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Home My WebLink About01-08-16_AgendaPkt Metropolitan Wastewater Management Commission A NIN, SPRINGFIELD �i OREGON partners in wastewater management MWMC MEETING AGENDA Friday, January 8, 2016 @ 7:30 a.m. City of Springfield City Hall, Library Meeting Room 225 Fifth St., Springfield, OR 97477 Please Turn Off Cell Phones 7:30 - 7:35 I. ROLL CALL 7:35 - 7:40 II. CONSENT CALENDAR a. MWMC 12/11/15 Meeting Minutes Action Requested: By motion, approve the Consent Calendar 7:40 - 7:45 III. PUBLIC COMMENT 7:45 — 8:00 IV. FY 2014-15 AUDITED FINANCIAL STATEMENTS AND REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meg Allocco Action Requested: By motion, accept the Annual Financial Report, including financial statements for FY 2014-15. 8:00 - 8:20 V. FY 2016-17 BUDGET KICK-OFF: KEY OUTCOMES AND PERFORMANCE INDICATORS . . . . . . . . . . . . Matt Stouder, Michelle Cahill, Katherine Bishop Action Requested: Provide comments and direction to staff regarding the purpose statement, key outcomes, and performance indicators. 8:20 - 8:40 VI. BIOGAS COGENERATION SYSTEM REPLACEMENT: FINANCIAL CHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Greg Watkins Action Requested: Discussion and Input 8:40 - 9:00 VII. FUNDING FOR INCREASE DIGESTION CAPACITY (PROJECT P80084 — DIGESTER) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Troy McAllister Action Requested: Project update and revised budget request 9:00 — 9:05 VIII. FY 2015-16 SUPPLEMENTAL BUDGET #2 . . . . . . . . . . . . . . . Meg Allocco Action Requested: By motion, approve Resolution 16-01 9:05 - 9:20 IX. BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR Page 1 of 2 9:20 X. ADJOURNMENT The meeting location is wheelchair-accessible. For the hearing-impaired, an interpreter can be provided with 48-hours-notice prior to the meeting. To arrange for service, call 541-726-3694. All proceedings before the MWMC are recorded. THE FULL PACKET IS POSTED ON THE WEBSITE www.mwmcpartners.org Page 2 of 2 AGENDA ITEM Ila. Metropolitan Wastewater Management Commission SPRINGFIELD OREGON partners in wastewater management MWMC MEETING MINUTES Friday, December 11 , 2015 @ 7:30 a.m. Water Pollution Control Facility, Willamette Meeting Room 410 River Avenue, Eugene, OR 97404 President Loud opened the meeting at 7:30 a.m. Roll call was taken by Kevin Kraaz. ROLL CALL Commissioners Present: George Brown, Doug Keeler, Hilary Loud, Walt Meyer, Joe Pishioneri and Faye Stewart Commissioners Absent: Bill Inge Staff in Attendance: Jolynn Barker, Steve Barnhardt, Katherine Bishop, Michelle Cahill, Judy Castleman, Amber Fossen, Randy Gray, John Huberd, K.C. Huffman (attorney), Kevin Kraaz, Barry Mays, Troy McAllister, Josh Newman, Anette Spickard, Loralyn Spiro, Matt Stouder and Mark Van Eeckhout Guest: Libby Barg from Barney and Worth CONSENT CALENDAR a. MWMC 11/13/15 Meeting Minutes b. Final Report— Repair and/or Replacement of the Biosolids Force Main — P80067 MOTION: IT WAS MOVED BY COMMISSIONER STEWART TO APPROVE THE CONSENT CALENDAR. THE MOTION WAS SECONDED BY COMMISSIONER PISHIONERI. THE MOTION PASSED UNANIMOUSLY 6/0 (1 ABSENT — INGE). PUBLIC COMMENT There was no public comment. STRATEGIC PLANNING SESSION Matt Stouder, MWMC General Manager, stated that today the Commission would be discussing mission, vision, image, logo and branding. He introduced Libby Barg, from Barney and Worth, who will facilitate the strategic planning session of the meeting. Ms. Barg said the purpose of the meeting is to build a foundation for creating a mission, vision, and value statements, an understanding of the Commission's expectation for the identity effort, and to discuss next steps. Mission Statement: Ms. Barg stated that a mission statement is a declaration of what you do. A good mission statement doesn't change very often because it relates to the core activities MWMC Meeting Minutes December 11, 2015 Page 2 of 12 you work on. When it does change, it may be due to a change in regulations or when you take something on that you haven't done before. MWMC's current mission statement is in its budget document. MWMC's core mission is to protect public health and safety and the environment by providing high quality wastewater management services to the Eugene-Springfield metropolitan area. In the survey the Commission took (prior to the meeting), two Commissioners commented that the current mission statement discusses where service is provided but not to whom. Ms. Barg asked for input from the Commission. Commissioner Keeler said it would be easy enough to add "for our community." Commissioner Pishioneri suggested instead of community, use "the people of"? He felt it would be more personal and applicable. Commissioner Stewart agrees that it needs to be more encompassing because it is not just for the ratepayers. It really is for the betterment of our community as a whole. The people who live outside the area are benefitting from it even though they are not necessarily paying for it. Commissioner Meyer likes "people" better than ratepayer. Commissioner Loud said ratepayer doesn't sound as warm as people. Ms. Barg said in summary it sounds like everyone is in agreement with "the people of Eugene-Springfield." Vision Statement: Ms. Barg said part of coming up with a vision statement is thinking about what is coming ahead and what the emerging trends will be. Ms. Barg asked what kinds of challenges will MWMC be facing five or ten years. Commissioner Stewart replied that regulations are continually changing and forcing us to make changes in our processes. Commissioner Keeler said that an outcome of the changes is that we may need a greater partnership with our community in that we may be asking them to make changes in behavior. This may be more on the commercial and industrial side but also residential too. Ms. Barg asked if customers would be providing part of the service through their actions and what they are discharging. Commissioner Keeler replied, possibly. Commissioner Meyer stated that a lot of what we the MWMC has done up until now has been to solve problems with mechanical solutions. The one that was just mentioned is that people may have to change their behavior with what they put into the system because the MWMC will likely be looking at the overall health of the Willamette River much more holistically. We will need people to be our partner in finding ways to make improvements to the whole system and help find ways to meet our requirements. He is seeing a much more broad based way of dealing with the river systems as we look to improve the quality of the river. Commissioner Loud agreed with Commissioner Meyer, stating that we have the pharmaceuticals and the temperature issues which are both becoming an issue that MWMC will have to deal with. MWMC Meeting Minutes December 11, 2015 Page 3 of 12 Commissioner Meyer gave an example: One of the things that would help the salmon is to find and to create more cold water refugia. Right now, the MWMC could do that but there is no mechanism in place to get any credit for it, yet we have a very strict temperature limit. We are going to have to work with the regulators and our partners on the Willamette River so that we have a project that is at the confluence of the Willamette and the McKenzie where we can create cold water refugia for the overall benefit of the river system and our ratepayers. Commissioner Stewart added that anything we can do to reduce consumption (of water) would also be beneficial. Conserving drinking water by using recycled water on our lawns is one example. This would allow the MWMC to lessen our discharge to the river. He knows this may be a difficult challenge, but given the opportunity with new development, we may be able to find ways to incorporate that type of technology. Commissioner Brown stated that Eugene's population is supposed to increase by 40,000 and Springfield somewhere around 10,000, so the MWMW will need to make sure the plant can handle the increased flows. Commissioner Pishioneri said he wrote the following for consideration: "We can anticipate change by planning for a fair financial system and implement community engagement for environmental vitality." Commissioner Keeler summarized that we have the regulation, environment, and people part, so we need something about technology. Technology is part of our business and we want to be current or better. Ms. Barg acknowledged that technology is changing rapidly. Commissioner Stewart added that he would like the MWMC to be a leader/example for other agencies. Ms. Barg said in the survey, when asked for a series of words that come to mind when you think about what you want the MWMC to achieve in the future, "leader" came up quite a few times. She gave the following groups of words, stating that the underlined words were given more than once. ✓ Dedicated, professional, leader, ingenuity, successful ✓ Fiscally responsible, efficient, smart spending, flat rates ✓ Water quality, compliance, protective ✓ Sustainable, reduced environmental impact ✓ Informed public She asked the Commission which one of these words (besides leader) would be important to have as part of the vision statement. Commissioner Loud said water quality. Commissioner Keeler said science and technology. Commissioner Pishioneri said that reduced environmental impact sounds negative. He prefers enhancing the environment or something like that. Commissioner Meyer said healthy Willamette River MWMC Meeting Minutes December 11, 2015 Page 4 of 12 Commissioner Loud said that ingenuity falls in with technology Commissioner Stewart said to say something that encompasses the McKenzie as well as the Willamette. Commissioner Loud stated that she liked aquatic systems better than Willamette basin. Ms. Barg clarified that the Commission wanted something more specific than the environment but more inclusive than the Willamette. Commissioner Stewart feels that there would be a better connection with the citizens if we say McKenzie rather than Willamette. Commissioner Meyer said that there are cities all over the world that would die to have a Willamette River. The quality of the water in the Willamette River is good. Commissioner Keeler asked in regards to "informed public," what about "engaged public". Ms. Barg said "engaged" is a good word considering that two of the statements have to do with developing partnerships with people and with other organizations. Ms. Barg asked if there was anything else in regards to engaging the public. Commissioner Meyer stated that he likes Springfield's outreach to classrooms. He would like to see it much broader, more like Clean Water Services where every third or fifth grader gets to take the River Ranger program. Ultimately, we will get an informed public by reaching out to the children. He thinks it has a double effect, not only does it teach them about what we do but it also introduces them to career paths they may not be aware of. Commissioner Pishioneri stated that SUB has a great outreach. So does EWEB. He thinks a coordinated effort with SUB, EWEB and MWMC would be good because the kids will get taught what not to put into the water system, about pesticides, etc. but also about what happens when the toilet is flushed. Value Statements: Ms. Barg said values statements are the words you use to tell customers and employees where the organization stands and what it believes in. She listed the words that were given in the survey that describes MWMC's values. They were in the following groupings and no words were used twice. ✓ Transparent, open and honest communications, collaborative ✓ Compliance, public health is #1, protection ✓ Quality service delivery, technical excellence, high quality work, best practices ✓ Leadership, long-term vision, political engagement ✓ Financial prudence, efficient, effective ✓ Genuine concern for staff, responsible, fairness ✓ Environmental stewardship Ms. Barg asked the Commission what jumps out at them as their MWMC core values. Commissioner Meyer said compliance has to be one of them. Commissioner Brown said it should say regulatory compliance to be clear. Commissioner Meyer added that you could say both compliance and environmental stewardship. MWMC Meeting Minutes December 11, 2015 Page 5 of 12 Commissioner Pishioneri said he felt that vision, values, and goals are all buzz words and that you don't need three major groups that have to be separated. Ms. Barg clarified that Commissioner Pishioneri thought that those three things could be one. He answered yes. Commissioner Keeler added that you could distill what is there. You might end up with five or six words or short phrases that capture the sentiment of each checkmark. Ms. Barg said that she noticed that there isn't anything on the list that has to do with people or customers. Commissioner Keeler replied that it is in the first one (core mission statement — "protect public health and safety"). Commissioner Pishioneri said we also have "quality of service." That is people, we are ensuring their safety. All of it is for the people. Commissioner Stewart said "fairness" speaks to him because it is the way we serve. Commissioner Meyer said "transparent, open" is one of the reasons he has been on the board for so many years. The Commission and staff have always been open and honest and collaborative, not confrontational. Ms. Barg asked if there was anything else, adding that she likes the idea that it could be words or very short phrases. Commissioner Keeler said he likes the concept of listing our values because mission and vision statements are pretty standard but listing your values is new to him and he likes it. MWMC's Identity: Ms. Barg said in the survey, the Commissioners were asked to identify MWMC's current identity. All the Commissioners agreed MWMC was not very well known. She said that the telephone survey that was done also revealed that people do not know who the MWMC is. She said the Commission was asked on the survey how important it is that we shape the organization's. On a scale of 1 to 7, the average is 5.43. Most of the responses stated that creating greater visibility would build community support for current and future endeavors. Commissioner Stewart said one of his premises in his position (as County Commissioner) that they are out doing a job because they are mandated to do a job. They create fees or taxes to pay for that job. He said that sometimes in our jobs we don't understand that we are providing a service and that customers are paying for the service. So if we want customers to continue to buy our service or help us meet our needs, we have to have a real good connection with the citizens so they understand and feel good about what we are doing. Ms. Barg said in the survey, when asked how important it is to rename the organization, the average goes down to 4.0 and you see a split in opinion. The comments on this question summarized are, "yeah the name could be improved but does it make a difference or would people care if we have a different name." She said when looking at shaping the organization there is generally some consensus there would be some benefits, but changing the name is a question mark. MWMC Meeting Minutes December 11, 2015 Page 6 of 12 Commissioner Loud said just because you change the brand name on the product, if you don't change the product itself it doesn't' really mean much. What we (the MWMC) are trying to do is show the public the change in the product. Ms. Barg asked if phasing was part of it, first you introduce yourself? Commissioner Loud replied yes because the public doesn't even know who we are. Commissioner Keeler said in regards to changing the product, he doesn't think we need to change the product. We have a good product—we have a good story to tell. Then you can get into how important it is to tell the story, how important is it to rebrand. Ms. Barg said one of the ways to look at rebranding is looking at pros and cons of rebuilding your identity. Most people generally agree that if you have a better identity, people will understand the service they are getting and will be willing to pay more for it and/or be involved in delivering it. She asked if there other pros in identity. Commissioner Keeler said being recognized so that when regulations are tougher and we need changes, (from our public, rate payers, whatever) you have something in place. Commissioner Meyer stated it helps in recruiting good people; for example, Clean Water Services can recruit easier than agencies that are not known. Commissioner Keeler replied that the MWMC is known to its peers, regulators, academia, and those sorts. Being known does bring you opportunities such as grants and to participate in studies, which we do. Ms. Barg asked what are the drawbacks or cons to building an identity. Commissioner Meyer said EWEB is a good example. They are well known in the community and are kind of a lightning rod right now. Ms. Barg said it seems right now the MWMC is flying under the radar. People don't know who the MWMC is. Ms. Barg continued, asking if there is a sense that a better identity won't bring some benefits to this organization; only that once you are known you are more in the spotlight? Commissioner Keeler said another con could be the level of effort made to make any changes along with costs. For staff, there would be some level of work. Commissioner Pishioneri added that along with that is staff buy-in. He said when you are working, you have your job, work, tasks, etc. and it doesn't really matter what you are called. You just need to get your work done. In order for staff to embrace change, we need to find out how it is going to affect them. If it doesn't affect them positively, it will likely be an uphill battle. Commissioner Keeler said we should be asking for opinions here. Commissioner Pishioneri replied that was his point. Commissioner Keeler said that if we decide to do rebranding, we need to spend the time to get a quality product that we can agree on. It doesn't have to be anonymous but it should be something that the board and the staff can both largely support. If there is a lot of ill sentiment, then he doesn't think we should. Commissioner Pishioneri stated that if the staff isn't behind it, then he is not interested because he doesn't see the outcome (payoff). MWMC Meeting Minutes December 11, 2015 Page 7 of 12 Ms. Barg asked what the Commission's expectations are in moving forward. She said it sounds like one of your expectations is that staff supports it. Commissioner Pishioneri added not to demand it but determine if staff wants or needs it. Commissioner Keeler said it needs to be a quality product. Mr. Stouder stated that the partner agencies need to be comfortable with any direction we move in because if they are not buying in, it will be hard to manage the expectations of the Commission versus the partner agencies. Commissioner Stewart added that it is one of the things that has made the MWMC really what it is — the three entities that pull together to create it. He doesn't want to lose the importance of the partnership. Commissioner Brown said that the MWMC is a premier example of regional cooperation. Commissioner Loud said that it is the epitome of a collaborative effort and yes it can be done because we are doing it. Commissioner Keeler said one of the things that tempers the risk of changing our brand for staff is they don't technically work for the MWMC they work for the City of Eugene or Springfield. Ms. Barg asked the Commission what the tactical end of moving forward looks like. Commissioner Keeler said we need to invest what is required. It is about quality and we have seen some wonderful examples from Oregon, Washington County, and around the country. Ms. Barg asked if that is getting cost estimates and understanding the budget implications. Commissioner Keeler replied that surely we need to understand the cost but we need to have alternatives and agreement on what we do, if we do change anything. He said that if we do decide to change the name there is no reason we can't use a DBA (doing business as). So at the legal level we are still the Metropolitan Wastewater Management Commission but there is a name we use to promote and share information. Commissioner Stewart said it would probably be somewhat complicated so it won't happen overnight— it will be timely and we need to understand how the rollout will take place. Ms. Barg clarified that he meant what are the steps to creating it and getting buy-in. Commissioner Stewart said it will be important to start here and then make sure the partners are also supportive. Ms. Barg clarified that for Commissioner Stewart it starts with support of the idea. Commissioner Stewart replied that today it is an idea, but there will be more substance to it when we go to make our presentations to our respective bodies and talk about why we think it is important. He doesn't think we should engage the respective bodies to help us create this, that is our job. Commissioner Brown said he is not sure that all the Commissioners are in agreement on changing the name. He doesn't see the value in it personally. He is willing to listen to people's ideas but reminded the Commission that people are not aware of the MWMC. He MWMC Meeting Minutes December 11, 2015 Page 8 of 12 thinks it goes back to educating kids more, although that will take longer. He would be okay with a name like Clean Water Services for poplar awareness. On the other hand, how much can we expect people to get excited about it? All most people want to know is that when they flush the toilet, it goes away. Commissioner Pishioneri agrees with Commissioner Brown in regards to questioning the value of the name change. Mr. Stouder stated that in the recent focus group and survey work done by MWMC, one clear theme is that people are busy and don't have time to deal with us. The other clear theme is that they got hung up on the name. It was preventing them from understanding the base level of what we do. Commissioner Meyer said in terms of implementation, he is in support of the expansion of our role and some of the things we do. In regards to the name change, he believes there are a couple of things that we need to do before we embark on finding that brand name. In his view, he would really like to hear how staff feels. He feels it is very important because he does not want to superimpose something on top of the staff if they are not supportive of it. Secondly, he said, we all hear about Clean Water Services but when they changed their name, they took on additional roles including stormwater management and drinking water (they run Hagg Lake). They have a broader function than the MWMC. An organization similar to ours is Clackamas County. They changed their name about 8 years ago to WES (Water Environment Services) and to this day most people do not know what WES is. He would like to hear what WES' experience has been before we embark on finding a name or make any decisions. Commissioner Loud said as a consumer you want to know why you are paying for another raise in rates. She feels that in regards to this, you want to sell a product that people want. I'm going to raise the rates on you because of sewer services; I'm going to raise the rates on you because we are going to give better clean water. One is more positive than the other and that is why she thinks we should change the name to something that is more positive in the public's eye. So rather than taking their sewer, we are giving them clean water. That is why she thinks we should change the name. Commissioner Keeler agreed with that, stating the reason you would even consider changing or enhancing your identity is to create that platform for the enhanced communication, which is something he believes the Commission wants. He feels split on whether to change the name. He said on one hand the MWMC has had a string of Communication Specialists that were doing their job and doing a good job. We could take a step forward with what they are doing. But if we didn't change a thing, he thinks that would be okay too. We have a good story to tell, the extent to which we need to tell it is another question. Ms. Barg asked how we are going to improve our identity. Changing the name is one of the options. Commissioner Keeler stated that a new Communication Plan had just been issued. It is for all stakeholders (other governments, academia, regulators, etc.). He said what we are trying to MWMC Meeting Minutes December 11, 2015 Page 9 of 12 focus on here is our neighbors (ratepayers, community), we don't need to think all- encompassing because we already have a Communication Plan. Mr. Stouder said the Communication Plan covers internal communication with our partners, and it also discusses how we plan to communicate with the public. Ms. Barg asked if there was a general agreement on shaping the organization's identity. Commissioner Keeler stated he is hearing the Commission is for shaping the organization's identity but are questioning the need to change the name. He asked for a consensus by nodding heads if that is how the rest saw it. All Commissioners agreed. Ms. Barg asked the Commission what their needs are to cover this step forward. Commissioner Stewart said we are just talking about the MWMC's public awareness and increasing its visibility. He doesn't think we need any outside buy-in, it is more internal. But if we decide we are not going to use the three logos anymore and we are going to come up with a catchy name, then he would like to discuss it with his other Lane County Commissioners. Commissioner Pishioneri said that his take on it is just having the public more aware of our presence. It isn't a matter of changing a name but goes back to education and engaging the public. It doesn't involve worrying about jurisdictional stuff. He said he is a huge proponent of educating young people and taking it to their classes. It was very impactful with his kids. His biggest concern is that the public doesn't know the good that is done here or that we existence. But then again being off the radar is nice as well. Commissioner Meyer said that as a Commission we should continue to support our staff to do the best possible job they can do, to enhance the work that we are doing with children, and continue to be fiscally responsible. He thinks in the long term, the public will begin to know what we are doing. One concern he has is that we embark on a name change and that it could cause negative media attention. Commissioner Stewart said there might be some value in surveying staff in a similar fashion as the commission was surveyed. They live it every day; maybe we (Commission) don't understand the concern. There may not be any concern but he would like to know if there is. The rest of the Commission agreed. Commissioner Meyer said he would like to see the survey a little broader in terms of how the staff sees the MWMC working for them in how they do their job; where the Commission could do a better job so they (staff) can do their job better. Ms. Barg confirmed that the survey would include similar questions that the Commission answered. Commissioner Pishioneri answered yes but a little bit more expanded, ask if they feel that the Commission is going in the right direction. Ms. Barg clarified that what the Commission was saying was that they wanted to improve communication with customers and a first step would be to survey staff to get input from them. (The Commission nodded yes.) MWMC Meeting Minutes December 11, 2015 Page 10 of 12 Mr. Stouder summarized what he heard. The MWMC has a Communication Plan that has a lot of information in it. There is general support from the Commission, as a body, to move forward with building community support based upon many elements in the Communication Plan and some others that were discussed. Next month we are going to kick off the budget process where we talk about our key outcomes and indicators. Key outcome #5 is about what we have been talking about today. There will be some indicators that will be changed from last year according to the input from the Commission. That will be a launching point to keep us moving forward. He said he is hearing that a name change for now is to be tabled. It is something that we can certainly revisit in the future. He is also hearing a survey of staff--- regional wastewater program staff would be appropriate. Commissioner Stewart said that he wouldn't table the name change. He would like to see what staff thinks before it is tabled. Mr. Stouder agreed, he said that what he meant by tabling it was to set it aside until we got more feedback. Commissioner Keeler encourages leaving some large open text boxes in the survey for random thoughts and suggestions. Commissioner Pishioneri said he would like to see the survey questions before they are sent out. Commissioner Pishioneri said in regards to the Communication Plan, he is very interested in an education program for the kids. A robust program that has some staff members and that is what they do. He knows it will take some money to do that so it will be a budget issue. Commissioner Keeler replied that we are doing that but maybe we could do more. Mr. Stouder answered this could be a topic for further discussion. He said how he sees it potentially working is that staff could update the Commission on what is currently being done, what resources are available, and then decide if we want to dedicate additional resources. Then that becomes a conversation with Eugene or Springfield about who would staff it, fund it, and work the internal process. For instance, if the Commission decides they want another FTE to do this type of work in Springfield, he would approach the City Manager and budget team and go through the request process, telling them why the need is there. A similar conversation would need to occur on the Eugene side if the request for resource was on their side. Commissioner Pishioneri said his preference would be to have that person(s) directly involved with all the school districts. Could it be done like that? Mr. Stouder replied that it could be. In certain areas we have programs that are separate but coordinated like the Pretreatment programs. It ensures that there is flexibility, even though they are very similar, that the Cities can implement their own policies. On an educational basis, it doesn't necessarily need to be that way. Commissioner Pishioneri said the kids that have worked with the McKenzie Watershed Council on water restoration projects are huge stewards of the environment. MWMC Meeting Minutes December 11, 2015 Page 11 of 12 Ms. Barg added to the Next Steps the staff survey and further discussing the educational program. Commissioner Stewart stated that LRAPA has a robust education program in the school system. It might be worth enquiring what they are doing in the schools. Mr. Stouder said staff would follow up on that. BUSINESS FROM COMMISSION, GENERAL MANAGER, AND WASTEWATER DIRECTOR General Manager: • Mr. Stouder thanked the Commission for their participation in this meeting. • Discussed January's meeting subjects: budget kickoff, key outcomes, financial audit report, and updates on both the Cogen and Digester projects. • He stated that there have been a few wrinkles in the Cogen project. When we went through the triple bottom line process on what to do with our gas, we selected moving forward with a 1.2 megawatt generator. Staff learned recently that EWEB is contemplating rates changes and restructuring their rates. EWEB indicated that their long term goal is to restructure how they charge for power. Staff is taking a step back and looking at what that means for us in this project. If the cost of our power goes down and our fixed rate goes up, how does that impact us? We are reanalyzing options to have the best information moving forward. Staff will discuss the cost of the project, project payback, etc. and make a recommendation on how we should continue. Wastewater Director: • Ms. Cahill, Wastewater Director said that last month she had announced that staff was moving forward to apply for a grant for the Cogen project. With the uncertainty of payback, which is a critical factor in the grant application, we are considering putting it on hold for a year to apply for that grant. • We are in our wet permit season and it is really wet. Our 20 million gallons a day (MGD) flow for the summer is different now. We hummed along at about 75 MGD and peaked at 110 last night and are back down again to 70 MGD this morning. • Willamette Workshop was last Friday and she was able to attend. It is a group of Oregon State, University of Oregon, and a lot of partners have been studying the Willamette, mostly around climate change impacts for the river and the watershed. The biggest take away from the workshop was that the current flows in the river might not be affected by climate change. The reason given is that even though there will be less snow melt in the Cascades, the rain water will be similar and go into the ground water, keeping the water flow okay. The forest will change — more fires, different temperatures. There is a draft Executive Report out for the Willamette Water 20-100. • The Meyer Memorial Trust reported on what they have been doing. The Willamette River report card came out. The Willamette over all got a B-. It is based on a lot of technical water quality data, fish and wildlife habitat flow. They give the flow a C. So even though they don't think the Willamette will change with climate change, it isn't all that great. The upper Willamette got a B and the lower Willamette got a C+ so we are doing better than the lower Willamette. MWMC Meeting Minutes December 11, 2015 Page 12 of 12 Commissioner Stewart asked if the study about climate change effects on stream flows said anything about temperature. Ms. Cahill replied they regretted that temperature was not part of their study and they acknowledge how severe an issue it is. Commissioner Stewart said that it seems to him that if you don't have snow pack which brings the temperature down, that we will have more problems with releasing water into the system; there will be lots of algae. ADJOURNMENT President Loud adjourned the meeting at 9:08 a.m. Minutes were recorded by Kevin Kraaz. AGENDA ITEM IV. Metropolitan Wastewater Management Commission SPRINGFIELD OREGON partners in wastewater management MEMORANDUM DATE: December 31, 2015 TO: Metropolitan Wastewater Management Commission (MWMC) FROM: Meg Allocco, MWMC Accountant SUBJECT: FY 2014-15 Audited Financial Statements and Report ACTION REQUESTED: Accept the annual financial report BACKGROUND The Commission is required to issue an Annual Financial Report, which has been audited by an independent Certified Public Accounting firm. The financial statements are the responsibility of the Commission's management. The accompanying statements for the MWMC were audited again this year by Grove, Mueller & Swank, P.C. DISCUSSION At the January 2016 MWMC meeting, a member of the audit team from Grove, Mueller & Swank, P.C. will comment on the audit (Attachment 1). Staff and the auditors will answer any questions the Commission may have. ACTION REQUESTED By motion, accept the Annual Financial Report, including the audited financial statements for FY 2014-15. ATTACHMENT 1. FY 2014-15 Annual Financial Report REGIONAL WASTEWATER PROGRAM ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2015 SR M r 0` Vl j - :„ 10 Metropolitan Wastewater Management Commission SPRINGFIELD OREGON partners in wastewater management A _ Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management METROPOLITAN WASTEWATER MANAGEMENT COMMISSION OF THE EUGENE-SPRINGFIELD METROPOLITAN AREA (A COMPONENT UNIT OF THE CITY OF SPRINGFIELD) ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2015 Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management METROPOLITAN WASTEWATER MANAGEMENT COMMISSION ANNUAL FINANCIAL REPORT For the year ended June 30,2015 TABLE OF CONTENTS Page INTRODUCTORY SECTION Governing Board i i i FINANCIAL SECTION Independent Auditor's Report 1-3 Management's Discussion&Analysis 4-9 Basic Financial Statements Statement of Net Position 10 Statement of Revenues,Expenses and Changes in Net Position 11 Statement of Cash Flows 12 Notes to Financial Statements 13-23 Supplemental Information Schedule of Revenues,Expenses and Changes in Fund Net Position-Budget and Actual Combining Schedule of Metropolitan Wastewater Funds 24 Regional Wastewater Fund 25 Regional Wastewater Capital Fund 26 Regional Wastewater Bond Capital Fund 27 Regional Wastewater Improvement SDC Fund 28 Regional Wastewater Reimbursement SDC Fund 29 Regional Wastewater Debt Service Fund 30 COMPLIANCE SECTION Independent Auditors Report Required by Oregon State Regulations 31-32 Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 33-34 Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management Introductory Section Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management Metropolitan Wastewater Management Commission of the Eugene-Springfield Metropolitan Area June 30, 2015 GOVERNING BOARD Hilary Loud Eugene 1800 Lakewood Court, #102 Citizen Representative Eugene, OR 97402 President Joe Pishioneri Springfield 961 S. 70t" St. Council Representative Springfield, OR 97478 Vice-President Bill Inge Lane County 1831 W. Broadway Citizen Representative Eugene, OR 97402 George Brown Eugene 1740 Graham Drive Council Representative Eugene, OR 97405 Doug Keeler Springfield 3905 Hayden Bridge Rd. Citizen Representative Springfield, OR 97477 Walt Meyer Eugene 3987 Brae Burn Dr. Citizen Representative Eugene, OR 97405 Faye Stewart Lane County 125 E. 8t" Ave. Lane County Commissioner Eugene, OR 97401 ADMINISTRATION 225 Fifth Street Springfield, Oregon 97477 Anette Spickard MWMC Executive Officer Matt Stouder MWMC General Manager Michelle Cahill Eugene Wastewater Division Director Robert J. Duey MWMC Finance Officer Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management Financial Section Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management Independent Auditor's Report Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management GROVE, MUELLER & SWANK, P'C. CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 475 Cottage Street NE,Suite 200,Salem,Oregon 97301 (503)581-7788 INDEPENDENT AUDITOR'S REPORT Governing Board Metropolitan Wastewater Management Commission 225 5th Street Springfield, Oregon 97477 Report on the Financial Statements We have audited the accompanying statements of net position of Metropolitan Wastewater Management Commission (MWMC) (a component unit of the City of Springfield, Oregon), as of June 30, 2015, and the related statement of revenues, expenses and changes in net position, and cash flows for the year then ended, and the related notes to the financial statements, which collectively comprise MWMC's basic financial statements as listed in the table of contents. Management's Responsihility 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. Auditor's Responsibility Our responsibility is to express opinions 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 auditor's 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 MWMC'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 MWMC'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. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Metropolitan Wastewater Management Commission as of June 30, 2015, and the respective changes in financial position, and cash flows thereof for the year then ended, in accordance with accounting principles generally accepted in the United States of America. Other Matters Management's Discussion and Analysis Accounting principles generally accepted in the United States of America require that the management's discussion and analysis (MD&A) 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 MD&A 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. Supplementary Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise MWMC's basic financial statements. The supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole. Report on Other Legal and Regulatory Requirements Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2015, on our consideration of MWMC'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 to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 MWMC's internal control over financial reporting and compliance. Other Reporting Required by Oregon Minimum Standards In accordance with Minimum Standards for Audits of Oregon Municipal Corporations,we have issued our report dated December 22, 2015, on our consideration of MWMC's compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. 2 The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. GROVE, MUELLER &SWANK, P.C. CERTIFIED PUBLICACCOUNTANTS By: Ryan T. Pasquarella,A Shareholder December 22, 2015 3 Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management Management's Discussion and Analysis Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the Metropolitan Wastewater Management Commission (MWMC), we offer readers of MWMC's financial statements this narrative overview and analysis of the financial activities of MWMC for the fiscal year ended June 30, 2015. Please read it in conjunction with MWMC basic financial statements, which begin on page 9. Mission The purpose of the MWMC is to protect health, safety and the environment by providing high quality wastewater management services to the Eugene-Springfield metropolitan area. The MWMC and its regional partners are committed to providing these services in a manner that is effective, efficient, and meets customer service expectations. Since the mid-1990's, the Commission and staff have worked together to identify key outcome areas within which to focus the annual work plan and budget priorities, as well as planning capital and construction administration. Responsibility and Controls The City of Springfield performs all administrative duties, as well as planning and capital construction of major capital assets for the MWMC in accordance with the provisions of an intergovernmental service agreement among the City of Springfield, the City of Eugene, and MWMC. The City of Eugene performs all operations and maintenance duties for the MWMC in accordance with the provisions of the intergovernmental service agreement among the City of Eugene, the City of Springfield, and MWMC. FINANCIAL HIGHLIGHTS • Total assets at June 30, 2015 were $238.6 million and exceeded liabilities by $140.3 million (i.e. net position). The increase in net position of $8.5 million was the result of a combination of a rate increase not yet spent on capital projects and a reduction of total debt. Of the total net position, $4.3 million is restricted for capital improvements, $49.9 million represents net investment in capital assets, $8.8 million for debt service, and $77.4 million is unrestricted and available for future appropriation. • Operating revenues for the year were $30.2 million. This is an increase of 1.4% from fiscal year 2014 operating revenue of$29.8 million • Total operating and maintenance expenses for the year were $10 million and the total administration expenses were $2.8 million compared to the prior year when expenses were $11.5 and $2.5 million respectively. 4 OVERVIEW OF ANNUAL FINANCIAL REPORT Management's Discussion and Analysis (MD&A) serves as an introduction to the basic financial statements and supplementary information. The MD&A represents management's examination and analysis of MWMC's financial condition and performance. The financial statements report information about MWMC using the accrual basis of accounting. As such, revenues are recognized when they are earned and expenses are recognized when they are incurred. The financial statements include a statement of net position; a statement of revenues, expenses, and changes in net position; a statement of cash flows; and notes to the financial statements. The statement of net position provides information about the nature and amount of resources and obligations at year-end. The statement of revenues, expenses, and changes in net position presents the results of the business activities over the course of the fiscal year and information on how the net position changed during the year. The statement of cash flows presents changes in cash and cash equivalents resulting from operational, capital and related financing, and investing activities. This statement presents information about cash receipts and cash disbursements, without consideration of the earnings event, when an obligation occurs, or depreciation of capital assets. The notes to the financial statements provide required disclosures and other information that are essential to a full understanding of material data provided in the statements. The notes present information about MWMC's accounting policies, significant account balances and activities, material risks, obligations, commitments, and contingencies. The financial statements represent a consolidation of six budgetary funds: the Regional Wastewater Fund, the Regional Wastewater Capital Fund, the Regional Wastewater Bond Capital Fund, the Regional Wastewater Improvement SDC Fund, the Regional Wastewater Reimbursement SDC Fund, and the Regional Debt Service Fund. For financial reporting purposes, management considers the activities relating to the operation of wastewater management to be of a unitary nature and they are reported as such. For operational purposes, the accounts of wastewater management are organized on the basis of funds, each of which is considered a separate accounting entity. Supplementary information comparing the budget to actual revenues and expenses is provided. The financial statements were prepared by City of Springfield staff from the detailed books and records of MWMC. The financial statements were audited during the independent external audit process. Financial Analysis The following comparative condensed financial statements serve as the key financial data and indicators for management, monitoring, and planning. 5 CONDENSED FINANCIAL STATEMENTS Statements of Net Position June 30, 2015 2014 Capital assets: Producing assets, net $ 118,406,201 $ 123,471,184 Construction in progress 6,441,935 5,474,908 Current and restricted assets 113,788,853 108,069,659 Total assets 238,636,989 237,015,751 Current liabilities 8,000,720 8,026,206 Long-term liabilities 90,310,045 91,181,635 Total liabilities 98,310,765 99,207,841 Net position: Net investment in capital assets 49,901,799 51,268,482 Restricted for capital improvement 4,257,063 3,947,500 Restricted for debt service 8,770,908 8,770,908 Unrestricted 77,396,454 73,821,020 Total net position $ 140,326,224 $ 137,807,910 The largest portion of MWMC's net position is its unrestricted assets, followed by investment in capital assets, and then the restricted amounts held for investment in the capital improvement plan. Statements of Revenues, Expenses, and Changes in Net Position June 30, 2015 2014 Operating revenues $ 30,166,903 $ 29,783,219 Operations &maintenance (9,978,175) (11,468,669) Administration (2,752,283) (2,524,876) Depreciation (7,760,533) (8,188,501) Operating income 9,675,912 7,601,173 Non-operating revenues (expenses), net (includes capital contributions) (1,143,049) (1,068,641) Change in net position $ 8,532,863 $ 6,532,532 6 Operating revenues increased by 1.3%from fiscal year 2014 to 2015. This increase was primarily due to an increase in user fees, offset by the loss of a large industrial customer from a fire and a decrease in renewable energy rebates and septage fees. Operating expenses for the year ended June 30, 2015 decreased by 7.6% from the previous year. The decrease can be attributed to the Cities of Springfield and Eugene (from whom MWMC contracts its employees) implementing a new accounting and reporting standard for pensions that resulted in a $6 million dollar prior period adjustment for the MWMC. To further complicate matters, the State's Legislature passed pension reforms in a prior year that resulted in the Cities PERS net pension liability becoming a net pension asset. The reduction of pension expenses that resulted from this legislation was allocated across all business-type activities and resulted in significant decreases in expenses compared to the prior year. This is a temporary decrease as the PERS legislation was subsequently challenged in the courts and overturned and we will see a large adjustment reversing the decrease in the following year. The impact of the legislation was a $2.2 million decrease in expenses. If we were to remove the impact of this adjustment, operating expenses increased by 6.4%. The increase was related to personnel costs for operations and administration, with materials and services remaining relatively flat. Depreciation actually decreased by 5% as fewer projects were completed and added in this fiscal year while some older assets are now fully depreciated. Non-operating expenses (interest and loss on disposal of assets) decreased by 6.2% from fiscal year 2014 primarily due to interest expense decreasing as debt is being reduced and a gain on disposal of assets in fiscal year 2015. Capital Assets MWMC's investment in capital assets as of June 30, 2015 was $124.8 million (net of accumulated depreciation). This investment in capital assets includes land, buildings, machinery and equipment, and other assets. The net decrease in the MWMC's investment in capital assets for the current fiscal year was 3.2%. MWMC has added assets this year as part of the continuing capital improvement plan in place for the facilities upgrades, but the increase in assets was not as high as the annual depreciation. Major capital asset events during the current fiscal year included the following: • Construction continued on the Biosolids Force Main Rehab, adding $1.6 million to work in progress. • Work began on Increase Digestion Capacity, with expenses of $.5 million in the current year. • Operations & Maintenance Building Improvements have begun, spending $.2 million in the current year. • $125,000 was spent harvesting poplar trees from Management Unit 1 of the Biocycle Farm. Complete harvest of this unit will be completed in FY16. • Planning and design work continued for the Thermal Load project spending $149,000 in the current year. MWMC's Capital Assets (net of depreciation) June 30, 2015 2014 Land $ 7,731,550 $ 7,731,550 Construction in progress 6,441,935 5,474,908 Buildings 60,229,756 63,713,006 Machinery and equipment 48,824,108 50,259,915 Other assets 1,620,787 1,766,713 Total $ 124,848,136 $ 128,946,092 Debt Administration: At the end of the current fiscal year, the MWMC had total bonded debt outstanding of $73.5 million, all of which is secured solely by sewer revenue sources. Notes payable were comprised entirely of State Revolving Fund Loans (SRF) which were obtained as additional funding to implement the Facilities Plan at more advantageous interest rates than would result from issuing another revenue bond. Additional information on the MWMC's capital assets and related debt can be found in Note F and Note H, beginning on page 16 of this report. Economic Factors and Next Year's Budget and Rates: For the year ended June 30, 2015, MWMC approved a 3.5% rate increase that was effective July 1, 2014 (a 3% increase was effective July 1, 2013). The new rate resulted in an average residential billing of$24.12 per month based on typical residential consumption of 5,000 gallons. The budget included an annual capital contribution of $7.2 million in order to fund implementation of the Facilities Plan. The budget also reflected the activities of a very large capital improvement program that will span at least 15 years and is estimated to cost around $196 million (in 2006 dollars). MWMC issued the first of a series of revenue bonds in November 2006 for $47.3 million, with a second series issued in November 2008 for $50.7 million. The FY 2015-16 budget reflects an 2% rate increase over the 2015 rates. The rates fund operations, administrative services, debt service, capital contributions, and satisfy bond coverage requirements. The new budget also includes an annual capital contribution of $8.5 million in order to fund the Facilities Plan. 8 Requests for Information This financial report is designed to provide our citizens and rate payers with a general overview of the finances for those funds maintained by the MWMC and to show MWMC's accountability for the funds it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: MWMC Accountant City of Springfield 225 Fifth Street, Springfield, OR 97477 9 Basic Financial Statements Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management Metropolitan Wastewater Management Commission Statement of Net Position June 30, 2015 ASSETS Capital assets: Plant and buildings $ 121,283,258 Machinery and equipment 117,070,434 Other assets 5,162,511 Total capital assets being depreciated 243,516,203 Less accumulated depreciation (132,841,552) Total capital assets being depreciated,net 110,674,651 Land 7,731,550 Construction in progress 6,441,935 Total capital assets 124,848,136 Current assets: Cash and investments 81,132,439 Intergovernmental receivable 3,356,116 Accrued interest 285,734 Prepaid expenses 19,107 Deposits 700,000 Total current assets 85,493,396 Restricted assets: Cash and investments 27,686,313 Notes receivable(System Development Charges)-non current 609,144 Total restricted assets 28,295,457 Total assets 238,636,989 LIABILITIES Current liabilities: Accounts and contracts payable 2,204,172 Other accrued liabilities 59,242 Interest payable 698,519 Current portion of notes payable 892,947 Current portion of revenue bonds payable 4,135,000 Unearned revenues 10,840 Total current liabilities 8,000,720 Long-term liabilities: Due to other governments 4,099,493 Notes payable 14,887,024 Revenue bonds payable(net of unamortized premium and current portion) 71,323,528 Total long-term liabilities 90,310,045 Total liabilities 98,310,765 NET POSITION Net investment in capital assets 49,901,799 Restricted for capital improvement 4,257,063 Restricted for debt service 8,770,908 Unrestricted 77,396,454 Total net position $ 140,326,224 The accompanying notes are an integral part of these statements. 10 Metropolitan Wastewater Management Commission Statement of Revenues, Expenses and Changes in Net Position Year Ended June 30, 2015 Operating revenues: Sewer user fees $ 30,154,506 Other operating receipts 12,397 Total operating revenues 30,166,903 Operating expenses: Operations and maintenance 9,978,175 Administration 2,752,283 Depreciation 7,760,533 Total operating expenses 20,490,991 Operating income 9,675,912 Non-operating revenues (expenses): Interest income 468,823 Interest expense (3,754,689) Lease income 49,252 Gain on disposal of assets 11,269 Miscellaneous revenue 17,684 Total non-operating revenues (expenses) (3,207,661) Income before contributions 6,468,251 Capital contributions 2,064,612 Change in net position 8,532,863 Net position,beginning of year, as restated(Note J) 131,793,361 Net position, end of year $140,326,224 The accompanying notes are an integral part of these statements. 11 Metropolitan Wastewater Management Commission Statement of Cash Flows Year Ended June 30, 2015 Cash flows from operating activities: Cash received from customers S 29,680,750 Cash paid to other governments (3,639,166) Cash paid to suppliers for goods and services (11,303,157) Other operating receipts 24,409 Net cash provided by operating activities 14,762,836 Cash flows from capital and related financing activities: Acquisition and construction of capital assets (3,651,308) Proceeds from issuance of notes payable 167,132 Principal paid on notes payable (737,811) Principal paid on revenue bonds payable (3,950,000) Interest payments (3,935,205) Capital contributions 2,040,797 Net cash used in capital and related financing activities (10,066,395) Cash flows from investing activities: Interest received 535,681 Lease income 49,252 Net cash provided by investing activities 584,933 Net increase in cash and investments 5,281,374 Cash and investments,beginning of year 103,537,378 Cash and investments,end of year $ 108,818,752 Statement of Net Position captions are as follows: Cash and investments $ 81,132,439 Restricted assets-cash and investments 27,686,313 S 108,818,752 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 9,675,912 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 7,760,533 Miscellaneous revenue 17,684 Changes in assets and liabilities: Intergovernment receivable (473,756) Prepaid expenses (7,107) Accounts and contracts payable (32,159) Due to other governments (2,172,599) Unearned revenue (5,672) Net cash provided by operating activities $ 14,762,836 The accompanying notes are an integral part of these statements. 12 Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management METROPOLTTAN WASTEWATER MANAGEMENT COMMTSSTON NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Metropolitan Wastewater Management Commission (MWMC) (a component unit of the City of Springfield, Oregon)was established on February 9, 1977 through an intergovernmental agreement between Lane County and the Cities of Eugene and Springfield. It was formed to construct, operate, and maintain regional sewage facilities. The Commission is composed of seven voting members from Eugene, Springfield, and Lane County. Three of the seven members are elected officials from each of the partner agencies' governing bodies. The financial operations of MWMC are reported as an entity using enterprise fund accounting. Tt is MWMC's intent that the costs of providing services to users on a continuing basis will be financed or recovered primarily through an equitable fee levied on all user classes. Reporting Entity These financial statements include all funds, organizations, departments, and offices that are not legally separate from the MWMC. The City of Springfield, Oregon, under the criteria of the GASB, considers the MWMC to be a component unit. The City provides all administrative functions for MWMC in accordance with an intergovernmental agreement. Given the nature and significance of MWMC's relationship to the City, the City believes it would be misleading to exclude MWMC from its basic financial statements. The City of Springfield performs all administrative duties and construction of major capital assets for MWMC in accordance with the provisions of a July 14, 1983 service agreement, which was updated and reaffirmed in 2005. The City of Eugene performs all operations and maintenance duties for MWMC under the same updated service agreement. The agreement is part of an arrangement among the Cities of Eugene and Springfield and MWMC whereby the two Cities perform all necessary operational and staff support activities of MWMC. Basis of Accounting The financial operations of MWMC are accounted for using the accrual basis of accounting. As such, revenues are recognized when they are earned and expenses are recognized when they are incurred. All activities of the MWMC are accounted for within six proprietary(enterprise) funds. Proprietary funds are used to account for operations that are (a) financed and operated in a manner similar to a private business enterprises where the intent of the governing body is that the cost (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or(b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance,public policy,management control,accountability,or other purposes. The accounting and financial reporting treatment applied to the MWMC is determined by its measurement focus. The transactions of the MWMC are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operations are included on the statement of net position. Net position (i.e., total assets less total liabilities) is segregated into three categories: net investment in capital assets;restricted for capital improvements;restricted for debt service; and unrestricted net position. MWMC distinguishes operating revenue and expenses from non-operating items. Operating revenues and expenses generally result from providing services to users. The principal operating revenues involve charges for services and the major operating expenses include the costs of plant operation and maintenance, administration, and depreciation of capital assets. All revenues and expenses not meeting these definitions are reported in these financial statements as non-operating revenues and expenses. 13 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued Cash and Investments MWMC participates in a cash and investment pool maintained by the City of Springfield as well as a separate MWMC LGIP account. The amount reported as cash and investments is the MWMC share of the total City of Springfield cash and investment pool in addition to the separate MWMC LGIP account. As of June 30, 2015, MWMC does not maintain investments separate from the investment pools. State statutes authorize the City to invest in obligations of the U.S. Treasury and its agencies,bankers' acceptances, high grade commercial paper, the State of Oregon Local Government Investment Pool, and repurchase agreements. Investments are stated at fair value. For purpose of the statement of cash flows, cash and investments in the City-wide investment pool (including restricted cash and investments) are considered cash and cash equivalents. The pool has the general characteristics of a demand deposit account for MWMC in that MWMC may deposit additional cash at any time and may withdraw cash at any time without prior notice or penalty. Accounts Receivable The municipal water utilities for the Cities of Eugene and Springfield bill and collect sewer-user fees. The collected amounts are due to MWMC. Accordingly, MWMC records the amounts due from the local water utilities as its accounts receivable. Both utilities have historically collected over 99% of accounts receivable, therefore no allowance for uncollectible amounts is recorded. Restricted Assets Assets whose use is restricted for construction or other purposes by provisions of state law, grants, or other agreements are segregated. When both restricted and unrestricted resources are available for use, it is MWMC's practice to use restricted resources first,when applicable,then unrestricted resources as they are needed. Capital Assets All capital assets are valued at historical cost or estimated historical cost. Cost includes labor, materials,and related indirect costs. The cost of additions, renewals, and betterments over $10,000 are capitalized. Repairs and minor replacements are charged to operating expenses. All depreciation is accumulated and shown as a reduction of historical costs reported on the Statement of Net Position. Depreciation has been provided over the estimated useful lives of the assets using the straight-line method. Upon disposal of such assets, the accounts are relieved of the related historical costs and accumulated depreciation and resulting gains and losses are reflected in income. The estimated useful lives agree with those used for cost analysis purposes as required by federal regulations. They are as follows: Plant and buildings 10—40 years Machinery and equipment 5— 15 years 14 METROPOLTTAN WASTEWATER MANAGEMENT COMMTSSTON NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE A—SUMMARY OF STGNTFTCANT ACCOUNTTNG POLTCTES—Continued Interest is capitalized on assets acquired with tax exempt debt. The amount of interest capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. Accumulated Unpaid Vacation, Sick Pay and Other Benefit Amounts The portions of accumulated unpaid vacation, sick, and compensatory time that are not expected to be paid within the year are reported as long-term liabilities as "due to other governments" since all employees are contracted from the cities of Eugene and Springfield. Long-term Debt Long-term debt is reported as a liability in the Statement of Net Position. Bond issuance costs and deferred amounts on refunding, are expensed in full in the year incurred. Bond premiums and discounts are amortized using the bonds outstanding method. Use of Estimates Tn preparing the Commission's financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Risk Management MWMC is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets. MWMC carries commercial insurance for such risks of loss. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. NOTE B—INTERGOVERNMENTAL AGREEMENTS Tn accordance with the MWMC service agreement dated July 14, 1983 and updated on July 5, 2005, the City of Eugene is responsible for the operations of the regional sewage facilities. The agreement obligated MWMC for costs incurred by the City of Eugene in operating and maintaining the Regional Sewage Facilities. These costs include employee benefits for City of Eugene employees. The interagency payable at June 30, 2015 for operation and maintenance costs incurred by the City of Eugene is $1,417,887 ($946,587 for 2014). The total costs charged to MWMC for the year ended June 30, 2015 were$9,978,175 ($11,468,669 for 2014). The City of Springfield, in accordance with the MWMC service agreement dated July 14, 1983 and updated July 5, 2005, provides the technical, financial, and administrative support services to MWMC. Costs charged to MWMC for the years ended June 30, 2015 and 2014 were $2,752,283 and $2,524,876 respectively and include employee benefits for City of Springfield employees. 15 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE B—INTERGOVERNMENTAL AGREEMENTS—Continued These costs include a pro-rata share of other post-employment benefits, specifically medical, dental and vision coverage for eligible retirees,their spouses, domestic partners, and dependents on a self-pay basis. Due to the effect of age, retiree claim costs are generally higher than claim costs for all members as a whole. The difference between retiree claim costs and the amount of retiree healthcare premiums represents implicit employer contribution. In addition, life insurance benefits are provided to fully disabled employees. The actuarial computed liability for the plan at June 30,2015 was$141,923. The MWMC has no employees of their own. All personnel costs reflected are related to the employees of the cities of Eugene and Springfield contracted to do the work of the MWMC. In addition to the post-employment benefit liability referenced above, the MWMC has recorded an interagency payable to the respective cities for the compensated absences of$620,045, and the net pension liability of$3,337,525 computed for those employees. The total interagency payable due to the cities of Eugene and Springfield is$4,099,493. NOTE C—COMMITMENTS AND CONTINGENCIES At June 30, 2015, MWMC was obligated by contracts for uncompleted construction projects for $5,824,258. At June 30,2014, the obligation on contracts for capital improvements projects was$1,712,403. NOTE D—STEWARDSHIP,COMPLIANCE AND ACCOUNTABILITY Budgetary information MWMC follows these procedures in establishing the budgetary data reflected in the statements presented in the supplementary information section. In the spring of each year, the Executive Officer submits a proposed budget to the Metropolitan Wastewater Management Commission. The budget is prepared on the modified accrual basis of accounting. Estimated revenues and expenditures are budgeted for by fund, department, and category. Information on the past year's actual receipts and expenditures and the current-year amended budget are provided in the budget document. MWMC conducts a public hearing for the purpose of obtaining citizen comments on the budget. MWMC then adopts the budget. All three governmental bodies included in the intergovernmental agreement,the City of Springfield,the City of Eugene, and Lane County,ratify the budget as appropriate. MWMC then makes a final approval by resolution. MWMC may change the budget throughout the year by transferring appropriations between levels of control and by adopting supplemental budgets. Any changes adopted by MWMC in this manner must also be adopted by the City of Springfield, because MWMC's budget is included in the budget of the City of Springfield. Management may transfer budget amounts between individual line items within the control level,but cannot make changes between the legal levels of control. During the fiscal year ended June 30,2015,MWMC adopted several transfer resolutions and supplemental budgets increasing expenditures by $2,470,117. This was funded by reserves and adjustments to beginning cash-carrying forward budget planned, but not spent at the end of FY 2014. 16 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE E—RESTRICTED CASH AND INVESTMENTS The Commission maintains cash and investments in several fund accounts in accordance with bond resolutions and Commission authorization. Descriptions of these fund account types are as follows: Construction funds—Used to account for legally restricted cash and investments for the purpose of construction of capital projects. Funds include proceeds from the issuance of bonds and notes and interest earned on those proceeds. System Development Charge Reserves — Used to account for charges assessed and collected in conjunction with installation of new sewer services in the Regional Sewer System and are restricted by State of Oregon Statutes to system enhancements and other related capital expenditures. Debt Service Reserves — Deposits held for debt service coverage pursuant to bond indentures and in lieu of, or replacing,bond sureties. Investments for Bond Principal and Interest — Used to account for cash and investments restricted by Bond Indentures of Trust for future payment of principal and interest on debt. State Revolving Loan reserves — Deposits held for debt service as required by the State of Oregon Department of Environmental Quality for Clean Water State Revolving Fund Loan Agreements. Insurance Reserve- Deposits held by direction of the Commission for use towards future insurance claims. Detailed amounts for restricted cash and investments were as follows: Current 2015 Construction funds $ 13,086,686 Debt service reserves 8,100,000 State Revolving Fund loan reserves 670,908 System development charge reserves 3,647,919 Investments for bond principal and interest 2,000,000 Insurance reserve 180,800 Current restricted cash $ 27,686,313 17 METROPOLITAN WASTEWATER MANAGEMENT COMMTSSTON NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE F—CAPITAL ASSETS Capital asset activity for the year ended June 30,2015 was as follows: Beginning Decreases and Ending Balance Increases Reclassifications Balance Capital assets,not being depreciated: Land $ 7,731,550 $ - $ - $ 7,731,550 Construction in progress 5,474,908 967,027 - 6,441,935 Total capital assets,not being depreciated 13,206,458 967,027 - 14,173,485 Capital assets,being depreciated: Buildings 120,580,640 702,618 - 121,283,258 Machinery and equipment 115,220,439 1,985,362 (135,367) 117,070,434 Other 5,152,039 10,472 - 5,162,511 Total capital assets,being depreciated 240,953,118 2,698,452 (135,367) 243,516,203 Less accumulated depreciation for: Buildings (56,867,634) (4,185,868) - (61,053,502) Machinery and equipment (64,960,524) (3,418,267) 132,465 (68,246,326) Other (3,385,326) (156,398) - (3,541,724) Total depreciation (125,213,484) (7,760,533) 132,465 (132,841,552) Total capital assets,being depreciated,net 115,739,634 (5,062,081) (2,902) 110,674,651 Capital assets,net $ 128,946,092 $ (4,095,054) $ (2,902) $ 124,848,136 NOTE G—REBATABLE ARBITRAGE MWMC issued revenue bonds in the amount of$47,270,000 on November 14,2006,and$50,730,000 on November 20, 2008. Interest earnings on unspent bond proceeds may result in an arbitrage rebate due to the federal government. Arbitrage regulations require that the first installment date computation be made at five years from the delivery date. The rebate is required to be made within 60 days of the calculation. MWMC's liability is estimated at zero as of June 30,2015. NOTE H—LONG TERM DEBT Revenue Bonds The Metropolitan Wastewater Management Commission sold $47,270,000 in revenue bonds in November 2006 to provide resources to finance the capital improvements program. The bond premium of $3,128,675 is being amortized over the life of the bonds. An additional bond issuance of$50,730,000 was issued November 20, 2008, with a bond premium of $283,564 being amortized over the life of the bonds. Reserves are maintained in accordance to the bond covenants in the amounts of$3.7 million and$4.0 million respectively. 18 METROPOLITAN WASTEWATER MANAGEMENT COMMTSSTON NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE H—LONG TERM DEBT-Continued Revenue obligation bonds payable transactions for the year ended June 30,2015 are as follows: Final Effective Outstanding Issued Matured Outstanding Issue Maturity Interest July 1, During During June 30, Due within Date Date Rate 2014 Year Year 2015 One Year Sewer system revenue bonds serviced by fund revenues: Series 2006 11/15/2006 2025 3.966% $35,455,000 $ - $ 1,985,000 $33,470,000 $ 2,090,000 Series2008 11/20/2008 2028 4.910% $41,985,000 $ - $ 1,965,000 $40,020,000 $ 2,045,000 Maturities of bond principal and interest are as follows: Fiscal Year Principal interest 2016 $ 4,135,000 $ 3,574,625 2017 4,325,000 3,384,000 2018 4,535,000 3,173,150 2019 4,770,000 2,940,525 2020 5,015,000 2,695,900 2021-25 29,195,000 9,345,541 2026-29 21,515,000 1,911,742 Total $ 73,490,000 S 27,025,481 19 METROPOLITAN WASTEWATER MANAGEMENT COMMTSSTON NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE H—LONG TERM DEBT-Continued Notes Payable At June 30, 2015, notes payable are as follows: Oregon Department of Environmental Quality(DEQ) State Revolving Fund loan,payable in semiannual installments,including interest at 2.77%,due 2030. $ 2,641,544 Oregon Department of Environmental Quality(DEQ) State Revolving Fund loan,payable in semiannual installments,zero interest,due 2030. 1,500,000 Oregon Department of Environmental Quality(DEQ) State Revolving Fund loan,payable in semiannual installments,including interest at 2.44%,due 2030. 6,709,217 Oregon Department of Environmental Quality(DEQ) State Revolving Fund loan,payable in semiannual installments,including interest at 2.65%,due 2032. 3,677,784 Oregon Department of Environmental Quality(DEQ) State Revolving Fund loan,payable in semiannual installments,including interest at 1.25%,due 2030. 1,251,426 Total $ 15,779,971 Long-term liability activity for the year ended June 30,2015 was as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Notes payable $ 16,350,650 $ 167,131 $ (737,811) $ 15,779,970 $ 892,947 20 METROPOLTTAN WASTEWATER MANAGEMENT COMMTSSTON NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE H—LONG TERM DEBT-Continued Principal and interest amounts due on these notes payable in each of the next five years,and in the aggregate thereafter,are as follows: Fiscal Year Principal Interest 2016 $ 892,947 $ 444,896 2017 1,051,124 391,184 2018 1,071,971 366,450 2019 1,093,314 341,131 2020 1,086,889 315,218 2021-25 4,413,464 1,207,471 2026-30 4,946,076 558,362 2031-33 1,224,186 41,470 Total $ 15,779,971 $ 3,666,182 The MWMC maintained a loan reserve of$641,728 as of June 30,2015 in accordance with the loan agreements with the Oregon Department of Environmental Quality. NOTE I—NEW PRONOUNCEMENTS The Metropolitan Wastewater Management Commission implemented the following pronouncement during the fiscal year: GASB Statement No. 68 "Accounting and Reporting for Pension Plans—an amendment of GASB Statement No. 27." The statement establishes accounting and financial reporting requirements related to pensions provided by governments. The statement was implemented in the current year. GASB Statement No. 69 "Government Combinations and Disposals of Government Operations." The statement establishes accounting and financial reporting standards related to government combinations and disposals of government operations. The statement was implemented in the current year. GASB Statement No. 71 "Pension Transition for Contributions Made Subsequent to the Measurement Date". The statement amends transition provisions of GASB Statement No. 68,establishes accounting and financial reporting standards for recognition of contributions made between the measurement date of the net pension liability and implementation of GASB Statement No. 68. The statement was implemented in the current year. 21 METROPOLITAN WASTEWATER MANAGEMENT COMMISSION NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE I—NEW PRONOUNCEMENTS—Continued The Metropolitan Wastewater Management Commission will implement new GASB pronouncements no later than the required fiscal year. Management has not determined the effect on the financial statements from implementing any of the following pronouncements. GASB Statement No. 72 "Fair Value Measurement and Application" addresses accounting and financial reporting issues related to fair value measurements. It provides guidance for determining a fair value measurement for financial reporting purposes, as well as guidance for applying fair value to certain investments, and disclosures related to all fair value measurements. The statement is effective for fiscal years beginning after June 15,2015. GASB Statement No. 73 "Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68", completes the suite of pension standards. The requirements in Statement 73 for reporting pensions generally are the same as in Statement 68. The statement is generally effective for fiscal years beginning after June 15,2015. GASB Statement No. 74 "Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans". This statement replaces Statement No. 46, "Financial Reporting for Post-employment Benefit Plans Other Than Pension Plans" as amended, and Statement 57, "OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans". It also includes requirements for defined contribution OPEB plans that replace the requirements for those OPEB plans in Statement No. 25, "Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans", as amended, and Statement No. 50, "Pension Disclosures". This statement is effective for financial statement periods beginning after June 15, 2016. GASB Statement No. 75,"Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions", addresses reporting by governments that provide OPEB to their employees and for governments that finance OPEB for employees of other governments. It requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about their OPEB liabilities. The statement is effective for fiscal years beginning after-June 15, 2016. GASB Statement No. 76 "The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments". This statement supersedes Statement No. 55, "The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments". This statement reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and nonauthoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP. The statement is effective for fiscal years beginning after June 15,2015. NOTE J—PRIOR PERIOD ADJUSTMENT A prior period adjustment in the amount of $6,014,549 has been recorded in fiscal year 2015 to decrease the beginning net position. GASB Statement 68 was implemented by the cities of Eugene and Springfield and requires that net pension liability be recorded as of June 30, 2015. This resulted in payroll expenses and a liability to other government agencies because all employees of MWMC are contracted from those cities. MWMC has recorded a prior- period adjustment of $5,531,246 relating to these payroll costs, and another adjustment of $483,303 for accrued compensated absences to the City of Eugene. MWMC is responsible for payment to the individual Cities for the portions related to the employees contracted to the Commission. 22 METROPOLITAN WASTEWATER MANAGEMENT COMMTSSTON NOTES TO FINANCIAL STATEMENTS June 30,2015 NOTE K—SUBSEQUENT EVENTS Management has evaluated subsequent events through December 22, 2015, the date on which the financial statements were available to be issued. Management is not aware of any subsequent events that require recognition or disclosure in the financial statements. 23 Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management Supplementary Information Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management 64 Y3 a a a a xJ.Xl CJ N W Q a � F z cL v3 v3 W 2 v � z z m � v O��•-.N � v1 O t� r` ��— a — a 7 J n y J r o x w O Z Z 24 Metropolitan Wastewater Management Commission REGIONAL WASTEWATER FUND SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION (NON-G,AAP BUDGETARY BASIS)-BUDGET AND ACTUAL Year Ended June 30,2015 Adjustments Budget to Budget GAAP Original Revised Basis Basis Basis Budget Budget Actual Variance Actual Actual Revenues: Charges for services S 30,170,000 S 30,020,000 $ 30,506,060 $ 486,060 $ 23,964 $ 30,530,024 Investment earnings 110,000 110,000 58,569 (51,431) 26,332 84,901 Licenses and permits 9,200 9,200 11,373 2,173 (476) 10,897 Fines and forfeitures 600 600 1,500 900 - 1,500 Miscellaneous revenue 700,500 700,500 3,501 (696,999) 14,172 17,673 Total revenues 30,990,300 30,840,300 30,581,003 (259,297) 63,992 30,644,995 Expenses: Current operating: Finance 123,702 123,702 115,201 8,501 - 115,201 Development and public works 16,553,945 16,311,183 14,822,997 1,488,186 (1,879,750) 12,943,247 Debt service: Principal 1,013,274 1,013,274 737,811 275,463 (737,811) - Interest 444,007 444,007 409,079 34,928 19,738 428,817 Depreciation - - - - 7,760,533 7,760,533 Total expenses 18,134,928 17,892,166 16,085,088 1,807,078 5,162,710 21,247,798 Excess of revenues over (under)expenses 12,855,372 12,948,134 14,495,915 1,547,781 (5,098,718) 9,397,197 Other financing sources(uses): Transfers in 17,890 17,890 17,890 - 3,766,300 3,784,190 Tian sfersout (13,806,701) (14,006,701) (14,006,701) (737,811) (14,744,512) Gain(loss)on disposal of assets 11,269 11,269 Total other financing sources(uses) (13,788,811) (13,988,811) (13,988,811) 3,039,758 (10,949,053) Change in net position (933,439) (1,040,677) 507,104 1,547,781 (2,058,960) (1,551,856) Net position,beginning ofyear,as'restated 13,693,350 15,650,933 15,650,934 - 123,820,138 139,471,072 Net position,end of year $ 12,759,911 $ 14,610,256 $ 16,158,038 $ 1,547,781 $ 121,761,178 $ 137,919,216 25 Metropolitan Wastewater Management Commission REGIONAL WASTEWATER CAPITAL FUND SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION (NON-GAAP BUDGETARY BASIS)-BUDGET AND ACTUAL Year Ended June 30,2015 Adjustments Budget to Budget GAAP Original Revised Basis Basis Basis Budget Budget Actual Variance Actual Actual Revenues: Intergovernmental revenue $ $ $ 167 $ 167 $ $ 167 Invesnnentearnings 100,000 100,000 51,947 (48,053) 29,109 81,056 Miscellaneous receipts 11 11 11 Total revenues 100,000 100,000 52,125 (47,875) 29,109 81,234 Expenses: Current operating: Development and public works 1,673,400 2,469,028 966,069 1,502,959 (966,069) - Capital projects 2,328,398 2,482,622 153,267 2,329,355 (153,267) Debt service: Interest - - - - (156,434) (156,434) Total expenses 4,001,798 4,951,650 1,119,336 3,832,314 (1,275,770) (156,434) Excess of revenues over (under)expenses (3,901,798) (4,851,650) (1,067,211) 3,784,439 1,304,879 237,668 Other financing sources(uses): Transfers in 7,500,000 7,700,000 7,700,000 - 2,722,811 10,422,811 Transfers out - - - - (1,119,336) (1,119,336) Loan proceeds 175,000 175,000 173,917 (1,083) (173,917) Total other financing sources(uses) 7,675,000 7,875,000 7,873,917 (1,083) 1,429,558 9,303,475 Change in net position 3,773,202 3,023,350 6,806,706 3,783,356 2,734,437 9,541,143 Net position,beginningofyear 63,476,259 65,789,817 65,789,817 (53,584,389) 12,205,428 Net position,end ofycar $ 67,249,461 $ 68,813,167 $ 72,596,523 $ 3,783,356 $ (50,849,952) $ 21,746,571 26 Metropolitan Wastewater Management Commission REGIONAL WASTEWATER BOND CAPITAL FUND SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION (NON-GAAP BUDGETARY BASIS)-BUDGET AND ACTUAL Year Ended June 30,2015 Adjustments Budget to Budget GAAP Original Revised Basis Basis Basis Budget Budget Actual Variance Actual Actual Revenues: Invesunent earnings $ 200,000 $ 200,000 $ 296,211 $ 96,211 $ (6,576) $ 289,635 Expenses: Capital projects 10,937,849 12,500,876 2,416,391 10,084,485 (2,416,391) - Debt service: Interest (14,178) (14,178) Total expenses 10,937,849 12,500,876 2,416,391 10,084,485 (2,430,569) (14,178) Excess ofrevenues over (under)expenses (10,737,849) (12,300,876) (2,120,180) 10,180,696 2,423,993 303,813 Other financing sources(uses): Transfers in - 1,965,000 1,965,000 Transfers out (2,416,391) (2,416,391) Total other financing sources(uses) (451,391) (451,391) Change in net position (10,737,849) (12,300,876) (2,120,180) 10,180,696 1,972,602 (147,578) Net position,beginning ofyear 18,249,950 19,206,866 19,206,861 (42,126,841) (22,919,975) Net position,end of year $ 7,512,101 $ 6,905,990 $ 17,086,686 $ 10,180,696 $ (40,154,239) $ (23,067,553) 27 Metropolitan Wastewater Management Commission REGIONAL WASTEWATER IMPROVEMENT SDC FUND SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION (NON-GAAP BUDGETARY BASIS)-BUDGET AND ACTUAL Year Ended June 30,2015 Adjustments Budget to Budget GAAP Original Revised Basis Basis Basis Budget Budget Actual Variance Actual Actual Revenues: Charges for services $ 750,000 $ 750,000 $ 1,905,908 $ 1,155,908 $ 8,950 $ 1,914,858 Investment earrings 7,500 7,500 11,277 3,777 463 11,740 Total revenues 757,500 757,500 1,917,185 1,159,685 9,413 1,926,598 Expenses: Current operating: Development and public works 3,000 3,000 1,371 1,629 1,371 Excess ofrevenues over (under)expenses 754,500 754,500 1,915,814 1,161,314 9,413 1,925,227 Other financing sources(uses): Transfers out (1,400,000) (1,400,000) (1,400,000) - (1,400,000) Change in net position (645,500) (645,500) 515,814 1,161,314 9,413 525,227 Net position,beginning of year 2,282,352 3,247,528 3,247,528 8,175 3,255,703 Net position,endofyear $ 1,636,852 $ 2,602,028 $ 3,763,342 $ 1,161,314 $ 17,588 $ 3,780,930 28 Metropolitan Wastewater Management Commission REGIONAL WASTEWATER REIMBURSEMENT SDC FUND SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION (NON-GAAP BUDGETARY BASIS)-BUDGET AND ACTUAL Year Ended June 30,2015 Adjustments Budget to Budget GAAP Original Revised Basis Basis Basis Budget Budget Actual Variance Actual Actual Revenues: Charges for services $ 82,000 $ 82,000 $ 151,799 $ 69,799 $ 994 $ 152,793 Investment earnings 1,800 1,800 1,154 (646) 337 1,491 Total revenues 83,800 83,800 152,953 69,153 1,331 154,284 Expenses: Current operating: Development and public works 2,000 2,000 110 1,890 110 Excess ofrevenues over (under)expenses 81,800 81,800 152,843 71,043 1,331 154,174 Other financing sources(uses): Transfers out (17,890) (17,890) (17,890) - (17,890) Change in net position 63,910 63,910 134,953 - 1,331 136,284 Net position,beginning of ycar 382,525 421,036 421,038 2 1,031 422,069 Net position,endofyear $ 446,435 $ 484,946 $ 555,991 S 71,045 $ 2,362 $ 558,353 29 Metropolitan Wastewater Management Commission REGIONAL WASTEWATER DEBT SERVICE FUND SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN FUND NET POSITION (NON-GAAP BUDGETARY BASIS)-BUDGET AND ACTUAL Year Ended June 30,2015 Adjustments Budget to Budget GAAP Original Revised Basis Basis Basis Budget Budget Actual Variance Actual Actual Expenses: Debt service: Principal S 3,950,000 S 3,950,000 S 3,950,000 S - $ (3,950,000) $ interest 3,756,701 3,756,701 3,756,700 1 (260,216) 3,496,484 Total expenses 7,706,701 7,706,701 7,706,700 1 (4,210,216) 3,496,484 Other financing sources(uses): Transfers in 7,706,701 7,706,701 7,706,701 - 7,706,701 Transfers out - - - (4,180,574) (4,180,574) Total other financing sources(uses) 7,706,701 7,706,701 7,706,701 (4,180,574) 3,526,127 Change in net position - - 1 29,642 29,643 Net position,beginning ofyear 1 1 (640,937) (640,936) Net position,end of year S $ 1 $ 2 $ 1 $ (611,295) S (611,293) 30 Metropolitan Wastewater Management Commission _.F'FlflG CICLC� _._- .... '. � '� partners in wastewater management Compliance Section