Budget Message / Highlights - Metropolitan Water Reclamation ...

METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO
2009 BUDGET
In 2006, the District proposed state legislation to give authority to establish an OPEB trust. Public Act 95-394 became
effective on August 26, 2007. An initial contribution of $15 million was budgeted in 2007. Following establishment of
the trust, additional funding of $10 million was placed in the OPEB trust for a total of $25 million. This additional
funding was due to surpluses in the Human Resources Department health insurance account and the deferral of projects
and purchases in other departments. In 2008, $22 million was placed in the OPEB trust, $7 million funded by a transfer
of earned investment interest from the Capital Improvements Bond Fund.
Retirement Fund
The District recognizes its responsibility to the employees’ retirement program, and the declining funded ratios that are
similar to challenges for other large Illinois pension funds. As a result, the District has assisted the Retirement Fund
with an analysis of additional funding options. As any change in the amount or source of funding for the Retirement
Fund would require changes in state statute, the analysis will provide a rational and objective basis for recommending
specific legislative changes. Most known options will increase the District’s employer contributions to the Retirement
Fund.
Financial Summary
The District’s appropriation and tax levy for 2009 as recommended, compared to the 2008 Budget, as adjusted is:
2009 2008 (adjusted) Increase / (Decrease) Percent Change
Total Tax Levy $ 412,317,710 $ 426,172,116 $ (13,854,406) (3.3)
Aggregate Levy 283,350,300 271,999,732 11,350,568 4.2
Appropriation 1,630,593,990 1,472,660,136 157,933,854 10.7
The aggregate levy is statutorily limited to an annual increase of 5 percent or the Consumer Price Index (CPI),
whichever is lower. The increase in the 2009 aggregate levy is equal to the estimated CPI for 2008.
In March 2008, the 2007 Bond and Interest Fund levy was abated by $7.1 million as a result of investment earnings
generated by the Corporate Fund and surplus levy resulting from the March 2007 debt refunding.
In conclusion, the District has several major challenges in the near future and is financially well positioned to meet
those challenges. The recommended 2009 Budget submittal is a cost-effective plan to meet the needs of our residents.
Respectfully submitted,
Terrence J. O’Brien
President
Cynthia M. Santos
Chairman, Committee on Budget and Employment
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