Finance Committee Meeting

Transcription

1 Finance Committee Meeting FY18 Strategic Business and Operating Plan and Preliminary Budget Review April 04,

2 Finance Committee Meeting FY18 Strategic Business Operating Plan and Preliminary Budget Review I. Strategic Business and Operating Plan (SBOP) II. FY18 Preliminary Budget III. Preliminary Budget Compared to Rate Commission Report IV. Next Steps and Questions 2

3 FY18 Strategic Business and Operating Plan Prepared in accordance with Section of the Charter of the Metropolitan St. Louis Sewer District 3

4 Strategic Business and Operating Plan VISION STATEMENT Quality Service Always MISSION STATEMENT To protect the public s health, safety, and water environment by responsibly providing wastewater and stormwater management. 4

5 Strategic Business and Operating Plan VALUES Integrity Acting ethically at all times, treating everyone with honesty, fairness and respect. Teamwork Working together to accomplish our mission with open communication, trust respect and diversity. Innovation Embracing continuous improvement and new solutions to achieve excellence. Employees Developing successful, responsible and safety conscious employees and acknowledging their contributions. Customers Building strong relationships by keeping our commitments, providing excellent service and being transparent in everything we do. 5

6 Strategic Business and Operating Plan GOALS A. Deliver consistent, high quality customer service; B. Comply with all legal and regulatory requirements and schedules; C. Minimize customer rate increases; and D. Be accountable to the St. Louis community. 6

7 Strategic Business and Operating Plan STRATEGIES 1. Educate and partner with stakeholders to build support; 2. Manage the District s costs and revenues to optimize financial impacts; 3. Integrate and improve the District s business processes; 4. Promote appropriate standards through proactive regulatory and legislative involvement; 5. Address customer and regulatory needs through a comprehensive infrastructure management program; 6. Create a learning and business oriented culture based on competency and accountability. 7

8 FY18 Preliminary Budget 8

9 FY18 Preliminary Balanced Budget FY18 Total Revenue ($$s in millions) Wastewater User Charges $360.4 Stormwater User Charges 0.0 Revenue Bonds Stormwater Taxes 31.4 Investment and Other Income 7.6 Use of Fund Balances 31.7 Total District Revenue $651.1 FY18 Total Expense ($$s in millions) Operating Budget $200.1 CIRP Debt Service Total District Expenses $

10 FY18 Preliminary Budget Key Points I. The General Fund budget includes: A. $0.3 million increase for Salaries & FICA excluding incremental budgets (includes 3.15% avg. wage increase.) Includes elimination of 16 positions. B. $1.4 million in incremental budgets tied to the SBOP, including 8 additional positions of which the majority is primarily related to providing storm water services. C. 1.4% or $2.6 million overall increase from FY17 I. Includes a Total Capital Improvement and Replacement Program (CIRP) budget of $341.9 million. II. Assumes the issuance of additional bonds with a par value of $200 million and approximately $20 million in premiums net of costs of issuance. III. The budget was developed to align with the July 2015 Rate Commission Report. 1 0

11 FY18 Preliminary Budget - Revenue ($$s in millions) Use of Fund Balance $31.7 5% WW User Charges $ % Total = $651.1 Taxes $31.4 5% Revenue Bonds $ % Investment and Other Income $7.6 1% 1 1

12 FY18 Budgeted Revenue by Major Category ($$s in millions) FY17 - $673.9 FY18 - $651.1 $22.8 M or 3% Decrease $450.0 $400.0 $350.0 $300.0 $250.0 $200.0 $150.0 $100.0 $50.0 $- FY17 $339.5 Change $20.9 FY18 $360.4 FY17 $242.5 Change ($22.5) FY18 $220.0 FY17 $30.7 Change $0.7 FY18 $31.4 FY17 $54.1 Change ($22.4) Change $0.5 FY18 $31.7 FY17 FY18 $7.1 $

13 Schedule of Residential User Rates Wastewater FY17 FY18 % Change Effective Date 7/1/16 7/1/17 Average Monthly Residential Bill (7 Ccf) $ $ % 1 3

14 FY18 Preliminary Total Budget Expenses ($$s in millions) Total CIRP Budget is $341.9, 53% of total Stormwater CIRP $10.3 2% Wastewater CIRP $ % Debt Service $ % Wastewater Operating Budget $ % Total = $651.1 Total Operating Budget is $200.1, 30% of total Stormwater Operating Budget $16.4 2% 1 4

15 FY18 Budget Operating Expense Components Wastewater General Fund 163,493,836 Improvement Fund 50,000 Wastewater Emergency Fund Water Backup Fund 3,801,300 General Insurance Fund 5,825,500 Sanitary Replacement Fund 7,500,000 Total Wastewater 180,670,636 Stormwater OMCI Funds 19,380,375 Total Operating Expenses 200,051,

16 FY18 General Fund Budget By Department CHANGE FY17 FY18 $ % Civil Service Commission $ 10,000 $ 10,000 $ - 0.0% Rate Commission 0 594, ,304 N/A Secretary-Treasurer (includes Board of Trustees) 1,809,168 1,899,735 90, % Executive Director 1,933,508 1,916,950 (16,558) -0.9% General Counsel 2,552,379 2,601,943 49, % Human Resources 10,299,833 10,286,917 (12,916) -0.1% Finance 20,533,378 20,300,675 (232,703) -1.1% Information Systems 13,773,149 13,880, , % Engineering 26,210,016 26,063,223 (146,793) -0.6% Operations 110,124, ,955, , % Total Departments $ 187,245,720 $ 188,510,064 $ 1,264, % Tax Commission Fee 76,893 0 (76,893) Incrementals 0 1,407,576 1,407,576 Total General Fund Operating Budget $ 187,322,613 $ 189,917,640 $ 2,595, % Energy Loan Debt Service 35,900 35,900 0 Total General Fund Operating Budget with Energy Loan $ 187,358,513 $ 189,953,540 $ 2,595, % 1 6

17 FY18 Budgeted Operating Expense by Major Category ($$s in millions) FY17 - $196.6 FY18 - $200.1 $3.5 M or 2% Increase $130.0 $120.0 $110.0 $100.0 $90.0 $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $- Change $4.5 FY17 $105.7 FY18 $110.2 FY17 $18.5 Change ($2.0) FY18 $16.5 FY17 $17.2 Change $0.3 FY18 $17.5 FY17 $50.1 Change $0.6 FY18 $50.7 FY17 $5.1 Change $0.1 FY18 $

18 FY18 Incremental Budget Summary Department Purpose FTE Change Budget Operations *Increase Stormwater Service Level 4 $1,151,513 Operations Implement Straight Shifts at 3 Treatment Plants 3 173,177 Information Systems Total General Fund Incremental Add an Assistant Director of Information Systems 1 82,886 8 $1,407,576 *Stormwater Incremental Budgets = $1.2 Million 1 8

19 FY18 District Funded Positions 1,100 1, ,011 Total 969 1, , , Assistant Director of Information Systems; 3 Treatment Plant Operators; 3 Collection System Technicians (SW); 1 Fleet Mechanic (SW) 8 Total Incremental Positions Flow Monitor Positions (10 Technicians and 4 Engineers; 1 Public Information Representative; 1 Central Services Coordinator 16 Total Eliminated Positions 600 FY14 FY15 FY16 FY17 FY18 1 9

20 Billed Ccf s are down significantly from Rate Commission (RC) levels. Bond issuances are lower in part due to Wastewater CIRP spending being down and the RC anticipated the need for debt service reserves. Most of the Other revenue variance is due to lower than anticipated Bad Debt Provisions. Debt Service Expense is lower because less debt has been issued. CIRP spending is favorable due to timing of projects and favorable bids. 2 0

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22 FY 2018 CIRP Program Summary Type of Project Number Budget Wastewater Construction ,156,000 Wastewater Engineering 79 60,516,000 Stormwater Construction 14 9,400,000 Stormwater Engineering 1 100,000 New Project Appropriations Subtotal: ,172,000 Continued Wastewater 5 20,936,000 Continued Stormwater 2 800,000 Continued Project Appropriations Subtotal: 7 21,736,000 PROJECT APPROPRIATION TOTALS: ,908,

23 FY 2018 CIRP New Wastewater & Stormwater Projects 3% 97% Stormwater $9.5 M 15 Projects Wastewater $310.7 M 152 Projects Total Budget $320.2 M Total Number of New Projects

24 FY 2018 CIRP New Wastewater Project Funding 6% Treatment Plants 12 Projects $17.8 M 65% County 108 Projects $206.7 M 16% City 13% City/County 13 Projects 34 Projects $52.7 M Total Number of Project Appropriations 167 Total Budget $320.2 M $43.0 M 2 4

25 5% General Fund: 16 Projects $16.8 M 5% OMCI/Special Funds: 25 Projects $14.1 M FY 2018 CIRP Funding Sources Total Number of Project Appropriations 167 Total Budget $320.2 M 90% Sanitary Replacement Fund: 126 Projects $289.3 M 2 5

26 FY 2018 CIRP Engineering & Construction - New 19% Engineering 80 Projects $60.6 M 81% Construction 87 Projects $259.6 M Total Number of Project Appropriations 167 Total Budget $320.2 M 2 6

27 FY 2018 CIRP Continued Projects Wastewater Coordination with Others 0 Easement Acquisition / Condemnation 2 Projects in Design / Major Scope Changes 3 Stormwater Coordination with Others 1 Easement Acquisition / Condemnation 1 Projects in Design / Major Scope Changes 0 Total: 7 2 7

28 FY 2018 CIRP Contingency Projects Type of Project Number Budget Wastewater 21 78,619,000 Stormwater 3 2,815,000 Phased Funding ,715,000 Project Totals: ,149,

29 FY 2018 CIRP New Allocations Type of Project Number % Budget Asset Management Renewal ,562,000 Cityshed ,238,000 CSO ,470,000 SSO ,696,000 Treatment Plant ,751,000 Districtwide ,955,000 Stormwater ,500,000 TOTALS: ,172,

30 FY 2018 CIRP Program Highlights Asset Management Renewal renewal of existing District infrastructure (assets) such as sewer lines, manholes, and pump stations. Renewal is required because of deterioration due to ageing infrastructure, and can take the form of partial repairs, rehabilitation, or full replacement depending on the condition of the asset. Rehabilitation and or replacement of six pump stations within the collection system. 3 0

31 FY 2018 CIRP Program Highlights Cityshed projects designed and constructed to mitigate the effects of wet weather surcharging and overland flooding of the combined sewer system. Primarily in the City of St. Louis. Types of projects include property buyouts, basin and relief sewer construction. Complete construction of the Harlem Baden Ph IV Improvements from Basin to Hamilton Trunk project 3 1

32 FY 2018 CIRP Program Highlights CSO projects in the combined sewer area that are intended to reduce or control Combined Sewer Overflows (CSO), a discharge from the combined sewer system at a point prior to the headworks of a wastewater treatment facility. The majority of MSDs CSOs are along the River DesPeres and the Mississippi River. Continue construction of the Maline Creek CSO Storage Facility and the CSO Volume Reduction Green Infrastructure Program projects 3 2

33 FY 2018 CIRP Program Highlights SSO projects to reduce and eliminate Sanitary Sewer Overflows (SSOs) in the separate sanitary sewer system. An SSO is any release of wastewater from the separate sewer collection system prior to a treatment facility. Construct 39,000 feet of sanitary sewer, and 11,000 feet of storm sewer to facilitate the removal of private I/I Work will result in the removal of up to 5 constructed SSOs. 3 3

34 FY 2018 CIRP Program Highlights Treatment Plant projects planned at one of the 7 existing wastewater treatment facilities within the District. Projects are required to renew ageing infrastructure, improve safety or efficiency, or to improve treatment processes due to changing regulations or permit requirements. Replacement of the Final Clarifiers at the Coldwater Creek Wastewater Treatment plant. 3 4

35 FY 2018 CIRP Program Highlights Districtwide projects are general projects that are required to deliver support activities for the CIRP and meet Consent Decree requirements. These projects are not site specific, and typically occur throughout the District. CCTV inspection and physical inspection of 700,000 feet of sewers, primarily focused on the older brick sewers in the City of St. Louis. 3 5

36 FY 2018 CIRP Program Highlights Stormwater projects that addresses localized structure and yard flooding and erosion issues driven by storm events throughout the District. Projects also provide for repairs and rehabilitation of the existing stormwater infrastructure within the District. Stormwater projects are funded separately from OMCI taxes. Construct improvements to reduce flooding at 9 structure and 25 yard locations, and address erosion at 10 properties 3 6

37 FY18 SBOP and Preliminary Budget Review Q & A 3 7

38 FY18 Next Steps 3 8

39 FY18 Budget Meeting Schedule * FY18 SBOP and Preliminary Budget Finance Committee Meeting Review (including CIRP) April 4, 2017; 9:00 a.m. Publication of Public Hearing Notice April 20, 2017 (The notice will be published in the St. Louis Post-Dispatch, St. Louis American, St. Louis Business Journal, and on the MSD Internet Site) FY18 Budget Follow-up Discussion Budget Introduction Public Hearing Budget Adoption Finance Committee Meeting May 2, 2017; Time: TBD Board of Trustee Meeting May 11, 2017; 5:00 p.m. After Board of Trustee Meeting (Finding of Fact Committee) May 11, 2017; 6:00 p.m. Board of Trustee Meeting June 8, 2017; 5:00 p.m. * All meetings held at 2350 Market Street, Room