HomeMy Public PortalAboutExhibit MSD 62 - Transcript of the May 30, 2018 Public Hearing PUBLIC HEARING PROCEEDING 5/30/2018
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1 METROPOLITAN ST. LOUIS SEWER DISTRICT
2 PUBLIC HEARING PROCEEDING
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7 TRANSCRIPT OF PROCEEDINGS
8 MAY 30, 2018
9 2675 SCOTT AVENUE, SUITE G
10 ST. LOUIS, MISSOURI
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REPORTED BY:
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REBECCA L. TUGGLE, CCR, RPR, CSR
18 ALARIS LITIGATION SERVICES
711 N. 11TH STREET
19 ST. LOUIS, MO 63101
(314) 644-2191
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1 APPEARANCES:
2 BRIAN L. HOELSCHER, P.E.
Executive Director
3 Metropolitan St. Louis Sewer District
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5 COMMISSIONERS PRESENT:
6 Russell Hawes, Chairman
Paul Brockmann
7 Mark Schoedel
Lloyd Palans
8 Paul Ziegler, Ed.
John L. Stein
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10 MODERATOR: Andy Likes
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1 P R O C E E D I N G S
2 CHAIRMAN HAWES: Good afternoon from
3 St. Louis. I'm Russell Hawes, Vice Chairman of the
4 Metropolitan St. Louis Sewer District Rate Commission,
5 and I will be presiding over this public hearing.
6 With me this afternoon are the following MSD Rate
7 Commission members. Paul Brockmann --
8 Mr. Paul Brockmann, Mr. Mark Schoedel,
9 Mr. Lloyd Palans, Mr. Paul Ziegler, and
10 Mr. Jack Stein.
11 This is a unique meeting for the rate
12 commission and the first time that we've facilitated
13 an air-streaming meeting and the opportunity to pose
14 questions on the rate commission's social media
15 channels.
16 Andy Likes is our moderator today and he'll
17 be taking your questions on Facebook and Twitter. For
18 Facebook, that's @msdratecommission and for Twitter,
19 that's @ratecommission, and e-mail
20 msdratecommission@gmail.com.
21 Now, the charter plan of the district was
22 amended at the general election on November 7, 2000,
23 and established the rate commission to review and make
24 recommendations to the district regarding changes in
25 wastewater rates, stormwater rates and tax rates
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1 proposed by the district. The charter plan requires
2 the MSD board of trustees to select organizations to
3 ensure a fair representation of all users of the
4 district services on the rate commission. The rate
5 commission representative organizations are to
6 represent commercial industrial users, residential
7 users and organizations interested in the operation of
8 the district, including organizations focused on
9 environmental issues, labor issues, socioeconomic
10 issues, community neighborhood organizations and other
11 nonprofit organizations. The MSD Rate Commission
12 currently consists of 15 members from these
13 organizations and institutions throughout St. Louis
14 City and County.
15 On February 26, 2018, the rate commission
16 received a rate change notice proposing changes to the
17 district stormwater rates. The rate commission
18 adopted operational rates and a procedural schedule to
19 govern the proceedings on March 4, 2018. Under the
20 current procedural schedule adopted by the rate
21 commission, the MSD Rate Commission has until
22 June 26, 2018, to review and make a recommendation to
23 the MSD board of trustees as to whether the proposed
24 rate should be approved, not approved, or modified,
25 with suggested changes and then approved. The
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1 commission requested an extension from the MSD board
2 of trustees until August 10, 2018, which was granted
3 on May 1, 2018. The commission on May 17, 2018,
4 adopted a new revised procedural schedule, including
5 the extension.
6 The MSD Rate Commission has engaged legal
7 counsel and a rate consultant, independent of those
8 used by MSD staff. Under procedural rules adopted by
9 the rate commission as amended, any person affected by
10 the rate change proposal had an opportunity to submit
11 an application to intervene in these proceedings. An
12 application to intervene has been filed by
13 Missouri Industrial Energy Consumers. This
14 application has been granted.
15 Since February 26, 2018, the MSD Rate
16 Commission has received testimony from MSD staff, the
17 rate consultant, and the interveners. The parties
18 have also engaged in discovery requests. A prehearing
19 conference for the purpose of identifying any issues
20 raised by the rate setting documents and the prepared
21 testimony previously submitted will be conducted on
22 the record.
23 All persons submitting testimony may
24 participate in the prehearing conference, and each
25 participant in the prehearing conference shall submit
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1 a prehearing conference report describing the issues
2 raised by the rate setting documents and the prepared
3 testimony, together with a brief description of such
4 participant's position, if any, on each issue and
5 rationale therefore. Ratepayers who do not wish to
6 intervene are permitted to participate in these
7 on-the-record public hearings conducted in seven
8 sessions, which started on May 8, 2018.
9 After today's session, there are two
10 hearings remaining. The rate commission published a
11 public notice regarding these proceedings in the
12 St. Louis Post Dispatch and the St. Louis American.
13 These notices contained the time, dates, and location
14 of each conferences and hearings.
15 The public hearing session this afternoon is
16 for the purpose of permitting the district to present
17 its stormwater rate change proposal and to permit any
18 taxpayer an opportunity to comment. We will begin
19 with a presentation by the district followed by a
20 public comment period. Different from our traditional
21 public hearings, today our public comment period will
22 include our social media accounts and e-mail where
23 people will be able to ask questions online during the
24 proceedings. We will have a facilitator asking those
25 questions -- that's Andy Likes -- to the rate
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1 commissioners following the presentation by the
2 district.
3 The district will be presenting a lot of
4 information so you may want to hold your questions to
5 the end of the presentation. Those wishing to be
6 heard should be -- include their name with their
7 question on Facebook, Twitter, or e-mail, and your
8 questions will be asked in the order that they were
9 received. Each ratepayer should identify any
10 organization represented by such ratepayer.
11 Now, is the district ready to proceed?
12 MR. HOELSCHER: Yes, Mr. Chairman, we are.
13 CHAIRMAN HAWES: All right. Then I will
14 send it to the district.
15 MR. HOELSCHER: Thank you, Mr. Chairman.
16 My name is Brian Hoelscher. I'm the
17 executive director and CEO here at MSD. I'm going to
18 give an overview of the stormwater capital funding
19 proposal the MSD staff has delivered to the rate
20 commission for review.
21 The presentation consists of three parts.
22 First, I will briefly do an overview of MSD and its
23 current services. Second, I will concentrate on just
24 what the existing stormwater services are that MSD
25 provides, where those revenues come from. And,
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1 finally, I'll go through a lot of detail about the
2 proposed stormwater rate proposal that's currently in
3 front of the rate commission for consideration.
4 There will be, as the chairman said, we will
5 receive questions and answer questions as we receive
6 them. If there are questions that we don't get to or
7 things that don't have -- the topic is not regarding
8 this rate proposal, MSD staff will make sure we get
9 back to you with any others questions you have.
10 Overview of MSD. We are a government
11 utility. We were created by a provision of the
12 State Constitution. We have a voter-approved charter.
13 Our board of trustees consists of six individuals,
14 three who are appointed by county executives, St.
15 Louis County, and three who are appointed by the mayor
16 of the City of St. Louis.
17 It's important to remember that we're two
18 utilities in one. We are a wastewater utility that
19 collects and treats wastewater, and there's a separate
20 dedicated source of revenue for that. We're also a
21 stormwater utility. We provide stormwater management
22 services. The revenues collected for these two
23 separate endeavors cannot be used for the other.
24 They're dedicated revenues for those specific
25 services.
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1 We have a 520-square mile service area.
2 That is all of the City of St. Louis, about 87 percent
3 of St. Louis County. 1.3 million customers. We
4 service 88 different municipalities within our service
5 boundaries. We have seven treatment plants. Those
6 treatment plants treat approximately 350 million
7 gallons per day. And if you add up all the sewers we
8 have, MSD has almost 10,000 miles of sewers that it
9 operates and maintains. That makes MSD the fourth
10 largest sewer system in miles of sewer throughout the
11 country.
12 The most recent time that we came to the
13 voters was in April 2016 with something called
14 Proposition S. The issue that was addressed by the
15 Proposition S vote was funds in order for us to
16 operate and maintain the public storm sewer system
17 located throughout our district. Prior to
18 Proposition S, any kind of public storm sewer
19 system -- inlets, manholes, concrete sewers that were
20 located west of I-270 -- MSD owned but had no revenues
21 to operate and maintain those. With the passage of
22 Proposition S, we're now able to operate and maintain
23 the public storm sewer system throughout our entire
24 district with everybody paying a fair share of the
25 cost.
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1 So where we stand right now with our current
2 stormwater services, take a look at the chart I've
3 got. In the upper left-hand corner, there's currently
4 two taxes that MSD collects and two sets of services.
5 First of all, we collect a .0188 cent of a hundred
6 dollar valuation property tax from all of our
7 customers. That shows up on your annual property tax
8 bill. That two-cent property tax pays for all of our
9 regulatory issues with regard to stormwater. It has
10 to do with the impact of pollutants in our stormwater
11 level, the impact that has on our local creeks and
12 streams. That tax has been in place, specifically
13 identified since 1979 prior to the Hancock Amendment,
14 and currently revenues we collect from that two-cent
15 tax is sufficient for the services we provide.
16 Second is what is -- this year will be a
17 9.71 cent per hundred dollar evaluation property tax.
18 That is the Proposition S fund that I spoke about
19 previously. That takes care of two of the three major
20 storm services that MSD can provide.
21 The other one is flooding and erosion. When
22 Proposition S passed, MSD was able to turn off two
23 other sources of stormwater revenue and eliminate
24 them, as well as set zero taxes in 21 different
25 separate subdistricts. That left a fund balance of
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1 those 23 different funds of $67 billion. MSD
2 committed as part of the Proposition S to address
3 stormwater flooding and erosion problems throughout
4 the district with that $67 million balance.
5 The map that you see on the presentation is
6 the same map that we used as part of Proposition S.
7 It's currently on MSD's website. If you were to look
8 at the map on our website, each one of those dots has
9 a number. Each number relates to a spreadsheet that
10 describes a project: What's being resolved; how we're
11 going to fix the problem; how much it cost; and when
12 it's going to get done. MSD's got 30 percent of these
13 projects done. It's on its way to designing and
14 constructing the balance.
15 The issue MSD wants to address is, once this
16 $67 million pot of money is gone for flooding and
17 erosion issues, there is no more money. There are no
18 revenues currently coming to -- coming into a fund in
19 order to address any of the erosion issues. MSD's
20 rate proposal is to provide a district-wide funding
21 source for us to be able to address flooding and
22 erosion issues district-wide.
23 Just an example of some of the problems
24 we're talking about, there's localized flooding.
25 Water that gets in people's backyards or because of
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1 lack of storm sewers or blocked swales, water sits in
2 people's yards for an inordinate amount of time
3 causing flooding locally.
4 The second one is regional flooding. Not
5 necessarily the Meramec River, but other rivers such
6 as Kiefer Creek or Fishpot Creek or River Des Peres.
7 Folk are living in floodplains, and when we have
8 extreme rain events, they are impacted by that
9 flooding.
10 And, finally, there's erosion. This is any
11 kind of creek erosion that can threaten roads,
12 garages, homes, yards. We're looking for a revenue
13 source in order to address these three different types
14 of issues.
15 How big is the problem? MSD collects a list
16 of stormwater issues as part of its regulatory
17 responsibilities. Based on that, we currently have
18 identified about 500 unfunded erosion and flooding
19 issues throughout our district boundaries. They total
20 about $562 million. They range anywhere from an
21 erosion that's ready to force a garage to fall into a
22 creek all the way down to stormwater after a rain that
23 sits in somebody's backyard too long, and those folks
24 would like that fixed. It's a whole range of
25 problems.
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1 What do we want to do to address that issue?
2 We want to implement a capital rate to fund
3 $30 million a year of stormwater capital improvements
4 to address flooding and erosion. A stormwater capital
5 rate will be based on the amount of the impervious
6 area on each customer's property. Impervious areas
7 are areas where when rainfall falls, it doesn't soak
8 into the ground; it runs off. This would be rooftops,
9 concrete driveways, concrete sidewalks.
10 The average charge for a single-family home
11 under our proposal is $2.25 per month for about $27
12 per year. All tax exempt entities and
13 not-for-profits, they will all be billed this tax. So
14 we're talk -- this charge. We're talking about
15 hospitals and schools, churches, airports. They will
16 all be measured from impervious area and called --
17 proposed and they all pay this charge.
18 Again, the flooding fund will address
19 unfunded stormwater issues. Estimates are that at
20 this current rate of funding, we'd get the program
21 done in 25 to 30 years to address all of the problems
22 that are currently existing.
23 Creeks and streams, as they have in the
24 past, will remain under private ownership. MSD
25 doesn't own these creeks and streams, nor are we a
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1 floodplain manager. The management of developments in
2 floodplains are controlled by the local municipalities
3 and that authority will remain with the local
4 municipalities.
5 A brief description again of impervious
6 area. Again, it's any surface such as concrete,
7 blacktop, rooftops, or in some cases impacted gravel
8 that don't absorb stormwater the way that natural
9 foliated ground would, which generally is traditional
10 stormwater runoff. Flooding and erosion services
11 being provided are directly impacted by the volume of
12 stormwater runoff created by an impervious area on
13 each property. The fairest way to determine the
14 revenue contribution of each property to solve this
15 problem is by measuring the amount of impervious area
16 on everybody's property. This methodology is commonly
17 used throughout the United States. And, again, as I
18 mentioned, we were talking about charging all users of
19 generators of stormwater, be it profit, not-for-profit
20 and new municipalities.
21 You may recall MSD attempted to put in an
22 impervious rate in place about 10 years ago. It was
23 found by the Missouri Supreme Court that because it
24 was not a voted-on rate, it was unconstitutional.
25 What came out of that meeting, what came out of that
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1 proposal, was that, though, if we were going to move
2 forward with addressing flooding and erosion, we
3 needed to do it on an impervious area based method.
4 That is what we're proposing here, a voted-on
5 impervious area, to be fair to all the ratepayers, and
6 also to be in compliance with state statutes.
7 How are we going to do the calculation?
8 It's going to be based on equivalent residential units
9 or ERUs. That's the measure of the average number of
10 square feet of an impervious area that's found on a
11 residential customer's properties. Current ERU, or
12 the average amount of impervious area, on a
13 residential property that's in MSD service area is
14 2600 square feet. The proposed rate was determined by
15 taking the recommended capital improvement program,
16 which is about 30 million annually, and dividing it up
17 by the number of ERUs that are throughout our
18 district. That's where we come up with the average
19 cost. For a residential customer, it would be $2.25
20 per month or $27 annually.
21 To get in a little more detail,
22 single-family residential customers will be calculated
23 and put into four different tiers, depending on the
24 amount of impervious area that's on their property.
25 The tier ranges were developed using equivalent
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1 residential unit as a reference point. This is a
2 commonly accepted practice to cost effectively bill
3 residential customers throughout the country.
4 So let's go through the tiers. First of
5 all, Tier 1. If you are a residential customer who
6 has between 200 and 2,000 square feet of impervious
7 area on your property, the charge that MSD is
8 proposing is $1.42 per month. That represents about
9 one-quarter of our residential customers.
10 To fall in Tier 2, that's between 2,001 and
11 3600 square feet of impervious area, we're proposing a
12 rate of $2.25 per month for those residential
13 customers. That represents about half of our
14 customers. You'll notice the 2600 square feet of one
15 ERU fits kind of right in the middle of that range.
16 Again, that is the typical charge we'll see for most
17 residential customers.
18 You know, a property with slightly more
19 impervious area will fall in Tier 3, anywhere between
20 3601 and 6000 square feet of impervious area will be
21 charged $3.74 cents per month. If they have a much
22 larger home, more impervious area, anything over 6000
23 square feet, we're proposing to charge $6.84 per
24 month. That's for residential customers.
25 We have 50,000 other customers --
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1 multi-family residential, industrial, commercial -- we
2 need to bill. We're going to do that based on the
3 amount of ERUs. Remember, one ERU is 2600 square
4 feet. So take an example of a commercial entity
5 that's 10,000 square feet of impervious area. You
6 take 10,000 square feet of an impervious area, divide
7 it by 2600, you come up with 3.85 ERUs. MSD will
8 round that up to four ERUs times $2.25 per month per
9 ERU, and that particular commercial property, we would
10 be able to charge $9 per month for stormwater
11 services.
12 The first full year of collection would be
13 our fiscal 2022, which is from July 1, 2021, through
14 June 2022. If this proposal moves forward, the first
15 billing would actually occur in July 1 -- until
16 January 1 of 2021 -- July 1, 2000 [sic]. Sorry.
17 January 1, 2000.
18 Total revenues we're collecting from the
19 single-family residential unit, we'll collect about
20 13.7 -- $13.8 million in revenue. That's slightly
21 half of the total program cost. And from the
22 nonresidential customers, $16.2 million, or slightly
23 more -- slightly more than 50 percent of the overall
24 program of $30 million.
25 How will we bill? For most customers,
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1 that's 450,000 of them, the stormwater capital rate
2 will appear on the current monthly bill that folks
3 receive for wastewater. There simply will be an
4 additional line on the monthly bill from MSD. We do
5 have customers, about 50,000 of them, who don't
6 currently receive wastewater services from MSD that
7 fall into two categories. We have nonresidential
8 customers who have at least 20 ERUs of impervious
9 area. MSD will be billing them on a monthly basis.
10 They will be in separate bills. Since they don't
11 receive a wastewater bill, it will be the only monthly
12 bill they receive from MSD.
13 All other customers, primarily residential,
14 we're going to be billing on a quarterly basis. Why
15 do we do that? Most residential customers, we're
16 going to be looking to charge $2.25 per month. It's
17 not cost effective for MSD to just send out a monthly
18 bill for 2.25 and look to receive those revenues. So
19 we'll be billing folks every three months.
20 There will be some incentive programs and
21 we're proposing within the -- proposing within the
22 rate we're sending to the rate commission. One of
23 them will be impervious credits. The easiest way to
24 lower your monthly bill will be to reduce your
25 impervious area. If you're a residential customer,
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1 you would be reducing the amount of impervious area;
2 so you will be dropped into a lower tier. If you are
3 a nonresidential customer, simply eliminating one ERU
4 or 2600 square feet. For every ERU you eliminate
5 impervious area, MSD will reduce the bill by $2.25 per
6 month.
7 Those properties that live next to the large
8 rivers -- the Mississippi River, the Meramec River,
9 and Missouri River -- we will be looking to provide a
10 70 percent credit. Their runoff goes directly into
11 large creeks and streams, MSD has no responsibility
12 for. But there are still impervious areas such as
13 roadways that need to be paid for, and 30 percent will
14 be their share of every bill.
15 We will provide an incentive for best
16 management practices. The incentive will be a
17 50 percent credit. A 50 percent credit will be if
18 you -- if a residential customer will take 500 square
19 feet of their impervious area and run it to a
20 treatment unit, such as a rain garden or a similar
21 kind of facility, MSD will make an up-front payment of
22 $135 to help assist with the cost of making that
23 installation. That results in a 50 percent credit of
24 the bill over the next 10 years.
25 Finally, low-impact development, we'll offer
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1 a credit of 35 percent for those who meet the
2 low-impact development criteria. That implies the
3 impervious area is less than 15 percent of the
4 residential property and the residential property is
5 more than three acres. This will allow it to mirror
6 the environmentally sensitive development design
7 standards that exist throughout the country, and the
8 credit of 35 percent will reflect reduction of actual
9 stormwater runoff for most properties.
10 How do we plan on proceeding? MSD staff, as
11 previously said, we submitted our proposal to the rate
12 commission on February 26, 2018. The rate commission
13 has 165 days to review the proposal and make the
14 recommendation to MSD board of trustees by
15 August 10th. We are holding technical meetings. This
16 is one of many. They will extend into June. Under
17 the current schedule, again the rate commission is
18 supposed to deliver to our board of trustees their
19 final recommendations by August 10th. If it is -- the
20 recommendation will be considered by a board of
21 trustees in the last part of calendar 2018. Assuming
22 that we move forward, the earliest chance for a public
23 vote would be in April of 2019. Prior to that vote in
24 April 2019, MSD will, again, have another public
25 information session. We won't be advocating for one
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1 way or the other, but we will provide information to
2 voters to let them know what will be on the April 2019
3 ballet.
4 There's two possible results from this. The
5 voters will vote yes. If they do vote yes, MSD will
6 start collecting the impervious rate and MSD will
7 start providing that service. If the voters vote no,
8 and MSD is not collecting the revenue for the service,
9 MSD will not provide that service. Again, if the vote
10 is yes, we will start collecting the new rate in
11 January 2020.
12 I do want to touch base on another rate
13 proposal that will be coming in the future. That's
14 stormwater that I've talked about before, and we are
15 coming up where MSD is going to have to go to the rate
16 commission for wastewater rates in 2021 through 2024.
17 Right now MSD staff is proposing to get a rate
18 proposal from the rate commission for the next set of
19 wastewater rates in February of 2019. Once we do
20 that, we will use the same process that I've described
21 for stormwater. The rate commission will consider our
22 proposal, and, again, we'll have a new set of public
23 participation meetings to gather input from the
24 public.
25 Mr. Chairman, that's the end of my
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1 presentation.
2 CHAIRMAN HAWES: Thank you, Mr. Hoelscher.
3 I appreciate that very much.
4 Andy, do we have any questions from the
5 public?
6 MODERATOR: We do. We've got several
7 already. The first one is actually about the rate
8 commission itself. "How is the rate commission
9 decided?"
10 CHAIRMAN HAWES: Does anyone want to take a
11 stab at that?
12 Mr. Hoelscher.
13 MR. HOELSCHER: Mr. Chair, I've been through
14 this a couple times so let me give it a try. MSD
15 charter was changed in 2000 to develop this rate
16 commission to review any kind of rate proposals by
17 MSD.
18 The rate commission consists of 15 different
19 organizations. The board of trustees accepts
20 applications from these organizations who would like
21 to serve on the rate commission. MSD tries to make
22 sure that the rate commission consists of a group of
23 organizations that represent our ratepayers as a
24 whole. For instance, socioeconomic groups,
25 neighborhood groups, government groups, labor groups,
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1 contracting groups, business groups. They try and
2 make sure they cover all those areas. MSD's board of
3 trustees appoint those 15 different organizations and
4 in their organizations, they'll appoint the individual
5 trustees, the individual members of the rate
6 commission. Rate commissioners, once they're
7 appointed, they serve a six-year term.
8 CHAIRMAN HAWES: Very well explained. Thank
9 you, Mr. Hoelscher.
10 Andy, any --
11 MODERATOR: Absolutely, sir.
12 And, by the way, I just want to remind
13 everyone if you have questions, please submit them on
14 Facebook and Twitter or by e-mail and we'll get to as
15 many of them as we can during the session today.
16 The next question come from Heather in
17 Wildwood. She says, "Thank you very much for the
18 presentation. If the monthly fee for stormwater is
19 passed, how long will the increase last and what's the
20 duration? 2022 to when?"
21 MR. HOELSCHER: MSD's proposal to the rate
22 commission is that the fee would last in perpetuity
23 unless a decision was made to shut it off. So right
24 now, as I mentioned before, we're talking about
25 collecting $30 million a year. That will result in us
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1 taking 25 to 30 years to address all of the stormwater
2 issues we know of now. Once we get to that point,
3 obviously, if it turns out we've eliminated or taken
4 care of most of the stormwater issues, there will be
5 another decision made as to whether or not we continue
6 the program or whether or not we need to terminate the
7 program.
8 MODERATOR: Next question is about the
9 credits you discussed a second ago, sir. "Can rain
10 barrels help qualify for a credit?"
11 MR. HOELSCHER: Mr. Chairman, I'll take that
12 one.
13 Rain barrels can, but understand the
14 standard that I've laid out. The way you can get a
15 credit for a rain barrel or a set of cisterns that
16 hold water, you're going to have to find something
17 that has enough volume to collect the runoff of 500
18 square feet of impervious area and hold that for one
19 to two years stored. Those are the current standards.
20 A single rain barrel will not do that. However, you
21 can chain them together or have some kind of a cistern
22 where it will hold enough water back, you would be
23 eligible for a credit.
24 MODERATOR: A follow-up question basically
25 to that. "What are some ways or examples to reduce
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1 impervious services on our properties so we can
2 qualify for that production?"
3 MR. HOELSCHER: So I'll give the typical
4 example on how to do a reduction, and this is what we
5 had -- what we saw when we passed the original
6 impervious rate back in 2007. The most common thing
7 we see is homeowners, what they will do, is they will
8 take their back concrete patios or sidewalks, and
9 because they need replacement, because they need work
10 done, they will remove them and replace them with
11 something that is pervious, such as pervious pavers or
12 just some kind of stone that will -- that will
13 eliminate the impervious area. We have had some
14 individuals and some businesses who've actually put
15 green roofs on their property so that they actually
16 have greenery on top of the roof. It captures the
17 stormwater, and that will count as a pervious area,
18 and not impervious, and that will also reduce
19 somebody's rates.
20 MODERATOR: Mr. Chairman, the next question
21 comes from an MSD ratepayer. "How do you prioritize
22 all of these projects?"
23 CHAIRMAN HAWES: Mr. Hoelscher?
24 MR. HOELSCHER: We plan on prioritizing the
25 projects the same way we currently do with the
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1 stormwater ones we had, as I explained earlier in the
2 $67 million worth of programs. We have a system set
3 up where we evaluate the value of various problems.
4 For instance, if somebody has erosion -- and I'll use
5 that as the easiest example -- in their backyard, it's
6 approaching their fence, that will have one benefit
7 value. If the erosion in somebody's backyard has come
8 up to their back patio in their home, that's a higher
9 benefit value. So we'll take all of the possible
10 problems and all the potential solutions and we'll
11 take those benefit points, divide them by cost, and
12 we'll end up with a benefit cost ratio. And the
13 higher priority projects that have the higher ratio
14 will be funded first.
15 MODERATOR: Next question is about flooding.
16 "If someone has flooding like we saw in the pictures
17 of the presentation earlier, how do they let MSD know
18 so that they can add it to the problem areas?"
19 MR. HOELSCHER: Because MSD currently
20 receives stormwater issues from residents and all
21 kinds of flooding in municipalities in our area, our
22 database is pretty good, but we know we don't have all
23 the problems. It's impossible for us to go out and
24 look for stormwater problems. If anyone has a
25 stormwater issue and you want to make sure it's on our
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1 list, even if you have called before, contact MSD,
2 explain the issue. If we have it in our system and it
3 seems as though the problem is still the same, we'll
4 simply probably say "thank you." If it's something
5 new or something's changed significantly, we'll send
6 an engineer out in the field to evaluate and determine
7 if there is a change in the priority. That is the way
8 MSD finds out the size of the stormwater issues
9 throughout the district, is complaints from customers.
10 So if you have one, please contact MSD.
11 MODERATOR: All right. Here's our first
12 question from Twitter this afternoon. "How do you
13 justify taxing residential landowners who have their
14 own septic system and don't use MSD services?" They
15 will have a follow-up based on your answer.
16 MR. HOELSCHER: If you have a septic system
17 and you are not getting wastewater services from MSD,
18 you are not getting a wastewater bill. Again, that is
19 one service that MSD is providing is wastewater
20 service. We're talking about a separate utility.
21 This is a stormwater utility. We're trying to address
22 problems having to do with a runoff that is causing
23 erosion and flooding issues. Those issues are driven
24 by the runoff that comes off of the impervious area
25 from any property, be it residential, commercial,
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1 industrial, not-for-profit, that runs into the local
2 drainage system. That is how we're going to be
3 providing that service, and we will not be charging
4 you wastewater charge. If you have a septic tank, you
5 will not get a bill from MSD; however, you will be
6 billed if we proceed with the program for stormwater.
7 MODERATOR: Mr. Chairman, the next question.
8 "Why didn't you combine the rate commissions for both
9 stormwater and wastewater?"
10 CHAIRMAN HAWES: Yes.
11 MR. HOELSCHER: Mr. Chairman, I'll pass on I
12 think the experiences that I think, especially those
13 who've been on the rate commission before, last time
14 when we did this, we tried combining both stormwater
15 and wastewater. We were able to get through it. It
16 worked. But it resulted in a very long process.
17 This, as opposed to the other stormwater rate, is a
18 brand-new service that MSD is offering. It was
19 staff's decision to present to the rate commission the
20 stormwater rate proposal separate from the wastewater
21 proposal. We think it's the right thing to do.
22 Again, it's a service that we don't currently provide
23 and we thought the extra attention was necessary in
24 order for the rate commission to be able to properly
25 deliberate on our proposal.
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1 MODERATOR: Mr. Chairman, the next question
2 is about your bill. "Will there be a separate bill?"
3 MR. HOELSCHER: So it depends. If you
4 currently get a wastewater bill, this charge will
5 simply be added to that current bill. You'll see a
6 stormwater charge on your monthly bill from MSD. If
7 you don't currently receive a wastewater bill, there's
8 a portion in the presentation, if you take a look, if
9 you have a lot of impervious area, at least 20 ERUs,
10 that's 20 times 2600s, that's an awful lot of
11 impervious area, we will bill you on a monthly basis.
12 If you don't currently receive a wastewater bill from
13 MSD, we plan for most -- for almost all residential
14 customers, we plan on billing quarterly.
15 MODERATOR: All right. Next question.
16 "Will everyone pay the same amount?" I believe you
17 answered that during your presentation, but you might
18 want to just follow-up on that.
19 MR. HOELSCHER: So if we -- I'm going to
20 backup to the -- let's see -- go forward two. One
21 more. Yeah, that's it. Okay.
22 Sorry, folks. I had a recent issue with my
23 one eye; so it's a little hard to see from a distance.
24 Repeat the question for me, if you would.
25 MODERATOR: "Will everyone pay the same
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1 amount?"
2 MR. HOELSCHER: Okay. Everybody will not
3 pay the same amount. Again, the amount that you pay
4 will be based on the amount of impervious area. For
5 residential customers that currently have -- the slide
6 that was up on the screen, depending on which tier
7 your residential property falls into, how much
8 impervious you have on your property, you will be
9 billed anyone from $1.42 per month to $6.84 per month.
10 Nonresidential customers, which will be industrial,
11 commercial, municipalities, they will be billed based
12 on the number of ERUs or blocks of 2600 square feet of
13 impervious area. Their bill will be based on $2.25
14 per month per ERU.
15 MODERATOR: Mr. Chairman, the next question
16 also comes from Twitter. "What if all the runoff we
17 have on our property goes into a retention pond and we
18 can prove it, will they still be charged?"
19 CHAIRMAN HAWES: Mr. Hoelscher.
20 MR. HOELSCHER: So there are, in any rate
21 proposal, circumstances that are very unusual. In the
22 way the proposal was put out, that's a particular
23 instance where we would assume somebody exists in the
24 same fashion as somebody whose runoff goes to a major
25 river -- Mississippi River, Missouri River, Meramec
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1 River. There will be 70 percent credit offered.
2 Again, the balance of the 30 percent is to address the
3 runoff that's coming from a public infrastructure does
4 not get billed, such as roads and streets. So if you
5 are in that situation, MSD reviews your bill, you can,
6 as described, you get a 70 percent credit and that
7 credit will also be retroactive since they started the
8 program.
9 MODERATOR: Next question. "Will people who
10 live in floodplains be included in this?"
11 MR. HOELSCHER: Yes, they will.
12 MODERATOR: That was quick.
13 That's what I have right now. We'll keep
14 looking for more questions. If you have questions,
15 please submit them on Facebook and Twitter. And with
16 that, I'll send it back to the chairman to see if the
17 rate commission have any questions.
18 CHAIRMAN HAWES: Any rate commissioners have
19 any questions at this point for Mr. Hoelscher?
20 MR. SCHOEDEL: Yes, Mr. Hoelscher, you
21 mentioned the credits. So it sounded like everybody
22 will pay at least some portion and never get 100
23 percent credits and pay nothing at all as part of this
24 rate increase?
25 MR. HOELSCHER: Yes, sir, that's correct.
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1 Again, the explanation and reason for that, MSD will
2 not be measuring and billing impervious area that also
3 serves as a stormwater conveyance. And that would be
4 roads, for instance, with curb and gutter. They
5 actually carry the stormwater. The areas of public
6 right-of-way are not being billed for impervious area.
7 That's a reason for maximum credit, that any
8 individual can get a 70 percent because we do need to
9 collect from the whole population who are being served
10 by these streets. We need to collect the monies that
11 address the runoff coming off that public
12 infrastructure.
13 CHAIRMAN HAWES: Any further question from
14 the rate commissioners?
15 MR. BROCKMANN: Brian, going back to the
16 buyout of properties in floodplains. What would
17 happen to those properties if we buy them out?
18 MR. HOELSCHER: So MSD, in some of the areas
19 where it was previously collecting taxes, has been
20 doing buyouts in floodplains. We plan on using the
21 same strategies we have in the past. One, we will
22 need municipalities to agree that it's worthwhile to
23 purchase somebody out of a floodplain. We're talking
24 about, as of today, homes that are in two and
25 five-year floodplains. Once we purchase those
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1 properties, we will move at fair market value.
2 There's a couple of guidelines to allow folks to move
3 or whatever they want to do to abandon the property.
4 MSD will take over the property, demo the current
5 facilities that are there, and then we will look to
6 turn the property over to somebody else. Usually
7 that's a municipality. On occasion, it's adjacent
8 property owners. However, when MSD turns that
9 property over, we'll also include an easement across
10 the entire property for preventing any kind of future
11 development happening that would increase the
12 impervious area.
13 CHAIRMAN HAWES: Thank you.
14 Any further questions from the rate
15 commissioners?
16 Andy, do we have any further questions from
17 the public?
18 MODERATOR: I do, Mr. Chairman. We've had a
19 couple more come in.
20 The first one is, for those -- the folks who
21 are not typically getting a bill right now, the
22 non-profits, the folks who are not typically taxed,
23 how soon will they know what they need to pay so that
24 they can budget for that?
25 CHAIRMAN HAWES: Mr. Hoelscher.
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1 MR. HOELSCHER: So right now the plan will
2 be to start the billing in January 2020, assuming a
3 positive vote in April 2019. Based on experiences in
4 instituting the non-voted-for impervious rate about 10
5 years ago, sometimes that will cause problems with
6 various entities because of the annual budgeting
7 process. We will work with them to make sure that we
8 do the billing in an appropriate way so they have an
9 opportunity to increase their annual budgets to make
10 sure they can accommodate the new cost.
11 MODERATOR: Mr. Chairman, we got another
12 question about the rate commission and the member
13 credentials. "It might just be good to say where all
14 of the rate commission members are from or their day
15 jobs."
16 CHAIRMAN HAWES: Okay. Well, I'll start.
17 I'm Russ Hawes. I'm the Chief Administrator Officer
18 for the City of Kirkwood, and I represent the
19 St. Louis Municipal League.
20 MR. BROCKMANN: I'm Paul Brockmann with the
21 Missouri Botanical Garden. I represent Missouri
22 Botanical Garden and other not-for-profit cultural
23 institutions.
24 MR. SCHOEDEL: I'm Mark Schoedel with
25 Lutheran Senior Services and I represent the older
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1 adults in the Metropolitan Sewer District service
2 area.
3 MR. PALANS: Thank you. I'm Lloyd Palans,
4 and I'm with Bryan Cave Law Firm downtown. And I
5 represent the municipality of the City of Ladue.
6 MR. ZIEGLER: My name is Paul Ziegler, and
7 I'm Executive Director of EducationPlus and represent
8 the public school district in the metropolitan area.
9 MR. STEIN: I'm John Stein. I retired from
10 Anheuser-Busch. I represent the Missouri Industrial
11 Energy Consumers, which is a consortium of large
12 industrial, electrical, water, and sewer users in the
13 St. Louis Metropolitan area.
14 MODERATOR: Mr. Chairman, you might want to
15 just say that there are many more rate commissioners
16 that aren't here today.
17 CHAIRMAN HAWES: Absolutely. The rate
18 commission is composed of 15 individuals representing
19 different interests throughout the area, as
20 Mr. Hoelscher identified, a good cross-section of the
21 community of the ratepayers of the metropolitan sewer
22 district.
23 MODERATOR: Okay. Next question is from
24 Twitter. "How will my property be evaluated for
25 impervious services? Will MSD be sending
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1 representatives into the field to measure or will it
2 be based on current property surveys?"
3 MR. HOELSCHER: That's a very good question.
4 As we've always done in the past, MSD will be basing
5 impervious areas on aerial photography. Aerial
6 photography is done in the area at least every one or
7 two years and is used by just about every public
8 entity, as well as private entities throughout the
9 area. So based on that photography, we can outline
10 the amount of the impervious area that's actually
11 within your property boundaries. For instance, most
12 people's driveways extend into the public
13 right-of-way. We will not be counting as an
14 impervious area your driveway that's off your
15 property. We'll only be counting the impervious areas
16 on the driveway.
17 There will be -- through computer analysis,
18 most of the data will be calculated automatically and
19 it will be hand-checked to make sure things are
20 correct. There is a chance there may be a mistake,
21 but if there are and somebody appeals, we will have to
22 go out and do a field verification. If there was a
23 mistake, we'll make sure to retroactively decrease the
24 amount being charged for the impervious area.
25 MODERATOR: Next question. "Do you have an
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1 estimate on how many jobs this will provide for the
2 St. Louis area?"
3 MR. HOELSCHER: So all of this work will be
4 based on contracted work. It won't be MSD employees
5 other than doing design work, as well as doing
6 inspection work. MSD's current program Project Clear
7 is generating about 250 new jobs at a level of about
8 300 to $350 million. So based on that, this
9 $30 million per year program will probably result in
10 just about 30 additional jobs, full-time jobs.
11 MODERATOR: Next question. Back to Twitter.
12 "Is Tier 4" -- you had these four tiers on your
13 PowerPoint slide -- "Is Tier 4 capped at 6000 square
14 feet regardless of how much more property you have
15 above 6000?" We are not charging more than $6.84 a
16 month.
17 MR. HOELSCHER: Correct. So any property
18 that has at least 6000 -- current residential property
19 that has at least 6000 square feet of impervious area,
20 it doesn't matter how much more you have in that, you
21 will be billed the rate that is currently shown on the
22 slide that's there. 6.84 per month, I believe.
23 MODERATOR: Great. I just want -- one more
24 chance. We have a couple more coming in. But I just
25 want to remind everybody, please submit your questions
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1 on Facebook and Twitter. You can also e-mail your
2 questions to msdratecommission@gmail.com.
3 And next question just came in. "If my
4 backyard floods every time it rains, will that be
5 taken care of, and how do I make sure you know about
6 that flooding in my backyard?"
7 MR. HOELSCHER: I want to answer this
8 question every time it's asked. If you have a
9 stormwater problem and you've never called us, call us
10 and tell us you have a problem. We'll make sure we
11 evaluate what the problem is. We'll at least have a
12 preliminary idea of where it would land in the cost
13 benefit analysis. If you have a stormwater problem,
14 call MSD and tell us. If you've called us in the past
15 and would like to make sure we have the information,
16 call us again. Especially if you called us in the
17 past and the situation has changed or gotten worse,
18 please call us and let us know. That will also keep
19 the database up and make the database as up to date as
20 we possibly can. Again, the only place we know of
21 stormwater issues are complaints we get from residents
22 and municipalities. Please call if you have
23 something.
24 MODERATOR: We had a question at the last
25 rate commission meeting up in Bridgeton I'd like to
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1 bring up today as well. "If a municipality is already
2 doing a stormwater project, they already have it
3 projected to complete, will MSD be working with them
4 if those projects line up with what you're proposing?"
5 MR. HOELSCHER: Yeah. I'm going to -- not
6 only that question, but I think I'm going to take the
7 opportunity to answer the much larger question.
8 Directly to that, if a municipality is doing a
9 project, and this is the most common example we see,
10 municipalities do collect stormwater part taxes. Many
11 of them do do their own stormwater projects. Most of
12 them, if they have stormwater plans or other lists,
13 they will coordinate with MSD so that we have all the
14 same database. If the municipality will move forward
15 and they're doing a project that has a proper priority
16 and is already programmed in MSD's program, MSD will
17 pay for that portion of their project that MSD was
18 planning to spend for construction.
19 That coordination actually goes much
20 further. Oftentimes, you can imagine, the most common
21 instance we see, if we're ready to do a stormwater
22 project and the municipality plans on putting a new
23 road surface in the year before we move, that's the
24 type of coordination we normally see within
25 municipalities. Not just stormwater dollars, but
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1 other capital improvement dollars. And we try the
2 best we can to work with all the municipalities to
3 make sure that either new infrastructure put in by MSD
4 or the infrastructure put in by the municipality is
5 not torn up because we're not coordinating our
6 efforts.
7 MODERATOR: For now, Mr. Chairman, I will
8 send it back to you to see if the rate commission has
9 any questions while we tabulate some other questions
10 on social media.
11 CHAIRMAN HAWES: Thank you, Andy.
12 Any further questions from the rate
13 commissioners or Mr. Hoelscher at this point?
14 Hearing none, anything further on --
15 MODERATOR: I have no additional questions
16 right now, Mr. Chairman.
17 CHAIRMAN HAWES: All right. Well, seeing
18 none, I'd like to thank all the participants this
19 afternoon for your participation, everybody who is out
20 there in TV land, so to speak.
21 MODERATOR: Mr. Chairman, I did get one
22 additional question.
23 CHAIRMAN HAWES: You got one. All right.
24 That's good.
25 MODERATOR: It says "Good presentation.
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1 Good setup for your system of evaluating and taxing
2 properties. I'm still not sure if I will vote for
3 it." Do you have any comment based on that comment?
4 MR. HOELSCHER: A very legitimate feeling.
5 MSD, again, is offering a service. There are
6 individuals, based on our surveying, we know quite a
7 bit of the individuals throughout our district that
8 find stormwater to be a serious issue. When we ask
9 about how much folks are willing to pay or what they
10 think it's worth to resolve those, we get a different
11 set of answers.
12 MSD, the rate proposal and from the rate
13 commission and how we plan to proceed, this is a
14 decision by the voters as to whether or not they want
15 us to provide this service. And now MSD does view it
16 and the reason everybody is voting -- it's not just a
17 service for the individuals immediately impacted by
18 the problem, but you can imagine we want to make sure
19 we -- MSD tries to provide a good drainage system
20 throughout its entire service area.
21 So whether or not -- however you decide to
22 vote is your call. MSD will make sure between January
23 and March that we try to be as clear as we possibly
24 can so everybody understands the consequences of
25 either voting yes or no in April 2019, and MSD will
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1 abide by the results of that vote.
2 MODERATOR: Follow-up question,
3 Mr. Hoelscher -- or actually, Mr. Chairman, "I think I
4 have an issue. Can you come out and check on it and
5 do I get a bill if you come out and check my property
6 for a flooding issue?"
7 MR. HOELSCHER: So anybody who calls us and
8 asks us to review a flooding issue, those services are
9 already paid for in the two-cent property tax that I
10 described earlier. That's a regulatory function as a
11 stormwater manager who happens to be asked. So if you
12 have a problem, we will go out for free. We will
13 evaluate your issue. Two things can happen. One, we
14 will make sure we log in the system -- and what does
15 happen in some instances, oftentimes there's very easy
16 fixes to some of the problems. Our engineer will work
17 with the property owner to see if the property owner
18 can't possibly, with very little effort and expense,
19 possibly resolve some of the problems they have
20 themselves.
21 MODERATOR: Next question. "If you don't
22 provide this service, who would in the future?"
23 MR. HOELSCHER: Understanding that
24 Chairman Hawes indicated he works for the City of
25 Kirkwood -- and I just want to throw that out there,
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1 and Mr. Palans represents the City of Ladue -- MSD
2 firmly believes we're the ones to provide the service.
3 We're set up by charter to be a regional authority to
4 provide this service. And stormwater services don't
5 abide -- or don't follow municipal boundaries. They
6 follow the watersheds. Those do not line up with
7 municipal boundaries. If MSD doesn't provide this
8 service, there is some capability with municipalities
9 to try and address this issue as they can within their
10 individual municipalities. MSD is continuously
11 pressing the state government to try and provide
12 funding to address these issues. Those are some
13 possibilities. What I would tell you, if you're
14 looking for a regional cost effective way to address
15 these issues, MSD is the right group in order to
16 provide those services.
17 MODERATOR: A question from Facebook this
18 time. "How will you let everyone know the outcome of
19 the proposal of the rate commission decision and
20 what's provided to the board of trustees?"
21 MR. HOELSCHER: As was mentioned earlier, on
22 our website is the entire proceedings for the rate
23 commission. The final report that's due on
24 August 10th will be on that website, on the rate
25 commission's website, as well as MSD's website from
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1 the 2018 stormwater rate proposal. You will see that
2 proposal. The board of trustees will then, in their
3 own way, go through a public process to determine
4 whether or not they want to accept those
5 recommendations or make changes. Again, those are
6 also public processes. You will find the discussion
7 in our committee meeting agendas. You will find
8 different board agendas as to how we move forward.
9 If you missed all that, in the end, I will
10 repeat again, January through March 2019, if we
11 proceed, MSD itself will have a series of meetings to
12 make sure everybody understands the issues. As a
13 matter of fact, if there's individual groups now or
14 later who would like an explanation of this, please
15 contact us. MSD will put a group together and we'll
16 meet with any neighborhood group or any business group
17 that would like to hear this presentation and ask
18 their own questions. We want people to be as educated
19 as they possibly can on the issue.
20 MODERATOR: Brian and Mr. Chairman, I will
21 say that this is the largest number of questions that
22 we have had at any of our meetings so far; so I want
23 to thank everybody for engaging on social media.
24 That's all the questions that I have at this time from
25 the public, sir.
PUBLIC HEARING PROCEEDING 5/30/2018
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ALARIS LITIGATION SERVICES
Page 45
1 CHAIRMAN HAWES: All right. Any further
2 from the rate commission?
3 Seeing none, again, I'd like to thank
4 everybody for participating this afternoon, including
5 the public. The next public hearing will be conducted
6 on June 6, 2018, at 6:00 p.m. at the Forest Park
7 Visitors Center. And with that, this public hearing
8 is now adjourned.
9 (Whereupon, the public hearing concluded at
10 1:54 p.m.)
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PUBLIC HEARING PROCEEDING 5/30/2018
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ALARIS LITIGATION SERVICES
Page 46
1 REPORTER CERTIFICATE
2 I, REBECCA L. TUGGLE, a Registered
Professional Reporter, Certified Court Reporter, and
3 Certified Shorthand Reporter within and for the State
of Missouri, do hereby certify that the MSD public
4 hearing held on May 30, 2018, commenced at Avatar
Studio, 2675 Scott Avenue, Suite G, St. Louis,
5 Missouri 63103; that said public hearing was reported
by myself, translated and proofread using
6 computer-aided transcription; and the above transcript
of proceedings is a true and accurate transcript of my
7 notes as taken at the time the proceedings were had.
8 I further certify that I am neither attorney
nor counsel for nor related nor employed by any of the
9 parties to the action in which this hearing was taken;
further, that I am not a relative or employee of any
10 attorney or counsel employed by the parties hereto or
financially interested in this action.
11
12 Dated this 5th day of June, 2018.
13
14
15
16 ____________________________________
Rebecca L. Tuggle, RPR, CCR, CSR
17
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PUBLIC HEARING PROCEEDING 5/30/2018
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ALARIS LITIGATION SERVICES
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bit 41:7
blacktop 14:7
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board 4:2,23
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boundaries 9:5
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38:25
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bring 39:1
Brockmann 2:6
3:7,8 32:15
34:20,20
Bryan 35:4
budget 33:24
budgeting 34:6
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business 23:1
44:16
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ALARIS LITIGATION SERVICES
businesses
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buy 32:17
buyout 32:16
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called 9:13 13:16
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carry 32:5
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Cave 35:4
CCR 1:17 46:16
cent 10:5,17
Center 45:7
cents 16:21
CEO 7:17
CERTIFICATE
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Certified 46:2,3
certify 46:3,8
chain 24:21
Chair 22:13
chairman 2:6
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Chief 34:17
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clear 37:6 41:23
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come 7:25
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comment 6:18
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commissioners
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community 4:10
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composed
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computer 36:17
computer-aid ...
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conferences
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consider 21:21
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considered
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consists 4:12
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consortium
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constructing
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construction
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consultant 5:7
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Consumers
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contact 27:1,10
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contained 6:13
continue 24:5
continuously
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contracted 37:4
contracting
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contribution
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controlled 14:2
conveyance
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coordinate
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coordinating
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coordination
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corner 10:3
correct 31:25
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cost 9:25 11:11
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34:10 38:12
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counsel 5:7
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count 25:17
counting 36:13
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country 9:11
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credit 19:10,17
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credits 18:23
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creek 12:6,6,11
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hearings 6:7,10
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Heather 23:16
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homeowners
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hospitals 13:15
hundred 10:5,17
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idea 38:12
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identify 7:9
identifying 5:19
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6:12,12 8:15,16
9:2,3 34:19
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lower 18:24
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11:20 13:11 15:1
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37:9
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12:16,22 13:3
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