HomeMy Public PortalAboutFiscal Year 2022 Popular Annual Financial ReportPOPULAR ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2022
METROPOLITAN ST. LOUIS SEWER DISTRICT
ST. LOUIS, MISSOURI
MSD PROJECT CLEAR
MSD Project Clear’s investment of billions of dollars across a generation will
improve water quality and minimize wastewater and stormwater issues in the
St. Louis region. It will invest billions of dollars over a generation in planning,
designing, and building community rainscaping; making system improvements;
monitoring for regulatory compliance; and undertaking an ambitious program
of maintenance and repair.
MSD MISSION
To protect the public’s health, safety, and water environment by
responsibly providing wastewater and stormwater management.
ON THE COVER
Pictured on the cover is the aftermath of the historic
rainfalls that caused significant flooding in the area.
TABLE OF CONTENTS
Directors’ Letter ....................................................................................................3
What We Do ...........................................................................................................4
A Tale of Two Systems ......................................................................................6
Looking Ahead – Special Feature ...............................................................8
MSD Goes Hybrid ................................................................................................9
Year in Review .....................................................................................................10
Looking Ahead .....................................................................................................11
Balance Sheet ......................................................................................................12
MSD Assets and Long-Term Obligations ..............................................13
Income Statement ............................................................................................14
Revenues and Expenses .................................................................................15
Cash Flow Statement ......................................................................................16
Cash Flow Activities Comparison .............................................................16
Performance Against Budget and Credit Rating ...........................17
2 | METROPOLITAN ST. LOUIS SEWER DISTRICT
Government Finance Officers Association of
the United States and Canada (GFOA) has
given an Award for Outstanding Achievement
in Popular Annual Financial Reporting to the
Metropolitan St. Louis Sewer District for its
Popular Annual Financial Report for the fiscal
year that ended June 30, 2021. The Award for
Outstanding Achievement in Popular Annual
Financial Reporting is a prestigious national
award recognizing conformance with the
highest standards for preparation of state and
local government popular reports.
In order to receive an Award for Outstanding
Achievement in Popular Annual Financial
Reporting, a government unit must publish a
Popular Annual Financial Report, the contents
of which conform to program standards of
creativity, presentation, understandability,
and reader appeal.
An Award for Outstanding Achievement in
Popular Annual Financial Reporting is valid for
a period of one year only. Metropolitan St. Louis
Sewer District has received a Popular Award
for the last 10 consecutive years (fiscal years
ended 2012-2021). We believe our current report
continues to conform to the Popular Annual
Financial Reporting requirements, and we are
submitting it to GFOA to determine its eligibility
for another Award.
“
”
Government Finance Officers Association
Award forOutstandingAchievement in
Popular Annual
Financial Reporting
Presented to
Metropolitan St. Louis Sewer DistrictMissouri
For its Annual Financial ReportFor the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
POPULAR ANNUAL FINANCIAL REPORT FY2022 | 3
We appreciate your interest in the Metropolitan St. Louis Sewer District (MSD) and are proud to
present our Popular Annual Financial Report for the Fiscal Year 2022 (FY22).
Throughout the ongoing COVID-19 pandemic, MSD has adjusted its business practices to
protect the health and safety of employees, contractors, and the larger community while
remaining focused on our mission to protect the public’s health, safety, and water environment
by responsibly providing wastewater and stormwater management.
In all that we do, MSD is committed to improving water quality, serving the daily needs of
residents, and implementing improvements that will alleviate wastewater concerns and benefit
the region for decades to come. In FY22, MSD appropriated funds for 152 new or continuing
wastewater and stormwater design and construction projects.
This annual report provides a nontechnical overview of MSD’s work and a snapshot of our most
recent fiscal year – July 1, 2021, to June 30, 2022. Within this report, you will learn how we are
carefully investing the funds we receive to maintain and improve our region’s wastewater and
stormwater systems.
In addition, you will find financial information for the past fiscal year that summarizes the more
in-depth financial review provided in our Annual Comprehensive Financial Report. Please note
that while the summary information provided here uses principles and guidelines consistent
with Generally Accepted Accounting Principles (GAAP), it has been simplified for general
audiences, and it is not GAAP-compliant. Both reports are available online at
www.msdprojectclear.org/about/fiscal-investor-relations/annual-reports/.
To request a printed copy of this information, contact MSD at 314-768-6260 or
send an email to customersvc@stlmsd.com.
The purpose of this report is to be informative and useful. As always, we welcome any
comments or suggestions on how we might improve future reports to better serve your
interests and needs.
Respectfully submitted,
Brian Hoelscher, P.E. Marion Gee
Executive Director & CEO Director of Finance
DIRECTORS’ LETTER
4 | METROPOLITAN ST. LOUIS SEWER DISTRICT
The Metropolitan St. Louis Sewer District owns,
operates, and maintains a sewer system which consists
of wastewater, stormwater, and combined collection
sewers – carrying both wastewater and stormwater –
pumping stations, and wastewater treatment facilities
that have been incorporated into one entity over the last
60-plus years.
MSD operates seven wastewater treatment facilities,
which process 289.5 million gallons of sewage each day
as well as 9,400 miles of pipeline across the area.
MSD provides a variety of additional services, including
monitoring of industrial waste, issuance of pretreatment
discharge permits, plan review and approvals, issuance
of connection permits, public education, and customer
service. It is one of the largest and most complex
systems in the United States. MSD is two separate
utilities within one organizational structure:
MSD’s Dual Function
Wastewater — collect “used” water disposed
of in sinks, toilets, and floor drains by
households and businesses, and then treat
it to regulatory standards before returning
it to the region’s waterways.
Stormwater — operate and maintain
the public storm sewer system and help
coordinate regional efforts to address
pollution carried in or caused by
stormwater runoff.
WHAT WE DO
454 sq. miles of
St. Louis County
(87%)
66 sq. miles of
St. Louis City
(100%)
1.3 MILLION SERVED
520 SQUARE MILE
SERVICE AREA
429,000 accounts
SOURCES: Northeast Ohio Regional Sewer District, Baltimore City Department of Public
Works, KC Water, City of San Diego, Metro Government of Nashville & Davidson County,
Tennessee, and San Antonio Water System (Rates based on 10 CCF)
Residential Wastewater User Charge
St. Louis and Other Municipalities
Kansas City
Cleveland
Baltimore
St. Louis
Nashville
San Diego
San Antonio
$127.77
$121.05
$71.32
$62.30
$49.36
$113.71
$81.76
Coldwater
WWTP
Grand GlaizeWWTP
FentonWWTP
MissouriRiver
WWTP
LemayWWTP
LowerMeramec
WWTP
I-270
I-270
I-270
I-44
I-44
I-64
I-64
I-255
I-55
I-170
I-70
I-70
Bissell PointWWTP
MSD Wastewater Treatment
Plants (WWTP) Service Area
POPULAR ANNUAL FINANCIAL REPORT FY2022 | 5
6 | METROPOLITAN ST. LOUIS SEWER DISTRICT
MSD Project Clear (MSDPC) is the fourth-largest
sewer system in the United States, servicing
more than 9,400 miles of pipeline across a large
area of more than 520 square miles.
MSDPC also processes stormwater in the
region in order to avoid flooding when heavy
storms occur. However, unlike wastewater,
stormwater does not need to be treated, so
it can bypass MSD’s wastewater treatment
plants and be discharged directly into the
natural streams that play a vital role in
stormwater removal.
MSD is two utilities in one – providing
collection and treatment of wastewater
generated by residential, commercial, and
industrial activities; and responsibility for
operation and maintenance of the separate
storm sewer systems that serve 90% of the
St. Louis County area municipalities.
The system is serviced by a separate sewer
with two sets of pipes: wastewater pipes and
stormwater pipes.
The wastewater pipes carry away used water
from sinks, dishwashers, showers, toilets, and
drains. Stormwater pipes collect rain and
snowmelt runoff from yards, pavement,
roads, and roofs and transport them to
area waterways.
The wastewater pipes must be routinely
cleaned and maintained to avoid blockages
and repair cracks. If these pipes are not
maintained, stormwater could leak into
them, exceeding the pipes’ capacity. If this
happens, basement backup and untreated
wastewater could be discharged into local
streams, potentially harming fish, aquatic
life, and humans.
A TALE OF TWO SYSTEMS: STORMWATER
AND WASTEWATER MANAGEMENT
POPULAR ANNUAL FINANCIAL REPORT FY2022 | 7
Wastwater and combined sewer pipes flow
into one of MSDPC’s seven water treatment
plants, where the dirty water is processed,
cleaned, and then returned into the area’s
larger rivers.
This allows MSDPC to keep pathogens and
pollutants out of waterways, decreasing
the public’s exposure. This wastewater
management is critical to residential and
commercial customers.
MSD Project Clear is responsible for managing
both programs with separate funding sources
– one for wastewater and one for stormwater.
Funding differences are affecting the success
of these two programs– one for the better
and one for the worse.
Not only is the system vital and complex,
so is the funding for it. A stable funding
mechanism and a modern approach to
wastewater management have been
improving water quality in the St. Louis region
and beyond. MSDPC’s wastewater program
is on schedule and under budget midway
through a 28-year, $6 billion series
of improvements.
However, severe flood and erosion problems
are on the rise, fueled by more frequent and
powerful storms due to climate change.
A series of severe storms and historic rainfall
in summer 2022 affected thousands in our
region, reflecting growing challenges to the
systems. Addressing just the stormwater-
related issues we know about today will
cost more than $700 million.
While MSD Project Clear is the only local
agency with the regional authority and
expertise to solve these growing stormwater
problems, we lack the funding to address
them. In order to do so, MSD will likely submit
a stormwater rate recommendation to the
independent Rate Commission. The Rate
Commission will prepare its own proposal
to the Board of Trustees, with potential voter
election in 2024.
MSDPC brings decades of experience and
dedication to protecting the place we’re proud
to call home. Your MSDPC team works 24/7 to
prevent pollutants from entering our rivers and
streams and to reduce flooding and basement
backups brought by heavy storms, but we
are not the flood authority. These critical
services impact our quality of life and must
be addressed by adequate funding to protect
citizens and property in the St. Louis region.
8 | METROPOLITAN ST. LOUIS SEWER DISTRICT
LOOKING AHEAD – SPECIAL FEATURE:
HISTORIC RAINFALL IN SUMMER 2022
CAUSES SEVERE FLOODING
Around the country, rain events are becoming
more frequent and more intense. This past
summer, the St. Louis region received an
unprecedented amount of rain, causing
destructive flash flooding throughout the area.
The region experienced three record-breaking
rain events within the span of 10 days.
On July 26, the region received more than 9"
of rain, which is the highest 24-hour rainfall
on record for St. Louis. That is considered
a 500-year rain event.
Field crews were still responding to many
calls when the area was hit just two days
later, on July 28th, with another 3.5" of rain
accumulating in just a few hours. Several of
the service areas were overloaded and issues
were compounded. Field crews worked a lot
of overtime, up to 16-hour days, addressing
customer service requests.
Within the initial 48-hour period, MSD crews
responded to 750 calls and worked around
the clock to address many blocked water
mains and sewer backups due to pipes
being overloaded.
And just a few days later, August 4th brought
another 7" of rainfall in just six hours – this
has less than a 1 in 1,000 chance of occurring
in any given year. The average rainfall for July
and August combined in St Louis is 7.5".
The stormwater systems are not sized to
accommodate such severe rain events,
and the rainfall overwhelmed much of the
southern service areas at that time.
These historic rainfall events demanded
extra hours across the teams – field crews
and customer service were stretched as call
volume increased dramatically. Staff from
other departments jumped in to help process
requests and manage the burden caused by
the historic flooding.
“I appreciate the amazing work done by all
MSD employees during the heavy rain period
we experienced, especially our field crews
and customer service team. These teams kept
customer concerns addressed and the systems
functioning,” said Bret Berthold, director
of operations at MSD. “Our team joined
forces and went above and beyond to serve
customers when they needed us most.”
Within the months following these rain
events, MSD received more than 14,000
service requests related to the rain events.
Field crews not only cleared blocked water
mains and other issues but also responded
with compassion and kindness to customers –
many of whom had water in their homes.
POPULAR ANNUAL FINANCIAL REPORT FY2022 | 9
MSD GOES HYBRID: IN-PERSON
AND VIRTUAL EVENTS
In FY22, MSD returned to hosting in-person events. Due to the increased attendance,
convenience, and success experienced during the pandemic, MSD continues to hold virtual
open house project meetings.
This year, in-person events included: the Home & Garden Show, SLACO Home Improvement
Summit, Fiesta in Florissant, and the Earthday 365 Festival.
10 | METROPOLITAN ST. LOUIS SEWER DISTRICT
YEAR IN REVIEW
Capital Improvement
MSD made 152 appropriations for new or
ongoing wastewater and stormwater design
and construction projects in FY22, totaling
$343 million.
Diversity
MSD remains committed to cultivating a
diverse workforce and developing programs
to assist underutilized minority and women-
owned firms. MSD continues to implement
programs and create capacity-building
opportunities to help fulfill this commitment.
In FY22, minority-owned firms performed
$28,420,147 on capital construction projects,
representing 14.58% of the District’s capital
program spending for the fiscal year.
Women-owned firms performed $16,664,198
in capital construction work, representing
8.55% of the District’s capital construction
program spending. Minority-owned design
firms (professional services) accounted for
$12,861,420, or 38.13%, of payments made to
design firms, and women-owned design firms
were paid $4,145,663, or 12.29%, of payments
made to design firms in FY22.*
During that same time frame, minority
workforce participation on capital
construction projects was 196,185 hours, or
27.29%, and women participation was 53,203
hours, or 7.40%, of total hours worked on
capital construction projects by contractors.
Minorities and women comprised 16.33% and
36.29%, respectively, of the staff of design
firms with workplace participation goals.
To learn more about MSD’s diversity-related
initiatives, visit www.msdprojectclear.org/
about/diversity/
*Numbers are as of August 2022. Please note, as project
documentation is finalized, precise numbers may fluctuate.
Peak Performance Awards
MSD was awarded top environmental honors
from the National Association of Clean
Water Agencies (NACWA), which recognized
all seven of MSD’s treatment plants with
Peak Performance Awards for excellence in
compliance with National Pollutant Discharge
Elimination System (NPDES) permit limits in
the 2021 calendar year.
PLATINUM PEAK PERFORMANCE AWARD
Plants that have completed at least five consecutive years
of 100% NPDES permit compliance.
• Fenton
• Grand Glaize
• Lower Meramec
• Missouri River
GOLD PEAK PERFORMANCE AWARD Plants that have achieved 100% NPDES permit compliance in the previous calendar year.
• Coldwater Creek
• Lemay
SILVER PEAK PERFORMANCE AWARD Plants that have no more than five NPDES permit violations in the previous calendar year.
• Bissell Point
POPULAR ANNUAL FINANCIAL REPORT FY2022 | 11
LOOKING AHEAD
MSD Project Clear
In FY23, MSD has plans for 104 new,
ongoing, or continued wastewater project
appropriations totaling $393 million. These
projects are funded primarily from the
Sanitary Replacement Fund and represent
$9 million in continued projects from the
previous fiscal year, and $384 million in new
and ongoing projects.
In addition to operating the existing
stormwater system, MSD Project Clear
plans 29 stormwater design and construction
projects totaling $24 million in FY23.
Continued projects from FY22 total
$0.2 million.
Disparity Study
Mason Tillman Associates, Ltd. completed an
update to MSD’s 2012 Disparity Study with
results released to the public on March 23, 2022,
followed by a period of public and stakeholder
input. In July 2022, the Disparity Study update
results, along with stakeholder and public input,
were presented to MSD’s Board of Trustees.
In August 2022, approval for acceptance of
the results was adopted. The Disparity Study
Update recommendations include: new
subcontracting goals of 21% MBE and 10%
WBE for Building Construction, 10% MBE
and 10% WBE for Non-Building Construction,
and 18% MBE and 13% WBE for Engineering
Professional Services.
Workforce analysis results recommended
updating workforce goals for Building and
Non-Building Construction to 37% minority,
11% women, and 46% for combined minority
and women construction apprentices.
For Engineering Professional Services, the
recommendations were for 31% minority
and 37% women.
Plans for implementation of the new goals
and program updates are underway with a
target to become effective at the beginning
of FY24. Additional recommendations for
establishing new Diversity programming
requiring additional funding, i.e. Sheltered
Market Program and Mentor Protégé
Program, are currently being explored for
future program development.
MSD Disparity Study PPT File available for download
at www.msdprojectclear.org/disparitystudy
12 | METROPOLITAN ST. LOUIS SEWER DISTRICT
FY22 FY21 FY20
ASSETS (as restated)
Current, non-current, restricted, and other assets $879,975 $831,541 $787,043
Capital assets (net of accumulated depreciation) 4,245,478 4,079,233 3,847,889
Total Assets 5,125,453 4,910,774 4,634,932
DEFERRED OUTFLOWS OF RESOURCES
Bonds and notes payable-deferred loss on refunding 3,069 5,469 5,889
Pension-related outflows 18,477 10,476 15,673
OPEB-related outflows 4,288 3,537 2,843
Total Deferred Outflows of Resources 25,834 19,482 24,405
LIABILITIES
Current liabilities 165,921 165,962 153,611
Non-current liabilities 1,910,231 1,833,143 1,722,223
Total Liabilities 2,076,152 1,999,105 1,875,834
DEFERRED INFLOWS OF RESOURCES
Bonds and notes payable-deferred
gain on refunding 11,427 2,793 1,393
Pension-related inflows 23,194 22,671 7,150
OPEB-related inflows 3,446 3,888 4,331
Lease inflows 3,426 3,773 —
Total Deferred Inflows of Resources 41,493 33,125 12,874
NET POSITION
Net investment in capital assets 2,407,702 2,299,302 2,184,736
Restricted 96,029 97,920 97,034
Unrestricted 529,911 500,804 488,859
Total Net Position $3,033,642 $2,898,026 $2,770,629
Definitions:
Current, non-current, restricted, and other assets: all assets other than capital assets that are owned or due to the District.
Capital assets (net of accumulated depreciation): the total value of all capital assets including all sanitary infrastructure,
general plant and equipment, and land.
Deferred outflows of resources: the use of resources that will be applied to future periods.
Current liabilities: money owed by the District and due within 12 months.
Non-current liabilities: money owed by the District that is due more than 12 months in the future.
Deferred inflows of resources: the purchase of resources that will be applied to future periods.
Net Position: difference between (a) assets and deferred outflows of resources and (b) liabilities and deferred inflows.
Net investment in capital assets: the value or net worth of all capital assets after related liabilities are deducted.
Restricted: the value or net worth of all assets designated for specific purposes after related liabilities are deducted.
Unrestricted: the value or net worth of all remaining assets after remaining liabilities are deducted.
Lease Inflows: changes to accounting standards improved the usefulness of information and reporting for leases. FY21 was restated as a result of the changes.
What it tells you:
A Statement of Net Position, also known as a Balance Sheet, is a financial statement that summarizes what
MSD owns and owes at a given point in time. It also shows our net worth at that specific point in time.
Our FY22 Balance Sheet shows that:
• Overall, the District as a whole is financially improving as evidenced by the increase in the Total Net Position.
• MSD’s assets and deferred outflows exceed liabilities and deferred inflows by $3.0 billion.
• Overwhelmingly, MSD’s assets are in the form of capital assets. The $4.2 billion in net capital assets is split into
the five categories shown on page 13.
• Of the $2.1 billion in liabilities, $1.9 billion are in the form of bonds and notes payable.
BALANCE SHEET
Condensed Statements of Net Position (dollars in thousands)
The financial information included is derived from the Annual Comprehensive Financial Report and presented
in conformity with Generally Accepted Accounting Principles.
Financials
POPULAR ANNUAL FINANCIAL REPORT FY2022 | 13
Financials
MSD ASSETS
Condensed Statements of Capital Assets Net of Depreciation (dollars in millions)
What We Own
(in millions)
MSD LONG-TERM OBLIGATIONS
Bonds and Notes Payable (Revenue Bonds and Direct Loan Balances Only)
What We Owe
55%28%
14%Collection and Pumping Plant $2,348
Construction in Progress 1,179
Treatment, Disposal Plant, and Equipment 608
Land 82
General Plant and Equipment 27
Lease Right of Use Asset 1
TOTAL FY22 ASSETS $4,245
1%2%
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2020 20212012 2013 2014 2015 2016 2017 2018 2019
14 | METROPOLITAN ST. LOUIS SEWER DISTRICT
FY22 FY21 FY20 FY19 FY18OPERATING REVENUES (as restated)
Sewer service charges $452,645 $425,248 $430,398 $399,929 $364,165
Provision for doubtful sewer service (5,076) (5,347) (5,612) (4,349) (2,990)
charge accounts
Licenses, permits, and other fees 3,937 3,754 3,012 3,063 3,777
Other 6,763 3,497 10,193 2,478 3,359
Total Operating Revenues 458,269 427,152 437,991 401,121 368,311
NON-OPERATING REVENUES
Property taxes levied by the District 44,480 43,624 35,439 34,108 33,749
Investment loss (12,514) 1,392 16,259 16,699 7,406
Rent and other income 439 428 302 301 254
Total Non-Operating Revenues 32,405 45,444 52,000 51,108 41,409
Total Revenues 490,674 472,596 489,991 452,229 409,720
OPERATING EXPENSES
Pumping and treatment 65,550 64,475 62,030 63,197 60,735
Collection system maintenance 45,870 48,113 47,652 45,617 44,786
Engineering 11,674 11,501 11,628 11,447 11,218
General and administrative 59,094 54,868 65,947 67,462 59,012
Water backup claims 2,031 3,985 4,653 5,600 1,557
Depreciation 95,494 91,352 87,633 83,640 81,326
Lease amortization 158 142 — — —
Asset management 18,776 16,024 17,195 13,755 15,131
Total Operating Expenses 298,647 290,460 296,738 290,718 273,765
NON-OPERATING EXPENSES
Net loss on disposal and
sale of capital assets 1,523 990 962 971 1,834
Non-recurring projects and studies 13,243 11,828 12,458 15,628 9,296
Interest expense 56,932 56,622 36,119 33,082 36,695
Total Non-Operating Expenses 71,698 69,440 49,539 49,681 47,825
Total Expenses 370,345 359,900 346,277 340,399 321,590
INCOME BEFORE CAPITAL
GRANTS AND CONTRIBUTION 120,329 112,696 143,714 111,830 88,130
Capital grants and contributions 15,287 14,701 6,391 17,378 26,077
CHANGE IN NET POSITION 135,616 127,397 150,105 129,208 114,207
Net position – beginning of year 2,898,026 2,770,629 2,620,524 2,491,316 2,391,168
Effect of adoption of GASB 75 — — — — (14,059)
NET POSITION – END OF YEAR $3,033,642 $2,898,026 $2,770,629 $2,620,524 $2,491,316
INCOME STATEMENT
Condensed Statements of Revenues, Expenses, and Changes in Net Position (dollars in thousands)
Definitions:
Operating revenues and expenses: all income and expenses received from the District’s daily normal business.
Non-operating revenues and expenses: all income and expenses not related to the District’s daily normal business.
Governmental Accounting Standard Board (GASB): establishes accounting and financial reporting standards for U.S. state and local governments
that follow Generally Accepted Accounting Principles.
GASB 75: this statement improved usefulness of information and reporting for other postemployment benefits (OPEB) other than pensions.
What it tells you:
A Statement of Revenues, Expenses, and Changes in Net Position, also known as an Income Statement, tells you where MSD
gets its funds and how they are spent. It also shows how much money MSD made or lost over a specific period of time.Our FY22 Income Statement shows that:
• The largest impacts to net position were the increase in sewer service charge revenue and the decrease in investment income.
• Operating expenses increased primarily due to an increase in pension expense based on an actuarial study, increase in general
liability insurance premiums, and increase in overall infrastructure operations.
Financials
POPULAR ANNUAL FINANCIAL REPORT FY2022 | 15
FY22 EXPENSES
Year ended June 30, 2022 (dollars in thousands)
Where The Money Goes
FY22 REVENUE
Year ended June 30, 2022 (dollars in thousands)
Where The Money Comes From
Sewer Service Charges, Net $447,569
Other (in Detail)
Property taxes levied by the District (9%) 44,480
Capital grants and contributions (3%) 15,287
Other operating revenues (1%) 6,763
Licenses, permits, and other fees (1%) 3,937
Rent and other income (0%) 439
Investment loss (2%) (12,514)
TOTAL REVENUE $505,961
Employment Costs $106,831
Depreciation 95,494
Interest Expense 56,932
Contracted Services 49,636
Other (in Detail)
Utilities (4%) 16,297
Non-recurring projects and studies (4%) 13,243
Materials and supplies (4%) 12,850
Other operating expenses (2%) 7,839
Insurance (2%) 5,807
Chemical supplies (1%) 3,735
Net loss on disposal and sale of capital assets (0%) 1,523
Lease Amortization (0%) 158
TOTAL EXPENSES $370,345
16%
29%
26%
84%
17%
15%
13%
Financials
16 | METROPOLITAN ST. LOUIS SEWER DISTRICT
Operating Activities Non-Capital Financing Activities Capital Activities Investing Activities-350,000
-300,000
-250,000
-200,000
-150,000
-100,000
-50,000
0
50,000
100,000
150,000
200,000
250,000 FY22 FY21 FY20
$2
3
6
,
6
7
1
$2
1
0
,
6
7
4
$2
1
6
,
9
7
0
$(4
4
,
8
5
5
)
$(1
6
,
5
8
6
)
$93
,
7
7
9
$4
3
,
9
8
3
$4
2
,
6
8
9
$3
4
,
9
8
3
CASH FLOW STATEMENT
Condensed Statements of Cash Flows (dollars in thousands)
CASH FLOW ACTIVITIES COMPARISON
(dollars in thousands)
FY22 FY21 FY20
Cash flows from operating activities $236,671 $210,674 $216,970
Cash flows from non-capital financing activities 43,983 42,689 34,983
Cash flows from capital and related financing activities (223,610) (211,637) (305,361)
Cash flows from investing activities (44,855) (16,586) 93,779
Net increase in cash and cash equivalents 12,188 25,140 40,371
Cash and cash equivalents at beginning of year 122,265 97,125 56,754
CASH AND CASH EQUIVALENTS – END OF YEAR $134,453 $122,265 $97,125
Definitions:
Cash flows from operating activities: all cash received or spent related to MSD’s daily normal business activities.
Cash flows from non-capital financing activities: all cash received or spent related to taxes.
Cash flows from capital and related financing activities: cash received or spent related to construction of MSD’s infrastructure.
Cash flows from investing activities: cash received or spent related to investing MSD’s cash reserves.
What it tells you:
A Cash Flow Statement summarizes both the cash and the net cash coming in and going out of MSD
during a given period.
Our FY22 Cash Flow Statement shows that:
• Cash flows from operating activities increased due to increased receipts from customers.
• Cash flows from non-capital financing activities increased due to more tax revenue collected.
• Cash flows from capital and related financing activities decreased due to a decrease in bond proceeds and
premiums received.
• Cash flows from investing activities decreased due to more cash spent on purchase of investments and less
investments maturing during FY22.
$(2
2
3
,
6
1
0
)
$(2
1
1
,
6
3
7
)
$(3
0
5
,
3
6
1
)
Financials
POPULAR ANNUAL FINANCIAL REPORT FY2022 | 17
Variance Explanation
CIRP came in under budget for FY22. The largest factor was projects being under budget either from good bids or
reduced scope, contributing to $21.9 million of the variance. Postponements due to easement acquisition delays,
scope revisions, and delays in choosing contractors contributed to $9.0 million of the variance. The remaining $2
million of savings resulted from canceled or completed projects coming in under budget.
Debt Service expenses were favorable for the District in FY22. The $6.2M variance in debt service (principal & interest
payments) is due in part to the refinancing of outstanding debt at lower interest rates. The District the didn’t issue
$2.9 million of debt that was anticipated in the FY22 budget. These savings were offset by $0.2M of principal and
interest from lease financing.
Operating expenses came in under budget for FY22. The largest of the variances was in Personnel Services of $8.6
million primarily due to vacancies. Contractual Services were favorable by $6.5M due to Professional Services of $1.6M,
Blocked Main & OC Claims $1.6M, Overcharged Main $1.2M and Building Repairs and Services $1M. Supply expenses
were also favorable by $1.7 million primarily due to Machinery & Equipment Parts. Utilities contributed to the District’s
favorable expense variance by finishing under budget by $650K. Capital Outlay offset a portion of these savings, with
expenses exceeding the budget by $4.7 million primarily for Processing Equipment at the treatment plants and pump
stations. It was cost effective for the District to replace older equipment versus spending additional service cost to
maintain the equipment.
What it tells you:
A credit rating provides an assessment of an organization’s creditworthiness based on its history of borrowing and repayment of funds as well as its assets and liabilities. A poor credit rating makes it more difficult to find financing and often results in higher interest rates. As the chart below illustrates, MSD has premium credit, with consistent ratings at the top of each credit rating agency’s scale. On a scale of Aaa to C, MSD earned an Aa1 rating from Moody’s. Similarly, on a scale of AAA to D, MSD earned AAA and AA+ ratings from Standard & Poor’s and Fitch, respectively. MSD has demonstrated to creditors and credit rating agencies its ability to manage large annual capital plans. The District’s solid financial management, including close monitoring of its financial performance, strong debt coverage, and liquidity also contribute to these ratings, which have remained constant the past three years. In MSD’s case, it shows that MSD has been a good steward of the funds allocated to the District.
What it tells you:
In MSD’s case, it shows that MSD has been a good steward of the funds allocated to the District.
FY22 FY21 FY20
Moody’s Aa1 Aa1 Aa1
Standard & Poor’s (S&P) AAA AAA AAA
Fitch AA+ AA+ AA+
Expense
Category
Budget
Expenses
Unspent
(Overspent)
Budget
Capital Improvement
and Replacement
Program (CIRP)
$359.3M
326.4M
32.9M
Debt Service
$173.9M
167.7M
6.2M
Operating
$224.3M
211.5M
12.8M
TOTAL
$757.5M
705.6M
51.9M
CREDIT RATING
PERFORMANCE AGAINST BUDGET
Financials
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