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HomeMy Public PortalAboutExhibit MSD 62 - Transcript of the May 30, 2018 Public Hearing PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 1 1 METROPOLITAN ST. LOUIS SEWER DISTRICT 2 PUBLIC HEARING PROCEEDING 3 4 5 6 7 TRANSCRIPT OF PROCEEDINGS 8 MAY 30, 2018 9 2675 SCOTT AVENUE, SUITE G 10 ST. LOUIS, MISSOURI 11 12 13 14 15 16 REPORTED BY: 17 REBECCA L. TUGGLE, CCR, RPR, CSR 18 ALARIS LITIGATION SERVICES 711 N. 11TH STREET 19 ST. LOUIS, MO 63101 (314) 644-2191 20 21 22 23 24 25 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 2 1 APPEARANCES: 2 BRIAN L. HOELSCHER, P.E. Executive Director 3 Metropolitan St. Louis Sewer District 4 5 COMMISSIONERS PRESENT: 6 Russell Hawes, Chairman Paul Brockmann 7 Mark Schoedel Lloyd Palans 8 Paul Ziegler, Ed. John L. Stein 9 10 MODERATOR: Andy Likes 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 3 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 4 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 5 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 6 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 7 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, PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 8 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. PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 9 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. PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 10 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 11 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 12 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. PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 13 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 14 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 15 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 16 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 -- PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 17 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, PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 18 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, PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 19 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 20 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 21 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 22 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, PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 23 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 24 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 25 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 26 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 27 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, PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 28 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. PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 29 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 30 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 31 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. PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 32 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 33 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. PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 34 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 35 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 36 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 37 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 38 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 39 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 40 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. PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 41 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 42 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, PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 43 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 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 44 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 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 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.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 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 18 19 20 21 22 23 24 25 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES A abandon 33:3 abide 42:1 43:5 able 6:23 9:22 10:22 11:21 17:10 28:15,24 Absolutely 23:11 35:17 absorb 14:8 accept 44:4 accepted 16:2 accepts 22:19 accommodate 34:10 accounts 6:22 accurate 46:6 acres 20:5 action 46:9,10 actual 20:8 add 9:7 26:18 added 29:5 additional 18:4 37:10 40:15 40:22 address 11:2,15 11:19,21 12:13 13:1,4,18,21 24:1 27:21 31:2 32:11 43:9,12,14 addressed 9:14 addressing 15:2 adjacent 33:7 adjourned 45:8 Administrator 34:17 adopted 4:18 4:20 5:4,8 adults 35:1 advocating 20:25 aerial 36:5,5 afternoon 3:2,6 6:15 27:12 40:19 45:4 agendas 44:7,8 ago 14:22 24:9 34:5 agree 32:22 air-streaming 3:13 airports 13:15 ALARIS 1:18 allow 20:5 33:2 amended 3:22 5:9 Amendment 10:13 American 6:12 amount 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33:24 budgeting 34:6 budgets 34:9 business 23:1 44:16 PUBLIC HEARING PROCEEDING 5/30/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES businesses 25:14 buy 32:17 buyout 32:16 buyouts 32:20 C C 3:1 calculated 15:22 36:18 calculation 15:7 calendar 20:21 call 38:9,14,16 38:18,22 41:22 called 9:13 13:16 27:1 38:9,14 38:16 calls 42:7 capability 43:8 capital 7:18 13:2 13:3,4 15:15 18:1 40:1 capped 37:13 captures 25:16 care 10:19 24:4 38:5 carry 32:5 cases 14:7 categories 18:7 cause 34:5 causing 12:3 27:22 Cave 35:4 CCR 1:17 46:16 cent 10:5,17 Center 45:7 cents 16:21 CEO 7:17 CERTIFICATE 46:1 Certified 46:2,3 certify 46:3,8 chain 24:21 Chair 22:13 chairman 2:6 3:2,3 7:12,13 7:15 8:4 21:25 22:2,10 23:8 24:11 25:20 25:23 28:7,10 28:11 29:1 30:15,19 31:16 31:18 32:13 33:13,18,25 34:11,16 35:14 35:17 40:7,11 40:16,17,21,23 42:3,24 44:20 45:1 chance 20:22 36:20 37:24 change 4:16 5:10 6:17 27:7 changed 22:15 27:5 38:17 changes 3:24 4:16,25 44:5 channels 3:15 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LITIGATION SERVICES 16:3 20:7 county 4:14 8:14 8:15 9:3 couple 22:14 33:2,19 37:24 Court 14:23 46:2 cover 23:2 created 8:11 14:12 credentials 34:13 credit 19:10,17 19:17,23 20:1 20:8 24:10,15 24:23 31:1,6,7 32:7 credits 18:23 24:9 31:21,23 creek 12:6,6,11 12:22 creeks 10:11 13:23,25 19:11 criteria 20:2 cross-section 35:20 CSR 1:17 46:16 cultural 34:22 curb 32:4 current 4:20 7:23 10:1 13:20 15:11 18:2 20:17 24:19 29:5 33:4 36:2 37:6,18 currently 4:12 8:2 10:3,14 11:7,18 12:17 13:22 18:6 25:25 26:19 28:22 29:4,7 29:12 30:5 37:21 customer 15:19 16:5 18:25 19:3,18 customer's 13:6 15:11 customers 9:3 10:7 15:22 16:3,9,13,14,17 16:24,25 17:22,25 18:5 18:8,13,15 27:9 29:14 30:5,10 D D 3:1 data 36:18 database 26:22 38:19 38:19 39:14 date 38:19 Dated 46:12 dates 6:13 day 9:7 34:14 46:12 days 20:13 decide 41:21 decided 22:9 decision 23:23 24:5 28:19 41:14 43:19 decrease 36:23 dedicated 8:20 8:24 deliberate 28:25 deliver 20:18 delivered 7:19 demo 33:4 depending 15:23 30:6 depends 29:3 Des 12:6 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