 Board of Trustees The Metropolitan St. Louis Sewer District Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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 District’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. 2 Board of Trustees The Metropolitan St. Louis Sewer District 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 be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 GAAS, 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 Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 28, 2022, on our consideration of The Metropolitan St. Louis Sewer 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 Metropolitan St. Louis Sewer 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 Metropolitan St. Louis Sewer District’s internal control over financial reporting and compliance. CliftonLarsonAllen LLP St. Louis, Missouri October 28, 2022 3 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 4 MANAGEMENT’S DISCUSSION AND ANALYSIS For the Years Ended June 30, 2022 and 2021 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. 2022 Financial Highlights  The District increased net capital assets by $166.2 million as a result of increases in land ($2.6 million) and depreciable capital assets net of depreciation ($178.3 million) offset by a decrease in construction in progress ($15.1 million).  The District placed $278.6 million of capital assets into service during fiscal year 2022. The continued high level of capitalization reflects the District’s work to meet long-term plans. Capitalized assets included: Collection and pumping plant $238.8 million Treatment and disposal plant and equipment $29.2 million General plant and equipment $7.5 million Land $2.6 million Lease Assets $0.5 million The net increase to accumulated depreciation and amortization was $93.1 million which takes into consideration the recording of depreciation and amortization relating to new assets in addition to depreciation and amortization on existing assets offset by the accumulated depreciation and amortization relieved for assets retired during the year. During the 2022 fiscal year the District implemented two Governmental Accounting Standards Board (“GASB”) Statements. See Note 1, Summary of Significant Accounting Policies, in the accompanying notes to the financial statements for more detailed information. 2021 Financial Highlights  The District increased capital assets by $231.3 million as a result of increases in construction in progress ($181.1 million), land ($1.2 million) and depreciable capital assets net of depreciation ($49.0 million). THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 5 The District placed $142.8 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 Lease Assets $1.0 million The net increase to accumulated depreciation and amortization was $86.9 million which takes into consideration the recording of depreciation and amortization relating to new assets in addition to depreciation and amortization on existing assets offset by the accumulated depreciation and amortization 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. 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 METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 6 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 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 $135.6 million. The improvement is due primarily to an increase in net investment in capital assets, subdistrict construction and improvement THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 7 funds, and unrestricted funds of $108.4 million, $3.7 million, and $29.1 million, respectively; offset by a decrease in debt service funds of $5.6 million. The increase in net investment in capital assets net position is comprised of a $166.2 million increase in net capital assets and a $20.4 million increase in unspent bond proceeds and $8.4 million in construction-related liabilities and is decreased by a $75.6 million increase in debt related to capital assets, $8.6 million increase in deferred gain on debt refunding, and the $2.4 million amortization of deferred losses. The $5.6 million decrease in the debt service funds net position is due primarily to the $6.8 million cash reserves paid out in fiscal 2022 to current refund certain debt. Condensed Financial Statements and Analysis June 30, Increase Increase June 30, 2021 (Decrease) June 30, (Decrease) 2022 As Restated 2022-2021 2020 2021-2020 Assets: Current, non-current, restricted, and other assets 879,975$ 831,541$ 48,434$ 787,043$ 44,498$ Capital assets (net of accumulated depreciation)4,245,478 4,079,233 166,245 3,847,889 231,344 Total Assets 5,125,453 4,910,774 214,679 4,634,932 275,842 Deferred Outflows of Resources: Bonds and notes payable-Deferred loss on refunding 3,069 5,469 (2,400)5,889 (420) Pension-related outflows 18,477 10,476 8,001 15,673 (5,197) OPEB-related outflows 4,288 3,537 751 2,843 694           Total Deferred Outflows of Resources 25,834 19,482 6,352 24,405 (4,923) Liabilities: Current liabilities 165,921 165,962 (41) 153,611 12,351 Non-current liabilities 1,910,231 1,833,143 77,088 1,722,223 110,920 Total Liabilities 2,076,152 1,999,105 77,047 1,875,834 123,271 Deferred Inflows of Resources: Bonds and notes payable-Deferred gain on refunding 11,427 2,793 8,634 1,393 1,400 Pension-related inflows 23,194 22,671 523 7,150 15,521 OPEB-related inflows      3,446 3,888 (442) 4,331 (443) Lease inflows 3,426 3,773 (347) — 3,773           Total Deferred Inflows of Resources 41,493 33,125 8,368 12,874 20,251 Net Position: Net investment in capital assets 2,407,702 2,299,302 108,400 2,184,736 114,566 Restricted 96,029 97,920 (1,891) 97,034 886 Unrestricted 529,911 500,804 29,107 488,859 11,945 Total Net Position 3,033,642$ 2,898,026$ 135,616$ 2,770,629$ 127,397$ Condensed Statements of Net Position (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 8 2022 Analysis Current, non-current, restricted, and other assets increased $48.4 million or 5.8% in the current year. The increase is predominately due to an increase in cash and long-term investments due to increased unspent bond proceeds and more taxes levied and collected. Capital assets net of accumulated depreciation increased by $166.2 million or 4.1% in the current year as the result of continued high levels of construction and acquisition of assets by the District. Current liabilities decreased by $0.4 million or 0.02% due primarily to an decrease in contracts and accounts payable and retainage held on capital projects, offset by increase in current portion of bond and notes payable. Non-current liabilities increased by $77.0 million or 4.2% primarily due to net increases in bonds and notes payable, net pension liability and total OPEB liability of $70.4 million, $4.4 million, and $1.9 million, respectively. The net increase in bonds and notes payable is related to the $197.3 million new senior and direct placement debt issued in fiscal year 2022 and a net increase of $21.9 million in premiums received in fiscal 2022 on debt issuances offset by $66.3 million for fiscal 2022 senior and subordinate debt payments reclassified to current liabilities, $28.4 million current refunding of existing debt, and $1.6 million amortization of premiums, net of discount. Net deferred outflows and inflows increased $14.7 million or 28.0% 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. 2021 Analysis Current, non-current, restricted, and other assets increased $44.5 million or 5.7% in fiscal year 2021. The increase is predominately due to an increase in investments and cash due to increased unspent bond proceeds and more taxes levied and collected. Capital assets net of accumulated depreciation increased by $231.3 million or 6.0% in fiscal year 2021 as the result of continued high levels of construction and acquisition of assets by the District. Current liabilities increased by $12.4 million or 8.0% due primarily to an increase in contracts and accounts payable, current portion of bond and notes payable and retainage held on capital projects. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 9 Non-current liabilities increased by $110.9 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 $21.4 million or 185.6% due primarily to updates to various information provided by the District’s actuary such as economic/demographic gains or losses, assumption changes or inputs, and investment gains or losses related to the District’s net pension liability or total OPEB liability. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 10 For the Fiscal For the Fiscal Year Ended Increase For the Fiscal Increase Year Ended June 30, 2021 (Decrease) Year Ended (Decrease) June 30, 2022 As Restated 2022-2021 June 30, 2020 2021-2020 Operating Revenues: Sewer service charges 452,645$ 425,248$ 27,397$ 430,398$ (5,150)$ Provision for doubtful sewer service charge accounts (5,076) (5,347) 271 (5,612) 265 Licenses, permits, and other fees 3,937 3,754 183 3,012 742 Other 6,763 3,497 3,266 10,193 (6,696) Total Operating Revenues 458,269 427,152 31,117 437,991 (10,839) Non-operating Revenues: Property taxes levied by the District 44,480 43,624 856 35,439 8,185 Investment income (loss)(12,514) 1,392 (13,906) 16,259 (14,867) Rent and other income 439 428 11 302 126 Total Non-operating Revenues 32,405 45,444 (13,039) 52,000 (6,556) Total Revenues 490,674 472,596 18,078 489,991 (17,395) Operating Expenses: Pumping and treatment 65,550 64,475 1,075 62,030 2,445 Collection system maintenance 45,870 48,113 (2,243) 47,652 461 Engineering 11,674 11,501 173 11,628 (127) General and administrative 59,094 54,868 4,226 65,947 (11,079) Water backup claims 2,031 3,985 (1,954) 4,653 (668) Depreciation 95,494 91,352 4,142 87,633 3,719 Lease amortization 158 142 16 — 142 Asset management 18,776 16,024 2,752 17,195 (1,171) Total Operating Expenses 298,647 290,460 8,186 296,738 (6,277) Non-operating Expenses: Net loss on disposal and sale of capital assets 1,523 990 533 962 28 Non-recurring projects and studies 13,243 11,828 1,415 12,458 (630) Interest expense 56,932 56,622 310 36,119 20,503 Total Non-operating Expenses 71,698 69,440 2,258 49,539 19,901 Total Expenses 370,345 359,900 10,444 346,277 13,623 Income Before Capital Grants And Contributions 120,329 112,696 7,633 143,714 (31,018) Capital Grants And Contributions 15,287 14,701 586 6,391 8,310 Change in Net Position 135,616 127,397 8,219 150,105 (22,708) Net Position - Beginning of Year 2,898,026 2,770,629 127,397 2,620,524 150,105 Net Position - End of Year 3,033,642$ 2,898,026$ 135,616$ 2,770,629$ 127,397$ Statements of Revenues, Expenses, and Changes in Net Position (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 11 2022 Analysis Net position increased $135.6 million or 4.7% over the prior year which was an $8.2 million or 6.4% increase from last year’s net position increase. The largest impacts to net position were the increase in sewer service charge revenue and the decrease in investment income. Total revenue increased by $18.1 million or 3.8% resulting primarily from the increase in sewer service charges. Other operating revenue increased $3.3 million or 7.3% primarily due to a lawsuit settlement received on a sewer construction project in fiscal year 2020. Property taxes increased $0.9 million or 2% due primarily to higher property valuation assessments and re-instatement of tax rates for several of the stormwater subdistricts. Investment income decreased $13.9 million or 998.8% primarily due to an $12.3 million unrealized loss on investments recorded in fiscal 2022. Total expenses increased by $10.4 million or 2.9% resulting primarily from the increase in non-recurring projects and studies. Operating expenses increased $8.2 million or 2.8% with increases in general and administrative, depreciation, asset management, and pumping and treatment, of $4.2 million, $4.1 million, $2.7 million, and $1.1 million, respectively; offset by decreases in collection system maintenance of $2.2 or 4.7%, and water backup claims of $2.0 million or 49.0%. General and administrative increased $4.5 million due to an increase in pension expense based on an actuarial study, $1.2 million increase in general liability insurance premiums, $1.0 million increase in overall infrastructure operations, and $0.8 million increase in security invoices. The general and administrative increases were offset by $2.8 million decrease in accrued vacation in fiscal 2022 compared to fiscal 2021. In fiscal year 2021, District employees began receiving vacation days as a lump sum versus receiving these days on a prorated basis in prior fiscal years. Non-operating expenses increased $2.3 million or 3.3% due to increases in depreciation expense. Capital grants and contributions increased $0.6 million or 4.0% with the majority of the increase resulting from capital contributions as the value of capital projects contributed to the District increased in fiscal 2022. 2021 Analysis Net position increased $127.4 million or 4.7% over the prior year which was a $22.8 million or 15.2% decrease from fiscal year 2020’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 $17.4 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 12 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 13 2022 Analysis The District ended the year with $134.5 million in cash and cash equivalents for an increase of $12.2 million or 10.0% from the prior year. Cash flows from operating activities increased by $26.0 million or 12.3% as a result of increased receipts from customers. Cash flows from non-capital financing activities increased by $1.3 million or 3.0% due to higher taxes receipts. Cash flows from capital and related financing activities decreased by $12.0 million or 5.7% due primarily to a $47.3 million decrease in bond proceeds and premiums received in fiscal year 2022 compared to fiscal year 2021, an increase of $8.0 million in principal, interest and fees paid on bonds due, a decrease of $1.6 million in capital grant proceeds, and $1.1 million decrease in insurance proceeds, offset by $45.6 million decrease in spending for capital assets. Cash flows from investing activities decreased by $28.3 million or 170.4%. The decrease primarily stems from the fact that the difference between investments maturing decreased $84.9 million while investments purchased increased $59.2 million in fiscal 2022 compared to fiscal year 2021. 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 $7.7 million For the Fiscal For the Fiscal Increase For the Fiscal Increase Year Ended Year Ended (Decrease) Year Ended (Decrease) June 30, 2022 June 30, 2021 2022-2021 June 30, 2020 2021-2020 Cash flows from operating activities 236,671$ 210,674$ 25,997$ 216,970$ (6,296)$ Cash flows from non-capital financing activities 43,983 42,689 1,294 34,983 7,706 Cash flows from capital and related financing activities (223,610) (211,637) (11,973) (305,361) 93,724 Cash flows from investing activities (44,855) (16,586) (28,269) 93,779 (110,365) Net increase (decrease) in cash and cash equivalents 12,188 25,140 (12,952) 40,371 (15,231) Cash and cash equivalents at beginning of year 122,265 97,125 25,140 56,754 40,371 Cash And Cash Equivalents At End Of Year 134,453$ 122,265$ 12,188$ 97,125$ 25,140$ Condensed Statements of Cash Flows (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 14 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. Capital Assets 2022 Analysis Total capital assets, net of accumulated depreciation, increased by $166.2 million or 4.1% over the prior year. Collection and pumping plant assets contained the majority of the increase with net additions of $184.4 million or 8.5%, primarily for capitalization of assets including new and improved sewers, dedicated assets, and infrastructure repairs. Land increased $2.6 million or 3.3% due to the acquisition of easements and other land, general plant and equipment increased $2.8 million or 11.5%, and lease assets increased $0.4 million or 40.1%. These increases are offset by construction in progress decrease of $15.1 million or 1.3% and net treatment and disposal plant and equipment decrease of $8.8 million or 1.4% due to no large projects being capitalized in fiscal 2022 to offset the June 30, Increase Increase June 30, 2021 (Decrease) June 30, (Decrease) 2022 As Restated 2022-2021 2020 2021-2020 Land 82,206$ 79,569$ 2,637$ 78,334$ 1,235$ Construction in progress 1,178,891 1,194,033 (15,143) 1,012,926 181,107 Treatment and disposal plant and equipment 608,440 617,238 (8,798) 638,730 (21,492) Collection and pumping plant 2,347,735 2,163,327 184,408 2,094,866 68,461 Lease right of use asset 1,248 891 357 — 891 General plant and equipment 26,958 24,175 2,783 23,033 1,142 Total 4,245,478$ 4,079,233$ 166,245 3,847,889$ 231,344$ Condensed Statements of Capital Assets Net of Depreciation (000's) THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 15 depreciation charge for the year. For more detailed information, see Note 4, Capital Assets, in the accompanying notes to the financial statements. 2021 Analysis Total capital assets, net of accumulated depreciation, increased by $166.2 million or 4.1% over the prior year. Collection and pumping plant assets contained the majority of the increase with net additions of $184.4 million or 8.5%, primarily for capitalization of assets including new and improved sewers, dedicated assets, and infrastructure repairs. Land increased $2.6 million or 3.3% due to the acquisition of easements and other land, general plant and equipment increased $2.8 million or 11.5%, and lease assets increased $0.4 million or 40.1%. These increases are offset by construction in progress decrease of $15.1 million or 1.3% and net treatment and disposal plant and equipment decrease of $8.8 million or 1.4% due to no large projects being capitalized in fiscal 2022 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 16 Long-Term Debt THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 17 2022 Analysis The District ended fiscal year 2022 with $1.7 billion in long-term debt outstanding. The District had one senior revenue bond addition this year, Series 2022B, totaling $109.1 million and one senior refunding revenue bond direct placement addition, Series 2022A, totaling $39.8 million. 2022A was used to refund $31.3 million of the Series 2012A senior revenue bond and $23.5 million of the Series 2012B senior revenue bond. 2022B was used to refund $9.3 million of senior revenue bond 2012B. The District also received $0.3 million, and $1.9 million, $10.9 million, $15.5 million, and $19.2 million in loan proceeds from the Series 2018B, Series 2019A, Series 2020A, Series 2021A, and Series 2021B Missouri Department of Natural Resources bonds, respectively. Total principal payments of $51.8 million, excluding the refunding referenced above, reduced outstanding debt in fiscal year 2022. For more detailed information, see Note 7, Long- Term Liabilities, in the accompanying notes to the financial statements. 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 7, 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 15, Commitments and Contingencies, for additional information regarding this litigation. The goal of MSD 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: THE METROPOLITAN ST. LOUIS SEWER DISTRICT Management’s Discussion And Analysis (Continued) Page 18  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, 2022, the District has issued $2.4 billion of the total authorization. The District’s long-term wastewater capital improvement program will continue to be funded through a combination of additional bonds and wastewater rate increases. Requests for Information This financial report is designed to provide a general overview of the District’s finances for all those with an interest in the District’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed or e-mailed to: Marion M. Gee, Director of Finance The Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, MO 63103-2555 314-768-6200 mgee@stlmsd.com THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements. Page 19 STATEMENTS OF NET POSITION Continued on Next Page June 30, 2022 2021 Assets As restated Current Assets Unrestricted Current Assets Cash and cash equivalents  64,845,757$ 91,337,843$ Investments                                          187,145,188 210,940,744 Sewer service charges receivable, less allowance of $75,304,317 in 2022 and                   $70,666,08 in 2021 69,517,193 66,387,300 Unbilled sewer service charges receivable 36,419,844 34,970,247 Property taxes receivable, less allowance of $6,023 in 2022 and $7,430 in 2021 294,552 363,496 Accrued income on investments                        1,067,364 1,434,887 Other receivables, less allowance of $54,456 in 2022 and $60,373 in 2021 2,814,607 2,623,352 Supplies inventory                                   8,923,100 8,475,419           Total Unrestricted Current Assets                             371,027,605 416,533,288        Restricted Current Assets Cash and cash equivalents 2,978,669 4,629,689 Investments                                          9,896,863 12,587,475 Other receivables                                    28,747 43,590           Total Restricted Current Assets                            12,904,279 17,260,754           Total Current Assets                             383,931,884 433,794,042 Non-Current Assets Restricted Assets Cash and cash equivalents  66,628,666 26,297,303 Investments                                          98,773,850 125,637,074 Long-term investments                                41,824,592 32,199,117 Property taxes receivable, less allowance of $35,016 in 2022 and $36,447 in 2021 1,680,621 1,750,616 Accrued income on investments 165,274 169,177           Total Restricted Non-Current Assets                             209,073,003 186,053,287 Other Assets Notes receivable                                     8,947,222 9,694,702 Long-term investments                                274,713,717 198,404,102 Other Receivables - Non Current (Leases) 3,308,705 3,594,566 Total Other Assets                            286,969,644 211,693,370 Capital Assets Depreciable:        Treatment and disposal plant and equipment           1,332,498,020 1,303,648,712        Collection and pumping plant                         3,329,457,199 3,093,068,764        General plant and equipment                          109,585,527 103,516,644 Lease right of use asset 1,548,555 1,032,853                                                             4,773,089,301 4,501,266,973        Less:  Accumulated depreciation                      1,788,407,446 1,695,494,536        Less:  Accumulated amortization 300,309 142,204        Net depreciable assets       2,984,381,546 2,805,630,233        Non-depreciable:        Land                                                 82,205,848 79,569,310        Construction in progress                             1,178,890,914 1,194,033,440 Net Capital Assets                                 4,245,478,308 4,079,232,983        Total Non-Current Assets                         4,741,520,955 4,476,979,640        Total Assets                                5,125,452,839 4,910,773,682 THE METROPOLITAN ST. LOUIS SEWER DISTRICT See the accompanying notes to financial statements. Page 20 STATEMENTS OF NET POSITION (Continued) June 30, 2022 2021 As restated Deferred Outflows of Resources Bonds and notes payable-Deferred loss on refunding                                   3,068,689 5,469,323 Pension-related outflows                                          18,476,825 10,476,420 OPEB-related outflows                                          4,288,181 3,536,916 Total Deferred Outflows of Resources                            25,833,695 19,482,659 Liabilities Current Liabilities Current Liabilities-Payable From Unrestricted Assets Contracts and accounts payable 36,703,337$ 40,797,900$  Lease liability 238,285 140,182 Deposits and accrued expenses 42,765,410 42,276,571 Retainage payable 18,224,079 20,326,492 Current portion of bonds and notes payable 66,337,500 61,157,300           Total Current Liabilities-Payable From Unrestricted Assets             164,268,611 164,698,445 Current Liabilities-Payable From Restricted Assets Contracts and accounts payable 828,414 702,175 Retainage payable 824,282 561,310           Total Current Liabilities-Payable From Restricted Assets                 1,652,696 1,263,485           Total Current Liabilities                         165,921,307 165,961,930        Non-Current Liabilities Deposits and accrued expenses                                  9,375,268 9,202,567 Net pension liability                                    33,871,056 29,495,178 Lease liability 1,007,232 755,991 Total OPEB liability                                   26,793,582 24,920,628 Bonds and notes payable                                         1,839,184,214 1,768,769,051 Total Non-Current Liabilities                     1,910,231,352 1,833,143,415        Total Liabilities                        2,076,152,659 1,999,105,345 Deferred Inflows of Resources Bonds and notes payable-Deferred gain on refunding 11,427,026 2,793,162 Pension-related inflows                                          23,194,024 22,671,398 OPEB-related inflows                                          3,445,503 3,888,085 Lease Inflows 3,425,569 3,772,962 Total Deferred Inflows of Resources                            41,492,122 33,125,607 Net Position Net investment in capital assets                                2,407,701,626 2,299,301,587 Restricted for:                                 Debt service                      24,146,279 29,706,793        Subdistrict construction and improvement                71,883,165 68,212,821 Unrestricted            529,910,683 500,804,188 Total Net Position                     3,033,641,753$ 2,898,025,389$   THE METROPOLITAN ST. LOUIS SEWER DISTRICT See accompanying Notes to Financial Statements. Page 21 STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 2022 2021 As restated   Operating Revenues     Sewer service charges                                   452,645,091$ 425,247,783$     Provision for doubtful sewer service charge accounts (5,076,402) (5,347,419)     Licenses, permits and other fees                       3,937,368 3,753,797     Other                                                   6,763,143 3,497,401     Total Operating Revenues                               458,269,200 427,151,562          Operating Expenses     Pumping and treatment                                   65,549,965 64,475,064     Collection system maintenance                           45,869,500 48,112,996     Engineering                                             11,674,101 11,500,796     General and administrative                               59,094,744 54,869,068     Water backup claims                                     2,030,765 3,984,849     Depreciation                                            95,494,079 91,352,269 Lease amortization 158,105 142,204     Asset management                                               18,776,087 16,023,983     Total Operating Expenses                              298,647,346 290,461,229          Operating Income         159,621,854 136,690,333          Non-Operating Revenues     Property taxes levied by the District                   44,479,669 43,624,302     Investment income (loss)                               (12,513,973) 1,392,278     Rent and other income                                    439,491 428,384     Total Non-Operating Revenues                          32,405,187 45,444,964          Non-Operating Expenses     Net loss on disposal and sale of capital assets         1,523,315 990,108     Non-recurring projects and studies                       13,243,184 11,827,723     Interest expense                                        56,931,596 56,622,132     Total Non-Operating Expenses                          71,698,095 69,439,963          Income Before Capital Grants And Contributions                       120,328,946 112,695,334          Capital Grants And Contributions     Capital assets contributed                               13,349,472 12,943,095     Grant revenue                                           1,937,946 1,758,069     Total Capital Grants And Contributions                           15,287,418 14,701,164          Change In Net Position 135,616,364 127,396,498   Net Position - Beginning Of Year, as restated 2,898,025,389 2,770,628,891   Net Position - End Of Year                                    3,033,641,753$ 2,898,025,389$ For The Years Ended June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT See accompanying Notes to Financial Statements. Page 22 STATEMENTS OF CASH FLOWS 2022 2021 As restated Cash Flows From Operating Activities Received from customers 452,184,440$ 425,929,012$ Paid to employees for services (105,607,408) (105,930,520) Paid to suppliers for goods and services (109,906,382) (109,324,477) Net Cash Provided By Operating Activities 236,670,650 210,674,015 Cash Flows Provided By Non-Capital Financing Activities Taxes levied and collected 43,982,614 42,688,546 Cash Flows From Capital And Related Financing Activities Proceeds from capital grants 1,944,266 3,537,577 Proceeds from issuance of debt 148,531,457 172,012,156 Premium on sale of bonds 13,362,572 37,194,201 Principal paid on debt (67,915,074) (62,599,880) Interest and fees paid on debt (65,442,437) (62,785,703) Payments for capital assets (257,484,786) (303,040,026) Proceeds from sale of capital assets 174,195 158,652 Proceeds received from other organization for their contribution to construction of treatment plant 1,576,500 1,154,696 Proceeds from insurance on destroyed capital assets — 1,088,835 Build America Bond tax credit 1,642,857 1,642,857 Net Cash (Used In) Capital And Related Financing Activities (223,610,450) (211,636,635) Cash Flows From Investing Activities Purchase of investments (574,463,863) (633,675,492) Proceeds from sale and maturity of investments 521,629,000 606,554,500 Investment income 7,667,949 10,297,068 Proceeds from rents 312,357 238,122 Net Cash Provided By (Used In) Investing Activities (44,854,557) (16,585,802) Net Increase In Cash And Cash Equivalents 12,188,257 25,140,124 Cash And Cash Equivalents At Beginning Of Year 122,264,835 97,124,711 Cash And Cash Equivalents At End Of Year 134,453,092$ 122,264,835$ Statements of Net Position Classification Current Assets - Unrestricted Cash and cash equivalents 64,845,757$ 91,337,843$ Current Assets - Restricted Cash and cash equivalents 2,978,669 4,629,689 Non-Current Assets - Restricted Cash and cash equivalents 66,628,666 26,297,303 Statements of Net Position Total Cash And Cash Equivalents 134,453,092$ 122,264,835$ Non-Cash Capital And Investing Activities Net proceeds from debt issuance placed into escrow to refund bonds 57,528,822$ 7,371,752$ Principal amount reduced and placed in escrow and related deferred loss/gain and premium (57,939,536) (7,371,752) Proceeds from debt issuance used to pay underwriters directly 388,277 932,589 Capital asset additions included in accounts payable 18,069,169 23,958,166 Capital assets contributed by other governments and developers 13,349,472 12,943,095 Fair value investment adjustment (gain) loss 20,249,148 7,406,329 Grant revenue (expense)479,585 288,446 For The Years Ended June 30, Continued on Next Page THE METROPOLITAN ST. LOUIS SEWER DISTRICT See accompanying Notes to Financial Statements. Page 23 STATEMENTS OF CASH FLOWS (Continued) 2022 2021 As restated Reconciliation Of Operating Income To Net Cash Flows Provided By Operating Activities Operating Income 159,621,854$ 136,690,333$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 95,494,079 91,494,473 Non-recurring projects and studies (13,243,184) (11,827,723) Tax commission fees 642,255 637,362 Change in operating assets and liabilities: (Increase) in billed and unbilled sewer service charges receivable (4,579,490) (516,584) Decrease in other receivables (115,378) (3,839,928) Decrease (increase) in supplies inventory (447,681) (461,822) Decrease in pension-related outflows (8,000,405) 5,197,232 (Increase) in OPEB-related outflows (751,265) (694,047) (Decrease) increase in contracts and accounts payable 1,244,071 693,426 (Decrease) increase in deposits and accrued expenses 824,311 990,938 (Decrease) in net pension liability 4,375,878 (28,297,735) (Decrease) increase in total OPEB liability 1,872,954 1,756,010 Increase in pension-related inflows 522,626 15,521,700 (Decrease) increase in OPEB-related inflows (442,582) (442,582) (Decrease) increase in Lease-related inflows (347,393) 3,772,962 Net Cash Provided By Operating Activities 236,670,650$ 210,674,015$ For The Years Ended June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT See accompanying Notes to Financial Statements. Page 24 STATEMENTS OF FIDUCIARY NET POSITION EMPLOYEES’ PENSION PLAN 2021 2020 Assets Investments at Fair Value: Collective Investment Funds 185,031,152$ 171,767,753$ Mutual Funds 62,608,137 60,179,174 Real Estate Investments 29,021,383 30,265,219 Corporate Obligations 27,025,796 27,630,867 Domestic Common Stocks 21,934,156 18,552,256 US Treasury and Agency Obligations 19,727,449 13,994,724 Money Market Funds 3,666,492 3,237,837 Municipal Obligations 1,370,872 1,292,527 Total Investments 350,385,437 326,920,357 Receivables Interest and Dividends Receivable 237,314 236,729 Total Receivables 237,314 236,729 Total Assets 350,622,751 327,157,086 Liabilities Accrued Expenses 248,908 244,402 Total Liabilities 248,908 244,402 Fiduciary Net Position Restricted for Pension Benefits 350,373,843$ 326,912,684$ December 31, THE METROPOLITAN ST. LOUIS SEWER DISTRICT See accompanying Notes to Financial Statements. Page 25 STATEMENTS OF CHANGES IN FIDUCIARY NET POSITION EMPLOYEES’ PENSION PLAN 2021 2020 Additions to Fiduciary Net Position Attributed to: Investment Income: Net Appreciation in Fair Value of Investments 28,693,382$ 32,083,437$ Interest and Dividends 4,440,589 5,514,283 Total Investment Income 33,133,971 37,597,720 Less - Investment Managers' and Advisors' Fees 1,051,185 922,422 Net Investment Income 32,082,786 36,675,298 Employer Contributions 12,159,284 13,416,065 Total Additions 44,242,070 50,091,363 Deductions from Fiduciary Net Position Attributed to: Benefits Paid to Retirees and Beneficiaries 20,665,530 19,273,097 Administrative Expenses 115,381 108,229 Total Deductions 20,780,911 19,381,326 Net Increase 23,461,159 30,710,037 Fiduciary Net Position Restricted for Pension Benefits, January 1 326,912,684 296,202,647 Fiduciary Net Position Restricted for Pension Benefits, December 31 350,373,843$ 326,912,684$ For the Years Ended December 31, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 26 NOTES TO FINANCIAL STATEMENTS June 30, 2022 AND 2021 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 27 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 9 and 10. 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 28 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 29 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 30 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 an initial, individual cost between $5,000 and $15,000, depending on the asset category, 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. 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. Class of Assets Useful Life in years Buildings (recorded within other categories) 20 to 50 Collection System 20 to 100 Pumping System 5 to 50 Treatment & Disposal Plant 5 to 50 Vehicles 7 to 10 General Support Equipment & Furniture 3 to 10 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 31 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 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 32 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, leases and OPEB obligations that are amortized over future periods. Lease-related amounts are recognized at the inception of leases in which the District is the lessor. The deferred inflow of resources is recorded in an amount equal to the corresponding lease receivable plus certain ancillary amounts received from the lessee at or before the commencement of the lease term that relate to future periods, less any lease incentives paid to, or on behalf of, the lessee at or before the commencement of the lease term. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term. 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. 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 33 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 remaining at year-end is expected to be used by the employee during the following fiscal year, the value 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 or an employee who dies while in active service with five or more years of service with the District, 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. 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 34 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 2022, the District implemented GASB Statement No. 87, Leases, (“GASB Statement No. 87”). GASB Statement No. 87 requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized inflows of resources or outflows of resources based on the payment provisions of the contract. It established a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. A lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and deferred inflow of resources. The District’s adoption of GASB Statement No. 87 in fiscal year 2022 resulted in retroactively restating the beginning balance of net position due to the recognition of lease receivable, right of use lease asset, lease liability, and deferred inflow of resources. The cumulative effect of applying GASB Statement No. 87 and the resulting restatement of beginning net position on the District’s Statement of Revenues, Expenses, and Changes in Net Position is detailed as follows: July 1, 2021 Net Position - Beginning Of Year, As Previously Stated 2,897,926,670$ Effect of Adoption of GASB 87 98,719 Net Position - Beginning Of Year, As Restated 2,898,025,389$ Effect of Adoption of GASB 87 - Restatement Consists Of Total lease receivables 3,877,683$ Lease right of use asset, net of amortization 890,649 Recognition of interest payable reported as contracts and accounts payable (478) Lease liability (896,473) Deferred inflows related to leases (3,772,962) Effect of Adoption of GASB 87 98,419$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 35 During fiscal year 2022, the District implemented GASB Statement No. 98, The Annual Comprehensive Financial Report. This statement establishes the term annual comprehensive financial report and its acronym, ACFR. That new term and acronym replaces the prior name, comprehensive annual financial report, and its acronym. During fiscal year 2022, the District implemented portions of GASB Statement No. 99, Omnibus 2022. This statement clarified provisions in GASB Statement No. 87, Leases, relating to the determination of the lease term, classification of a lease as a short-term lease, recognition and measurement of lease liability and a lease asset, and identification of lease incentives. This statement also clarified provisions in GASB Statement No. 96, Subscription-Based Information Technology Arrangements, related to the subscription-based technology arrangement (SBITA) term, classification of a SBITA as a short-term SBITA, and recognition and measurement of a subscription liability. The updates to GASB 96 will be reflected when the District implements this statement in fiscal year 2023. During fiscal year 2022, the District implemented all applicable and relevant sections of Implementation Guide No. 2019-3, Leases, for which the objective of this Implementation Guide is to provide guidance that clarifies, explains, or elaborates on the requirements of Statement No. 87, Leases. 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. During fiscal year 2021 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 subsequently postponed to reporting periods THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 36 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 37 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. The following GASB Statements which became effective during fiscal year 2022 and 2021 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. 92, Omnibus 2020 (fiscal 2022) • Statement No. 93, Replacement of Interbank Offered Rates (fiscal 2022) 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. 101 Compensated Absences (fiscal 2024) • Statement No. 100, Accounting Changes and Error Corrections – an amendment of GASB 62 (fiscal 2023) • Statement No. 91, Conduit Debt Obligations (fiscal 2023) • 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) Reclassifications Prior period financial statement amounts may have been reclassified to conform to current period presentation. These reclassifications had a $98,719 increase to fiscal year 2021’s total net position. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 38 2. Deposits and Investments Deposits At June 30, 2022, the reported amount of the District’s deposits was $63,887,919 and the bank balance was $73,069,173. Of the bank balance, $936,976 was covered by the Federal Deposit Insurance Corporation (“FDIC”); $72,132,197 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 $21,617,850 held in a trusted escrow account for the State that will be used to make future bond payments. 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. 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 $250,000 for interest bearing accounts and noninterest bearing accounts. The District’s investment policy complies with the provisions of state laws and requires collateralization on repurchase agreements, time certificates of deposit and deposits with banking institutions that are not covered by the FDIC, and the collateralization level shall be 103% and shall be based on the fair value of the pledged collateral. Investments The Secretary-Treasurer is authorized to invest, with the approval of the Board, funds not immediately needed for the purpose to which said funds are applicable, in the same manner as the state treasurer may invest funds of the State of Missouri pursuant to Section 15, Article IV of the Constitution of Missouri, as amended from time to time. The District’s investment policy conforms to the investment policy guidelines for the State of Missouri. The District’s investment policy authorizes the District to invest in the following instruments: U.S. Treasury obligations, certificates of deposit, obligations of any agency or instrumentality of the U.S., repurchase agreements, bankers’ acceptances, and commercial paper, all according to terms specified in the policy. The District also has investments in money market mutual funds that hold securities approved by the District’s investment policy. At June 30, 2022, and June 30, 2021, all of the District’s investments were in compliance with the District’s investment policy and Charter. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 39 A summary of deposits and investments as of June 30, 2022, and June 30, 2021 is as follows: A reconciliation to the Statements of Net Position is as follows: Investment Type Cost Fair Value Cost Fair Value Deposits 63,887,919$ 63,887,919$ 97,274,120$ 97,274,120$ Money Market Mutual Funds 21,617,850 21,617,850 19,990,860 19,990,860 U.S. Treasury and Agency Obligations 501,598,900 489,050,072 539,097,325 538,632,467 Commercial Paper 173,000,000 172,251,461 46,126,622 46,135,900 Total 760,104,669$ 746,807,302$ 702,488,927$ 702,033,347$ 2022 2021 2022 2021 Cash and Cash Equivalents Unrestricted Current 64,845,757$ 91,337,843$ Restricted Current 2,978,669 4,629,689 Restricted Non-Current 66,628,666 26,297,303 Investments Unrestricted Current 187,145,188 210,940,744 Restricted Current 9,896,863 12,587,475 Restricted Non-Current 98,773,850 125,637,074 Long-Term Investments Restricted Non-Current 41,824,592 32,199,117 Other 274,713,717 198,404,102 Total 746,807,302$ 702,033,347$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 40 Interest Rate Risk As of June 30, 2022, and 2021, 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 Investment Type Fair Value (Years) Fair Value (Years) U.S. Treasury Obligations 306,177,567$ 1.66 338,993,883$ 1.16 U.S. Agency Obligations 182,872,505 1.45 199,638,584 1.13 Commercial Paper 172,251,461 0.23 46,135,900 0.24 Total 661,301,533$ 1.23 584,768,367$ 1.07 2022 2021 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 41 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, 2022, and June 30, 2021, the District’s investments in commercial paper were rated A-1 by Standard & Poor’s (“S&P”), F-1 by Fitch 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+, by Fitch AAA and Moody’s Aaa. 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, 2022, or June 30, 2021: Issuer 2022 2021 Treasury Notes 46.3 58.0 Federal Home Loan Bank 8.3 13.3 Federal Agriculture Mortgage Association 5.9 1.4 Federal Home Loan Bank Discount Note 5.2 2.7 Federal Farm Credit Funding Corp 2.1 10.7 Percent Of Total Investments THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 42 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. 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. The District has the following recurring fair value measurements as of June 30, 2022, and June 30, 2021:  Money Market Mutual Funds of $21.6 million and $20.0 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 $489.0 million and $538.6 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)  Commercial Paper of $172.3 million and $46.1 million, respectively, is valued using a market approach to measuring fair value prices that considers relevant information generated by market transactions involving identical or similar assets or group of assets. (Level 2 inputs) See Notes 9 and 10 for information regarding the cash and investments held by the Fiduciary Pension Trust Fund. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 43 3. Notes Receivable The District has a note receivable with Missouri American Water Company (“MOAM”) for its portion of the capital costs related to the Lower Meramec Wastewater Treatment Plant. The original loan established in fiscal year 2008 bears interest at 4.35%, while the two loans added during fiscal year 2013 bear interest at 4.50% and 3.52%. The current portion of this note is included in the Unrestricted Other receivables line on the Statements of Net Position. The note receivable will mature in fiscal year 2033. At June 30, 2022, future payments are as follows: At June 30, 2021, future payments were as follows: 2023 1,154,696$ 2024 1,154,696 2025 1,154,696 2026 1,154,696 2027 1,154,696 2028-2032 5,773,479 2033 563,799 12,110,758 Less: Amount representing interest 2,416,056 Total Notes Receivable 9,694,702$ Classification in Statement of Net Position: Current - Other receivables 747,480$ Non-current - Notes receivable 8,947,222 Total Notes Receivable 9,694,702$ 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 representing interest 2,854,724 Total Notes Receivable 10,410,729$ Classification in Statement of Net Position: Current - Other receivables 716,027$ Non-current - Notes receivable 9,694,702 Total Notes Receivable 10,410,729$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 44 4. Capital Assets The following is a summary of capital assets changes for the fiscal years ended June 30, 2022 and 2021: Balance June 30, 2021 Balance as restated June 30, 2022 Capital assets not being depreciated: Land 79,569,310$ 2,636,538$ —$ 82,205,848$ Construction in progress 1,194,033,441 243,968,862 (259,111,388) 1,178,890,914 Total capital assets not being depreciated 1,273,602,751 246,605,399 (259,111,388) 1,261,096,762 Capital assets, being depreciated Treatment and disposal plant and equipment 1,303,648,712 29,236,363 (387,056) 1,332,498,020 Collection and pumping plant 3,093,068,764 238,812,299 (2,423,864) 3,329,457,199 General plant and equipment 103,516,644 7,536,642 (1,467,759) 109,585,527 Total capital assets being depreciated 4,500,234,120 275,585,305 (4,278,679) 4,771,540,746 Less Accumulated depreciation for Treatment and disposal plant and equipment (686,410,998) (37,884,475) 237,651 (724,057,822) Collection and pumping plant (929,741,932) (52,881,431) 900,805 (981,722,558) General plant and equipment (79,341,606) (4,728,173) 1,442,713 (82,627,066) Total accumulated depreciation (1,695,494,536) (95,494,079) 2,581,169 (1,788,407,446) Total capital assets being depreciated, net 2,804,739,584 180,091,226 (1,697,510) 2,983,133,300 Lease Assets, being amortized 1,032,853 515,702 — 1,548,555 Less Accumulated amortization (142,204) (158,105) — (300,309) Total Lease Assets being amortized, net 890,649 357,597 — 1,248,246 Total Capital Assets 4,079,232,984$ 427,054,222$ (260,808,898)$ 4,245,478,308$ DeletionsAdditions THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 45 A restatement of assets for FY21 is reflective of the GASB 87 implementation. 5. Leases MSD, as a Lessee, has entered into lease agreements for fire hydrant keys & reducers, order control chemical treatment equipment, printing and imaging equipment, antenna, and equipment space. In fiscal years 2022 and 2021, the district recorded lease assets in the amount of $1,032,853 and $515,702, less accumulated amortization of $142,204 and $158,105, respectively. Balance Balance June 30, 2021 June 30, 2020 As Restated Capital assets not being depreciated: Land 78,333,629$ 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 depreciated 1,091,259,558 300,886,518 (118,543,325) 1,273,602,751 Capital assets being depreciated: Treatment and disposal plant and equipment 1,289,884,442 14,244,282 (480,012) 1,303,648,712 Collection and pumping plant 2,974,542,039 120,283,066 (1,756,341) 3,093,068,764 General plant and equipment 100,949,737 6,083,654 (3,516,747) 103,516,644 Total capital assets being depreciated 4,365,376,218 140,611,002 (5,753,100) 4,500,234,120 Less: Accumulated depreciation: Treatment and disposal plant and equipment (651,154,735) (35,699,307) 443,044 (686,410,998) Collection and pumping plant (879,675,620) (50,729,803) 663,491 (929,741,932) General plant and equipment (77,916,252) (4,923,159) 3,497,805 (79,341,606) Total accumulated depreciation (1,608,746,607) (91,352,269) 4,604,340 (1,695,494,536) Total capital assets being depreciated, net 2,756,629,611 49,258,733 (1,148,760) 2,804,739,584 Lease Assets, being amortized — 1,032,853 — 1,032,853 Less Accumulated amortization — (142,204) — (142,204) Total Lease Assets being amortized, net — 890,649 — 890,649 Total Capital Assets 3,847,889,169$ 351,035,900$ (119,692,085)$ 4,079,232,984$ Additions Deletions THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 46 The future principal and interest lease payments as of June 30, 2022, were as follows: MSD, as a lessor, has entered into lease agreements with four companies involving land usage and one company for building usage. The total amount of inflows of resources, including lease revenue, interest revenue, and other lease related inflows, recognized during the fiscal years 2022, and 2021 was $4,155,434 and $731,194, respectively. At June 30, 2022, the principle and interest requirements to maturity for the lease receivable are as follows: Fiscal Year Principal Interest Total 2023 238,285$ 15,614$ 253,899$ 2024 241,903 12,517 254,420 2025 245,957 9,000 254,957 2026 247,369 5,411 252,780 2027 199,736 1,812 201,548 2028 - 2031 72,266 347 72,613 1,245,516$ 44,701$ 1,290,217$ Fiscal Year Principal Interest Total 2023 285,860$ 34,226$ 320,086$ 2024 295,945 32,001 327,946 2025 321,965 29,444 351,409 2026 150,570 27,158 177,728 2027 163,173 25,290 188,463 2028 - 2032 886,636 95,374 982,010 2033 - 2037 892,563 38,069 930,632 2038 - 2042 157,914 12,455 170,369 2043 - 2047 166,200 8,564 174,764 2048 - 2052 196,697 4,281 200,978 2053 - 2055 77,042 350 77,392 3,594,565$ 307,212$ 3,901,777$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 47 6. 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. Taxes 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 2022 and 2021, the District recorded revenue from property taxes in the amount of $44,479,669 and $43,624,302, respectively. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 48 7. Long-Term Liabilities The following is a summary of changes in the District’s long-term liabilities for the year ended June 30, 2022: Original Balance Balance Issuance June 30, June 30, Current Amounts 2021 Additions Retirements 2022 Portion Bonds and Notes Payable: Wastewater System Senior Revenue Bonds: Series 2010B 85,000,000$ 85,000,000$ —$ —$ 85,000,000$ —$ Series 2012A 225,000,000 40,320,000 — (36,645,000) 3,675,000 — Series 2012B 141,730,000 37,800,000 — (36,860,000) 940,000 — Series 2013B 150,000,000 38,990,000 — (3,520,000) 35,470,000 3,695,000 Series 2015B 223,855,000 166,030,000 — (3,070,000) 162,960,000 3,220,000 Series 2016C 150,000,000 138,740,000 — (3,070,000) 135,670,000 3,195,000 Series 2017A 316,175,000 305,580,000 — (5,490,000) 300,090,000 11,040,000 Series 2019B 52,130,000 51,295,000 — (880,000) 50,415,000 920,000 Series 2019C (Taxable) 276,260,000 274,745,000 — (1,545,000) 273,200,000 1,570,000 Series 2020B 120,000,000 118,055,000 — (1,895,000) 116,160,000 1,990,000 Series 2022B 109,070,000 — 109,070,000 — 109,070,000 6,345,000 Water Infrastructure Finance and Innovation Act (WIFIA) Senior Bonds: Series 2018A 47,722,204 261,480 — — 261,480 — Wastewater System Senior Refunding Revenue Bonds, Direct Placement: Series 2021C 5,620,000 5,620,000 — — 5,620,000 — Series 2022A 39,845,000 — 39,845,000 — 39,845,000 — Water Pollution Control and Drinking Water Subordinate Revenue Bonds (State Revolving Funds Program): Series 2004B 161,280,000 46,625,000 — (9,540,000) 37,085,000 9,610,000 Series 2005A 6,800,000 2,400,000 — (375,000) 2,025,000 385,000 Series 2006A 42,715,000 16,075,000 — (2,530,000) 13,545,000 2,590,000 Series 2006B 14,205,000 5,890,000 — (780,000) 5,110,000 800,000 Series 2008A/B 40,000,000 17,790,000 — (2,050,000) 15,740,000 2,095,000 Missouri Department of Natural Resources: Series 2009A 23,000,000 11,891,700 — (1,203,700) 10,688,000 1,231,600 Series 2010A 7,980,700 4,682,900 — (404,600) 4,278,300 412,900 Series 2010C 37,000,000 21,269,000 — (1,890,000) 19,379,000 1,939,000 Series 2011A 39,769,300 28,611,300 — (1,884,000) 26,727,300 1,932,000 Series 2013A 52,000,000 38,679,000 — (2,427,000) 36,252,000 2,490,000 Series 2015A 75,000,000 58,973,000 — (3,589,000) 55,384,000 3,674,000 Series 2016A 20,000,000 17,001,000 — (899,000) 16,102,000 919,000 Series 2016B 75,500,000 65,850,000 — (3,358,000) 62,492,000 3,432,000 Series 2018B 25,174,403 24,302,912 871,491 (533,000) 24,641,403 1,082,000 Series 2019A 23,952,000 22,011,686 1,940,314 — 23,952,000 — Series 2020A 22,000,000 9,983,418 10,888,992 — 20,872,410 — Series 2021A 63,101,000 5,333,065 15,520,285 — 20,853,350 — Series 2021B 40,201,000 7,260,558 19,159,765 (874,000) 25,546,323 1,770,000 2,712,085,607$ 1,667,066,019$ 197,295,847$ (125,312,300)$ 1,739,049,566$ 66,337,500$ Add: Unamortized premium, net of discount 166,472,148 Total Bonds and Notes Payable 1,905,521,714$ Current Portion of Bonds and Notes Payable 66,337,500$ Non-Current Bonds and Notes Payable 1,839,184,214 Total Bonds and Notes Payable 1,905,521,714$ Net Pension Liability 29,495,178$ 4,375,878$ —$ 33,871,056$ —$ Total OPEB Liability 24,920,628$ 1,872,954$ —$ 26,793,582$ —$ Deposits and Accrued Expenses 686,968$ 63,980$ —$ 750,948$ —$ Compensated absences 9,461,777 792,714 (671,912) 9,582,579 958,259 Total Deposits and Accrued Expenses 10,148,745$ 856,694$ (671,912)$ 10,333,527$ 958,259$ Current Portion (Compensated absences) in Current Deposits and Accrued Expenses 958,259$ Non-Current Deposits and Accrued Expenses 9,375,268 Total Deposits and Accrued Expenses 10,333,527$ Landfill closure and postclosure costs THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 49 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: Wastewater System Senior Revenue Bonds: Series 2010B 85,000,000$ 85,000,000$ —$ —$ 85,000,000$ —$ Series 2011B 52,250,000 13,725,000 — (13,725,000) — — Series 2012A 225,000,000 45,620,000 — (5,300,000) 40,320,000 5,300,000 Series 2012B 141,730,000 41,525,000 — (3,725,000) 37,800,000 4,050,000 Series 2013B 150,000,000 42,380,000 — (3,390,000) 38,990,000 3,520,000 Series 2015B 223,855,000 168,950,000 — (2,920,000) 166,030,000 3,070,000 Series 2016C 150,000,000 141,695,000 — (2,955,000) 138,740,000 3,070,000 Series 2017A 316,175,000 309,240,000 — (3,660,000) 305,580,000 5,490,000 Series 2019B 52,130,000 52,130,000 — (835,000) 51,295,000 880,000 Series 2019C (Taxable) 276,260,000 276,260,000 — (1,515,000) 274,745,000 1,545,000 Series 2020B 120,000,000 — 120,000,000 (1,945,000) 118,055,000 1,895,000 Water Infrastructure Finance and Innovation Act (WIFIA) Senior Bonds: Series 2018A 47,722,204 261,480 — — 261,480 — Wastewater System Senior Refunding Revenue Bonds, Direct Placement: Series 2021C 5,620,000 — 5,620,000 — 5,620,000 — Water Pollution Control and Drinking Water Subordinate Revenue Bonds (State Revolving Funds Program): Series 2004B 161,280,000 55,730,000 — (9,105,000) 46,625,000 9,540,000 Series 2005A 6,800,000 2,765,000 — (365,000) 2,400,000 375,000 Series 2006A 42,715,000 18,550,000 — (2,475,000) 16,075,000 2,530,000 Series 2006B 14,205,000 6,650,000 — (760,000) 5,890,000 780,000 Series 2008A/B 40,000,000 19,795,000 — (2,005,000) 17,790,000 2,050,000 Missouri Department of Natural Resources: Series 2009A 23,000,000 13,068,200 — (1,176,500) 11,891,700 1,203,700 Series 2010A 7,980,700 5,079,500 — (396,600) 4,682,900 404,600 Series 2010C 37,000,000 23,111,000 — (1,842,000) 21,269,000 1,890,000 Series 2011A 39,769,300 30,449,300 — (1,838,000) 28,611,300 1,884,000 Series 2013A 52,000,000 41,044,000 — (2,365,000) 38,679,000 2,427,000 Series 2015A 75,000,000 62,478,000 — (3,505,000) 58,973,000 3,589,000 Series 2016A 20,000,000 17,158,430 722,570 (880,000) 17,001,000 899,000 Series 2016B 75,500,000 61,285,085 7,850,915 (3,286,000) 65,850,000 3,358,000 Series 2018B 25,267,000 18,228,388 6,074,524 — 24,302,912 533,000 Series 2019A 23,952,000 6,291,992 15,719,694 — 22,011,686 — Series 2020A 22,000,000 — 9,983,418 — 9,983,418 — Series 2021A 63,101,000 — 5,333,065 — 5,333,065 — Series 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 50 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, $744,149,393 has not been issued as of June 30, 2022. Wastewater System Senior Refunding Revenue Bonds Payable, Direct Placement In March 2020, the District entered into a forward-delivery direct purchase agreement to issue $39,845,000 of Wastewater System Senior Refunding Revenue Bonds Series 2022A (“Series 2022A”) which closed in May 2022. These Series 2022A bonds were issued to partially refund the Series 2012A bonds maturing in fiscal years 2033 through 2039 totaling $31,345,000 and partially refund the Series 2012B bonds maturing in fiscal years 2025 through 2027 totaling $23,500,000. Proceeds of $48,087,226, including a premium of $8,242,226 and $6,771,267 in excess debt service reserves contributed by the District were used to partially defease Series 2012A and 2012B and the related balances for those bonds were reduced from the District’s financial statements in fiscal year 2022. This direct placement refunding decreased total debt service payments by $17,896,368, 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 $8,201,500. These Series 2022A senior direct placement bonds have interest rates of 5.00% and are payable in semiannual installments at varying amounts through May 1, 2039. In March 2020, the District entered into a forward-delivery direct purchase agreement to issue $5,620,000 of Wastewater System Senior Refunding Revenue Date of Authorization Voter Authorized Amount February 2004 500,000,000$ August 2008 275,000,000 June 2012 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 51 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 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. 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, 2022, are as follows: Wastewater System Revenue Bonds Payable In June 2022, the District issued $109,070,000 of Wastewater System Senior Refunding Revenue Bonds Series 2022B (“Series 2022B”). These bonds were issued for two purposes: $9,070,000 to partially refund the Series 2012B bonds maturing Years ending June 30, Principal Interest Total 2023 —$ 2,262,182$ 2,262,182$ 2024 — 2,273,250 2,273,250 2025 3,360,000 2,273,250 5,633,250 2026 6,915,000 2,105,250 9,020,250 2027 7,110,000 1,759,500 8,869,500 2028-2032 5,620,000 6,751,250 12,371,250 2033-2037 8,285,000 4,700,750 12,985,750 2038-2039 14,175,000 1,213,750 15,388,750 Total 45,465,000$ 23,339,182$ 68,804,182$ Wastewater System Senior Refunding Revenue Bonds Payable Direct Placement THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 52 in fiscal years 2023 through 2024 totaling $9,310,000. The remaining $100,000,000 was issued pursuant to the April 2016 authorization for the purpose of constructing, repairing, replacing, and equipping new and existing District wastewater facilities. None of the funds from this issuance have been expended. A premium of $13,362,572 was received on the $100,000,000 portion of the Series 2022B. These Series 2022B senior bonds have an interest rate of 5.0% and are payable in semiannual installments at varying amounts through June 1, 2052. The Series 2022B refunding net proceeds of $9,382,256 (including a premium of $371,595 less payments of $20,617 in underwriter fees and $35,584 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 the future debt service payments defined above on the Series 2012B, the sum of the $9,382,256 deposited into escrow and the earnings on the U.S. government securities refunded $9,070,000 in principal payments for call dates May 1, 2023 and May 1, 2024 for Series 2012B and the interest thereon, this leaves a principal payment of $940,000 due on May 2031 and the related balance for Series 2012B was reduced from the District’s financial statements in fiscal year 2022. This refunding decreased total debt service payments by $303,860 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 $294,263. Interest payments of $72,256 and principal payments of $9,310,000 were made from the escrow account in fiscal year 2022. In December 2020, the District issued $120,000,000 of Wastewater System Senior Revenue Bonds Series 2020B (“Series 2020B”). 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 and as of June 30, 2022, $156,829,736 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. 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 53 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 payments of $13,671,500 and principal payments of $187,045,000 were made from the escrow account in fiscal year 2022. All $273,430,000 debt defeased in substance to be paid from the escrow account with an outstanding amount of $86,385,000 as of June 30, 2022. 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 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 54 constructing, repairing, replacing, and equipping new and existing District 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 $5,058,775 and principal payments of $ $50,060,000 were made from the escrow account in fiscal year 2022. Of the $125,760,000 debt defeased in substance to be paid from the escrow account, $52,355,000 remains outstanding as of June 30, 2022. 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 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”). These 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 55 2008A bonds and $150,000,000 was 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 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. 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. See the explanation for Series 2019C above for further information. As a result of the advance refundings, Series 2015B bonds are considered partially defeased. 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 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 56 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. These 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 bond’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 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). See the explanation for Series 2019C above for further information. In May 2022, there was direct placement senior refunding revenue bonds issued to refund fiscal years 2025-2027 totaling $23,500,000. See the explanation for Series 2022A above for further information. As a result of the advance refunding, and the direct placement refunding, Series 2012B bonds are considered partially defeased. In August 2012, the District issued $225,000,000 of Wastewater System Senior Revenue Bonds Series 2012A (“Series 2012A”). 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 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. 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). See the explanation for Series 2017A above for further information. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 57 In December 2019, there was a taxable advance refunding of the Series 2012A bonds for the fiscal years 2040 through 2042 totaling $103,120,000. In May 2022, there was direct placement senior refunding revenue bonds issued to refund fiscal years 2033-2039 totaling $31,345,000. See the explanation for Series 2022A above for further information. As a result of the advance refundings, and direct placement refunding Series 2012A bonds are considered partially defeased. In December 2011, the District issued $52,250,000 of Wastewater System Senior Revenue Bonds Series 2011B (“Series 2011B”). 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 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 2020 the subsidy percentage was 32.9% while for 2021 the subsidy percentage was 33.0%. In fiscal year 2022 the subsidy percentage was 33.0% and is expected to be 33.0% in fiscal year 2023. 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 58 Bonds listed above. Under the provisions of the bond indentures, the District covenants to establish rates for the services of the Wastewater System sufficient 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 59 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 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, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 60 2010C, 2011A, 2013A, 2015A, 2016A, 2016B, 2018B, 2019A, 2020A, 2021A, and 2021B direct loans (pages 61-70) do 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. 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, 2022 and 2021, the District was in compliance with this covenant. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 61 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, 2022, 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, 2022, 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 $40,201,000 for the purpose of improving, renovating, repairing, replacing, and equipping the District’s Wastewater System. The Years ending June 30, Principal Interest Total 2023 47,455,000$ 57,132,565$ 104,587,565$ 2024 48,385,000 55,939,449 104,324,449 2025 45,145,000 54,147,503 99,292,503 2026 43,270,000 52,482,991 95,752,991 2027 41,095,000 50,809,456 91,904,456 2028-2032 252,645,000 224,723,894 477,368,894 2033-2037 280,845,000 168,844,864 449,689,864 2038-2042 349,590,000 103,118,252 452,708,252 2043-2047 181,965,000 39,032,661 220,997,661 2048-2052 55,760,000 7,222,375 62,982,375 Total 1,346,155,000$ 813,454,010$ 2,159,609,010$ Wastewater System Revenue Bonds Payable/ Water Pollution Control and Drinking Water Revenue Bonds Payable THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 62 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, 2022, the outstanding loan balance was $25,546,323. 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, 2022, the outstanding loan balance was $20,853,350. 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 63 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, 2022, the outstanding loan balance was $20,872,410. 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 $23,952,000 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds are issued from the April 2016 authorization. The District’s interest rate is 0.98% and is payable in semiannual installments at varying amounts through July 1, 2042. Principal and Interest Requirements on State of Missouri Direct Loan Series 2019A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2019A outstanding as of June 30, 2022, are as follows: Years ending June 30, Principal Interest Total 2023 —$ 234,730$ 234,730$ 2024 1,015,000 232,255 1,247,255 2025 1,035,000 222,259 1,257,259 2026 1,057,000 212,062 1,269,062 2027 1,078,000 201,655 1,279,655 2028-2032 5,724,000 844,657 6,568,657 2033-2037 6,321,000 551,279 6,872,279 2038-2042 6,985,000 227,189 7,212,189 2043 737,000 3,611 740,611 Total 23,952,000$ 2,729,697$ 26,681,697$ State of Missouri Direct Loan Series 2019A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 64 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. In April 2022, the total loan amount was reduced to $25,174,403 due to the expiration of the SRF loan. 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 incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn down on this loan. The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2018B outstanding as of June 30, 2022, are as follows: State of Missouri Direct Loan Series 2016B In December 2016, the State of Missouri Direct Loan Program issued to the District an amount totaling $75,500,000 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds were issued from the June 2012 authorization. The District’s interest rate is 1.2% and is payable in semiannual installments at varying amounts through July 1, 2037. Years ending June 30, Principal Interest Total 2023 1,079,403$ 335,409$ 1,414,812$ 2024 1,100,000 321,381 1,421,381 2025 1,122,000 306,125 1,428,125 2026 1,144,000 290,566 1,434,566 2027 1,168,000 274,696 1,442,696 2028-2032 6,202,000 1,123,831 7,325,831 2033-2037 6,840,000 676,483 7,516,483 2038-2041 5,986,000 188,039 6,174,039 Total 24,641,403$ 3,516,530$ 28,157,933$ State of Missouri Direct Loan Series 2018B THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 65 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, 2022, 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 $20,000,000 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds are issued from the June 2012 authorization. The District’s interest rate is 1.2% and is payable in semiannual installments at varying amounts through January 1, 2037. Principal and Interest Requirements on State of Missouri Direct Loan Series 2016A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. Years ending June 30, Principal Interest Total 2023 3,432,000$ 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 3,741,000 568,548 4,309,548 2028-2032 19,966,000 2,145,630 22,111,630 2033-2037 22,242,000 887,466 23,129,466 2038 2,360,000 14,160 2,374,160 Total 62,492,000$ 6,322,380$ 68,814,380$ State of Missouri Direct Loan Series 2016B THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 66 The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2016A outstanding as of June 30, 2022, 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 $75,000,000 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds were issued from the June 2012 authorization. The District’s interest rate is 1.2% and is payable in semiannual installments at varying amounts through January 1, 2035. Principal and Interest Requirements on State of Missouri Direct Loan Series 2015A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2015A outstanding as of June 30, 2022, are as follows: Years ending June 30, Principal Interest Total 2023 919,000$ 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 1,002,000 144,660 1,146,660 2028-2032 5,347,000 536,598 5,883,598 2033-2037 5,955,000 199,686 6,154,686 Total 16,102,000$ 1,575,378$ 17,677,378$ State of Missouri Direct Loan Series 2016A Years ending June 30, Principal Interest Total 2023 3,674,000$ 664,452$ 4,338,452$ 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 4,038,000 477,624 4,515,624 2028-2032 21,763,000 1,619,001 23,382,001 2033-2035 14,352,000 309,368 14,661,368 Total 55,384,000$ 4,789,199$ 60,173,199$ State of Missouri Direct Loan Series 2015A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 67 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. The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2013A outstanding as of June 30, 2022, 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 $39,769,300 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds were issued from the August 2008 authorization. The District’s interest rate is 1.5% and is payable in semiannual installments at varying amounts through January 1, 2034. Years ending June 30, Principal Interest Total 2023 2,490,000$ 295,698$ 2,785,698$ 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 2,760,000 209,231 2,969,231 2028-2032 14,920,000 688,020 15,608,020 2033-2035 8,214,000 103,169 8,317,169 Total 36,252,000$ 2,056,394$ 38,308,394$ State of Missouri Direct Loan Series 2013A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 68 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, 2022, are as follows: State of Missouri Direct Loan Series 2010C In December 2010, the State of Missouri Direct Loan Program issued to the District an amount totaling $37,000,000 for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. The principal and interest on the bonds are expected to be paid from future wastewater revenues and the bonds were issued from the August 2008 authorization. The District’s interest rate is 1.7% and is payable in semiannual installments at varying amounts through January 1, 2031. Principal and Interest Requirements on State of Missouri Direct Loan Series 2010C As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. Years ending June 30, Principal Interest Total 2023 1,932,000$ 398,939$ 2,330,939$ 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 2,137,000 276,143 2,413,143 2028-2032 11,528,000 873,491 12,401,491 2033-2035 5,033,300 96,233 5,129,533 Total 26,727,300$ 2,661,305$ 29,388,605$ State of Missouri Direct Loan Series 2011A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 69 The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2010C outstanding as of June 30, 2022, 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 $7,980,700 for the construction, improvement, renovation, repair, replacement and equipping of its Wastewater System, under the authority of and in full compliance with the District’s Charter (“Plan”) and the bonds were issued from the August 2008 authorization. The District’s interest rate is 1.5% and is payable in semiannual installments at varying amounts through July 1, 2031. Principal and Interest Requirements on State of Missouri Direct Loan Series 2010A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2010A outstanding as of June 30, 2022, are as follows: Years ending June 30, Principal Interest Total 2023 1,939,000$ 311,790$ 2,250,790$ 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 2,148,000 177,911 2,325,911 2028-2031 9,168,000 345,527 9,513,527 Total 19,379,000$ 1,574,098$ 20,953,098$ State of Missouri Direct Loan Series 2010C Years ending June 30, Principal Interest Total 2023 412,900$ 61,795$ 474,695$ 2024 421,300 55,657 476,957 2025 429,800 49,390 479,190 2026 438,500 42,998 481,498 2027 447,400 36,475 483,875 2028-2032 2,128,400 79,807 2,208,207 Total 4,278,300$ 326,122$ 4,604,422$ State of Missouri Direct Loan Series 2010A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 70 State of Missouri Direct Loan Series 2009A In October 2009, the DNR loaned $23,000,000 to the District. The State of Missouri Direct Loan Series 2009A note bears interest at a rate of 1.5% per annum and is payable through January 1, 2030. The purpose of this note was to finance the designing, constructing, improving, renovating, repairing, replacing and equipping of new and existing sewer facilities within the District. The principal and interest on the note are expected to be paid from future wastewater revenues and the note was issued from the August 2008 authorization. Principal and Interest Requirements on State of Missouri Direct Loan Series 2009A As the District incurred approved capital expenditures, the DNR reimbursed the District for the expenditures from the bond proceeds account. All funds have been drawn on this loan. The annual principal and interest requirements to maturity on the State of Missouri Direct Loan Series 2009A outstanding as of June 30, 2022, are as follows: In accordance with the Direct Loan Series 2009A, 2010A, 2010C, 2011A, 2013A, 2015A, 2016A, 2016B, 2018B, 2019A, 2020A, 2021A, and 2021B ordinances, the District’s annual net operating revenues from wastewater activities, as defined in the agreement, coupled with investments earnings must be at least 115% of the current year’s principal and interest due on all bonds. At June 30, 2022 and 2021, the District was in compliance with this covenant. Wastewater System Cash and Investments The following accounts have been established in accordance with bond ordinances and financing agreements that require receipts generated from operations be segregated and certain reserve accounts be established: Years ending June 30, Principal Interest Total 2023 1,231,600$ 151,537$ 1,383,137$ 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 1,349,500 76,690 1,426,190 2028-2031 4,238,700 109,330 4,348,030 Total 10,688,000$ 682,096$ 11,370,096$ State of Missouri Direct Loan Series 2009A THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 71 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. Debt Service Reserve Fund After initial deposit of the amount required pursuant to the bond ordinances and financing agreements of the Series 2010B, 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, 2022, and 2021, cash and investments in the Debt Service Reserve Fund totaled $14,220,682 and $21,045,454, 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 72 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. Series 2022A was issued without a debt service reserve fund requirement and at that time $6,771,267 in excess debt service reserves along with the Series 2022A proceeds were used in a current refunding of Series 2012A and 2012B. Series 2022B was issued without a debt service reserve fund requirement. 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, 2022 and 2021, cash and investments in the Special Participant Bond Reserve Account held on behalf of the District totaled $48,137,652 and $58,050,189, 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, 2022. 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, 2012A, 2012B and 2013B bonds, shall be deposited into the Project Fund. At June 30, 2022 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 73 and 2021, cash and investments in the Project Funds totaled $112,835,735 and $92,415,533, 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, 2022 and 2021, cash and investments in the Rebate Fund totaled $228,446 and $228,349, respectively. 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 2052 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 2022 was $123.9 million with pledged revenues of $283.0 million. This provided a coverage ratio of 2.3 and pledged revenues represented 61.8% of all net operating revenues. Direct Borrowings and Direct Placements For the fiscal years ending June 30, 2022 and 2021, the District had bonds and notes from direct borrowings of $769,678,403 and $769,771,000, respectively. Each series of the District’s subordinate debt evidence a loan from the Missouri Department of Natural Resources. The net revenues of the wastewater system are pledged to the payment of the subordinate debt; however, payment of the subordinate debt from pledged revenues are junior and subordinate to the Senior THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 74 Bonds. The subordinate debt contain terms regarding events of default with finance-related consequences that are classified as (1) delinquent or non-payment of principal and interest payment on the District’s bonds, (2) failure to perform obligations under the agreement with the bond purchaser, (3) misrepresentation to the bond purchaser, and (4) bankruptcy. The District’s Series 2018 Bond evidences a loan from the United States Environmental Protection Agency. The net revenues of the wastewater system are pledged to the payment of the Series 2018 Bond, which was issued as a Senior Bond. The Series 2018 Bond contains terms regarding events of default with finance-related consequences that are classified as (1) delinquent or non-payment of principal and interest payment on the District’s bonds, (2) failure to perform obligations under the agreement with the bond purchaser, (3) misrepresentation to the bond purchaser, (4) bankruptcy, (5) covenant default, (6) judgments in excess of $50,000,000 and (7) failure to maintain existence. The District had direct placement bonds of $45,465,000 and $5,620,000 in the fiscal years ending June 30, 2022 and 2021, 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, 2022 and 2021. The District has authorized the issuance of Wastewater System Senior Refunding Revenue Bonds, Direct Placement Series 2023A, Series 2025A and 2026A to be issued on May 1, 2023, May 1, 2025, and May 1, 2026, respectively. The par amount of the bonds will total $263,530,000. The Series 2023A and Series 2025A 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 and the Series 2026A bonds will be purchased by Barclays Capital 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 a portion of the outstanding Wastewater System Senior Revenue Bonds Series 2013B, Series 2015B and Series 2016B. Wastewater System Senior Refunding Revenue Bonds, Direct Placement Series 2022A, was issued May 3, 2022, and the $39,845,000 proceeds were used to partially refund the outstanding debt issues 2012A and 2012B. See the explanation for Series 2022A above for further information. 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 75 The Amended and Restated Forward Delivery Bond Purchase Agreement for the Series 2023A, Series 2025A and Series 2026A Bonds contain 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. 8. 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 76 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 77 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, 2021, and 2020, 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 $12,243,539 and $12,771,525, excluding certain professional fees paid by the District, were made to the Pension Plan during the District’s fiscal years ended June 30, 2022, and 2021, respectively. These contributions were made in accordance with actuarially determined contribution requirements based on actuarial valuations performed at December 31, 2021, and 2020, respectively. Net Pension Liability The net pension liability was measured as of December 31, 2021, and 2020 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. Actuarial Assumptions. The total pension liability in the December 31, 2021, and 2020 actuarial valuations were determined using the following actuarial assumptions, applied to all periods included in the measurement: Increase 2021 2020 (Decrease) Active plan members 396 450 (54) Retirees and beneficiaries currently receiving benefits 841 800 41 Terminated members entitled to receive benefits 164 172 (8) Total 1,401 1,422 (21) As of December 31, Inflation 2.50 percent Salary Increases 4.25 percent, average, including inflation Investment Rate of Return 6.25 and 6.75 percent, net of pension plan investment expense, including inflation for years ended December 31, 2021 and 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 78 Effective December 31, 2021, and December 31, 2020, 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-2021 and MP-2020 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, 2021, and 2020 are as follows: Long-Term Expected Arithmetic Target Real Rate Asset Class Allocation of Return Large Cap US Equity 25.0% 4.0% Domestic Core Bonds 14.0% -0.2% Core "Plus" Bonds 13.0% 0.4% Real Estate 12.0% 2.7% Developed International Equity 12.0% 5.0% Small Cap US Equity 10.0% 4.5% Global Fixed Income 8.0% 3.4% Emerging Markets Equity 6.0% 5.6% Total 100.0% December 31, 2021 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 79 Discount Rate. The discount rate used to measure the total pension liability at December 31, 2021, and 2020, was 6.25 and 6.75 percent, respectively. 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. Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Changes in Net Pension Liability (a) (b) (a) - (b) Balances as of December 31, 2020 356,407,862$ 326,912,684$ 29,495,178$ Changes for the year: Service cost 4,477,486 — 4,477,486 Interest 23,673,688 — 23,673,688 Effect of economic/demographic gains or losses 1,563,845 — 1,563,845 Effect of assumptions changes or inputs 18,787,548 — 18,787,548 Benefit payments (20,665,530) (20,665,530) — Employer contributions — 12,144,484 (12,144,484) Net investment income — 31,982,205 (31,982,205) Balances as of December 31, 2021 384,244,899$ 350,373,843$ 33,871,056$ Changes in Net Pension Liability for the Year Ending December 31, 2021 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Changes in Net Pension Liability (a) (b) (a) - (b) Balances as of December 31, 2019 353,995,560$ 296,202,647$ 57,792,913$ Changes for the year: Service 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 — — — Benefit payments (19,273,097) (19,273,097) — Employer contributions — 13,398,565 (13,398,565) Net investment income — 36,584,569 (36,584,569) Balances as of December 31, 2020 356,407,862$ 326,912,684$ 29,495,178$ Changes in Net Pension Liability for the Year Ending December 31, 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 80 Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability calculated using the 6.25 and 6.75 percent discount rate for December 31, 2021, and December 31, 2020, respectively, 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. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the years ended June 30, 2022, and 2021, the District recognized pension expense of $9,141,638 and $5,192,722, respectively, after accounting for all deferred outflows and inflows of resources. The District reported pension-related deferred outflows of resources and deferred inflows of resources from the following sources: 1% Current 1% Decrease Discount Rate Increase (5.25%) (6.25%) (7.25%) Net Pension Liability 76,413,375$ 33,871,056$ (2,259,652)$ December 31, 2021 1% Current 1% Decrease Discount Rate Increase (5.75%) (6.75%) (7.75%) Net Pension Liability 68,384,716$ 29,495,178$ (3,623,239)$ December 31, 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 81 In the years ending June 30, 2022, and 2021, amounts currently reported as deferred outflows of resources, $6,605,179 and $6,506,124, respectively, related to the District’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the years ended June 30, 2023, and 2022, respectively. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Payable to The Pension Plan At June 30, 2022, and 2021, the District did not have outstanding required contributions to the Pension Plan. 9. Fiduciary Pension Trust Fund Cash and Investments The Metropolitan St. Louis Sewer District Employees’ Pension Plan (“Pension Plan”) is reported as a Fiduciary Pension Trust Fund. The Plan reports financial data on a calendar year basis and issues a publicly available financial report with audited financial statements which can be found on the District’s www.msdprojectclear.org website or may be obtained by writing: The Metropolitan St. Louis Sewer District, 2350 Market Street, St. Louis, MO 63103- Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Differences between expected and actual experience 912,243$ 1,744,230$ —$ 5,077,158$ Changes of assumptions 10,959,403 — 3,970,296 — Net difference between projected and actual earnings — 21,449,794 — 17,594,240 Contributions made subsequent to measurement date 6,605,179 — 6,506,124 — Total 18,476,825$ 23,194,024$ 10,476,420$ 22,671,398$ June 30, 2022 June 30, 2021 Net Deferrals of Resources Year ended June 30,: 2023 2,944,605$ 2024 (6,792,974) 2025 (5,421,444) 2026 (2,052,565) (11,322,378)$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 82 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 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: Real 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 fair value of investments managed consisted of the following: As of December 31, 2021 2020 Investments, at Fair Value Collective Investment Funds 185,031,152$ 171,767,753$ Mutual Funds 62,608,137 60,179,174 Real Estate Investments 29,021,383 30,265,219 Corporate Obligations 27,025,796 27,630,867 Domestic Common Stocks 21,934,156 18,552,256 US Treasury and Agency Obligations 19,727,449 13,994,724 Money Market Funds 3,666,492 3,237,837 Municipal Obligations 1,370,872 1,292,527 Total Investments 350,385,437$ 326,920,357$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 83 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: 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: As of December 31, 2020 Weighted Average Maturity Investment Type Fair Value (in Years) Corporate Obligations 27,630,867$ 3.92 U.S. Treasury and Agency Obligations 13,994,724 5.46 Municipal Obligations 1,292,527 3.57 Total 42,918,118$ Portfolio Weighted Average Maturity in Years 4.42 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 84  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.  The following tables provide information on the credit ratings associated with the Pension Plan’s investments in debt securities: U.S. Treasury S & P & Agency Municipal Corporate Rating Obligations Obligations Obligations Total AAA —$ —$ 3,746,560$ 3,746,560$ AA 19,727,449 981,242 998,815 21,707,506 A — 219,601 5,991,808 6,211,409 BBB — 30,684 11,176,202 11,206,886 BB — — 206,003 206,003 Not Rated — 139,345 4,906,408 5,045,753 Total 19,727,449$ 1,370,872$ 27,025,796$ 48,124,117$ Credit Rating by Investment as of December 31, 2021 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 85 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, 2021 or 2020 are as follows: 10. 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, 2021 and December 31, 2020: U.S. Treasury S & P & Agency Municipal 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 Rating by Investment as of December 31, 2020 2021 2020 BlackRock Russell 1000 Index Non-Lendable Fund 92,394,458$ 26.4 % 83,783,652$ 25.9 % Prudential Core Plus Bond Fund 45,880,955 13.1 40,461,722 12.5 Morgan Stanley International Equity Fund I 41,919,939 12.0 40,216,372 12.4 UBS Trumbull Property Fund 29,022,521 8.3 30,265,219 9.3 Brandywine Global Opportunistic Fixed Income 25,976,417 7.4 27,297,538 8.4 Kennedy Mid Cap Value 22,776,255 6.5 18,571,060 5.7 Morgan Stanley Emerging Markets Fund I 20,688,321 5.9 19,962,802 6.2 TimesSquare Small Cap Growth Fund 19,581,409 5.6 19,005,439 5.9 December 31, % % THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 86 Investments Measured at Fair Value Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Investments by Fair Value Level 12/31/2021 (Level 1) (Level 2) (Level 3) Debt Securities: Corporate Obligations 27,025,796$ —$ 27,025,796$ —$ US Treasury Notes and Bonds 13,576,666 13,576,666 — — US Government Agency Obligations 6,150,783 — 6,150,783 — Municipal Obligations 1,370,872 — 1,370,872 — Total Debt Securities 48,124,117 13,576,666 34,547,451 — Equity Securities: Domestic Equities 21,934,156 21,934,156 — — International Equities 41,919,816 — 41,919,816 — Emerging Markets Fund 20,688,321 — 20,688,321 — Total Equity Securities 84,542,293 21,934,156 62,608,137 — Total Investments by Fair Value Level 132,666,410 35,510,822$ 97,155,588$ —$ Unfunded Redemption Redemption Investments Measured at the Net Asset Value (NAV) Commitments Frequency Notice Period Domestic Equities (1)111,961,752 — Daily Varies Core Plus Bond Commingled Trust Fund (2)45,880,947 — Daily 1 Day Real Estate Funds (3)29,021,383 — Quarterly 60 Days Global Fixed Income Collective Trust Fund (4)25,976,417 — Daily 10 Days Diversified Hedge Fund of Fund (5)1,212,036 — Quarterly 90 Days Total Investments Measured at the Net Asset Value 214,052,535 Money Market at Amortized Cost 3,666,492 Total Investments at Fair Value 350,385,437$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 87 (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 Investments Measured at Fair Value Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Investments by Fair Value Level 12/31/2020 (Level 1) (Level 2) (Level 3) Debt Securities: Corporate Obligations 27,630,867$ —$ 27,630,867$ —$ US Treasury Notes and Bonds 8,491,150 8,491,150 — — US Government 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 — Equity Securities: Domestic 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 Investments by Fair Value Level 121,649,548 27,043,406$ 94,606,142$ —$ Unfunded Redemption Redemption Investments Measured at the Net Asset Value (NAV) Commitments 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 Hedge Fund of Fund (5)1,219,402 — Quarterly 90 Days Total Investments Measured at the Net Asset Value 202,032,972 Money Market at Amortized Cost 3,237,837 Total Investments at Fair Value 326,920,357$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 88 stable, primarily income-oriented properties. 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 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. 11. 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 (“Plan”), available to all District employees, permits them to defer a portion of their salary up to Internal Revenue Code limits. The District does not contribute to the 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 Plan. 2021 2020 BlackRock Russell 1000 Index Non-Lendable Fund 92,394,458$ 26.4 % 83,783,652$ 25.9 % Prudential Core Plus Bond Fund 45,880,955 13.1 40,461,722 12.5 Morgan Stanley International Equity Fund I 41,919,939 12.0 40,216,372 12.4 UBS Trumbull Property Fund 29,022,521 8.3 30,265,219 9.3 Brandywine Global Opportunistic Fixed Income 25,976,417 7.4 27,297,538 8.4 Kennedy Mid Cap Value 22,776,255 6.5 18,571,060 5.7 Morgan Stanley Emerging Markets Fund I 20,688,321 5.9 19,962,802 6.2 TimesSquare Small Cap Growth Fund 19,581,409 5.6 19,005,439 5.9 December 31, % % THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 89 At June 30, 2022 and 2021, the District had outstanding liabilities owed to the Plan of $192,964 and $176,954, respectively. The 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 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 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 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 90 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. 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 METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 91 The District’s contributions to the DC Plan amounted to $3,034,606 and $2,816,157 for the years ended June 30, 2022 and 2021, respectively. Forfeitures were $214,069 and $99,855, for the years ended June 30, 2022 and 2021, respectively, and the balances in the prepaid forfeitures account as of June 30, 2022 and 2021 were $17,508 and $6,097, respectively. At June 30, 2022 and 2021, the District had outstanding liabilities owed to the DC Plan of $118,731 and $101,147, 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. 12. 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 92 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 2022 the monthly amount the District paid towards the retiree’s premium was $647.22 for retirees qualifying for the wellness incentive ($658.06 for retirees with wellness qualified spouse). The $647.22 paid by the District equates to 86% of the traditional plan’s premium and 92% of the high deductible plan’s premium. For retirees not qualifying for the wellness incentive, the District paid $603.89 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 8-20% 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 93 The monthly premiums for calendar year 2022 plans and coverage tiers are as follows: In fiscal year 2021, and in the first six months of fiscal year 2022, 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 $567.19 of the premium which equates to 80% for the traditional plan and 86% for the high deductible plan. The retiree paid 100% of the spousal, children or family premium incremental increases in addition to the remaining 7-20% of the retiree’s total monthly premium. The OPEB Plan also provided life insurance coverage for a very small closed group of disabled former employees. Total Retiree OPEB Benefit Net Cost Coverage Tier Premium Paid by District to Retiree Traditional Plan with wellness incentive Retiree 754.86$ 647.22$ 107.64$ Retiree + Spouse 1,608.07 658.06 950.01 Retiree + Child(ren) 1,461.10 647.22 813.88 Retiree + Family 2,228.70 658.06 1,570.64 Traditional Plan with no wellness incentive Retiree 754.86 603.89 150.97 Retiree + Spouse 1,608.07 603.89 1,004.18 Retiree + Child(ren) 1,461.10 603.89 857.21 Retiree + Family 2,228.70 603.89 1,624.81 High Deductible Plan with wellness incentive Retiree 702.36 647.22 55.14 Retiree + Spouse 1,496.18 658.06 838.12 Retiree + Child(ren) 1,359.44 647.22 712.22 Retiree + Family 2,073.62 658.06 1,415.56 High Deductible Plan with no wellness incentive Retiree 702.36 603.89 98.47 Retiree + Spouse 1,496.18 603.89 892.29 Retiree + Child(ren) 1,359.44 603.89 755.55 Retiree + Family 2,073.62 603.89 1,469.73 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 94 The monthly premiums for calendar year 2021 plans and coverage tiers are as follows: The ordinance establishing the OPEB Plan assigned the authority to establish and amend OPEB Plan benefit provisions to the District. The contribution requirements of the District and OPEB 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, 2022 and 2021, the following employees were covered by the benefit terms: Total Retiree OPEB Benefit Net Cost Coverage Tier Premium Paid by District to Retiree Traditional Plan with wellness incentive 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 Traditional Plan with no wellness incentive 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 wellness incentive 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 wellness incentive 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 June 30, 2022 June 30, 2021 Inactive employees or beneficiaries currently receiving benefit payments 118 117 Active employees 916 956 Total 1,034 1,073 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 95 Total OPEB Liability The District’s total OPEB liability measured as of December 31, 2021, and December 31, 2020, was $26,793,582 and $24,920,628, respectively. The District’s total OPEB liabilities for both years were determined based on an actuarial valuation dates, June 30, 2021 and June 30, 2019, respectively, and 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 dates of June 30, 2021 and June 30, 2019, respectively, and the reporting fiscal year end dates of June 30, 2022, and June 30, 2021. Actuarial Assumptions and Other Inputs. The total OPEB liabilities based on the June 30, 2021 and 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-2021 scale for the measurement date of December 31, 2021 and using the MP-2020 scale for the measurement date of December 31, 2020. The actuarial assumptions are based on prior and current year experiences. The plan has not had a formal actuarial experience study performed. Inflation 2.50 percent Healthcare cost trend rates 5.70 percent for 2021, gradually decreasing to an ultimate rate of 3.70 percent for 2073 and beyond Salary increases 4.25 percent, average, including inflation Retiree's share of benefit- related costs 8 - 20 percent and 7-20 percent of projected health insurance premiums for retirees depending on plan selected (traditional or high deductible) and wellness qualification for 2022 and 2021, respectively Discount rate 2.06 percent for December 31, 2021 2.12 percent for December 31, 2020 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 96 Changes in the Total OPEB Liability Changes of assumptions or other inputs reflect a change in the discount rate from 2.12 percent in 2020 to 2.06 percent in 2021 and the change in mortality assumptions referenced above. 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, 2021, calculated using the discount rate of 2.06%, 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 (1.06%) or 1-percentage-point higher (3.06%) than the current 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. Changes in the Total OPEB Liability for the Years Ending Increase (Decrease) December 31, 2021 December 31, 2020 Total OPEB Liability Beginning Balance 24,920,628$ 23,164,618$ Changes for the year: Service cost 2,106,855 1,826,622 Interest on total OPEB liability 553,336 662,562 Effect of plan changes — — Effect of economic/demographic gains or losses 533,798 — Changes of assumptions or other inputs 542,115 898,156 Benefit payments (1,863,150) (1,631,330) Net changes 1,872,954 1,756,010 Total OPEB Liability Ending Balance 26,793,582$ 24,920,628$ 1% Current 1% Decrease Discount Rate Increase (1.06%) (2.06%) (3.06%) Total OPEB Liability 28,436,953$ 26,793,582$ 25,217,639$ December 31, 2021 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 97 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, 2021, 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 (4.70% decreasing to 2.70%) or 1-percentage-point higher (6.70% decreasing to 4.70%) than the current range of healthcare cost trend rates of 5.70% decreasing to 3.70%. 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%. 1% Current 1% Decrease Discount Rate Increase (1.12%) (2.12%) (3.12%) Total OPEB Liability 26,426,249$ 24,920,628$ 23,475,956$ December 31, 2020 Current Healthcare Cost Trend 1% Decrease Rates 1% Increase (4.70% (5.70% (6.70% decreasing decreasing decreasing to 2.70%) to 3.70%) to 4.70%) Total OPEB Liability 24,033,084$ 26,793,582$ 30,064,474$ December 31, 2021 Current Healthcare Cost Trend 1% Decrease Rates 1% Increase (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 98 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the years ended June 30, 2022 and 2021, the District recognized OPEB expense of $2,606,467 and $2,343,501, respectively. At June 30, 2022 and 2021, 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, 2022 and 2021, amounts currently reported as deferred outflows of resources, $926,270 and $862,060, respectively, related to the District’s benefit payments subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the years ended June 30, 2023 and 2022, respectively. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Deferred Deferred Deferred Deferred Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Differences between expected and actual experience 488,174$ 2,858,373$ —$ 3,201,103$ Changes of assumptions or other inputs 2,873,737 587,130 2,674,856 686,982 Benefit payments made subsequent to measurement date 926,270 — 862,060 — Total 4,288,181$ 3,445,503$ 3,536,916$ 3,888,085$ June 30, 2022 June 30, 2021 Net Deferrals of Resources Year ended June 30: 2023 (53,724)$ 2024 (53,724) 2025 (53,724) 2026 (53,724) 2027 (53,724) Thereafter 185,028 (83,592)$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 99 13. 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, 2022 and 2021, these liabilities amounted to $5,057,417 and $5,148,770, respectively. The claims liabilities reported are based on the requirements of GASB Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, which requires that a liability for claims be reported if information obtained prior to the issuance of the financial statements indicates it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Changes in the balance of claims liabilities during fiscal 2022, 2021, and 200 were as follows: The District obtains periodic funding valuations from the third-party administrators managing the self-insurance programs and adjusts the charges as required to maintain the appropriate level of estimated claims liability. The District also maintains excess liability insurance coverage for workers' compensation and medical and hospitalization claims; general liability; and water backup damage to customers’ property. The District purchases commercial insurance for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three years. 2022 2021 2020 Liability - Beginning of Year 5,148,770$ 4,755,168$ 7,920,684$ Current year claims and changes in estimates 16,230,426 17,588,499 18,916,140 Claim payments (16,321,779) (17,194,897) (22,081,656) Liability - End of Year 5,057,417$ 5,148,770$ 4,755,168$ THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 100 14. 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 $750,948 and $686,968 reported as landfill closure and post- closure care liabilities at June 30, 2022 and 2021, respectively, represent the cumulative amounts reported at fiscal year-end and represent 76.7% of the estimated closure and post-closure care costs of the landfill for fiscal years ended June 30, 2022 and 2021. These amounts are based on what it would cost to perform all closure and post-closure care in 2022 and 2021, 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 the remaining estimated cost of closure and post-closure care annually. 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. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 101 15. 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, 2022 and 2021 financial statements. The District has entered into construction and other contracts amounting to approximately $540,000,000 and $470,000,000 at June 30, 2022 and 2021, respectively, and through the respective audit report date. The District had $744,149,393 and $853,126,796 in revenue bonds authorized by the voters but unissued as of June 30, 2022 and 2021, respectively. 16. Restricted Net Position The Statements of Net Position report $96,029,444 and $97,919,614 of restricted net position at June 30, 2022 and 2021, respectively, of which $71,883,165 and $68,212,821 are restricted due to enabling legislation, as of June 30, 2022 and 2021, respectively. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 102 17. Segment Information The District issued wastewater revenue bonds to finance wastewater infrastructure projects. The District accounts for both wastewater and stormwater activities in a single enterprise fund, but investors in those bonds rely solely on the revenue generated by the wastewater activities for repayment. Fiscal year 2022 and 2021 summary financial information for each business segment is presented below. A segment is an identifiable activity reported as a stand-alone entity for which one or more revenue bonds are outstanding. A segment has a specifically identifiable revenue stream pledged in support of the revenue bonds and has related expenses, gains and losses and assets, deferred outflows, liabilities and deferred inflows that are required by external parties to be accounted for separately. The wastewater system is the only reportable segment that meets the requirements of GASB Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments. The stormwater system is reported on for informational purposes only. Financial information as of and for the years ended June 30, 2022 and 2021 of the District’s Wastewater Segment is as follows: THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 103 2022 2021 As Restated Assets Current Assets Unrestricted Current Assets Cash and cash equivalents  62,741,070$ 88,014,051$ Investments                                          180,153,078 201,964,355 Sewer service charges receivable, less allowance of                   $75,207,244 in 2022 and $70,561,791 in 2021 69,470,552 66,333,963 Unbilled sewer service charges receivable 36,419,844 34,970,247 Accrued income on investments                        1,045,802 1,386,438 Other receivables, less allowance of $54,456 in 2022                 and $60,373 in 2021 2,814,607 2,623,352 Supplies inventory                                   8,923,100 8,475,419           Total Unrestricted Current Assets                             361,568,053 403,767,825        Restricted Current Assets Other receivables                                      28,747 43,590           Total Restricted Current Assets                            28,747 43,590           Total Current Assets                            361,596,800 403,811,415 Non-Current Assets Restricted Assets Cash and cash equivalents  62,288,385 20,680,722 Investments                                          84,353,060 110,366,490 Long-term investments                                5,152,944 5,996,719 Property taxes receivable (17,972) (17,971) Accrued income on investments                        22,769 (120,562)        Total Restricted Non-Current Assets                             151,799,186 136,905,398 Other Assets     Notes receivable                                      8,947,222 9,694,702 Long-term investments                                264,169,435 189,961,198 Other Receivables - Non Current (Leases) 3,308,705 3,594,566             Total Other Assets                            276,425,362 203,250,466        Capital Assets     Depreciable:        Treatment and disposal plant and equipment           1,332,498,020 1,303,648,712        Collection and pumping plant                         2,630,842,605 2,411,802,786        General plant and equipment                          91,204,300 86,303,314 Lease right of use asset 1,548,555 1,032,853                                                             4,056,093,480 3,802,787,665        Less:  Accumulated depreciation                      1,541,823,124 1,459,412,219        Less:  Accumulated amortization 300,309 142,204        Net depreciable assets       2,513,970,047 2,343,233,242            Non-depreciable:        Land                                                 72,328,276 71,102,122        Construction in progress                             1,146,653,155 1,163,985,241           Net Capital Assets                                3,732,951,478 3,578,320,605                    Total Non-Current Assets                         4,161,176,026 3,918,476,469                         Total Assets                               4,522,772,826 4,322,287,884 WASTEWATER SEGMENT STATEMENTS OF NET POSITION June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 104 2022 2021 As Restated Deferred Outflows of Resources:        Bonds and notes payable-Deferred loss on refunding                      3,068,689 5,469,323        Pension-related outflows                                              16,090,775 9,199,570        OPEB-related outflows                                              3,696,507 3,049,400                  Total Deferred Outflows of Resources                        22,855,971 17,718,293 Liabilities Current Liabilities-Payable From Unrestricted Assets Contracts and accounts payable  36,602,049$ 40,758,787$  Lease liability 238,285 140,182 Deposits and accrued expenses 33,265,734 33,961,774 Retainage payable  18,128,103 20,326,492 Current portion of bonds and notes payable  66,337,500 61,157,300 Total Current Liabilities-Payable From Unrestricted Assets 154,571,671 156,344,535 Current Liabilities-Payable From Restricted Assets Contracts and accounts payable  — 510 Total Current Liabilities-Payable From Restricted Assets — 510             Total Current Liabilities                       154,571,671 156,345,045        Non-Current Liabilities Deposits and accrued expenses 9,375,268 9,202,567 Net pension liability 28,320,167 24,550,973  Lease liability 1,007,232 755,991 Total OPEB liability 23,111,464 21,498,182 Bonds and notes payable  1,839,184,214 1,768,769,051             Total Non-Current Liabilities                       1,900,998,345 1,824,776,764                         Total Liabilities                              2,055,570,016 1,981,121,809 Deferred Inflows of Resources:     Bonds and Notes payable - Deferred gain on refunding 11,427,026 2,793,162        Pension-related inflows                                              20,688,338 20,238,170        OPEB-related inflows                                              2,947,746 3,328,967      Lease-related Inflows 3,425,569 3,772,962                  Total Deferred Inflows of Resources                        38,488,679 30,133,261 Net Position Net investment in capital assets 1,896,771,593 1,799,542,191 Restricted for:       Debt service                                       24,146,279 29,706,793       Subdistrict construction and improvement           1,930,828 1,957,758 Unrestricted 528,721,402 497,544,364                  Total Net Position               2,451,570,102$ 2,328,751,106$   WASTEWATER SEGMENT STATEMENTS OF NET POSITION (Continued) June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 105 2022 2021 As Restated   Operating Revenues     Sewer service charges                                   452,645,902$ 425,250,174$     Recovery of (provision for) doubtful sewer service charge accounts (5,082,815) (5,353,771)     Licenses, permits, and other fees                       3,937,368 3,753,797     Other                                                   6,748,206 3,495,172     Total Operating Revenues                              458,248,661 427,145,372          Operating Expenses     Pumping and treatment                                   65,549,965 64,475,064     Collection system maintenance                           32,688,059 35,006,085     Engineering                                             1,074,617 902,282     General and administrative                              58,779,438 55,195,106     Water backup claims                                     2,030,765 3,984,849     Depreciation                                            84,210,777 80,604,140 Lease amortization 158,105 142,204     Asset management                                               17,202,182 15,141,153     Total Operating Expenses                             261,693,908 255,450,883          Operating Income                    196,554,753 171,694,489          Non-Operating Revenues     Investment income                                       (10,800,614) 1,304,545     Rent and other income                                   439,491 428,384     Total Non-Operating Revenues                          (10,361,123) 1,732,929          Non-Operating Expenses     Net loss on disposal and sale of capital assets         832,835 608,073     Non-recurring projects and studies                       11,351,959 10,555,396     Interest expense                                        56,931,596 56,622,130     Total Non-Operating Expenses                          69,116,390 67,785,599          Income Before Capital Grants And Contributions                       117,077,240 105,641,819          Capital Grants And Contributions     Capital assets contributed                               5,262,151 8,608,122     Grant revenue                                           479,605 1,288,444     Total Capital Grants And Contributions                          5,741,756 9,896,566   Change In Net Position 122,818,996 115,538,385   Net Position - Beginning Of Year 2,328,751,106 2,213,212,721   Net Position - End Of Year                                    2,451,570,102$ 2,328,751,106$ WASTEWATER SEGMENT STATEMENTS 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 106 2022 2021 As Restated Cash Flows From Operating Activities Received from customers 450,977,641$ 427,556,320$ Paid to employees for services (105,607,408) (105,930,520) Paid to suppliers for goods and services (82,702,143) (83,426,791) Net Cash Provided By Operating Activities 262,668,090 238,199,009 Cash Flows Provided By Non-Capital Financing Activities Taxes levied and collected 15,215 4,032 Cash Flows From Capital And Related Financing Activities Proceeds from capital grants 485,924 3,067,953 Proceeds from issuance of debt 148,531,457 172,012,156 Premium on sale of bonds 13,362,572 37,194,201 Principal paid on debt (67,915,074) (62,599,880) Interest and fees paid on debt (65,442,437) (62,785,703) Payments for capital assets (243,034,353) (290,256,122) Proceeds from sale of capital assets 713,306 158,652 Proceeds from note receivable for other organization's contribution to construction of treatment plant 1,576,500 1,154,696 Proceeds from insurance on destroyed capital assets — 1,088,835 Build America Bond tax credit 1,642,857 1,642,857 Net Cash (Used In) Capital And Related Financing Activities (210,079,248) (199,322,355) Cash Flows From Investing Activities Purchase of investments (507,982,689) (557,806,139) Proceeds from sale and maturity of investments 464,511,080 530,033,856 Investment income 6,889,877 9,337,384 Proceeds from rents 312,357 238,122 Net Cash (Used In) Provided By Investing Activities (36,269,375) (18,196,777) Net Increase In Cash And Cash Equivalents 16,334,682 20,683,909 Cash And Cash Equivalents At Beginning Of Year 108,694,773 88,010,864 Cash And Cash Equivalents At End Of Year 125,029,455$ 108,694,773$ Ended June 30, WASTEWATER SEGMENT STATEMENTS OF CASH FLOWS For The Years THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 107 Financial information as of and for the years ended June 30, 2022 and 2021 of the District’s Stormwater Segment is as follows: 2022 2021 Assets Current Assets Unrestricted Current Assets Cash and cash equivalents  2,104,687$ 3,323,792$ Investments                                          6,992,110 8,976,389 Sewer service charges receivable, less allowance of                   $97,073 in 2022 and $104,297 in 2021 46,641 53,337 Property taxes receivable, less allowance of $6,023 in 2022 and $7,430 in 2021  294,552 363,496 Accrued income on investments                        21,562 48,449        Total Unrestricted Current Assets                             9,459,552 12,765,463        Restricted Current Assets Cash and cash equivalents 2,978,669 4,629,689 Investments                                          9,896,863 12,587,475        Total Restricted Current Assets                            12,875,532 17,217,164  Total Current Assets                             22,335,084 29,982,627 Non-Current Assets Restricted Assets Cash and cash equivalents  4,340,281 5,616,581 Investments                                          14,420,790 15,270,584 Long-term investments                                36,671,648 26,202,398 Property taxes receivable, less allowance of $35,016 in 2022 and $36,447 in 2021 1,698,593 1,768,587 Accrued income on investments                        142,505 289,739        Total Restricted Non-Current Assets                             57,273,817 49,147,889 Other Assets Long-term investments                                10,544,282 8,442,904             Total Other Assets                            10,544,282 8,442,904 Capital Assets     Depreciable:        Collection and pumping plant                         698,614,594 681,265,978        General plant and equipment                          18,381,227 17,213,330                                                             716,995,821 698,479,308        Less:  Accumulated depreciation                      246,584,322 236,082,317        Net depreciable assets       470,411,499 462,396,991            Non-depreciable:        Land                                                 9,877,572 8,467,188        Construction in progress                             32,237,759 30,048,200           Net Capital Assets                                512,526,830 500,912,379                    Total Non-Current Assets                         580,344,929 558,503,172                         Total Assets                               602,680,013 588,485,799        STORMWATER SEGMENT STATEMENTS OF NET POSITION June 30, THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 108 2022 2021 Deferred Outflows of Resources:        Pension-related outflows                                              2,386,050 1,276,850        OPEB-related outflows                                              591,674 487,516                  Total Deferred Outflows of Resources                        2,977,724 1,764,366 Liabilities Current Liabilities-Payable From Unrestricted Assets Contracts and accounts payable   101,288$ 39,113$ Deposits and accrued expenses  9,499,676 8,314,797 Retainage payable   95,976 — Total Current Liabilities-Payable From Unrestricted Assets 9,696,940 8,353,910 Current Liabilities-Payable From Restricted Assets Contracts and accounts payable   828,414 701,665 Retainage payable   824,282 561,310 Total Current Liabilities-Payable From Restricted Assets 1,652,696 1,262,975             Total Current Liabilities                        11,349,636 9,616,885        Non-Current Liabilities        Net pension liability                   5,550,889 4,944,205        Total OPEB liability                   3,682,118 3,422,446             Total Non-Current Liabilities                       9,233,007 8,366,651                          Total Liabilities                     20,582,643 17,983,536 Deferred Inflows of Resources:        Pension-related inflows                                              2,505,686 2,433,228        OPEB-related inflows                                         497,757 559,118                  Total Deferred Inflows of Resources                         3,003,443 2,992,346 Net Position Net investment in capital assets 510,930,034 499,759,396 Restricted for:       Subdistrict construction and improvement           69,952,336 66,255,063 Unrestricted 1,189,281 3,259,824                   Total Net Position 582,071,651$ 569,274,283$   STATEMENTS OF NET POSITION (Continued) June 30, STORMWATER SEGMENT THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 109 2022 2021   Operating Revenues     Sewer service charges                                   (811)$ (2,391)$     Recovery of (provision for) doubtful sewer service charge accounts 6,413 6,352     Other                                                   14,937 2,229     Total Operating Revenues                              20,539 6,190          Operating Expenses     Collection system maintenance                            13,181,441 13,106,911     Engineering                                             10,599,484 10,598,514     General and administrative                               315,306 (326,038)     Depreciation                                             11,283,302 10,748,129     Asset management                                               1,573,905 882,830     Total Operating Expenses                              36,953,438 35,010,346          Operating (Loss)                                         (36,932,899) (35,004,156)          Non-Operating Revenues     Property taxes levied by the District                   44,479,669 43,624,302     Investment income                                       (1,713,359) 87,733     Total Non-Operating Revenues                           42,766,310 43,712,035          Non-Operating Expenses     Net loss on disposal and sale of capital assets         690,480 382,035     Non-recurring projects and studies                       1,891,225 1,272,327     Total Non-Operating Expenses                           2,581,705 1,654,362          Income (Loss) Before Capital Contributions                        3,251,706 7,053,517          Capital Contributions     Capital assets contributed                               8,087,321 4,334,972     Grant revenue                                            1,458,341 469,624     Total Capital Contributions                           9,545,662 4,804,596   Change In Net Position 12,797,368 11,858,113   Net Position - Beginning Of Year 569,274,283 557,416,170          Net Position - End Of Year                                    582,071,651$ 569,274,283$ STORMWATER SEGMENT STATEMENTS 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 110 2022 2021 Cash Flows From Operating Activities Received from customers 1,206,799$ (1,627,308)$ Paid to suppliers for goods and services (27,204,239) (25,897,686) Net Cash (Used In) Operating Activities (25,997,440) (27,524,994) Cash Flows Provided By Non-Capital Financing Activities Taxes levied and collected 43,967,398 42,684,514 Cash Flows From Capital And Related Financing Activities Proceeds from capital grants 1,458,342 469,624 Payments for capital assets (14,450,433) (12,783,904) Proceeds from sale of capital assets (539,111) — Net Cash (Used In) Capital And Related Financing Activities (13,531,202) (12,314,280) Cash Flows From Investing Activities Purchase of investments (66,481,174) (75,869,353) Proceeds from sale and maturity of investments 57,117,920 76,520,644 Investment income 778,072 959,684 Net Cash Provided By Investing Activities (8,585,182) 1,610,975 Net Increase In Cash And Cash Equivalents (4,146,426) 4,456,215 Cash And Cash Equivalents At Beginning Of Year 13,570,062 9,113,847 Cash And Cash Equivalents At End Of Year 9,423,637$ 13,570,062$ Ended June 30, STORMWATER SEGMENT STATEMENTS OF CASH FLOWS For The Years THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 111 18. 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 112 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 Development Redevelopment Redevelopment Total Tax or City Zones Bonds Authority Corporations Abatements St Louis County —$ 166,659$ —$ 11,893$ 178,552$ Bellerive — 3,642 — — 3,642 Berkeley 2,717 — — — 2,717 Brentwood — — — 8,818 8,818 Bridgeton — 498 — 7,357 7,855 Clayton — 75,352 — 4,082 79,434 Edmundson — — — 14,047 14,047 Eureka — 344 — — 344 Ferguson — 6,610 — 975 7,585 Frontenac — — — 11,793 11,793 Hazelwood 9,054 55,453 — 129,542 194,049 Kinloch — — — 56,774 56,774 Jennings — 162 — — 162 Maplewood — — — 13,774 13,774 Maryland Heights — — — 5,304 5,304 Normandy — — — 1,343 1,343 Olivette — — — 2,516 2,516 Overland — — — 4,591 4,591 Richmond Heights — — — 22,253 22,253 Rock Hill — — — 2,370 2,370 St. Ann — 356 — — 356 Sunset Hills — — — 863 863 University City — — 12,532 — 12,532 Woodson Terrace — — — 204 204 Total Tax Abatements 11,771$ 309,076$ 12,532$ 298,499$ 631,878$ For the Year Ended June 30, 2022 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 113 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 per $100 of assessed value for both fiscal 2022 and 2021 that were abated by St. Louis City are reported in the following tables. Land Enhanced Industrial Clearance for Urban St. Louis County Enterprise Development Redevelopment Redevelopment Total Tax or City Zones Bonds Authority Corporations Abatements St Louis County —$ 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 Jennings — 151 — — 151 Maplewood — — — 13,617 13,617 Maryland Heights — 404 — 7,406 7,810 Normandy — — — 3,025 3,025 Olivette — — — 2,566 2,566 Overland — — — 9,067 9,067 Richmond Heights — — — 18,263 18,263 Rock Hill — — — 2,749 2,749 St. Ann — 700 — — 700 Sunset 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 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 114 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 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: Reduced Unabated Tax Abated Tax Tax St. Louis City Values Revenue Values Revenue Revenue Residential 157,389,170$ 163,842$ 107,787,020$ 21,320$ 142,522$ Commercial 162,562,700 169,228 142,609,494 47,505 121,722 Total 319,951,870$ 333,070$ 250,396,514$ 68,825$ 264,245$ For the Year Ended June 30, 2022 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$ Commercial 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 the Year Ended June 30, 2021 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 115 In summary, the District’s total tax revenues reduced during fiscal 2022 and 2021 as a result of the programs of other governments are as follows: TIF TIF Incremental Reduced Incremental Reduced St. Louis County or City Values Tax Revenues Values Tax Revenues St. Louis County and Cities Located in St. Louis County 571,648,520$ 616,237$ 541,545,970$ 583,787$ St. Louis County PILOTs Received — (97,358) — (55,007) St. Louis City 1,301,447,243 321,587 1,309,205,243 401,965 St. Louis City PILOTs Received — (39,620) — (44,808) Total 1,873,095,763$ 800,846$ 1,850,751,213$ 885,937$ June 30, 2022 For the Years Ended June 30, 2021 Reduced Reduced St. Louis County or City Tax Revenues Tax Revenues St. Louis County and Cities Located in St. Louis County - Tax Abatements 631,878$ 575,103$ St. Louis City - Tax Abatements 264,245 289,861 St. Louis County and Cities Located in St. Louis County - TIFs 518,879 528,780 St. Louis City - TIFs 281,967 357,157 Total Reduced Tax Revenues 1,696,969$ 1,750,901$ For the Years Ended June 30, 2022 June 30, 2021 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Notes to Financial Statements (Continued) Page 116 19. Subsequent Events In preparing these financial statements the District has evaluated events and transactions for potential recognition or disclosure through November 1, 2022, the date the financial statements were available to be issued. The District experienced a major weather event at the end of July 2022 resulting in extreme flooding due to heavy rainfall with totals upwards of 10 inches in some areas. As of September 30, 2022, water backup claims and overcharged claims paid to date are $1.7 million with outstanding reserves of $8.2 million for a total of $9.9 million. The District has a $6.5 million deductible with a $10 million policy limit and is expected to recover any amount paid over the deductible up to $16.5 million. In October 2022, the District entered into agreements with the State of Missouri’s Direct Loan Program to receive amounts up to $125.0 million for the purpose of improving, renovating, repairing, replacing and equipping the District’s Wastewater System. Series 2022C, loan amount of up to $10.0 million, will have principal repayments effective in 2024 with a maturity date of 2043. Series 2022D, loan amount of up to $115.0 million will have principal repayments effective in 2025 (FY26) with the maturity date of 2044 (FY45). The principal and interest on the bonds are expected to be paid from future wastewater revenues. The District’s interest rate is projected at 1.25% and is payable in semiannual installments at varying amounts through 2044 in addition to an annual administrative fee of .50%. As the District incurs approved capital expenditures, the Department of Natural Resources reimburses the District for the expenditures from the bond proceeds account and deposits the approved amount in a bond reserve fund. The District repays the loan at a projected interest rate of 1.25% based on the amount that has been borrowed. The payment requirements to maturity will be determined after the debt is fully issued. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 117 REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS June 30, 2022 20 2 1 2 0 2 0 2 0 1 9 2 0 1 8 2 0 1 7 2 0 1 6 2 0 1 5 2 0 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 , 4 7 7 $ 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 $ Int 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 2 3 , 6 7 4 2 3 , 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 Eff e c t o f p l a n c h a n g e s — — — — — — — — Eff 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 ) 1 , 5 6 4 ( 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 ) Eff 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 1 8 , 7 8 8 — 1 1 , 9 1 1 — 1 , 6 6 7 1 1 , 6 6 5 — 6 , 5 0 0 Be n e f i t p a y m e n t s ( 2 0 , 6 6 6 ) ( 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 7 , 8 3 7 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 3 5 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 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 ) 3 8 4 , 2 4 4 3 5 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 1 2 , 1 4 4 1 3 , 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 Me m b e r c o n t r i b u t i o n s — — — — — — — — Inv 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 3 1 , 9 8 2 3 6 , 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 ( 2 0 , 6 6 6 ) ( 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 2 3 , 4 6 0 3 0 , 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 Pla 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 3 2 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 2 4 6 , 2 4 7 Pla 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 ) 3 5 0 , 3 7 2 3 2 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 ) 3 3 , 8 7 2 $ 2 9 , 4 9 5 $ 5 7 , 7 9 3 $ 7 4 , 3 9 7 $ 4 8 , 3 8 9 $ 6 7 , 0 3 9 $ 5 2 , 6 0 0 $ 3 9 , 8 9 6 $ Fid 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 . 1 8 % 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 3 0 , 9 4 8 $ 3 4 , 3 9 1 $ 3 6 , 7 9 3 $ 3 9 , 4 3 7 $ 4 1 , 8 6 9 $ 4 2 , 0 5 5 $ 4 3 , 3 4 5 $ 4 4 , 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 1 0 9 . 4 5 % 8 5 . 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 c h a n g e d t o 6 . 2 5 % i n 2 0 2 1. B o t h r a t e s w e r e c h a n g e d t o 6 . 7 5 % i n 2 0 2 0 a n d 2 0 1 9 , 6 . 9 0 % i n 2 0 1 8 a n d 2 0 1 7 a n d 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 i n 2 0 2 1 , 2 0 20 a n d 2 0 1 9 w e r e 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 o f c h a n g i n g m o r t a l i t y t a b l e s i n 2 0 1 9 i s a l s o r e f l e c t e d i n t h e a s s u mp 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 s 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 nn 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 , 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 , i n f l a t i on 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 ) 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 , THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 118 REQUIRED SUPPLEMENTARY INFORMATION (Continued) SCHEDULE OF EMPLOYER CONTRIBUTIONS TO EMPLOYEES’ PENSION PLAN June 30, 2022 Schedule of Employer Contributions To Employees' Pension Plan Fiscal Year 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% 2022 12,243,540 12,243,540 — 32,315,839 37.89% Notes to Schedule: 1. This schedule will ultimately present ten years of information when available. 2. Valuation Date: Actuarially determined contribution rates are calculated as of January 1 of the fiscal year in which the contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial Cost Method: Entry Age Normal Amortization Method: Level dollar layered, 20 year periods Asset Valuation Method: 3-year smoothing period Inflation: 2.50% Salary Increases: 4.25%, average, including inflation Investment Rate of Return: 6.25%, net of pension plan investment expense, including inflation for 2022. 6.75%, net of pension plan investment expense, including inflation for 2020 and 2021 6.90%, net of pension plan investment expense, including inflation for 2018 and 2019 7.00%, net of pension plan investment expense, including inflation for all years prior to 2018 Mortality: In the 2022, 2021 and 2020 actuarial valuations, assumed life expectancies were calculated using the Pub-2010 General Amount-Weighted Mortality Tables with generational projection based on Scale MP-2021, 2020 and 2019, respectively. In the 2019, 2018 and 2017 actuarial valuations, assumed life expectancies were calculated using the RP-2014 Employee and Healthy Annuitant Mortality Table (with generational projections from 2006 based on the most current MP improvement scale which is updated annually) and the RP-2014 Disabled Mortality Table. In the 2016 and 2015 actuarial valuations, assumed life expectancies were calculated using the RP-2000 Healthy Annuitant Mortality Table and the RP-2000 Disabled Mortality Table. THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 119 REQUIRED SUPPLEMENTARY INFORMATION (Continued) SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY June 30, 2022 2021 2020 2019 2018 2017 Total OPEB Liability Service cost 2,107$ 1,827$ 1,397$ 1,781$ 1,622$ Interest on total OPEB liability 553 663 1,017 865 895 Effect of plan changes — — 86 — — Effect of economic/demographic gains or (losses) 534 — (3,887) — — Changes of assumptions or other inputs 542 898 1,926 (987) 438 Benefit payments (1,863) (1,631) (1,539) (1,689) (1,600) Net change in total OPEB liability 1,873 1,757 (1,000) (30) 1,355 Total OPEB Liability - Beginning 24,921 23,165 24,164 24,194 22,839 Total OPEB Liability - Ending 26,794$ 24,921$ 23,165$ 24,164$ 24,194$ Notes to Schedule: 1. Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period. The following are the discount rates used in each period: 2021 2.06% 2020 2.12% 2019 2.74% 2018 4.10% 2017 3.44% 2016 3.78% 2. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits. 3. This schedule will ultimately present ten years of information when available. 4. Contributions to the OPEB plan are not based on a measure of pay so accordingly, no measure of payroll is presented. Schedule of Changes in Total OPEB Liability In (000's) Calendar Year Ending December 31, 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 ...................................... 120 – 121 Revenue Capacity These schedules contain information to help the reader assess the District’s most significant local revenue source, the user charge ...................................................................................... 122 – 130 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 ............................................................................. 131 – 132 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 ........................................................................................... 133 – 135 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 ............................................... 136 – 138 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 120 2013 2014 2015 a 2016 a 2017 a Net Position Net investment in capital assets 1,877,692$ 1,845,394$ 1,805,453$ 1,809,386$ 1,876,249$ Restricted 111,066 142,764 142,445 136,547 135,259 Unrestricted 251,300 279,794 330,218 381,124 379,660 Total Net Position 2,240,058$ 2,267,952$ 2,278,116$ 2,327,057$ 2,391,168$ 2018 a 2019 a 2020 a 2021 a 2022 a As restated Net Position Net investment in capital assets 1,968,740$ 2,063,519$ 2,184,736$ 2,299,302$ 2,407,702$ Restricted 129,579 127,414 97,034 97,920 96,029 Unrestricted 392,997 429,591 488,859 500,804 529,911 Total Net Position 2,491,316$ 2,620,524$ 2,770,629$ 2,898,025$ 3,033,642$ a Years 2015 to current include a change in the calculation of the net position components which is not reflected in years prior. NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (000's) Fiscal Year Fiscal Year THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 121 Income before Non-operating Capital Capital Change Fiscal Operating Operating Operating Revenue/ Grants and Grants and in Net Year Revenues Expenses Income (Expenses) Contributions Contributions Position 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 427,151,562 290,461,229 136,690,333 (23,994,999) 112,695,334 14,701,164 127,396,498 2022 458,269,200 298,647,346 159,621,854 (39,292,908) 120,328,946 15,287,418 135,616,364 *2021 was restated due to implementation of GASB 87 CHANGES IN NET POSITION LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 122 OPERATING REVENUES BY SOURCE LAST TEN FISCAL YEARS Licenses, Fiscal Sewer Service Permits, and Year Charges, Net Other Fees Other 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 2022 447,568,689 3,937,368 6,763,143 458,269,200 Total Operating Revenues THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 123 OPERATING EXPENSES LAST TEN FISCAL YEARS Fiscal Employment Materials and Contracted Chemical Year Costs Utilities Supplies Services Supplies 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 2022 106,830,879 16,296,769 12,850,178 49,636,282 3,735,229 Fiscal Year Insurance Other Amortization 2013 2,696,416 3,561,780 160,128,594 70,029,840 n/a 230,158,434 2014 2,737,491 5,530,535 167,210,428 74,087,207 n/a 241,297,635 2015 2,791,622 3,713,021 177,879,889 78,641,259 n/a 256,521,148 2016 3,218,041 3,023,288 189,111,956 83,983,749 n/a 273,095,705 2017 3,293,267 5,121,777 193,883,284 81,194,391 n/a 275,077,675 2018 3,371,910 5,459,242 192,438,864 81,326,342 n/a 273,765,206 2019 3,819,449 3,182,068 207,077,666 83,639,843 n/a 290,717,509 2020 4,158,280 5,656,605 209,106,084 87,633,312 n/a 296,739,396 2021 4,410,048 5,199,319 198,966,756 91,352,269 142,204 290,461,229 2022 5,806,596 7,839,230 202,995,163 95,494,079 158,105 298,647,346 Note: Balances in FY18 and prior were restated in FY19 to accurately reflect expenses in the appropriate category. The majority of the changes were increases to Employment Costs and Other and decreases to Materials and Supplies and Contracted Services. Subtotal, Expenses before Depreciation Total Operating ExpensesDepreciation THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 124 2013 2014 2015 2016 2017 Non-operating revenues Property taxes levied by the District 26,016,135$ 27,450,319$ 24,764,324$ 25,671,058$ 32,458,054$ Investment income 1,056,966 2,966,549 3,000,591 4,635,866 2,902,624 Rent and other income 293,159 302,506 37,321 102,865 106,562 Total non-operating revenues 27,366,260 30,719,374 27,802,236 30,409,789 35,467,240 Non-operating expenses Interest expense 21,062,474 25,661,127 27,138,546 28,943,200 31,250,777 Net loss on disposal and sale of capital assets 795,527 5,248,443 1,420,902 324,513 673,044 Non-recurring projects and studies 4,676,203 3,492,667 12,317,488 11,000,403 7,459,538 Legal claims — — — — Total non-operating expenses 26,534,204 34,402,237 40,876,936 40,268,116 39,383,359 Net non-operating revenue (expense) 832,056$ (3,682,863)$ (13,074,700)$ (9,858,327)$ (3,916,119)$ 2018 2019 2020 2021, As restated 2022 Non-operating revenues Property taxes levied by the District 33,748,932$ 34,107,619$ 35,439,441$ 43,624,302$ 44,479,669$ Investment income 7,405,957 16,699,153 16,259,182 1,392,278 (12,513,973) Rent and other income 253,799 301,446 301,631 428,384 439,491 Total non-operating revenues 41,408,688 51,108,218 52,000,254 45,444,964 32,405,187 Non-operating expenses Interest expense 36,695,083 33,082,384 36,119,362 56,622,132 56,931,596 Net loss on disposal and sale of capital assets 1,833,908 970,825 961,476 990,108 1,523,315 Non-recurring projects and studies 9,296,358 15,628,590 12,458,231 11,827,723 13,243,184 Total non-operating expenses 47,825,349 49,681,799 49,539,069 69,439,963 71,698,095 Net non-operating revenue (expense) (6,416,661)$ 1,426,419$ 2,461,185$ (23,994,999)$ (39,292,908)$ Note: Interest expense increased in FY21 due to the implementation of GASB Statement No. 89, Accounting for Interest Cost Incurred Before 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. Fiscal Year NON-OPERATING REVENUES AND EXPENSES LAST TEN FISCAL YEARS Fiscal Year THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 125 Type of Monthly Charge Unmetered c Residential c Non-Residential Wastewater User Charge Base Charge $27.31 $27.31 $27.31 Compliance Charge a Tier 1 — — $4.55 Tier 2 — — 62.64 Tier 3 — — 136.37 Tier 4 — — 181.83 Tier 5 — — 227.29 Volume Charges per Ccf b — 5.17 5.17 per room 3.06 — — per water closet 11.40 — — per bath 9.51 — — per separate shower 9.51 — — Extra Strength Surcharges a Suspended Solids ("SS") over 300 milligrams per liter — — $309.88 Biochemical Oxygen Demand ("BOD") over 300 — — 832.28 milligrams per liter Chemical Oxygen Demand ("COD") over 600 milligrams — — 416.14 per liter Notes: a Applicable only to non-residential customers, Extra Strength Surcharges priced per ton b Ccf = Hundred cubic feet c User charges for certain low income residential users will be 50 percent of the regular user charge Source: Finance Department USER CHARGE RATES As of June 30, 2022 Metered THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 126 Type of Monthly Charge Unmetered c Residential c Non-Residential Wastewater User Charge Base Charge $27.31 $27.31 $27.31 Com pliance Charge a Tier 1 — — $4.55 Tier 2 — — 62.64 Tier 3 — — 136.37 Tier 4 — — 181.83 Tier 5 — — 227.29 Volume Charges per Ccf b — 5.17 5.17 per room 3.06 — — per water closet 11.40 — — per bath 9.51 — — per separate shower 9.51 — — Extra Strength Surcharges a Suspended Solids ("SS") over 300 milligrams per liter — — $309.88 Biochemical Oxygen Demand ("BOD") over 300 — — 832.28 milligrams per liter Chemical Oxygen Demand ("COD") over 600 milligrams — — 416.14 per liter Notes: a Applicable only to non-residential customers, Extra Strength Surcharges priced per ton b Ccf = Hundred cubic feet c User charges for certain low income residential users will be 50 percent of the regular user charge Source: Finance Department USER CHARGE RATES As of June 30, 2022 Metered THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 127 Fiscal Year Wastewater Charges Billed1 Wastewater Charges Collected2 Collections as a % of Wastewater Charges Billed 2013 233,882,795$ 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% 2022 446,532,652 439,461,443 98.42% 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. USER CHARGE REVENUES LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 128 2013 b 2014 2015 2016 2017 c Residential: Single-Family/Unit 1 379.56$ 421.08$ 434.76$ 491.52$ 535.08$ Multi-Family/Unit 324.12 360.36 434.04 490.80 492.00 Commercial/Industrial: Service Charge/Unit 2 478.56 412.56 348.12 296.80 336.69 Sanitary Sewer Usage Charge per Ccf 2.28 2.50 2.82 3.21 3.59 Extra Strength Surcharges: SS over 300 milligrams per liter (price per ton) 231.35 231.35 244.03 251.88 262.00 BOD over 300 milligrams per liter (price per ton) 620.14 620.14 620.14 632.38 654.00 COD over 600 milligrams per liter (price per ton) 310.07 310.07 310.07 316.19 327.00 2018 2019 2020 2021 d,e 2022 Residential: Single-Family/Unit 1 591.72$ 602.76$ 666.84$ 674.31$ 699.96$ Multi-Family/Unit 544.08 602.76 666.84 674.31 699.96$ Commercial/Industrial: Service Charge/Unit 2 363.53 395.42 428.90 435.83 452.32 Sanitary Sewer Usage Charge per Ccf 3.97 4.40 4.87 4.97 5.17 Extra Strength Surcharges: SS over 300 milligrams per liter (price per ton) 269.07 277.03 283.87 297.97 $309.88 BOD over 300 milligrams per liter (price per ton) 671.63 691.50 708.56 786.85 832.28 COD over 600 milligrams per liter (price per ton) 335.82 345.76 354.30 393.43 416.14 Notes: 1 Based on average usage of a typical single-family 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 implemented 5-tier Compliance Charge Rate Model, so the Service Charge/Unit is based on calculated weighted average compliance charge. FY 2013, FY 2014 & FY 2015 Service Charge/Unit were adjusted to reflect the weighted average compliance charge calculations. Prior to FY 2013, there was only 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 blended rates due to the Board approving a delay from 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 Department SEWER USER CHARGES (COMPOSITE-ANNUAL) LAST TEN FISCAL YEARS Fiscal Year Fiscal Year THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 129 Single- Multi- Fiscal Family Family Non- Total Year Residential Residential Residential Accounts 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 2022 363,525 41,387 23,940 428,852 Source: Finance Department Note: Total accounts listed above are as of June 30 for each fiscal year listed. NUMBER OF CUSTOMERS BY TYPE LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 130 Customer Amount % Anheuser-Busch 6,009,037$ 1.33% Washington University 2,259,830 0.50% City Of St Louis 2,119,128 0.47% Missouri-American Water Co 2,109,851 0.47% St Louis University 1,630,212 0.36% BJC Health System 1,386,559 0.31% Sensient Colors Inc 1,382,103 0.31% Sigma-Aldrich 1,343,327 0.30% Jost Real Estate LLC 1,257,051 0.28% The Boeing Company 1,149,697 0.25% Subtotal (10 largest) 20,646,796 4.56% Balance from other customers 431,998,295 95.44% Grand totals 452,645,091$ 100.00% Customer Amount % Anheuser-Busch 5,715,199$ 2.42% Washington University The 1,475,706 0.62% Mallinckrodt Nuclear 1,405,103 0.59% City Of St Louis-Parks 1,030,029 0.44% St Louis University Hospital 1,028,812 0.43% Sigma-Aldrich 735,691 0.31% McDonnell Aircraft Corp/Boeing 720,564 0.30% Sensient Colors Inc 702,801 0.30% Saint Louis Zoo 663,673 0.28% Prairie Farms Dairy Inc 590,349 0.25% Subtotal (10 largest) 14,067,927 5.95% Balance from other customers 222,522,873 94.05% Grand totals 236,590,800$ 100.00% User Charges TEN LARGEST CUSTOMERS CURRENT YEAR AND NINE YEARS AGO Fiscal Year 2022 User Charges Fiscal Year 2013 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 131 Unamortized Fiscal Subordinate Capital Premium, Net Year Senior Subordinate Direct Loans Lease of Discount Amount Per Capita 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 2022 1,318,376,480 73,505,000 347,168,086 — 166,472,148 1,905,521,714 1,477 3.67 Notes: Calculation of "Per Capita" for 2012 through 2013 is based on estimated population levels. Calculation of "As a Share of Personal Income (%)" for 2012 through 2013 is based on estimated income levels. Fiscal years 2013 through 2019 "Per Capita" and "As a Share of Personal Income (%)" were restated to conform to the calculation used for fiscal year 2020. Sources: Regional Economic Information System, Bureau of Economic 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 132 Amount of Debt Percentage of Debt within within Governmental Unit Debt Outstanding District Boundary District Boundary City of St. Louis 75,755,000$ 75,755,000$ 100.0% St. Louis County 64,395,000 63,879,840 99.2 Municipalities 93,669,597 93,669,597 100.0 City of St. Louis School District 210,359,000 210,359,000 100.0 St. Louis County School Districts 1,675,769,095 1,660,594,375 99.1 Fire Districts 138,325,261 128,544,703 92.9 2,258,272,954$ 2,232,802,516 98.9% Total Direct Debt 1,905,521,714 Total Direct and Overlapping Debt 4,138,324,230$ Sources: City of St. Louis, Office of Comptroller St. Louis County, Department of Revenue St. Louis Public Schools, Financial/Treasurer Office Missouri Department of Education, School Finance Polled Governments Polled Fire Districts Note: Although the District comprises all of the St. Louis City and most of St. Louis County, it does not entirely match the County's boundaries. The calculation of overlapping debt is based on the percentage that a political jurisdiction's territory lies within the District's territory. These percentages are weighted against the debt outstanding thus providing the amount of debt within District Boundary. COMPUTATION OF OVERLAPPING DEBT As Of June 30, 2022 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 133 Less: Operating Expenses (excluding Non- depreciation, Net Fiscal Operating operating Gross GASB 68 & Available Year Revenues Revenues Revenues GASB 75) Revenues 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 2022 458,248,661 4,226,652 462,475,313 179,411,916 283,063,397 Fiscal Coverage Year Principal Interest Total Ratio 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 2022 61,157,300 62,728,378 123,885,678 2.3 Fiscal Coverage Year Principal Interest Total Ratio 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 2022 28,820,000 55,200,621 84,020,621 3.4 Note: The methodology used to calculate the net available revenues and the coverage ratio was adjusted during fiscal year 2013 and all previous years were restated for comparative purposes. The 2013 change in methodology consisted of removing agency fees, previously reflected as a deduction from net available revenues, and now combining them with interest in the debt service section. In fiscal year 2017 the methodology was changed to exclude GASB non-cash transactions from the debt service coverage calculation. Fiscal years 2015 and 2016 have been adjusted to also exclude the GASB 68 non-cash pension expense. In fiscal year 2021 the methodology was changed to exclude non-cash unrealized gain/loss on investments from the debt service coverage calculation. PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS Senior and Subordinate Debt Service Senior Debt Service THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 134 Per Personal Capita Total Median Fiscal Income Personal Number of Household Labor Year Populations (millions) 1 Income 1 Households 2 Income 3 City County State Force 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 2022 1,290,497 51,927 40,238 553,224 62,724 3.3 2.3 2.4 675,242 Notes: 1The data in fiscal years 2013-2019 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; 2013 is based on 2010 census. 3 Median Household Income added to this schedule in fiscal year 2020 and all prior years updated to include this data. Sources: Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce, and Missouri Economic Resource and Information Center (MERIC) http://www.bea.gov/regional/reis/scb.cfm Footnotes- 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 135 Percentage Percentage Employer Employees of Total Rank Employees of Total Rank BJC HealthCare 29,595 4% 1 25,374 4% 1 Washington University in St. Louis 18,805 3% 2 13,677 2% 3 Mercy Health 15,410 2% 3 10,247 2% 9 Boeing, Integrated Defense Systems 14,865 2% 4 14,730 2% 2 SSM Healthcare 14,600 2% 5 11,312 2% 5 Scott Air Force Base 13,000 2% 6 13,020 2% 4 Schnuck Markets, Inc.8,658 1% 7 10,553 2% 8 Saint Louis University 6,596 1% 8 0% City of St. Louis 6,489 1% 9 0% Special School District of St. Louis County 5,773 1% 10 0% Archdiosese of St. Louis 0%11,207 2% 6 Wal-Mart Stores Inc.0%10,600 2% 7 McDonald's Restaurants of St. Louis 0%9,500 2% 10 133,791 20% 130,220 21% Total Employment 658,160 100% 612,072 100% Note: Employees are for the St. Louis area which includes several counties not served by the District. Sources: St. Louis Business Journal's Book of Lists 2022 as of August 2022 St. Louis Business Journal's Book of Lists 2013 PRINCIPAL EMPLOYERS (ST. LOUIS METROPOLITAN AREA) CURRENT YEAR AND NINE YEARS AGO Fiscal Year 2022 Fiscal Year 2013 THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 136 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Administrative 124 122 129 126 131 129 127 117 121 113 Office/Clerical 86 82 84 82 82 75 73 84 78 79 Plant Operation & Laboratory 249 252 236 226 227 222 228 231 237 259 Engineering & Technical 148 151 155 152 151 150 166 174 176 173 Sewer Construction & Maintenance 324 328 345 358 360 365 341 349 344 292 Total Employees 931 935 949 944 951 941 935 955 956 916 Note: The total employees listed above are as of June 30 for each respective year. Source: Human Resources Department EMPLOYMENT LEVEL LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 137 Average Sewage Fiscal Treatment in Millions Year of Gallons per Day 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 2022 289.5 Source: Operations Department AVERAGE FLOW LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT Page 138 2013 2014 2015 2016 2017 Miles of sewers 9,578 9,563 9,531 9,700 9,400 Number of treatment plants 7 7 7 7 7 Treatment capacity (MGD) a 528 533 538 538 593 Annual engineering maximum plant capacity (millions of gallons) 192,629 194,454 196,279 196,279 216,354 Amount treated annually (millions of gallons) 119,253 99,945 119,547 122,366 120,033 Unused capacity (millions of gallons) 73,376 94,509 76,732 73,913 96,321 Percentage of capacity utilized 62% 51% 61% 62% 55% 2018 2019 2020 2021 2022 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 593 593 593 811 811 Annual engineering maximum plant capacity (millions of gallons) 216,354 216,354 216,354 216,354 216,354 Amount treated annually (millions of gallons) 96,534 144,754 134,502 109,195 105,726 Unused capacity (millions of gallons) 119,820 71,600 81,852 107,159 110,628 Percentage of capacity utilized 45%67% 62% 50% 49% Sources: Operations Department and Engineering Department Note: a Million gallons per day - treatment capacity changed in fiscal year 2021 to reflect primary treatment capacity. Prior years reflect permitted secondary average treatment capacity. Fiscal Year Fiscal Year OPERATING AND CAPITAL INDICATORS LAST TEN FISCAL YEARS THE METROPOLITAN ST. LOUIS SEWER DISTRICT2350 MARKET STREET, ST. LOUIS, MISSOURI 63103WWW.MSDPROJECTCLEAR.ORG • 314-768-6200