The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Milwaukee Metropolitan Sewerage District (the District) under programs of the federal government for the year ended December 31, 2025. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District.
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. Grant funds receivable and related revenues are recognized as the related capital project expenditures are incurred. This policy differs from actual grant billings, which are prepared in accordance with respective grant provisions. Differences between grant funds receivable and grant funds billed are caused primarily by planning costs incurred on construction projects that have not been finalized, architectural and engineering costs not billed due to procedural compliance limitations and construction costs incurred, but unpaid. These temporary differences will reverse over the remaining award period. Loans payable are recognized as loan funds are received. Only the receipts from the federal loan programs during 2025 have been considered for major program determination. The outstanding balance of the federal loan programs at December 31, 2025 that relate to capital project expenditures from prior years were not considered for major program determination. Loans provided through the State of Wisconsin Department of Administration are not subject to ongoing reporting, rather only disbursements of federal funds are reported.
The District has not elected to use the 10% de minimis indirect cost rate. The District prepares the Schedule of the Final Capital Projects' Indirect Cost Rate annually following the method previous approved by the Environmental Protection Agency.
On December 21, 2021, the District entered into a Water Infrastructure Finance and Innovation Act (WIFIA) loan agreement with the United States Environmental Protection Agency for an amount up to $41,615,374. The WIFIA loan is expected to provide partial funding for the Milwaukee Waterway Flood Management and Restoration projects. Payment of the WIFIA loan will have a final maturity on April 1, 2051. The fixed interest rate is 1.90%, per annum. The District has drawn a total of $16,853,000 of the WIFIA loan as of December 31, 2025. The outstanding loan principal balance is $16,853,000 and $8,229,000 as of December 31, 2025 and 2024, respectively. Payment of the principal portion of the outstanding WIFIA loan balance shall commence on October 1, 2032. Until the final draw has taken place, there is no final repayment schedule. Changes in the WIFIA loan for the year ended December 31, 2025 were as follows: (In Thousands) Beginning Ending Due Within Balance Additions Reductions Balance One Year WIFIA loan $ 8,229 $ 8,624 $ - $ 16,853 $ -