The URL can be used to link to this page

Home My Public Portal AboutExhibit MSD 3C - Direct Testimony, Richard Unverferth, MSDMSD Exhibit No. MSD 3C 2018 Stormwater Rate Proceeding RICHARD L. UNVERFERTH Direct Testimony Metropolitan St. Louis Sewer District February 26, 2018 Table of Contents Page Witness Background and Experience ........................................................................................... 1 Stormwater Capital Improvement and Replacement Program ..................................................... 2 Stormwater Regulatory Services................................................................................................... 6 Stormwater Operations and Maintenance ..................................................................................... 6 Conclusion .................................................................................................................................... 7 Direct Testimony of Richard L. Unverferth, MSD February 26, 2018 2018 Stormwater Rate Proceeding 1 MSD Exhibit No. MSD 3C Witness Background & Experience 1 Q1. Please state your name, business address, telephone number, and email address. 2 A. Richard L. Unverferth, 2350 Market, St. Louis, Missouri 63103-2555, 314-768-6204, 3 rlunve@stlmsd.com 4 Q2. What is your occupation? 5 A. I am the Director of Engineering for the Metropolitan St. Louis Sewer District (District). 6 Q3. How long have you been associated with the District? 7 A. I have been associated with the District for 30 years. 8 Q4. What is your professional experience? 9 A. I have been with the District since January 1987. I held numerous staff–level engineering 10 positions early in my career, I was promoted to Engineering Manager in September 1993, 11 was transferred to Operations/Maintenance Department from 1995 through 2001 as an 12 Associate Director responsible for the Operations Technical Division, returned to the 13 Engineering Department in 2001 as a Program Manager in the Planning Division, and 14 promoted to Assistant Director of Engineering/Planning in 2006 overseeing the long 15 range planning of the District’s Capital Improvement and Replacement Program currently 16 being implemented. I was promoted to my present position of Director of Engineering on 17 May 18, 2013. Prior to joining the District I held staff-level engineering positions with 18 the City of St. Louis and the City of St. Charles. 19 Q5. What is your educational Background? 20 A. I hold a Bachelor of Science degree in Civil Engineering from the University of Missouri 21 – Rolla (Missouri University of Science and Technology). 22 Q6. Are You a Registered Professional Engineer? 23 A. Yes, I am a registered Professional Engineer in the state of Missouri. 24 Direct Testimony of Richard L. Unverferth, MSD February 26, 2018 2018 Stormwater Rate Proceeding 2 MSD Exhibit No. MSD 3C Stormwater Capital Improvement and Replacement Program (CIRP) 1 Q7. What is the purpose of MSD’s stormwater CIRP? 2 A. The stormwater CIRP (see Appendix D of the Rate Change Proposal) provides a listing, 3 schedule and cost of needed additions and improvements to the stormwater sewer and 4 drainage system to address issues of flooding and erosion. 5 Q8. Why is the CIRP needed? 6 A. The CIRP is needed to provide the project identification, planned fiscal year and 7 anticipated annual costs associated with system improvements. This will then provide 8 the basis for required annual revenue to plan, design, and construct these improvements. 9 Q9. What type of projects make up the Stormwater CIRP? 10 A. The stormwater CIRP is primarily made up of projects identified from historical records 11 and engineering studies to address customer complaints about flooding and erosion. 12 Identified projects are segmented into three main categories: Local Flooding (small scale 13 flooding caused by overland flow or smaller streams), Regional Flooding (large scale 14 flooding in locations of major creeks and rivers), and Erosion (loosening and washing 15 away of soil due to the actions of water, usually adjacent to creeks and rivers). More 16 specifically, types of stormwater flooding problems listed in order of severity include: 17 structure flooding, roadway flooding, and yard flooding. Types of erosion problems 18 listed in order of severity include: stream erosion threatening a structure, stream erosion 19 threatening a road, and yard erosion. The CIRP includes the proposed funding for 20 design, construction, easement acquisition, buyouts, general service agreements for 21 survey and geotechnical services necessary to accomplish this work. 22 Q10. What is the current funding source for stormwater capital projects? 23 A. There is currently no dedicated funding for stormwater capital improvements. With the 24 Direct Testimony of Richard L. Unverferth, MSD February 26, 2018 2018 Stormwater Rate Proceeding 3 MSD Exhibit No. MSD 3C implementation of the District O & M tax structure in 2016, the subdistrict specific taxes 1 referred to as OMCI taxes, which were limited to specific portions of the District to fund 2 stormwater capital projects in those specific areas, were reduced to zero and existing 3 customer rates were eliminated. 4 Q11. What is being done with the remaining OMCI fund Balances? 5 The remaining fund balances in the OMCI accounts are being spent on a finite list of 6 priority projects within the specific areas. OMCI fund balances are being utilized to 7 partially fund the 179 projects identified in the 2015 Rate Change proposal and 8 committed to as part of Proposition S. Current status of those projects can be found in 9 Exhibit MSD 14. A total of 158 projects are on schedule or completed, 9 projects were 10 cancelled due to technical or easement issues, 9 were cancelled due to the issue being 11 resolved by the owners or other entities, and 3 projects have been deferred due to 12 property acquisition, coordination, or other issues. 13 Q12. What is the size of the stormwater CIRP to address flooding and erosion reflected in 14 the Rate Proposal? 15 A. The District currently has identified 483 projects to address flooding and erosion issues. 16 The projects identified will require approximately $562 million dollars to complete. 17 MSD will continue to assess the existing project listing and anticipates additional projects 18 will be identified as new issues arise. 19 Q13. How were the costs for Stormwater CIRP project types determined that are 20 presented in the Rate Proposal? 21 A. For storm sewer work, cost estimates are based on historical District bid prices using 22 conceptual design information. For channel restoration and green infrastructure 23 improvements, estimates are based on the technical expertise of consulting engineers and 24 Direct Testimony of Richard L. Unverferth, MSD February 26, 2018 2018 Stormwater Rate Proceeding 4 MSD Exhibit No. MSD 3C past data on similar District projects. For property buyouts, estimates are based on St. 1 Louis City or St. Louis County assessed values plus costs for relocation and demolitions. 2 Q14. What is the proposed method of funding the CIRP reflected in the Rate Proposal? 3 A. The District is proposing an impervious area-based Stormwater Capital Rate by which 4 individual customers are charged based on the amount of impervious surface area 5 contained on their property. Additional information on the Stormwater Capital Rate can 6 be found in Section 4.3 of the Rate Proposal and the Direct Testimony of Thomas A. 7 Beckley (see Exhibit MSD3E) 8 Q15. Has the District proposed a credit or incentive program related to the proposed 9 Stormwater Capital Rate? 10 A. Yes. Similar to other stormwater programs across the country the District has developed 11 a proposed Storm Water Incentive Program that provides customer incentives for 12 reducing their effective impervious area through the use of constructed features or low 13 impact development. The details of the proposed Impervious Area Incentive program can 14 be found in Section 4.4 of the Rate Proposal. Basis and analysis for Impervious Area 15 Incentive Program has been provided in the Rate Change Proposal (Appendix J). A 16 discussion regarding incentive programs can also be found in the Direct Testimony of 17 Henrietta Locklear (see Exhibit MSD3F). 18 Q16. Has an appeal process been developed for customers to contest the amount of 19 impervious surface area used to determine their rate tier? 20 A. Yes. When the new Stormwater Capital Rate structure is put into place, MSD will be 21 prepared to handle customer inquiries to ensure customers are correctly billed. MSD will 22 designate Engineering Department staff to assess customer claims and make adjustments 23 to impervious areas to adjust the billable units used by Finance. GIS tools will enable 24 Direct Testimony of Richard L. Unverferth, MSD February 26, 2018 2018 Stormwater Rate Proceeding 5 MSD Exhibit No. MSD 3C this process to be handled efficiently. It is anticipated that the use of a Tiered system will 1 greatly minimize the number of issues that will result in a billing change. 2 Q17. Will the Levee Districts be impacted by the District’s proposed Stormwater Capital 3 Rate? 4 A. No, with the exception of the Missouri Bottom-Hazelwood levee district. The remaining 5 Levee Districts possess, pursuant to statutory authority, the responsibility to provide 6 stormwater services within their respective service areas. The Levee Districts will 7 execute their powers and duties by assuming all O & M activities and complete 8 management of the stormwater system, including capital improvements to address 9 flooding and erosion. Thus, MSD and the Levee Districts will continue agreements that 10 leave such issues to the Levee Districts. MSD will continue to provide only certain 11 regulatory services within the Levee Districts, which services are funded by the 12 regulatory tax currently assessed throughout the MSD service area, including the Levee 13 Districts. Accordingly, MSD will not assess a Stormwater Capital Rate within the Levee 14 Districts (with the exception of the Missouri Bottom-Hazelwood levee district). (See 15 Exhibit MSD 13 for Levee District Agreements) 16 Q18. What resources will the District need to successfully manage, construct, and 17 complete the expanded Stormwater CIRP presented in this rate proposal? 18 A. The Engineering Department will need to procure additional resources to plan, design, 19 manage, and inspect the construction improvements proposed in the proposed 20 Stormwater CIRP. The Department intends to perform all tasks with both internal 21 staffing and external consulting resources. The department estimates approximately forty 22 (40) internal FTEs to deliver the program, consisting of existing staff and new hires. 23 Q19. What costs for the Engineering Department have been added to the Rate Proposal 24 Direct Testimony of Richard L. Unverferth, MSD February 26, 2018 2018 Stormwater Rate Proceeding 6 MSD Exhibit No. MSD 3C associated with this increase in stormwater CIRP? 1 A. The costs for Engineering can be found on “Capital Labor” Expense Line of Table 4-6 on 2 Page 4-7 of the rate proposal. The operating costs are comprised of engineering staff to 3 manage the proposed stormwater CIRP and costs to generate and maintain the District’s 4 impervious area data utilized to generate the billing data. 5 Q20. Are there any other contributions or grants the District could possibly obtain? 6 A. In the past the District has been able to take advantage of the Missouri State Stormwater 7 Grant and Loan Program. However, that program has not been funded by the State of 8 Missouri in many years. More recently, there have been minimal grant opportunities that 9 could support the District’s stormwater activities. The District performs state and federal 10 lobbying activities, one of the main goals of which is to seek financial assistance for the 11 District. 12 Stormwater Regulatory Services 13 Q21. Will the Rate Proposal have any impact on the District’s current or future 14 obligations for Stormwater Regulatory Services? 15 A. No. There is currently a District-Wide 2 cent ad valorem tax per $100 Assessed Value 16 levied by the District that provides adequate funding to meet our current regulatory 17 obligations. This tax will remain in place to fund these services. 18 Stormwater Operations and & Maintenance Services 19 Q22. Will the Rate Proposal have any impact on the District’s current or future 20 obligations for Stormwater Operations and Maintenance? 21 A. No. There is currently a District-Wide 10 cent ad valorem tax per $100 Assessed Value 22 levied by the District that provides adequate funding to meet our current Operations and 23 Maintenance activities. This tax will remain in place to fund these services. 24 Direct Testimony of Richard L. Unverferth, MSD February 26, 2018 2018 Stormwater Rate Proceeding 7 MSD Exhibit No. MSD 3C Q23. Will the Stormwater Rate Proposal and Stormwater CIRP have any impact on the 1 delivery of the District’s Wastewater CIRP or compliance with the District’s 2 Consent Decree? 3 A. No. The District will continue the delivery of the Wastewater CIRP as planned within 4 the current wastewater rate structure. The District is currently in compliance with all 5 portions of the Consent Decree and continues to deliver the Wastewater CIRP on-time 6 and within budget. 7 Conclusion 8 Q24. Have Stormwater capital improvements been delayed due to lack of funding? 9 A. Yes, especially in the areas of the District where previous funding was not available. 10 Q25. Does the proposed stormwater rate change enhance the District’s ability to provide 11 adequate sewer and drainage systems and facilities, or related services? 12 A. Yes. The proposed Stormwater Capital Rate will allow the District to adequately address 13 the numerous flooding and erosion issues currently being experienced by our ratepayers. 14 Q26. Does this conclude your prepared direct testimony in this matter? 15 A. Yes, it does. 16