Budget Message / Highlights - Metropolitan Water Reclamation ...
Budget Message / Highlights - Metropolitan Water Reclamation ... Budget Message / Highlights - Metropolitan Water Reclamation ...
METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO 2009 BUDGET BOARD OF COMMISSIONERS 11000 BOARD OF COMMISSIONERS 2007 2008 2009 42 45 45 012 Legislative Section 35 37 37 013 Treasury Section 7 7 7 014 Administrative Section 0 1 1 EXECUTIVE DIRECTOR DEPARTMENTS 114 114
METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO 2009 BUDGET BOARD OF COMMISSIONERS 2009 BUDGET NARRATIVE As the policy-making entity of the Metropolitan Water Reclamation District, the Board of Commissioners is charged with the task of establishing policies and procedures which meet the District’s objective of protecting the water environment for the citizens of Cook County. The mission of the Board of Commissioners is the mission of the District: to protect the health and safety of the public in its service area; protect the quality of the water supply source (Lake Michigan); improve the quality of water in watercourses in its service area; protect businesses and homes from flood damages; and manage water as a vital resource for its service area. The Treasurer is charged to: direct the District’s financial program to maximize investment interest income while preserving safety of principal; issue bonds to meet District capital requirements; make timely payment of required debt service; and provide continuing sound financial management to maintain the District’s exceptional AAA bond rating. The 2009 appropriation request for the Board of Commissioners is $4,404,800, an increase of $127,300 or 3.0 percent above the 2008 appropriation. Staffing requirements for the department remain unchanged at 45 employees. Significant features of this year’s budget are: • Investment Interest Income Estimate: $27.4 million or less – 2009 will be a difficult year for investing due to very low interest rates forecasted for the fixed income market; • Implementation of web-based CD purchase bidding system – this will begin when the District’s portal technology is available; work is anticipated for late 2009; • Creation of a District Debt Policy – the policy will incorporate GFOA guidelines for issuing debt; • Bond Sale – The District will issue approximately $300 million Limited Tax Capital Improvement Bonds to fund planned infrastructure improvements and rehabilitation in the second half of 2009; • OPEB activities – the Investment Advisor will develop the Trust’s Investment Policy and purchase the initial inventory of investment funds; • Actuarial valuation of OPEB liability as of January 1, 2009 – an asset-liability modeling study to determine future cash requirements for the Trust will be included. This study is required to determine how best to invest the Trust’s assets to earn sufficient investment return to satisfy the Retiree Health Care Plan’s liability for future benefits. Accomplishments during 2008 were: • Investment Interest Income is estimated to be $32.3 million. The chart on the following page summarizes Investment Interest Income and average investment interest rates for the years 2000-2009; • The District had no exposure to volatile variable rate debt or interest rate swaps. The District terminated its last swap transaction in March 2007 when the financial conditions were favorable to exit the swap; • On December 1, 2008, the District called for redemption of $43,700,000 principal value Refunding Bonds, Series July, 1997, maturities of 2010 through 2014. A required 2 percent call premium of $874,000 resulted in a cost of $44,574,000 for call of the bonds. Future interest costs of $12,513,300 were avoided, and tax levies totaling $58,252,124 for future years have been abated. The call was financed with $22 million of retained interest income and other funds available in the Capital Improvements Bond Funds; • The economic downturn in the financial markets created significant new challenges for investing in short-term interestbearing investments. As of year-end, the District experienced no loss on investments. The Department’s goals and initiatives for 2009 include the following: 1. Maximize investment income. Maximize investment yield on District investments while protecting principal in compliance with Investment Policy. A low interest rate environment will continue through 2009. Invest available cash balances to policy limits to earn highest positive yield without jeopardizing principal value. Develop a Certificate of Deposit purchase bidding system utilizing new SAP portal technology. 2. Maximize capital financing efficiencies. Treasury will research creation of a Debt Policy that will incorporate GFOA guidelines for issuing debt. A web-based bond marketing system will be investigated for subsequent Capital Improvement Bond issuance. Work with the Information Technology Department to program the remaining legacy debt service processes and reporting in SAP. This project will include the replication of SRF loan process from Excel to within the SAP Treasury Module. 115 115
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METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO<br />
2009 BUDGET<br />
BOARD OF COMMISSIONERS<br />
11000<br />
BOARD OF COMMISSIONERS<br />
2007 2008 2009<br />
42 45 45<br />
012<br />
Legislative Section<br />
35 37 37<br />
013<br />
Treasury Section<br />
7 7 7<br />
014<br />
Administrative Section<br />
0 1 1<br />
EXECUTIVE DIRECTOR<br />
DEPARTMENTS<br />
114<br />
114