HomeMy Public PortalAboutFiscal Year 2023 Popular Annual Financial ReportPOPULAR ANNUAL FINANCIAL REPORT
Fiscal Year Ended June 30, 2023
METROPOLITAN ST. LOUIS SEWER DISTRICT
ST. LOUIS, MISSOURI
MSD PROJECT CLEAR
MSD Project Clear is our initiative to improve water quality and alleviate many
wastewater concerns in the St. Louis region. It will invest billions of dollars over
a generation in planning, designing, and building community rainscaping,
system improvements, and 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
A glimpse at the Tunnel Boring Machine (TBM) that bored the Jefferson Barracks Tunnel – A Remarkable
Passage for Progress. Extending from just south of I-255 at Koch Road to the Lemay Wastewater Treatment
Plant, this transformative tunnel will stand as a pivotal achievement by MSD in its mission to eliminate
wastewater overflows when complete.
TABLE OF CONTENTS
Directors’ Letter ....................................................................................................3
What We Do ...........................................................................................................4
Deer Creek Tunnel ..............................................................................................6
Major Milestones Reached .............................................................................6
Looking Ahead – Special Feature ...............................................................8
MSD Public Education......................................................................................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, 2022. 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 11 consecutive years (fiscal years
ended 2012-2022). 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 for
Outstanding
Achievement in
Popular Annual
Financial Reporting
Presented to
Metropolitan St. Louis Sewer District
Missouri
For its Annual Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
POPUL AR ANNUAL FINANCIAL REPORT FY2023 | 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 2023 (FY23).
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 FY23, MSD appropriated funds for 141 new or continuing
wastewater and stormwater design and construction projects.
This annual report provides a non-technical overview of MSD’s work and a snapshot of our
most recent fiscal year – July 1, 2022 to June 30, 2023. 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 – pump
stations, and wastewater treatment facilities that have been
incorporated into one entity over nearly 70 years.
MSD provides a variety of additional services, including
monitoring of industrial waste, issuance of pretreatment
discharge permits, plan review and approvals, issuance
of connection permits, public education, and customer
service. It is one of the largest and most complex
systems in the United States. MSD is two separate
utilities within one organizational structure:
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
458 sq. miles of
St. Louis County
(87%)
62 sq. miles of
St. Louis City
(100%)
1.3 MILLION SERVED
520 SQUARE MILE
SERVICE AREA
431,000 accounts
SOURCES: Northeast Ohio Regional Sewer District, Baltimore City Department of Public Works, KCWater, City of San Diego, Metro Government of Nashville &
Davidson County, Tennessee, MSD Project Clear, and San Antonio Water System. (Rates based on 10 CCF & FY23 Rates)
Residential Wastewater User Charge
St. Louis and Other Municipalities
Kansas City
Cleveland
Baltimore
St. Louis
Nashville
San Diego
San Antonio
$135.39
$126.10
$73.48
$70.01
$53.44
$113.84
$81.76
Coldwater
WWTP
Grand Glaize
WWTP
Fenton
WWTP
MissouriRiver
WWTP
Lemay
WWTP
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 Point
WWTP
MSD Wastewater Treatment
Plants (WWTP) Service Area
POPUL AR ANNUAL FINANCIAL REPORT FY2023 | 5
6 | METROPOLITAN ST. LOUIS SEWER DISTRICT
One of the largest and most ambitious projects
in MSD’s history is now an integral part of our
wastewater system: The Deer Creek Tunnel. The
tunnel, which is 200 feet underground, runs 3.9
miles from Clayton through Richmond Heights,
Brentwood, Webster Groves, Maplewood and
Shrewsbury, and results in a drastic reduction
in basement backups and overflows in the
communities it serves.
Decades ago, when the wastewater system was
designed and built, bypasses were built to act as
relief valves when the system was over capacity.
When the system couldn’t take any more water,
the excess flow would be diverted to one of
these bypasses and overflow into creeks.
With the Deer Creek Tunnel operational, that
will be alleviated in these areas.
With a 19-foot finished diameter, the Deer
Creek Tunnel gives MSD an additional 40
million gallons of system capacity in the Deer
Creek Watershed.
The Deer Creek Tunnel captures excess flow
when the wastewater system is over capacity,
stores it temporarily, and then channels it to
a wastewater treatment plant. With the Deer
Creek Tunnel now in operation, we’re taking
a significant step forward improving not only
water quality, but also enhancing the quality of
life in our community.
In 2012, MSD embarked on a groundbreaking
agreement with the EPA and the Missouri
Coalition for the Environment. The objectives
were clear: eliminate the number of Sanitary
Sewer Overflows (SSOs) and the environmental
impact of untreated wastewater discharges
into the environment. To date, MSD has met or
exceeded all goals. The most ambitious of those
goals was the removal of 70 SSOs between
2019 and the end of 2023; a goal MSD hit nearly
three months early. MSD remains ahead of
schedule, having already eliminated five SSOs
ahead of a 2028 deadline and two SSOs ahead
of a 2033 deadline. This leaves MSD with just 26
of the approximately 650 SSOs that existed in
the service area 40 years ago. This achievement
reflects MSD’s dedication to environmental
excellence as we enter a new decade of initiatives.
DEER CREEK UPDATE
85% OF SSO s REMOVED
POPUL AR ANNUAL FINANCIAL REPORT FY2023 | 7
For nearly 70 years, the Metropolitan St. Louis
Sewer District (MSD) has been responsibly
managing the country’s fourth-largest sewer
system. Covering 520 square miles, MSD
operates and maintains nearly 10,000 miles of
sewer pipe and seven treatment plants. MSD
provides two essential services within a single
organizational structure: the collection and
treatment of wastewater from sinks, toilets,
and floor drains which is then treated to ensure
it meets high standards before it is released
back into the local waterways; and the public
stormwater sewer system which channels
stormwater runoff to area waterways.
Wastewater pipes must be routinely inspected,
cleaned, and maintained to ensure the
wastewater system operates as designed.
MSD is also investing heavily in critical systems
improvements, (as detailed in the Deer Creek
project on page 6), to ensure the system has the
capacity to handle surges. The results of the 650
system improvements over the past decade
have been remarkable: An impressive 85
percent reduction in Sanitary Sewer Overflows
(SSOs) and a 25 percent reduction in wastewater
backups into homes and businesses.
Regarding stormwater, MSD diligently adheres
to a schedule of routine cleaning, inspections
and small-scale rehabilitation projects.
However, there is no districtwide funding for
substantial system improvements. The surge
in flooding and erosion as a result of climate
change is more than the existing stormwater
infrastructure can handle. Between 2011-2022,
MSD customers reported a total of 7,377
stormwater-related issues. As depicted in the
graph below, there has been a substantial
increase in problems over the past few years.
The reality is that stormwater system
improvements require funding that does not
currently exist. As part of our commitment to
transparency and community involvement,
customers will have the opportunity to vote
on two crucial ballot proposals in 2024. One
proposal would grant MSD additional bonding
authority, to spread out the cost of wastewater
system improvements over time. The other
would create funding for the districtwide
stormwater capital improvement program.
MSD serves 1.3 million people across its vast
network that handles 350 million gallons of
water daily. The dedicated MSD team works
around the clock to prevent pollutants in rivers
and streams and mitigate flood and storm-
related issues, vital for the region’s well-being.
The upgrades will enable MSD to better serve
the community now and in the future, aligning
with the evolving needs of the environment
and technology.
MSD’S TWO SYSTEMS:
STORMWATER AND WASTE WATER
Stormwater Problems 4,000
3,000
2,000
1,000
0
2011 – 2014 2015 – 2018 2019 – 2022
8 | METROPOLITAN ST. LOUIS SEWER DISTRICT
LOOKING AHEAD – SPECIAL FEATURE:
UPDATES TO BIOSOLIDS FACILITY TO
GREATLY IMPROVE AIR QUALITY
MSD continues to make improvements to
our wastewater systems that impact not
only water quality, but air quality as well. As
we near the halfway point of our $7.2 billion
wastewater capital improvement plan, one of
the largest initiatives that MSD has instituted
is updates to the biosolids facilities at the
region’s two largest treatment plants, Bissell
Point and Lemay. While the existing facilities
have consistently met or exceeded all air
quality standards, the new systems will ensure
continued compliance with the Clean Air Act.
By investing $900 million into new fluidized
bed incinerators, MSD is modernizing
infrastructure, replacing century-old
technology with innovative, eco-friendly
systems to combust solid waste generated
during the wastewater treatment process.
Incinerators reduce the volume of waste by
converting it to sterile ash. This upgrade, which
is one of the largest in scale and investment in
MSD history, is expected to reduce emissions
by as much as 90 percent, which will greatly
improve air quality.
Slated to begin construction in early 2024,
this project will create 200 construction jobs,
several permanent jobs, and reduce operation
and maintenance costs by $2 million annually,
while also benefiting the environment.
POPUL AR ANNUAL FINANCIAL REPORT FY2023 | 9
MSD PUBLIC EDUCATION
AT COMMUNITY EVENTS
In FY23, MSD continues to educate the public on its initiatives and programs.
This year, in-person events included: the Home & Garden Show, SLACO Home Improvement
Summit, Green Living Festial, Hispanic Festival, Day of the Dead Festival, Climate Solutions Day,
and the Earthday 365 Festival.
10 | METROPOLITAN ST. LOUIS SEWER DISTRICT
YEAR IN REVIEW
Capital Improvement
MSD made 141 appropriations for new or
ongoing wastewater and stormwater design
and construction projects in FY23, totaling
$399.6 million.
Diversity
MSD remains committed to cultivating a
diverse workforce and developing programs
to assist under-utilized minority and women-
owned firms. MSD continues to implement
programs and create capacity-building
opportunities to help fulfill this commitment.
In FY23, minority-owned firms performed
$46,756,848 in capital construction projects,
representing 37.32% of the District’s capital
program spending for the fiscal year.
Women-owned firms performed $9,274,257
in capital construction work, representing
7.41% of the District’s capital construction
program spending. Minority-owned design
firms (professional services) accounted for
$7,183,277, or 44.67%, of payments made to
design firms, and women-owned design
firms were paid $3,022,151, or 18.79%, of
payments made to design firms in FY23.*
During that same time frame, minority
workforce participation on capital
construction projects was 158,956 hours, or
27.91%, and women participation was 38,835
hours, or 6.82%, of total hours worked on
capital construction projects by contractors.
Minorities and women comprised 10.6% and
34.13%, respectively, of the staff of design firms
with workplace participation goals.*
To learn more about MSD’s diversity-related
initiatives, visit www.msdprojectclear.org/
diversityreport.
* Numbers are as of June 30, 2023. 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 2022 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
POPUL AR ANNUAL FINANCIAL REPORT FY2023 | 11
LOOKING AHEAD
MSD Project Clear
In FY24, MSD has plans for 109 new,
ongoing, or continued wastewater project
appropriations totaling $543.5 million. These
projects are funded primarily from the
Sanitary Replacement fund and represent
$0.6 million in continued projects from the
previous fiscal year, and $542.8 million in new
and ongoing projects.
In addition to operating the existing
stormwater system, MSD Project Clear plans
33 stormwater design and construction
projects totaling $22.9 million in FY24.
Continued projects from FY23 total $0.3
million. These projects are primarily funded
from OMCI tax revenue.
Disparity Study
In FY23, MSD began implementing plans to
apply updates to its diversity programs. These
updates were based on the study results
released in March 2022 by Mason Tillman
and Associates, Ltd. The update analysis was
conducted to ensure that MSD’s diversity
programs comply by examining whether or
not inequities of statistical significance exist int
the procurement and contracting of minority,
women and disadvantaged businesses.
The 2012 Disparity Study served to establish a
foundation for an expansive offering of initiatives
put in place. The update serves to build upon
MSD’s momentum towards elimination
of inequities through regular and timely
examination of its programs, market availability
and the impact of relief to those affected.
Changes to MSD’s Diversity Program will be
effective for contracts awarded after July 1, 2023.
MSD Disparity Study PPT File available for download
at www.msdprojectclear.org/disparitystudy
12 | METROPOLITAN ST. LOUIS SEWER DISTRICT
FY23 FY22 FY21
ASSETS (as restated)
Current, non-current, restricted, and other assets $772,295 $879,975 $831,541
Capital assets (net of accumulated depreciation) 4,496,600 4,266,307 4,079,233
Total Assets 5,268,895 5,146,282 4,910,774
DEFERRED OUTFLOWS OF RESOURCES
Bonds and notes payable-deferred loss on refunding 2,808 3,069 5,469
Pension-related outflows 50,084 18,477 10,476
OPEB-related outflows 3,916 4,288 3,537
Total Deferred Outflows of Resources 56,808 25,834 19,482
LIABILITIES
Current liabilities 197,680 172,069 165,962
Non-current liabilities 1,924,964 1,924,343 1,833,143
Total Liabilities 2,122,644 2,096,412 1,999,105
DEFERRED INFLOWS OF RESOURCES
Bonds and notes payable-deferred
gain on refunding 12,197 11,427 2,793
Pension-related inflows 1,419 23,194 22,671
OPEB-related inflows 4,499 3,446 3,888
Lease inflows 3,078 3,426 3,773
Total Deferred Inflows of Resources 21,193 41,493 33,125
NET POSITION
Net investment in capital assets 2,566,272 2,408,271 2,299,302
Restricted 106,787 96,029 97,920
Unrestricted 508,807 529,911 500,804
Total Net Position $ 3,181,866 $ 3,034,211 $2,898,026
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: GASB 87: this statement improved usefulness of information and reporting for leases.
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 FY23 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 $3.2 billion.
• Overwhelmingly, MSD’s assets are in the form of capital assets. The $4.5 billion in net capital assets is split into the six
categories shown on page 13.
• Of the $2.1 billion in liabilities, $1.8 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
POPUL AR ANNUAL FINANCIAL REPORT FY2023 | 13
Financials
MSD ASSETS
Condensed Statements of Capital Assets Net of Depreciation (dollars in millions)
What We Own
(in millions)
MSD LONG-TERM OBLIGATIONS
Bonds and Notes Payable (Revenue Bonds and Direct Loan Balances Only)
What We Owe
53%31%
13%Collection and Pumping Plant $2,396
Construction in Progress 1,383
Treatment, Disposal Plant, and Equipment 576
Land 84
Intangible assets 31
General Plant and Equipment 28
TOTAL FY23 ASSETS $4,497
0.75%
0.25%
2%
$500
$1,000
$1,500
$2,000
2022 202320142015201620172018201920202021
14 | METROPOLITAN ST. LOUIS SEWER DISTRICT
FY23 FY22 FY21 FY20 FY19OPERATING REVENUES (as restated)
Sewer service charges $470,429 $452,645 $425,248 $430,398 $399,929
Provision for doubtful sewer service (5,407) (5,076) (5,347) (5,612) (4,349)
charge accounts
Licenses, permits, and other fees 3,913 3,937 3,754 3,012 3,063
Other 2,842 6,763 3,497 10,193 2,478
Total Operating Revenues 471,777 458,269 427,152 437,991 401,121
NON-OPERATING REVENUES
Property taxes levied by the District 48,730 44,480 43,624 35,439 34,108
Investment loss 12,660 (12,514) 1,392 16,259 16,699
Rent and other income 421 439 428 302 301
Total Non-Operating Revenues 61,811 32,405 45,444 52,000 51,108
Total Revenues 533,588 490,674 472,596 489,991 452,229
OPERATING EXPENSES
Pumping and treatment 67,521 65,550 64,475 62,030 63,197
Collection system maintenance 47,539 45,870 48,113 47,652 45,617
Engineering 11,621 11,674 11,501 11,628 11,447
General and administrative 66,784 52,518 54,868 65,947 67,462
Water backup claims 7,715 2,031 3,985 4,653 5,600
Depreciation 96,288 95,494 91,352 87,633 83,640
Lease amortization 7,229 6,031 142 — —
Asset management 14,443 18,776 16,024 17,195 13,755
Total Operating Expenses 319,140 297,944 290,460 296,738 290,718
NON-OPERATING EXPENSES
Net loss on disposal and
sale of capital assets 1,590 1,523 990 962 971
Non-recurring projects and studies 16,900 13,243 11,828 12,458 15,628
Interest expense 57,615 57,066 56,622 36,119 33,082
Total Non-Operating Expenses 76,105 71,832 69,440 49,539 49,681
Total Expenses 395,245 369,766 359,900 346,277 340,399
INCOME BEFORE CAPITAL
GRANTS AND CONTRIBUTION 138,343 120,898 112,696 143,714 111,830
Capital grants and contributions 9,312 15,287 14,701 6,391 17,378
CHANGE IN NET POSITION 147,655 136,185 127,397 150,105 129,208
Net position – beginning of year 3,034,211 2,898,026 2,770,629 2,620,524 2,491,316
NET POSITION – END OF YEAR $3,181,866 $3,034,211 $2,898,026 $2,770,629 $2,620,524
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.
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 FY23 Income Statement shows that:
• The largest impacts to net position were the increase in investment income and the increase in sewer service charge revenue.
• Operating expenses increased primarily due to an increase in general and administrative, water back up claims, pumping and
treatment, collection system maintenance, amortization and depreciation.
Financials
POPUL AR ANNUAL FINANCIAL REPORT FY2023 | 15
FY23 EXPENSES
Year ended June 30, 2023 (dollars in thousands)
Where The Money Goes
FY23 REVENUE
Year ended June 30, 2023 (dollars in thousands)
Where The Money Comes From
Sewer Service Charges, Net $465,022
Other (in Detail)
Property Taxes Levied by the District (9%) 48,730
Investment Income (2%) 12,660
Capital Grants and Contributions (2%) 9,312
Licenses, Permits, and OtherFees (1%) 3,913
Other Operating Revenues (0%) 2,842
Rent and Other Income (0%) 421
TOTAL REVENUE $542,900
Employment Costs $121,243
Depreciation 96,288
Interest Expense 57,615
Contracted Services 53,441
Other (in Detail)
Non-recurring Projects and Studies (4%) 16,900
Utilities (4%) 15,413
Materials and Supplies (3%) 12,827
Lease Amortization (2%) 7,229
Insurance (1%) 5,714
Chemical Supplies (1%) 4,436
Other Operating Expenses (1%) 2,549
Net Loss on Disposal and Sale of Capital Assets (0%) 1,590
TOTAL EXPENSES $395,245
14%
31%
24%
86%
16%
15%
14%
Financials
16 | METROPOLITAN ST. LOUIS SEWER DISTRICT
Operating Activities
Non-Capital
Financing Activities Capital Activities Investing Activities-500000
-400000
-300000
-200000
-100000
0
100000
200000
300000 FY23 FY22 FY21
$2
3
0
,
1
5
6
$2
3
6
,
6
7
1
$2
1
0
,
6
7
4
$4
2
,
3
8
3
$(4
4
,
8
5
5
)
$(1
6
,
5
8
6
)
$4
7
,
4
0
4
$4
3
,
9
8
2
$4
2
,
6
8
9
CASH FLOW STATEMENT
Condensed Statements of Cash Flows (dollars in thousands)
CASH FLOW ACTIVITIES COMPARISON
(dollars in thousands)
FY23 FY22 FY21
Cash flows from operating activities $230,156 $236,671 $210,674
Cash flows from non-capital financing activities 47,404 43,982 42,689
Cash flows from capital and related financing activities (405,210) (223,610) (211,637)
Cash flows from investing activities 42,383 (44,855) (16,586)
Net increase in cash and cash equivalents (85,267) 12,188 25,140
Cash and cash equivalents at beginning of year 134,453 122,265 97,125
CASH AND CASH EQUIVALENTS – END OF YEAR $49,186 $134,453 $122,265
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: ccash 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 FY23 Cash Flow Statement shows that:
• Cash flows from operating activities primarily decreased due to increased payments to suppliers.
• Cash flows from non-capital financing activities increased due to higher tax receipts.
• Cash flows from capital and related financing activities primarily decreased due to a decrease in bond proceeds and
a decrease in spending for capital assets.
• Cash flows from investing activities increased due to more investments maturing during FY23 than during FY22.
$(4
0
5
,
2
1
0
)
$(2
2
3
,
6
1
0
)
$(2
1
1
,
6
3
7
)
Financials
POPUL AR ANNUAL FINANCIAL REPORT FY2023 | 17
Variance Explanation
The CIRP came in $135.4M under budget in FY23. One project in particular was budgeted for $101M in FY23, but
was delayed by the Board while being considered. This project was appropriated in FY24. Project appropriation
postponements due to the easement acquisition and bid process, scope revisions, or coordination with third
parties, contributed to $9.3 million of the variance. Liquidation of prior year encumbrances resulted in a $865K
favorable variance. The balance of the budget savings was from projects being under budget either from favorable
bid totals, reduced project scopes, or project cancellations.
Debt Service expenses were $9.8M favorable for the District in FY23. Series 2023B Principal & Interest payments
were budgeted for $6.6M in FY23 but the borrowing was delayed until FY24. The remaining favorable $3.2M
variance in debt service comes from debt issuance cost budgeted in FY23 for 2023B & 2023C SRF Project Bonds
totaling $3M and $144K not realized in FY23 but set to occur for FY24 relating to the 2023D federal Wifia loan.
Offsetting expenditures occurred due to new accounting categories for Leasing Financing and Subscription
Financing to comply with the new GASB 96 that were not budgeted for FY23 totaling $287K.
Operating expenses were $13.4M under budget in FY23. The largest favorable variance was from Personnel Services
with $12M primarily due to employment vacancies. Contractual Services were favorable by $3M due to Professional
Services, and Bond & Liability Insurance totaling $6M, but was offset by an unfavorable variance in Water Back Up
expenses of $3M. In the Utilities category, electric usage was the prime contributing factor to the District’s favorable
expense variance by finishing under budget by $2.9M. The largest factor leading to Supply expenses finishing below
budget by $2.3M was fewer than expected expenditures related to Machinery & Equipment Parts and Construction
& Building Supplies. Capital Outlay offset a portion of these savings, with expenses exceeding the budget by $6.8M
due in part to $4.5M from Processing Equipment (pumps & settling tanks) in need of replacement particularly at
Bissell Wastewater Treatment Plant, $1M for upgrading Auxiliary Equipment & $1.3M upgrade in Instruments &
Apparatus for various treatment plants and pump stations.
What it tells you:
A credit rating provides an assessment of an organization’s credit worthiness, based on its history of borrowing and
repayment of funds as well as its assets and liabilities. A poor credit rating makes it more difficult to find financing and
often results in higher interest rates. As the chart below illustrates, MSD has premium credit, with consistent ratings at
the top of each credit rating agency’s scale. On a scale of Aaa to C, MSD earned an Aa1 rating from Moody’s. Similarly,
on a scale of AAA to D, MSD earned AAA and AA+ ratings from Standard & Poor’s and Fitch, respectively. MSD has
demonstrated to creditors and credit rating agencies its ability to manage large annual capital plans. The District’s
solid financial management, including close monitoring of its financial performance, strong debt coverage, and
liquidity also contribute to these ratings, which have remained consistent the past three years.
What it tells you:
In MSD’s case, it shows that MSD has been a good steward of the funds allocated to the District.
FY23 FY22 FY21
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)
$418.5M
283.1M
135.4M
Debt Service
$168.8M
159.0M
9.8M
Operating
$235.6M
222.2M
13.4M
TOTAL
$822.9M
664.3M
158.6M
CREDIT RATING
PERFORMANCE AGAINST BUDGET
Financials
msdprojectclear.org
MSDProjectClear
@MSDProjectClear
Msdprojectclear
youtube.com/Msdprojectclear
Metropolitan St. Louis Sewer District
Metropolitan St. Louis Sewer District
Stay up-to-date with
MSD Project Clear online
and on social media.
2350 MARKET STREET, ST. LOUIS, MO 63103 | 314-768-6260