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HomeMy Public PortalAboutExhibit MSD 59 - Transcript of the May 15, 2018 Public Hearing PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 1 1 IN THE CITY OF BRIDGETON 2 STATE OF MISSOURI 3 4 5 6 7 8 9 METROPOLITAN ST. LOUIS SEWER DISTRICT RATE COMMISSION 10 11 12 PUBLIC HEARING 13 14 15 16 17 MAY 15, 2018 6:00 p.m. 18 19 20 21 22 Bridgeton Recreation Center 23 4201 Fee Fee Road 24 Bridgeton, MO 63044 25 PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 2 1 A P P E A R A N C E S 2 3 Metropolitan St. Louis Sewer District Rate Commission: 4 Russell Hawes - Chairman 5 Mickey Croyle Tom Ratzki 6 Chan Mahanta Mark Schoedel 7 Brad Goss 8 9 MSD Executive Director and CEO: 10 Brian Hoelscher, P.E. 11 12 13 14 15 16 17 18 19 20 21 22 Court Reporter: Georgia Beth Long, CCR/CSR 23 Missouri CCR #622 Illinois CSR #084-004742 24 Alaris Litigation Services 711 North Eleventh Street 25 St. Louis, Missouri 63101 PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 3 1 MR. HAWES: We're going to call this public 2 hearing to order. Good evening. I'm Russ Hawes, member 3 of the Metropolitan St. Louis Sewer District Rate 4 Commission. I will be presiding over the public hearing 5 this evening. 6 With me today are the following MSD Rate 7 Commission Members: Mickey Croyle, Brad Goss, Chan 8 Mahanta, Tom Ratzki -- and Mark Schoedel. Sorry. I 9 didn't have you down. 10 MR. SCHOEDEL: That's all right. 11 MR. HAWES: The charter plan of the district was 12 amended at a general election on November 7, 2000 and 13 established the Rate Commission to review and make 14 recommendations to the district regarding changes in 15 wastewater rates, stormwater rates, and tax rates 16 proposed by the district. 17 The charter plan requires the MSD Board of 18 Trustees to select organizations to ensure a fair 19 representation of all users of the district's services 20 of the Rate Commission. 21 The Rate Commission representative organizations 22 are to represent commercial, industrial users, 23 residential uses, and other organizations interested in 24 the operation of the district; including organizations 25 focusing environmental issues, labor issues, PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 4 1 socioeconomic issues, community neighborhood 2 organizations and other nonprofit organizations. 3 The MSD Rate Commission currently consists of 15 4 members from organizations and institutions throughout 5 St. Louis City and County. 6 On February 26, 2018, the Rate Commission 7 received a rate change notice, proposing changes to the 8 district's stormwater rates. The Rate Commission 9 adopted operational rules in a procedural schedule to 10 govern the proceedings on March 24, 2018. 11 Under the current procedural schedule, adopted by 12 the Rate Commission, the MSD Rate Commission has until 13 June 26, 2018 to review and make a recommendation to the 14 MSD Board of Trustees as to whether the proposed rate 15 should be approved, not approved, or modified with 16 suggested changes, and then approved. 17 The commission requested an extension from the 18 MSD Board of Trustees until August 10, 2018, which was 19 granted on May 1, 2018. The commission will consider on 20 May 17, 2018 a new, revised procedural schedule, 21 including the extension. 22 The MSD Rate Commission has engaged legal counsel 23 and a rate consultant, independent of those used by the 24 MSD staff. 25 Under procedural rules adopted by the Rate PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 5 1 Commission as amended, any person affected by rate 2 change proposal has an opportunity to submit an 3 application to intervene in these proceedings. 4 An application to intervene has been filed by the 5 Missouri Industrial Energy Consumers. This application 6 has been granted. 7 Since February 26, 2018, the MSD Rate Commission 8 has received testimony from MSD staff, the rate 9 consultant, and the intervener. The parties have also 10 engaged in discovery requests. 11 A prehearing conference for the purpose of 12 identifying any issues raised by the rate setting 13 documents and the prepared testimony previously 14 submitted will be conducted on the record. 15 All persons submitting testimony may participate 16 in the prehearing conference, and each participant in 17 the prehearing conference shall submit a prehearing 18 conference report, describing the issues raised by the 19 rate settings document and will hear testimony, together 20 with a brief description of each participant's position, 21 if any, on each issue and the rational therefore. 22 Ratepayers who do not wish to intervene are 23 permitted to participate in these on-the-record public 24 hearings conducted in six sessions beginning on May 8, 25 2018. PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 6 1 The Rate Commission published the public notice 2 regarding these proceedings in the St. Louis Post 3 Dispatch and in the St. Louis American. These notices 4 contain the time, dates, and location for each of the 5 conferences and hearings. 6 The public hearing session tonight is for the 7 purpose of permitting the district to present its 8 stormwater rate change proposal, and permit any 9 ratepayer the opportunity to comment. 10 We will begin with the presentation by the 11 district, followed by a public comment period. Those 12 wishing to speak should sign in on the sheet provided, 13 and will be called on in the order of the names listed 14 thereon. 15 Each ratepayer should identify themselves and any 16 organizations represented by such ratepayer. 17 Now several housekeeping rules before we begin. 18 If you wish to present testimony, please sign in the on 19 the clipboard by the door. Speakers will be recognized 20 in the order in which they sign up. 21 Each ratepayer may have a maximum of 10 minutes 22 to speak, regarding the proposed rate change. As a 23 presiding officer, I can limit or expand that time 24 should I deem it necessary. 25 Restrooms are located down the hall, and I am not PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 7 1 clear on which direction her. They are right across the 2 hall. Thank you. 3 And basically, that wraps up the housekeeping 4 rules and the opening statement. Are there any 5 questions regarding the procedure this evening from 6 anyone in attendance? Hearing none, I will turn it to 7 the district. Is the district ready to proceed? 8 MR. HOELSCHER: Yes, sir. We are. 9 MR. HAWES: Please step forward. 10 MR. HOELSCHER: Does everyone have one of these? 11 No. A hard copy of this presentation? Then I will move 12 the screen along. 13 So I'm going to present MSD's staff's rate 14 proposal for stormwater funding. There's three areas 15 I'm going to cover. First, I'm going to give an 16 overview of MSD, what MSD consists of. 17 Then I'm going to talk about the existing 18 stormwater services that MSD currently provides, where 19 the revenues come from, and go over in detail the 20 stormwater proposal that MSD has put in front of the 21 Rate Commission. 22 First of all, some information about MSD in 23 general. We are a government utility. We were created 24 by an amendment to the state constitution. Our 25 regulations are governed by a charter that was approved PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 8 1 by the voters of our district. 2 Our governance is a six-member board of trustees; 3 three appointed by the mayor of the City of St. Louis 4 and three appointed by the county executive. 5 An important point to remember, we are two 6 utilities; a wastewater utility and a stormwater 7 utility. The wastewater utility is funded by your bill 8 your wastewater bill that you receive. That's not a 9 topic that we're presenting this evening. 10 The stormwater utility currently has two funding 11 sources. What we're proposing in this rate proposal is 12 a third funding source to officer a third service. 13 MSD is a 520-square mile service area; all of the 14 City of St. Louis, and just about 90 percent of St. 15 Louis County. We have 1.3 million customers and serve 16 88 different municipalities. 17 The system has seven treatment plants for 18 wastewater, and we treat about 350 million gallons per 19 day of wastewater. You add all the sewers together, and 20 you come up with just about 10,000 miles of sewers 21 throughout the district, which makes us the fourth 22 largest sewer system in the United States. 23 The most recent action on stormwater that was 24 taken by MSD was Proposition S that was passed in April 25 2016. The issue that was addressed was unequal storm PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 9 1 sewer operation and maintenance funding; an issue that 2 MSD has dealt with since 1989. 3 There was funding to some degree to operate and 4 maintain the public storm sewer system east of 270 and 5 east of Lindbergh. There was no money to operate and 6 maintain the public storm sewer system west of 270 and 7 west of Lindbergh. 8 Proposition S took care of that and did a couple 9 things. First of all, it eliminated all other sources 10 -- eliminated two sources of revenue and set it at zero. 11 21 different taxes that were being collected in spots 12 within the district. 13 The second thing it did was put in place a 14 10-cent property tax to allow us to operate and maintain 15 the sewer system. 16 On the next page, you see a map of the district. 17 This is just an explanation of where we currently stand 18 with stormwater funding. 19 Right now, MSD collects a 1.88 cent per $100 20 valuation in property tax to take care of regulatory 21 issues. This is pollutants that are in stormwater 22 runoff that impact the local creeks and streams. 23 That funding source has been in place since 1979, 24 prior to the passage of the Hancock amendment. And that 25 currently provides sufficient funding for MSD to provide PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 10 1 those services. 2 The second one shows a 9.71 stormwater tax. That 3 is the Proposition S proposal. It was passed in April 4 2016, resulting in just under a 12-cent per $100 5 valuation tax to our ratepayers. 6 So we have a regulatory compliance program for 7 stormwater run off, operation and maintenance for the 8 public storm sewer system, which are inlets, manholes, 9 sewers. 10 The last thing that was left when we did 11 Proposition S, we had funds remaining in 23 different 12 funds that we used for capital work, addressing flooding 13 and erosion. If you take a look at this map, it's the 14 same map we used during Proposition S. The blue areas 15 are the district's boundaries. Each one of those dots 16 is a project that MSD has committed to do. 17 If you go on our website, the Prop S description 18 and data is still on our website. You'll see that map, 19 and you also find the spreadsheet. 20 In each one of those dots is a number. That 21 number represents a project on the spreadsheet. That 22 spreadsheet gives a problem that we're going to resolve, 23 how we're going to resolve it, where the project is, how 24 much it's going to cost, and when it's going to be done. 25 So again, $67 million-worth of work to address PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 11 1 flooding and erosion issues throughout the district -- I 2 think you're okay with what I've covered so far. 3 So -- but the issue is once that's $67 million of 4 funding balance is gone, there is no more revenue coming 5 in to address stormwater problems, flooding, erosion 6 throughout the district. The proposal is for the voters 7 to consider providing a revenue source to provide that 8 service districtwide. 9 Just a description of the kind of stuff we're 10 talking about. One is localized flooding. This can 11 happen in a lot of ways; the way properties were graded, 12 the way they've been regraded, installation of swimming 13 pools that block backyard swales. There's a lot of 14 things that cause backyard flooding in homes that we 15 currently don't have funding to address. 16 There's regional flooding, kind of the larger 17 stuff that's usually associated with flood planes. And 18 not just the Meramec River, but we're talking about 19 areas like Deer Creek, Maline Creek, some of those 20 areas. River Des Peres, where there can be regional 21 flooding going on for folks living close to creeks and 22 streams. 23 And finally, the erosion caused by heavy rains, 24 which cause the creeks to come up and cause erosion and 25 cause property damage. PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 12 1 The scope of the problems represented by the map 2 you see up here, we get -- we recognize there's about 3 500 unfunded erosion and flooding issues that we've 4 identified throughout the district. 5 This identification comes mostly from complaints 6 from customers; sometimes the complaints come from 7 individual municipalities to let us know about the 8 issues. 9 We estimate the total cost to fix all of these 10 issues is $562 million. These are all not the same. 11 One of these dots could represent significant erosion 12 that maybe is causing a garage to threaten to fall into 13 a creek. Some if it can be that a resident is unhappy 14 with how long stormwater sits in their backyard after a 15 rain. It's a whole scope of things. 16 The plan is to implement a stormwater capital 17 rate with a revenue source of about $30 million per 18 year. The rate is planned to be based on the amount of 19 impervious area on each customer's property. 20 The average charge for the average single family 21 home is proposed to be $2.25 per month, or $27 per year. 22 Tax-exempt entities will be subject to the 23 stormwater capital rate. That would include churches, 24 city halls, schools, the city airport. They would all 25 be charged based on the impervious area. PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 13 1 Again we'll address the unfunded stormwater 2 issues. Estimates are that all the issues that we've 3 identified currently have be addressed in about 30 4 years. These are approximations. 5 Stormwater problems have a habit of disappearing, 6 and then sometimes other ones showing up. A lot of 7 times, it depends on the opinion of the individual 8 property owners who are being impacted. 9 Creeks and streams will remain private as they 10 are right now. And the food plane management 11 responsibility to control development will sit with the 12 flood plane managers and the individual municipalities 13 as it does now. 14 What is impervious area? It's a hard surface, 15 such as a concrete blacktop, roofs, hard compacted 16 gravel that doesn't absorb stormwater such as bare 17 ground would with grass cover. It generates stormwater 18 runoff. The water hits and runs directly off. 19 The flooding and erosion services being proposed 20 are directly impacted by the volume of stormwater that's 21 created by these impervious areas. 22 Staff's opinion that the fairest way to determine 23 the revenue contribution of each property is through a 24 impervious area measurement method. That's a method 25 that's used broadly throughout the United States to PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 14 1 reduce revenue for these types of programs. 2 For a little reminder, about 10 years ago, MSD 3 attempted to institute an impervious-based rate without 4 a vote of the people. It was felt that this was a rate, 5 kind of similar to what states have done throughout the 6 rest of country. 7 We were sued over that, it went through the 8 Supreme Court. And in the end, it was decided that if 9 we put an impervious rate, such as what we had in place, 10 we would have to vote on it. Because we didn't vote on 11 it, the Supreme Court found that we could not use just a 12 rate -- a separate rate for the wastewater system. 13 So how are we going to calculate this? We're 14 going to base it on the amount of impervious area. 15 You'll hear the term ERU, which is an equivalent 16 residential unit. 17 The equivalent residential unit has a median 18 amount of impervious area. For residential customers in 19 MSD's boundaries, that's about 2600 square feet of 20 impervious area per lot. 21 The proposed rate was determined by taking the 22 recommended capital improvement program, or about $30 23 million and divided by the estimated number of ERUs 24 within our service area. When you do that calculation, 25 you come up with a number of $2.25 per ERU, or PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 15 1 equivalent residential unit. 2 That breaks down in more detail exactly how 3 everybody is impacted. The single-family residential 4 customers are going to be calculated using a four-tier 5 system. The difference is going to be in the amount of 6 impervious area. So you're going to be put into 7 buckets, depending on the range of the impervious area 8 on your property. 9 If you look under the second bullet, under tiers, 10 there will be a Tier 1. If your residential property 11 has between 200 and 2,000 square feet of impervious 12 area, the proposal is to bill you $1.42 per month for 13 the stormwater program. That represents about one 14 quarter of MSD's residential customers. 15 If your property is between 2,010 and 3,600 16 square feet of pervious area, MSD's proposal is to 17 charge those residential properties $2.25 per month. 18 That tier contains about one half of MSD's residential 19 customers. 2,600 square feet is just about the median 20 for the St. Louis area for the residential customers. 21 Tier 3, if you have a larger property, more 22 impervious area, between 3,601 and 6,000 square feet, 23 the charge is $3.74 per month. 24 And a larger property, Tier 4 any residential 25 property that has at least 6,000 square feet of PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 16 1 impervious area, the proposal is to charge them $6.84 2 per month. 3 Those are residential customers, which represent 4 about 450,000 accounts. There are 50,000 other accounts 5 that are multi-family, commercials, and other 6 nonresidential. 7 We're not going to put them in tiers. We're 8 going to bill them per ERU. As I said before, an ERU is 9 2,600 square feet. So for an example, if a customer -- 10 as you see up on the screen here -- they have 10,000 11 square feet -- this is a nonresidential -- 10,000 square 12 feet of impervious area. If you divide that by 2,600, 13 which is one ERU, you come up with 3.85. 14 If you round that up to 4, and since we're 15 billing $2.25 per ERU, four times $2.25 would be $9.00 16 per month, would be the charge for that particular 17 commercial property. 18 The first full year of revenue collection would 19 be from July 1, 2021 through June 30, 2022. We will 20 actually start collecting the revenues, though, in 21 January 2020. 22 The total revenues for the single family 23 residential customers under this formula will bring in 24 just half of the $30 million per year program. The 25 revenue from the nonresidential customers will bring in PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 17 1 just over half, or $16.2 million. 2 How frequently we're going to bill. The 3 stormwater capital rate will appear on the monthly bill 4 of any customer that are currently billed for 5 wastewater. That's about 90 percent of our overall 6 customers, if this passes. 7 There are about 50,000 properties who do not 8 receive wastewater services from MSD, and thus, don't 9 receive a monthly bill. 10 If there are customers who are not billed for 11 wastewater, but their properties contain more than 20 12 ERUs, we will bill them monthly. They will also start 13 getting a monthly bill, which they have never gotten 14 before. 15 Any other customers, be they residential or 16 commercial property, with less than 20 ERUs, our plan is 17 to bill them quarterly. The reason for is just cost 18 effectiveness. The average residential customer is 19 going to get billed $2.25 per month for stormwater. If 20 that's the only bill they get from us, it's not 21 cost-effective for us to go through the cost of sending 22 out a $2.25 per month bill. So we're going to send 23 those bills out quarterly. 24 There is a incentive programs that's built into 25 the process. The easiest way to get an incentive is to PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 18 1 decrease the amount of impervious surfaces that you 2 have. 3 Green roofs, or other kinds of engineered 4 pervious areas are not billable. For instance, if you 5 have a concrete patio, and you convert that to an 6 engineered pervious paver patio, that will be counted as 7 impervious area. 8 How does that reflect itself? If you're a 9 residential customer, you would have to remove enough 10 impervious area to drop you into another tier. If 11 you're not a nonresidential, customer you would need to 12 remove enough pervious area, at least 2,600 square feet, 13 to eliminate and ERU on your property. 14 Stormwater that's running off of properties that 15 go directly to large rivers or other equivalents -- for 16 instance, homes that are along the Missouri River or the 17 Mississippi River or the Meramec River, and the runoff 18 goes directly to those large rivers, we're proposing a 19 70 percent credit on the rate. 20 There's an incentive for best management 21 practices. We currently have some design standards for 22 what we do for green infrastructure. On a residential 23 customer, per our standards, if they were to build a 24 best management practice that collected water from 25 500-square feet of impervious area, they would get an PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 19 1 incentive payment of $135 once they complete that work. 2 On a commercial area, for every ERU that's 3 treated with the best management practice, we're 4 proposing a 50 percent credit for every ERU that's 5 captured by a best management practice. 6 We also have a low impact development criteria, 7 which is 35 percent credit. If you have a lot size 8 that's greater than three acres, and the amount of 9 impervious area is less than 15 percent of the parcel 10 size, you get a 35 percent credit. This is a system 11 that mirrors environmentally sensitive development and 12 is currently a standard out there to provide this type 13 of credit. 14 The timeline for the stormwater capital rate 15 proposal, again, I'm kind of mimicking some of the 16 information that was provided by the chair of the Rate 17 Commission. 18 The proposal was submitted by staff to the Rate 19 Commission on February 26, 2018. The Rate Commission 20 now has 165 days, which includes a 45-day extension 21 recently approved by the Board of Trustees, to review 22 proposal and make a recommendation to MSD's Board of 23 Trustees. 24 There will be technical meetings through June and 25 July 2018. There is a currently schedule, but if you PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 20 1 wanted to keep track of how what that schedule looks, 2 you can do that by going to www.stlmsd.com. And there 3 are updates of exactly when those meetings will occur 4 and where they will occur at. 5 There will be public hearings such as this. If 6 you notice, we're on second public hearing. There's 7 five more that are going to be scheduled. Four are 8 scheduled, there's one more yet to be scheduled in June. 9 Under that current schedule, assuming the Rate 10 Commission takes advantage of the extension offered by 11 the board, the Rate Commission should deliver to the 12 Board of Trustees their recommendation in August. 13 If that's approved, MSD's Board of Trustees will 14 take the last part of calendar year 2018 to consider the 15 recommendation of the Rate Commission. And assuming we 16 move forward, if we're going to move forward with the 17 public vote, it will probably occur in April 2019; with 18 the new rate, as I previously mentioned, becoming 19 effective in January 2020. 20 So that is it for the stormwater. That's the 21 proposal for stormwater. I do want to touch briefly on 22 wastewater. As I said, it's two utilities. And we 23 usually do the rate proposals together. In this case, 24 we've done them separately; stormwater first. 25 There will be wastewater proposal next year, PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 21 1 which is the largest part of the bill you get from MSD. 2 Just so you know, it's scheduled. MSD staff will begin 3 that rate proposal development this summer. 4 Rate Commission meetings are scheduled to begin 5 in September 2018, with staff presenting to the Rate 6 Commission a wastewater proposal in February or March of 7 2019. That will start almost the same process you see 8 now, consisting on the Rate Commission considering the 9 proposals, public meetings, Rate Commission making a 10 recommendation to our board. 11 If all that happens, we should have the work of 12 the Rate Commission and the board done by the end of 13 calendar 2019. And any votes that are needed after 14 there would occur after that. All this information will 15 be up on our website and also be advertised once we get 16 to that point. 17 Here's more information, or any questions Lance 18 LeComb is our manager of public information. He's the 19 spokesperson. There's his phone number, there's also an 20 e-mail address. Any information he gets, he will 21 forward to our Rate Commission. 22 There's also a Rate Commission address and 23 information on the website, if you want to send 24 something directly to the Rate Commission. 25 Again, this is a Rate Commission process. Any PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 22 1 information we'll make sure we forward to the Rate 2 Commission. That is the end of MSD's presentation, Mr. 3 Chairman. 4 MR. HAWES: Thank you. We would like to open the 5 public hearing to take any comments from the public. 6 Are there any questions for MSD or the Rate Commission? 7 Anyone who signed up. 8 MR. HOELSCHER: You are the only person from the 9 public here. I thought you would like you to know that. 10 No pressure. 11 MS. CROYLE: Thank you for coming. 12 MR. HOELSCHER: Very knowledgeable person, by the 13 way, in this industry. 14 MR. POLK: Just keeping track of all of you. 15 MR. HAWES: Are there any questions from the Rate 16 Commission regarding the presentation from Mr. Hoelscher 17 and MSD? Very good. 18 MR. GOSS: Will you be buying out structures that 19 are in flood planes? And if so, what's the program to 20 do that that may be in place that you're contemplating? 21 MR. HOELSCHER: So right now, as we do with the 22 taxes we collected before, there's a program we already 23 do. 24 Homes that have the highest benefit cost/ratio 25 against all other stormwater problems, they have the PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 23 1 highest ratio. We will go in, we will buy homes out of 2 flooding areas. Right now, we're talking about homes 3 that are right now are existing in two- and five-year 4 flood planes. Those are the kind of the areas we're 5 buying right now. 6 The protocol for doing that is once we purchase 7 the homes, MSD has been successful at making sure the 8 actual ownership of the homes goes to adjacent property 9 owners, possibly go to the cities. But once we do that, 10 we take the property and we put an easement over the 11 entire property that prevents any future development. 12 The theory behind that up to this point has been 13 for us to allow the flood plane to act as a flood plane 14 during the rain events. 15 MR. GOSS: Thank you. 16 MR. HAWES: Any further questions for Rate 17 Commission members? 18 MS. CROYLE: I guess a question I have is with 19 the flood planes, there's always the issue in 20 communities of giving allowances to build on flood 21 planes. Is there any way of keeping that from 22 happening? 23 MR. HOELSCHER: So MSD's regulatory authority 24 consists of assuring that any structures built in flood 25 planes don't result in a rise in the creek levels. PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 24 1 All governance having to do with not just new 2 development, but allowing the repair of a development 3 within flood planes sit with the flood plane managers, 4 which are the individual municipalities and the county. 5 Since the question comes up, we also have no 6 regulatory authority over, for instance, the levies that 7 protect along the Missouri River, that protect 8 Chesterfield Valley. That's between the entities who 9 own the property, as well as the Corp of Engineers. 10 So MSD's authority is very, very limited. Do we 11 have an interest? We do. Not just for servicing our 12 customers, for those who may be in these areas, but any 13 area that is in a flood plane is getting sanitary sewer 14 service. And when that area floods or the sanitary 15 sewers flood and cause problems with a lot of other 16 homes and overflows in the system. So there is a 17 unique, very beneficial side -- a benefit of having a 18 program like that. 19 MR. RATZKI: I have a question about maintenance, 20 you talked about the buyout. Oftentimes you offer the 21 homeowners nearby or adjacent to the property to buy the 22 property or deed it over to them, or however you do 23 that. 24 Is there any agreement on maintenance from that 25 standpoint? Or is the district -- then I'll take it to PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 25 1 another step. You mentioned many times, a lot of these 2 are localized flooding and erosion issues that are on 3 private property. But the district can use these funds 4 to fix those. 5 Again, you do an erosion control solution, and 6 private property, again, most of those are natural 7 anyway. But is there any agreement when that work's 8 done that somebody else can do the maintenance, or is 9 that something the district needs to budget? 10 MR. HOELSCHER: Right. So I'm glad you asked 11 that. That gives me an opportunity to clear up a point. 12 Understand that almost the vast majority of MSD 13 facilities are on private property now; wastewater and 14 stormwater. We have easements that allow us to access 15 them. But they are on private property. 16 MR. RATZKI: Right. 17 MR. HOELSCHER: So let's take the example of 18 erosion. I think you brought that up. If we have an 19 erosion issue, and the benefit of helping the customer 20 provided by the cost ends up being a project we would 21 do, we would go and take a look. 22 Typically there are two solutions. One is we can 23 bio-stabilize the erosion in some way. One, to make 24 sure it's not a problem at the property anymore, and 25 also to make sure we don't transfer the problem further PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 26 1 downstream. 2 Another option that can be possible on some 3 occasions is, it's just so critical that the solution 4 also results in us buying the properties out, because 5 you just don't have a livable piece of property anymore. 6 In all those instances, we have to get property 7 rights to get on the properties, easements of some kind, 8 to be able to do the construction. 9 Once we're done, the facilities aren't ours. In 10 the past, we've been really, really successful making 11 sure that we don't -- at least for the most recent part 12 of the program -- making sure we don't end up owning 13 those properties. 14 Staff's discussions internally have been if we 15 move forward with this program, one of the conditions 16 are going to be that the municipalities, ahead of time, 17 agree that they would be responsible for making sure 18 something happens to the property and gets maintained; 19 take possession of it. 20 We would have, again, an easement on it to make 21 sure it can't be redeveloped. Hopefully, it will be as 22 successful as it has been in the past, where the cities 23 take it over, or a lot of times the adjacent property 24 owners will want the property, just for buffer room. 25 We're planning on that same type of thing happening. PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 27 1 MR. RATZKI: So it'd transfer to the 2 municipality. I guess my point is, does there need to 3 be some sort of an agreement between the municipality 4 and the adjacent property owners to say, it's your 5 responsibility now to keep it mowed or to keep it -- 6 MR. HOELSCHER: So right now, that happens just 7 through process, because it's a good thing to do. I 8 think there are some properties, older parts of the 9 system where we've done some buyouts and we still own 10 the property. 11 But in the County, I think it's outside the 12 combined sewer area. Our discussions have been we're 13 probably going to mandate that the city agrees that they 14 will take over project. If we purchase the property 15 outright and we have part ownership, that they are then 16 responsibile for either taking ownership of the 17 property, or disposing in some other way, which I 18 suspect in some instances, may be a piece of property 19 owner stake. So we're not responsible for maintenance. 20 MR. GOSS: Right. How -- if that turnover 21 happens, how will those folks in the municipality or the 22 neighbors, who acquire the ENP held accountable for the 23 maintenance of that? Will MSD follow up and inspect 24 that from time to time? Or how will that work. 25 MR. HOELSCHER: So you won't find -- because of PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 28 1 regulatory requirements, for instance, on erosion. You 2 won't find us building concrete walls or things that are 3 part of the public systems. We're reestablished as much 4 as we can bio-stabilizing natural improvements that goes 5 back in. 6 There are normal warranties that go along with 7 construction. After that, they sit out there in the 8 same fashion they were at before. Almost a lot of these 9 are in subdivisions, whether they're actually indentured 10 and the subdivision trustees are supposed to maintain 11 these anyway. 12 Or else there's right-of-ways or easements where 13 there is no easily-identifiable entity. They're just 14 public facilities. 15 So the responsibility would go to, I guess, 16 whoever -- I'm being a little vague here because every 17 instance in the district is different depending on where 18 we stand. So the point is, it's billed so they would 19 last. 20 MR. GOSS: Let me give you an example. If you 21 have a rain garden that needs to take place over time. 22 And so presumably, if this is turned over to a 23 subdivision, the trustees need to do that. And if they 24 don't do that, then the rain garden won't function. 25 MR. HOELSCHER: I wasn't necessarily talking PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 29 1 about -- we'll get into that deeper. I don't think any 2 discussion necessarily had to do with rain gardens. 3 MR. GOSS: I was trying to give an example. 4 MR. HOELSCHER: An example of a rain garden, 5 we're offering that because we think it's a good thing 6 to do. It's a minimal credit for folks who do rain 7 gardens for one or two-year storm events. 8 When you get the 20, 30, and 40-year storm events 9 that cause flooding and erosion, it's like those rain 10 gardens aren't even there. So it's more of an incentive 11 to folks just to be greener and just to be thinking 12 about what's going on. 13 We're not going to see a whole lot of benefit 14 downstream because we put a rain garden in on a large 15 scale. 16 You could, on the individual projects -- and 17 we've even built some projects, where we kind of put the 18 icing on the cake and bill a little less rate 19 infrastructure because we've been able to build enough 20 rain gardens in a school, or something like that. They 21 do have mandates that they have to maintain this 22 facility. 23 MR. GOSS: Okay. 24 MR. HAWES: Any further questions from the Rate 25 Commission members? PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 30 1 MR. POLK: I do have -- I have one, Brian. The 2 percentage credit that you were talking, about the 50 3 percent, 35 percent, is that a credit on what would 4 normally be the rate charged against that property? 5 MR. HOELSCHER: Correct. If you're getting 6 billed $2.25, and you get a 50 percent credit, your bill 7 is now -- check with Mary -- $1.12 or $1.13. But we 8 charge you once. 13. Okay. There's our finance guy. 9 We charge $1.13. 10 MR. GOSS: Round up. 11 MR. POLK: That's all. 12 MR. HAWES: All right. Well, if that is all the 13 questions we have for tonight, we can close this public 14 hearing. Thank you for coming. 15 16 17 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 31 1 CERTIFICATE OF REPORTER 2 STATE OF MISSOURI ) 3 ) ss. CITY OF ST. LOUIS ) 4 5 I, Georgia Beth Long, a Certified Court Reporter (MO), 6 Certified Shorthand Reporter (IL), do hereby certify 7 that the meeting aforementioned was held on the time and 8 in the place previously described. 9 10 IN WITNESS WHEREOF, I have hereunto set my hand and 11 seal. 12 13 14 15 16 17 ____________________________ 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES A able 26:8 29:19 absorb 13:16 access 25:14 accountable 27:22 accounts 16:4,4 acquire 27:22 acres 19:8 act 23:13 action 8:23 actual 23:8 add 8:19 address 10:25 11:5,15 13:1 21:20,22 addressed 8:25 13:3 addressing 10:12 adjacent 23:8 24:21 26:23 27:4 adopted 4:9,11 4:25 advantage 20:10 advertised 21:15 aforemention... 31:7 ago 14:2 agree 26:17 agreement 24:24 25:7 27:3 agrees 27:13 ahead 26:16 airport 12:24 Alaris 2:24 allow 9:14 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www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES entities 12:22 24:8 entity 28:13 environmental 3:25 environment... 19:11 equivalent 14:15,17 15:1 equivalents 18:15 erosion 10:13 11:1,5,23,24 12:3,11 13:19 25:2,5,18,19 25:23 28:1 29:9 ERU 14:15,25 16:8,8,13,15 18:13 19:2,4 ERUs 14:23 17:12,16 established 3:13 estimate 12:9 estimated 14:23 Estimates 13:2 evening 3:2,5 7:5 8:9 events 23:14 29:7,8 everybody 15:3 exactly 15:2 20:3 example 16:9 25:17 28:20 29:3,4 executive 2:9 8:4 existing 7:17 23:3 expand 6:23 explanation 9:17 extension 4:17 4:21 19:20 20:10 F facilities 25:13 26:9 28:14 facility 29:22 fair 3:18 fairest 13:22 fall 12:12 family 12:20 16:22 far 11:2 fashion 28:8 February 4:6 5:7 19:19 21:6 Fee 1:23,23 feet 14:19 15:11 15:16,19,22,25 16:9,11,12 18:12,25 felt 14:4 filed 5:4 finally 11:23 finance 30:8 find 10:19 27:25 28:2 first 7:15,22 9:9 16:18 20:24 five 20:7 five-year 23:3 fix 12:9 25:4 flood 11:17 13:12 22:19 23:4,13 23:13,19,20 23:24 24:3,3 24:13,15 flooding 10:12 11:1,5,10,14,16 11:21 12:3 13:19 23:2 25:2 29:9 floods 24:14 focusing 3:25 folks 11:21 27:21 29:6,11 follow 27:23 followed 6:11 following 3:6 food 13:10 formula 16:23 forward 7:9 20:16,16 21:21 22:1 26:15 found 14:11 four 16:15 20:7 four-tier 15:4 fourth 8:21 frequently 17:2 front 7:20 full 16:18 function 28:24 funded 8:7 funding 7:14 8:10,12 9:1,3 9:18,23,25 11:4,15 funds 10:11,12 25:3 further 23:16 25:25 29:24 future 23:11 G gallons 8:18 garage 12:12 garden 28:21 28:24 29:4,14 gardens 29:2,7 29:10,20 general 3:12 7:23 generates 13:17 Georgia 2:22 31:5 getting 17:13 24:13 30:5 give 7:15 28:20 29:3 gives 10:22 25:11 giving 23:20 glad 25:10 go 7:19 10:17 17:21 18:15 23:1,9 25:21 28:6,15 goes 18:18 23:8 28:4 going 3:1 7:13 7:15,15,17 10:22,23,24 10:24 11:21 14:13,14 15:4,5 15:6 16:7,8 17:2,19,22 20:2,7,16 26:16 27:13 29:12,13 good 3:2 22:17 27:7 29:5 Goss 2:7 3:7 22:18 23:15 27:20 28:20 29:3,23 30:10 gotten 17:13 govern 4:10 governance 8:2 24:1 governed 7:25 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impervious 12:19,25 13:14 13:21,24 14:9 14:14,18,20 15:6,7,11,22 16:1,12 18:1,7 18:10,25 19:9 impervious-b... 14:3 implement 12:16 important 8:5 improvement 14:22 improvements 28:4 incentive 17:24 17:25 18:20 19:1 29:10 include 12:23 includes 19:20 including 3:24 4:21 indentured 28:9 independent 4:23 individual 12:7 13:7,12 24:4 29:16 industrial 3:22 5:5 industry 22:13 information 7:22 19:16 21:14,17,18,20 21:23 22:1 infrastructure 18:22 29:19 inlets 10:8 inspect 27:23 installation 11:12 instance 18:4,16 24:6 28:1,17 instances 26:6 27:18 institute 14:3 institutions 4:4 interest 24:11 interested 3:23 internally 26:14 intervene 5:3,4 5:22 intervener 5:9 issue 5:21 8:25 9:1 11:3 23:19 25:19 issues 3:25,25 4:1 5:12,18 9:21 11:1 12:3,8 12:10 13:2,2 25:2 it'd 27:1 J January 16:21 20:19 July 16:19 19:25 June 4:13 16:19 19:24 20:8 K keep 20:1 27:5 27:5 keeping 22:14 23:21 kind 11:9,16 14:5 19:15 23:4 26:7 29:17 kinds 18:3 know 12:7 21:2 22:9 knowledgea... 22:12 L labor 3:25 Lance 21:17 large 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11:18 18:17 method 13:24 13:24 Metropolitan 1:9 2:3 3:3 Mickey 2:5 3:7 mile 8:13 miles 8:20 million 8:15,18 11:3 12:10,17 14:23 16:24 17:1 million-worth 10:25 mimicking 19:15 minimal 29:6 minutes 6:21 mirrors 19:11 Mississippi 18:17 Missouri 1:2 2:23,25 5:5 18:16 24:7 31:2 MO 1:24 31:5 modified 4:15 money 9:5 month 12:21 15:12,17,23 16:2,16 17:19 17:22 monthly 17:3,9 17:12,13 move 7:11 20:16 20:16 26:15 PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES mowed 27:5 MSD 2:9 3:6,17 4:3,12,14,18 4:22,24 5:7,8 7:16,16,18,20 7:22 8:13,24 9:2,19,25 10:16 14:2 17:8 21:1,2 22:6,17 23:7 25:12 27:23 MSD's 7:13 14:19 15:14,16 15:18 19:22 20:13 22:2 23:23 24:10 multi-family 16:5 municipalities 8:16 12:7 13:12 24:4 26:16 municipality 27:2,3,21 N N 2:1 names 6:13 natural 25:6 28:4 nearby 24:21 necessarily 28:25 29:2 necessary 6:24 need 18:11 27:2 28:23 needed 21:13 needs 25:9 28:21 neighborhood 4:1 neighbors 27:22 never 17:13 new 4:20 20:18 24:1 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8:14 17:5 18:19 19:4 19:7,9,10 30:3 30:3,6 percentage 30:2 Peres 11:20 period 6:11 permit 6:8 permitted 5:23 permitting 6:7 person 5:1 22:8 22:12 persons 5:15 pervious 15:16 18:4,6,12 phone 21:19 piece 26:5 27:18 place 9:13,23 14:9 22:20 28:21 31:8 plan 3:11,17 12:16 17:16 plane 13:10,12 23:13,13 24:3 24:13 planes 11:17 22:19 23:4,19 23:21,25 24:3 planned 12:18 planning 26:25 plants 8:17 please 6:18 7:9 point 8:5 21:16 23:12 25:11 27:2 28:18 POLK 22:14 30:1,11 pollutants 9:21 pools 11:13 position 5:20 possession 26:19 possible 26:2 possibly 23:9 Post 6:2 practice 18:24 19:3,5 practices 18:21 prehearing 5:11 5:16,17,17 prepared 5:13 present 6:7,18 7:13 presentation 6:10 7:11 22:2 22:16 presenting 8:9 21:5 presiding 3:4 6:23 pressure 22:10 presumably 28:22 prevents 23:11 previously 5:13 20:18 31:8 prior 9:24 private 13:9 25:3,6,13,15 probably 20:17 27:13 problem 10:22 25:24,25 problems 11:5 12:1 13:5 22:25 24:15 procedural 4:9 4:11,20,25 procedure 7:5 proceed 7:7 proceedings 4:10 5:3 6:2 process 17:25 21:7,25 27:7 program 10:6 14:22 15:13 16:24 22:19 22:22 24:18 26:12,15 programs 14:1 17:24 project 10:16,21 10:23 25:20 PUBLIC HEARING 5/15/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 27:14 projects 29:16 29:17 Prop 10:17 properties 11:11 15:17 17:7,11 18:14 26:4,7 26:13 27:8 property 9:14 9:20 11:25 12:19 13:8,23 15:8,10,15,21 15:24,25 16:17 17:16 18:13 23:8,10,11 24:9,21,22 25:3,6,13,15 25:24 26:5,6 26:18,23,24 27:4,10,14,17 27:18 30:4 proposal 5:2 6:8 7:14,20 8:11 10:3 11:6 15:12,16 16:1 19:15,18,22 20:21,25 21:3 21:6 proposals 20:23 21:9 proposed 3:16 4:14 6:22 12:21 13:19 14:21 proposing 4:7 8:11 18:18 19:4 Proposition 8:24 9:8 10:3 10:11,14 protect 24:7,7 protocol 23:6 provide 9:25 11:7 19:12 provided 6:12 19:16 25:20 provides 7:18 9:25 providing 11:7 public 1:12 3:1,4 5:23 6:1,6,11 9:4,6 10:8 20:5,6,17 21:9 21:18 22:5,5,9 28:3,14 30:13 published 6:1 purchase 23:6 27:14 purpose 5:11 6:7 put 7:20 9:13 14:9 15:6 16:7 23:10 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