HomeMy Public PortalAboutExhibit MSD 103 - District Response to Letter from Kevin MorrisExhibit MSD 103
measured by each customer's water meter as similarly used by the water provider and as reported
to MSD by the water provider. For unmetered customers, contributed wastewater volume is
likewise based on water usage, but water usage is determined by applying certain average water
usage volume figures to each customer's rooms and plumbing fixtures as similarly used by the
water provider and as reported to MSD by the water provider. An exception to this rule is that
currently unmetered residents in the City of St. Louis can install a water meter and be charged as
a metered customer similar to the residents in St. Louis County. MSD would then use the
metered winter water usage as reported by the City of St. Louis water Division in developing the
monthly bill.
Specifically, the District applies water usage volumes of 14.5 gallons per day (gpd) for
each room, 54.2 gpd for each water closet (toilet), and 45.2 gpd for each bath and separate
shower. To calculate the volume based charge on the unmetered customer's monthly wastewater
bill, the District takes the customer's rooms and fixtures, multiplies those attributes by the
appropriate water usage volume and calculates an annual usage volume, and then divides the
annual usage volume by 12 (after converting to Ccf) to obtain the monthly water usage. The
monthly usage is then multiplied by the same volume rate that metered customers pay to obtain
the charge for each room, water closet, bath, and shower. The monthly fixed based charge that
appears on MSD's bills is the same for both unmetered and metered customers.
The water usage volume figures used by the District can be traced back to a 1958 study
by Black & Veatch (B&V) for the City of St. Louis Water Division. That study was later
validated and used in B&V's 1993 rate study that resulted in the District's first variable rate
wastewater user charge (MSD Ord. 9029). That charge was the subject of the Missouri Growth
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litigation, in which the Missouri Court of Appeals held the District's wastewater user charge was
a "fee," not a "tax" under a Hancock Amendment analysis. Missouri Growth Ass 'n v. MSD,
941 S.W.2d 615 (Mo. App. E.D. 1997). In its opinion, the court aptly described the District's
methodology: For customers who have water meters, the consumed volume is determined by
their metered water usage. ...For non -metered customers, the consumed volume charge is
determined by using water consumption figures based on the number of rooms and fixtures on
their property... . Therefore, the charge bears a direct relationship to the services provided.
Missouri Growth, 941 S.W.2d at 623-24.
In 2014 the District engaged Vertex Business Services to determine whether the 1958
water usage data (validated in 1993) for rooms and plumbing fixtures should be updated. A
study was conducted which analyzed available metered water usage data for similar properties
taking into account demographic attributes of the customer account such as age, number of
people in the household, region, etc. This was done by developing a statistically representative
sampling of similar, but metered, properties with various numbers of rooms and fixtures, and
then comparing those actual metered water usage volumes with the District's room/fixture
volume figures. The results of the analysis revealed that the water usage of unmetered customers
was approximately 10% higher than metered customer usage and nearly 10% lower than the
estimated unmetered usage being utilized at the time of the study. As a result of the analysis,
the applied water usage volumes that were used to determine the amount to bill unmetered
customers were reduced by approximately 10%. In addition, the study determined that there was
not another alternative methodology that did a better job of approximating water usage than the
current room/fixture method.
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In conclusion, as described above the methodology used to bill unmetered MSD
customers has been in place since the 1950's, it was validated in the 1990's, approved by the MO
Court of Appeals in 1997 and the volume figures were updated in 2014. This methodology has
been found to impose a fair and reasonable burden on all classes of ratepayers five times since
2000. It is fair to say that this methodology accomplishes just what you are asking for, a fair and
reasonable burden on all classes of ratepayers. If you have additional questions feel free to
contact me at 314-768-6299.
Sincerely,
Marion Gee
Director of Finance
cc: MSD Rate Commission
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