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HomeMy Public PortalAboutExhibit MSD 67 - Transcript of the June 6, 2018 Public Hearing PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 1 1 PUBLIC MEETING OF THE RATE COMMISSION OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT 2 2018 STORMWATER RATE CHANGE 3 4 5 June 6, 2018 5595 Grand Drive 6 St. Louis, Missouri 63112 6:00 p.m. 7 8 9 Jo Ann Dickson, CCR 1085 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 2 1 A P P E A R A N C E S 2 RATE COMMISSION: 3 JOHN L. STEIN, CHAIRMAN GERALD BECKMANN 4 RUSSELL HAWES TOM RATZKI 5 The Court Reporter: 6 Ms. Jo Ann Dickson 7 Alaris Litigation Services 711 North Eleventh Street 8 St. Louis, Missouri 63101 (314) 644-2191 9 10 ALSO PRESENT: BRIAN HOELSCHER, MSD 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 3 1 * * * * * 2 MR. STEIN: Well, I see by the clock that it 3 is 6 P.M., so I think we can commence. Good evening. I'm 4 Jack Stein, a member of the Metropolitan Saint Louis Sewer 5 District Rate Commission and I will be residing over the 6 public hearing this evening. 7 With me tonight are the following MSD rate 8 commission members, Mr. Gerald Beckmann, Mr. Russell Hawes, 9 Mr. Tom Ratzki. 10 The charter plan of the District was amended 11 at the general election on November 7th, 2000 and 12 established the Rate Commission to review and make 13 recommendations for the District regarding changes in waste 14 water rates, stormwater rates and tax rates proposed by the 15 District. 16 The charter plan requires the MSD board of 17 trustees to select organizations to ensure a fair 18 representation of all users of the District's services on 19 the Rate Commission. The Rate Commission representative 20 organizations are to represent commercial, industrial 21 users, residential users, and other organizations 22 interested in the operation of the District, including 23 organizations focusing on environmental issues, labor 24 issues, socioeconomic issues, community neighborhood 25 organizations and other nonprofit organizations. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 4 1 The MSD Rate Commission currently consists of 2 15 members from organizations and institutions throughout 3 Saint Louis city and county. On February 26th, 2018, the 4 Rate Commission received a rate change notice proposing 5 changes to the District's stormwater rates. The Rate 6 Commission adopted operational rules and a procedural 7 schedule to govern the proceedings on March 4th, 2018. 8 Under the current procedural schedule adopted 9 by the Rate Commission, the MSD Rate Commission has until 10 June 26th, 2018 to review and make a recommendation to the 11 MSD board of trustees as to whether the proposed rates 12 should be approved, not approved, or modified -- excuse 13 me -- with suggested changes and then approved. 14 The Commission requested that an extension 15 from the MSD board of trustees until August the 10th, 2018, 16 which was granted on May 1st, 2018. The Commission will 17 consider on May 17th a new revised -- or did consider on 18 May 17th, 2018 a new revised procedural schedule including 19 the extension. 20 The MSD Rate Commission has engaged legal 21 counsel and a rate consultant independent of those used by 22 the MSD staff. Under procedural rules adopted by the Rate 23 Commission as amended, any person effected by the rate 24 change proposal had an opportunity to submit an application 25 to intervene in these proceedings. An application to PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 5 1 intervene has been filed by Missouri Industrial Energy 2 Consumers. This application has been granted. 3 Since February 26th, 2018, the MSD Rate 4 Commission has received testimony from MSD staff, the rate 5 consultant and the intervenor. The parties have also 6 engaged in discovery requests. 7 A prehearing conference for the purpose of 8 identifying any issues raised by the rate setting documents 9 and prepared testimony previously submitted will be 10 conducted on the record. All persons submitting testimony 11 may participate in the prehearing conference, and each 12 participant in the prehearing conference shall submit a 13 prehearing conference report describing the issues raised 14 by the rate setting documents and the prepared testimony, 15 together with a brief description of such participants' 16 position, if any, on each issue and the rationale 17 therefore. 18 Rate payors who do not wish to intervene are 19 permitted to participate in these on the record public 20 hearings conducted in six sessions beginning on May the 21 8th, 2018. The Rate Commission published a public notice 22 regarding these proceedings in the Saint Louis Post 23 Dispatch and in the Saint Louis American. These notices 24 contain the time, dates and location of each of the 25 conferences and hearings. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 6 1 The public hearing session tonight is for the 2 purpose of permitting the District to present its 3 stormwater rate change proposal and to permit any rate 4 payor an opportunity to comment. We will begin with the 5 presentation by the District, followed by the public -- a 6 public comment period. 7 The District will be presenting a lot of 8 information, so I would ask that you hold your questions 9 until the comment period as perhaps many of your initial 10 questions will be answered by the end of the presentation. 11 Those wishing to speak should sign in on the 12 sheet provided and will be called on in the order of the 13 names listed thereon. Each rate payor should identify 14 themselves and any organizations represented by such rate 15 payor. 16 A few housekeeping rules before we begin. 17 Number one, if you wish to present testimony or expect that 18 you may have questions or comments, please sign in on the 19 clipboard by the entrance. Speakers will be recognized in 20 the order in which they sign up. 21 Each rate payor may have a maximum of ten 22 minutes to speak regarding the proposed rate change. As 23 the presiding officer I can limit or expand the time should 24 I deem it necessary. 25 If you have not done so already, please PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 7 1 silence your cell phones. Exits from this room are located 2 right there (indicating) and restrooms are located across 3 the hall. And I think that takes me to any questions 4 regarding the procedure this evening. 5 Hearing none, is the District ready to 6 proceed? 7 MR. HOELSCHER: Yes, sir, Mr. Chairman, we 8 are. My name is Brian Hoelscher. I'm the executive 9 director and CEO of MSD. I'm going to give the stormwater 10 capital funding proposal. The proposal is going to come in 11 three parts. First of all, I'm going to give one slide, a 12 brief overview of MSD. The second slide is going to be an 13 overview talking about the existing revenues and the 14 existing stormwater services that MSD provides. And then 15 the balance of the presentation will have to do with a 16 proposal for a new rate, a new charge, and a new service 17 that MSD is proposing to provide. 18 As the chairman indicated, once I'm done, the 19 Rate Commission will allow an opportunity to ask any 20 questions or have any comments about the proposal you see. 21 If you notice, we have folks in blue shirts 22 here from MSD. If you have a question about something 23 other than the rate proposal, once these proceedings are 24 completed, these folks will hang around and can answer 25 other questions you may have regarding MSD. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 8 1 Okay. Somebody needs to help me. You didn't 2 tell me which button. 3 Okay. So MSD in general, we are a government 4 utility created under provision of the state constitution 5 and we have a voter approved charter that's the basis for 6 our existence that sets our rules and regulations. We have 7 a board of trustees consisting of six members, three are 8 appointed by the mayor of the City of Saint Louis and three 9 by the county executive of Saint Louis County. 10 It's important to remember we are two 11 utilities. One, we are a waste water utility that collects 12 and treats waste water. Most people pay for that on their 13 monthly bill, the waste water. 14 We're also a stormwater utility. We currently 15 collect some taxes to provide existing stormwater services. 16 Again, the proposal here is to propose another revenue 17 source to provide additional services. 18 We have a 520 square mile service area. It's 19 the City of Saint Louis and about 87 percent of Saint Louis 20 County. We serve 1.3 million customers. 88 municipalities 21 are located within our boundaries. We have seven treatment 22 plants. They treat about 350 million gallons of waste 23 water per day. 24 And if you add up all the sewers you see right 25 there, it's just over 9,000 miles of sewers. That makes us PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 9 1 the fourth largest waste water utility by miles of sewers 2 in the country. Ahead of us are New York, Chicago, and 3 we're just behind Los Angles. 4 So current status of stormwater, you 5 may recall in April 2016 MSD had an election called 6 Proposition S. Proposition S addressed an issue having 7 to do with the funds required to operate and maintain the 8 public storm sewer system. 9 Prior to Proposition S, MSD did not 10 district-wide collect revenues to operate and maintain the 11 storm sewer system. In fact, the public storm sewer system 12 west of 270 and west of Lindbergh, MSD has owned since 1989 13 but never collected any revenues to operate and maintain 14 that system. 15 Proposition S took care of that. So now 16 everybody throughout the district is paying the same 17 property tax for us to operate and maintain the public 18 storm sewer system in the same way for everybody. 19 So the current status right now of MSD's 20 stormwater services, if you look in the upper left hand 21 part of this chart, everybody's property tax bill you see a 22 two cent per $100 evaluation property tax. That property 23 tax pays for MSD services having to do with mitigating the 24 impact of pollutants that are in stormwater run-off that 25 effects our creeks and streams. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 10 1 That two cent tax has been designated and has 2 been in place since before 1979. This is before the 3 Hancock Amendment. It has always produced sufficient 4 revenues for that service and we've never had to increase 5 it. 6 We also collect a ten cent stormwater tax from 7 Proposition S. That's 10 cents per $100 valuation of your 8 property. That pays for the operation and maintenance of 9 the public storm sewer system which are inlets, manholes, 10 storm sewers and fully paved concrete channels. It pays 11 for the operation and maintenance of that throughout the 12 District's boundaries. 13 When we put Proposition S in place, we 14 eliminated two revenue sources that were collected in 15 various parts of the district, as well as 21 other revenues 16 we set at zero from 21 separate taxing subdistricts. 17 When we set those 23 different sources at 18 zero, there were existing balances in all those funds. 19 They totaled 67 million dollars. As committed in 20 Proposition S, we took those 67 million dollars that were 21 leftover and we committed to doing the projects you see on 22 the blue map here. 23 For those of you that remember Prop S, you've 24 seen this map before. We used it extensively during that. 25 That map is currently up on our website. If you were to go PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 11 1 to the website and look under Proposition S, you would see 2 each one of those dots has a number in it. There's a 3 spreadsheet on our website. If you go to that number, you 4 will see the stormwater issue we're resolving, how we're 5 going to fix it, what it's going to cost, and when it's 6 going to be complete. 7 We have about 30 percent of those projects 8 done and another 30 or 40 percent are currently in design. 9 Those projects are addressing creek erosion and flooding. 10 So what we're going to address is, we were 11 going to complete those 67 million dollars worth of 12 projects, but once we do, the program is over. There are 13 no revenues going towards that service any further. We're 14 asking the voters whether or not they would like for us to 15 continue that program. 16 So, again, the issues we're talking about is 17 localized flooding, water in people's backyard, street 18 flooding that won't go away, regional flooding if you live 19 closer to a small or major creek and you have a floodplain 20 that floods, not necessarily just the Meramec River, but 21 River Des Peres, Fish Pod Creek, Kiefer Creek, any of the 22 odd named streams that go through people's backyards. And 23 also erosion. Creek erosion can effect streets and roads. 24 It could also effect peoples' property. 25 How many of these problems are there? MSD as PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 12 1 part of its regulatory requirement collects stormwater 2 issues from customers. They call and say I have this 3 stormwater problem. Right now we've identified over 500 4 different issues throughout the district that are unfunded 5 at a total cost of about 562 million dollars. 6 Now, that number bounces around a lot. Storm 7 water problems will go away and new ones will get created 8 and that 562 number will bounce around. But that's just 9 about the scope of what we're talking about tackling 10 sometime in the future. 11 So what is the proposal? The proposal is for 12 MSD to implement 30 million dollars per year program, 13 collect 30 million dollars in revenues to go after those 14 problems that you just saw on the previous map. It's going 15 to be based on the amount of impervious area on the 16 property. 17 The average charge for the average residential 18 customer we're proposing is $2.25 per month, for about $27 19 per year. It is a voted on charge, therefore, MSD is 20 proposing to bill not just residents but also 21 not-for-profits, schools, churches, airports, city halls. 22 The program again will address unfunded 23 stormwater issues that has to do with flooding and erosion. 24 The estimates are that all the current problems we know of 25 can be addressed in about 30 years. As it's always been, PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 13 1 creeks and streams throughout the district are privately 2 owned. They will remain that way. 3 And the floodplain management responsibilities 4 within the floodplain with regard to development or 5 redevelopment or what to do with homes that are flooded, 6 those are currently managed by the local municipalities who 7 serve as floodplain managers. They will retain that 8 responsibility. 9 So the rationale, what is impervious area? 10 It's a hardened surface that when rainfall hits it runs 11 off. It doesn't have a chance to hit the ground, soak into 12 the ground like you would with the normal vegetative 13 surface. 14 Examples, concrete, blacktop, rooftops, 15 driveways, back patios, sidewalks, those types of things, 16 they generate the extra run-off that's causing the issues 17 that we're trying to resolve. The reason that makes sense 18 is that the services we're looking to provide, they're 19 directly impacted by the amount of run-off. That 20 impervious area is what's creating the additional run-off. 21 The fairest way to determine the contribution 22 of every one of our rate payors for solving that issue is 23 through an impervious area method. The more impervious 24 area you have, the more you pay towards a solution. It's 25 not a new type of thing. Impervious area is a common PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 14 1 measurement throughout the country for utilities who have 2 stormwater programs. 3 Again, all property, property public and 4 private, will be measured for impervious area and be billed 5 for impervious charges put in place. 6 Those of you may recall about ten years ago 7 MSD proposed to this Rate Commission that we charge an 8 impervious rate similar to our waste water rate. A rate 9 does not have to be voted on. So MSD went through that 10 process. 11 By the time -- we did get sued over it. By 12 the time we got done, the Supreme Court determined that if 13 we wanted to charge an impervious -- collect revenues based 14 on impervious area, it required a vote of the public. 15 So, one, we have the court telling us you need 16 to vote. And also after that, in previous meetings with 17 the Rate Commission, they indicated that if you move 18 forward with this service in the future, we desire that you 19 use impervious area as the method for determining the 20 appropriate way to distribute those costs. 21 How are we going to bill? Here's what the 22 calculation looks like. And I'll explain that. And after 23 that I'll give you the details of what it really means. So 24 we're going to be billing based on equivalent residential 25 units. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 15 1 The equivalent residential units is the 2 average number of square feet of impervious area on a 3 typical residential property in MSD's boundaries. An ERU 4 is 2600 square feet. So the average amount of impervious 5 area on the average residential property in MSD's 6 boundaries is 2600 square feet. 7 The way we came up with the rate, we took the 8 number of ERU's divided by a proposed 30 million dollar per 9 year program and that's how we came up with the rate for 10 the average customer of $2.25 per month. 11 What does that mean for individuals? So how 12 we're going to bill individual residential customers, we're 13 going to bill them based on a four tiered system. The 14 amount of impervious area they have will allow them to fall 15 in one of four categories. The tier ranges are based on an 16 ERU or equivalent. It's a commonly accepted practice 17 throughout the country for folks to bill residential 18 customers on tiers and not measure to the exact square foot 19 all the impervious area on the residential property. 20 What do those tiers look like? You see tier 21 one. If you are a residential property and you have 22 between 200 and 2,000 square feet of impervious area on the 23 property, our proposal is for those properties to pay $1.42 24 per month to the program. Tier one encompasses about 25 one-fourth of the residential properties throughout MSD's PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 16 1 boundaries. 2 If you fall in tier two, your residential 3 property is between 2,001 and 3600 square feet of 4 impervious area, you're at -- we're proposing that you pay 5 $2.25 per month to the program. Fifty percent of the 6 residential properties in MSD's boundaries fall in tier 7 two. 8 If you have a larger home, tier three, 3601 to 9 6,000 square feet, we're looking for those properties to 10 pay $3.74 per month. 11 And if you have a much larger residential 12 property with more than 6,000 square feet of impervious 13 area, the charge we're proposing is $6.84 per month for 14 those larger residential properties. 15 So those are the residential folks. It's 16 about 450,000 accounts. We have 50,000 other accounts who 17 are nonresidential. Those are the industrial, commercial, 18 multifamily units. We're going to bill them per the number 19 of ERU's that are on their property. Remember, ERU is 2600 20 square feet. That's the average residential impervious 21 area in MSD's boundaries. 22 For instance, if a commercial property has 23 10,000 square feet of impervious area, you divide that by 24 one ERU, which is 2600, you come up with 3.85. MSD will 25 round that up to four ERU's at $2.25 per ERU, so the cost PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 17 1 to that commercial customer would be $9 per month. And 2 we'll calculate everybody who's nonresidential in that 3 fashion. 4 The way this is set up, if this passes, MSD 5 will start -- the first time they will collect a full year 6 of revenue will be starting July 2021 through June 2022. 7 How the revenues break out, the residential 8 customers, they will provide about 13.8 million dollars in 9 revenue, or just half of the 30 million dollars proposed. 10 The nonresidential customers provide about 16.2 million 11 dollars of revenue, or just a little over half of the total 12 cost of the program. 13 How we're going to bill individuals. Most 14 individuals, especially residential, if you receive a 15 monthly MSD waste water bill, we will simply add this 16 charge as another line on your monthly bill if this passes. 17 We do have some customers who have become 18 stormwater customers who are not currently waste water 19 customers. If you think of large parking lots that don't 20 have waste water connections or those types of things. 21 So if we have customers that have at least 20 22 ERU's of impervious area on their property, we're going to 23 bill them monthly the same way. They'll get a monthly 24 bill. They won't have a waste water bill, they will just 25 get a stormwater bill. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 18 1 If we have properties that are less than 20 2 ERU's, an easy example is a residential property on a 3 septic tank who is not a waste water customer, they're 4 currently not receiving a monthly bill, we are going to 5 bill them quarterly. 6 The reason for that is the typical average 7 residential customer is supposed to pay $2.25 per month. 8 It doesn't make sense for MSD to go to the expense of 9 trying to bill and collect $2.25 a month. So we would bill 10 those customers quarterly, $7.75. 11 We do have some incentive programs for those 12 who want to reduce the cost of their stormwater. The 13 easiest way is to reduce the amount of impervious area on 14 your property. For residential -- for both residential and 15 nonresidential, the easiest was is to reduce your amount of 16 impervious area. 17 How do you do that? Ten years ago when we put 18 the impervious charge in place, what we did have some 19 people do, by example, is take the back concrete patio, 20 remove the concrete pad and place pervious blocks in place. 21 That reduced their impervious area. 22 So the way a residential customer could reduce 23 their cost is to eliminate the amount of impervious area to 24 put them down another tier. 25 For nonresidential customers who we're billing PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 19 1 for ERU every 2600 feet, the easiest way to reduce their 2 cost is remove ERU's of impervious area. So every 2600 3 square feet they remove, they get credit of $2.25 per month 4 taken off their bill. 5 We also have credits for particulars of the 6 property. If your stormwater runs up to a large river, not 7 to one of the local creeks and streams, the Mississippi, 8 the Meramec, the Missouri River, MSD doesn't have any 9 jurisdiction over it at all. You will get a 70 percent 10 credit. You'll only pay 30 percent of the bill. 11 The reason you'll pay 30 percent of the bill, 12 the impervious area we are not billing for is the 13 impervious area associated with transportation facilities. 14 The reason for that, if you think of a typical street, 15 curvy gutter, those facilities are also serving as 16 stormwater transition facilities, so we're not billing for 17 that. 18 But we do need to collect revenues based on 19 that run-off, therefore, the maximum credit you get is 20 30 percent. Everybody is going to pay for the run-off 21 coming off the local streets. 22 You can do best management practices. We'll 23 offer a residential property if they can take 500 square 24 feet of impervious area and direct it to a best management 25 practice, which would be something like a rain garden, and PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 20 1 they can capture it per our standards which are one or two 2 year storm. They can do that and we'll give them an 3 up-front check of $135 towards their cost of doing that. 4 That $135 for a typical customers is five year's worth of 5 billing. 6 For a commercial entity, they do the same 7 thing, for every ERU that they treat the same way as I 8 discussed, they'll take an ERU, make a drain to a rain 9 garden with sufficient capacity. We'll only charge them 10 50 percent of the $2.25 per ERU. 11 Finally, low impact development, there is an 12 opportunity for a 35 percent credit for large residential 13 properties that have relatively little impervious area. So 14 for property that's at least three acres in size, and 15 within that three acres of impervious area is 15 percent or 16 less of the total lot size, they will be offered a 17 35 percent credit. 18 The reason being there's so much green space 19 and not -- so much pervious ground around the property that 20 it mitigates the run-off that's coming off the impervious 21 area on most properties. 22 Reiterating in some ways the schedule that the 23 chairman just indicated, again, we did submit to the Rate 24 Commission our proposal on February 26th. The Rate 25 Commission has 165 days to review that proposal. The PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 21 1 proposal is due back to our board by August 10. 2 The Rate Commission will hold technical 3 meetings through June and July. If you're interested in 4 those, you go to www.stlmsd.com. These technical meetings 5 are like a trial. So if you went to our website, took a 6 look at the proceedings for this Rate Commission, you would 7 find exhibits -- you would find the rate proposal, you 8 would find the exhibits that were submitted by MSD, you 9 would find testimony that's submitted by MSD and others, 10 along with cross-examination of those witnesses, and you'd 11 also find discovery requests. All that documentation is on 12 our website if you're interested. 13 The public hearings as we show here, this is 14 the last currently scheduled one. There is one more that 15 the Rate Commission needs to schedule. Again, proposal is 16 due by August 10. If the proposal is approved, the 17 earliest that there will be a vote is April 2019. Once the 18 Rate Commission is done in August, they will send a rate 19 proposal. 20 Our board of trustees, they will use the last 21 part of calendar 2018 considering the recommendations from 22 the Rate Commission. Assuming we move forward, again, 23 there will a vote in April 2019. 24 There's two possible results. In April of 25 2019, if the residents of our district decide they want PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 22 1 this new service and they vote yes, MSD will start 2 providing it. We'll start collecting revenues in 3 January 2020. If the public votes no, MSD will not provide 4 this service. 5 So to keep in mind now, when we are about at 6 the end of stormwater proposal, MSD does every four years 7 go to the Rate Commission for a rate proposal for our waste 8 water rates. Currently the Rate Commission has reviewed 9 rates through the summer of 2020. 10 So come February 2019, we will submit to them 11 a waste water rate proposal, the other utility that we are, 12 to consider rates from summer 2020 through summer 2024. 13 Again, that will start in February of 2019. The 14 proceedings will be very similar to this in structure. 15 Obviously the information will be different because it will 16 be a waste water proposal. 17 Any questions from MSD, there's a phone number 18 here. Again, our website, you can go to stlmsd.com under 19 Rate Commission and see all of the proceedings. 20 And, Mr. Chairman, that is the end of my 21 presentation. 22 MR. STEIN: Thank you, Mr. Hoelscher. 23 At this point in time we will take comments 24 and questions from the public. And as soon as someone 25 brings forward the sign-in sheet, we will commence. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 23 1 Thank you. Does Patti Sherman wish to make 2 comments or ask questions? 3 MS. SHERMAN: Yes, I do, a couple of questions 4 based on the presentation. The ERU, does that include -- 5 that does not include on a residential street the street? 6 MR. STEIN: Mr. Hoelscher, do you want to 7 address that. 8 MR. HOELSCHER: So for a residential property, 9 it includes the impervious area that's within your property 10 boundaries. So for a typical residential customer, your 11 street pavement goes out to the roadway. We'll stop 12 counting impervious area once we hit your property line. 13 MS. SHERMAN: And how do you determine what 14 our square footage is? Does someone come to your house? 15 MR. HOELSCHER: We do it through aerial 16 photography. Right now not MSD but a lot of other 17 entities, they use aerial photography. As a matter of 18 fact, we group with other entities that pay for the cost of 19 doing that. 20 Based on aerial photography, using computer 21 programs, we will outline most of the impervious area and 22 make some hand adjustments, and that's the way the 23 impervious area will be determined for each property. 24 MS. SHERMAN: Okay. How is it that we could 25 have so many sewers? Fourth behind the three largest PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 24 1 cities in the country. How could this happen? And is that 2 part of the reason we have all of these -- 3 MR. STEIN: Well, I'll take a stab at that. 4 We have a very light density development compared to some 5 of the other larger cities, a lot of single family 6 dwellings. As development expanded out in Saint Louis 7 County after World War II, a lot of single family homes, 8 large lots, etc., and the necessity of that was a lot of 9 smaller sewers in a much larger network to service the 10 population. Would you agree with that? 11 MR. HOELSCHER: Yeah, and I will just build on 12 what he said. If you put some numbers to it, MSD has taken 13 over 79 separate sewer districts that are in its current 14 boundaries. As the chairman said, somebody developed a 15 subdivision, they put their own set of small sewers in, and 16 they may or may not put any treatment at the end of that 17 sewer before it dumped into a local creek and stream. 18 If you were to rebuild Saint Louis area sewer 19 system from scratch, you would not build it the way it is 20 now. We did when we took over built a lot of collection 21 sewers, larger interceptors, made sure we collected all the 22 flows, but the collection system near the homes right now 23 are all small sewers that resulted in many miles of pipe. 24 And unfortunately the problem -- and this is a 25 waste water problem, your problem with the collection PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 25 1 system comes from the joints. So the more pipe you have, 2 the more joints you have and the more problems you have. 3 MS. SHERMAN: When you mentioned that 4 nonprofits are going to be included, does that include 5 hospitals and universities? 6 MR. STEIN: Yes. 7 MS. SHERMAN: And my main question is really 8 not about waste water. The reason I came because my 9 bill -- I live alone. I'm in a large house. I got my bill 10 yesterday, which was the same bill I've had for a long 11 time, $97 a month. 12 I have three and-a-half bathrooms. And I 13 suppose that's what it's based on. But there's something 14 wrong here. And I'm wondering if there can't be some more 15 equitable way of charging households such as mine. 16 MR. STEIN: Do you want to explain. 17 MR. HOELSCHER: Yeah. And that is waste 18 water. MSD collects its billing data from the water 19 providers. So not in your instance, but, for instance, out 20 in the county where Missouri American provides water, we 21 actually get monthly usage data from them on each property. 22 That's the basis for how much we charge waste water. 23 In the city, the water usage data that we get 24 from city water is based on, as you said, the attributes of 25 the home. Every attribute such as a bathroom or living PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 26 1 room or bedroom has an amount charged to it. They charge 2 for stormwater -- or for drinking water, potable water, 3 based on the attributes of the home. That's the data MSD 4 receives to do the waste water charge. 5 The only other thing I would say in general, 6 everybody who is a resident of the City of Saint Louis, and 7 this isn't an MSD program, but the city, if you want to do 8 a change, the change that's available now is to have a 9 meter, along with the plumbing changes installed in your 10 home, and then the city will actually start billing you for 11 water based on your actual water usage, and MSD will then 12 charge you based on your actual water usage. 13 It's not a program MSD -- it's not even under 14 MSD's jurisdiction. But if you're interested in pursuing 15 that, if you talk with us afterwards, we can hopefully find 16 the contact information of who in the city you can contact. 17 MS. SHERMAN: Thank you. 18 MR. STEIN: Any other questions? Thank you. 19 Mr. Peter Perkins, do you have comments or 20 questions? 21 MR. PERKINS: Yeah, I have a question. Thank 22 you, by the way. 23 So I looked at the map. I came in a minute or 24 two late and you had the map of projects that you all are 25 currently funded for. I have two creeks that meet on my PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 27 1 property. I'm not in a flood zone but there's a lot of 2 erosion. And so I had two plans drawn up to four to five 3 banks of the creek channel, one with a gated wall and rock 4 in and everything like that. 5 And when I went to the City of Ladue, they 6 said there's a program, that they're funded and they'll 7 50 percent of the renovation, yet if I sit and wait, MSD 8 might -- you know, they have a picture of this beautiful 9 wall, you know, along the side of my creek. 10 So my question is, how do I know where I fall 11 in the priority and the timeline, and is it truly funded or 12 should I just take my 50 percent and go ahead and fix it 13 right now. How do I make that decision? 14 MR. HOELSCHER: You've done a great job of 15 explaining the current state of stormwater in the district. 16 As a matter of fact, we have on the Rate Commission a 17 representative from the City of Ladue and he doesn't happen 18 to be in attendance tonight. 19 So the way this works out, municipalities have 20 the ability to collect a parks and stormwater tax to do 21 stormwater projects on their own. And they all have 22 different programs. You described the program that sits 23 with Ladue. 24 MSD will gather all the issues it has. You 25 may be -- well, you may be on this list, we would have to PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 28 1 check, or you may be on this map, we don't know. We can 2 check afterwards and let you know. But what we do with 3 every problem we receive, we do a calculation. We do a 4 benefit. For instance, if we're addressing erosion that's 5 starting to eat a little bit at your back bank, that has 6 one benefit value. 7 The erosion has swallowed your garage and is 8 up to the back door of your house, that has a much larger 9 benefit value. 10 So every issue we know of, we take that 11 benefit, divide it by the cost of the project and we end up 12 with a benefit cost ratio. The ones with a higher ratio 13 are the ones we do first. 14 So one of two things, if you called and told 15 us about your problem in the past, that means we do have it 16 on record, we don't lose it. Or if you would like to check 17 and make sure it's still there, you can contact us and 18 check. 19 If you've done that and something changes, 20 it's always good to call us and tell us that something has 21 changed. 22 Where we go from here, if you look on the rate 23 proposal, we've got two or three years -- two or three 24 years of projects identified based on the current benefit 25 cost ratio we've committed to doing. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 29 1 But if you check with us and we take a look 2 and we do the calculation, assuming this passes, we'll be 3 able to tell you what year we suspect we would get to your 4 particular issue, and you can compare that with the various 5 options -- the other option you have with the City of 6 Ladue. 7 I would tell you any improvement you do, MSD 8 is responsible for reviewing, inspecting and permitting 9 stormwater including private entities. 10 So did I hit everything -- 11 MR. PERKINS: You did. So I could find out, 12 you could tell me if I'm currently on the funded track -- 13 MR. HOELSCHER: Yes. 14 MR. PERKINS: -- and where I would fall in the 15 next three years, or if I fall in the unfunded track and 16 then I just kind of have to go hope this passes. 17 MR. HOELSCHER: And then we would go through 18 the prioritization process to give it a chance really to 19 give you again, 5 years off, 15 years off, based on the 20 benefit cost ratio of everything else we know. 21 MR. PERKINS: Got it. Okay. thank you. 22 MR. STEIN: Do the Rate Commissioners have any 23 questions or comments? 24 MR. RATZKI: I'd like to ask the public, is 25 your feeling that the district should provide this PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 30 1 additional service, provide capital improvements to be able 2 to build these facilities that are needed for erosion and 3 blight control? That's really what our goal is. We need 4 to come to a conclusion that we support this on behalf of 5 the public or we don't. 6 MR. PERKINS: I might be biased because it 7 effects my house more than others, but I live in Ladue 8 where there's creeks all over the place, and, yeah, I would 9 rather see every house pay a piece and have it taken care 10 of the correct way. 11 MR. RATZKI: And another comment to add to 12 what Brian said is that if it doesn't pass, then you're off 13 the list totally. So you need to factor that into your 14 decision if this passes or not. 15 MS. SHERMAN: So who else would pay for this? 16 MR. RATZKI: From our position there's nobody 17 else besides Metropolitan Saint Louis Sewer District that 18 can manage. Like I said, some municipalities have funds, 19 but we don't have much say in that. It's up to which 20 municipalities get funded for bigger projects or no project 21 at all. 22 MR. STEIN: Thank you, Mr. Ratzki. Question? 23 MR. PERKINS: When is the vote? 24 MR. RATZKI: The earliest it would be is April 25 of 2019. PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 31 1 MR. PERKINS: Okay. Got it. 2 MR. RATZKI: And I think the past history of 3 the district has been pretty consistent when they put a 4 date out there that they're going to try -- 5 MR. HOELSCHER: The only thing I'll add to 6 that is this whole formal process will end at the end of 7 this calendar year. You will find in January, February and 8 March, MSD staff going out with a large communication 9 campaign. 10 We won't advocate one way or the other, but 11 we'll make sure as best we can that every voter understands 12 what it is they're voting on, what happens if they vote no 13 and what happens if they vote yes. 14 So we've done that every time we've had a 15 proposal go in front of the voters. We plan on doing that 16 again this year. 17 MR. STEIN: Anything else -- 18 MR. RATZKI: I don't know if it's the right 19 thing to ask the public, but obviously one of the issues in 20 this decision is the residential, the commercial and the 21 nonprofits. 22 Right now the proposal is to tax the 23 nonprofits exactly the same as everybody else. It's 24 something that the Rate Commission could consider to not do 25 that or not -- is there any thoughts? PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 32 1 MS. SHERMAN: I say absolutely. They should 2 be taxed like everyone else, hospitals and universities 3 here, as in other cities, are taxed in a fair way and we're 4 not. So I was glad to hear that. 5 MR. RATZKI: So we just need to know the 6 public's opinion on that. 7 MR. STEIN: As a further clarification, this 8 is not proposed to tax them. It is a rate. 9 MR. HOELSCHER: So we can be clear for 10 legalities, in the State of Missouri it's a voted on 11 charge. If it was a tax, we could not bill them. I'm 12 required by my general counsel to make that statement. 13 MR. STEIN: Are there any other comments or 14 questions? 15 Hearing none, this public hearing is 16 adjourned. Thank you all for coming. 17 (Thereupon, the public meeting was adjourned 18 at 6:45 p.m.) 19 20 21 22 23 24 25 PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 33 1 CERTIFICATE OF REPORTER 2 I, Jo Ann Dickson, Certified Shorthand 3 Reporter, Notary Public within and for the State of 4 Missouri, do hereby certify that the foregoing proceeding 5 was taken by me to the best of my ability and thereafter 6 reduced to typewriting under my direction; that I am 7 neither counsel for, related to, nor employed by any of the 8 parties to the action in which this proceeding was taken, 9 and further that I am not a relative or employee of any 10 attorney or counsel employed by the parties thereto, nor 11 financially or otherwise interested in the outcome of the 12 action. 13 14 ______________________________ 15 Jo Ann Dickson, CCR, 1085 16 17 18 19 20 21 22 23 24 25 PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES A ability 27:20 33:5 able 29:3 30:1 absolutely 32:1 accepted 15:16 accounts 16:16 16:16 acres 20:14,15 action 33:8,12 actual 26:11,12 add 8:24 17:15 30:11 31:5 additional 8:17 13:20 30:1 address 11:10 12:22 23:7 addressed 9:6 12:25 addressing 11:9 28:4 adjourned 32:16,17 adjustments 23:22 adopted 4:6,8 4:22 advocate 31:10 aerial 23:15,17 23:20 ago 14:6 18:17 agree 24:10 ahead 9:2 27:12 airports 12:21 Alaris 2:7 allow 7:19 15:14 amended 3:10 4:23 Amendment 10:3 American 5:23 25:20 amount 12:15 13:19 15:4,14 18:13,15,23 26:1 and-a-half 25:12 Angles 9:3 Ann 1:9 2:6 33:2,15 answer 7:24 answered 6:10 application 4:24,25 5:2 appointed 8:8 appropriate 14:20 approved 4:12 4:12,13 8:5 21:16 April 9:5 21:17 21:23,24 30:24 area 8:18 12:15 13:9,20,23,24 13:25 14:4,14 14:19 15:2,5,14 15:19,22 16:4 16:13,21,23 17:22 18:13,16 18:21,23 19:2 19:12,13,24 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clear 32:9 clipboard 6:19 clock 3:2 closer 11:19 collect 8:15 9:10 10:6 12:13 14:13 17:5 18:9 19:18 27:20 collected 9:13 10:14 24:21 collecting 22:2 collection 24:20,22,25 collects 8:11 12:1 25:18 come 7:10 16:24 22:10 23:14 30:4 comes 25:1 coming 19:21 20:20 32:16 commence 3:3 22:25 comment 6:4,6 6:9 30:11 comments 6:18 7:20 22:23 23:2 26:19 29:23 32:13 commercial 3:20 16:17,22 17:1 20:6 31:20 commission 1:1 2:2 3:5,8,12 3:19,19 4:1,4,6 4:9,9,14,16,20 4:23 5:4,21 7:19 14:7,17 20:24,25 21:2 21:6,15,18,22 22:7,8,19 27:16 31:24 Commissioners 29:22 committed 10:19,21 28:25 common 13:25 commonly 15:16 communication 31:8 community 3:24 compare 29:4 compared 24:4 complete 11:6,11 completed 7:24 computer 23:20 conclusion 30:4 concrete 10:10 13:14 18:19,20 conducted 5:10 5:20 conference 5:7 5:11,12,13 conferences 5:25 connections 17:20 consider 4:17,17 22:12 31:24 considering 21:21 consistent 31:3 consisting 8:7 consists 4:1 constitution 8:4 consultant 4:21 5:5 Consumers 5:2 contact 26:16 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23:23 determining 14:19 developed 24:14 development 13:4 20:11 24:4,6 Dickson 1:9 2:6 33:2,15 different 10:17 12:4 22:15 27:22 direct 19:24 direction 33:6 directly 13:19 director 7:9 discovery 5:6 21:11 discussed 20:8 Dispatch 5:23 distribute 14:20 district 1:1 3:5,10 3:13,15,22 6:2 6:5,7 7:5 9:16 10:15 12:4 13:1 21:25 27:15 29:25 30:17 31:3 District's 3:18 4:5 10:12 district-wide 9:10 districts 24:13 divide 16:23 28:11 divided 15:8 documentation 21:11 documents 5:8 5:14 doing 10:21 20:3 23:19 28:25 31:15 dollar 15:8 dollars 10:19,20 11:11 12:5,12,13 17:8,9,11 door 28:8 dots 11:2 drain 20:8 drawn 27:2 drinking 26:2 Drive 1:5 driveways 13:15 due 21:1,16 dumped 24:17 dwellings 24:6 E E 2:1,1 earliest 21:17 30:24 easiest 18:13,15 19:1 easy 18:2 eat 28:5 effect 11:23,24 PUBLIC MEETING 6/6/2018 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES effected 4:23 effects 9:25 30:7 election 3:11 9:5 Eleventh 2:7 eliminate 18:23 eliminated 10:14 employed 33:7 33:10 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