COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEARS ENDING DECEMBER 31, 2018 AND 2017
Western Lake Superior Sanitary District
Duluth, Minnesota
COMPREHENSIVE ANNUAL
F I N A N C I A L R E P O R T
WESTERN LAKE SUPERIOR SANITARY DISTRICT
DULUTH, MINNESOTA
FOR THE FISCAL YEARS ENDED DECEMBER 31, 2018 AND 2017
Prepared by Business Services Division
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT YEARS ENDED DECEMBER 31, 2018 AND 2017
TABLE OF CONTENTS
Page Number INTRODUCTORY SECTION
Letter of Transmittal 1 Certificate of Achievement 4 Organization Structure 5 Board of Directors 6 Political Boundaries 7
FINANCIAL SECTION Independent Auditors’ Report 8 Management’s Discussion and Analysis 11 Basic Financial Statements
Comparative Statement of Net Position 18 Comparative Statement of Revenues, Expenses, and Changes in Net Position 20 Comparative Statement of Cash Flows 22 Notes to Financial Statements 24
Required Supplementary Information
Schedule of WLSSD’s Proportionate Share of the Net Pension Liability 65 Schedule of WLSSD Contributions 66 Schedule of Changes in WLSSD’s OPEB Liability and Related Ratios 67
Supplementary Schedules
Detailed Schedule of Revenue Compared to Budget 68 Detailed Schedule of Expenses 69
Compared to Budget – Departmental Level Schedule of Expenditures of Federal Awards 72 Notes to the Schedule of Expenditures of Federal Awards 73
STATISTICAL SECTION (Last Ten Fiscal Years) (Unaudited)
Financial Trends Net Position by Component 76 Changes in Net Position 77 Operating Revenue by Source/Uses 78 Operating Expenses by Function/Object 79 Nonoperating Revenues and Expenses 80
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT YEARS ENDED DECEMBER 31, 2018 AND 2017
TABLE OF CONTENTS (CONTINUED)
Page Number
STATISTICAL SECTION (Last Ten Fiscal Years) (Unaudited) – (Continued)
Revenue Capacity Total Wastewater Treated by Billing Parameters 81 Wastewater Volume 82 Operations and Maintenance Unit Costs 83 Solid Waste Volume (MSW) and Tipping Fee 84 Solid Waste Volume (MSW) 85 Principal Revenue Payers 86
Debt Activity
Ratio of Outstanding Debt by Type 87 Net Tax Capacity and Estimated Actual Value of Taxable Property 88 Net General Bonded Debt Ratios 89 Pledged Revenue Coverage 90
Demographic and Economic Information
Demographic and Economic Statistics 91 Principal Employers 92
Operating Information
Number of Employees by Identifiable Activity 93 Operating Indicators – Wastewater Operations 94 Capital Asset Statistics – Wastewater Operations 95
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2626 Courtland Street
Duluth, MN 55806-1894
phone 218.722.3336
fax 218.727.7471
www.wlssd.com
Western Lake Superior Sanitary District
April 16, 2019 Board of Directors Western Lake Superior Sanitary District 2626 Courtland Street Duluth, Minnesota 55806 The Comprehensive Annual Financial Report of the Western Lake Superior Sanitary District (WLSSD) for the fiscal year ended December 31, 2018 is hereby submitted. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, including all disclosures, rests with WLSSD. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to fairly present the financial position and results of operations of the enterprise fund. All disclosures necessary to enable the reader to gain an understanding of the financial activities of the WLSSD have been included. Please refer to the Management Discussion and Analysis section of this document for a more detailed discussion of WLSSD financial and planning highlights. Services of WLSSD WLSSD is located in northeastern Minnesota, and encompasses 513 square miles and includes the cities of Cloquet, Carlton, Scanlon, and Wrenshall, and townships of Silver Brook, Thomson, and Twin Lakes in Carlton County and the cities of Duluth, Hermantown, Proctor, and Rice Lake, and the townships of Canosia, Duluth, Grand Lake, Lakewood, Midway, and Solway in St. Louis County. WLSSD was established in 1971 to improve and protect the waters of the lower St. Louis River basin. This was accomplished by providing wastewater treatment to the municipalities listed above, as well as to four large industrial customers. In 1974, the State Legislature also gave WLSSD the additional responsibility for solid waste management. The combination of both wastewater treatment and proper solid waste management resulted in the cleanup of the waters of the St. Louis River which remains one of the most significant events in the environmental history of this region. The WLSSD continues to make significant capital investments in our wastewater collection and treatment systems and our solid waste services. Long-term strategic, asset management and capital planning have ensured that the WLSSD continues to meet all financial, environmental and operational requirements.
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2018 Comprehensive Annual Financial Report Local Economy WLSSD serves a large geographic territory (513 square miles) with a relatively diverse service area and a population of approximately 138,700. The WLSSD serves a region with a diverse economy comprised of healthcare, forest products manufacturing, aviation and a large and robust higher education sector. The largest contributor to loadings is the forest products segment. During 2018, both the Sappi pulp and paper mill and the Verso paper mill in Duluth ran with little to no downtime. Long-term Financial Planning As part of the Master Planning Process, WLSSD develops ten (10) year capital plans for both Wastewater and Solid Waste operations. This planning process integrates projected changes in demand with an engineering assessment of the major components of the facility. These capital projections are utilized in combination with loading projections and operating assumptions to develop a ten year projection for operating costs. These projections are used to make informed decisions on debt and loan financing to ensure adequate fund balances are maintained over both the short and long-terms. Internal Controls WLSSD management is responsible for designing, establishing and maintaining an internal control system that protects WLSSD assets from loss, theft or misuse and ensures that adequate accounting data is compiled to prepare the financial statements in accordance with generally accepted accounting principles. Internal control systems are designed to provide reasonable assurance that these objectives are met, while recognizing that the cost of a control should not exceed the benefits. The evaluation of costs and benefits requires management estimates and judgments. WLSSD’s internal control system is continually monitored and evaluated by management as a good business practice. Independent Audit WLSSD’s enabling legislation requires an annual audit of all books and accounts to be made by independent certified public accountants or by the State Auditor’s office. This requirement has been complied with, and the certified public accountants’ opinion accompanies this report. The auditors will issue a management and compliance letter covering the review made as part of their examination of the District's system of internal control and compliance with applicable legal provisions. The management and compliance letter will not modify or affect in any way this report on the financial statements.
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2018 Comprehensive Annual Financial Report Awards The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the WLSSD for its Comprehensive Annual Financial Report for the fiscal year ended December 31, 2017. This was the thirty-fourth consecutive year that the WLSSD has received this prestigious award. In order to be awarded a Certificate of Achievement, WLSSD published an easily readable and efficiently organized Comprehensive Annual Financial Report. This report satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. Acknowledgments The accurate and timely preparation of this report could not have been accomplished without the efficiency and dedication of WLSSD's Business Services Division. We express our appreciation to all members of the division, and to the staff of the certified public accountants who reviewed and assisted in the preparation. We would also like to thank the WLSSD Board of Directors for their interest and support in planning and conducting the financial operations of the District in a responsible and progressive manner. Respectfully submitted,
Marianne Bohren Cathy Remington Executive Director Director of Finance
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WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
BOARD OF DIRECTORS
Members Length of Service Appointment Date Term Expires
James Aird 9.5 Years 4/30/2009 7/1/2019
Dave Manderfeld 14.5 Years 8/24/2004 7/1/2019
Julene Boe 5.5 Years 7/1/2013 7/1/2019
Loren Lilly 1.5 Years 4/18/2017 7/1/2020
Laura Ness 1.5 Years 7/17/2017 7/1/2020
Marcia Podratz 6.5 Years 4/23/2012 7/1/2020
Ruth Janke 9.5 Years 7/1/2009 7/1/2021
Archie Chelseth 4.5 Years 7/1/2014 7/1/2021
Paul Thomsen 6.5 Years 6/25/2012 7/1/2021
Executive Team Length of Service
Marianne Bohren Executive Director 14.5 Years
Carrie Clement Manager of Planning & Technical Services 18 Years
Al Parrella Manager of Operations & Maintenance 40 Years
Position
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FINANCIAL SECTION
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INDEPENDENT AUDITORS’ REPORT Board of Directors Western Lake Superior Sanitary District Duluth, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of Western Lake Superior Sanitary District (WLSSD), as of and for the years ended December 31, 2018 and 2017, and the related notes to the financial statements, which collectively comprise WLSSD’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to WLSSD’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of WLSSD’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Board of Directors Western Lake Superior Sanitary District
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Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Western Lake Superior Sanitary District as of December 31, 2018 and 2017, and the respective changes in financial position and, cash flows, thereof, for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Schedule of WLSSD’s Proportionate Share of the Net Pension Liability, and Schedule of Changes in WLSSD’s OPEB Liability and Related Ratios, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise WLSSD’s basic financial statements. The introductory section, Detailed Schedule of Revenue Compared to Budget, Detailed Schedule of Expenses Compared to Budget - Departmental Level and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards, as required of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), is also presented for purposes of additional analysis and is not a required part of the basic financial statements. The Detailed Schedule of Revenue Compared to Budget, Detailed Schedule of Expenses Compared to Budget -Departmental Level, and Schedule of Expenditures of Federal Awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
Board of Directors Western Lake Superior Sanitary District
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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 16, 2019, on our consideration of WLSSD'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 result of that testing, and not to provide an opinion on the effectiveness of the WLSSD’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 WLSSD’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP Brainerd, Minnesota April 16, 2019
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
(UNAUDITED)
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This section presents management’s analysis of the Western Lake Superior Sanitary District’s (WLSSD) financial condition and activities for the fiscal year ending December 31, 2018. Please read this information in conjunction with the financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
Operating revenues increased by $817,572 or 2.27% higher than 2017. Total budgeted wastewater charges for 2018 increased by 1.94% over 2017. Overall, actual wastewater charges in 2018 were $367,267 higher than 2017 primarily due to increased unit costs. Solid waste user charges and service fees were $182,693 higher than 2017 due to volumes and user rates. The capacity availability fee was $108,769 higher than 2017 due to increased projects. Miscellaneous income was $158,842 higher than 2017 primarily due to increased paint care reimbursement revenue and increased hauled waste user charges.
Operating expenses before depreciation and amortization were 1.48% or $366,217 higher than prior year expenses. Operating expenses for chemicals were higher in 2018 by $169,345 primarily due to chemical price increases. Contract services were higher in 2018 by $135,338 primarily due to electrical contract services
WLSSD continued to fund a significant portion of capital projects from current revenues. Wastewater capital projects funded from current revenue were $3 million in 2018.
OVERVIEW OF THE FINANCIAL STATEMENTS
Management’s Discussion and Analysis (MD&A) serves as an introduction to the basic financial statements. The MD&A represents management’s examination and analysis of WLSSD’s financial condition and performance. The MD&A is required to accompany the basic financial statements and notes to the financial statements and, therefore, is included as required supplementary information.
REQUIRED FINANCIAL STATEMENTS
The financial statements of WLSSD are presented as an enterprise fund using the accrual basis of accounting that is similar to the accounting used by private sector companies. The Statement of Net Position includes all of WLSSD’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources and provides information about the nature and amounts of investments in resources (assets) and the obligation to creditors (liabilities). It also provides the basis for evaluating the capital structure and assessing the liquidity of WLSSD.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
(UNAUDITED)
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REQUIRED FINANCIAL STATEMENTS (CONTINUED)
All of the current year’s revenues and expenses are accounted for in the Statement of Revenues, Expenses, and Changes in Net Position. This statement measures the performance of the operations over the past year and can be used to determine whether WLSSD has recovered all of its costs through its user fees and other charges. The Statement of Cash Flows reports cash receipts, cash payments, and net changes in cash resulting from operations, investments, and financing activities and provides answers to such questions as where did the cash come from, what was cash used for, and what was the change in the cash balance during the reporting period.
NET POSITION
To begin our analysis, a summary of WLSSD’s Statement of Net Position is presented in Table A-1.
2017 to 2018 2016 to 2017Increase Increase
2018 2017 2016 (Decrease) (Decrease)
Current and Other Assets $ 50,895 $ 46,978 $ 47,649 $ 3,917 $ (671)
Capital Assets 95,467 94,950 96,222 517 (1,272) Total Assets 146,362 141,928 143,871 4,434 (1,943)
Deferred Outflows of Resources 1,016 1,711 3,832 (695) (2,121)
Current Liabilities 11,100 11,146 11,570 (46) (424) Long-Term Debt 45,671 45,431 52,391 240 (6,960)
Total Liabilities 56,771 56,577 63,961 194 (7,384)
Deferred Inflows of Resources 1,687 1,563 1,247 124 316
Net Investment in Capital Assets 47,993 48,968 44,836 (975) 4,132 - Restricted 20,430 19,491 18,940 939 551 - Unrestricted 20,497 17,040 18,719 3,457 (1,679)
Total Net Position $ 88,920 $ 85,499 $ 82,495 $ 3,421 $ 3,004
Table A-1Condensed Statement of Net Position
(000’s)
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
(UNAUDITED)
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REQUIRED FINANCIAL STATEMENTS (CONTINUED)
NET POSITION (CONTINUED)
As noted in the table above, total Net Position increased by $3.42 million in 2018 as compared to $3.00 million in 2017. The 2018 increase resulted from total assets increasing by $4.43 million, GASB 68 Deferred Outflows decreasing by $0.70 million, total liabilities increasing by $0.19 million, and GASB 68 Deferred Inflows increasing by $0.12 million. The 2017 increase resulted from total assets decreasing by $1.94 million, GASB 68 Deferred Outflows decreasing by $2.12 million and GASB 68 Deferred Inflows increasing by $0.32 million offset by a decrease in total liabilities of $7.38 million. In 2018, current and other assets increased by $3.92 million primarily due to an increase in cash and investments of $2.57 million, an increase in Accounts Receivable and Due from Other Governments of $0.14 million, an increase in inventory and prepaid expenses of $0.21 million and an increase of assets restricted for Wastewater Infrastructure Fund and Debt Service of $0.88 million. In 2017, current and other assets decreased by $0.67 million primarily due to a decrease in cash and investments of $1.03 million, a decrease in Due from Other Governments of $0.66 million, an increase in inventory and prepaid expenses of $0.37 million and an increase of assets restricted for Wastewater Infrastructure Fund and Debt Service of $0.56 million. In 2018, net capital assets increased by $0.52 million primarily due to capital outlays related to wastewater projects related to the Scanlon interceptor ($3.79 million), screw pump improvements ($0.38 million), Oxygen Plant and Main Switchgear improvements ($5.01 million) and other wastewater ($1.36 million) projects less depreciation expense ($10.02 million). In 2017, net capital assets decreased by $1.27 million primarily due to capital outlays related to wastewater projects related to the clarifier ($0.57 million), Lakeside interceptor ($0.37 million), Scanlon interceptor ($3.32 million), screw pump improvements ($0.94 million), Wrenshall pump station ($0.65 million), and other wastewater ($2.39 million) projects less depreciation expense ($9.5 million). Current liabilities decreased in 2018 by $0.05 million primarily due to a decrease in accounts payable ($0.49 million) and a decrease in Construction Contracts Payable ($0.19 million) offset by an increase in Due to Other Governments for year end user adjustments ($0.27 million) and an increase in General Obligation Debt Service ($0.40 million). Current liabilities decreased in 2017 by $0.42 million primarily due to a decrease in construction contracts payable for capital projects. The increase in long-term liabilities of 2018 of $0.24 million is primarily due to an increase in long-term debt financing (new debt issues higher than debt payoff of $1.26 million) offset by a decrease in GASB 68 Net Pension Liability of $1.02 million. The decrease in long-term liabilities of 2017 of $6.96 million is primarily due to a decrease in long-term debt financing (payoff of debt higher than new debt issues of $4.82 million) and a decrease in GASB 68 Net Pension Liability of $2.16 million.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
(UNAUDITED)
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REQUIRED FINANCIAL STATEMENTS (CONTINUED) NET POSITION (CONTINUED)
2017 to 2018 2016 to 2017Dollar Change Dollar Change
Increase Increase
2018 2017 2016 (Decrease) (Decrease)
Operating Revenues Wastewater User Charges $ 26,786 $ 26,419 $ 26,704 $ 367 $ (285)
Solid Waste Fees 8,224 8,041 7,822 183 220 District-Wide Allocation 355 355 355 - -
Capacity Availability Fee 471 362 424 109 (62) Other Operating Revenues 988 829 884 159 (55) Nonoperating Revenues:
Earnings on Investments 601 294 157 307 137 Operating Grants 390 395 421 (5) (26) Other Nonoperating Revenue 14 5 3 9 2
Property Taxes 1,130 1,106 1,100 24 6 Total Revenues 38,959 37,807 37,870 1,152 (63)
Operating Expenses 25,155 24,788 24,877 367 (89) Depreciation Expenses 10,024 9,578 9,484 446 94 Non-Operating Expenses 708 773 840 (65) (67) Total Expenses 35,887 35,140 35,201 748 (62)
Income (Loss) Before Capital Contributions 3,072 2,667 2,669 404 (1)
Capital Contributions 349 336 1,657 13 (1,321)
Changes in Net Position 3,421 3,003 4,326 419 (1,323)
Beginning Net Position 85,499 82,495 78,169 3,004 4,326
Prior Period Adjustment - - - - -
Beginning Net Position, Restated - - 78,169 - (78,169)
Ending Net Position $ 88,920 $ 85,499 $ 82,495 $ 3,421 $ 3,004
Table A-2Condensed Statement of Revenues, Expenses, and Changes in Net Position
(000’s)
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
(UNAUDITED)
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REQUIRED FINANCIAL STATEMENTS (CONTINUED)
NET POSITION (CONTINUED)
While the Statement of Net Position shows the change in financial position, the Statement of Revenues, Expenses and Changes in Net Position provides answers as to the nature and source of these changes. As can be seen in Table A-2 above, there was an increase in income or loss before capital contributions of $3.07 million in 2018, an increase in income or loss before capital contributions of $2.67 million in 2017, and an increase in income or loss before capital contributions of $2.67 million in 2016. Operating revenues increased by $0.82 million in 2018 primarily due to an increase in wastewater user charges of $0.37 million, an increase in solid waste user charges of $0.18 million, an increase in Capacity Availability Fee revenue of $0.11 million and an increase in other revenue charges of $0.16 million. Operating revenues decreased by $0.18 million in 2017 primarily due to a decrease in wastewater user charges of $0.28 million and other revenue charges of $0.12 million offset by an increase in solid waste user charges of $0.22 million. Non-operating revenues for 2018 increased by $0.34 million primarily due to an increase in earnings on investments. Non-operating revenues for 2017 increased by $0.12 million primarily due to an increase in earnings on investments. Total operating expenses increased by $0.37 million in 2018. Primary expense increases were $0.17 million for chemicals and $0.14 million for electrical contractors. Total operating expenses decreased by $0.09 million in 2017. Primary expense decreases of $0.29 million for chemicals were offset by $0.25 million expense increases for electrical contractors.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
(UNAUDITED)
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CAPITAL ASSETS At the end of 2018, WLSSD had invested $331.01 million in capital assets as shown in Table A-3. Capital assets increased by $10.47 million primarily due to improvements to the wastewater plant and other wastewater improvements.
2017 to 2018 2016 to 2017Dollar Change Dollar Change
Increase Increase
2018 2017 2016 (Decrease) (Decrease)
Land & Easements $ 812 $ 812 $ 812 $ - $ - Improvements 220,449 210,351 202,312 10,098 8,039
Buildings & Structures 74,673 74,673 74,673 - - Furniture & Equipment 31,846 31,546 31,431 300 115
Motor Vehicle 3,234 3,160 3,072 73 88 Total 331,014 320,542 312,300 10,471 $ 8,242
235,547 225,593 216,079 9,954 $ 9,514
Net Capital Assets $ 95,467 $ 94,950 $ 96,222 $ 517 $ (1,272)
Less: Accumulated Depreciation
Table A-3Capital Assets
(000’s)
More detailed information about WLSSD’s capital assets is presented in Note 3.A.3 to the financial statements.
DEBT ADMINISTRATION
WLSSD is required to maintain, in a sinking fund at year-end, cash and investments to meet the debt service payments for the following year. Wastewater debt service charges are recovered entirely through user charges. It is the goal of management to maintain a minimum of 120% the following year’s debt service in the fund at year-end. Such a goal has been incorporated into all future long-term capital planning. General obligation indebtedness at year-end 2018 was $46.69 million. This amount includes $8.27 million in general obligation bonds and $38.42 million in general obligation notes from the State of Minnesota revolving loan fund. Additional general obligation revenue notes were issued in the amount of $8.91 million to fund wastewater infrastructure. More detailed information about WLSSD’s long-term debt activity is presented in Notes 3.B. 2-4.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
OPERATING INFORMATION CAPITAL ASSET STATISTICS – WATERWATER OPERATIONS
LAST TEN FISCAL YEARS
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DEBT ADMINISTRATION (CONTINUED) General obligation indebtedness at year-end 2017 was $45.00 million. This amount includes $12.24 million in general obligation bonds and $32.76 million in general obligation notes from the State of Minnesota revolving loan fund. Additional general obligation revenue notes were issued in the amount of $2.39 million to fund wastewater infrastructure. More detailed information about WLSSD’s long-term debt activity is presented in Notes 3.B. 2-4.
ECONOMIC FACTORS
Table A-4 shows the wastewater rate history for each of the four billing parameters: flow, peak flow, BOD, and suspended solids for the period 2014 through 2018. For the five-year period presented the cost of flow increased by 5.91%, the cost of peak flow decreased by 4.33%, the cost of BOD decreased by 0.43% and the cost of suspended solids increased by 15.51%. The typical domestic strength (domestic equivalent) cost per 1000 gallons increased by 8.49% over this period. Domestic strength wastewater assumptions are 200 MG/L for BOD and 200 MG/L for suspended solids.
SuspendedFlow Peak Flow BOD Solids Domestic Equivalent
Fiscal Year (per 1000 gal) (per 1000 gal) (per lb) (per lb) Cost/1000 gallons2014 0.5438 0.0208 0.1632 0.2701 1.732015 0.5717 0.0243 0.1509 0.2777 1.77
2016 0.5472 0.0193 0.1432 0.3026 1.78
2017 0.5338 0.0193 0.1557 0.2930 1.78
2018 0.5759 0.0199 0.1625 0.3120 1.88
Table A-4Wastewater Rate History
FINANCIAL CONTACT
This financial report is designed to provide our customers and creditors with a general overview of WLSSD’s finances and to demonstrate WLSSD’s accountability. If you have questions about this report or need additional financial information, contact the Western Lake Superior Sanitary District, 2626 Courtland Street, Duluth, Minnesota 55806-1894.
BASIC FINANCIAL STATEMENTS
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
COMPARATIVE STATEMENT OF NET POSITION DECEMBER 31, 2018 AND 2017
The notes to the financial statements are an integral part of this statement. (18)
Assets and Deferred Outflows of Resources
Current Assets:Cash and Cash Equivalents $ 5,744,959 $ 5,981,372Investments 17,677,449 14,866,771Accounts Receivable 2,451,508 2,269,744Accrued Interest Receivable 212,586 103,121Due from Other Governments 1,405,708 1,446,031Inventory 2,317,103 2,185,960Prepaid Expense 458,864 375,849Assets Restricted for Memorial Fund Investments 2,516 2,582Assets Restricted for Wastewater Infrastructure Fund Capital Replacement Investments 2,759,288 3,099,560Assets Restricted for General Obligation Debt Service Investments 17,865,129 16,647,167
Total Current Assets 50,895,110 46,978,157
Noncurrent Assets:Capital Assets: 331,013,825 320,542,350 Less: Allowance for Depreciation (235,547,345) (225,592,861)
Total Capital Assets Net of Accumulated Depreciation 95,466,480 94,949,489
Total Assets 146,361,590 141,927,646
Deferred Outflows of Resources:Pension Related 1,016,343 1,710,968
Total Assets and Deferred Outflows of Resources 147,377,933 143,638,614
2018 2017
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
COMPARATIVE STATEMENT OF NET POSITION (CONTINUED) DECEMBER 31, 2018 AND 2017
The notes to the financial statements are an integral part of this statement. (19)
Liabilities and Deferred Inflows of Resources
Current Liabilities:Accounts Payable $ 1,098,280 $ 1,584,745Salaries and Wages Payable 443,987 419,290Accrued Vacation Payable 474,615 501,218Compensatory Time Payable 238,494 278,408Payroll Deductions Payable 15,270 9,886Due to Other Governments 343,184 72,442Employee Benefits 18,270 16,633Construction Contracts Payable 772,739 965,497 Current Liabilities Payable from Restricted Assets: General Obligation Debt Service
Accrued Interest Payable 197,211 227,883 General Obligation Bonds 3,795,000 3,970,000 General Obligation Taxable Revenue Notes 3,703,192 3,099,520
Total Current Liabilities 11,100,242 11,145,522
Noncurrent Liabilities:General Obligation Taxable Revenue Notes 34,718,332 29,663,276General Obligation Bonds (Net of Unamortized
Bond Discounts and Premiums) 4,484,693 8,283,626Net Pension Liability 6,074,611 7,092,551Sick Leave Liability 68,919 119,788Other Postemployment Benefits Obligation 324,905 272,490
Total Noncurrent Liabilities 45,671,460 45,431,731
Total Liabilities 56,771,702 56,577,253
Deferred Inflows of Resources:Pension Related 1,686,593 1,563,158
Total Liabilities and Deferred Inflows of Resources 58,458,295 58,140,411
Net Position
Net Investment in Capital Assets 47,992,524 48,967,570Restricted:
Memorial Fund 2,516 2,582 Wastewater Infrastructure Fund Capital Replacement 2,759,288 3,099,560 General Obligation Debt Service 17,667,918 16,389,100
Unrestricted 20,497,392 17,039,391
Total Net Position $ 88,919,638 $ 85,498,203
2018 2017
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
COMPARATIVE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
YEARS ENDED DECEMBER 31, 2018 AND 2017
The notes to the financial statements are an integral part of this statement. (20)
Operating Revenue:User Charges - Municipalities $ 11,220,492 $ 11,189,619 User Charges - Industries 15,565,523 15,229,129 User Charges - Solid Waste 5,585,909 5,473,131 Service Fee - Solid Waste 2,638,047 2,568,132 District-wide Allocation 354,999 354,998 Capacity Availability Charges 471,143 362,374 Other Income 987,916 829,074
Total Operating Revenue 36,824,029 36,006,457
Operating Expenses:Salaries, Wages and Compensation 7,350,891 7,194,814 Employee Benefits 2,957,164 3,488,123 Other Postemployment Benefits 52,415 8,074 Professional Services 185,296 134,925 Safety and Training 148,481 115,029 Public Information and Other Special Services 221,656 207,956 Easements and Rents 61,907 57,871 Travel 13,305 13,734 Repairs and Maintenance 1,064,553 921,948 Solid Waste Disposal 5,007,245 4,912,086 Insurance 157,725 155,933 Outside Services 206,287 228,901 Contracted Services 2,168,394 2,033,056 Supplies 454,565 411,641 Utilities 3,459,444 3,464,940 Office Expenses 71,967 71,158 Chemicals 1,226,341 1,056,996 Dues, Publications, and Permits 102,061 97,775 Grants to Other Governmental Units 219,523 192,168 Miscellaneous 25,812 21,687 Depreciation 10,024,381 9,578,370
Total Operating Expenses 35,179,413 34,367,185
Operating Income (Loss) 1,644,616 1,639,272
2018 2017
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
COMPARATIVE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION (CONTINUED)
YEARS ENDED DECEMBER 31, 2018 AND 2017
The notes to the financial statements are an integral part of this statement. (21)
Nonoperating Revenue (Expenses):Earnings on Investments $ 600,878 $ 294,140 Gain on Sale of Capital Asset 14,130 5,181 Operating Grants 390,401 395,190 Property Taxes 1,130,463 1,105,907 Interest Expense (660,592) (772,579) Loss on Disposal of Obsolete Inventory (47,701) (863)
Total Nonoperating Revenue (Expenses) 1,427,579 1,026,976
Income (Loss) Before Contributions 3,072,195 2,666,248
Capital ContributionsState 87,288 245,705 Federal 261,952 90,371
Total Capital Contributions 349,240 336,076
Changes in Net Position 3,421,435 3,002,324
Net Position - Beginning of Year 85,498,203 82,495,879
Net Position - End of Year $ 88,919,638 $ 85,498,203
2018 2017
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
COMPARATIVE STATEMENT OF CASH FLOWS YEARS ENDED DECEMBER 31, 2018 AND 2017
The notes to the financial statements are an integral part of this statement. (22)
Cash Flows from Operating ActivitiesCash Received from Customers $ 36,131,708 $ 35,758,922 Cash Paid to Suppliers (15,495,185) (14,283,362) Cash Paid to Employees (10,593,603) (10,377,361) Other Operating Revenues 987,916 829,074
Net Cash Provided by Operating Activities 11,030,836 11,927,273
Cash Flows from Noncapital Financing ActivitiesState and Federal Operating Grants 224,357 417,156 Property Taxes 1,130,213 1,104,101
Net Cash Provided by Noncapital Financing Activities 1,354,570 1,521,257
Cash Flows from Capital and Related Financing Activities Financing Activities
Proceeds from Sale of Capital Assets 14,130 5,181 Proceeds from Note Issues 8,907,728 2,393,725 Proceeds from Capital Contributions 349,240 336,076 Principal Paid on General Obligation Bonds (3,970,000) (4,330,000) Interest Paid on General Obligation Bonds (691,264) (795,094) Principal Paid on Public Facilities Authority General Obligation Note (3,249,000) (3,046,317) Acquisition or Construction of Capital Assets (10,734,130) (8,725,559) Loss on Disposal of Obsolete Inventory (47,701) (863)
Net Cash Used by Capital and Related Financing Activities (9,420,997) (14,162,851)
Cash Flows from Investing ActivitiesSale of Investments 34,566,572 27,089,737 Interest on Investments 491,413 244,114 Purchase of Investments (38,258,807) (30,942,145)
Net Cash Usec by Investing Activities (3,200,822) (3,608,294)
Net Increase (Decrease) in Cash and Cash Equivalents (236,413) (4,322,615)
Cash and Cash Equivalents - Beginning of Year 5,981,372 10,303,987
Cash and Cash Equivalents - End of Year $ 5,744,959 $ 5,981,372
2018 2017
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
COMPARATIVE STATEMENT OF CASH FLOWS (CONTINUED) YEARS ENDED DECEMBER 31, 2018 AND 2017
The notes to the financial statements are an integral part of this statement. (23)
Reconciliation of Operating Income to Net Cash Provided by (Used in) Operating Activities
Net Operating Income (Loss) $ 1,644,616 $ 1,639,272 Adjustments to Reconcile Net Operating Income to Net Cash Provided by Operating Activities
Depreciation 10,024,381 9,578,370 Pension Adjustment (199,880) 273,208 Change in Assets and Liabilities Decrease (Increase) in Receivables 24,853 598,665 Decrease (Increase) in Inventory (131,143) (224,689) Decrease (Increase) in Prepaids (83,015) (144,061) Increase (Decrease) in Payables (248,976) 206,508
Net Cash Provided by Operating Activities $ 11,030,836 $ 11,927,273
2018 2017
Noncash Investing, Capital and Financing Activities
In 2018, WLSSD had $6,165 of bond discount amortized within interest expense. This amount is included within the principal paid on general obligation bonded debt. In 2018, WLSSD had $10,098 of bond premium amortized within interest expense. This amount is included within the principal paid on general obligation bonded debt. In 2018, WLSSD acquired capital assets of $772,739 which had not been paid for at year-end. The unpaid amount is shown as contracts payable. In 2017, WLSSD had $8,429 of bond discount amortized within interest expense. This amount is included within the principal paid on general obligation bonded debt. In 2017, WLSSD had $10,098 of bond premium amortized within interest expense. This amount is included within the principal paid on general obligation bonded debt. In 2017, WLSSD acquired capital assets of $965,497 which had not been paid for at year-end. The unpaid amount is shown as contracts payable.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(24)
1. Summary of Significant Accounting Policies
The accounting policies of the Western Lake Superior Sanitary District (WLSSD) conform to generally accepted accounting principles (GAAP) for the years ended December 31, 2018 and 2017. The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (statements and interpretations). This financial report has been prepared in conformity with Governmental Accounting Standards Board Statements.
A. Financial Reporting Entity
WLSSD was formed pursuant to 1971 Minnesota Laws, chapter 478, as amended. WLSSD was created for the purpose of protection of the public health, safety, and welfare of the area, for the preservation and best use of waters, land and other natural resources, for the prevention, control and abatement of water pollution and disposal of solid waste, and for the efficient and economic collection, treatment and disposal of sewage and solid waste. WLSSD is governed by a nine-member board which consists of one member appointed by Carlton County, three members appointed by the City of Cloquet, four members appointed by the City of Duluth and one member appointed by St. Louis County. The Board is organized with a chair and vice-chair elected in July of each year.
As required by generally accepted accounting principles, these financial statements present WLSSD (primary government) and its component units for which WLSSD is financially accountable. There is financial accountability if the Primary Government appoints a voting majority of an organization’s governing body and has the ability to impose its will on that governing body; or there is the potential for the organization to provide specific financial benefits or to impose specific financial burden on the Primary Government. Based on the criteria for determining component units, WLSSD is not required to include any component units.
B. Basis of Presentation - Fund Accounting
The accounts of WLSSD are presented as an enterprise fund. Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges.
C. Basis of Accounting
Accounting records are maintained on the accrual basis, under which revenues are recorded when earned, and expenses, including vacation leave, are recorded when incurred.
When both restricted and unrestricted resources are available for use, it is WLSSD’s policy to use restricted resources first, then unrestricted resources as needed.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(25)
1. Summary of Significant Accounting Policies (Continued) D. Assets, Liabilities, and Net Position
1. Assets
Cash and Cash Equivalents For purposes of the statement of cash flows, WLSSD has defined cash and cash equivalents as deposits in checking and savings accounts and petty cash. All other investments are not considered to be cash equivalents.
WLSSD has elected to value all money market and participating interest-earning investment contracts that mature within one year of acquisition at amortized cost. All of WLSSD’s holdings in commercial paper, bankers’ acceptances, negotiable certificates of deposit, and government agency securities qualify for amortized cost reporting. WLSSD’s investments in money market mutual funds are valued at the current share price. The carrying value of the investments which are valued at amortized cost does not differ materially from the fair value of those investments.
Inventory The inventory consists of chemicals, fuels, and expendable supplies held for consumption. The chemicals and fuels were inventoried at year-end and were valued at cost using the first-in, first-out method. A perpetual inventory system is maintained for the supplies inventory, which is valued using the moving weighted-average cost method. Restricted Assets Certain funds of WLSSD are classified as restricted assets on the statement of net position because the restriction is either imposed by law through constitutional provisions or enabling legislation or imposed externally by creditors, grantors, contributors, or laws or regulations of other governments. Therefore, their use is limited by applicable laws and regulations. Restricted assets consist of monies specified for payment of memorial fund scholarships, wastewater infrastructure capital replacement, and bond and note principal and interest. These assets are offset by restricted net position.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(26)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities, and Net Position (Continued)
1. Assets (Continued)
Capital Assets Capital assets are defined by WLSSD as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset’s lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets is included as part of the capitalized value of the assets constructed. During 2018 and 2017, WLSSD capitalized $42,281 and $18,899 of interest, respectively.
Depreciation of capital assets is determined using the straight-line method. The estimated useful lives of the assets are:
Classification Range Buildings and Structures 30 Years Improvements Other Than Buildings 10-20 Years Furniture and Equipment: Furniture 10 Years Equipment 5-15 Years Motor Vehicles 5 Years
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(27)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities, and Net Position (Continued) 2. Liabilities
Compensated Absences Employees are granted from ten to twenty-six days of vacation per year depending on their years of service and union bargaining unit. Varying amounts of vacation, depending on length of service, may be accumulated and carried over to the succeeding year. Unused vacation is paid to employees upon their termination. Vacation leave is expensed when earned.
Effective January 1, 1984, employees no longer accrue sick leave. Personnel are authorized sick leave as needed up to a maximum of twenty weeks. Prior to 1984, sick leave was earned and accumulated at various rates based on length of service.
Other Post-Employment Benefits WLSSD’s supervisory/confidential employees participate in a post-retirement health savings plan administered by the Minnesota State Retirement System. At retirement, the value of supervisory/confidential employee’s vacation balance is transferred to the post-retirement health savings plan to be used to cover post-retirement medical expenses. The amounts are contributed tax-free and there are no taxes paid when the amounts are withdrawn from the employees account. Effective January 1, 2009, upon voluntary retirement under PERA, the value of a bargaining unit employee’s accumulated sick bank balance established as of December 31, 1983, will be transferred to a post-retirement health care savings plan administered by the Minnesota State Retirement System. Pensions For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA’s fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(28)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Net Position (Continued) 3. Net Position
WLSSD’s net position is reported in three parts: (1) net investment in capital assets; (2) restricted net position; and (3) unrestricted net position. When an expense is incurred for purposes which both restricted and unrestricted net position is available, it is WLSSD’s policy to use restricted first, then unrestricted net position. It is WLSSD’s policy to maintain minimum unrestricted net position targets for solid waste and wastewater functions. In the solid waste function the operations fund should maintain unrestricted net position of at least 25% of the next year’s annual operating expenditures, or $1,192,896. In addition, the solid waste function should maintain a balance of $550,000 in the capital fund and $150,000 in the transfer station capital fund. In the wastewater function, the operations fund should maintain unrestricted net position of at least 25% of the next year’s annual operating expenditures, or $4,030,478. The wastewater function should maintain a balance of $1,000,000 in the capital fund plus the highest annual WIF set aside of $1,367,847, for a total at December 31, 2018 of $2,367,847.
E. Revenues
Operating revenues, such as user charges, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as operating grants and earnings on investments, result from non-exchange transactions or incidental activities. WLSSD's operating and maintenance costs are allocated to the municipalities and industries using WLSSD’s sewage treatment system through a user service charge. The allocation is based on the “Cost Apportionment Policy” adopted by the Board of Directors. The general planning, regulation, and technical assistance provided by WLSSD are funded by a district-wide allocation. These costs are allocated against all governmental units within WLSSD based on their assessed valuation.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(29)
1. Summary of Significant Accounting Policies (Continued)
E. Revenues (Continued) Solid waste users are charged tipping fees based on the volume of refuse disposed and a hauler collected solid waste management fee based on the customer container sizes. The fees are approved by the Board. A line item fee is levied on residential parcels to cover use of the solid waste facilities such as the household hazardous waste facility and material recovery center. The amount to be charged against real estate per parcel is set by the Board and certified to St. Louis County and Carlton County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The counties are required to distribute collections to WLSSD three times each year.
The property tax calendar is as follows:
Adopt final levy and certify to Counties October 15 Lien date January 1 Receive first installment from Counties prior year’s balance of tax collections January 26 First half property taxes due May 15 Receive second installment from County first half tax collections July 6 Second half property taxes due October 15 Receive third installment from County second half tax collections December 4
Capital contributions consist of federal and state capital grants for the construction of pump stations and other wastewater treatment system improvements.
F. Expenses
Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on the capital assets. All expenses not meeting this definition are reported as other expenses.
G. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
H. Prior Period Comparative Financial Information/Reclassification Certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(30)
2. Stewardship, Compliance, and Accountability
A. General Obligation Bond Reserve Requirement
The bond resolutions require that the value of cash, cash equivalents, and investments on hand at October 1, 2018 and 2017 plus the estimated revenues to be collected through September 30, 2019 and 2018, be not less than the amount of principal and interest due on the bonds in the next succeeding year. WLSSD has complied with this requirement.
B. Budgets and Budgetary Accounting
Minnesota Statutes §458D.08 requires WLSSD’s Board to adopt an annual budget. WLSSD follows these procedures in establishing the budgetary data reflected in the financial statements:
(1) During September thru October, the Executive Director submits to the
Board of Directors an estimate of revenues and expenses for the fiscal year commencing January 1. Revenues and expenses are budgeted on an accrual basis.
(2) The budget is adopted by the Board of Directors by the passage of a motion on or before November 1.
(3) The Board of Directors may increase or decrease the budget at any time by the passage of a motion. Management may increase or decrease line items within the budget.
(4) Budgetary control of expenses is maintained at the level of total expenses. For management control purposes, the expenses are controlled at the department level.
(5) Unexpended items within the budget lapse at year-end.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(31)
2. Stewardship, Compliance, and Accountability (Continued)
B. Budgets and Budgetary Accounting (Continued)
Below is a summary statement of actual and budget revenues and expenses for the fiscal years ended December 31, 2018 and 2017:
Variance
FavorableBudget Actual (Unfavorable)
Operating Revenue:User Charges - Municipalities $ 11,497,030 $ 11,220,492 $ (276,538) User Charges - Industries 14,944,451 15,565,523 621,072 User Charges - Solid Waste 5,426,840 5,585,909 159,069 Service Fee - Solid Waste 2,380,000 2,638,047 258,047 District-wide Allocation 355,000 354,999 (1) Capacity Availability Charges 350,000 471,143 121,143 Other Income 796,475 987,916 191,441
Total Operating Revenue 35,749,796 36,824,029 1,074,233
Operating Expenses:Operating Expenses Before
Depreciation 25,484,725 25,155,032 329,693 Depreciation 9,648,251 10,024,381 (376,130)
Total Operating Expenses 35,132,976 35,179,413 (46,437)
Operating Income (Loss) 616,820 1,644,616 1,027,796
Nonoperating Revenue (Expenses):Earnings on Investments 173,000 600,878 427,878 Gain on Sale of Capital Asset - 14,130 14,130 Operating Grants 414,781 390,401 (24,380) Property Taxes 1,130,738 1,130,463 (275) Interest Expense (740,219) (660,592) 79,627 Loss on Disposal of Obsolete Inventory - (47,701) (47,701)
Total Nonoperating Revenue (Expenses) 978,300 1,427,579 449,279
Income (Loss) Before Contributions 1,595,120 3,072,195 1,477,075
Capital Contributions - 349,240 349,240
Change in Net Position $ 1,595,120 $ 3,421,435 $ 1,826,315
2018
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(32)
2. Stewardship, Compliance, and Accountability (Continued)
B. Budgets and Budgetary Accounting (Continued)
Variance
FavorableBudget Actual (Unfavorable)
Operating Revenue:User Charges - Municipalities $ 11,123,455 $ 11,189,619 $ 66,164 User Charges - Industries 14,807,349 15,229,129 421,780 User Charges - Solid Waste 5,208,365 5,473,131 264,766 Service Fee - Solid Waste 2,306,500 2,568,132 261,632 District-wide Allocation 355,000 354,998 (2) Capacity Availability Charges 350,000 362,374 12,374 Other Income 716,775 829,074 112,299
Total Operating Revenue 34,867,444 36,006,457 1,139,013
Operating Expenses:Operating Expenses Before
Depreciation 24,915,720 24,788,815 126,905 Depreciation 9,027,828 9,578,370 (550,542)
Total Operating Expenses 33,943,548 34,367,185 (423,637)
Operating Income (Loss) 923,896 1,639,272 715,376
Nonoperating Revenue (Expenses):Earnings on Investments 85,500 294,140 208,640 Gain on Sale of Capital Asset - 5,181 5,181 Operating Grants 399,538 395,190 (4,348) Property Taxes 1,106,075 1,105,907 (168) Interest Expense (910,248) (772,579) 137,669 Loss on Disposal of Obsolete Inventory - (863) (863)
Total Nonoperating Revenue (Expenses) 680,865 1,026,976 346,111
Income (Loss) Before Contributions 1,604,761 2,666,248 1,061,487
Capital Contributions - 336,076 336,076
Change in Net Position $ 1,604,761 $ 3,002,324 $ 1,397,563
2017
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(33)
3. Detailed Notes
A. Assets
1. Deposits and Investments Reconciliation of WLSSD’s total cash and investments to the financial statements follows:
Current Assets: 2018 2017
Cash and Cash Equivalents $ 5,744,959 $ 5,981,372
Investments 17,677,449 14,866,771
Restricted Assets:
Memorial Fund Investments 2,516 2,582
Wastewater Infrastructure Fund Capital Replacement
Investments 2,759,288 3,099,560
Debt Service Investments 17,865,129 16,647,167
Total Cash and Investments $ 44,049,341 $ 40,597,452
a. Deposits
Minnesota Statutes §§118A.02 and 118A.04 authorize WLSSD to designate a depository for public funds and to invest in certificates of deposit. Minnesota Statutes §118A.03 requires that all WLSSD’s deposits be protected by insurance, surety bond, or collateral. The fair value of collateral pledged shall be at least 10% more than the amount on deposit at the close of the financial institution's banking day, not covered by insurance or bonds. Authorized collateral includes treasury bills, notes and bonds; issues of U.S. government agencies; general obligations rated “A” or better, revenue obligations rated “AA” or better; irrevocable standby letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral.
Custodial Credit Risk Custodial credit risk is the risk that in the event of a financial institution failure, WLSSD’s deposits may not be returned to it. WLSSD’s policy is that all Certificates of Deposit shall be collateralized in compliance with Minnesota Statutes §118A.03. As of December 31, 2018, WLSSD’s bank balance was not exposed to custodial credit risk.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(34)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments Minnesota Statutes §§118A.04 and 118A.05 generally authorize the following types of investments as available to WLSSD:
(1) securities which are direct obligations or are guaranteed or insured
issues of the United States, its agencies, its instrumentalities, or organizations created by an act of Congress, except mortgage-backed securities defined as “high risk” by Minnesota Statutes §118A.04, subd. 6;
(2) mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments;
(3) general obligations of the State of Minnesota and its municipalities, and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service;
(4) bankers’ acceptances of United States banks; (5) commercial paper issued by United States corporations or their
Canadian subsidiaries that is rated in the highest quality category by two nationally recognized rating agencies and matures in 270 days or less; and
(6) with certain restrictions, in repurchase agreements, securities lending agreements, joint powers investment trusts, and guaranteed investment contracts.
The Minnesota Municipal Money Market Fund is a money market accounts that are valued at amortized cost with maturities of investments of one year or less. The Minnesota Municipal Market Trust Fund does not have its own credit rating. PMA Financial Network, Inc., who administers the Minnesota Municipal Money Market Fund Trust, holds an organization credit rating of AA by Standard & Poor’s.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(35)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments (Continued)
Custodial Credit Risk The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. It is WLSSD’s policy that all investment securities be held in safekeeping in compliance with the requirements of Minnesota Statutes §118A.06. This statute allows investment securities to be held in safekeeping with (1) any federal reserve bank, (2) any bank authorized under the laws of the United States or any state to exercise corporate trust powers, including, but not limited to the bank from which the investment is purchased, (3) a primary reporting dealer in United States government securities to the Federal Reserve Bank of New York, or (4) a securities broker-dealer which is registered as a broker-dealer under chapter 80A or is exempt from the registration requirements, is regulated by the Securities and Exchange Commission, and maintains insurance through the Securities Investor Protection Corporation or excess insurance coverage in an amount equal to or greater than the value of the securities held.
At December 31, 2018 and 2017, WLSSD had no investments which were subject to custodial credit risk.
Interest Rate Risk Interest rate risk is the risk that changes in the market interest rates will adversely affect the fair value of an investment. WLSSD investment policy limits investment maturities to fewer than two years. The policy sets guidelines for the minimum percentages of the investment portfolio to be maintained at various maturities. In this way, WLSSD minimizes their exposure to interest rate risk by investing in both shorter and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(36)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments (Continued) Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. It is WLSSD’s policy to invest only in securities that meet the ratings requirements set by state statute. Minnesota Statutes §118A.04 requires commercial paper to be rated in the highest quality category by at least two nationally recognized rating agencies and mature in 270 days or less. State and local government securities must be rated “A” or better for general obligation securities and “AA” or better for revenue obligations. Public funds may also be invested in United States securities which are direct obligations or are guaranteed or insured issues of the United States, its agencies, its instrumentalities, or organizations created by an act of Congress. Concentration of Credit Risk The concentration of credit risk is the risk of loss that may be caused by WLSSD’s investment in a single issuer. It is WLSSD’s policy to diversify the use of investment instruments to avoid incurring unreasonable risks inherent in over investing in specific instruments, individual financial institutions, or maturities. WLSSD’s investment in Federal Home Loan Bank Notes Securities comprises 33% of WLSSD’s total investments. WLSSD’s investment policy allows WLSSD to invest in U.S. treasury obligations, U.S. government agency securities, and certificates of deposit which are fully insured by the Federal Deposit Insurance Corporation, without limit. However, certificates of deposit are limited to 50% with any one depository. Repurchase agreements and bankers’ acceptances are limited by the investment policy to no more than 50% of the portfolio and no more than 50% with any one depository. Commercial paper is limited to no more than 50% of the portfolio and no more than 10% with any one issuer. Money market funds are limited to a maximum of 25% of the portfolio.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(37)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments (Continued)
Concentration of Credit Risk, Credit, and Interest Rate Risks
Value at
Investment Type Rating Agency 12/31/18
U.S. Government Agency Securities
Federal Home Loan Bank Notes AA+/AAA S&P/ Moody's 7% 5/28/2019 2,500,000$ Federal Home Loan Bank Notes AA+/AAA S&P/ Moody's 5% 3/27/2019 2,020,403
Federal Home Loan Bank Notes AA+/AAA S&P/ Moody's 9% 3/14/2019 3,500,000
Federal Home Loan Bank Notes AA+/AAA S&P/ Moody's 12% 12/20/2019 6,751,758
Total U.S. Government Agency Securities 14,772,161$
Carrying Value
Investment Type Rating Agency as of 12/31/18
Negotiable Certificates of Deposit
Bank of the Ozarks AR CD N/R,N/R N/A <5% 1/18/2019 245,700$
Discover Bank Greenwood DL CD N/R,N/R N/A <5% 1/24/2019 245,000
Banner Bank, Walla Walla WA CD N/R,N/R N/A <5% 1/25/2019 245,000
Ponce Bank Bronx CD N/R,N/R N/A <5% 1/25/2019 245,000
Citibank National Association CD N/R,N/R N/A <5% 1/25/2019 245,000
State Bank of India New York NY CD N/R,N/R N/A <5% 1/25/2019 245,000
Cathay Bank Los Angeles CA CD N/R,N/R N/A <5% 1/29/2019 245,000
Bank of Ruston LA CD N/R,N/R N/A <5% 1/30/2019 245,000
Merrick Bank South Jordan UT CD N/R,N/R N/A <5% 1/30/2019 245,000
Synovus Bank Columbus GA CD N/R,N/R N/A <5% 1/30/2019 245,000
Patriot Bank NA/Stamford CD N/R,N/R N/A <5% 1/31/2019 245,000
First Mid-Illinois Bank & Trust IL CD N/R,N/R N/A <5% 3/22/2019 245,000
Oriental Bank CD N/R,N/R N/A <5% 3/28/2019 244,000
Bank Barolda NY CD N/R,N/R N/A <5% 3/29/2019 244,000
Peoples Bank Holyoke MA CD N/R,N/R N/A <5% 3/29/2019 244,000
Valley Cent Bank Reading OH Cd N/R,N/R N/A <5% 3/29/2019 244,000
Prospect Bank / Edgar County B&TC IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Village Bank & Trust Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Crystal Lake B&TC NA Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Northbrook B&TC Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Schaumburg B&TC, Advantage National Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Beverly Bank & Trust Co Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
State Bank of the Lakes Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
St Charles B&TC Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Lake Forest B&T Co Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Wheaton Bank and Trust Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Hinsdale B&TC Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Libertyville B&TC Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Barrington B&TC Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Town Bank Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
Old Plank Trail Community Bank Wintrust IL CD N/R,N/R N/A <5% 4/22/2019 244,500
TCF National Bank CD N/R,N/R N/A <5% 4/25/2019 244,000
Synchrony Bank CD N/R,N/R N/A <5% 4/25/2019 244,000
Farmers & Merchant Savings Bank CD N/R,N/R N/A <5% 4/29/2019 244,000
Enerbank USA CD N/R,N/R N/A <5% 4/30/2019 244,000
UBS Bank USA Salt Lake City UT CD N/R,N/R N/A <5% 4/30/2019 244,000
Concentration Risk Interest Rate
Risk Credit Risk
Credit Rating Over 5 Percent of
Portfolio Maturity Date
Credit Rating Over 5 Percent of
Portfolio Maturity Date
Concentration Risk Interest Rate
Risk Credit Risk
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(38)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments (Continued)
Concentration of Credit Risk, Credit and Interest Rate Risks (Continued)
Value at
Investment Type Rating Agency 12/31/18 Credit Rating Over 5 Percent of
Portfolio Maturity Date
Concentration Risk Interest Rate
Risk Credit Risk
Sandhills Bank North, Myrtle Beach SC CD N/R,N/R N/A <5% 4/30/2019 244,000$
Bank of China NY CD N/R,N/R N/A <5% 5/20/2019 244,000
CFG Community Bank MD CD N/R,N/R N/A <5% 5/20/2019 244,200
Bank 7 OK CD N/R,N/R N/A <5% 5/20/2019 244,100
Cornerstone Bank York NE CD N/R,N/R N/A <5% 5/20/2019 244,200
Prudential Savings Bank PA CD N/R,N/R N/A <5% 5/20/2019 244,300
Post Oak Bank TX CD N/R,N/R N/A <5% 5/20/2019 244,300
Wintrust Bank/North Shore Comm Bank & Trust IL CD N/R,N/R N/A <5% 5/20/2019 244,200
New Omni Bank CA CD N/R,N/R N/A <5% 5/20/2019 244,300
Mission National Bank CA CD N/R,N/R N/A <5% 5/20/2019 244,400
Pacific Western Bank CA CD N/R,N/R N/A <5% 5/20/2019 244,400
Capital Community Bank UT CD N/R,N/R N/A <5% 5/20/2019 244,400
ZBNA CD N/R,N/R N/A <5% 5/21/2019 244,000
MUFG Union Bank San Francisco, CA CD N/R,N/R N/A <5% 5/22/2019 244,000
Fifth Third Bank Cincinnati OH CD N/R,N/R N/A <5% 5/23/2019 244,000
City National Bank of Florida, Miami CD N/R,N/R N/A <5% 5/24/2019 244,000
Wex Bank Midvale UT CD N/R,N/R N/A <5% 5/30/2019 244,000
Bank United National Association CD N/R,N/R N/A <5% 5/30/2019 244,000
First Internet Bank of Indiana CD N/R,N/R N/A <5% 6/24/2019 243,600
Millenium Bank IL CD N/R,N/R N/A <5% 6/24/2019 243,800
First Capital Bank TN CD N/R,N/R N/A <5% 6/24/2019 243,800
North American Banking Company MN CD N/R,N/R N/A <5% 6/24/2019 243,900
Newbank NA NY CD N/R,N/R N/A <5% 6/24/2019 243,900
Mainstreet Bank VA CD N/R,N/R N/A <5% 6/24/2019 243,900
National Bank of St. Anne IL CD N/R,N/R N/A <5% 6/24/2019 244,000
First Western Federal Savings Bank SD CD N/R,N/R N/A <5% 6/24/2019 244,000
Premier Bank IA CD N/R,N/R N/A <5% 6/24/2019 244,000
Servisfirst Bank FL CD N/R,N/R N/A <5% 6/24/2019 243,900
American Plus Bank NA CA CD N/R,N/R N/A <5% 6/24/2019 244,000
Corporate One Federal Credit Union N/R,N/R N/A <5% 6/24/2019 244,000
Ameris Bank Moultrie GA CD N/R,N/R N/A <5% 6/27/2019 244,000
Axiom Bank Maitland FL CD N/R,N/R N/A <5% 6/28/2019 244,000
Iberiabank Lafayette LA CD N/R,N/R N/A <5% 6/28/2019 244,000
State Bank of Fenton MI CD N/R,N/R N/A <5% 6/28/2019 244,000
Stifel Bank and Trust CD N/R,N/R N/A <5% 6/27/2019 244,000
East West Bank San Marino CA CD N/R,N/R N/A <5% 6/28/2019 244,000
United Bank Fairfax VA CD N/R,N/R N/A <5% 6/28/2019 244,000
Flagship Bank Wayzata MN CD N/R,N/R N/A <5% 6/28/2019 244,000
Citadel FCU PA CD N/R,N/R N/A <5% 11/15/2019 243,000
Northeast Community Bank NY CD N/R,N/R N/A <5% 11/15/2019 243,200
Elga Credit Union MI CD N/R,N/R N/A <5% 11/15/2019 243,200
Financial Federal Bank TN CD N/R,N/R N/A <5% 11/15/2019 243,400
Bank of America Charlotte NC CD N/R,N/R N/A <5% 11/21/2019 243,000
Branch Banking & Trust Winston Salem NC CD N/R,N/R N/A <5% 11/20/2019 243,000
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(39)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments (Continued)
Concentration of Credit Risk, Credit and Interest Rate Risks (Continued)
Value at
Investment Type Rating Agency 12/31/18 Credit Rating Over 5 Percent of
Portfolio Maturity Date
Concentration Risk Interest Rate
Risk Credit Risk
Compass Bank Birmingham AL CD N/R,N/R N/A <5% 11/29/2019 243,000$
USNY Bank Geneva NY CD N/R,N/R N/A <5% 11/26/2019 243,000
Global Bank NY CD N/R,N/R N/A <5% 12/19/2019 243,200
Sonabank VA CD N/R,N/R N/A <5% 12/19/2019 243,000
Modern Bank National Association NY CD N/R,N/R N/A <5% 12/19/2019 243,200
CIBC Bank USA/Private Bank MI CD N/R,N/R N/A <5% 12/19/2019 243,200
Mizuho Bank USA CD N/R,N/R N/A <5% 12/26/2019 243,000
Bank of India NY CD N/R,N/R N/A <5% 12/26/2019 243,000
BMO Harris Bank IL CD N/R,N/R N/A <5% 12/27/2019 243,000
Renasant Bank Tupelo MS CD N/R,N/R N/A <5% 12/31/2019 243,000
Total Negotiable Certificates of Deposit 21,721,500
Total Investments 100% 36,493,661
Repurchase Agreements
US Bank - Sweep 5,160,240
Deposits 828,037
4M Fund N/A N/A N/A 890,848
Wells Fargo Government Fund AAA S&P/Moody's N/A 181,354
First American-Prime Obligation Fund AAA S&P/Moody's N/A 492,576
Petty Cash 2,625
Total Cash and Investments 44,049,341$
N/A - Not Applicable
<5% - Concentration is Less Than 5% of Investment
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(40)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments (Continued)
Concentration of Credit Risk, Credit and Interest Rate Risks (Continued)
Value at
Investment Type Rating Agency 12/31/17
U.S. Government Agency Securities
Federal Home Loan Bank Notes AA+/AAA S&P/ Moody's 12% 3/19/2018 3,988,013$
Carrying Value
Investment Type Rating Agency as of 12/31/17
Negotiable Certificates of Deposit
Nexbank SSB TX CD N/R,N/R N/A <5% 1/26/2018 247,500$
KS Statebank / Kansas State Bank of Manhattan KS CD N/R,N/R N/A <5% 1/26/2018 247,500
Capital Bank TX CD N/R,N/R N/A <5% 1/26/2018 247,600
First Commons Bank NA MA CD N/R,N/R N/A <5% 1/26/2018 247,600
Orrstown Bank PA CD N/R,N/R N/A <5% 1/26/2018 247,600
Savoy Bank NY CD N/R,N/R N/A <5% 1/26/2018 247,600
Citizens State Bank of La Crosse WI CD N/R,N/R N/A <5% 1/26/2018 247,600
Bremer Bank NA MN N/R,N/R N/A <5% 1/26/2018 247,500
Southside Bank TX CD N/R,N/R N/A <5% 1/26/2018 247,700
Millbury National Bank MA CD N/R,N/R N/A <5% 1/26/2018 247,700
Banco do Brasil Americas FL CD N/R,N/R N/A <5% 1/26/2018 247,700
United Bank CT CD N/R,N/R N/A <5% 1/26/2018 247,700
Essa Bank & Trust Stoudsburg PA CD N/R,N/R N/A <5% 1/30/2018 249,000
Boston Private Bank & Trust Co CD N/R,N/R N/A <5% 1/31/2018 249,000
First Citrus Bank Tampa FL CD N/R,N/R N/A <5% 3/28/2018 249,000
Bar Harbor Bank & Trust ME CD N/R,N/R N/A <5% 3/29/2018 249,000
Atlantic Stewardship Bank NJ CD N/R,N/R N/A <5% 3/29/2018 249,000
City National Bank Miami FL CD N/R,N/R N/A <5% 3/29/2018 249,000
TCF National Bank CD N/R,N/R N/A <5% 3/29/2018 249,000
Corporate One Federal Credit Union OH CD N/R,N/R N/A <5% 3/26/2018 247,200
Bank North Carolina NC CD N/R,N/R N/A <5% 3/29/2018 248,000
Allegiance Bank Houston TX CD N/R,N/R N/A <5% 3/29/2018 248,000
Enterprise Bank NA CD N/R,N/R N/A <5% 3/30/2018 248,000
Peoples Bank Mangolia AR CD N/R,N/R N/A <5% 3/29/2018 248,000
First Internet Bank of IN CD N/R,N/R N/A <5% 3/26/2018 247,100
Cornerstone Bank York NE CD N/R,N/R N/A <5% 3/26/2018 247,200
Regent Bank OK CD N/R,N/R N/A <5% 3/26/2018 247,400
Middlefield Banking Company OH CD N/R,N/R N/A <5% 3/26/2018 247,400
Valley National Bank OK CD N/R,N/R N/A <5% 3/26/2018 247,300
Patriot Bank OK CD N/R,N/R N/A <5% 3/26/2018 247,400
Newbank NA NY CD N/R,N/R N/A <5% 3/26/2018 247,500
Fieldpoint Private Bank & Trust CT CD N/R,N/R N/A <5% 3/26/2018 247,500
Drake Bank MN CD N/R,N/R N/A <5% 3/26/2018 247,500
Premier Bank IA CD N/R,N/R N/A <5% 3/26/2018 247,600
ZBNA CD N/R,N/R N/A <5% 3/26/2018 249,000
Credit Rating Over 5 Percent of
Portfolio Maturity Date
Concentration Risk Interest Rate
Risk Credit Risk
Concentration Risk Interest Rate
Risk Credit Risk
Credit Rating Over 5 Percent of
Portfolio Maturity Date
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(41)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments (Continued)
Concentration of Credit Risk, Credit and Interest Rate Risks (Continued)
Value at
Investment Type Rating Agency 12/31/17 Credit Rating Over 5 Percent of
Portfolio Maturity Date
Concentration Risk Interest Rate
Risk Credit Risk
F&M Bank Clarksville TN CD N/R,N/R N/A <5% 4/27/2018 249,000$
DMB Community Bank WI CD N/R,N/R N/A <5% 4/27/2018 249,000
Pacific Coast Bankers Bank Waln CD N/R,N/R N/A <5% 4/27/2018 249,000
Summit Street Bank Santa Rosa CA CD N/R,N/R N/A <5% 4/27/2018 249,000
SNB Bank NA OK CD N/R,N/R N/A <5% 4/20/2018 247,100
CFG Community Bank MD CD N/R,N/R N/A <5% 4/20/2018 247,000
First National Bank AR CD N/R,N/R N/A <5% 4/20/2018 247,100
Associated Bank NA WI CD N/R,N/R N/A <5% 4/20/2018 247,100
Wintrust Bank Chicago IL CD N/R,N/R N/A <5% 4/26/2018 249,000
Pacific Western Bank CA CD N/R,N/R N/A <5% 4/26/2018 249,000
Bank of China NY CD N/R,N/R N/A <5% 4/27/2018 249,000
Farmers Exchange Bank OK CD N/R,N/R N/A <5% 5/17/2018 246,800
Unity Bank MN CD N/R,N/R N/A <5% 5/17/2018 246,900
North Amnerican Banking Company MN CD N/R,N/R N/A <5% 5/17/2018 246,900
Farmers & Merchants Union Bank WI CD N/R,N/R N/A <5% 5/17/2018 246,900
Bank 7 OK CD N/R,N/R N/A <5% 5/17/2018 247,000
Comenity Capital Bank UT CD N/R,N/R N/A <5% 5/22/2018 249,000
Bank West San Francisco CA CD N/R,N/R N/A <5% 5/23/2018 249,000
Plains Capital Bank TX CD N/R,N/R N/A <5% 5/24/2018 249,000
Transportation Alliance Bank UT CD N/R,N/R N/A <5% 5/25/2018 249,000
Midcountry Bank Metropolis IL CD N/R,N/R N/A <5% 5/30/2018 249,000
Pacific Premier Bank CD N/R,N/R N/A <5% 5/30/2018 249,000
Parkway Bank & Trust Harwood Heights IL CD N/R,N/R N/A <5% 5/30/2018 249,000
Century Bank KY CD N/R,N/R N/A <5% 5/30/2018 249,000
First Foundation Bank Irvine CA CD N/R,N/R N/A <5% 5/31/2018 249,000
Investors Community Bank WI CD N/R,N/R N/A <5% 5/31/2018 249,000
Old National Bank Evansville IN CD N/R,N/R N/A <5% 5/31/2018 249,000
Royal Business Bank CA CD N/R,N/R N/A <5% 6/21/2018 246,500
Landmark Community Bank TN CD N/R,N/R N/A <5% 6/21/2018 246,500
Mainstreet Bank VA CD N/R,N/R N/A <5% 6/21/2018 246,500
First Capital Bank TN CD N/R,N/R N/A <5% 6/21/2018 246,500
Morgan Stanley Bank NA UT CD N/R,N/R N/A <5% 6/29/2018 246,000
Ally Bank Midvale UT CD N/R,N/R N/A <5% 6/29/2018 246,000
Morgan Stanley Pvt Bank CD N/R,N/R N/A <5% 6/29/2018 246,000
Seacoast National Bank Stuart FL CD N/R,N/R N/A <5% 6/29/2018 246,000
Compass Bank Birmingham AL CD N/R,N/R N/A <5% 6/29/2018 246,000
Grand River Bank Grandville MI CD N/R,N/R N/A <5% 6/29/2018 246,000
Rockford Bank & Trust Co IL CD N/R,N/R N/A <5% 8/20/2018 247,400
TBK Bank, SSB/The National Bank IL CD N/R,N/R N/A <5% 8/20/2018 247,400
State Bank of India Chicago IL CD N/R,N/R N/A <5% 8/27/2018 247,000
Goldman Sachs Bank NY CD N/R,N/R N/A <5% 8/29/2018 247,000
New York Community Bank Westbury NY CD N/R,N/R N/A <5% 8/30/2018 247,000
Superior Choice Credit Union Superior WI CD N/R,N/R N/A <5% 9/18/2018 246,700
MRV Banks MO CD N/R,N/R N/A <5% 9/18/2018 246,800
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(42)
3. Detailed Notes (Continued)
A. Assets (Continued)
1. Deposits and Investments (Continued)
b. Investments (Continued)
Concentration of Credit Risk, Credit and Interest Rate Risks (Continued)
Value at
Investment Type Rating Agency 12/31/17 Credit Rating Over 5 Percent of
Portfolio Maturity Date
Concentration Risk Interest Rate
Risk Credit Risk
Crestmark Bank MI CD N/R,N/R N/A <5% 9/18/2018 247,000$
USAmeribank FL CD N/R,N/R N/A <5% 9/18/2018 246,900
Western Alliance Bank / Torrey Pines Bank CA CD N/R,N/R N/A <5% 9/18/2018 246,900
Texas Capital Bank TX CD N/R,N/R N/A <5% 9/18/2018 247,000
Financial Federal Bank TN CD N/R,N/R N/A <5% 9/18/2018 247,000
BMO Harris Bank Chicago IL CD N/R,N/R N/A <5% 9/27/2018 246,000
Chemical Bank & Trust Midland MI CD N/R,N/R N/A <5% 9/28/2018 246,000
Mbank Manistique MI CD N/R,N/R N/A <5% 10/26/2018 246,000
Metabank Storm Lake IA CD N/R,N/R N/A <5% 10/30/2018 246,000
Beal Bank Las Vegas NV CD N/R,N/R N/A <5% 10/31/2018 246,000
Enterprise Bank Allison Park PA CD N/R,N/R N/A <5% 11/21/2018 246,031
Community West Bank Goleta CA CD N/R,N/R N/A <5% 11/27/2018 246,000
Bank of India NY CD N/R,N/R N/A <5% 11/28/2018 246,000
Mainsource Bank Greensburg IN CD N/R,N/R N/A <5% 11/28/2018 246,000
Webbank Salt Lake City UT CD N/R,N/R N/A <5% 11/28/2018 246,000
Jonesboro St Bank Jonesboro LA CD N/R,N/R N/A <5% 11/29/2018 245,000
Meadows Bank Las Vegas NV CD N/R,N/R N/A <5% 11/30/2018 246,000
Cooperative Bank Roslindale CD N/R,N/R N/A <5% 11/30/2018 246,000
Public Service Credit Union CO CD N/R,N/R N/A <5% 12/17/2018 245,700
Sonabank VA CD N/R,N/R N/A <5% 12/17/2018 245,600
Quontic Bank FSB NY CD N/R,N/R N/A <5% 12/17/2018 245,700
Bank Leumi USA NY CD N/R,N/R N/A <5% 12/17/2018 245,900
T Bank NA TX CD N/R,N/R N/A <5% 12/17/2018 245,900 CIBC Bank USA / Private Bank MI CD N/R,N/R N/A <5% 12/17/2018 246,000 Great Midwest Bank WI CD N/R,N/R N/A <5% 12/17/2018 246,000 BNY Mellon CD N/R,N/R N/A <5% 12/19/2018 246,000 Safra National Bank NY CD N/R,N/R N/A <5% 12/27/2018 246,000 Sunwest Bank Irvine CA CD N/R,N/R N/A <5% 12/28/2018 246,000 Citizens St Bank Tyler TX CD N/R,N/R N/A <5% 12/28/2018 245,000 First Sentry Bank WV CD N/R,N/R N/A <5% 12/28/2018 246,000 Total Negotiable Certificates of Deposit 26,954,131
Total Investments 100% 30,942,144
Repurchase Agreements
Wells Fargo - Sweep 5,308,186
Deposits 673,186
4M Fund N/A N/A N/A 1,330,923
Wells Fargo Government Fund AAA S&P/Moody's N/A 1,977,648
First American-Prime Obligation Fund AAA S&P/Moody's N/A 362,890
Petty Cash 2,475
Total Cash and Investments 40,597,452$
N/A - Not Applicable
<5% - Concentration is Less Than 5% of Investment
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(43)
3. Detailed Notes (Continued)
A. Assets (Continued) 1. Deposits and Investments (Continued)
b. Investments (Continued)
Fair Value Measurement
WLSSD uses fair value measurements to record fair value adjustments to certain assets to determine fair value disclosures. WLSSD follows an accounting standard that defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and requires expanded disclosures about fair value measurements. In accordance with this standard, WLSSD has categorized its investments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level I) and the lowest priority to unobservable inputs (Level III). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets recorded on the statement of net position are categorized based on the inputs to the valuation techniques as follows:
Level I - Financial assets are valued using inputs that are unadjusted quoted prices in active markets accessible at the measurement date of identical financial assets. The inputs include those traded on an active exchange, such as the New York Stock Exchange, as well as U.S. Treasury and other U.S. government and agency mortgage-backed securities that are traded by dealers or brokers in active over-the-counter markets. Level II - Financial assets are valued based on quoted prices for similar assets, or inputs that are observable, either directly or indirectly for substantially the full term through corroboration with observable market data.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(44)
3. Detailed Notes (Continued)
A. Assets (Continued) 1. Deposits and Investments (Continued)
b. Investments (Continued)
Fair Value Measurement (Continued)
Level III - Financial assets are valued using pricing inputs which are unobservable for the asset, inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset.
Investments are measured as follows: Type Level 1 Level 2 Level 3 Total
Federal Home Loan Bank -$ 14,772,161$ -$ 14,772,161$
Investments Measured at Amortized Cost
4M Fund 890,848
Money Market Funds 673,930
Repurchase Agreements 5,160,240
Negotiable Certificates of Deposit 21,721,500
Total Investments Measured at Amortized Cost 28,446,518
Cash and Cash Equivalents 830,662
Total Cash and Cash Investments 44,049,341$
The Minnesota Municipal Money Market Fund Trust is an external investment pool (Pool) that is managed to maintain a dollar-weighted average portfolio maturity of no greater than 60 days and seeks to maintain a constant net asset value (NAV) per share of $1.00. The Pool elects to measure its investments at amortized cost in accordance with accounting statements issued by the Government Accounting Standards Board. WLSSD reports its investment in the Pool at the NAV per share, the fair value established by the Pool.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(45)
3. Detailed Notes (Continued)
A. Assets (Continued) 2. Due from Other Governments
Due from other governments consists of the following:
2018 2017
Current AssetsMunicipality Service Charges $ 1,027,415 $ 1,005,912 Other 378,293 440,119
Total $ 1,405,708 $ 1,446,031
3. Capital Assets
Capital asset activity for the year ended December 31, 2018, was as follows:
Beginning Balance Increases Decreases Ending Balance Capital Assets, Not Depreciated
Land $ 605,265 $ - $ - $ 605,265
Easements 207,149 - - 207,149
Total Capital Assets,
Not Depreciated 812,414 - - 812,414
Capital Assets, Depreciated
Improvements 210,351,289 10,098,030 - 220,449,319
Buildings and Structures 74,672,544 - 74,672,544
Furniture and Equipment 31,545,831 300,195 - 31,846,026
Motor Vehicles 3,160,272 143,145 69,895 3,233,522
Total Capital Assets, Depreciated 319,729,936 10,541,370 69,895 330,201,411
Less: Accumulated Depreciation for:
Improvements 118,324,801 9,546,249 - 127,871,050
Buildings and Structures 73,360,665 120,698 - 73,481,363
Furniture and Equipment 31,082,414 169,856 - 31,252,270
Motor Vehicles 2,824,981 187,576 69,895 2,942,662
Total Accumulated Depreciation 225,592,861 10,024,379 69,895 235,547,345
Total Capital Assets, Depreciated, Net 94,137,075 516,991 - 94,654,066
Capital Assets, Net $ 94,949,489 $ 516,991 $ - $ 95,466,480
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(46)
3. Detailed Notes (Continued)
A. Assets (Continued)
3. Capital Assets (Continued)
Capital asset activity for the year ended December 31, 2017, was as follows:
Beginning Balance Increases Decreases Ending Balance Capital Assets, Not Depreciated
Land $ 605,265 $ - $ - $ 605,265
Easements 207,149 - - 207,149
Total Capital Assets,
Not Depreciated 812,414 - - 812,414
Capital Assets, Depreciated
Improvements 202,312,017 8,039,272 - 210,351,289
Buildings and Structures 74,672,544 - - 74,672,544
Furniture and Equipment 31,430,812 115,019 - 31,545,831
Motor Vehicles 3,072,356 151,929 64,013 3,160,272
Total Capital Assets, Depreciated 311,487,729 8,306,220 64,013 319,729,936
Less: Accumulated Depreciation for:
Improvements 109,179,929 9,144,872 - 118,324,801
Buildings and Structures 73,239,501 121,164 - 73,360,665
Furniture and Equipment 30,940,560 141,854 - 31,082,414
Motor Vehicles 2,718,514 170,480 64,013 2,824,981
Total Accumulated Depreciation 216,078,504 9,578,370 64,013 225,592,861
Total Capital Assets, Depreciated, Net 95,409,225 (1,272,150) - 94,137,075
Capital Assets, Net $ 96,221,639 $ (1,272,150) $ - $ 94,949,489
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(47)
3. Detailed Notes (Continued)
B. Liabilities
1. Due to Other Governments
Due to other governments consists of the following:
Current liabilities - (Payable from current assets):
2018 2017User Adjustments $ 343,184 $ 72,442
2. Long-Term Debt
Long-term debt is comprised of the following:
Types of Indebtedness Final
Maturity Installment
Amounts Interest
Rates (%) Original Issues
Amount Outstanding Balance December 31, 2018
General Obligation Bonds
2011A G.O. Refunding Bonds 2020
2.00-3.50 $ 16,045,000 $ 3,350,000
2012E G.O. Refunding Bonds 2021
0.20-2.15 8,635,000 2,145,000
2015C G.O Refunding Bond 2021
0.65-2.05 2,680,000 1,250,000
2016B G.O Refunding Bond 2022
0.80-1.75 2,255,000 1,525,000
Total General Obligation Bonds $ 29,615,000 8,270,000
Less: Unamortized Discount (7,979)
Plus: Unamortized Premium 17,672
Total General Obligation
Bonds, Net $ 8,279,693
$90,000-$1,200,000
$1,620,000-$1,940,000
$245,000-$510,000
$365,000-$390,000
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(48)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
2. Long-Term Debt (Continued)
Types of Indebtedness Final
Maturity Installment
Amounts Interest
Rates (%) Original Issues
Amount Outstanding Balance December 31, 2018
General Obligation Taxable Revenue Notes
2006 G.O. Taxable Revenue Note 2021 2.82 $ 3,579,691 $ 946,000
2007 G.O. Taxable Revenue Note 2023 2.611 2,359,776 885,000
2009 G.O. Taxable Revenue Note 2024 2.70 1,889,541 893,000
2010 G.O. Taxable Revenue Note 2025 1.589 3,351,540 1,606,255
2010 G.O. Taxable Revenue Note 2025 1.59 678,748 302,000
2010 G.O. Taxable Revenue Note 2025 1.591 342,262 168,000
2010 G.O. Taxable Revenue Note 2025 1.586 151,866 74,866
2011 G.O. Taxable Revenue Note 2026 1.52 1,610,959 892,000
2011 G.O. Taxable Revenue Note 2026 1.52 316,131 177,000
2011 G.O. Taxable Revenue Note 2026 1.52 3,581,330 2,013,000
2012 G.O. Taxable Revenue Note 2027 1.693 5,452,173 3,357,000
2013 G.O. Taxable Revenue Note 2028 1.00 2,947,518 1,825,000
2013 G.O. Taxable Revenue Note 2028 1.00 2,125,969 1,433,000
2014 G.O. Taxable Revenue Note 2029 1.00 6,941,990 5,247,000
2015 G.O. Taxable Revenue Note 2030 1.00 7,029,490 5,928,000
2015 G.O. Taxable Revenue Note 2030 1.00 2,132,276 1,496,000
2016 G.O. Taxable Revenue Note 2031 1.00 1,747,561 1,568,962
$180,490-$523,000
$50,276-$132,000
$21,000- $25,000
$239,077-$324,000
$4,000- $186,000
$9,541- $158,000
$63,599-$131,000
$200,540- $240,255
$40,748- $45,000
$100,518- $191,000
$90,969- $150,000
$360,990-$501,000
$8,000- $11,000
$46,959- $117,000
$10,131- $23,000
$110,330- $265,000
$180,173- $399,000
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(49)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
2. Long-Term Debt (Continued)
Types of Indebtedness Final
Maturity Installment
Amounts Interest
Rates (%) Original Issues
Amount Outstanding Balance December 31, 2018
2016 G.O. Taxable Revenue Note 2031 1.00 $ 3,216,871 $ 2,584,946
2018 G.O. Taxable Revenue Note 2033 1.25 708,870 678,051
2018 G.O. Taxable Revenue Note 2033 1.25 2,448,277 2,259,653
2018 G.O. Taxable Revenue Note 2033 1.25 2,343,195 107,354
2018 G.O. Taxable Revenue Note 2033 1.23 1,907,254 53,136
2018 G.O. Taxable Revenue Note 2033 1.23 15,309,936 3,926,301
Total General Obligation
Taxable Revenue Notes $ 72,173,224 $ 38,421,524
$29,416-$54,055
$65,173-$144,763
$97,922-$185,760
$86,317-$178,191
$555,847-$1,158,549
$105,016-$239,960
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(50)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
3. Debt Service Requirements
Debt service requirements at December 31, 2018, were as follows:
Year Ending
December 31
2019 $ 3,795,000 $ 194,660 $ 3,703,192 $ 499,568
2020 2,980,000 108,605 3,752,414 444,809
2021 1,105,000 28,220 3,812,683 389,188
2022 390,000 6,825 3,536,037 332,526
2023 - - 3,582,478 284,270
2024-2028 - - 14,739,223 771,767
2029-2033 - - 5,295,497 137,911
Total $ 8,270,000 $ 338,310 $ 38,421,524 $ 2,360,471
Principal Interest Principal Interest
General Obligation Notes General Obligation Bonds
4. Changes in Long-Term Liabilities
Long-term liability activity for the year ended December 31, 2018, was as follows:
Additions Reductions
General Obligation Bonds $ 12,240,000 $ - $ 3,970,000 $ 8,270,000 $ 3,795,000
Public Facilities Authority
General Obligation Notes 32,762,796 8,907,728 3,249,000 38,421,524 3,703,192
Total 45,002,796 8,907,728 7,219,000 46,691,524 7,498,192
Sick Leave Liability 119,788 2,469 53,338 68,919 -
OPEB Liability 272,490 81,761 29,346 324,905 -
Long-Term Liabilities $ 45,395,074 $ 8,991,958 $ 7,301,684 $ 47,085,348 $ 7,498,192
Beginning Balance Ending Balance
Due Within One Year
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(51)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
4. Changes in Long-Term Liabilities (Continued)
Long-term liability activity for the year ended December 31, 2017, was as follows:
Additions Reductions
General Obligation Bonds $ 16,570,000 $ - $ 4,330,000 $ 12,240,000 $ 3,970,000
Public Facilities Authority
General Obligation Notes 33,415,388 2,393,725 3,046,317 32,762,796 3,099,520
Total 49,985,388 2,393,725 7,376,317 45,002,796 7,069,520
Sick Leave Liability 129,731 17,856 27,799 119,788 -
OPEB Liability 264,416 37,420 29,346 272,490 -
Long-Term Liabilities $ 50,379,535 $ 2,449,001 $ 7,433,462 $ 45,395,074 $ 7,069,520
Beginning Balance Ending Balance
Due Within One Year
The general obligation bonds and notes are retired with income from operations. WLSSD has a contingent liability against its full faith and credit to the extent that income from operations is insufficient to retire the general obligation bonds. The general obligation bonds of WLSSD are exempt from the limitations on net debt imposed by Minnesota law. WLSSD does not expect any retirements in 2019 and therefore, the current portion of the sick leave liability is zero.
5. Refunding Debt Issued
During 2016, WLSSD issued 2016 Taxable General Obligation Refunding Bonds, Series 2016B in the amount of $2,255,000 with an interest rate of .80 to 1.75 percent. These proceeds were used to provide for the current refunding of the 2007A General Obligation Bonds. The balance of the 2007A maturities being refunded was $2,505,000 and interest rates of 4.00 to 4.50 percent. As a result of this refunding, WLSSD decreased its debt service requirements $250,000 resulting in an economic gain (difference between the present value of the debt service payment on the old and new debt service) of $173,248. The deferred outflow related to the gain on refunding was not material to the financial statements of WLSSD and therefore was not recognized and amortized.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(52)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
6. Defined Benefit Pension Plans
a) Pension Description WLSSD participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401 (a) of the Internal Revenue Code.
All full-time and certain part-time employees of WLSSD are covered by the General Employees Plan. General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security.
b) Benefits Provided
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Vested, terminated employees who are entitled to benefits, but are not receiving them yet are bound by the provisions in effect at the time they last terminate their public service. General Employees Plan benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA’s Coordinated Plan members. Members hired prior to July 1, 1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2% for each of the first 10 years of service and 1.7% for each additional year. Under Method 2, the accrual rate for Coordinated members is 1.7% for all years of service. The accrual rate for former MERF members is 2.0% for each of the first 10 years of service and 2.5% for each additional year. For members hired prior to July 1, 1989 a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989 normal retirement age is the age for unreduced Social Security benefits capped at 66.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(53)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
6. Defined Benefit Pension Plans (Continued)
b) Benefits Provided (Continued) Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. If the General Employees Plan is at least 90% funded for two consecutive years, benefit recipients are given a 2.5% increase. If the plan has not exceeded 90% funded, or have fallen below 80%, benefit recipients are given a 1.0% increase. A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase. Members receiving benefits for a least one year but less than 12 full months as of June 30 will receive a pro rata increase.
c) Contributions Minnesota Statutes Chapter 353 sets the rates for employer and employee Contributions. Contribution rates can only be modified by the state legislature. Coordinated Plan members were required to contribute 6.50% of their annual covered salary in calendar year 2018. WLSSD was required to contribute 7.50% for Coordinated Plan members. WLSSD’s contributions to the General Employees Fund for the years ended December 31, 2018 and 2017 were $557,535 and $544,106, respectively. WLSSD’s contributions were equal to the required contributions as set by state statute.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(54)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
6. Defined Benefit Pension Plans (Continued) d) Pension Costs
At December 31, 2018 and 2017, WLSSD reported a liability of $6,074,611 and $7,092,551, respectively, for its proportionate share of the General Employees Fund’s net pension liability. WLSSD’s net pension liability reflected a reduction due to the State of Minnesota’s contribution of $16 million to the fund in 2018. The State of Minnesota is considered a non-employer contributing entity and the state’s contribution meets the definition of a special funding situation. The State of Minnesota’s proportionate share of the net pension liability associated with WLSSD totaled $199,096. The net pension liability was measured as of June 30, 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. WLSSD’s proportion of the net pension liability was based on WLSSD’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2017 through June 30, 2018 relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2018 WLSSD’s proportion share was .1095% which was a decrease of 0.0016% from its proportion measured as of June 30, 2017. The District's Proportionate Share of the Net Pension Liability 6,074,611$ State of Minnesota's Proportionate Share of the Net Pension Liability 199,096 Total District's Proportionate Share of Net Pension Liability 6,273,707$
For the years ended December 31, 2018 and 2017, WLSSD’s recognized pension expense of $374,284 and $802,092 respectively for its proportionate share of the General Employees Plan’s pension expense. In addition, WLSSD recognized an additional $46,429 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s contribution of $16 million to the General Employees Fund.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(55)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
6. Defined Benefit Pension Plans (Continued) d) Pension Costs (continued)
At December 31, 2018 and 2017, WLSSD reported its proportionate share of the General Employees Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
DescriptionDeferred Outflows of
ResourcesDeferred Inflows of
ResourcesDifferences Between Expected and Actual Economic Experience 160,785$ 177,170$ Changes in Actuarial Assumptions 580,280 682,547 Net Difference Between Projected and Actual Earnings on Pension Plan Investments - 620,729 Changes in Proportion and Differences Between WLSSD Contributions and Proportionate Share of Contributions - 206,147WLSSD Contributions Subsequent to the Measurement Date 275,278 -
Total 1,016,343$ 1,686,593$
2018
DescriptionDeferred Outflows of
ResourcesDeferred Inflows of
ResourcesDifferences Between Expected and Actual Economic Experience 233,749$ 456,282$ Changes in Actuarial Assumptions 1,177,516 711,029 Net Difference Between Projected and Actual Earnings on Pension Plan Investments 45,808 - Changes in Proportion and Differences Between WLSSD Contributions and Proportionate Share of Contributions - 395,847WLSSD Contributions Subsequent to the Measurement Date 253,895 -
Total 1,710,968$ 1,563,158$
2017
$275,278 reported as deferred outflows of resources related to pensions resulting from District contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(56)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
6. Defined Benefit Pension Plans (Continued) d) Pension Costs (continued)
December 31, 2019. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Pension Expense Amount
92,648$ (393,994) (517,396) (126,786)
20212022
Year Ended December 31,20192020
e) Actuarial Assumptions
The total pension liability in the June 30, 2018, actuarial valuation was determined using the following actuarial assumptions:
Inflation 2.50% per YearSalary Increases 3.25% per YearInvestment Rate of Return 7.50%
Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants were based on RP-2014 tables for males or females, as appropriate, with slight adjustments to fit PERA’s experience. Cost of living benefit increases for retirees are assumed to be 1.25% per year. Actuarial assumptions used in the June 30, 2018, valuation were based on the results of actuarial experience studies. The most recent six-year experience study in the General Employees Plan was completed in 2015.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(57)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
6. Defined Benefit Pension Plans (Continued) e) Actuarial Assumptions (Continued)
The following changes in actuarial assumptions occurred in 2018: (1) The mortality projection scale was changed from MP-2015 to MP-2017. (2) The assumed benefit increase was changed from 1.0% per year through
2044 and 2.5% per year thereafter to 1.25% per year.
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis using a building-block method in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
Asset Class Target Allocation Long-Term Expected Real
Rate of Return Domestic Stocks 36 % 5.10 %International Stocks 17 5.30Bonds 20 0.75Alternative Assets 25 5.90Cash 2 0.00
Totals 100 %
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
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3. Detailed Notes (Continued)
B. Liabilities (Continued)
6. Defined Benefit Pension Plans (Continued)
f) Discount Rate The discount rate used to measure the total pension liability in 2018 was 7.50%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
g) Pension Liability Sensitivity The following presents WLSSD’s proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what WLSSD’s proportionate share of the net pension liability would be if it were calculated using a discount rate one percentage point lower or one percentage point higher than the current discount rate:
Description 1% Higher Current
Discount Rate 1% LowerJune 30, 2018
General Employees Fund Discount Rate 6.50% 7.50% 8.50%
Sensitivity of Net Pension Liability at Current Single Discount Rate 9,872,021$ 6,074,611$ 2,939,958$
June 30, 2017General Employees Fund Discount Rate 6.50% 7.50% 8.50%
Sensitivity of Net Pension Liability at Current Single Discount Rate 11,001,073$ 7,092,551$ 3,892,715$
h) Pension Plan Fiduciary Net Position Detailed information about each pension plan’s fiduciary net position is available in a separately-issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
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3. Detailed Notes (Continued)
B. Liabilities (Continued)
7. Postemployment Benefits
Plan Description and Funding Policy WLSSD participates in a single-employer fully-insured plan. There is no explicit subsidy for employees hired prior to December 31, 1983 with no accumulated sick leave and for employees hired on or after January 1, 1984. Active employees who retire from WLSSD when eligible to receive a retirement benefit from PERA, that do not qualify for the aforementioned benefits, and do not participate in any other health benefits program providing coverage similar to that herein described, will be eligible to continue coverage with respect to both themselves and their eligible dependents under WLSSD’s health benefits program. These retirees are required to pay 100% of the total premium cost. Since the premium is a blended rate determined on the entire active and retiree population, the retirees are receiving an implicit rate subsidy. The plan does not issue a publicly available financial report. Funding Policy WLSSD has no assets accumulated in a trust that meets the criteria in GASB 75. The authority to provide these benefits is established in Minnesota Statutes §471.61, subdivision 2a. The cost of other postemployment benefits is funded on a “pay-as-you-go” method. For the year ended December 31, 2018, WLSSD contributed $29,346 to the plan. Actuarial Methods and Assumptions WLSSD’s OPEB liability was measured as of January 1, 2018, and the total OPEB liability was determined by an actuarial valuation as of January 1, 2017. The total OPEB liability was determined by an actuarial valuation as of January 1, 2017, using the following actuarial assumptions, applied to all periods including in the measurement, unless otherwise specified: Inflation 2.50%Salary Increases 3.00%Health Care Trend Rates 6.25% Decreasing to
5.00% Over 5Years
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(60)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
7. Postemployment Benefits (Continued)
Actuarial Methods and Assumptions (Continued) Mortality rates were based on the RP-2014 with projected mortality improvements based on scale MP-2016, and other adjustments. The actuarial assumptions used in the January 1, 2017 valuation were based on the results of an actuarial experience study for the period January 1, 2016 to December 31, 2016. The discount rate used to measure the total OPEB liability was 3.30%. The discount rate is based on the estimated yield of 20-year AA-rated municipal bonds. Since the most recent GASB 45 valuation, the following changes have been made: The discount rate was changed from 3.50% to 3.30%.
Changes in the OPEB Liability
Total OPEB Liability
Balance December 31, 2017 272,490$ Changes for the Year:
Service Costs 25,132 Interest Cost 10,852 Assumption Changes 45,777 Benefit Payments (29,346)
Net Change in Total OPEB Liability 52,415 Balance as of December 31, 2018 324,905$
The following presents the OPEB liability of WLSSD, as well as what the WLSSD’s OPEB liability would be if it were calculated using a discount rate one percentage lower or one percentage higher than the current discount rate:
1% Decrease Discount Rate 1% Increase(2.30%) (3.30%) (4.30%)
OPEB Liability 345,029$ 324,905$ 305,834$
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(61)
3. Detailed Notes (Continued)
B. Liabilities (Continued)
7. Postemployment Benefits (Continued)
Actuarial Methods and Assumptions (Continued) The following presents the OPEB liability of WLSSD, as well as what the WLSSD’s OPEB liability would be if it were calculated using healthcare cost trend rates that are 1% lower (5.25% decreasing to 4.00% over 5 years) or 1% higher (7.25% decreasing to 6.00% over 5 years) than the current healthcare cost trend rates:
Current Trend1% Decrease Rates (6.25% 1% Increase
(5.25% Decreasing (Decreasing to (7.25% Decreasingto 4.00%) 5.00%) to 6.00%)
OPEB Liability 294,117$ 324,905$ 360,868$ For the year ended December 31, 2018, the WLSSD recognized OPEB expense of $35,984. At December 31, 2018, WLSSD reported no deferred inflow of resources and no deferred outflows of resources.
4. Other Note Disclosures
A. Major Customers Major customers of services provided by WLSSD were as follows:
2018 2017 2018 2017Sappi Cloquet LLC $ 11,254,946 $ 10,211,714 30.6% 28.4%City of Duluth 8,881,800 8,854,932 24.1% 24.6%Verso Duluth Mill 3,558,272 4,102,422 9.7% 11.4%
Percentage ofUser Service Total User
Charges Service Charges
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(62)
4. Other Note Disclosures (Continued)
B. Construction Commitments
As of December 31, 2018, WLSSD had the following commitments with respect to unfinished capital projects.
Project
Remaining
Construction
Commitment
Expected Date of
Completion
Oxygen Supply 10,810,105$ 12/1/2019
Main Switchgear CHP 3,807,010 7/15/2020
Miscellaenous Interceptor Rehab Phase 1 2,235,841 9/1/201916,852,956$
C. Risk Management WLSSD is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; health and dental claims, injuries to employees, and natural disasters. These risks are covered by commercial insurance purchased from independent third parties except for dental claims which are self-insured, workers compensation and health insurance for which WLSSD belongs to public entity risk pools. WLSSD has a $50,000 deductible for property and a $1,000 deductible for liability insurance coverage per covered incident. There have been no significant reductions in insurance coverage during the current year. Settled claims from these risks have not exceeded insurance coverage in the past three fiscal years. WLSSD retains the risk of loss from claims related to employee dental. WLSSD has contracted with Delta Dental to administer WLSSD’s dental claims. WLSSD charges a premium to each employee and contributes an employer’s share based on negotiated union contracts to cover the estimated dental claims. Claims are recognized as they are paid.
2018 2017
Unpaid Claims, Beginning of Year -$ -$ Incurred Claims 77,368 69,329 Claim Payments (77,368) (69,329) Unpaid Claims, End of Year -$ -$
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(63)
4. Other Note Disclosures (Continued)
C. Risk Management (Continued) Workers compensation coverage is obtained through the League of Minnesota Cities Insurance Trust – Group Self-Insured Workers’ Compensation Plan, a public entity risk pool operated by the League of Minnesota Cities to lower and stabilize its members’ workers’ compensation costs and to assure that its members have a source of coverage available. The League of Minnesota Cities purchases reinsurance to protect the program from catastrophic and abnormal claims. WLSSD pays an annual premium to the pool and has elected to have a deductible of $5,000 per occurrence (for medical costs only). The deductible option under this plan allows WLSSD to obtain a premium discount of 11%. As medical costs are incurred, the claims are paid by the pool and then are billed back to WLSSD up to the amount of the deductible per occurrence.
For group health insurance, WLSSD belongs to the North East Service Cooperative (NESC), a joint powers entity which sponsors a plan to provide group employee health benefits to its participating members. All members pool premiums and losses; however, a particular member may receive increases or decreases depending on a good or bad year of claims experience. Premiums are determined annually by the NESC and are based partially on the experience of WLSSD and partially on the experience of the group. The NESC solicits proposals from carriers and negotiates the contracts.
D. Postemployment Health Care – Northland VEBA Trust Plan
In 2007, WLSSD Board approved a Voluntary Employees’ Beneficiary Association (VEBA) plan for funding employee health benefits for supervisors effective January 1, 2008 as authorized under Sections 501(c)(9) and 213(d) of the IRS Code. Effective January 1, 2009, all employees were eligible for participation in this plan. The VEBA plan is a health reimbursement plan providing for individual employer-funded accounts that can be used to help pay eligible medical expenses incurred by participating employees. The plan is used in combination with a high-deductible health plan. Funding is provided through pre-tax contributions from WLSSD based on employee health care elections. The VEBA plan is administered by Compensation Consultants, Ltd. The current maximum WLSSD contribution for active participating employees is $3,000 for those with family medical coverage with a $3,700 deductible and $1,350 for active participating employees for those with single medical coverage with a $1,850 deductible. Any balance remaining in an employee’s account at year-end rolls over into the subsequent year. All bargaining unit and supervisory employees participating in WLSSD’s high-deductible medical insurance plan are covered by the VEBA plan.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017
(64)
4. Other Note Disclosures (Continued)
E. Legal Contingencies WLSSD may be involved in various claims and litigation. Although the outcome of any claims is not presently determinable, in the opinion of WLSSD’s attorney, the resolution of these matters will not have a material adverse effect on the financial condition of WLSSD.
REQUIRED SUPPLEMENTARY INFORMATION
This Page Has Been Intentionally Left Blank.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
SCHEDULE OF WLSSD’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY DECEMBER 31, 2018
(65)
Measurement Date
June 30, 2018
Measurement Date
June 30, 2017
Measurement Date
June 30, 2016
Measurement Date
June 30, 2015
0.1095% 0.1111% 0.1140% 0.1181%
6,074,611$ 7,092,551$ 9,256,235$ 6,120,555$
199,096 89,175 120,902 -
Total District's Proportionate Share of Net Pension Liability 6,273,707$ 7,181,726$ 9,377,137$ 6,120,555$
7,354,870$ 7,150,592$ 7,061,992$ 6,936,710$
82.59% 99.19% 131.07% 88.23%
79.50% 75.90% 68.81% 78.20%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability
WLSSD's Proportionate Share of the Net Pension Liability as a Percentage of Its Covered Payroll
WLSSD's Covered Payroll
WLSSD's Proportionate Share of the Net Pension Liability
WLSSD's Proportion of the Net Pension Liability
State's Proportionate Share of the Net Pension Liability Associated with WLSSD
Note: Information prior to 2015 is not available.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
SCHEDULE OF WLSSD CONTRIBUTIONS DECEMBER 31, 2018
(66)
2018 2017 2016 2015 2014
PERAContractually Required Contribution 557,535$ 544,106$ 533,833$ 523,052$ 507,255$ Contributions in Relation to the Contractually Required Contribution (557,535) (544,106) (533,833) (523,052) (507,255) Contribution Deficiency (Excess) -$ -$ -$ -$ -$
WLSSD's Covered Payroll 7,433,800$ 7,254,747$ 7,117,773$ 6,974,027$ 6,996,621$
Contributions as a Percentage of Covered Payroll 7.50% 7.50% 7.50% 7.50% 7.25%
Note: Information prior to 2014 is not available.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
SCHEDULE OF CHANGES IN WLSSD’S OPEB LIABILITYAND RELATED RATIOS
DECEMBER 31, 2018
(67)
Measurement Date
January 1, 2018Total OPEB LiabilityService Cost 25,132$ Interest Cost 10,852 Assumption Changes 45,777 Benefit Payments (29,346) Net Change in Total OPEB Liability 52,415 Total OPEB Liability - Beginning 272,490 Total OPEB Liability - Ending 324,905$
Covered-Employee Payroll 6,924,798$
5%District's OPEB Liability as a Percentage of Covered-Employee Payroll
Notes to Schedule of Funding Progress WLSSD implemented GASB Statement No. 75 in 2018, and the above table will be expended to 10 years of information as the information becomes available. No assets are accumulated in a trust.
This Page Has Been Intentionally Left Blank.
SUPPLEMENTARY SCHEDULES
This Page Has Been Intentionally Left Blank.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
DETAILED SCHEDULE OF REVENUE COMPARED TO BUDGET YEAR ENDED DECEMBER 31, 2018
WITH COMPARATIVE ACTUAL AMOUNTS FOR YEAR ENDED DECEMBER 31, 2017
(68)
2018Variance 2017
Actual Favorable ActualBudget Revenue (Unfavorable) Revenue
Wastewater TreatmentUser Charges -
MunicipalitiesDuluth $ 9,094,981 $ 8,881,800 $ (213,181) $ 8,854,932
Cloquet 981,235 873,786 (107,449) 895,054
Proctor 302,046 359,284 57,238 336,941
Hermantown 458,391 461,668 3,277 430,969
Scanlon 104,182 107,780 3,598 119,565
Thomson Township (Esko) 130,903 130,222 (681) 132,220
Carlton 105,714 106,784 1,070 111,426
Twin Lakes Township 77,537 71,570 (5,967) 68,963
Wrenshall 19,092 19,856 764 23,671
Thomson 8,574 7,363 (1,211) 8,516
Jay Cooke 3,426 4,098 672 4,177
North Shore 43,398 41,959 (1,439) 43,768
Knife River 17,617 15,026 (2,591) 15,713
Oliver 16,974 16,577 (397) 16,422
Rice Lake Township 49,285 47,365 (1,920) 48,247
MPCA Landfill 11,374 10,381 (993) 13,964
Midway 4,567 4,594 27 4,450
Pike Lake 67,734 60,379 (7,355) 60,621
Total Municipalities 11,497,030 11,220,492 (276,538) 11,189,619
Industries Sappi 10,477,207 11,254,946 777,739 10,211,714
USG 453,711 505,893 52,182 482,540
Verso Duluth Mill 3,757,482 3,558,272 (199,210) 4,102,422
Specialty Minerals 256,051 246,412 (9,639) 432,453
Total Industries 14,944,451 15,565,523 621,072 15,229,129
Total Wastewater Treatment 26,441,481 26,786,015 344,534 26,418,748
User Charges - Solid Waste 5,426,840 5,585,909 159,069 5,473,131
Service Fee - Solid Waste 2,380,000 2,638,047 258,047 2,568,132
Other Revenue District-Wide Allocation 355,000 354,999 (1) 354,998
Capacity Availability Fee 350,000 471,143 121,143 362,374
Earnings on Investments 173,000 600,878 427,878 294,140
Operating Grants 414,781 390,401 (24,380) 395,190
Property Taxes 1,130,738 1,130,463 (275) 1,105,907
Capital Contributions - 349,240 349,240 336,076
Gain on Sale of Capital Asset - 14,130 14,130 5,181
Miscellaneous 796,475 987,916 191,441 829,074
Total Other Revenue 3,219,994 4,299,170 1,079,176 3,682,940
Total Revenue $ 37,468,315 $ 39,309,141 $ 1,840,826 $ 38,142,951
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
DETAILED SCHEDULE OF EXPENSES COMPARED TO BUDGET – DEPARTMENTAL LEVEL
YEAR ENDED DECEMBER 31, 2018 WITH COMPARATIVE ACTUAL AMOUNTS FOR
YEAR ENDED DECEMBER 31, 2017
(69)
2018
Variance 2017
Actual Favorable Actual
Budget Expenses (Unfavorable) Expenses
Clean Water Production
Salaries & Benefits $ 2,113,200 $ 1,864,201 $ 248,999 $ 2,133,626
Electricity 2,088,839 1,822,057 266,782 1,873,000
Fuels 122,771 109,370 13,401 116,428
Chemicals 1,177,928 1,226,341 (48,413) 1,056,996
Other Operating Expenses 467,811 368,182 99,629 301,982
Total Clean Water Production 5,970,549 5,390,151 580,398 5,482,032
Conveyance System
Salaries & Benefits 506,561 478,739 27,822 508,080
Electricity 1,000,191 982,964 17,227 980,006
Other Operating Expenses 661,860 464,723 197,137 525,162
Total Conveyance System 2,168,612 1,926,426 242,186 2,013,248
Biosolids
Salaries & Benefits 723,953 697,588 26,365 718,565
Other Operating Expenses 170,625 148,612 22,013 132,729
Total Biosolids 894,578 846,200 48,378 851,294
Maintenance
Salaries & Benefits 2,192,799 2,016,633 176,166 2,066,750
Repairs 650,000 832,511 (182,511) 606,215
Contracted Services 440,000 711,101 (271,101) 771,788
Other Operating Expenses 115,300 144,096 (28,796) 142,757
Total Maintenance 3,398,099 3,704,341 (306,242) 3,587,510
Environmental Programs WastewaterSalaries & Benefits 193,794 188,479 5,315 188,131 Operating Expenses 83,034 82,481 553 72,053
Total Environmental Programs Wastewater 276,828 270,960 5,868 260,184
Transfer Station
Salaries & Benefits 62,787 58,530 4,257 60,525
Solid Waste Disposal 4,639,647 4,722,989 (83,342) 4,626,637
Operating Expenses 26,900 23,738 3,162 20,975
Total Transfer Station 4,729,334 4,805,257 (75,923) 4,708,137
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
DETAILED SCHEDULE OF EXPENSES COMPARED TO BUDGET – DEPARTMENTAL LEVEL (CONTINUED)
YEAR ENDED DECEMBER 31, 2018 WITH COMPARATIVE ACTUAL AMOUNTS FOR
YEAR ENDED DECEMBER 31, 2017
(70)
2018
Variance 2017
Actual Favorable Actual
Budget Expenses (Unfavorable) Expenses
Material Recovery Center Salaries & Benefits $ 430,606 $ 475,523 $ (44,917) $ 421,369
Solid Waste Disposal 294,815 295,445 (630) 293,327
Contract Services 251,765 242,352 9,413 238,601
Operating Expenses 60,800 52,787 8,013 40,135
Total Material Recovery Center 1,037,986 1,066,107 (28,121) 993,432
Organics
Salaries & Benefits 202,202 198,022 4,180 218,127
Operating Expenses 122,842 123,597 (755) 104,378
Total Organics 325,044 321,619 3,425 322,505
Household Hazardous Waste
Salaries & Benefits 445,389 413,851 31,538 421,968
Operating Expenses 413,850 448,422 (34,572) 423,601
Total Household Hazardous Waste 859,239 862,273 (3,034) 845,569
Environmental Programs Solid WasteSalaries & Benefits 416,030 337,373 78,657 374,720 Operating Expenses 394,481 368,464 26,017 334,564 Total Environmental Programs Solid Waste 810,511 705,837 104,674 709,284
Environmental Programs GrantsOperating Expenses 24,136 44,475 (20,339) -
Business Services
Salaries & Benefits 1,319,859 1,459,820 (139,961) 1,476,807
Other Postemployment Benefits - 52,415 (52,415) 8,074
Insurance 160,000 157,725 2,275 155,933
Professional Services 181,500 185,296 (3,796) 200,340
Operating Expenses 697,725 702,414 (4,689) 589,718
Total Business Services 2,359,084 2,557,670 (198,586) 2,430,872
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
DETAILED SCHEDULE OF EXPENSES COMPARED TO BUDGET – DEPARTMENTAL LEVEL (CONTINUED)
YEAR ENDED DECEMBER 31, 2018 WITH COMPARATIVE ACTUAL AMOUNTS FOR
YEAR ENDED DECEMBER 31, 2017
(71)
2018
Variance 2017
Actual Favorable Actual
Budget Expenses (Unfavorable) Expenses
Planning & Engineering
Salaries & Benefits $ 962,624 $ 1,012,575 $ (49,951) $ 957,269
Contracted Services 4,000 2,041 1,959 16,633
Operating Expenses 19,200 25,744 (6,544) 9,322
Total Planning & Engineering 985,824 1,040,360 (54,536) 983,224
Management Information System
Salaries & Benefits 488,535 474,998 13,537 484,946
Contracted Services 100,199 35,315 64,884 173,456
Operating Expenses 160,972 218,871 (57,899) 57,241
Total Management Information System 749,706 729,184 20,522 715,643
Lab Services
Salaries & Benefits 648,575 631,718 16,857 652,051
Contracted Services 75,000 34,585 40,415 114,623
Operating Expenses 171,620 217,869 (46,249) 119,207
Total Lab Services 895,195 884,172 11,023 885,881
Non-Departmental Depreciation 9,648,251 10,024,381 (376,130) 9,578,370
Interest and Bond Amortization Expense 740,219 660,592 79,627 772,579
Other Non-Departmental - 47,701 (47,701) 863
Total Non-Departmental 10,388,470 10,732,674 (344,204) 10,351,812
Total Expenses $ 35,873,195 $ 35,887,706 $ 5,828 $ 35,140,627
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED DECEMBER 31, 2018
The notes to the schedule of expenditures of federal awards are an integral part of this statement. (72)
Federal Grantor Federal Pass-Through Agency Pass-Through CFDA Grant Program Title Grant Numbers Number Expenditures Subrecipients
U.S. Environmental Protection Agency Passed Through Minnesota Department of Employment and Economic Development Capitalization Grants for Clean Water State Revolving Funds Scanlon Interceptor Phase 4 MPFA-CWRF-L-011-FY17 66.458 $ 1,527,818 $ - Screw Pumps / Wrenshall Pump Station MPFA-CWRF-L-036-FY17 66.458 2,434 - Scanlon Interceptor Fiberglass Pipe Rehabilitation MPFA-CWRF-L-043-FY19 66.458 2,340,389 - Miscellaneous Interceptors MPFA-CWRF-L-044-FY19 66.458 107,354 - Screw Pumps Phase 2 MPFA-CWRF-L-042-FY19 66.458 678,051 - Main Switchgear CHP MPFA-CWRF-L-040-FY19 66.458 79,426 - Oxygen Supply MPFA-CWRF-L-041-FY19 66.458 5,365,768 -
Total U.S. Environmental Protection Agency $ 10,101,240 $ -
PassedThrough to
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED DECEMBER 31, 2018
(73)
1. Reporting Entity The Schedule of Expenditures of Federal Awards presents the activities of federal award programs
expended by the Western Lake Superior Sanitary District. WLSSD’s reporting entity is defined in Note 1 to the financial statements.
2. Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Western Lake Superior Sanitary District under programs of the federal government for the year ended December 31, 2018. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Western Lake Superior Sanitary District, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Western Lake Superior Sanitary District.
3. Summary of Significant Accounting Policies
Expenditures reported on the schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. WLSSD has elected to not use the 10% de minimis indirect cost rate allowed under Uniform Guidance.
4. Reconciliation to Comparative Statement of Revenues, Expenses, and Changes in Net
Position and Note 3.B.4.
Expenditures under CFDA No. 66.458 are capitalized in capital assets on the financial statements. The funding received under this program is federal grant funding shown as additions to the long-term debt payable. Other federal grants are reported as operating grants or federal contributions.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED) YEAR ENDED DECEMBER 31, 2018
(74)
4. Reconciliation to Comparative Statement of Revenues, Expenses, and Changes in Net Position and Note 3.B.4. (Continued)
Nonoperating Revenues: Operating Grants $ 390,401
Less: State Portion of Operating Grants (390,401)
Federal Portion of Operating Grants -
Capital Contributions - Federal 261,952
Public Facility Authority Loans 9,839,288
Expenditures Per Schedule of Expenditures of Federal Awards $ 10,101,240
This Page Has Been Intentionally Left Blank.
STATISTICAL SECTION (Last Ten Fiscal Years)
(Unaudited)
This Page Has Been Intentionally Left Blank.
WESTERN LAKE SUPERIOR SANITARY DISTRICT DULUTH, MINNESOTA
STATISTICAL SECTION
(75)
This part of Western Lake Superior Sanitary District’s comprehensive annual 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 WLSSD’s overall financial health. Contents Financial Trends – Pages 76-80
These schedules contain trend information to help the reader understand how WLSSD’s financial performance and well-being have changed over time.
Revenue Capacity – Pages 81-86 These schedules contain information to help the reader assess WLSSD’s revenue sources for both wastewater and solid waste generators.
Debt Capacity – Pages 87-90 These schedules contain information to help the reader assess the affordability of WLSSD’s current levels of outstanding debt and its ability to issue additional debt in the future.
Demographic and Economic Information – Pages 91-92 These schedules contain demographic and economic indicators to help the reader understand the environment within which WLSSD’s financial activities take place.
Operating Information – Pages 93-95 These schedules contain service and infrastructure data to help the reader understand how the information in WLSSD’s financial report relates to the services WLSSD provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.
WE
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(76)
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1620
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1120
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$
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$
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$
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$
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$
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$
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Tot
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$
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Sou
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WE
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(77)
20
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1720
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1420
1320
1220
1120
1020
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Ope
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$
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$
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$
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$
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$
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$
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$
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Sou
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Dep
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Wes
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Lak
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San
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WE
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RC
E/U
SE
S
LA
ST
TE
N F
ISC
AL
YE
AR
S
(78)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Use
r C
harg
es -
Mun
icip
als
$
11,
220,
492
$
11,
189,
619
$
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Use
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C
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Cit
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Jay
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Sou
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1
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2,58
7
1,3
92,2
42
1
,37
7,74
5 S
olid
Was
te D
ispo
sal
5 ,00
7,24
5
4,9
12,
086
4
,830
,222
4,6
38,
046
4
,34
0,38
0
4,2
19,7
71
4
,50
9,46
0
4,1
92,
071
4
,366
,532
3,8
24,
531
Oth
er
1,4
14,
020
1
,29
7,13
7
1,2
98,0
51
1
,12
5,13
5
1,1
68,
016
1
,105
,695
1,1
71,
138
1
,20
8,88
2
1,2
00,5
94
1
,16
9,01
9 S
ubt
ota
l E
xpen
ses
Bef
ore
Dep
reci
atio
n
2
5,15
5,03
2
2
4,78
8,81
5
2
4,8
77,0
15
23,
748,
773
23,
642,
321
22
,715
,130
2
3,91
7,85
1
2
2,69
3,64
9
2
2,1
04,6
31
20,
375,
609
Dep
reci
atio
n/A
mo
rtiz
atio
n
1
0,02
4,38
1
9,5
78,
370
9
,483
,767
9,2
58,
381
8
,29
2,39
4
8,1
85,0
02
9
,95
6,86
5
9,5
65,
029
9
,257
,383
8,9
44,
940
TO
TA
L O
PE
RA
TIN
G E
XP
EN
SE
S $
3
5,17
9,41
3 $
3
4,36
7,18
5 $
3
4,3
60,7
82
$
33,
007,
154
$
31,
934,
715
$
30
,900
,132
$
3
3,87
4,71
6 $
3
2,25
8,67
8 $
3
1,3
62,0
14
$
29,
320,
549
(Una
udit
ed)
Sou
rce:
Fin
ance
Dep
artm
ent
Wes
tern
Lak
e S
uper
ior
San
itar
y D
istr
ict
OP
ER
AT
ING
EX
PE
NS
ES
BY
FU
NC
TIO
N
OP
ER
AT
ING
EX
PE
NS
ES
BY
OB
JEC
T
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
F
INA
NC
IAL
TR
EN
DS
N
ON
OP
ER
AT
ING
RE
VE
NU
ES
AN
D E
XP
EN
SE
S
LA
ST
TE
N F
ISC
AL
YE
AR
S
(80)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Ear
ning
s on
Inv
estm
ents
$
600
,878
$
294,
140
$
15
6,95
4 $
83,
444
$
4
5,76
3 $
50,
639
$
2
8,40
6 $
24,
668
$
5
1,47
0 $
125,
840
Gai
n/(L
oss)
on
Sal
e of
Cap
ital
Ass
ets
1
4,13
0
5
,181
2
,550
19,
863
2
1,78
2
8
,185
6
,111
31,
876
7,4
19
2,6
07
Ope
ratin
g G
rant
s
3
90,4
01
39
5,19
0
420,
717
40
6,33
8
455,
328
34
4,26
7
392,
121
38
2,96
9
348,
810
34
5,72
1
Pro
pert
y T
axes
1
,130
,463
1,
105,
907
1,10
0,26
3
1,
108,
655
79
8,70
5
798,
391
80
5,33
8
803,
970
79
6,53
6
794,
953
Inte
rest
Exp
ense
(1)
(66
0,59
2)
(
772,
579)
(84
0,49
7)
(1,
042,
621)
(
1,07
3,87
1)
(1,
556,
604)
(
1,43
4,07
0)
(1,
876,
762)
(
2,19
0,31
2)
(2,
067,
620)
Oth
er E
xpen
ses
(4
7,70
1)
(863
)
-
(
559)
-
-
(2
5,69
0)
(20
,448
)
(24
,594
)
(29
,495
)
Tot
al N
onop
erat
ing
Rev
enue
s/(E
xpen
ses)
$
1
,427
,579
$
1,
026,
976
$
83
9,98
7 $
575,
120
$
24
7,70
7 $
(
355,
122)
$
(22
7,78
4) $
(
653,
727)
$ (
1,01
0,67
1) $
(
827,
994)
(Una
udit
ed)
(1)
- N
et o
f ca
pita
lize
d am
ount
s
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Sup
erio
r S
anit
ary
Dis
tric
t
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
R
EV
EN
UE
CA
PA
CIT
Y W
AS
TE
WA
TE
R O
PE
RA
TIO
NS
T
OT
AL
WA
ST
EW
AT
ER
TR
EA
TE
D B
Y B
ILL
ING
PA
RA
ME
TE
RS
L
AS
T T
EN
FIS
CA
L Y
EA
RS
(81)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
MU
NIC
IPA
LIT
IES
Flo
w (
mil
lion
gal
/day
)14
.21
16.8
315
.88
15.1
917
.12
15.1
715
.18
15.6
917
.51
16.2
8B
OD
(lb
s/da
y)18
,116
17,6
4617
,573
18,0
7217
,533
17,7
4817
,755
19,0
4819
,697
18,8
84S
uspe
nded
Sol
ids
(lbs
/day
)21
,289
21,1
8222
,002
22,3
3022
,902
22,4
3922
,813
24,4
4526
,457
24,5
55
IND
US
TR
IES
Flo
w (
mil
lion
gal
/day
)21
.61
21.6
021
.08
21.3
220
.92
19.9
320
.49
20.3
420
.35
19.4
0B
OD
(lb
s/da
y)62
,334
65,5
1676
,723
75,0
8168
,477
59,1
5970
,765
69,8
1773
,809
63,2
91S
uspe
nded
Sol
ids
(lbs
/day
)20
,117
22,8
3321
,913
26,7
4128
,757
27,3
0724
,703
23,1
2525
,036
26,4
60
TO
TA
L W
AS
TE
WA
TE
R
Flo
w (
mil
lion
gal
/day
)35
.82
38.4
336
.96
36.5
138
.04
35.1
035
.67
36.0
337
.86
35.6
8B
OD
(lb
s/da
y)80
,450
83,1
6294
,296
93,1
5386
,010
76,9
0788
,520
88,8
6593
,506
82,1
75S
uspe
nded
Sol
ids
(lbs
/day
)41
,406
44,0
1543
,915
49,0
7151
,659
49,7
4647
,516
47,5
7051
,493
51,0
15
Sou
rce:
Fin
ance
Dep
artm
ent
Wes
tern
Lak
e S
uper
ior
San
itar
y D
istr
ict
(Una
udit
ed)
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
W
AS
TE
WA
TE
R V
OL
UM
E
LA
ST
TE
N F
ISC
AL
YE
AR
S
(82)
0
10
,000
20
,000
30
,000
40
,000
50
,000
60
,000
70
,000
80
,000
90
,000
10
0,0
00
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
LBS/DAY
WA
ST
EW
AT
ER
VO
LU
ME
(Un
au
dit
ed
)B
OD
(lb
s/d
ay)
Su
sp
en
de
d S
olid
s (
lbs/d
ay)
S
ourc
e: F
inan
ce D
epar
tmen
t Wes
tern
Lak
e S
uper
ior
Sani
tary
Dis
tric
t
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
R
EV
EN
UE
CA
PA
CIT
Y W
AS
TE
WA
TE
R O
PE
RA
TIO
NS
O
PE
RA
TIO
NS
AN
D M
AIN
TE
NA
NC
E U
NIT
CO
ST
S
LA
ST
TE
N F
ISC
AL
YE
AR
S
(83)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Flo
w (
cost
/100
0gal
) $
0.5
759
$
0
.533
8 $
0.5
472
$
0
.571
7 $
0.5
438
$
0
.556
7 $
0.5
564
$
0
.510
3 $
0.4
052
$
0
.376
2
Exc
ess
Flo
w (
cost
/100
0 ga
l) $
0.0
199
$
0
.019
3 $
0.0
193
$
0
.024
3 $
0.0
208
$
0
.020
3 $
0.0
175
$
0
.016
7 $
0.0
141
$
0
.012
4
BO
D (
cost
/lb)
$
0
.162
5 $
0.1
557
$
0
.143
2 $
0.1
509
$
0
.163
2 $
0.1
777
$
0
.150
1 $
0.1
462
$
0
.215
1 $
0.2
286
Sus
pend
ed S
olid
s (c
ost/l
b) $
0.3
120
$
0
.293
0 $
0.3
026
$
0
.277
7 $
0.2
701
$
0
.266
4 $
0.2
701
$
0
.261
4 $
0.2
096
$
0
.201
3
Dom
estic
Equ
ival
ent
(C
ost/1
000g
al)
$
1.8
8 $
1
.78
$
1.7
8 $
1
.77
$
1.7
3 $
1
.76
$
1.7
3 $
1
.67
$
1.5
6 $
1
.54
(Una
udit
ed)
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Sup
erio
r S
anit
ary
Dis
tric
t
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
R
EV
EN
UE
CA
PA
CIT
Y S
OL
ID W
AS
TE
OP
ER
AT
ION
S
OL
ID W
AS
TE
VO
LU
ME
(M
SW
) A
ND
TIP
PIN
G F
EE
L
AS
T T
EN
FIS
CA
L Y
EA
RS
(84)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
VO
LU
ME
(T
ons)
Dis
tric
t (S
t. L
ouis
Cou
nty)
47,7
6148
,184
53,6
0951
,600
52,6
6452
,458
51,2
4951
,648
53,9
8455
,719
Car
lton
Cou
nty
15,3
3215
,187
14,6
1713
,684
13,0
0912
,392
11,7
3513
,012
12,7
5212
,919
Itas
ca C
ount
y-
-
49
9-
-
-
-
-
-
-
Lak
e C
ount
y6,
935
7,01
76,
961
6,33
45,
051
5,01
55,
364
5,41
95,
332
4,77
3
Coo
k C
ount
y3,
466
3,47
93,
249
3,09
62,
608
3,15
73,
636
3,61
33,
452
4,09
2
Cit
y of
Sup
erio
r12
,537
12,6
835,
956
6,89
85,
288
5,31
55,
933
5,91
54,
601
3,67
5
TO
TA
L V
OL
UM
E86
,031
86,5
5084
,891
81,6
1278
,620
78,3
3777
,917
79,6
0780
,121
81,1
78
Tip
ping
Fee
(P
er T
on)
Tra
nsfe
r S
tati
on $
49
.30
$
48.5
5 $
4
8.02
$
48.2
3 $
47.7
5 $
47.1
1 $
46.3
4 $
45.2
4 $
45.2
8 $
45.4
8
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Sup
erio
r S
anit
ary
Dis
tric
t(U
naud
ited
)
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
S
OL
ID W
AS
TE
VO
LU
ME
(M
SW
) L
AS
T T
EN
FIS
CA
L Y
EA
RS
(85)
81,1
78
80,1
2179
,607
77,9
1778
,337
78,6
20
81,6
12
84,8
91
86,5
5086
,031
72,0
00
74,0
00
76,0
00
78,0
00
80,0
00
82,0
00
84,0
00
86,0
00
88,0
00
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
TONS
SO
LID
WA
ST
E V
OL
UM
E (
MS
W)
(Un
au
dit
ed)
S
ourc
e: F
inan
ce D
epar
tmen
t Wes
tern
Lak
e S
uper
ior
Sani
tary
Dis
tric
t
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
P
RIN
CIP
AL
RE
VE
NU
E P
AY
ER
S
CU
RR
EN
T Y
EA
R A
ND
NIN
E Y
EA
RS
AG
O
(86)
Cus
tom
erA
mou
nt%
Am
ount
%C
ity o
f D
ulut
h $
8
,881
,800
24
.12%
7,57
0,71
5$
24.1
5%S
appi
Clo
quet
LL
C
11
,254
,946
30
.56%
9,49
2,79
630
.28%
Ver
so D
ulut
h M
ill
3,5
58,2
72
9.66
%3,
492,
072
11.1
4%W
aste
Man
agem
ent
1,9
13,1
85
5.20
%1,
170,
946
3.74
%
Sub
tota
l
25
,608
,203
69
.54%
21,
726,
529
69.3
0%
Bal
ance
fro
m O
ther
Cus
tom
ers
11,2
15,8
26
30.4
6%
9,62
3,79
9 30
.70%
Gra
nd T
otal
Use
r C
harg
es $
36
,824
,029
10
0.00
% $
3
1,35
0,32
8 10
0.00
%
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Supe
rior
San
itar
y D
istr
ict
(Una
udit
ed)
Fis
cal Y
ear
2018
Fis
cal Y
ear
2009
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
D
EB
T A
CT
IVIT
Y
RA
TIO
OF
OU
TS
TA
ND
ING
DE
BT
BY
TY
PE
L
AS
T T
EN
FIS
CA
L Y
EA
RS
(87)
G
EN
ER
AL
TA
XA
BL
EA
S A
SH
AR
EFI
SC
AL
OB
LIG
AT
ION
RE
VE
NU
EU
NA
MO
RT
IZE
DU
NA
MO
RT
IZE
DT
OT
AL
OF
PE
RSO
NA
LY
EA
RB
ON
DS
NO
TE
SP
RE
MIU
MD
ISC
OU
NT
DE
BT
PE
R C
AP
ITA
INC
OM
E
2009
$
2
0,15
0,00
0 $
35,
367,
052
$
-
$
-
$
5
5,51
7,05
2 $
428
1.
31%
2010
1
7,79
5,00
0
34,
345,
930
-
(11
7,81
3)
52,
023,
117
4
02
1.18
%
2011
3
1,76
0,00
0
32,
926,
538
88,3
61
(9
7,16
7)
64,
677,
732
3
69
1.07
%
2012
3
2,78
5,00
0
17,
194,
114
78,2
62
(7
8,10
6)
49,
979,
270
3
55
1.02
%
2013
2
8,77
0,00
0
22,
414,
032
68,1
64
(6
1,07
7)
51,
191,
119
3
87
1.07
%
2014
2
4,77
0,00
0
22,
278,
322
58,0
66
(4
6,14
2)
47,
060,
246
3
42
0.90
%
2015
2
0,73
5,00
0
29,
081,
151
47,9
67
(3
3,27
4)
49,
830,
844
3
62
0.96
%
2016
1
6,57
0,00
0
33,
415,
388
37,8
69
(2
2,57
4)
50,
000,
683
3
61
0.87
%
2017
1
2,24
0,00
0
32,
762,
796
27,7
71
(1
4,14
5)
45,
016,
422
3
25
0.78
%
2018
8,2
70,0
00
3
8,42
1,52
4 17
,672
(7,
979)
4
6,70
1,21
7
337
0.
77%
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Supe
rior
San
itar
y D
istr
ict
(Una
udite
d)
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
D
EB
T A
CT
IVIT
Y
NE
T T
AX
CA
PA
CIT
Y A
ND
ES
TIM
AT
ED
AC
TU
AL
VA
LU
E O
F T
AX
AB
LE
PR
OP
ER
TY
L
AS
T T
EN
FIS
CA
L Y
EA
RS
(88)
FIS
CA
LN
ET
TA
XE
ST
IMA
TE
DN
ET
TA
XE
ST
IMA
TE
DN
ET
TA
X
ES
TIM
AT
ED
YE
AR
CA
PA
CIT
YM
AR
KE
T V
AL
UE
CA
PA
CIT
YM
AR
KE
T V
AL
UE
CA
PA
CIT
YM
AR
KE
T V
AL
UE
2009
$
10
9,31
5,38
5 $
9,
549,
241,
200
$
3,1
82,9
85
$
16
8,11
8,50
0 $
112,
498,
370
$
9,7
17,3
59,7
00
2010
10
5,71
3,42
2
9,
392,
341,
074
3,2
81,2
94
17
3,32
0,12
6
108,
994,
716
9,5
65,6
61,2
00
2011
10
0,09
7,68
2
9,
435,
714,
800
4,8
95,6
57
25
9,45
1,70
0
104,
993,
339
9,6
95,1
66,5
00
2012
9
7,63
5,86
0
9,
264,
971,
300
5,1
87,1
72
27
4,23
5,60
0
102,
823,
032
9,5
39,2
06,9
00
2013
10
0,42
4,81
0
9,
384,
243,
720
5,5
52,5
95
29
2,83
3,50
0
105,
977,
405
9,6
77,0
77,2
20
2014
10
3,47
8,45
5
9,
622,
916,
600
5,9
11,0
53
31
1,43
5,40
0
109,
389,
508
9,9
34,3
52,0
00
2015
10
8,49
7,31
9
9,
979,
669,
500
6,2
54,0
74
32
7,93
1,10
0
114,
751,
393
10,3
07,6
00,6
00
2016
11
2,28
9,00
3
10,
253,
508,
300
6,2
97,5
12
33
1,78
1,30
0
118,
586,
515
10,5
85,2
89,6
00
2017
11
9,52
0,49
4
10,
872,
660,
000
6,7
04,2
85
35
1,92
5,25
0
126,
224,
779
11,2
24,5
85,2
50
2018
12
6,95
8,05
2
11,
448,
399,
200
6,7
11,6
87
35
2,80
4,45
0
133,
669,
739
11,8
01,2
03,6
50
Sour
ce:
St. L
ouis
Cou
nty
and
Car
lton
Cou
nty
Aud
itor
s' O
ffic
e
(Una
udite
d)
RE
AL
PR
OP
ER
TY
PE
RS
ON
AL
PR
OP
ER
TY
TO
TA
L
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
D
EB
T A
CT
IVIT
Y
NE
T G
EN
ER
AL
BO
ND
ED
DE
BT
RA
TIO
S
LA
ST
TE
N F
ISC
AL
YE
AR
S
(89)
RA
TIO
OF
NE
TG
RO
SS
DE
BT
SE
RV
ICE
NE
TR
AT
IO O
F N
ET
NE
T B
ON
DE
DB
ON
DE
D D
EB
T T
ON
ET
TA
XB
ON
DE
DF
UN
DS
BO
ND
ED
BO
ND
ED
DE
BT
TO
DE
BT
PE
RE
ST
IMA
TE
DP
OP
UL
AT
ION
CA
PA
CIT
Y
DE
BT
AV
AIL
AB
LE
DE
BT
NE
T T
AX
CA
PA
CIT
YC
AP
ITA
MA
RK
ET
VA
LU
E
2009
135,
721
$
112
,498
,370
$
54,
495,
930
$
9,98
8,67
6 $
44,
507,
254
39.5
6% $
327
.90
0.46
%
2010
137,
536
108
,994
,716
50,
721,
538
1
0,05
7,84
9
40,
663,
689
37.3
1%
295
.70
0.43
%
2011
138,
061
104
,993
,339
48,
954,
114
1
0,61
0,73
7
38,
343,
377
36.5
2%
277
.70
0.40
%
2012
137,
650
102
,823
,032
53,
273,
770
1
1,54
0,63
6
41,
733,
134
40.5
9%
303
.18
0.44
%
2013
137,
519
105
,977
,405
51,
184,
032
1
2,61
3,62
1
38,
570,
411
36.3
9%
280
.47
0.40
%
2014
137,
684
109
,389
,508
47,
048,
322
1
3,69
4,84
4
33,
353,
478
30.4
9%
242
.25
0.34
%
2015
138,
245
114
,751
,393
49,
816,
151
1
4,40
9,10
9
35,
407,
042
30.8
6%
256
.11
0.34
%
2016
138,
492
118
,586
,515
49,
985,
388
1
5,70
6,04
9
34,
279,
339
28.9
1%
247
.52
0.32
%
2017
138,
536
126
,224
,779
45,
016,
422
1
6,38
9,10
0
28,
627,
322
22.6
8%
206
.64
0.26
%
2018
138,
735
133
,669
,739
46,
701,
217
1
7,66
7,91
8
29,
033,
299
21.7
2%
209
.27
0.25
%
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Sup
erio
r S
anita
ry D
istr
ict
(Una
udit
ed)
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
D
EB
T A
CT
IVIT
Y
PL
ED
GE
D R
EV
EN
UE
CO
VE
RA
GE
L
AS
T T
EN
FIS
CA
L Y
EA
RS
(90)
NE
T R
EV
EN
UE
DIR
EC
TA
VA
ILA
BL
ED
EB
T S
ER
VIC
E R
EQ
UIR
EM
EN
TS
FIS
CA
LG
RO
SS
OP
ER
AT
ING
FO
RY
EA
RR
EV
EN
UE
EX
PE
NS
ES
(1)
DE
BT
SE
RV
ICE
PR
INC
IPA
LIN
TE
RE
ST
TO
TA
LC
OV
ER
AG
E
2009
$
3
2,61
9,44
9 $
20,
375,
609
$
1
2,24
3,84
0 $
5
,423
,074
$
2
,233
,946
$
7
,657
,020
16
0%
2010
3
4,58
2,65
5
22,
104,
631
1
2,47
8,02
4
5
,336
,138
2
,042
,353
7
,378
,491
16
9%
2011
3
3,57
0,37
3
22,
693,
649
1
0,87
6,72
4
5
,412
,600
1
,627
,237
7
,039
,837
15
5%
2012
3
4,69
0,28
9
23,
917,
851
1
0,77
2,43
8
5
,707
,604
1
,237
,478
6
,945
,082
15
5%
2013
3
4,87
0,65
2
22,
715,
130
1
2,15
5,52
2
5
,753
,364
1
,132
,452
6
,885
,816
17
7%
2014
3
6,11
1,23
6
23,
642,
321
1
2,46
8,91
5
5
,810
,592
1
,130
,292
6
,940
,884
18
0%
2015
3
7,74
6,20
7
23,
748,
773
1
3,99
7,43
4
8
,871
,950
1
,052
,390
9
,924
,340
14
1%
2016
3
7,87
0,75
2
24,
877,
015
1
2,99
3,73
7
8
,917
,766
937
,413
9
,855
,179
13
2%
2017
3
7,80
6,87
5
24,
788,
815
1
3,01
8,06
0
7
,376
,317
815
,661
8
,191
,978
15
9%
2018
3
8,95
9,90
1
25,
155,
032
1
3,80
4,86
9
7
,219
,000
719
,677
7
,938
,677
17
4%
(Una
udite
d)(1
) D
epre
ciat
ion
and
amor
tiza
tion
expe
nses
hav
e be
en e
xclu
ded.
S
ourc
e: F
inan
ce D
epar
tmen
t Wes
tern
Lak
e Su
peri
or S
anit
ary
Dis
tric
t
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
D
EM
OG
RA
PH
IC A
ND
EC
ON
OM
IC I
NF
OR
MA
TIO
N
DE
MO
GR
AP
HIC
AN
D E
CO
NO
MIC
ST
AT
IST
ICS
L
AS
T T
EN
FIS
CA
L Y
EA
RS
(91)
FI
SCA
LP
ER
SON
AL
PE
R C
AP
ITA
YE
AR
PO
PU
LA
TIO
N (
1)IN
CO
ME
PE
RS
ON
AL
IN
CO
ME
(2)
LO
CA
LST
AT
E
2009
135,
721
$
4,
633,
379,
219
$
34,1
39
8.20
%7.
40%
2010
137,
536
4,
747,
192,
576
34,5
16
7.40
%6.
80%
2011
138,
061
4 ,
797,
067,
506
34,7
46
6.70
%5.
80%
2012
137,
650
4,
988,
711,
300
36,2
42
6.50
%5.
80%
2013
137,
519
5,
249,
237,
749
38,1
71
5.60
%4.
30%
2014
137,
684
5,
423,
510,
444
39,3
91
4.40
%3.
60%
2015
138,
248
5,
228,
815,
856
37,8
22
5.50
%3.
70%
2016
138,
492
5,
750,
603,
316
41,5
23
5.60
%4.
10%
2017
138,
536
5,
798,
701,
252
41,8
57
4.30
%3.
30%
2018
138,
735
6,
033,
862,
620
43,4
92
3.90
%2.
80%
(Una
udit
ed)
Sour
ces:
(1)
Min
neso
ta S
tate
Dem
ogra
pher
s O
ffic
e(2
) B
urea
u of
Eco
nom
ic A
naly
sis
- R
egio
nal -
Met
ropo
lita
n St
atis
tica
l Are
a
(3
) M
inne
sota
Dep
artm
ent o
f E
mpl
oym
ent a
nd E
cono
mic
Dev
elop
men
t
UN
EM
PL
OY
ME
NT
RA
TE
(3)
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
D
EM
OG
RA
PH
IC A
ND
EC
ON
OM
IC I
NF
OR
MA
TIO
N
PR
INC
IPA
L E
MP
LO
YE
RS
C
UR
RE
NT
YE
AR
AN
D N
INE
YE
AR
S A
GO
(92)
Per
cent
age
Per
cent
age
of T
otal
of T
otal
Em
ploy
erE
mpl
oyee
s (1
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ank
Em
ploy
men
tE
mpl
oyee
sR
ank
Em
ploy
men
tE
ssen
tia
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lth
(SM
DC
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lth
Sys
tem
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569
14.
75%
5,03
41
3.99
%S
t. L
uke'
s H
ospi
tal
2,05
12
1.48
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585
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Min
er's
Inc
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31.
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St.
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ount
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1,95
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ulut
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ir N
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00
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ted
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e99
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29%
Tot
als
20,0
0814
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15,6
4812
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(Una
udite
d)
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Sup
erio
r Sa
nita
ry D
istr
ict
(1)
Nor
thla
nd C
onne
ctio
n
Fis
cal Y
ear
2018
Fis
cal Y
ear
2009
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
O
PE
RA
TIN
G I
NF
OR
MA
TIO
N
NU
MB
ER
OF
EM
PL
OY
EE
S B
Y I
DE
NT
IFIA
BL
E A
CT
IVIT
Y
LA
ST
TE
N F
ISC
AL
YE
AR
S
(93)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
WA
STE
WA
TE
RC
lean
Wat
er18
.14
18.5
719
.74
19.6
9
19
.12
18.0
420
.14
16.2
319
.40
19.9
6C
onve
yanc
e4.
304.
304.
304.
42
4.30
4.30
4.27
4.30
4.30
4.12
Bio
soli
ds7.
087.
087.
087.
10
7.28
7.71
7.85
8.38
8.10
8.10
Mai
nten
ance
20.9
921
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20.3
321
.03
24.0
126
.18
24.1
222
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23.2
023
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Env
iron
men
tal P
rogr
ams
1.95
1.
95
2.45
2.
45
-
-
-
-
-
-
Subt
otal
52.4
653
.00
53.9
054
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54.7
156
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56.3
851
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55.0
055
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tion
0.50
0.50
0.50
0.50
0.
400.
400.
400.
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l Pro
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3.
49
3.40
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-
-
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-
-
R
ecyc
ling
-
-
-
-
0.40
0.40
0.40
0.40
0.62
0.26
Subt
otal
17.3
717
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17.4
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910
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510
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00
AD
MIN
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RA
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usin
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11.7
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8.87
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9.00
8.50
8.68
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iron
men
tal P
rogr
ams
0.00
0.00
0.00
-
5.96
5.94
5.93
6.02
5.75
5.98
Man
agem
ent I
nfor
mat
ion
Syst
ems
5.00
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3.68
4.00
4.
295.
104.
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003.
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66L
ab6.
006.
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357.
00
6.00
6.00
6.34
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Subt
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31.4
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30.0
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35.6
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5910
1.99
102.
8610
3.63
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3.35
102.
03
Sou
rce:
Fin
anci
al R
ecor
ds o
f W
este
rn L
ake
Sup
erio
r S
anit
ary
Dis
tric
t(U
naud
ited)
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
O
PE
RA
TIN
G I
NF
OR
MA
TIO
N
OP
ER
AT
ING
IN
DIC
AT
OR
S –
WA
ST
EW
AT
ER
OP
ER
AT
ION
S
LA
ST
TE
N F
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YE
AR
S
(94)
FL
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BO
DT
SS
FL
OW
PE
AK
FL
OW
*B
OD
TSS
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CA
L Y
EA
RM
G/D
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LB
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AY
Cos
t/10
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alC
ost/
1000
Gal
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b
2018
35.8
280
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41,4
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5759
$
0.
0199
$
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1625
$
0.
3120
20
1738
.43
83,1
6244
,015
0.53
38
0.01
93
0.15
57
0.29
30
2016
36.9
694
,296
43,9
15
0.
5472
0.
0193
0.
1432
0.
3026
20
1536
.51
93,1
5349
,071
0.57
17
0.02
43
0.15
09
0.27
77
2014
38.0
486
,010
51,6
59
0.
5438
0.
0208
0.
1632
0.
2701
20
1335
.10
76,9
0749
,746
0.55
67
0.02
03
0.17
77
0.26
64
2012
35.6
788
,520
47,5
16
0.
5564
0.
0175
0.
1501
0.
2701
20
1136
.03
88,8
6547
,570
0.51
03
0.01
67
0.14
62
0.26
14
2010
37.8
693
,506
51,4
93
0.
4052
0.
0141
0.
2151
0.
2096
20
0935
.68
82,1
7551
,015
0.37
62
0.01
24
0.22
86
0.20
13
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Sup
erio
r Sa
nita
ry D
istr
ict
(Una
udit
ed)
VO
LU
ME
R
AT
ES
WE
ST
ER
N L
AK
E S
UP
ER
IOR
SA
NIT
AR
Y D
IST
RIC
T
DU
LU
TH
, MIN
NE
SO
TA
O
PE
RA
TIN
G I
NF
OR
MA
TIO
N
CA
PIT
AL
AS
SE
T S
TA
TIS
TIC
S –
WA
TE
RW
AT
ER
OP
ER
AT
ION
S
LA
ST
TE
N F
ISC
AL
YE
AR
S
(95)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Was
tew
ater
Sa
nita
ry S
ewer
s (m
iles)
74.5
6074
.390
74.6
2074
.330
74.2
6074
.667
74.6
6774
.667
74.6
6774
.667
T
reat
men
t Cap
acity
(M
GD
)48
.40
48.4
048
.40
48.4
048
.40
48.4
048
.40
48.4
048
.40
48.4
0
BO
D T
reat
men
t Cap
acity
(L
bs/D
ay)
121,
000
121,
000
121,
000
121,
000
121,
000
121,
000
121,
000
121,
000
121,
000
121,
000
Sou
rce:
Fin
ance
Dep
artm
ent W
este
rn L
ake
Sup
erio
r Sa
nita
ry D
istr
ict
(Una
udit
ed)