Loading...
EXHIBIT MSD 79 - Transcript of Technical Conference for Rebuttal Testimony - May 9, 2019_0 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 1 1 IN THE CITY OF ST. LOUIS 2 STATE OF MISSOURI 3 4 5 6 7 8 9 10 11 MSD TECHNICAL CONFERENCE FOR REBUTTAL TESTIMONY 12 13 14 15 16 17 MAY 9, 2019 18 19 20 21 22 23 Metropolitan Saint Louis Sewer District 24 2350 Market Street 25 Saint Louis, MO 63103 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 2 1 I N D E X O F E X A M I N A T I O N 2 3 WITNESS: MICHAEL GORMAN 4 Examination by Mr. Snoke PAGE 15 Examination by Ms. Myers PAGE 27 5 Examination by Ms. Stump PAGE 38 Examination by Ms. Kumar PAGE 57 6 Examination by Mr. Schoedel PAGE 60 Examination by Mr. Stein PAGE 61 7 Examination by Mr. Palans PAGE 64 Examination by Mr. Toenjes PAGE 74 8 9 WITNESS: PAM LEMOINE 10 Examination by Ms. Myers PAGE 77 Examination by Mr. Neuschafer PAGE 85 11 Examination by Ms. Stump PAGE 89 Examination by Mr. Palans PAGE 91 12 13 WITNESS: PRABHA KUMAR 14 Examination by Ms. Myers PAGE 101 Examination by Mr. Neuschafer PAGE 107 15 Examination by Ms. Stump PAGE 112 Examination by Mr. Stein PAGE 113 16 Examination by Mr. Goss PAGE 116 17 WITNESS: NICOLE YOUNG 18 Examination by Ms. Myers PAGE 118 19 Examination by Mr. Neuschafer PAGE 119 Examination by Ms. Stump PAGE 124 20 Examination by Mr. Bresnan PAGE 125 Examination by Mr. Stein PAGE 126 21 22 23 24 25 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 3 1 A P P E A R A N C E S 2 COMMISSIONERS: 3 Mr. Leonard Toenjes, Chairman 4 Mr. Russell Hawes Mr. Don Bresnan 5 Ms. Mickey Croyle Mr. Mark Schoedel 6 Mr. John Stein Mr. Lloyd Palans 7 Mr. Gerald Beckmann Mr. Paul Ziegler (via telephone) 8 9 COUNSEL: 10 For the Rate Commission: Ms. Lisa O. Stump 11 Mr. Brian Malone Lashly & Baer 12 714 Locust Street St. Louis, MO 63101-1699 13 314.621.2939 14 For Missouri Industrial Energy Consumers: Mr. Brandon W. Neuschafer 15 Bryan Cave Leighton Paisner LLP One Metropolitan Square 16 211 North Broadway, Suite 3600 St. Louis, MO 63102-2750 17 For the Metropolitan Sewer District: 18 Ms. Susan Myers Metropolitan Saint Louis Sewer District 19 2350 Market Street Saint Louis, MO 63103 20 314-768-6200 21 22 23 24 25 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 4 1 A P P E A R A N C E S (CONTINUED) 2 3 ALSO PRESENT: 4 Ms. Pamela Lemonie, Consultant to the Rate Commission Black & Veatch 5 16305 Swingley Ridge Road, Suite 230 Chesterfield, MO 63017 6 7 Ms. Nicole Young Lion CSG 8 915 Olive Street St. Louis, MO 63101 9 10 MSD Director of Finance: Mr. Marion Gee 11 12 MSD Director of Engineering: Mr. Rich Unverferth 13 14 MSD Executive Director and CEO: Mr. Brian Hoelscher 15 16 WITNESSES: 17 Mr. Michael Gorman Ms. Pamela Lemoine 18 Ms. Prabha Kumar Ms. Nicole Young 19 20 21 22 Court Reporter: Georgia Beth Long, CSR, CCR 23 Illinois CSR #084-004742 Missouri CCR #1401 24 Alaris Litigation Services 711 North Eleventh Street 25 St. Louis, Missouri 63101 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 5 1 CHAIRMAN TOENJES: We will call to order the May 2 9, 2019, meeting of the Rate Commission of the 3 Metropolitan St. Louis Sewer District. 4 Our technical conference will begin. My name is 5 Leonard Toenjes. I am the Chair of the Rate Commission 6 Metropolitan St. Louis Sewer District, and will serve as 7 Chair of this proceeding. Let's start with a role call. 8 We will ask Mr. Schoedel to take the role call. 9 MR. SCHOEDEL: Thank you. Jerry Beckmann. 10 MR. BECKMANN: Present. 11 MR. SCHOEDEL: Brandy Bowdry. Paul Brockmann. 12 Don Bresnan. 13 MR. BRESNAN: Present. 14 MR. SCHOEDEL: Mickey Croyle. 15 MS. CROYLE: Present. 16 MR. SCHOEDEL: Brad Goss. 17 MR. GOSS: Present. 18 MR. SCHOEDEL: Russell Hawes. Chan Mahanta. 19 Steven Mahfood. Lloyd Palans. 20 MR. PALANS: Present. 21 MR. SCHOEDEL: Tom Ratzki. Mark Schoedel, 22 present. John Stein. 23 MR. STEIN: Present. 24 MR. SCHOEDEL: Leonard Toenjes. 25 CHAIRMAN TOENJES: Present. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 6 1 MR. SCHOEDEL: Paul Ziegler. Paul, are you 2 online? Mr. Chairman, we have eight. We have a quorum. 3 CHAIRMAN TOENJES: Thank you, Mr. Schoedel. The 4 charter plan for the District was approved by the voters 5 of St. Louis and St. Louis County at a special election 6 of February 9, 1954, and amended at a general election 7 on November 7, 2000. 8 The amendment to the charter plan established the 9 Rate Commission to review and make recommendations to 10 the District regarding changes in wastewater rates, 11 stormwater rates, and tax rates proposed by the 12 District. 13 The charter plan requires the Board of Trustees 14 of the District to select organizations to name 15 delegates to the Rate Commission to ensure a fair 16 representation of all users of the district's services. 17 The Rate Commission representative organizations 18 are to represent commercial/industrial users, 19 residential uses, and other organizations interested in 20 the operation of the District; including organizations 21 focusing environmental issues, labor issues, 22 socioeconomic issues, community neighborhood 23 organizations, and other nonprofit organizations. 24 The Rate Commission currently consists of 25 representatives of Associated General Contractors of TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 7 1 Missouri, St. Louis County Municipal League, Lutheran 2 Senior Services, St. Louis Counsel of Construction 3 Consumers, Greater St. Louis Labor Counsel, Missouri 4 Botanical Garden, Mound City Bar Association, League of 5 Women Voters of Metro St. Louis, Home Builders 6 Association, Farm County Incorporated, Missouri 7 Coalition for the Environment, City of Ladue, Engineers 8 Club of St. Louis, Missouri Industrial Energy Consumers, 9 and Education Plus. 10 Upon receipt of a rate change notice from the 11 District, the Rate Commission is to recommend to the 12 Board of Trustees changes in the wastewater, stormwater, 13 or tax rate necessary to pay, number one, interest and 14 principal falling due on bonds issued to finance assets 15 of the District; number two, the cost of operation and 16 maintenance; and number three, such amounts as may be 17 required to cover emergencies and anticipated 18 delinquencies. 19 Further, any changes in a rate recommended to the 20 Board of Trustees by the Rate Commission is to be 21 accompanied by a statement that the proposed rate 22 change: 23 Number one, is consistent with constitutional 24 statutory or common law as amended from time to time. 25 Number two, enhances the district's ability to TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 8 1 provide adequate sewer and drainage systems and 2 facilities, or related services. 3 Number three, is consistent with and not in 4 violation of any covenant or provision relating to any 5 outstanding bonds or indebtedness of the District. 6 Number four, does not impair the ability of the 7 District to comply with applicable federal or state laws 8 or regulations as amended from time to time. 9 And number five, imposes a fair and reasonable 10 burden on all classes of ratepayers. 11 The Rate Commission received a rate change notice 12 from the District on March 4, 2019. 13 Under the District's charter plan, the Rate 14 Commission must, on or before July 2, 2019, issue its 15 report on the proposed rate change notice to the Board 16 of Trustees and the District, unless the Board of 17 Trustees, upon application of the Rate Commission, 18 extends the period of time for the issuance of the Rate 19 Commission report for an additional 45-day period. 20 At its meeting on March 14, 2019 the Board of 21 Trustees approved the Rate Commission's request for an 22 extension. 23 The rate commission's report on a proposed rate 24 change must now be issued on or before August 16, 2019. 25 Under procedural rules adopted by the Rate TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 9 1 Commission on March 8, 2019, any person affected by the 2 rate change proposal had an opportunity to submit an 3 application to intervene in these proceedings no later 4 than March 25, 2019. 5 An application to intervene was filed by Missouri 6 Industrial Energy Consumers, which was deemed granted. 7 On March 4, 2019 the District submitted to the 8 Rate Commission prepared direct testimony of Brian L. 9 Hoelsher, Susan M. Myers, Richard L. Unverferth, Brett 10 A. Berthold, Marion M. Gee, Tim R. Snoke, Bethany Pugh, 11 William Stannard, and Thomas A. Beckley. 12 On March 8, 2019, the Rate Commission submitted 13 its first discovery request to the District. On March 14 13, 2019, the District filed its responses. 15 On March 11, 2019, the Rate Commission submitted 16 its second discovery request to the District, which the 17 District responded to on March 20, 2019. 18 On March 25, 2019, the Rate Commission submitted 19 its third discovery request to the District, which the 20 District responded to on April 2, 2019. 21 On April 8, 2019, a technical conference was held 22 on the record regarding the rate setting documents and 23 the direct testimony filed with the Rate Commission by 24 the District. 25 The purpose of the technical conference was to TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 10 1 provide the District an opportunity to answer questions 2 propounded by members of the Rate Commission, then by 3 any intervenor, and finally by Lashly and Baer, legal 4 counsel to the Rate Commission. 5 On April 8, 2019, intervenor Missouri Industrial 6 Energy Consumers submitted its first discovery request 7 to the District, which the District responded to on 8 April 18, 2019. 9 On April 11, 2019, the Rate Commission submitted 10 its fourth discovery request to the District, which the 11 District responded to on April 22, 2019. 12 On April 11, 2019, intervenor Missouri Industrial 13 Energy Consumers submitted its second discovery request 14 to the District, which the District responded to on 15 April 22, 2019. 16 On April 26, 2019, the District submitted its 17 first discovery request to intervenor Missouri 18 Industrial Energy Consumers; to which Missouri 19 Industrial Energy Consumers responded to on May 7, 2019. 20 On April 23, the Rate Commission consultants and 21 intervenor Missouri Industrial Energy Consumers 22 submitted rebuttal testimony. 23 This technical conference will be held on the 24 record, regarding the rebuttal testimony. 25 Each person submitting rebuttal testimony shall TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 11 1 answer questions propounded by members of the Rate 2 Commission, the District, then the intervenor, and 3 finally by our legal counsel. 4 Following the technical conference, the District, 5 the intervenor, and the Rate Commission consultant may 6 submit prepared surrebuttal testimony and schedules. 7 A technical conference will be held on the record 8 regarding the surrebuttal testimony on June 20, 2019. 9 Ratepayers who do not wish to intervene will be 10 permitted to participate in a series of on-the-record 11 public hearing sessions, which will begin on May 14, 12 2019. 13 Who is here on behalf of St. Louis Metropolitan 14 Sewer District? 15 MS. MYERS: Susan Myers. 16 CHAIRMAN TOENJES: Who is here on the behalf of 17 Missouri Industrial Energy Consumers? 18 MR. NEUSCHAFER: Brandon Neuschafer. 19 CHAIRMAN TOENJES: Also present are Pam Lemoine 20 and Prabha Kumar of Black and Veatch, Nicole Young of 21 Lion CSG, consultant to the Rate Commission. 22 And Lisa Stump and Brian Malone on Lashly and 23 Baer, legal counsel to the Rate Commission. 24 Under the Rate Commission's operational rules, no 25 person shall be required to answer questions for a total TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 12 1 period of more than three hours. 2 And the time shall be evenly divided among all of 3 the participants desiring to ask questions. 4 Following questions by members of the Rate 5 Commission, I will attempt to allocate the time equally 6 among the participants and our legal counsel. 7 To the extent that the District, the intervener, 8 or legal counsel has not completed the questions at the 9 expiration of that person's allotted time; and to the 10 extent that time remains, such persons will be permitted 11 to propound additional questions until the three hours 12 has expired. 13 Does anyone have any procedural matters? 14 MS. STUMP: Mr. Chair? 15 CHAIRMAN TOENJES: Yes, Ms. Stump. 16 MS. STUMP: Would you like to approve the minutes 17 while you have a quorum? 18 CHAIRMAN TOENJES: I would love to. 19 MS. STUMP: I think they should -- everyone 20 should have them. They're the minutes from April 9 -- 21 April 8 and 9. 22 MR. SCHOEDEL: Mr. Chairman, I note that Mr. Goss 23 has arrived as well. Paul Ziegler, are you online. 24 MR. ZIEGLER: I am online. 25 MR. SCHOEDEL: Thank you. Noted in attendance. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 13 1 CHAIRMAN TOENJES: Would anyone care to review 2 the minutes and/or make a motion in regard to the 3 minutes? 4 MR. BROCKMANN: I'll make a motion. 5 MR. BRESNAN: Second. 6 CHAIRMAN TOENJES: A motion made and seconded to 7 adopt the minutes as presented. All in favor, signify 8 by saying aye. 9 (THOSE VOTING IN FAVOR ANNOUNCED AYE) 10 CHAIRMAN TOENJES: Opposed? Hearing none, the 11 minutes approved. Thank you, Ms. Stump. Any other 12 procedural matters? 13 MR. GOSS: Mr. Chairman, I need some technical 14 assistance to get on MSD's network. If someone can help 15 me from MSD. I had the same problem had last time I'm 16 having again. Thank you. 17 CHAIRMAN TOENJES: There being no further 18 procedural matters, Mr. Neuschafer, are you ready to 19 present those persons for whom you've filed testimony on 20 behalf of Missouri Industrial Energy Consumers? 21 MR. NEUSCHAFER: I am. 22 CHAIRMAN TOENJES: Plead proceed. 23 MR. NEUSCHAFER: Brandon Neuschafer. 24 CHAIRMAN TOENJES: Would you introduce your 25 witness, please. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 14 1 MR. NEUSCHAFER: Yes. On behalf of Missouri 2 Industrial Energy Consumers, Mr. Michael Gorman of 3 Brubaker and Associates is here to answer questions 4 about the written testimony that was submitted. 5 CHAIRMAN TOENJES: Thank you. Mr. Gorman, is the 6 testimony you're about to give the truth, the whole 7 truth, and nothing but the truth? 8 MR. GORMAN: Yes. 9 CHAIRMAN TOENJES: Thank you. Does any member of 10 the Rate Commission have questions of Mr. Gorman at this 11 time? 12 Hearing none, Ms. Myers do you have any questions 13 for Mr. Gorman? 14 MS. MYERS: Yes, we do. 15 CHAIRMAN TOENJES: Please come forward. 16 MS. MYERS: Good morning. 17 CHAIRMAN TOENJES: Ms. Myers, will you please 18 introduce your team. 19 MS. MYERS: I will. The district's first line of 20 questioning is going to have to do with our finance plan 21 so Tim Snoke, MSD secretary/treasurer, and Bethany Pugh 22 from PFM are going to ask that line of questions. 23 CHAIRMAN TOENJES: Thank you. Please proceed. 24 MS. MYERS: Thank you. 25 EXAMINATION TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 15 1 BY MR. SNOKE: 2 Q. Good morning again. 3 A. Good morning. 4 Q. Okay. I want to start by talking about interest 5 rates. So throughout your rebuttal testimony, which is 6 on Exhibit MIEC73, you broadly use the term interest 7 rate. 8 But there are different kinds of interest rates, 9 correct? For example, coupon rate and yield? 10 A. Yeah. I was using the term to describe the cost 11 of the funds to the MSD for issuing additional -- 12 Q. Okay. So cost can be interpreted in a different 13 way. So coupon rate is the rate of interest paid on the 14 bond's face value; is that correct? 15 A. Yes. 16 Q. And then a yield is the actual return an investor 17 receives, based on the coupon rate, but also the price 18 paid for the bond, right? 19 A. Correct. 20 Q. So those can be different? 21 A. They can. 22 Q. In your model, you assume that they are the same? 23 A. I was attempting to price the actual cost to the 24 MSD of issuing additional debt. 25 I will acknowledge that I did not notice a line TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 16 1 in your model, where you were projecting to issue debt 2 at a premium to face value. 3 So the 3 percent interest costs that I included 4 in my model, I will acknowledge is probably too low. 5 Q. Okay. So that will actually let me skip a little 6 bit of questions, which I think will please everybody. 7 So if we go to your model. So in the -- your 8 response to our first discovery request, you did provide 9 a table, table 2 to question five, I believe. That will 10 be on page 3 of Exhibit 75. 11 A. I did. Yes. 12 Q. I don't want to belabor this point; but you are 13 showing premium, correct? 14 A. I did. 15 Q. And that's the line that should -- 16 A. I used the same assumption that was already built 17 into the model, and that assumed that the bond would be 18 sold at a premium. 19 (INTERRUPTION BY COURT REPORTER) 20 A. I did not change the model. The model had built 21 in an assumption that the bonds would be sold at a 22 premium. 23 Q. Is it fair to say that the construction fund cash 24 for financing plan in your model right now is not 25 correct? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 17 1 A. I do believe the interest costs are probably too 2 low. But the model still projected the level of the 3 funds available. 4 Q. Well -- 5 A. Including the premiums. I can review that, but 6 it's my understanding that the model automatically 7 estimated the amount of bonds to be issued, and then 8 made the assumption about the bonds face value being 9 sold at a premium. 10 Q. In your models, since you're assuming the lower 11 cost of debt, it should be assuming lower premiums than 12 what's in our model. 13 And in fact, this shows higher premiums than in 14 our model. 15 I know you don't have our model in front of you. 16 But do you recall if that's correct? 17 A. I will review that. But the interest costs 18 probably understates what the costs of funds would be to 19 MSD. 20 But the actual cash proceeds from bond sales is a 21 function of additional debt that needs to be sold in 22 order to have the cash available to fund the program. 23 And using the model, with an assumption of 24 selling an amount of bonds stated in the face value, and 25 then the model having the stated amount of assumptions TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 18 1 for premiums, would accumulate the amount of cash 2 available to MSD by selling more bonds. 3 Q. Okay. So it sounds like it's fair to say that 4 you're not aware of an error in your version of the 5 model that is calculating premium, when it should not be 6 calculating premium. 7 A. Well, I don't agree with the assertion you're 8 making. 9 I will say that I think I've understated the 10 funds -- the cost of funds available to MSD. 11 Q. Okay. So going back to our discussion -- brief 12 discussion about coupons and yields. 13 We've already agreed that coupon can be different 14 than yield. 15 Do you understand that a premium is generated 16 only when the coupon rate is higher than the yield? 17 A. That's right. Yes. 18 Q. Okay. And in your model, you stated in -- this 19 was in discovery response, Exhibit 75 again. This was 20 on page 1 in response one. 21 The face value of the bonds would be equal to the 22 proceeds received from market; which by definition, 23 means no premium, correct? 24 A. Where did I say that? 25 Q. That is in Exhibit 75 on page 1 in response one. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 19 1 The second sentence says: Hence, it assumes that the 2 face value of the bonds would be equal to the bond 3 proceeds received from the market. 4 A. Yeah. That is the understanding I had at the 5 model, because I missed the line that showed that the 6 bond would be sold at a premium. 7 Q. Okay. So -- 8 A. I acknowledged that when I first sat down. 9 Q. Right. But that statement then, by definition, 10 means there's no premium. 11 A. It does. Yes. 12 Q. Okay. So the amount of premium, which totals 95 13 million in table two then, should not be in your 14 financing plan. 15 That's line 3 of table two at the bottom of 16 page 3 in Exhibit 75. 17 A. That may be. Yes. 18 Q. And so given that that -- and it's a total of 95 19 million, should not be there, isn't it likely that 20 increasing the funding of CIRP by that amount to cover 21 the shortfall is going to increase the proposed 22 wastewater service charges that you've proposed? 23 A. It would increase the revenue department. Yes. 24 Q. Okay. Thank you. I want to move on to some of 25 the underlying assumptions in your plan. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 20 1 So we've already established that in your model, 2 the bond -- the coupon rate equals the yield rate. 3 In our first discovery request, which is Exhibit 4 74, we asked if you were aware of any recent 5 transactions that used similar assumptions to what you 6 used; including coupons and yields that match. 7 And you provided three examples. Do you want me 8 to go through those examples or -- 9 A. No. I recall them. Two of them were MSD recent 10 bond issues. 11 Another one was in Indianapolis, a citizens 12 wastewater report. 13 Q. Right. One of them was an MSD bond issuance. 14 It's series 17A. I have the official bond statement 15 here. 16 So I'm going to open it up to the inside page, 17 where it lists the interest or coupon rates and the 18 yields. 19 A. I'm familiar. 20 Q. Okay. So the yields and the coupons on that page 21 are not the same, are they? 22 A. They are not. 23 Q. Okay. And in fact, can you tell by looking at 24 that, that the majority of the coupons -- I'm sorry, 25 yes. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 21 1 The coupon rates, or interest rate, in that model 2 are 5 percent, consistent with MSD's model? 3 A. I think I said that in the data response that 4 you're referring to. Yes. 5 Q. All right. So this is not an example of a bond 6 being issued for a coupon rate equals yield. 7 A. I wasn't disputing that the bonds can be sold. 8 I'm agreeing to the face value. 9 I'm simply stating the assumption I believed was 10 accurately reflected in the model, where I was 11 attempting to estimate the cost to MSD. Not issuing 12 additional debt financing. 13 Q. Okay. Then the next two examples you gave are 14 from Citizens Energy Group, CWA Wastewater Authority. 15 And on page 2 of your discovery response, which 16 again is Exhibit 75, you reference a page in Citizen's 17 2018 financial report that lists bond issuances. 18 It is page 22 that you reference -- can you 19 confirm; is that -- that is the page that you 20 referenced? 21 A. Yes. 22 Q. Okay. Thank you. And so I'll start with the 23 second issuance listed there, which is a 2017A fund. 24 There's a description in the far left of that 25 bond. I won't ask you to read it. But there's a TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 22 1 parenthetical in that description that says SRF; is that 2 correct? 3 A. Yes. 4 Q. Are you aware that's State Resolving Fund? 5 A. That is correct. Yes. 6 Q. So this is a State Revolving Fund loan. It's 7 actually issued at a subsidized rate, so it's not a 8 comparable bond transaction. But MSD has proposed 9 senior issuances; is that correct? 10 A. That's what SRF mean, and that would be a correct 11 description. 12 Q. Okay. And then the 2016A bonds, it's noted -- 13 and you note that the coupons there range from 2 to 5 14 percent. 15 And so I can show you a page from that official 16 statement, if you like. But again, that's going to be a 17 bond where the coupons and the yields do not match. So 18 a premium would be generated, correct? 19 A. That's any understanding. Yeah. 20 Q. Yeah. Okay. So I talked just a little bit about 21 the wastewater market in general. 22 Do you understand that the benchmark yield -- are 23 you aware that the benchmark yield in the municipal bond 24 market is the MMD rate? 25 A. Benchmark yield on an AA-rated water/wastewater? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 23 1 Q. Within the tax exempt municipal bond market, MMD 2 is the benchmark at which bonds are priced. And so 3 they're in a spread to MMD? 4 A. If you're -- yes. If you're acquiring a bond, 5 that's true. 6 Q. Okay. And so while MMD is reported as a yield, 7 it assumes 5 percent coupons; are you aware of that? 8 A. Well, that's what you modelled so -- 9 Q. So it assumes -- 10 A. That's what you sold your 2017 bond issuances. 11 Q. And so if MSD is projecting bond issuances at 12 mostly 5 percent coupon rate, the MMD benchmark rate 13 assumes a 5 percent coupon rate, and the examples you 14 provided use mostly a 5 percent coupon rate, isn't it 15 reasonable that our financial model should use those 16 same assumptions? 17 A. It would. But the combination of those 18 assumptions would result in bonds that are too expensive 19 in your model. 20 With a 5 percent coupon rate, then the premium 21 you used was too low. The premium should have been 22 higher or be more in line with what your 2017 net cost 23 of your bond was, which is around -- what did I say? 24 Three and a half? 25 Q. It was about three and a half on the new money. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 24 1 Three quarter roughly overall. So future bonds -- 2 A. -- assumptions you had in your model at a 5 3 percent coupon rate, you're net cost of those bonds 4 would've been in excess of 4 percent. 5 Q. Okay. So -- and this is another assumption in 6 your model; that future rates should reflect current 7 rates and not make an allowance for rate increases for 8 the uncertainty of future projections? 9 A. It's my recommendation to the commission that the 10 model be developed as closely as possible to what the 11 actual cost will be to MSD. 12 I've been looking at projected interest rates for 13 20 years now. And in the data response I provided you, 14 I showed that over the last 10 years, in particular, 15 there have been projections of very large increases, the 16 interest rates, which have always turned out to be wrong 17 in the last 10 years. 18 There continues to be an outlook for an increase 19 in interest rates. The change in market conditions 20 still seems to leave us with a lot of uncertainty about 21 whether or not interest rates really will change. 22 So your question and the data response to me was 23 whether or not I accommodated an expectation of an 24 increased in interest rates. 25 And my response was, is I recognize interest TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 25 1 rates can increase. But there's no clear known fact 2 that they will increase. 3 So in order to accommodate the uncertainty about 4 where interest rates will be, I thought it would be more 5 appropriate to be more conservative in estimating what 6 the interest rate is in the model, relative to currently 7 interest rates. 8 And that's what I attempted to do. But as I 9 stated at the outset, I did make an error in the model. 10 Because I did not recognize the line item, which assumed 11 those bonds would be sold at a premium. 12 Q. So in your rebuttal testimony, and then as 13 revised a little bit in your discovery request, you did 14 report that economist's estimates over a shorter period, 15 two years, have proven to be incorrect. 16 And given that you just stated that there is 17 uncertainty in the marketplace, and that even economists 18 are not able to accurately predict rates, isn't it 19 reasonable to, over a longer forecast period, five 20 years, in the case of our rate proposal, to make some 21 allowances for the possibility of increasing rates? 22 A. As I said, I think it's appropriate to have a 23 conservative estimate of what the interest rate will be. 24 But I don't think there needs to be too much of a 25 risk factor added. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 26 1 Because interest rates, as I've said, over the 2 last 10 years, there's been projections of very large 3 increases in interest rates. They have not been 4 realized. 5 Interest rates have stayed low over the last 10 6 years. Market data and the federal reserve are 7 projecting interest rates to be relatively stable, 8 largely because inflation is relatively stable. 9 The federal reserves' interaction in the 10 marketplace has been normalized. So the impact to -- 11 the federal reserve impact on both short-term and 12 long-term interest rates is no longer received this as a 13 factor that may drive up interest rates. 14 So with all of that, I would agree that there 15 needs to be some consideration that interest rates can 16 increase. 17 But I would recommend to the Rate Commission that 18 an interest rate projection that is much higher than 19 what current interest rates not be used in the model. 20 Because I think that it unjustifiably inflates 21 the revenue requirement, and unnecessarily increases 22 wastewater rates to MSD customers. 23 Q. Okay. And as you noted earlier, the rates that 24 are currently in your model, you acknowledge, are too 25 low? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 27 1 A. I will correct those in rebuttal if you believe 2 they are incorrect. And I would agree. 3 Q. Okay. 4 A. Based on a more detailed review of that model 5 with more time to look at it. 6 And quite frankly, in responding to your data 7 request, I was wondering why you were asking those 8 questions. 9 It caused me to dig into it a little deeper and 10 see that I did make a mistake. 11 MR. SNOKE: Okay. Thank you. I don't have any 12 place questions. 13 MS. MYERS: Okay. I have a few questions. We're 14 going to switch gears and talk about the CIRP for a 15 little bit. 16 CHAIRMAN TOENJES: Ms. Myers, for the court 17 reporter, we now have Rich Unverferth. 18 MS. MYERS: Rich Unverferth, our Director of 19 Engineering, is sitting at the table with me. 20 CHAIRMAN TOENJES: Thank you. 21 EXAMINATION 22 BY MS. MYERS: 23 Q. Okay. Like I said, this set of questions is 24 going to be around our CIRP program -- 25 A. Okay. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 28 1 Q. -- and your rebuttal testimony to that. So on 2 page 16 and 17 of your rebuttal testimony, you 3 identified three examples of projects that you believe 4 are discretionary and could be deferred for a few years. 5 Is that an accurate characterization of your 6 testimony? 16 and 17. 7 A. Yeah. I was trying to give examples of certain 8 projects that were included in the forecast for Fiscal 9 Year 23 and 24 that could be deferred for a couple of 10 years. 11 I wasn't trying to identify the specific projects 12 that should be deferred; but simply there should be -- I 13 believe there is flexibility in order to levelize the 14 level of annual CIRP annual spend. 15 So this was an attempt to identify projects that 16 may give MSD more flexibility and levelizing that level. 17 Q. Okay. Did you characterize those three examples 18 as, one, the wastewater solids combustion boiler; two, 19 the wastewater plant repair; and three, capacity 20 expansion? 21 A. I did. Yes. 22 Q. Okay. And also on page 2 of your schedule MPG3, 23 in your testimony, you further identified seven specific 24 project numbers that you believe are discretionary 25 during the FY23-24 period; is that correct? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 29 1 A. It was my attempt at identifying whether or not 2 there is some discretion in MSD. 3 It was not my recommendation to defer those 4 specific projects. 5 Rather, it's my recommendation to levelize the 6 annual CIRP spend. And to the extent that flexibility 7 exists I'm encouraging you to do it. 8 Because levelizing the CIRP will levelize the 9 regular ^ product? and mitigate unnecessary increases in 10 wastewater rates. 11 Q. Okay. So I want to talk about those three 12 examples, project types that you've used. 13 First, we'll talking about the wastewater solids 14 combustion boiler. 15 If you look at page 17 of your testimony, you 16 list a wastewater solids combustion boiler as a project 17 that could be deferred, as we've just spoken, correct? 18 A. It's my understanding it can be. Yes. 19 Q. Okay. So you've also said that you were not 20 identifying specific projects. 21 But that wastewater solids combustion boiler that 22 you're referring to, is that actually Project 12565 from 23 page 2 of your schedule MPG3? 24 A. I believe it is. Yes. 25 Q. You understand the incinerators at the Bissell TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 30 1 and Lemay wastewater treatment plants are required for 2 proper handling of biosolids; is that correct? 3 A. I understand that they're not in service right 4 now. But they will be placed in service for this 5 purpose. Yes. 6 Q. You also understand that the incinerators at the 7 Bissell and Lemay treatment plants were constructed in 8 the early 1970s? 9 A. I did confirm that. But I do understand that has 10 MSD found it appropriate to replace them. 11 Q. Okay. Do you also understand that the operation 12 of the incinerators are regulated by the United States 13 EPA and MDNR? 14 A. That's my understanding. 15 Q. Are you familiar with the regulations and 16 subsequent operating permits for the Bissell and Lemay 17 treatment plant incinerators? 18 A. I did not review that specifically. 19 Q. So you are not familiar with those regulations? 20 A. The regulations on the need for the -- the 21 boilers? 22 Q. The regulations that relate to the operation of 23 the incinerators. 24 A. I have not reviewed that specifically. 25 Q. Okay. What is your understanding of the TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 31 1 District's Second Material Amendment to the Consent 2 Decree? 3 A. That there's certain levels of retrofits and 4 improvements to the system that have to be made to 5 satisfy the consent decree with the EPA. 6 Q. Okay. I'm going to hand to you MSD Exhibit 37A. 7 Would you please identify the title of that document. 8 A. United States District Court, Eastern District of 9 Missouri, Eastern Division. Second Material Amendment 10 to Consent Decree. 11 Q. Okay. And as you just confirmed, that was issued 12 by the U.S. District Court of the Eastern District of 13 Missouri, correct? 14 A. That's the title of the document. Yes. 15 Q. Okay. Would you please turn to page 3 of that 16 document. 17 A. I'm there. 18 Q. And read the highlighted portion. 19 A. Whereas the parties agree that the proposed 20 amendment is necessary because MSD currently incinerates 21 68,000 tons of sewage/sludge annually, utilizing 22 multiple-earth incinerators, the federal plan 23 requirements for sewage/sludge incineration units 24 constructed on or before October 14, 2010, set forth in 25 40CFR Part 62, Subpart LLL, paren, SSI rule, close TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 32 1 paren, issued by EPA in 2016 required MSD to replace its 2 multiple-earth incinerators. The replacement of the 3 incinerators will occur in fiscal years 21 through 26. 4 The timeframe is estimated to cost approximately 360 5 million in 2017 dollars. 6 Q. So based upon the District's Second Material 7 Amendment to the Consent Decree, the District really 8 doesn't really have a discretion to delay this project, 9 does it? 10 A. Well, not beyond 2026. That's true. 11 Q. Okay. Thank you. I want to move on to the 12 second example. Actually, it was your third example. 13 Capacity expansion. Regarding the capacity 14 expansion that you referred to in your testimony, are 15 you referring to the projects related to the capacity 16 expansion of the lower Meramec wastewater treatment 17 facility, which was Project 12255 on page 2 of your 18 schedule MPG3? 19 A. Yes. 20 Q. Okay. And are you also referring to Project 21 12170 of that same table as the decommissioning of the 22 Fenton treatment plant facility? 23 A. Well, I understand those two are interrelated 24 together. Yes. 25 Q. Okay. So those are the two specific projects TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 33 1 that you are referring to in your testimony. 2 A. That was a project that was identified as 3 potentially allowing MSD some flexibility on managing 4 this annual CIRP spending. 5 Q. Are you aware that all of these projects are 6 listed in consent decree? 7 A. No, I am not. 8 Q. Do you understand that the Fenton treatment plant 9 facility, to be eliminated by these projects, is located 10 in the Meramec River flood plain? 11 A. I haven't confirmed that. But that does sound 12 correct. 13 Q. Okay. And did you know that that treatment plant 14 has flooded twice in the last four years? 15 A. It's my understanding that there are issues with 16 that plant. Yes. 17 CHAIRMAN TOENJES: I couldn't -- could you 18 please. 19 MR. GORMAN: Pardon me. 20 CHAIRMAN TOENJES: -- speak in the microphone. 21 MR. GORMAN: Pardon me. 22 MS. MYERS: Do you hear that, or do we need to 23 back up. 24 (THE COURT REPORTER READ BACK THE LAST ANSWER) 25 Q. MS. MYERS: So the District does not really have TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 34 1 the discretion to delay consent decree projects 2 associated with the Meramec treatment plant or the 3 decommissioning on the Fenton treatment plant, do we? 4 A. Well, you don't have complete discretion. But my 5 recommendation wasn't to not do the project. 6 But simply manage the annual spend, such that you 7 can do it in a reasonable amount of time, and do it in 8 such a way that you don't have unnecessary increases in 9 wastewater rates. 10 Q. But you also indicated that you were not familiar 11 with the projects being listed in the consent decree. 12 So you're not familiar with the schedule of those 13 projects in the consent decree? 14 A. Not specifically on a project basis. But I did 15 look at your consent decree timeline projections. 16 And the period over which you are given in order 17 to make retrofits in the system to comply with the 18 consent decree. 19 And I believe, moving some of these capital 20 programs that you budgeted to '23 and '24 out to '25 and 21 '26, it's my understanding would not conflict your 22 obligations of the consent decree. 23 Q. But you testified you did not look at the 24 specific schedule for the specific projects, correct? 25 A. Yeah. There's only so much time to look at all TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 35 1 of these projections. 2 And in looking at the revenue requirements, 3 you've included in support of your proposal to increase 4 wastewater rates, I did look at the eye-level budgeting 5 information. 6 And based on that, it did appear as though there 7 was some time available to comply with the consent 8 decree and accommodate all of these projects. 9 But do it over a period that stretched out two 10 years, relative to what MSD was projecting. 11 Q. Okay. So just to summarize, I understand you did 12 not look at these specific project schedules in the 13 consent decree -- 14 A. Correct. 15 Q. -- correct? 16 A. Correct. 17 Q. Okay. So moving on to your second example, which 18 is the wastewater plant repair. 19 In your testimony, you provided a listing of 20 various wastewater treatment plant repair projects you 21 feel could be delayed at the district's discretion; is 22 that correct? 23 A. I feel could possibly be delayed, as some items 24 that would support the levelization of the annual CIRP 25 spending. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 36 1 Q. Okay. So what environmental impacts or MPDS 2 permit violations would result from the District's 3 failure to complete the listed rehabilitation repair and 4 replacement projects? Are you aware of any? 5 A. I have not reviewed that. 6 Q. Okay. The District is obligated to operate and 7 maintain its facility to stay in compliance with its 8 regulatory obligations and wastewater treatment plant 9 permits; is that correct? 10 A. That's my understanding. Yes. 11 Q. Have you reviewed the district's asset management 12 approach and prioritization process in planning these 13 types of projects? 14 A. Well, I have reviewed that before. But in this 15 case, I was simply look at their budgeted level of 16 capital expenditures and noted that there was a very 17 significant increase in FY23 and 24. 18 That seemed ripe for replanning and spreading it 19 out up through FY26. And that can be done. 20 The level of wastewater rate increase needed in 21 this case would be considerably lower. 22 Q. So based upon your review, the District really 23 does not have any discretion to delay these types of 24 projects due to regulatory risk, do we? 25 A. I can't specifically say that there's a TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 37 1 requirement to do it by fiscal year 2024. 2 But based on my review, the EPA consent decree 3 does extend beyond that date. 4 But I can't point to any specific commitment MSD 5 has made to the EPA. 6 Q. Okay. Thank you. So moving on to the extra 7 strength surcharge topic. 8 A. All right. 9 Q. So on page -- on page 29 of your rebuttal 10 testimony, starting on line 11. 11 You state MSD's capital expenditures related to 12 BOD and TSS are primarily associated with the 13 improvement of operating efficiency of wastewater 14 treatment plants, because these improvements are 15 expected to reduce the costs of waste disposal. 16 Is that an accurate characterization of your 17 statement? 18 A. It is. 19 Q. Okay. So is it true that MSD allocated these 20 capital costs to all of our customer classes? 21 A. It is. But the capital costs associated 22 specifically with the extra strengths are assumed to be 23 a basic level for all customers. 24 And then customers that have extra strength are 25 paying extra charges for those. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 38 1 So the effect of modernizing and improving the 2 wastewater treatment plant, as I understand your cost of 3 service study supports a proposal to increase BOD and 4 TSS extra strength surcharge. 5 Q. Okay. But it is your testimony that are all of 6 our customers pay the -- that is allocated across all of 7 our customers, correct? 8 A. It is a cost of wastewater treatment, so yes. It 9 is a certain assumption with a level of BOD and TSS 10 that's made by all customers. 11 MS. MYERS: Okay. Thank you. We don't have any 12 further questions. 13 CHAIRMAN TOENJES: Thank you, Ms. Myers. 14 Ms. Stump, do you have questions for Mr. Gorman on 15 behalf of the Rate Commission. 16 MS. STUMP: I do, Mr. Chairman. 17 CHAIRMAN TOENJES: Please come forward. 18 EXAMINATION 19 BY MS. STUMP: 20 Q. Good morning, Mr. Gorman. 21 A. Good morning. 22 Q. Forgive me if it takes a minute. I just want to 23 not be repetitive. 24 As you know from having done this before, my role 25 is a little bit different. I kind of want to make sure TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 39 1 we're clarifying things for the record and the Rate 2 Commission has what it needs on the various factors and 3 criteria under the charter, which I think you're 4 familiar with, correct? 5 A. I am. Thank you. 6 Q. Let's start on page 2 and 3 of your testimony. 7 On the finance policy for the CIRP, you talk about how 8 the District in the past has had 75 percent debt and 25 9 percent PAYGO. 10 And this rate change proposal as 60 percent debt 11 and 40 percent PAYGO. 12 But then you conclude that you believe that 70 13 percent debt and 30 percent PAYGO is correct for this 14 rate change proposal. Can you explain why you got to 15 the 70/30? 16 A. Yes. A financial policy is both the PAYGO debt 17 financing and the PAYGO financing. But it also includes 18 a debt service coverage minimum. 19 Under the policy that this board approved in the 20 last three rate cycles, it was 75/25 as a targeted debt 21 and equity funding. It also has a minimum debt service 22 coverage funding of 1.6 times. 23 As the level of imbedded debt grows for the 24 utility, as they continue to make work-related and EPA 25 capital expenditures, the percentage of rate revenue TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 40 1 funding needed to maintain a minimum debt service 2 coverage ratio of 1.6 times is growing in relationship 3 to the annual grip spend. 4 So in order to maintain that minimum debt service 5 coverage requirement at around 1.6 times, in this case, 6 I think the 75/25 can't be met it, because it will push 7 the debt service coverage ration below 1.6 times. 8 So I've recommended 70/30, which actually sets it 9 a little above 1.6 times. 10 And I think that's significant, because the 11 combination of these two financial metrics under the old 12 policy ensure that there's adequate debt service 13 coverage, because that's an important factor in the 14 credit standing of the utility. 15 It also helps establish just how much equity 16 funding is needed on an annual basis in order to 17 maintain that level of debt service coverage. 18 So in this case, it's grown from 75/25 in the 19 last couple cases to what I think is appropriate in this 20 case of 70/30. 21 I expect in the next case, because the capital 22 expenditures appear to be levelling off, that the level 23 of PAYGO funding will be much higher than 70 percent. 24 And the reason I would expect that is because in 25 order to maintain the minimum debt service coverage TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 41 1 ratio, the level of PAYGO funding is going to increase 2 from this point, because we have moved so far into the 3 major capital expenditure program. 4 Q. Thank you. While we're on page 3, you've got -- 5 page 2 actually. You're proposing to reduce amount of 6 revenue the rate change proposal would bring into the 7 District over the four-year period. 8 I'm looking at that little chart that you have. 9 The District proposes to generate 69 million in 10 increased revenue, and then you've got 45 million? 11 A. I do, yeah. That's about a $24 billion reduction 12 by the end of the fourth year. 13 Q. And why do you believe that that's appropriate? 14 A. Well, there's three adjustments I made to the 15 cost of service. 16 One, I will reverse. That is the level of 17 interest rates. They were overstating their cost in 18 these bonding issues. 19 I still believe that they're probably overstated 20 there, but I think I understated it in the way I 21 adjusted the model. I will correct that. 22 The second issue is their proposal to increase 23 the debt service coverage minimum from 1.6 times, as 24 it's been in the last three rate proceedings, up to 1.8 25 times in this case unnecessarily shifts the level of TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 42 1 rate revenue funding to equity versus debt. 2 And that unnecessarily increases the revenue 3 requirement in each of the four years over the next -- 4 in this rate cycle. 5 And second, the level of annual CIRP spending has 6 been increasing in each of the rate cycles. 7 In this year, this cycle again has increased. 8 But particularly, in the last two years of the four-year 9 rate cycle, it increased by about $70 million a year. 10 If that can be spread out over a six-year 11 appeared instead of -- well, let me go back. 12 The CIRP annual spend over this cycle increased 13 relative to the last cycled, but significantly the last 14 two years of this cycle increased by about $70 million, 15 relative to the first two years. 16 But the year immediately following, fiscal year 17 2024, which is in this rate cycle, the annual CIRP drops 18 significantly and stays lower through 2030. 19 So if that $70 million increase in CIRP funding 20 in '23 and '24 can be spread out over '25 or '26, then 21 you can reduce the revenue increase and rate increase 22 you need in this case to pay for the level of CIRP 23 funding that will be done over the next four years. 24 And significantly, if that can be accomplished, 25 then you not only reduce the wastewater rates needed TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 43 1 over the next four years; but by spreading the level of 2 CIRP spending out, you actually reduce the amount of the 3 bonds that have to be sold to fund those programs when 4 they're actually funded. 5 So I think there's benefits to customers by 6 reducing rate increases in this case. I think there 7 will be -- in this rate cycle, I think there will be 8 benefits to customers and subsequent rate cycles, 9 because more of the CIRP funding will be -- revenue 10 funding, as opposed the issuing additional debt. 11 Q. As Ms. Myers pointed out, though, I believe that 12 one of the things that the District and the Rate 13 Commission also have to consider is whether the rate 14 change proposal will allow it to comply with all laws, 15 including the consent decree. 16 So my question would be, given what you know now, 17 do you believe the rate change proposal, as you've got 18 it here with 45 million, do you believe that that would 19 be -- impair the District's ability to comply with the 20 laws and regulations, including the consent decree? 21 A. Well, not sure. But I will look at that. Ms. 22 Myers showed me a document that showed that certain 23 incinerator projects have to be done by 2026. 24 That's two years beyond 2024. And in my 25 modelling, I deferred a couple of projects out through TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 44 1 2026. 2 So I don't think that change would necessarily 3 conflict with that timeline obligation of MSD. 4 She also commented on some wastewater capacity 5 expansions and suggested there's some timeline limits on 6 those. I'll review that to see whether or not this 7 proposal conflicts with that. 8 If it doesn't, then I think that -- what's very 9 significant about this is to the extent there is any 10 flexibility in MSD's ability to time when they actually 11 make this capital investment that they have some control 12 over the pace. 13 And then they also have some control over the 14 rate increases that's needed in this case. 15 And Ms. Myers has raised some important issues 16 that I don't dispute. You have to comply with the EPA 17 regulations. 18 But considering whether or not the MSD has timed 19 the capital investments in a way that doesn't result in 20 the most attractive rate structure for its customers, I 21 think it has merit and should be explored by the Rate 22 Commission to ensure customers don't have to pay rate 23 increases that could be avoided by more prudent 24 management of CIRP spending by MSD. 25 Q. One of the other factors that the Rate Commission TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 45 1 has to determine is whether the rate change proposal 2 generates funds necessary for emergencies and 3 delinquencies. 4 Do you think that your -- is it your opinion that 5 the proposal that you're making will generate funds 6 necessary for emergencies and delinquencies with the 7 smaller proposed revenue increase? 8 A. Yes. With the corrections, it may be necessary 9 for the interest rate, and I will review the CIRP 10 funding issues. That will change the revenue position 11 that I take with modifications. 12 But with those adjustments, the rate model I used 13 was essentially the same as the MSD's rate model. 14 It accommodates the need for cash for the MSD. 15 It reflects uncollectible bills by MSD, and need to pass 16 those costs on to customers who do pay their bills. 17 It reflects the liquidity needs of the MSD to 18 fund their operating expenses, their cash reserves to 19 ensure that they're in compliance with the bonds, or 20 issuing additional bonds. 21 It ensures that the debt service coverage ratio 22 is adequate to not only meet the initial requirements 23 for minimum debt service coverage, but also is strong 24 enough to maintain a AA bond rating, which is MSD's 25 current bond rating, and is what I targeted -- or I TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 46 1 accepted as a reasonable target for these financial 2 forecasts. 3 So I believe the actual objectives -- financial 4 objectives the MSD included in their model were not 5 contested. 6 And with very limited changes in that model, I 7 think there's opportunities for much lower rate 8 increases in this case, while still providing MSD the 9 funding needed to accommodate all the capital investment 10 that has to be made to comply with EPA regulations. 11 But there are some soft spots that I do need to 12 look at, based on what the MSD pointed out today -- 13 Q. So even though it will result in less revenue, it 14 is still your opinion that it would be sufficient to 15 cover all emergencies and delinquencies. 16 A. The revenue is adequate under the forecast 17 included the model. 18 The adjustments to revenue was an opportunity to 19 reduce the debt service coverage ratio down to what has 20 been previously approved by this board, which changes 21 the mix of funding from debt and equity percentages that 22 the MSD had to 40 percent. 23 Equity funding is 60 percent debt, I changed it 24 to 30 percent equity funding and 70 percent debt. That 25 lower the revenue requirement. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 47 1 The increase in capital spending in the last two 2 years for those projects, which I believe were 3 discretionary and could be deferred for a couple of 4 years, also reduced the revenue increase in those two 5 years. 6 All other financial metrics in the MSD were met 7 in this financial model. 8 Q. You had a lot of discussions about the interest 9 rates, so I don't want to -- you're going to go back and 10 look at that again, it's my understanding. 11 But you believe the 5 percent is too high; is 12 that the sum of where you are right now? 13 A. Yeah. The 5 percent interest rate was 14 accompanied by an assumed premium, selling the bond in 15 the model. 16 And that premium was about 13 percent. And the 17 net effect of that would price a bond out a little more 18 than 4 percent. 19 That's about a percentage point more than what 20 MSD paid for 2017 bond issue. 21 So the real question is, will interest rates 22 increase over the next four years. 23 I've been in rate cases for many, many years, 24 including the last four rate cycles for the MSD. 25 We've always been looking at increases in TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 48 1 interest rates, and we haven't seen them. 2 There's projections for increases in interest 3 rates now. There have been every year for the last 12 4 years. 5 More often, those projected interest rate 6 increases have not materialized. Interest rates have 7 stayed relatively flat. 8 But nevertheless, the MSD has to recover its 9 actual interest costs, and that will be based on market 10 conditions when the bonds are sold. 11 But at the same time, the overstating what those 12 interest costs will likely be will have the effect of 13 unnecessarily increasing wastewater rates to customers 14 in this utility. 15 And I think that the cost to customers should be 16 considered in formulating what an appropriate assumption 17 is for what the interest rate will be over this 18 four-year rate cycle. 19 Q. And Mr. Gorman, what do you -- you obviously 20 think it's going to less than what they're proposing. 21 What do you think the effect to MSD is, if in 22 fact the interest rates will increase? 23 You already said we don't have any clear 24 indicators. But what if instead, interest rates -- 25 something happens in this country where interest rates TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 49 1 are above 5 percent, or at 5 percent? 2 What's going to going to happen to the CIRP or 3 MSD in general, based on that assumption in this model 4 for this rate change proposal? 5 A. Well, I'm not aware of anything that would 6 prevent the MSD from coming in and saying, look, there's 7 been a material change in our cost. And we need to 8 adjust the wastewater rates approved for this docket. 9 To the extent that interest rates do increase 10 well beyond what's reflected in the forecast, and MSD's 11 rates are not adjusted, that would mean that their debt 12 service coverage would be a little lower. 13 Probably not below the minimum level of 1.6 times 14 used in the forecast; certainly well above the 1.25 15 minimum, that would put them in default and the bond in 16 danger. 17 So there is some flexibility in the debt service 18 coverage level in the event that interest rates are 19 higher than what's included in the forecast here. 20 But there's also the natural hedge for the MSD 21 here. If their costs increase considerably, relative to 22 what is assumed when we make these rate forecasts that 23 threatens their financial strength, financial viability, 24 I think -- I presume they would have the right to come 25 in and ask the Rate Commission to consider an emergency TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 50 1 rate increase, because something beyond their control 2 happened, which threatens the financial strength of the 3 MSD. 4 Q. So if interest rates in fact go up, your answer 5 is that MSD would need to come back to the Rate 6 Commission to do a new rate change proposal, 7 essentially. 8 A. No. I think I explained that if interest rates 9 go up, but not significantly, then that would simply 10 mean a lower debt service coverage would be earned 11 relative to the forecast period. 12 But that would not harm MSD's financial integrity 13 because rates are being set -- even at 1.6 times debt 14 service coverage ratio, at a relatively strong financial 15 coverage of debt obligations. 16 So that would erode the actual earned ESC 17 relative to the target ESC. But there's a lot of 18 breathing room in that factor. 19 My second point was, is that there's a material 20 change in the MSD's costs relative to what's included in 21 the rates. 22 And that material change increases their 23 financial integrity, or financial viability; then it 24 would seem prudent for them to seek an increase in rates 25 to accommodate that change in costs. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 51 1 Q. Thank you. Let's switch to I&I for a minute. I 2 think it's on page 6 of your testimony. 3 You note that I&I costs are more accurately 4 reflected as 50/50 as opposed to MSD's proposal of 40 5 percent customer and 60 percent throughout. 6 Could you please explain what supports your 50/50 7 breakdown as supplied to MSD? 8 A. Well, I believe Black and Veatch's studies would 9 support it; your on witness's studies support -- 10 Q. Correct. I'm asking you your opinion right now. 11 A. Well, that's part of my opinion; is the studies 12 done by Black and Veatch supports -- reflect an I&I at a 13 much higher ratio for customers than reflected in MSD's 14 studies here. 15 For other wastewater utilities, I believe it is 16 common to have a customer component of I&I at 50 percent 17 or even higher. 18 And another aspect of I&I cost is, you know -- 19 the reason I&I's infiltration, the inflow of ground 20 water and sewer water into the wastewater system so that 21 the amount of that water collected is a direct function 22 of the length of pipe you have to connect all your 23 customers to the wastewater system, the number of lift 24 stations that can get water infiltrated, the number of 25 manhole covers that can get water infiltrate. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 52 1 So that the number of customers on the system, 2 the geographical distance that the utility has to 3 install pipe in order to connect all those customers, 4 has a big impact on the amount of the amount I&I, water 5 -- I&I infiltration into the wastewater system. 6 It's not simply the volume of the wastewater that 7 those customers put into the system. It's more largely 8 driven by the length of the pipe and the number of that 9 infrastructure I just described. 10 That's typically recognized by companies like 11 Black and Veatch when they do studies on I&I. 12 And because of the causation of I&I, the length 13 of pipe and those other factors, the classification of 14 those costs is generally weighted more heavily toward a 15 customer component and not as heavily weighted towards 16 actual wastewater contributions to the system. 17 Because the wastewater contributions to the 18 system really don't drive the I&I. They're just an 19 additional cost the wastewater utility has to incur 20 because it exists in some I&I in meeting their primary 21 objective. And that's to treat the wastewater fluid 22 that's put into the system. 23 Q. Thank you. As we talked about, the Rate 24 Commission has certain factors and criteria that they 25 have -- that they look at and they have to determine TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 53 1 under the charter in looking the rate change proposal. 2 And certainly, from your testimony, there's parts 3 about the district's proposal that you disagree with. 4 But I'm going to ask you some questions, just 5 because I'm trying to get exactly what -- you don't 6 mention the factors and criteria in your testimony. So 7 I just want to ask you about them. 8 A. Thank you. 9 Q. And right now, I'm asking about the District's 10 rate change proposal. 11 So do you believe that -- do you have an opinion 12 on whether the rate change proposal is necessary to pay 13 interest and principal falling due on bonds issued to 14 finance the assets with the District? 15 A. Not the rate increase proposed by MSD staff. But 16 a rate increase is necessary, particularly in fiscal 17 year 23 and 24. 18 Q. Do you have an opinion on whether the rate change 19 proposal is necessary to pay for the cost of operation 20 and maintenance? 21 A. The rate increase that I've outlined in my 22 testimony is necessary for that. Yes. 23 Q. What about the district's rate change proposal? 24 A. I think they're -- the proposed District rate 25 increase produces revenues that are in excess of the TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 54 1 amount of revenue needed to cover those costs. 2 Q. And do you have an opinion on whether the rate 3 change proposal provides for funds in such amounts to 4 cover emergencies and anticipated delinquencies? 5 A. Under my proposal, I believe it does. Under the 6 District's it would also. 7 But again, I believe the District's rate change 8 proposal creates more revenue than the District needs. 9 Q. Okay. And is the District's rate -- well, let's 10 talk about both. 11 The rate change proposal; do you have an opinion 12 as to whether it's consistent with constitutional, 13 statutory, or common law, as amended from time to time? 14 And you don't have to have an opinion on those. 15 A. As my non-lawyer opinion, I think the rates need 16 to be adequate to maintain the financial integrity of 17 the utility. 18 Which is what I sought to estimate in my 19 testimony, and I believe MSD staff's level of revenue is 20 in excess of an amount needed to maintain the financial 21 integrity of the utility. 22 Q. Do you have an opinion as to whether the 23 District's rate change proposal enhances the District's 24 ability to provide adequate sewer and drainage systems 25 and facilities and related services? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 55 1 A. Again, I believe my revenue increase is adequate 2 to cover that in a conservative manner. 3 And I believe MSD staff's revenue increase is in 4 excess of the amount needed to cover those costs. 5 Q. Do you have an opinion as to whether the 6 District's rate change proposal is consistent with and 7 not in violation of any covenant or provision, relating 8 to any outstanding bonds or indebtedness of the 9 District? 10 A. Sorry. Can you repeat that? 11 Q. Sure. Whether the District's rate change 12 proposal is consistent with and not in violation of any 13 covenant or provision relating to any outstanding bonds 14 or indebtedness of the District? 15 A. I don't believe that they're inconsistent with 16 their debt obligations, no. 17 I believe they're inconsistent with their 18 obligations for reasonable pricing to the customer. 19 Q. And the next factor we've talked about a little 20 bit, but I would also like to ask again. 21 Do you have an opinion as to whether the rate 22 change proposal does not impair the ability of the 23 District to comply with applicable federal or state laws 24 or regulations? 25 A. Same answer. I believe the district's revenues TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 56 1 are in excess of what they need to comply with the state 2 laws and regulations, with the caveats that we've walked 3 through already. 4 And I believe that the lower revenue requirement 5 would be adequate to accommodate those obligations. 6 Q. And then finally, do you have an opinion as to 7 whether the District's rate change proposal, as they 8 propose it, imposes a fair and reasonable burden on all 9 classes of ratepayers? 10 A. I do not. I believe the MSD's proposal produces 11 an excessive rate burden on all customers. 12 And I don't believe that they're cost of service 13 study accurately allocates costs to the various 14 classification of functional components of wastewater 15 service. 16 So I propose to reduce the revenue collections 17 from the MSD that is necessary to maintain the financial 18 integrity, and meet their capital expenditure 19 obligations to state and federal regulatory agencies. 20 And do so in a way that will maintain their 21 financial integrity and earn their very strong AA-rated 22 bond rating, but do so at more reasonable prices to 23 customers. 24 I also believe that the MSD has proposed a rate 25 structure, which shifts too much costs to the volume TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 57 1 charge, which can create instability in the revenue 2 collections, which I think is a bad policy for a utility 3 that keeps taking on more debt. 4 You want stable revenue collections. So reducing 5 the -- increasing the level of revenue collected from 6 the volume charge and reducing the relative level from 7 customers and fixed charges that are imposed on 8 customers each month may have -- may create more 9 instability and revenue collections. 10 So I think from a financial and integrity 11 standpoint, the MSD proposed rate structure should be 12 modified to at least have the same increase in the 13 monthly customer charges as they do in the volume metric 14 charges. 15 MS. STUMP: Okay. Excuse me just a minute, Mr. 16 Chair. Prabha Kumar is one of the rate change 17 consultants. She's got at least one question, I 18 believe. 19 EXAMINATION 20 BY MS. KUMAR: 21 Q. Mr. Gorman, I think to the counsel's question on 22 what happened if the interest rate potentially goes 23 higher. 24 One of the things that you mentioned was that if 25 interest rates happen to go higher, then the one thing TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 58 1 that could happen is the debt service coverage could be 2 lower than the 1.6, but were it -- would it still be 3 higher than the 1.25, was your statement. Was that 4 correct? Did I capture that correctly? 5 A. Well, I don't know if I got that specific. But 6 if you look at my schedule MPG1, page 2, I'm actually 7 setting rates at the minimum DSC of 1.7 times, which 8 increases over the forecast period, up to almost 1.9 9 times. 10 So what I said was is that if interest rates are 11 higher than what is reflected in my forecast, that will 12 increase interest expense on new bonds; not the old 13 bonds, because there will be contractural obligations. 14 But that increase in interest expense on the new 15 bonds will increase operating expenses and reduce the 16 revenue available to -- that goes -- essentially reduces 17 operating income to the utility. 18 And that will shrink the actual earned debt 19 service coverage ratio. And it will shrink it below 20 what was assumed for ratemaking purposes. 21 But it would be below the 1.6 times, if rates 22 were set based on 1.6 times. But my projection shows 23 something a little higher than 1.7 and 1.8. 24 Q. Correct. So in the situation when if interest 25 rates go higher than projected, then you are TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 59 1 acknowledging that it could reduce the debt service 2 coverage, relative to what you have projected. 3 So the question, then, is if the debt service 4 coverage get reduced to what you have projected, that 5 could also have an impact on the amount of money 6 available for cash financing of capital for the program; 7 would you agree to that? 8 A. Yes. 9 MS. STUMP: Thank you. I believe that's it. 10 Thank you very much. 11 CHAIRMAN TOENJES: Thank you, Ms. Stump. Before 12 we proceed with your questions, Mr. Neuschafer, we'll 13 take a 10-minute break and resume at 10:25. 14 (WHEREUPON, A BRIEF RECESS WAS TAKEN) 15 CHAIRMAN TOENJES: We will continue with our 16 questioning. Next step in the process is to allow Mr. 17 Neuschafer to ask Mr. Gorman any questions. 18 Mr. Neuschafer, do you have questions for Mr. 19 Gorman? 20 MR. NEUSCHAFER: I do not. 21 CHAIRMAN TOENJES: You do not. Thank you. Any 22 of the rate commissioners have questions for Mr. Gorman. 23 MR. SCHOEDEL: Yes, Mr. Chairman. 24 CHAIRMAN TOENJES: Mr. Schoedel, then Mr. Stein. 25 EXAMINATION TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 60 1 BY MR. SCHOEDEL: 2 Q. Mr. Gorman, you stated that the interest rates -- 3 and I know it's a complicated issue with projecting 4 interest rates. And I'm certainly not a finance person. 5 But with your experience and reviewing over the 6 years, you mentioned that MSD's may be too high based on 7 past experience and hard to interpret what might -- I 8 shouldn't say interpret, but guess what the future 9 interest rates are. 10 In your opinion, what do you think would be a 11 more appropriate interest rate to include in their 12 model? 13 A. Well, I need to look at that more carefully, 14 because their model actually assumes that the coupon 15 rate and -- it is not necessarily the cost of the bonds, 16 because the bonds are expected to be sold at a premium. 17 But I would think that the net effect; that is 18 the actual cost to MSD of the proceeds from the bond, 19 which would be a combination of what the coupon cost is, 20 and the net proceeds to MSD should produce a net cost of 21 around 3 and a half to 4 percent. 22 Their cost right now is closer to 4 and a half 23 percent. So I think there is some interest rate -- 24 there is an overstatement in the interest cost to the 25 MSD in their model. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 61 1 But it's not as large as I reflected in my direct 2 testimony. 3 Q. So roughly speaking, about a percentage less than 4 what their model currently shows? 5 A. Yeah. I need to confirm those numbers. But it's 6 something, 1 half to 1 -- 1 half of 1 percent to 1 7 percent. Yes. 8 MR. SCHOEDEL: Okay. Thank you. 9 CHAIRMAN TOENJES: Mr. Stein. 10 EXAMINATION 11 BY MR. STEIN: 12 Q. Mr. Gorman, there's been a lot of discussion 13 around debt service coverage ratios. 14 I think it's been stated that in the past, the 15 District's financial guidelines have said that they 16 wanted to maintain a minimum of 1.6 in order to maintain 17 their AA bond rating; is that correct? 18 A. That is. 19 Q. Currently, in this case, they're looking at a 20 minimum of 1.8. 21 In an era of very steady interest rates and 22 nothing on the horizon to indicate that's going to 23 change in the foreseeable future, why would we want to 24 increase the debt service coverage from 1.6 to 1.8? 25 A. Well, the debt service coverage is a different TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 62 1 issue than the interest rate issue. That really helps 2 establish the equity in debt funding of the capital 3 program. 4 We have a rough target of 75 percent debt, 25 5 percent equity initially. But that percentage really is 6 ultimately going to be controlled by maintaining a 7 minimum the debt service coverage ratio. 8 So there's two things. The debt service coverage 9 ratio gives an idea of the financial stability of the 10 utility, and the credit rating agencies will review. 11 So 1.6 coverage, 1.6 times debt service coverage 12 is very, very strong coverage for a utility company of 13 MSD's size and the stability of their revenue 14 collections. 15 You know, other utility companies, like the one 16 in Indiana that we talked about a little bit, they 17 actually set rates at a 1.45 debt service coverage 18 target on the total debt service. 19 So 1.6 has already got a lot of cushion built 20 into it. So the need to push it up to 1.8 would be 21 necessary if there's any threat to their bond rating, 22 for the bond rating to express any concern on the 23 financial strength of the utility. 24 They're not. And for that reason, I don't 25 believe there's a need to change the financial policy TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 63 1 from a minimum of 1.6 coverage up to a 1.8 coverage, as 2 proposed by MSD in this case. 3 Q. If the debt service coverage were to shrink below 4 1.6 and -- what level do you think the District's bond 5 rating would be reduced? 6 A. The bond rating analyst would look at the actual 7 -- our debt service coverage ratio, look at the 8 utility's ability to correct it. 9 So if it dipped down to a low level, as long as 10 it's not in default range at 1.25 or less, they can 11 issue additional bonds. 12 Then there's a remedy available to the utility to 13 adjust their rates to increase their level of debt 14 service coverage. 15 I would expect, based on the events that have 16 taken place at my other utilities, that they can weather 17 a short period where they have a much weaker debt 18 service coverage ratio than 1.6; possibly down to 1.4 or 19 even 1.3. 20 As long as there's the expectation from credit 21 analysts that the utility can correct that by seeking a 22 rate change that will ultimately strengthen that debt 23 service coverage ratio, in a reasonably short period of 24 time. 25 Q. If their bond rating went below AA, what would be TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 64 1 the financial implications of that? 2 A. Their new bond issues would be sold at a higher 3 interest cost to the utility. 4 Q. Do you have any sense of what percentage rate 5 that might result in, what delta in the percentage rates 6 there might be? 7 A. Depends on the market that it occurs in. And on 8 average, it probably would be 10 to 20 basis points. 9 But in a period of financial distress, the 10 difference between a AA and a single A bond rating could 11 be 50 to 70 basis points. 12 That would be a market where there's overall 13 distress in the marketplace, and the market participants 14 are looking for securities of higher protection, lower 15 risk, and paying a premium for them. 16 MR. SCHOEDEL: Thank you. 17 CHAIRMAN TOENJES: Mr. Palans. 18 MR. PALANS: Thank you. 19 EXAMINATION 20 BY MR. PALANS: 21 Q. Mr. Gorman, were you present during the 22 proceedings, where testimony was educed on April 8 and 23 April 9 earlier? 24 A. I was not at that those proceedings. 25 CHAIRMAN TOENJES: Mr. Palans, could you get a TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 65 1 little closer to the microphone? 2 Q. MR. PALANS: Have you had an opportunity to 3 review the transcript of the proceedings and testimony 4 that was educed on April 8 and April 9? 5 A. No, I did not. I primarily focused on the 6 testimony, discovery responses, and all the exhibits 7 included in the MSD original filing. 8 Q. So you've not reviewed that transcript nor the 9 evidence that was educed? 10 A. I think the evidence was included in their 11 filing, but I have not reviewed the transcript. 12 Q. Have you had an opportunity to review the 13 declaration of our consultant, the Rate Commission's 14 consultant, Ms. Lemoine? 15 A. Yes. 16 Q. I'm going to start with basics to just 17 understand. And the basics, I'm going to the beginning 18 of your declaration, pages 2 and 3, where you summarize 19 your findings and conclusions. 20 I want to just make this as simple as possible. 21 You propose to reduce the revenues available to the 22 District during the this cycle by $24 million; am I 23 reading that correctly? 24 A. At the end of the fourth year, that is correct. 25 Q. Then you begin to describe adjustments that you TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 66 1 made to MSD's forecasted wastewater revenue 2 requirements. 3 And you say that you made only three adjustments. 4 Then you go on to list a paragraph with four subparts. 5 Identify those three adjustments that you made 6 for us. 7 A. The three adjustments include the following: I 8 revised their model to reflect that the financial policy 9 that's been approved by this Rate Commission, at least 10 over the last three rate cycles, that included a funding 11 mix of 75 percent bonds, 25 percent equity, and a 12 minimum debt service coverage ratio of 1.6 times. 13 MSD's filing was based on a 60 percent debt, 40 14 percent equity funding mix, and a minimum debt service 15 coverage of 1.8 times. 16 Q. Let me just interrupt. So that's number one. 17 A. That's number one. 18 Q. Okay. Number two. 19 A. Number two is: I adjusted the interest rate on 20 new bonds projected to be issued over the four-year rate 21 cycle. 22 Q. Okay. That's number two. 23 A. Number three is: I adjusted the annual CIRP 24 spend in fiscal year 23 and 24, and moved some of those 25 capital projects out to FY25 and 26. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 67 1 So that levelized the annual CIRP spending over 2 the period FY21 through FY26. 3 Q. I would like to just focus on two of the three 4 that you mentioned; the two being interest rate and the 5 CIRP scheduling. 6 A. Okay. 7 Q. You indicated that, with respect to interest 8 rates, that you may be wrong on your estimate of the 9 interest rate pricing. Did I understand your testimony 10 correctly? 11 A. Yeah. I may have understated the interest costs 12 because of other components of the model, which I 13 overlooked. Correct. 14 Q. So if you were wrong on the interest rate 15 reduction, your assumption would similarly be incorrect, 16 correct? 17 A. The revenue requirement adjustment would be 18 overstated. Yes. 19 Q. And with regard to CIRP, which was number three, 20 you deferred projects that are identified CIRP projects 21 during the this period; is that my understanding? 22 A. Yeah. I deferred projects that were scheduled in 23 the MSD projections for FY23 and 24 to FY25 and 26. 24 Q. And I believe in response to Mr. Myers' question, 25 you identified an amendment to the consent decree that TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 68 1 was filed with the Court, and which the EPA has agreed 2 upon; is that correct? 3 A. Yes. 4 Q. Have you ever seen that amendment to the consent 5 decree before today? 6 A. I did not. But I would note that that amendment 7 doesn't conflict with what I did. 8 Q. It does not conflict with what you did; that's 9 your opinion? 10 A. Well, that's what it said. 11 Q. Well -- 12 A. It said that the capital requirements for the 13 wastewater treatment plants must be completed by 2026. 14 And that's consistent with the change in the 15 MSD's forecast that I made. 16 Q. Are you aware of the fact that consent decree is 17 mandated requirement under law? 18 A. I am. 19 Q. And that you are proposing that CIRP projects be 20 spread in fiscal year fiscal 24 -- beyond that period to 21 a future period, correct? 22 A. For the -- yes. And doing that would levelize 23 the annual CIRP spending. 24 Q. Doesn't deferrals make those project costs 25 increase with increased risks? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 69 1 A. Well, if you push them out into a future period, 2 there may be some inflationary impacts on the costs. 3 Q. Inflationary impacts could be higher interest 4 rates applicable, correct? 5 A. Could be lower interest rates. So I don't see 6 interest rate as a risk that, particularly, by pushing 7 them out, would allow for more of these projects to be 8 funded by equity because there wouldn't be such a 9 significant need for more debt capital in FY23 and 24. 10 Q. Are you aware of the fact that the testimony is 11 that the District must spend $600 billion in present-day 12 costs to satisfy its obligations under the consent 13 decree during the next 20 years? 14 A. Yes. That consent decree, -- I haven't checked 15 that number but, yes. 16 There is a present value cost in the consent 17 decree that was estimated by MSD at the outset of the 18 program that was designed to comply with the EPA consent 19 decree. 20 Q. And are you aware of fact -- I believe you 21 testified, that interest rates have been consistently 22 low for the past 10 years? 23 A. Yes. 24 Q. And -- 25 A. Well, yes. Around 2008, you know, there was a TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 70 1 period where municipal interest rates were higher. 2 But they've been relatively low, certainly -- 3 interest rates from a treasury and a corporate bond 4 perspective have been low for the last 10 years. 5 There was a period where municipal rates were 6 high, relative to corporate bonds. 7 But certainly for the last five to eight years, 8 all interest rates, including municipals, have been 9 relatively allow. 10 Q. If you've reviewed the transcript from the 11 proceedings on April 8 and April 9, there was a term 12 used that interest rates are at historical lows. Do you 13 remember that? 14 A. I wouldn't be -- that's certainly true with 15 respect to treasury securities. 16 Q. Do you agree with my statement; that interest 17 rates are at historical lows? 18 A. They have been. Right now, they're -- I don't 19 know if that's necessarily true. 20 I think treasury bond -- 30-year treasury bond 21 has dipped back below 3 percent. But 3 percent is so. 22 It's not historically low, but not -- 23 Q. It's low? 24 A. Yeah. Well, it's low. But the reason it's low 25 is because inflation is under control. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 71 1 A 3 percent treasury bond implies a 1 percent 2 real return and a 2 percent inflation outlook, and that 3 type of real return and treasury bond is really not low. 4 It just indicates that we're in an environment of 5 low interest rates. 6 Q. And you also aware, if you read the transcript, 7 that the pricing for projects, CIRP projects, are also 8 at historical lows? 9 A. Well, I didn't read the transcripts. But I 10 didn't contest the CIRP projected costs. 11 I'm simply observing that if you can manage the 12 pace in such a way that you levelize the annual CIRP 13 spend, you can accomplish all the projects without much 14 more of an increase in rates to MSD customers. 15 Q. And you're also aware, and I think you referred 16 to the fact, that the District enjoys a AA rating from 17 one of the credit agencies. I think it's Standard and 18 Poor's; do you recall that? 19 A. I do. 20 Q. And that liquidity of the District is strong at 21 present? 22 A. It is. 23 Q. So based upon low interest rates, favorable 24 pricing on CIRP, and a strong liquidity position, it's 25 your position that CIRP projects should be deferred into TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 72 1 future periods as opposed to done at the present? 2 A. Yes. And I would point out that all of those 3 positive financial metrics that you just walked through, 4 where that accomplished into financial policy that's 5 been approved by this Commission for the last three rate 6 cycles, there's no need to change it as MSD is proposing 7 in this case. 8 And deferring CIRP program will not impair the 9 financial strength of the utility. 10 It will simply spread out the cost over more 11 years and mitigate the increased wastewater rates needed 12 to maintain this strong financial standing of this 13 utility and still fund all of those programs within a 14 time period that meets their EPA and state and federal 15 regulatory mandates. 16 But it will lower the cost to wastewater 17 customers. 18 Q. Doesn't these deferrals that you propose of CIRP 19 projects expose to District to contingencies such as may 20 be encountered with its aging infrastructure? 21 A. There could be outages of the existing 22 infrastructure. That's true. 23 Q. And it would expose the District to funding or 24 financing that may be highly competitive and cost more 25 in future years? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 73 1 A. I don't think that's a real risk. I think that's 2 an exaggeration of the system planning. 3 Q. And do you believe that regulatory compliance, or 4 changes in regulatory compliance might affect the 5 contingent exposure risks of the District? 6 A. Regulatory compliances and obligation of the 7 utility they must comply with. Yes. 8 Q. And are you aware of the fact that District has 9 advised us that there is a declining consumption and a 10 reduction of water demand and revenues, while costs for 11 water services are increasing? 12 A. I do. And that's why I propose to reject the 13 wastewater rate design of MSD and focus instead on fixed 14 monthly fees to the customers to reflect this fixed cost 15 nature of MSD and stabilize that revenue collection. 16 Q. And would you also consider inflationary risks to 17 be a potential additional cost for the District? 18 A. Inflation is a risk to the extent it increases 19 the level of spend necessary to maintain service 20 operations and reliability. 21 MR. PALANS: Thank you. I have no further 22 questions. 23 CHAIRMAN TOENJES: Thank you, Mr. Palans. Any 24 questions by any other rate commissioner at this time? 25 Mr. Gorman, I have one question. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 74 1 EXAMINATION 2 BY CHAIRMAN TOENJES: 3 Q. You talked about the -- well, I have a couple of 4 questions. 5 The first one: You talked about the volume 6 metric charge and how that created some uncertainty in 7 your reallocation comments. Could you sort of elaborate 8 on that a little bit? 9 A. Sure. The MSD rate design doesn't increase the 10 fixed monthly fees to all customers by the same percent 11 increase. 12 It's increasing the volume metric charge. The 13 volume metric charge is based on the billable water, 14 billing units that are measured by the water utility. 15 They are applied to the volume metric charge as 16 they're approved by the MSD wastewater rate structure. 17 To the extent customers' volume metric use of 18 water varies during the relevant time period, that can 19 have an impact on the amount of revenue collected by 20 MSD, because the rates are applied to those volume 21 metric billing charges. 22 To the extent customers reduce consumption, 23 volume consumption, that can reduce revenues to MSD. 24 To the extent customers install more efficient 25 water appliances, that can reduce revenue collections to TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 75 1 MSD. 2 In contrast, of those revenue collections through 3 the volume metric charge, it will depend on what the 4 actual volume metric billing is collected by MSD, by 5 water utilities within the service territory. 6 In contrast to that, the fixed monthly fees, the 7 meter charges, and the other fixed fees in the MSD are 8 stated on the customer bill. 9 So they're stable. The revenue collections is 10 far more predictable. 11 And because of MSD's largely-fixed cost nature -- 12 there are some volume metric charges that vary with 13 usage on the system. 14 But most of their capital -- most of their 15 cost-related capital investments are in the fixed costs. 16 So stabilizing revenue collections by pricing the 17 structure, pricing the MSD service in a way that 18 provides more stable revenue collection will benefit the 19 MSD and the bond orders in the MSD, because it makes 20 their ability to meet debt service targets, it makes the 21 ability to predict whether or not they can achieve the 22 debt service charges in a more highly probablistic 23 fashion. 24 Conversely, you know, when you have revenue 25 that's dependent on volume metric billing units, which TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 76 1 can be impacted by a lot of factors, it's much less 2 ceratin how much revenue the MSD will actually collect. 3 Q. So your recommendation will be to change that 4 percentage -- change that balance -- 5 A. Well, just -- 6 Q. -- more related towards a fixed rate? 7 A. Relative to what the MSD has proposed here, yes. 8 Their cost of service studies supports -- with it just 9 from an I&I allocation -- supports pricing that 10 wastewater service in a way that it imposes higher fixed 11 charges on customers and lower volume metric charges. 12 So that's supported by both cost of service 13 study. I think it's fair to all customers. 14 And I think it's also more prudent, given the 15 significant debt load that the MSD has taken on, because 16 it stabilizes revenue collection. 17 CHAIRMAN TOENJES: Any other questions by any 18 other of the Commissioners? Thank you, Mr. Neuschafer. 19 Thank you, Mr. Gorman. 20 Ms. Stump, are you ready to present those persons 21 for who you filed testimony on behalf of the Rate 22 Commission. 23 MS. STUMP: I am. 24 CHAIRMAN TOENJES: Please come forward. 25 MS. STUMP: We will start with Ms. Pam Lemoine. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 77 1 CHAIRMAN TOENJES: Thank you. Ms. Lemoine, is 2 the testimony you're about to give the truth, the whole 3 truth, and nothing but the truth? 4 MS. LEMOINE: Yes. 5 CHAIRMAN TOENJES: Thank you. Ms. Myers, do you 6 have questions for Ms. Lemoine. 7 MS. MYERS: Yes, we do. With me, I have Marion 8 Gee and Tim Snoke, our secretary/treasurer. 9 EXAMINATION 10 BY MS. MYERS: 11 Q. Good morning. 12 A. Good morning. 13 Q. The questions we have for you are around your 14 rebuttal testimony. 15 So I'm certain you have that with you. I'm just 16 going to kind of walk through that. 17 On page 6 of your rebuttal testimony, you agree 18 with and support MSD's rate proposal, seeking 19 authorization to issue additional bonds during the 20 period of FY21 through 24; is that correct? 21 A. Yes. 22 Q. And you also state that issuing additional bonds 23 provides multiple benefits. Can you explain some of 24 those benefits? 25 A. Certainly. When utilities are undertaking large TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 78 1 capital programs, there are a number of different 2 factors to take into consideration in developing a 3 long-term financial plan to provide the maximum benefit 4 and the lowest cost for customers. 5 So by issuing debt, you have the ability spread 6 costs out over the users, who will benefit from those 7 facilities. 8 So for instance, with treatment plant expansion 9 or something like that, if you were to cash finance it, 10 your current customers pay that entire burden. 11 Whereas if you debt finance a portion of that, or 12 all of that, you spread that cost over the users who 13 benefit from that facility. 14 Q. Okay. You also agree that MSD's proposed capital 15 financing plan provides a reasonable mix of cash and 16 debt financing; is that correct? 17 A. Yes. 18 Q. Okay. Is this a reasonable and cost-effective 19 approach? 20 A. Is the funding mix that you're speaking to? 21 Q. Correct. 22 A. Yes. When I reviewed the MSD proposal, I looked 23 at the policies that were taken into consideration in 24 developing that financial plan, in light of the 25 commentary provided by the rating agencies in your 2017 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 79 1 rating, and the considerations they gave for affirming 2 your ratings, as well as their comments with regard to 3 items that could cause a decline in your rating in the 4 future. 5 And as has been stated previously, at this point 6 in time for the District, debt service coverage really 7 is driving the financial plan, not the cash debt mix. 8 The cash debt mix is an outcome of achieving the 9 debt service coverage that's required in light of the 10 currently CIRP funding level. 11 Q. Okay. On page 13 of your testimony, you noted -- 12 I'll wait until you get there -- that MSD's capital 13 financing plan to finance the CIRP is a sound capital 14 financing approach. What do you mean by that? 15 A. The capital financing approach in the financial 16 plan is showing stability in the utility's financial 17 metrics over time. 18 So while the financial plan is showing a decline 19 in debt service coverage, for instance, over the study 20 period to the minimum of the 1.8 times in 2024, that 21 rate of decline has been managed over that time period. 22 It's not jumping around, for instance. The rate 23 increases over that time period are fairly levelized. 24 And so the overall mix shows stability over that 25 study period. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 80 1 Q. Okay. And in your professional opinion in 2 assuming voter authorization for additional bonds, does 3 MSD proposed financing plan help minimize the impact of 4 the CIRP on the wastewater rates during the FY21 through 5 FY24 period? 6 A. It appears to do so. Yes. Obviously, there are 7 multiple ways to put together financial plans that could 8 shift costs here or there over time. 9 But in total, the based on a 1.8 debt service 10 coverage target, the capital program that you're facing, 11 the financial plan seems reasonable to me. 12 Q. Okay. And also on page 6 of lines 20 through 22, 13 do you concur with the District's approach to establish 14 a financial plan that allows for the debt service 15 coverage of two and a half times or greater for senior 16 lien bonds, and 1.8 times or greater for total debt 17 coverage? 18 A. Yes, I do. As I indicated, I reviewed the rating 19 agency reports with regard to the 2017 rating and the 20 commentary that they provided. 21 Each of the rating agencies have slightly 22 different ways they go about conducting their 23 methodology for rating debt. 24 And certainly, debt service coverage is just one 25 of many factors that have to be looked at. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 81 1 So it's important to look at everything in total. 2 But in reviewing the rating agency's criteria and their 3 commentary, 1.8 times seems reasonable to me. 4 It's higher than Standard and Poor's rating 5 threshold of 1.6 times. But when you look at Moody's 6 and Fitch, they are more conservative with their 7 expectations for debt service coverage. And one of the 8 them even indicated that they would look closely at a 9 downgrade or a negative rating action if the debt 10 service coverage dropped below what they were expecting 11 to see, which they quoted as being 1.9 or so, if I 12 recall correctly. 13 Q. Okay. Do you agree that the escalation factors 14 in debt financing assumptions MSD used to project 15 operating and maintenance expenditures and debt service 16 are reasonable? 17 A. Yes. 18 Q. Did you also conclude that MSD CIRP is 19 reasonable? 20 A. I will defer the review of the CIRP to Ms. Nicole 21 Young, as far as the details are concerned. 22 As a rate consultant, I'm not versed in all of 23 the details that would be necessary to evaluate each of 24 the projects specifically. 25 I'd really defer to MSD experts in developing TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 82 1 that plan. But in my review of the consent decree and 2 the schedules, in my review of how the costs were 3 estimated, and my review of how the costs were either 4 incorporated into the financial plan, as indicated in 5 the rate proposal, adjusting for inflation, adjusting 6 for liquidations and so forth, it appears reasonable to 7 me. 8 Q. Okay. Just as a follow up to that, can I draw 9 your attention to page 12, line 10 through 12 of your 10 testimony. That's where this question came from. 11 Could you just read line 10 through 12 at the 12 beginning of -- 13 A. Based on your experience with other large 14 wastewater utilities, do you have an opinion regarding 15 the reasonableness of the District's CIRP. 16 Q. And you answered that yes -- 17 A. Yes. 18 Q. -- correct? Okay. Thank you. You agree with 19 MSD that the proposed rates outlined in the rate 20 proposal will achieve adequate fund balances to provide 21 for any unanticipated expenditures or emergencies during 22 the proposed rate cycle? 23 A. Based on my review of the rate proposal, and more 24 specifically, the rate model, the details therein, the 25 rate projections appear to project sufficient fund TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 83 1 balances over the study period. 2 Q. Okay. On page 7 -- back on page 7 of your 3 rebuttal testimony, starting with line 6, you recommend 4 that MSD increase its rates during the FY21 through FY24 5 to avoid a potential spike in rates in FY25; is that 6 correct? 7 A. That's correct. 8 Q. Okay. The rate increases shown for FY25 are for 9 illustrative purposes only. 10 A. That's correct. 11 Q. And you also understand that these rates are not 12 the proposed rates on which the Rate Commission is 13 issuing anything in this rate proposal. 14 A. That is correct. The rate study period is 15 through 2024. 16 But it's always important to look at a longer 17 term -- longer period, particularly the year or two 18 subsequent, to be knowledgeable about what the potential 19 implications might be down the road of decisions that 20 are be being made for this rate proposal period. 21 Q. So given your knowledge of the district's history 22 of the projected rate increases beyond the proposed 23 four-year rate cycle being less than expected, would you 24 agree that it would be fair and reasonable to increase 25 rates in the current four-year cycle to mitigate a TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 84 1 potential spike in 2025? 2 A. I do. I think that, in the past, it is true that 3 costs have been lower than anticipated, which have 4 allowed the rates for this current rate period to be 5 lower than what had previously been projected in the 6 prior rate period. 7 However, at this point in time, we are looking at 8 low interest rates. There's been testimony that the 9 bids are come in lower than even budgeted. So we're in 10 a very favorable time period. 11 So I think there is a risk of assuming that that 12 trend will continue to become even more apparent in the 13 future. 14 In fact, I think there's probably a risk -- more 15 of a risk at this point in time the other way; that 16 three or four years from now, interest rates could be -- 17 or inflation rates could be higher, the construction 18 industry could be in a different position, where bids 19 are coming in higher. 20 So I really don't agree that you can extrapolate 21 the fact that we came in lower this time, that that 22 would happen again in the future. It's a risk. 23 MS. MYERS: That complete our questions. Thank 24 you. 25 CHAIRMAN TOENJES: Thank you, Ms. Myers. Mr. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 85 1 Neuschafer, do you have questions for Ms. Lemoine? 2 MR. NEUSCHAFER: I do. 3 EXAMINATION 4 BY MR. NEUSCHAFER: 5 Q. Good morning. 6 A. Good morning. 7 Q. Looking at your testimony I want to talk about 8 the ratio of debt to cash financing, question 23. 9 Actually, to begin, you indicate that 25 to 30 10 percent is -- of the ratio of a debt to dash financing 11 is an industry-accepted best practice, and is in 12 practice with other utilities. 13 A. That is correct. 14 Q. Okay. Yet this proposal, you identify that MSD 15 is calling for cash financing of 37 percent. 16 A. On average for this rate period, that's correct. 17 Q. Okay. And your testimony is that 37 percent is 18 consistent with the industry accepted-best practice and 19 practice of other utilities of 25 to 30 percent? 20 A. That is a target and an industry practice, 21 correct. 22 But again, as I mention earlier, the debt cash 23 mix that is targeted is not a standalone policy that can 24 be achieved in a vacuum. 25 It's a function of a utility's outstanding debt, TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 86 1 and the impact that debt service coverage has on revenue 2 that's generated to meet that debt service coverage 3 level, as well as the size of the capital program. 4 So if the capital program changes, all things 5 being equal, that cash generated will result in a 6 different percentage, just from the basic math. 7 Q. Okay. I guess I'm having trouble understanding 8 -- using your testimony, using the numbers provided in 9 your testimony, how 37 percent is consistent with 25. 10 I understand that can change. But I don't 11 understand how a number that is anywhere from 25 to 50 12 percent higher than the range that is best practice is 13 consistent with that range? 14 A. Because based on the District's outstanding debt 15 and debt service coverage requirement of 1. -- or the 16 target goal of 1.8 times, that generates revenue 17 sufficient to, in this rate period, cash finance 37 18 percent on average. 19 Over time again, it's your -- the debt service 20 coverage provides cash for cash finance capital; that's 21 your numerator. 22 Your CIRP is your denominator. So as those two 23 -- as that changes, that percentage will change. 24 Because the District is heavily debt burdened 25 right now due to the consent decree and the requirements TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 87 1 thereunder, that debt service coverage does provide for 2 additional cash financing that is, right now, on a 3 percentage basis, more than what we see on average for 4 the industry. 5 Q. Okay. I believe you just spoke a bit about 6 establishing a series of revenue increases in '21 7 through '24 that are slightly higher than those 8 proposed. 9 Is that your testimony; that you think MSD should 10 consider that approach? 11 A. Correct. In order to mitigate what could 12 potentially be a spike of two times that level that 13 we're looking at now in 2025. 14 Q. Did you consider any alternatives, like spreading 15 out the projects to the extent possible under, you know, 16 applicable law or consent orders, over a greater period 17 of time? 18 A. I did not look at moving out capital projects, 19 because the capital projects are predominantly consent 20 decree-related and regulatory-driven. 21 And again, not being an engineer that's focused 22 on that, would not be in my position to be making 23 decisions on projects building out. 24 Q. Okay. So just to be clear, I'm not talking about 25 not doing the projects. I'm talking about timing of TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 88 1 projects. 2 A. Correct. 3 Q. Okay. And you don't have an opinion on that; or 4 you haven't looked at that issue. 5 A. No. I think that there are a lot of risks -- or 6 a lot of things that need to be taken into consideration 7 in developing a schedule for capital projects. 8 Certainly, costs and trying to levelize costs is 9 one of them. Meeting schedule projects in the consent 10 decree is obviously critical. And then the regulatory 11 requirement for the incinerator project that's required 12 a date certain. 13 And you don't want to postpone those projects out 14 to the deadline, because then you run a great risk if 15 thing that happens, as far as weather, or ability to 16 obtain contractors, or whatever the case may be, you 17 don't want to run the risk in missing those deadlines. 18 So you need to have a cushion there as well. 19 There are also considerations that capital 20 project managers take into consideration is the 21 sequencing of certain projects. 22 So on the asset management side, oftentimes 23 projects need to sequenced in a certain way. 24 And so you can't move one out without moving 25 another. And so there are a lot of different TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 89 1 considerations that are really beyond the scope of my 2 expertise. 3 Q. Okay. So did you -- you didn't, if I'm 4 understanding, you didn't really look at the timing of 5 projects. 6 Did you look at any other methods to address rate 7 increases, other than just higher revenues? 8 A. Again, in an addressing this question, that was 9 the point of the question; was that with slightly higher 10 revenue increases in this study period, that spike in 11 2025 could be mitigated. 12 MR. NEUSCHAFER: Okay. That's all I've got. 13 Thank you. 14 CHAIRMAN TOENJES: Thank you, Mr. Neuschafer. 15 Ms. Stump, do you have further questions for Ms. 16 Lemoine. 17 MS. STUMP: Just going to ask her a real quick 18 question. 19 EXAMINATION 20 BY MS. STUMP: 21 Q. So Ms. Lemoine, in your interchange with Mr. 22 Neuschafer about the CIRP, is it correct, though, that 23 Ms. Young did look at the -- in more detail, the CIRP 24 and the timing of the projects? 25 A. Yes. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 90 1 Q. So if he has additional questions, he could ask 2 those of her -- 3 A. Correct. 4 Q. -- when she testifies? Thank you. I think that 5 we -- I mean, I will have an opportunity in surrebuttal 6 to discuss what your thoughts are and what your opinions 7 are on Mr. Gorman's testimony. 8 We can do that in the surrebuttal phase. But I 9 guess I just want to give you an opportunity, since he 10 brought it up. 11 When I was asking him about the I&I percentage, 12 and he referred to -- he was relying on Black and 13 Veatch. And would you like to comment on that at all? 14 A. The report that he referenced is not a report 15 that I personally developed myself, but I am familiar 16 with it. 17 And it evaluated different methodologies for 18 determining an estimate for how to allocate I&I between 19 customer and volume. 20 And I would refer to Ms. Prabha Kumar, who will 21 be testifying soon, related to her testimony with 22 regards to I&I as well from her perspective. 23 But there is there's no specific hard engineered 24 way to determine an allocation of I&I. That's why we 25 see a range in the industry. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 91 1 Q. Okay. Like I said, we'll have an opportunity in 2 surrebuttal to address the issues raised by Mr. Gorman 3 more. 4 A. Yes. 5 MS. STUMP: That's all I have. 6 CHAIRMAN TOENJES: Thank you, Ms. Stump. 7 Questions from our rate commissions? Mr. Palans. 8 MR. PALANS: Thank. 9 EXAMINATION 10 BY MR. PALANS: 11 Q. Ms. Lemoine, on your declaration page 6, 12 paragraph 1. Your testimony is that you support the 13 District's rate proposal to seek authorization for the 14 District to issue additional bonds to finance a portion 15 of the CIRP during the fiscal year 21 through 24, 16 correct? 17 A. Correct. 18 Q. And this financing provides multiple benefits, 19 including it mitigates the impact on users rates, 20 correct? 21 A. That's correct. 22 Q. And it aligns repayment of debt with the 23 long-term useful life of the assets correct? 24 A. Correct. 25 Q. And it enables future ratepayers of the system to TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 92 1 contribute to the cost of the debt service, correct? 2 A. That's correct. 3 Q. And you state that this proposed capital 4 financing, which is 37 percent cash funding of CIRP, is 5 consistent with similar financial best practices used by 6 other peer wastewater facilities, and it provides a 7 reasonable mix of cash and debt financing, correct? 8 A. Correct. 9 Q. And the proposal allows the debt service coverage 10 of 2.5 times or greater for senior lien bonds, and 1.8 11 or greater for total debt coverage, right? 12 A. That's correct. 13 Q. You go on to say on page 7, paragraph 6, that 14 while there are gradual annual revenue adjustments 15 presented through fiscal 24, the District's long-term 16 projection is outlined in MSD number 57 and the 17 District's rate model, which is MSD 52, indicate a much 18 higher revenue increase in fiscal 25. Is that your 19 testimony? 20 A. Yes. 21 Q. And on pages 11 and 12, question 20. You 22 indicate that during the current rate cycle of fiscal 21 23 through 24, there are almost 1.6 billion in total CIRP 24 needs, and almost 30 million in routine cap ex, right? 25 A. Yes. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 93 1 Q. In fact, the District projects that its CIRP 2 needs for fiscal 25 to 28 are expected to be $873 3 million, and substantial capital spending remains after 4 fiscal 28 to comply with the consent decree, right? 5 A. Correct. 6 Q. And that consent decree is not going to expire 7 for another 20 years, through 2039; is that correct? 8 A. I believe that's the date. Yes. 9 Q. And how much capital spending is required after 10 fiscal 28, if you know? 11 A. I could not state off the top of my head 12 accurately. 13 Q. But we know that the cost of compliance through 14 the duration of the consent decree, 20 years from now, 15 is roughly 600 billion -- I'm sorry, $6 billion in 16 today's dollars? 17 A. It's substantial. Yes. 18 Q. At the beginning of fiscal 25, as I understand 19 your testimony, the District is projecting a potential 20 rate increase of 7.2 percent to maintain its minimum 21 policy level; is that right? 22 A. Correct. 23 Q. And this is nearly double the indicated rate 24 increases for the current rate cycle, correct? 25 A. Correct. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 94 1 Q. And is this projected rate increase projected to 2 continue in later fiscal years after fiscal 25? 3 A. No. As I recall, it drops back down. 4 Q. And it's your testimony that this type and 5 magnitude of higher rate increase right at the beginning 6 of the next cycle may cause -- and I'm quoting, bill 7 impact volatility, correct? 8 A. Correct. 9 Q. What do you mean when you say, it may cause bill 10 impact volatility? 11 A. It would result in customers seeing a much larger 12 percentage increase in their bills in that year than 13 would be necessary if the rates were adjusted to 14 eliminate that spike. 15 Q. And this is going to impact both mom-and-pop 16 consumer ratepayers, as well as high-volume user 17 ratepayers, correct? 18 A. That's correct. Particularly being in the first 19 year. With MSD's rate proposal, they conduct the cost 20 of service analysis and establish rates based on cost of 21 service in year one. 22 With that larger revenue increase required, in 23 addition to any potential adjustments to cost of service 24 in that year, could even further impact certain 25 customers, depending on how that cost of service study TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 95 1 turns out. 2 Q. You were present during the testimony that was 3 educed on April 8 and April 9 last month; were you not? 4 A. Yes. 5 Q. And you heard the testimony of the witnesses, 6 recognizing that the District faces mandatory compliance 7 with the consent decree? 8 A. Yes. 9 Q. And the District has an aging sewer system 10 infrastructure? 11 A. Yes. 12 Q. And the District currently experiences a 13 favorable financial position and favorable liquidity 14 position? 15 A. Yes. 16 Q. That these are times of historically low interest 17 rates? 18 A. Yes. 19 Q. And that the District confirms that it has 20 experienced historically favorable competitive bid 21 pricing on certain CIRP projects, correct? 22 A. Yes. 23 Q. Given all these factors and current conditions, 24 what can the District do to avoid or mitigate this bill 25 impact volatility, or smooth the bill volatility, which TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 96 1 is projected to occur at the beginning of fiscal 25? 2 A. The primary action would be -- as I stated in my 3 testimony, would be to slightly adjust the revenue 4 increases in this rate proposal period to allow for a 5 levelization of those increases over time. 6 Q. And this would be an increase, which would be 7 slightly higher than those proposed? 8 A. It would require slightly higher rate increases 9 in one or more of these -- the years of this rate 10 proposal. Yes. 11 Q. And you believe that these can be increased 12 within a range of reasonableness? 13 A. Yes. 14 Q. Do you have an opinion as to what would be a 15 reasonable amount for that increase? 16 A. I do not have the specific numbers here today. 17 But I can provide that in surrebuttal testimony. 18 Q. Given the favorable conditions that we now have 19 -- by favorable conditions, I'm including low interest 20 rates, low CIRP pricing and so forth. 21 Should the District take advantage of this 22 additional debt financing as well during the this cycle, 23 and thereby perform more CIRP projects than those which 24 are currently scheduled? 25 A. I don't know that I would recommend that. There TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 97 1 are a lot of additional factors that one has to take 2 into consideration, including, you know, contractor 3 capacity, the capacity of MSD's staff to manage a large 4 program and more projects. 5 I will say also that the District has experienced 6 significant double-digit rate increases for many years. 7 I think that there is rate fatigue in the community. 8 And so the ability to continue to move forward in 9 a meaningful way with the consent decree, based on the 10 outcome of the second material amendment to the consent 11 decree, while moderating rate increases as much as 12 possible is recommended. 13 Q. So is it your testimony that the District has an 14 opportunity to adopt a pragmatic approach to establish a 15 series of revenue increases during this rate cycle, 16 which are moderate and reasonable in amount? 17 A. Correct. 18 Q. Will such an approach help to moderate or smooth 19 the level the annual rate increases are projected 20 through fiscal 24, as well as mitigate the anticipated 21 spike in the revenue increase in fiscal 25 and 22 thereafter? 23 A. Yes. 24 Q. In this suggested revenue increase, during the 25 current rate cycle, is this consistent with Ms. Kumar's TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 98 1 testimony of her declaration where she states, quote, to 2 mitigate any potential rate shock on surcharge 3 customers, the District should consider phasing in to 4 cost of service over at least a two-year time period. 5 The District should also consider increasing all 6 rates, including surcharge rates, during fiscal 22 7 through 24, based on an across-the-board increase 8 approach, close quote. Do you agree with that 9 statement? 10 A. That is correct. 11 Q. You were present today and had the opportunity to 12 hear Mr. Gorman's testimony? 13 A. Yes. 14 Q. Can you tell me if you agree with his testimony? 15 I'm not holding you to specifics at all. 16 We don't need to embellish there. What strikes 17 you as being good or bad? 18 A. I was going to say, there were a number of 19 different topics that were addressed in his testimony. 20 Again, as we've spoken about, the debt cash 21 financing mix and debt service coverage. 22 One of the comments I would make with regard to 23 adhering to historic -- past policy for the current rate 24 cycle, I would suggest that it's always important to 25 look at current conditions and current rating agency TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 99 1 expectations. 2 That rating agency expectations in the past may 3 not be the rating agency expectations of today. 4 And as you review the rating agency reports, it's 5 clear that there is an expectation that, given the high 6 level of debt that MSD holds now and is anticipated to 7 increase in the future, that there is an expectation 8 collectively among the three rating agencies for debt 9 service coverage that is higher than the 1.6 times. 10 In addition, the Moody's median report -- which 11 is an exhibit, I don't recall the number -- the current 12 median debt service coverage for water and wastewater 13 utilities right now is closer to 1.9 times as well. 14 So the policy of 1.8 is in line with stated 15 objectives at the rating agencies, as well as current 16 medians. 17 Q. Mr. Gorman's testimony is that he would extract 18 $24 million of revenue from the District during this 19 rate cycle, this next rate cycle. 20 Do you agree with the concept of extracting $24 21 million in revenue from the District during this cycle? 22 A. So what he's proposing were a series of 23 adjustments that would reduce the revenue requirement, 24 which reduces the increase in revenue to MSD. 25 So I would pose it in a little bit of a different TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 100 1 manner. He's stated that he acknowledges that his 2 assumed interest rate for future debt is too low. That 3 is the biggest driver of that $24 million. 4 In looking at the rate model that he provided in 5 response to the discovery request, it appears to me -- 6 it's difficult because of the nature and the way 7 adjustments were made to that model. It's a little 8 difficult for me to say with all certainty. 9 But in looking at the -- pardon me while I find 10 it real quick. 11 In looking at his testimony, MPG1, comparing the 12 revenue requirement for the MSD proposal in the MIEC 13 adjusted proposal, at the bottom shows that the 14 projected debt service coverage -- his projected debt 15 service coverage is also not reaching 1.6 times. It's 16 not substantially different than the MSD proposal. 17 Q. Mr. Gorman is incorrect on the cost of funds -- 18 interest rates increase, his premise is flawed; is it 19 not? 20 A. Correct. 21 Q. And if Mr. Gorman is incorrect on the ability to 22 extend the CIRP projects, defer CIRP projects which are 23 required under the consent decree, his proposal is 24 flawed; is it not? 25 A. Correct. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 101 1 MR. PALANS: Thank you. I have no further 2 questions. 3 CHAIRMAN TOENJES: Thank you Mr. Palans. Any 4 further questions for Ms. Lemoine? 5 Hearing none. Thank you, Ms. Lemoine. Ms. 6 Stump, do you have any additional witnesses? 7 MS. STUMP: I do. Ms. Prabha Kumar. 8 CHAIRMAN TOENJES: Ms. Kumar, is the testimony 9 you're about to give the truth, the whole truth, and 10 nothing butt the truth? 11 MS. KUMAR: It is. 12 CHAIRMAN TOENJES: Does any member of the Rate 13 Commission have questions for Ms. Kumar at this time? 14 Hearing none, Ms. Myers do you have questions for 15 Ms. Kumar on behalf of the District? 16 MS. MYERS: Yes we do. 17 EXAMINATION 18 BY MS. MYERS: 19 Q. Okay. The questions that we have are around your 20 rebuttal testimony. 21 So starting off on page 6, line 11, you state 22 that MSD's rate proposal is fair and reasonable on all 23 classes of ratepayers; is that correct? 24 A. That is correct. 25 Q. In your rebuttal testimony, you recommend phasing TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 102 1 in the cost of service over at least a two-year period, 2 correct? 3 A. That is correct. For the surcharge customers. 4 Q. So if MSD were to phase in the cost of service, 5 is it your opinion that other MSD customers not subject 6 to the extra surcharge rate should subsidize the revenue 7 lost from phasing in the surcharge rate? 8 A. That would be the eventual impact of your 9 subsidized -- if you are phasing in for a class of 10 customer, all things being equal, then that class of 11 customers temporarily would take on that impact. 12 Q. So do you believe that that is fair and 13 reasonable for those customers? 14 A. From the point of view of practical ratemaking, 15 creating an impact on a class of customers, while from a 16 cost of service perspective may be necessary, it does 17 pose a practical problem in terms of the level of 18 increase somebody can absorb. 19 But in that context of practical ratemaking, it 20 is a common practice in the industry to have a phase-in 21 approach. 22 Q. Okay. Are you aware that the existing extra 23 strength surcharge rates charged over the period of FY18 24 through FY20 do not cover the actual cost of service? 25 A. Yes. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 103 1 Q. Okay. So page 7 on your rebuttal testimony, 2 starting with line 14. 3 You indicate that it is not clear to you which 4 specific section of the CDM report the District used to 5 attribute the allocation factors for infiltration and 6 inflow of 40 percent to customers and 60 percent volume 7 components. 8 Are you aware that this information was provided 9 in Exhibit MSD65C? 10 A. Yes. The report was referenced. But what I'm 11 really saying there is that when you look at the CDM 12 report, there are lots of numbers and lots of tables, 13 and there are about eight or nine scenarios that the CDM 14 report has. 15 And if you look at just the tables in the report, 16 every scenario has an assumption already built into the 17 table. But those assumptions are not explained at all. 18 And also in the CDM report, it doesn't draw a 19 specific conclusion to say after all the analysis, this 20 should be the percentage for I&I. 21 And the second thing I want to point out in the 22 CDM report that we got, there are pages missing in the 23 report. 24 And that also, for example, section 4.3; while 25 it's listed in table of the contents, that was not there TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 104 1 as the last section in that report. They're both not 2 there, and in-between pages are missing. 3 Q. So is that what you meant by it wasn't clear how 4 we came to our conclusion? 5 A. Yeah. What I'm saying is that the specific 6 section, the specific recommendation in the report is 7 not really clearly cited in the -- in saying that the 8 60/40 use that that was really referring to the 9 testimony from Mr. Bill Stannard when I was making it. 10 Q. On page 7 of your testimony, and page 8 -- so 11 it's page 7, lines 22, 23; and page 8, lines 1 and 2. 12 You indicate that the 40 percent customer and 60 13 percent volume allocation factors used in this proposal 14 to allocate I&I tends to allocate more I&I costs to the 15 volume component than the example guidelines provided in 16 the WEF manual of practice, number 27. 17 Isn't it true that this manual provides for 18 illustrative purposes only and is not intended to 19 reflect a standard that can be applied to just any 20 entity? 21 A. That is correct. We are not saying that it is a 22 standard, and that's why we clearly use the words that 23 this is as an example guideline. 24 However, it is an industry guideline and an 25 industry-accepted practice manual. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 105 1 Q. Okay. So what do you mean by it's an industry 2 standard guideline? 3 A. The standard -- again, I'm not an attorney, so 4 I'm going to say the standard is really like a 5 stipulation. 6 Saying that, okay -- these are for example. If 7 you want to convert gallons to a number, to another 8 measure that are standards, you can use a conversion 9 factor to specifically stimulate the standards. 10 Here, what the manual says is that it's 11 qualitatively explains what infiltrates and in-flow is 12 there, and the impact of infiltration and in-flow. 13 And then it gives guidelines to say that these 14 are the guidelines -- in an illustrative example, it 15 gives the guidelines of 66 percent for customer and the 16 37 percent for volume. 17 And so that's really what we mean. But in the 18 absence of any detailed engineering study, these 19 guidelines are used in practical ratemaking, because 20 ratemaking is not always a precise science. 21 But in the absence of actual data, there are 22 guidelines that are used as a basis. 23 Q. So it was used for illustrative purposes. 24 A. In the manual, it's used for illustrative 25 purposes. But in the industry, in the absence of very TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 106 1 detailed and reliable data, these guidelines are used as 2 a basis. 3 Q. Okay. I'm going to hand you MIEC Exhibit 73. 4 I'm assume you don't have that with you. 5 A. I have -- actually, I do have it. 6 Q. I'm sorry. I shouldn't have made that 7 assumption. Will you please identify that document? 8 A. This is the rebuttal testimony of Mr. Michael 9 Gorman. 10 Q. Okay. And would you turn to page 26 of that 11 document. Have you reviewed table 5 on page 26? 12 A. Yes. I've seen this. 13 Q. So is table 5 titled, I&I Allocation Basis Used 14 By Other Utilities? 15 A. That is correct. 16 Q. Is it correct that line 2 of that table states 17 that Kansas City, Missouri I&I allocation is 40 percent 18 to customers and 60 percent to volume? 19 A. That is correct. 20 Q. Would you agree that Kansas City, Missouri is 21 more similar to St. Louis in terms of geographic 22 proximity, having both a combined and separate sewer 23 system climatic conditions, and geographic size than the 24 other cities shown in that table? 25 A. I can't attest to that level of specificity. But TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 107 1 I can say, yes, Kansas City has the geographic proximity 2 and does have combined sewer systems. 3 And obviously, Kansas City is different from -- 4 in terms of geographic location, is different from some 5 of the other utilities listed in table 5. 6 MS. MYERS: Okay. That concludes our questions. 7 Thank you. 8 CHAIRMAN TOENJES: Thank you, Ms. Myers. Mr. 9 Neuschafer do you have questions for Ms. Kumar. 10 MR. NEUSCHAFER: I do. 11 CHAIRMAN TOENJES: Please come forward. 12 EXAMINATION 13 BY MR. NEUSCHAFER: 14 Q. Good morning. 15 A. Good morning. 16 Q. I would like to go to your testimony. Let's go 17 to question 9, in which you opine about the fairness and 18 reasonableness of the District rate proposal. 19 If you recall, Ms. Myers asked you about one 20 sentence in this answer, where you said that the 21 District's rate proposal can be considered to be fair 22 and reasonable; is that correct? 23 A. That is correct. 24 Q. In fact, it appears that your conclusion was 25 that, first, overall it can be considered fair and TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 108 1 reasonable; is that correct? 2 A. Yes. I'm saying that it is fair and reasonable, 3 but there are practical considerations that the District 4 can also use in setting rates. 5 Q. And then you identified a number of these 6 practical considerations in your answer to this 7 question, including long-term resiliency, mitigation of 8 future rate volatility, fair allocation of cost to 9 classes that not only align with the industry-accepted 10 practices, but also doesn't impose undue burden on 11 customers classes, and a fair levels of revenue 12 increases from customer classes during the rate period; 13 is that correct? 14 A. Correct. 15 Q. And then you end with, the District's proposal 16 could better reflect these other considerations; is that 17 correct? 18 A. Correct. 19 Q. Thank you. I would like to then move over to the 20 infiltration and in-flow discussion that I believe was 21 at question 11. 22 I'm trying not to ask the same questions we've 23 already got here. So please bear with me just a bit. 24 So just to be clear, your testimony is that the 25 40 percent customer/60 percent volume tends to allocate TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 109 1 more I&I cost to volume component than more commonly 2 seen in other utilities, many other utilities, and in 3 the example guidelines that were discussed. 4 A. Correct. 5 Q. Do you have a recommended I&I allocation, based 6 on your knowledge of the MSD system? 7 A. It's not a specific number that I'm specifically 8 recommending here. 9 But what I'm saying is, again, when you look at 10 the number of utilities, and even when you look at -- 11 again, the overall guidelines, but really if you look at 12 the utilities, generally you find that there's 13 allocation more leaning towards the number of customers 14 a because the numbers of customers has an influencing 15 role in the I&I. 16 And so it's not only just volume. And that was 17 the point we were trying to make here. 18 Q. Sure. And I believe you referenced the CDM 19 report -- 20 A. Correct. 21 Q. -- in your responses to Ms. Myer's questions. 22 And I'm not -- are you familiar with the statement in 23 the original rate proposal, MSD Exhibit 1, that says, 24 there are no known changes in the system that would 25 significantly change the assumptions in that report -- TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 110 1 A. Yes. 2 Q. -- leading to a 60/40 split? 3 A. I remember that statement. 4 Q. Do you agree with that statement; that there have 5 been no changes between 2005 and 2019 that would 6 necessitate a change to the I&I allocation? 7 A. That was actually one of our concerns; that the 8 passage of time is significant between 2005 and the CDM 9 report was prepared in 2019. 10 And during that passage of time, things do 11 change. The number of -- the service could be changed, 12 and the service area, in terms of number of connections 13 that could have come into the system. 14 And of course, on the flipside, the controls that 15 are being done in terms of capture. 16 So all we are saying is that, yes, that is a big 17 passage of time. And therefore, to just cite a report 18 that was done in 2005 -- and especially when that report 19 also has some of the issues, where there are a lot of 20 assumptions that went into the report, which are not 21 clearly stated, whether the assumptions are not from 22 numbers that we see plugged in. 23 And again, as I said before, the pages were 24 missing. So it was a concern that the 60/40 is being 25 used, because it was cited in a CDM report from 2005. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 111 1 Q. Okay. One final question. Again, at the end of 2 page 7 of your testimony and the beginning of page 8, 3 we've talked about this a couple times already. 4 You reference what is commonly seen in many other 5 utilities. Can you provide some examples of what other 6 utilities, and perhaps also their I&I rates that they 7 use? 8 A. From my experience and judgment -- and again, we 9 did municipalities, because not many municipalities 10 really have a significant study done, and it is a costly 11 study to do. 12 Generally, the guidelines are that 66 percent/37 13 percent. Or for example, in Citizens Energy, where they 14 had a similar kind of study done, but more recent -- it 15 was not as old as the 2005 CDM study -- where they 16 looked at multiple types of allocation parameters. 17 We analyzed six different types. And the -- 18 there, we did get an average from those analysis, and it 19 turned out to be 75 percent for customer and 25 percent 20 for volume. And that is also a midwestern utility. 21 So those are some of the examples. So 22 oftentimes, even in the exhibit that was referenced 23 before in my testimony and questions, there are more 24 that are leaning towards a little more towards volume 25 than leaning more towards number of customers in I&I TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 112 1 allocation. 2 Q. And that was Citizens Energy you said? 3 A. Citizens Energy. 4 Q. And that is in? 5 A. Indianapolis. 6 MR. NEUSCHAFER: Indianapolis. Okay. Thank you. 7 CHAIRMAN TOENJES: Thank you, Mr. Neuschafer. 8 Ms. Stump, do you have questions for Ms. Kumar. 9 EXAMINATION 10 BY MS. STUMP: 11 Q. I would ask for Ms. Kumar to just restate what 12 she just what said on the percentages. 13 A. In the context of the Citizens Energy Group, 14 where we did do a study, and part of the study there, we 15 evaluated six different approaches to determining what 16 the I&I application would be. 17 And sort of what showed was that in that study, 18 75 percent of the allocation was to customers, and 25 19 percent of the allocation was to volume. So it was a 20 75/25 kind of an issue. 21 CHAIRMAN TOENJES: Thank you. Is there a -- 22 MS. STUMP: I think we're good. 23 CHAIRMAN TOENJES: Thank you, Ms. Stump. Do any 24 of the rate commissioners have questions for Ms. Kumar? 25 Mr. Stein. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 113 1 MR. STEIN: Thank you, Mr. Chairman. 2 EXAMINATION 3 BY MR. STEIN: 4 Q. Ms. Kumar, I would like to talk about two things. 5 First of all, the I&I issue. 6 In the cross-examination, it was pointed out that 7 Kansas City has a 40/60 split. 8 In that same table, on page 26 of Mr. Gorman's 9 testimony, does it not show that St. Joseph, Missouri, 10 has a 60/40 split? 11 A. Correct. 12 Q. And is St. Joseph not in the same geographical 13 area as St. Louis? 14 A. It is. 15 Q. And is it not maybe 80 miles from Kansas City? 16 A. I would -- subject to tests, I would -- 17 Q. Okay. 18 A. -- indicate that. 19 Q. So it would appear that there is a reasonable 20 spread of potentially reasonable splits on I&I? 21 A. Correct. It really -- there's a very reasonable 22 difference. 23 Q. In past testimony and past rate cases, I believe 24 MSD has stated over and over that it has the fourth 25 largest collection system in the country. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 114 1 A. I'm aware. 2 Q. More miles of sewer than all but three other 3 sewer systems in the country. 4 And would you agree that the length or the extent 5 of collection systems has an a direct impact on 6 potential I&I? 7 A. Correct. I mean, the spread of the collection 8 system, the number of connections, the number of 9 manholes, all of those do have an influential role in 10 the I&I. 11 Q. So that would argue for a higher emphasis on 12 customer versus volume? 13 A. That could be a potential opportunity for the I&I 14 leaning more towards customers than just volume. 15 Q. I would like to switch now and talk about the 16 issue of extra strength surcharges, that I think you 17 addressed. 18 And if I may paraphrase what you said, your 19 opinion is that it would be more appropriate to phase 20 those charges in rather than increase them all in one 21 year? 22 A. Correct. That's a consideration that could play 23 a role here. 24 Q. Would you agree that the typical extra strength 25 wastewater discharger has options to reduce those TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 115 1 charges? 2 Such as, number one, instituting projects or 3 process changes to reduce those discharges of BOD and 4 suspended solids? 5 A. They do. 6 Q. Could they also reduce production at that site to 7 do the same thing? 8 A. Subject to what their business is and the nature 9 of their business. 10 Q. Could they close their facility to eliminate 11 those charges? 12 A. Again, not knowing what the facilities are and 13 what the specific circumstances are, I would not be able 14 to say whether they could close the facility. 15 But there may be things that are under their 16 control. 17 Q. If they instituted any of those options, would 18 that not result in stranded investment on the part of 19 the District for handling those extra strength 20 components? 21 A. Again, depending on the level of what they do, 22 yes. The District always has fixed costs in what they 23 design the facility for. 24 But again, this is not just one consideration. 25 There are multiple considerations, including TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 116 1 environmental considerations of being a good steward 2 when you're operating a business in that environment. 3 Q. But for sake of argument, if those -- if a 4 discharger reduced or eliminated its discharges, and 5 there were stranded investment in terms of equipment or 6 facilities that the District no longer needed, who would 7 bear the fixed costs for that stranded investment? 8 A. It would be the entire system users. 9 MR. STEIN: Thank you. 10 CHAIRMAN TOENJES: Thank you, Mr. Stein. Do any 11 other rate commissioners have questions for Ms. Kumar? 12 Mr. Goss. 13 MR. GOSS: I just have one question about the I&I 14 assumptions. 15 EXAMINATION 16 BY MR. GOSS: 17 Q. If you use Mr. Gorman's assumptions as opposed to 18 MSD's assumptions on I&I allocations, what does that do 19 to MSD's rate? How does it change? Do you know? 20 A. We haven't run the analysis. We can certainly 21 run it and have it in the rebuttal -- surrebuttal 22 testimony. 23 But what it would do is when you allocate a 24 little more cost to the customer, meaning doing 40 to 25 customer and 60 to volume, or 50 to customer and 50 to TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 117 1 volume, including the fixed charges portion of the rate 2 structure, and then it would reduce the volume rate and 3 rate structure, all else being equal. 4 Q. Okay. But I would like to see that run, because 5 what I try -- what I'm trying to do is understand with 6 all the technical testimony, do I care? 7 Because if it's not going to affect in a material 8 way the rate that's being proposed, I don't. 9 If it does, then that's a different story. So 10 that would be helpful to me. 11 A. Sure. 12 CHAIRMAN TOENJES: Do any other rate 13 commissioners have questions for Ms. Kumar? Hearing 14 none Ms. Kumar, thank you. I suggest with take a break 15 until 11:55, at which time we will resume. 16 (WHEREUPON, A BRIEF RECESS WAS TAKEN) 17 CHAIRMAN TOENJES: All right. Being 11:55, Ms. 18 Stump, do you have any additional witnesses? 19 MS. STUMP: I do. Ms. Nicole young. 20 CHAIRMAN TOENJES: Ms. Young is the testimony 21 you're about to give the truth, the whole truth, and 22 nothing butt the truth? 23 MS. YOUNG: It is. 24 CHAIRMAN TOENJES: Do any of the rate 25 commissioners have any questions for Ms. Young? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 118 1 Hearing none, Ms Myers, do you have any questions 2 for Ms. Young on behalf of the District? 3 MS. MYERS: I do. 4 CHAIRMAN TOENJES: Please come forward. 5 EXAMINATION 6 BY MS. MYERS: 7 Q. Couple real quick ones. Is it your opinion that 8 -- you identified in your rebuttal testimony that the 9 projects that the District has identified in the CIRP 10 for FY21 through FY24 are appropriate? 11 A. Yes. 12 Q. And how did you come to that conclusion? 13 A. The majority of the projects -- about 1.1 14 billion -- are consent decree related. 15 Another -- my estimation is 340 million are 16 regulatory based. It leaves very little room for 17 adjustment within the CIRP. 18 Q. Okay. And do you also agree that the cost 19 estimates for the projects identified for that same 20 period are sufficient? 21 A. I do. 22 Q. And how did you come to that conclusion? 23 A. Overall basis, looking at the scope of work and 24 general estimation of knowledge of the projects, they 25 seemed reasonable. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 119 1 MS. MYERS: That concludes my questions. Thank 2 you. 3 CHAIRMAN TOENJES: Thank you, Ms. Myers. Mr. 4 Neuschafer, do you have questions for Ms. Young. 5 MR. NEUSCHAFER: I do. 6 EXAMINATION 7 BY MR. NEUSCHAFER: 8 Q. How are you? 9 A. Good. You? 10 Q. Good. So your testimony, I believe you just 11 summarized it with Ms. Myers. 12 Basically on two point; the projects identified 13 are appropriate, right? 14 A. Yes. 15 Q. Okay. And that the cost estimates were completed 16 in accordance with common practice; is that correct? 17 A. Yes. 18 Q. Did you -- anywhere in your testimony, analyze or 19 provide any opinion on the timing of projects? Whether 20 the timing selected by MSD is appropriate. 21 A. I did review the consent decree. And my 22 understanding of the MAC regulations for the 23 incinerator, they do seem appropriate. Yes. 24 Q. Okay. Is that in your written testimony? 25 A. No. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 120 1 Q. Okay. You that actually just related to the 2 fluidized bed? 3 A. Sure. 4 Q. What about -- you said that it's accurate. Is 5 there an obligation to complete it during or prior to 6 2024? 7 A. Based on the consent decree, yes. 8 Q. Okay. Do you recall the testimony earlier where 9 the second amendment was referenced that said it needed 10 to be completed by 2026? 11 A. If -- okay. 12 Q. Okay. What about the timing of the other consent 13 decree required projects? 14 Did you analyze whether MSD has the appropriate 15 timing schedule, based on the consent decree 16 requirements? 17 A. I did look at the critical milestones in the 18 consent decree, you know, some of them have specific bid 19 years. 20 All of them have dates for achievement for full 21 operation. We did evaluate those. I did evaluate 22 those. 23 Q. Did you provide any analysis of that in your 24 testimony? 25 A. Not in my written testimony. No. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 121 1 Q. Did you prepare a memorandum or any other notes 2 relating to the timing of projects? 3 A. I did not. 4 Q. Okay. Let's talk about cost estimates. You said 5 they were completed in accordance with common practice. 6 And I believe you explained to Ms. Myers that you 7 looked at the scope of work and general estimates; is 8 that correct? 9 A. Yes. 10 Q. Can you explain more as to what you considered to 11 determine that the cost estimates are in accordance with 12 common practice? 13 A. Looking at the scope of work for the projects and 14 the size and magnitude of them, looking at the costs, 15 they seem appropriate to me. 16 Q. Did you look at individual projects? 17 A. I did. 18 Q. And did you look at the cost documentation for 19 individual projects? 20 A. I looked at what was provided by the District. 21 Q. In the record? 22 A. Yes. 23 Q. Where in the record did you find this 24 information? 25 A. In the CIRP. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 122 1 Q. And that included backup cost documentation, or 2 did that include MSD's conclusions as what the estimated 3 costs were? 4 A. Based on the conclusions. 5 Q. Okay. So you didn't review any of the underlying 6 documentation -- 7 A. That's correct. 8 Q. -- you just reviewed MSD's conclusion of the 9 estimated costs. 10 A. I reviewed what was submitted by the District. 11 That is correct. 12 Q. So then how do we know that the cost estimates 13 were completed in accordance with common practice if all 14 you saw with the number associated with the proposed 15 projects? 16 A. We have not dug into the underlying cost. 17 Q. Okay. So then how do you know -- or how can you 18 testify that the cost estimates were completed in 19 accordance with common practice? 20 A. It's based on my knowledge of the District and 21 the way that they do cost estimate. 22 Q. So you're taking the District's word for it? 23 A. Not taking the District's word for it. But it's 24 my understanding, based on my experience. 25 Q. What experience is that? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 123 1 A. 20 years working with the District. 2 Q. Okay. You work with a company called Lion CSG? 3 A. I do. 4 Q. Are they a current contractor of MSD? 5 A. We are. 6 Q. Do you intend to -- does Lion CSG intend to bid 7 on projects that might be completed pursuant to the 8 CIRP? 9 A. We do. 10 Q. Have you -- well, you talked about your 20 years 11 of experience. 12 Have you analyzed a capital spend program of this 13 size and duration in the past? 14 A. I have. 15 Q. And who was that for? 16 A. MSD. 17 Q. MSD. Okay. Any program other than MSD's -- an 18 MSD program? 19 A. Yes. I've done rate work for American Bottoms. 20 I've done analysis for a number of clients. 21 I would have to go back and honestly look at my 22 résumé over the 20 years to give you a full list. 23 Q. And those -- I guess I want to be clear, those 24 are capital spend programs that involve spending 25 billions of dollars on system upgrades? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 124 1 A. For St. Louis MSD, I worked on the Skimi 2 [phonetic] project, which was a precursor to a lot of 3 the work that's being done now. 4 We did a full analysis of the entire District. I 5 was responsible for the Wood River/Des Peres watershed, 6 which is the largest watershed in MSD. 7 MR. NEUSCHAFER: That's all I got. Thank you. 8 CHAIRMAN TOENJES: Thank you, Mr. Neuschafer. 9 Ms. Stump, do you have further questions for Ms. Young? 10 MS. STUMP: I do. 11 EXAMINATION 12 BY MS. STUMP: 13 Q. Nicole, does the fact that Lion CSG may or may 14 not bid on any future projects with MSD affect your 15 opinion at all in your testimony you submitted? 16 A. Not for this rate case. No. 17 Q. Thank you. Also, trying to summarize I think 18 where Mr. Neuschafer was headed. 19 So as we now -- and as you heard, the MIEC 20 testimony was certain major capital projects in 2023 and 21 '24 are not needed at that level; you remember that 22 discussion earlier today? 23 A. I do. 24 Q. Can you just give your overall opinion on that 25 testimony and that idea? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 125 1 A. Sure. We did look at the projects that were 2 identified by -- to be identified as potentially moving 3 farther out. 4 And looking at that, 92 percent of those are 5 either consent decree or regulatory driven. 6 So there's -- as I stated earlier, there's really 7 very little opportunity for movement of those projects. 8 Q. So it would arguably make it difficult for the 9 District to comply with the consent decree if it was? 10 A. That's correct. 11 MS. STUMP: Thank you. I have no further 12 questions. 13 CHAIRMAN TOENJES: Thank you, Ms. Stump. Do any 14 of the rate commissioners have any -- yes, Mr. Bresnan. 15 EXAMINATION 16 BY MR. BRESNAN: 17 Q. I, too, have like, 39 years in the construction 18 industry. 19 And I think a point we're overlooking here is, 20 also from a consumer standpoint, we're talking about 21 spreading the cost out over the consumer. 22 Isn't one of the ultimate goals to finish the 23 project? 24 Because if you're a person with flooding in your 25 yard -- I'm backing up and putting on a very basic TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 126 1 premise. 2 Don't you want that project finished, rather than 3 having your bill reduced, as Mr. Goss might say, where 4 it only makes two dollars a month difference? 5 So my question to you would be, isn't is it a 6 best practice to finish these project, either ahead of 7 schedule or on time, rather than just spread them out, 8 in your opinion? 9 A. I think given the deadlines in the consent 10 decree, it is a risk to defer them until the year that 11 they're required by the consent decree. 12 Because there are always issues in construction. 13 And so starting those earlier is generally better. 14 I will also say that the dates in the consent 15 decree for the achievement of full operation is not just 16 for construction, but for full startup. 17 And oftentimes, some of these projects have 18 startup issues that need to be worked out before full 19 achievement can be made. 20 MR. BRESNAN: Thank you. No further questions. 21 CHAIRMAN TOENJES: Thank you, Mr. Bresnan. Mr. 22 Stein. 23 MR. STEIN: Thank you, Mr. Chairman. 24 EXAMINATION 25 BY MR. STEIN: TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 127 1 Q. Ms. Young, a few questions about the CIRP. May I 2 presume that you have read and familiarized yourself 3 with this extensive list of projects? 4 A. I have. 5 Q. Can you tell me what percentage, by dollar, is 6 driven by the consent decree versus other needs? 7 A. Yes. Sorry. I do have this in one of my 8 spreadsheets somewhere. It appears to be about 77 9 percent. 10 Q. Is consent decree? 11 A. Consent-decree driven. 12 Q. So if my math is still good, that says 23 percent 13 is non-consent decree, and there is some leeway, 14 potentially, in the timing of those projects; is that 15 correct? 16 A. In the remainder? 17 Q. Yes. 18 A. There are two other buckets of projects -- well, 19 actually three. 20 But another portion of that is the incinerator 21 projects and sludge transfer, which is an additional 19 22 percent. 23 Those are driven by regulations that have target 24 dates. And then there are another 3 percent that are 25 driven by BDS permit requirements. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 128 1 Q. If my math is correct, that says that 99 percent 2 of what's in the CIRP, you have to do? 3 A. That's correct. 4 Q. Okay. Just a couple questions here, just picking 5 some things out here at random. 6 On page 4 of the CIRP project list, Bissell Point 7 treatment plant. Prepare sluice gates and components of 8 concrete: 2.4 million. 9 Is that required by the consent decree or any 10 other MPDS gas obligations? 11 A. Sorry. Could you state that again? 12 Q. Project 12548. 13 A. That project is about -- what I can say about 14 that is the sluice gates and concrete structures are 15 critical to providing treatment at Bissell. 16 And if that treatment isn't provided, MPDS 17 permits cannot be met. 18 Q. Let's go down to the next project, 12566, Bissell 19 Point trickling filter media replacement: $23.2 20 million. 21 Are you aware that aeration facilities have been 22 mothballed that could potentially take those trickling 23 filters offline with no problems in meeting the MPDS 24 permit? 25 A. I am aware of that. And an evaluation had been TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 129 1 done previously by the District to look at the 2 electrical costs of running those aeration systems. 3 And it was determined that the trickling filters 4 were more efficient from an energy standpoint. 5 Q. No question as to the energy efficiency. But the 6 capital project could be postponed with a hit to the 7 energy cost, and a potential benefit resulting from 8 postponing that capital expenditure. 9 It's no different than my car. If I have a 10 10-year-old car, and I would like to replace it with a 11 new one, but I'm looking at $30,000 to do that. 12 But maybe I can get by with a $500 tune-up and a 13 couple new tires for $400. 14 So if I don't have the cash on hand right now, 15 and the financing doesn't look appropriate, I can get a 16 couple -- a little more time out of that car. 17 I'm saying here, if we looked farther at this 18 CIRP list, could we not identify projects that could be 19 pushed back? 20 I'm not saying five or 10 years, or eliminate it; 21 but pushed back further in time that we could spread the 22 cost out and reduce some of the rate shock? 23 A. I will say specific to the Bissell plant, the 24 aeration systems that you're mentioning, unfortunately, 25 have been out of service and have deteriorated to the TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 130 1 point that they are no longer able to be put back in 2 service. 3 Q. Are you certain of that? 4 A. Yes. I would be happy to visit the Bissell plant 5 with you sometime. 6 MR. STEIN: Thank you very much. 7 CHAIRMAN TOENJES: Thank you, Mr. Stein. Further 8 questions for Ms. Young? Thank you, Ms. Young. 9 Are there any other matters before the Rate 10 Commission this morning? 11 I would like to thank Mr. Neuschafer and MIEC for 12 all their hard work and helping the Rate Commission 13 understand various aspects of the proposal. 14 I would like to thank Ms. Lemoine and the team, 15 and Ms. Young and Ms. Kumar for their hard work in 16 helping the rate commissioners understand aspects of the 17 proposal. 18 And hearing no other matters, we will adjourn 19 until 9:00 a.m. on June the 20th, 2019. Mr. Stein. 20 MR. STEIN: Do we not have public hearings coming 21 up? 22 CHAIRMAN TOENJES: Mr. Brockmann, would you care 23 to talk about the public hearing? 24 MR. BROCKMANN: We have one next Tuesday. I 25 don't know the location, but I will be there. TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 131 1 CHAIRMAN TOENJES: So there will be a public 2 hearing at the county library on Music Road on May 14th. 3 MR. BROCKMANN: Another one on May 22, another 4 one on June 4. And then we'll be here, and then 5 following that, June 27, July 10, July 24. 6 CHAIRMAN TOENJES: As any good public relations 7 chair would be. Do we have a motion to adjourn? 8 MS. CROYLE: I have a question. 9 CHAIRMAN TOENJES: Ms. Croyle. 10 MS. CROYLE: Will the MSD information be on the 11 website before the meeting? So those of us that are 12 attending can see it ahead of time. 13 MR. HOELSCHER: The information that is being 14 presented? Sean, is that a plan or not? We'll make 15 sure it gets up by late in the day Monday. 16 MS. CROYLE: Monday or Tuesday would be fine. 17 MR. HOELSCHER: We'll make sure it goes up before 18 we have. 19 MS. CROYLE: It's nice to see ahead of time and 20 download it and have it be able to look at it. Thank 21 you. 22 CHAIRMAN TOENJES: Any other matters? I think I 23 heard a motion to adjourn somewhere down here. 24 MR. STEIN: Motion to adjourn. 25 CHAIRMAN TOENJES: Is there a second? TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 132 1 MR. BROCKMANN: Second. 2 CHAIRMAN TOENJES: All in favor. 3 (THOSE VOTING IN FAVOR ANNOUNCED AYE) 4 CHAIRMAN TOENJES: Opposed? Thank you. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 133 1 CERTIFICATE OF REPORTER 2 STATE OF MISSOURI ) 3 ) ss. CITY OF ST. LOUIS ) 4 5 6 7 I, Georgia Beth Long, a Certified Shorthand Reporter, 8 Certified Court Reporter, do hereby certify that the 9 meeting aforementioned was held on the time and in the 10 place previously described. 11 12 IN WITNESS WHEREOF, I have hereunto set my hand and 13 seal. 14 15 16 17 18 19 ____________________________ 20 21 22 23 24 25 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES A a.m 130:19 AA 45:24 61:17 63:25 64:10 71:16 AA-rated 22:25 56:21 ability 7:25 8:6 43:19 44:10 54:24 55:22 63:8 75:20,21 78:5 88:15 97:8 100:21 able 25:18 115:13 130:1 131:20 absence 105:18 105:21,25 absorb 102:18 accepted 46:1 accepted-best 85:18 accommodate 25:3 35:8 46:9 50:25 56:5 accommodat... 24:23 accommodates 45:14 accompanied 7:21 47:14 accomplish 71:13 accomplished 42:24 72:4 accumulate 18:1 accurate 28:5 37:16 120:4 accurately 21:10 25:18 51:3 56:13 93:12 achieve 75:21 82:20 achieved 85:24 achievement 120:20 126:15 126:19 achieving 79:8 acknowledge 15:25 16:4 26:24 acknowledged 19:8 acknowledges 100:1 acknowledging 59:1 acquiring 23:4 across-the-bo ... 98:7 action 81:9 96:2 actual 15:16,23 17:20 24:11 46:3 48:9 50:16 52:16 58:18 60:18 63:6 75:4 102:24 105:21 added 25:25 addition 94:23 99:10 additional 8:19 12:11 15:11,24 17:21 21:12 43:10 45:20 52:19 63:11 73:17 77:19,22 80:2 87:2 90:1 91:14 96:22 97:1 101:6 117:18 127:21 address 89:6 91:2 addressed 98:19 114:17 addressing 89:8 adequate 8:1 40:12 45:22 46:16 54:16 54:24 55:1 56:5 82:20 adhering 98:23 adjourn 130:18 131:7,23,24 adjust 49:8 63:13 96:3 adjusted 41:21 49:11 66:19,23 94:13 100:13 adjusting 82:5 82:5 adjustment 67:17 118:17 adjustments 41:14 45:12 46:18 65:25 66:3,5,7 92:14 94:23 99:23 100:7 adopt 13:7 97:14 adopted 8:25 advantage 96:21 advised 73:9 aeration 128:21 129:2,24 affect 73:4 117:7 124:14 affirming 79:1 aforemention ... 133:9 agencies 56:19 62:10 71:17 78:25 80:21 99:8,15 agency 80:19 98:25 99:2,3 99:4 agency's 81:2 aging 72:20 95:9 agree 18:7 26:14 27:2 31:19 59:7 70:16 77:17 78:14 81:13 82:18 83:24 84:20 98:8,14 99:20 106:20 110:4 114:4,24 118:18 agreed 18:13 68:1 agreeing 21:8 ahead 126:6 131:12,19 Alaris 4:24 align 108:9 aligns 91:22 allocate 12:5 90:18 104:14 104:14 108:25 116:23 allocated 37:19 38:6 allocates 56:13 allocation 76:9 90:24 103:5 104:13 106:13 106:17 108:8 109:5,13 110:6 111:16 112:1,18 112:19 allocations 116:18 allotted 12:9 allow 43:14 59:16 69:7 70:9 96:4 allowance 24:7 allowances 25:21 allowed 84:4 allowing 33:3 allows 80:14 92:9 alternatives 87:14 amended 6:6 7:24 8:8 54:13 amendment 6:8 31:1,9,20 32:7 67:25 68:4,6 97:10 120:9 American 123:19 amount 17:7,24 17:25 18:1 19:12,20 34:7 41:5 43:2 51:21 52:4,4 54:1,20 55:4 59:5 74:19 96:15 97:16 amounts 7:16 54:3 analysis 94:20 103:19 111:18 116:20 120:23 123:20 124:4 analyst 63:6 analysts 63:21 analyze 119:18 120:14 analyzed 111:17 123:12 and/or 13:2 ANNOUNCED 13:9 132:3 annual 28:14,14 29:6 33:4 34:6 35:24 40:3,16 42:5 42:12,17 66:23 67:1 68:23 71:12 92:14 97:19 annually 31:21 answer 10:1 11:1 11:25 14:3 33:24 50:4 55:25 107:20 108:6 answered 82:16 anticipated 7:17 54:4 84:3 97:20 99:6 apparent 84:12 appear 35:6 40:22 82:25 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 113:19 appeared 42:11 appears 80:6 82:6 100:5 107:24 127:8 appliances 74:25 applicable 8:7 55:23 69:4 87:16 application 8:17 9:3,5 112:16 applied 74:15 74:20 104:19 approach 36:12 78:19 79:14,15 80:13 87:10 97:14,18 98:8 102:21 approaches 112:15 appropriate 25:5,22 30:10 40:19 41:13 48:16 60:11 114:19 118:10 119:13,20,23 120:14 121:15 129:15 approve 12:16 approved 6:4 8:21 13:11 39:19 46:20 49:8 66:9 72:5 74:16 approximately 32:4 April 9:20,21 10:5,8,9,11,12 10:15,16,20 12:20,21 64:22,23 65:4,4 70:11,11 95:3,3 area 110:12 113:13 arguably 125:8 argue 114:11 argument 116:3 arrived 12:23 asked 20:4 107:19 asking 27:7 51:10 53:9 90:11 aspect 51:18 aspects 130:13 130:16 assertion 18:7 asset 36:11 88:22 assets 7:14 53:14 91:23 assistance 13:14 associated 6:25 34:2 37:12,21 122:14 Associates 14:3 Association 7:4 7:6 assume 15:22 106:4 assumed 16:17 25:10 37:22 47:14 49:22 58:20 100:2 assumes 19:1 23:7,9,13 60:14 assuming 17:10 17:11 80:2 84:11 assumption 16:16,21 17:8 17:23 21:9 24:5 38:9 48:16 49:3 67:15 103:16 106:7 assumptions 17:25 19:25 20:5 23:16,18 24:2 81:14 103:17 109:25 110:20,21 116:14,17,18 attempt 12:5 28:15 29:1 attempted 25:8 attempting 15:23 21:11 attendance 12:25 attending 131:12 attention 82:9 attest 106:25 attorney 105:3 attractive 44:20 attribute 103:5 August 8:24 Authority 21:14 authorization 77:19 80:2 91:13 automatically 17:6 available 17:3 17:22 18:2,10 35:7 58:16 59:6 63:12 65:21 average 64:8 85:16 86:18 87:3 111:18 avoid 83:5 95:24 avoided 44:23 aware 18:4 20:4 22:4,23 23:7 33:5 36:4 49:5 68:16 69:10,20 71:6 71:15 73:8 102:22 103:8 114:1 128:21,25 aye 13:8,9 132:3 B back 18:11 33:23,24 42:11 47:9 50:5 70:21 83:2 94:3 123:21 129:19 129:21 130:1 backing 125:25 backup 122:1 bad 57:2 98:17 Baer 3:11 10:3 11:23 balance 76:4 balances 82:20 83:1 Bar 7:4 based 15:17 27:4 32:6 35:6 36:22 37:2 46:12 48:9 49:3 58:22 60:6 63:15 66:13 71:23 74:13 80:9 82:13,23 86:14 94:20 97:9 98:7 109:5 118:16 120:7,15 122:4 122:20,24 basic 37:23 86:6 125:25 Basically 119:12 basics 65:16,17 basis 34:14 40:16 64:8,11 87:3 105:22 106:2,13 118:23 BDS 127:25 bear 108:23 116:7 Beckley 9:11 Beckmann 3:7 5:9,10 bed 120:2 beginning 65:17 82:12 93:18 94:5 96:1 111:2 behalf 11:13,16 13:20 14:1 38:15 76:21 101:15 118:2 belabor 16:12 believe 16:9 17:1 27:1 28:3,13 28:24 29:24 34:19 39:12 41:13,19 43:11 43:17,18 46:3 47:2,11 51:8,15 53:11 54:5,7 54:19 55:1,3 55:15,17,25 56:4,10,12,24 57:18 59:9 62:25 67:24 69:20 73:3 87:5 93:8 96:11 102:12 108:20 109:18 113:23 119:10 121:6 believed 21:9 benchmark 22:22,23,25 23:2,12 benefit 75:18 78:3,6,13 129:7 benefits 43:5,8 77:23,24 91:18 Berthold 9:10 best 85:11 86:12 92:5 126:6 Beth 4:22 133:7 Bethany 9:10 14:21 better 108:16 126:13 beyond 32:10 37:3 43:24 49:10 50:1 68:20 83:22 89:1 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES bid 95:20 120:18 123:6 124:14 bids 84:9,18 big 52:4 110:16 biggest 100:3 bill 75:8 94:6,9 95:24,25 104:9 126:3 billable 74:13 billing 74:14,21 75:4,25 billion 41:11 69:11 92:23 93:15,15 118:14 billions 123:25 bills 45:15,16 94:12 biosolids 30:2 Bissell 29:25 30:7,16 128:6 128:15,18 129:23 130:4 bit 16:6 22:20 25:13 27:15 38:25 55:20 62:16 74:8 87:5 99:25 108:23 Black 4:4 11:20 51:8,12 52:11 90:12 board 6:13 7:12 7:20 8:15,16 8:20 39:19 46:20 BOD 37:12 38:3 38:9 115:3 boiler 28:18 29:14,16,21 boilers 30:21 bond 15:18 16:17 17:20 19:2,6 20:2,10,13,14 21:5,17,25 22:8,17,23 23:1,4,10,11,23 45:24,25 47:14,17,20 49:15 56:22 60:18 61:17 62:21,22 63:4 63:6,25 64:2 64:10 70:3,20 70:20 71:1,3 75:19 bond's 15:14 bonding 41:18 bonds 7:14 8:5 16:21 17:7,8,24 18:2,21 19:2 21:7 22:12 23:2,18 24:1,3 25:11 43:3 45:19,20 48:10 53:13 55:8,13 58:12 58:13,15 60:15 60:16 63:11 66:11,20 70:6 77:19,22 80:2 80:16 91:14 92:10 Botanical 7:4 bottom 19:15 100:13 Bottoms 123:19 Bowdry 5:11 Brad 5:16 Brandon 3:14 11:18 13:23 Brandy 5:11 break 59:13 117:14 breakdown 51:7 breathing 50:18 Bresnan 2:20 3:4 5:12,13 13:5 125:14,16 126:20,21 Brett 9:9 Brian 3:11 4:14 9:8 11:22 brief 18:11 59:14 117:16 bring 41:6 broadly 15:6 Broadway 3:16 Brockmann 5:11 13:4 130:22 130:24 131:3 132:1 brought 90:10 Brubaker 14:3 Bryan 3:15 buckets 127:18 budgeted 34:20 36:15 84:9 budgeting 35:4 Builders 7:5 building 87:23 built 16:16,20 62:19 103:16 burden 8:10 56:8,11 78:10 108:10 burdened 86:24 business 115:8 115:9 116:2 butt 101:10 117:22 C C 3:1 4:1 calculating 18:5 18:6 call 5:1,7,8 called 123:2 calling 85:15 cap 92:24 capacity 28:19 32:13,13,15 44:4 97:3,3 capital 34:19 36:16 37:11,20 37:21 39:25 40:21 41:3 44:11,19 46:9 47:1 56:18 59:6 62:2 66:25 68:12 69:9 75:14,15 78:1,14 79:12 79:13,15 80:10 86:3,4,20 87:18,19 88:7 88:19 92:3 93:3,9 123:12 123:24 124:20 129:6,8 capture 58:4 110:15 car 129:9,10,16 care 13:1 117:6 130:22 carefully 60:13 case 25:20 36:15,21 40:5 40:18,20,21 41:25 42:22 43:6 44:14 46:8 61:19 63:2 72:7 88:16 124:16 cases 40:19 47:23 113:23 cash 16:23 17:20,22 18:1 45:14,18 59:6 78:9,15 79:7,8 85:8,15,22 86:5,17,20,20 87:2 92:4,7 98:20 129:14 causation 52:12 cause 79:3 94:6,9 caused 27:9 Cave 3:15 caveats 56:2 CCR 4:22,23 CDM 103:4,11,13 103:18,22 109:18 110:8 110:25 111:15 CEO 4:14 ceratin 76:2 certain 28:7 31:3 38:9 43:22 52:24 77:15 88:12,21 88:23 94:24 95:21 124:20 130:3 certainly 49:14 53:2 60:4 70:2,7,14 77:25 80:24 88:8 116:20 certainty 100:8 CERTIFICATE 133:1 Certified 133:7 133:8 certify 133:8 chair 5:5,7 12:14 57:16 131:7 Chairman 3:3 5:1,25 6:2,3 11:16,19 12:15 12:18,22 13:1,6 13:10,13,17,22 13:24 14:5,9 14:15,17,23 27:16,20 33:17,20 38:13,16,17 59:11,15,21,23 59:24 61:9 64:17,25 73:23 74:2 76:17,24 77:1 77:5 84:25 89:14 91:6 101:3,8,12 107:8,11 112:7 112:21,23 113:1 116:10 117:12,17 117:20,24 118:4 119:3 124:8 125:13 126:21,23 130:7,22 131:1 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 131:6,9,22,25 132:2,4 Chan 5:18 change 7:10,22 8:11,15,24 9:2 16:20 24:19,21 39:10,14 41:6 43:14,17 44:2 45:1,10 49:4,7 50:6,20,22 50:25 53:1,10 53:12,18,23 54:3,7,11,23 55:6,11,22 56:7 57:16 61:23 62:25 63:22 68:14 72:6 76:3,4 86:10,23 109:25 110:6 110:11 116:19 changed 46:23 110:11 changes 6:10 7:12,19 46:6 46:20 73:4 86:4,23 109:24 110:5 115:3 characterizati ... 28:5 37:16 characterize 28:17 charge 57:1,6 74:6,12,13,15 75:3 charged 102:23 charges 19:22 37:25 57:7,13 57:14 74:21 75:7,12,22 76:11,11 114:20 115:1,11 117:1 chart 41:8 charter 6:4,8,13 8:13 39:3 53:1 checked 69:14 Chesterfield 4:5 circumstances 115:13 CIRP 19:20 27:14,24 28:14 29:6,8 33:4 35:24 39:7 42:5,12 42:17,19,22 43:2,9 44:24 45:9 49:2 66:23 67:1,5 67:19,20 68:19,23 71:7 71:10,12,24,25 72:8,18 79:10 79:13 80:4 81:18,20 82:15 86:22 89:22 89:23 91:15 92:4,23 93:1 95:21 96:20 96:23 100:22 100:22 118:9 118:17 121:25 123:8 127:1 128:2,6 129:18 cite 110:17 cited 104:7 110:25 cities 106:24 Citizen's 21:16 citizens 20:11 21:14 111:13 112:2,3,13 City 1:1 7:4,7 106:17,20 107:1,3 113:7 113:15 133:3 clarifying 39:1 class 102:9,10 102:15 classes 8:10 37:20 56:9 101:23 108:9 108:11,12 classification 52:13 56:14 clear 25:1 48:23 87:24 99:5 103:3 104:3 108:24 123:23 clearly 104:7,22 110:21 clients 123:20 climatic 106:23 close 31:25 98:8 115:10,14 closely 24:10 81:8 closer 60:22 65:1 99:13 Club 7:8 Coalition 7:7 collect 76:2 collected 51:21 57:5 74:19 75:4 collection 73:15 75:18 76:16 113:25 114:5,7 collections 56:16 57:2,4,9 62:14 74:25 75:2,9,16 collectively 99:8 combination 23:17 40:11 60:19 combined 106:22 107:2 combustion 28:18 29:14,16 29:21 come 14:15 38:17 49:24 50:5 76:24 84:9 107:11 110:13 118:4,12 118:22 coming 49:6 84:19 130:20 comment 90:13 commentary 78:25 80:20 81:3 commented 44:4 comments 74:7 79:2 98:22 commercial/i ... 6:18 commission 3:10 4:4 5:2,5 6:9,15,17,24 7:11,20 8:11,14 8:17,19 9:1,8 9:12,15,18,23 10:2,4,9,20 11:2,5,21,23 12:5 14:10 24:9 26:17 38:15 39:2 43:13 44:22 44:25 49:25 50:6 52:24 66:9 72:5 76:22 83:12 101:13 130:10 130:12 commission's 8:21,23 11:24 65:13 commissioner 73:24 commissioners 3:2 59:22 76:18 112:24 116:11 117:13 117:25 125:14 130:16 commissions 91:7 commitment 37:4 common 7:24 51:16 54:13 102:20 119:16 121:5,12 122:13 122:19 commonly 109:1 111:4 community 6:22 97:7 companies 52:10 62:15 company 62:12 123:2 comparable 22:8 comparing 100:11 competitive 72:24 95:20 complete 34:4 36:3 84:23 120:5 completed 12:8 68:13 119:15 120:10 121:5 122:13,18 123:7 compliance 36:7 45:19 73:3,4 93:13 95:6 compliances 73:6 complicated 60:3 comply 8:7 34:17 35:7 43:14,19 44:16 46:10 55:23 56:1 69:18 73:7 93:4 125:9 component 51:16 52:15 104:15 109:1 components 56:14 67:12 103:7 115:20 128:7 concept 99:20 concern 62:22 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 110:24 concerned 81:21 concerns 110:7 conclude 39:12 81:18 concludes 107:6 119:1 conclusion 103:19 104:4 107:24 118:12 118:22 122:8 conclusions 65:19 122:2,4 concrete 128:8 128:14 concur 80:13 conditions 24:19 48:10 95:23 96:18 96:19 98:25 106:23 conduct 94:19 conducting 80:22 conference 1:11 5:4 9:21,25 10:23 11:4,7 confirm 21:19 30:9 61:5 confirmed 31:11 33:11 confirms 95:19 conflict 34:21 44:3 68:7,8 conflicts 44:7 connect 51:22 52:3 connections 110:12 114:8 consent 31:1,5 31:10 32:7 33:6 34:1,11,13 34:15,18,22 35:7,13 37:2 43:15,20 67:25 68:4,16 69:12,14,16,18 82:1 86:25 87:16,19 88:9 93:4,6,14 95:7 97:9,10 100:23 118:14 119:21 120:7,12 120:15,18 125:5,9 126:9 126:11,14 127:6 127:10 128:9 Consent-decr... 127:11 conservative 25:5,23 55:2 81:6 consider 43:13 49:25 73:16 87:10,14 98:3 98:5 considerably 36:21 49:21 consideration 26:15 78:2,23 88:6,20 97:2 114:22 115:24 considerations 79:1 88:19 89:1 108:3,6 108:16 115:25 116:1 considered 48:16 107:21 107:25 121:10 considering 44:18 consistent 7:23 8:3 21:2 54:12 55:6,12 68:14 85:18 86:9,13 92:5 97:25 consistently 69:21 consists 6:24 constitutional 7:23 54:12 constructed 30:7 31:24 construction 7:2 16:23 84:17 125:17 126:12,16 consultant 4:4 11:5,21 65:13 65:14 81:22 consultants 10:20 57:17 consumer 94:16 125:20,21 Consumers 3:14 7:3,8 9:6 10:6,13,18,19 10:21 11:17 13:20 14:2 consumption 73:9 74:22,23 contents 103:25 contest 71:10 contested 46:5 context 102:19 112:13 contingencies 72:19 contingent 73:5 continue 39:24 59:15 84:12 94:2 97:8 CONTINUED 4:1 continues 24:18 contractor 97:2 123:4 contractors 6:25 88:16 contractural 58:13 contrast 75:2,6 contribute 92:1 contributions 52:16,17 control 44:11,13 50:1 70:25 115:16 controlled 62:6 controls 110:14 Conversely 75:24 conversion 105:8 convert 105:7 corporate 70:3 70:6 correct 15:9,14 15:19 16:13,25 17:16 18:23 22:2,5,9,10,18 27:1 28:25 29:17 30:2 31:13 33:12 34:24 35:14 35:15,16,22 36:9 38:7 39:4,13 41:21 51:10 58:4,24 61:17 63:8,21 65:24 67:13 67:16 68:2,21 69:4 77:20 78:16,21 82:18 83:6,7,10,14 85:13,16,21 87:11 88:2 89:22 90:3 91:16,17,20,21 91:23,24 92:1 92:2,7,8,12 93:5,7,22,24 93:25 94:7,8 94:17,18 95:21 97:17 98:10 100:20,25 101:23,24 102:2,3 104:21 106:15,16,19 107:22,23 108:1,13,14,17 108:18 109:4 109:20 113:11 113:21 114:7,22 119:16 121:8 122:7,11 125:10 127:15 128:1,3 corrections 45:8 correctly 58:4 65:23 67:10 81:12 cost 7:15 15:10 15:12,23 17:11 18:10 21:11 23:22 24:3,11 32:4 38:2,8 41:15,17 48:15 49:7 51:18 52:19 53:19 56:12 60:15,18 60:19,20,22 60:24 64:3 69:16 72:10,16 72:24 73:14,17 75:11 76:8,12 78:4,12 92:1 93:13 94:19 94:20,23,25 98:4 100:17 102:1,4,16,24 108:8 109:1 116:24 118:18 119:15 121:4,11 121:18 122:1,12 122:16,18,21 125:21 129:7 129:22 cost-effective 78:18 cost-related 75:15 costly 111:10 costs 16:3 17:1 17:17,18 37:15 37:20,21 45:16 48:9,12 49:21 50:20 50:25 51:3 52:14 54:1 55:4 56:13,25 67:11 68:24 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 69:2,12 71:10 73:10 75:15 78:6 80:8 82:2,3 84:3 88:8,8 104:14 115:22 116:7 121:14 122:3,9 129:2 counsel 3:9 7:2 7:3 10:4 11:3 11:23 12:6,8 counsel's 57:21 country 48:25 113:25 114:3 county 6:5 7:1,6 131:2 couple 28:9 40:19 43:25 47:3 74:3 111:3 118:7 128:4 129:13,16 coupon 15:9,13 15:17 18:13,16 20:2,17 21:1,6 23:12,13,14,20 24:3 60:14,19 coupons 18:12 20:6,20,24 22:13,17 23:7 course 110:14 court 4:22 16:19 27:16 31:8,12 33:24 68:1 133:8 covenant 8:4 55:7,13 cover 7:17 19:20 46:15 54:1,4 55:2,4 102:24 coverage 39:18 39:22 40:2,5 40:7,13,17,25 41:23 45:21 45:23 46:19 49:12,18 50:10 50:14,15 58:1 58:19 59:2,4 61:13,24,25 62:7,8,11,11,12 62:17 63:1,1,3 63:7,14,18,23 66:12,15 79:6 79:9,19 80:10 80:15,17,24 81:7,10 86:1,2 86:15,20 87:1 92:9,11 98:21 99:9,12 100:14 100:15 covers 51:25 create 57:1,8 created 74:6 creates 54:8 creating 102:15 credit 40:14 62:10 63:20 71:17 criteria 39:3 52:24 53:6 81:2 critical 88:10 120:17 128:15 cross-examin ... 113:6 Croyle 3:5 5:14 5:15 131:8,9,10 131:16,19 CSG 4:7 11:21 123:2,6 124:13 CSR 4:22,23 current 24:6 26:19 45:25 78:10 83:25 84:4 92:22 93:24 95:23 97:25 98:23 98:25,25 99:11,15 123:4 currently 6:24 25:6 26:24 31:20 61:4,19 79:10 95:12 96:24 cushion 62:19 88:18 customer 37:20 51:5,16 52:15 55:18 57:13 75:8 90:19 102:10 104:12 105:15 108:12 111:19 114:12 116:24,25,25 customer/60 108:25 customers 26:22 37:23 37:24 38:6,7 38:10 43:5,8 44:20,22 45:16 48:13,15 51:13,23 52:1 52:3,7 56:11 56:23 57:7,8 71:14 72:17 73:14 74:10,22 74:24 76:11,13 78:4,10 94:11 94:25 98:3 102:3,5,11,13 102:15 103:6 106:18 108:11 109:13,14 111:25 112:18 114:14 customers' 74:17 CWA 21:14 cycle 42:4,7,9 42:12,14,17 43:7 48:18 65:22 66:21 82:22 83:23 83:25 92:22 93:24 94:6 96:22 97:15 97:25 98:24 99:19,19,21 cycled 42:13 cycles 39:20 42:6 43:8 47:24 66:10 72:6 D D 2:1 danger 49:16 dash 85:10 data 21:3 24:13 24:22 26:6 27:6 105:21 106:1 date 37:3 88:12 93:8 dates 120:20 126:14 127:24 day 131:15 deadline 88:14 deadlines 88:17 126:9 debt 15:24 16:1 17:11,21 21:12 39:8,10,13,16 39:18,20,21 39:23 40:1,4,7 40:12,17,25 41:23 42:1 43:10 45:21 45:23 46:19 46:21,23,24 49:11,17 50:10 50:13,15 55:16 57:3 58:1,18 59:1,3 61:13 61:24,25 62:2 62:4,7,8,11,17 62:18 63:3,7 63:13,17,22 66:12,13,14 69:9 75:20 75:22 76:15 78:5,11,16 79:6,7,8,9,19 80:9,14,16,23 80:24 81:7,9 81:14,15 85:8 85:10,22,25 86:1,2,14,15,19 86:24 87:1 91:22 92:1,7,9 92:11 96:22 98:20,21 99:6 99:8,12 100:2 100:14,14 decisions 83:19 87:23 declaration 65:13,18 91:11 98:1 decline 79:3,18 79:21 declining 73:9 decommissio ... 32:21 34:3 decree 31:2,5 31:10 32:7 33:6 34:1,11,13 34:15,18,22 35:8,13 37:2 43:15,20 67:25 68:5,16 69:13,14,17,19 82:1 86:25 88:10 93:4,6 93:14 95:7 97:9,11 100:23 118:14 119:21 120:7,13,15,18 125:5,9 126:10 126:11,15 127:6 127:10,13 128:9 decree-related 87:20 deemed 9:6 deeper 27:9 default 49:15 63:10 defer 29:3 81:20,25 100:22 126:10 deferrals 68:24 72:18 deferred 28:4,9 28:12 29:17 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 43:25 47:3 67:20,22 71:25 deferring 72:8 definition 18:22 19:9 delay 32:8 34:1 36:23 delayed 35:21 35:23 delegates 6:15 delinquencies 7:18 45:3,6 46:15 54:4 delta 64:5 demand 73:10 denominator 86:22 department 19:23 depend 75:3 dependent 75:25 depending 94:25 115:21 Depends 64:7 describe 15:10 65:25 described 52:9 133:10 description 21:24 22:1,11 design 73:13 74:9 115:23 designed 69:18 desiring 12:3 detail 89:23 detailed 27:4 105:18 106:1 details 81:21,23 82:24 deteriorated 129:25 determine 45:1 52:25 90:24 121:11 determined 129:3 determining 90:18 112:15 developed 24:10 90:15 developing 78:2,24 81:25 88:7 difference 64:10 113:22 126:4 different 15:8,12 15:20 18:13 38:25 61:25 78:1 80:22 84:18 86:6 88:25 90:17 98:19 99:25 100:16 107:3,4 111:17 112:15 117:9 129:9 difficult 100:6,8 125:8 dig 27:9 dipped 63:9 70:21 direct 9:8,23 51:21 61:1 114:5 Director 4:10,12 4:14 27:18 disagree 53:3 discharger 114:25 116:4 discharges 115:3 116:4 discovery 9:13 9:16,19 10:6,10 10:13,17 16:8 18:19 20:3 21:15 25:13 65:6 100:5 discretion 29:2 32:8 34:1,4 35:21 36:23 discretionary 28:4,24 47:3 discuss 90:6 discussed 109:3 discussion 18:11 18:12 61:12 108:20 124:22 discussions 47:8 disposal 37:15 dispute 44:16 disputing 21:7 distance 52:2 distress 64:9,13 District 1:23 3:17,18 5:3,6 6:4,10,12,14 6:20 7:11,15 8:5,7,12,16 9:7 9:13,14,16,17 9:19,20,24 10:1,7,7,10,11 10:14,14,16 11:2 11:4,14 12:7 31:8,8,12,12 32:7 33:25 36:6,22 39:8 41:7,9 43:12 53:14,24 54:8 55:9,14,23 65:22 69:11 71:16,20 72:19 72:23 73:5,8 73:17 79:6 86:24 91:14 93:1,19 95:6,9 95:12,19,24 96:21 97:5,13 98:3,5 99:18 99:21 101:15 103:4 107:18 108:3 115:19 115:22 116:6 118:2,9 121:20 122:10,20 123:1 124:4 125:9 129:1 district's 6:16 7:25 8:13 14:19 31:1 32:6 35:21 36:2,11 43:19 53:3,9 53:23 54:6,7 54:9,23,23 55:6,11,25 56:7 61:15 63:4 80:13 82:15 83:21 86:14 91:13 92:15,17 107:21 108:15 122:22,23 divided 12:2 Division 31:9 docket 49:8 document 31:7 31:14,16 43:22 106:7,11 documentation 121:18 122:1,6 documents 9:22 doing 68:22 87:25 116:24 dollar 127:5 dollars 32:5 93:16 123:25 126:4 Don 3:4 5:12 double 93:23 double-digit 97:6 down 19:8 46:19 63:9,18 83:19 94:3 128:18 131:23 downgrade 81:9 download 131:20 drainage 8:1 54:24 draw 82:8 103:18 drive 26:13 52:18 driven 52:8 125:5 127:6,11 127:23,25 driver 100:3 driving 79:7 dropped 81:10 drops 42:17 94:3 DSC 58:7 due 7:14 36:24 53:13 86:25 dug 122:16 duration 93:14 123:13 E E 2:1,1 3:1,1 4:1,1 earlier 26:23 64:23 85:22 120:8 124:22 125:6 126:13 early 30:8 earn 56:21 earned 50:10,16 58:18 Eastern 31:8,9 31:12 economist's 25:14 economists 25:17 Education 7:9 educed 64:22 65:4,9 95:3 effect 38:1 47:17 48:12,21 60:17 efficiency 37:13 129:5 efficient 74:24 129:4 eight 6:2 70:7 103:13 either 82:3 125:5 126:6 elaborate 74:7 election 6:5,6 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES electrical 129:2 Eleventh 4:24 eliminate 94:14 115:10 129:20 eliminated 33:9 116:4 embellish 98:16 emergencies 7:17 45:2,6 46:15 54:4 82:21 emergency 49:25 emphasis 114:11 enables 91:25 encountered 72:20 encouraging 29:7 energy 3:14 7:8 9:6 10:6,13,18 10:19,21 11:17 13:20 14:2 21:14 111:13 112:2,3,13 129:4,5,7 engineer 87:21 engineered 90:23 engineering 4:12 27:19 105:18 Engineers 7:7 enhances 7:25 54:23 enjoys 71:16 ensure 6:15 40:12 44:22 45:19 ensures 45:21 entire 78:10 116:8 124:4 entity 104:20 environment 7:7 71:4 116:2 environmental 6:21 36:1 116:1 EPA 30:13 31:5 32:1 37:2,5 39:24 44:16 46:10 68:1 69:18 72:14 equal 18:21 19:2 86:5 102:10 117:3 equally 12:5 equals 20:2 21:6 equipment 116:5 equity 39:21 40:15 42:1 46:21,23,24 62:2,5 66:11 66:14 69:8 era 61:21 erode 50:16 error 18:4 25:9 ESC 50:16,17 escalation 81:13 especially 110:18 essentially 45:13 50:7 58:16 establish 40:15 62:2 80:13 94:20 97:14 established 6:8 20:1 establishing 87:6 estimate 21:11 25:23 54:18 67:8 90:18 122:21 estimated 17:7 32:4 69:17 82:3 122:2,9 estimates 25:14 118:19 119:15 121:4,7,11 122:12,18 estimating 25:5 estimation 118:15,24 evaluate 81:23 120:21,21 evaluated 90:17 112:15 evaluation 128:25 evenly 12:2 event 49:18 events 63:15 eventual 102:8 everybody 16:6 evidence 65:9 65:10 ex 92:24 exactly 53:5 exaggeration 73:2 Examination 2:4,4,5,5,6,6 2:7,7,10,10,11 2:11,14,14,15,15 2:16,18,19,19 2:20,20 14:25 27:21 38:18 57:19 59:25 61:10 64:19 74:1 77:9 85:3 89:19 91:9 101:17 107:12 112:9 113:2 116:15 118:5 119:6 124:11 125:15 126:24 example 15:9 21:5 32:12,12 35:17 103:24 104:15,23 105:6,14 109:3 111:13 examples 20:7 20:8 21:13 23:13 28:3,7 28:17 29:12 111:5,21 excess 24:4 53:25 54:20 55:4 56:1 excessive 56:11 Excuse 57:15 Executive 4:14 exempt 23:1 exhibit 15:6 16:10 18:19,25 19:16 20:3 21:16 31:6 99:11 103:9 106:3 109:23 111:22 exhibits 65:6 existing 72:21 102:22 exists 29:7 52:20 expansion 28:20 32:13 32:14,16 78:8 expansions 44:5 expect 40:21 40:24 63:15 expectation 24:23 63:20 99:5,7 expectations 81:7 99:1,2,3 expected 37:15 60:16 83:23 93:2 expecting 81:10 expenditure 41:3 56:18 129:8 expenditures 36:16 37:11 39:25 40:22 81:15 82:21 expense 58:12 58:14 expenses 45:18 58:15 expensive 23:18 experience 60:5,7 82:13 111:8 122:24 122:25 123:11 experienced 95:20 97:5 experiences 95:12 expertise 89:2 experts 81:25 expiration 12:9 expire 93:6 expired 12:12 explain 39:14 51:6 77:23 121:10 explained 50:8 103:17 121:6 explains 105:11 explored 44:21 expose 72:19 72:23 exposure 73:5 express 62:22 extend 37:3 100:22 extends 8:18 extension 8:22 extensive 127:3 extent 12:7,10 29:6 44:9 49:9 73:18 74:17,22,24 87:15 114:4 extra 37:6,22 37:24,25 38:4 102:6,22 114:16,24 115:19 extract 99:17 extracting 99:20 extrapolate 84:20 eye-level 35:4 F TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES F 2:1 face 15:14 16:2 17:8,24 18:21 19:2 21:8 faces 95:6 facilities 8:2 54:25 78:7 92:6 115:12 116:6 128:21 facility 32:17,22 33:9 36:7 78:13 115:10,14 115:23 facing 80:10 fact 17:13 20:23 25:1 48:22 50:4 68:16 69:10,20 71:16 73:8 84:14,21 93:1 107:24 124:13 factor 25:25 26:13 40:13 50:18 55:19 105:9 factors 39:2 44:25 52:13 52:24 53:6 76:1 78:2 80:25 81:13 95:23 97:1 103:5 104:13 failure 36:3 fair 6:15 8:9 16:23 18:3 56:8 76:13 83:24 101:22 102:12 107:21 107:25 108:2 108:8,11 fairly 79:23 fairness 107:17 falling 7:14 53:13 familiar 20:19 30:15,19 34:10 34:12 39:4 90:15 109:22 familiarized 127:2 far 21:24 41:2 75:10 81:21 88:15 Farm 7:6 farther 125:3 129:17 fashion 75:23 fatigue 97:7 favor 13:7,9 132:2,3 favorable 71:23 84:10 95:13,13 95:20 96:18 96:19 February 6:6 federal 8:7 26:6 26:9,11 31:22 55:23 56:19 72:14 feel 35:21,23 fees 73:14 74:10 75:6,7 Fenton 32:22 33:8 34:3 filed 9:5,14,23 13:19 68:1 76:21 filing 65:7,11 66:13 filter 128:19 filters 128:23 129:3 final 111:1 finally 10:3 11:3 56:6 finance 4:10 7:14 14:20 39:7 53:14 60:4 78:9,11 79:13 86:17 86:20 91:14 financial 21:17 23:15 39:16 40:11 46:1,3 47:6,7 49:23 49:23 50:2,12 50:14,23,23 54:16,20 56:17,21 57:10 61:15 62:9,23 62:25 64:1,9 66:8 72:3,4,9 72:12 78:3,24 79:7,15,16,18 80:7,11,14 82:4 92:5 95:13 financing 16:24 19:14 21:12 39:17,17 59:6 72:24 78:15 78:16 79:13,14 79:15 80:3 81:14 85:8,10 85:15 87:2 91:18 92:4,7 96:22 98:21 129:15 find 100:9 109:12 121:23 findings 65:19 fine 131:16 finish 125:22 126:6 finished 126:2 first 9:13 10:6,17 14:19 16:8 19:8 20:3 29:13 42:15 74:5 94:18 107:25 113:5 fiscal 28:8 32:3 37:1 42:16 53:16 66:24 68:20,20 91:15 92:15,18 92:22 93:2,4 93:10,18 94:2 94:2 96:1 97:20,21 98:6 Fitch 81:6 five 8:9 16:9 25:19 70:7 129:20 fixed 57:7 73:13 73:14 74:10 75:6,7,15 76:6 76:10 115:22 116:7 117:1 flat 48:7 flawed 100:18 100:24 flexibility 28:13 28:16 29:6 33:3 44:10 49:17 flipside 110:14 flood 33:10 flooded 33:14 flooding 125:24 fluid 52:21 fluidized 120:2 focus 67:3 73:13 focused 65:5 87:21 focusing 6:21 follow 82:8 following 11:4 12:4 42:16 66:7 131:5 forecast 25:19 28:8 46:16 49:10,14,19 50:11 58:8,11 68:15 forecasted 66:1 forecasts 46:2 49:22 foreseeable 61:23 Forgive 38:22 formulating 48:16 forth 31:24 82:6 96:20 forward 14:15 38:17 76:24 97:8 107:11 118:4 found 30:10 four 8:6 33:14 42:3,23 43:1 47:22,24 66:4 84:16 four-year 41:7 42:8 48:18 66:20 83:23 83:25 fourth 10:10 41:12 65:24 113:24 frankly 27:6 front 17:15 full 120:20 123:22 124:4 126:15,16,18 function 17:21 51:21 85:25 functional 56:14 fund 16:23 17:22 21:23 22:4,6 43:3 45:18 72:13 82:20,25 funded 43:4 69:8 funding 19:20 39:21,22 40:1 40:16,23 41:1 42:1,19,23 43:9,10 45:10 46:9,21,23,24 62:2 66:10,14 72:23 78:20 79:10 92:4 funds 15:11 17:3 17:18 18:10,10 45:2,5 54:3 100:17 further 7:19 13:17 28:23 38:12 73:21 89:15 94:24 101:1,4 124:9 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 125:11 126:20 129:21 130:7 future 24:1,6,8 60:8 61:23 68:21 69:1 72:1,25 79:4 84:13,22 91:25 99:7 100:2 108:8 124:14 FY18 102:23 FY20 102:24 FY21 67:2 77:20 80:4 83:4 118:10 FY23 36:17 67:23 69:9 FY23-24 28:25 FY24 80:5 83:4 118:10 FY25 66:25 67:23 83:5,8 FY26 36:19 67:2 G gallons 105:7 Garden 7:4 gas 128:10 gates 128:7,14 gears 27:14 Gee 4:10 9:10 77:8 general 6:6,25 22:21 49:3 118:24 121:7 generally 52:14 109:12 111:12 126:13 generate 41:9 45:5 generated 18:15 22:18 86:2,5 generates 45:2 86:16 geographic 106:21,23 107:1,4 geographical 52:2 113:12 Georgia 4:22 133:7 Gerald 3:7 give 14:6 28:7 28:16 77:2 90:9 101:9 117:21 123:22 124:24 given 19:18 25:16 34:16 43:16 76:14 83:21 95:23 96:18 99:5 126:9 gives 62:9 105:13,15 go 16:7 20:8 42:11 47:9 50:4,9 57:25 58:25 66:4 80:22 92:13 107:16,16 123:21 128:18 goal 86:16 goals 125:22 goes 57:22 58:16 131:17 going 14:20,22 18:11 19:21 20:16 22:16 27:14,24 31:6 41:1 47:9 48:20 49:2,2 53:4 61:22 62:6 65:16,17 77:16 89:17 93:6 94:15 98:18 105:4 106:3 117:7 good 14:16 15:2 15:3 38:20,21 77:11,12 85:5 85:6 98:17 107:14,15 112:22 116:1 119:9,10 127:12 131:6 Gorman 2:3 4:17 14:2,5,8 14:10,13 33:19 33:21 38:14 38:20 48:19 57:21 59:17,19 59:22 60:2 61:12 64:21 73:25 76:19 91:2 100:17,21 106:9 Gorman's 90:7 98:12 99:17 113:8 116:17 Goss 2:16 5:16 5:17 12:22 13:13 116:12,13 116:16 126:3 gradual 92:14 granted 9:6 great 88:14 greater 7:3 80:15,16 87:16 92:10,11 grip 40:3 ground 51:19 Group 21:14 112:13 growing 40:2 grown 40:18 grows 39:23 guess 60:8 86:7 90:9 123:23 guideline 104:23,24 105:2 guidelines 61:15 104:15 105:13 105:14,15,19 105:22 106:1 109:3,11 111:12 H half 23:24,25 60:21,22 61:6 61:6 80:15 hand 31:6 106:3 129:14 133:12 handling 30:2 115:19 happen 49:2 57:25 58:1 84:22 happened 50:2 57:22 happens 48:25 88:15 happy 130:4 hard 60:7 90:23 130:12 130:15 harm 50:12 Hawes 3:4 5:18 head 93:11 headed 124:18 hear 33:22 98:12 heard 95:5 124:19 131:23 hearing 11:11 13:10 14:12 101:5,14 117:13 118:1 130:18,23 131:2 hearings 130:20 heavily 52:14,15 86:24 hedge 49:20 held 9:21 10:23 11:7 133:9 help 13:14 80:3 97:18 helpful 117:10 helping 130:12 130:16 helps 40:15 62:1 hereunto 133:12 high 47:11 60:6 70:6 99:5 high-volume 94:16 higher 17:13 18:16 23:22 26:18 40:23 49:19 51:13,17 57:23,25 58:3 58:11,23,25 64:2,14 69:3 70:1 76:10 81:4 84:17,19 86:12 87:7 89:7,9 92:18 94:5 96:7,8 99:9 114:11 highlighted 31:18 highly 72:24 75:22 historic 98:23 historical 70:12 70:17 71:8 historically 70:22 95:16 95:20 history 83:21 hit 129:6 Hoelscher 4:14 131:13,17 Hoelsher 9:9 holding 98:15 holds 99:6 Home 7:5 honestly 123:21 horizon 61:22 hours 12:1,11 I I&I 51:1,3,12,16 51:18 52:4,5,11 52:12,18,20 76:9 90:11,18 90:22,24 103:20 104:14 104:14 106:13 106:17 109:1,5 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 109:15 110:6 111:6,25 112:16 113:5,20 114:6 114:10,13 116:13,18 I&I's 51:19 idea 62:9 124:25 identified 28:3 28:23 33:2 67:20,25 108:5 118:8,9 118:19 119:12 125:2,2 identify 28:11,15 31:7 66:5 85:14 106:7 129:18 identifying 29:1 29:20 Illinois 4:23 illustrative 83:9 104:18 105:14 105:23,24 imbedded 39:23 immediately 42:16 impact 26:10,11 52:4 59:5 74:19 80:3 86:1 91:19 94:7,10,15,24 95:25 102:8,11 102:15 105:12 114:5 impacted 76:1 impacts 36:1 69:2,3 impair 8:6 43:19 55:22 72:8 implications 64:1 83:19 implies 71:1 important 40:13 44:15 81:1 83:16 98:24 impose 108:10 imposed 57:7 imposes 8:9 56:8 76:10 improvement 37:13 improvements 31:4 37:14 improving 38:1 in-between 104:2 in-flow 105:11,12 108:20 incinerates 31:20 incineration 31:23 incinerator 43:23 88:11 119:23 127:20 incinerators 29:25 30:6,12 30:17,23 31:22 32:2,3 include 60:11 66:7 122:2 included 16:3 28:8 35:3 46:4,17 49:19 50:20 65:7,10 66:10 122:1 includes 39:17 including 6:20 17:5 20:6 43:15,20 47:24 70:8 91:19 96:19 97:2 98:6 108:7 115:25 117:1 income 58:17 inconsistent 55:15,17 incorporated 7:6 82:4 incorrect 25:15 27:2 67:15 100:17,21 increase 19:21 19:23 24:18 25:1,2 26:16 35:3 36:17,20 38:3 41:1,22 42:19,21,21 45:7 47:1,4,22 48:22 49:9,21 50:1,24 53:15 53:16,21,25 55:1,3 57:12 58:12,14,15 61:24 63:13 68:25 71:14 74:9,11 83:4 83:24 92:18 93:20 94:1,5 94:12,22 96:6 96:15 97:21 97:24 98:7 99:7,24 100:18 102:18 114:20 increased 24:24 41:10 42:7,9,12,14 68:25 72:11 96:11 increases 24:7 24:15 26:3,21 29:9 34:8 42:2 43:6 44:14,23 46:8 47:25 48:2,6 50:22 58:8 73:18 79:23 83:8,22 87:6 89:7,10 93:24 96:4,5,8 97:6 97:11,15,19 108:12 increasing 19:20 25:21 42:6 48:13 57:5 73:11 74:12 98:5 incur 52:19 indebtedness 8:5 55:8,14 Indiana 62:16 Indianapolis 20:11 112:5,6 indicate 61:22 85:9 92:17,22 103:3 104:12 113:18 indicated 34:10 67:7 80:18 81:8 82:4 93:23 indicates 71:4 indicators 48:24 individual 121:16 121:19 Industrial 3:14 7:8 9:6 10:5 10:12,18,19,21 11:17 13:20 14:2 industry 84:18 85:18,20 87:4 90:25 102:20 104:24 105:1 105:25 125:18 industry-acce ... 85:11 104:25 108:9 infiltrate 51:25 infiltrated 51:24 infiltrates 105:11 infiltration 51:19 52:5 103:5 105:12 108:20 inflates 26:20 inflation 26:8 70:25 71:2 73:18 82:5 84:17 inflationary 69:2,3 73:16 inflow 51:19 103:6 influencing 109:14 influential 114:9 information 35:5 103:8 121:24 131:10 131:13 infrastructure 52:9 72:20 72:22 95:10 initial 45:22 initially 62:5 inside 20:16 instability 57:1,9 install 52:3 74:24 instance 78:8 79:19,22 instituted 115:17 instituting 115:2 integrity 50:12 50:23 54:16 54:21 56:18,21 57:10 intend 123:6,6 intended 104:18 interaction 26:9 interchange 89:21 interest 7:13 15:4,6,8,13 16:3 17:1,17 20:17 21:1 24:12,16,19,21 24:24,25 25:4,6,7,23 26:1,3,5,7,12 26:13,15,18,19 41:17 45:9 47:8,13,21 48:1 48:2,5,6,9,12 48:17,22,24 48:25 49:9,18 50:4,8 53:13 57:22,25 58:10,12,14,24 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 60:2,4,9,11,23 60:24 61:21 62:1 64:3 66:19 67:4,7,9 67:11,14 69:3 69:5,6,21 70:1 70:3,8,12,16 71:5,23 84:8 84:16 95:16 96:19 100:2,18 interested 6:19 interpret 60:7,8 interpreted 15:12 interrelated 32:23 interrupt 66:16 INTERRUPTI... 16:19 intervene 9:3,5 11:9 intervener 12:7 intervenor 10:3 10:5,12,17,21 11:2,5 introduce 13:24 14:18 investment 44:11 46:9 115:18 116:5,7 investments 44:19 75:15 investor 15:16 involve 123:24 issuance 8:18 20:13 21:23 issuances 21:17 22:9 23:10,11 issue 8:14 16:1 41:22 47:20 60:3 62:1,1 63:11 77:19 88:4 91:14 112:20 113:5 114:16 issued 7:14 8:24 17:7 21:6 22:7 31:11 32:1 53:13 66:20 issues 6:21,21 6:22 20:10 33:15 41:18 44:15 45:10 64:2 91:2 110:19 126:12 126:18 issuing 15:11,24 21:11 43:10 45:20 77:22 78:5 83:13 item 25:10 items 35:23 79:3 J Jerry 5:9 John 3:6 5:22 Joseph 113:9,12 judgment 111:8 July 8:14 131:5,5 jumping 79:22 June 11:8 130:19 131:4,5 K Kansas 106:17 106:20 107:1,3 113:7,15 keeps 57:3 kind 38:25 77:16 111:14 112:20 kinds 15:8 know 17:15 33:13 38:24 43:16 51:18 58:5 60:3 62:15 69:25 70:19 75:24 87:15 93:10,13 96:25 97:2 116:19 120:18 122:12,17 130:25 knowing 115:12 knowledge 83:21 109:6 118:24 122:20 knowledgeable 83:18 known 25:1 109:24 Kumar 2:5,13 4:18 11:20 57:16,20 90:20 101:7,8 101:11,13,15 107:9 112:8,11 112:24 113:4 116:11 117:13,14 130:15 Kumar's 97:25 L L 9:8,9 labor 6:21 7:3 Ladue 7:7 large 24:15 26:2 61:1 77:25 82:13 97:3 largely 26:8 52:7 largely-fixed 75:11 larger 94:11,22 largest 113:25 124:6 Lashly 3:11 10:3 11:22 late 131:15 law 7:24 54:13 68:17 87:16 laws 8:7 43:14 43:20 55:23 56:2 leading 110:2 League 7:1,4 leaning 109:13 111:24,25 114:14 leave 24:20 leaves 118:16 leeway 127:13 left 21:24 legal 10:3 11:3 11:23 12:6,8 Leighton 3:15 Lemay 30:1,7,16 Lemoine 2:9 4:17 11:19 65:14 76:25 77:1,4,6 85:1 89:16,21 91:11 101:4,5 130:14 Lemonie 4:4 length 51:22 52:8,12 114:4 Leonard 3:3 5:5 5:24 let's 5:7 39:6 51:1 54:9 107:16 121:4 128:18 level 17:2 28:14 28:16 36:15 36:20 37:23 38:9 39:23 40:17,22 41:1 41:16,25 42:5 42:22 43:1 49:13,18 54:19 57:5,6 63:4,9 63:13 73:19 79:10 86:3 87:12 93:21 97:19 99:6 102:17 106:25 115:21 124:21 levelization 35:24 96:5 levelize 28:13 29:5,8 68:22 71:12 88:8 levelized 67:1 79:23 levelizing 28:16 29:8 levelling 40:22 levels 31:3 108:11 library 131:2 lien 80:16 92:10 life 91:23 lift 51:23 light 78:24 79:9 limited 46:6 limits 44:5 line 14:19,22 15:25 16:15 19:5,15 23:22 25:10 37:10 82:9,11 83:3 99:14 101:21 103:2 106:16 lines 80:12 104:11,11 Lion 4:7 11:21 123:2,6 124:13 liquidations 82:6 liquidity 45:17 71:20,24 95:13 Lisa 3:10 11:22 list 29:16 66:4 123:22 127:3 128:6 129:18 listed 21:23 33:6 34:11 36:3 103:25 107:5 listing 35:19 lists 20:17 21:17 Litigation 4:24 little 16:5 22:20 25:13 27:9,15 38:25 40:9 41:8 47:17 49:12 55:19 58:23 62:16 65:1 74:8 99:25 100:7 111:24 116:24 118:16 125:7 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 129:16 LLL 31:25 Lloyd 3:6 5:19 LLP 3:15 load 76:15 loan 22:6 located 33:9 location 107:4 130:25 Locust 3:12 long 4:22 63:9 63:20 133:7 long-term 26:12 78:3 91:23 92:15 108:7 longer 25:19 26:12 83:16,17 116:6 130:1 look 27:5 29:15 34:15,23,25 35:4,12 36:15 43:21 46:12 47:10 49:6 52:25 58:6 60:13 63:6,7 81:1,5,8 83:16 87:18 89:4,6 89:23 98:25 103:11,15 109:9,10,11 120:17 121:16 121:18 123:21 125:1 129:1,15 131:20 looked 78:22 80:25 88:4 111:16 121:7,20 129:17 looking 20:23 24:12 35:2 41:8 47:25 53:1 61:19 64:14 84:7 85:7 87:13 100:4,9,11 118:23 121:13 121:14 125:4 129:11 lost 102:7 lot 24:20 47:8 50:17 61:12 62:19 76:1 88:5,6,25 97:1 110:19 124:2 lots 103:12,12 Louis 1:1,23,25 3:12,16,18,19 4:8,25 5:3,6 6:5,5 7:1,2,3,5 7:8 11:13 106:21 113:13 124:1 133:3 love 12:18 low 16:4 17:2 23:21 26:5,25 63:9 69:22 70:2,4,22,23 70:24,24 71:3 71:5,23 84:8 95:16 96:19 96:20 100:2 lower 17:10,11 32:16 36:21 42:18 46:7,25 49:12 50:10 56:4 58:2 64:14 69:5 72:16 76:11 84:3,5,9,21 lowest 78:4 lows 70:12,17 71:8 Lutheran 7:1 M M 2:1 9:9,10 MAC 119:22 magnitude 94:5 121:14 Mahanta 5:18 Mahfood 5:19 maintain 36:7 40:1,4,17,25 45:24 54:16 54:20 56:17 56:20 61:16,16 72:12 73:19 93:20 maintaining 62:6 maintenance 7:16 53:20 81:15 major 41:3 124:20 majority 20:24 118:13 making 18:8 45:5 87:22 104:9 Malone 3:11 11:22 manage 34:6 71:11 97:3 managed 79:21 management 36:11 44:24 88:22 managers 88:20 managing 33:3 mandated 68:17 mandates 72:15 mandatory 95:6 manhole 51:25 manholes 114:9 manner 55:2 100:1 manual 104:16 104:17,25 105:10,24 March 8:12,20 9:1,4,7,12,13,15 9:17,18 Marion 4:10 9:10 77:7 Mark 3:5 5:21 market 1:24 3:19 18:22 19:3 22:21,24 23:1 24:19 26:6 48:9 64:7,12,13 marketplace 25:17 26:10 64:13 match 20:6 22:17 material 31:1,9 32:6 49:7 50:19,22 97:10 117:7 materialized 48:6 math 86:6 127:12 128:1 matters 12:13 13:12,18 130:9 130:18 131:22 maximum 78:3 MDNR 30:13 mean 22:10 49:11 50:10 79:14 90:5 94:9 105:1,17 114:7 meaning 116:24 meaningful 97:9 means 18:23 19:10 meant 104:3 measure 105:8 measured 74:14 media 128:19 median 99:10 99:12 medians 99:16 meet 45:22 56:18 75:20 86:2 meeting 5:2 8:20 52:20 88:9 128:23 131:11 133:9 meets 72:14 member 14:9 101:12 members 10:2 11:1 12:4 memorandum 121:1 mention 53:6 85:22 mentioned 57:24 60:6 67:4 mentioning 129:24 Meramec 32:16 33:10 34:2 merit 44:21 met 40:6 47:6 128:17 meter 75:7 methodologies 90:17 methodology 80:23 methods 89:6 metric 57:13 74:6,12,13,15 74:17,21 75:3 75:4,12,25 76:11 metrics 40:11 47:6 72:3 79:17 Metro 7:5 Metropolitan 1:23 3:15,17,18 5:3,6 11:13 Michael 2:3 4:17 14:2 106:8 Mickey 3:5 5:14 microphone 33:20 65:1 midwestern 111:20 MIEC 100:12 106:3 124:19 130:11 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES MIEC73 15:6 miles 113:15 114:2 milestones 120:17 million 19:13,19 32:5 41:9,10 42:9,14,19 43:18 65:22 92:24 93:3 99:18,21 100:3 118:15 128:8 128:20 minimize 80:3 minimum 39:18 39:21 40:1,4 40:25 41:23 45:23 49:13 49:15 58:7 61:16,20 62:7 63:1 66:12,14 79:20 93:20 minute 38:22 51:1 57:15 minutes 12:16 12:20 13:2,3,7 13:11 missed 19:5 missing 88:17 103:22 104:2 110:24 Missouri 1:2 3:14 4:23,25 7:1,3,6,8 9:5 10:5,12,17,18 10:21 11:17 13:20 14:1 31:9 31:13 106:17 106:20 113:9 133:2 mistake 27:10 mitigate 29:9 72:11 83:25 87:11 95:24 97:20 98:2 mitigated 89:11 mitigates 91:19 mitigation 108:7 mix 46:21 66:11 66:14 78:15 78:20 79:7,8 79:24 85:23 92:7 98:21 MMD 22:24 23:1,3,6,12 MO 1:25 3:12,16 3:19 4:5,8 model 15:22 16:1,4,7,17,20 16:20,24 17:2 17:6,12,14,15 17:23,25 18:5 18:18 19:5 20:1 21:1,2,10 23:15 23:19 24:2,6 24:10 25:6,9 26:19,24 27:4 41:21 45:12,13 46:4,6,17 47:7 47:15 49:3 60:12,14,25 61:4 66:8 67:12 82:24 92:17 100:4,7 modelled 23:8 modelling 43:25 models 17:10 moderate 97:16 97:18 moderating 97:11 modernizing 38:1 modifications 45:11 modified 57:12 mom-and-pop 94:15 Monday 131:15 131:16 money 23:25 59:5 month 57:8 95:3 126:4 monthly 57:13 73:14 74:10 75:6 Moody's 81:5 99:10 morning 14:16 15:2,3 38:20 38:21 77:11,12 85:5,6 107:14 107:15 130:10 mothballed 128:22 motion 13:2,4,6 131:7,23,24 Mound 7:4 move 19:24 32:11 88:24 97:8 108:19 moved 41:2 66:24 movement 125:7 moving 34:19 35:17 37:6 87:18 88:24 125:2 MPDS 36:1 128:10,16,23 MPG1 58:6 100:11 MPG3 28:22 29:23 32:18 MSD 1:11 4:10,12 4:14 13:15 14:21 15:11,24 17:19 18:2,10 20:9,13 21:11 22:8 23:11 24:11 26:22 28:16 29:2 30:10 31:6,20 32:1 33:3 35:10 37:4,19 44:3,18,24 45:14,15,17 46:4,8,12,22 47:6,20,24 48:8,21 49:3,6 49:20 50:3,5 51:7 53:15 54:19 55:3 56:17,24 57:11 60:18,20,25 63:2 65:7 67:23 69:17 71:14 72:6 73:13,15 74:9 74:16,20,23 75:1,4,7,17,19 75:19 76:2,7 76:15 78:22 80:3 81:14,18 81:25 82:19 83:4 85:14 87:9 92:16,17 99:6,24 100:12,16 102:4,5 109:6 109:23 113:24 119:20 120:14 123:4,16,17,18 124:1,6,14 131:10 MSD's 13:14 21:2 37:11 44:10 45:13 45:24 49:10 50:12,20 51:4 51:13 56:10 60:6 62:13 66:1,13 68:15 75:11 77:18 78:14 79:12 94:19 97:3 101:22 116:18 116:19 122:2,8 123:17 MSD65C 103:9 multiple 77:23 80:7 91:18 111:16 115:25 multiple-earth 31:22 32:2 municipal 7:1 22:23 23:1 70:1,5 municipalities 111:9,9 municipals 70:8 Music 131:2 Myer's 109:21 Myers 2:4,10,14 2:18 3:18 9:9 11:15,15 14:12 14:14,16,17,19 14:24 27:13,16 27:18,22 33:22,25 38:11,13 43:11 43:22 44:15 77:5,7,10 84:23,25 101:14,16,18 107:6,8,19 118:1,3,6 119:1 119:3,11 121:6 Myers'67:24 N N 2:1,1,1 3:1 4:1 name 5:4 6:14 natural 49:20 nature 73:15 75:11 100:6 115:8 nearly 93:23 necessarily 44:2 60:15 70:19 necessary 7:13 31:20 45:2,6 45:8 53:12,16 53:19,22 56:17 62:21 73:19 81:23 94:13 102:16 necessitate 110:6 need 13:13 30:20 33:22 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 42:22 45:14 45:15 46:11 49:7 50:5 54:15 56:1 60:13 61:5 62:20,25 69:9 72:6 88:6,18,23 98:16 126:18 needed 36:20 40:1,16 42:25 44:14 46:9 54:1,20 55:4 72:11 116:6 120:9 124:21 needs 17:21 25:24 26:15 39:2 45:17 54:8 92:24 93:2 127:6 negative 81:9 neighborhood 6:22 net 23:22 24:3 47:17 60:17,20 60:20 network 13:14 Neuschafer 2:10,14,19 3:14 11:18,18 13:18 13:21,23,23 14:1 59:12,17 59:18,20 76:18 85:1,2,4 89:12,14,22 107:9,10,13 112:6,7 119:4,5 119:7 124:7,8 124:18 130:11 nevertheless 48:8 new 23:25 50:6 58:12,14 64:2 66:20 129:11 129:13 nice 131:19 Nicole 2:17 4:7 4:18 11:20 81:20 117:19 124:13 nine 103:13 non-consent 127:13 non-lawyer 54:15 nonprofit 6:23 normalized 26:10 North 3:16 4:24 note 12:22 22:13 51:3 68:6 noted 12:25 22:12 26:23 36:16 79:11 notes 121:1 notice 7:10 8:11 8:15 15:25 November 6:7 number 7:13,15 7:16,23,25 8:3 8:6,9 51:23 51:24 52:1,8 66:16,17,18,19 66:22,23 67:19 69:15 78:1 86:11 92:16 98:18 99:11 104:16 105:7 108:5 109:7,10,13 110:11,12 111:25 114:8,8 115:2 122:14 123:20 numbers 28:24 61:5 86:8 96:16 103:12 109:14 110:22 numerator 86:21 O O 2:1,1 3:10 objective 52:21 objectives 46:3 46:4 99:15 obligated 36:6 obligation 44:3 73:6 120:5 obligations 34:22 36:8 50:15 55:16,18 56:5,19 58:13 69:12 128:10 observing 71:11 obtain 88:16 obviously 48:19 80:6 88:10 107:3 occur 32:3 96:1 occurs 64:7 October 31:24 official 20:14 22:15 offline 128:23 oftentimes 88:22 111:22 126:17 okay 15:4,12 16:5 18:3,11,18 19:7,12,24 20:20,23 21:13,22 22:12 22:20 23:6 24:5 26:23 27:3,11,13,23 27:25 28:17 28:22 29:11,19 30:11,25 31:6 31:11,15 32:11 32:20,25 33:13 35:11,17 36:1,6 37:6,19 38:5,11 54:9 57:15 61:8 66:18,22 67:6 78:14,18 79:11 80:1,12 81:13 82:8,18 83:2,8 85:14,17 86:7 87:5,24 88:3 89:3,12 91:1 101:19 102:22 103:1 105:1,6 106:3,10 107:6 111:1 112:6 113:17 117:4 118:18 119:15 119:24 120:1,8 120:11,12 121:4 122:5,17 123:2 123:17 128:4 old 40:11 58:12 111:15 Olive 4:8 on-the-record 11:10 ones 118:7 online 6:2 12:23 12:24 open 20:16 operate 36:6 operating 30:16 37:13 45:18 58:15,17 81:15 116:2 operation 6:20 7:15 30:11,22 53:19 120:21 126:15 operational 11:24 operations 73:20 opine 107:17 opinion 45:4 46:14 51:10,11 53:11,18 54:2 54:11,14,15,22 55:5,21 56:6 60:10 68:9 80:1 82:14 88:3 96:14 102:5 114:19 118:7 119:19 124:15,24 126:8 opinions 90:6 opportunities 46:7 opportunity 9:2 10:1 46:18 65:2,12 90:5 90:9 91:1 97:14 98:11 114:13 125:7 opposed 13:10 43:10 51:4 72:1 116:17 132:4 options 114:25 115:17 order 5:1 17:22 25:3 28:13 34:16 40:4,16 40:25 52:3 61:16 87:11 orders 75:19 87:16 organizations 6:14,17,19,20 6:23,23 original 65:7 109:23 outages 72:21 outcome 79:8 97:10 outlined 53:21 82:19 92:16 outlook 24:18 71:2 outset 25:9 69:17 outstanding 8:5 55:8,13 85:25 86:14 overall 24:1 64:12 79:24 107:25 109:11 118:23 124:24 overlooked 67:13 overlooking 125:19 overstated TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 41:19 67:18 overstatement 60:24 overstating 41:17 48:11 P P 3:1,1 4:1,1 pace 44:12 71:12 page 2:4,4,5,5 2:6,6,7,7,10,10 2:11,11,14,14,15 2:15,16,18,19 2:19,20,20 16:10 18:20,25 19:16 20:16,20 21:15,16,18,19 22:15 28:2,22 29:15,23 31:15 32:17 37:9,9 39:6 41:4,5 51:2 58:6 77:17 79:11 80:12 82:9 83:2,2 91:11 92:13 101:21 103:1 104:10 104:10,11,11 106:10,11 111:2 111:2 113:8 128:6 pages 65:18 92:21 103:22 104:2 110:23 paid 15:13,18 47:20 Paisner 3:15 Palans 2:7,11 3:6 5:19,20 64:17,18,20 64:25 65:2 73:21,23 91:7 91:8,10 101:1,3 Pam 2:9 11:19 76:25 Pamela 4:4,17 paragraph 66:4 91:12 92:13 parameters 111:16 paraphrase 114:18 pardon 33:19,21 100:9 paren 31:25 32:1 parenthetical 22:1 part 31:25 51:11 112:14 115:18 participants 12:3,6 64:13 participate 11:10 particular 24:14 particularly 42:8 53:16 69:6 83:17 94:18 parties 31:19 parts 53:2 pass 45:15 passage 110:8 110:10,17 Paul 3:7 5:11 6:1 6:1 12:23 pay 7:13 38:6 42:22 44:22 45:16 53:12,19 78:10 PAYGO 39:9,11 39:13,16,17 40:23 41:1 paying 37:25 64:15 peer 92:6 percent 16:3 21:2 22:14 23:7,12,13,14 23:20 24:3,4 39:8,9,10,11,13 39:13 40:23 46:22,23,24 46:24 47:11,13 47:16,18 49:1,1 51:5,5,16 60:21,23 61:6 61:7 62:4,5 66:11,11,13,14 70:21,21 71:1,1 71:2 74:10 85:10,15,17,19 86:9,12,18 92:4 93:20 103:6,6 104:12 104:13 105:15 105:16 106:17 106:18 108:25 108:25 111:13 111:19,19 112:18 112:19 125:4 127:9,12,22 127:24 128:1 percent/37 111:12 percentage 39:25 47:19 61:3 62:5 64:4,5 76:4 86:6,23 87:3 90:11 94:12 103:20 127:5 percentages 46:21 112:12 Peres 124:5 perform 96:23 period 8:18,19 12:1 25:14,19 28:25 34:16 35:9 41:7 50:11 58:8 63:17,23 64:9 67:2,21 68:20 68:21 69:1 70:1,5 72:14 74:18 77:20 79:20,21,23 79:25 80:5 83:1,14,17,20 84:4,6,10 85:16 86:17 87:16 89:10 96:4 98:4 102:1,23 108:12 118:20 periods 72:1 permit 36:2 127:25 128:24 permits 30:16 36:9 128:17 permitted 11:10 12:10 person 9:1 10:25 11:25 60:4 125:24 person's 12:9 personally 90:15 persons 12:10 13:19 76:20 perspective 70:4 90:22 102:16 PFM 14:22 phase 90:8 102:4 114:19 phase-in 102:20 phasing 98:3 101:25 102:7,9 phonetic 124:2 picking 128:4 pipe 51:22 52:3 52:8,13 place 27:12 63:16 133:10 placed 30:4 plain 33:10 plan 6:4,8,13 8:13 14:20 16:24 19:14,25 31:22 78:3,15 78:24 79:7,13 79:16,18 80:3 80:11,14 82:1,4 131:14 planning 36:12 73:2 plans 80:7 plant 28:19 30:17 32:22 33:8,13,16 34:2,3 35:18 35:20 36:8 38:2 78:8 128:7 129:23 130:4 plants 30:1,7 37:14 68:13 play 114:22 Plead 13:22 please 13:25 14:15,17,23 16:6 31:7,15 33:18 38:17 51:6 76:24 106:7 107:11 108:23 118:4 plugged 110:22 Plus 7:9 point 16:12 37:4 41:2 47:19 50:19 72:2 79:5 84:7,15 89:9 102:14 103:21 109:17 119:12 125:19 128:6,19 130:1 pointed 43:11 46:12 113:6 points 64:8,11 policies 78:23 policy 39:7,16 39:19 40:12 57:2 62:25 66:8 72:4 85:23 93:21 98:23 99:14 Poor's 71:18 81:4 portion 31:18 78:11 91:14 117:1 127:20 pose 99:25 102:17 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 71:24,25 84:18 87:22 95:13,14 positive 72:3 possibility 25:21 possible 24:10 65:20 87:15 97:12 possibly 35:23 63:18 postpone 88:13 postponed 129:6 postponing 129:8 potential 73:17 83:5,18 84:1 93:19 94:23 98:2 114:6,13 129:7 potentially 33:3 57:22 87:12 113:20 125:2 127:14 128:22 Prabha 2:13 4:18 11:20 57:16 90:20 101:7 practical 102:14 102:17,19 105:19 108:3,6 practice 85:11 85:12,18,19,20 86:12 102:20 104:16,25 119:16 121:5,12 122:13,19 126:6 practices 92:5 108:10 pragmatic 97:14 precise 105:20 precursor 124:2 predict 25:18 75:21 predictable 75:10 predominantly 87:19 premise 100:18 126:1 premium 16:2 16:13,18,22 17:9 18:5,6,15 18:23 19:6,10 19:12 22:18 23:20,21 25:11 47:14,16 60:16 64:15 premiums 17:5 17:11,13 18:1 prepare 121:1 128:7 prepared 9:8 11:6 110:9 present 4:3 5:10,13,15,17 5:20,22,23 5:25 11:19 13:19 64:21 69:16 71:21 72:1 76:20 95:2 98:11 present-day 69:11 presented 13:7 92:15 131:14 presume 49:24 127:2 prevent 49:6 previously 46:20 79:5 84:5 129:1 133:10 price 15:17,23 47:17 priced 23:2 prices 56:22 pricing 55:18 67:9 71:7,24 75:16,17 76:9 95:21 96:20 primarily 37:12 65:5 primary 52:20 96:2 principal 7:14 53:13 prior 84:6 120:5 prioritization 36:12 probablistic 75:22 probably 16:4 17:1,18 41:19 49:13 64:8 84:14 problem 13:15 102:17 problems 128:23 procedural 8:25 12:13 13:12,18 proceed 13:22 14:23 59:12 proceeding 5:7 proceedings 9:3 41:24 64:22,24 65:3 70:11 proceeds 17:20 18:22 19:3 60:18,20 process 36:12 59:16 115:3 produce 60:20 produces 53:25 56:10 product 29:9 production 115:6 professional 80:1 program 17:22 27:24 41:3 59:6 62:3 69:18 72:8 80:10 86:3,4 97:4 123:12,17 123:18 programs 34:20 43:3 72:13 78:1 123:24 project 28:24 29:12,16,22 32:8,17,20 33:2 34:5,14 35:12 68:24 81:14 82:25 88:11,20 124:2 125:23 126:2 126:6 128:6,12 128:13,18 129:6 projected 17:2 24:12 48:5 58:25 59:2,4 66:20 71:10 83:22 84:5 94:1,1 96:1 97:19 100:14 100:14 projecting 16:1 23:11 26:7 35:10 60:3 93:19 projection 26:18 58:22 92:16 projections 24:8,15 26:2 34:15 35:1 48:2 67:23 82:25 projects 28:3,8 28:11,15 29:4 29:20 32:15 32:25 33:5,9 34:1,11,13,24 35:8,20 36:4 36:13,24 43:23,25 47:2 66:25 67:20 67:20,22 68:19 69:7 71:7,7,13,25 72:19 81:24 87:15,18,19,23 87:25 88:1,7,9 88:13,21,23 89:5,24 93:1 95:21 96:23 97:4 100:22 100:22 115:2 118:9,13,19,24 119:12,19 120:13 121:2,13 121:16,19 122:15 123:7 124:14,20 125:1,7 126:17 127:3,14,18,21 129:18 proper 30:2 proposal 9:2 25:20 35:3 38:3 39:10,14 41:6,22 43:14 43:17 44:7 45:1,5 49:4 50:6 51:4 53:1 53:3,10,12,19 53:23 54:3,5 54:8,11,23 55:6,12,22 56:7,10 77:18 78:22 82:5 82:20,23 83:13,20 85:14 91:13 92:9 94:19 96:4,10 100:12 100:13,16,23 101:22 104:13 107:18,21 108:15 109:23 130:13,17 propose 56:8 56:16 65:21 72:18 73:12 proposed 6:11 7:21 8:15,23 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 19:21,22 22:8 31:19 45:7 53:15,24 56:24 57:11 63:2 76:7 78:14 80:3 82:19,22 83:12,22 87:8 92:3 96:7 117:8 122:14 proposes 41:9 proposing 41:5 48:20 68:19 72:6 99:22 propound 12:11 propounded 10:2 11:1 protection 64:14 proven 25:15 provide 8:1 10:1 16:8 54:24 78:3 82:20 87:1 96:17 111:5 119:19 120:23 provided 20:7 23:14 24:13 35:19 78:25 80:20 86:8 100:4 103:8 104:15 121:20 128:16 provides 54:3 75:18 77:23 78:15 86:20 91:18 92:6 104:17 providing 46:8 128:15 provision 8:4 55:7,13 proximity 106:22 107:1 prudent 44:23 50:24 76:14 public 11:11 130:20,23 131:1,6 Pugh 9:10 14:21 purpose 9:25 30:5 purposes 58:20 83:9 104:18 105:23 105:25 pursuant 123:7 push 40:6 62:20 69:1 pushed 129:19 129:21 pushing 69:6 put 49:15 52:7 52:22 80:7 130:1 putting 125:25 Q qualitatively 105:11 quarter 24:1 question 16:9 24:22 43:16 47:21 57:17,21 59:3 67:24 73:25 82:10 85:8 89:8,9 89:18 92:21 107:17 108:7 108:21 111:1 116:13 126:5 129:5 131:8 questioning 14:20 59:16 questions 10:1 11:1,25 12:3,4 12:8,11 14:3,10 14:12,22 16:6 27:8,12,13,23 38:12,14 53:4 59:12,17,18,22 73:22,24 74:4 76:17 77:6,13 84:23 85:1 89:15 90:1 91:7 101:2,4,13 101:14,19 107:6 107:9 108:22 109:21 111:23 112:8,24 116:11 117:13,25 118:1 119:1,4 124:9 125:12 126:20 127:1 128:4 130:8 quick 89:17 100:10 118:7 quite 27:6 quorum 6:2 12:17 quote 98:1,8 quoted 81:11 quoting 94:6 R R 3:1 4:1 9:10 raised 44:15 91:2 random 128:5 range 22:13 63:10 86:12,13 90:25 96:12 rate 3:10 4:4 5:2,5 6:9,15,17 6:24 7:10,11,13 7:19,20,21 8:11 8:11,13,15,17,18 8:21,23,23,25 9:2,8,12,15,18 9:22,23 10:2 10:4,9,20 11:1 11:5,21,23,24 12:4 14:10 15:7 15:9,13,13,17 18:16 20:2,2 21:1,6 22:7,24 23:12,12,13,14 23:20 24:3,7 25:6,20,23 26:17,18 36:20 38:15 39:1,10,14,20 39:25 41:6,24 42:1,4,6,9,17 42:21 43:6,7,8 43:12,13,17 44:14,20,21 44:22,25 45:1 45:9,12,13 46:7 47:13,23 47:24 48:5,17 48:18 49:4,22 49:25 50:1,5 50:6 52:23 53:1,10,12,15 53:16,18,21,23 53:24 54:2,7 54:9,11,23 55:6,11,21 56:7,11,24 57:11,16,22 59:22 60:11,15 60:23 62:1 63:22 64:4 65:13 66:9,10 66:19,20 67:4 67:9,14 69:6 72:5 73:13,24 74:9,16 76:6 76:21 77:18 79:21,22 81:22 82:5,19 82:22,23,24 82:25 83:8,12 83:13,14,20 83:22,23 84:4 84:6 85:16 86:17 89:6 91:7,13 92:17 92:22 93:20 93:23,24 94:1 94:5,19 96:4 96:8,9 97:6,7 97:11,15,19,25 98:2,23 99:19 99:19 100:2,4 101:12,22 102:6,7 107:18 107:21 108:8 108:12 109:23 112:24 113:23 116:11,19 117:1 117:2,3,8,12,24 123:19 124:16 125:14 129:22 130:9,12,16 ratemaking 58:20 102:14 102:19 105:19 105:20 ratepayers 8:10 11:9 56:9 91:25 94:16,17 101:23 rates 6:10,11,11 15:5,8 20:17 21:1 24:6,7,12 24:16,19,21,24 25:1,4,7,18,21 26:1,3,5,7,12 26:13,15,19,22 26:23 29:10 34:9 35:4 41:17 42:25 47:9,21 48:1,3 48:6,13,22,24 48:25 49:8,9 49:11,18 50:4 50:8,13,21,24 54:15 57:25 58:7,10,21,25 60:2,4,9 61:21 62:17 63:13 64:5 67:8 69:4,5,21 70:1 70:3,5,8,12,17 71:5,14,23 72:11 74:20 80:4 82:19 83:4,5,11,12 83:25 84:4,8 84:16,17 91:19 94:13,20 95:17 96:20 98:6,6 100:18 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 102:23 108:4 111:6 rating 45:24,25 56:22 61:17 62:10,21,22 63:5,6,25 64:10 71:16 78:25 79:1,3 80:18,19,21,23 81:2,4,9 98:25 99:2,3 99:4,8,15 ratings 79:2 ratio 40:2 41:1 45:21 46:19 50:14 51:13 58:19 62:7,9 63:7,18,23 66:12 85:8,10 ration 40:7 ratios 61:13 Ratzki 5:21 reaching 100:15 read 21:25 31:18 33:24 71:6,9 82:11 127:2 reading 65:23 ready 13:18 76:20 real 47:21 71:2,3 73:1 89:17 100:10 118:7 realized 26:4 reallocation 74:7 really 24:21 32:7,8 33:25 36:22 52:18 62:1,5 71:3 79:6 81:25 84:20 89:1,4 103:11 104:7,8 105:4,17 109:11 111:10 113:21 125:6 reason 40:24 51:19 62:24 70:24 reasonable 8:9 23:15 25:19 34:7 46:1 55:18 56:8,22 78:15,18 80:11 81:3,16,19 82:6 83:24 92:7 96:15 97:16 101:22 102:13 107:22 108:1,2 113:19 113:20,21 118:25 reasonablene... 82:15 96:12 107:18 reasonably 63:23 rebuttal 1:11 10:22,24,25 15:5 25:12 27:1 28:1,2 37:9 77:14,17 83:3 101:20 101:25 103:1 106:8 116:21 118:8 recall 17:16 20:9 71:18 81:12 94:3 99:11 107:19 120:8 receipt 7:10 received 8:11 18:22 19:3 26:12 receives 15:17 RECESS 59:14 117:16 recognize 24:25 25:10 recognized 52:10 recognizing 95:6 recommend 7:11 26:17 83:3 96:25 101:25 recommenda... 24:9 29:3,5 34:5 76:3 104:6 recommenda... 6:9 recommended 7:19 40:8 97:12 109:5 recommending 109:8 record 9:22 10:24 11:7 39:1 121:21,23 recover 48:8 reduce 37:15 41:5 42:21,25 43:2 46:19 56:16 58:15 59:1 65:21 74:22,23,25 99:23 114:25 115:3,6 117:2 129:22 reduced 47:4 59:4 63:5 116:4 126:3 reduces 58:16 99:24 reducing 43:6 57:4,6 reduction 41:11 67:15 73:10 refer 90:20 reference 21:16 21:18 111:4 referenced 21:20 90:14 103:10 109:18 111:22 120:9 referred 32:14 71:15 90:12 referring 21:4 29:22 32:15 32:20 33:1 104:8 reflect 24:6 51:12 66:8 73:14 104:19 108:16 reflected 21:10 49:10 51:4,13 58:11 61:1 reflects 45:15,17 regard 13:2 67:19 79:2 80:19 98:22 regarding 6:10 9:22 10:24 11:8 32:13 82:14 regards 90:22 regular 29:9 regulated 30:12 regulations 8:8 30:15,19,20 30:22 43:20 44:17 46:10 55:24 56:2 119:22 127:23 regulatory 36:8 36:24 56:19 72:15 73:3,4,6 88:10 118:16 125:5 regulatory-dri ... 87:20 rehabilitation 36:3 reject 73:12 relate 30:22 related 8:2 32:15 37:11 54:25 76:6 90:21 118:14 120:1 relating 8:4 55:7,13 121:2 relations 131:6 relationship 40:2 relative 25:6 35:10 42:13,15 49:21 50:11,17 50:20 57:6 59:2 70:6 76:7 relatively 26:7 26:8 48:7 50:14 70:2,9 relevant 74:18 reliability 73:20 reliable 106:1 relying 90:12 remainder 127:16 remains 12:10 93:3 remedy 63:12 remember 70:13 110:3 124:21 repair 28:19 35:18,20 36:3 repayment 91:22 repeat 55:10 repetitive 38:23 replace 30:10 32:1 129:10 replacement 32:2 36:4 128:19 replanning 36:18 report 8:15,19 8:23 20:12 21:17 25:14 90:14,14 99:10 103:4,10,12,14 103:15,18,22 103:23 104:1,6 109:19,25 110:9,17,18,20 110:25 reported 23:6 reporter 4:22 16:19 27:17 33:24 133:1,7 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 133:8 reports 80:19 99:4 represent 6:18 representation 6:16 representative 6:17 representativ ... 6:25 request 8:21 9:13,16,19 10:6 10:10,13,17 16:8 20:3 25:13 27:7 100:5 require 96:8 required 7:17 11:25 30:1 32:1 79:9 88:11 93:9 94:22 100:23 120:13 126:11 128:9 requirement 26:21 37:1 40:5 42:3 46:25 56:4 67:17 68:17 86:15 88:11 99:23 100:12 requirements 31:23 35:2 45:22 66:2 68:12 86:25 120:16 127:25 requires 6:13 reserve 26:6,11 reserves 45:18 reserves'26:9 residential 6:19 resiliency 108:7 Resolving 22:4 respect 67:7 70:15 responded 9:17 9:20 10:7,11,14 10:19 responding 27:6 response 16:8 18:19,20,25 21:3,15 24:13 24:22,25 67:24 100:5 responses 9:14 65:6 109:21 responsible 124:5 restate 112:11 result 23:18 36:2 44:19 46:13 64:5 86:5 94:11 115:18 resulting 129:7 resume 59:13 117:15 résumé 123:22 retrofits 31:3 34:17 return 15:16 71:2 71:3 revenue 19:23 26:21 35:2 39:25 41:6,10 42:1,2,21 43:9 45:7,10 46:13 46:16,18,25 47:4 54:1,8,19 55:1,3 56:4,16 57:1,4,5,9 58:16 62:13 66:1 67:17 73:15 74:19,25 75:2,9,16,18 75:24 76:2,16 86:1,16 87:6 89:10 92:14,18 94:22 96:3 97:15,21,24 99:18,21,23 99:24 100:12 102:6 108:11 revenues 53:25 55:25 65:21 73:10 74:23 89:7 reverse 41:16 review 6:9 13:1 17:5,17 27:4 30:18 36:22 37:2 44:6 45:9 62:10 65:3,12 81:20 82:1,2,3,23 99:4 119:21 122:5 reviewed 30:24 36:5,11,14 65:8,11 70:10 78:22 80:18 106:11 122:8 122:10 reviewing 60:5 81:2 revised 25:13 66:8 Revolving 22:6 Rich 4:12 27:17 27:18 Richard 9:9 Ridge 4:5 right 15:18 16:24 18:17 19:9 20:13 21:5 30:3 37:8 47:12 49:24 51:10 53:9 60:22 70:18 86:25 87:2 92:11,24 93:4 93:21 94:5 99:13 117:17 119:13 129:14 ripe 36:18 risk 25:25 36:24 64:15 69:6 73:1,18 84:11,14,15,22 88:14,17 126:10 risks 68:25 73:5,16 88:5 River 33:10 River/Des 124:5 road 4:5 83:19 131:2 role 5:7,8 38:24 109:15 114:9 114:23 room 50:18 118:16 rough 62:4 roughly 24:1 61:3 93:15 routine 92:24 rule 31:25 rules 8:25 11:24 run 88:14,17 116:20,21 117:4 running 129:2 Russell 3:4 5:18 S S 3:1 4:1 Saint 1:23,25 3:18,19 sake 116:3 sales 17:20 sat 19:8 satisfy 31:5 69:12 saw 122:14 saying 13:8 49:6 103:11 104:5,7,21 105:6 108:2 109:9 110:16 129:17,20 says 19:1 22:1 105:10 109:23 127:12 128:1 scenario 103:16 scenarios 103:13 schedule 28:22 29:23 32:18 34:12,24 58:6 88:7,9 120:15 126:7 scheduled 67:22 96:24 schedules 11:6 35:12 82:2 scheduling 67:5 Schoedel 2:6 3:5 5:8,9,11,14 5:16,18,21,21 5:24 6:1,3 12:22,25 59:23,24 60:1 61:8 64:16 science 105:20 scope 89:1 118:23 121:7,13 seal 133:13 Sean 131:14 second 9:16 10:13 13:5 19:1 21:23 31:1,9 32:6,12 35:17 41:22 42:5 50:19 97:10 103:21 120:9 131:25 132:1 seconded 13:6 secretary/tre ... 14:21 77:8 section 103:4 103:24 104:1,6 securities 64:14 70:15 see 27:10 44:6 69:5 81:11 87:3 90:25 110:22 117:4 131:12,19 seeing 94:11 seek 50:24 91:13 seeking 63:21 77:18 seen 48:1 68:4 106:12 109:2 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 111:4 select 6:14 selected 119:20 selling 17:24 18:2 47:14 senior 7:2 22:9 80:15 92:10 sense 64:4 sentence 19:1 107:20 separate 106:22 sequenced 88:23 sequencing 88:21 series 11:10 20:14 87:6 97:15 99:22 serve 5:6 service 19:22 30:3,4 38:3 39:18,21 40:1 40:4,7,12,17 40:25 41:15 41:23 45:21 45:23 46:19 49:12,17 50:10 50:14 56:12,15 58:1,19 59:1,3 61:13,24,25 62:7,8,11,17,18 63:3,7,14,18 63:23 66:12 66:14 73:19 75:5,17,20,22 76:8,10,12 79:6,9,19 80:9,14,24 81:7,10,15 86:1 86:2,15,19 87:1 92:1,9 94:20,21,23 94:25 98:4,21 99:9,12 100:14 100:15 102:1,4 102:16,24 110:11,12 129:25 130:2 services 4:24 6:16 7:2 8:2 54:25 73:11 sessions 11:11 set 27:23 31:24 50:13 58:22 62:17 133:12 sets 40:8 setting 9:22 58:7 108:4 seven 28:23 sewage/sludge 31:21,23 sewer 1:23 3:17 3:18 5:3,6 8:1 11:14 51:20 54:24 95:9 106:22 107:2 114:2,3 shift 80:8 shifts 41:25 56:25 shock 98:2 129:22 short 63:17,23 short-term 26:11 shorter 25:14 shortfall 19:21 Shorthand 133:7 show 22:15 113:9 showed 19:5 24:14 43:22 43:22 112:17 showing 16:13 79:16,18 shown 83:8 106:24 shows 17:13 58:22 61:4 79:24 100:13 shrink 58:18,19 63:3 side 88:22 significant 36:17 40:10 44:9 69:9 76:15 97:6 110:8 111:10 significantly 42:13,18,24 50:9 109:25 signify 13:7 similar 20:5 92:5 106:21 111:14 similarly 67:15 simple 65:20 simply 21:9 28:12 34:6 36:15 50:9 52:6 71:11 72:10 single 64:10 site 115:6 sitting 27:19 situation 58:24 six 111:17 112:15 six-year 42:10 size 62:13 86:3 106:23 121:14 123:13 Skimi 124:1 skip 16:5 slightly 80:21 87:7 89:9 96:3,7,8 sludge 127:21 sluice 128:7,14 smaller 45:7 smooth 95:25 97:18 Snoke 2:4 9:10 14:21 15:1 27:11 77:8 socioeconomic 6:22 soft 46:11 sold 16:18,21 17:9,21 19:6 21:7 23:10 25:11 43:3 48:10 60:16 64:2 solids 28:18 29:13,16,21 115:4 somebody 102:18 soon 90:21 sorry 20:24 55:10 93:15 106:6 127:7 128:11 sort 74:7 112:17 sought 54:18 sound 33:11 79:13 sounds 18:3 speak 33:20 speaking 61:3 78:20 special 6:5 specific 28:11 28:23 29:4 29:20 32:25 34:24,24 35:12 37:4 58:5 90:23 96:16 103:4,19 104:5,6 109:7 115:13 120:18 129:23 specifically 30:18,24 34:14 36:25 37:22 81:24 82:24 105:9 109:7 specificity 106:25 specifics 98:15 spend 28:14 29:6 34:6 40:3 42:12 66:24 69:11 71:13 73:19 123:12,24 spending 33:4 35:25 42:5 43:2 44:24 47:1 67:1 68:23 93:3,9 123:24 spike 83:5 84:1 87:12 89:10 94:14 97:21 split 110:2 113:7 113:10 splits 113:20 spoke 87:5 spoken 29:17 98:20 spots 46:11 spread 23:3 42:10,20 68:20 72:10 78:5,12 113:20 114:7 126:7 129:21 spreading 36:18 43:1 87:14 125:21 spreadsheets 127:8 Square 3:15 SRF 22:1,10 ss 133:3 SSI 31:25 St 1:1 3:12,16 4:8 4:25 5:3,6 6:5 6:5 7:1,2,3,5,8 11:13 106:21 113:9,12,13 124:1 133:3 stability 62:9,13 79:16,24 stabilize 73:15 stabilizes 76:16 stabilizing 75:16 stable 26:7,8 57:4 75:9,18 staff 53:15 97:3 staff's 54:19 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 55:3 standalone 85:23 standard 71:17 81:4 104:19,22 105:2,3,4 standards 105:8,9 standing 40:14 72:12 standpoint 57:11 125:20 129:4 Stannard 9:11 104:9 start 5:7 15:4 21:22 39:6 65:16 76:25 starting 37:10 83:3 101:21 103:2 126:13 startup 126:16 126:18 state 1:2 8:7 22:4,6 37:11 55:23 56:1,19 72:14 77:22 92:3 93:11 101:21 128:11 133:2 stated 17:24,25 18:18 25:9,16 60:2 61:14 75:8 79:5 96:2 99:14 100:1 110:21 113:24 125:6 statement 7:21 19:9 20:14 22:16 37:17 58:3 70:16 98:9 109:22 110:3,4 states 30:12 31:8 98:1 106:16 stating 21:9 stations 51:24 statutory 7:24 54:13 stay 36:7 stayed 26:5 48:7 stays 42:18 steady 61:21 Stein 2:6,15,20 3:6 5:22,23 59:24 61:9,11 112:25 113:1,3 116:9,10 126:22,23,25 130:6,7,19,20 131:24 step 59:16 Steven 5:19 steward 116:1 stimulate 105:9 stipulation 105:5 stormwater 6:11 7:12 story 117:9 stranded 115:18 116:5,7 Street 1:24 3:12 3:19 4:8,24 strength 37:7 37:24 38:4 49:23 50:2 62:23 72:9 102:23 114:16 114:24 115:19 strengthen 63:22 strengths 37:22 stretched 35:9 strikes 98:16 strong 45:23 50:14 56:21 62:12 71:20 71:24 72:12 structure 44:20 56:25 57:11 74:16 75:17 117:2,3 structures 128:14 studies 51:8,9,11 51:14 52:11 76:8 study 38:3 56:13 76:13 79:19,25 83:1 83:14 89:10 94:25 105:18 111:10,11,14,15 112:14,14,17 Stump 2:5,11,15 2:19 3:10 11:22 12:14,15,16,19 13:11 38:14,16 38:19 57:15 59:9,11 76:20 76:23,25 89:15,17,20 91:5,6 101:6,7 112:8,10,22,23 117:18,19 124:9 124:10,12 125:11,13 subject 102:5 113:16 115:8 submit 9:2 11:6 submitted 9:7 9:12,15,18 10:6 10:9,13,16,22 14:4 122:10 124:15 submitting 10:25 Subpart 31:25 subparts 66:4 subsequent 30:16 43:8 83:18 subsidize 102:6 subsidized 22:7 102:9 substantial 93:3,17 substantially 100:16 sufficient 46:14 82:25 86:17 118:20 suggest 98:24 117:14 suggested 44:5 97:24 Suite 3:16 4:5 sum 47:12 summarize 35:11 65:18 124:17 summarized 119:11 supplied 51:7 support 35:3 35:24 51:9,9 77:18 91:12 supported 76:12 supports 38:3 51:6,12 76:8,9 surcharge 37:7 38:4 98:2,6 102:3,6,7,23 surcharges 114:16 sure 38:25 43:21 55:11 74:9 109:18 117:11 120:3 125:1 131:15,17 surrebuttal 11:6 11:8 90:5,8 91:2 96:17 116:21 Susan 3:18 9:9 11:15 suspended 115:4 Swingley 4:5 switch 27:14 51:1 114:15 system 31:4 34:17 51:20 51:23 52:1,5,7 52:16,18,22 73:2 75:13 91:25 95:9 106:23 109:6 109:24 110:13 113:25 114:8 116:8 123:25 systems 8:1 54:24 107:2 114:3,5 129:2 129:24 T T 2:1 table 16:9,9 19:13,15 27:19 32:21 103:17 103:25 106:11 106:13,16,24 107:5 113:8 tables 103:12,15 take 5:8 45:11 59:13 78:2 88:20 96:21 97:1 102:11 117:14 128:22 taken 59:14 63:16 76:15 78:23 88:6 117:16 takes 38:22 talk 27:14 29:11 39:7 54:10 85:7 113:4 114:15 121:4 130:23 talked 22:20 52:23 55:19 62:16 74:3,5 111:3 123:10 talking 15:4 29:13 87:24 87:25 125:20 target 46:1 50:17 62:4,18 80:10 85:20 86:16 127:23 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES targeted 39:20 45:25 85:23 targets 75:20 tax 6:11 7:13 23:1 team 14:18 130:14 technical 1:11 5:4 9:21,25 10:23 11:4,7 13:13 117:6 telephone 3:7 tell 20:23 98:14 127:5 temporarily 102:11 tends 104:14 108:25 term 15:6,10 70:11 83:17 terms 102:17 106:21 107:4 110:12,15 116:5 territory 75:5 testified 34:23 69:21 testifies 90:4 testify 122:18 testifying 90:21 testimony 1:11 9:8,23 10:22 10:24,25 11:6 11:8 13:19 14:4 14:6 15:5 25:12 28:1,2,6 28:23 29:15 32:14 33:1 35:19 37:10 38:5 39:6 51:2 53:2,6 53:22 54:19 61:2 64:22 65:3,6 67:9 69:10 76:21 77:2,14,17 79:11 82:10 83:3 84:8 85:7,17 86:8,9 87:9 90:7,21 91:12 92:19 93:19 94:4 95:2,5 96:3,17 97:13 98:1,12 98:14,19 99:17 100:11 101:8 101:20,25 103:1 104:9,10 106:8 107:16 108:24 111:2 111:23 113:9,23 116:22 117:6 117:20 118:8 119:10,18,24 120:8,24,25 124:15,20,25 tests 113:16 thank 5:9 6:3 12:25 13:11,16 14:5,9,23,24 19:24 21:22 27:11,20 32:11 37:6 38:11,13 39:5 41:4 51:1 52:23 53:8 59:9,10,11,21 61:8 64:16,18 73:21,23 76:18 76:19 77:1,5 82:18 84:23 84:25 89:13 89:14 90:4 91:6,8 101:1,3 101:5 107:7,8 108:19 112:6,7 112:21,23 113:1 116:9,10 117:14 119:1,3 124:7,8 124:17 125:11 125:13 126:20 126:21,23 130:6,7,8,11,14 131:20 132:4 thereunder 87:1 thing 57:25 88:15 103:21 115:7 things 39:1 43:12 57:24 62:8 86:4 88:6 102:10 110:10 113:4 115:15 128:5 think 12:19 16:6 18:9 21:3 25:22,24 26:20 39:3 40:6,10,19 41:20 43:5,6,7 44:2,8,21 45:4 46:7 48:15,20 48:21 49:24 50:8 51:2 53:24 54:15 57:2,10,21 60:10,17,23 61:14 63:4 65:10 70:20 71:15,17 73:1,1 76:13,14 84:2 84:11,14 87:9 88:5 90:4 97:7 112:22 114:16 124:17 125:19 126:9 131:22 third 9:19 32:12 Thomas 9:11 thought 25:4 thoughts 90:6 threat 62:21 threatens 49:23 50:2 three 7:16 8:3 12:1,11 20:7 23:24,25 24:1 28:3,17,19 29:11 39:20 41:14,24 66:3 66:5,7,10,23 67:3,19 72:5 84:16 99:8 114:2 127:19 threshold 81:5 Tim 9:10 14:21 77:8 time 7:24,24 8:8,8,18 12:2 12:5,9,10 13:15 14:11 27:5 34:7 34:25 35:7 44:10 48:11 54:13,13 63:24 72:14 73:24 74:18 79:6,17,21,23 80:8 84:7,10 84:15,21 86:19 87:17 96:5 98:4 101:13 110:8,10,17 117:15 126:7 129:16,21 131:12,19 133:9 timed 44:18 timeframe 32:4 timeline 34:15 44:3,5 times 39:22 40:2,5,7,9 41:23,25 49:13 50:13 58:7,9,21,22 62:11 66:12,15 79:20 80:15 80:16 81:3,5 86:16 87:12 92:10 95:16 99:9,13 100:15 111:3 timing 87:25 89:4,24 119:19 119:20 120:12 120:15 121:2 127:14 tires 129:13 title 31:7,14 titled 106:13 today 46:12 68:5 96:16 98:11 99:3 124:22 today's 93:16 Toenjes 2:7 3:3 5:1,5,24,25 6:3 11:16,19 12:15,18 13:1,6 13:10,17,22,24 14:5,9,15,17 14:23 27:16 27:20 33:17 33:20 38:13 38:17 59:11,15 59:21,24 61:9 64:17,25 73:23 74:2 76:17,24 77:1 77:5 84:25 89:14 91:6 101:3,8,12 107:8,11 112:7 112:21,23 116:10 117:12,17 117:20,24 118:4 119:3 124:8 125:13 126:21 130:7 130:22 131:1,6 131:9,22,25 132:2,4 Tom 5:21 tons 31:21 top 93:11 topic 37:7 topics 98:19 total 11:25 19:18 62:18 80:9,16 81:1 92:11,23 totals 19:12 transaction 22:8 transactions 20:5 transcript 65:3 65:8,11 70:10 71:6 transcripts 71:9 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES transfer 127:21 treasury 70:3,15 70:20,20 71:1 71:3 treat 52:21 treatment 30:1 30:7,17 32:16 32:22 33:8,13 34:2,3 35:20 36:8 37:14 38:2,8 68:13 78:8 128:7,15 128:16 trend 84:12 trickling 128:19 128:22 129:3 trouble 86:7 true 23:5 32:10 37:19 70:14,19 72:22 84:2 104:17 Trustees 6:13 7:12,20 8:16 8:17,21 truth 14:6,7,7 77:2,3,3 101:9 101:9,10 117:21 117:21,22 try 117:5 trying 28:7,11 53:5 88:8 108:22 109:17 117:5 124:17 TSS 37:12 38:4 38:9 Tuesday 130:24 131:16 tune-up 129:12 turn 31:15 106:10 turned 24:16 111:19 turns 95:1 twice 33:14 two 7:15,25 19:13,15 20:9 21:13 25:15 28:18 32:23 32:25 35:9 40:11 42:8,14 42:15 43:24 47:1,4 62:8 66:18,19,22 67:3,4 80:15 83:17 86:22 87:12 113:4 119:12 126:4 127:18 two-year 98:4 102:1 type 71:3 94:4 types 29:12 36:13,23 111:16 111:17 typical 114:24 typically 52:10 U U.S 31:12 ultimate 125:22 ultimately 62:6 63:22 unanticipated 82:21 uncertainty 24:8,20 25:3 25:17 74:6 uncollectible 45:15 underlying 19:25 122:5,16 understand 18:15 22:22 29:25 30:3,6 30:9,11 32:23 33:8 35:11 38:2 65:17 67:9 83:11 86:10,11 93:18 117:5 130:13,16 understanding 17:6 19:4 22:19 29:18 30:14,25 33:15 34:21 36:10 47:10 67:21 86:7 89:4 119:22 122:24 understated 18:9 41:20 67:11 understates 17:18 undertaking 77:25 undue 108:10 unfortunately 129:24 United 30:12 31:8 units 31:23 74:14 75:25 unjustifiably 26:20 unnecessarily 26:21 41:25 42:2 48:13 unnecessary 29:9 34:8 Unverferth 4:12 9:9 27:17,18 up 20:16 26:13 33:23 36:19 41:24 50:4,9 58:8 62:20 63:1 82:8 90:10 125:25 130:21 131:15 131:17 upgrades 123:25 usage 75:13 use 15:6 23:14 23:15 74:17 104:8,22 105:8 108:4 111:7 116:17 useful 91:23 user 94:16 users 6:16,18 78:6,12 91:19 116:8 uses 6:19 utilities 51:15 63:16 75:5 77:25 82:14 85:12,19 99:13 106:14 107:5 109:2,2,10,12 111:5,6 utility 39:24 40:14 48:14 52:2,19 54:17 54:21 57:2 58:17 62:10,12 62:15,23 63:12,21 64:3 72:9,13 73:7 74:14 111:20 utility's 63:8 79:16 85:25 utilizing 31:21 V vacuum 85:24 value 15:14 16:2 17:8,24 18:21 19:2 21:8 69:16 varies 74:18 various 35:20 39:2 56:13 130:13 vary 75:12 Veatch 4:4 11:20 51:12 52:11 90:13 Veatch's 51:8 versed 81:22 version 18:4 versus 42:1 114:12 127:6 viability 49:23 50:23 view 102:14 violation 8:4 55:7,12 violations 36:2 visit 130:4 volatility 94:7 94:10 95:25 95:25 108:8 volume 52:6 56:25 57:6,13 74:5,12,13,15 74:17,20,23 75:3,4,12,25 76:11 90:19 103:6 104:13 104:15 105:16 106:18 108:25 109:1,16 111:20 111:24 112:19 114:12,14 116:25 117:1,2 voter 80:2 voters 6:4 7:5 VOTING 13:9 132:3 W W 3:14 wait 79:12 walk 77:16 walked 56:2 72:3 want 15:4 16:12 19:24 20:7 29:11 32:11 38:22,25 47:9 53:7 57:4 61:23 65:20 85:7 88:13,17 90:9 103:21 105:7 123:23 126:2 wanted 61:16 wasn't 21:7 28:11 34:5 104:3 waste 37:15 wastewater 6:10 7:12 19:22 20:12 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 21:14 22:21 26:22 28:18 28:19 29:10,13 29:16,21 30:1 32:16 34:9 35:4,18,20 36:8,20 37:13 38:2,8 42:25 44:4 48:13 49:8 51:15,20 51:23 52:5,6 52:16,17,19,21 56:14 66:1 68:13 72:11,16 73:13 74:16 76:10 80:4 82:14 92:6 99:12 114:25 water 51:20,20 51:21,24,25 52:4 73:10,11 74:13,14,18,25 75:5 99:12 water/wastew... 22:25 watershed 124:5,6 way 15:13 34:8 41:20 44:19 56:20 71:12 75:17 76:10 84:15 88:23 90:24 97:9 100:6 117:8 122:21 ways 80:7,22 we'll 29:13 59:12 91:1 131:4,14,17 we're 27:13 39:1 41:4 71:4 84:9 87:13 112:22 125:19,20 we've 18:13 20:1 29:17 47:25 55:19 56:2 98:20 108:22 111:3 weaker 63:17 weather 63:16 88:15 website 131:11 WEF 104:16 weighted 52:14 52:15 went 63:25 110:20 WHEREOF 133:12 William 9:11 wish 11:9 witness 2:3,9,13 2:17 13:25 133:12 witness's 51:9 witnesses 4:16 95:5 101:6 117:18 Women 7:5 wondering 27:7 Wood 124:5 word 122:22,23 words 104:22 work 118:23 121:7,13 123:2 123:19 124:3 130:12,15 work-related 39:24 worked 124:1 126:18 working 123:1 would've 24:4 wouldn't 69:8 70:14 written 14:4 119:24 120:25 wrong 24:16 67:8,14 X X 2:1,1 Y yard 125:25 yeah 15:10 19:4 22:19,20 28:7 34:25 41:11 47:13 61:5 67:11,22 70:24 104:5 year 28:9 37:1 41:12 42:7,9 42:16,16 48:3 53:17 65:24 66:24 68:20 83:17 91:15 94:12,19,21,24 114:21 126:10 years 24:13,14 24:17 25:15 25:20 26:2,6 28:4,10 32:3 33:14 35:10 42:3,8,14,15 42:23 43:1,24 47:2,4,5,22 47:23 48:4 60:6 69:13,22 70:4,7 72:11 72:25 84:16 93:7,14 94:2 96:9 97:6 120:19 123:1 123:10,22 125:17 129:20 yield 15:9,16 18:14,16 20:2 21:6 22:22,23 22:25 23:6 yields 18:12 20:6,18,20 22:17 young 2:17 4:7 4:18 11:20 81:21 89:23 117:19,20,23 117:25 118:2 119:4 124:9 127:1 130:8,8 130:15 Z Ziegler 3:7 6:1 12:23,24 0 084-004742 4:23 1 1 18:20,25 61:6 61:6,6,6,6 71:1 86:15 91:12 104:11 109:23 1.1 118:13 1.25 49:14 58:3 63:10 1.3 63:19 1.4 63:18 1.45 62:17 1.6 39:22 40:2 40:5,7,9 41:23 49:13 50:13 58:2,21,22 61:16,24 62:11 62:11,19 63:1,4 63:18 66:12 81:5 92:23 99:9 100:15 1.7 58:7,23 1.8 41:24 58:23 61:20,24 62:20 63:1 66:15 79:20 80:9,16 81:3 86:16 92:10 99:14 1.9 58:8 81:11 99:13 10 24:14,17 26:2 26:5 64:8 69:22 70:4 82:9,11 129:20 131:5 10-minute 59:13 10-year-old 129:10 10:25 59:13 101 2:14 107 2:14 11 9:15 10:9,12 37:10 92:21 101:21 108:21 11:55 117:15,17 112 2:15 113 2:15 116 2:16 118 2:18 119 2:19 12 48:3 82:9,9 82:11 92:21 12170 32:21 12255 32:17 124 2:19 125 2:20 12548 128:12 12565 29:22 12566 128:18 126 2:20 13 9:14 47:16 79:11 14 8:20 11:11 31:24 103:2 1401 4:23 14th 131:2 15 2:4 16 8:24 28:2,6 16305 4:5 17 28:2,6 29:15 17A 20:14 18 10:8 19 127:21 1954 6:6 1970s 30:8 2 2 8:14 9:20 16:9 21:15 22:13 28:22 29:23 32:17 39:6 41:5 58:6 65:18 71:2 104:11 106:16 2.4 128:8 2.5 92:10 TECHNICAL CONFERENCE 5/9/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 20 9:17 11:8 24:13 64:8 69:13 80:12 92:21 93:7,14 123:1,10,22 2000 6:7 2005 110:5,8,18 110:25 111:15 2008 69:25 2010 31:24 2016 32:1 2016A 22:12 2017 23:10,22 32:5 47:20 78:25 80:19 2017A 21:23 2018 21:17 2019 1:17 5:2 8:12,14,20,24 9:1,4,7,12,14,15 9:17,18,20,21 10:5,8,9,11,12 10:15,16,19 11:8,12 110:5,9 130:19 2023 124:20 2024 37:1 42:17 43:24 79:20 83:15 120:6 2025 84:1 87:13 89:11 2026 32:10 43:23 44:1 68:13 120:10 2030 42:18 2039 93:7 20th 130:19 21 32:3 87:6 91:15 92:22 211 3:16 22 10:11,15 21:18 80:12 98:6 104:11 131:3 23 10:20 28:9 34:20 42:20 53:17 66:24 85:8 104:11 127:12 23.2 128:19 230 4:5 2350 1:24 3:19 24 28:9 34:20 36:17 41:11 42:20 53:17 65:22 66:24 67:23 68:20 69:9 77:20 87:7 91:15 92:15,23 97:20 98:7 99:18,20 100:3 124:21 131:5 25 9:4,18 34:20 39:8 42:20 62:4 66:11 85:9,19 86:9 86:11 92:18 93:2,18 94:2 96:1 97:21 111:19 112:18 26 10:16 32:3 34:21 42:20 66:25 67:23 106:10,11 113:8 27 2:4 104:16 131:5 28 93:2,4,10 29 37:9 3 3 16:3,10 19:15 19:16 31:15 39:6 41:4 60:21 65:18 70:21,21 71:1 127:24 30 39:13 46:24 85:9,19 92:24 30-year 70:20 30,000 129:11 314-768-6200 3:20 314.621.2939 3:13 340 118:15 360 32:4 3600 3:16 37 85:15,17 86:9,17 92:4 105:16 37A 31:6 38 2:5 39 125:17 4 4 8:12 9:7 24:4 47:18 60:21 60:22 128:6 131:4 4.3 103:24 40 39:11 46:22 51:4 66:13 103:6 104:12 106:17 108:25 116:24 40/60 113:7 400 129:13 40CFR 31:25 45 41:10 43:18 45-day 8:19 5 5 21:2 22:13 23:7,12,13,14 23:20 24:2 47:11,13 49:1,1 106:11,13 107:5 50 51:16 64:11 86:11 116:25 116:25 50/50 51:4,6 500 129:12 52 92:17 57 2:5 92:16 6 6 51:2 77:17 80:12 83:3 91:11 92:13 93:15 101:21 60 2:6 39:10 46:23 51:5 66:13 103:6 104:12 106:18 116:25 60/40 104:8 110:2,24 113:10 600 69:11 93:15 61 2:6 62 31:25 63017 4:5 63101 4:8,25 63101-1699 3:12 63102-2750 3:16 63103 1:25 3:19 64 2:7 66 105:15 111:12 68,000 31:21 69 41:9 7 7 6:7 10:19 83:2 83:2 92:13 103:1 104:10,11 111:2 7.2 93:20 70 39:12 40:23 42:9,14,19 46:24 64:11 70/30 39:15 40:8,20 711 4:24 714 3:12 73 106:3 74 2:7 20:4 75 16:10 18:19 18:25 19:16 21:16 39:8 62:4 66:11 111:19 112:18 75/25 39:20 40:6,18 112:20 77 2:10 127:8 8 8 9:1,12,21 10:5 12:21 64:22 65:4 70:11 95:3 104:10,11 111:2 80 113:15 85 2:10 873 93:2 89 2:11 9 9 1:17 5:2 6:6 12:20,21 64:23 65:4 70:11 95:3 107:17 9:00 130:19 91 2:11 915 4:8 92 125:4 95 19:12,18 99 128:1