Budget Message / Highlights - Metropolitan Water Reclamation ...

METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO
FINANCIAL NARRATIVE
2009 BUDGET
FUND STRUCTURE, PURPOSE, AND ACCOUNTING BASIS
The financial structure of the Metropolitan Water Reclamation District of Greater Chicago is organized on a fund accounting
basis. Each statutorily authorized fund maintains a self-balancing set of accounts that are reported separately in their own
financial statements. The District’s use of funds ensures that public money is spent appropriately and within the amounts
authorized. Established funds account for the different types of activities and legal restrictions that are associated with a
particular government function. The use of funds and the budgeting, accounting, and auditing that are associated with this
type of structure are governed by Illinois Compiled Statutes and generally accepted accounting principles (GAAP), as
determined by the Governmental Accounting Standards Board (GASB).
The MWRDGC uses the following funds to control its financial activities:
Corporate,
Corporate Working Cash,
Capital Improvements Bond,
Bond & Interest (Debt Service),
Construction,
Construction Working Cash,
Stormwater,
Stormwater Working Cash,
Reserve Claim, and
Retirement.
The chart on the facing page shows the flow of money within and between these funds.
The Corporate Fund is used to pay for the operations and general expenditures of the District, not specifically chargeable to
other funds. The Corporate Working Cash Fund consists of accounts maintained for the sole purpose of making temporary
loans to the Corporate Fund in anticipation of tax collections. The accounts of the Corporate, Corporate Working Cash and
Reserve Claim Funds are combined and reported as the General Corporate Fund for financial reporting purposes.
The capital project funds account for resources used for the acquisition of capital facilities. The Capital Improvements Bond
Fund is used for improvements, replacements, and additions to designated environmental improvement projects, and accounts
for the proceeds of bonds authorized by the Illinois General Assembly, grant revenues, and other revenues. The Construction
Fund is used for the acquisition of long-term assets used in the principal functions of the District, and accounts for a property
tax levy and other revenues. The Construction Working Cash Fund consists of accounts maintained for the sole purpose of
making temporary loans to the Construction Fund in anticipation of tax collections. The accounts of the Construction and
Construction Working Cash Funds are combined and reported as the Construction Fund for financial reporting purposes.
The Bond and Interest Fund is used for the payment of interest and redemption of general obligation bond issues. It accounts
for property tax levies and certain other revenues, such as interest on investments. A subfund is created for each bond issue.
The Reserve Claim Fund is used for the payment of claims, awards, losses, or liabilities that might be imposed against the
District and for the replacement or repair of damaged District property. It accounts for a property tax levy and other
revenues. As stated above, the accounts of the Reserve Claim Fund are included in the General Corporate Fund for financial
reporting purposes.
The Stormwater Management Fund was established beginning in 2005 by an act of the Illinois state legislature. The purpose
of this fund is to account for property tax levies and certain other revenues, such as interest on investments and permit fees,
which are used for planning, management and implementation activities relating to stormwater, flood and floodwater
management in Cook County, including areas outside of the District’s corporate boundaries. The Stormwater Management
Working Cash Fund, established during 2005 by an act of the Illinois state legislature, consists of accounts maintained for the
sole purpose of making temporary loans to the Stormwater Management Fund in anticipation of tax collections. The accounts
of the Stormwater Management Fund and the Stormwater Working Cash Funds are combined and reported as the Stormwater
Management Fund for financial reporting purposes.
The Retirement Fund is used to fund pension costs in accordance with statutory provisions and to account for a specific
property tax levy. The taxes are collected by the District and paid to the MWRD Retirement Fund, a pension trust fund.
BASIS OF ACCOUNTING
All of these funds are defined as governmental-type funds, except for the pension trust fund. For GAAP purposes, the
governmental funds are accounted for on a spending or “financial flow” measurement focus using the modified accrual basis
of accounting, which means that only current assets and liabilities, are generally included on the balance sheets. The reported
fund balances (net current assets) are considered a measure of “available spendable resources.”
The Comprehensive Annual Financial Report of the District is prepared on a GAAP basis. GASB Statement Number 34 was
effective for the 2002 fiscal year, and the District is in compliance with all of its provisions. The District is using the modified
approach for assessing infrastructure, except for TARP deep tunnels and drop shafts which will be depreciated. The District
uses specific budgetary accounts to record the repair or preservation of existing capital assets in addition to the construction
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