HomeMy Public PortalAboutExhibit MSD 37A - MSD's Response to Third Discovery Request of the Rate CommissionExhibit MSD 37A
BEFORE THE RATE COMMISSION OF THE
METROPOLITAN ST. LOUIS SEWER DISTRICT
MSD'S RESPONSE TO THIRD DISCOVERY REQUEST
OF THE RATE COMMISSION
The Metropolitan St. Louis Sewer District Response
ISSUE: STORMWATER RATE CHANGE PROCEEDING
WITNESS: THE METROPOLITAN ST. LOUIS SEWER DISTRICT
SPONSORING PARTY: RATE COMMISSION
DATE PREPARED: APRIL 20, 2018
Lashly & Baer, P.C.
714 Locust Street
St. Louis, Missouri 63101
Exhibit MSD 37A
BEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a )
Stormwater Rate Change Proposal by )
The Rate Commission of The Metropolitan )
St. Louis Sewer District )
APRIL 20, 2018 THIRD DISCOVERY REQUEST
OF THE RATE COMMSSION
The Metropolitan St. Louis Sewer District
Pursuant to § 7.280 and § 7.290 of the Charter Plan of The Metropolitan St. Louis Sewer District
(the "Charter Plan"), Operational Rule 3(5) and Procedural Schedule § 17 and § 18 of the Rate
Commission of The Metropolitan St. Louis Sewer District ("Rate Commission"), The
Metropolitan St. Louis Sewer District ("District") hereby responds to the April 10, 2018 Third
Discovery Request of The Rate Commission for additional information and answers regarding
the Rate Change Notice dated February 26, 2018 (the "Rate Change Notice").
Exhibit MSD 37A
BEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a )
Stormwater Rate Change Proposal by )
The Rate Commission of The Metropolitan )
St. Louis Sewer District )
THIRD DISCOVERY REQUEST
OF THE RATE COMMISSION
Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis Sewer
District (the "Charter Plan"), Operational Rule 3(5) and Procedural Schedule §§ 1, 17 and 18 of
the Rate Commission of the Metropolitan St. Louis Sewer District ("Rate Commission"), the
Rate Commission requests additional information and answers from the Metropolitan St. Louis
Sewer District ("District") regarding the Rate Change Proposal dated February 26, 2018 (the
"Rate Change Proposal").
The District is requested to amend or supplement the responses to this Discovery
Request, if the District obtains information upon the basis of which (a) the District knows that a
response was incorrect when made, or (b) the District knows that the response, though correct
when made, is no longer correct.
The following Discovery Requests are deemed continuing so as to require the District to
serve timely supplemental answers if the District obtains further information pertinent thereto
between the time the answers are served and the time of the Prehearing Conference.
3
Exhibit MSD 37A
THIRD DISCOVERY REQUEST
1. Please provide the number of parcels within the District which are not currently
subject to District wastewater charges (e.g., because the land is vacant), but are included in the
property tax rolls of St. Louis County of the City of St. Louis, and therefore are subject to the
$0.10 O&M stormwater tax authorized by Proposition S (2016).
(a) Of these parcels, please state what percentage have impervious area and therefore
would also pay the proposed Stormwater Capital Rate.
(b) Please provide the anticipated potential new revenue from this group of
ratepayers.
(c) Please state what percentage that amount of revenue represents of the total
anticipated revenue from the proposed Stormwater Capital Rate.
RESPONSE: The number of parcels in this category is approximately 50,000. One of
the steps to prepare for impervious area billing will involve a cleanup of the billing database to
ensure parcels are properly billed. For many parcels, this may involve associating parcels with
adjacent parcels that do receive a wastewater bill. In our implementation timeline, this process
is significant and will take months to accomplish.
(a) Approximately 44% of these parcels have greater than 200 sq. ft of impervious
area on them and will be billed the Storm Water Capital Rate.
(b) The anticipated potential revenue from these parcels is approximately $3.1
million per year.
(c) Based on total anticipated revenues of $30,111,100, the percentage of revenue
from this group is approximately 10%.
2. Exhibit MSD 30N provides an assessed valuation trend analysis going back to
2010. Please provide such analysis for the years 2000-2009.
RESPONSE: The assessed valuation for 2000 was not available. Information for the
years 2001 through 2009 can be found in Exhibit MSD 37B.
3. Exhibit MSD 30C lists the potential annual charges from the proposed
Stormwater Capital Rate for live ratepayers. Please provide similar information for additional
ratepayers, from various classes of ratepayers, such as commercial developments, including "big
box" stores, large school campuses & universities, larger school districts (e.g., Rockwood,
Parkway, and Lindbergh), large non-profit entities, large churches in various areas of the District
service area, casinos, and few large industrial or manufacturing facilities.
4
Exhibit MSD 37A
RESPONSE: A spreadsheet (Exhibit MSD 37C) containing a detailed list of non-
residential properties and the associated impervious surface area as of the most recent update in
2012 has been provided along with the estimated annual charges. All information associated
with parcels in levee districts where the District does not anticipate charging the Stormwater
Capital Rate has been removed. The lines that were used to produce Exhibit MSD 30C are
highlighted in yellow except those associated with Cortex. For Cortex, it was necessary for
MSD's GIS team to provide a total of that delineated area rather than identify specific parcels in
the list. The District recommends that this spreadsheet be queried in order to satisfy this
request.
4. Please provide pie charts demonstrating the anticipated percentage of annual
revenue from various classes and sub -classes of ratepayers from the proposed Stormwater
Capital Rate. Specifically, please provide pie charts demonstrating the amount of anticipated
annual revenue derived from the following classes/subclasses:
Chart 1: Residential, Commercial, Large Industrial/Manufacturing, Non -Profit;
Chart 2: Of the residential ratepayers, the amount per each of the 4 tiers;
Chart 3: Of the commercial ratepayers, provide a breakdown by 4 sizes of parcels:
(1) smaller (e.g., a typical of a single business); (2) medium (typical of a
small strip mall or larger standalone business like a big box store, such as
a Menards); (3) larger parcels (such as a major big box store development,
car dealership, or similar larger parcels or parcels developed together); and
(4) mega -commercial (such as a shopping mall, larger car dealership,
casino, etc.); and
Chart 4: Of the Non -Profits, provide a breakdown similar to the commercial
breakdown, showing the percentage of revenue to be derived from: (1)
small single lots; (2) medium size churches or schools; (3) large churches
or school campuses; and (4) larger universities, major universities &
school districts, etc.
RESPONSE: The District is proposing to bill two classes of customers: residential and
commercial. The table below provides the residential ERU's by tier and the projected revenue in
FY 22 when the full rate of $2.25 is expected to be charged. This information was extracted from
the Rate Model (Exhibit MSD 18) that was provided to the Commission and its Rate Consultant.
The spreadsheet provided in response to Question #3 (Exhibit MSD 37C) provides the estimated
revenue that the District expects to receive from non-residential customers. In order to ensure
that the information requested for Charts 1, 3, and 4 are appropriately classified in the manner
requested by the Rate Commission, the District recommends that this spreadsheet be queried in
order to satisfy this request.
5
Exhibit MSD 37A
Tier
Projected Residential Revenue — FY 22
ERU's Rate
FY 22 Revenue
Tier
Tier 1: 200- 2,000Sq Ft
Tier 2: 2,001- 3,600 Sq Ft
Tier 3: 3,601 - 6,000 Sq. Ft.
Tier 4: >6,0 Sq. Ft,
ERU's
120,523
218,750
84469
27,122
Rate FY 22 Revenue
L.42 $ 2,p0/5�0, 96
2.25 $ 5,906,250
3.74 $ 3,606,621
6.84 $ 2,226,174
$ 13,789,141
5. Please explain in detail how the District evaluated and chose the option of a one-
time credit/incentive) as opposed to an ongoing credit/incentive program. Given the scope of the
problems associated with flooding and erosion caused or worsened by stormwater runoff, please
explain why an ongoing credit/incentive program was not justified.
RESPONSE: The average residential customer will be billed one ERU, or $27.00 per
year ($2.25 for 12 months). A 50% credit will amount to $13.50 per year. An ongoing credit
program would involve costs to track and manage the credit program, plus efforts to continue to
ensure the effectiveness of the creditable practice. The District chose not to create a
burdensome program unsupported by revenue or otherwise offset by the benefits received. The
most direct approach was selected, to simply provide a one-time incentive.
6. Has the District considered a combined credit/incentive or cost -sharing program
with the intent of reducing impervious surface in the District's service area? If such a program
was considered, please explain in detail why it was rejected.
RESPONSE: The District has proposed a credit/incentive program in the Rate Proposal
to reduce impervious surfaces or to construct volume reducing stormwater BMPs to mitigate the
impacts from those surfaces. If customers construct pervious surfaces, they will not be subject to
the stormwater rate. This is an incentive to not add impervious surfaces. If the customer
removes impervious surfaces, their bill will be reduced accordingly by the area removed This is
an incentive to reduce impervious area.
7. Has the District considered establishing an ongoing program of education and
information funded through the proposed Stormwater Capital Rate to, at a minimum, encourage
citizens to understand the need to reduce impervious surface and the impact of impervious
surface on the public health and the area's water quality? If such a program was considered,
please explain in detail why it was rejected.
6
Exhibit MSD 37A
RESPONSE: The District is not proposing to establish this kind of education program
through the proposed Stormwater Capital Rate. The District already provides this service
through its stormwater regulatory program, which is funded by existing stormwater revenue (i. e.,
$0.02 ad valorem property tax). The St. Louis County Phase II Stormwater Management Plan,
Fall 2017, describes the practices that MSD has committed to completing through 2021. See
MSD website:
hops: //www. stlmsd com/sites/default/files/education/ SWMP. 2017. REVISED%20FINAL.pdf
Some examples of educational programming includes providing brochures to citizens and
volunteer organizations; sponsoring educational classes through the Missouri Botanical
Garden; sponsoring the St. Louis Audubon Society's Bring Conservation Home Program;
hosting information booths at community events such as St. Louis Earth Day and St. Louis Home
and Garden Show; and supporting classroom education using the Enviroscape® watershed
model.
8. Please provide any legal opinion prepared by the District, or on behalf of the
District, analyzing whether the proposed Stormwater Capital Rate is a rate/charge under
§ 3.020(16) of the District's Charter Plan, as opposed to a tax or special assessment.
RESPONSE: See Exhibit MSD 37D
9. In testimony at the April 4, 2018 technical conference, Brian Hoelscher testified
that, if it is determined that the District lacks the authority to assess the proposed Stormwater
Capital Rate against non-profit entities, or the District elects not to do so, that the District would
reduce or eliminate the services that would be provided to non-profit entities. Please give
specific examples of what services a non-profit entity would not be eligible to receive from the
District if non -profits do not pay the proposed Stormwater Capital Rate.
RESPONSE: The Executive Director testified that if the Rate Commission process
resulted in the non-profit entities not paying the proposed Stormwater Capital Rate, then these
entities would not be provided the flooding and erosion services being paid for by this
Stormwater Capital Rate. If however, after the Rate Commission process it was determined
(through legal action, applicable legislative actions, etc.) that the non-profit entities should not
be contributing to the cost of this program but still benefit from the flooding and erosion services
being paid for by this Stormwater Capital Rate, then the District would still provide those
services.
10. In testimony at the April 4, 2018 technical conference, Brian Hoelscher testified
that the District intends to charge the Stormwater Capital Rate to residents/property owners who
do not currently receive a bill for wastewater services. Please give one or more example(s) of the
types of parcel(s) which would not be charged for wastewater services, but would be charged the
Stormwater Capital Rate.
Exhibit MSD 37A
RESPONSE: The types of residents/property owners who do not currently receive a
wastewater bill but may be charged the Stormwater Capital Rate can include but are not limited
to: homes or parcels served by septic tanks, park properties without wastewater facilities, farm
properties with pavement or storage buildings, and parking lot only parcels.
11. Does the District presently assess the property tax authorized by Proposition S
(2016) against persons described in § 204.700, RSMo. (residential real property owners within
the District's service area whose property does not receive sanitary sewer services from the
District and whose property does not cause stormwater to flow into the District's sewer system)?
Please explain why or why not.
RESPONSE: Yes, under Article X, Section 6.1 of the Missouri Constitution, certain
properties are expressly exempted from taxation, while other certain properties may be exempted
by general law (i.e., by a specific statute). Properties expressly exempted by the Constitution are
primarily those owned by governmental entities. Properties that may be exempted by statute
include those owned by religious, school, and other charitable and non-profit entities.
Importantly, the section also contains this declaration: "All laws exempting from taxation
property other than the property enumerated in this article, shall be void. " Mo. Const. art. X, §
6.1. Thus, any law purporting to exempt from taxation any property that is not listed in Article X,
Section 6.1 is void. The § 204.700, RSMo. properties are neither expressly exempted nor among
the potentially exempted properties enumerated in this section. The District's stormwater ad
valorem property taxes are "taxes" within the meaning of § 204.700, RSMo. and Article X,
Section 6.1. Therefore, at least to the extent § 204.700, RSMo. purports to exempt from taxation
the § 204.700, RSMo. properties, § 204.700, RSMo. is void Accordingly, the District has
properly assessed its stormwater ad valorem property taxes on the § 204.700, RSMo. properties.
Properties located in levee districts that have signed maintenance agreements with the District
are not subject to the Proposition S tax.
12. If the District later determines that the monthly charge per ERU ($2.25 per
month) should be increased, is it the District's position that voter approval would be legally
required? Please explain why or why not. Would the District seek voter approval even if it
determined that it was not legally obligated to do so? If the District has prepared or received a
legal opinion on this topic, please provide a copy of same.
RESPONSE: It is the District's position that any increase in a voter approved rate
would be taken back to the voters for their consideration. If the District determined at some point
that it was not legally obligated to seek voter approval, it may consider making such changes.
The District does not have a legal opinion on this topic. Please refer to Exhibit MSD 22, pg. 36.
13. Does MSD anticipate taking over maintenance of private detention/retention
ponds/facilities, such as those currently owned and/or maintained by homeowners associations or
subdivision trustees?
8
Exhibit MSD 37A
RESPONSE: No, the District will not provide maintenance of private detention/
retention/ponds/facilities as part of the Stormwater Capital Rate or any existing stormwater
funding mechanism. As stated in the question, these facilities are private and were constructed
by the property owners as a regulatory requirement with perpetual agreements to be maintained
by that entity. The District does not expect the ratepayers to fund this obligation because it does
not impose a fair and reasonable burden on all classes of ratepayers.
14. Does the District have a specific list of types of best management practices
("BMPs") that would be eligible for the residential credit program? If such list exists, could
residential ratepayers apply for a credit for items or features not on such list which they believe
meet the minimum capture criteria (500 sq. ft. impervious area captured)? See MSD Ex. 1, p. 4-
7. Would customers with rain gardens installed as part of the Combined Sewer Overflow
("CSO") Rainscaping program receive the one-time incentive?
RESPONSE: Yes, the District's BMP Toolbox contains information that identifies
volume reducing best management practices at hops: //www. stlmsd. com/what-we-do/stormwater-
management/bmp-toolbox/technology-matrix. This list is generally common nationwide for
stormwater BMPs thanks to the efforts of EPA and the stormwater industry. The District will
consider additional practices that can be demonstrated to achieve similar performance.
Customers participating in the CSO Rainscaping program will not receive a one-time incentive
since the District incurs the cost of the Rainscaping program as part of its Consent Decree
commitment to reduce Combined Sewer Overflows on the Mississippi.
15. If a residential property owner receives the one-time credit, but sells the property
within 10 years while the credit is active, is there a requirement for such property owner to
reimburse the District the remaining amount? Would the new property owner be required to
continue to maintain the BMP? Would the new property owner be required to reapply for the
credit? Will such BMPs be inspected by the District? If yes, please state the frequency of such
inspections.
RESPONSE: A residential property owner would not be required to reimburse the
District for the amount of the one-time credit that is received if the properly is sold. The District
does not propose an ongoing program to manage the BMPs. As stated in the answer to question
5, the cost of an ongoing credit program will exceed the revenues or benefits from a residential
customer. A new property owner would not be eligible for the credit since the value of the BMP
was paid to the previous property owner. The District assumes that most BMPs will remain in
place and functional until such time that the BMP fails or is removed by the property owner.
16. Does the District believe that the upfront award of a credit would drive more
participation than an ongoing 50% credit on the ratepayer's monthly bill? Explain why or why
not.
9
Exhibit MSD 37A
RESPONSE: Yes, the District believes that a one-time payment of $135.00 will drive
more participation than reducing the customer's bill by $1.12 per month. The District believes
that most customers will not want to wait 120 months in order to receive the full amount of their
incentive.
17. Will the residential credit (50% of the average residential bill over 10 years) be
calculated as 0.5 multiplied by the annual cost of 1 ERU over 10 years for all residential
customers? Or will credits for residential ratepayers in each of the four tiers vary based on tiers?
RESPONSE: The residential credit is proposed as a one-time incentive payment, equal
to the value of 50% of one ERU over 10 years ($2.25 times 0.5 times 12 months times 10 years
equals $135.00). In the Rate Proposal, one incentive is proposed for all residential customers,
regardless of billing Tier.
18. Will private roads maintained by a homeowners association or subdivision
trustees be included in calculations of impervious area throughout the District's service area? If
the answer is yes, who will the District bill? Please explain the District's rationale for including
or not including such roads in calculations of impervious area?
RESPONSE: The impervious area in those sections of private roads that provide
exclusive access to a single property is billed to that single property. The rationale is that this
impervious area is for the sole benefit of that property. If there are stretches of private road that
are used by multiple property owners to access their properties then those stretches will not be
billed for their impervious areas. Impervious areas on driveways or stretches of private roads to
individual properties coming off the initial feeder private road will be billed to the respective
properties.
19. How frequently will the District update the stormwater billing database? Will
updates be made monthly to address property owner changes, changes to impervious area, etc.?
RESPONSE: The District will update the stormwater billing database ownership
information on an ongoing basis from a customer service and billing perspective. As new
properties are developed, impervious data will be provided from the District's Development
Review program to Finance to enable billing. At a broader scale, the District will use updated
parcel data from the City and County as it is received, typically hi -annually. Also, as stated in
the Stormwater Rate Proposal, impervious area delineation will be updated every two years.
20. Please provide a breakdown of the 40 toll time employees that will be employed
for stormwater capital projects funded by the Stormwater Capital Rate. How many of these will
be new employees and how many will be current employees who will be moved from existing
programs to this program?
10
Exhibit MSD 37A
RESPONSE: A breakdown of current employees delivering the stormwater capital
projects is included in the table below, The District may need new hires for some of the
additional stormwater positions. Of the fifteen (15) additional positions, some may be filled with
employees reallocated from wastewater positions to stormwater positions, particularly over time
as the number of wastewater capital projects decrease.
Full Time Equivalents
Current
Proposed
Planning Division
5
6
Design Division
8
15
Construction Management
16
23
Total:
29
44
21. In testimony at the April 4, 2018 technical conference, Marion Gee provided a
summary of budgeted and actual bad debt allowance for Fiscal Year 2016 and Fiscal Year 2017.
Can the District explain why Fiscal Year 2017 is nearly 1/2 lower than Fiscal Year 2016?
RESPONSE: The District's provision for bad debt expenses was reevaluated in
September 2016 (FY 17) and the bad debt percentage applied to billed revenues was reduced to
better reflect actual results that were improving as the result of prior changes to the District's
collection processes (i.e., use of second placement collection agencies and additional collection
law firms). In addition, upgrades to the District's billing system in FY 16 allowed it to better
track payments related to billings older than five years and to make adjustments to the bad debt
percentage applied to these billings. Delinquent billings that were in excess of five years were
previously written off at 100%.
22. Table 4-6 (See MSD Ex. 1, p. 4-7) indicates that the costs of this program are
being capitalized. Does the District envision that costs associated with billing, collections,
inspections, etc., would be capitalised, or are such costs associated with the Stormwater Capital
Rate anticipated to be recovered through the District's O&M fund?
RESPONSE: An appropriate portion of all District overhead cost (i.e., billings,
collections, legal, finance, and human resource expenses) will be capitalized and charged to the
Stormwater Capital Rate Fund.
23. In testimony at the April 4, 2018 technical conference, Tom Beckley indicated
that he could provide a comparison of Proposition S revenues compared to projected revenue at
the time of the last rate proposal. Please provide such an analysis.
11
Exhibit MSD 37A
RESPONSE: As shown in Table 5-3 on Page 5-9 of Exhibit MSD 9, the Stormwater
Operations (Proposed) revenue was projected to be $24, 607, 840 for FY 17. This was the
projected revenue from the Proposition S property tax levy. As shown in Table 4-4 on Page 4-5
of Exhibit MSD 1, the actual Stormwater Service Tax Revenues in FY 17 were $27, 214, 778. The
variance between the projected and actual revenue can be attributed to growth in property
assessment valuations. In FY 17, property assessment valuations increased by 7.64%
24. Please describe how condominiums will be treated for purposes of billing the
Stormwater Capital Rate. Will they be treated as commercial property? Will impervious area in
common areas and driveways be included within calculations of impervious area? Who would
the District bill for such impervious area?
RESPONSE: Condominiums will be treated similar to commercial property. The
impervious surface area of the complex would be measured and ER U's would be calculated and
billed to the condominium association.
25. Please provide the credit program manuals referenced by Henrietta Locklear in
her testimony at the April 4, 2018 technical conference (Baltimore, Northeast Ohio Regional
Sewer District). Please provide any manuals relating to credits for homeowners associations
and/or subdivision trustees.
RESPONSE: The information is provided as Exhibit MSD 37E through 37E-8.
26. Please provide any study within the District's custody supporting its methodology
for prioritizing projects in the CIRP-1 and CIRP-2 project lists. See MSD Ex. 1, p. 6-11. Please
explain how the district calculates the cost and benefit of projects to determine a project's
priority. Please provide examples of the District's scoring process. How has this cost/benefit
analysis been modified based on homeowner input?
RESPONSE: The District is providing Exhibit MSD 37F — SSMIP 1995 Policy and
Standards Report, Exhibit MSD 37G — Stormwater Facility Planning Final Report 2010, and
Exhibit MSD 37H — Prioritization Scoring Examples. Exhibit MSD 37F provides information
relating to the initial development of the District's cost -benefit prioritization analysis for
stormwater projects. The development of this report included a number of stakeholder partners
providing the basis for stormwater improvements and regulation within the District. Exhibit
MSD 37G provides updated details and procedures for cost -benefit prioritization and project
costing. As part of the 2010 update, the District reviewed, prioritized and conceptually costed
all existing issues known at that time. This update provides for the majority of issues in the
CIRP-1 and CIRP-2 project lists.
12
Exhibit MSD 37A
The process for prioritization was provided in Question #13 of the District's response to
the First Discovery Request. See Exhibit MSD 30B. Exhibit MSD 37H provides example
prioritization scoring for five CIRP projects.
In general, homeowner and customer input weighs heavily into the capital program.
First, projects are identified and project scopes are determined based upon customer complaints
and explanation of impacts, which are considered in the District's analysis of solutions and
project identification. If projects have not yet been completed, additional customer calls and
service requests are evaluated and considered. As priority projects approach budgeting, the
District Engineers revisit the site to perform a preliminary engineering analysis of the solution,
considering the alternatives and scope of work This often involves contact and discussions with
property owners for information. Lastly, as projects are budgeted and in the early stages of
project engineering design, the design team also meets with impacted customers to get their
input. In most cases the impacted customers must grant the District property rights to perform
the work
27. Please explain in detail how the conceptual cost estimate of $562 million will be
adjusted over time as projects are completed, certain projects are eliminated, or certain projects
become more pressing.
RESPONSE: The estimated conceptual cost to address identified stormwater capital
needs will be adjusted over time based on a variety of factors, including: completed projects,
eliminated/cancelled projects, newly identified projects, projects increasing in severity
(becoming more pressing), and changing construction costs/inflation.
Completed Projects. As projects are completed, they will be removed from the remaining
list of projects of identified stormwater capital needs. The $562 Million conceptual estimate will
be reduced as projects are completed. The District will be able to provide an accounting of
completed projects and their costs.
Eliminated/cancelled projects. Projects may be cancelled at various points prior to
construction. At the time when a preliminary study is performed on a project, it may be
determined that it is no longer needed or warranted, and it may be cancelled. During design, a
project may be cancelled if the more detailed engineering analysis performed at that time
indicates that the project is not needed, or if impacted property owners indicate they are not in
favor of the project. A project could also be cancelled if the District is informed that a third
party has addressed an identified stormwater capital need, such as a private redevelopment
changing drainage characteristics, or a municipality constructing a public improvement project
which impacts a stormwater issue. In every case, if a project is eliminated/cancelled it will be
removed from the remaining list of projects of identified stormwater capital needs. The $562
Million conceptual estimate will be reduced as projects are eliminated
13
Exhibit MSD 37A
Newly identified projects. Projects are newly identified as customer stormwater
complaints are filed with the District, and field engineers investigate if a capital project is
warranted to address the issues raised. Projects are also identified as municipalities perform
stormwater planning studies. For instance, a number of municipalities have performed or are in
the process of performing comprehensive stormwater studies within their municipalities to
identj stormwater capital needs within their respective community. These needs assessments
are then provided to the District, and are evaluated to determine which projects meet District
criteria for capital projects, leading to projects being added to the District's list of identified
stormwater capital needs. The $562 Million conceptual estimate will be increased as projects
are added.
Projects increasing in severity. Field conditions related to projects, in particular
erosion/bank stabilization issues, may become more deteriorated over time. If a worsening field
condition is brought to the attention of the District, we may evaluate the project to determine if
an increased scope of work is now warranted to address the issue. If so, the conceptual scope
and related cost will be updated The $562 Million conceptual estimate may be increased as
projects increase in severity.
Changing construction costs/inflation. Over time, it is anticipated that the cost of
construction will increase with inflation. When the District notices a persistent trend in
increasing as -hid construction costs for stormwater projects over and above the estimates
generated from the District's conceptual cost curves and unit prices used for estimating, then
conceptual cost curves and unit prices will be adjusted to reflect current market conditions and
prices. This process would also occur (in reverse) in the event of a deflationary period in the
economy. The $562 Million conceptual estimate would increase as projects increase in cost due
to inflation.
See answer to Question #26 and Exhibit MSD 37G — Stormwater Facility Planning Final
Report 2010 for stormwater costing methodology.
28. Please clarify whether (a) native, undeveloped property and/or (b) vacant property
which was previously developed (e.g., a lot where a building has been razed and the soil
compacted) would be subject to the proposed Stormwater Capital Rate. Please explain the
District's rationale for including/excluding such properties.
RESPONSE: Whether property is native or previously developed is irrelevant for the
proposed Stormwater Capital Rate. The billing is based upon the impervious surfaces within a
property identified and measured from aerial photography. See Exhibit MSD 1, page 6-2. The
definition of impervious area is contained in the Rate Proposal Glossary; see Exhibit MSD 1,
page 7-2.
14
Exhibit MSD 37A
a) Native, undeveloped property would technically be subject to the Stormwater Capital
Rate; however, the billing amount would be zero as undeveloped property presumably
does not contain billable impervious surface area.
b) The billing of vacant property would depend on whether impervious surfaces remain on
the property.
29. Please explain how requirement that a BMP capture runoff from a minimum of
500 square feet of impervious area to qualify for a residential credit/incentive was determined?
RESPONSE: A minimum area threshold was selected to minimize the District's
administrative costs related to benefits that are not significant. Five hundred square feet is
approximately 20% of an ERU. Under the proposed program, any benefit would equate to less
than 45 cents per month (20% of an ERU), and any administration of such would cost more than
the benefit. Further, as this incentive is intended to influence customer behavior, the District is
hopeful that participating customers would install BMPs to mitigate runoff from at least a fifth of
a typical residence.
Respectfully submitted,
Susan M. Myers, General Counsel
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
2350 Market Street
St. Louis, Missouri 63103
smyers@stlmsd.com
Tel: (314) 768-6366
Fax: (314) 768-6279
15
Exhibit MSD 37A
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing was sent by electronic transmission
to Lisa O. Stump, Lashly & Baer, P.C., Brian J. Malone, Lashly & Baer, P.C. and Brandon W.
Neuschafer, Brian Cave, LLP, on this 20th day of April, 2018.
Lisa O. Stump, Esq.
Brian J. Malone, Esq.
Lashly & Baer, P.C.
714 Locust Street
St. Louis, MO 63101
lostump@lashlybaer.com
Brandon W. Neuschafer
Bryan Cave, LLP
211 N. Broadway, Suite 3600
St. Louis, MO 63102
bwneuschafer@bclplaw.com
ISMCk IA Iti
Susan M. Myers, General Counsel
THE METROPOLITAN ST. LOUIS SEWER DISTRICT
2350 Market Street
St. Louis, Missouri 63103
smyers@stlmsd.com
Tel: (314) 768-6366
Fax: (314) 768-6279
16