HomeMy Public PortalAboutExhibit RC 37 - Rate Commission's Third Discovery Request to MSD April 10, 2018BEFORE THE RATE COMMISSION OF THE
METROPOLITAN ST. LOUIS SEWER DISTRICT
THIRD DISCOVERY REQUEST
ISSUE: STORMWATER RATE CHANGE PROCEEDING
WITNESS: METROPOLITAN ST. LOUIS SEWER DISTRICT
SPONSORING PARTY: RATE COMMISSION
DATE PREPARED: APRIL 10, 2018
Lashly & Baer, P.C.
714 Locust Street
St. Louis, Missouri 63101
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BEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a Stormwater )
Rate Change Proposal by the Rate Commission )
of the Metropolitan St. Louis Sewer District )
DISCOVERY REQUEST
OF THE RATE COMMISSION
Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis Sewer
District (the “Charter Plan”), Operational Rule 3(5) and Procedural Schedule §§ 1, 17 and 18 of
the Rate Commission of the Metropolitan St. Louis Sewer District (“Rate Commission”), the
Rate Commission requests additional information and answers from the Metropolitan St. Louis
Sewer District (“District”) regarding the Rate Change Proposal dated February 26, 2018 (the
“Rate Change Proposal”).
The District is requested to amend or supplement the responses to this Discovery
Request, if the District obtains information upon the basis of which (a) the District knows that a
response was incorrect when made, or (b) the District knows that the response, though correct
when made, is no longer correct.
The following Discovery Requests are deemed continuing so as to require the District to
serve timely supplemental answers if the District obtains further information pertinent thereto
between the time the answers are served and the time of the Prehearing Conference.
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THIRD DISCOVERY REQUEST
1. Please provide the number of parcels within the District which are not currently
subject to District wastewater charges (e.g., because the land is vacant), but are included in the
property tax rolls of St. Louis County of the City of St. Louis, and therefore are subject to the
$0.10 O&M stormwater tax authorized by Proposition S (2016).
(a) Of these parcels, please state what percentage have impervious area and
therefore would also pay the proposed Stormwater Capital Rate.
(b) Please provide the anticipated potential new revenue from this group of
ratepayers.
(c) Please state what percentage that amount of revenue represents of the total
anticipated revenue from the proposed Stormwater Capital Rate.
RESPONSE:
2. MSD Exhibit 30N provides an assessed valuation trend analysis going back to
2010. Please provide such analysis for the years 2000-2009.
RESPONSE:
3. MSD Exhibit 30C lists the potential annual charges from the proposed
Stormwater Capital Rate for five ratepayers. Please provide similar information for additional
ratepayers, from various classes of ratepayers, such as commercial developments, including “big
box” stores, large school campuses & universities, larger school districts (e.g., Rockwood,
Parkway, Lindbergh), large non-profit entities, large churches in various areas of the District
service area, casinos, and few large industrial or manufacturing facilities.
RESPONSE:
4. Please provide pie charts demonstrating the anticipated percentage of annual
revenue from various classes and sub-classes of ratepayers from the proposed Stormwater
Capital Rate. Specifically, please provide pie charts demonstrating the amount of anticipated
annual revenue derived from the following classes/subclasses:
Chart 1: Residential, Commercial, Large Industrial/Manufacturing, Non-
Profit;
Chart 2: Of the residential ratepayers, the amount per each of the 4 tiers;
Chart 3: Of the commercial ratepayers, provide a breakdown by 4 sizes of
parcels: (1) smaller (e.g., a typical of a single business); (2)
medium (typical of a small strip mall or larger standalone business
like a big box store, such as a Menards); (3) larger parcels (such as
a major big box store development, car dealership, or similar larger
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parcels or parcels developed together); and (4) mega-commercial
(such as a shopping mall, larger car dealership, casino, etc.); and
Chart 4: Of the Non-Profits, provide a breakdown similar to the commercial
breakdown, showing the percentage of revenue to be derived from:
(1) small single lots; (2) medium size churches or schools; (3)
large churches or school campuses; and (4) larger universities,
major universities & school districts, etc.
RESPONSE:
5. Please explain in detail how the District evaluated and chose the option of a one-
time credit/incentive) as opposed to an ongoing credit/incentive program. Given the scope of the
problems associated with flooding and erosion caused or worsened by stormwater runoff, please
explain why an ongoing credit/incentive program was not justified.
RESPONSE:
6. Has the District considered a combined credit/incentive or cost-sharing program
with the intent of reducing impervious surface in the District’s service area? If such a program
was considered, please explain in detail why it was rejected.
RESPONSE:
7. Has the District considered establishing an ongoing program of education and
information funded through the proposed Stormwater Capital Rate to, at a minimum, encourage
citizens to understand the need to reduce impervious surface and the impact of impervious
surface on the public health and the area’s water quality? If such a program was considered,
please explain in detail why it was rejected.
RESPONSE:
8. Please provide any legal opinion prepared by the District, or on behalf of the
District, analyzing whether the proposed Stormwater Capital Rate is a rate/charge under
§ 3.020(16) of the District’s Charter Plan, as opposed to a tax or special assessment.
RESPONSE:
9. In testimony at the April 4, 2018 technical conference, Brian Hoelscher testified
that, if it is determined that the District lacks the authority to assess the proposed Stormwater
Capital Rate against non-profit entities, or the District elects not to do so, that the District would
reduce or eliminate the services that would be provided to non-profit entities. Please give
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specific examples of what services a non-profit entity would not be eligible to receive from the
District if non-profits do not pay the proposed Stormwater Capital Rate.
RESPONSE:
10. In testimony at the April 4, 2018 technical conference, Brian Hoelscher testified
that the District intends to charge the Stormwater Capital Rate to residents/property owners who
do not currently receive a bill for wastewater services. Please give one or more example(s) of the
types of parcel(s) which would not be charged for wastewater services, but would be charged the
Stormwater Capital Rate.
RESPONSE:
11. Does the District presently assess the property tax authorized by Proposition S
(2016) against persons described in § 204.700, RSMo. (residential real property owners within
the District’s service area whose property does not receive sanitary sewer services from the
District and whose property does not cause stormwater to flow into the District’s sewer system)?
Please explain why or why not.
RESPONSE:
12. If the District later determines that the monthly charge per ERU ($2.25 per
month) should be increased, is it the District’s position that voter approval would be legally
required? Please explain why or why not. Would the District seek voter approval even if it
determined that it was not legally obligated to do so? If the District has prepared or received a
legal opinion on this topic, please provide a copy of same.
RESPONSE:
13. Does MSD anticipate taking over maintenance of private detention/retention
ponds/facilities, such as those currently owned and/or maintained by homeowners associations or
subdivision trustees?
RESPONSE:
14. Does the District have a specific list of types of best management practices
(“BMPs”) that would be eligible for the residential credit program? If such list exists, could
residential ratepayers apply for a credit for items or features not on such list which they believe
meet the minimum capture criteria (500 sq. ft. impervious area captured)? See MSD Ex. 1, p. 4-
7. Would customers with rain gardens installed as part of the Combined Sewer Overflow
(“CSO”) Rainscaping program receive the one-time incentive?
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RESPONSE:
15. If a residential property owner receives the one-time credit, but sells the property
within 10 years while the credit is active, is there a requirement for such property owner to
reimburse the District the remaining amount? Would the new property owner be required to
continue to maintain the BMP? Would the new property owner be required to reapply for the
credit? Will such BMPs be inspected by the District? If yes, please state the frequency of such
inspections.
RESPONSE:
16. Does the District believe that the upfront award of a credit would drive more
participation than an ongoing 50% credit on the ratepayer’s monthly bill? Explain why or why
not.
RESPONSE:
17. Will the residential credit (50% of the average residential bill over 10 years) be
calculated as 0.5 multiplied by the annual cost of 1 ERU over 10 years for all residential
customers? Or will credits for residential ratepayers in each of the four tiers vary based on tiers?
RESPONSE:
18. Will private roads maintained by a homeowners association or subdivision
trustees be included in calculations of impervious area throughout the District’s service area? If
the answer is yes, who will the District bill? Please explain the District’s rationale for including
or not including such roads in calculations of impervious area?
RESPONSE:
19. How frequently will the District update the stormwater billing database? Will
updates be made monthly to address property owner changes, changes to impervious area, etc.?
RESPONSE:
20. Please provide a breakdown of the 40 full time employees that will be employed
for stormwater capital projects funded by the Stormwater Capital Rate. How many of these will
be new employees and how many will be current employees who will be moved from existing
programs to this program?
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RESPONSE:
21. In testimony at the April 4, 2018 technical conference, Marion Gee provided a
summary of budgeted and actual bad debt allowance for Fiscal Year 2016 and Fiscal Year 2017.
Can the District explain why Fiscal Year 2017 is nearly ½ lower than Fiscal Year 2016?
RESPONSE:
22. Table 4-6 (See MSD Ex. 1, p. 4-7) indicates that the costs of this program are
being capitalized. Does the District envision that costs associated with billing, collections,
inspections, etc., would be capitalized, or are such costs associated with the Stormwater Capital
Rate anticipated to be recovered through the District’s O&M fund?
RESPONSE:
23. In testimony at the April 4, 2018 technical conference, Tom Beckley indicated
that he could provide a comparison of Proposition S revenues compared to projected revenue at
the time of the last rate proposal. Please provide such an analysis.
RESPONSE:
24. Please describe how condominiums will be treated for purposes of billing the
Stormwater Capital Rate. Will they be treated as commercial property? Will impervious area in
common areas and driveways be included within calculations of impervious area? Who would
the District bill for such impervious area?
RESPONSE:
25. Please provide the credit program manuals referenced by Henrietta Locklear in
her testimony at the April 4, 2018 technical conference (Baltimore, Northeast Ohio Regional
Sewer District). Please provide any manuals relating to credits for homeowners associations
and/or subdivision trustees.
RESPONSE:
26. Please provide any study within the District’s custody supporting its methodology
for prioritizing projects in the CIRP-1 and CIRP-2 project lists. See MSD Ex. 1, p. 6-11. Please
explain how the district calculates the cost and benefit of projects to determine a project’s
priority. Please provide examples of the District’s scoring process. How has this cost/benefit
analysis been modified based on homeowner input?
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RESPONSE:
27. Please explain in detail how the conceptual cost estimate of $562 million will be
adjusted over time as projects are completed, certain projects are eliminated, or certain projects
become more pressing.
RESPONSE:
28. Please clarify whether (a) native, undeveloped property and/or (b) vacant property
which was previously developed (e.g., a lot where a building has been razed and the soil
compacted) would be subject to the proposed Stormwater Capital Rate. Please explain the
District’s rationale for including/excluding such properties.
RESPONSE:
29. Please explain how requirement that a BMP capture runoff from a minimum of
500 square feet of impervious area to qualify for a residential credit/incentive was determined?
RESPONSE:
Respectfully submitted,
/s/ Brian J. Malone
Lisa O. Stump
Brian J. Malone
LASHLY & BAER, P.C.
714 Locust Street
St. Louis, Missouri 63101
Tel: (314) 621-2939
Fax: (314) 621-6844
lostump@lashlybaer.com
bmalone@lashlybaer.com
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CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing was sent by electronic transmission
to Janice Fenton, Office Associate Senior, Metropolitan St. Louis Sewer District; Susan Myers,
Counsel for the Metropolitan St. Louis Sewer District; and Brandon Neuschafer, Counsel for the
Missouri Industrial Energy Consumers, on this 10th day of April, 2018.
Ms. Janice Fenton
Office Associate Senior
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103
JFENTON@stlmsd.com
Ms. Susan Myers
General Counsel
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103
smyers@stlmsd.com
Counsel for the Metropolitan St. Louis
Sewer District
Brandon Neuschafer
Bryan Cave Leighton Paisner LLP
One Metropolitan Square, Suite 3600
St. Louis, MO 63102-2750
bwneuschafer@bclplaw.com
Counsel for Intervenor Missouri Industrial
Energy Consumers
/s/ Brian J. Malone
Brian J. Malone