Loading...
Exhibit MSD 68 - Transcript of Technical Conference for District Testimony - April 8, 2019 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 1 1 METROPOLITAN ST. LOUIS SEWER DISTRICT 2 TECHNICAL CONFERENCE FOR DISTRICT TESTIMONY 3 & RATE SETTING DOCUMENTS 4 5 6 7 8 MEETING 9 APRIL 8, 2019 10 11 12 13 14 15 16 17 REPORTED BY: 18 19 REBECCA L. TUGGLE, CCR, RPR, CSR 20 ALARIS LITIGATION SERVICES 21 711 N. 11TH STREET 22 ST. LOUIS, MO 63101 23 (314) 644-2191 24 25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 2 1 I N D E X 2 3 Opening Statement by Ms. Myers 12 4 5 DISTRICT'S EVIDENCE: 6 7 BRIAN L. HOELSCHER, P.E.: Questions by Mr. Neuschafer 15 8 Questions by Ms. Stump 28 Questions by Commissioner Palans 36 9 Questions by Commissioner Stein 76 Questions by Commissioner Goss 81 10 Questions by Commissioner Ratzki 89 Questions by Chairman Toenjes 89 11 SUSAN MYERS, GENERAL COUNSEL: 12 Questions by Ms. Jones 92 Questions by Ms. Stump 94 13 Questions by Commissioner Palans 101 Questions by Commissioner Brockmann 105 14 MARION GEE: 15 Questions by Mr. Neuschafer 108 Questions by Ms. Stump 126 16 Questions by Commissioner Goss 144 Questions by Commissioner Stein 147 17 Questions by Commissioner Palans 151 Questions by Commissioner Goss 165 18 Questions by Chairman Toenjes 166 19 TIM SNOKE: 20 Questions by Mr. Neuschafer 168 Questions by Ms. Stump 177 21 Questions by Commissioner Goss 189 Questions by Commissioner Palans 189 22 23 24 25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 3 1 I N D E X C O N T I N U E D 2 BETHANY PUGH: 3 Questions by Mr. Neuschafer 200 Questions by Ms. Stump 204 4 Questions by Commissioner Palans 210 Questions by Commissioner Ratzki 229 5 Questions by Chairman Toenjes 233 6 WILLIAM STANNARD: 7 Questions by Mr. Neuschafer 235 Questions by Ms. Stump 247 8 Questions by Commissioner Stein 251 Questions by Commissioner Palans 256 9 THOMAS A. BECKLEY: 10 Questions by Mr. Neuschafer 269 Questions by Ms. Stump 288 11 Questions by Commissioner Stein 299 Questions by Commissioner Palans 301 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 4 1 APPEARANCES: 2 Lisa Stump, Attorney At Law 3 Brian J. Malone, Attorney At Law Lashly & Baer, P.C. 4 714 Locust Street St. Louis, MO 63101 5 (314) 621-2939 lstump@lashlybaer.com 6 bmalone@lashlybaer.com FOR: The Rate Commission. 7 Brandon Neuschafer, Attorney At Law 8 Kamilah Jones, Attorney At Law Bryan Cave LLP 9 One Metropolitan Square 211 North Broadway, Suite 3600 10 St. Louis, MO 63102 (314) 259-2050 11 bwneuschafer@bclplaw.com kami.jones@bclplaw.com 12 FOR: Missouri Industrial Energy Consumers. 13 Susan M. Myers, General Counsel 14 Metropolitan St. Louis Sewer District 2350 Market Street 15 St. Louis, MO 63103 (314) 768-6209 16 smyers@stlmsd.com FOR: Metropolitan St. Louis 17 Sewer District 18 19 20 21 22 23 24 25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 5 1 APPEARANCES CONTINUED 2 3 COMMISSIONERS PRESENT: Mickey Croyle 4 Tom Ratzki (via telephone) John L. Stein (Jack) 5 Paul Brockmann Russell Hawes 6 Leonard Toenjes (Chair) Mark Schoedel 7 Steve Mahfood Chan Mahanta 8 Brad Goss Gerald Beckmann 9 Lloyd Palans Brandy Bowdry (via telephone) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 6 1 PROCEEDINGS BEGAN AT 9:00 A.M. 2 CHAIRMAN TOENJES: My name is Leonard 3 Toenjes, and I'm chairman of the Rate 4 Commission, the Metropolitan St. Louis Sewer 5 District, and will serve as the chair of this 6 proceeding. 7 The charter plan in the district was 8 approved by the voters of St. Louis and St. 9 Louis County at a special election on 10 February 9, 1954, and amended at a general 11 election on November 7, 2000. The amendment to 12 the charter plan established the Rate 13 Commission to review and make recommendations 14 to the District regarding changes in wastewater 15 rates, stormwater rates and tax rates proposed 16 by the District. 17 The charter plan requires the Board of 18 Trustees of the District to select 19 organizations to name delegates to the Rate 20 Commission to ensure a fair representation of 21 all users of the District services. The Rate 22 Commission representative organizations are to 23 represent commercial industrial users, 24 residential users, and other organizations 25 interested in the operation of the District, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 7 1 including organizations focusing on 2 environmental issues, labor issues, 3 socioeconomic issues, community neighborhood 4 organizations and other nonprofit 5 organizations. 6 The Rate Commission currently consists of 7 representatives of Associated General 8 Contractors of Missouri; St. Louis County 9 Municipal League; Lutheran Senior Services; St. 10 Louis Council of Construction Consumers; 11 Greater St. Louis Labor Council; Missouri 12 Botanical Garden; Mound City Bar Association; 13 League of Women Voters of Metro St. Louis; Home 14 Builders Association; North County, 15 Incorporated; Missouri Coalition for the 16 Environment; the City of Ladue; Engineers Club 17 of St. Louis; Missouri Industrial Energy 18 Consumers; and Education Plus. 19 Upon receipt of a rate change notice from 20 the District, the Rate Commission is to 21 recommend to the Board of Trustees changes in a 22 wastewater, stormwater, or tax rate necessary 23 to pay interest and principal falling due on 24 bonds issued to finance assets of the District, 25 the costs of operation and maintenance, and MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 8 1 such amounts as may be required to cover 2 emergencies and anticipated delinquencies. 3 Further, any change in a rate recommended 4 to the Board of Trustees by the Rate Commission 5 is to be accompanied by a statement that the 6 proposed rate change is consistent with 7 constitutional, statutory, or common law as 8 amended from time to time; enhances the 9 District's ability to provide adequate sewer 10 and drainage systems in facilities or related 11 services; is consistent with and not in 12 violation of any covenant or provision relating 13 to any outstanding bonds or indebtedness of the 14 District; does not impair the ability of the 15 District to comply with applicable federal or 16 state laws or regulations as amended from time 17 to time; and imposes a fair and reasonable 18 burden on all classes of ratepayers. 19 The Rate Commission received a rate change 20 notice from the District on March 4, 2019. 21 Under the District's charter plan, the Rate 22 Commission must on or before July 2, 2019, 23 issue its report on the proposed rate change 24 notice to the Board of Trustees of the District 25 unless the Board of Trustees upon application MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 9 1 of the Rate Commission extends the period of 2 time for the issuance of the Rate Commission 3 report for an additional 45-day period. At its 4 meeting on March 14, 2019, the Board of 5 Trustees approved the Rate Commission's request 6 for an extension. The Rate Commission's report 7 on the proposed rate change must now be issued 8 on or before August 16, 2019. 9 Under procedural rules adopted by the Rate 10 Commission on March 8, 2019, any person 11 affected by the rate change proposal had an 12 opportunity to submit an application to 13 intervene in these proceedings no later than 14 March 25, 2019. An application to intervene 15 has been filed by the Missouri Industrial 16 Energy Consumers. This application has been 17 deemed granted. 18 On March 4, 2019, the District submitted 19 to the Rate Commission prepared District 20 testimony of Brian L. Hoelscher, Susan M. 21 Myers, Richard L. Unverferth, Bret A. Berthold, 22 Marion M. Gee, Tim R. Snoke, Bethany Pugh, 23 William Stannard, and Thomas A. Beckley. 24 On March 8, 2019, the Rate Commission 25 submitted its first discovery request to the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 10 1 District. On March 13, 2019, the District 2 filed its responses. On March 11, 2019, the 3 Rate Commission submitted its second discovery 4 request to the District, which the District 5 responded to on March 20, 2019. On 6 March 25, 2019, the Rate Commission submitted 7 its third discovery request to the District, 8 which the District responded to on April 2, 9 2019. 10 This technical conference will be held on 11 the record regarding the rate setting documents 12 and the direct testimony filed with the Rate 13 Commission by the District. The purpose of 14 this technical conference is to provide the 15 District an opportunity to answer questions 16 propounded by members of the Rate Commission, 17 then by any intervenor, and finally by Lashly & 18 Baer, legal counsel to the Rate Commission. 19 Following this technical conference, the 20 intervenor and the Rate Commission consultants 21 may, on or before April 23, 2019, submit 22 prepared rebuttal testimony. 23 Who is here on behalf of Metropolitan 24 St. Louis Sewer District? 25 MS. MYERS: Susan Myers. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 11 1 CHAIRMAN TOENJES: Who is here on behalf 2 of the Missouri Industrial Energy Consumers? 3 MR. NEUSCHAFER: Brandon Neuschafer and 4 Kami Jones. 5 CHAIRMAN TOENJES: Also present are Pamela 6 Lemoine of Black & Veatch, consultant to the 7 Rate Commission, and Lisa Stump and Brian 8 Malone of Lashly & Baer, legal counsel to the 9 Rate Commission. 10 Under the Rate Commission's operational 11 rules, no person shall be required to answer 12 questions for a total period of more than three 13 hours, and the time shall be evenly divided 14 among all of the participants desiring to ask 15 questions. 16 Following questions by members of the Rate 17 Commission, I will attempt to allocate the time 18 equally among the participants and our legal 19 counsel. To the extent that the District, the 20 intervenor, or legal counsel has not completed 21 the questions at the expiration of that 22 person's allotted time, and to the extent that 23 time remains, such persons will be permitted to 24 propound additional questions until the three 25 hours has expired. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 12 1 Are there any procedural matters that need 2 to be discussed? Hearing none -- 3 MS. STUMP: I was just going to say none. 4 CHAIRMAN TOENJES: Ms. Myers, would you 5 like to make an opening statement? 6 MS. MYERS: I do have a short opening 7 statement. 8 OPENING STATEMENT BY MS. MYERS 9 MS. MYERS: Good morning and welcome to 10 the Rate Commission process. On behalf of MSD, 11 we appreciate you-all being here this morning 12 and participating in this process. I know 13 you've already put a lot of time into 14 understanding the district's rate proposal. So 15 as you continue through that process, please 16 keep the following in mind: 17 MSD's wastewater capital improvement and 18 replacement program is primarily composed of 19 projects required to comply with the district's 20 consent decree. The projects required to 21 comply with the consent decree are mandated by 22 plans that have been approved by the EPA. This 23 rate change proposal proposes to increase the 24 wastewater charges for the district's typical 25 residential customer by just 2 percent in MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 13 1 fiscal year '21 and just under 4 percent each 2 year thereafter for fiscal year '22 through 3 fiscal year '24. 4 These single digit increases will provide 5 the revenue necessary to perform the required 6 operations, maintenance, and construction 7 activities and are less than previously 8 projected because of the following: The cost 9 of financing is less than that that was 10 anticipated. The operational and maintenance 11 expenses are less than those anticipated. The 12 CIRP costs are lower than anticipated, and the 13 district's consent decree was extended from 23 14 years to 28 years. 15 The calculation of the rates being 16 proposed in this process follow the same 17 wastewater rate methodology approved by the 18 court and approved by previous Rate 19 Commissions. It imposes a fair and reasonable 20 burden on all classes of ratepayers. 21 Our testimony today will provide 22 clarification regarding the detailed aspects of 23 the rate change proposal and demonstrate how 24 the proposed rates are necessary to fund MSD's 25 future obligations required by the consent MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 14 1 decree. 2 The order of appearance of MSD's witnesses 3 will be Brian Hoelscher, MSD executive 4 director; myself, MSD general counsel, Rich 5 Unverferth, director of engineering; Bret 6 Berthold, director of operations; Marion Gee, 7 director of finance; Tim Snoke, 8 secretary/treasurer; Bethany Pugh of Public 9 Financial Management serving as the district's 10 financial advisor; William Stannard of 11 Raftelis, financial consultants, serving as the 12 district's rate consultant; and Thomas Beckley, 13 also with Raftelis Consultants serving as the 14 district's rate consultant. 15 This concludes my opening remarks. I ask 16 that the opening remarks be accepted by the 17 Rate Commission as Exhibit MSD64. Thank you. 18 CHAIRMAN TOENJES: Thank you, Ms. Myers. 19 Are there any other parties wishing to 20 make an opening statement? 21 Hearing none, Ms. Myers, are you ready to 22 proceed? 23 MS. MYERS: We are. And I'll call our 24 first witness as Brian Hoelscher. 25 CHAIRMAN TOENJES: Thank you. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 15 1 Mr. Hoelscher. 2 (The witness was duly sworn.) 3 CHAIRMAN TOENJES: Does any member of the 4 Rate Commission have questions for 5 Mr. Hoelscher at this time? 6 Seeing none, Mr. Neuschafer, do you have 7 questions for Mr. Hoelscher at this time? 8 MR. NEUSCHAFER: I do. 9 CHAIRMAN TOENJES: Please proceed. 10 EXAMINATION: 11 BY MR. NEUSCHAFER: 12 Q Good morning, Mr. Hoelscher. 13 A Good morning. 14 Q So, again, I am Brandon Neuschafer 15 representing the Missouri Industrial Energy 16 Consumers, and we have a number of questions. I'll 17 just preface this with, some of these questions may 18 be questions that you want me to ask some other 19 people who will come later today. Just let me know 20 if that's the case. I don't always know who the 21 right person to ask my questions of is, but I figure 22 you can direct me to the right person. 23 A So I'm going to, in anticipation of this, 24 since we don't have a notice before, I'm planning 25 on, if I can, give a general, and then I will direct MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 16 1 you to -- 2 Q That's fine. 3 A -- who the person is. 4 Q I appreciate it. 5 So I wanted to start out looking at 6 your testimony. You have a copy of your testimony 7 in front of you? 8 A Yes, sir. 9 Q Questions 8 and 9 of your testimony get to 10 some comments actually that Ms. Myers just made 11 regarding this program. Ultimately this program is 12 costing less than we projected it was going to cost 13 back in 2015. That's -- at a high level, that's 14 correct; right? 15 A Yes. Yes. 16 Q And -- 17 A Well, it's costing less for that four-year 18 cycle. 19 Q Right. 20 A Yes. 21 Q That's right. I believe back in 2015, the 22 estimates were, that we'd be looking at 10 percent 23 increases per year for this cycle? 24 A Correct. 25 Q And, instead, we just heard we're looking MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 17 1 at 2 to 4 percent per year? 2 A Correct. 3 Q And some of the reasons that are presented 4 both in your testimony and that we just heard in the 5 opening statement are that the cost of financing is 6 less, that O&M costs are less, that the CIRP cost is 7 lower, and that the extension of the consent decree 8 had an impact. Are those the four major reasons? 9 A The four main positive ones, yes. 10 Q Yes. And so what is the -- what is the -- 11 the negatives -- are the negative impacts? 12 A Right. The one negative that I think was 13 also in somebody's testimony is, early on in the 14 last rate cycle, we saw that the number of billable 15 units that we would be able to bill for was 16 reduced -- was less than what we had anticipated in 17 the budget. So we did have a revenue shortfall 18 compared to what our proposal was. We made some 19 adjustments in the first fiscal year of the last 20 four-year cycle to adjust to that. 21 Q So I want to understand that a little bit. 22 So the historical numbers -- or the actual numbers, 23 I guess I should say -- 24 A The actual numbers were less than what we 25 had budgeted for and what was approved in the last MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 18 1 rate cycle. 2 Q Okay. And so you have adjusted your 3 projections to account for the actual numbers being 4 less than what you had projected? 5 A We projected something -- and you can get 6 with Marion Gee if you don't want -- mind -- about 7 the details of how we got there. 8 Q Okay. Let's go to one of the other 9 reasons that's presented in your testimony and that 10 we heard about, was that the cost of financing is 11 less than anticipated. What's the basis -- or why 12 is the cost of financing less than was anticipated 13 back in '15 -- 14 A So, again, I would ask you to go to 15 Tim Snoke, if you can ultimately. But our increased 16 use of SRF beyond what was originally available, 17 taking advantage of leftover dollars and you use the 18 SRF, just in general, I think the rates that we 19 were -- out on the market that we were able to 20 gather when we did the bonding. So we had financing 21 alternatives that Tim Snoke and his team took 22 advantage of. I think it's those kind of things. I 23 would ask you to ask him. 24 Q Sure. 25 A He can go through the details more -- MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 19 1 Q Sure. Sure. Next one, O&M costs are 2 lower than anticipated. What's -- what's the basis 3 for that? 4 A So, again, the details are Bret Berthold, 5 but I'd give you in -- what's happening is we're 6 always, especially in the operations area, looking 7 for better ways to do things, whether that's 8 technology or other things. And Bret Berthold can 9 go over what we saw over the last four years. Ended 10 up reducing the cost and, in some cases, actually 11 reduced the burden of the consent decree, primarily 12 making it less expensive to meet some items in the 13 consent decree. And Bret can go over that. It's 14 something we will plan on doing these next four 15 years. We don't always in all cases know what they 16 are. It's kind of a continuous improvement process 17 that's used in the operations department for going 18 into the system. 19 Q Okay. Let's see, the third factor was 20 CIRP costs are lower. And is -- what is that a 21 function of? Is that better information? Is that 22 what -- one thing I want to try to flesh out here, 23 is that because the consent decree was extended? 24 A No, no, no. This one has to do with, 25 remarkably, MSD still getting some very, very, very MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 20 1 good pricing on the majority of its capital program. 2 Q Okay. 3 A Rich Unverferth can go over that with you. 4 We are seeing, especially in a big part of what we 5 do -- lining, for instance, the sewers, we are 6 seeing prices that you don't see throughout anywhere 7 else in the country; so . . . 8 Q Okay. And we're all well aware that the 9 consent degree was extended. So my understanding is 10 that's having an impact now because you're able to 11 push off some of those consent decree projects to a 12 future rate cycle. 13 A So at a very high level, if you remember 14 the projections we gave you four years ago, we were 15 looking at double-digit increases through '24 and 16 then kind of a leveling off. A five-year extension, 17 along with being able to move some projects back, 18 kind of let us hit that peak four years earlier than 19 we had originally presented to the Rate Commission 20 four years ago. So that whole process, in the end, 21 it still cost us the same amount of money to do all 22 the work. It's just, very simply, spread over 28 23 years instead of 23. 24 Q Okay. All right. Thank you. 25 I want to talk about something I MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 21 1 think is going to be an issue throughout the 2 proceeding is strength surcharges. And I 3 understand -- I believe it may have been Mr. Beckley 4 who testified that strength surcharges are 5 increasing more sharply than overall rates. Is that 6 consistent with your understanding of where strength 7 surcharges are going to go under this rate proposal? 8 A Yes. 9 Q And why is that? 10 A I would ask that you ask Mr. Beckley that 11 issue. 12 Q It's also my understanding that the 13 largest component of the upcoming CIRP program 14 relates to increase in capacity -- capacity of the 15 system; is that -- 16 A True. Capacity is the issue in the 17 consent decree; so the capacity of the system. 18 Q Yet, the strength surcharges -- and we're 19 trying to figure out the connection between the 20 strength surcharges and capacity. Strength 21 surcharges are increasing significantly, but at the 22 same time, most of these new projects are about 23 capacity and not -- not actual treatment costs; 24 right? 25 A So there's relationships in the -- there MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 22 1 are portions that have to do -- that affect, 2 obviously, the cost of the extra strength sur -- 3 strength surcharges. Mr. Gee, Mr. Beckley, I would 4 ask you get into the details with them. There's a 5 lot of interrelated factors. They'd be the ones to 6 ask. 7 Q Okay. Just generally with extra strength 8 surcharges, is it you or the discharger who is 9 sampling that discharge? 10 A Check with Mr. Unverferth. I believe it's 11 both. 12 Q Okay. 13 A I believe the billings -- I don't know, 14 you'd have to ask Mr. Unverferth. 15 Q Okay. Okay. I'm going to look at the 16 second discovery request right now. There is -- 17 number 19 in the second discovery requests talks 18 about affordability. The answer discusses -- and I 19 mention that just because this -- I don't know that 20 you necessarily have to have it in front of you 21 here -- but it discusses affordability in the 22 context of a single-family residential consumer 23 heavily. 24 A Yes, sir. 25 Q Have you -- have you-all done any analysis MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 23 1 of multi-family consumers or nonresidential 2 consumers with respect to affordability of the 3 proposed rates? 4 A I don't believe we did. The reason we're 5 using the typical residential customer as -- as the 6 guidance right now is that was the basis of 7 affordability that was used in the development of 8 our consent decree; therefore, we're presenting the 9 information that way. 10 As far as affordability with anybody 11 else, I think subsequent folks, Mr. Gee, Mr. Snoke, 12 some of the consultants would be best to ask them. 13 I'm not sure exactly who would be able to address 14 that issue. 15 Q Okay. Tie it back to the surcharges a 16 little bit. Are you aware of any discussion about 17 phasing in the surcharges as opposed to a 18 significant increase in one year? 19 A Exactly how they decided to do that to 20 determine this was the right way to go about it, I 21 would ask you to ask those folks again also. 22 Q Okay. So I believe the record also 23 reflects that bad debt is increasing and consumer 24 assistance program accounts are rising. Is that 25 generally -- MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 24 1 A Yes, I believe that's -- yeah. 2 Q Has there been any discussion about 3 shifting costs -- or shifting some of the costs 4 associated with bad debt or the consumer assistance 5 programs to other users through fees or surcharges? 6 A I think it just simply goes to the pot of 7 needed revenue, but I'd ask you to ask Marion Gee 8 about that. I don't believe the -- the cost of 9 those programs or that cost is set aside to any 10 specific individual. It's just loaded into the 11 overall cost -- the overall rates that are being 12 set. 13 Q Okay. Okay. Let's see. I think this 14 would help if we -- if you have the rate proposal 15 document itself. Table 4-3. 16 A What page is that on? 17 Q I'm going to find it here myself and then 18 I'll let you know. Okay. Table 4-3 is on page 4-7. 19 A Got it. 20 Q And what I'm looking at, this is the 21 wastewater contributed volumes table. And down 22 towards the bottom, lines 12 and 13, they show us 23 total wastewater volume and then the percentage 24 change, which I presume is from the year before, 25 historically and projected. And as we look along MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 25 1 that percent change from '13 -- fiscal year 2013 to 2 fiscal year 2017, we saw some larger declines 3 between 1.4 percent and 3.7 percent. The decline 4 fell off a bit in '18. And now you're projecting 5 relatively flat, maybe slight increases per year. 6 I'm trying to understand what -- what 7 has led to the trend of the historical reductions in 8 contributed volumes, and then the next question 9 would be what's leading us to believe it's going to 10 stay flat or slightly increase? 11 A So, one, I would ask that you ask Marion 12 Gee about that. 13 Q Okay. 14 A In general, the reduction in number of 15 bill -- and this is the billable units issue I 16 mentioned earlier, the total wastewater volume -- is 17 a water -- water conservation efforts, both at the 18 residential and nonresidential level, that decreases 19 the amount of water usage, as well as mechanically 20 just some of the fixtures that go into new homes 21 also result in less water usage, and we're 22 estimating that that's what is causing that. You 23 can check with Marion Gee to make sure. I believe I 24 got that right. 25 As far as the projections, and MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 26 1 they're very conservative projections if you look at 2 the past. As to why we made those, I would again 3 ask that you ask Mr. Gee. 4 Q Okay. I'll move on to a little different 5 topic here. I&I. And there are some discussion in 6 the rate proposal on page 4-31. It says, 7 district-wide, I&I is approximately 59 percent of 8 the total wastewater flow. I believe the rate 9 proposal in the last cycle back in 2015 put I&I at 10 about 50 percent and we're trying to figure out 11 if -- what the -- what the basis is for that 12 increase over the last four years from 50 to 59 13 percent? 14 A I would ask that you question Mr. Gee. He 15 can either give you the answer on that, or else he 16 can direct you to the person that did the 17 calculation. 18 Q Okay. 19 A Or Tom Beckley. But Mr. Gee can confirm 20 that before he testifies. 21 Q And there's also a reference to a 22 January 2005 study by CDM, on the same page, the 23 next paragraph, about the allocation amongst the 24 classes. That 2005 study, was there any -- was 25 there any additional analysis given to that 2005 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 27 1 study? Do we know if it's still valid? That's the 2 ultimate question. 3 A So I would request -- again, I would ask 4 Mr. Gee and probably then to Mr. Beckley. 5 Q Okay. 6 A I think the statement in the end, there's 7 no changes in the system that would significantly 8 change this assumption -- 9 Q Yeah. 10 A -- is the statement. Exactly what the 11 work is behind it, you can ask those two 12 individuals. 13 Q Okay. I think I have some more questions, 14 but I know I'll need to ask those of other people; 15 so I'll just wait until we get to that point in 16 time. I think that's all I've got right now. 17 A Thank you. 18 Q Thank you. 19 CHAIRMAN TOENJES: Thank you, 20 Mr. Neuschafer. 21 MR. NEUSCHAFER: Yep. 22 CHAIRMAN TOENJES: Ms. Stump, do you have 23 any questions for Mr. Hoelscher on behalf of 24 the Rate Commission? 25 MS. STUMP: I do have a few questions. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 28 1 EXAMINATION 2 BY MS. STUMP: 3 Q Good morning. 4 A Good morning. 5 Q I'm trying not to reask you things that 6 have already been asked. 7 Mr. Hoelscher, as you know, my role 8 as legal counsel to the Rate Commission is also just 9 to clarify some things for the record. So I may be 10 asking you things that are already in there, but I'm 11 trying to get additional clarification. 12 A Okay. 13 Q Can you explain a little bit just what the 14 different sources of wastewater funding are for the 15 district and what percentage maybe comes from each 16 or -- 17 A I would ask you to talk to Mr. Gee if you 18 want specific details, and I think it is somewhere 19 in the rate proposal. Almost the sole source of 20 funding for our wastewater program is the wastewater 21 rates. There are no set-aside taxes that pay for 22 wastewater. There are things like permit fees where 23 some of those revenues may go in and other sources. 24 Anymore detail on that, again, I think is in the 25 rate proposal. But my knowledge as to what the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 29 1 exact numbers are, Mr. Gee would probably have to 2 give that information. 3 Q Thank you. You've already talked -- both 4 you and Ms. Myers have talked about the steps that 5 the district took that resulted in the reduction of 6 the rate increases for '21 and '24. I'm curious as 7 to whether the district has made any projections for 8 rates for years beyond '24 yet? 9 A We have. I believe we put in the rate 10 proposal through '28, I think. I would have to 11 check with Mr. Gee. I'm sure there's a general 12 financial model, but nothing that's necessarily rate 13 proposal ready to go beyond that. Best I've got. 14 Q And then one -- one other question on the 15 third discovery request, on question number 3 -- 16 and, again, this may not be your question, but -- 17 A You skipped the one I answered, but that's 18 okay. Go ahead. 19 Q Do you want me to reask you what -- 20 A No, no, no, no. Go ahead. 21 Q Okay. On number 3, it says, "Please 22 explain what effect, if any, a decision by the 23 District's voters not to approve Prop S would have 24 on the wastewater CIRP or the rate change proposal 25 generally, and then what funds presently allocated MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 30 1 to address wastewater be redirected to address 2 stormwater, and, if so, explain it." 3 Can you -- one, you can read the 4 answer there. But if you can explain, now that we 5 are faced with the fact that the voters didn't 6 approve it, if you could explain in more detail what 7 effect that might have on the wastewater CIRP, that 8 would be helpful. 9 A Okay. So I think if -- if the proposal 10 had passed, some of the overhead costs associated 11 with the Prop S, the recently Prop S -- the failed 12 Prop S proposition, some of those overhead costs 13 would have been assigned to that revenue source. 14 Because that's gone, most of those overhead costs 15 would then be reassigned back to the wastewater 16 revenue stream. And I think Mr. -- the statement 17 here -- and I think Mr. Gee is the one, if you want 18 more details, was that the funds -- the funds we 19 currently have access -- associated with wastewater 20 is sufficient, the impact is relatively minor. We 21 saw no reason to increase the proposed wastewater 22 rates because of that failure. 23 Some other things that may happen in 24 the future, I mentioned earlier in my statement 25 about OMCI taxing districts possibly coming online. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 31 1 Q Do you mind restating those just for the 2 record? 3 A Sure. So probably the most immediate and 4 significant one, which the earliest would be 5 collecting revenues in January 2021, would be going 6 back to the 13 subdistricts and I think the 43 7 communities between the City of St. Louis and I-270, 8 where three years ago we set those tax rates at 9 zero. We committed to coming back to those cities 10 once this last vote was taken and saying, okay, the 11 board has the right to reset these tax rates, we 12 need to get your opinion. 13 So we'll go through that process. If 14 those were all turned back on at the rates they were 15 set at prior to three years ago, it would generate 16 9.7, $9.8 million worth of revenue for flooding and 17 erosion projects. And so if that comes on, in 18 subsequent budgets, part of the overhead costs that 19 are now being -- would now be charged wastewater, 20 those would also be -- go over to stormwater. 21 So it's kind of a -- it's kind of a 22 little bit of a moving target, depending on what 23 will happen over the next four years. If you want 24 more details, you can ask Mr. Gee. But I think what 25 happens is the impact is so minor that we don't see MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 32 1 a reason to request additional dollars on the 2 wastewater revenue side to account for it. 3 Q But Mr. Gee would be able to tell us a 4 little bit more about the details of how minor and 5 what the amounts are? 6 A He'd be the one to do that, yes. 7 Q Okay. Thank you. 8 I think it's in your testimony, but 9 at one point, you say that there's no impact on the 10 rate change proposal due to the existing labor 11 agreements because they end at the conclusion? Or 12 maybe it was -- 13 A I think it's in -- you might want to check 14 the third response to the Rate Commission, the first 15 question. 16 Q It's in here. 17 A It's also in my testimony. 18 Q Yeah. Question 11. They have no impact. 19 But I just -- can you explain a 20 little bit in more detail about your process with 21 the labor agreements and then how the expected new 22 labor agreement may or may not impact the rate 23 change proposal? 24 A Sure. Some of the folks who've been on 25 this Rate Commission for a while will recall one of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 33 1 the issues that always came up during the wastewater 2 rate proposals is that we were somewhere in the 3 middle of labor agreements. So either a labor 4 agreement was going to end two years into the 5 proposed proposal with already committed to raises 6 and increases and labor rates, and then the next two 7 years were open. 8 A rate cycle ago, we matched up the 9 labor agreements with the wastewater rate proposal 10 so that we would not start negotiations with our 11 labor unions for the labor contracts until both the 12 Rate Commission process and the board's review of 13 the Rate Commission recommendations were completed. 14 So right now we're scheduled in the 15 spring of 2020 to start negotiations with our 16 different labor unions. As part of those 17 negotiations, we'll have in hand the revenues that 18 have been approved -- that have been recommended by 19 the Rate Commission and approved by the Board of 20 Trustees. Those will be available to us and they'll 21 be an important part of the negotiations, knowing 22 what funds are available for those negotiations. 23 Part of that, if you look at my 24 address in my -- the first item under the third 25 discovery request as to one of the reasons we're on MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 34 1 a four-year cycle was to -- was to eliminate a 2 problem we had in the past with these labor 3 agreements overlapping that. So we're on that 4 schedule right now. We're planning in the spring of 5 2020 to take into account whatever was finally 6 approved for those rates, knowing the revenues are 7 available, and negotiate the next four years of 8 labor agreements. 9 Q So whether then the labor agreement 10 affecting the rate proposal, you got -- you're going 11 to go to them with the rate -- 12 A We got the rate proposal affecting the 13 labor agreement, which is the right way to do it. 14 Q I don't think I -- I think all the other 15 specific questions have been answered. But just as 16 the director of MSD, I want to ask you a couple 17 questions just about, you know, the charter. 18 And can you just -- we have other 19 testimony from other district representatives about 20 the rate and the rate change proposal. But I'd like 21 to get you stating on the record to -- do you 22 believe that the rate change proposal is fair and 23 reasonable? 24 A Yes. 25 Q Can you explain why you believe that? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 35 1 A For all the reasons that are in the 2 documents we received, the testimony and the 3 proposals. It follows the same basic process that 4 we've done in the past to make sure we're fair and 5 reasonable in how we distribute the cost of the 6 wastewater program. 7 Q And what -- when you say all those 8 factors, can you explain that a little bit more, 9 that you've used in the past? 10 A So I would refer to all of the 11 back-and-forth testimony and questions that have 12 been asked in the past rate cycles. We do have a -- 13 we do have a court ruling that the general structure 14 meets those requirements. I feel like I'm getting 15 in the legal realm here so that's why I'm hesitating 16 a little bit. And we've used those basic approved 17 structures moving forward with very little change. 18 So that's what gives me the comfort level that 19 they're fair and reasonable. 20 Q Okay. I don't think I -- I'm trying to 21 make sure we have -- get everything out as early as 22 possible. 23 A Okay. 24 Q So if that's all right, I'm just making 25 sure the consultant doesn't have any questions. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 36 1 MS. STUMP: We good? 2 Then we're good. No more questions. 3 Thank you very much. 4 THE WITNESS: Thank you. 5 CHAIRMAN TOENJES: Thank you, Ms. Stump. 6 Do any of the rate commissioners have 7 questions for the witness? 8 Mr. Palans. 9 COMMISSIONER PALANS: Yes. Thank you. 10 EXAMINATION 11 BY COMMISSIONER PALANS: 12 Q Good morning, Mr. Hoelscher. 13 A Good morning. 14 Q In her opening statement, Ms. Myers 15 indicated that the wastewater rates that are 16 presently under consideration and will be continuing 17 in the future have been set primarily to comply with 18 the consent decree. Is that your understanding? 19 A That's correct. 20 Q And because we -- the consent decree is 21 really driving all of these costs -- the CIRP 22 projects, the increased capacity, the avoidance of 23 having wastewater come into the streams that are in 24 the district -- is that a fair statement? 25 A It is. I would say this rate proposal MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 37 1 compared to others, you do have the issue of the 2 incinerator work that we're going to meet Clean Air 3 Act requirements. So that's something -- that's 4 probably a larger non-CD impact we've had on a rate 5 proposal than any other previous rate proposal. 6 Q Okay. Because we're dealing with a 7 consent decree that must be complied with over the 8 next 20 years, I'd like to try and identify with you 9 what are the risk factors that we face that may 10 impact our ability to comply with the consent decree 11 over time. I'm going to list a bunch of stuff and 12 you tell me whether these are appropriate risk 13 factors or inappropriate. 14 I understand in our brief study of 15 wastewater and the need for treatment, that we have 16 an aging infrastructure. As I understand it, the 17 district has over 6300 miles of sanitary and 18 combined sewers, over 270 pump stations, 7 19 wastewater treatment plants, and some sewers are 20 over 150 years old. Am I speaking correctly or do 21 you take exception to anything that I've said? 22 A That's a correct characterization. 23 Q Just -- by the way, where are these sewers 24 that are 150 years old? 25 A Walk the streets in downtown St. Louis and MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 38 1 you might walk over the top of one. 2 Q And those -- are those things that 3 collapse from time to time? 4 A No. Actually, the newer ones are the ones 5 that collapse. The ones that older are doing very 6 well; so -- wood's -- wood is a wonderful product to 7 build sewers with; so . . . 8 Q So if we have an aging infrastructure, and 9 I think we all understand that and our consultant 10 has also confirmed that that is a concern, an aging 11 infrastructure, in terms of a risk factor would 12 increase the need for capital management over time. 13 Do you agree with that? 14 A Yes. 15 Q Okay. And it would also increase the need 16 for asset management over time; correct? 17 A Yes. 18 Q The St. Louis Post-Dispatch reported on 19 March 24th of this year that a sewer ruptured in 20 South St. Louis County where untreated sewage 21 exceeding 50,000 gallons overflowed into the 22 Mississippi River. Are you familiar with that 23 event? 24 A Unfortunately, there are buried 25 infrastructure that has catastrophic failures on MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 39 1 occasions, yes. 2 Q So this is all a part of the aging 3 infrastructure what could happen, what might 4 happen -- 5 A It could happen to a pipe that's in the 6 ground for a year as well. That kind of failure. 7 Q Is it more likely to happen with an aging 8 infrastructure than with a newer -- 9 A I think obviously, yes. Yeah. 10 Q So first -- first risk is age, aging 11 infrastructure? 12 A Although, it's addressed. It's addressed 13 in this rate proposal and in the consent decree and 14 in our financial models. 15 Q I understand that -- 16 A So it's not an additional risk that's not 17 already being addressed in this rate proposal. 18 Q I -- I understand. But in order to meet 19 the needs that are set out in the consent decree, 20 the aging infrastructure and depletion of that 21 structure could impact the cost going forward? 22 A It will, but not beyond what's already 23 anticipated. The consent decree already puts in 24 mandated activities to make sure that we put in an 25 appropriate CMOM in asset management activity so MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 40 1 that we don't get in the place where we don't have 2 funds set aside to continuously renew and upgrade 3 infrastructure, especially in the collection system. 4 That's been mandated. 5 So the cost to do that on an ongoing 6 basis, one, is a lot of it is mandated by the 7 consent decree and is already in the financial 8 models; so any projections you see from us for cost, 9 unless there's one isolated extensive instance, you 10 won't see any impact to our rate proposal having to 11 do with aging infrastructure beyond what we've 12 already presented. 13 Q If I have an old car, it's going to cost 14 me more to maintain that old car than if I buy a new 15 car. Is that a fair statement? 16 A Unless you line it with CIPP pipe on the 17 inside, then you cheaply have renewed that vehicle, 18 which is one of the main -- there's a lot of items 19 and a lot of products and a lot of technology we use 20 to check the condition, do condition evaluations, 21 rehab on a schedule as necessary, as part of a 22 risk -- risk-avoidance process. Lining of pipe is a 23 great way to take a 50-year-old pipe and put a 24 brand-new plastic liner inside the pipe. It's 25 something we do extensively. There's a lot of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 41 1 technological increases. 2 So while I agree it was there, I 3 think we have a handle on it, the cost to 4 continuously look at it and renew that 5 infrastructure, and, on occasion, when necessary, 6 replace, is already in that rate proposal. So I -- 7 I think when I think of risk, I think of risk beyond 8 those we've identified and already accounted for in 9 our rate proposal. 10 So I wouldn't -- I wouldn't identify 11 it as risk, and I'm taking it as a risk being 12 something outside the provisions that are already in 13 our rate proposal. 14 Q Let's identify another one, and that would 15 be capital funding for water and sewer projects is 16 increasingly scarce and highly competitive. That's 17 what our consultant tells us. Do you agree with 18 that statement? 19 A I don't know the basis for it. We found 20 on the borrowing side, our bonds being very 21 favorable with a lot of interest. I suspect they 22 may have been talking about outside sources such as 23 federal grants or something like that. Those are 24 decreased, especially from when the program was 25 first put in place in the '70s and '80s. Our MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 42 1 program is wrapped around that. 2 There's probably right now compared 3 to the last 30 years a slight tick-up in amount of 4 assistance that's available from the Federal 5 Government, with WIFIA loans, kind of a new program 6 where we borrow money directly from the Treasury. 7 We have a continuous relationship with the Corps of 8 Engineers that we established 15 years ago that 9 brings federal monies in, a couple million dollars a 10 year on average. 11 So does it look like what it did in 12 the '70s or '80s? No, it doesn't. There's less 13 funds now. As far as the availability of funds, 14 say, compared to five years ago, we probably have 15 more opportunities than we did -- not a lot -- but a 16 few more opportunities we did five to 10 years ago. 17 Q If capital funding for water and sewer 18 projects is increasingly scarce and becomes more 19 highly competitive over the next 20 years, that 20 would impact negatively the amount of cost? 21 A If that were to happen, yes. 22 Q Another factor that we've become aware of 23 is regulatory compliance, the cost of compliance 24 primarily with the Clean Water requirements. Is 25 that a factor that can impact the district's MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 43 1 compliance with the consent decree over the next 20 2 years? 3 A And that answer is yes, and I believe -- 4 and Rich Unverferth, either his testimony or his 5 response to one of the discovery requests, has 6 indicated there are other regulatory initiatives 7 that are currently working their way through the EPA 8 and the Department of Justice, not so much at the 9 state level anymore. They could result in 10 additional burdens on MSD that are outside the rate 11 proposal we currently have in place. 12 I would put to you our rate -- our 13 consent decree does have provisions to allow us to 14 consider the affordability impacts of those kind of 15 changes. So -- and an example is the incinerator 16 work that we moved up. It was the primary reason 17 why we are allowed to take into account the 18 affordability of the work we've done. 19 Right now it doesn't directly affect 20 us because we have our consent decree conditions, 21 but there is a program that's now in law by Congress 22 called "Integrated Planning" where entities are 23 allowed to take all of their regulatory requirements 24 and -- as opposed to the past was if there's a 25 requirement, just do it. We don't care if you can MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 44 1 afford it or not; you now get to be able to do a 2 structure analysis of the affordability of those 3 kind of changes compared to your other requirements 4 and be allowed to do an analysis. This is the most 5 critical thing to do first. 6 We were -- fortunately, when we were 7 negotiating our consent decree, the industry and the 8 EPA were in the process of having that discussion 9 and we were able to roll or fold quite a few of 10 those components into our consent decree. And, 11 again, just like we do with the incinerators, that's 12 kind of available. 13 Does it have an impact? Yes. It's 14 not something that automatically happens. It's 15 something we have to address and something that we 16 would have to approve. So I would list that one as 17 a risk. 18 Q Okay. So we've identified aging 19 infrastructure, the capital funding may be 20 increasingly scarce or highly competitive, 21 regulatory compliance. You also mentioned in the 22 materials declining consumption, and you mentioned 23 the declining consumption reduces water demand and 24 revenues while costs for water services are 25 increasing. Is that your understanding? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 45 1 A Yes. 2 Q And what is -- what is lower consumption? 3 What is it using, less what? 4 A So use -- people who have a meter in the 5 County, as the easiest example. So we base the 6 amount of flow that we believe is going down the 7 sewer for wastewater based on three months of winter 8 portable water usage, what water is coming in. In 9 the wintertime, it's a logical assumption, all 10 that's going back down the sewer. So if people 11 start using less of that water, then you have less 12 billable units in which to distribute the costs. 13 I think you saw previously I was 14 being questioned by MIEC, and I think if you took a 15 look there, we saw the usage going down. So one of 16 the -- it's one of the items you're going to see 17 here in the proceedings. Fortunately, because of 18 our sequencing, we have a chance to kind of 19 light-size that every four years. But we're going 20 to be making estimates as to what's going to happen 21 in the billable units over the next four years. 22 So in the short-term, in these 23 four-year predictions, if we're wrong and people 24 keep conserving more than what we projected, we're 25 going to end up with less revenues coming into the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 46 1 district. So it's kind of a short four-year period. 2 Longer than that -- and I'm talking a 3 little out of my league here, and some of the 4 experts would be the better ones -- but you start 5 getting to the place where the -- the set charge and 6 everybody pays for having the availability of the 7 system starts becoming the driving factor in the 8 cost versus the actual billable units of how much is 9 actually used. And that just results in the change 10 in the way you collect revenue. 11 So a little bit beyond my expertise, 12 but there is a long-term -- potential long-term 13 impact in that as well. 14 Q Yeah, I believe Mr. Neuschafer was 15 pointing out section 4 of the wastewater rate 16 proposal, 4-4, on proposed wastewater customer 17 accounts. And it looks to me as total customer 18 accounts are declining over a period of time, does 19 that have any relationship to a declining 20 population? 21 A That does a little bit and -- and I 22 don't -- that's not the one I was -- or it wasn't 23 the line I was necessarily looking at. I think, in 24 general, the population in the St. Louis area may 25 change somewhat. I think -- and I would think you'd MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 47 1 want to ask Mr. Gee, I think the larger impact for 2 St. Louis, in particular for MSD, has to do with 3 water conservation less than the change in 4 population. 5 And, remember, water conservation, I 6 gave the example of individual homes. That applies 7 to industry and commercial entities as well, being 8 more effective with their use of water. 9 Q So we've identified aging infrastructure; 10 capital funding increasingly scarce, perhaps highly 11 competitive; regulatory compliance; declining 12 consumption. We're also told that extreme weather 13 events, such as flooding or heavy stormwater 14 pressures, may affect costs and compliance under the 15 consent decree. Is that a fair statement to 16 consider? 17 A It can impact the costs. Probably, 18 incrementally, the biggest issue we have is the 19 flooding issue, is that our sewer system then gets 20 flooded and there's additional cost. Hopefully most 21 of it would be reimbursable from insurance or FEMA 22 for the impact to the wastewater collection systems 23 that happen to be located within the floodplains. 24 So the extreme weather issue, I will 25 tell you for St. Louis -- or I'm going to use the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 48 1 word "climate change" if nobody is opposed to that. 2 So for kind of the climate change, St. Louis is 3 probably impacted less than other utilities 4 throughout the country, but there is an impact. 5 It -- probably for St. Louis, the 6 major thing we see on the wastewater side, again, 7 has to do with when the wastewater system is located 8 within the floodplain areas. And that's the biggest 9 impact we see. The more often that occurs, the more 10 often we have the backup issues caused by the 11 flooding, and the more times we have how you 12 reestablish the system once the flooding is 13 dissipated; so . . . 14 Q Another factor that may impact compliance 15 over the next 20 years, may be inflation, 16 inflationary costs on operations, maintenance 17 expense and capital costs. Is that a fair 18 characterization? 19 A Yes. I would put the district, MSD, and 20 the St. Louis area, at least with regard to the 21 capital program MSD had put in place, we got lucky 22 and hit kind of a sweet spot we've been benefiting 23 from so far. But I agree that financial situation 24 can easily change in the future and that could be a 25 potential risk. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 49 1 Q And what about what you don't know, such 2 as latent or unforeseen risks in construction as you 3 build out these sewers consistent with the 4 requirements under the consent decree? For example, 5 I -- when we visited the River Des Peres project, we 6 understand that in drilling the tunnel, water surged 7 into the tunnel and caused additional costs of 8 construction. These latent costs or expenses may 9 impact compliance with the consent decree in terms 10 of cost going forward. Is that fair? 11 A I would think program-wide for overall 12 with the district, I don't suspect we'll see that at 13 a level that the Rate Commission sees. On 14 individual projects as an issue, yeah. Right now 15 the costs are coming in under. There's some way to 16 move. But I -- it would take a pretty extreme event 17 to have a really large impact on -- on our program, 18 a large unknown. 19 We're not building anything we 20 haven't built before. We're familiar with how this 21 works. We got a lot of good knowledge, sometimes as 22 far as 200 feet down, as to what's in the ground. 23 Can something pop up? Yeah. Does it impact really 24 the long-term financial, the cost of this program or 25 how we have to collect rates? Probably not MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 50 1 significantly, once you consider the huge size of 2 the program. 3 If we were the type of utility that 4 had two large projects going on and that's all we 5 were funding and one got sucked up by a sinkhole and 6 disappeared, yeah, I would say they'd have a very 7 large issue. Fortunately, our program -- 8 fortunately or unfortunately -- our program is large 9 enough that I think that just becomes variations to 10 the program, and I don't see anything happening 11 with -- happening with an individual project or two 12 that would really have a major impact on the -- or 13 put at risk the program rate proposal. 14 Q I guess hand-in-glove with the latent or 15 unknown or unforeseen risks may also include 16 uninsured losses. Any types of catastrophic losses 17 that there's either no insurance or inadequate 18 insurance might be a risk that could impact 19 compliance; correct? 20 A Sure. Sure. 21 Q As I understand, the materials you 22 identify, pension or retiree costs that the district 23 has, and they're called OPEB costs, as I understand 24 it, the district has defined benefit plans for 25 retirees. So we have defined -- I'm going to miss MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 51 1 the date that we -- 2 MR. SNOKE: 2010. 3 THE WITNESS: Thank you. 4 A So as of 2010, all district employees who 5 had at least five years of service were allowed to 6 remain in the defined benefit program. Because of 7 the rising cost of pensions and the liabilities 8 associated with that, we went to a defined 9 contribution plan. So right now, MSD contributes a 10 defined amount of money to the retirement plans. 11 That is, we offer folks to do the investment, but 12 that is basically managed by the individual 13 employees. So we don't have undefined benefit plans 14 anymore with costs going up and unknown number of 15 folks who would be part of the program. We've 16 actually got a program that's -- it's still 17 increasing in number of participants, but at some 18 point, those who, unfortunately, leave the roles of 19 those who are retiring, and the ones who enter are 20 going to level out and then it'll start going down. 21 And so how -- what percentage we have 22 that funded, Mr. Snoke has planned that out along 23 with his financial advisers exactly the way to do 24 that so we both don't overfund it and it also -- and 25 that will be funded right on the nose when we -- MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 52 1 that comes to fruition. 2 Q (By Commissioner Palans) But the defined 3 benefit plan, my simplistic view means you got to 4 pay a set benefit at retirement, a target amount at 5 retirement for -- for approved beneficiary. Is that 6 your understanding? 7 A Correct. Yeah. However it's calculated, 8 but, yes, correct. 9 Q And is there also to be considered as a 10 risk factor market risks on investments? 11 A Yes. 12 Q As investments go down in value in a 13 recessionary period, the deficiency necessary to 14 fund these defined benefits may increase? 15 A True. And that is one of the reasons 16 we're getting out of the defined benefit programs. 17 Q And what about environmental remediation. 18 Does the district face any issues with respect to 19 environmental remediations? 20 A Not that -- not anything significant that 21 we're aware of, no. 22 Q So I've gone through kind of a laundry 23 list of factors with you that I've identified 24 starting with the aging infrastructure and now just 25 concluding with environmental remediation. Are MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 53 1 there any other risk factors that you can think of 2 that we missed? 3 A No. I would like to add, you know, about 4 half of what you list, we have sufficiently managed 5 and it won't be an impact beyond what's anticipated. 6 The others are always out there. Some are 7 manageable, especially through the conditions -- the 8 provisions we have in the consent decree. Others, 9 if we have a flood and the whole St. Louis area goes 10 under water, you know, we're not planning for that. 11 There's potential impacts of those types that can 12 happen. 13 But I would put there -- I just want 14 to make sure we understand there are risks and there 15 are a lot of them that are well managed by the 16 district to the point of I would say not being a 17 risk. There are others that are risks that we 18 are -- we know they're there, at least we know how 19 we proceed. And then there are always the potential 20 risks. Mr. Sprague is up testifying in Jeff City 21 today what do we do if the New Madrid Fault goes 22 off. There's things like that that can occur; 23 so . . . 24 Q Well you've managed risk based upon a 25 financial forecast through fiscal of '24; right? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 54 1 A No. Way beyond that. We have financial 2 planning documents that go decades. 3 Q Okay. 4 A Not necessarily applicable to this rate 5 proposal, but so that we know what both -- you had 6 mentioned, for instance, we have those kind of odd 7 documents through retirement for the defined benefit 8 program. That's the only way you can manage the 9 program is to know how -- what are you going to do 10 with it by the time that it's expired. And we have 11 those kind of financial models to run the overall 12 business, it extends out decades. 13 Q What if voters don't authorize additional 14 bond financing, is that a risk of compliance? 15 A For us, no. They will pay a different 16 rate without bonding. One of the -- what's being 17 proposed to the Rate Commission we've always done 18 is, one, we have a rate proposal we're recommending 19 that includes bonding. There's a -- there's a part 20 of the rate proposal that says if the public doesn't 21 approve the bonding, here are the rates they will be 22 paying basically called PAYGO scenario. We're not 23 borrowing any money; just pay for everything out of 24 the rates. 25 So in the end, the public will be MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 55 1 presented with the options. You can approve the 2 additional bonding, here would be your rates. If 3 you don't approve the additional bonding, here's the 4 rate structure that you agree to. 5 Q And I think in response to Ms. Stump's 6 questions, with regard to wastewater funding 7 sources, those sources come from the rates people 8 pay or the monies that you borrow? 9 A Correct. 10 Q And if you're not borrowing money because 11 the public doesn't authorize that borrowing under 12 votes, then it's going to fall upon the population 13 to pay to meet compliance with the consent decree; 14 correct? 15 A I think that's very obvious, yes. 16 Q I'd like to just shift a bit and talk 17 about best practices in terms of wastewater 18 treatment and compliance, and just ask you a general 19 question. And that is, what is MSD doing to align 20 itself with industry-wide best practices? 21 A So I would -- one of the things I would 22 ask you is to -- if you want to get a much more 23 intelligent professional answer, ask Bret Berthold 24 that question when he sits up here. I'm sure he's 25 glad that I volunteered him for that. But it is in MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 56 1 his testimony. 2 You'll find in the rate proposal, 3 there are metrics that we always use and compare 4 ourselves to other industries. You'll find a 5 measure of those metrics either in the rate proposal 6 or in Bret's testimony -- I'm not sure which one, I 7 think in the rate proposal -- where we compare our 8 costs per unit of anything we do against other 9 wastewater utilities throughout the country to make 10 sure, hey, are we doing things cost effective. 11 I mentioned during one of the 12 testimony thing here, especially about technologies, 13 and I'm not the expert, but I'll give you a few. We 14 now have a remote way of testing the structural 15 integrity of force mains without having to dig them 16 up. It's technology we put in years ago to help try 17 and pre-identify areas where force mains, for 18 instance, might break. 19 We are consistently doing CCTVing of 20 the system. We used to, as mandated by the CD, do 21 cleaning and TV inspection of all the sewers on a 22 regular -- sanitary sewers on a regular schedule to 23 make sure they're in good shape, make sure they're 24 open. We use the technology where we use an 25 ultrasounding transmitting and receiver from manhole MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 57 1 to manhole to actually check whether or not the 2 sewer is open. 3 We got the EPA to approve us in using 4 new technologies, much more effective, instead of a 5 four-man crew with two pieces of equipment, we have 6 two individuals who simply put the devices on two 7 manholes and get their reading and move on. That's 8 one of the cost efficiency moves we've made. 9 A long time ago, you'll find some of 10 MSD's plants are very automated. As far as the 11 number of individuals and the cost per treated 12 gallon, we're very, very competitive throughout the 13 country. 14 So all those types of things are -- 15 they're outlined in the rate proposal some of the 16 standards. I probably had gotten wrong some of the 17 specific activities and I know I've missed some. 18 Again, I read -- and if you're really interested in 19 that, especially on the operations side, it will 20 kind of bring you up to speed on everything that 21 we've done over a given period. 22 Q I read an article somebody sent me called 23 "The Smart City Under Our Feet" that references 24 Kansas City initiating an extensive sensor network 25 that uses a self-learning hydraulic model which runs MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 58 1 thousands of simulations in the cloud helping the 2 sewer system do things like redirect sewer overflows 3 to avoid flooding and polluting local watersheds. 4 Is MSD doing anything like that? 5 A So we looked into it. Every technology is 6 application-specific. And I -- I -- there is 7 probably some ability to use that to some small 8 amount. I would put to you there is an issue that 9 we continuously run into. And I'll give you an 10 example that we came up on. 11 The combined sewer system, which is 12 your primary area with large enough sewers that you 13 can do some storage and kind of do those kind of 14 retainage and prevent overflows. That sewer system 15 is located at the top of it so close to the bottom 16 floors of the development area around St. Louis, 17 very, very little room to maneuver or make a 18 mistake. 19 MSD does on a regular basis keep 20 looking at what the new technologies are, what it 21 will look like. Back in the early '90s, we looked 22 at it as part of the River Des Peres ORS system. 23 Put in a few samples. It didn't work. Technology 24 probably wasn't smart enough at the time. The 25 systems weren't smart enough at the time. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 59 1 We've had various vendors and our 2 folks track these as to, hey, is there places to do 3 this. Probably if the places, off the top of my 4 head, where we've really used it, one, if we know 5 storms or something are coming, we do have tunnels 6 to transmit flows and the treatment plant will drain 7 those down. That kind of gives us some storage 8 ability prior to a storm coming go up, decreases 9 overflows. 10 A lot of the technology we use is a 11 lot of times after the fact related to stormwater 12 events and their impact on both the combined system 13 and primarily the storm-sewer system where we are -- 14 are actually over time using kind of some of the 15 radar images you see on TV. We have systems and a 16 vendor who will take that information, actually 17 recreate a storm, realtime the actual rainfall 18 during a given period, they're in a certain area, 19 and we run simulations through our models. And our 20 whole system's model. We run those simulations now. 21 Every improvement to the system, we run through the 22 simulation to make sure we're getting the results 23 that we're looking at. 24 So we use the technology as it's 25 presented to us. Is there anything that we're way MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 60 1 behind on? No. We've looked at the technology. If 2 it's applied and it's cost effective, we put it in 3 place. There's a lot of things that aren't 4 necessarily appropriate for the way our particular 5 system is set up, and that's where a lot of the cost 6 effectiveness that I kind of spoke of earlier is 7 coming up. A lot of it out of the operations group. 8 Some out of the engineering. That's where you see 9 some of those cost savings come from, is -- is 10 looking at new ways of doing things with new 11 technologies. 12 Q Over time, I've seen businesses dedicate 13 funds, revenue funds, to research and development. 14 Does MSD allocate a certain percentage of its 15 revenues to R&D? 16 A Well, some of -- some of the things that I 17 mentioned before, those come up as specific business 18 cases within individual operating budgets. Some of 19 the things I'm sure I mentioned in operations, and I 20 know we've gone through this, if somebody says it's 21 worth looking at, we have a business process that 22 anything beyond your base budget and new initiatives 23 have to go through a business analysis process that 24 gets approved by the district, hey, what's your 25 business case, what's your return on investment, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 61 1 what risks are you missing out -- are you trying to 2 address. That's the only way anything gets put in 3 the budget. It's the individual departments looking 4 at their particular areas. 5 Same thing with your -- with our 6 information systems department. John is not here 7 today. As I said, he's in Jeff City. But how we've 8 done that; how we've mitigated risks there; how 9 we're -- where it's appropriate and not appropriate 10 to move certain aspects of the district to the 11 cloud, for instance, as opposed to having local 12 servers. And it's not -- the answer isn't always 13 the same one, doing those kinds of analysis. It's 14 something that's done by the individual departments 15 and coordinated by the senior directors 16 district-wide. 17 Q In the course of our stormwater rate 18 considerations, we had a discussion at length on 19 public-private partnerships and the availability of 20 public-private partnerships. Is there an 21 opportunity on the wastewater side, as you see it, 22 to effect savings for the district in the future 23 based upon a public-private venture? 24 A So, yes, potentially. I will give you 25 one. Don't forget that every consultant contractor MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 62 1 we hire is a public-private venture so I would -- 2 that's a piece that everybody kind of misses. MSD 3 isn't just taking its existing staff and building 4 this stuff. 5 But on that, the first place probably 6 where I got involved in having those kind of 7 discussions was in 2011 and '12. This had to do 8 when the City was considering privatizing its water 9 utility with Veolia, I believe was the name of the 10 company. P3-type initiatives were being 11 investigated primarily through the National 12 Association Clean Water agencies, attended a 13 multi-day conference in 2011 or '12. Veolia had 14 just lost their contract down here. It was a good 15 time to have the discussions about how that would 16 relate to MSD facilities. And the biggest issues 17 they had in the wastewater industry, in MSD's 18 particular situation was at the time the issues 19 were, we don't want to pay prevailing wage, we don't 20 have to deal with diversity programs. We don't have 21 to -- we don't want to go through public contracting 22 processes. And so it just became real easy. And 23 the consensus I was getting from those folks who 24 wanted to invest in those type of things was, no, it 25 doesn't really -- we got to work this out. So some MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 63 1 things happened nationally. 2 SRF funds were now -- I believe now 3 allowed to be part of a public-private partnership 4 where you can use SRF loans. So time came to look 5 at that again. 6 THE WITNESS: I know I've got a date 7 wrong, but either 2015, Tim? 2016 when you and 8 I looked at this again? 9 MR. SNOKE: Yes. 10 A 2015 or '16, we did it again. This time 11 it was predisposing in New York. This one was in 12 Denver. Went up and took a look. Had the 13 discussion. I would have to look at my notes in 14 detail. 15 But what we were coming out with is 16 for them to even come close with the type of 17 facilities we're putting in place for public-private 18 partnerships, was, okay, they kind of figured out 19 that some of these other things that I mentioned 20 aren't going away. But they were talking about then 21 also being allowed to operate and maintain the 22 system over multiple decades in order to even get 23 close to be able to make money with MSD type of 24 facilities, but the same issues came up. Being able 25 to operate and maintain them at their own labor MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 64 1 rates, at their own staff levels. And obviously we 2 have our own staff here. 3 So I -- I'm really summating what's 4 there. There's an opportunity to bring somebody 5 else besides myself to review this. I think Tim 6 Snoke kind of okayed -- okay, it's not really there 7 right now. 8 Tim and I follow this. At least on 9 an annual basis, we take a look at what the new 10 products are, what the new discussions are. We've 11 decided not to go to this year's big event having to 12 do with P3-type investors in our industry. When 13 somebody will say, well, hey, we'd like to make 14 money, you know, we've got money, we want to do 15 something with it, we tell them buy our bonds, it's 16 a great way to invest in public infrastructure. 17 So we know it's out there. We keep 18 looking. We'll keep checking what's out there. The 19 particular issues -- the particular pieces we have, 20 you know, large Greenfield brand-new treatment 21 plants to kind of orient themselves towards that. 22 Or I would put you -- a public-private partnership 23 is also an alternative delivery design build and 24 operate for a period during training, which we're 25 going to do with incinerators. That's kind of a MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 65 1 P3-type activity, and we're going to do that. 2 We had this one function where we're 3 tearing down the process and putting a brand-new 4 process in place. It doesn't exist anywhere else. 5 It made sense to do that there. 6 One of the things you really run into 7 is a lot of the program that we're putting in place 8 is just in people's private backyards. And just for 9 P-3 investments, that makes it part of -- in a 10 dedicated right-of-way, say, for a highway or a 11 dedicated piece of property where you're going to 12 build a brand-new treatment plant, and then go at it 13 and maintain it. It's just a little bit different. 14 I'm not giving those specifics, but just saying 15 that's why it's applicable in some places and not 16 applicable in other places. 17 Q Thank you. In June of 2016, the Board of 18 Trustees of the District approved wastewater rates 19 for the average household of 10 percent per year for 20 fiscal 2017 through 2020. Now, in 2019, you're 21 proposing rate increase of less than -- well, 22 basically 4 percent and 2 percent, or 2 percent and 23 4 percent. Maybe I've got them mixed up. 2 percent 24 in '21 and 4 percent in '21 to '24. 25 I think you identified the factors MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 66 1 that you said support the fact that you wanted to 2 reduce the rates from the 10 percent down to this 3 current level that's presently proposed. And I 4 think in Mr. Gee's testimony, he identifies some 5 savings that have occurred specifically with regard 6 to cost savings that the district has received. 7 Let me just ask you, the consent 8 decree requires the district to spend, as I 9 understand it, $4.7 billion in 2011 dollars, and the 10 consent decree has been expanded -- or extended five 11 years to 2039. What's the estimated cost of 12 compliance of the consent decree for the next 20 13 years to 2039 in current dollars? 14 A That's either in Rich Unverferth's 15 testimony or in one of the discovery requests. I 16 think he did a complete analysis of that. We knew 17 it was time to update that figure. I don't have it 18 off the top of my head. I would -- as opposed to me 19 guessing, I would like to defer to that piece. 20 Q Okay. Fair. 21 A I think -- I'd like to expand on the -- I 22 may answer your question. Can I expand on the 23 statement you made to provide a little more 24 understanding? 25 Q Sure. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 67 1 A Okay. So where I kind of thought some of 2 this was going is why, all of a sudden, 10 percent, 3 10 percent, and then it kind of flattens out. Four 4 years ago, we indicated that would happen in 2025, 5 that the thing would flatten out. So everything 6 we've been doing in the past -- one of the reasons 7 for the significant increases over almost 15 years 8 now prior to getting in place is that MSD was paying 9 so little and ignoring everything. That's the 10 reason we've had these significant upticks. 11 We knew we were going to get to a 12 place where the balance of money that we're asking 13 directly from the ratepayers for money we're going 14 to use immediately for operations and capital, and 15 then for the debt service and the way we're -- 16 eventually, we are going to hit a place where it's, 17 hey, it's kind of evening out, and you're going to 18 have small increases. Because as you collect bond 19 money and spend it, it's not there anymore so the 20 next four years, you have to add a little. So we 21 knew we were going to get there. 22 Probably the way our particular chart 23 looks, which probably didn't look extremely 24 different from any other city throughout the United 25 States who suffered a consent decree, was you're MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 68 1 going from that extremely low unsustainable cost. 2 We had to get to a sustainable thing. 3 So I think what you're seeing why 4 that changed there, again, we had planned, I think, 5 on the projections we had shown to the Rate 6 Commission, four years ago was that it was 37.6, one 7 and one, is what we were going to see for those -- 8 for those -- for '25 through '28. So that -- we 9 were originally projecting that it would kind of 10 flatten out around '25. 11 A consent decree change, primarily 12 along with the other ones, just kind of just moved 13 that up four years. Based on what it is we've got 14 to do, we now see that flattening out happening in 15 2021 instead of 2025. 16 Q But the current rate increase as 17 previously approved was 10 percent a year, and we 18 know that the district is going to have to borrow 19 considerable monies to comply with the consent 20 decree going forward. My question is, from a 21 business prudent standpoint, wouldn't it be better 22 to build somewhat of a cushion and leave the rates 23 as they currently are to increase your liquidity, 24 your borrowing capacity, and your credit profile? 25 A So I'm going to leave Tim Snoke to give MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 69 1 the detailed answer. We are continuously in our 2 proposals to the Rate Commission balancing a comfort 3 level that what we're asking for is sufficient to 4 perform the work we need to do, while at the same 5 time, not overcharging our customers. We take that 6 really seriously. 7 Could we collect more funds for a 8 while and have a bigger cushion? You could. I 9 don't know that that necessarily falls into being 10 fair and reasonable for all our ratepayers. I think 11 we need to go through the process of making our best 12 guess as to what's the most cost effective way to 13 build. 14 The staff -- I've been through this 15 process a long time. I think this Rate Commission 16 process within a defined period of -- it's varied 17 between four and five years, gives you a good chance 18 to kind of reset. You had mentioned the risk comes 19 in with some costs, or if we had been able to find 20 previously identified cost savings and reduce that, 21 and allows us every four years to kind of reset 22 that. 23 I think it's really prudent upon the 24 district to only ask for what we reasonably need to 25 operate and not ask for anymore. As far as how that MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 70 1 matches up and why that's really good financial 2 sense for the district, I would really get out of my 3 league, and I think Tim Snoke would probably do a 4 better job describing that. It's something you guys 5 will be giving your advice to us, too, as well what 6 your feelings are. 7 But, you know, one of the -- I guess 8 I'll expand. One of the things that we had talked 9 about, the voting earlier. For the first time, four 10 years ago when we voted on rates, somebody started 11 saying is it time to -- and I'm not saying I agree 12 with this -- is it time to stop mortgaging our 13 children's future and just raise the rates now and 14 stop borrowing money. That's a view some people 15 have. I think it kind of falls in line with what 16 you're saying. 17 That's the reason we set up two 18 alternatives for the public, to let us know what is 19 the best way to go at this, and that's why we 20 provided two options for the Rate Commission to take 21 a look at. 22 Q In the course of the stormwater 23 proceedings, I think I understood that in setting 24 the rate, that the district retained analysts or did 25 focus group studies to identify a percentage rate MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 71 1 that the community -- that the public would accept 2 and approve in a vote. Has there been any type of 3 focus group study in setting these rates that are 4 before us today? 5 A So the entire consent decree went through 6 a federally mandated public participation process as 7 to what needs to get done, how far should we go. 8 Probably the biggest input they had is how much 9 should we be mitigating the overflows in the 10 combined sewer system: How much is cost effective; 11 where does it make sense; how much are you willing 12 to pay for. That drove kind of the entire agreement 13 that we had with the EPA as far as how to move 14 forward with that. 15 So that kind of input, in general, 16 along with these general numbers, I think the 17 statement that my predecessor made at the time, by 18 the time we're done with this, the rates will be 19 $100 per month, which were our current projections 20 at the time. That was known by the public. As we 21 went through the process of signing the consent 22 decree, all that public -- all the public activity 23 surrounding that. 24 As far as the wastewater rates and 25 where this is going, right now, other than having MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 72 1 already gone through that, now having this agreement 2 in place, we'll be going -- we're going through the 3 public process now. I think it starts with the Rate 4 Commission. It goes with the public outreach the 5 Rate Commission does, the information they receive. 6 The same information we'll get from the board of 7 trustees will go through the process. Information 8 we'll give to folks prior to the election. 9 And because we've turned this corner, 10 I would tell you internally -- although it's not 11 here, I don't believe -- we do have to have a 12 re-discussion with everybody about where is 13 everything now because there's a big change after 14 this month. Rates have kind of dropped off. 15 If you look really, really long 16 range, you had mentioned collecting monies. We're 17 eventually going to get to the place where the 18 question is going to be do you keep rates the same 19 or do you lower them. Do you lower rates and kind 20 of maintain the strategy we're doing now or do you 21 maintain the current rates and decide you will do 22 enhancements to the system that may be beyond the 23 current regulatory requirements. 24 Right now -- because of where we're 25 at right now, we're meeting regulatory requirements. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 73 1 We will not be doing anything else in the wastewater 2 system. So that -- that discussion kind of comes 3 later once we peaked up and topped off. 4 Q That's a judgment question, is it not? 5 A It's a policy decision by the board. 6 Q But -- I understand it's a policy decision 7 by the board, but it's also a matter of business 8 judgment whether you build equity in anticipation of 9 future contingencies, contingent loss that may 10 occur, or whether you pass the savings on to the 11 community today. 12 A Well, we always pass the savings on to the 13 community today. And that's our current strategy, 14 is we'll take what we need, we'll make our best 15 guess over a four-year period, try and save as much 16 money as we can. You're looking right here now, 17 monies we saved are resulting in these rates being 18 lower than they would have otherwise. The money 19 comes back to the public. 20 That's our current strategy. That's 21 the board's current direction they want to go. 22 We're looking for the Rate Commission to tell us if 23 something should be different, I guess. That's one 24 of the options the Rate Commission had given us. 25 Q Were you present at the presentations made MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 74 1 to the credit rating agency? 2 A Yes. 3 Q And -- 4 A Now, I don't know about all of them. Any 5 of them done in person, I believe -- 6 MR. SNOKE: They were the ones in person. 7 We did have one over the phone. 8 A So in person, I was. On occasion, because 9 they're just updates, I'll just do them over the 10 phone with a slideshow. But whenever we have very 11 large ones, we'll make the trip out and be present. 12 Q (By Commissioner Palans) And did you speak 13 at those presentations? 14 A Yes, sir. 15 Q What subjects did you describe and testify 16 to if -- before those rating agencies? 17 A So I don't remember in detail. But, in 18 general, the discussions have to do with the 19 financial -- you know, where the district is 20 financially, what -- how guaranteed is your future 21 revenue sources. They found our current process to 22 be very positive. Where are you at compared to 23 other entities. They're doing those kind of 24 comparisons. 25 One of the things, just because they MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 75 1 mention it, they seem to be regularly impressed with 2 the strong management of the district, how it 3 occurs. I don't mean me. I just mean the district 4 in total. I think that's always been a positive in 5 our pocket. 6 The fact that we have a Rate 7 Commission process to get public input and public 8 awareness, other than just relying on the specific 9 entity, I think that's a positive. The fact that we 10 have a long-term plan as to how to get this stuff 11 done. How we've reacted to changes. 12 Right now, I don't believe the rating 13 agencies know that we've had a change in the consent 14 decree. They will the next time we update them as 15 to what's going on and the positive impact that 16 would have in our rating. So it -- it's everything 17 like that that we present to them. 18 They have a few questions about the 19 issues. Quite honestly, there's a few of them we 20 joke with and say why can't we get AAA ratings from 21 you guys, and they just laugh a little bit. We got 22 them at least thinking about it; so . . . 23 Q Thank you, Mr. Hoelscher. I have no 24 further questions. 25 CHAIRMAN TOENJES: Thank you, Mr. Palans. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 76 1 Any other rate commissioners have 2 questions for Mr. Hoelscher? 3 Mr. Stein. 4 EXAMINATION 5 BY COMMISSIONER STEIN: 6 Q Mr. Hoelscher, I'm going to ask you a more 7 mundane question. Historically, the district has 8 provided wastewater treatment services to the City 9 of Arnold; is that correct? 10 A Yes, and that -- yeah, since the '80s 11 sometime. 12 Q And now they have sold their collection 13 system to Missouri American Water; is that correct? 14 A Correct. 15 Q Can you explain the process under which 16 you would negotiate the price for treatment with 17 Missouri American? 18 A Sure. And if I get this wrong, I may have 19 Ms. Myers ask me questions to correct this. But the 20 way it's set up right now, we basically maintain and 21 extended the existing agreement from 1984. The 22 original agreement in 1984 was we will transport our 23 flow to you and all costs, all our share of the cost 24 of collecting, treating, and discharging that, you 25 will bill us based on meter volume with the 10 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 77 1 percent surcharge on top of that. 2 The other provision was, at the time 3 in the '80s, the idea was we were immediately going 4 to eliminate the Grand Glaize treatment plant, the 5 Fenton treatment plant, the Baumgartner treatment 6 plant, the Meramec treatment plant, and just put one 7 major facility that took care of the tar -- the 8 Meramec River. So we contemplated us building one 9 huge project and then pay their share of the capital 10 cost once that all got done. 11 The reason for the change in the -- 12 the reason for the amendment to that agreement prior 13 to MO-AM taking over Arnold was it wasn't going to 14 happen in one big shot and we need to modify the 15 agreement to reflect this stage of construction. 16 So what happens there, as different 17 improvements go through the facilities that affect 18 their part of the -- that affect the plants, they 19 are assigned a certain percentage that they're 20 responsible for. I think right now it's 9 percent. 21 Any improvements we make throughout the Meramec 22 sewer system that relate -- that gets to the Meramec 23 plant, they are responsible for 9 percent of those 24 costs, plus an additional 10 percent. So right now, 25 not only are they paying us for O&M, they're paying MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 78 1 us their share over a given time period that's 2 mandated by the agreement and a -- there's a 3 standard AA municipal bonds or something like that. 4 Whatever their percentage is, it's in the original 5 agreement. At that rate, they're paying us for that 6 share of that capital program -- of that capital 7 improvement. They're paying that right now. 8 That agreement -- once Missouri 9 American indicated they were going to purchase 10 Arnold -- and I'm going to get this wrong and I'll 11 be told if I get it wrong -- it was basically 12 assigned to our -- to MO-AM, but Arnold is still 13 responsible as well to make sure they continue 14 paying us both for the capital work as well as the 15 operation payments and activities. 16 Well, MO-AM pays, correct, but we -- 17 Arnold is still also responsible to the City. 18 Q Is there a separate cost to service study 19 that defines the costs that are set to Arnold, like 20 the 9 percent? Is there a separate cost of service 21 study that you have done to determine those factors 22 on which you bill them? 23 A So on the capital side, their share of the 24 capital cost was based on -- when we contemplated 25 the actual expansion of the Meramec plants, their MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 79 1 contribution was calculated against MSD's 2 contribution. Those percentages were set at that 3 time for capital costs. 4 With regard to O&M, on a regular 5 billing basis, it's based on the amount of flow that 6 they contribute to the overall flow of the plant. 7 So one month they may be contributing 30 percent of 8 the flow. They'll get charged 30 percent of the O&M 9 cost at Meramec, along with the 10 percent 10 multiplier. Some months it may be 40 percent of the 11 flow, and so their O&M will be based on that. 12 Q Is that structure for billing them 13 something that you review on a periodic basis as 14 we're doing here every four years with the user 15 charges for MSD's direct customers? 16 A So it happens at every billing. We take 17 actual costs. So if they got billed something for 18 being 30 percent of the flow one month, four years 19 later, that billing would be impacted by increase in 20 operation costs, increase in labor costs, increase 21 in chemical costs. That would be reflected. It's 22 the actual cost the district experienced during that 23 time period is what they're getting billed. So that 24 there's not a rate structure to update, they're 25 paying the actual booked costs during any period and MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 80 1 they're paying a certain percentage of that based on 2 the percentage of flow that comes from Arnold 3 compared to everything that's treated at the Meramec 4 plant. 5 Q Is there some process to audit that to 6 ensure that they are paying the true cost of 7 service? 8 A Well, we generate the bill; they don't. 9 The actual bill is generated by us based on all of 10 our costs. And the flow -- the flow meter that we 11 have access to that they're discharging the water 12 system and our flow cost, we're the one that 13 generate the bill to them every month. It's 14 different every month, every month and three months. 15 It's different every billing period based on actual 16 calculations. 17 So as to whether we've actually 18 audited that we're calculating it right, I would 19 have to ask Marion. I suspect we may have as part 20 of a regular audit, but I don't know. 21 Q Missouri American is governed by the 22 Public Service Commission and they would have to 23 provide a cost of service study on a regular basis 24 to justify their rates to the customers in Arnold. 25 Are you providing any input to that cost of service MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 81 1 analysis? 2 A I don't know, but I strongly assume 3 they're taking the past history of the agreement, 4 the data that comes out of the agreement we have, 5 and they're using that in their application to the 6 Missouri Public Service Commission to request rates. 7 Q Do you have any sense of how the rates 8 that a typical residence pays in Arnold compares to 9 the rates that would be paid by a direct customer of 10 MSD? 11 A I don't. We could probably gather that 12 for you. Tim Snoke happens to live in Arnold. So I 13 don't know how those compare. 14 Q Okay. Thank you. 15 CHAIRMAN TOENJES: Mr. Goss. 16 EXAMINATION 17 BY COMMISSIONER GOSS: 18 Q Brian, I had -- do you want to check? 19 A I wanted to make sure I got it right. I 20 did so I -- 21 THE WITNESS: No, I mean, did I get it 22 right in my answers? 23 MR. SNOKE: Yeah. 24 THE WITNESS: Oh, good. 25 Q (By Commissioner Goss) Brian, I just have MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 82 1 a couple more questions. 2 In the current rate proposal, are 3 there projects being planned to provide storage 4 facilities in Clayton and in U City, are those part 5 of the capital improvements that are contemplated? 6 A Either asking Richard -- I don't know if 7 those specific ones happen to be in that rate cycle 8 specific projects. I would -- we can either -- I 9 think -- well, Rich is here today. Rich would 10 probably know and be ready for it. He can let you 11 know that. I don't -- off the top of my head, I 12 don't really know. 13 Q Okay. In a more general way, the 14 decisions that are made regarding designs of those 15 kinds of projects, how are those made? Can you 16 describe that? 17 A So the designs of the facilities, the end 18 product and the end requirement is listed -- is 19 listed in our consent decree as to what the end 20 product has to be, what the -- what the performance 21 have to be and whatever it is we're putting in 22 place. 23 Q So it'd be like the results that you're 24 supposed to obtain -- 25 A Right. And how much you're supposed to MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 83 1 store for what period, or how much you're supposed 2 to decrease flows or how you -- in some cases, I 3 think they even indicate how much total volume 4 you're supposed to have in storage. They're all a 5 little bit different, depending on what type of 6 facility you're talking about. 7 So what the designers do, they design 8 the most cost-effective system to be able to meet 9 the requirements that are in the consent decree. 10 Q So the consent decree, do they identify 11 watersheds then or areas in the district where we're 12 supposed to achieve certain goals? 13 A So the consent decree is wrapped around 14 overflows of basement backups wherever they occur. 15 So the primary piece of the consent decree is make 16 those go away. Exactly how you do it, depending on 17 which particular part of the process we're talking 18 about, we have some flexibility. So for a sanitary 19 sewer overflow, oftentimes the requirement is make 20 that overflow go away by 2029. Or combined sewers, 21 it may be different because we're kind of mitigating 22 the process, not eliminating. Mitigate by building 23 a storage facility to store so much flow or -- they 24 have different requirements, depending on which part 25 of the system we're looking at. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 84 1 So the goals overall have already 2 been set. One, the goal is to -- two primary goals, 3 I guess, legally. Make sanitary sewer overflows go 4 away because they're illegal. Eliminate basement 5 backups and mitigate the overflows and the combined 6 sewer system to the degree you've indicated and show 7 that the resulting flows meet water quality 8 requirements, which is kind of the last piece that 9 we have to do when this is all over is show that 10 we've -- the work we've done has met the tentative 11 goal. 12 Q In designing improvements, does MSD take 13 into account any impact on surrounding property 14 values that putting in a particular type of 15 improvement might have? For example, a storage 16 facility that's 30-feet high as opposed to putting 17 the storage facility underground, what possible 18 impact that may have on property values. Is that 19 part of what you folks consider? 20 A Yeah, that's considered along with -- and 21 the public input part of that is a big -- is usually 22 a big part of it. And then on our side, it's the 23 consideration of what is really being accomplished. 24 Because, for instance, putting aboveground tank and 25 lead to a belowground tank means that every MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 85 1 ratepayer throughout the entire district is going to 2 have to pay -- pay more. So oftentimes it's a 3 discussion with the individuals, the entities, 4 trying to find the balance between what they find 5 acceptable to the community and what we find 6 acceptable -- we believe would be acceptable to the 7 ratepayers. So each site is a little bit different. 8 We've got a standard process that's 9 worked pretty well. Some municipalities, that 10 doesn't work because the dynamics either were 11 different and we didn't know it or they changed 12 during the process. You mentioned U City that's 13 been in the paper. We started through a process of 14 being very, very successful. It changed for a lot 15 of reasons. We went back, started over. In other 16 places, it's worked real, real well. 17 So it all involves finding a -- with 18 the community and with the public that's there, 19 finding the balance between what's acceptable to 20 them and what is -- what we feel is the most -- what 21 is a fair amount that ultimately our ratepayers will 22 have to pay for. 23 Q Yeah. In the U City process, what I've 24 read is that there was some issue taken with, I 25 guess for want of a better term, "social justice," MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 86 1 that there was an impact on the U City community in 2 District 43, I think it was. It was very different 3 than what was going to take place in the City of 4 Clayton and -- you know, and that they weren't being 5 treated similarly; although, the situations were 6 similar. 7 Can you -- anymore insight on that 8 than what I have read in the Post-Dispatch? 9 A Yeah. So I'll give you what the 10 discussions look like. You know, most of the 11 existing sewer systems are located in the low point 12 in the sewer sheds, in the watersheds. So, you 13 know, they usually -- a lot of it's -- a lot of it's 14 near the rivers. Because, one, you got to collect 15 the flows and also you got to discharge them. 16 One of the strategies that we found 17 that people have found really, really acceptable is, 18 since we're building near or at areas that flood, is 19 building these things in flooded areas. That's one 20 of the first places we start. It worked that way in 21 St. Ann. Hazelwood was a little bit different. It 22 worked that way in Crestwood. It's worked that way 23 in a lot of municipalities where we put these things 24 in place. 25 In this particular instance, we MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 87 1 started in that direction and it became -- well, no, 2 it's a social justice issue these -- in U City, some 3 historic difference about folks who live in that 4 floodplain and they raise the issue of being 5 environmental justice. 6 So I will give you in the end -- so 7 the decision was made, you know, ultimately, okay, 8 it's not acceptable to the community to move forward 9 with this. Some folks were happy that we weren't 10 doing that. There were also folks who lived in 11 those areas that say, boy, I sure wish you could buy 12 me out anyway. So it's us just working through the 13 community and seeing a large degree of what is the 14 most acceptable way. 15 The City of St. Louis, a lot of the 16 buyouts that are associated with surcharge and 17 combined sewers, quite honestly, these places are 18 flooding were places that were in floodplains before 19 you built the sewers, before a whole lot of folks 20 were here. You know, they're there. So programs 21 there of buying out and a lot of them moving to 22 places that don't have that issue. So it worked 23 real well. 24 So on occasion, we run into a problem 25 where the social -- the values that are being MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 88 1 expressed by certain parts of the community aren't 2 always in align and we have to find where is the 3 sweet spot to get the folks who are actually the 4 decision-makers to move forward. So University City 5 was a little bit of a struggle. 6 Q So is that something that MSD will be 7 going back to U City? Because the problem still 8 exists, I assume, that needs to be solved? 9 A So what we did was there were future parts 10 of the program that were being used in other areas. 11 There were some cost effective, cost savings ideas 12 we had in other parts of the program, either 13 upstream or downstream of that site, that gave us 14 another opportunity to look at putting it in a place 15 that, quite honestly, was found to be unacceptable 16 to a previous administration that the current 17 administration finds acceptable. So we are working 18 through that program with them and kind of going 19 through the process of working in that direction 20 right now. And I -- that's as much as I can give 21 you on that; so . . . 22 Q Okay. Thank you. 23 CHAIRMAN TOENJES: Thank you, Mr. Goss. 24 Questions from any other rate 25 commissioners for this witness? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 89 1 Mr. Ratzki, Ms. Bowdry, any questions for 2 Mr. Hoelscher? 3 COMMISSIONER RATZKI: Leonard, this is Tom 4 Ratzki. Can you hear me fine? 5 CHAIRMAN TOENJES: Yes. 6 EXAMINATION 7 BY COMMISSIONER RATZKI: 8 Q For Mr. Hoelscher, just on the topic of 9 Arnold, when you experience the floods at Fenton and 10 Grand Glaize, were any of the costs of the emergency 11 work and/or the costs of other upgrades after the 12 flood passed on to Arnold and, therefore, Missouri 13 American? 14 A So I don't know how that works. You know, 15 a lot of that was covered by insurance. Some 16 wasn't. As to how that agreement was executed, I 17 don't know. That -- I'd have to get that 18 information from somebody else. 19 Q Thank you. 20 CHAIRMAN TOENJES: Ms. Bowdry? 21 EXAMINATION 22 BY CHAIRMAN TOENJES: 23 Q I have one question, Mr. Hoelscher. Maybe 24 it's in the material. Does the -- do the trustees 25 have a policy on percentage of revenues that is used MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 90 1 for debt service? As we talk about the PAYGO versus 2 bond indebtedness, is there a percentage of overall 3 revenues -- 4 A So there is a district investment -- not 5 "investment" policy -- wrong word. There's a 6 district policy as to what degree the board took an 7 action to agree to, and I don't know. I would have 8 to check with Tim Snoke. 9 Q Okay. Thank you. I'd just like to know 10 if there is a guideline that's established by the 11 trustees for the percentage of revenue that goes to 12 debt -- 13 A So I think whenever Tim comes up here, 14 he'll be prepared to answer that, if that's okay. 15 Q Thank you. 16 CHAIRMAN TOENJES: Ms. Myers, do you have 17 any further questions for the witness? 18 MS. MYERS: We do not, no. 19 CHAIRMAN TOENJES: Thank you, 20 Mr. Hoelscher. 21 THE WITNESS: Thank you. 22 CHAIRMAN TOENJES: I'm going to suggest we 23 take a 10-minute break prior to calling the 24 next witness. We'll reconvene at 11:10. 25 (Whereupon, a brief break was taken.) MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 91 1 CHAIRMAN TOENJES: Thank you. We will go 2 back into session. 3 Ms. Stump has asked me to put on the 4 record that Ms. Bowdry joined the call about 5 9:15 this morning after the roll call. So we 6 will let the record reflect that change. 7 Next witness or witnesses scheduled is 8 Ms. Myers. 9 Ms. Myers, would you come forward, please. 10 MS. MYERS: Okay. We're trying to get our 11 line-up figured out. So -- yes, I am the next 12 witness. 13 CHAIRMAN TOENJES: Thank you, Ms. Myers. 14 (The witness was duly sworn.) 15 CHAIRMAN TOENJES: Thank you. 16 Do any of the rate commissioners have 17 questions for this witness at this time? 18 Hearing none, Mr. Neuschafer, do you have 19 questions of Ms. Myers? 20 MR. NEUSCHAFER: Yes. MIEC does, but my 21 colleague will handle this. 22 CHAIRMAN TOENJES: Please come forward. 23 For the court reporter, could we be sure 24 to get your name for the record. 25 MS. JONES: It is Kamilah Jones. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 92 1 CHAIRMAN TOENJES: Thank you, Ms. Jones. 2 Please go forward. 3 EXAMINATION 4 BY MS. JONES: 5 A Good morning. 6 Q (By Ms. Jones) Good morning. I guess to 7 start off, I just wanted to look at your written 8 testimony a little. 9 A Okay. 10 Q In there you indicated that the proposed 11 rate change imposes a fair and reasonable burden 12 across all classes of ratepayers. Could you explain 13 to me a little bit how you came to that conclusion? 14 A Sure. This rate structure was approved by 15 the court of appeals in the late '90s and it has 16 been the exact same structure that we've used for 17 every Rate Commission process since that time, and 18 it's been found by all of those Rate Commissions to 19 be fair and reasonable. 20 Q Thank you. Does that framework come from 21 the case you cited, the Missouri Growth case at all? 22 A Yes, it does. 23 Q Could you take a moment to just explain 24 the factors in that case and how they relate to -- 25 how they relate to determining that it's a fair and MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 93 1 reasonable burden? 2 A Sure. 3 Q If you need a copy of that case, I have 4 one on hand. 5 A No. The rate -- MSD's rate structure was 6 litigated in the 1990s. There was an earlier case 7 than the Missouri Growth case which found that our 8 rate structure was not constitutional. So we went 9 back and re- -- reworked that structure. There was 10 another case called the Keller versus Marion County 11 Ambulance, which that case identified five factors 12 that a rate needed to meet to be considered a user 13 fee as opposed to a tax. And so we followed that 14 guidance from that case to develop the rate 15 structure that the Missouri Growth case then found 16 to be constitutional, and we have been very diligent 17 since that time to make sure we do not alter that 18 rate structure at all. 19 Q Thank you. So just to be clear, it seems 20 that it's your opinion that the proposed rate change 21 retains the same general methodology across all 22 classes of ratepayers? 23 A Yes, it does. It follows the same rate 24 structure and methodology that we've used 25 previously. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 94 1 Q Have you obtained any legal opinions in 2 relation to developing this rate change? 3 A No, we have not. 4 Q Have you yourself issued any legal 5 opinions? 6 A No, we have not. We have just relied on 7 the Missouri Growth case and the fact that we have 8 not altered the rate structure. 9 Q Thank you. 10 A You're welcome. 11 MS. JONES: That's all. 12 CHAIRMAN TOENJES: Thank you, Ms. Jones. 13 Ms. Stump, do you have questions for 14 Ms. Myers? 15 MS. STUMP: I believe I have a few. 16 CHAIRMAN TOENJES: Thank you. 17 EXAMINATION. 18 BY MS. STUMP: 19 Q Good morning. 20 A Good morning. 21 Q Again. I want to step back just a little 22 bit and talk about the charter a little bit. 23 A Okay. 24 Q Can you identify for the record the 25 provisions of the charter plan that are relied upon MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 95 1 by the district to establish in charge ratings? 2 A I'll have to take a minute to look them 3 up. 4 Q That's fine. 5 A Okay. 6 Q I thought you had it memorized. 7 A Article 7 of the charter is titled 8 "Finance and taxation," and within that section, 9 there are a number of different -- within that 10 chapter, I should say -- there are a number of 11 different sections that speak to the Rate Commission 12 and -- and the requirements of -- of how the Rate 13 Commission is developed and what -- what eventually 14 comes from the Rate Commission. 15 Section -- I just had it. Section 16 7.270 is the criteria governing the rate. Those -- 17 those criteria are what the staff keeps in 18 consideration when developing the rate proposal. 19 Q And is there -- is there charter authority 20 to use different billing methods for metered and 21 non-metered users? 22 A The charter requirements are the criteria 23 that I just spoke of. So 7.270 are the criteria. 24 As specific about meter versus unmetered is not 25 spoken to in the charter. It's the meter versus MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 96 1 unmetered wouldn't have to meet these five criteria 2 that I just spoke to. 3 Q So when you're looking at the authority 4 under the charter for establishing the rates, you're 5 looking at the factors that we're talking about? 6 A Correct. 7 Q The admission factors? 8 A Correct. 9 Q There's not any other provisions of the 10 charter that you're relying on to establish or set 11 your rates? 12 A That might be a question for Marion to 13 respond to. 14 Q Okay. Just to clarify, too. Under this 15 proposal, governmental and nonprofits will pay the 16 same rates in the rate change proposal; correct? 17 A Yes. This is a user fee for wastewater 18 services. 19 Q I know you talked in detail with Ms. Jones 20 about the Missouri Growth Association case. And my 21 recollection is that that case, too, talks a lot 22 about the best-equated period, that that comes out 23 of that case somewhat. Are the metered users in the 24 single-family homes still billed based on the 25 best-equated period? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 97 1 A The rate structure has not changed, no. 2 Q And are they billed based upon this 3 best-equated period? 4 A That, you'll have to ask Marion. 5 Q Okay. And I heard you state that you do 6 believe the rate change -- the proposed rate change 7 is consistent with constitutional, statutory, and 8 common law? 9 A Yes. 10 Q Can you explain -- and I know we've 11 already talked a little bit about this, but, again, 12 how and whether and to what extent the rate change 13 proposal will affect impact and comply with the 14 consent decree? 15 A The rate change proposal was developed to 16 support the needs that are required by the consent 17 decree. 18 Q So it's your opinion that the rate change 19 proposal as drafted will lead to compliance with the 20 consent decree? 21 A Correct. Correct, for the next four-year 22 period. The proposal -- the proposal is for -- is 23 for rates for the next four-year period. Those 24 rates are developed to support compliance with the 25 consent decree. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 98 1 Q So let me ask you another way. Would 2 failure to approve the rate change jeopardize the 3 district's ability to comply with the consent 4 decree? 5 A Yes, because failure to approve a rate 6 proposal here, we -- we only have rates approved 7 through June of 2020 so we need rates approved for 8 the next four years. So by not approving a rate 9 during this rate proposal could affect the 10 compliance, yes. 11 Q And if the Rate Commission didn't approve 12 the amounts -- the rate change proposal in the 13 amounts that you're proposing, would that affect the 14 ability to comply with the consent decree or result 15 in failing to comply with the consent decree? 16 A I believe it could impact it, yes, because 17 we would have to continue with the rate that we -- 18 we had approved. 19 Q But in this case, that's a higher -- as 20 Mr. Palans was discussing earlier, that would be a 21 higher rate; correct? 22 A No. The -- this proposal proposes to 23 increase -- have an increase the first year of 24 2 percent, I believe. So 2 percent increase of what 25 we are currently charging. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 99 1 Q I see what you're saying. Even though it 2 was projected to be a higher increase at this time, 3 the proposal didn't go that far? The last one? 4 A The last rate -- 5 Q Right? 6 A -- proposal projected that we would need a 7 higher percent increase than what the current rate 8 proposal is projecting. 9 Q Is the district at risk of any penalties, 10 I mean, beyond the consent decree? As you know, the 11 factor talks about the compliance with all 12 applicable federal or state laws and regulations, 13 and it seems to be we always come back to the 14 consent decree. I guess my question is, is there 15 anything else out there that -- 16 A The Clean Water Act itself has penalties 17 as part of the act and then the consent decree has 18 specific penalties. So, I mean, one could assume if 19 we were not complying with the consent decree, we 20 would get hit with those penalties. And I don't 21 know if there would be a chance that they could also 22 penalize us under the Clean Water Act in addition to 23 the consent decree. I would think it would just be 24 the penalties under the consent decree. 25 Q Any other laws or regulations that are of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 100 1 concern to the district in setting this rate change 2 proposal? 3 A As far as penalties go? 4 Q As far as the district's compliance, 5 right. 6 A No, that would be the most impactful, I 7 believe. 8 Q Does the proposed rate change propose a 9 fair and reasonable burden on all classes of 10 ratepayers? 11 A We believe that it does, yes. 12 Q Why do you believe that it does? 13 A Based upon the consistent rate structure 14 that we're using that we've used time and time 15 before and it being the same rate structure. 16 Q Again, we talked about the consent decree 17 and we've talked about regulation. Is there any 18 other litigation out there that you're concerned 19 about that the district believes might be impacted 20 as a result of this rate change proposal? 21 A No, not currently we don't have any. 22 Q I guess my final question is, is there 23 anything you want to add about the discussion about 24 the City of Arnold where you -- in concurrence with 25 Mr. Hoelscher's testimony? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 101 1 A Yes. I think Brian covered it pretty 2 well, yes. I don't have anything further to add. 3 Q Okay. I think that's all my questions. 4 CHAIRMAN TOENJES: Thank you, Ms. Stump. 5 Any of the rate commissioners have 6 questions for Ms. Myers? 7 Mr. Palans. 8 COMMISSIONER PALANS: Thank you. 9 EXAMINATION 10 BY COMMISSIONER PALANS: 11 Q Ms. Myers, in your direct testimony in 12 response to questions this morning, you indicate 13 that the proposed wastewater rate change is 14 consistent with constitutional, statutory, or common 15 laws amended from time to time; correct? 16 A Correct. 17 Q And you reference and rely upon the 18 Missouri Growth Association case from the Missouri 19 Court of Appeals; correct? 20 A Correct. 21 Q And that opinion held that the district's 22 wastewater service charges were user fees, not 23 taxes; right? 24 A Correct. 25 Q And, therefore, the rate increase did not MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 102 1 require voter approval under the Hancock Amendment? 2 A Correct. 3 Q Okay. I guess my question is, but for the 4 borrowings that are being requested -- I think 5 there's a $500 million facility or additional 6 borrowing that is being requested as part of this 7 proposal. But for those borrowings, would it even 8 be necessary to go to the public for voter approval 9 to raise these rates? 10 A I'm not sure I'm following your question. 11 The rates can be increased without going for voter 12 approval. Voter approval is needed for bonding. 13 Q For the bonding? 14 A Correct. 15 Q For the bonding for the borrowing? 16 A Correct. 17 Q But not for the rate increase itself? 18 A Correct. 19 Q Because that is a user fee and not 20 approved tax? That's my understanding. 21 A Correct. 22 Q In response to the first interrogatories 23 that were directed to the district, I think it's 24 Exhibit 61A, you were asked to describe the analysis 25 you performed to reach a conclusion that the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 103 1 wastewater rate change is consistent with 2 constitutional, statutory, or common law, and so 3 forth. And your response was the precedence was set 4 by the Missouri Growth Association case and the 5 methodology of measuring and billing MSD. So the 6 wastewater rate has not changed. That was your 7 response; correct? 8 A That is correct. 9 Q You were then asked to provide copies of 10 any memo, report, work paper, summary analysis, and 11 so forth, that supports this conclusion. And your 12 response was "none"; is that correct? 13 A That's correct. 14 Q So you performed no other analysis and 15 there is no other memo, report, or analysis that 16 supports your legal conclusion? 17 A No. As I've stated before, the rate 18 structure has not changed since the -- the ruling of 19 the Missouri Growth case. 20 Q All right. And you personally reviewed 21 the consent decree? 22 A Correct. 23 Q Are you familiar with the terms of the 24 consent decree? 25 A Yes. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 104 1 Q Have you reviewed the outstanding bond 2 documents or other indebtedness of the district? 3 A I rely on Tim Snoke for that. 4 Q And are you relying upon Mr. Snoke then to 5 state whether or not the district is in compliance 6 or in violation of any covenant contained in the 7 bond documents or indebtedness of the district? 8 A Yes. He analyzes that. 9 Q So that's not your bailiwick? 10 A That's correct. 11 Q Have you requested or obtained any opinion 12 from outside counsel to address any matter that 13 you're testifying to today? 14 A No, we have not. 15 Q Ms. Stump asked you with regard to 16 potential litigation risks that the district might 17 face. I assume the district is in litigation with 18 folks. Is that a fair statement? 19 A That's true. 20 Q Are there any reserves that are currently 21 set aside to cover any contingent losses in that 22 litigation? 23 A No, not currently. 24 Q So there's no case pending upon which the 25 district has taken a reserve on its balance sheet? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 105 1 A Correct. 2 Q Are there any exposure risks that the 3 district has in litigation at present? 4 A No. Currently, the pending litigation 5 of -- I would say does not rise to the level of a 6 risk to this rate proposal. 7 Q So it may exist, but it's not material; is 8 that correct? 9 A Correct. That's a -- that's a good way of 10 putting it, yes. 11 Q Thank you. I have no further questions. 12 CHAIRMAN TOENJES: Thank you, Mr. Palans. 13 Any of the other rate commissioners have 14 questions for Ms. Myers at this time? 15 Yes, Mr. Brockmann. 16 EXAMINATION 17 BY COMMISSIONER BROCKMANN: 18 Q You continue to refer to the criteria of 19 the Missouri Growth case for all the fair and 20 reasonable aspects of the rate. What do other 21 municipalities or other sewer districts across the 22 country rely on? Are there other factors besides 23 these that we rely on and realizes the Missouri 24 Growth is pertinent to Missouri? 25 A The Missouri Growth case analyzed a MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 106 1 provision of the Missouri Constitution that we refer 2 to as the Hancock Law. That is specific to 3 Missouri. So I would say that nationwide, other 4 states may not -- may or may not have a similar law 5 as the Hancock Law. So I don't -- I don't have a 6 comparison that I've done with other states because 7 in Missouri, we've been concerned about the Hancock 8 Law. 9 Q So if you're all sitting around a table, 10 MSD staff, and you're comparing your situation with 11 other similar organizations across the country, what 12 other groups have better deals or less criteria or 13 things than this? Do you feel this is unduly heavy? 14 A I don't have an answer to that. I'm -- I 15 would like to defer maybe to one of the folks from 16 Raftelis because they have done some more 17 comparisons nationwide than what I have done. 18 Q Okay. That's all. 19 CHAIRMAN TOENJES: Any further questions 20 for Ms. Myers? 21 Mr. Ratzki, Ms. Bowdry, any questions for 22 Ms. Myers? 23 COMMISSIONER RATZKI: None here by Tom 24 Ratzki, no. 25 CHAIRMAN TOENJES: Hearing none, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 107 1 Ms. Myers, thank you. 2 THE WITNESS: Thank you. 3 CHAIRMAN TOENJES: The next witness that 4 has been identified by the district is Rich 5 Unverferth. 6 MS. MYERS: If I can ask the Rate 7 Commission, we would like to change the order 8 of our witnesses. One of our witnesses needs 9 to catch a plane later tonight so I was going 10 to propose that we move -- we change the order 11 of the witnesses. 12 CHAIRMAN TOENJES: So you think this 13 questioning may take until tonight? 14 MS. MYERS: I anticipated that, yes. If 15 you tell me it won't, then we won't need to 16 change the order. 17 CHAIRMAN TOENJES: Certainly. Certainly. 18 MS. MYERS: Okay. So if the Rate 19 Commission is fine with that, then we're going 20 to start with Marion Gee next. And the plan 21 will be to kind of go through -- to keep the 22 same order from Marion to the end and then 23 we'll come back and pick up Rich Unverferth and 24 Bret Berthold after that. 25 CHAIRMAN TOENJES: Thank you. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 108 1 MS. MYERS: Okay. 2 CHAIRMAN TOENJES: I will say you and 3 Mr. Hoelscher are excellent at delegation. 4 Mr. Gee, welcome. 5 THE WITNESS: Good morning. 6 (The witness was duly sworn.) 7 CHAIRMAN TOENJES: Thank you. 8 Mr. Neuschafer, do you have questions for 9 Mr. Gee at this time? 10 MR. NEUSCHAFER: We do. And if I could 11 have just about two minutes to -- 12 CHAIRMAN TOENJES: Please take your time. 13 I understand. I understand. 14 MR. NEUSCHAFER: -- to collect. 15 CHAIRMAN TOENJES: Please take your time. 16 MR. NEUSCHAFER: Thank you. 17 CHAIRMAN TOENJES: Please proceed, Mr. 18 Neuschafer. 19 MR. NEUSCHAFER: Thank you very much. 20 EXAMINATION 21 BY MR. NEUSCHAFER: 22 Q Good morning, Mr. Gee. 23 A Good morning. 24 Q How are you? 25 A Doing well. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 109 1 Q Good. I think we'll start with your 2 testimony. If you have a copy of that available 3 there? 4 A Yes, I do. 5 Q Question -- let's flip to question number 6 13, page 3. You opine that the proposed rate change 7 imposes a fair and reasonable burden on all classes 8 of ratepayers. That's correct? 9 A That is correct. 10 Q And this is because the proposed rate 11 adjustments closely align with the cost of service 12 at each class? 13 A That's correct, it does. 14 Q Okay. So if I understand correctly, the 15 conclusion then is that the rate proposal is fair 16 and reasonable on a class-by-class basis? 17 A That is correct. 18 Q Okay. You -- so the opinion is based on 19 the cost to provide wastewater services to each 20 customer class. Can you provide for some detail on 21 how cost of services are calculated? 22 A Well, I would defer that question to the 23 folks at Raftelis. They actually performed the cost 24 of service calculations on our behalf. 25 Q So when you -- when you state that the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 110 1 cost of service closely aligns with each class and 2 is fair and reasonable, you're basing that on the 3 analysis conducted by Raftelis? 4 A In part, yes. 5 Q So what else are you basing that on, other 6 than the analysis by Raftelis? 7 A Well, there's a lot of information that's 8 in our rate change proposal, some of which was 9 developed by Raftelis. We gave them information in 10 which they used to -- to come to their conclusions 11 and mostly obtain information independently of us. 12 Q Okay. Let's go to number 14. And you 13 indicate there that MSD is trying to balance the use 14 of debt and PAYGO to fund the CIRP; correct? 15 A That's correct. 16 Q How did you determine -- or how did MSD 17 determine that the proposed amount of debt and PAYGO 18 are the best mix? 19 A Well, we look at, of course, what's the 20 end pipe going to have on the rates if we decided 21 that more PAYGO was needed as opposed to more bond 22 funding. Certainly, when we go and we talk to our 23 rating agencies, that is a criteria. The agencies 24 will tell us that your debt mix or your level of 25 debt puts you at a particular rating criteria. So MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 111 1 we take all of that into consideration when we're 2 looking at the amount that we're going to bond 3 versus PAYGO. So it's the impact on customers with 4 respect to the rates, the ability of us to maintain 5 a strong bond rating, which indirectly -- I 6 shouldn't say "indirectly" -- but directly would 7 impact customers if our bond rating was to decrease. 8 We just -- we more than likely would have to pay 9 additional interest expenses. So it's a combination 10 of things that we look at. 11 Q Is it -- you mentioned, too, in particular 12 the impact on customers and the impact on your bond 13 rating. Is either one of those more important than 14 the other in terms of -- 15 A I would say they're equally important. 16 Your bond rating is going to impact your customers 17 obviously. Because if your bond rating is not a 18 good one, then you're going to incur additional 19 interest costs, which would then, in turn, be passed 20 on to customers. 21 Q Yeah. So then you also talked about 22 discussions with the credit agencies. Are those -- 23 are those largely historical discussions: Here's 24 what your mix has been; here's what your debt is 25 currently; and, you know, here's how we're MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 112 1 responding to that? Or, for example, have you -- 2 have you discussed, or has MSD discussed, this 3 current rate proposal with any of the credit 4 agencies to see how are they going to respond to 5 this current proposal? 6 A I have not had any discussions with any 7 credit rating agencies with respect to this current 8 proposal. I'm not sure if Mr. Snoke has or not. 9 That is something you may want to ask him. 10 But when we talk to the credit rating 11 agencies, they not only are looking at your current 12 financial results, but we also talked to him about 13 kind of what do we see in the future, what do we 14 anticipate our capital program would look like. So 15 we do have that and it goes out several years. 16 We talk to him about what do we see 17 our revenues, how do we think those are going to 18 project out as well. So you have to look at it from 19 a current perspective, but also they're interested 20 in, perspectively, what are your financial results 21 going to look like or are they projected at. 22 Q Okay. Move ahead here to number 16. This 23 is about customer bad debt. So how do you determine 24 bad debt expenses per year? 25 A We look at the number of accounts that are MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 113 1 written off in a particular fiscal year or not 2 collected after a certain amount of time in which we 3 have attempted to collect from a customer. 4 Q Okay. And you provided some, I guess, 5 estimates for future fiscal years. And I note the 6 fiscal year 20 has a 10 1/2 percent percentage and 7 then the remainder of the years are 2 1/2 to 8 3.75 percent. Why is fiscal year '20 so much higher 9 than the others? 10 A Well, that -- those are not estimates of 11 bad debt expenses. What that represents is it's the 12 amount of growth and bad debt expenses. We tie 13 those directly to growth in revenue. So the 2 1/2 14 percent was basically what the rate increase that 15 goes into effect in 2020 will be. And the other 16 percentages there, for the most part, match the rate 17 projections going forward from this proposal. 18 Q So for fiscal year -- and I want to make 19 sure I understand this. For fiscal year '20, you're 20 projecting a 10 1/2 percent increase in the amount 21 of bad debt as opposed to fiscal year '19? 22 A In the growth rate, correct. 23 Q Okay. And so why -- why is it so much 24 higher that year than in the subsequent years? 25 A Because, again, we're anticipating that MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 114 1 revenue will grow by 10 1/2 percent. So what we've 2 done is assigned -- based on the amount of funding 3 that we're going to get, we've applied those growth 4 rates through bad debt expenses. So we've tied 5 those directly to growth and revenue. 6 Q Okay. How do these numbers then compare 7 to historical bad debt? 8 A I'd have to go back and look. I'm -- off 9 the top of my head, I'm not really sure historically 10 what they look like. We did provide the Rate 11 Commission with a copy of our comprehensive annual 12 financial report. Those numbers are contained 13 within that report. 14 Q Okay. I'm going to go back to 15 Mr. Hoelscher's testimony this morning. He said 16 your name a lot so I'm going to try to go back 17 through my notes and -- 18 A I appreciate it. 19 Q -- and -- and see -- see if we can capture 20 some of these questions. 21 So one of the first things that we 22 talked about with Mr. Hoelscher was sort of a 23 comparison of the projections back in 2015 versus 24 what is -- what's actually at this rate proposal. 25 And one of the negative impacts was that less MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 115 1 portable water was being used, and so there was less 2 revenue. I wanted to understand -- I wanted to try 3 to understand that a little better. Can you help 4 explain what that negative impact is, how it's 5 impacting this rate proposal? 6 A Excuse me. Sure. Well, we look at the -- 7 let me back up for a moment. If you look at the 8 current four-year rate cycle from FY17 through FY20, 9 we were projecting that our wastewater revenues are 10 going to be approximately $35 million less than what 11 was anticipated when the 2015 rate proceeding 12 occurred. And that is primarily due to decreases in 13 the number of CCFs, which is volume based that we 14 bill for. 15 Q Okay. 16 A And it's not only do we see that in -- 17 with respect to residential customers, but obviously 18 we see that with our commercial customers as well. 19 There's a declined usage. 20 Q Okay. All right. Thank you. The -- 21 okay. So the next thing that I think we discussed 22 with Mr. Hoelscher was we were talking about 23 strength surcharges. And I asked a question that -- 24 it's our understanding, from reading the materials, 25 that most of the projects in the current CIRP relate MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 116 1 to increase in capacity of the system, not 2 necessarily ability to treat the water itself, but 3 increase in the capacity of the system. Is that 4 consistent with your understanding? 5 A I would defer that question at this time. 6 Q So do you have a copy of the rate proposal 7 in front of you? 8 A I do. 9 Q Table ES-3, which is obviously going to be 10 near the beginning in there. Let's see, it's page 11 5, ES-4 and ES-5. And table ES-3 is on page ES-5. 12 And we're looking at some of the extra strength 13 surcharges, actually on both of these tables here. 14 So we start with table ES-2, towards the bottom for 15 extra strength surcharges, and it shows that we get 16 surcharges when suspended solids, biochemical oxygen 17 demand, and chemical oxygen demand are over certain 18 thresholds. That's correct? 19 A That's my understanding. That's correct. 20 Q Okay. And then if we flip over to ES-3 on 21 the next page, there was -- it looks like some -- 22 some modeling was done with respect to what the 23 projected bills would look like. And at the bottom 24 for nonresidential excess strength wastewater, 25 there's a footnote 1. That is -- that talks about MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 117 1 these assume excess strength at certain levels. 2 What we're having trouble with here 3 is it -- it assumes levels of 150, 200 and 4 250 milligrams per liter. But when you compare that 5 to the extra strength surcharges on table ES-2, 6 those thresholds seem higher. 7 This may be something that you want 8 to refer to me to someone else. I'm not sure. But 9 we don't see how those numbers are syncing up, how 10 you can have modeling of excess strength wastewater 11 on ES-3, but the thresholds you're using aren't 12 consistent with the thresholds in ES-2. 13 A I'm going to defer that question to 14 Mr. Beckley. 15 Q Mr. Beckley. Okay. Thank you. 16 Okay. Having a discussion with 17 Mr. Hoelscher about affordability. And in the 18 second discovery request, number 19, there was some 19 analysis of affordability in the context of 20 single-family residential customers. 21 And the question for Mr. Hoelscher 22 was: Has there been any analysis of affordability 23 for multi-family or nonresidential customers? 24 A Well, if you look at figure 5-1, which is 25 under "rate change proposal," it's page 5-3. That MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 118 1 provides you with how the district compares the 2 statement of utilities there, with the largest U.S. 3 cities, for nonresidential customers at -- and I 4 think it's 100 CCFs and we use 10,000 CCFs as well. 5 It's not really a measure of 6 affordability that you would find similar to your 7 residential customer. Their are guidelines that are 8 published related to affordability metrics that 9 pertain to residential customers. Because of the 10 various types of commercial entities that you have 11 in the various types of usages, it's a little bit 12 more difficult to come up with one affordability 13 measure for commercial customers. So what you do is 14 you look at what your rates are compared to various 15 levels of usage, and that's what we've done on that 16 particular figure. 17 Q You say you compare your rates at various 18 levels of usage? 19 A Correct. 20 Q Against -- 21 A The rates -- 22 Q -- other utilities? 23 A That's correct. So if you look at that 24 particular figure, for instance, at 100 CCFs out of 25 the 50 utilities, MSD is 21. And at 10,000 CCFs, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 119 1 we're 22nd in terms of cost. 2 Q Okay. And so -- but just to be clear, 3 this is cost; this is not affordability? 4 A Well, I would assume cost has to do with 5 the affordability. 6 Q It's related. But just telling us what 7 the cost is doesn't mean that you've done an 8 analysis of the businesses in the area and how this 9 is going to -- are they going to be able to pay 10 these rates? 11 A We have not audited every business in 12 St. Louis to determine if this rate is affordable. 13 Q Okay. All right. We'll move on here. 14 The -- actually going back a little bit to the 15 wastewater volume and then the numbers declining. 16 Mr. Hoelscher attributed that to water conservation 17 efforts, fixtures using less water. And he 18 mentioned that -- that you might have some more 19 information. Are there other factors that come into 20 play here? 21 A I think certainly anytime you have rate 22 adjustments, folks look for opportunities, as they 23 do with any other bill, to change behaviors that 24 would result in a decrease in your bill. 25 Certainly, with commercial customers, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 120 1 I'm sure they take a look at their business 2 processes that use water which contribute to your 3 wastewater abilities to determine if there are 4 things that they can do to reduce the amount of 5 water that they're using. That, in turn, impacts 6 MSD with respect to its revenues. 7 Q Okay. And so table 4-3 -- let's see -- 8 again, that is on page 4-7. Has some historical 9 declines looking at the past five years of kind of 10 averaging a 1.4 to 3.7 percent reduction with a much 11 smaller reduction in 2018. Why are we seeing, in 12 the projected numbers out of the last few years, a 13 flat or small growth, when we've seen actually much 14 higher decreases in the past few years? What's the 15 change? 16 A Well, we basically -- we track the 17 amounts, certainly the amount of volume on a monthly 18 basis that we bill. And whenever we prepare the 19 budgets for the upcoming fiscal year, we will make 20 tweaks to our forecast in terms of billed volumes. 21 And so with regards to the last -- well, actually 22 the current rate cycle, we've had to reduce the 23 amount that were projected in terms of revenue that 24 we're going to receive from volumetric charges. 25 So what -- what we -- where we think MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 121 1 we're at, is that there's only so much conservation 2 that residential customers can do. Certainly 3 commercial customers can always look for ways to 4 tweak their -- their processes and use less water. 5 But we think in terms of that decline, we've seen 6 that kind of plateau. So we're -- basically our 7 forecast is we expect that the volumetric charges 8 will be flat going out over the next four-year 9 cycle. 10 Q Would you consider that projection to be a 11 conservative projection? 12 A I would hope that it is. 13 Q Okay. Okay. Let's move to page 4-31 of 14 the rate proposal. There's some discussion of 15 infiltration and inflow, and that the current 16 district-wide I&I is approximately 59 percent. And 17 the question I had for Mr. Hoelscher is, back in 18 2015, I&I was identified at about 50 percent. I'm 19 trying to understand what makes up for that increase 20 in volume, I&I volume, over the last four years? 21 A I would defer that question to 22 Mr. Stannard, Mr. Beckley with Raftelis. 23 Q Okay. A couple more and I think we'll be 24 done here. The table 4-5 of the rate proposal, 25 which is on page -- page 4-11, talk about other MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 122 1 wastewater operating revenue. And a couple of the 2 other revenue sources in here are construction 3 inspection fees and waste hauler permits. And in -- 4 if you compare fiscal year 2018, which are actual 5 numbers, versus the budgeted numbers for fiscal year 6 '19, you get some pretty large percentage increases. 7 What's -- what's the basis for those increases? 8 A For which particular -- 9 Q Construction. We'll start with 10 construction inspection fees, which go from actual 11 in fiscal year 2018 of about 530,000 to budgeted a 12 little over 750,000 in '19. 13 A Right. I would assume we probably had a 14 conversation with the particular areas that handle 15 construction inspections, and some information with 16 respect to the number of permits that they had 17 issued or inspections that they anticipated doing 18 during that budget year. That difference that 19 you're referencing there of about $200,000, I 20 realize that's -- still, it's $200,000. But with 21 respect to our revenue budget of $430-plus million, 22 it's not going to move the needle with respect to 23 rates that much at all. 24 Q Okay. We also notice -- then I assume you 25 have a similar answer with respect to waste hauler MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 123 1 permits? 2 A Correct. 3 Q Yeah. The -- so going down to 4 miscellaneous revenues, there seem to have been a 5 more than double, maybe even 250 percent, from 6 fiscal year '17 to '18, but then it seems to drop 7 back to numbers that are consistent with fiscal year 8 2017 in the next few years. Do you know what the 9 cause for the spike there is for a couple years? 10 A Yeah. It's more than likely due to 11 interest income that was -- that was generated. And 12 you'll see up upticks in interest income, of course, 13 whenever we have bond issues or whenever we have 14 additional cash inflows that generate interest. But 15 that is what that appears to be. I would have to go 16 and do some analysis to determine the exact cause of 17 it. 18 But as the footnote says, that 19 particular line item includes interest -- the 20 reimbursements that we would receive. So it could 21 have also have been reimbursements that we got from 22 FEMA due to flooding events that took place in 2017, 23 20- -- 2016. 24 Q Okay. Thank you. Let's see. The last 25 one. Table 4-17 which is on page 4-36. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 124 1 A You said page -- I'm sorry? 2 Q Yeah. Page 4-36. I'm looking at table 3 4-17. In particular, I'm looking at the percentages 4 on the far right-hand column, the percentage of 5 change that's being required. And this is based off 6 of the 2021 test year; is that correct? 7 A Yes, it is. 8 Q And we've got for metered customers, 9 the -- what I'll call the residential -- are both 10 under 2 percent; is that correct? Single-family and 11 multi-family residential, the change required is 12 under 2 percent for each of those? 13 A The change required for -- I'm sorry? 14 Q That's what the table says here. Percent 15 change required based on the cost of service and 16 the -- the revenue under improved fiscal year '20 17 rates? 18 A Correct. That's correct for fiscal year 19 '20 for the rates. 20 Q So basically what you're -- okay. And 21 then for nonresidential, we're at 4 percent, a 22 little over 4 percent. Why is there such a 23 difference between the residential customers which 24 are under 2 percent and the nonresidential which are 25 at 4 percent? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 125 1 A Well, that's -- basically is what the 2 numbers reflect. What you're looking at is if we 3 were to charge our FY20 approved rates and compared 4 that to the cost of service, what the differential 5 would be. 6 As I pointed out earlier, part of 7 what we're seeing here with nonresidential customers 8 is their volumetric charges are less than what we 9 anticipated. So if you were to apply our FY20 rates 10 to their volumetric charges and then, in turn, 11 compare that to their cost of service, you would 12 expect a larger difference there because a good 13 number of our city residential customers are on 14 metered. So that remedy is going to be, for the 15 most part, flat as long as you maintain the number 16 of accounts. 17 So where your volumetric charges are 18 impacted is with your residential customers that are 19 primarily outside of the city limits, but they're 20 all commercial customers. They have meters. So you 21 would expect to see a greater difference there with 22 respect to the cost of service compared to the 23 revenues under the existing rates. 24 Q How does MSD determine the cost of service 25 for -- for a nonresidential customer versus a MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 126 1 residential customer? 2 A Well, the attribute server -- I mean, it's 3 pretty much the same, and I will defer that to 4 Mr. Beckley. But in the rate proposal itself, 5 there's information with regards to what are some of 6 the factors that -- that would determine. 7 The way we bill, of course, is based 8 on number of attributes. I believe that the 9 commission has been given information in this rate 10 change proposal and also previously with regards to 11 kind of what that cost structure looks like and 12 certainly what the cost structure we anticipate will 13 look like going forward. 14 Q Okay. I think that's all I've got. Thank 15 you. 16 CHAIRMAN TOENJES: Thank you, 17 Mr. Neuschafer. 18 Since it's noon, we will take a break and 19 we will have -- we'll resume with Ms. Stump's 20 questions when we return at 12:45. 21 (Whereupon, a brief lunch break was 22 taken.) 23 EXAMINATION 24 BY MS. STUMP: 25 Q Good afternoon. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 127 1 A Good afternoon. 2 Q Okay. I think rather than starting with 3 your testimony, I'm going to start with the 4 questions that I asked Mr. Hoelscher. He referred 5 to you; so I know you're ready on those. 6 One of the things that Mr. Hoelscher 7 and I talked about was the sources of the wastewater 8 funding. We know that the bulk of that comes from 9 the ratepayers. But can you describe a little bit 10 more about the exact sources or point me to a 11 certain exhibit? 12 A Yes. I would refer you to the rate change 13 proposal, table ES-1, which is found on page ES-3. 14 There's a wastewater financial plan which outlines 15 the wastewater revenue sources and what we are 16 projecting those to be for FY19 and '20. And it 17 also shows you projected amounts for this particular 18 rate cycle, FY21 through FY24. 19 Q Can you describe a little bit the 20 different sources? 21 A Yeah. The bulk of the sources of revenues 22 are, of course, the user charge revenue. For 23 instance, for FY21, which would be the first fiscal 24 year that relates to this rate cycle, $453 million 25 of the revenue -- pledged revenue amount of 461 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 128 1 million comes from our user charge revenue. So you 2 could see that the overwhelming majority of the 3 revenue source is from our user charge revenue. 4 Q And what are the other sources? 5 A The other sources are investment income, 6 and also there's other miscellaneous revenue sources 7 which are also identified in the rate change 8 proposal as well. 9 Q Can you kind of explain the miscellaneous 10 ones? 11 A Yeah. There are things like the 12 connection fees that I was asked about earlier, the 13 permit fees, waste hauler fees, things such as that. 14 Q So without me having to do the math, what 15 percentage, around, is the user fee? 90-something? 16 A I would have to do the calculation for 17 you. I unfortunately can't do that in my head. 18 Q That's okay. We'll come back. That's 19 okay. I'll do the math myself. 20 Okay. The other thing that I had 21 discussed with Mr. Hoelscher was about -- from the 22 third discovery request, specifically question 23 number 3, which talked about what effect, if any, a 24 decision by the voters not to approve Prop S would 25 have on the wastewater CIRP or the rate change MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 129 1 proposal generally. And would funds presently 2 allocated to address wastewater be redirected to 3 address stormwater and explaining how that would 4 work. 5 A Okay. And so your -- I'm sorry. Your 6 question was again? 7 Q If you could -- according to this 8 discovery response, the -- a vote no on Proposition 9 S would have no impact on the rates being proposed 10 by MSD for fiscal years 2021 through 2024. Funds 11 presently allocated to address wastewater matters 12 would not be redirected to address stormwater 13 matters, but we did discuss with Mr. Hoelscher a 14 little bit about the overhead costs. 15 So can you explain that in detail a 16 little bit more? 17 A Sure. Yeah. I think in a response, it 18 indicates that if there was a no vote on Prop S, 19 which there were, that there would be overhead in 20 capitalized labor that would be charged to other 21 capital projects; so it will give you -- just to 22 refer back to with respect to the dollar amounts. 23 In FY20, if you look at the rate 24 change proposal that related to the stormwater 25 initiative, there were $1.3 million worth of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 130 1 capitalized labor costs that we had anticipated 2 being charged to the stormwater program; so not a 3 whole lot of money. 4 FY21, that number grew to -- I think 5 it was about $5.9 million. Again, those are 6 capitalized labor costs; so what that means is that 7 if those individuals aren't working on capital 8 projects related to stormwater, they would then be 9 working on capital projects related to wastewater. 10 So we didn't anticipate that -- or we don't 11 anticipate having to adjust our rate change proposal 12 as a result of that vote. 13 Q But we would assume now that, for example, 14 for 2020, the 1.3 million, that that would be now 15 wastewater cost rather than stormwater? 16 A It could be a wastewater cost. There may 17 be activities that were included in that 1.3 million 18 estimate that we're simply not going to do. 19 Q But what you're telling me is regardless, 20 you wouldn't change the rate change proposal based 21 on that? 22 A No, we would not. 23 Q Okay. All right. Can we go to your 24 testimony, please. 25 A Sure. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 131 1 Q I want to ask some questions about the 2 budget, which I think is -- on page 2 and page 3 of 3 your testimony, you talked about the budget. 4 My first question would be: I know 5 you say in question 12 that the preliminary budget 6 will be approved and provided to the board by 7 March 15th, and it's my understanding it has now. 8 So can you summarize any differences 9 between the preliminary budget presented to the 10 board compared to the projections that are used in 11 this proposal? 12 A Well, the biggest difference between the 13 board -- the budget that was provided to the board 14 and -- relates to what occurred with the stormwater 15 vote. We actually -- we prepared two different 16 budgets scenarios: a yes vote for Prop S and a no 17 vote. 18 So with respect to Prop S, I think we 19 reduced our revenue estimates by about $9 million, 20 because we don't anticipate obviously receiving 21 those revenues since the proposal did not pass, but 22 that really did not have any impact on the 23 wastewater budget. 24 So the budget that we presented had 25 not gone back and compared that to the projected MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 132 1 estimates. The board hasn't approved that yet. So 2 we're still in the process of getting the budget 3 approved. But I can say that significantly -- 4 there's not a significant difference between the 5 numbers that we were projecting for FY20 compared to 6 what is in the preliminary budget. 7 The rate change proposal that's 8 before the commission actually relates to FY20 9 through FY24; so any differences in terms of costs 10 that's less than what we budgeted, that would roll 11 over into the next revenue cycle period, which would 12 help to offset the rates if that were to occur. 13 Q And just for information, when do you 14 anticipate that the board will approve the budget? 15 A The budget will not be formally approved 16 until June. 17 Q Okay. Thank you. 18 A Sure. 19 Q Okay. On question 7, you indicate that 20 historically the district has only spent 21 95.4 percent of its operating budget. But I believe 22 the rate model has an O&M-based -- has -- the rate 23 model project O&M is based on the -- a total budget. 24 So why wouldn't you use -- why are 25 you using 100 percent instead of 95.4? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 133 1 A Well, actually my response to question 7 2 is that for FY17 and FY18, the district spent 3 95.4 percent of its budget, and there are a couple 4 reasons for that. 5 I think I -- in my testimony earlier 6 today and also in my direct testimony, I mentioned 7 that our revenues have been less than what we had 8 projected. We were looking at this four-year rate 9 cycle that we're currently in. We're projecting our 10 revenues to be approximately $35 million less than 11 what we budgeted. We noticed a downturn in our 12 revenues, and so we had to make reductions in our 13 budget expenditures to accommodate that shortfall. 14 I think in FY16, we were projecting 15 that at one time we were going to be $13 million 16 below budget with respect to revenues. And so what 17 we did is our management team met. We made 18 decisions to basically curtail discretionary 19 spending so that we would be able to meet our 20 financial targets. 21 Q Well, I guess on that line, too, you use 22 in your model the historical spending rates, but 23 then you're using -- you're not using the historical 24 number on the budget if you've only been spending 25 95.4 percent. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 134 1 A I'm not sure I follow the question. 2 We're using what our best guess 3 estimate is for that particular fiscal year as to 4 what we anticipate spending. 5 Q But historically, you haven't spent the 6 whole amount; right? 7 A We have not. But as I just pointed out, 8 some of that was due to measures that we enacted so 9 that we would not spend the budget to offset the 10 revenue shortfall. 11 Q So you don't anticipate the historical 12 trend to continue? 13 A You mean 95 percent? 14 Q Yeah. 15 A I would hope that we would -- we would 16 come in below our budget projections. Obviously, 17 that's always our goal, is to be efficient in terms 18 of how we spend money. I don't know if we will come 19 in at 95 and a half percent. I don't know that for 20 sure, but certainly our goal is to spend less than 21 what our budget is. 22 Q Okay. One other question from the rate 23 change proposal. 24 Table 4-6, which is, I believe, on 25 page 4-14, there is a -- the rate change proposal MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 135 1 shows O&M increasing by a large amount between 2 fiscal year '18 and '19. Can you explain the 3 reasons for that increase? 4 A Looks like there is some additional 5 amounts -- if you're looking at the FY19 -- I'm 6 assuming you're looking at FY19 projected -- 7 Q Yes. 8 A -- compared to FY18 historical? 9 I'm sorry. What numbers specifically 10 are you looking at? 11 Q And I'll -- 12 MS. LEMOINE: '18 versus '19. 13 MS. STUMP: Right. I'm going to let 14 Pam -- this -- obviously, this is a technical 15 question. Is it all right with you if she -- 16 CHAIRMAN TOENJES: Please. 17 MS. STUMP: Go ahead. Yeah. You can come 18 up here, if that's okay with you. 19 MS. LEMOINE: Yes. We just wanted to 20 clarify the reasons for the increase between 21 the fiscal '18 and fiscal '19 for total 22 operating expenses, which would be line 17. 23 THE WITNESS: Okay. So that's about 24 roughly $18 million difference there, if I'm 25 looking at that correctly. You're looking at MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 136 1 the 148.3 million compared to the 166.8 2 million -- 3 MS. LEMOINE: Correct. 4 THE WITNESS: -- right? 5 Okay. So if we start -- I know one change 6 involves the secretary-treasurer's office. 7 There was about $1.5 million that we budgeted 8 for the election. That relates to Prop S. 9 That's a one-time occurrence that would have 10 been included in that amount there. So you'll 11 see an uptick there from the approximately 1 -- 12 or $2 million figure to about 3.3 million. 13 Okay. 14 Then going down, you'll also see an uptick 15 there in finance, and what that involved is we 16 had additional expenditures related to Prop S 17 as well. There was some anticipated changes 18 that we were going to have to make to our 19 billing systems to accommodate that. There was 20 also work that we needed to do, irrespective of 21 how the vote went, in advance to get some 22 things aligned just to get us to the point 23 where our data matched what was in the property 24 assessor's records, and we also required some 25 additional programming that related to that MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 137 1 effort. 2 IT, I'm not offhand exactly sure what 3 that -- that difference is that's there. I'm 4 assuming that that is probably also related to 5 some work that we did relative to Prop S as 6 well. 7 And then going down, if you look at -- I'm 8 sorry. I'm giving you Prop S numbers, but I 9 just looked at that, and most of this is 10 wastewater. But collection system, that's 11 probably additional maintenance work that was 12 needed. 13 To get you specific answers, I would have 14 to go back and obviously look at this, and we 15 could provide you with a specific relative to 16 the changes. 17 But off the top of my head, those are a 18 couple of things that I know that occurred. 19 MS. LEMOINE: So when you were talking 20 about the Prop -- Prop S, that's not part of 21 this now -- 22 THE WITNESS: Right. No. I just noticed 23 a tab that was there. I thought what this was 24 depicting was our total wastewater budget, but 25 it's not. I mean, I thought it was our total MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 138 1 budget. Actually, what we're showing here is 2 our total wastewater budget. So I need to get 3 you more specifics on what those differences 4 are. 5 MS. STUMP: Can you guys do that? That'd 6 be great. 7 Thank you. Okay. You can stay. 8 Q (By Ms. Stump) If -- if the voters do not 9 approve the bond, authorization rates will be 10 higher. Did the district reflect any changes to 11 delinquencies or bad debt due to the higher rates? 12 A Not that I can recall. I think we 13 projected that those numbers -- that the growth 14 rates would basically be the same, but I'd have to 15 go and verify that in the model. 16 Q And did you evaluate the -- did the 17 district evaluate the potential impact of higher 18 rates on large industrial consumers or other 19 commercial customers? 20 A We've prepared -- as I mentioned earlier 21 during my testimony, there is a chart in the -- in 22 the rate change proposal that gives you what those 23 rates or charges would be -- not rates, but what the 24 charges would be at -- I think it was at 10,000 CCF, 25 and we used a hundred, how that would compare to MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 139 1 other utilities throughout the country. 2 Q Okay. I have a couple more questions, 3 Mr. Gee. 4 Do you believe that the proposed rate 5 change imposes a fair and reasonable burden on all 6 classes of ratepayers? 7 A Yes, I do. 8 Q Why? 9 A Well, as I pointed out in my testimony, if 10 you compare the cost of service -- and give me a 11 second. I'm actually trying to find that question 12 that was posed. It may be in the discovery. 13 But to answer your question, if you 14 look at the cost of service compared to the amount 15 of revenue that we're expected to generate from each 16 customer class, the percent differences were pretty 17 much right on target. If I'm recalling correctly, 18 there was nothing that was over a percent. But, 19 again, we addressed that question in one of the 20 testimonies. 21 I think this is it. Yeah, this is 22 it. 23 Q What question are you referring to? 24 A I'm looking at question number 12 in the 25 second discovery request. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 140 1 And so what I indicated there is the 2 difference between the cost of service compared to 3 the revenue under the proposed classes. Rates for 4 each class was as follows: single-family 5 residential customers, the difference between the 6 rates and the cost of services .03 percent; for 7 multifamily, it was .44 percent; and for 8 nonresidential, it was a negative .10 percent. 9 So what that indicates is that the 10 costs that we are expected to incur to serve those 11 various customer classes closely aligns with the 12 revenues we're expected to generate. 13 Q And, therefore, you believe it to be fair 14 and reasonable? 15 A I do. 16 Q One of the other factors that is in the 17 charter relates to funds for emergencies and 18 delinquencies. Do you believe that the rate 19 proposal provides adequate funds for emergencies and 20 delinquencies? 21 A I do. 22 Q And, I guess, two parts then. One, can 23 you explain to me how the district -- what -- how 24 the district would define an emergency? And then 25 also just explain a little bit about why you believe MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 141 1 the rate proposal provides adequate funds for that. 2 A I would define an emergency as an 3 unexpected event that's going to have some impact 4 either financially or in some other way on the 5 district. We do have funds that -- that we budget 6 for and that we put monies into so that if we do 7 have an emergency, we have -- for instance, if 8 there's a flooding that occurs or -- and there's 9 water backups into customers' homes, we have a water 10 backup fund that we fund each year so that we're 11 somewhat protected if that were to occur. 12 We also have funds that if we have 13 unexpected repairs that we need to make either at 14 our treatment plants or in our collection systems 15 and those are emergencies, we have funds available 16 to -- to take care of those as well. 17 Obviously, we have insurance that we 18 maintain so if we have a catastrophic event, we're 19 protected. And the deductibles, we're protected and 20 expect to recover reimbursement associated with that 21 emergency, but -- 22 Q And so how does the rate proposal provide 23 adequate funds for that? Does it provide any 24 additional funds? Does it keep it at the same 25 levels, would you say? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 142 1 A I don't know if it provides any additional 2 funds for it, but we're -- we've identified I think 3 in the proposal -- certainly it's in our budget that 4 we've listed as an exhibit. It provides information 5 on like, for instance, the wastewater backup fund 6 that I mentioned. The amount is set aside to fund 7 that. Any of our emergency funds use the 8 information as well in that budget on what that 9 funding level will look like. 10 Q Okay. I'll let Commissioner Palans ask 11 those things. 12 Can you give us a total amount spent 13 to date to comply with the consent decree? 14 A I believe that's in the rate change 15 proposal. Off the top of my head, I'm not exactly 16 sure, but I know we put that information in the rate 17 change proposal, I believe. And I can tell you -- 18 Q I guess I'm trying to get at, too, is how 19 much have we spent under this rate proposal and then 20 how much that leaves to be spent for the remainder 21 of the time that was subject to the consent decree. 22 A Okay. And if you look at section 7, I'm 23 going to refer you to page 7-13 of the rate change 24 proposal. 25 The very first row that's there in MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 143 1 that chart provides you with information on what we 2 spent to date. It says "Appropriations." Actually, 3 these are appropriations to comply with the consent 4 decree of a total of $1.7 million to date, and that 5 the 2018 forecast to complete the consent decree is 6 4.3 billion. 7 There are project listings that are 8 also in the appendix which provide for the CIRP 9 projects that we expect to spend, and so each of the 10 amounts are listed in the consent decree, referring 11 to those documents. 12 Q Is there a summary anywhere of how much 13 will be spent under this rate change proposal and 14 how much will be left after that, without having to 15 add them all up? 16 A I believe that there is. Actually, I 17 think we show a total. 18 If you turn to page 4-15, the last 19 paragraph on that page indicates that the 20 anticipated CIRP for the next four-year rate cycle 21 is projected to be $1.58 billion. And at the top of 22 the page, it also talks about what I mentioned 23 earlier, what the estimated amount is that we're 24 going to spend or that we have spent for 25 appropriations is 1.7 million. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 144 1 Q That's at the top of that -- oh, I see. 2 A Yeah, in the first paragraph. 3 Q And so when we say, in the last paragraph, 4 "The anticipated CIRP for the next four-year rate 5 cycle period is 1.58 billion," then you're saying 6 that all would be spent going for the consent 7 decree? 8 A No. Not all of that is consent decree. I 9 would defer actually that question to Rich -- 10 Q Okay. 11 A -- when he comes up. 12 Q I appreciate it. I think you guys have 13 given us a lot of information. That's why I'm 14 trying to just get the -- 15 A Sure. 16 Q -- short answers. 17 I do not have anymore questions. 18 Thank you. 19 A You're welcome. 20 CHAIRMAN TOENJES: Thank you, Ms. Stump. 21 Mr. Goss, questions for Mr. Gee? 22 EXAMINATION 23 BY COMMISSIONER GOSS: 24 Q Mr. Gee, Ms. Stump had asked you about 25 your budgeting at the 95.4 percent and had an MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 145 1 exchange about that. 2 What -- do you know what the rate 3 would be if, in fact, you had to use the 4 95.4 percent number as opposed to the 100 percent 5 number? 6 A I do not know. 7 Q How about 97 percent? 8 A I -- I don't know what the number would be 9 at if we would have used various percentages of the 10 budget. We can certainly, I mean, run that. 11 Q Yeah, I'd like you to look at that. Just 12 tell me, you know, what's 1 percent -- what is a 1 13 percent difference? And the only reason I'm asking 14 is if it doesn't matter, I don't want to spend time 15 on it. 16 A Right. 17 Q If it makes a difference, then we ought to 18 know about it. 19 A Well, I can give you the order of 20 magnitude on -- in terms of what the rate adjustment 21 would look like, but our -- the 95.4 percent number, 22 95 and a half percent, whatever it was -- let's say 23 it's 95 percent -- our operating expense budget is 24 typically around $200 million, okay? So if you 25 estimate 4 percent of that, that's $8 million a MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 146 1 year. 2 Our revenues have also -- as I 3 mentioned earlier, if you look at the four-year rate 4 cycle, our revenues are projected to be about 5 $32 million roughly short. So in a sense, those two 6 things almost kind of align. The reduction in 7 revenues that we're seeing almost matches the 8 reduction or the decrease in operating expenses that 9 we're projecting. So if we were to run that through 10 the model, I don't think you're going to see a 11 significant difference in the rates that are being 12 proposed at all because you'd have to consider also 13 that revenue shortfall. 14 Q That's something I'd be interested in 15 seeing -- 16 A Okay. 17 Q -- because that seems like -- I think the 18 direction of our counsel's questions were to try and 19 figure out, does this make an impact on the rate or 20 not, and so that's what I'm really interested in. 21 A Yeah. An $8 million decline in operating 22 expenses is not going to make a significant 23 difference in our rate change proposal. Our capital 24 program, as I mentioned earlier, or the four-year 25 cycle, is one point -- almost $1.6 billion. So MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 147 1 $32 million worth of operating expenses, or whatever 2 that turns out to be over the four-year period, it's 3 not going to swing these numbers significantly at 4 all. Not to say that there might not be a penny or 5 two difference, but it's not going to make a 6 significant difference when you're talking about a 7 capital program that's $1.6 billion and then you 8 have debt service, which is about 100 million, and 9 O&M, which is more than two. But we certainly can 10 provide you with that information. 11 Q I would appreciate that very much. And 12 it's obviously -- for me, that's more than 13 walk-around money, but I get it in the context -- 14 A Yeah. 15 Q -- of this rate. And so I think I'd like 16 to know that. 17 CHAIRMAN TOENJES: Mr. Stein. 18 EXAMINATION 19 BY COMMISSIONER STEIN: 20 Q Mr. Gee, just a couple things I'd like to 21 pursue. 22 One, you mentioned earlier that there 23 are other charges, such as connection fees and waste 24 hauler fees, et cetera, that enter into your overall 25 revenue. I may have missed it, but septic hauler MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 148 1 fees, those are not mentioned in this -- in this 2 rate case. Are they being adjusted? 3 A They actually are in the rate case. The 4 table that Mr. -- I forgot his last name. I'm 5 sorry. 6 CHAIRMAN TOENJES: Mr. Neuschafer? 7 A Yes. When he came up earlier, those are 8 listed as separate income items. 9 Q (By Commissioner Stein) Do you have the 10 table that that's on? 11 BY MR. NEUSCHAFER: 4-5 and 4-11. 12 A Yeah. If you look at page 4-11 in the 13 rate change proposal, we were budgeting that those 14 waste hauler -- hauler revenue items would be about 15 $900,000 per year. 16 Q (By Commissioner Stein) My second question 17 has to do with bad debt collection. 18 You weren't here, but in the rate 19 case I believe before the last one -- so we're going 20 back to, what? 2011? -- the Rate Commission raised 21 some serious questions about the district's track 22 record in terms of collecting bad debt. And 23 subsequent to that, there was an effort by the 24 finance department to constitute a more aggressive 25 bad debt collection effort. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 149 1 Has that effort been continued, and 2 are you considering any changes or enhancements to 3 that? 4 A Yes. That effort has been continued. I 5 think what you're referring to is back when that 6 change was made, the district modified their 7 collection process so that we always start off 8 initially with just pre-collect phone calls and 9 letters that we send to customers just informing 10 them of the need, obviously, to pay their bill. 11 If that's not successful, then it's 12 turned over to what's called a first placement 13 collection agency, and they hold the account for, I 14 think, up to like nine months or so, roughly. If 15 that's not successful, it's then turned over to a 16 second placement collection agency, and these are 17 agencies that specialize in collecting debt. It's a 18 little bit more difficult that a traditional first 19 placement agency may not be able to collect. 20 If that is unsuccessful, then 21 ultimately it's sent to our collection attorneys 22 that we employ to assist us with collecting a debt. 23 And we do file liens on the properties so that if 24 they're sold, we would expect to collect when those 25 properties are sold. So that's just kind of a MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 150 1 general overview of our existing process. 2 There have been some things that we 3 have tweaked. For instance, we have looked at ways 4 that we could garnish additional funds from folks 5 that are not paying. 6 A good example of that would be, we 7 have several people that buy either apartment 8 complexes or rental units, and they are paid through 9 Section 8 funds, through HUD. We've worked with 10 both the County and the City, and now we garnish 11 those revenue streams. So that has been somewhat 12 successful for us. 13 We've actually had folks that have 14 come in that hold a good deal of money and have 15 said, "Hey, we don't really want you guys impacting 16 our ability to do business with HUD," so they paid 17 us what's due. So that's kind of one example of 18 kind of what we've done. 19 We're also looking at some additional 20 strategies to put in place that involves 21 garnishments. We have not fully vetted that yet 22 with the board or with our collection attorneys. 23 But we're always looking for ways obviously to 24 enhance the amount that we collect from people that 25 are delinquent because we realize that if they don't MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 151 1 pay, then that causes us to shift it to the other 2 customers that are paying. 3 Q Thank you. That's very helpful. 4 CHAIRMAN TOENJES: Mr. Palans. 5 EXAMINATION 6 BY COMMISSIONER PALANS: 7 Q Thank you. 8 Mr. Gee -- you pronounce Gee or Gee? 9 A It's Gee. 10 Q Gee. Okay. 11 A Just like the alphabet. 12 Q We don't want to be inappropriate. 13 A That's okay. 14 Q Mr. Gee, in your direct testimony, MSD 3E 15 on page 6, starting with question 21, the question 16 is, "How do the wastewater user change revenues 17 currently projected for fiscal '17 to fiscal '20 18 compare to the amounts forecasted for these fiscal 19 years in the 2015 rate model?" 20 And you indicate that wastewater user 21 revenues for 20 -- for fiscal year '17 through 22 fiscal year '20 are projectively lower than 23 forecasted in 2015 by $20.3 million; correct? 24 A That is correct. 25 Q And then other revenue for fiscal '17 to MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 152 1 fiscal '20 is projected to be higher than forecasted 2 in 2015 by $9.7 million; is that correct? 3 A That is correct. That's correct. 4 Q And could you just tell us the reasons why 5 we -- it's lower by 20.3 million for user revenues 6 but other revenues are higher than forecasted by 7 that $9 million? What goes into those numbers? 8 A Give me one second. I want to find that 9 appendix site I referenced. 10 What I'm looking at is in the rate 11 change proposal. It's page 7-118, specifically, 12 what goes into wastewater service charges. 13 As I mentioned earlier, the reason 14 for that decline is primarily because the volumetric 15 charges that we've billed has declined both -- for 16 both residential meter customers, of course, and for 17 commercial customers. 18 With respect to the other revenues, 19 what those consist of again are the items that I 20 mentioned earlier. They could be connection fees, 21 waste hauler fees, interest income, a number of 22 different things. So that revenue source has 23 actually been a little higher than what we thought. 24 Q Okay. And then you go on to say that 25 "Operating expenses for fiscal '17 to fiscal '20 are MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 153 1 projected to be lower than forecasted in 2015 by 2 $43.2 million"; correct? 3 A That is correct. 4 Q And could you tell us what the factors are 5 that affect that number? 6 A Yeah. There's a number of factors. 7 As I mentioned earlier, when we 8 noticed that our revenues are coming in less than 9 what we anticipated, we took a look at discretionary 10 expenditures and determined that we needed to 11 basically, to the extent that we could, hold off on 12 those expenditures, and those could be things like 13 if we had personnel that we anticipated hiring, 14 maybe we delay those until the revenue situation 15 improved. If we had nonemergency expenditures that 16 pertained to the collection system, that could wait. 17 Certainly we didn't want to do anything to 18 compromise the integrity of the system. But to the 19 extent that we could wait on those expenditures, 20 then we did just that. 21 We looked at things like, you know, 22 avoid traveling or -- just the typical things that 23 any business would take a look at when they were 24 faced with that kind of revenue shortfall. 25 So part of that reduction in MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 154 1 operating expenses has to do with the fact that we 2 adjusted what we're spending funds on to basically 3 help to offset that revenue shortfall. 4 Q Under the current financial model, have 5 you built those discretionary expenses back into 6 this so that they are forecasted to be spent? 7 A We do have -- any budget that, you know, 8 is produced by just about any entity has some degree 9 of discretionary expenditures in it. Our budget for 10 the existing -- for FY20 has those discretionary 11 expenditures in them. Those, again, are things like 12 if we had vacant positions and we think we need to 13 fill those, those are in the budget. If we have 14 maintenance-related items that we think really needs 15 to be performed, then those things also are in the 16 budget. 17 Q But during this applicable period, those 18 operating expenses were lowered because you 19 eliminated a grouping of discretionary expenses; 20 correct? 21 A Some was. And I don't want to give you 22 the impression that the reduction in expenses is 23 solely attributed to us reducing discretionary 24 items. We also had some cost savings that occurred 25 in the budget as well due to -- and I think Bret MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 155 1 Berthold, when he comes up, will talk to you about 2 some of the things that our operations department 3 has did that resulted in some cost savings. 4 One involved a method in which we go 5 about identifying lines that need to be cleaned, and 6 we -- that generated some cost savings for us. And 7 there are other types of activities like that that 8 occurred. 9 So part of it was us identifying 10 items that we could cut or hold off on. Others were 11 simply cost savings that we received as well. 12 Q Could you prepare for us a listing or a 13 statement of the discretionary expenses that have 14 been included in this current forecast that were 15 eliminated from the prior forecast to build up that 16 $43 million number? 17 A Yes. We will put a document together for 18 you. 19 Q Thank you. 20 You also indicate that total debt 21 service expenses for fiscal '17 to fiscal '20 are 22 projected to be lower than forecasted in 2015 by 23 26.9 million; correct? 24 A Correct. 25 Q What's the reason for that? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 156 1 A Part of that is refunding of bonds. So we 2 were able to basically lower our interest rates by 3 refunding debt. When we're putting together rate 4 proposals, we do not anticipate the ability to -- to 5 refund, nor should we. So we take a conservative 6 approach. 7 That going forward is going to be 8 somewhat curtailed because of the new tax laws. You 9 can no longer do what's called an advance refunding. 10 So we don't -- so that's going to eliminate not -- 11 not -- we still can do a traditional refunding, but 12 advanced refundings we can no longer do. 13 There are also a couple of other 14 things, too, that resulted in the debt service being 15 less than anticipated. Traditionally, you used to 16 have to either, A, buy bond insurance, or you would 17 fund that -- you would fund what's called a debt 18 service reserve with cash; so you would basically 19 borrow money, place it in a reserve account, and 20 that reserve account was there so that if the 21 district failed to make a debt service payment or 22 defaulted, bond orders would have access to that 23 cash. That's no longer required. 24 So there are several million dollars 25 that we saved in terms of having to issue bonds or MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 157 1 debt service because we didn't have to fund those 2 cash reserves. And, as I mentioned earlier, we 3 issued debt, we were able to refund debt. And also 4 I think Mr. Hoelscher testified earlier that the 5 rates that we were paying on our bond issues were 6 less than what we anticipated; so we took advantage 7 of a low interest rate environment. 8 We were also able to borrow 9 additional funding through the state bond fund, and 10 those rates are typically less than what you would 11 get on a traditional municipal bond issue. So 12 things resulted in that decrease. 13 Q As I understand the current proposal, the 14 reason we're going to the voters is that there's 15 additional borrowings that are going to be requested 16 be made. Is that your understanding? 17 A That is correct. 18 Q Are any of the proceeds of those 19 borrowings intended to be used for any bond 20 refundings to save money? 21 A We did not project in this proposal any 22 refundings, no. 23 Q Do you believe under your current 24 knowledge of your portfolio that that may be 25 available to -- for the district to save money in MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 158 1 this period, refundings? 2 A You know, I really -- I don't know. And 3 the reason I say that is if I could predict what 4 interest rates would be, I probably wouldn't be 5 working here. So it's really difficult for you to 6 look out even months from now -- because I 7 personally have worked on bond issues where it 8 looked like we were in a position to refund that 9 debt, and something happened in the marketplace, and 10 within a month's time period, that refunding 11 opportunity was totally eliminated. 12 So you never know what could occur. 13 I certainly hope that that's the case, but I don't 14 know for sure. 15 Q But this source of funds, if the rate is 16 approved, the voters approved it and the 17 $500 million borrowing is available, that would be 18 available to affect future savings if it's -- if it 19 becomes financially feasible? 20 A That would not be. The $500 million that 21 we're projected to issue, that is solely to fund 22 capital improvement projects. 23 Q Okay. 24 A That has nothing to do with refunding. 25 Q Okay. Where's the money come from for MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 159 1 refunding? 2 A Okay. If you refund, then basically what 3 you're doing is you're going out and -- let's say I 4 have a hundred million dollars worth of bonds 5 outstanding. I'm going to issue bonds for maybe 6 less than that amount, maybe $95 million to replace 7 that $100 million at a lower interest rate. So 8 that's where you're getting your monies. 9 Q So that also would be borrowed funds? 10 A It would be borrowed. You're basically 11 replacing funds that are outstanding now at a higher 12 interest rate. 13 Q Do you need to get voter approval to do 14 that replacement financing? 15 A I would defer that to Mr. Snoke, but I do 16 not believe that we do that for refundings. 17 Q So just to recap on what we've been 18 talking about in terms of current projections versus 19 2015 projections, on the revenue side we have 20 $10.6 million less revenue than previously 21 forecasted in 2015, and I get there by taking 22 20.3 million and subtracting 9.7 million? 23 A Yes. I would say that's correct. 24 Q And on the expense side, we've got about 25 $70 million less expenses than previously forecasted MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 160 1 in 2015, and I get there by adding 43.2 with 26.9; 2 correct? 3 A Yes. Debt service expenses are less than 4 what we projected, and the operating expenses are 5 less. 6 Q So from a net cost savings for the 7 district, I come up with a number of about 8 $60 million through '20 -- fiscal '20 over what was 9 forecasted in 2015. Is that a fair statement? 10 That's 70.1 minus 9.7. 11 A That's about -- that's about right. Yeah, 12 it's the 61 point -- if you look at that exhibit, it 13 gives you a number there for change in fund balance, 14 and it's about $61.4 million roughly. 15 Q And is this one of the factors you used to 16 reduce the rate increase to 2 percent in fiscal '21 17 and under 4 percent for the following year? 18 A It certainly helps. Anytime you have 19 available fund balance, we roll that forward into 20 the next rate cycle period, and that -- those funds 21 are available to assist with reducing rates. But 22 the one thing also you need to look at, not all of 23 those funds relate to wastewater. 24 If you go back up to that line 25 item -- I don't know if you have that -- the rate MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 161 1 change proposal in front of you, but, for instance, 2 we're showing -- for taxes, there's a $14 million 3 favorable variance in terms of what we are 4 anticipating to collect from taxes. That's included 5 in that $61 million figure. We cannot use taxes for 6 wastewater expenditures. 7 There's also other items that are in 8 the other category that relate to items that 9 probably we can only spend on stormwater. So not 10 all of that difference is solely attributed to funds 11 that are available for the wastewater program. 12 Q As I understand the consent decree, the 13 costs of compliance for the next 20 years to 2039 in 14 current 2019 dollars is about $6 billion. Is that a 15 fair statement? 16 A I believe that is correct. 17 Q And in terms of having that capacity -- 18 and I'm going to call it debt capacity -- to pay 19 that expense, it's important for the district to 20 maintain liquidity; correct? 21 A Correct. 22 Q And it would be prudent for the district 23 to maximize its liquidity over the period; correct? 24 A To the extent that we could, that is 25 correct. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 162 1 Q And increasing your liquidity would make 2 the district a more creditworthy borrower in the 3 eyes of lenders, would it not? 4 A It could, yes. That's one of the 5 criteria. 6 Q And wouldn't that also be a criteria that 7 the credit rating agencies would review and look at 8 favorably in assessing their ultimate rating for the 9 district? 10 A It could be, yes. They do look at 11 liquidity as one of many measures. 12 Q And that liquidity could also serve as a 13 cushion, if you will, against various risk factors 14 that I discussed this morning with Mr. Hoelscher, 15 would it not? 16 A It could, yes. 17 Q I want to just go over something to make 18 sure I understand it, and that is the impact of 19 Prop S -- the failure of Prop S to be approved. 20 Prop S was based upon stormwater 21 approval and build-out of capital projects for 22 stormwater needs, was it not? 23 A Yes, that's correct. 24 Q And built into that forecast was cost -- 25 were costs associated with fulfilling the projects MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 163 1 that were identified for stormwater needs; correct? 2 A Correct. 3 Q Now that Prop S has failed, you don't need 4 that stormwater money to build out stormwater 5 projects? 6 A Correct. The funds that we had identified 7 in the proposal were not available; so obviously 8 they would not be there to fund the projects. 9 Q Wouldn't there be a reduction of personnel 10 and operating costs and overhead associated going 11 forward since you're not funding stormwater 12 projects? 13 A Well, not necessarily. I mean, you have a 14 certain amount of fixed costs. I think I mentioned 15 earlier that -- for FY20, for instance, I think we 16 had $1.3 million built in to the stormwater proposal 17 for capitalized labor, and what that is, is it's 18 employees or costs that we would incur for the 19 stormwater program. Those costs may not necessarily 20 go away. There are other activities that we still 21 have to do that costs could be used for consent 22 decree-related projects or for other regulatory 23 activities that we need to undertake as well. 24 Q Okay. Well, here's where I get confused. 25 Let's just say, for example, that I need 100 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 164 1 employees to fulfill a task for wastewater and 2 stormwater. And now stormwater is no longer on the 3 table; we're not funding that. 4 A Correct. 5 Q You're saying now you need 100 employees 6 to deal with wastewater. 7 A No, that's not what I'm saying. 8 In the rate change proposal for 9 stormwater, I think we anticipated having to add 10 some additional costs, okay? So part of that is you 11 no longer have to add that -- those additional costs 12 because the proposition did not pass. 13 There are probably some individuals 14 that we anticipated that we would shift over to 15 work, some on stormwater or some on wastewater. 16 That doesn't go away. What goes away are those 17 additional costs that you anticipated that you're 18 going to add into the district, but because Prop S 19 did not pass, you're not going to incur those costs. 20 Q Bear with me. I'm still confused. 21 A Okay. So if I anticipated -- and I'm just 22 throwing out a number for you; so it's not an exact 23 number. 24 If I anticipated that we needed to 25 hire 20 employees to -- as a result of Prop S -- MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 165 1 okay? -- and Prop S doesn't pass, I no longer need 2 to hire those 20 employees. That was not cost that 3 I already had embedded in my budgets. Those were 4 costs that I anticipated if Prop S would have 5 passed. 6 So the fact that it fails doesn't 7 necessarily mean that I have those number of 8 employees that exist within MSD that I can eliminate 9 because I never hired those folks. 10 Q But you said earlier that you were going 11 to utilize existing employees on the stormwater 12 projects, did you not? 13 A I think what I said is we had capitalized 14 labor that was budgeted in the stormwater proposal, 15 some of which -- some of the activities may have 16 been performed by existing employees; some of the 17 activities may not have been. 18 Q Thank you. I have no further questions. 19 CHAIRMAN TOENJES: Thank you, Mr. Palans. 20 Mr. Goss? 21 EXAMINATION 22 BY COMMISSIONER GOSS: 23 Q I just have one question. 24 On the -- in connection with the 25 bonds, what replaced the requirement for the reserve MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 166 1 fund? If you no longer have a reserve fund, what 2 bond would you see requiring? 3 A They did not require anything because 4 basically they look at your credit strength now. So 5 if you have a bond rating that is -- one that's very 6 good -- ours is AA, AAA for one agency -- they just 7 eliminated that requirement for you to fund the 8 reserve. 9 Q Great. Thank you. 10 CHAIRMAN TOENJES: Any other commissioners 11 with any questions for Mr. Gee? Mr. Ratzki? 12 Ms. Bowdry? 13 COMMISSIONER RATZKI: No questions from 14 Tom Ratzki. 15 EXAMINATION 16 BY CHAIRMAN TOENJES: 17 Q Mr. Gee, I'll ask you one question that I 18 asked Mr. Hoelscher earlier -- 19 A Yes, sir. 20 Q -- about the -- a board of trustee policy 21 on the percentage of revenue that's dedicated to 22 debt services. There's such a policy? 23 A I am not familiar with a policy that's 24 dedicated to debt service. Basically our -- our 25 budget amount that is approved by the board is what MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 167 1 we anticipate paying for debt service for the 2 upcoming fiscal year, but I'm not familiar with any 3 such policy. 4 Q And what's that percentage been over the 5 last five years or so? 6 A Of our -- our debt service is typically -- 7 right now, I think it's about $110 million of our 8 projected expenditures, which were roughly about 9 $700 million worth of expenditures, about 10 one-seventh, roughly, of our expenditures relate to 11 debt service. Now, that fluctuates because our 12 capital program amount changes; so -- 13 Q All right. Thank you. 14 A You're welcome. 15 CHAIRMAN TOENJES: Ms. Myers, do you have 16 any questions for this witness? 17 MS. MYERS: No, I do not. 18 CHAIRMAN TOENJES: Thank you, Mr. Gee. 19 THE WITNESS: Thank you, sir. 20 CHAIRMAN TOENJES: Our next witness is 21 Mr. Snoke. 22 (The witness was duly sworn.) 23 CHAIRMAN TOENJES: Thank you. 24 Mr. Neuschafer, do you have any questions 25 on behalf of Missouri Industrial Energy MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 168 1 Consumers? 2 BY MR. NEUSCHAFER: I do. 3 CHAIRMAN TOENJES: Thank you. Please come 4 forward. 5 EXAMINATION 6 BY MR. NEUSCHAFER: 7 Q Good afternoon. 8 A Good afternoon. 9 Q Let's start with your testimony. 10 A Yes. 11 Q You have a copy there in front you? 12 A Yes. 13 Q Okay. Great. 14 Question number 7. This -- this 15 question, I guess, basically talked about how we're 16 going to fund the program, where the three main 17 sources of funding are from. And if I add up these 18 three sources of funding here, which are additional 19 debt financing that's already authorized, new debt 20 under a new authorization, and PAYGO, we would get 21 to about 1.455 billion. Does that look about right? 22 A Let's see. Yes, I would agree. 23 So I think -- let me go to -- I think 24 it's on page 4-17 -- the financing plan. So some -- 25 there's some additional sources there to bridge the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 169 1 gap to be about 1.6 billion. 2 Q You're anticipating my question. So if 3 you can go into that, that's great. 4 A Sure. So the table on page -- on page 5 4-17 is table 4-8, which is the capital improvement 6 replacement financing plan. So one thing that's not 7 included in my numbers, I believe, is the premium. 8 So when we issue bonds, the interest rate that 9 municipal investors usually apply is higher than the 10 market rate; so we receive a premium from them, some 11 additional funds that don't have to get paid back. 12 That is about 24 million is what we anticipate. 13 Q Can you -- is that on this table or -- 14 A Yes. I'm sorry. That is -- line 3 is the 15 premium. 16 Q Oh, the premium? 17 A Yep. 18 Q Okay. And that's 24 -- about 24 over the 19 course -- 20 A Over the four years, correct. 21 Capitalized internal labor is line 5. 22 And probably Mr. Gee can give a better accounting. 23 He disappeared. Oh, he isn't here. We already had 24 him. That's another piece. 25 Q Got away while he could. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 170 1 A Yeah, he did. 2 The WIFIA draw is line 6. So WIFIA's 3 a loan, actually, that we've already closed but we 4 haven't started drawing on yet. That's been built 5 in here because those are funds that have already 6 been entered into agreement for; so that will fund 7 into the next four-year cycle. Then grants and 8 contributions and interest income is another about 9 33, 34 million. So if we add those up, hopefully 10 that bridges the gap there. 11 Q It probably at least comes close. Not 12 sure it gets us all the way there, but it comes 13 close. But at least helps us understand what that 14 difference was between the 1.6 billion number that 15 we've been hearing. 16 And so -- actually, if I look at 17 this -- if you look at that same table, uses of 18 funds, line 11, and then the subtotal, line 14, 19 that's probably -- 20 A That's -- 21 Q -- more accurate for the $1.6 billion 22 total cost? 23 A That's correct. 24 Q Okay. Thank you. 25 Back to your testimony, question 16, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 171 1 you talk about "recent comments we had from rating 2 agencies." And I'd like to understand what those 3 comments are. 4 A Sure. So there were -- some of the 5 exhibits that we provided were the rating agency 6 reports. And so those typically have a section that 7 outline what it would take for either rates -- rate 8 changes to improve or to cause them to go lower. 9 And so for us, those are typically centered around 10 our debt service coverage and liquidity. So those 11 are the two main things that they look at. 12 Q And so -- you say "the recent comments." 13 That comes from the reports then? 14 A That comes from the reports. 15 Q Now, have you had any discussions -- you 16 or MSD had any discussions with any of the ratings 17 agencies about this particular proposal? 18 A So I've reached out to all the rating 19 agencies and let them know that this proposal was 20 delivered, planned them to our website where they 21 can track the proceedings or they can view the rate 22 proposal. 23 It just so happens that Moody's, one 24 of the rating agencies, did kind of a, you know, 25 mid-period assessment on us just in the last week, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 172 1 and so they had this data available when they did 2 that, and they affirmed our ratings. 3 Haven't gotten any specific comments 4 to -- from them about this proposal, but typically 5 our rates in the process is viewed as a strength. 6 Q Okay. Good. 7 So I think we all agree on the goal 8 of maintaining strong credit ratings. I don't think 9 that's in dispute at all. 10 What I want to know, if we're looking 11 at a 60-40 split here of debt versus PAYGO, 12 that's -- I think, as compared to historically, 13 that's maybe a little less debt and a little more 14 PAYGO? 15 A That's correct. 16 Q And what's the basis for that? 17 A Really it was the rates that drove that. 18 So using more debt increased the debt service, and 19 we would have required higher revenue then to 20 maintain the debt service coverage levels that were 21 targeted. 22 When I talk about debt service 23 coverage, that's our net revenue; so operating 24 expenses minus revenues, that is available to pay 25 debt service. So that net revenue number is the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 173 1 numerator. The debt service, which is the principal 2 and interest that we pay, is the denominator. And 3 so we target 2 and a half times on our senior debt 4 and 1.8 times on overall debt when we are setting 5 rates. So more debt actually would have required 6 higher rates at some point to meet those coverage 7 targets. 8 Q Do you have feedback from the credit 9 ratings agencies about the level of debt service 10 coverage that -- that would then start impacting 11 your -- your ratings? 12 A So when we talk to the rating agencies, we 13 discuss our targets with them. We say this is what 14 we're targeting, this is where we're trying to set 15 rates to achieve these goals, and so their ratings 16 are somewhat based on that. 17 The ratings usually are not just that 18 here you are today but where they expect you to be 19 over, say, the next couple of years. So we have 20 feedback from that standpoint. And the ratings 21 reports themselves, that are exhibits, usually they 22 say things like if, you know, coverage and/or 23 liquidity were to fall below our targets or even 24 historical levels, that could crush your ratings. 25 Q So you said "targets." What are the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 174 1 actuals of your -- 2 A Well, the actuals from the last couple of 3 years have been higher than target because -- for 4 the reasons that we've talked about. Expenses have 5 been a little bit lower. The CIRP plan has come in 6 less expensive; so we have lower debt service and 7 lower expenses. We have higher liquidity because of 8 the CIRP plan coming in lower than expected. We've 9 got some additional cash. 10 Q So would you say you've got some cushion 11 there? 12 A We do have some cushion. 13 Q Okay. Did you do an analysis of -- let's 14 say instead of doing the 60-40 split, you did a 15 55-45 split? Was there any analysis done as to the 16 impact of that on -- really, just the impact of that 17 overall? 18 A You know, we looked at some different 19 scenarios. I don't remember what the exact splits 20 were. But you might want to ask Bret to tell us 21 about some of the models we looked at. 22 But if you increase debt too much, 23 you had to increase rates to cover the service 24 coverage. If you use too much PAYGO, you have to 25 increase rates to cover the PAYGO portions. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 175 1 Q So how confident are you that MSD set the 2 right balance? 3 A I think we -- I am confident that we are 4 in the right range. 5 Q What do you think the right range is? 6 A I think 60-40 is the right range for this 7 proposal. 8 Q And why would you say 60-40 as opposed to, 9 say, 65-35 or 55-45? 10 A I think if we go down to 55-45, the PAYGO 11 will require an increase in rates. And if we -- in 12 the last proposal, we targeted a 70-30 split. I 13 think that would offset increased rates and be 14 higher debt coverage. That was something that we 15 worked on with both PFM and Raftelis; so -- 16 Q Okay. Question 28 of your testimony, you 17 identify that the proposed rate change is consistent 18 with and not in violation of any covenant or 19 provision relating to outstanding bonds or 20 indebtedness of the district; right? 21 A Correct. 22 Q What -- what outstanding bonds or 23 indebtedness -- when I think about covenants or 24 provisions, I think about actual written documents 25 that say you can and cannot do XYZ. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 176 1 A Right. 2 Q And so what documents are you considering? 3 A So I'm considering the master bond 4 ordinance and all the supplemental ordinances for 5 each debt issuance that we've had, including the 6 SRF, the direct loans, the state revolving loan. 7 Q And did you -- in order to reach this 8 conclusion, did you review those documents with this 9 specific proposal in mind? 10 A We review these documents regularly. We 11 typically issue once a year, and so we review those 12 documents and have to do an analysis, some tests, 13 some additional bonds rate tests, and so we look at 14 this pretty regularly. 15 Q Okay. I talked earlier both with 16 Mr. Hoelscher and Mr. Gee about affordability. And 17 it is clear that there was some affordability 18 analysis done with respect to residential customers. 19 But it sounds like -- has there been any 20 affordability analysis done with respect to 21 multi-family or nonresidential customers? 22 A I'm not aware of any affordability 23 analysis or any benchmarks. 24 Q Okay. And we've also talked a bit about 25 an excess strength surcharge that will increase what MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 177 1 I'll call significantly in the first year of the 2 program. 3 Was there any discussion about 4 phasing in those surcharges rather than applying 5 them all at once? 6 A That is well outside my area of expertise. 7 I wasn't involved in that. 8 Q Okay. That's all I've got. Thank you. 9 CHAIRMAN TOENJES: Thank you, 10 Mr. Neuschafer. 11 Ms. Stump. 12 MS. STUMP: I have a few questions. 13 CHAIRMAN TOENJES: Please. 14 EXAMINATION 15 BY MS. STUMP: 16 Q Hello. 17 A Hello. 18 Q I'll start first with -- let's talk a 19 little bit about this table on 4-8, if you will -- 20 table 4-8 -- 21 A Okay. 22 Q -- on 4-17 that you were already talking 23 about. 24 The rate proposal, it's got -- 25 projects the use of low interest loans, including MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 178 1 SRF loans and the WIFIA -- 2 A Correct. 3 Q -- funding at 25,267 for FY19 and 75,000 4 for FY20. 5 Can you explain how the FY19 and '20 6 projections were determined? 7 A Sure. Those were based on projects that 8 were already approved by the state; so they're in 9 the intended use plan, or they're expected to be in 10 the intended use plan for those periods. So we 11 already have projects identified that we are 12 comfortable we'll receive SRF funding. 13 Q And then how do you project the SRF 14 fundings for the years going forward? 15 A So that is an estimate. The state has 16 limited funds available. And so all, you know, 17 special districts, municipalities in the state that 18 have clean water projects are eligible for those. 19 It's a competitive process. 20 If you look at the intended use plan 21 from the state, you would see that the state usually 22 likes to give or targets about 30 percent of their 23 available funds to go to what they call large 24 metropolitan areas or large districts. And that -- 25 they define large as anybody with over 75,000 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 179 1 residents. So there's a number of municipalities in 2 the state that are eligible for those funds. 3 So we have historically been the 4 largest user, occasionally going over that 5 30 million number, but not always. So we thought 6 that was a safe estimate that we would be able to 7 get from -- from the state. There's no guarantee 8 that we can get that, and if there is more 9 available, then we will probably try to get more. 10 Q Why 75 million in 2020, which you've said 11 has already been designated; right? 12 A Right. 13 Q And -- but then you're -- you're 14 anticipating a -- it back down to 30 million in 15 2021? 16 A Yeah. So the state issues an intended use 17 plan for one year at a time, and we have had 18 conversations with the state so feel comfortable 19 with that fiscal year '20 number. 20 We -- they have not published nor -- 21 we may have submitted some applications, but we have 22 no reasonable way to forecast what those proceeds 23 will be going forward. 75 million would be a very 24 high amount. 25 Q That's just a -- I mean, that's a big MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 180 1 difference, but you've got 75 million for 2020. 2 A Right. And we have less than 30 million 3 in 2019. 4 Q Anything in particular that -- they're 5 just -- 6 A Well, like I said, if they have a couple 7 hundred million dollars to loan, they target usually 8 30 percent for large metropolitan areas; so that 9 would be maybe -- if they had 200 million to lend 10 out, that would be $60 million to lend out to all 11 large metropolitan areas. We're only one of the 12 large metropolitan areas; so we would have to share 13 that money. 14 Now, if others in the state do not 15 apply or don't need the money, there might be more 16 available for us. 17 Q Which may have been what happened with 18 2020? 19 A Which is probably what happened with 2020. 20 Q Okay. As long as we're talking about the 21 SRF loans, in your testimony on page 9, questions 30 22 and 31, you talk about the advantages and 23 disadvantages of participating in the program. 24 Can you just summarize that a little 25 bit for us? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 181 1 A Sure. The major benefits are it's a 2 reduced borrowing rate; so it's a significantly 3 lower interest rate than what we would get on -- 4 going to the capital market, which is where we get 5 most of our borrowed funds. 6 Now, the -- the timeframe that we 7 have to pay these loans back is shorter also. So on 8 an annual basis, there's not a huge difference in 9 the debt service cost, but the SRF program is a 10 20-year debt versus 30 years. So over the life of 11 the loan, there's a significant savings to using the 12 SRF program; so it's a cost benefit the more SRF we 13 use. 14 Disadvantage is really hits our 15 engineering group probably more. There's a lot of 16 reporting requirements; so we don't have the capital 17 markets. And then again the SRF program is -- 18 there's limited availability; so we cannot possibly 19 fund our entire program with SRF because there's not 20 enough SRF money. And, again, it's a competitive 21 process; others are also eligible. For every dollar 22 that somebody else gets is a dollar that we don't 23 get. 24 Those are probably the primary 25 reasons. The SRF loans are a little bit less MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 182 1 flexible, too. With the capital markets, we have a 2 little more flexibility and structure. With SRF, 3 the state has a specific structure they like and 4 that they use over and over. 5 Q And on question 31, you indicate that SRF 6 funds are primarily to be used for sanitary sewer 7 projects that may not be available for certain 8 combined sewer projects. 9 Can you elaborate on those and what 10 the state's requirements are? 11 A Yeah. The state, I believe, has just a 12 certain amount available for combined sewer 13 projects; so there may be some money available. 14 But, again, being a competitive process and limited 15 amount of funds, we may not -- those funds may not 16 be available for us from year to year; so that's 17 what that means. 18 Q So we talked a little bit about your 19 monies that you already have determined to come up 20 in 2020, I think it was. And on question 33, you 21 say the district has applied to have funds allocated 22 to it in the 2020 intended use plan, and you 23 submitted SRF applications. 24 Do you know the total value of the 25 CIRP projects that the district has applied for SRF MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 183 1 funding? 2 A I think it's roughly the 75 million. 3 There may be -- in the intended use plan, there's 4 sometimes some contingency areas. Engineering is 5 the one that kind of suggested projects that we use 6 for that; so -- and they are the ones that make the 7 applications for the intended use plan. 8 Rich Unverferth may know and can get 9 that number from his group. 10 Q So back to the WIFIA, it's my 11 understanding that EPA authorized a 47.7 million 12 WIFIA loan in December 2018 -- 13 A Correct. 14 Q -- to help finance the Deer Creek Sanitary 15 Tunnel and Sanitary Relief Project. 16 Is this loan reflected in the rate 17 change proposal? 18 A It is reflected in the rate change 19 proposal. 20 Q And do you anticipate applying for another 21 loan in 2019? 22 A We did not build into the rate proposal 23 any additional WIFIA funds, but it is something we 24 are discussing. 25 Q When do you make that determination? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 184 1 A I believe -- there's usually annual 2 periods where the program is open for applications. 3 I believe the period was open last week, and -- and 4 we have, I think, till July. I think we have until 5 July to submit a letter of interest indicating our 6 interest entering into another -- a WIFIA loan. 7 At that point, again, it's a 8 competitive process. They will choose some of the 9 projects selected. In the first round, we were one 10 of 12 entities in the nation that were selected and 11 invited to apply for a WIFIA loan. 12 Q I was just -- why wouldn't you want to 13 apply for a WIFIA loan for 2019? 14 A Again, there are a lot of additional 15 requirements. I think it's something that we will 16 talk about. I think there might be benefits just 17 because we've already agreed to a structure, but 18 it's a conversation that we're -- that we're having. 19 I anticipate at some point we will apply for 20 additional WIFIA funds. 21 Q And that's not at all -- just to make it 22 on the record, that's not figured into this? The 23 only -- 24 A Correct. 25 Q -- currents figured into the proposal is MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 185 1 the December 2018? 2 A That's correct. 3 Q I'm sorry. I'm just making sure. 4 A You're fine. 5 Q I don't -- you've already explained, I 6 think, the 60-40. 7 If the district incurs additional 8 debt as part of this rate change proposal, is its 9 ability to rely on debt funding for future rate 10 proposals limited? 11 A I don't think that necessarily limits it. 12 According to the rate agency reports, as long as we 13 can meet our debt service coverages and maintain 14 liquidity, we're probably in pretty good shape. 15 Those are the metrics we mostly look at. But we 16 will -- you know, every four years, we look at this 17 again; so it depends on what CIRP is doing. If we 18 need additional debt funding in the future, I 19 believe it will be available to us. 20 Q I know Exhibit 9 in the Moody's report, 21 they identify certain factors that lead -- that 22 could lead to a downgrade, such as narrow liquidity 23 or debt service coverage, inability to successfully 24 manage the consent decree, significant decline in 25 system demand. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 186 1 Do you have concern about any of -- 2 any of these? 3 A I'm not concerned from the standpoint -- I 4 think we have reasonable assumptions built in here, 5 but there are always some things that we can't 6 control right; so -- you know, volume is something 7 that we don't control; so that might be a concern. 8 But I think it's also why we go back 9 and look at this every few years so we can reset 10 assumptions. But I think the financing plan 11 assumptions that we have built in here are -- are 12 certainly reasonable. 13 Q And in Exhibit 40, Fitch identified 14 previous public votes in support of issuance of 15 additional bonds as evidence that the district 16 maintains a strong voter confidence. 17 I'm just concerned -- I'm just 18 curious if the whole voter reaction to Prop S, if 19 you see that as having any effect on -- when Fitch 20 looks at previous public votes, would that come into 21 play at all? 22 A I don't think it will because this was for 23 a new service. We were looking to provide a new 24 service, and we're asking for funding for it. 25 The bond votes goes specifically to MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 187 1 our wastewater funding, and so I think they're 2 separate issues. They're separate kind of votes and 3 completely separate issues. 4 Q So you don't believe the voters' rejection 5 of Prop S will have any impact on the -- 6 A I do not. 7 Q Do you have any -- I know this is -- you 8 may not have thought this through yet, but do you 9 have any concern that the failure of Prop S may 10 suggest that the voters may not be able to tolerate 11 even additional rate increases? 12 A I don't -- I don't think so. I mean, I 13 know -- you know, these rate increases are lower 14 than what we've proposed historically, at least in 15 recent history; so from that standpoint, I think 16 there'll be some relief. They're not higher. 17 And, you know, when they go back 18 to -- when we go back to the polls, the question is 19 not whether or not we've had the consent decree; 20 it's always whether or not or we bond; so rates 21 would be significantly higher if we didn't. 22 We haven't seen any evidence that, 23 you know, we had a large increase in people not 24 paying. The rating agencies don't have any metrics 25 that would say that at the level we're at, people MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 188 1 would stop paying, and we're in typical 2 affordability metrics that are used in the industry. 3 Q Okay. Thank you. 4 Just go through my notes one more 5 time, make sure. 6 On your last question on your 7 testimony, question 37, where you're talking about 8 Missouri American Water, is that back to the Arnold 9 thing? 10 A Yes. 11 Q Okay. Is there anything you want to add 12 about the whole Arnold discussion that we had 13 earlier? 14 A No. 15 Q Okay. Brian must have done a very good 16 job. 17 MR. HOELSCHER: How much do you pay a 18 month, Tim, if you don't mind me asking? 19 THE WITNESS: I pay a little bit over $40 20 a month. 21 MS. STUMP: I have no further questions. 22 CHAIRMAN TOENJES: Thank you, Ms. Stump. 23 We're going to take one question from 24 Mr. Goss. Then we're going to take a break. 25 EXAMINATION MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 189 1 BY COMMISSIONER GOSS: 2 Q Thank you for your testimony. 3 Is the reason that you didn't include 4 the WIFIA funds, the possible application for those 5 in the rate proposal, is because it would not have 6 any material impact on the rate dispute being 7 requested, or was there some other reason? 8 A Well, it wouldn't have a material impact. 9 There'd be some impact -- 10 COMMISSIONER GOSS: Thank you for your 11 question -- or answer. That's all I want to 12 know. I just want to know if it's material. 13 That's all I care about. 14 CHAIRMAN TOENJES: We'll take a break till 15 2:15. 16 (Whereupon, a brief break was taken.) 17 CHAIRMAN TOENJES: Let's see. We are 18 missing our witness. 19 Mr. Snoke, we will continue with questions 20 from rate commissioners. 21 Mr. Palans? 22 EXAMINATION 23 BY COMMISSIONER PALANS: 24 Q Good afternoon, Mr. Snoke. 25 A Good afternoon. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 190 1 Q I want to go through some portions of your 2 direct testimony with you. It's MSD 3F; so if 3 you've got that handy. 4 A I do. 5 Q And question 6, page 1, you describe how 6 the district will finance its major capital 7 expenditures for this rate cycle; correct? 8 Oh, wait. What is the rate cycle? 9 Let's nail it down. 10 A So this rate cycle -- this question is 11 referring to the rate cycle fiscal '17 through '20. 12 Q '17 through 20. Okay. 13 And in question 7, you state that the 14 district expects to finance its cap ex from three 15 sources: cash on hand, new debt drawn from the 16 675 million of debt financing available under the 17 current $900 million bond authorization -- 18 A Correct. 19 Q -- and user charges based on rate 20 increases approved by the trustees; correct? 21 A Correct. 22 Q Okay. And then in question 8 is the 23 future cap ex needs. You do reference three 24 sources. You assume the use of 539 million of 25 additional debt financing under its current MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 191 1 $900 million authorization; right? 2 A Correct. 3 Q Is this the same $900 million 4 authorization that you reference in question 7? 5 A It is. 6 Q Okay. And second, 366 million of 7 additional debt under a new $500 million 8 authorization; right? 9 A Correct. 10 Q And that's why we're going to the voters 11 for this approval; right? 12 A Correct. 13 Q That's -- that's the only reason we're 14 going to the voters under this proposal? 15 A That's correct. 16 Q Okay. And $550 million of PAYGO to fund 17 CIRP from fiscal '21 to fiscal '24. 18 Tell me what PAYGO is in layman's 19 terms. 20 A Sure. So in this context, we're -- PAYGO 21 is the amount of rates that we collect that go 22 directly to fund the capital plans. So not used for 23 debt services; it pays for projects. 24 Q So it's not gross revenues; it's a portion 25 of the revenues that you collect? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 192 1 A That's correct. 2 Q You go on to state in question 7 that the 3 district expects to continue using debt as a major 4 component of CIRP, and then I -- I'm going to quote 5 you -- "until such time as it no longer becomes 6 financially prudent"? 7 A Correct. 8 Q Okay. So what do you mean by that 9 statement, "until such time as it no longer becomes 10 financially prudent"? 11 A Every time we borrow money, we add debt 12 service, and the capital plan is not a straight, 13 flat capital plan. There's ups and downs. So there 14 may be periods where the rates that we have are 15 sufficient to fund the capital plan without any 16 additional debt, and the addition of debt may 17 actually cause us to increase rates beyond what is 18 needed to fund the capital plan. 19 Q So the factors that go into whether it's 20 financially prudent may include interest rate 21 increases? 22 A Correct. 23 Q Other factors that may impact the 24 creditworthiness of the district? 25 A That's correct. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 193 1 Q Like debt service coverage that we were 2 talking about? 3 A Mm-hmm. 4 Q What about the costs of CIRP? We've heard 5 a lot of testimony about how the engineers have 6 brought in the CIRP costs at what I would describe 7 as historic lows; correct? 8 A Correct. 9 Q And what happens if it goes the other 10 direction? That may impact the financial liability 11 of the district, could it not? 12 A It could. 13 Q In question 11, you indicate that the 14 proposed CIRP is anticipated to be funded with a 15 combination of approximately 60 percent of debt and 16 40 percent PAYGO; right? 17 A Correct. 18 Q And that's -- just so I understand, that's 19 just for this cycle, just for this proposal? 20 A That is correct. 21 Q We're not saying you're going to do 22 60 percent-40 percent for the next 20 years to 23 comply with the consent decree? 24 A That's correct. 25 Q So you may end up taking more debt in MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 194 1 future years to comply with the consent decree if 2 needed? 3 A That's correct. 4 Q And there's been a lot of talk about this 5 $3 billion debt capacity that the district has. 6 A Yeah. I address -- 7 Q Where's that come from? 8 A They -- I -- that -- so there was a 9 3 billion number in the rate model. That was just 10 set there as a number that was high enough so as to 11 not interfere with the calculations. So I would say 12 we do not have a $3 billion debt capacity. 13 Q Has the board of trustees set a 3 billion 14 debt capacity? 15 A They have not. 16 Q Has anybody told you you can't borrow more 17 than $3 billion? 18 A They have not. 19 Q Have they said to you, "When it comes to 20 compliance of the consent decree in 2035, we may 21 need 4 and a half billion dollars worth of debt. 22 You can't go there." Have they said that you? 23 A Nobody has said that. 24 Q Okay. In question 15, you state that the 25 district worked with its financial advisor, PFM, to MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 195 1 develop a financing plan that maintains AA bond 2 ratings. 3 And you go on to state that Fitch, 4 Moody's, and S&P have all noted that the district's 5 current credit rating could be compromised if 6 projected service debt coverage fell below projected 7 levels; correct? 8 A Correct. 9 Q And the district must maintain a strong 10 liquidity position; correct? 11 A That's correct. 12 Q And you go on to state that a reduction in 13 cash balances below historical norms could also 14 pressure your credit rating; correct? 15 A Correct. 16 Q So if the voters do not authorize the 17 additional bond issue, rates will increase more 18 quickly because the district will need to fund CIRP 19 through PAYGO only. Is that a fair statement? 20 A That's fair. 21 Q So liquidity is good. Yes? 22 A Liquidity's good, yes. 23 Q Liquidity allows the district to maintain 24 its credit rating? 25 A That's correct. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 196 1 Q Keeps the rating agencies happy? 2 A Yes. 3 Q And it enhances or improves the financial 4 flexibility of the district; correct? 5 A Yes. 6 Q A few -- seems like days ago, but a few -- 7 few minutes ago, we talked with Mr. Gee about -- 8 CHAIRMAN TOENJES: Time passes quickly 9 here in these meetings. 10 Q (By Commissioner Palans) We talked with 11 Mr. Gee about liquidity and operations and liquidity 12 savings or enhancement that has occurred over the 13 past few years, which is better than what the board 14 was presented as a forecast in 2015; correct? 15 A Correct. 16 Q And so the district has experienced better 17 liquidity than previously forecasted. And this 18 enhances or improves the district's 19 creditworthiness, does it not? 20 A It could. We're already one of the 21 highest rated districts in the nation. We have the 22 highest rating from S&P, the second highest rating 23 from the other two rating agencies. So additional 24 liquidity wouldn't necessarily improve our credit 25 score because there's really not much higher we can MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 197 1 go. 2 Q What is your credit rating from S&P? 3 A AAA. 4 Q And what is it from Moody's and Fitch? 5 A From Fitch, it's AA-plus; and from 6 Moody's, it's Aa1. 7 Q What do you need to do to get to AAA for 8 both of them, or A1 from both of them? 9 A I don't think we would get there from 10 liquidity. It would probably be debt service 11 coverage, but I think given the amount of debt we 12 have outstanding, we're probably -- it's probably 13 going to be hard to get to AAA from both of those. 14 Q If the district were to operate under a 15 budget as approved previously in the forecast that 16 was presented to the board of trustees, 10 percent 17 increases per am, this would increase liquidity, 18 would it not? 19 A It would increase liquidity given -- based 20 on the current assumptions for costs, yes. 21 Q And it would increase your 22 creditworthiness in the eyes of the outside world 23 lenders and even rating agencies, would it not? 24 A It's -- it's possible. I think we're 25 already held in high esteem there. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 198 1 Q And you would have increased financial 2 flexibility, would you not? 3 A We would. 4 Q And you could create a cushion for the 5 district to meet whatever storms might be 6 approaching in the future in the event that any of 7 these horribles that we went through this morning 8 should ever occur, these contingent exposure risks, 9 I'll call them; correct? 10 A Correct. I think we have some of that 11 already built in though. 12 Q So do you not believe it to be good 13 prudent business judgment to build liquidity into a 14 model as we go forward? 15 A Absolutely. I think it's prudent and 16 we've done that. 17 Q Were you present when the presentations 18 were made to the credit rating agencies? 19 A Yes. 20 Q And when were they? 21 A We -- so the last time I went to the 22 capital markets, we went to the rating agencies in 23 October of 2017, and then we had some phone calls 24 with the rating agencies in November of 2018 before 25 the WIFIA loan was entered into. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 199 1 Q And what did you present as your portion 2 of the show? 3 A So usually I talk about debt structure and 4 liquidity. 5 Q And what questions were you asked, if you 6 recall? 7 A You know, I don't remember specific 8 questions, but usually what I'll go over is just 9 why, you know, we're going over the structure we 10 requested. Usually we're looking at level debt 11 service payments. 12 I was asked questions about what we 13 expected the interest rate to be, the term of the 14 loan, when would there be principal amortization. 15 And then on the liquidity side, I presented what we 16 measure -- or at least cash on hand and where we 17 expected that to go. 18 COMMISSIONER PALANS: Thank you, 19 Mr. Chairman. I have no further questions. 20 CHAIRMAN TOENJES: Thank you, Mr. Palans. 21 Any of the other rate commissioners have 22 questions for Mr. Snoke? 23 Those on the phone, any questions for 24 Mr. Snoke? 25 COMMISSIONER RATZKI: No questions from MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 200 1 Tom Ratzki. 2 CHAIRMAN TOENJES: Ms. Myers, do you have 3 any questions for Mr. Snoke? 4 MS. MYERS: I do not. 5 CHAIRMAN TOENJES: Thank you, Mr. Snoke. 6 THE WITNESS: Thank you. 7 CHAIRMAN TOENJES: Appreciate it. 8 We will move forward with Bethany Pugh. 9 (The witness was duly sworn.) 10 CHAIRMAN TOENJES: Thank you. 11 Any members of the Rate Commission have 12 questions for Ms. Pugh at this point? 13 Mr. Neuschafer, do you have any questions 14 for Ms. Pugh? 15 MR. NEUSCHAFER: I do. 16 CHAIRMAN TOENJES: Please come forward. 17 EXAMINATION 18 BY MR. NEUSCHAFER: 19 Q Good afternoon. 20 A Good afternoon. 21 Q I just have a couple of questions. 22 But I wanted to talk about -- we've 23 been talking about this all afternoon so far -- the 24 split that's been developed, the 60-40 split between 25 bond and PAYGO financing. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 201 1 Did you -- were you involved in any 2 of the modeling that helped come up with that 60-40 3 split? 4 A Yes. PFM worked with the district staff 5 to develop a financial plan and model. 6 Q Okay. And how -- in your understanding, 7 how was the 60-40 split established? 8 A So this is somewhat of an iterative 9 process. I mean, because all of those assumptions 10 drive one another which ultimately impact the rate 11 increases. So the core statistics that we look at, 12 not so much PAYGO -- that's certainly one of them -- 13 but it's what does the coverage look like, what does 14 liquidity look like, and what is the impact on 15 rates. And so all of these things kind of drive one 16 another. 17 So given the amount of dollars that 18 were already on hand, we started looking at the next 19 four years, fiscal year '21-'24, for this rate 20 proposal, kind of start with that equation. What 21 are your capital investment needs? And what's a 22 debt go -- you know, debt-PAYGO mix? How does that 23 impact coverage? Are we hitting the targets that 24 we've set for ourselves? How does it impact 25 liquidity? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 202 1 So it's very much an iterative 2 process. You don't go in necessarily saying that 3 it'll be 60-40, and the chips fall where they may. 4 But you kind of look at all those statistics and 5 figure out what's the right medium in consideration 6 of what the rate increases will have to be. 7 Q Okay. Was modeling -- was -- so I 8 understand the process to get to 60-40 there, did 9 you then test that and do any modeling, "Okay. We 10 got to 60-40 using this iterative process. We want 11 to test to see what rates and what impacts on our 12 credit there would be from, say, slightly different 13 steps"? 14 A So I think the target outcome isn't 15 necessarily debt-PAYGO. The target outcome, among 16 other things, is what do the rate increases look 17 like? Are we funding on full CIP? Are we hitting 18 our coverage targets? Are we hitting our cash -- 19 our day's cash on hands targets? And does that -- 20 the mix get us to the right -- all those other 21 outputs, rate increases, hitting our target? So on, 22 so forth. If that helps. 23 Q Yeah. I think I understand what you're 24 saying. 25 Let's talk about just the credit MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 203 1 ratings. 2 A Sure. 3 Q In your opinion, what would funding the 4 CIRP through a 65 percent debt financing look like? 5 A So if we ran that scenario, what I would 6 look at is what does it do to rates in terms of rate 7 increase, but also how does it impact our debt 8 service coverage, how does it impact liquidity 9 compared to other analyses and say, look, what is 10 the optimal scenario for the district. 11 Q You said "if I ran that analysis." I'm 12 reading into that -- 13 A I don't remember which analyses we did, 14 but, again, it's -- you start with what you need to 15 fund. You start with -- you obviously start with 16 any assumptions related to debt-PAYGO to see what 17 does that do to rate increases, what does it do to 18 coverage, what does it do to day's cash on hand. We 19 kind of hit everything we're trying to hit with 20 respect to that. 21 Q Okay. So I understand that you got to 22 60-40. I guess what I'm trying to then understand 23 is, was any analysis done with any other numbers 24 then, with 65-35, with 55-45, to maybe test that, 25 "Hey," you know, "really we are at the sweet spot MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 204 1 with 60-40 because if we did 55-45, it's going to 2 have this negative impact on customer rates, or it's 3 going to have this negative impact on credit rating; 4 so we know that's going too far," for example? 5 A You know, I would have to go back and 6 count and look at other iterations to more 7 appropriately answer your question. 8 MR. NEUSCHAFER: Okay. That's all I've 9 got. Thank you. 10 CHAIRMAN TOENJES: Thank you, 11 Mr. Neuschafer. 12 Ms. Stump, do you have questions for 13 Ms. Pugh? 14 MS. STUMP: I do have a few, please. 15 CHAIRMAN TOENJES: Please. 16 EXAMINATION 17 BY MS. STUMP: 18 Q Good afternoon. 19 A Good afternoon. 20 Q In your testimony, on page 4 on question 21 6, I just want to kind of clarify a couple things. 22 You're talking about -- in the middle 23 of the paragraph it says, "Based on these 24 parameters, we then analyzed the District's 25 historical ratio of debt to cash funding for CIRP." MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 205 1 And then you say, "75 to 25 percent 2 debt to equity." 3 Then the next two sentences, there's 4 also a debt to cash reference. 5 A What page? 6 Q Question 6. 7 And I just wanted to confirm -- I 8 mean, are you using the phrases "debt to cash" and 9 "debt to equity" interchangeably? 10 A Yes. 11 Q Can you explain that a little bit? 12 A Yes. 13 Q Okay. Can you explain -- 14 A First difference between the -- 15 Q Why are they interchangeable, the words 16 "debt to equity" and "debt to cash"? 17 A It's not debt. It's coming out of dollars 18 generated from your revenues, or potentially 19 interest income, but still dollars generated from 20 your revenues. 21 Q Okay. Thank you. 22 We've -- you had some discussion with 23 Mr. Neuschafer, too, about the 60-40 split. 24 Do you anticipate or did you look at, 25 at all, or anticipate maintaining a 60-40 split MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 206 1 beyond fiscal year '24? 2 A No. 3 Q "No," you don't anticipate it, or "No," 4 you didn't look at it? 5 A No, we didn't look at it. 6 Q Thank you. 7 On your question 8, you -- about the 8 third line down, "To mitigate interest rate risk 9 associated with future issuances, PFM added 10 additional spreads to the yields ranging from 11 .70 percent." 12 What does that mean when you say 13 "additional spreads to the yields"? Can you explain 14 that in -- 15 A Sure. So we know what current market 16 conditions are. If we were to sell bonds today, 17 what those interest rates would be. Since we're 18 projecting over a five-year period, we want to 19 provide some additional cushion so that if there's 20 interest -- if interest rates increased, our 21 assumptions would still be reasonable in terms of 22 what debt service would cost in the future since 23 this is essentially an interest rate cushion that 24 we're building into the analysis. 25 Q So how much did you -- of that is MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 207 1 allocated in the -- 2 A So it ranges from 70 basis points to 145 3 basis points between the fiscal '21 to '24 year 4 period. 5 Q Thanks. 6 We've heard a lot of discussion about 7 liquidity and the word liquidity. I'm going to ask 8 you to try to explain that a little bit more. 9 On question 11, on page 6, you 10 provide a definition of "days cash on hands" as 11 being calculated by dividing cash and relatively 12 liquid investments by operating expenses less 13 depreciation, then dividing by 365 days. 14 What kind of investments do you 15 consider relatively liquid investments? 16 A So actually in the ratings presentation 17 that's attached by exhibit, you'll see exactly what 18 we present to the rating agencies in terms of the 19 district's investment portfolio, all the things we 20 look at, essentially how long would it take to cash 21 out or the average maturity, those types of things. 22 How quickly can you access those dollars if you 23 needed to. 24 Q And that's in the exhibit that's filed 25 with your testimony? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 208 1 A I don't know if it's with my testimony, 2 but it's -- a rating agency presentation is an 3 exhibit. 4 Q I think it's a new one. Because according 5 to this, it's 63. 6 MR. SNOKE: That was the last one we gave 7 you. 8 MS. STUMP: Came with the last one? Okay. 9 I'm sorry. Do we have enough -- 10 MS. MYERS: That's the -- our -- MSD's 11 response to the third discovery request. 12 MS. STUMP: Okay. 13 MS. MYERS: It's MSD 63A. 14 THE WITNESS: It's F. F as in "Frank." 15 It's F. 16 MS. STUMP: Thank you. 17 Q (By Ms. Stump) So just for the record, the 18 F -- 63F is the actual -- 19 A Ratings presentation. 20 Q -- presentation, yes. Okay. 21 And in your calculation, too, you 22 refer to operating expenses less depreciation, which 23 seems to admit principal payments on outstanding 24 debt; is that correct? 25 A So -- depreciation, no. That's kind of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 209 1 the depreciation on the capital assets. And days 2 cash on hand is a metric that the rating agencies 3 actually use. They have different variations of how 4 they calculate it by agency, but the concept is 5 really a metric that's fairly widely used. And so 6 the only reason you subtract depreciation is because 7 it isn't necessarily cash expense. You can fund 8 depreciation, but depreciation itself is a, you 9 know, auditing calculation. 10 Q Thank you. 11 And when -- you just referred to a 12 little bit about the rating agencies, but can you 13 summarize -- maybe what you just said, but can you 14 summarize how rating agencies review liquidity? 15 A The purpose of the calculation days cash 16 on hand or liquidity is how much money can you 17 access that's not restricted as to purpose in case 18 of emergencies either on operational or from a 19 capital funding perspective. So that's what -- when 20 we talk about days cash on hands and how the rating 21 agencies look at it, that's what they're trying to 22 figure out, how much unrestricted dollars you have 23 available to address financial needs. 24 Q Okay. Thank you. That's very succinctly 25 said. I appreciate it. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 210 1 A I try. 2 Q And then I'll just ask you a final 3 question, which you heard me ask Mr. Snoke, too. 4 And as the -- as the district's 5 financial advisor, do you believe that the failure 6 of Prop S affects the district's -- or will affect 7 the district's debt rating at all? 8 A No. I mean, I think part of the reason 9 is, as I understand the way the voting on the bond 10 levies, is the alternative is 100 percent cash 11 funding, which means a higher increase in rates. So 12 I'm not aware of anything, although I don't -- you 13 know, I'm not a pollster, but that changes the kind 14 of political dynamic as it relates to what the 15 anticipated results for the next vote, specifically 16 on this bond level. 17 MS. STUMP: I have no further questions. 18 CHAIRMAN TOENJES: Thank you, Ms. Stump. 19 Any questions from any of the rate 20 commissioners? 21 Mr. Palans? 22 EXAMINATION 23 BY COMMISSIONER PALANS: 24 Q Thank you. 25 Ms. Pugh, I understand that PFM is MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 211 1 the district's financial advisor on all aspects of 2 debt policy development? 3 A Yes. 4 Q And debt transaction management? 5 A Correct. 6 Q And credit rating presentations? 7 A Correct. 8 Q And ongoing debt monitoring? 9 A Correct. 10 Q When was PFM retained to serve as 11 financial advisor in connection with this rate 12 proceeding? 13 A Well, we've had an ongoing relationship 14 with the district; so we've worked on, I think, 15 every rate proceeding, if you talk about the 16 commission process since inception. So I know that 17 we were distinctly engaged for this one since it's 18 part of our ongoing services. 19 Q It's been a continuing -- 20 A Sure. 21 Q -- process of continuing engagement -- 22 A Correct. 23 Q -- correct? 24 When did you first meet with the 25 district's representatives about this rate proposal? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 212 1 A Wow. I don't know when the first call 2 was. Was that -- I don't even know. But, you know, 3 this is the multi-month preparatory process that the 4 district takes to prepare -- prepare the rate 5 proposal. It's an iterative process between PFM and 6 Raftelis in terms of our financial planning model 7 and their -- their robust rate model; so that's a 8 multi-month process. I'd have to get it out and 9 look at my calendar to get you more specific than 10 that. 11 Q Did the first inquiry from the district 12 come a year ago or more? 13 A I have no idea. I'd have to get -- I'd 14 have to break -- I'd have to follow up. 15 I will say that I did participate in 16 this process back in 2015 -- or was it '14? '15, 17 '14, whenever the last one was. So, I mean, 18 there's -- there's a bit of historical knowledge 19 that's built into this from my perspective. 20 Q And I think you indicate that you've been 21 working with the district since 2012. Does that 22 sound about right? 23 A That's correct, yes. 24 Q And how is PFM compensated for its work as 25 financial advisor for the district? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 213 1 A We're compensated on a transaction basis; 2 so it's a per-transaction fee. 3 Q And on this particular rate proposal, what 4 is the transaction amount or fee that is at issue? 5 A There is no -- there is no fee. Our 6 compensation for the work that we do both on a 7 transaction and in between transactions is rolled up 8 into the transaction fee. So I don't -- I honestly 9 couldn't answer your question. 10 Q Well, how do you figure it out? How do 11 you determine what you're going to charge? 12 A Well, we went through a request for 13 proposals process; so the district's -- I mean, this 14 is probably -- the last one was probably in 2015. 15 Don't quote me on it. But we submit a proposal. We 16 submitted a fee proposal. That would be to 17 compensate on a -- dollar per bonds, the terminology 18 that's used in our marketplace. 19 Q Dollar per bond? 20 A Correct. 21 Q So this rate proposal has a bond -- new 22 bond financing that is intended to go to voters -- 23 A No. No. So all I'm saying is we don't -- 24 we don't have a fee structure that is contingent 25 upon this particular work. It's more comprehensive. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 214 1 So we will get paid the next time we do a bond 2 issuance. 3 Q I'm a little confused. 4 How do you figure out what you're 5 owed? 6 A We multiply the amount of debt that's 7 being issued by our fee. 8 Q Okay. In this rate proposal, I understand 9 it's -- $500 million bond is requested. 10 A When you do, which you're not going to 11 do -- it's not likely that there would be one $500 12 million issuance. It's likely that there would be 13 subsequent -- you know, the next transaction may be 14 $100 million or $200 million, and our fee is a 15 multiple of that, or it's multiplied by the bar 16 amount that that debt's issued. 17 Q You got me. 18 Can you explain it? And maybe it's 19 just me. But I understand this proposal has a 20 $500 million bond component embedded in it that is 21 intended to go to voters. 22 A Okay. 23 Q So if that is approved, you know, are you 24 paid based upon that approval -- that bond approval? 25 A We are paid when you've actually executed MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 215 1 debt transactions. 2 Q Okay. So when the bond -- when the loan 3 is made, when the closing occurs? 4 A Yes. 5 Q And that closing, under this rate 6 proposal, is supposed to be a $500 million proposal? 7 A So you're voting -- or you're asking the 8 voters to authorize up to $500 million in issuances. 9 You're not likely to issue all $500 million at once. 10 You're going to issue over a four-year period some 11 amount of money; right? The next transaction you 12 issue could be $150 million. When you issue it -- 13 when that particular bond issuance settles, then we 14 will get paid based upon the amount of debt issued, 15 and then the next one similarly, then the next one 16 after that. 17 Q Okay. Okay. So you're not compensated 18 based upon voter approval of a gross amount? 19 A No. 20 Q Okay. Are there any initiatives or 21 bonuses that are built into your compensation? 22 A No. Your staff drives a really hard 23 bargain. 24 Q You indicate that -- in your testimony 25 that you also serve clients in addition to the MSD: MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 216 1 The Greater Cincinnati District, the District of 2 Columbia, Orlando, Des Moines, Hampton Roads. 3 Are there others that you can think 4 of that you represent? 5 A So the firm -- just to be clear, I don't 6 personally work on all those accounts, although I do 7 work on some. But the firm or myself or colleagues 8 around the country. It's a national firm. We have 9 600-plus employees across the country, and so we in 10 that capacity tend to work with a lot of large 11 public utility entities as financial advisor. 12 Q I want to just stay with sewer 13 districts -- 14 A Okay. 15 Q -- for the moment. 16 Do you work -- does P -- PFM work 17 with other sewer districts that are operating under 18 consent decrees with EPA? 19 A Yes. 20 Q Which ones would those include? 21 A So some of those are listed on there: DC, 22 Wausau, Cincinnati, City of Toledo, Ohio. I would 23 have to -- you can make a discovery for a full list. 24 Q Do you personally work with those? 25 A Yes. I personally work with the City of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 217 1 Toledo, Ohio, and Greater Cincinnati. 2 Q Based upon your personal knowledge and 3 work with Toledo and Cincinnati, how do their 4 metrics -- borrowing metrics liquidity compare with 5 this district? 6 A This would be the highest rated -- 7 actually I have to go back and look at -- MSD, they 8 haven't issued in probably a while. But you're at 9 or exceeding, in terms of creditworthiness and 10 strength, those entities. 11 Q Okay. Thank you. 12 You say in your testimony that you've 13 developed several financial plans evaluating 14 economic policy and risk implications of myriad 15 financial alternatives. 16 A Yes. 17 Q Tell me what you did. 18 A So that -- what that intends to imply is 19 different types of debt structures, fixed versus 20 variable terms, different types of debt products, be 21 it publicly or privately placed debt. So kind of 22 the myriads of financial product -- the myriad of 23 those types of financial products that might be 24 valuable to a public utility entity for one reason 25 or the other: forward, starting obligations, a MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 218 1 multitude of things. 2 Q Have you shared those models evaluating 3 policy and risk implications and financial 4 alternatives with the district? 5 A Well, I mean, I think every product is not 6 necessarily for everyone; so we've looked at what 7 makes the most sense and then made ourselves 8 available to analyze on behalf of the district. 9 I think it's important to know -- I 10 mean, long-term interest rates, fixed interest rates 11 have been -- it's kind of odd, but they've been at 12 all-time lows for like 10 years now. So locking in 13 long-term fixed rates for an entity like yourself 14 that can afford them, that has a very robust debt 15 profile, often makes a lot of sense relative to 16 other alternatives. 17 Q Have you shared the risk implications and 18 the modeling of risk implications with MSD? 19 A Yes. 20 Q And those have been ongoing as this 21 process developed? 22 A So yeah. I mean, we've developed 23 financial planning models and, I guess, constantly 24 as it relates to looking at different iterations of 25 your CIRP, so on and so forth. So I hope I'm MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 219 1 answering your question. 2 Q You're good. You're good. 3 These models, I assume they're 4 available for us to review so that we can understand 5 the risks that you are advising the district may 6 have in terms of meeting obligations and borrowing 7 money from different sources? 8 A Well, so the financial model that -- and 9 I'm going to look over here to my colleague who also 10 works on that, that we've developed for you, largely 11 does one thing. It takes the CIRP, takes the 12 projected operating expenses, which comes from the 13 Raftelis model, and looks at what rate increases 14 need to be in order to fund, and to meet all of your 15 commitments, both operational and capital, and still 16 meet the metrics that we're targeting from a credit 17 perspective, which is coverage and days cash on 18 hand; i.e., liquidity. And within that context, it 19 structures and projects debt service, either with 20 respect to revenue bonds, the capital markets bonds, 21 versus SRF bonds. And, obviously, most recent -- 22 recently, excuse me, WIFIA. 23 At times, not necessarily with 24 respect to this rate cycle, and you can correct me 25 if I'm wrong, looked at other terms. Again, given MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 220 1 where long-term interest rates are, it still makes 2 sense to continue with a 30-year level debt service 3 structure, give or take, with respect to revenue 4 bonds. So there hasn't been a ton of iterations, if 5 you will, on that because the structure makes sense 6 for what we're trying to accomplish, if that answers 7 your question. 8 Q Well, it sort of does. I'm concerned with 9 what you presented to the district to identify risk 10 implications in the model. 11 A So that's the part I'm not clear on what 12 you're at. And I know you're responding to what was 13 in my testimony, but I'm not sure what you're 14 asking. 15 Q Well, you said you've -- I'm quoting you. 16 A Sure. 17 Q I have developed several financial plans 18 evaluating the economic policy and risk implications 19 of myriad financial alternatives. I'd like to know 20 what those plans are. 21 A What question are you -- 22 MS. MYERS: I didn't want her talking over 23 you for the court reporter. 24 COMMISSIONER PALANS: Oh, okay. 25 Q (By Commissioner Palans) I apologize if I MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 221 1 interrupted you. I didn't mean to. 2 A No. 3 Q I'm just -- I'm just trying to clarify 4 what I'm asking for and what you're saying. 5 A Can you reference the question you're 6 reading from? 7 Q Yeah. I'm referencing question 4 on page 8 2, about middle of the line 15, 16. 9 A So this was more of a resume statement, 10 like what I have done for my clients generally. It 11 wasn't intended to suggest specific -- it wasn't 12 specific or exclusive to MSD, just to be clear. 13 Q And so you didn't evaluate risk 14 implications for the district? 15 A Yes, we have -- constantly evaluating risk 16 implications for the district, but I don't -- like 17 I'm just confused in terms of what you're talking 18 about, as it relates to the district. I told you 19 the modeling process that we went through. There 20 are, relative to other debt alternatives, 30-year 21 level debt service, publicly-offered debt is 22 probably the riskless -- most riskless, if that's 23 even a word, debt that you can pursue. 24 Q So you have shared modeling -- financial 25 modeling with the district over the time of your MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 222 1 engagement; correct? 2 A Yes. Yes. 3 Q And have come -- and they've periodically 4 been furnished in response to different assumptions 5 -- 6 A Right. 7 Q -- that are made; right? 8 A Right. Or even recommendations or 9 considerations in terms of laborious market trends, 10 structures that are -- 11 Q That's what I would like to see and that's 12 what I would like our commission to see so that we 13 can understand the risks that you understood to be 14 appropriate in your modeling. That's all I'm asking 15 for, okay? 16 A Okay. 17 Q You have a statement -- and I'm going on 18 page 3 of your testimony. Right around line 16, you 19 indicate you began working for the district in 2012. 20 And then the next sentence follows: "Most recently, 21 PFM staff and I have worked with the District and 22 its bond counsel." Who is that? 23 A Gilmore Bell. 24 Q I'm sorry? 25 A Gilmore Bell. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 223 1 Q Okay. And where are they located? 2 A The attorneys that work with the district 3 are located here in St. Louis. 4 Q Okay. In consideration -- this is a 5 sentence that begins on line 21. "In consideration 6 of operational and capital funding needs, as well as 7 credit rating metrics associated with maintaining 8 credit ratings in the AA category, PFM has 9 recommended the amount of proposed senior debt -- 10 senior lien debt issuances and mix of debt to 11 pay-as-you-go capital funding for MSD's projects 12 through fiscal year 24." 13 Is the -- what is this AA category, 14 this AA credit rating category? 15 A That is so the rating agencies have rating 16 categories that are indicative of credit worthiness. 17 AAA being the strongest, which you have one AAA 18 rating by S&P. AA is a -- is one notch below that. 19 And then there are, quote unquote, modifiers within 20 that category. So from Fitch and S&P, it's a plus 21 or no -- no signal, or minus. And for Moody's, it's 22 1, 2, 3. 23 So a Aa1, which is what you have from 24 Moody's and an A, I believe, plus from Fitch means, 25 you know, within the A category -- or AA category, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 224 1 excuse me, you're the highest. So that's why Tim 2 referenced a second ago you have the highest 3 possible rating from S&P and the second highest 4 possible rating from Moody's and Fitch. 5 Q Based upon your experience in the industry 6 as a financial advisor, what does this district need 7 to do to move up a notch to AAA? 8 A Yeah, I'm not sure that there's much 9 that -- and -- and so, by the way, these are -- 10 well, nevermind. I'm not sure there's much you can 11 do because sometimes regional economy plays a role; 12 right? So there's not a whole lot you can -- this 13 district can individually do to impact the regional 14 economy. And I know Moody's historically, not just 15 with respect to this measure, but with respect to 16 general also municipalities' ratings, the regional 17 economy and the robustness of it has impact on 18 ratings. I -- you know, given the rates at which 19 you're able to access -- the district is able to 20 access the market, I think -- and the strength of 21 the ratings that you already have, from my 22 perspective, you're in a pretty good place in order 23 to access the market at optimal rates. 24 Q And based upon your experience and 25 knowledge as financial advisor, does the proposed MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 225 1 split of debt to cash ratio of approximately 2 60 percent debt, 40 percent cash, does that maintain 3 the AA credit rating for this district during the 4 operating period? 5 A It does because coverage and liquidity are 6 within the bounds that we've targeted and the rating 7 agencies have identified, as necessary, to maintain 8 the district's rating. 9 Q Okay. And just in the following question 10 8, on page 4, the second sentence, it says "To 11 mitigate interest rate risk associated with future 12 issuances, PFM added additional spreads to the 13 yields, assumed ranging from approximately 14 .7 percent for fiscal 2020 issuance to 1.45 percent 15 for projected bond issuance in fiscal 24." 16 What does that mean? 17 A So it means since we're not borrowing 18 today, we are taking interest rate risk that rates 19 will be what we need them to be in a year from now 20 for borrowing. We don't want to make that 21 assumption because once these rates are approved, 22 they're going to be approved for a four-year cycle. 23 So we put some additional cushion, we make an 24 account for the fact that rates could rise in our 25 assumptions so that if they do, we've kind of built MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 226 1 that into the model. 2 Q Okay. And you go on on page 5 to 3 reference in line 14, Moody's stated that, quote, 4 "Narrow liquidity or debt service coverage are 5 factors that could lead to a downgrade." 6 A Correct. 7 Q Would that hold true for S&P and Fitch as 8 well, those factors -- 9 A Yeah. 10 Q -- those kind of universal benefactors? 11 A They may have similar -- 12 Q Yeah, they're not unique for -- all the 13 credit rating agencies do that. 14 So you heard -- you've been present 15 as we started these proceedings today and you heard 16 the testimony from other witnesses. This -- these 17 costs that the district is incurring over the next 18 20 years are driven to comply with a consent decree. 19 And the district has to spend, I think, 6 billion 20 dollars in CIRP in order to meet the concerns of 21 the -- the EPA and the government through 2039. 22 A Right. 23 Q It's founded on CIRP, which we understand 24 to be historically low priced right now, for 25 whatever reason. That was the testimony that has MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 227 1 previously been given. If it flips itself -- right 2 now, we've experienced historically low interest 3 rates for the past 10 years, since the capital 4 markets blew up, we could just as easily experience 5 CIRP escalation, inflationary costs associated with 6 parts, labor, materials, could we not? You're 7 nodding. You got to say -- 8 A I'm not an expert in these areas, but that 9 makes sense to me, yes. 10 Q Okay. And so when it comes to managing a 11 business plan, do you think it makes sense to manage 12 only for the next operating period through fiscal -- 13 what is it -- '24? I didn't even know which one 14 we're -- '24. Or should we be looking out on the 15 horizon further to conserve resources, increase 16 liquidity and maintain a better credit profile? In 17 your experience, in terms of business judgment on 18 this. 19 A Yeah, I think a multi-year plan, which is 20 what you have, and I know that there is also, you 21 know, analysis, generally speaking, kind of thinking 22 beyond that; so all the best practices that relates 23 to those types of things the district does do. I 24 think in terms of a rate setting cycle, four years 25 is optimal and you get, as was noted earlier, credit MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 228 1 for having a multi-year rate approval cycle as an 2 entity. 3 Things could change, I think is your 4 point. And I think, again, we talk about liquidity 5 and debt service coverage, those metrics, in some 6 ways you think about it, do kind of account for the 7 unknowns. If your costs go up, for example, having 8 robust cash on hands gives you a cushion to be able 9 to address those challenges. And then ultimately, 10 if those things happen, if constructions cost -- 11 inflation is catastrophic, then you're going to have 12 to account for that in your rates, but so will every 13 other, you know, entity. Presumably; right? If 14 this is a -- it's a trend, industry trend. 15 Q Do you believe it to be good, prudent 16 business practice to increase liquidity as much as 17 possible to be prepared for these unforeseen 18 contingent events? 19 A I think the district and every entity has 20 to make their decisions from a policy perspective, 21 which can and probably should be informed by what 22 the level of rate increases are going to be, how 23 much liquidity is prudent for you as an entity, 24 which is going to be dependent upon, you know, 25 factors specific to you as an entity, what your debt MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 229 1 service coverage needs to be. 2 So all of these things are evaluated 3 in the context of the model and I feel good about 4 both -- and so do the credit rating agencies and the 5 market as is proven by history with the level of 6 liquidity you have, the amount of debt service 7 you -- coverage you have and are projecting for the 8 future and what that -- how that impacts your -- 9 excuse me -- your rates, your user fees. 10 COMMISSIONER PALANS: Thank you. I have 11 no further questions. 12 CHAIRMAN TOENJES: Thank you, Mr. Palans. 13 Any other rate commissioners have questions for 14 Ms. Pugh? Anyone on the phone? 15 COMMISSIONER RATZKI: Yes, this is Tom 16 Ratzki. I have a few questions for Beth. 17 CHAIRMAN TOENJES: Please go ahead. 18 EXAMINATION 19 BY COMMISSIONER RATZKI: 20 Q On page 3, line 12, you use the acronym 21 EIERA when you're talking about the revolving loan 22 program. Is that the standard state revolving 23 program? What does EIERA stand for? 24 A We're talking about the standard revolving 25 loan funds that the district has access. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 230 1 COMMISSIONER MAHFOOD: Tell you what that 2 stands for. 3 CHAIRMAN TOENJES: Okay. Mr. Mahfood. 4 COMMISSIONER MAHFOOD: The Environmental 5 Improvement and Energy Resources Authority, 6 which is assigned to the Department of Natural 7 Resources. 8 COMMISSIONER RATZKI: Is that a special 9 type of revolving loan or is this a standard 10 typical state revolving loan program? 11 COMMISSIONER MAHFOOD: It's not a 12 revolving loan fund program by itself. It's an 13 agency that manages the Missouri state 14 revolving loan fund in cooperation with the 15 water programs and the Department of Natural 16 Resources. In fact, they were the first -- 17 yeah, that's the simple answer. 18 Q (By Commissioner Ratzki) Okay. I've got a 19 follow on to Mr. Palans' line of questioning. 20 When you talk about evaluating a 21 period of financial alternatives, have you ever 22 advised the district to refinance any of their 23 bonds? 24 A Yes. We've been involved in every 25 refunding that the district has done. And -- MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 231 1 Q I wonder whether the district has refunded 2 any of their bonds? 3 A Yes, there's been multiple -- the district 4 has issued multiple refunding bond issuances to take 5 advantage of lower interest rates over the years. 6 Q Okay. Has -- does refunding impact the 7 utility bond ratings? If so, is it favorable or 8 unfavorable? 9 A It's a favorable thing because you -- the 10 way the district has done those has been to 11 essentially lower on a uniform basis debt service 12 cost with respect to the bonds that were issued; so 13 that is a positive. 14 Q Where I'm going with my question is, 15 there's some talk earlier in the day about the 16 situation we're in with lowering the rates from what 17 we previously anticipated to we have more reserve 18 for un-anticipated activities. Would it be 19 advisable to the district to have additional funding 20 available to refund bonds if interest rates do go 21 lower? 22 A You don't need additional funding to 23 refund bonds. Essentially, you're borrowing from 24 the market to take out the bonds that you already 25 have and replacing it with lower debt service debt. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 232 1 So there's not, to my knowledge, I think there's any 2 additional authorization, for example, that's 3 required for that, and there's no -- there's no 4 source of funding necessary. You can access the 5 capital markets to borrow money to take out higher 6 cost debt with lower cost debt. That's the process 7 of how it -- 8 Q I guess I misunderstood some of the 9 earlier discussions and testimony that the timing is 10 critical and that there are approvals that had to be 11 done within the board's -- the district's board of 12 trustees to do that and I never did understand it 13 quite -- being on the phone, if the bond issue, to 14 refund bonds, require a vote of the people or not. 15 I did not quite understand that answer. 16 A Not to my knowledge. 17 Q It's hard to -- okay. That's where I was 18 going. I just wanted to see if that is something 19 that should be in the arsenal of the district to be 20 able to refund bonds more readily. 21 A It's definitely a tool that's in the 22 arsenal of the district. It's definitely a tool 23 that the district is taking advantage of every time 24 that it made sense and prudent to do so. 25 Unfortunately, it's not a tool that is as viable as MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 233 1 it used to be because of the tax reform in 2017. 2 Q Okay. Thank you. 3 CHAIRMAN TOENJES: Thank you, Mr. Ratzki. 4 Questions from other rate commissioners? 5 EXAMINATION 6 BY CHAIRMAN TOENJES: 7 Q One question, Ms. Pugh, and I don't know 8 if you're in a position to answer this or not. But 9 Mr. Gee stated earlier that the debt service portion 10 of the budget is about one-seventh of the overall 11 budget. Is that consistent with the other districts 12 you've worked with? 13 A So I think the thing that is consistent is 14 the approach to figuring out what the right amount 15 of debt service and debt outstanding is and based 16 upon target coverage levels and target liquidity 17 levels. Not every district has the same targets in 18 terms of, one, what they want their ratings -- 19 ratings to be. So these are all iterative. A 20 target rating will impact the amount of coverage you 21 need, the amount of liquidity you need, in general. 22 But also, obviously, you have to be able to pay all 23 of your bills. So fund all your CIRP and evaluate 24 what that does to your rates and the affordability 25 thereof. I apologize if that doesn't answer your MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 234 1 question. 2 Q So other districts may be more comfortable 3 with a lower bond rating -- 4 A Exactly. 5 Q -- in order to keep rates a little lower 6 and keep that debt service -- 7 A Right. But they probably don't have 4.7 8 billion dollars in consent decree to think about; so 9 -- 10 Q I understand. 11 A You know, there's so many things that are 12 district or entity specific that you have to take -- 13 keep in mind. 14 Q Thank you. 15 A You're welcome. 16 CHAIRMAN TOENJES: Ms. Myers, do you have 17 any questions for the witness? 18 MS. MYERS: I do not. 19 CHAIRMAN TOENJES: Thank you, Ms. Pugh. 20 Appreciate it. 21 THE WITNESS: Thank you. 22 CHAIRMAN TOENJES: Our next witness, 23 Mr. Stannard. 24 (The witness was duly sworn.) 25 CHAIRMAN TOENJES: Thank you. Do members MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 235 1 of the Rate Commission have questions for this 2 witness at this time? 3 Hearing none, Mr. Neuschafer, do you have 4 questions for Mr. Stannard? 5 MR. NEUSCHAFER: I do. 6 CHAIRMAN TOENJES: Please come forward. 7 EXAMINATION 8 BY MR. NEUSCHAFER: 9 Q Good afternoon. 10 A Good afternoon. 11 Q Do you have a copy of your testimony -- 12 A I do. 13 Q -- in front of you there? Okay. If you 14 could turn to -- we'll start with question 22. That 15 is on page 7. You testify about the I&I percentage 16 and -- and the current percentage that's referenced 17 in your testimony and in the rate proposal is 18 59 percent; is that correct? 19 A That's correct. 20 Q Okay. If you recall in 2015, I&I was 21 about 50 percent. Is that accurate? 22 A That is accurate. 23 Q What makes up for that increase in volume? 24 A Well, there's multiple -- there's a 25 multiple number of factors that have gone into play MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 236 1 with regard to what is going on with infiltration 2 inflow that we receive and the total flows at the 3 wastewater treatment plants. At the time of the 4 last rate proposal, certainly we were looking at the 5 historical data. And it's a calculation based on 6 how much flow we get in the plant compared to how 7 much flow we presume is coming from our customers 8 using the water volumes, water usage volumes during 9 the winter periods, for the metered customers, our 10 estimated flows from our unmetered customers. And, 11 of course, the nonresidential flows that we -- 12 generally, our water usage data. But in some cases, 13 some of the larger industries may be metered sewage 14 flows from those customers. 15 But that difference comes from 16 inflow, which is stormwater that enters into the 17 system, both combined systems, as well as in the 18 separated areas, as well as infiltration, which is 19 really groundwater that seeps into the systems as 20 well. 21 There's -- as you know, because of 22 the consent decree, we are obligated to undertake 23 significant investments to reduce overflows. So 24 when we have overflows, a portion of that flow 25 overflows into the streams and rivers and doesn't MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 237 1 ever get to the wastewater plant. So as we reduce 2 the amount of overflows, then that effect is we will 3 increase both the amount of flow that gets to the 4 plant from those -- that inflow and infiltration. 5 Likewise, with the SSO investments as well in trying 6 to eliminate the -- the overflows, which has an 7 effect of increasing the flow at the plant. 8 Then at the same time, we're also 9 doing investments in trying to reduce the amount of 10 flow that -- from properties that get into the 11 system. So there's ways and investments are being 12 made in the CIRP to try to reduce those flows at the 13 same time, but until those things happen, there will 14 be a period of time where our flow increases at the 15 plant, which we're seeing. 16 And so what we also looked at was 17 what are some other implications or factors that -- 18 that effect the amount of flow that we get at the 19 plant and rainfall is a significant element. So we 20 wanted to take a look at how could we refine the 21 process in this rate proposal to reflect the 22 changing dynamics of the system with the capital 23 improvements that have been implemented and will 24 continue to be implemented, as well as starting to 25 more normalize the data. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 238 1 So we look at the last three years of 2 data, of actual data and determined that given that 3 there's an increase in flow that we would have 4 expected as we reduce the amount of overflows. And 5 so that's how we ended up at the -- in looking at 6 the average over the last three years, that that 7 data indicated 59 percent being -- of the total flow 8 being infiltration inflow. 9 Q Okay. So you -- is that consistent? I 10 mean, when you see this number, 59 percent, is that 11 surprising to you based on where we were at four 12 years ago? 13 A Again, you know, the 50 to 60 percent is 14 not an unusual amount when you look at combined 15 systems around the country. In fact, there are some 16 that are -- there's fully separated systems, have 17 infiltration inflow of that level. But part of it 18 depends upon the -- the topography of the land and 19 where we are relative in the elevation of our sewers 20 and large sewer lines that are potentially below 21 groundwater level. You're going to have more 22 seepage into the system. 23 And, as I said, we were expecting 24 that with the reduction in overflows through the 25 consent decree programs that we're engaged with, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 239 1 that we would anticipate an increase in the total 2 infiltration inflow at the plant until we can make 3 counteracting investments to reduce flows into the 4 system all together. 5 Q Does this next cycle include such programs 6 for use of the flow into the system all together? 7 A Investments are underway, but until we see 8 the data, there's really no way to know. So we're 9 looking at normalizing the data. So we look at the 10 most recent three years of historical data, whereas, 11 the prior study at the prior rate proceeding, we 12 were looking at a much longer period of average 13 flows for that 50 percent. So we believe the 14 59 percent is more relevant to what is happening 15 now. And then the four-year -- in the next four 16 years, we'll be able to get better data for the next 17 rate cycle to determine if similar findings will 18 need to be made. 19 Q Okay. Thank you. Let's move on to the 20 next question, responsibility. How is 21 responsibility determined. And we understand that, 22 based on your testimony, 40 percent of -- and I 23 assume it's the cost associated -- or actually 24 40 percent of the total I&I is related to individual 25 customers at 60 percent to the district's collection MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 240 1 system infrastructure. 2 Can you help me understand what you 3 mean there? So let's start with 40 percent as 4 related to the individual customers. 5 A So looking at what -- what causes 6 infiltration inflow under both a generic, typical 7 system, or say MSD particularly, there are multiple 8 places where infiltration inflow can occur. So on 9 the private property side of things; so every 10 residential home has a sewer lateral that comes from 11 the home out to the district's system, that the 12 sewer industry -- that lateral is a source of 13 infiltration inflow, depending on its age and 14 condition. There's also opportunities for homes to 15 discharge wet weather flows into the system as well, 16 even through roof leaders, area drains, or sump 17 pumps. 18 There was a time many years ago when 19 actually the federal home loan bureau, whatever 20 that -- after World War II, required roof leaders, 21 area drains, and sump pumps to be connected to the 22 sewer system. So since then, we've gone through the 23 process of trying to remove that element from the 24 system. But there's -- those customer connections 25 can be a source of infiltration inflow. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 241 1 Then when you think of the linear 2 infrastructure of the system, those -- the pipe 3 network, both separated and combined; so separate -- 4 let's take just the separate sewer system. Those 5 can -- they have joints, there's manholes, all of 6 those have opportunities to leak either during dry 7 weather, during groundwater just seeping in, or 8 during wet weather periods as well. So faulty 9 manhole covers, there's lots of sources where those 10 things can happen. 11 And a combined system is designed to 12 take flow from both storm flow, as well as sanitary 13 flow. So there's that element. And then on our 14 interceptors that are along low level areas in the 15 city, they will -- every joint has -- over time has 16 the opportunity to separate and leak more into the 17 system. 18 So what we're trying to do is look at 19 what portion of responsibility of infiltration 20 inflow would come from customers. And so you think 21 residential customers versus commercial customers 22 versus industrial customers. And generally the -- 23 what we say is that some portion of that we can 24 assign just -- and share equally. If you're a 25 customer, you're going to share that portion whether MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 242 1 you're a big customer or small customer. 2 So if you have 10,000 CCF per month 3 or 2,000 CCF per month, your responsibility would be 4 the same. Whereas, the large industrial customers, 5 their sewer connections will be engineered and 6 inspected when they're constructed. The residential 7 properties went back 30, 40 years ago, the level of 8 engineering and inspection during the construction 9 of those sewer service laterals, it was much less 10 than what we would expect under the industrial 11 properties. 12 Then -- so what portion of that 13 should be customer related and then what portion 14 would be based on the size of the sewer collection 15 system can be appropriately shared based on people's 16 use of the system relative to their volumes. 17 So in this case, the district had 18 retained Camp Dresser & McKee, CDM engineering firm 19 to do that analysis and they've done a pretty 20 in-depth analysis and came up with the 60 percent 21 on -- based on volume, 40 percent on the basis of 22 customers reflecting the nature of MSD's system. 23 Q So there was a lot there and I follow -- I 24 was following you, but I want to make sure I'm 25 following you. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 243 1 A Sure. 2 Q So the 40 percent at related individual 3 customers, that would be from, let's say, an 4 individual structure, whether it be a residence or a 5 business? 6 A Right. 7 Q And their -- you know, their connection to 8 the sewer systems, their stormwater runoff from the 9 road or whatever. 60 percent is just system wide. 10 So as I understand it, the next part of the 11 testimony, that 40 percent that relates to 12 individual customers, that is allocated amongst 13 every customer on sort of a per-customer basis? So 14 it works out to be -- and I'm pulling a number out 15 of random -- a quarter per customer, you know, based 16 on the number of customers and the dollars 17 associated with that, you pay that whether you're, 18 you know, a single-family homeowner or a large 19 industrial user? 20 A That is correct. 21 Q Okay. And so the remaining 60 percent is 22 allocated based on, I assume, metered volume? 23 A Metered volume or for the unmetered 24 customers, that that estimated amount of volume that 25 is from sanitary sewage from the unmetered customers MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 244 1 and then certain large industrial customers that 2 have sewage meters; so it is metered. 3 Q Okay. So that is, I guess, not a flat fee 4 per customer. But, you know, everyone theoretically 5 pays something, it's just that the more water you 6 contribute to the system, the more you pay? 7 A Right. 8 Q And so the 2005 CDM study, my 9 understanding is your testimony is that you reviewed 10 it and that those percentages that they came up 11 with, the 40-60 split are reasonable? 12 A Yes, I review -- yes, I -- and I reviewed 13 that study at the time of the prior -- at about the 14 time the 2005 study was done and at that point as 15 being the consultant to the Rate Commission. 16 Q Yeah. 17 A And then we looked at it again the last 18 rate cycle. Again, we looked at it again to see, 19 you know, things are changing and there wasn't 20 enough data at this point to say, hey, we should 21 redo that study, but assuming my recommendation or 22 discussions with MSD staff was that this may be 23 something you want to put on the radar train for the 24 next rate cycle that we undertake, a similar 25 analysis to see should that be -- should those MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 245 1 percentages -- are they still valid or not. 2 Q You advised that in 2015? 3 A No, for this case. 4 Q For this case. So for next time? 5 A For next time, yes. 6 Q But for now, your opinion is that the 7 assumptions, the conclusions in that report are 8 still valid and accurate? 9 A Yes. 10 Q Okay. Let's go to question 16. You 11 conclude -- well, actually you establish some 12 definitions for the terms fair and reasonable in the 13 context of utility rate setting; correct? 14 A Yes. 15 Q And in question 17, you conclude that 16 based on your definitions, this rate change proposal 17 is fair and reasonable -- 18 A Yes. 19 Q -- correct? These definitions that are 20 identified in question 16, one for fair and one for 21 reasonable, are these your definitions or are these 22 established industry definitions or are these 23 definitions from court proceedings? 24 A These are definitions that I've -- and 25 colleagues that have been involved in the rate MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 246 1 setting business and cost service analysis and 2 certainly over my 45 years of what is -- what is 3 reasonable and what is fair in trying to essentially 4 segment those into two components; the levels of 5 revenues. Are we asking customers in total to pay a 6 fair amount of -- a reasonable amount of revenues to 7 the system? Is that money going to be used 8 reasonably to provide this -- a significant -- if 9 they need the services. 10 Likewise, fair being relative to the 11 cost of service. Do the proposed rates -- have they 12 distributed the cost and they recovering the cost in 13 an appropriate way among all the customer classes. 14 Q So these have been developed over the 15 course of your -- I guess the course of your 16 professional career. Does that professional career 17 involve advising only utilities or have you ever 18 been advising ratepayers as well? 19 A Most of my experience has been working 20 with utilities, but I've also testified as an expert 21 witness on behalf of industries and ratepayers as 22 well. But typically, my work has been with -- for 23 the utility side, but I have worked for industries 24 in examining the -- the fairness and equity of 25 proposed rates being charged to them. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 247 1 Q Is that rates other than sewer rates or is 2 that -- 3 A Sewer and water rates. 4 Q Okay. 5 A Mostly a fair number of sewer rates over 6 the years. 7 Q Okay. Thank you. 8 CHAIRMAN TOENJES: Thank you, 9 Mr. Neuschafer. 10 Ms. Stump, do you have any questions for 11 Mr. Stannard? 12 MS. STUMP: A quick one. Mr. Neuschafer 13 took most of my questions, but there's still 14 one I'm not quite clear on. 15 EXAMINATION 16 BY MS. STUMP: 17 Q Hello. 18 A Hello. 19 Q So you and I have talked for many years 20 about I&I; correct? As many of the rate 21 commissioners. But some of them are new; so I just 22 want to kind of -- and I listened closely to your 23 discussion with Mr. Neuschafer, but I've got to -- I 24 want to try to summarize maybe a little bit what you 25 went through. Is that okay? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 248 1 A That's fine. 2 Q So the -- the 60-40 you talked about was 3 based from the 2005 CDM study; correct? 4 A Yes. 5 Q And that you still find those to remain 6 reasonable? 7 A Yes. 8 Q And now if we go back to question 22 where 9 we're talking again about now we've got -- we've 10 increased to 59 percent, and from what I understood 11 in your discussion with Mr. Neuschafer, that this 12 increase is made up of a part because of the capital 13 improvements that have been implemented? 14 A Yes. From the standpoint that the total 15 amount of overflows in the system have been reduced. 16 Plus the other thing that happened, when we look at 17 the three years data in a -- the historical three 18 years we looked at, we also aligned that with 19 rainfall -- rainfall data and how the impact of 20 rainfall was having on increasing flows at the 21 treatment plant. So, again, we're trying to 22 normalize that level of flow that we'd expect. And 23 we know what our sanitary discharges -- I think we 24 have a pretty good handle on that coming from 25 customers. But the wet weather, both in terms of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 249 1 inflow, storm flow that's not overflow, and then the 2 infiltration is related more to the rainfall 3 during -- over the year, but -- and that's very 4 complex from the standpoint of duration and 5 intensity of flow -- rainfall when it happens and 6 where it happens, but right. 7 Again, usually the data that is 8 available to the district and trying to normalize 9 what we believe would be an appropriate level of 10 infiltration inflow anticipated during the next four 11 years. 12 Q So you don't expect that to -- the 13 district to improve? 14 A I think -- well, we'll know. One, if 15 we -- if we eliminate overflows a hundred percent, 16 both the CSOs and the SSOs, then we expect the total 17 flow that we receive at the plant might increase, 18 you know, more. But at the same time, they're doing 19 things, working with private property owners to make 20 sure that things that are getting into the system 21 through the customer connections or other sources 22 are being excluded from the systems so they don't 23 get into our collection system at all. So those 24 things are going on as well. 25 So, again, the data -- a lot of the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 250 1 data driven of that standpoint as we get down the 2 road, we can assess what's happening and how 3 effective things have been. 4 Q And I guess one other -- one other 5 question. So if we've gone from 50 to 59 percent, 6 but we're keeping the standard that was at 40 and 7 60 percent, you don't think that that net -- that 8 has to be changed, the methodology and -- so I'm 9 just trying to get to why you don't think the 10 standard should be changed if we've gone from 50/59 11 percent? 12 A Well, the 50/59 is just what the total 13 level of infiltration inflow and it's not an 14 analysis of where it comes from. Some cases -- and 15 we may -- you know, we may be getting more from 16 customers or we may be getting less from customers 17 and more from the system because it's more the 18 interceptor system because we reduce the overflows. 19 But the data -- as far as the 20 detailed data that -- and the analysis that was 21 undertaken by CDM, we thought what had been done, 22 that it was still optimal now and didn't need to be 23 undated. 24 Q Well, I guess that's what I'm getting at. 25 I think Mr. Neuschafer was trying to get there, too. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 251 1 Is why wouldn't, when we've got that change, we 2 don't -- why didn't you think that it needed to be 3 redone now? 4 A Well, one is timing. 5 Q Okay. 6 A Because, like I said, it takes some time. 7 I don't know how long CDM took to do that last 8 study, but it's going to take some time. And we 9 were looking at data after 2018 actual data. And so 10 last summer and fall, we were trying to update the 11 total amount of filtration inflow. And so there 12 really wasn't adequate time to initiate a new study 13 and felt the study was -- the prior study was still 14 reasonable. 15 Q Okay. That's all. Thank you. 16 CHAIRMAN TOENJES: Thank you, Ms. Stump. 17 Any members of the Rate Commission? Mr. Stein? 18 COMMISSIONER STEIN: Beat you to it, 19 Lloyd. 20 EXAMINATION 21 BY COMMISSIONER STEIN: 22 Q Just a couple questions, Mr. Stannard. I 23 understand your point. As we eliminate SSOs, we're 24 increasing inflow to the system. On the opposite 25 side of the coin, the district, in my observation MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 252 1 over the last, at least 20 years, has been spending 2 large amounts of money to line sewers, which, in 3 effect, reduces infiltration. So are you telling us 4 that the district is adding inflow at a faster rate 5 than it's getting rid of infiltration? Are we 6 fighting a losing battle here? 7 A I hope not. But, again, the -- it's one 8 of those things, it's a very large system and so 9 there's two components. One is the lining of sewers 10 is to reduce the -- essentially the amount of SSOs. 11 But then we also have the CSOs, and the combined 12 systems. So lining of sewers isn't really related 13 to the combined sewers. 14 So when we do things to reduce the 15 CSOs, that's increasing the capacity and that 16 capacity of our collection system, that flow that 17 gets there, we get it to the plant. It has to go to 18 the plant instead of being overflow. So it's going 19 to be a -- it's going to be kind of offsetting 20 things for a number of years as we move forward. 21 But in four years from now, we'll have a much better 22 perspective as to how effective efforts have been, 23 both from an operations standpoint, as well as a 24 capital investment standpoint. 25 Q Is your lining the sewers, obviously MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 253 1 that -- that keeps more flow within the sewer. It 2 almost sounds like the SSO and the lining are 3 fighting with each other. I guess I'm not phrasing 4 this correctly. But as you -- as you tighten up the 5 sewers, you're keeping more flow there, which is 6 going to increase the amount of going to the plant. 7 But you're also eliminating, at the same time, 8 infiltration coming in from groundwater. So is it a 9 -- is it just a cost push there, that you're taking 10 it out over here, but you're putting more back over 11 here? 12 A Well, I guess the -- you think about the 13 linear infrastructure that is the pipes, we want 14 to -- we don't -- we want to reduce the amount of 15 infiltration that gets into those joints and perhaps 16 cracks in the pipe network. And so programs like 17 lining will help prevent those things from 18 happening. 19 But at the same time, we have every 20 residential sewer lateral and we have as many miles 21 of customer pipe that they own in their -- in their 22 laterals as we do in our own system, and how we can 23 encourage customers to replace and rehabilitate 24 their sewer laterals over time will have an equally 25 important impact on the 12 flows we have at the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 254 1 plant. 2 So that's -- there are systems, 3 whether it be sewer districts like St. Louis -- 4 Milwaukee Metropolitan Sewer District, the 5 investment they're making to try to provide 6 financial incentives to individual customers to 7 replace their sewer laterals. It's a big challenge 8 because it's private property and you can't force 9 people to do it. You can't go in and get on to 10 their property to do it for them, but can we 11 encourage them to replace and rehabilitate their own 12 sewer lateral systems. 13 It's a battle that St. Louis is 14 fighting, but just about every wastewater utility in 15 the country fights that same battle. 16 Q My other question, and you may not be the 17 person to answer this, but on page 4-39 in the rate 18 proposal, it says that the cost of service analysis 19 indicates a significant increase in the surcharge 20 rates for BOD, COD, and TSS. This increase is 21 caused by several factors, most significantly that 22 the capital cost allocated to these functional 23 categories increased by approximately 70 percent 24 from fiscal year 2017 to the test year of fiscal 25 year 2021. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 255 1 And I won't read the whole rest of 2 the sentence, but what are the projects or CIRP 3 items that relate to that capital cost that's 4 driving the -- the cost of treating BOD and TSS? 5 What -- what actually is the money being spent on 6 that's causing that -- that huge percentage 7 increase? 8 A I'll do the Brian response and so I'll 9 give you a general response and then defer to 10 Mr. Beckley who will be able to handle the details 11 on that. But it's going to be projects that we've 12 done or planned to do at the wastewater treatment 13 plant that deal with secondary treatment -- or 14 primary treatment, secondary treatment, and solids 15 handling. So it's incinerator projects, anything 16 that would do with the biosolids plant, those are 17 principally related to beauty, COD, and suspended 18 solids. And secondary treatment activities are 19 going to be more heavily weight to BOD costs. 20 So there's the capital cost and then 21 there's ongoing changes in -- in the structure of 22 the O&M expenses that we have for -- the secondary 23 treatment of wastewater plant is very energy 24 dependent; so it's a very -- uses a lot of energy to 25 do secondary treatment. And those costs are MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 256 1 principally BOD related. So if our energy costs 2 increase at a higher pace, then that will have an 3 impact as well. 4 And then the other -- the denominator 5 in the calculation is the total pounds of beauty or 6 COD or suspended solids that we receive at the 7 plant, how are those going relative to what was done 8 previously. So -- so -- but Mr. Beckley will be 9 able to get into -- more into the weeds with you 10 with regard to specific projects. 11 Q Thank you. 12 CHAIRMAN TOENJES: Thank you, Mr. Stein. 13 Mr. Palans. 14 EXAMINATION 15 BY COMMISSIONER PALANS: 16 Q Mr. Stannard, the rate proposal that has 17 been tendered to us states that Raftelis developed 18 the wastewater rates contained in the rate proposal 19 based on industry standard rate design methods. Do 20 you agree with that statement? 21 A Yes. 22 Q What industry are we using? 23 A Be the Water Environment Federation, which 24 is the National Association of Wastewater 25 Professionals, both in terms of wastewater MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 257 1 utilities, as well as vendors and consultants that 2 serve in the wastewater industry. And the Water 3 Environment Federation has prepared manuals of 4 practice with regard to cost of service processes 5 that we are consistent with. 6 Q So it's more than just the utilities 7 themselves. It's the people that work with the 8 utilities; the vendors and the providers to those 9 utilities? 10 A Yes. 11 Q And what are the -- you go on -- well, the 12 district goes on to say that the proposed rates were 13 calculated using a Raftelis-developed rate model 14 customized for the district's unique needs. How was 15 this rate model customized? What factors did you 16 look at to customize this model? 17 A Multiple factors including the -- 18 essentially starting with a chart of accounts; so 19 the detailed chart of accounts for tracking 20 operating and maintenance expense, capital expenses, 21 debt service, all those elements that reflects the 22 budgetary criteria that the district uses in 23 establishing their annual budgets that become part 24 of the financial plan of the rate model, as well as 25 the customer usage characteristic data, both in MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 258 1 terms of the water consumption that is used for the 2 metered water customers, as well as the data for the 3 unmetered customers within the City of St. Louis on 4 the residential. And then multi-family industrial, 5 those components. 6 So all of the components of the chart 7 of accounts, the nature of the -- how the St. Louis 8 MSD business is managed and operated or reflected in 9 the determination of the model itself as far as -- 10 Q So you -- 11 A It's not -- it's not a -- it's not an 12 off-the-shelf model that is a plug-and-play thing; 13 so -- 14 Q It's not -- it's not a boilerplate. You 15 use specific data from this district? 16 A Yes. 17 Q Customer information from this district? 18 A Yes, sir. 19 Q In your direct testimony, which is MSD 3H, 20 question 11, the question is, "How should it be 21 determined whether the rate change proposal is 22 consistent with constitutional, statutory, or common 23 laws amended from time to time?" 24 And then your answer is, the 25 district's legal counsel advises that these issues MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 259 1 concerning authority and so forth and case law 2 should be evaluated. 3 You're not opining that this is true, 4 that it is consistent with constitutional, 5 statutory, or authority at this time? You're 6 relying upon legal counsel, are you not? 7 A I'm relying on legal counsel that -- 8 trying to think of an example of is that a user -- a 9 user charge as opposed to a tax, on that -- I have 10 an opinion with regard to that. But the other legal 11 components of that -- of that question really rely 12 on legal counsel prior to that determination. 13 Q And on page 5, question 13. Question: 14 "How should it be determined whether the rate change 15 proposal is consistent with and not in violation of 16 any covenant or provision relating to any 17 outstanding bonds or indebtedness?" 18 Your answer is "Such a determination 19 requires an analysis of covenants or provisions 20 contained in those documents." 21 You're not testifying that you've 22 examined those documents at each of those covenants, 23 are you? 24 A Well, actually, the Raftelis team and Mr. 25 Beckley, in the process, that was part of the MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 260 1 element that we did undertake with regard to our 2 analysis in conjunction with PFM and -- and the 3 district to ensure that we're meeting all those 4 requirements and those covenants of outstanding 5 bonds that the district has. 6 Q But you're not testifying that you 7 reviewed every bond document, every covenant, every 8 provision in the consent decree to determine that 9 they are in compliance with each and every one, are 10 they? You didn't do that personally, did you? 11 A I did not, but that certainly -- from 12 terms of bond covenants, not consent decree, the 13 bond covenants, there's a general bond ordinance and 14 those bond covenants stayed consistent for every 15 bond issued. And so those are the -- whether it be 16 additional bond tests, the -- the reserve fund 17 requirements or the coverage requirements to ensure 18 that we are complying with the minium requirements 19 that are set forth in those, we did do that. 20 COMMISSIONER PALANS: Would you read my 21 last question back and then answer the 22 question, please. 23 (The requested portion of 24 testimony was read back by the 25 court reporter.) MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 261 1 Q (By Commissioner Palans) Would you please 2 answer the question again, please. 3 A No, I did not review every outstanding 4 bond ordinance, but there is a master bond ordinance 5 that my team did review as part of the process for 6 this. 7 Q Thank you. 8 You were asked a question in the 9 context of the utility rate setting. What do the 10 words, quote, "fair and reasonable," closed quote, 11 mean? Could you tell us what those words mean? 12 A I'll start with the reasonable. So you 13 say fair and reasonable. So reasonable is the total 14 amount of revenue that we're -- we're requesting or 15 desiring that our customers pay us to support the 16 operation maintenance, debt service, and capital 17 investment, as well as liquidity in this utility, is 18 that a reasonable amount? Are we asking people to 19 pay more than is necessary to provide the assurance 20 that we can continue to provide wastewater service 21 today and into the future. 22 Then fairness is resulting in the how 23 those costs are then distributed among customer 24 classes. Do they fairly recover that cost of 25 service so that customers who pay for the service, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 262 1 based on the class of the service that they -- that 2 the customer class and is it -- is it a fair 3 distribution of those costs so that they are not 4 being asked to pay or subsidize another class of 5 customers. 6 Q So it requires not just to be fair, but it 7 also requires it to be reasonable. It's conjunctive 8 requirement; correct? 9 A Yes. 10 Q Fair and reasonable. And you state that 11 reasonable means that revenue requirements upon 12 which the rates are based reflect an appropriate 13 level of funding to enable the utility to provide 14 adequate and sustainable service and support the 15 financial health of the utility. That's your 16 testimony; correct? 17 A Yeah, and that's what I just said. 18 Q What we've heard from the witnesses today 19 seem to focus upon two components that are at 20 historical lows. And you were present when the 21 evidence was introduced today. Have you -- have not 22 been present? 23 A Yes, I have. 24 Q We understand that we are experiencing 25 historically low interest rates. In fact, I think MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 263 1 the testimony was, at least for the last 10 years 2 since the capital markets blew up, historically low 3 interest rates; correct? 4 A Correct. 5 Q And we also heard that the CIRP costs are 6 also surprisingly historically low; correct? 7 A Yes. 8 Q And so it would seem to me that these two 9 components, low interest rates, historically low 10 CIRP costs, create an opportunity for the district 11 to fix these problems today at low cost -- lower 12 costs. Is that a fair assessment? 13 A Yes. And I believe that's since they 14 are -- we're spending money on a daily basis, that 15 they're taking advantage of low bid prices and that 16 when we do issue debt, it's at a lower than expected 17 interest rate. 18 Q But based upon -- and this is kind of the 19 reverse of the perfect storm. This is the perfect 20 opportunity. Low interest -- low interest rates, 21 low CIRP costs; correct? 22 A Correct. 23 Q So would it not make sense, rather than 24 spread these costs in CIRP over 20 years, to 25 collapse this time period and do more borrowing MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 264 1 during this period when interest rates are lower? 2 Wouldn't that be fair and reasonable under your 3 definition? 4 A Not necessarily. 5 Q Tell me why. 6 A First of all, we have millions of dollars 7 of capital improvements to do. We can't do more 8 because there's a limitation logistically of how 9 much construction work we could do at any one point 10 in time. Nor can we do everything concurrent with 11 everything else because there are a lot of pieces 12 that have to fit together. 13 So trying to -- if we can -- if we 14 can spend more money, if it makes sense and we're 15 able to do more, I'm sure the district has that in 16 mind to the extent it makes sense and doesn't cause 17 difficulties or increase costs by getting things out 18 of sequence in the plan, in the CIRP process. 19 Also, as we -- we're -- because of 20 the situation, we've been able to enhance the 21 liquidity of the -- of the district; so when you 22 look at the fact that the liquidity measures in 23 terms of days cash on hand are well above 500 days, 24 which was the target that we've had; so that have 25 been able to ensure that they have adequate MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 265 1 liquidity, the question then becomes how much is too 2 much. 3 That's a -- again, it's a challenge 4 that most utilities around the country are faced 5 with, trying to get to 120 days of liquidity, not 6 having 500 days of liquidity. So we're at a -- 7 we're at a benefit and we're -- one reason we're 8 rated AAA because of our ability to achieve those 9 levels of liquidity and have solid support by the 10 citizens and customers and without having the rate 11 increases that would be -- perhaps some people would 12 view as excessive; so . . . 13 Q What would you describe as a midpoint on 14 days of liquidity that you would see in utilities in 15 the country? 16 A I think 100- -- probably 150 days to 180 17 days is probably more -- of more common level. 18 Q Is that the norm? 19 A I wouldn't want to say norm. Just based 20 on what I've seen in the industry, I haven't seen 21 any specific metrics that I can recall, but 22 certainly PFM would have better data on that. But I 23 think given that the number of AA or AAA rated 24 utilities is small compared to the total number of 25 utilities, that the average number of days of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 266 1 liquidity for A-rated, that will be much lower than 2 what we have. 3 Q So would not you agree that there is an 4 opportunity for this district to use its strength 5 and its liquidity to accelerate these projects and 6 pay for them and complete them so that these costs 7 or uncertainties don't last for the next 20 years? 8 A I think -- yeah, that's -- you're really 9 looking at -- and, really, Mr. Unverferth would be 10 able to respond to how we could -- could we -- if we 11 had more money, could we do more quicker than what 12 is laid out in front of us, as far as the plan. 13 Because, again, as -- in doing major programs like 14 this, there's a process and a timing, as things 15 can't be done concurrently, they -- some projects 16 are relying on other projects to be done first. 17 So we have to look at the overall 18 plan. And I suspect -- and I would expect that that 19 would be an ongoing management process that they 20 have, if they can accelerate something, and take 21 advantage of a lower cost, they would do that. 22 Q But this -- this district is uniquely 23 situated in a financial profile with cash 24 availability days on hand that is superior to other 25 districts. And that's an opportunity for this MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 267 1 district, is it not? 2 A Yeah. But the thing about having cash, if 3 you spend it, you no longer have it. 4 Q Well, but you're spending it on projects 5 that you must comply with under law. That's good. 6 A Right. But it may only -- if they only 7 have to do it five years from now or 10 years from 8 now, and you do it now, then there's also the 9 intergenerational equity out of taking rates and 10 revenues from today's customers to benefit customers 11 at 20 and 30 years from now. 12 Q But you're spreading those costs with a 13 borrowing over that period of time, are you not? 14 A If we borrowed more. 15 Q Yes. 16 A But then if we have a liquidity, then we'd 17 be using that to do it instead of borrowing. So, 18 yes, that whole balancing, do we spend it out of our 19 PAYGO, do we increase that and reduce the amount of 20 borrowing, or do we do more borrowing, but then 21 would we have a limited amount of authorization we 22 have, if we have to go back and get more 23 authorization, but then it's the more bonds we 24 issue, the more debt service coverage we'll have to 25 generate as well. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 268 1 So there's a max -- a term I use is 2 maximum debt financing. There's an optimal amount 3 of balance between debt and equity when we finance a 4 project to achieve certain metrics, including 5 coverage and liquidity. So they're not -- they're 6 not independently -- they're all interdependent in 7 how those things fit together. 8 Q Thank you. I have no further questions. 9 CHAIRMAN TOENJES: Thank you, Mr. Palans. 10 Any of the other rate commissioners have any 11 questions for Mr. Stannard? 12 Ms. Myers, any questions for Mr. Stannard? 13 MS. MYERS: I do not, no. 14 CHAIRMAN TOENJES: Thank you, 15 Mr. Stannard. 16 THE WITNESS: Wait a minute. You don't 17 have any questions? 18 CHAIRMAN TOENJES: No, sir. No, sir. 19 THE WITNESS: You getting tired? 20 CHAIRMAN TOENJES: No, sir. 21 I believe we are scheduled until 5:00 22 p.m.; is that correct? Five-minute break and 23 we will resume at 4:00 o'clock. 24 (Whereupon, a brief break was taken.) 25 CHAIRMAN TOENJES: Mr. Beckley. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 269 1 THE WITNESS: Hi. 2 (The witness was duly sworn.) 3 CHAIRMAN TOENJES: Do any members of the 4 Rate Commission have questions for Mr. Beckley? 5 Hearing none, Mr. Neuschafer, do you have 6 any questions for Mr. Beckley? 7 MR. NEUSCHAFER: I do. 8 CHAIRMAN TOENJES: Please come forward. 9 EXAMINATION 10 BY MR. NEUSCHAFER: 11 Q Good afternoon, Mr. Beckley. How are you? 12 A Hi. 13 Q Do you have a copy of your testimony -- 14 A I do. 15 Q -- in front of you? I'd like to start out 16 looking at question 20. This was within a section 17 on cost of service analysis. And I understand from 18 looking at question 20 that you-all picked a test 19 year to determine the cost of service for this 20 proceeding? 21 A Correct. 22 Q And that year was fiscal year 2021? 23 A Correct. 24 Q Why did you pick fiscal year 2021? 25 A The typical approach to setting a test MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 270 1 year is to use the first year of your period you're 2 going to set rates. So that's the way it's always 3 been done here at MSD. That I've been working here 4 since 2007, it's always the first year of the -- of 5 the rate cycle period, previously you used five-year 6 rate cycles, now we're down to four years. But it's 7 always -- and that's typical practice is you do a 8 single test year and then future years for your 9 projection period are just based off that one test 10 year, as opposed to using multiple test years, which 11 is sometimes done but is less common. 12 Q So in picking that test year and doing 13 your analysis, the cost of service for that test 14 year, was there anything unique or different about 15 that year? For example, certain costs that would 16 you not expect in other years? 17 A There are not. And we adjust the O&M 18 cost. When we look at the incremental costs, we do 19 make adjustments for -- for expenses that we expect 20 will only happen periodically or, for instance, rate 21 commission proceedings are set, you know, to happen 22 in the years they occur. So we do account for large 23 costs that we don't expect to be repeating every 24 single year; so that's accounted for. 25 Q That's factored into the model? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 271 1 A Yes. 2 Q And so if you had picked a different year, 3 say fiscal year 2022, you wouldn't have expected any 4 of the cost of service to be significantly 5 different, maybe some inflation? 6 A No, we can -- and typical, the reason we 7 just use one test year out of the four even is that 8 we don't expect costs to change -- the allocation of 9 cost to change dramatically from year to year. We 10 know there may be some small changes, but it's not 11 going to change dramatically. So typically 12 utilities are comfortable using a single test year 13 and then saying, well, the allocation of costs in 14 that test year should be similar for the next four 15 years. 16 Q Okay. So help me understand just at a 17 high level, how are cost of service allocated 18 amongst the different classes of consumers? 19 A So we allocate costs, you know, based on 20 functional components, you know, how this business 21 operated and what functions performing. And then 22 for each -- for the different customers, we identify 23 units of service that identify how much of those 24 functions they use, how many gallons they 25 contribute, how many customers they are, and what MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 272 1 their contributions for strength are, are, you know, 2 basically the three largest factors that we have in 3 a wastewater utility such as MSD. 4 Q And is that consistent amongst the 5 industry for wastewater utilities? 6 A Yes. It's based on that's a standard 7 approach to cost of services, is looking at those 8 type of factors. 9 Q Okay. I'd like to look at question 27. 10 You talk about wastewater strength surcharges. In 11 particular for BOD, COD, and TSS. 12 A Right. 13 Q And the capital costs have increased 14 approximately 70 percent from fiscal year 2017 to 15 the test year of fiscal year 2021? 16 A Right. 17 Q Can you help us understand the basis for 18 that 70 percent increase? 19 A That's based on an allocation of the 20 capital cost. We have the total pool and then, you 21 know, they're split between collection and treatment 22 and then treatment is allocated between, you know -- 23 much like Bill Stannard mentioned -- preliminary, 24 primary, secondary, solids handling and other 25 functions that occur in the treatment plant. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 273 1 And over the course from FY17 to 2 FY21, basically we were looking at kind of what 3 happened in the proposal last time compared to what 4 happened now. And we look at that and the 5 allocation of capital cost based on the capital 6 that's been invested in the system, is increased by 7 70 percent. 8 Q Okay. So you didn't -- what I'm hearing 9 is you did an analysis and that showed an increase 10 by 70 percent. What were the factors that -- 11 that -- that factored into that analysis? 12 A It's investment in the treatment plants. 13 I mean, it's based on increased investment in the 14 treatment plants. 15 Q Okay. Was that investment as a result of 16 the consent decree projects? 17 A At the treatment plants, my understanding 18 is they're less related to consent decree projects, 19 but Rich Unverferth would be much better equipped to 20 handle that. But certainly -- I mean, some of 21 the -- I believe some are. But, in general, it's 22 less related to consent decree than just . . . 23 Q So in your testimony here, line 4, you say 24 that the increase was caused -- the increase in the 25 surcharge rates for BOD, COD, and TSS was caused by MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 274 1 several factors, one of which was the 70 percent 2 increase in cost. What other factors are 3 contributing to the significant increase in 4 surcharge rates? 5 A For BOD, there was a -- approximately just 6 over 5 percent decrease in units of service. So 7 even if we held costs constant, there would have 8 been -- there would have had to be an increase to 9 reflect lowering units of service. But, in general, 10 it's mainly driven by capital cost as is shown in 11 the table, you know, in that -- in that answer. I 12 mean, to be -- you know, to give you a little 13 background, obviously during the course of when we 14 were preparing this rate proposal, we knew the large 15 industrial customers would be concerned about this 16 and that's why we -- we spent a fair bit of time 17 making sure that -- that the output that the model 18 was indicating was reasonable and accurate and 19 that's why we went into this level of detail on this 20 specific answer in our prepared testimony we first 21 submitted. 22 Q I'd like to look at that table. 23 A Sure. 24 Q Yeah. And you have -- you have costs 25 allocated, first TSS versus BOD. But then you have MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 275 1 operating costs allocated to strength and capital 2 cost allocated to strength as well. 3 A Right. 4 Q We got two different distinctions there. 5 A Mm-hmm. 6 Q Can you -- can you help explain how you 7 attribute costs first to TSS versus BOD and then to 8 operating versus capital? 9 A Well, operating versus capital, I mean, 10 that's based -- operating is our operating 11 maintenance budget and then it's the allocation of 12 operating maintenance budget among different 13 functions. Treatment and collection and then 14 treatment's further broken down between TSS, BOD 15 volume, and those types of functional categories. 16 Capital is broken down the same way to reflect the 17 functional categories they are used to support. 18 And so TSS and BOD are functional 19 categories in our cost allocation process. 20 Basically, we end up saying these are the total 21 costs allocable to the TSS based on the approach 22 that's been -- the standard industry approach. And, 23 again, it's the same approach that's been used here 24 for the past several rate cycles. There hasn't been 25 a change in the allocations. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 276 1 Q Okay. Let's see. Question -- we'll go 2 ahead and do question 28 while we're right here. 3 A Sure. 4 Q Actually, let's save that one. I'm sorry. 5 Let's start with bad debt or let's go to bad debt. 6 A Okay. 7 Q Is bad debt allocated across all rate 8 classes, the cost associated with bad debt? 9 A Yes. 10 Q Is that -- is there any actual analysis of 11 where the bad debt comes from, whether it's 12 primarily residential, primarily nonresidential? 13 A Not that I'm aware of. We typically 14 just -- we handle this kind of proportional to all 15 customers. 16 Q If there's no analysis of which customers 17 are the origin of bad debt, how can you allocate 18 that proportion? 19 A It's handled kind of in a similar matter 20 to administrative, I mean, where it's kind of 21 allocated based on the allocation of a total pot of 22 costs that's across all the functional categories 23 because we can't say that bad debt is only 24 treatment, only collection. And so it's allocated 25 across those categories basically as a cost to each MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 277 1 of those functional categories. 2 Q So I'm thinking more of classes of 3 consumers. 4 A But you have to remember, we only get to 5 classes based on units of service. So it has to 6 first be allocated to a function and then when we 7 identify units of service, that's how you get to 8 classes, based on units of service. So there's 9 not -- we don't -- for instance, we don't say, well, 10 it all comes from residential so it should be 11 reflected in their units of service. We recognize 12 that on the cost side and then the units of service 13 are -- are units of service that we bill based on 14 the actual units of service that we bill on. 15 Q Okay. I think I'm following you. Okay. 16 We talked with Mr. Stannard about a 2005 CRM study? 17 A CDM. 18 Q I'm sorry. CDM. You're correct. 19 Relating to allocation of I&I costs. Did you review 20 that as -- that study as part of this proceeding? 21 A I have reviewed that study in the past, 22 yes. 23 Q Did you review it as part of this 24 proceeding? 25 A Not recently. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 278 1 Q Okay. So do you have an opinion as to 2 whether it's still accurate? 3 A I don't believe that there's -- 4 Mr. Stannard is better qualified to speak and I 5 would just say that his answer is the answer you 6 should go with. 7 Q Okay. Give me just a minute here. 8 I'd like to go to some questions that 9 I was asking of Mr. Hoelscher and he volunteered you 10 to answer these questions. I'd like to look at, in 11 the rate proposal, tables ES-2 and ES-3. These will 12 be there at the beginning because they're in the 13 executive summary. 14 A All right. ES-2 is wastewater user 15 charges. 16 Q Yes. 17 A And three is comparison of bills. Oh, 18 yeah. 19 Q And what we're trying to track here is -- 20 relates to extra strength surcharges. 21 A Yeah. 22 Q So -- 23 A I can answer your question. 24 Q Okay. 25 A The keyword in the footnote is excess. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 279 1 That is the amount of excess strength among -- above 2 domestic. So it's 150, 200 to 200 excess strength 3 above domestic. 4 Q So I want to -- and so I want to make sure 5 I'm synching this up correctly. So let's take -- 6 let's take suspended solids. So on table ES-2, line 7 15, it talks about extra strength surcharge for 8 suspended solids over 300 milligrams a liter. 9 A Right. 10 Q So when you're talking about excess 11 strength of 150 milligrams a liter, what we're 12 ultimately talking about is the actual measured 13 strength of suspended solids is 450 milligrams a 14 liter? 15 A Correct. 16 Q Okay. Thank you. Let's go to table 4-17 17 -- 18 A Sure. 19 Q -- of the rate proposal. That is on page 20 4-36 of the rate proposal. This is a comparison of 21 existing revenue to wastewater cost of service. And 22 what we see here are increases or -- I guess as the 23 table outlines it, indicated percentage change 24 required of approximately 4 percent for 25 nonresidential, which is 2, to a little less than 2 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 280 1 percent -- or two times the single family and 2 multi-family percent changes required. Can you help 3 us understand why that percent change is so much 4 different for nonresidential as opposed to single 5 and multi-family? 6 A Based on the cost service analysis, the 7 volume rate needs to go up more than the base 8 charge. The base charge is only -- is going up a 9 smaller amount than the volume rate and multi and 10 nonresidential customers pay a larger portion of the 11 volume rate than they do of base charge. And so 12 that's why that -- based on this analysis, they're 13 seeing a higher increase than the average. 14 And I would also point out, you kind 15 of skipped over all the other still lower unmetered 16 customers. Both single and multi-family are paying 17 a higher level than just 2 percent and those are 18 residential customers, the non-metered. 19 Q Yeah, I'm looking at the total system down 20 there. 21 A Okay. 22 Q 4.04 versus 1.8 -- 23 A Right. 24 Q -- and 2.59. So am I understanding 25 correctly, what you're saying is proposing an MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 281 1 increased reliance on volumetric charges? 2 A Well, it's not an increased reliance. 3 It's just the cost of service for volume charge went 4 up greater than the cost of service for base charge. 5 I would say -- I'm not sure I like the saying that 6 it's based on an increased reliance. It's just what 7 the cost of service indicated. 8 Q Okay. So then let's go back to your 9 testimony. Question 28. Your ultimate conclusion 10 is that the rates proposed are fair and equitable. 11 How do you define fair and equitable? 12 A Based on the cost service analysis and 13 when you look at -- and kind of the table that 14 demonstrates it well is one that we referred to 15 earlier, the table 4-20, you know, kind of -- based 16 on the cost service analysis are the rates that 17 we're proposing recovering costs in a proportionate 18 matter from a customer class based on their units of 19 service. 20 And that tables shows that once we 21 make the proposed adjustments, that all of the 22 customer classes are within 1 percent of the 23 indicated cost service based on cost service 24 analysis. We can't get quite -- take that -- 25 everybody to zero there because our rate structure MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 282 1 is somewhat simplified in we only have a base volume 2 charge. It's the same between all classes, but our 3 goal is to -- to get that close and that's what it 4 indicates. 5 So based on cost service analysis, 6 which recognizes different customer classes' uses of 7 the MSD sewer system, they are paying their 8 reasonable cost of service based on this analysis. 9 Q Let's -- so 4-20 -- table 4-20, which for 10 the record, anyone following along, 4-41 of the rate 11 proposal is the page, we see positive numbers -- 12 let's look at the total system down there at the 13 bottom. Single family, multi-family, 14 nonresidential. We see positive numbers for single 15 family and multi-family. What does that mean? 16 A That means that they're going to -- 17 they're paying slightly more than their cost of 18 service. But, you know, those positive numbers, .03 19 percent for single family, which when we're dealing 20 with rates that have to be rounded to a penny, 21 that's -- to some extent, that's just margin of 22 error there. 23 Q And so applying logic to that then for 24 nonresidential, is the negative 0.10 percent -- 25 A Right. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 283 1 Q -- means that they are -- they are paying 2 slightly less -- 3 A Yeah. I mean, but you can see it's 130 -- 4 you can see that the dollar -- the total dollars 5 there, it's 130,758,000. And we're projecting that 6 we would cover 130,623,000. And, again, that's 7 partly due to the fact that we have to simplify our 8 rate. We don't have to, but we do simplify our rate 9 structure, single family, and -- and, of course, and 10 you'll have the same base charge or we have the same 11 volume charge; so we want to keep our rates simple 12 and easy to understand. 13 Q So ultimately, in your opinion, fair and 14 reasonable means the -- the revenue is as close to 15 the cost of service for that class as possible? 16 A Yeah. And you have to recognize, there's 17 a lot of assumptions that go into this that are not 18 this precise. 19 Q Yeah. And those assumptions are a lot of 20 our questions. 21 A There's a lot of assumptions in here and, 22 you know, you can't -- when you see something that's 23 within 1 percent, that's well within the margin of 24 error of all the different assumptions that we have 25 in this model. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 284 1 Q Now, you did qualify your conclusion a bit 2 by saying it's a strong indication that it will 3 yield a fair and equitable recovery. Strong -- I'm 4 curious -- 5 A Well, because -- 6 Q -- why a strong indication as opposed to 7 it does? 8 A One thing that we pretty much always 9 guarantee is that things will not unfold the way we 10 believe they will. Usage will be different and cost 11 will be different and it's based on a lot of the 12 assumptions we just talked about. We make 13 assumptions we think are reasonable assumptions 14 based on our experience and history, but they -- 15 they will not unfold the way -- you know, for 16 instance, when we were talking about the surcharges, 17 the fact that BOD went down 5 percent. It was not 18 something that we expected and that will cause a 19 difference in the cost service. 20 Q Okay. So the final thing that I wanted to 21 talk to you about. We talked earlier about the 22 split between bonds and PAYGO financing. And the 23 fact that it's in the rate proposal set at 60-40. 24 And I understand from Ms. Pugh that iterative 25 process to get there and accept that you didn't MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 285 1 start out saying we're trying to justify 60-40; 2 correct? 3 A And I would -- I wouldn't use the word -- 4 the phrase that it's set at 60-40. That's not -- as 5 Ms. Pugh said, it's an iterative process how we 6 arrived at that and there's a lot of factors we're 7 considering. But at the end of the day, the rate 8 increases and how much we're paying for with debt 9 versus cash is driven by coverage and it's driven by 10 fund balance, desired fund balance levels. 11 And those are the two factors that 12 drive how much rate increase we're proposing over 13 this period because you'll see when we get to the 14 fourth year basically, our senior debt -- senior 15 debt service coverage gets down to 1.81 or 1.82, and 16 that's basically we're striving our increase over 17 the entire period, is the fact that 1.8 is what 18 working with PFM and Tim Snoke and Marion Gee, you 19 know, that's where we're comfortable that we're 20 going to be able to maintain our ratings on our debt 21 is with debt coverage of 1.8 or higher on senior 22 debt. 23 And so at the end of the day, that 24 1.8 is what drives everything. And even if we -- we 25 could certainly issue more debt if we wanted to. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 286 1 All that would happen is we would end up with more 2 cash at the end of the period and cash that we don't 3 necessarily have any need for above what we've 4 identified is reasonable levels of cash to maintain 5 our -- 6 Q Yeah. 7 A -- our cover -- our ratings. And so 8 that's what's driving because in the past there have 9 been certain -- and I'm sure some rate commissioners 10 remember -- 70-30 used to kind of be the number that 11 we were aiming for. And in that case, that was more 12 set by, well, we want to do it as 30 PAYGO. 13 But now we're getting to the point 14 that we have so much debt outstanding that we're 15 generating so much cash from coverage because we 16 want to have at least 1.8 covered senior lien, 2.5 17 total. We're generating a certain amount of cash 18 because of that, and there's really nothing else to 19 spend that money on except put it in the bank and 20 use it as fund balance or spend it on capital. 21 Q So why not spend it on capital? 22 A That's what we are doing with it. 23 Q Okay. 24 A And that's why it's gone from 30 to 40 25 percent. It's not because we made a conscious MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 287 1 decision that we want to spend more cash on capital. 2 It's because we're generating more cash from 3 coverage than we have in the past. 4 Q So did you -- as -- as the 60-40 split was 5 developed -- 6 A The 60-40 split wasn't developed -- 7 Q That's what -- that's what within -- 8 A -- as an answer. 9 Q Okay. As you reached your answer of 10 60-40, did you then pressure test that to say, well, 11 okay, what would a -- what would a 55-45 split look 12 like or what would a 65-35 split look like? What 13 are the impacts of those splits? How would they 14 impact our credit ratings? How would they impact 15 rates, etc.? 16 A If we had gone -- if we had spent -- if we 17 spent less on -- if we issued more debts, spent less 18 on PAYGO, we would -- it would have just sat in the 19 fund balance and we would have -- and had greater 20 levels of fund balance. If we spent more, then it 21 would raise rates further than what we're proposing 22 because using debt in a responsible manner in order 23 to maintain our ratings provides for lower rates in 24 the short-term by spreading the cost of those assets 25 over a large period of time, 20, 30 years from now, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 288 1 whether using SRF or -- revenue-wise. 2 Q And I understand that theoretically. Did 3 you actually model what that looks like? 4 A In this specific case, we did not do any 5 scenarios that looked at let's issue even more debt 6 than what we are proposing. We did not look at 7 that. 8 Q Okay. Thank you. 9 CHAIRMAN TOENJES: Thank you, 10 Mr. Neuschafer. 11 Ms. Stump, do you have questions for Mr. 12 Beckley? 13 MS. STUMP: I do. 14 CHAIRMAN TOENJES: Please come forward. 15 EXAMINATION 16 BY MS. STUMP: 17 Q Good afternoon. I'm just going to go 18 through your testimony and ask some questions and 19 try not to repeat Mr. Neuschafer's questions. 20 A Okay. 21 Q Let's look on page 3, specifically 22 question 10, where you say that "Based on my past 23 experience with the District, my experience with 24 other urban utilities throughout the United States, 25 and general trends in wastewater flows throughout MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 289 1 the United States, I believe the forecasts are 2 reasonable." 3 And the question is "What is your 4 opinion of the forecast of customers and contributed 5 volumes?" 6 Can you explain a -- I mean, you make 7 the conclusion, but can you explain a little bit 8 more about how those were projected in the first 9 place? 10 A We worked with -- MSD's finance staff 11 developed those projections. We worked with them to 12 review them and make sure they were reasonable. 13 And, you know, it's been mentioned before that, you 14 know, there's been some variability in our change of 15 customers and flows especially in recent years. But 16 based on our experience with MSD and, in general, 17 there is declining usage, you know, for customers 18 throughout the country. That's kind of the urban 19 trends I was referring to. 20 For purposes of setting rates, we 21 felt that the forecast that was developed by MSD 22 finance staff and with our assistance and input was 23 a reasonable projection to -- to balance risk to the 24 utility and while not having rates, you know, be 25 higher than necessary to generate too much revenue. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 290 1 Q Do you recall how accurate the projections 2 were in the 2015 proposal? 3 A They -- usage has decreased more than we 4 thought it would. From 2012 you said; right? 5 Q I said '15, but I think -- whenever the 6 last one was. 7 A The 2015 proposal -- compared to our 2015 8 proposal, there was a greater decline in usage than 9 what we had expected, billed volumes especially. 10 Q And has that been considered at all in 11 determining the forecast for this rate proposal? 12 A We -- we -- right now, the forecast is 13 projecting less of a decrease than has been -- than 14 has actually occurred in the past. And, again, 15 that's so that we're not setting rates higher than 16 they need to be. And we're hopeful that -- as 17 somebody else mentioned, you know, we -- we believe 18 there's a leveling off of that decline. Usage keeps 19 declining throughout the United States, but we're 20 pretty confident it won't get to zero, but we're not 21 sure when it -- you know, how exactly it's going to 22 slow down, but it does appear to be slowing down 23 here, as well other communities we work in. 24 Q Thank you. On page 4, I just want to pick 25 up a little bit -- on question 12, you've got that MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 291 1 you were asked do the wastewater expenses included 2 in -- including any costs that could be allocated to 3 stormwater and you said no. But just want to follow 4 up on my questions to other individuals, including 5 Mr. Hoelscher, where we talked about the overhead 6 cost. Can you give your opinion a little bit on 7 what may happen -- what the effect may be at all 8 with the failure of Prop S? 9 A Yeah. Based on our modeling, the way 10 we've modeled expenses and our discussions with 11 finance staff is there will be some impact, 12 particularly in overhead. If we had some amount of 13 overhead going to stormwater based on that proposal, 14 that will not just disappear because those projects 15 aren't going away. You know, we're expecting to do 16 more, maybe get a higher allocation of overhead. We 17 can't necessarily get rid of all that overhead just 18 because we're not doing stormwater now. 19 But, you know, as Mr. Gee indicated, 20 we don't think -- while there's certainly a dollar 21 cost to that, we think it -- it's not going to be 22 significant and it could be absorbed within 23 hopefully the rates that we've proposed. 24 Q So when you say hopefully the rates 25 that -- you're not planning, at this point, of MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 292 1 making any adjustment? 2 A Correct. 3 Q You don't believe it will affect the rate 4 proposal? 5 A Everything that's been indicated to me is 6 that the rate proposal is not going to be updated to 7 reflect that. 8 Q Thank you. 9 On page 6, on the wastewater 10 financial plan, you've got a -- you make the 11 statement that "Based on discussions with district 12 staff, as well as the District's financial advisor, 13 it was established that the driving factor in 14 determining rate increases is the District's desire 15 to maintain a total debt coverage level of 1.8, as 16 discussed in the testimony of Tim Snoke." 17 I just wanted to clarify because 18 you're -- I mean, you're saying here that that's the 19 driving factor in determining rate increases. 20 A Ultimately, when you look at our rate 21 proposal, at the end of 2024, our -- to hold that 22 coverage level, it's at 1.81, I believe, and that's 23 basically kind of -- that's what ends up being the 24 main factor driving the total level of rate 25 increases that we -- we are projecting we -- need to MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 293 1 be done over the four-year rate proposal. 2 Q So it's the main factor and not the only 3 factor? 4 A When you look at a rate model, at the end 5 of the day, there's usually just one factor that 6 drives how high your rate increase needs to be 7 because if we didn't need 1.81, we could lower it 8 more and just you have more fund balance or 9 something. But at the end of the day, there's 10 always -- there's one factor that drives your total 11 level of rate increase. 12 Now, there's a lot of factors we look 13 at throughout the process, but it -- there's one 14 factor that kind of gets you to the final answer. 15 It's -- it's the one kind of -- your limiting factor 16 basically. You look at a lot of different factors, 17 but one factor is your limiting factor. It's the 18 one that's closest to where you want it to be. 19 And in the case of this -- because 20 like, for instance, the two main ones we look at, at 21 our debt are senior and total. And so now we're in 22 total. Last rate proposal period, senior debt was 23 actually the driving factor. And when you look at 24 the -- when you look at the 2015 rate proposal, at 25 the end of four years, we were down to 2.52 on MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 294 1 senior and we were shooting for 2.5. This time 2 we're actually well above 2.5 on senior and it's 3 total debt service that's driving it at 1.8. 4 And part of that is driven by the 5 fact that we issued -- that we had issued more 6 subordinate debt than what we expected in the past. 7 Also just better interest rate environment that's 8 occurred. It's affected that as well. 9 Q Okay. Thank you. 10 On cost of service, I think 11 Mr. Neuschafer got all those questions. I do have 12 one -- are there any -- were there any policy 13 considerations in determining the projected rates 14 beyond the cost of service? 15 A Only policy decisions, you know, that we 16 -- 17 Q Like affordability or -- 18 A No. 19 Q Okay. 20 A They're based on -- and affordability is 21 addressed through the customer assistance program, 22 you know, as opposed to doing it through a cost 23 service approach. No, there's no other -- there's 24 no other fact -- policy-driven factors that are cost 25 of service based. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 295 1 Q Okay. Thank you. 2 It's my understanding from the model 3 that this -- the -- while we've got rate increases 4 that are ranging from 2.5 in fiscal year '21 to 3.75 5 in '22, '23, and '24, it's my understanding from the 6 modeling, you're projecting the need for a 7 7.2 percent increase in fiscal year '25, the year 8 following? 9 A That's currently what the financial 10 planning is showing, that there will be a larger 11 increase necessary in 2025 based on the various 12 assumptions that we're using right now. 13 Q Can you explain why there's a need for a 14 rate increase that's about double in the years 15 before and the year after? 16 A I believe it's driven by capital projects 17 in that year, but I'd have to look exactly what's 18 driving that rate increase that year. But I believe 19 it's capital, either -- I believe it's debt service. 20 Q Because couldn't you then increase -- I 21 mean, did you think about at all setting the rate a 22 little bit higher during these four years to avoid 23 such a jump in the fifth year? 24 A That's certainly an approach that could be 25 taken. I think, on the other hand, there's some MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 296 1 concern that, you know, part of the reason they're 2 low this time around is because things have unfolded 3 so favorably over the current four-year forecast. 4 We don't want to have them unfolding more 5 favorably -- and not -- and I shouldn't say more 6 favorably. But it if that were to occur again, then 7 we're just raising rates that we didn't necessarily 8 need to raise. 9 Q Another thing that was pointed out was 10 that the billing and customer costs that we have for 11 this proposal appear to be lower than in our -- in 12 the previous rate proposal and were -- and comprised 13 a smaller percentage of total cost. Why -- do you 14 know why the billing and the customer costs -- 15 A Off the top of my head, that was -- that 16 was certainly something we noticed. And that goes 17 to something I was discussing with Mr. Neuschafer, 18 is that our fixed charge is going down a lower 19 percentage than our volume charge and a big part of 20 that actually was our lower billing cost in customer 21 service. 22 I believe there was actually -- I 23 could point to Marion Gee, except he's not going to 24 testify again. But there was actually some one-time 25 costs that were inadvertently included in the last MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 297 1 rate proposal, I think was one of the factors that 2 we determined. Because we actually looked at that 3 relatively late in the rate cycle process, now that 4 I think about it. There was some one-time cost that 5 were in the test year that -- that caused the test 6 year revenue requirement to be higher than it 7 necessarily needed to be. 8 Q Okay. Thank you. 9 I think you adequately addressed all 10 the surcharge questions, unless you want some more 11 questions. 12 I do want to talk a little bit about 13 your last question and -- well, second to last 14 question in your testimony about where you've got 15 are these proposed rates fair and equitable. 16 A Mm-hmm. 17 Q And I know you discussed this with Mr. 18 Neuschafer, but as the Rate Commission will be 19 writing the report, you know, the actual factor 20 that's in the charter is whether the proposed rate 21 change imposes a fair and reasonable -- or 22 equitable -- fair and reasonable burden on classes 23 of ratepayers. 24 So my question to you is, do you 25 believe that the proposed rate change imposes a fair MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 298 1 and reasonable burden on all classes of ratepayers? 2 A Yeah. I -- the cost of service analysis 3 and the approach that we've used fairly and 4 reasonably allocates cost among the customer classes 5 based on their units of service, their -- their use 6 and demands of the MSD sewer system based on the 7 units of service that we use to measure their 8 demand. Number of customers, contributed volumes, 9 and strength. 10 Q And when you use the word "equitable" in 11 your testimony, did you consider that the same as 12 reasonable or -- because I noticed Mr. Stannard used 13 reasonable -- 14 A Well, no, because equitable is more 15 related to -- equit -- fair and equitable is more 16 related to a similar thing, which is the allocation 17 of cost among class. Because as Mr. Stannard said, 18 reasonable relates to are we recovering a reasonable 19 level of overall the revenue requirements. So 20 fair -- fair and equitable are similar in -- in 21 terms of addressing are we recovering costs from 22 customer classes in an equit -- a fair and equitable 23 manner. 24 Q But you believe it meets the standard, 25 which we have in the charter -- MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 299 1 A Yes. 2 Q -- which is fair and reasonable? 3 Okay. Thank you. I have no further 4 questions. 5 CHAIRMAN TOENJES: Thank you, Ms. Stump. 6 Questions from any of the rate 7 commissioners? Mr. Stein. 8 EXAMINATION 9 BY COMMISSIONER STEIN: 10 Q Mr. Beckley -- let me be sure you can hear 11 me here. 12 A I can. 13 Q On page 4-37, looking again at the 14 increase in extra strength surcharges, by my 15 calculation, from fiscal year 2020 to fiscal '21, 16 suspended solids go up by 11 percent and BOD goes up 17 by 27 percent and I didn't even calculate the COD. 18 Would you not agree that that creates 19 an incentive for those subject to those surcharges 20 to invest in facilities to reduce those charges, or 21 in the extreme, to eliminate operations that create 22 those charges? 23 A To some extent, that's the -- that's the 24 purpose of the surcharge -- always the purpose of 25 the surcharges is to incentivize industries to MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 300 1 remove those if they can cost effectively do so. I 2 mean, sometimes it doesn't make sense for them. But 3 certainly, that's always one of the points of having 4 an extra strength surcharge is to incentivize people 5 to not indiscriminately put them into our system and 6 have us remove them. 7 Q Well, maybe it's not even indiscriminate. 8 It's just the way the process is designed. 9 A I regretted -- I regretted saying that 10 word as soon as I said it. Indiscriminate really 11 wasn't the right word. But just, you know, 12 without -- you know, to -- to do what they can to 13 minimize them; so -- 14 Q So if they do that, those items of capital 15 that have been put in place, clarifiers, blowers, 16 tanks, etc., are still going to be there. They're 17 fixed costs. Are those costs not then going to have 18 to be -- down the road have to be allocated to the 19 other users? 20 A You're correct, they are. But certainly, 21 you know, kind of the general perspective is that we 22 don't want to -- you know, we don't want large 23 industries putting in huge amounts of excess 24 surcharge and that we should discourage them from 25 doing so by having charges that, you know, recover MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 301 1 those costs in a fair and equitable manner. 2 I mean, there is a challenge because 3 there's some utilities -- quite frankly, I've worked 4 with utilities where they're required by EPA 5 requirements to have these surcharges, but they're 6 having challenges that they're not getting enough 7 strength. So there's a lot of competing issues when 8 you get into what you're talking about that I think 9 are kind of beyond the scope. But certainly that's 10 a philosophical discussion that many of us could sit 11 around here and have for an entire day, and some of 12 the challenges that utilities are facing when it 13 comes to that regard. 14 Q I could tell you from being on the other 15 side of the fence, it's more than philosophical. 16 It's very real. 17 A Yeah. 18 Q Thank you. 19 CHAIRMAN TOENJES: Mr. Palans. 20 EXAMINATION 21 BY COMMISSIONER PALANS: 22 Q Mr. Beckley, you are senior manager with 23 Raftelis and you're the office lead in Kansas City; 24 correct? 25 A Correct. Yes. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 302 1 Q Does Raftelis perform work for the Kansas 2 City Sewer District? 3 A We did a cost of service study for Kansas 4 City several years ago, probably six, seven, years 5 ago, and we have not done work for them since then. 6 Q As a resident of Kansas City, could you 7 just give us your estimate, if you can, as to the 8 charges in Kansas City for sewer service versus the 9 charges in St. Louis? 10 A As somebody who pays Kansas City charges, 11 they're higher than they are here. And they are 12 facing a lot of challenges. They do have a slightly 13 different challenge, which is they have historically 14 provided a lot of wholesale service to customer 15 communities outside of the City of Kansas City. And 16 as the costs increase in Kansas City to meet consent 17 decree requirements, several of their largest 18 customers have found alternatives to sending their 19 flow to Kansas City, which has created even more 20 pressure on their sewer rates as they've lost 21 customers, yet their consent decree costs don't go 22 down because these wholesale customers buy -- have 23 found alternatives. 24 The City of Liberty where I used to 25 live built its own sewage treatment plant, and MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 303 1 Johnson County, Kansas, which is a large suburban 2 community on the other side of the state line, used 3 to send some of their flow to Kansas City, Missouri. 4 But as costs increased, they found a way to send 5 that to one of their own existing treatment plants 6 instead. It was a large capital investment, but 7 they felt it was worth it. 8 And certainly Kansas City has -- has 9 now stuck with paying the cost of the consent decree 10 without these large customers. 11 Q So Kansas City is operating under a 12 consent decree? 13 A Yes. 14 Q Do you have an estimate as to what their 15 cost of compliance with CIRP projects are over the 16 period of time that the decree envisions? 17 A It -- I don't -- off the top of my head, I 18 want to say 3.1 million, but honestly I don't know 19 if that's the right number anyway. But that number 20 comes to mind. It's -- it's in the multiple 21 billions just like St. Louis. 22 Q Are you familiar with the fact that Kansas 23 City is utilizing some extensive sensor network to 24 make their operation more economical in terms of 25 forecasting? Are you aware of that technology? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 304 1 A I'm not familiar with that. 2 Q Okay. Mr. Beckley, when were you -- I 3 should say when was Raftelis engaged to perform the 4 services in connection with this rate proposal? 5 A With this rate proposal, we were engaged 6 approximately two years ago. We signed a 7 multiple -- multi-year agreement to assist with last 8 year's stormwater proposal, this year's rate 9 proposal, as well as bond issuances, each year 10 prepare a feasibility -- or financial feasibility 11 reports for bond issuances. 12 Q I'd like to just focus on the wastewater 13 piece of it. When did you perform your first 14 services, if you can recall, with respect to the 15 wastewater proposal? 16 A This rate water -- wastewater proposal? 17 Q Yes, sir. 18 A We started in the summer of last year 19 because basically we started this after we finished 20 the stormwater. We were not doing them both 21 simultaneously. 22 Q Okay. And as I understand, Raftelis does 23 rate design financial planning and bond feasibility 24 studies; correct? 25 A Yes. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 305 1 Q What is the relationship of Raftelis with 2 PFM? How do you guys work together? 3 A We have a relationship with PFM for a lot 4 of our clients, but it's basically just if our 5 client happens to have PFM as their financial 6 advisor, we'll often work with them to discuss 7 assumptions, especially related to debt financing. 8 And specifically here, they -- they project all the 9 debt service that's used and our -- and our rate 10 model comes from PFM. 11 Q When you first met on this wastewater 12 proposal, who did you meet with? 13 A We've had a lot of working group meetings 14 and it's typically -- I would say -- I mean, roughly 15 it's basically the people that have presented 16 testimony in this proceeding, are typically who were 17 in those meetings. 18 Q Does Raftelis -- I'm sorry -- does PFM 19 participate in those meetings? 20 A Yes, usually Bethany participates by 21 phone. 22 Q And as I understand your testimony, the 23 conclusion that the rate as proposed is fair and 24 reasonable is driven by debt coverage level of 1.8. 25 Is that a fair characterization? MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 306 1 A Right. 2 Q Okay. Where did that number come from? 3 Who said that first to you? 4 A My understanding is it was developed by 5 Tim, PFM, with some input from finance, as to what 6 level we believe is appropriate to maintain our bond 7 ratings, where they're at. 8 Q Could you say that again? Who developed 9 the 1.8? 10 A Tim, PFM, and I would say finance may have 11 some input in that, but it mostly comes from the 12 treasurer's office and PFM. 13 Q Okay. Tim? PFM? I lost you. 14 A Tim Snoke. 15 Q Tim? 16 A Tim Snoke, the treasurer. 17 MS. MYERS: And PFM. 18 Q (By Commissioner Palans) Okay. Okay. 19 Yeah, I'm sorry. 20 A It's been a long day. 21 Q It has been a long day. 22 In preparing the recommendation and 23 finding that this is fair and reasonable, this rate, 24 did you do any other rate studies or modeling to 25 suggest that there was a range of reasonableness, MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 307 1 not just stuck to 1.8? 2 A Over the course, I mean, there were 3 different factors just based on as assumptions 4 changed. It's not like we had all the same 5 assumptions when we started working on this nine 6 months ago. They -- they have changed over that 7 period of time. And we looked at different things, 8 you know, projecting consumption change based on, 9 you know, adjustments and new data coming -- you 10 know, as we got more data along the lines, as well 11 changes to expenses, both capital and operating. 12 And so it was an iterative process, I 13 think that, you know, to use the word Bethany used, 14 that we arrived at the proposed rates we are 15 proposing. 16 Q As you went through this study and went 17 through these factors, certain things got better 18 over the past year and they came into clarity? 19 A Yeah. 20 Q Expenses were less than anticipated 21 resulting in greater liquidity, and while revenues 22 did go down there, was a positive liquidity impact, 23 if you were here earlier, of roughly $60 million for 24 the district. 25 A Mm-hmm. MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 308 1 Q Did you take that into consideration in 2 setting the 1.8? 3 A Well, the 1.8 is independent of fund 4 balance. It doesn't -- fund balance doesn't change 5 our -- our coverage levels because fund balance 6 doesn't count towards coverage for most utilities. 7 Unless -- unless their coverage is defined to 8 include fund balance, which does happen for some 9 utilities, but not for St. Louis MSD. 10 So fund balance doesn't impact 11 coverage. But what you see in the proposed rates is 12 while we have liquidity above the levels we've 13 identified as the minimum, that we have actually 14 spent that down over the course of this -- of this 15 rate proposal. And so while there is additional 16 money available now, we're projecting that that's 17 going to be spent down over the four-year rate 18 proposal period. 19 Q So I take it that 1.8 represents a 20 midpoint in an analysis? 21 A No. 22 Q It's not the cut-off point; correct? 23 A That's -- that's the minimum that we've -- 24 that -- that has been indicated to us that we would 25 like to have to maintain our -- that we're MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 309 1 comfortable maintaining our bond ratings. 2 Q But there is a range of reasonableness, is 3 there not? 4 A There is absolutely -- 5 Q It's not just limited -- 6 A I would say if we went to 1.79, I don't 7 think we would -- we would be downgraded, probably. 8 But I don't know. Somebody -- Tim and Bethany are 9 intimately involved with the rating agencies and 10 discussions with them and those rating presentations 11 and so we rely on their expertise and their 12 experience. And certainly PFM is a large firm. As 13 Bethany mentioned, they have 600 people who, you 14 know, this -- what they do is they deal with the 15 bond markets and rely on their expertise to tell us 16 that they feel that if we want to maintain our bond 17 ratings, that that's the level that we should 18 probably maintain. But it's not -- it's certainly 19 not an exact science. 20 Q So it could well be a debt coverage level 21 of 1.75 to 1.85, could it? 22 A It could be. But for purposes of rate 23 setting, we have to -- we have to set a number and 24 -- 25 Q But it's not a bright line is where I'm MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 310 1 going with this. 2 A Not for purposes of saying we will 3 absolutely be downgraded if we go below 1.8. But 4 for purposes of rate setting, we do -- we do need to 5 set a hard number or else we -- we don't want to 6 come in here and present we think rates should be 7 between $5 and 5.15 per, you know, CCF. We need to 8 set an exact rate and so we need to set an exact 9 cut-off to be able to do that. 10 Q Okay. Thank you. I have no further 11 questions. 12 CHAIRMAN TOENJES: Thank you, Mr. Palans. 13 Any other rate commissioners have any 14 questions for Mr. Beckley? 15 Ms. Myers, any questions for Mr. Beckley? 16 MS. MYERS: No, we do not. 17 CHAIRMAN TOENJES: Thank you. I'm going 18 to suggest that since Mr. Stein does not want 19 to work overtime tonight -- 20 COMMISSIONER STEIN: Not unless I get time 21 and a half. 22 CHAIRMAN TOENJES: -- that we will -- we 23 will conclude our hearing for today. We will 24 resume at 1:00 p.m. tomorrow, April 9, 2019. 25 We will start with the testimony of Rich MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 311 1 Unverferth, followed by the testimony of Bret 2 Berthold. 3 Any further comments prior to adjourning? 4 We will stand adjourned until 1:00 p.m. 5 tomorrow. 6 (Whereupon, the MSD hearing was adjourned 7 at 4:52 p.m.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES Page 312 1 REPORTER CERTIFICATE 2 I, REBECCA L. TUGGLE, a Registered Professional 3 Reporter, Certified Court Reporter, and Certified Shorthand Reporter within and for the State of 4 Missouri, do hereby certify that the MSD hearing held on April 8, 2019, commenced at Metropolitan St. 5 Louis Sewer District, 2350 Market Street, Room 109, St. Louis, Missouri 63103; that said hearing was 6 reported by myself, translated and proofread using computer-aided transcription; and the above 7 transcript of proceedings is a true and accurate transcript of my notes as taken at the time the 8 proceedings were had. I further certify that I am neither 9 attorney nor counsel for nor related nor employed by any of the parties to the action in which this 10 hearing was taken; further, that I am not a relative or employee of any attorney or counsel employed by 11 the parties hereto or financially interested in this action. 12 13 14 15 16 ________________________________ 17 Rebecca L. Tuggle, RPR, CCR, CSR 18 19 20 21 22 23 24 25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES A A-rated 266:1 A.M 6:1 A1 197:8 AA 78:3 166:6 195:1 223:8,13 223:14,18,25 225:3 265:23 AA-plus 197:5 Aa1 197:6 223:23 AAA 75:20 166:6 197:3,7 197:13 223:17 223:17 224:7 265:8,23 abilities 120:3 ability 8:9,14 37:10 58:7 59:8 98:3,14 111:4 116:2 150:16 156:4 185:9 265:8 able 17:15 18:19 20:10,17 23:13 32:3 44:1,9 63:23,24 69:19 83:8 119:9 133:19 149:19 156:2 157:3,8 179:6 187:10 224:19 224:19 228:8 232:20 233:22 239:16 255:10 256:9 264:15 264:20,25 266:10 285:20 310:9 aboveground 84:24 absolutely 198:15 309:4 310:3 absorbed 291:22 accelerate 266:5,20 accept 71:1 284:25 acceptable 85:5,6,6,19 86:17 87:8,14 88:17 accepted 14:16 access 30:19 80:11 156:22 207:22 209:17 224:19 224:20,23 229:25 232:4 accommodate 133:13 136:19 accompanied 8:5 accomplish 220:6 accomplished 84:23 account 18:3 32:2 34:5 43:17 84:13 149:13 156:19 156:20 225:24 228:6 228:12 270:22 accounted 41:8 270:24 accounting 169:22 accounts 23:24 46:17,18 112:25 125:16 216:6 257:18 257:19 258:7 accurate 170:21 235:21,22 245:8 274:18 278:2 290:1 312:7 achieve 83:12 173:15 265:8 268:4 acronym 229:20 act 37:3 99:16 99:17,22 action 90:7 312:9,11 activities 13:7 39:24 57:17 78:15 130:17 155:7 163:20 163:23 165:15 165:17 231:18 255:18 activity 39:25 65:1 71:22 actual 17:22,24 18:3 21:23 46:8 59:17 78:25 79:17 79:22,25 80:9,15 122:4 122:10 175:24 208:18 238:2 251:9 276:10 277:14 279:12 297:19 actuals 174:1,2 add 53:3 67:20 100:23 101:2 143:15 164:9,11 164:18 168:17 170:9 188:11 192:11 added 206:9 225:12 adding 160:1 252:4 addition 99:22 192:16 215:25 additional 9:3 11:24 26:25 28:11 32:1 39:16 43:10 47:20 49:7 54:13 55:2,3 77:24 102:5 111:9,18 123:14 135:4 136:16 136:25 137:11 141:24 142:1 150:4,19 157:9 157:15 164:10 164:11,17 168:18,25 169:11 174:9 176:13 183:23 184:14,20 185:7,18 186:15 187:11 190:25 191:7 192:16 195:17 196:23 206:10 206:13,19 225:12,23 231:19,22 232:2 260:16 308:15 address 23:13 30:1,1 33:24 44:15 61:2 104:12 129:2,3 129:11,12 194:6 209:23 228:9 addressed 39:12,12,17 139:19 294:21 297:9 addressing 298:21 adequate 8:9 140:19 141:1,23 251:12 262:14 264:25 adequately 297:9 adjourned 311:4 311:6 adjourning 311:3 adjust 17:20 130:11 270:17 adjusted 18:2 148:2 154:2 adjustment 145:20 292:1 adjustments 17:19 109:11 119:22 270:19 281:21 307:9 administration 88:16,17 administrative 276:20 admission 96:7 admit 208:23 adopted 9:9 advance 136:21 156:9 advanced 156:12 advantage 18:17 18:22 157:6 231:5 232:23 263:15 266:21 advantages 180:22 advice 70:5 advisable 231:19 advised 230:22 245:2 advisers 51:23 advises 258:25 advising 219:5 246:17,18 advisor 14:10 194:25 210:5 211:1,11 212:25 216:11 224:6 224:25 292:12 305:6 affect 22:1 43:19 47:14 77:17,18 97:13 98:9,13 153:5 158:18 210:6 292:3 affirmed 172:2 afford 44:1 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 218:14 affordability 22:18,21 23:2 23:7,10 43:14 43:18 44:2 117:17,19,22 118:6,8,12 119:3,5 176:16 176:17,20,22 188:2 233:24 294:17,20 affordable 119:12 afternoon 126:25 127:1 168:7,8 189:24,25 200:19,20,23 204:18,19 235:9,10 269:11 288:17 age 39:10 240:13 agencies 62:12 74:16 75:13 110:23,23 111:22 112:4,7 112:11 149:17 162:7 171:2,17 171:19,24 173:9,12 187:24 196:1 196:23 197:23 198:18,22,24 207:18 209:2 209:12,14,21 223:15 225:7 226:13 229:4 309:9 agency 74:1 149:13,16,19 166:6 171:5 185:12 208:2 209:4 230:13 aggressive 148:24 aging 37:16 38:8,10 39:2,7 39:10,20 40:11 44:18 47:9 52:24 ago 20:14,20 31:8,15 33:8 42:8,14,16 56:16 57:9 67:4 68:6 70:10 196:6,7 212:12 224:2 238:12 240:18 242:7 302:4,5 304:6 307:6 agree 38:13 41:2,17 48:23 55:4 70:11 90:7 168:22 172:7 256:20 266:3 299:18 agreed 184:17 agreement 32:22 33:4 34:9,13 71:12 72:1 76:21,22 77:12,15 78:2 78:5,8 81:3,4 89:16 170:6 304:7 agreements 32:11,21 33:3 33:9 34:3,8 ahead 29:18,20 112:22 135:17 229:17 276:2 aiming 286:11 Air 37:2 ALARIS 1:20 align 55:19 88:2 109:11 146:6 aligned 136:22 248:18 aligns 110:1 140:11 all-time 218:12 allocable 275:21 allocate 11:17 60:14 271:19 276:17 allocated 29:25 129:2,11 182:21 207:1 243:12,22 254:22 271:17 272:22 274:25 275:1 275:2 276:7 276:21,24 277:6 291:2 300:18 allocates 298:4 allocation 26:23 271:8 271:13 272:19 273:5 275:11 275:19 276:21 277:19 291:16 298:16 allocations 275:25 allotted 11:22 allow 43:13 allowed 43:17 43:23 44:4 51:5 63:3,21 allows 69:21 195:23 alphabet 151:11 alter 93:17 altered 94:8 alternative 64:23 210:10 alternatives 18:21 70:18 217:15 218:4 218:16 220:19 221:20 230:21 302:18,23 Ambulance 93:11 amended 6:10 8:8,16 101:15 258:23 amendment 6:11 77:12 102:1 American 76:13 76:17 78:9 80:21 89:13 188:8 amortization 199:14 amount 20:21 25:19 42:3,20 45:6 51:10 52:4 58:8 79:5 85:21 110:17 111:2 113:2,12,20 114:2 120:4,17 120:23 127:25 134:6 135:1 136:10 139:14 142:6,12 143:23 150:24 159:6 163:14 166:25 167:12 179:24 182:12 182:15 191:21 197:11 201:17 213:4 214:6,16 215:11,14,18 223:9 229:6 233:14,20,21 237:2,3,9,18 238:4,14 243:24 246:6 246:6 248:15 251:11 252:10 253:6,14 261:14,18 267:19,21 268:2 279:1 280:9 286:17 291:12 amounts 8:1 32:5 98:12,13 120:17 127:17 129:22 135:5 143:10 151:18 252:2 300:23 analyses 203:9 203:13 analysis 22:25 26:25 44:2,4 60:23 61:13 66:16 81:1 102:24 103:10 103:14,15 110:3 110:6 117:19,22 119:8 123:16 174:13,15 176:12,18,20 176:23 203:11 203:23 206:24 227:21 242:19 242:20 244:25 246:1 250:14,20 254:18 259:19 260:2 269:17 270:13 273:9 273:11 276:10 276:16 280:6 280:12 281:12 281:16,24 282:5,8 298:2 308:20 analysts 70:24 analyze 218:8 analyzed 105:25 204:24 analyzes 104:8 and/or 89:11 173:22 Ann 86:21 annual 64:9 114:11 181:8 184:1 257:23 answer 10:15 11:11 22:18 26:15 30:4 43:3 55:23 61:12 66:22 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 69:1 90:14 106:14 122:25 139:13 189:11 204:7 213:9 230:17 232:15 233:8,25 254:17 258:24 259:18 260:21 261:2 274:11 274:20 278:5 278:5,10,23 287:8,9 293:14 answered 29:17 34:15 answering 219:1 answers 81:22 137:13 144:16 220:6 anticipate 112:14 126:12 130:10,11 131:20 132:14 134:4,11 156:4 167:1 169:12 183:20 184:19 205:24,25 206:3 239:1 anticipated 8:2 13:10,11,12 17:16 18:11,12 19:2 39:23 53:5 107:14 115:11 122:17 125:9 130:1 136:17 143:20 144:4 153:9,13 156:15 157:6 164:9,14,17,21 164:24 165:4 193:14 210:15 231:17 249:10 307:20 anticipating 113:25 161:4 169:2 179:14 anticipation 15:23 73:8 anybody 23:10 178:25 194:16 anymore 28:24 43:9 51:14 67:19 69:25 86:7 144:17 anytime 119:21 160:18 anyway 87:12 303:19 apartment 150:7 apologize 220:25 233:25 appeals 92:15 101:19 appear 290:22 296:11 appearance 14:2 APPEARANC ... 4:1 5:1 appears 123:15 appendix 143:8 152:9 applicable 8:15 54:4 65:15,16 99:12 154:17 application 8:25 9:12,14 9:16 81:5 189:4 application-s ... 58:6 applications 179:21 182:23 183:7 184:2 applied 60:2 114:3 182:21 182:25 applies 47:6 apply 125:9 169:9 180:15 184:11,13,19 applying 177:4 183:20 282:23 appreciate 12:11 16:4 114:18 144:12 147:11 200:7 209:25 234:20 approach 156:6 233:14 269:25 272:7 275:21,22,23 294:23 295:24 298:3 approaching 198:6 appropriate 37:12 39:25 60:4 61:9,9 222:14 246:13 249:9 262:12 306:6 appropriately 204:7 242:15 appropriations 143:2,3,25 approval 102:1 102:8,12,12 159:13 162:21 191:11 214:24 214:24 215:18 228:1 approvals 232:10 approve 29:23 30:6 44:16 54:21 55:1,3 57:3 71:2 98:2 98:5,11 128:24 132:14 138:9 approved 6:8 9:5 12:22 13:17,18 17:25 33:18,19 34:6 35:16 52:5 60:24 65:18 68:17 92:14 98:6,7,18 102:20 125:3 131:6 132:1,3 132:15 158:16 158:16 162:19 166:25 178:8 190:20 197:15 214:23 225:21 225:22 approving 98:8 approximately 26:7 115:10 121:16 133:10 136:11 193:15 225:1,13 254:23 272:14 274:5 279:24 304:6 April 1:9 10:8,21 310:24 312:4 area 19:6 46:24 48:20 53:9 58:12,16 59:18 119:8 177:6 240:16,21 areas 48:8 56:17 61:4 83:11 86:18,19 87:11 88:10 122:14 178:24 180:8,11,12 183:4 227:8 236:18 241:14 Arnold 76:9 77:13 78:10,12 78:17,19 80:2 80:24 81:8,12 89:9,12 100:24 188:8 188:12 arrived 285:6 307:14 arsenal 232:19 232:22 article 57:22 95:7 aside 24:9 40:2 104:21 142:6 asked 28:6 35:12 91:3 102:24 103:9 104:15 115:23 127:4 128:12 144:24 166:18 199:5,12 261:8 262:4 291:1 asking 28:10 67:12 69:3 82:6 145:13 186:24 188:18 215:7 220:14 221:4 222:14 246:5 261:18 278:9 aspects 13:22 61:10 105:20 211:1 assess 250:2 assessing 162:8 assessment 171:25 263:12 assessor's 136:24 asset 38:16 39:25 assets 7:24 209:1 287:24 assign 241:24 assigned 30:13 77:19 78:12 114:2 230:6 assist 149:22 160:21 304:7 assistance 23:24 24:4 42:4 289:22 294:21 associated 7:7 24:4 30:10,19 51:8 87:16 141:20 162:25 163:10 206:9 223:7 225:11 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 227:5 239:23 243:17 276:8 Association 7:12,14 62:12 96:20 101:18 103:4 256:24 assume 81:2 88:8 99:18 104:17 117:1 119:4 122:13 122:24 130:13 190:24 219:3 239:23 243:22 assumed 225:13 assumes 117:3 assuming 135:6 137:4 244:21 assumption 27:8 45:9 225:21 assumptions 186:4,10,11 197:20 201:9 203:16 206:21 222:4 225:25 245:7 283:17 283:19,21,24 284:12,13,13 295:12 305:7 307:3,5 assurance 261:19 attached 207:17 attempt 11:17 attempted 113:3 attended 62:12 attorney 4:2,3,7 4:8 312:9,10 attorneys 149:21 150:22 223:2 attribute 126:2 275:7 attributed 119:16 154:23 161:10 attributes 126:8 audit 80:5,20 audited 80:18 119:11 auditing 209:9 August 9:8 authority 95:19 96:3 230:5 259:1,5 authorization 138:9 168:20 190:17 191:1,4 191:8 232:2 267:21,23 authorize 54:13 55:11 195:16 215:8 authorized 168:19 183:11 automated 57:10 automatically 44:14 availability 42:13 46:6 61:19 181:18 266:24 available 18:16 33:20,22 34:7 42:4 44:12 109:2 141:15 157:25 158:17 158:18 160:19 160:21 161:11 163:7 172:1,24 178:16,23 179:9 180:16 182:7,12,13,16 185:19 190:16 209:23 218:8 219:4 231:20 249:8 308:16 average 42:10 65:19 207:21 238:6 239:12 265:25 280:13 averaging 120:10 avoid 58:3 153:22 295:22 avoidance 36:22 aware 20:8 23:16 42:22 52:21 176:22 210:12 276:13 303:25 awareness 75:8 B back 16:13,21 18:13 20:17 23:15 26:9 30:15 31:6,9 31:14 45:10 58:21 73:19 85:15 88:7 91:2 93:9 94:21 99:13 107:23 114:8 114:14,16,23 115:7 119:14 121:17 123:7 128:18 129:22 131:25 137:14 148:20 149:5 154:5 160:24 169:11 170:25 179:14 181:7 183:10 186:8 187:17,18 188:8 204:5 212:16 217:7 242:7 248:8 253:10 260:21 260:24 267:22 281:8 back-and-forth 35:11 background 274:13 backup 48:10 141:10 142:5 backups 83:14 84:5 141:9 backyards 65:8 bad 23:23 24:4 112:23,24 113:11,12,21 114:4,7 138:11 148:17,22,25 276:5,5,7,8,11 276:17,23 Baer 4:3 10:18 11:8 bailiwick 104:9 balance 67:12 85:4,19 104:25 110:13 160:13,19 175:2 268:3 285:10,10 286:20 287:19,20 289:23 293:8 308:4,4,5,8,10 balances 195:13 balancing 69:2 267:18 bank 286:19 bar 7:12 214:15 bargain 215:23 base 45:5 60:22 280:7 280:8,11 281:4 282:1 283:10 based 45:7 53:24 61:23 68:13 76:25 78:24 79:5,11 80:1,9,15 96:24 97:2 100:13 109:18 114:2 115:13 124:5,15 126:7 130:20 132:23 162:20 173:16 178:7 190:19 197:19 204:23 214:24 215:14 215:18 217:2 224:5,24 233:15 236:5 238:11 239:22 242:14,15,21 243:15,22 245:16 248:3 256:19 262:1 262:12 263:18 265:19 270:9 271:19 272:6 272:19 273:5 273:13 275:10 275:21 276:21 277:5,8,13 280:6,12 281:6,12,15,18 281:23 282:5 282:8 284:11 284:14 288:22 289:16 291:9 291:13 292:11 294:20,25 295:11 298:5 298:6 307:3,8 basement 83:14 84:4 basic 35:3,16 basically 51:12 54:22 65:22 76:20 78:11 113:14 120:16 121:6 124:20 125:1 133:18 138:14 153:11 154:2 156:2,18 159:2,10 166:4 166:24 168:15 272:2 273:2 275:20 276:25 285:14,16 292:23 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 293:16 304:19 305:4,15 basing 110:2,5 basis 18:11 19:2 23:6 26:11 40:6 41:19 58:19 64:9 79:5,13 80:23 109:16 120:18 122:7 172:16 181:8 207:2,3 213:1 231:11 242:21 243:13 263:14 272:17 battle 252:6 254:13,15 Baumgartner 77:5 Bear 164:20 Beat 251:18 beauty 255:17 256:5 Beckley 3:9 9:23 14:12 21:3,10 22:3 26:19 27:4 117:14,15 121:22 126:4 255:10 256:8 259:25 268:25 269:4 269:6,11 288:12 299:10 301:22 304:2 310:14,15 Beckmann 5:8 becoming 46:7 began 6:1 222:19 beginning 116:10 278:12 begins 223:5 behalf 10:23 11:1 12:10 27:23 109:24 167:25 218:8 246:21 behaviors 119:23 believe 16:21 21:3 22:10,13 23:4,22 24:1,8 25:9,23 26:8 29:9 34:22 34:25 43:3 45:6 46:14 62:9 63:2 72:11 74:5 75:12 85:6 94:15 97:6 98:16,24 100:7,11,12 126:8 132:21 134:24 139:4 140:13,18,25 142:14,17 143:16 148:19 157:23 159:16 161:16 169:7 182:11 184:1,3 185:19 187:4 198:12 210:5 223:24 228:15 239:13 249:9 263:13 268:21 273:21 278:3 284:10 289:1 290:17 292:3,22 295:16,18,19 296:22 297:25 298:24 306:6 believes 100:19 Bell 222:23,25 belowground 84:25 benchmarks 176:23 benefactors 226:10 beneficiary 52:5 benefit 50:24 51:6,13 52:3,4 52:16 54:7 181:12 265:7 267:10 benefiting 48:22 benefits 52:14 181:1 184:16 Berthold 9:21 14:6 19:4,8 55:23 107:24 155:1 311:2 best 23:12 29:13 55:17 55:20 69:11 70:19 73:14 110:18 134:2 227:22 best-equated 96:22,25 97:3 Beth 229:16 Bethany 3:2 9:22 14:8 200:8 305:20 307:13 309:8 309:13 better 19:7,21 46:4 68:21 70:4 85:25 106:12 115:3 169:22 196:13 196:16 227:16 239:16 252:21 265:22 273:19 278:4 294:7 307:17 beyond 18:16 29:8,13 39:22 40:11 41:7 46:11 53:5 54:1 60:22 72:22 99:10 192:17 206:1 227:22 294:14 301:9 bid 263:15 big 20:4 64:11 72:13 77:14 84:21,22 179:25 242:1 254:7 296:19 bigger 69:8 biggest 47:18 48:8 62:16 71:8 131:12 bill 17:15 25:15 76:25 78:22 80:8,9,13 115:14 119:23 119:24 120:18 126:7 149:10 272:23 277:13 277:14 billable 17:14 25:15 45:12,21 46:8 billed 79:17,23 96:24 97:2 120:20 152:15 290:9 billing 79:5,12 79:16,19 80:15 95:20 103:5 136:19 296:10 296:14,20 billings 22:13 billion 66:9 143:6,21 144:5 146:25 147:7 161:14 168:21 169:1 170:14,21 194:5,9,12,13 194:17,21 226:19 234:8 billions 303:21 bills 116:23 233:23 278:17 biochemical 116:16 biosolids 255:16 bit 17:21 23:16 25:4 28:13 31:22 32:4,20 35:8,16 46:11 46:21 55:16 65:13 75:21 83:5 85:7 86:21 88:5 92:13 94:22 94:22 97:11 118:11 119:14 127:9,19 129:14,16 140:25 149:18 174:5 176:24 177:19 180:25 181:25 182:18 188:19 205:11 207:8 209:12 212:18 247:24 274:16 284:1 289:7 290:25 291:6 295:22 297:12 Black 11:6 blew 227:4 263:2 blowers 300:15 bmalone@las... 4:6 board 6:17 7:21 8:4,24,25 9:4 31:11 33:19 65:17 72:6 73:5,7 90:6 131:6,10,13,13 132:1,14 150:22 166:20 166:25 194:13 196:13 197:16 232:11 board's 33:12 73:21 232:11 BOD 254:20 255:4,19 256:1 272:11 273:25 274:5 274:25 275:7 275:14,18 284:17 299:16 boilerplate MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 258:14 bond 54:14 67:18 90:2 104:1,7 110:21 111:2,5,7,12,16 111:17 123:13 138:9 156:16 156:22 157:5 157:9,11,19 158:7 166:2,5 176:3 186:25 187:20 190:17 195:1,17 200:25 210:9 210:16 213:19 213:21,22 214:1,9,20,24 215:2,13 222:22 225:15 231:4 231:7 232:13 234:3 260:7 260:12,13,13 260:14,15,16 261:4,4 304:9 304:11,23 306:6 309:1 309:15,16 bonding 18:20 54:16,19,21 55:2,3 102:12 102:13,15 bonds 7:24 8:13 41:20 64:15 78:3 156:1,25 159:4,5 165:25 169:8 175:19,22 176:13 186:15 206:16 213:17 219:20,20,21 220:4 230:23 231:2,12,20 231:23,24 232:14,20 259:17 260:5 267:23 284:22 bonuses 215:21 booked 79:25 borrow 42:6 55:8 68:18 156:19 157:8 192:11 194:16 232:5 borrowed 159:9 159:10 181:5 267:14 borrower 162:2 borrowing 41:20 54:23 55:10,11 68:24 70:14 102:6,15 158:17 181:2 217:4 219:6 225:17,20 231:23 263:25 267:13,17,20 267:20 borrowings 102:4,7 157:15 157:19 Botanical 7:12 bottom 24:22 58:15 116:14 116:23 282:13 bounds 225:6 Bowdry 5:9 89:1,20 91:4 106:21 166:12 boy 87:11 Brad 5:8 brand-new 40:24 64:20 65:3,12 Brandon 4:7 11:3 15:14 Brandy 5:9 break 56:18 90:23,25 126:18,21 188:24 189:14 189:16 212:14 268:22,24 Bret 9:21 14:5 19:4,8,13 55:23 107:24 154:25 174:20 311:1 Bret's 56:6 Brian 2:7 4:3 9:20 11:7 14:3 14:24 81:18,25 101:1 188:15 255:8 bridge 168:25 bridges 170:10 brief 37:14 90:25 126:21 189:16 268:24 bright 309:25 bring 57:20 64:4 brings 42:9 Broadway 4:9 Brockmann 2:13 5:5 105:15,17 broken 275:14 275:16 brought 193:6 Bryan 4:8 budget 17:17 60:22 61:3 122:18,21 131:2 131:3,5,9,13 131:23,24 132:2,6,14,15 132:21,23 133:3,13,16,24 134:9,16,21 137:24 138:1,2 141:5 142:3,8 145:10,23 154:7,9,13,16 154:25 166:25 197:15 233:10 233:11 275:11 275:12 budgetary 257:22 budgeted 17:25 122:5,11 132:10 133:11 136:7 165:14 budgeting 144:25 148:13 budgets 31:18 60:18 120:19 131:16 165:3 257:23 build 38:7 49:3 64:23 65:12 68:22 69:13 73:8 155:15 163:4 183:22 198:13 build-out 162:21 Builders 7:14 building 49:19 62:3 77:8 83:22 86:18 86:19 206:24 built 49:20 87:19 154:5 162:24 163:16 170:4 186:4,11 198:11 212:19 215:21 225:25 302:25 bulk 127:8,21 bunch 37:11 burden 8:18 13:20 19:11 92:11 93:1 100:9 109:7 139:5 297:22 298:1 burdens 43:10 bureau 240:19 buried 38:24 business 54:12 60:17,21,23 60:25 68:21 73:7 119:11 120:1 150:16 153:23 198:13 227:11,17 228:16 243:5 246:1 258:8 271:20 businesses 60:12 119:8 buy 40:14 64:15 87:11 150:7 156:16 302:22 buying 87:21 buyouts 87:16 bwneuschafe ... 4:11 C C 3:1 calculate 209:4 299:17 calculated 52:7 79:1 109:21 207:11 257:13 calculating 80:18 calculation 13:15 26:17 128:16 208:21 209:9,15 236:5 256:5 299:15 calculations 80:16 109:24 194:11 calendar 212:9 call 14:23 91:4,5 124:9 161:18 177:1 178:23 198:9 212:1 called 43:22 50:23 54:22 57:22 93:10 149:12 156:9 156:17 calling 90:23 calls 149:8 198:23 Camp 242:18 cap 190:14,23 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 21:14,16,17,20 21:23 36:22 68:24 116:1,3 161:17,18 194:5 194:12,14 216:10 252:15 252:16 capital 12:17 20:1 38:12 41:15 42:17 44:19 47:10 48:17,21 67:14 77:9 78:6,6,14 78:23,24 79:3 82:5 112:14 129:21 130:7,9 146:23 147:7 158:22 162:21 167:12 169:5 181:4,16 182:1 190:6 191:22 192:12,13,15,18 198:22 201:21 209:1,19 219:15,20 223:6,11 227:3 232:5 237:22 248:12 252:24 254:22 255:3 255:20 257:20 261:16 263:2 264:7 272:13,20 273:5,5 274:10 275:1 275:8,9,16 286:20,21 287:1 295:16 295:19 300:14 303:6 307:11 capitalized 129:20 130:1,6 163:17 165:13 169:21 capture 114:19 car 40:13,14,15 care 43:25 77:7 141:16 189:13 career 246:16 246:16 case 15:20 60:25 92:21 92:21,24 93:3 93:6,7,10,11,14 93:15 94:7 96:20,21,23 98:19 101:18 103:4,19 104:24 105:19 105:25 148:2 148:3,19 158:13 209:17 242:17 245:3 245:4 259:1 286:11 288:4 293:19 cases 19:10,15 60:18 83:2 236:12 250:14 cash 123:14 156:18,23 157:2 174:9 190:15 195:13 199:16 202:18 202:19 203:18 204:25 205:4 205:8,16 207:10,11,20 209:2,7,15,20 210:10 219:17 225:1,2 228:8 264:23 266:23 267:2 285:9 286:2 286:2,4,15,17 287:1,2 catastrophic 38:25 50:16 141:18 228:11 catch 107:9 categories 223:16 254:23 275:15,17,19 276:22,25 277:1 category 161:8 223:8,13,14 223:20,25,25 cause 123:9,16 171:8 192:17 264:16 284:18 caused 48:10 49:7 254:21 273:24,25 297:5 causes 151:1 240:5 causing 25:22 255:6 Cave 4:8 CCF 138:24 242:2,3 310:7 CCFs 115:13 118:4,4,24,25 CCR 1:19 312:17 CCTVing 56:19 CD 56:20 CDM 26:22 242:18 244:8 248:3 250:21 251:7 277:17 277:18 centered 171:9 certain 59:18 60:14 61:10 77:19 80:1 83:12 88:1 113:2 116:17 117:1 127:11 163:14 182:7 182:12 185:21 244:1 268:4 270:15 286:9 286:17 307:17 certainly 107:17 107:17 110:22 119:21,25 120:17 121:2 126:12 134:20 142:3 145:10 147:9 153:17 158:13 160:18 186:12 201:12 236:4 246:2 260:11 265:22 273:20 285:25 291:20 295:24 296:16 300:3 300:20 301:9 303:8 309:12 309:18 CERTIFICATE 312:1 Certified 312:3 312:3 certify 312:4,8 cetera 147:24 chair 5:6 6:5 chairman 2:10 2:18 3:5 6:2,3 11:1,5 12:4 14:18,25 15:3 15:9 27:19,22 36:5 75:25 81:15 88:23 89:5,20,22 90:16,19,22 91:1,13,15,22 92:1 94:12,16 101:4 105:12 106:19,25 107:3,12,17,25 108:2,7,12,15 108:17 126:16 135:16 144:20 147:17 148:6 151:4 165:19 166:10,16 167:15,18,20 167:23 168:3 177:9,13 188:22 189:14 189:17 196:8 199:19,20 200:2,5,7,10 200:16 204:10,15 210:18 229:12 229:17 230:3 233:3,6 234:16,19,22 234:25 235:6 247:8 251:16 256:12 268:9 268:14,18,20 268:25 269:3 269:8 288:9 288:14 299:5 301:19 310:12 310:17,22 challenge 254:7 265:3 301:2 302:13 challenges 228:9 301:6 301:12 302:12 Chan 5:7 chance 45:18 69:17 99:21 change 7:19 8:3 8:6,19,23 9:7 9:11 12:23 13:23 24:24 25:1 27:8 29:24 32:10 32:23 34:20 34:22 35:17 46:9,25 47:3 48:1,2,24 68:11 72:13 75:13 77:11 91:6 92:11 93:20 94:2 96:16 97:6,6 97:12,15,18 98:2,12 100:1 100:8,20 101:13 103:1 107:7,10,16 109:6 110:8 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 117:25 119:23 120:15 124:5 124:11,13,15 126:10 127:12 128:7,25 129:24 130:11 130:20,20 132:7 134:23 134:25 136:5 138:22 139:5 142:14,17,23 143:13 146:23 148:13 149:6 151:16 152:11 160:13 161:1 164:8 175:17 183:17,18 185:8 228:3 245:16 251:1 258:21 259:14 271:8,9,11 275:25 279:23 280:3 289:14 297:21 297:25 307:8 308:4 changed 68:4 85:11,14 97:1 103:6,18 250:8,10 307:4,6 changes 6:14 7:21 27:7 43:15 44:3 75:11 136:17 137:16 138:10 149:2 167:12 171:8 210:13 255:21 271:10 280:2 307:11 changing 237:22 244:19 chapter 95:10 characteristic 257:25 characterizati ... 37:22 48:18 305:25 charge 46:5 95:1 125:3 127:22 128:1,3 213:11 259:9 280:8,8,11 281:3,4 282:2 283:10,11 296:18,19 charged 31:19 79:8 129:20 130:2 246:25 charges 12:24 79:15 101:22 120:24 121:7 125:8,10,17 138:23,24 147:23 152:12 152:15 190:19 278:15 281:1 299:20,22 300:25 302:8 302:9,10 charging 98:25 chart 67:22 138:21 143:1 257:18,19 258:6 charter 6:7,12 6:17 8:21 34:17 94:22,25 95:7 95:19,22,25 96:4,10 140:17 297:20 298:25 cheaply 40:17 check 22:10 25:23 29:11 32:13 40:20 57:1 81:18 90:8 checking 64:18 chemical 79:21 116:17 children's 70:13 chips 202:3 choose 184:8 Cincinnati 216:1 216:22 217:1,3 CIP 202:17 CIPP 40:16 CIRP 13:12 17:6 19:20 21:13 29:24 30:7 36:21 110:14 115:25 128:25 143:8,20 144:4 174:5,8 182:25 185:17 191:17 192:4 193:4,6,14 195:18 203:4 204:25 218:25 219:11 226:20,23 227:5 233:23 237:12 255:2 263:5,10,21 263:24 264:18 303:15 cited 92:21 cities 31:9 118:3 citizens 265:10 city 7:12,16 31:7 53:20 57:23 57:24 61:7 62:8 67:24 76:8 78:17 82:4 85:12,23 86:1,3 87:2,15 88:4,7 100:24 125:13,19 150:10 216:22 216:25 241:15 258:3 301:23 302:2,4,6,8 302:10,15,15 302:16,19,24 303:3,8,11,23 clarification 13:22 28:11 clarifiers 300:15 clarify 28:9 96:14 135:20 204:21 221:3 292:17 clarity 307:18 class 109:12,20 110:1 139:16 140:4 262:1,2 262:4 281:18 283:15 298:17 class-by-class 109:16 classes 8:18 13:20 26:24 92:12 93:22 100:9 109:7 139:6 140:3,11 246:13 261:24 271:18 276:8 277:2,5,8 281:22 282:2 297:22 298:1 298:4,22 classes'282:6 Clayton 82:4 86:4 clean 37:2 42:24 62:12 99:16,22 178:18 cleaned 155:5 cleaning 56:21 clear 93:19 119:2 176:17 216:5 220:11 221:12 247:14 client 305:5 clients 215:25 221:10 305:4 climate 48:1,2 close 58:15 63:16,23 170:11,13 282:3 283:14 closed 170:3 261:10 closely 109:11 110:1 140:11 247:22 closest 293:18 closing 215:3,5 cloud 58:1 61:11 Club 7:16 CMOM 39:25 Coalition 7:15 COD 254:20 255:17 256:6 272:11 273:25 299:17 coin 251:25 collapse 38:3,5 263:25 colleague 91:21 219:9 colleagues 216:7 245:25 collect 46:10 49:25 67:18 69:7 86:14 108:14 113:3 149:19,24 150:24 161:4 191:21,25 collected 113:2 collecting 31:5 72:16 76:24 148:22 149:17 149:22 collection 40:3 47:22 76:12 137:10 141:14 148:17,25 149:7,13,16,21 150:22 153:16 239:25 242:14 249:23 252:16 272:21 275:13 276:24 Columbia 216:2 column 124:4 combination 111:9 193:15 combined 37:18 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 58:11 59:12 71:10 83:20 84:5 87:17 182:8,12 236:17 238:14 241:3,11 252:11 252:13 come 15:19 36:23 55:7 60:9,17 63:16 91:9,22 92:20 99:13 107:23 110:10 118:12 119:19 128:18 134:16,18 135:17 150:14 158:25 160:7 168:3 174:5 182:19 186:20 194:7 200:16 201:2 212:12 222:3 235:6 241:20 269:8 288:14 306:2 310:6 comes 28:15 31:17 52:1 69:18 73:2,19 80:2 81:4 90:13 95:14 96:22 127:8 128:1 144:11 155:1 170:11,12 171:13,14 194:19 219:12 227:10 236:15 240:10 250:14 276:11 277:10 301:13 303:20 305:10 306:11 comfort 35:18 69:2 comfortable 178:12 179:18 234:2 271:12 285:19 309:1 coming 30:25 31:9 45:8,25 49:15 59:5,8 60:7 63:15 153:8 174:8 205:17 236:7 248:24 253:8 307:9 commenced 312:4 comments 16:10 171:1,3,12 172:3 311:3 commercial 6:23 47:7 115:18 118:10 118:13 119:25 121:3 125:20 138:19 152:17 241:21 commission 4:6 6:4,13,20,22 7:6,20 8:4,19 8:22 9:1,2,10 9:19,24 10:3,6 10:13,16,18,20 11:7,9,17 12:10 14:17 15:4 20:19 27:24 28:8 32:14,25 33:12,13,19 49:13 54:17 68:6 69:2,15 70:20 72:4,5 73:22,24 75:7 80:22 81:6 92:17 95:11,13 95:14 98:11 107:7,19 114:11 126:9 132:8 148:20 200:11 211:16 222:12 235:1 244:15 251:17 269:4 270:21 297:18 Commission's 9:5,6 11:10 Commissioner 2:8,9,9,10,13 2:13,16,16,17 2:17,21,21 3:4 3:4,8,8,11,11 36:9,11 52:2 74:12 76:5 81:17,25 89:3 89:7 101:8,10 105:17 106:23 142:10 144:23 147:19 148:9 148:16 151:6 165:22 166:13 189:1,10,23 196:10 199:18 199:25 210:23 220:24,25 229:10,15,19 230:1,4,8,11,18 251:18,21 256:15 260:20 261:1 299:9 301:21 306:18 310:20 commissioners 5:3 36:6 76:1 88:25 91:16 101:5 105:13 166:10 189:20 199:21 210:20 229:13 233:4 247:21 268:10 286:9 299:7 310:13 Commissions 13:19 92:18 commitments 219:15 committed 31:9 33:5 common 8:7 97:8 101:14 103:2 258:22 265:17 270:11 communities 31:7 290:23 302:15 community 7:3 71:1 73:11,13 85:5,18 86:1 87:8,13 88:1 303:2 company 62:10 compare 56:3,7 81:13 114:6 117:4 118:17 122:4 125:11 138:25 139:10 151:18 217:4 compared 17:18 37:1 42:2,14 44:3 74:22 80:3 118:14 125:3,22 131:10,25 132:5 135:8 136:1 139:14 140:2 172:12 203:9 236:6 265:24 273:3 290:7 compares 81:8 118:1 comparing 106:10 comparison 106:6 114:23 278:17 279:20 comparisons 74:24 106:17 compensate 213:17 compensated 212:24 213:1 215:17 compensation 213:6 215:21 competing 301:7 competitive 41:16 42:19 44:20 47:11 57:12 178:19 181:20 182:14 184:8 complete 66:16 143:5 266:6 completed 11:20 33:13 completely 187:3 complex 249:4 complexes 150:8 compliance 42:23,23 43:1 44:21 47:11,14 48:14 49:9 50:19 54:14 55:13,18 66:12 97:19,24 98:10 99:11 100:4 104:5 161:13 194:20 260:9 303:15 complied 37:7 comply 8:15 12:19,21 36:17 37:10 68:19 97:13 98:3,14 98:15 142:13 143:3 193:23 194:1 226:18 267:5 complying 99:19 260:18 component 21:13 192:4 214:20 components 44:10 246:4 252:9 258:5 258:6 259:11 262:19 263:9 271:20 composed 12:18 comprehensive 114:11 213:25 comprised MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 296:12 compromise 153:18 compromised 195:5 computer-aid... 312:6 concept 209:4 concern 38:10 100:1 186:1,7 187:9 296:1 concerned 100:18 106:7 186:3,17 220:8 274:15 concerning 259:1 concerns 226:20 conclude 245:11,15 310:23 concludes 14:15 concluding 52:25 conclusion 32:11 92:13 102:25 103:11 103:16 109:15 176:8 281:9 284:1 289:7 305:23 conclusions 110:10 245:7 concurrence 100:24 concurrent 264:10 concurrently 266:15 condition 40:20,20 240:14 conditions 43:20 53:7 206:16 conducted 110:3 conference 1:2 10:10,14,19 62:13 confidence 186:16 confident 175:1 175:3 290:20 confirm 26:19 205:7 confirmed 38:10 confused 163:24 164:20 214:3 221:17 Congress 43:21 conjunction 260:2 conjunctive 262:7 connected 240:21 connection 21:19 128:12 147:23 152:20 165:24 211:11 243:7 304:4 connections 240:24 242:5 249:21 conscious 286:25 consensus 62:23 consent 12:20 12:21 13:13,25 17:7 19:11,13 19:23 20:9,11 21:17 23:8 36:18,20 37:7 37:10 39:13,19 39:23 40:7 43:1,13,20 44:7,10 47:15 49:4,9 53:8 55:13 66:7,10 66:12 67:25 68:11,19 71:5 71:21 75:13 82:19 83:9,10 83:13,15 97:14 97:16,20,25 98:3,14,15 99:10,14,17,19 99:23,24 100:16 103:21 103:24 142:13 142:21 143:3,5 143:10 144:6,8 161:12 163:21 185:24 187:19 193:23 194:1 194:20 216:18 226:18 234:8 236:22 238:25 260:8 260:12 273:16 273:18,22 302:16,21 303:9,12 conservation 25:17 47:3,5 119:16 121:1 conservative 26:1 121:11 156:5 conserve 227:15 conserving 45:24 consider 43:14 47:16 50:1 84:19 121:10 146:12 207:15 298:11 considerable 68:19 consideration 36:16 84:23 95:18 111:1 202:5 223:4 223:5 308:1 considerations 61:18 222:9 294:13 considered 52:9 84:20 93:12 290:10 considering 62:8 149:2 176:2,3 285:7 consist 152:19 consistent 8:6 8:11 21:6 49:3 97:7 100:13 101:14 103:1 116:4 117:12 123:7 175:17 233:11,13 238:9 257:5 258:22 259:4 259:15 260:14 272:4 consistently 56:19 consists 7:6 constant 274:7 constantly 218:23 221:15 constitute 148:24 Constitution 106:1 constitutional 8:7 93:8,16 97:7 101:14 103:2 258:22 259:4 constructed 242:6 construction 7:10 13:6 49:2 49:8 77:15 122:2,9,10,15 242:8 264:9 constructions 228:10 consultant 11:6 14:12,14 35:25 38:9 41:17 61:25 244:15 consultants 10:20 14:11,13 23:12 257:1 consumer 22:22 23:23 24:4 consumers 4:12 7:10,18 9:16 11:2 15:16 23:1 23:2 138:18 168:1 271:18 277:3 consumption 44:22,23 45:2 47:12 258:1 307:8 contained 104:6 114:12 256:18 259:20 contemplated 77:8 78:24 82:5 context 22:22 117:19 147:13 191:20 219:18 229:3 245:13 261:9 contingencies 73:9 contingency 183:4 contingent 73:9 104:21 198:8 213:24 228:18 continue 12:15 78:13 98:17 105:18 134:12 189:19 192:3 220:2 237:24 261:20 continued 5:1 149:1,4 continuing 36:16 211:19,21 continuous 19:16 42:7 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 40:2 41:4 58:9 69:1 contract 62:14 contracting 62:21 contractor 61:25 Contractors 7:8 contracts 33:11 contribute 79:6 120:2 244:6 271:25 contributed 24:21 25:8 289:4 298:8 contributes 51:9 contributing 79:7 274:3 contribution 51:9 79:1,2 contributions 170:8 272:1 control 186:6,7 conversation 122:14 184:18 conversations 179:18 cooperation 230:14 coordinated 61:15 copies 103:9 copy 16:6 93:3 109:2 114:11 116:6 168:11 235:11 269:13 core 201:11 corner 72:9 Corps 42:7 correct 16:14,24 17:2 36:19 37:22 38:16 50:19 52:7,8 55:9,14 76:9 76:13,14,19 78:16 96:6,8 96:16 97:21,21 98:21 101:15 101:16,19,20 101:24 102:2 102:14,16,18,21 103:7,8,12,13 103:22 104:10 105:1,8,9 109:8,9,13,17 110:14,15 113:22 116:18 116:19 118:19 118:23 123:2 124:6,10,18,18 136:3 151:23 151:24 152:2,3 152:3 153:2,3 154:20 155:23 155:24 157:17 159:23 160:2 161:16,20,21 161:23,25 162:23 163:1,2 163:6 164:4 169:20 170:23 172:15 175:21 178:2 183:13 184:24 185:2 190:7,18,20,21 191:2,9,12,15 192:1,7,22,25 193:7,8,17,20 193:24 194:3 195:7,8,10,11 195:14,15,25 196:4,14,15 198:9,10 208:24 211:5 211:7,9,22,23 212:23 213:20 219:24 222:1 226:6 235:18 235:19 243:20 245:13,19 247:20 248:3 262:8,16 263:3,4,6,21 263:22 268:22 269:21,23 277:18 279:15 285:2 292:2 300:20 301:24,25 304:24 308:22 correctly 37:20 109:14 135:25 139:17 253:4 279:5 280:25 cost 13:8 16:12 17:5,6 18:10,12 19:10 20:21 22:2 24:8,9,11 35:5 39:21 40:5,8,13 41:3 42:20,23 46:8 47:20 49:10,24 51:7 56:10 57:8,11 60:2,5,9 66:6 66:11 68:1 69:12,20 71:10 76:23 77:10 78:18,20,24 79:9,22 80:6 80:12,23,25 88:11,11 109:11 109:19,21,23 110:1 119:1,3,4 119:7 124:15 125:4,11,22,24 126:11,12 130:15,16 139:10,14 140:2,6 154:24 155:3 155:6,11 160:6 162:24 165:2 170:22 181:9 181:12 206:22 228:10 231:12 232:6,6 239:23 246:1 246:11,12,12 253:9 254:18 254:22 255:3 255:4,20 257:4 261:24 263:11 266:21 269:17,19 270:13,18 271:4,9,17 272:7,20 273:5 274:2 274:10 275:2 275:19 276:8 276:25 277:12 279:21 280:6 281:3,4,7,12,16 281:23,23 282:5,8,17 283:15 284:10 284:19 287:24 291:6 291:21 294:10 294:14,22,24 296:13,20 297:4 298:2,4 298:17 300:1 302:3 303:9 303:15 cost-effective 83:8 costing 16:12,17 costs 7:25 13:12 17:6 19:1,20 21:23 24:3,3 30:10,12,14 31:18 36:21 44:24 45:12 47:14,17 48:16 48:17 49:7,8 49:15 50:22 50:23 51:14 56:8 69:19 76:23 77:24 78:19 79:3,17 79:20,20,21 79:25 80:10 89:10,11 111:19 129:14 130:1,6 132:9 140:10 161:13 162:25 163:10,14,18,19 163:21 164:10 164:11,17,19 165:4 193:4,6 197:20 226:17 227:5 228:7 255:19,25 256:1 261:23 262:3 263:5 263:10,12,21 263:24 264:17 266:6 267:12 270:15 270:18,23 271:8,13,19 272:13 274:7 274:24 275:1 275:7,21 276:22 277:19 281:17 291:2 296:10,14,25 298:21 300:17 300:17 301:1 302:16,21 303:4 Council 7:10,11 counsel 2:11 4:13 10:18 11:8 11:19,20 14:4 28:8 104:12 222:22 258:25 259:6 259:7,12 312:9,10 counsel's 146:18 count 204:6 308:6 counteracting 239:3 country 20:7 48:4 56:9 57:13 105:22 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 106:11 139:1 216:8,9 238:15 254:15 265:4,15 289:18 County 6:9 7:8 7:14 38:20 45:5 93:10 150:10 303:1 couple 34:16 42:9 82:1 121:23 122:1 123:9 133:3 137:18 139:2 147:20 156:13 173:19 174:2 180:6 200:21 204:21 251:22 course 61:17 70:22 110:19 123:12 126:7 127:22 152:16 169:19 236:11 246:15,15 273:1 274:13 283:9 307:2 308:14 court 13:18 35:13 91:23 92:15 101:19 220:23 245:23 260:25 312:3 covenant 8:12 104:6 175:18 259:16 260:7 covenants 175:23 259:19 259:22 260:4 260:12,13,14 cover 8:1 104:21 174:23,25 283:6 286:7 coverage 171:10 172:20,23 173:6,10,22 174:24 175:14 185:23 193:1 195:6 197:11 201:13,23 202:18 203:8 203:18 219:17 225:5 226:4 228:5 229:1,7 233:16,20 260:17 267:24 268:5 285:9,15,21 286:15 287:3 292:15,22 305:24 308:5 308:6,7,11 309:20 coverages 185:13 covered 89:15 101:1 286:16 covers 241:9 cracks 253:16 create 198:4 263:10 299:21 created 302:19 creates 299:18 credit 68:24 74:1 111:22 112:3,7,10 162:7 166:4 172:8 173:8 195:5,14,24 196:24 197:2 198:18 202:12 202:25 204:3 211:6 219:16 223:7,8,14,16 225:3 226:13 227:16,25 229:4 287:14 creditworthin... 192:24 196:19 197:22 217:9 creditworthy 162:2 Creek 183:14 Crestwood 86:22 crew 57:5 criteria 95:16,17 95:22,23 96:1 105:18 106:12 110:23,25 162:5,6 257:22 critical 44:5 232:10 CRM 277:16 Croyle 5:3 crush 173:24 CSOs 249:16 252:11,15 CSR 1:19 312:17 curious 29:6 186:18 284:4 current 66:3,13 68:16 71:19 72:21,23 73:13 73:20,21 74:21 82:2 88:16 99:7 112:3,5,7,11,19 115:8,25 120:22 121:15 154:4 155:14 157:13,23 159:18 161:14 190:17,25 195:5 197:20 206:15 235:16 296:3 currently 7:6 30:19 43:7,11 68:23 98:25 100:21 104:20 104:23 105:4 111:25 133:9 151:17 295:9 currents 184:25 curtail 133:18 curtailed 156:8 cushion 68:22 69:8 162:13 174:10,12 198:4 206:19 206:23 225:23 228:8 customer 12:25 23:5 46:16,17 81:9 109:20 112:23 113:3 118:7 125:25 126:1 139:16 140:11 204:2 240:24 241:25 242:1,1 242:13 243:13 243:15 244:4 246:13 249:21 253:21 257:25 258:17 261:23 262:2 281:18 281:22 282:6 294:21 296:10 296:14,20 298:4,22 302:14 customers 69:5 79:15 80:24 111:3,7,12,16 111:20 115:17 115:18 117:20 117:23 118:3,9 118:13 119:25 121:2,3 124:8 124:23 125:7 125:13,18,20 138:19 140:5 149:9 151:2 152:16,17 176:18,21 236:7,9,10,14 239:25 240:4 241:20,21,21 241:22 242:4 242:22 243:3 243:12,16,24 243:25 244:1 246:5 248:25 250:16,16 253:23 254:6 258:2,3 261:15,25 262:5 265:10 267:10,10 271:22,25 274:15 276:15 276:16 280:10 280:16,18 289:4,15,17 298:8 302:18 302:21,22 303:10 customers' 141:9 customize 257:16 customized 257:14,15 cut 155:10 cut-off 308:22 310:9 cycle 16:18,23 17:14,20 18:1 20:12 26:9 33:8 34:1 82:7 115:8 120:22 121:9 127:18 127:24 132:11 133:9 143:20 144:5 146:4 146:25 160:20 170:7 190:7,8 190:10,11 193:19 219:24 225:22 227:24 228:1 239:5,17 244:18,24 270:5 297:3 cycles 35:12 270:6 275:24 D D 2:1 3:1,1 daily 263:14 data 81:4 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 136:23 172:1 236:5,12 237:25 238:2 238:2,7 239:8 239:9,10,16 244:20 248:17,19 249:7,25 250:1,19,20 251:9,9 257:25 258:2 258:15 265:22 307:9 307:10 date 51:1 63:6 142:13 143:2,4 day 231:15 285:7,23 293:5,9 301:11 306:20,21 day's 202:19 203:18 days 196:6 207:10,13 209:1,15,20 219:17 264:23 264:23 265:5 265:6,14,16,17 265:25 266:24 DC 216:21 deal 62:20 150:14 164:6 255:13 309:14 dealing 37:6 282:19 deals 106:12 debt 23:23 24:4 67:15 90:1,12 110:14 110:17,24,25 111:24 112:23 112:24 113:11 113:12,21 114:4 114:7 138:11 147:8 148:17 148:22,25 149:17,22 155:20 156:3 156:14,17,21 157:1,3,3 158:9 160:3 161:18 166:22 166:24 167:1,6 167:11 168:19 168:19 171:10 172:11,13,18,18 172:20,22,25 173:1,3,4,5,9 174:6,22 175:14 176:5 181:9,10 185:8 185:9,13,18,23 190:15,16,25 191:7,23 192:3 192:11,16,16 193:1,15,25 194:5,12,14,21 195:6 197:10,11 199:3,10 201:22 203:4 203:7 204:25 205:2,4,8,9 205:16,16,17 206:22 208:24 210:7 211:2,4,8 214:6 215:1,14 217:19,20,21 218:14 219:19 220:2 221:20 221:21,21,23 223:9,10,10 225:1,2 226:4 228:5,25 229:6 231:11 231:25,25 232:6,6 233:9,15,15 234:6 257:21 261:16 263:16 267:24 268:2 268:3 276:5,5 276:7,8,11,17 276:23 285:8 285:14,15,20 285:21,22,25 286:14 287:22 288:5 292:15 293:21 293:22 294:3 294:6 295:19 305:7,9,24 309:20 debt's 214:16 debt-PAYGO 201:22 202:15 203:16 debts 287:17 decades 54:2 54:12 63:22 December 183:12 185:1 decide 72:21 decided 23:19 64:11 110:20 decision 29:22 73:5,6 87:7 128:24 287:1 decision-mak ... 88:4 decisions 82:14 133:18 228:20 294:15 decline 25:3 121:5 146:21 152:14 185:24 290:8,18 declined 115:19 152:15 declines 25:2 120:9 declining 44:22 44:23 46:18 46:19 47:11 119:15 289:17 290:19 decrease 83:2 111:7 119:24 146:8 157:12 274:6 290:13 decreased 41:24 290:3 decreases 25:18 59:8 115:12 120:14 decree 12:20,21 13:13 14:1 17:7 19:11,13,23 20:11 21:17 23:8 36:18,20 37:7,10 39:13 39:19,23 40:7 43:1,13,20 44:7,10 47:15 49:4,9 53:8 55:13 66:8,10 66:12 67:25 68:11,20 71:5 71:22 75:14 82:19 83:9,10 83:13,15 97:14 97:17,20,25 98:4,14,15 99:10,14,17,19 99:23,24 100:16 103:21 103:24 142:13 142:21 143:4,5 143:10 144:7,8 161:12 185:24 187:19 193:23 194:1,20 226:18 234:8 236:22 238:25 260:8 260:12 273:16 273:18,22 302:17,21 303:9,12,16 decree-related 163:22 decrees 216:18 dedicate 60:12 dedicated 65:10,11 166:21,24 deductibles 141:19 deemed 9:17 Deer 183:14 defaulted 156:22 defer 66:19 106:15 109:22 116:5 117:13 121:21 126:3 144:9 159:15 255:9 deficiency 52:13 define 140:24 141:2 178:25 281:11 defined 50:24 50:25 51:6,8 51:10 52:2,14 52:16 54:7 69:16 308:7 defines 78:19 definitely 232:21,22 definition 207:10 264:3 definitions 245:12,16,19 245:21,22,23 245:24 degree 20:9 84:6 87:13 90:6 154:8 delay 153:14 delegates 6:19 delegation 108:3 delinquencies 8:2 138:11 140:18,20 delinquent 150:25 delivered 171:20 delivery 64:23 demand 44:23 116:17,17 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 185:25 298:8 demands 298:6 demonstrate 13:23 demonstrates 281:14 denominator 173:2 256:4 Denver 63:12 department 19:17 43:8 61:6 148:24 155:2 230:6 230:15 departments 61:3,14 dependent 228:24 255:24 depending 31:22 83:5,16 83:24 240:13 depends 185:17 238:18 depicting 137:24 depletion 39:20 depreciation 207:13 208:22,25 209:1,6,8,8 Des 49:5 58:22 216:2 describe 74:15 82:16 102:24 127:9,19 190:5 193:6 265:13 describing 70:4 design 64:23 83:7 256:19 304:23 designated 179:11 designed 241:11 300:8 designers 83:7 designing 84:12 designs 82:14 82:17 desire 292:14 desired 285:10 desiring 11:14 261:15 detail 28:24 30:6 32:20 63:14 74:17 96:19 109:20 129:15 274:19 detailed 13:22 69:1 250:20 257:19 details 18:7,25 19:4 22:4 28:18 30:18 31:24 32:4 255:10 determination 183:25 258:9 259:12,18 determine 23:20 78:21 110:16,17 112:23 119:12 120:3 123:16 125:24 126:6 213:11 239:17 260:8 269:19 determined 153:10 178:6 182:19 238:2 239:21 258:21 259:14 297:2 determining 92:25 290:11 292:14,19 294:13 develop 93:14 195:1 201:5 developed 95:13 97:15 97:24 110:9 200:24 217:13 218:21,22 219:10 220:17 246:14 256:17 287:5,6 289:11,21 306:4,8 developing 94:2 95:18 development 23:7 58:16 60:13 211:2 devices 57:6 difference 87:3 122:18 124:23 125:12,21 131:12 132:4 135:24 137:3 140:2,5 145:13 145:17 146:11 146:23 147:5 147:6 161:10 170:14 180:1 181:8 205:14 236:15 284:19 differences 131:8 132:9 138:3 139:16 different 26:4 28:14 33:16 54:15 65:13 67:24 73:23 77:16 80:14,15 83:5,21,24 85:7,11 86:2 86:21 95:9,11 95:20 127:20 131:15 152:22 174:18 202:12 209:3 217:19 217:20 218:24 219:7 222:4 270:14 271:2 271:5,18,22 275:4,12 280:4 282:6 283:24 284:10,11 293:16 302:13 307:3,7 differential 125:4 difficult 118:12 149:18 158:5 difficulties 264:17 dig 56:15 digit 13:4 diligent 93:16 direct 10:12 15:22,25 26:16 79:15 81:9 101:11 133:6 151:14 176:6 190:2 258:19 directed 102:23 direction 73:21 87:1 88:19 146:18 193:10 directly 42:6 43:19 67:13 111:6 113:13 114:5 191:22 director 14:4,5 14:6,7 34:16 directors 61:15 Disadvantage 181:14 disadvantages 180:23 disappear 291:14 disappeared 50:6 169:23 discharge 22:9 86:15 240:15 discharger 22:8 discharges 248:23 discharging 76:24 80:11 discourage 300:24 discovery 9:25 10:3,7 22:16 22:17 29:15 33:25 43:5 66:15 117:18 128:22 129:8 139:12,25 208:11 216:23 discretionary 133:18 153:9 154:5,9,10,19 154:23 155:13 discuss 129:13 173:13 305:6 discussed 12:2 112:2,2 115:21 128:21 162:14 292:16 297:17 discusses 22:18 22:21 discussing 98:20 183:24 296:17 discussion 23:16 24:2 26:5 44:8 61:18 63:13 73:2 85:3 100:23 117:16 121:14 177:3 188:12 205:22 207:6 247:23 248:11 301:10 discussions 62:7,15 64:10 74:18 86:10 111:22,23 112:6 171:15,16 232:9 244:22 291:10 292:11 309:10 dispute 172:9 189:6 dissipated 48:13 distinctions 275:4 distinctly 211:17 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES distribute 35:5 45:12 distributed 246:12 261:23 distribution 262:3 district 1:1,2 4:14 4:17 6:5,7,14 6:16,18,21,25 7:20,24 8:14 8:15,20,24 9:18,19 10:1,1,4 10:4,7,8,13,15 10:24 11:19 28:15 29:5,7 34:19 36:24 37:17 46:1 48:19 49:12 50:22,24 51:4 52:18 53:16 60:24 61:10 61:22 65:18 66:6,8 68:18 69:24 70:2,24 74:19 75:2,3 76:7 79:22 83:11 85:1 86:2 90:4,6 95:1 99:9 100:1,19 102:23 104:2 104:5,7,16,17 104:25 105:3 107:4 118:1 132:20 133:2 138:10,17 140:23,24 141:5 149:6 156:21 157:25 160:7 161:19 161:22 162:2,9 164:18 175:20 182:21,25 185:7 186:15 190:6,14 192:3 192:24 193:11 194:5,25 195:9,18,23 196:4,16 197:14 198:5 201:4 203:10 211:14 212:4,11 212:21,25 216:1,1 217:5 218:4,8 219:5 220:9 221:14 221:16,18,25 222:19,21 223:2 224:6 224:13,19 225:3 226:17 226:19 227:23 228:19 229:25 230:22,25 231:1,3,10,19 232:19,22,23 233:17 234:12 242:17 249:8 249:13 251:25 252:4 254:4 257:12,22 258:15,17 260:3,5 263:10 264:15 264:21 266:4 266:22 267:1 288:23 292:11 302:2 307:24 312:5 district's 2:5 8:9,21 12:14,19 12:24 13:13 14:9,12,14 29:23 42:25 98:3 100:4 101:21 148:21 195:4 196:18 204:24 207:19 210:4 210:6,7 211:1 211:25 213:13 225:8 232:11 239:25 240:11 257:14 258:25 292:12,14 district-wide 26:7 61:16 121:16 districts 30:25 105:21 178:17 178:24 196:21 216:13,17 233:11 234:2 254:3 266:25 diversity 62:20 divided 11:13 dividing 207:11 207:13 document 24:15 155:17 260:7 documents 1:3 10:11 35:2 54:2,7 104:2,7 143:11 175:24 176:2,8,10,12 259:20,22 doing 19:14 38:5 55:19 56:10,19 58:4 60:10 61:13 67:6 72:20 73:1 74:23 79:14 87:10 108:25 122:17 159:3 174:14 185:17 237:9 249:18 266:13 270:12 286:22 291:18 294:22 300:25 304:20 dollar 129:22 181:21,22 213:17,19 283:4 291:20 dollars 18:17 32:1 42:9 66:9,13 156:24 159:4 161:14 180:7 194:21 201:17 205:17,19 207:22 209:22 226:20 234:8 243:16 264:6 283:4 domestic 279:2 279:3 double 123:5 295:14 double-digit 20:15 down 24:21 45:6,10,15 49:22 51:20 52:12 59:7 62:14 65:3 66:2 123:3 136:14 137:7 175:10 179:14 190:9 206:8 250:1 270:6 275:14,16 280:19 282:12 284:17 285:15 290:22,22 293:25 296:18 300:18 302:22 307:22 308:14,17 downgrade 185:22 226:5 downgraded 309:7 310:3 downs 192:13 downstream 88:13 downtown 37:25 downturn 133:11 drafted 97:19 drain 59:6 drainage 8:10 drains 240:16 240:21 dramatically 271:9,11 draw 170:2 drawing 170:4 drawn 190:15 Dresser 242:18 drilling 49:6 drive 201:10,15 285:12 driven 226:18 250:1 274:10 285:9,9 294:4 295:16 305:24 drives 215:22 285:24 293:6 293:10 driving 36:21 46:7 255:4 286:8 292:13 292:19,24 293:23 294:3 295:18 drop 123:6 dropped 72:14 drove 71:12 172:17 dry 241:6 due 7:23 32:10 115:12 123:10 123:22 134:8 138:11 150:17 154:25 283:7 duly 15:2 91:14 108:6 167:22 200:9 234:24 269:2 duration 249:4 dynamic 210:14 dynamics 85:10 237:22 E MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES E 2:1 3:1,1 earlier 20:18 25:16 30:24 60:6 70:9 93:6 98:20 125:6 128:12 133:5 138:20 143:23 146:3 146:24 147:22 148:7 152:13 152:20 153:7 157:2,4 163:15 165:10 166:18 176:15 188:13 227:25 231:15 232:9 233:9 281:15 284:21 307:23 earliest 31:4 early 17:13 35:21 58:21 easiest 45:5 easily 48:24 227:4 easy 62:22 283:12 economic 217:14 220:18 economical 303:24 economy 224:11,14,17 Education 7:18 effect 29:22 30:7 61:22 113:15 128:23 186:19 237:2 237:7,18 252:3 291:7 effective 47:8 56:10 57:4 60:2 69:12 71:10 88:11 250:3 252:22 effectively 300:1 effectiveness 60:6 efficiency 57:8 efficient 134:17 effort 137:1 148:23,25 149:1,4 efforts 25:17 119:17 252:22 EIERA 229:21 229:23 either 26:15 33:3 43:4 50:17 56:5 63:7 66:14 82:6,8 85:10 88:12 111:13 141:4,13 150:7 156:16 171:7 209:18 219:19 241:6 295:19 elaborate 182:9 election 6:9,11 72:8 136:8 element 237:19 240:23 241:13 260:1 elements 257:21 elevation 238:19 eligible 178:18 179:2 181:21 eliminate 34:1 77:4 84:4 156:10 165:8 237:6 249:15 251:23 299:21 eliminated 154:19 155:15 158:11 166:7 eliminating 83:22 253:7 embedded 165:3 214:20 emergencies 8:2 140:17,19 141:15 209:18 emergency 89:10 140:24 141:2,7,21 142:7 employ 149:22 employed 312:9,10 employee 312:10 employees 51:4 51:13 163:18 164:1,5,25 165:2,8,11,16 216:9 enable 262:13 enacted 134:8 encourage 253:23 254:11 ended 19:9 238:5 ends 292:23 energy 4:12 7:17 9:16 11:2 15:15 167:25 230:5 255:23,24 256:1 engaged 211:17 238:25 304:3 304:5 engagement 211:21 222:1 engineered 242:5 engineering 14:5 60:8 181:15 183:4 242:8,18 engineers 7:16 42:8 193:5 enhance 150:24 264:20 enhancement 196:12 enhancements 72:22 149:2 enhances 8:8 196:3,18 ensure 6:20 80:6 260:3,17 264:25 enter 51:19 147:24 entered 170:6 198:25 entering 184:6 enters 236:16 entire 71:5,12 85:1 181:19 285:17 301:11 entities 43:22 47:7 74:23 85:3 118:10 184:10 216:11 217:10 entity 75:9 154:8 217:24 218:13 228:2 228:13,19,23 228:25 234:12 environment 7:16 157:7 256:23 257:3 294:7 environmental 7:2 52:17,19 52:25 87:5 230:4 envisions 303:16 EPA 12:22 43:7 44:8 57:3 71:13 183:11 216:18 226:21 301:4 equally 11:18 111:15 241:24 253:24 equation 201:20 equipment 57:5 equipped 273:19 equit 298:15,22 equitable 281:10,11 284:3 297:15 297:22 298:10,14,15 298:20,22 301:1 equity 73:8 205:2,9,16 246:24 267:9 268:3 erosion 31:17 error 282:22 283:24 ES-1 127:13 ES-2 116:14 117:5,12 278:11 278:14 279:6 ES-3 116:9,11,20 117:11 127:13 278:11 ES-4 116:11 ES-5 116:11,11 escalation 227:5 especially 19:6 20:4 40:3 41:24 53:7 56:12 57:19 289:15 290:9 305:7 essentially 206:23 207:20 231:11 231:23 246:3 252:10 257:18 establish 95:1 96:10 245:11 established 6:12 42:8 90:10 201:7 245:22 292:13 establishing 96:4 257:23 esteem 197:25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES estimate 130:18 134:3 145:25 178:15 179:6 302:7 303:14 estimated 66:11 143:23 236:10 243:24 estimates 16:22 45:20 113:5,10 131:19 132:1 estimating 25:22 et 147:24 evaluate 138:16 138:17 221:13 233:23 evaluated 229:2 259:2 evaluating 217:13 218:2 220:18 221:15 230:20 evaluations 40:20 evening 67:17 evenly 11:13 event 38:23 49:16 64:11 141:3,18 198:6 events 47:13 59:12 123:22 228:18 eventually 67:16 72:17 95:13 everybody 46:6 62:2 72:12 281:25 evidence 2:5 186:15 187:22 262:21 ex 190:14,23 exact 29:1 92:16 123:16 127:10 164:22 174:19 309:19 310:8,8 exactly 23:13,19 27:10 51:23 83:16 137:2 142:15 207:17 234:4 290:21 295:17 EXAMINATION 15:10 28:1 36:10 76:4 81:16 89:6,21 92:3 94:17 101:9 105:16 108:20 126:23 144:22 147:18 151:5 165:21 166:15 168:5 177:14 188:25 189:22 200:17 204:16 210:22 229:18 233:5 235:7 247:15 251:20 256:14 269:9 288:15 299:8 301:20 examined 259:22 examining 246:24 example 43:15 45:5 47:6 49:4 58:10 84:15 112:1 130:13 150:6 150:17 163:25 204:4 228:7 232:2 259:8 270:15 exceeding 38:21 217:9 excellent 108:3 exception 37:21 excess 116:24 117:1,10 176:25 278:25 279:1 279:2,10 300:23 excessive 265:12 exchange 145:1 excluded 249:22 exclusive 221:12 excuse 115:6 219:22 224:1 229:9 executed 89:16 214:25 executive 14:3 278:13 exhibit 14:17 102:24 127:11 142:4 160:12 185:20 186:13 207:17,24 208:3 exhibits 171:5 173:21 exist 65:4 105:7 165:8 existing 32:10 62:3 76:21 86:11 125:23 150:1 154:10 165:11,16 279:21 303:5 exists 88:8 expand 66:21 66:22 70:8 expanded 66:10 expansion 78:25 expect 121:7 125:12,21 141:20 143:9 149:24 173:18 242:10 248:22 249:12,16 266:18 270:16 270:19,23 271:8 expected 32:21 139:15 140:10 140:12 174:8 178:9 199:13 199:17 238:4 263:16 271:3 284:18 290:9 294:6 expecting 238:23 291:15 expects 190:14 192:3 expenditures 133:13 136:16 153:10,12,15,19 154:9,11 161:6 167:8,9,10 190:7 expense 48:17 145:23 159:24 161:19 209:7 257:20 expenses 13:11 49:8 111:9 112:24 113:11 113:12 114:4 135:22 146:8 146:22 147:1 152:25 154:1,5 154:18,19,22 155:13,21 159:25 160:3 160:4 172:24 174:4,7 207:12 208:22 219:12 255:22 257:20 270:19 291:1 291:10 307:11 307:20 expensive 19:12 174:6 experience 89:9 224:5 224:24 227:4 227:17 246:19 284:14 288:23,23 289:16 309:12 experienced 79:22 196:16 227:2 experiencing 262:24 expert 56:13 227:8 246:20 expertise 46:11 177:6 309:11 309:15 experts 46:4 expiration 11:21 expired 11:25 54:10 explain 28:13 29:22 30:2,4 30:6 32:19 34:25 35:8 76:15 92:12 92:23 97:10 115:4 128:9 129:15 135:2 140:23,25 178:5 205:11 205:13 206:13 207:8 214:18 275:6 289:6,7 295:13 explained 185:5 explaining 129:3 exposure 105:2 198:8 expressed 88:1 extended 13:13 19:23 20:9 66:10 76:21 extends 9:1 54:12 extension 9:6 17:7 20:16 extensive 40:9 57:24 303:23 extensively 40:25 extent 11:19,22 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 97:12 153:11,19 161:24 264:16 282:21 299:23 extra 22:2,7 116:12,15 117:5 278:20 279:7 299:14 300:4 extreme 47:12 47:24 49:16 299:21 extremely 67:23 68:1 eyes 162:3 197:22 F F 208:14,14,15 208:18 face 37:9 52:18 104:17 faced 30:5 153:24 265:4 facilities 8:10 62:16 63:17 63:24 77:17 82:4,17 299:20 facility 77:7 83:6,23 84:16 84:17 102:5 facing 301:12 302:12 fact 30:5 59:11 66:1 75:6,9 94:7 145:3 154:1 165:6 225:24 230:16 238:15 262:25 264:22 283:7 284:17,23 285:17 294:5 294:24 303:22 factor 19:19 38:11 42:22 42:25 46:7 48:14 52:10 99:11 292:13 292:19,24 293:2,3,5,10 293:14,15,17 293:17,23 297:19 factored 270:25 273:11 factors 22:5 35:8 37:9,13 52:23 53:1 65:25 78:21 92:24 93:11 96:5,7 105:22 119:19 126:6 140:16 153:4,6 160:15 162:13 185:21 192:19 192:23 226:5 226:8 228:25 235:25 237:17 254:21 257:15,17 272:2,8 273:10 274:1 274:2 285:6 285:11 293:12 293:16 294:24 297:1 307:3,17 failed 30:11 156:21 163:3 failing 98:15 fails 165:6 failure 30:22 39:6 98:2,5 162:19 187:9 210:5 291:8 failures 38:25 fair 6:20 8:17 13:19 34:22 35:4,19 36:24 40:15 47:15 48:17 49:10 66:20 69:10 85:21 92:11,19 92:25 100:9 104:18 105:19 109:7,15 110:2 139:5 140:13 160:9 161:15 195:19,20 245:12,17,20 246:3,6,10 247:5 261:10 261:13 262:2 262:6,10 263:12 264:2 274:16 281:10 281:11 283:13 284:3 297:15 297:21,22,25 298:15,20,20 298:22 299:2 301:1 305:23 305:25 306:23 fairly 209:5 261:24 298:3 fairness 246:24 261:22 fall 55:12 173:23 202:3 251:10 falling 7:23 falls 69:9 70:15 familiar 38:22 49:20 103:23 166:23 167:2 303:22 304:1 family 280:1 282:13,15,19 283:9 far 23:10 25:25 42:13 48:23 49:22 57:10 69:25 71:7,13 71:24 99:3 100:3,4 124:4 200:23 204:4 250:19 258:9 266:12 faster 252:4 Fault 53:21 faulty 241:8 favorable 41:21 161:3 231:7,9 favorably 162:8 296:3,5,6 feasibility 304:10,10,23 feasible 158:19 February 6:10 federal 8:15 41:23 42:4,9 99:12 240:19 federally 71:6 Federation 256:23 257:3 fee 93:13 96:17 102:19 128:15 213:2,4,5,8,16 213:24 214:7 214:14 244:3 feedback 173:8 173:20 feel 35:14 85:20 106:13 179:18 229:3 309:16 feelings 70:6 fees 24:5 28:22 101:22 122:3 122:10 128:12 128:13,13 147:23,24 148:1 152:20 152:21 229:9 feet 49:22 57:23 fell 25:4 195:6 felt 251:13 289:21 303:7 FEMA 47:21 123:22 fence 301:15 Fenton 77:5 89:9 fifth 295:23 fighting 252:6 253:3 254:14 fights 254:15 figure 15:21 21:19 26:10 66:17 117:24 118:16,24 136:12 146:19 161:5 202:5 209:22 213:10 214:4 figured 63:18 91:11 184:22 184:25 figuring 233:14 file 149:23 filed 9:15 10:2 10:12 207:24 fill 154:13 filtration 251:11 final 100:22 210:2 284:20 293:14 finally 10:17 34:5 finance 7:24 14:7 95:8 136:15 148:24 183:14 190:6 190:14 268:3 289:10,22 291:11 306:5 306:10 financial 14:9,10 14:11 29:12 39:14 40:7 48:23 49:24 51:23 53:25 54:1,11 70:1 74:19 112:12 112:20 114:12 127:14 133:20 154:4 193:10 194:25 196:3 198:1 201:5 209:23 210:5 211:1,11 212:6 212:25 216:11 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 217:13,15,22 217:23 218:3 218:23 219:8 220:17,19 221:24 224:6 224:25 230:21 254:6 257:24 262:15 266:23 292:10,12 295:9 304:10 304:23 305:5 financially 74:20 141:4 158:19 192:6 192:10,20 312:11 financing 13:9 17:5 18:10,12 18:20 54:14 159:14 168:19 168:24 169:6 186:10 190:16 190:25 195:1 200:25 203:4 213:22 268:2 284:22 305:7 find 24:17 56:2 56:4 57:9 69:19 85:4,4 85:5 88:2 118:6 139:11 152:8 248:5 finding 85:17,19 306:23 findings 239:17 finds 88:17 fine 16:2 89:4 95:4 107:19 185:4 248:1 finished 304:19 firm 216:5,7,8 242:18 309:12 first 9:25 14:24 17:19 32:14 33:24 39:10 39:10 41:25 44:5 62:5 70:9 86:20 98:23 102:22 114:21 127:23 131:4 142:25 144:2 149:12 149:18 177:1,18 184:9 205:14 211:24 212:1,11 230:16 264:6 266:16 270:1 270:4 274:20 274:25 275:7 277:6 289:8 304:13 305:11 306:3 fiscal 13:1,2,3 17:19 25:1,2 53:25 65:20 113:1,5,6,8,18 113:19,21 120:19 122:4,5 122:11 123:6,7 124:16,18 127:23 129:10 134:3 135:2,21 135:21 151:17 151:17,18,21,22 151:25 152:1 152:25,25 155:21,21 160:8,16 167:2 179:19 190:11 191:17,17 201:19 206:1 207:3 223:12 225:14,15 227:12 254:24,24 269:22,24 271:3 272:14 272:15 295:4 295:7 299:15 299:15 fit 264:12 268:7 Fitch 186:13,19 195:3 197:4,5 223:20,24 224:4 226:7 five 42:14,16 51:5 66:10 69:17 93:11 96:1 120:9 167:5 267:7 Five-minute 268:22 five-year 20:16 206:18 270:5 fix 263:11 fixed 163:14 217:19 218:10 218:13 296:18 300:17 fixtures 25:20 119:17 flat 25:5,10 120:13 121:8 125:15 192:13 244:3 flatten 67:5 68:10 flattening 68:14 flattens 67:3 flesh 19:22 flexibility 83:18 182:2 196:4 198:2 flexible 182:1 flip 109:5 116:20 flips 227:1 flood 53:9 86:18 89:12 flooded 47:20 86:19 flooding 31:16 47:13,19 48:11 48:12 58:3 87:18 123:22 141:8 floodplain 48:8 87:4 floodplains 47:23 87:18 floods 89:9 floors 58:16 flow 26:8 45:6 76:23 79:5,6 79:8,11,18 80:2,10,10,12 83:23 236:6,7 236:24 237:3 237:7,10,14,18 238:3,7 239:6 241:12,12,13 248:22 249:1 249:5,17 252:16 253:1 253:5 302:19 303:3 flows 59:6 83:2 84:7 86:15 236:2,10,11,14 237:12 239:3 239:13 240:15 248:20 253:25 288:25 289:15 fluctuates 167:11 focus 70:25 71:3 262:19 304:12 focusing 7:1 fold 44:9 folks 23:11,21 32:24 51:11,15 59:2 62:23 72:8 84:19 87:3,9,10,19 88:3 104:18 106:15 109:23 119:22 150:4 150:13 165:9 follow 13:16 64:8 134:1 212:14 230:19 242:23 291:3 followed 93:13 311:1 following 10:19 11:16 12:16 13:8 102:10 160:17 225:9 242:24 242:25 277:15 282:10 295:8 follows 35:3 93:23 140:4 222:20 footnote 116:25 123:18 278:25 force 56:15,17 254:8 forecast 53:25 120:20 121:7 143:5 155:14 155:15 162:24 179:22 196:14 197:15 289:4 289:21 290:11 290:12 296:3 forecasted 151:18,23 152:1 152:6 153:1 154:6 155:22 159:21,25 160:9 196:17 forecasting 303:25 forecasts 289:1 forget 61:25 forgot 148:4 formally 132:15 forth 103:3,11 202:22 218:25 259:1 260:19 fortunately 44:6 45:17 50:7,8 forward 35:17 39:21 49:10 68:20 71:14 87:8 88:4 91:9 91:22 92:2 113:17 126:13 156:7 160:19 163:11 168:4 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 178:14 179:23 198:14 200:8 200:16 217:25 235:6 252:20 269:8 288:14 found 41:19 74:21 86:16,17 88:15 92:18 93:7,15 127:13 302:18,23 303:4 founded 226:23 four 17:8,9 19:9 19:14 20:14,18 20:20 26:12 31:23 34:7 45:19,21 67:3 67:20 68:6,13 69:17,21 70:9 79:14,18 98:8 121:20 169:20 185:16 201:19 227:24 238:11 239:15 249:10 252:21 270:6 271:7,14 293:25 295:22 four-man 57:5 four-year 16:17 17:20 34:1 45:23 46:1 73:15 97:21,23 115:8 121:8 133:8 143:20 144:4 146:3 146:24 147:2 170:7 215:10 225:22 239:15 293:1 296:3 308:17 fourth 285:14 framework 92:20 Frank 208:14 frankly 301:3 front 16:7 22:20 116:7 161:1 168:11 235:13 266:12 269:15 fruition 52:1 fulfill 164:1 fulfilling 162:25 full 202:17 216:23 fully 150:21 238:16 function 19:21 65:2 277:6 functional 254:22 271:20 275:15 275:17,18 276:22 277:1 functions 271:21 271:24 272:25 275:13 fund 13:24 52:14 110:14 141:10,10 142:5,6 156:17 156:17 157:1,9 158:21 160:13 160:19 163:8 166:1,1,7 168:16 170:6 181:19 191:16 191:22 192:15 192:18 195:18 203:15 209:7 219:14 230:12 230:14 233:23 260:16 285:10 285:10 286:20 287:19,20 293:8 308:3,4 308:5,8,10 funded 51:22 51:25 193:14 funding 28:14 28:20 41:15 42:17 44:19 47:10 50:5 55:6 110:22 114:2 127:8 142:9 157:9 163:11 164:3 168:17,18 178:3,12 183:1 185:9,18 186:24 187:1 202:17 203:3 204:25 209:19 210:11 223:6,11 231:19,22 232:4 262:13 fundings 178:14 funds 29:25 30:18,18 33:22 40:2 42:13,13 60:13 60:13 63:2 69:7 129:1,10 140:17,19 141:1 141:5,12,15,23 141:24 142:2,7 150:4,9 154:2 158:15 159:9 159:11 160:20 160:23 161:10 163:6 169:11 170:5,18 178:16,23 179:2 181:5 182:6,15,15,21 183:23 184:20 189:4 229:25 furnished 222:4 further 8:3 75:24 90:17 101:2 105:11 106:19 165:18 188:21 199:19 210:17 227:15 229:11 268:8 275:14 287:21 299:3 310:10 311:3 312:8,10 future 13:25 20:12 30:24 36:17 48:24 61:22 70:13 73:9 74:20 88:9 112:13 113:5 158:18 185:9,18 190:23 194:1 198:6 206:9 206:22 225:11 229:8 261:21 270:8 FY16 133:14 FY17 115:8 133:2 273:1 FY18 133:2 135:8 FY19 127:16 135:5,6 178:3 178:5 FY20 115:8 125:3,9 129:23 132:5 132:8 154:10 163:15 178:4 FY21 127:18,23 130:4 273:2 FY24 127:18 132:9 G gallon 57:12 gallons 38:21 271:24 gap 169:1 170:10 Garden 7:12 garnish 150:4 150:10 garnishments 150:21 gather 18:20 81:11 Gee 2:14 9:22 14:6 18:6 22:3 23:11 24:7 25:12,23 26:3 26:14,19 27:4 28:17 29:1,11 30:17 31:24 32:3 47:1 107:20 108:4 108:9,22 139:3 144:21 144:24 147:20 151:8,8,8,9,10 151:14 166:11 166:17 167:18 169:22 176:16 196:7,11 233:9 285:18 291:19 296:23 Gee's 66:4 general 2:11 4:13 6:10 7:7 14:4 15:25 18:18 25:14 29:11 35:13 46:24 55:18 71:15,16 74:18 82:13 93:21 150:1 224:16 233:21 255:9 260:13 273:21 274:9 288:25 289:16 300:21 generally 22:7 23:25 29:25 129:1 221:10 227:21 236:12 241:22 generate 31:15 80:8,13 123:14 139:15 140:12 267:25 289:25 generated 80:9 123:11 155:6 205:18,19 generating 286:15,17 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 287:2 generic 240:6 Gerald 5:8 getting 19:25 35:14 46:5 52:16 59:22 62:23 67:8 79:23 132:2 159:8 249:20 250:15,16,24 252:5 264:17 268:19 286:13 301:6 Gilmore 222:23 222:25 give 15:25 19:5 26:15 29:2 56:13 58:9 61:24 68:25 72:8 86:9 87:6 88:20 129:21 139:10 142:12 145:19 152:8 154:21 169:22 178:22 220:3 255:9 274:12 278:7 291:6 302:7 given 26:25 57:21 59:18 73:24 78:1 126:9 144:13 197:11,19 201:17 219:25 224:18 227:1 238:2 265:23 gives 35:18 59:7 69:17 138:22 160:13 228:8 giving 65:14 70:5 137:8 glad 55:25 Glaize 77:4 89:10 go 18:8,14,25 19:9,13 20:3 21:7 23:20 25:20 28:23 29:13,18,20 31:13,20 34:11 52:12 54:2 59:8 60:23 62:21 64:11 65:12 69:11 70:19 71:7 72:7 73:21 77:17 83:16,20 84:3 91:1 92:2 99:3 100:3 102:8 107:21 110:12,22 114:8,14,16 122:10 123:15 130:23 135:17 137:14 138:15 152:24 155:4 160:24 162:17 163:20 164:16 168:23 169:3 171:8 175:10 178:23 186:8 187:17,18 188:4 190:1 191:21 192:2 192:19 194:22 195:3,12 197:1 198:14 199:8 199:17 201:22 202:2 204:5 213:22 214:21 217:7 226:2 228:7 229:17 231:20 245:10 248:8 252:17 254:9 257:11 267:22 276:1 276:5 278:6,8 279:16 280:7 281:8 283:17 288:17 299:16 302:21 307:22 310:3 goal 84:2,11 134:17,20 172:7 282:3 goals 83:12 84:1 84:2 173:15 goes 24:6 53:9 53:21 72:4 90:11 112:15 113:15 152:7,12 164:16 186:25 193:9 257:12 296:16 299:16 going 12:3 15:23 16:12 19:17 21:1,7 22:15 24:17 25:9 31:5 33:4 34:10 37:2,11 39:21 40:13 45:6,10,15,16 45:19,20,25 47:25 49:10 50:4,25 51:14 51:20,20 54:9 55:12 63:20 64:25 65:1,11 67:2,11,13,16 67:17,21 68:1,7 68:18,20,25 71:25 72:2,2 72:17,18 75:15 76:6 77:3,13 78:9,10 85:1 86:3 88:7,18 90:22 102:11 107:9,19 110:20 111:2,16 111:18 112:4,17 112:21 113:17 114:3,14,16 115:10 116:9 117:13 119:9,9 119:14 120:24 121:8 122:22 123:3 125:14 126:13 127:3 130:18 133:15 135:13 136:14 136:18 137:7 141:3 142:23 143:24 144:6 146:10,22 147:3,5 148:19 156:7,7,10 157:14,15 159:3,5 161:18 163:10 164:18 164:19 165:10 168:16 178:14 179:4,23 181:4 188:23,24 191:10,14 192:4 193:21 197:13 199:9 204:1,3 204:4 207:7 213:11 214:10 215:10 219:9 222:17 225:22 228:11 228:22,24 231:14 232:18 236:1 238:21 241:25 246:7 249:24 251:8 252:18,19 253:6,6 255:11,19 256:7 270:2 271:11 280:8 282:16 285:20 288:17 290:21 291:13,15,21 292:6 296:18 296:23 300:16,17 308:17 310:1 310:17 good 12:9 15:12 15:13 20:1 28:3,4 36:1,2 36:12,13 49:21 56:23 62:14 69:17 70:1 81:24 92:5,6 94:19,20 105:9 108:5 108:22,23 109:1 111:18 125:12 126:25 127:1 150:6,14 166:6 168:7,8 172:6 185:14 188:15 189:24 189:25 195:21 195:22 198:12 200:19,20 204:18,19 219:2,2 224:22 228:15 229:3 235:9,10 248:24 267:5 269:11 288:17 Goss 2:9,16,17 2:21 5:8 81:15 81:17,25 88:23 144:21 144:23 165:20 165:22 188:24 189:1,10 gotten 57:16 172:3 governed 80:21 governing 95:16 government 42:5 226:21 governmental 96:15 Grand 77:4 89:10 granted 9:17 grants 41:23 170:7 great 40:23 64:16 138:6 166:9 168:13 169:3 greater 7:11 125:21 216:1 217:1 281:4 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 287:19 290:8 307:21 Greenfield 64:20 grew 130:4 gross 191:24 215:18 ground 39:6 49:22 groundwater 236:19 238:21 241:7 253:8 group 60:7 70:25 71:3 181:15 183:9 305:13 grouping 154:19 groups 106:12 grow 114:1 growth 92:21 93:7,15 94:7 96:20 101:18 103:4,19 105:19,24,25 113:12,13,22 114:3,5 120:13 138:13 guarantee 179:7 284:9 guaranteed 74:20 guess 17:23 50:14 69:12 70:7 73:15,23 84:3 85:25 92:6 99:14 100:22 102:3 113:4 133:21 134:2 140:22 142:18 168:15 203:22 218:23 232:8 244:3 246:15 250:4,24 253:3,12 279:22 guessing 66:19 guidance 23:6 93:14 guideline 90:10 guidelines 118:7 guys 70:4 75:21 138:5 144:12 150:15 305:2 H half 53:4 134:19 145:22 173:3 194:21 310:21 Hampton 216:2 Hancock 102:1 106:2,5,7 hand 33:17 93:4 190:15 199:16 201:18 203:18 209:2,16 219:18 264:23 266:24 295:25 hand-in-glove 50:14 handle 41:3 91:21 122:14 248:24 255:10 273:20 276:14 handled 276:19 handling 255:15 272:24 hands 202:19 207:10 209:20 228:8 handy 190:3 happen 30:23 31:23 39:3,4,5 39:7 42:21 45:20 47:23 53:12 67:4 77:14 82:7 228:10 237:13 241:10 270:20 270:21 286:1 291:7 308:8 happened 63:1 158:9 180:17 180:19 248:16 273:3,4 happening 19:5 50:10,11 68:14 239:14 250:2 253:18 happens 31:25 44:14 77:16 79:16 81:12 171:23 193:9 249:5,6 305:5 happy 87:9 196:1 hard 197:13 215:22 232:17 310:5 hauler 122:3,25 128:13 147:24 147:25 148:14 148:14 152:21 Hawes 5:5 Hazelwood 86:21 he'll 90:14 head 59:4 66:18 82:11 114:9 128:17 137:17 142:15 296:15 303:17 health 262:15 hear 89:4 299:10 heard 16:25 17:4 18:10 97:5 193:4 207:6 210:3 226:14,15 262:18 263:5 hearing 12:2 14:21 91:18 106:25 170:15 235:3 269:5 273:8 310:23 311:6 312:4,5 312:10 heavily 22:23 255:19 heavy 47:13 106:13 held 10:10 101:21 197:25 274:7 312:4 Hello 177:16,17 247:17,18 help 24:14 56:16 115:3 132:12 154:3 183:14 240:2 253:17 271:16 272:17 275:6 280:2 helped 201:2 helpful 30:8 151:3 helping 58:1 helps 160:18 170:13 202:22 hereto 312:11 hesitating 35:15 hey 56:10 59:2 60:24 64:13 67:17 150:15 203:25 244:20 Hi 269:1,12 high 16:13 20:13 84:16 179:24 194:10 197:25 271:17 293:6 higher 98:19,21 99:2,7 113:8 113:24 117:6 120:14 138:10 138:11,17 152:1 152:6,23 159:11 169:9 172:19 173:6 174:3,7 175:14 187:16,21 196:25 210:11 232:5 256:2 280:13,17 285:21 289:25 290:15 291:16 295:22 297:6 302:11 highest 196:21 196:22,22 217:6 224:1,2 224:3 highly 41:16 42:19 44:20 47:10 highway 65:10 hire 62:1 164:25 165:2 hired 165:9 hiring 153:13 historic 87:3 193:7 historical 17:22 25:7 111:23 114:7 120:8 133:22,23 134:11 135:8 173:24 195:13 204:25 212:18 236:5 239:10 248:17 262:20 historically 24:25 76:7 114:9 132:20 134:5 172:12 179:3 187:14 224:14 226:24 227:2 262:25 263:2 263:6,9 302:13 history 81:3 187:15 229:5 284:14 hit 20:18 48:22 67:16 99:20 203:19,19 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES hits 181:14 hitting 201:23 202:17,18,21 Hoelscher 2:7 9:20 14:3,24 15:1,5,7,12 27:23 28:7 36:12 75:23 76:2,6 89:2,8 89:23 90:20 108:3 114:22 115:22 117:17 117:21 119:16 121:17 127:4,6 128:21 129:13 157:4 162:14 166:18 176:16 188:17 278:9 291:5 Hoelscher's 100:25 114:15 hold 149:13 150:14 153:11 155:10 226:7 292:21 home 7:13 240:10,11,19 homeowner 243:18 homes 25:20 47:6 96:24 141:9 240:14 honestly 75:19 87:17 88:15 213:8 303:18 hope 121:12 134:15 158:13 218:25 252:7 hopeful 290:16 hopefully 47:20 170:9 291:23 291:24 horizon 227:15 horribles 198:7 hours 11:13,25 household 65:19 HUD 150:9,16 huge 50:1 77:9 181:8 255:6 300:23 hundred 138:25 159:4 180:7 249:15 hydraulic 57:25 I I-270 31:7 I&I 26:5,7,9 121:16,18,20 235:15,20 239:24 247:20 277:19 i.e 219:18 idea 77:3 212:13 ideas 88:11 identified 41:8 44:18 47:9 52:23 65:25 69:20 93:11 107:4 121:18 128:7 142:2 163:1,6 178:11 186:13 225:7 245:20 286:4 308:13 identifies 66:4 identify 37:8 41:10,14 50:22 70:25 83:10 94:24 175:17 185:21 220:9 271:22,23 277:7 identifying 155:5,9 ignoring 67:9 II 240:20 illegal 84:4 images 59:15 immediate 31:3 immediately 67:14 77:3 impact 17:8 20:10 30:20 31:25 32:9,18 32:22 37:4,10 39:21 40:10 42:20,25 44:13 46:13 47:1,17,22 48:4,9,14 49:9 49:17,23 50:12,18 53:5 59:12 75:15 84:13,18 86:1 97:13 98:16 111:3,7,12,12,16 115:4 129:9 131:22 138:17 141:3 146:19 162:18 174:16 174:16 187:5 189:6,8,9 192:23 193:10 201:10,14,23 201:24 203:7 203:8 204:2 204:3 224:13 224:17 231:6 233:20 248:19 253:25 256:3 287:14,14 291:11 307:22 308:10 impacted 48:3 79:19 100:19 125:18 impactful 100:6 impacting 115:5 150:15 173:10 impacts 17:11 43:14 53:11 114:25 120:5 202:11 229:8 287:13 impair 8:14 implemented 237:23,24 248:13 implications 217:14 218:3 218:17,18 220:10,18 221:14,16 237:17 imply 217:18 important 33:21 111:13,15 161:19 218:9 253:25 imposes 8:17 13:19 92:11 109:7 139:5 297:21,25 impressed 75:1 impression 154:22 improve 171:8 196:24 249:13 improved 124:16 153:15 improvement 12:17 19:16 59:21 78:7 84:15 158:22 169:5 230:5 improvements 77:17,21 82:5 84:12 237:23 248:13 264:7 improves 196:3 196:18 in-depth 242:20 inability 185:23 inadequate 50:17 inadvertently 296:25 inappropriate 37:13 151:12 incentive 299:19 incentives 254:6 incentivize 299:25 300:4 inception 211:16 incinerator 37:2 43:15 255:15 incinerators 44:11 64:25 include 50:15 189:3 192:20 216:20 239:5 308:8 included 130:17 136:10 155:14 161:4 169:7 291:1 296:25 includes 54:19 123:19 including 7:1 176:5 177:25 257:17 268:4 291:2,4 income 123:11 123:12 128:5 148:8 152:21 170:8 205:19 Incorporated 7:15 increase 12:23 21:14 23:18 25:10 26:12 30:21 38:12,15 52:14 65:21 68:16,23 79:19,20,20 98:23,23,24 99:2,7 101:25 102:17 113:14 113:20 116:1,3 121:19 135:3 135:20 160:16 174:22,23,25 175:11 176:25 187:23 192:17 195:17 197:17 197:19,21 203:7 210:11 227:15 228:16 235:23 237:3 238:3 239:1 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 248:12 249:17 253:6 254:19 254:20 255:7 256:2 264:17 267:19 272:18 273:9,24,24 274:2,3,8 280:13 285:12 285:16 293:6 293:11 295:7 295:11,14,18 295:20 299:14 302:16 increased 18:15 36:22 102:11 172:18 175:13 198:1 206:20 248:10 254:23 272:13 273:6 273:13 281:1,2 281:6 303:4 increases 13:4 16:23 20:15 25:5 29:6 33:6 41:1 67:7 67:18 122:6,7 187:11,13 190:20 192:21 197:17 201:11 202:6,16,21 203:17 219:13 228:22 237:14 265:11 279:22 285:8 292:14,19,25 295:3 increasing 21:5 21:21 23:23 44:25 51:17 135:1 162:1 237:7 248:20 251:24 252:15 increasingly 41:16 42:18 44:20 47:10 incremental 270:18 incrementally 47:18 incur 111:18 140:10 163:18 164:19 incurring 226:17 incurs 185:7 indebtedness 8:13 90:2 104:2,7 175:20,23 259:17 independent 308:3 independently 110:11 268:6 indicate 83:3 101:12 110:13 132:19 151:20 155:20 182:5 193:13 212:20 215:24 222:19 indicated 36:15 43:6 67:4 78:9 84:6 92:10 140:1 238:7 279:23 281:7,23 291:19 292:5 308:24 indicates 129:18 140:9 143:19 254:19 282:4 indicating 184:5 274:18 indication 284:2,6 indicative 223:16 indirectly 111:5 111:6 indiscriminate 300:7,10 indiscriminat ... 300:5 individual 24:10 47:6 49:14 50:11 51:12 60:18 61:3,14 239:24 240:4 243:2,4,12 254:6 individually 224:13 individuals 27:12 57:6,11 85:3 130:7 164:13 291:4 industrial 4:12 6:23 7:17 9:15 11:2 15:15 138:18 167:25 241:22 242:4 242:10 243:19 244:1 258:4 274:15 industries 56:4 236:13 246:21 246:23 299:25 300:23 industry 44:7 47:7 62:17 64:12 188:2 224:5 228:14 240:12 245:22 256:19,22 257:2 265:20 272:5 275:22 industry-wide 55:20 infiltration 121:15 236:1,18 237:4 238:8 238:17 239:2 240:6,8,13,25 241:19 249:2 249:10 250:13 252:3,5 253:8,15 inflation 48:15 228:11 271:5 inflationary 48:16 227:5 inflow 121:15 236:2,16 237:4 238:8 238:17 239:2 240:6,8,13,25 241:20 249:1 249:10 250:13 251:11,24 252:4 inflows 123:14 information 19:21 23:9 29:2 59:16 61:6 72:5,6,7 89:18 110:7,9 110:11 119:19 122:15 126:5,9 132:13 142:4,8 142:16 143:1 144:13 147:10 258:17 informed 228:21 informing 149:9 infrastructure 37:16 38:8,11 38:25 39:3,8 39:11,20 40:3 40:11 41:5 44:19 47:9 52:24 64:16 240:1 241:2 253:13 initially 149:8 initiate 251:12 initiating 57:24 initiative 129:25 initiatives 43:6 60:22 62:10 215:20 input 71:8,15 75:7 80:25 84:21 289:22 306:5,11 inquiry 212:11 inside 40:17,24 insight 86:7 inspected 242:6 inspection 56:21 122:3,10 242:8 inspections 122:15,17 instance 20:5 40:9 54:6 56:18 61:11 84:24 86:25 118:24 127:23 141:7 142:5 150:3 161:1 163:15 270:20 277:9 284:16 293:20 insurance 47:21 50:17,18 89:15 141:17 156:16 Integrated 43:22 integrity 56:15 153:18 intelligent 55:23 intended 157:19 178:9,10,20 179:16 182:22 183:3,7 213:22 214:21 221:11 intends 217:18 intensity 249:5 interceptor 250:18 interceptors 241:14 interchangea... 205:15 interchangea... 205:9 interdependent 268:6 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES interest 7:23 41:21 111:9,19 123:11,12,14,19 152:21 156:2 157:7 158:4 159:7,12 169:8 170:8 173:2 177:25 181:3 184:5,6 192:20 199:13 205:19 206:8 206:17,20,20 206:23 218:10 218:10 220:1 225:11,18 227:2 231:5 231:20 262:25 263:3 263:9,17,20 263:20 264:1 294:7 interested 6:25 57:18 112:19 146:14,20 312:11 interfere 194:11 intergenerati ... 267:9 internal 169:21 internally 72:10 interrelated 22:5 interrogatories 102:22 interrupted 221:1 intervene 9:13 9:14 intervenor 10:17 10:20 11:20 intimately 309:9 introduced 262:21 invest 62:24 64:16 299:20 invested 273:6 investigated 62:11 investment 51:11 60:25 90:4,5 128:5 201:21 207:19 252:24 254:5 261:17 273:12 273:13,15 303:6 investments 52:10,12 65:9 207:12,14,15 236:23 237:5 237:9,11 239:3,7 investors 64:12 169:9 invited 184:11 involve 246:17 involved 62:6 136:15 155:4 177:7 201:1 230:24 245:25 309:9 involves 85:17 136:6 150:20 irrespective 136:20 isolated 40:9 issuance 9:2 176:5 186:14 214:2,12 215:13 225:14 225:15 issuances 206:9 215:8 223:10 225:12 231:4 304:9,11 issue 8:23 21:1 21:11,16 23:14 25:15 37:1 47:18,19,24 49:14 50:7 58:8 85:24 87:2,4,22 156:25 157:11 158:21 159:5 169:8 176:11 195:17 213:4 215:9,10,12,12 232:13 263:16 267:24 285:25 288:5 issued 7:24 9:7 94:4 122:17 157:3 214:7,16 215:14 217:8 231:4,12 260:15 287:17 294:5,5 issues 7:2,2,3 33:1 48:10 52:18 62:16,18 63:24 64:19 75:19 123:13 157:5 158:7 179:16 187:2,3 258:25 301:7 it'd 82:23 it'll 51:20 202:3 item 33:24 123:19 160:25 items 19:12 40:18 45:16 148:8,14 152:19 154:14 154:24 155:10 161:7,8 255:3 300:14 iterations 204:6 218:24 220:4 iterative 201:8 202:1,10 212:5 233:19 284:24 285:5 307:12 J J 4:3 Jack 5:4 January 26:22 31:5 Jeff 53:20 61:7 jeopardize 98:2 job 70:4 188:16 John 5:4 61:6 Johnson 303:1 joined 91:4 joint 241:15 joints 241:5 253:15 joke 75:20 Jones 2:12 4:8 11:4 91:25,25 92:1,4,6 94:11 94:12 96:19 judgment 73:4 73:8 198:13 227:17 July 8:22 184:4 184:5 jump 295:23 June 65:17 98:7 132:16 justice 43:8 85:25 87:2,5 justify 80:24 285:1 K Kami 11:4 kami.jones@b... 4:11 Kamilah 4:8 91:25 Kansas 57:24 301:23 302:1 302:3,6,8,10 302:15,16,19 303:1,3,8,11 303:22 keep 12:16 45:24 58:19 64:17,18 72:18 107:21 141:24 234:5,6,13 283:11 keeping 250:6 253:5 keeps 95:17 196:1 253:1 290:18 Keller 93:10 keyword 278:25 kind 18:22 19:16 20:16,18 31:21 31:21 39:6 42:5 43:14 44:3,12 45:18 46:1 48:2,22 52:22 54:6,11 57:20 58:13 58:13 59:7,14 60:6 62:2,6 63:18 64:6,21 64:25 67:1,3 67:17 68:9,12 69:18,21 70:15 71:12,15 72:14 72:19 73:2 74:23 83:21 84:8 88:18 107:21 112:13 120:9 121:6 126:11 128:9 146:6 149:25 150:17,18 153:24 171:24 183:5 187:2 201:15,20 202:4 203:19 204:21 207:14 208:25 210:13 217:21 218:11 225:25 226:10 227:21 228:6 247:22 252:19 263:18 273:2 276:14 276:19,20 280:14 281:13 281:15 286:10 289:18 292:23 293:14,15 300:21 301:9 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES kinds 61:13 82:15 knew 66:16 67:11,21 274:14 know 12:12 15:19,20 19:15 22:13,19 24:18 27:1,14 28:7 34:17 41:19 49:1 53:3,10 53:18,18 54:5 54:9 57:17 59:4 60:20 63:6 64:14,17 64:20 68:18 69:9 70:7,18 74:4,19 75:13 80:20 81:2,13 82:6,10,11,12 85:11 86:4,10 86:13 87:7,20 89:14,14,17 90:7,9 96:19 97:10 99:10,21 111:25 123:8 127:5,8 131:4 134:18,19 136:5 137:18 142:1,16 145:2 145:6,8,12,18 147:16 153:21 154:7 158:2,2 158:12,14 160:25 171:19 171:24 172:10 173:22 174:18 178:16 182:24 183:8 185:16 185:20 186:6 187:7,13,13,17 187:23 189:12 189:12 199:7,9 201:22 203:25 204:4 204:5 206:15 208:1 209:9 210:13 211:16 212:1,2,2 214:13,23 218:9 220:12 220:19 223:25 224:14,18 227:13,20,21 228:13,24 233:7 234:11 236:21 238:13 239:8 243:7 243:15,18 244:4,19 248:23 249:14,18 250:15 251:7 270:21 271:10 271:19,20 272:1,21,22 274:11,12 281:15 282:18 283:22 284:15 285:19 289:13,14,17 289:24 290:17,21 291:15,19 294:15,22 296:1,14 297:17,19 300:11,12,21 300:22,25 303:18 307:8 307:9,10,13 309:8,14 310:7 knowing 33:21 34:6 knowledge 28:25 49:21 157:24 212:18 217:2 224:25 232:1,16 known 71:20 L L 1:19 2:7 5:4 9:20,21 312:2 312:17 labor 7:2,11 32:10,21,22 33:3,3,6,9,11,11 33:16 34:2,8,9 34:13 63:25 79:20 129:20 130:1,6 163:17 165:14 169:21 227:6 laborious 222:9 Ladue 7:16 laid 266:12 land 238:18 large 49:17,18 50:4,7,8 58:12 64:20 74:11 87:13 122:6 135:1 138:18 178:23,24,25 180:8,11,12 187:23 216:10 238:20 242:4 243:18 244:1 252:2,8 270:22 274:14 287:25 300:22 303:1 303:6,10 309:12 largely 111:23 219:10 larger 25:2 37:4 47:1 125:12 236:13 280:10 295:10 largest 21:13 118:2 179:4 272:2 302:17 Lashly 4:3 10:17 11:8 late 92:15 297:3 latent 49:2,8 50:14 lateral 240:10 240:12 253:20 254:12 laterals 242:9 253:22,24 254:7 laugh 75:21 laundry 52:22 law 4:2,3,7,8 8:7 43:21 97:8 103:2 106:2,4 106:5,8 259:1 267:5 laws 8:16 99:12 99:25 101:15 156:8 258:23 layman's 191:18 lead 84:25 97:19 185:21 185:22 226:5 301:23 leaders 240:16 240:20 leading 25:9 league 7:9,13 46:3 70:3 leak 241:6,16 leave 51:18 68:22,25 leaves 142:20 led 25:7 left 143:14 leftover 18:17 legal 10:18 11:8 11:18,20 28:8 35:15 94:1,4 103:16 258:25 259:6,7,10,12 legally 84:3 Lemoine 11:6 135:12,19 136:3 137:19 lend 180:9,10 lenders 162:3 197:23 length 61:18 Leonard 5:6 6:2 89:3 let's 18:8 19:19 24:13 41:14 109:5 110:12 116:10 120:7 121:13 123:24 145:22 159:3 163:25 168:9 168:22 174:13 177:18 189:17 190:9 202:25 239:19 240:3 241:4 243:3 245:10 276:1 276:4,5,5 279:5,6,16 281:8 282:9 282:12 288:5 288:21 letter 184:5 letters 149:9 level 16:13 20:13 25:18 35:18 43:9 49:13 51:20 66:3 69:3 105:5 110:24 142:9 173:9 187:25 199:10 210:16 220:2 221:21 228:22 229:5 238:17 238:21 241:14 242:7 248:22 249:9 250:13 262:13 265:17 271:17 274:19 280:17 292:15 292:22,24 293:11 298:19 305:24 306:6 309:17,20 leveling 20:16 290:18 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES levels 64:1 117:1 117:3 118:15,18 141:25 172:20 173:24 195:7 233:16,17 246:4 265:9 285:10 286:4 287:20 308:5 308:12 levies 210:10 liabilities 51:7 liability 193:10 Liberty 302:24 lien 223:10 286:16 liens 149:23 life 181:10 light-size 45:19 likes 178:22 Likewise 237:5 246:10 limitation 264:8 limited 178:16 181:18 182:14 185:10 267:21 309:5 limiting 293:15 293:17 limits 125:19 185:11 line 40:16 46:23 70:15 123:19 133:21 135:22 160:24 169:14 169:21 170:2 170:18,18 206:8 221:8 222:18 223:5 226:3 229:20 230:19 252:2 273:23 279:6 303:2 309:25 line-up 91:11 linear 241:1 253:13 liner 40:24 lines 24:22 155:5 238:20 307:10 lining 20:5 40:22 252:9 252:12,25 253:2,17 liquid 207:12,15 liquidity 68:23 161:20,23 162:1,11,12 171:10 173:23 174:7 185:14 185:22 195:10 195:21,23 196:11,11,17,24 197:10,17,19 198:13 199:4 199:15 201:14 201:25 203:8 207:7,7 209:14,16 217:4 219:18 225:5 226:4 227:16 228:4 228:16,23 229:6 233:16 233:21 261:17 264:21,22 265:1,5,6,9,14 266:1,5 267:16 268:5 307:21,22 308:12 Liquidity's 195:22 Lisa 4:2 11:7 list 37:11 44:16 52:23 53:4 216:23 listed 82:18,19 142:4 143:10 148:8 216:21 listened 247:22 listing 155:12 listings 143:7 liter 117:4 279:8 279:11,14 litigated 93:6 litigation 1:20 100:18 104:16 104:17,22 105:3,4 little 17:21 23:16 26:4 28:13 31:22 32:4,20 35:8,16,17 46:3,11,21 58:17 65:13 66:23 67:9 67:20 75:21 83:5 85:7 86:21 88:5 92:8,13 94:21 94:22 97:11 115:3 118:11 119:14 122:12 124:22 127:9 127:19 129:14 129:16 140:25 149:18 152:23 172:13,13 174:5 177:19 180:24 181:25 182:2,18 188:19 205:11 207:8 209:12 214:3 234:5 247:24 274:12 279:25 289:7 290:25 291:6 295:22 297:12 live 81:12 87:3 302:25 lived 87:10 Lloyd 5:9 251:19 LLP 4:8 loaded 24:10 loan 170:3 176:6 180:7 181:11 183:12,16,21 184:6,11,13 198:25 199:14 215:2 229:21 229:25 230:9 230:10,12,14 240:19 loans 42:5 63:4 176:6 177:25 178:1 180:21 181:7,25 local 58:3 61:11 located 47:23 48:7 58:15 86:11 223:1,3 locking 218:12 Locust 4:4 logic 282:23 logical 45:9 logistically 264:8 long 57:9 69:15 72:15 125:15 180:20 185:12 207:20 251:7 306:20,21 long-term 46:12 46:12 49:24 75:10 218:10 218:13 220:1 longer 46:2 156:9,12,23 164:2,11 165:1 166:1 192:5,9 239:12 267:3 look 22:15 24:25 26:1 33:23 41:4 42:11 45:15 58:21 63:4,12 63:13 64:9 67:23 70:21 72:15 86:10 88:14 92:7 95:2 110:19 111:10 112:14,18 112:21,25 114:8 114:10 115:6,7 116:23 117:24 118:14,23 119:22 120:1 121:3 126:13 129:23 137:7 137:14 139:14 142:9,22 145:11,21 146:3 148:12 153:9 153:23 158:6 160:12,22 162:7,10 166:4 168:21 170:16 170:17 171:11 176:13 178:20 185:15,16 186:9 201:11 201:13,14 202:4,16 203:4,6,9 204:6 205:24 206:4,5 207:20 209:21 212:9 217:7 219:9 237:20 238:1 238:14 239:9 241:18 248:16 257:16 264:22 266:17 270:18 272:9 273:4 274:22 278:10 281:13 282:12 287:11 287:12 288:6 288:21 292:20 293:4 293:12,16,20 293:23,24 295:17 looked 58:5,21 60:1 63:8 137:9 150:3 153:21 158:8 174:18,21 218:6 219:25 237:16 244:17 244:18 248:18 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 288:5 297:2 307:7 looking 16:5,22 16:25 19:6 20:15 24:20 46:23 58:20 59:23 60:10 60:21 61:3 64:18 73:16 73:22 83:25 96:3,5 111:2 112:11 116:12 120:9 124:2,3 125:2 133:8 135:5,6,10,25 135:25 139:24 150:19,23 152:10 172:10 186:23 199:10 201:18 218:24 227:14 236:4 238:5 239:9 239:12 240:5 251:9 266:9 269:16,18 272:7 273:2 280:19 299:13 looks 46:17 67:23 116:21 126:11 135:4 186:20 219:13 288:3 losing 252:6 loss 73:9 losses 50:16,16 104:21 lost 62:14 302:20 306:13 lot 12:13 22:5 40:6,18,19,19 40:25 41:21 42:15 49:21 53:15 59:10,11 60:3,5,7 65:7 85:14 86:13,13 86:23 87:15 87:19,21 89:15 96:21 110:7 114:16 130:3 144:13 181:15 184:14 193:5 194:4 207:6 216:10 218:15 224:12 242:23 249:25 255:24 264:11 283:17,19,21 284:11 285:6 293:12,16 301:7 302:12 302:14 305:3 305:13 lots 241:9 Louis 1:1,22 4:4 4:10,14,15,16 6:4,8,9 7:8,10 7:11,13,17 10:24 31:7 37:25 38:18 38:20 46:24 47:2,25 48:2 48:5,20 53:9 58:16 87:15 119:12 223:3 254:3,13 258:3,7 302:9 303:21 308:9 312:5,5 low 68:1 86:11 157:7 177:25 226:24 227:2 241:14 262:25 263:2,6,9,9,11 263:15,20,20 263:21 296:2 lower 13:12 17:7 19:2,20 45:2 72:19,19 73:18 151:22 152:5 153:1 155:22 156:2 159:7 171:8 174:5,6,7 174:8 181:3 187:13 231:5,11 231:21,25 232:6 234:3,5 263:11,16 264:1 266:1,21 280:15 287:23 293:7 296:11,18,20 lowered 154:18 lowering 231:16 274:9 lows 193:7 218:12 262:20 lstump@lashl... 4:5 lucky 48:21 lunch 126:21 Lutheran 7:9 M M 4:13 9:20,22 Madrid 53:21 magnitude 145:20 Mahanta 5:7 Mahfood 5:7 230:1,3,4,11 main 17:9 40:18 168:16 171:11 292:24 293:2 293:20 mains 56:15,17 maintain 40:14 63:21,25 65:13 72:20 72:21 76:20 111:4 125:15 141:18 161:20 172:20 185:13 195:9,23 225:2,7 227:16 285:20 286:4 287:23 292:15 306:6 308:25 309:16,18 maintaining 172:8 205:25 223:7 309:1 maintains 186:16 195:1 maintenance 7:25 13:6,10 48:16 137:11 257:20 261:16 275:11,12 maintenance-... 154:14 major 17:8 48:6 50:12 77:7 181:1 190:6 192:3 266:13 majority 20:1 128:2 making 19:12 35:24 45:20 69:11 185:3 254:5 274:17 292:1 Malone 4:3 11:8 manage 54:8 185:24 227:11 manageable 53:7 managed 51:12 53:4,15,24 258:8 management 14:9 38:12,16 39:25 75:2 133:17 211:4 266:19 manager 301:22 manages 230:13 managing 227:10 mandated 12:21 39:24 40:4,6 56:20 71:6 78:2 maneuver 58:17 manhole 56:25 57:1 241:9 manholes 57:7 241:5 manner 287:22 298:23 301:1 manuals 257:3 March 8:20 9:4 9:10,14,18,24 10:1,2,5,6 38:19 131:7 margin 282:21 283:23 Marion 2:14 9:22 14:6 18:6 24:7 25:11,23 80:19 93:10 96:12 97:4 107:20,22 285:18 296:23 Mark 5:6 market 4:14 18:19 52:10 169:10 181:4 206:15 222:9 224:20,23 229:5 231:24 312:5 marketplace 158:9 213:18 markets 181:17 182:1 198:22 219:20 227:4 232:5 263:2 309:15 master 176:3 261:4 match 113:16 matched 33:8 136:23 matches 70:1 146:7 material 89:24 105:7 189:6,8 189:12 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES materials 44:22 50:21 115:24 227:6 math 128:14,19 matter 73:7 104:12 145:14 276:19 281:18 matters 12:1 129:11,13 maturity 207:21 max 268:1 maximize 161:23 maximum 268:2 McKee 242:18 mean 75:3,3 81:21 99:10,18 119:7 126:2 134:13 137:25 145:10 163:13 165:7 179:25 187:12 192:8 201:9 205:8 206:12 210:8 212:17 213:13 218:5,10,22 221:1 225:16 238:10 240:3 261:11,11 273:13,20 274:12 275:9 276:20 282:15 283:3 289:6 292:18 295:21 300:2 301:2 305:14 307:2 means 52:3 84:25 130:6 182:17 210:11 223:24 225:17 262:11 282:16 283:1 283:14 measure 56:5 118:5,13 199:16 224:15 298:7 measured 279:12 measures 134:8 162:11 264:22 measuring 103:5 mechanically 25:19 medium 202:5 meet 19:12 37:2 39:18 55:13 83:8 84:7 93:12 96:1 133:19 173:6 185:13 198:5 211:24 219:14 219:16 226:20 302:16 305:12 meeting 1:8 9:4 72:25 219:6 260:3 meetings 196:9 305:13,17,19 meets 35:14 298:24 member 15:3 members 10:16 11:16 200:11 234:25 251:17 269:3 memo 103:10,15 memorized 95:6 mention 22:19 75:1 mentioned 25:16 30:24 44:21,22 54:6 56:11 60:17,19 63:19 69:18 72:16 85:12 111:11 119:18 133:6 138:20 142:6 143:22 146:3,24 147:22 148:1 152:13,20 153:7 157:2 163:14 272:23 289:13 290:17 309:13 Meramec 77:6 77:8,21,22 78:25 79:9 80:3 met 84:10 133:17 305:11 meter 45:4 76:25 80:10 95:24,25 152:16 metered 95:20 96:23 124:8 125:14 236:9 236:13 243:22,23 244:2 258:2 meters 125:20 244:2 method 155:4 methodology 13:17 93:21,24 103:5 250:8 methods 95:20 256:19 metric 209:2,5 metrics 56:3,5 118:8 185:15 187:24 188:2 217:4,4 219:16 223:7 228:5 265:21 268:4 Metro 7:13 metropolitan 1:1 4:9,14,16 6:4 10:23 178:24 180:8,11,12 254:4 312:4 Mickey 5:3 mid-period 171:25 middle 33:3 204:22 221:8 midpoint 265:13 308:20 MIEC 45:14 91:20 miles 37:17 253:20 milligrams 117:4 279:8,11,13 million 31:16 42:9 102:5 115:10 122:21 127:24 128:1 129:25 130:5 130:14,17 131:19 133:10 133:15 135:24 136:1,2,7,12,12 143:4,25 145:24,25 146:5,21 147:1 147:8 151:23 152:2,5,7 153:2 155:16 155:23 156:24 158:17,20 159:4,6,7,20 159:22,22,25 160:8,14 161:2 161:5 163:16 167:7,9 169:12 170:9 179:5,10 179:14,23 180:1,2,7,9,10 183:2,11 190:16,17,24 191:1,3,6,7,16 214:9,12,14,14 214:20 215:6 215:8,9,12 303:18 307:23 millions 264:6 Milwaukee 254:4 mind 12:16 18:6 31:1 176:9 188:18 234:13 264:16 303:20 minimize 300:13 minimum 308:13,23 minium 260:18 minor 30:20 31:25 32:4 minus 160:10 172:24 223:21 minute 95:2 268:16 278:7 minutes 108:11 196:7 miscellaneous 123:4 128:6,9 missed 53:2 57:17 147:25 misses 62:2 missing 61:1 189:18 Mississippi 38:22 Missouri 4:12 7:8,11,15,17 9:15 11:2 15:15 76:13,17 78:8 80:21 81:6 89:12 92:21 93:7,15 94:7 96:20 101:18 101:18 103:4,19 105:19,23,24 105:25 106:1,3 106:7 167:25 188:8 230:13 303:3 312:4,5 mistake 58:18 misunderstood 232:8 mitigate 83:22 84:5 206:8 225:11 mitigated 61:8 mitigating 71:9 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 83:21 mix 110:18,24 111:24 201:22 202:20 223:10 mixed 65:23 Mm-hmm 193:3 275:5 297:16 307:25 MO 1:22 4:4,10 4:15 MO-AM 77:13 78:12,16 model 29:12 57:25 59:20 132:22,23 133:22 138:15 146:10 151:19 154:4 194:9 198:14 201:5 212:6,7 219:8 219:13 220:10 226:1 229:3 257:13,15,16 257:24 258:9 258:12 270:25 274:17 283:25 288:3 293:4 295:2 305:10 modeled 291:10 modeling 116:22 117:10 201:2 202:7,9 218:18 221:19 221:24,25 222:14 291:9 295:6 306:24 models 39:14 40:8 54:11 59:19 174:21 218:2,23 219:3 modified 149:6 modifiers 223:19 modify 77:14 Moines 216:2 moment 92:23 115:7 216:15 money 20:21 42:6 51:10 54:23 55:10 63:23 64:14 64:14 67:12,13 67:19 70:14 73:16,18 130:3 134:18 147:13 150:14 156:19 157:20,25 158:25 163:4 180:13,15 181:20 182:13 192:11 209:16 215:11 219:7 232:5 246:7 252:2 255:5 263:14 264:14 266:11 286:19 308:16 monies 42:9 55:8 68:19 72:16 73:17 141:6 159:8 182:19 monitoring 211:8 month 71:19 72:14 79:7,18 80:13,14,14 188:18,20 242:2,3 month's 158:10 monthly 120:17 months 45:7 79:10 80:14 149:14 158:6 307:6 Moody's 171:23 185:20 195:4 197:4,6 223:21,24 224:4,14 226:3 morning 12:9,11 15:12,13 28:3 28:4 36:12,13 91:5 92:5,6 94:19,20 101:12 108:5 108:22,23 114:15 162:14 198:7 mortgaging 70:12 Mound 7:12 move 20:17 26:4 49:16 57:7 61:10 71:13 87:8 88:4 107:10 112:22 119:13 121:13 122:22 200:8 224:7 239:19 252:20 moved 43:16 68:12 moves 57:8 moving 31:22 35:17 87:21 MSD 12:10 14:3 14:4 19:25 34:16 43:10 47:2 48:19,21 51:9 55:19 58:4,19 60:14 62:2,16 63:23 67:8 81:10 84:12 88:6 103:5 106:10 110:13,16 112:2 118:25 120:6 125:24 129:10 151:14 165:8 171:16 175:1 190:2 208:13 215:25 217:7 218:18 221:12 240:7 244:22 258:8,19 270:3 272:3 282:7 289:16 289:21 298:6 308:9 311:6 312:4 MSD's 12:17 13:24 14:2 57:10 62:17 79:1,15 93:5 208:10 223:11 242:22 289:10 MSD64 14:17 multi 280:9 multi-day 62:13 multi-family 23:1 117:23 124:11 176:21 258:4 280:2 280:5,16 282:13,15 multi-month 212:3,8 multi-year 227:19 228:1 304:7 multifamily 140:7 multiple 63:22 214:15 231:3,4 235:24,25 240:7 257:17 270:10 303:20 304:7 multiplied 214:15 multiplier 79:10 multiply 214:6 multitude 218:1 mundane 76:7 municipal 7:9 78:3 157:11 169:9 municipalities 85:9 86:23 105:21 178:17 179:1 municipalities' 224:16 Myers 2:3,11 4:13 9:21 10:25,25 12:4 12:6,8,9 14:18 14:21,23 16:10 29:4 36:14 76:19 90:16,18 91:8,9,10,13,19 94:14 101:6,11 105:14 106:20 106:22 107:1,6 107:14,18 108:1 167:15,17 200:2,4 208:10,13 220:22 234:16,18 268:12,13 306:17 310:15 310:16 myriad 217:14 217:22 220:19 myriads 217:22 N N 1:21 2:1 3:1,1,1 nail 190:9 name 6:2,19 62:9 91:24 114:16 148:4 narrow 185:22 226:4 nation 184:10 196:21 national 62:11 216:8 256:24 nationally 63:1 nationwide 106:3,17 Natural 230:6 230:15 nature 242:22 258:7 near 86:14,18 116:10 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES necessarily 22:20 29:12 46:23 54:4 60:4 69:9 116:2 163:13,19 165:7 185:11 196:24 202:2 202:15 209:7 218:6 219:23 264:4 286:3 291:17 296:7 297:7 necessary 7:22 13:5,24 40:21 41:5 52:13 102:8 225:7 232:4 261:19 289:25 295:11 need 12:1 27:14 31:12 37:15 38:12,15 69:4 69:11,24 73:14 77:14 93:3 98:7 99:6 107:15 138:2 141:13 149:10 154:12 155:5 159:13 160:22 163:3,23,25 164:5 165:1 180:15 185:18 194:21 195:18 197:7 203:14 219:14 224:6 225:19 231:22 233:21,21 239:18 246:9 250:22 286:3 290:16 292:25 293:7 295:6,13 296:8 310:4,7 310:8 needed 24:7 93:12 102:12 110:21 136:20 137:12 153:10 164:24 192:18 194:2 207:23 251:2 297:7 needle 122:22 needs 39:19 71:7 88:8 97:16 107:8 154:14 162:22 163:1 190:23 201:21 209:23 223:6 229:1 257:14 280:7 293:6 negative 17:11 17:12 114:25 115:4 140:8 204:2,3 282:24 negatively 42:20 negatives 17:11 negotiate 34:7 76:16 negotiating 44:7 negotiations 33:10,15,17,21 33:22 neighborhood 7:3 neither 312:8 net 160:6 172:23,25 250:7 network 57:24 241:3 253:16 303:23 Neuschafer 2:7 2:15,20 3:3,7 3:10 4:7 11:3,3 15:6,8,11,14 27:20,21 46:14 91:18,20 108:8,10,14,16 108:18,19,21 126:17 148:6,11 167:24 168:2 168:6 177:10 200:13,15,18 204:8,11 205:23 235:3 235:5,8 247:9 247:12,23 248:11 250:25 269:5,7,10 288:10 294:11 296:17 297:18 Neuschafer's 288:19 never 158:12 165:9 232:12 nevermind 224:10 new 21:22 25:20 32:21 40:14 42:5 53:21 57:4 58:20 60:10 60:10,22 63:11 64:9,10 156:8 168:19,20 186:23,23 190:15 191:7 208:4 213:21 247:21 251:12 307:9 newer 38:4 39:8 nine 149:14 307:5 nodding 227:7 non-CD 37:4 non-metered 95:21 280:18 nonemergency 153:15 nonprofit 7:4 nonprofits 96:15 nonresidential 23:1 25:18 116:24 117:23 118:3 124:21 124:24 125:7 125:25 140:8 176:21 236:11 276:12 279:25 280:4 280:10 282:14 282:24 noon 126:18 norm 265:18,19 normalize 237:25 248:22 249:8 normalizing 239:9 norms 195:13 North 4:9 7:14 nose 51:25 notch 223:18 224:7 note 113:5 noted 195:4 227:25 notes 63:13 114:17 188:4 312:7 notice 7:19 8:20 8:24 15:24 122:24 noticed 133:11 137:22 153:8 296:16 298:12 November 6:11 198:24 number 15:16 17:14 22:17 25:14 29:15,21 51:14,17 57:11 95:9,10 109:5 110:12 112:22 112:25 115:13 117:18 122:16 125:13,15 126:8 128:23 130:4 133:24 139:24 145:4 145:5,8,21 152:21 153:5,6 155:16 160:7 160:13 164:22 164:23 165:7 168:14 170:14 172:25 179:1,5 179:19 183:9 194:9,10 235:25 238:10 243:14 243:16 247:5 252:20 265:23,24,25 286:10 298:8 303:19,19 306:2 309:23 310:5 numbers 17:22 17:22,24 18:3 29:1 71:16 114:6,12 117:9 119:15 120:12 122:5,5 123:7 125:2 132:5 135:9 137:8 138:13 147:3 152:7 169:7 203:23 282:11 282:14,18 numerator 173:1 O O 3:1 o'clock 268:23 O&M 17:6 19:1 77:25 79:4,8 79:11 132:23 135:1 147:9 255:22 270:17 O&M-based 132:22 obligated 236:22 obligations 13:25 217:25 219:6 observation 251:25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES obtain 82:24 110:11 obtained 94:1 104:11 obvious 55:15 obviously 22:2 39:9 64:1 111:17 115:17 116:9 131:20 134:16 135:14 137:14 141:17 147:12 149:10 150:23 163:7 203:15 219:21 233:22 252:25 274:13 occasion 41:5 74:8 87:24 occasionally 179:4 occasions 39:1 occur 53:22 73:10 83:14 132:12 141:11 158:12 198:8 240:8 270:22 272:25 296:6 occurred 66:5 115:12 131:14 137:18 154:24 155:8 196:12 290:14 294:8 occurrence 136:9 occurs 48:9 75:3 141:8 215:3 October 198:23 odd 54:6 218:11 off-the-shelf 258:12 offer 51:11 offhand 137:2 office 136:6 301:23 306:12 offset 132:12 134:9 154:3 175:13 offsetting 252:19 oftentimes 83:19 85:2 oh 81:24 144:1 169:16,23 190:8 220:24 278:17 Ohio 216:22 217:1 okay 18:2,8 19:19 20:2,8 20:24 22:7,12 22:15,15 23:15 23:22 24:13 24:13,18 25:13 26:4,18 27:5 27:13 28:12 29:18,21 30:9 31:10 32:7 35:20,23 37:6 38:15 44:18 54:3 63:18 64:6 66:20 67:1 81:14 82:13 87:7 88:22 90:9,14 91:10 92:9 94:23 95:5 96:14 97:5 101:3 102:3 106:18 107:18 108:1 109:14 109:18 110:12 112:22 113:4 113:23 114:6,14 115:15,20,21 116:20 117:15 117:16 119:2,13 120:7 121:13,13 121:23 122:24 123:24 124:20 126:14 127:2 128:18,19,20 129:5 130:23 132:17,19 134:22 135:18 135:23 136:5 136:13 138:7 139:2 142:10 142:22 144:10 145:24 146:16 151:10,13 152:24 158:23 158:25 159:2 163:24 164:10 164:21 165:1 168:13 169:18 170:24 172:6 174:13 175:16 176:15,24 177:8,21 180:20 188:3 188:11,15 190:12,22 191:6,16 192:8 194:24 201:6 202:7,9 203:21 204:8 205:13,21 208:8,12,20 209:24 214:8 214:22 215:2 215:17,17,20 216:14 217:11 220:24 222:15,16 223:1,4 225:9 226:2 227:10 230:3,18 231:6 232:17 233:2 235:13 235:20 238:9 239:19 243:21 244:3 245:10 247:4,7,25 251:5,15 271:16 272:9 273:8,15 276:1,6 277:15 277:15 278:1,7 278:24 279:16 280:21 281:8 284:20 286:23 287:9 287:11 288:8 288:20 294:9 294:19 295:1 297:8 299:3 304:2,22 306:2,13,18,18 310:10 okayed 64:6 old 37:20,24 40:13,14 older 38:5 OMCI 30:25 once 31:10 48:12 50:1 73:3 77:10 78:8 176:11 177:5 215:9 225:21 281:20 one-seventh 167:10 233:10 one-time 136:9 296:24 297:4 ones 17:9 22:5 38:4,4,5 46:4 51:19 68:12 74:6,11 82:7 128:10 183:6 216:20 293:20 ongoing 40:5 211:8,13,18 218:20 255:21 266:19 online 30:25 OPEB 50:23 open 33:7 56:24 57:2 184:2,3 opening 2:3 12:5,6,8 14:15 14:16,20 17:5 36:14 operate 63:21 63:25 64:24 69:25 197:14 operated 258:8 271:21 operating 60:18 122:1 132:21 135:22 145:23 146:8,21 147:1 152:25 154:1 154:18 160:4 163:10 172:23 207:12 208:22 216:17 219:12 225:4 227:12 257:20 275:1 275:8,9,10,10 275:12 303:11 307:11 operation 6:25 7:25 78:15 79:20 261:16 303:24 operational 11:10 13:10 209:18 219:15 223:6 operations 13:6 14:6 19:6,17 48:16 57:19 60:7,19 67:14 155:2 196:11 252:23 299:21 opine 109:6 opining 259:3 opinion 31:12 93:20 97:18 101:21 104:11 109:18 203:3 245:6 259:10 278:1 283:13 289:4 291:6 opinions 94:1,5 opportunities 42:15,16 119:22 240:14 241:6 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES opportunity 9:12 10:15 61:21 64:4 88:14 158:11 241:16 263:10 263:20 266:4 266:25 opposed 23:17 43:24 48:1 61:11 66:18 84:16 93:13 110:21 113:21 145:4 175:8 259:9 270:10 280:4 284:6 294:22 opposite 251:24 optimal 203:10 224:23 227:25 250:22 268:2 options 55:1 70:20 73:24 order 14:2 39:18 63:22 107:7 107:10,16,22 145:19 176:7 219:14 224:22 226:20 234:5 287:22 orders 156:22 ordinance 176:4 260:13 261:4 261:4 ordinances 176:4 organizations 6:19,22,24 7:1 7:4,5 106:11 orient 64:21 origin 276:17 original 76:22 78:4 originally 18:16 20:19 68:9 Orlando 216:2 ORS 58:22 ought 145:17 outcome 202:14,15 outline 171:7 outlined 57:15 outlines 127:14 279:23 output 274:17 outputs 202:21 outreach 72:4 outside 41:12 41:22 43:10 104:12 125:19 177:6 197:22 302:15 outstanding 8:13 104:1 159:5,11 175:19 175:22 197:12 208:23 233:15 259:17 260:4 261:3 286:14 overall 21:5 24:11,11 49:11 54:11 79:6 84:1 90:2 147:24 173:4 174:17 233:10 266:17 298:19 overcharging 69:5 overflow 83:19 83:20 249:1 252:18 overflowed 38:21 overflows 58:2 58:14 59:9 71:9 83:14 84:3,5 236:23 236:24,25 237:2,6 238:4 238:24 248:15 249:15 250:18 overfund 51:24 overhead 30:10 30:12,14 31:18 129:14,19 163:10 291:5 291:12,13,16,17 overlapping 34:3 overtime 310:19 overview 150:1 overwhelming 128:2 owed 214:5 owners 249:19 oxygen 116:16 116:17 P P 216:16 P-3 65:9 P.C 4:3 P.E 2:7 p.m 268:22 310:24 311:4,7 P3-type 62:10 64:12 65:1 pace 256:2 page 24:16,18 26:6,22 109:6 116:10,11,21 117:25 120:8 121:13,25,25 123:25 124:1,2 127:13 131:2,2 134:25 142:23 143:18,19,22 148:12 151:15 152:11 168:24 169:4,4 180:21 190:5 204:20 205:5 207:9 221:7 222:18 225:10 226:2 229:20 235:15 254:17 259:13 279:19 282:11 288:21 290:24 292:9 299:13 paid 81:9 150:8 150:16 169:11 214:1,24,25 215:14 Palans 2:8,13,17 2:21 3:4,8,11 5:9 36:8,9,11 52:2 74:12 75:25 98:20 101:7,8,10 105:12 142:10 151:4,6 165:19 189:21,23 196:10 199:18 199:20 210:21 210:23 220:24,25 229:10,12 256:13,15 260:20 261:1 268:9 301:19 301:21 306:18 310:12 Palans'230:19 Pam 135:14 Pamela 11:5 paper 85:13 103:10 paragraph 26:23 143:19 144:2,3 204:23 parameters 204:24 part 20:4 31:18 33:16,21,23 39:2 40:21 51:15 54:19 58:22 63:3 65:9 77:18 80:19 82:4 83:17,24 84:19,21,22 99:17 102:6 110:4 113:16 125:6,15 137:20 153:25 155:9 156:1 164:10 185:8 210:8 211:18 220:11 238:17 243:10 248:12 257:23 259:25 261:5 277:20,23 294:4 296:1 296:19 participants 11:14,18 51:17 participate 212:15 305:19 participates 305:20 participating 12:12 180:23 participation 71:6 particular 47:2 60:4 61:4 62:18 64:19,19 67:22 83:17 84:14 86:25 110:25 111:11 113:1 118:16,24 122:8,14 123:19 124:3 127:17 134:3 171:17 180:4 213:3,25 215:13 272:11 particularly 240:7 291:12 parties 14:19 312:9,11 partly 283:7 partnership 63:3 64:22 partnerships 61:19,20 63:18 parts 88:1,9,12 140:22 227:6 pass 73:10,12 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 131:21 164:12 164:19 165:1 passed 30:10 89:12 111:19 165:5 passes 196:8 Paul 5:5 pay 7:23 28:21 52:4 54:15,23 55:8,13 62:19 71:12 77:9 85:2,2,22 96:15 111:8 119:9 149:10 151:1 161:18 172:24 173:2 181:7 188:17,19 233:22 243:17 244:6 246:5 261:15 261:19,25 262:4 266:6 280:10 pay-as-you-go 223:11 PAYGO 54:22 90:1 110:14,17 110:21 111:3 168:20 172:11 172:14 174:24 174:25 175:10 191:16,18,20 193:16 195:19 200:25 201:12 267:19 284:22 286:12 287:18 paying 54:22 67:8 77:25,25 78:5,7,14 79:25 80:1,6 150:5 151:2 157:5 167:1 187:24 188:1 280:16 282:7 282:17 283:1 285:8 303:9 payment 156:21 payments 78:15 199:11 208:23 pays 46:6 78:16 81:8 191:23 244:5 302:10 peak 20:18 peaked 73:3 penalize 99:22 penalties 99:9 99:16,18,20 99:24 100:3 pending 104:24 105:4 penny 147:4 282:20 pension 50:22 pensions 51:7 people 15:19 27:14 45:4,10 45:23 55:7 70:14 86:17 150:7,24 187:23,25 232:14 254:9 257:7 261:18 265:11 300:4 305:15 309:13 people's 65:8 242:15 per-customer 243:13 per-transaction 213:2 percent 12:25 13:1 16:22 17:1 25:1,3,3 26:7 26:10,13 65:19 65:22,22,22 65:23,23,24 66:2 67:2,3 68:17 77:1,20 77:23,24 78:20 79:7,8 79:9,10,18 98:24,24 99:7 113:6,8,14,20 114:1 120:10 121:16,18 123:5 124:10,12,14,21 124:22,24,25 132:21,25 133:3,25 134:13,19 139:16,18 140:6,7,8 144:25 145:4 145:4,7,12,13 145:21,22,23 145:25 160:16 160:17 178:22 180:8 193:15 193:16,22 197:16 203:4 205:1 206:11 210:10 225:2 225:2,14,14 235:18,21 238:7,10,13 239:13,14,22 239:24,25 240:3 242:20 242:21 243:2 243:9,11,21 248:10 249:15 250:5,7,11 254:23 272:14,18 273:7,10 274:1 274:6 279:24 280:1,2,3,17 281:22 282:19 282:24 283:23 284:17 286:25 295:7 299:16,17 percent-40 193:22 percentage 24:23 28:15 51:21 60:14 70:25 77:19 78:4 80:1,2 89:25 90:2,11 113:6 122:6 124:4 128:15 166:21 167:4 235:15,16 255:6 279:23 296:13,19 percentages 79:2 113:16 124:3 145:9 244:10 245:1 Peres 49:5 58:22 perfect 263:19 263:19 perform 13:5 69:4 302:1 304:3,13 performance 82:20 performed 102:25 103:14 109:23 154:15 165:16 performing 271:21 period 9:1,3 11:12 46:1,18 52:13 57:21 59:18 64:24 69:16 73:15 78:1 79:23,25 80:15 83:1 96:22,25 97:3 97:22,23 132:11 144:5 147:2 154:17 158:1,10 160:20 161:23 184:3 206:18 207:4 215:10 225:4 227:12 230:21 237:14 239:12 263:25 264:1 267:13 270:1 270:5,9 285:13,17 286:2 287:25 293:22 303:16 307:7 308:18 periodic 79:13 periodically 222:3 270:20 periods 178:10 184:2 192:14 236:9 241:8 permit 28:22 128:13 permits 122:3 122:16 123:1 permitted 11:23 person 9:10 11:11 15:21,22 16:3 26:16 74:5,6,8 254:17 person's 11:22 personal 217:2 personally 103:20 158:7 216:6,24,25 260:10 personnel 153:13 163:9 persons 11:23 perspective 112:19 209:19 212:19 219:17 224:22 228:20 252:22 300:21 perspectively 112:20 pertain 118:9 pertained 153:16 pertinent 105:24 PFM 175:15 194:25 201:4 206:9 210:25 211:10 212:5 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 212:24 216:16 222:21 223:8 225:12 260:2 265:22 285:18 305:2 305:3,5,10,18 306:5,10,12,13 306:17 309:12 phasing 23:17 177:4 philosophical 301:10,15 phone 74:7,10 149:8 198:23 199:23 229:14 232:13 305:21 phrase 285:4 phrases 205:8 phrasing 253:3 pick 107:23 269:24 290:24 picked 269:18 271:2 picking 270:12 piece 62:2 65:11 66:19 83:15 84:8 169:24 304:13 pieces 57:5 64:19 264:11 pipe 39:5 40:16 40:22,23,24 110:20 241:2 253:16,21 pipes 253:13 place 40:1 41:25 43:11 46:5 48:21 60:3 62:5 63:17 65:4,7 67:8,12,16 72:2,17 82:22 86:3,24 88:14 123:22 150:20 156:19 224:22 289:9 300:15 placed 217:21 placement 149:12,16,19 places 59:2,3 65:15,16 85:16 86:20 87:17 87:18,22 240:8 plan 6:7,12,17 8:21 19:14 51:9 52:3 75:10 94:25 107:20 127:14 168:24 169:6 174:5,8 178:9,10,20 179:17 182:22 183:3,7 186:10 192:12,13,15,18 195:1 201:5 227:11,19 257:24 264:18 266:12 266:18 292:10 plane 107:9 planned 51:22 68:4 82:3 171:20 255:12 planning 15:24 34:4 43:22 53:10 54:2 212:6 218:23 291:25 295:10 304:23 plans 12:22 50:24 51:10,13 191:22 217:13 220:17,20 plant 59:6 65:12 77:4,5,6 77:6,23 79:6 80:4 236:6 237:1,4,7,15,19 239:2 248:21 249:17 252:17 252:18 253:6 254:1 255:13 255:16,23 256:7 272:25 302:25 plants 37:19 57:10 64:21 77:18 78:25 141:14 236:3 273:12,14,17 303:5 plastic 40:24 plateau 121:6 play 119:20 186:21 235:25 plays 224:11 please 12:15 15:9 29:21 91:9,22 92:2 108:12,15,17 130:24 135:16 168:3 177:13 200:16 204:14 204:15 229:17 235:6 260:22 261:1,2 269:8 288:14 pledged 127:25 plug-and-play 258:12 plus 7:18 77:24 223:20,24 248:16 pocket 75:5 point 27:15 32:9 51:18 53:16 86:11 127:10 136:22 146:25 160:12 173:6 184:7,19 200:12 228:4 244:14,20 251:23 264:9 280:14 286:13 291:25 296:23 308:22 pointed 125:6 134:7 139:9 296:9 pointing 46:15 points 207:2,3 300:3 policy 73:5,6 89:25 90:5,6 166:20,22,23 167:3 211:2 217:14 218:3 220:18 228:20 294:12,15 policy-driven 294:24 political 210:14 polls 187:18 pollster 210:13 polluting 58:3 pool 272:20 pop 49:23 population 46:20,24 47:4 55:12 portable 45:8 115:1 portfolio 157:24 207:19 portion 191:24 199:1 233:9 236:24 241:19 241:23,25 242:12,13 260:23 280:10 portions 22:1 174:25 190:1 posed 139:12 position 158:8 195:10 233:8 positions 154:12 positive 17:9 74:22 75:4,9 75:15 231:13 282:11,14,18 307:22 possible 35:22 84:17 189:4 197:24 224:3 224:4 228:17 283:15 possibly 30:25 181:18 Post-Dispatch 38:18 86:8 pot 24:6 276:21 potential 46:12 48:25 53:11,19 104:16 138:17 potentially 61:24 205:18 238:20 pounds 256:5 practice 228:16 257:4 270:7 practices 55:17 55:20 227:22 pre-collect 149:8 pre-identify 56:17 precedence 103:3 precise 283:18 predecessor 71:17 predict 158:3 predictions 45:23 predisposing 63:11 preface 15:17 preliminary 131:5,9 132:6 272:23 premium 169:7 169:10,15,16 preparatory 212:3 prepare 120:18 155:12 212:4,4 304:10 prepared 9:19 10:22 90:14 131:15 138:20 228:17 257:3 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 274:20 preparing 274:14 306:22 present 5:3 11:5 73:25 74:11 75:17 105:3 198:17 199:1 207:18 226:14 262:20,22 310:6 presentation 207:16 208:2 208:19,20 presentations 73:25 74:13 198:17 211:6 309:10 presented 17:3 18:9 20:19 40:12 55:1 59:25 131:9 131:24 196:14 197:16 199:15 220:9 305:15 presenting 23:8 presently 29:25 36:16 66:3 129:1,11 pressure 195:14 287:10 302:20 pressures 47:14 Presumably 228:13 presume 24:24 236:7 pretty 49:16 85:9 101:1 122:6 126:3 139:16 176:14 185:14 224:22 242:19 248:24 284:8 290:20 prevailing 62:19 prevent 58:14 253:17 previous 13:18 37:5 88:16 186:14,20 296:12 previously 13:7 45:13 68:17 69:20 93:25 126:10 159:20 159:25 196:17 197:15 227:1 231:17 256:8 270:5 price 76:16 priced 226:24 prices 20:6 263:15 pricing 20:1 primarily 12:18 19:11 36:17 42:24 59:13 62:11 68:11 115:12 125:19 152:14 182:6 276:12,12 primary 43:16 58:12 83:15 84:2 181:24 255:14 272:24 principal 7:23 173:1 199:14 208:23 principally 255:17 256:1 prior 31:15 59:8 67:8 72:8 77:12 90:23 155:15 239:11 239:11 244:13 251:13 259:12 311:3 private 65:8 240:9 249:19 254:8 privately 217:21 privatizing 62:8 probably 27:4 29:1 31:3 37:4 42:2,14 47:17 48:3,5 49:25 57:16 58:7,24 59:3 62:5 67:22,23 70:3 71:8 81:11 82:10 122:13 137:4,11 158:4 161:9 164:13 169:22 170:11 170:19 179:9 180:19 181:15 181:24 185:14 197:10,12,12 213:14,14 217:8 221:22 228:21 234:7 265:16,17 302:4 309:7 309:18 problem 34:2 87:24 88:7 problems 263:11 procedural 9:9 12:1 proceed 14:22 15:9 53:19 108:17 proceeding 6:6 21:2 115:11 211:12,15 239:11 269:20 277:20,24 305:16 proceedings 6:1 9:13 45:17 70:23 171:21 226:15 245:23 270:21 312:7 312:8 proceeds 157:18 179:22 process 12:10 12:12,15 13:16 19:16 20:20 31:13 32:20 33:12 35:3 40:22 44:8 60:21,23 65:3 65:4 69:11,15 69:16 71:6,21 72:3,7 74:21 75:7 76:15 80:5 83:17,22 85:8,12,13,23 88:19 92:17 132:2 149:7 150:1 172:5 178:19 181:21 182:14 184:8 201:9 202:2,8 202:10 211:16 211:21 212:3,5 212:8,16 213:13 218:21 221:19 232:6 237:21 240:23 259:25 261:5 264:18 266:14 266:19 275:19 284:25 285:5 293:13 297:3 300:8 307:12 processes 62:22 120:2 121:4 257:4 produced 154:8 product 38:6 82:18,20 217:22 218:5 products 40:19 64:10 217:20 217:23 professional 55:23 246:16 246:16 312:2 Professionals 256:25 profile 68:24 218:15 227:16 266:23 program 12:18 16:11,11 20:1 21:13 23:24 28:20 35:6 41:24 42:1,5 43:21 48:21 49:17,24 50:2 50:7,8,10,13 51:6,15,16 54:8,9 65:7 78:6 88:10,12 88:18 112:14 130:2 146:24 147:7 161:11 163:19 167:12 168:16 177:2 180:23 181:9 181:12,17,19 184:2 229:22 229:23 230:10,12 294:21 program-wide 49:11 programming 136:25 programs 24:5 24:9 52:16 62:20 87:20 230:15 238:25 239:5 253:16 266:13 project 49:5 50:11 77:9 112:18 132:23 143:7 157:21 178:13 183:15 268:4 305:8 projected 13:8 16:12 18:4,5 24:25 45:24 99:2,6 112:21 116:23 120:12 120:23 127:17 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 131:25 133:8 135:6 138:13 143:21 146:4 151:17 152:1 153:1 155:22 158:21 160:4 167:8 195:6,6 219:12 225:15 289:8 294:13 projecting 25:4 68:9 99:8 113:20 115:9 127:16 132:5 133:9,14 146:9 206:18 229:7 283:5 290:13 292:25 295:6 307:8 308:16 projection 121:10,11 270:9 289:23 projections 18:3 20:14 25:25 26:1 29:7 40:8 68:5 71:19 113:17 114:23 131:10 134:16 159:18 159:19 178:6 289:11 290:1 projectively 151:22 projects 12:19 12:20 20:11,17 21:22 31:17 36:22 41:15 42:18 49:14 50:4 82:3,8 82:15 115:25 129:21 130:8,9 143:9 158:22 162:21,25 163:5,8,12,22 165:12 177:25 178:7,11,18 182:7,8,13,25 183:5 184:9 191:23 219:19 223:11 255:2 255:11,15 256:10 266:5 266:15,16 267:4 273:16 273:18 291:14 295:16 303:15 pronounce 151:8 proofread 312:6 Prop 29:23 30:11,11,12 128:24 129:18 131:16,18 136:8 136:16 137:5,8 137:20,20 162:19,19,20 163:3 164:18 164:25 165:1,4 186:18 187:5,9 210:6 291:8 properties 149:23,25 237:10 242:7 242:11 property 65:11 84:13,18 136:23 240:9 249:19 254:8 254:10 proportion 276:18 proportional 276:14 proportionate 281:17 proposal 9:11 12:14,23 13:23 17:18 21:7 24:14 26:6,9 28:19,25 29:10,13,24 30:9 32:10,23 33:5,9 34:10 34:12,20,22 36:25 37:5,5 39:13,17 40:10 41:6,9,13 43:11 46:16 50:13 54:5,18,20 56:2,5,7 57:15 82:2 95:18 96:15,16 97:13 97:15,19,22 97:22 98:6,9 98:12,22 99:3 99:6,8 100:2 100:20 102:7 105:6 109:15 110:8 112:3,5,8 113:17 114:24 115:5 116:6 117:25 121:14 121:24 126:4 126:10 127:13 128:8 129:1,24 130:11,20 131:11,21 132:7 134:23,25 138:22 140:19 141:1,22 142:3 142:15,17,19 142:24 143:13 146:23 148:13 152:11 157:13 157:21 161:1 163:7,16 164:8 165:14 171:17 171:19,22 172:4 175:7,12 176:9 177:24 183:17,19,22 184:25 185:8 189:5 191:14 193:19 201:20 211:25 212:5 213:3,15,16,21 214:8,19 215:6 215:6 235:17 236:4 237:21 245:16 254:18 256:16,18 258:21 259:15 273:3 274:14 278:11 279:19 279:20 282:11 284:23 290:2 290:7,8,11 291:13 292:4 292:6,21 293:1,22,24 296:11,12 297:1 304:4,5 304:8,9,15,16 305:12 308:15 308:18 proposals 33:2 35:3 69:2 156:4 185:10 213:13 propose 100:8 107:10 proposed 6:15 8:6,23 9:7 13:16,24 23:3 30:21 33:5 46:16 54:17 66:3 92:10 93:20 97:6 100:8 101:13 109:6,10 110:17 129:9 139:4 140:3 146:12 175:17 187:14 193:14 223:9 224:25 246:11,25 257:12 281:10 281:21 291:23 297:15,20,25 305:23 307:14 308:11 proposes 12:23 98:22 proposing 65:21 98:13 280:25 281:17 285:12 287:21 288:6 307:15 proposition 30:12 129:8 164:12 propound 11:24 propounded 10:16 protected 141:11 141:19,19 proven 229:5 provide 8:9 10:14 13:4,21 66:23 80:23 82:3 103:9 109:19,20 114:10 137:15 141:22,23 143:8 147:10 186:23 206:19 207:10 246:8 254:5 261:19 261:20 262:13 provided 70:20 76:8 113:4 131:6,13 171:5 302:14 providers 257:8 provides 118:1 140:19 141:1 142:1,4 143:1 287:23 providing 80:25 provision 8:12 77:2 106:1 175:19 259:16 260:8 provisions 41:12 43:13 53:8 94:25 96:9 175:24 259:19 prudent 68:21 69:23 161:22 192:6,10,20 198:13,15 228:15,23 232:24 public 14:8 54:20,25 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 55:11 62:21 64:16 70:18 71:1,6,20,22 71:22 72:3,4 73:19 75:7,7 80:22 81:6 84:21 85:18 102:8 186:14 186:20 216:11 217:24 public-private 61:19,20,23 62:1 63:3,17 64:22 publicly 217:21 publicly-offer ... 221:21 published 118:8 179:20 Pugh 3:2 9:22 14:8 200:8,12 200:14 204:13 210:25 229:14 233:7 234:19 284:24 285:5 pulling 243:14 pump 37:18 pumps 240:17 240:21 purchase 78:9 purpose 10:13 209:15,17 299:24,24 purposes 289:20 309:22 310:2 310:4 pursue 147:21 221:23 push 20:11 253:9 put 12:13 26:9 29:9 39:24 40:23 41:25 43:12 48:19,21 50:13 53:13 56:16 57:6 58:8,23 60:2 61:2 64:22 77:6 86:23 91:3 141:6 142:16 150:20 155:17 225:23 244:23 286:19 300:5 300:15 puts 39:23 110:25 putting 63:17 65:3,7 82:21 84:14,16,24 88:14 105:10 156:3 253:10 300:23 Q qualified 278:4 qualify 284:1 quality 84:7 quarter 243:15 question 25:8 26:14 27:2 29:14,15,16 32:15,18 55:19 55:24 66:22 68:20 72:18 73:4 76:7 89:23 96:12 99:14 100:22 102:3,10 109:5 109:5,22 115:23 116:5 117:13,21 121:17 121:21 128:22 129:6 131:4,5 132:19 133:1 134:1,22 135:15 139:11 139:13,19,23 139:24 144:9 148:16 151:15 151:15 165:23 166:17 168:14 168:15 169:2 170:25 175:16 182:5,20 187:18 188:6,7 188:23 189:11 190:5,10,13,22 191:4 192:2 193:13 194:24 204:7,20 205:6 206:7 207:9 210:3 213:9 219:1 220:7,21 221:5,7 225:9 231:14 233:7 234:1 235:14 239:20 245:10,15,20 248:8 250:5 254:16 258:20,20 259:11,13,13 260:21,22 261:2,8 265:1 269:16,18 272:9 276:1,2 278:23 281:9 288:22 289:3 290:25 297:13,14,24 questioned 45:14 questioning 107:13 230:19 questions 2:7,8 2:8,9,9,10,10 2:12,12,13,13 2:15,15,16,16 2:17,17,18,20 2:20,21,21 3:3 3:3,4,4,5,7,7,8 3:8,10,10,11,11 10:15 11:12,15 11:16,21,24 15:4,7,16,17,18 15:21 16:9 27:13,23,25 34:15,17 35:11 35:25 36:2,7 55:6 75:18,24 76:2,19 82:1 88:24 89:1 90:17 91:17,19 94:13 101:3,6 101:12 105:11 105:14 106:19 106:21 108:8 114:20 126:20 127:4 131:1 139:2 144:17 144:21 146:18 148:21 165:18 166:11,13 167:16,24 177:12 180:21 188:21 189:19 199:5,8,12,19 199:22,23,25 200:3,12,13,21 204:12 210:17 210:19 229:11 229:13,16 233:4 234:17 235:1,4 247:10,13 251:22 268:8 268:11,12,17 269:4,6 278:8 278:10 283:20 288:11 288:18,19 291:4 294:11 297:10,11 299:4,6 310:11 310:14,15 quick 247:12 quicker 266:11 quickly 195:18 196:8 207:22 quite 44:9 75:19 87:17 88:15 232:13,15 247:14 281:24 301:3 quote 192:4 213:15 223:19 226:3 261:10 261:10 quoting 220:15 R R 9:22 R&D 60:15 radar 59:15 244:23 Raftelis 14:11,13 106:16 109:23 110:3,6,9 121:22 175:15 212:6 219:13 256:17 259:24 301:23 302:1 304:3,22 305:1,18 Raftelis-devel ... 257:13 rainfall 59:17 237:19 248:19 248:19,20 249:2,5 raise 70:13 87:4 102:9 287:21 296:8 raised 148:20 raises 33:5 raising 296:7 ran 203:5,11 random 243:15 range 72:16 175:4,5,6 306:25 309:2 ranges 207:2 ranging 206:10 225:13 295:4 rate 1:3 4:6 6:3 6:12,19,21 7:6 7:19,20,22 8:3 8:4,6,19,19,21 8:23 9:1,2,5,6 9:7,9,11,19,24 10:3,6,11,12,16 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 10:18,20 11:7,9 11:10,16 12:10 12:14,23 13:17 13:18,23 14:12 14:14,17 15:4 17:14 18:1 20:12,19 21:7 24:14 26:6,8 27:24 28:8,19 28:25 29:6,9 29:12,24 32:10,14,22 32:25 33:2,8 33:9,12,13,19 34:10,11,12,20 34:20,22 35:12 36:6,25 37:4,5 39:13 39:17 40:10 41:6,9,13 43:10,12 46:15 49:13 50:13 54:4,16,17,18 54:20 55:4 56:2,5,7 57:15 61:17 65:21 68:5,16 69:2 69:15 70:20 70:24,25 72:3 72:5 73:22,24 75:6 76:1 78:5 79:24 82:2,7 88:24 91:16 92:11,14,17,18 93:5,5,8,12,14 93:18,20,23 94:2,8 95:11 95:12,14,16,18 96:16 97:1,6,6 97:12,15,18 98:2,5,8,9,11 98:12,17,21 99:4,7 100:1,8 100:13,15,20 101:5,13,25 102:17 103:1,6 103:17 105:6 105:13,20 107:6,18 109:6 109:10,15 110:8 112:3 113:14,16,22 114:10,24 115:5 115:8,11 116:6 117:25 119:12 119:21 120:22 121:14,24 126:4,9 127:12 127:18,24 128:7,25 129:23 130:11 130:20 132:7 132:22,22 133:8 134:22 134:25 138:22 139:4 140:18 141:1,22 142:14 142:16,19,23 143:13,20 144:4 145:2 145:20 146:3 146:19,23 147:15 148:2,3 148:13,18,20 151:19 152:10 156:3 157:7 158:15 159:7 159:12 160:16 160:20,25 164:8 169:8,10 171:7,21 175:17 176:13 177:24 181:2,3 183:16 183:18,22 185:8,9,12 187:11,13 189:5 189:6,20 190:7,8,10,11 190:19 192:20 194:9 199:13 199:21 200:11 201:10,19 202:6,16,21 203:6,17 206:8,23 210:19 211:11 211:15,25 212:4,7 213:3 213:21 214:8 215:5 219:13 219:24 225:11 225:18 227:24 228:1 228:22 229:13 233:4 235:1,17 236:4 237:21 239:11,17 244:15,18,24 245:13,16,25 247:20 251:17 252:4 254:17 256:16,18,19 257:13,15,24 258:21 259:14 261:9 263:17 265:10 268:10 269:4 270:5 270:6,20 274:14 275:24 276:7 278:11 279:19,20 280:7,9,11 281:25 282:10 283:8,8 284:23 285:7 285:12 286:9 290:11 292:3 292:6,14,19 292:20,24 293:1,4,6,11 293:22,24 294:7 295:3 295:14,18,21 296:12 297:1 297:3,18,20 297:25 299:6 304:4,5,8,16 304:23 305:9 305:23 306:23,24 308:15,17 309:22 310:4 310:8,13 rated 196:21 217:6 265:8 265:23 ratepayer 85:1 ratepayers 8:18 13:20 67:13 69:10 85:7,21 92:12 93:22 100:10 109:8 127:9 139:6 246:18,21 297:23 298:1 rates 6:15,15,15 13:15,24 18:18 21:5 23:3 24:11 28:21 29:8 30:22 31:8,11,14 33:6 34:6 36:15 49:25 54:21 54:24 55:2,7 64:1 65:18 66:2 68:22 70:10,13 71:3 71:18,24 72:14 72:18,19,21 73:17 80:24 81:6,7,9 96:4 96:11,16 97:23 97:24 98:6,7 102:9,11 110:20 111:4 114:4 118:14,17 118:21 119:10 122:23 124:17 124:19 125:3,9 125:23 129:9 132:12 133:22 138:9,11,14,18 138:23,23 140:3,6 146:11 156:2 157:5,10 158:4 160:21 171:7 172:5,17 173:5,6,15 174:23,25 175:11,13 187:20 191:21 192:14,17 195:17 201:15 202:11 203:6 204:2 206:17 206:20 210:11 218:10,10,13 220:1 224:18 224:23 225:18,21,24 227:3 228:12 229:9 231:5 231:16,20 233:24 234:5 246:11,25 247:1,1,3,5 254:20 256:18 257:12 262:12,25 263:3,9,20 264:1 267:9 270:2 273:25 274:4 281:10 281:16 282:20 283:11 287:15 287:21,23 289:20,24 290:15 291:23 291:24 294:13 296:7 297:15 302:20 307:14 308:11 310:6 rating 74:1,16 75:12,16 110:23,25 111:5,7,13,16,17 112:7,10 162:7 162:8 166:5 171:1,5,18,24 173:12 187:24 195:5,14,24 196:1,22,22 196:23 197:2 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 197:23 198:18 198:22,24 204:3 207:18 208:2 209:2 209:12,14,20 210:7 211:6 223:7,14,15,15 223:18 224:3 224:4 225:3 225:6,8 226:13 229:4 233:20 234:3 309:9,10 ratings 75:20 95:1 171:16 172:2,8 173:9 173:11,15,17,20 173:24 195:2 203:1 207:16 208:19 223:8 224:16,18,21 231:7 233:18 233:19 285:20 286:7 287:14,23 306:7 309:1 309:17 ratio 204:25 225:1 Ratzki 2:10 3:4 5:4 89:1,3,4,7 106:21,23,24 166:11,13,14 199:25 200:1 229:15,16,19 230:8,18 233:3 re-93:9 re-discussion 72:12 reach 102:25 176:7 reached 171:18 287:9 reacted 75:11 reaction 186:18 read 30:3 57:18 57:22 85:24 86:8 255:1 260:20,24 readily 232:20 reading 57:7 115:24 203:12 221:6 ready 14:21 29:13 82:10 127:5 real 62:22 85:16,16 87:23 301:16 realize 122:20 150:25 realizes 105:23 really 36:21 49:17,23 50:12 57:18 59:4 62:25 64:3,6 65:6 69:6,23 70:1,2 72:15,15 82:12 84:23 86:17,17 114:9 118:5 131:22 146:20 150:15 154:14 158:2,5 172:17 174:16 181:14 196:25 203:25 209:5 215:22 236:19 239:8 251:12 252:12 259:11 266:8,9 286:18 300:10 realm 35:15 realtime 59:17 reask 28:5 29:19 reason 23:4 30:21 32:1 43:16 67:10 70:17 77:11,12 145:13 152:13 155:25 157:14 158:3 189:3,7 191:13 209:6 210:8 217:24 226:25 265:7 271:6 296:1 reasonable 8:17 13:19 34:23 35:5,19 69:10 92:11,19 93:1 100:9 105:20 109:7,16 110:2 139:5 140:14 179:22 186:4 186:12 206:21 244:11 245:12 245:17,21 246:3,6 248:6 251:14 261:10 261:12,13,13,18 262:7,10,11 264:2 274:18 282:8 283:14 284:13 286:4 289:2,12,23 297:21,22 298:1,12,13,18 298:18 299:2 305:24 306:23 reasonablene... 306:25 309:2 reasonably 69:24 246:8 298:4 reasons 17:3,8 18:9 33:25 35:1 52:15 67:6 85:15 133:4 135:3 135:20 152:4 174:4 181:25 reassigned 30:15 Rebecca 1:19 312:2,17 rebuttal 10:22 recall 32:25 138:12 199:6 235:20 265:21 290:1 304:14 recalling 139:17 recap 159:17 receipt 7:19 receive 72:5 120:24 123:20 169:10 178:12 236:2 249:17 256:6 received 8:19 35:2 66:6 155:11 receiver 56:25 receiving 131:20 recessionary 52:13 recognize 277:11 283:16 recognizes 282:6 recollection 96:21 recommend 7:21 recommenda... 244:21 306:22 recommenda... 6:13 33:13 222:8 recommended 8:3 33:18 223:9 recommending 54:18 reconvene 90:24 record 10:11 23:22 28:9 31:2 34:21 91:4,6,24 94:24 148:22 184:22 208:17 282:10 records 136:24 recover 141:20 261:24 300:25 recovering 246:12 281:17 298:18,21 recovery 284:3 recreate 59:17 redirect 58:2 redirected 30:1 129:2,12 redo 244:21 redone 251:3 reduce 66:2 69:20 120:4 120:22 160:16 236:23 237:1 237:9,12 238:4 239:3 250:18 252:10 252:14 253:14 267:19 299:20 reduced 17:16 19:11 131:19 181:2 248:15 reduces 44:23 252:3 reducing 19:10 154:23 160:21 reduction 25:14 29:5 120:10,11 146:6,8 153:25 154:22 163:9 195:12 238:24 reductions 25:7 133:12 reestablish 48:12 refer 35:10 105:18 106:1 117:8 127:12 129:22 142:23 208:22 reference 26:21 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 101:17 190:23 191:4 205:4 221:5 226:3 referenced 152:9 224:2 235:16 references 57:23 referencing 122:19 221:7 referred 127:4 209:11 281:14 referring 139:23 143:10 149:5 190:11 289:19 refinance 230:22 refine 237:20 reflect 77:15 91:6 125:2 138:10 237:21 262:12 274:9 275:16 292:7 reflected 79:21 183:16,18 258:8 277:11 reflecting 242:22 reflects 23:23 257:21 reform 233:1 refund 156:5 157:3 158:8 159:2 231:20 231:23 232:14 232:20 refunded 231:1 refunding 156:1 156:3,9,11 158:10,24 159:1 230:25 231:4,6 refundings 156:12 157:20 157:22 158:1 159:16 regard 48:20 55:6 66:5 79:4 104:15 236:1 256:10 257:4 259:10 260:1 301:13 regarding 6:14 10:11 13:22 16:11 82:14 regardless 130:19 regards 120:21 126:5,10 regional 224:11 224:13,16 Registered 312:2 regretted 300:9,9 regular 56:22 56:22 58:19 79:4 80:20,23 regularly 75:1 176:10,14 regulation 100:17 regulations 8:16 99:12,25 regulatory 42:23 43:6,23 44:21 47:11 72:23,25 163:22 rehab 40:21 rehabilitate 253:23 254:11 reimbursable 47:21 reimbursement 141:20 reimburseme ... 123:20,21 rejection 187:4 relate 62:16 77:22 92:24 92:25 115:25 160:23 161:8 167:10 255:3 related 8:10 59:11 118:8 119:6 129:24 130:8,9 136:16 136:25 137:4 203:16 239:24 240:4 242:13 243:2 249:2 252:12 255:17 256:1 273:18,22 298:15,16 305:7 312:9 relates 21:14 127:24 131:14 132:8 136:8 140:17 210:14 218:24 221:18 227:22 243:11 278:20 298:18 relating 8:12 175:19 259:16 277:19 relation 94:2 relationship 42:7 46:19 211:13 305:1,3 relationships 21:25 relative 137:5,15 218:15 221:20 238:19 242:16 246:10 256:7 312:10 relatively 25:5 30:20 207:11 207:15 297:3 relevant 239:14 reliance 281:1,2 281:6 relied 94:6,25 relief 183:15 187:16 rely 101:17 104:3 105:22,23 185:9 259:11 309:11,15 relying 75:8 96:10 104:4 259:6,7 266:16 remain 51:6 248:5 remainder 113:7 142:20 remaining 243:21 remains 11:23 remarkably 19:25 remarks 14:15 14:16 remediation 52:17,25 remediations 52:19 remedy 125:14 remember 20:13 47:5 74:17 174:19 199:7 203:13 277:4 286:10 remote 56:14 remove 240:23 300:1,6 renew 40:2 41:4 renewed 40:17 rental 150:8 repairs 141:13 repeat 288:19 repeating 270:23 replace 41:6 159:6 253:23 254:7,11 replaced 165:25 replacement 12:18 159:14 169:6 replacing 159:11 231:25 report 8:23 9:3 9:6 103:10,15 114:12,13 185:20 245:7 297:19 reported 1:17 38:18 312:6 reporter 91:23 220:23 260:25 312:1 312:3,3,3 reporting 181:16 reports 171:6,13 171:14 173:21 185:12 304:11 represent 6:23 216:4 representation 6:20 representative 6:22 representativ ... 7:7 34:19 211:25 representing 15:15 represents 113:11 308:19 request 9:5,25 10:4,7 22:16 27:3 29:15 32:1 33:25 81:6 117:18 128:22 139:25 208:11 213:12 requested 102:4,6 104:11 157:15 189:7 199:10 214:9 260:23 requesting 261:14 requests 22:17 43:5 66:15 require 102:1 166:3 175:11 232:14 required 8:1 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 11:11 12:19,20 13:5,25 97:16 124:5,11,13,15 136:24 156:23 172:19 173:5 232:3 240:20 279:24 280:2 301:4 requirement 43:25 82:18 83:19 165:25 166:7 262:8 297:6 requirements 35:14 37:3 42:24 43:23 44:3 49:4 72:23,25 83:9 83:24 84:8 95:12,22 181:16 182:10 184:15 260:4 260:17,17,18 262:11 298:19 301:5 302:17 requires 6:17 66:8 259:19 262:6,7 requiring 166:2 research 60:13 reserve 104:25 156:18,19,20 165:25 166:1,8 231:17 260:16 reserves 104:20 157:2 reset 31:11 69:18 69:21 186:9 residence 81:8 243:4 resident 302:6 residential 6:24 12:25 22:22 23:5 25:18 115:17 117:20 118:7,9 121:2 124:9,11,23 125:13,18 126:1 140:5 152:16 176:18 240:10 241:21 242:6 253:20 258:4 276:12 277:10 280:18 residents 179:1 resources 227:15 230:5 230:7,16 respect 23:2 52:18 111:4 112:7 115:17 116:22 120:6 122:16,21,22 122:25 125:22 129:22 131:18 133:16 152:18 176:18,20 203:20 219:20,24 220:3 224:15 224:15 231:12 304:14 respond 96:13 112:4 266:10 responded 10:5 10:8 responding 112:1 220:12 response 32:14 43:5 55:5 101:12 102:22 103:3,7,12 129:8,17 133:1 208:11 222:4 255:8,9 responses 10:2 responsibility 239:20,21 241:19 242:3 responsible 77:20,23 78:13,17 287:22 rest 255:1 restating 31:1 restricted 209:17 result 25:21 43:9 98:14 100:20 119:24 130:12 164:25 273:15 resulted 29:5 155:3 156:14 157:12 resulting 73:17 84:7 261:22 307:21 results 46:9 59:22 82:23 112:12,20 210:15 resume 126:19 221:9 268:23 310:24 retainage 58:14 retained 70:24 211:10 242:18 retains 93:21 retiree 50:22 retirees 50:25 retirement 51:10 52:4,5 54:7 retiring 51:19 return 60:25 126:20 revenue 13:5 17:17 24:7 30:13,16 31:16 32:2 46:10 60:13 74:21 90:11 113:13 114:1,5 115:2 120:23 122:1,2 122:21 124:16 127:15,22,25 127:25 128:1,3 128:3,6 131:19 132:11 134:10 139:15 140:3 146:13 147:25 148:14 150:11 151:25 152:22 153:14,24 154:3 159:19 159:20 166:21 172:19,23,25 219:20 220:3 261:14 262:11 279:21 283:14 289:25 297:6 298:19 revenue-wise 288:1 revenues 28:23 31:5 33:17 34:6 44:24 45:25 60:15 89:25 90:3 112:17 115:9 120:6 123:4 125:23 127:21 131:21 133:7,10 133:12,16 140:12 146:2,4 146:7 151:16,21 152:5,6,18 153:8 172:24 191:24,25 205:18,20 246:5,6 267:10 307:21 reverse 263:19 review 6:13 33:12 64:5 79:13 162:7 176:8,10,11 209:14 219:4 244:12 261:3 261:5 277:19 277:23 289:12 reviewed 103:20 104:1 244:9,12 260:7 277:21 revolving 176:6 229:21,22,24 230:9,10,12,14 reworked 93:9 Rich 14:4 20:3 43:4 66:14 82:9,9 107:4 107:23 144:9 183:8 273:19 310:25 Richard 9:21 82:6 rid 252:5 291:17 right 15:21,22 16:14,19,21 17:12 20:24 21:24 22:16 23:6,20 25:24 27:16 31:11 33:14 34:4,13 35:24 42:2 43:19 49:14 51:9,25 53:25 64:7 71:25 72:24 72:25 73:16 75:12 76:20 77:20,24 78:7 80:18 81:19,22 82:25 88:20 99:5 100:5 101:23 103:20 115:20 119:13 122:13 130:23 134:6 135:13 135:15 136:4 137:22 139:17 145:16 160:11 167:7,13 168:21 175:2,4 175:5,6,20 176:1 179:11,12 180:2 186:6 191:1,8,11 193:16 202:5 202:20 212:22 215:11 222:6,7,8,18 224:12 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 226:22,24 227:1 228:13 233:14 234:7 243:6 244:7 249:6 267:6 272:12,16 275:3 276:2 278:14 279:9 280:23 282:25 290:4 290:12 295:12 300:11 303:19 306:1 right-hand 124:4 right-of-way 65:10 rise 105:5 225:24 rising 23:24 51:7 risk 37:9,12 38:11 39:10,16 40:22 41:7,7,11 41:11 44:17 48:25 50:13 50:18 52:10 53:1,17,24 54:14 69:18 99:9 105:6 162:13 206:8 217:14 218:3 218:17,18 220:9,18 221:13,15 225:11,18 289:23 risk-avoidance 40:22 riskless 221:22 221:22 risks 49:2 50:15 52:10 53:14,17 53:20 61:1,8 104:16 105:2 198:8 219:5 222:13 River 38:22 49:5 58:22 77:8 rivers 86:14 236:25 road 243:9 250:2 300:18 Roads 216:2 robust 212:7 218:14 228:8 robustness 224:17 role 28:7 224:11 roles 51:18 roll 44:9 91:5 132:10 160:19 rolled 213:7 roof 240:16,20 room 58:17 312:5 roughly 135:24 146:5 149:14 160:14 167:8 167:10 183:2 305:14 307:23 round 184:9 rounded 282:20 row 142:25 RPR 1:19 312:17 rules 9:9 11:11 ruling 35:13 103:18 run 54:11 58:9 59:19,20,21 65:6 87:24 145:10 146:9 runoff 243:8 runs 57:25 ruptured 38:19 Russell 5:5 S S 29:23 30:11,11 30:12 128:24 129:9,18 131:16 131:18 136:8,16 137:5,8,20 162:19,19,20 163:3 164:18 164:25 165:1,4 186:18 187:5,9 210:6 291:8 S&P 195:4 196:22 197:2 223:18,20 224:3 226:7 safe 179:6 samples 58:23 sampling 22:9 sanitary 37:17 56:22 83:18 84:3 182:6 183:14,15 241:12 243:25 248:23 sat 287:18 save 73:15 157:20,25 276:4 saved 73:17 156:25 savings 60:9 61:22 66:5,6 69:20 73:10 73:12 88:11 154:24 155:3 155:6,11 158:18 160:6 181:11 196:12 saw 17:14 19:9 25:2 30:21 45:13,15 saying 31:10 65:14 70:11,11 70:16 99:1 144:5 164:5,7 193:21 202:2 202:24 213:23 221:4 271:13 275:20 280:25 281:5 284:2 285:1 292:18 300:9 310:2 says 26:6 29:21 54:20 60:20 123:18 124:14 143:2 204:23 225:10 254:18 scarce 41:16 42:18 44:20 47:10 scenario 54:22 203:5,10 scenarios 131:16 174:19 288:5 schedule 34:4 40:21 56:22 scheduled 33:14 91:7 268:21 Schoedel 5:6 science 309:19 scope 301:9 score 196:25 second 10:3 22:16,17 117:18 139:11,25 148:16 149:16 152:8 191:6 196:22 224:2 224:3 225:10 297:13 secondary 255:13,14,18 255:22,25 272:24 secretary-tre... 136:6 secretary/tre... 14:8 section 46:15 95:8,15,15 142:22 150:9 171:6 269:16 sections 95:11 see 19:19 20:6 24:13 31:25 40:8,10 45:16 48:6,9 49:12 50:10 59:15 60:8 61:21 68:7,14 99:1 112:4,13,16 114:19,19 115:16,18 116:10 117:9 120:7 123:12 123:24 125:21 128:2 136:11,14 144:1 146:10 166:2 168:22 178:21 186:19 189:17 202:11 203:16 207:17 222:11,12 232:18 238:10 239:7 244:18 244:25 265:14 276:1 279:22 282:11 282:14 283:3 283:4,22 285:13 308:11 seeing 15:6 20:4,6 68:3 87:13 120:11 125:7 146:7,15 237:15 280:13 seen 60:12 120:13 121:5 187:22 265:20,20 seepage 238:22 seeping 241:7 seeps 236:19 sees 49:13 segment 246:4 select 6:18 selected 184:9 184:10 self-learning 57:25 sell 206:16 send 149:9 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 303:3,4 sending 302:18 senior 7:9 61:15 173:3 223:9 223:10 285:14 285:14,21 286:16 293:21 293:22 294:1 294:2 301:22 sense 65:5 70:2 71:11 81:7 146:5 218:7,15 220:2,5 227:9,11 232:24 263:23 264:14,16 300:2 sensor 57:24 303:23 sent 57:22 149:21 sentence 222:20 223:5 225:10 255:2 sentences 205:3 separate 78:18 78:20 148:8 187:2,2,3 241:3,4,16 separated 236:18 238:16 241:3 septic 147:25 sequence 264:18 sequencing 45:18 serious 148:21 seriously 69:6 serve 6:5 140:10 162:12 211:10 215:25 257:2 server 126:2 servers 61:12 service 51:5 67:15 78:18 78:20 80:7,22 80:23,25 81:6 90:1 101:22 109:11,24 110:1 124:15 125:4,11 125:22,24 139:10,14 140:2 147:8 152:12 155:21 156:14,18,21 157:1 160:3 166:24 167:1,6 167:11 171:10 172:18,20,22 172:25 173:1,9 174:6,23 181:9 185:13,23 186:23,24 192:12 193:1 195:6 197:10 199:11 203:8 206:22 219:19 220:2 221:21 226:4 228:5 229:1,6 231:11 231:25 233:9 233:15 234:6 242:9 246:1,11 254:18 257:4 257:21 261:16 261:20,25,25 262:1,14 267:24 269:17,19 270:13 271:4 271:17,23 274:6,9 277:5 277:7,8,11,12 277:13,14 279:21 280:6 281:3,4,7,12,16 281:19,23,23 282:5,8,18 283:15 284:19 285:15 294:3 294:10,14,23 294:25 295:19 296:21 298:2,5,7 302:3,8,14 305:9 services 1:20 6:21 7:9 8:11 44:24 76:8 96:18 109:19 109:21 140:6 166:22 191:23 211:18 246:9 272:7 304:4 304:14 serving 14:9,11 14:13 session 91:2 set 24:9,12 31:8 31:15 36:17 39:19 40:2 46:5 52:4 60:5 70:17 76:20 78:19 79:2 84:2 96:10 103:3 104:21 142:6 173:14 175:1 194:10,13 201:24 260:19 270:2,21 284:23 285:4 286:12 309:23 310:5 310:8,8 set-aside 28:21 setting 1:3 10:11 70:23 71:3 100:1 173:4 227:24 245:13 246:1 261:9 269:25 289:20 290:15 295:21 308:2 309:23 310:4 settles 215:13 seven 302:4 sewage 38:20 236:13 243:25 244:2 302:25 sewer 1:1 4:14,17 6:4 8:9 10:24 38:19 41:15 42:17 45:7,10 47:19 57:2 58:2,2,11,14 71:10 77:22 83:19 84:3,6 86:11,12 105:21 182:6,8 182:12 216:12 216:17 238:20 240:10,12,22 241:4 242:5,9 242:14 243:8 247:1,3,5 253:1,20,24 254:3,4,7,12 282:7 298:6 302:2,8,20 312:5 sewers 20:5 37:18,19,23 38:7 49:3 56:21,22 58:12 83:20 87:17,19 238:19 252:2 252:9,12,13 252:25 253:5 shape 56:23 185:14 share 76:23 77:9 78:1,6,23 180:12 241:24 241:25 shared 218:2,17 221:24 242:15 sharply 21:5 sheds 86:12 sheet 104:25 shift 55:16 151:1 164:14 shifting 24:3,3 shooting 294:1 short 12:6 46:1 144:16 146:5 short-term 45:22 287:24 shorter 181:7 shortfall 17:17 133:13 134:10 146:13 153:24 154:3 Shorthand 312:3 shot 77:14 show 24:22 84:6,9 143:17 199:2 showed 273:9 showing 138:1 161:2 295:10 shown 68:5 274:10 shows 116:15 127:17 135:1 281:20 side 32:2 41:20 48:6 57:19 61:21 78:23 84:22 159:19 159:24 199:15 240:9 246:23 251:25 277:12 301:15 303:2 signal 223:21 signed 304:6 significant 23:18 31:4 52:20 67:7,10 132:4 146:11 146:22 147:6 181:11 185:24 236:23 237:19 246:8 254:19 274:3 291:22 significantly MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 21:21 27:7 50:1 132:3 147:3 177:1 181:2 187:21 254:21 271:4 signing 71:21 similar 86:6 106:4,11 118:6 122:25 226:11 239:17 244:24 271:14 276:19 298:16 298:20 similarly 86:5 215:15 simple 230:17 283:11 simplified 282:1 simplify 283:7,8 simplistic 52:3 simply 20:22 24:6 57:6 130:18 155:11 simulation 59:22 simulations 58:1 59:19,20 simultaneously 304:21 single 13:4 270:8,24 271:12 280:1,4 280:16 282:13 282:14,19 283:9 single-family 22:22 96:24 117:20 124:10 140:4 243:18 sinkhole 50:5 sir 16:8 22:24 74:14 166:19 167:19 258:18 268:18,18,20 304:17 sit 301:10 site 85:7 88:13 152:9 sits 55:24 sitting 106:9 situated 266:23 situation 48:23 62:18 106:10 153:14 231:16 264:20 situations 86:5 six 302:4 size 50:1 242:14 skipped 29:17 280:15 slideshow 74:10 slight 25:5 42:3 slightly 25:10 202:12 282:17 283:2 302:12 slow 290:22 slowing 290:22 small 58:7 67:18 120:13 242:1 265:24 271:10 smaller 120:11 280:9 296:13 smart 57:23 58:24,25 smyers@stlm ... 4:16 Snoke 2:19 9:22 14:7 18:15,21 23:11 51:2,22 63:9 64:6 68:25 70:3 74:6 81:12,23 90:8 104:3,4 112:8 159:15 167:21 189:19,24 199:22,24 200:3,5 208:6 210:3 285:18 292:16 306:14,16 social 85:25 87:2,25 socioeconomic 7:3 sold 76:12 149:24,25 sole 28:19 solely 154:23 158:21 161:10 solid 265:9 solids 116:16 255:14,18 256:6 272:24 279:6,8,13 299:16 solved 88:8 somebody 57:22 60:20 64:4,13 70:10 89:18 181:22 290:17 302:10 309:8 somebody's 17:13 somewhat 46:25 68:22 96:23 141:11 150:11 156:8 173:16 201:8 282:1 soon 300:10 sorry 124:1,13 129:5 135:9 137:8 148:5 169:14 185:3 208:9 222:24 276:4 277:18 305:18 306:19 sort 114:22 220:8 243:13 sound 212:22 sounds 176:19 253:2 source 28:19 30:13 128:3 152:22 158:15 232:4 240:12 240:25 sources 28:14 28:23 41:22 55:7,7 74:21 122:2 127:7,10 127:15,20,21 128:4,5,6 168:17,18,25 190:15,24 219:7 241:9 249:21 South 38:20 speak 74:12 95:11 278:4 speaking 37:20 227:21 special 6:9 178:17 230:8 specialize 149:17 specific 24:10 28:18 34:15 57:17 60:17 75:8 82:7,8 95:24 99:18 106:2 137:13 137:15 172:3 176:9 182:3 199:7 212:9 221:11,12 228:25 234:12 256:10 258:15 265:21 274:20 288:4 specifically 66:5 128:22 135:9 152:11 186:25 210:15 288:21 305:8 specifics 65:14 138:3 speed 57:20 spend 66:8 67:19 134:9,18 134:20 143:9 143:24 145:14 161:9 226:19 264:14 267:3 267:18 286:19 286:20,21 287:1 spending 133:19,22,24 134:4 154:2 252:1 263:14 267:4 spent 132:20 133:2 134:5 142:12,19,20 143:2,13,24 144:6 154:6 255:5 274:16 287:16,17,17 287:20 308:14,17 spike 123:9 split 172:11 174:14,15 175:12 200:24 200:24 201:3 201:7 205:23 205:25 225:1 244:11 272:21 284:22 287:4 287:6,11,12 splits 174:19 287:13 spoke 60:6 95:23 96:2 spoken 95:25 spot 48:22 88:3 203:25 Sprague 53:20 spread 20:22 263:24 spreading 267:12 287:24 spreads 206:10 206:13 225:12 spring 33:15 34:4 Square 4:9 SRF 18:16,18 63:2,4 176:6 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 178:1,12,13 180:21 181:9 181:12,12,17,19 181:20,25 182:2,5,23,25 219:21 288:1 SSO 237:5 253:2 SSOs 249:16 251:23 252:10 St 1:1,22 4:4,10 4:14,15,16 6:4 6:8,8 7:8,9,11 7:13,17 10:24 31:7 37:25 38:18,20 46:24 47:2,25 48:2,5,20 53:9 58:16 86:21 87:15 119:12 223:3 254:3,13 258:3,7 302:9 303:21 308:9 312:4,5 staff 62:3 64:1,2 69:14 95:17 106:10 201:4 215:22 222:21 244:22 289:10,22 291:11 292:12 stage 77:15 stand 229:23 311:4 standard 78:3 85:8 229:22 229:24 230:9 250:6,10 256:19 272:6 275:22 298:24 standards 57:16 standpoint 68:21 173:20 186:3 187:15 248:14 249:4 250:1 252:23 252:24 stands 230:2 Stannard 3:6 9:23 14:10 121:22 234:23 235:4 247:11 251:22 256:16 268:11,12,15 272:23 277:16 278:4 298:12 298:17 start 16:5 33:10 33:15 45:11 46:4 51:20 86:20 92:7 107:20 109:1 116:14 122:9 127:3 136:5 149:7 168:9 173:10 177:18 201:20 203:14 203:15,15 235:14 240:3 261:12 269:15 276:5 285:1 310:25 started 70:10 85:13,15 87:1 170:4 201:18 226:15 304:18 304:19 307:5 starting 52:24 127:2 151:15 217:25 237:24 257:18 starts 46:7 72:3 state 8:16 43:9 97:5 99:12 104:5 109:25 157:9 176:6 178:8,15,17,21 178:21 179:2,7 179:16,18 180:14 182:3,11 190:13 192:2 194:24 195:3 195:12 229:22 230:10,13 262:10 303:2 312:3 state's 182:10 stated 103:17 226:3 233:9 statement 2:3 8:5 12:5,7,8 14:20 17:5 27:6,10 30:16 30:24 36:14 36:24 40:15 41:18 47:15 66:23 71:17 104:18 118:2 155:13 160:9 161:15 192:9 195:19 221:9 222:17 256:20 292:11 states 67:25 106:4,6 256:17 288:24 289:1 290:19 stating 34:21 stations 37:18 statistics 201:11 202:4 statutory 8:7 97:7 101:14 103:2 258:22 259:5 stay 25:10 138:7 216:12 stayed 260:14 Stein 2:9,16 3:8 3:11 5:4 76:3,5 147:17,19 148:9,16 251:17,18,21 256:12 299:7 299:9 310:18 310:20 step 94:21 steps 29:4 202:13 Steve 5:7 stop 70:12,14 188:1 storage 58:13 59:7 82:3 83:4,23 84:15 84:17 store 83:1,23 storm 59:8,17 241:12 249:1 263:19 storm-sewer 59:13 storms 59:5 198:5 stormwater 6:15 7:22 30:2 31:20 47:13 59:11 61:17 70:22 129:3,12,24 130:2,8,15 131:14 161:9 162:20,22 163:1,4,4,11,16 163:19 164:2,2 164:9,15 165:11 165:14 236:16 243:8 291:3 291:13,18 304:8,20 straight 192:12 strategies 86:16 150:20 strategy 72:20 73:13,20 stream 30:16 streams 36:23 150:11 236:25 Street 1:21 4:4 4:14 312:5 streets 37:25 strength 21:2,4 21:6,18,20,20 22:2,3,7 115:23 116:12 116:15,24 117:1 117:5,10 166:4 172:5 176:25 217:10 224:20 266:4 272:1 272:10 275:1 275:2 278:20 279:1,2,7,11,13 298:9 299:14 300:4 301:7 striving 285:16 strong 75:2 111:5 172:8 186:16 195:9 284:2,3,6 strongest 223:17 strongly 81:2 structural 56:14 structure 35:13 39:21 44:2 55:4 79:12,24 92:14,16 93:5 93:8,9,15,18 93:24 94:8 97:1 100:13,15 103:18 126:11 126:12 182:2,3 184:17 199:3,9 213:24 220:3 220:5 243:4 255:21 281:25 283:9 structures 35:17 217:19 219:19 222:10 struggle 88:5 stuck 303:9 307:1 studies 70:25 304:24 306:24 study 26:22,24 27:1 37:14 71:3 78:18,21 80:23 239:11 244:8,13,14,21 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 248:3 251:8 251:12,13,13 277:16,20,21 302:3 307:16 stuff 37:11 62:4 75:10 Stump 2:8,12,15 2:20 3:3,7,10 4:2 11:7 12:3 27:22,25 28:2 36:1,5 91:3 94:13,15 94:18 101:4 104:15 126:24 135:13,17 138:5,8 144:20,24 177:11,12,15 188:21,22 204:12,14,17 208:8,12,16,17 210:17,18 247:10,12,16 251:16 288:11 288:13,16 299:5 Stump's 55:5 126:19 subdistricts 31:6 subject 142:21 299:19 subjects 74:15 submit 9:12 10:21 184:5 213:15 submitted 9:18 9:25 10:3,6 179:21 182:23 213:16 274:21 subordinate 294:6 subsequent 23:11 31:18 113:24 148:23 214:13 subsidize 262:4 subtotal 170:18 subtract 209:6 subtracting 159:22 suburban 303:1 successful 85:14 149:11,15 150:12 successfully 185:23 succinctly 209:24 sucked 50:5 sudden 67:2 suffered 67:25 sufficient 30:20 69:3 192:15 sufficiently 53:4 suggest 90:22 187:10 221:11 306:25 310:18 suggested 183:5 Suite 4:9 summarize 131:8 180:24 209:13,14 247:24 summary 103:10 143:12 278:13 summating 64:3 summer 251:10 304:18 sump 240:16,21 superior 266:24 supplemental 176:4 support 66:1 97:16,24 186:14 261:15 262:14 265:9 275:17 supports 103:11 103:16 supposed 82:24,25 83:1 83:4,12 215:6 sur 22:2 surcharge 77:1 87:16 176:25 254:19 273:25 274:4 279:7 297:10 299:24 300:4 300:24 surcharges 21:2 21:4,7,18,20 21:21 22:3,8 23:15,17 24:5 115:23 116:13 116:15,16 117:5 177:4 272:10 278:20 284:16 299:14 299:19,25 301:5 sure 18:24 19:1,1 23:13 25:23 29:11 31:3 32:24 35:4,21 35:25 39:24 50:20,20 53:14 55:24 56:6,10,23,23 59:22 60:19 66:25 76:18 78:13 81:19 87:11 91:23 92:14 93:2,17 102:10 112:8 113:19 114:9 115:6 117:8 120:1 129:17 130:25 132:18 134:1,20 137:2 142:16 144:15 158:14 162:18 169:4 170:12 171:4 178:7 181:1 185:3 188:5 191:20 203:2 206:15 211:20 220:13 220:16 224:8 224:10 242:24 243:1 249:20 264:15 274:17 274:23 276:3 279:4,18 281:5 286:9 289:12 290:21 299:10 surged 49:6 surprising 238:11 surprisingly 263:6 surrounding 71:23 84:13 Susan 2:11 4:13 9:20 10:25 suspect 41:21 49:12 80:19 266:18 suspended 116:16 255:17 256:6 279:6 279:8,13 299:16 sustainable 68:2 262:14 sweet 48:22 88:3 203:25 swing 147:3 sworn 15:2 91:14 108:6 167:22 200:9 234:24 269:2 synching 279:5 syncing 117:9 system 19:18 21:15,17 27:7 40:3 46:7 47:19 48:7,12 56:20 58:2,11 58:14,22 59:12,13,21 60:5 63:22 71:10 72:22 73:2 76:13 77:22 80:12 83:8,25 84:6 116:1,3 137:10 153:16,18 185:25 236:17 237:11,22 238:22 239:4 239:6 240:1,7 240:11,15,22 240:24 241:2 241:4,11,17 242:15,16,22 243:9 244:6 246:7 248:15 249:20,23 250:17,18 251:24 252:8 252:16 253:22 273:6 280:19 282:7 282:12 298:6 300:5 system's 59:20 systems 8:10 47:22 58:25 59:15 61:6 86:11 136:19 141:14 236:17 236:19 238:15 238:16 243:8 249:22 252:12 254:2 254:12 T T 3:1 tab 137:23 table 24:15,18 24:21 106:9 116:9,11,14 117:5 120:7 121:24 123:25 124:2,14 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 127:13 134:24 148:4,10 164:3 169:4,5,13 170:17 177:19 177:20 274:11 274:22 279:6 279:16,23 281:13,15 282:9 tables 116:13 278:11 281:20 take 34:5 37:21 40:23 43:17 43:23 49:16 59:16 64:9 69:5 70:20 73:14 79:16 84:12 86:3 90:23 92:23 95:2 107:13 108:12,15 111:1 120:1 126:18 141:16 153:23 156:5 171:7 188:23,24 189:14 207:20 220:3 231:4 231:24 232:5 234:12 237:20 241:4 241:12 251:8 266:20 279:5 279:6 281:24 308:1,19 taken 31:10 85:24 90:25 104:25 126:22 189:16 268:24 295:25 312:7 312:10 takes 212:4 219:11,11 251:6 talk 20:25 28:17 55:16 90:1 94:22 110:22 112:10,16 121:25 155:1 171:1 172:22 173:12 177:18 180:22 184:16 194:4 199:3 200:22 202:25 209:20 211:15 228:4 230:20 231:15 272:10 284:21 297:12 talked 29:3,4 70:8 96:19 97:11 100:16,17 111:21 112:12 114:22 127:7 128:23 131:3 168:15 174:4 176:15,24 182:18 196:7 196:10 247:19 248:2 277:16 284:12,21 291:5 talking 41:22 46:2 63:20 83:6,17 96:5 115:22 137:19 147:6 159:18 177:22 180:20 188:7 193:2 200:23 204:22 220:22 221:17 229:21,24 248:9 279:10 279:12 284:16 301:8 talks 22:17 96:21 99:11 116:25 143:22 279:7 tank 84:24,25 tanks 300:16 tar 77:7 target 31:22 52:4 139:17 173:3 174:3 180:7 202:14 202:15,21 233:16,16,20 264:24 targeted 172:21 175:12 225:6 targeting 173:14 219:16 targets 133:20 173:7,13,23,25 178:22 201:23 202:18,19 233:17 task 164:1 tax 6:15 7:22 31:8,11 93:13 102:20 156:8 233:1 259:9 taxation 95:8 taxes 28:21 101:23 161:2,4 161:5 taxing 30:25 team 18:21 133:17 259:24 261:5 tearing 65:3 technical 1:2 10:10,14,19 135:14 technological 41:1 technologies 56:12 57:4 58:20 60:11 technology 19:8 40:19 56:16 56:24 58:5 58:23 59:10 59:24 60:1 303:25 telephone 5:4,9 tell 32:3 37:12 47:25 64:15 72:10 73:22 107:15 110:24 142:17 145:12 152:4 153:4 174:20 191:18 217:17 230:1 261:11 264:5 301:14 309:15 telling 119:6 130:19 252:3 tells 41:17 tend 216:10 tendered 256:17 tentative 84:10 term 85:25 199:13 268:1 terminology 213:17 terms 38:11 49:9 55:17 103:23 111:14 119:1 120:20 120:23 121:5 132:9 134:17 145:20 148:22 156:25 159:18 161:3,17 191:19 203:6 206:21 207:18 212:6 217:9,20 219:6,25 221:17 222:9 227:17,24 233:18 245:12 248:25 256:25 258:1 260:12 264:23 298:21 303:24 test 124:6 202:9,11 203:24 254:24 269:18,25 270:8,9,10,12 270:13 271:7 271:12,14 272:15 287:10 297:5,5 testified 21:4 157:4 246:20 testifies 26:20 testify 74:15 235:15 296:24 testifying 53:20 104:13 259:21 260:6 testimonies 139:20 testimony 1:2 9:20 10:12,22 13:21 16:6,6,9 17:4,13 18:9 32:8,17 34:19 35:2,11 43:4 56:1,6,12 66:4 66:15 92:8 100:25 101:11 109:2 114:15 127:3 130:24 131:3 133:5,6 138:21 139:9 151:14 168:9 170:25 175:16 180:21 188:7 189:2 190:2 193:5 204:20 207:25 208:1 215:24 217:12 220:13 222:18 226:16,25 232:9 235:11 235:17 239:22 243:11 244:9 258:19 260:24 262:16 263:1 269:13 273:23 274:20 281:9 288:18 292:16 297:14 298:11 305:16,22 310:25 311:1 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES testing 56:14 tests 176:12,13 260:16 thank 14:17,18 14:25 20:24 27:17,18,19 29:3 32:7 36:3,4,5,9 51:3 65:17 75:23,25 81:14 88:22 88:23 89:19 90:9,15,19,21 91:1,13,15 92:1 92:20 93:19 94:9,12,16 101:4,8 105:11 105:12 107:1,2 107:25 108:7 108:16,19 115:20 117:15 123:24 126:14 126:16 132:17 138:7 144:18 144:20 151:3,7 155:19 165:18 165:19 166:9 167:13,18,19 167:23 168:3 170:24 177:8,9 188:3,22 189:2,10 199:18,20 200:5,6,10 204:9,10 205:21 206:6 208:16 209:10,24 210:18,24 217:11 229:10 229:12 233:2 233:3 234:14 234:19,21,25 239:19 247:7 247:8 251:15 251:16 256:11 256:12 261:7 268:8,9,14 279:16 288:8 288:9 290:24 292:8 294:9 295:1 297:8 299:3,5 301:18 310:10 310:12,17 Thanks 207:5 That'd 138:5 theoretically 244:4 288:2 thereof 233:25 they'd 22:5 50:6 thing 19:22 44:5 48:6 56:12 61:5 67:5 68:2 115:21 128:20 160:22 169:6 188:9 219:11 231:9 233:13 248:16 258:12 267:2 284:8 284:20 296:9 298:16 things 18:22 19:7,8 28:5,9 28:10,22 30:23 38:2 53:22 55:21 56:10 57:14 58:2 60:3,10 60:16,19 62:24 63:1,19 65:6 70:8 74:25 86:19 86:23 106:13 111:10 114:21 120:4 127:6 128:11,13 136:22 137:18 142:11 146:6 147:20 150:2 152:22 153:12 153:21,22 154:11,15 155:2 156:14 157:12 171:11 173:22 186:5 201:15 202:16 204:21 207:19,21 218:1 227:23 228:3,10 229:2 234:11 237:13 240:9 241:10 244:19 249:19,20,24 250:3 252:8 252:14,20 253:17 264:17 266:14 268:7 284:9 296:2 307:7,17 think 17:12 18:18 18:22 21:1 23:11 24:6,13 27:6,13,16 28:18,24 29:10 30:9,16 30:17 31:6,24 32:8,13 34:14 34:14 35:20 38:9 39:9 41:3 41:7,7,7 45:13 45:14 46:23 46:25,25 47:1 49:11 50:9 53:1 55:5,15 56:7 64:5 65:25 66:4,16 66:21 68:3,4 69:10,15,23 70:3,15,23 71:16 72:3 75:4,9 77:20 82:9 83:3 86:2 90:13 99:23 101:1,3 102:4,23 107:12 109:1 112:17 115:21 118:4 119:21 120:25 121:5 121:23 126:14 127:2 129:17 130:4 131:2,18 133:5,14 138:12,24 139:21 142:2 143:17 144:12 146:10,17 147:15 149:5 149:14 154:12 154:14,25 157:4 163:14 163:15 164:9 165:13 167:7 168:23,23 172:7,8,12 175:3,5,6,10 175:13,23,24 182:20 183:2 184:4,4,15,16 185:6,11 186:4 186:8,10,22 187:1,12,15 197:9,11,24 198:10,15 202:14,23 208:4 210:8 211:14 212:20 216:3 218:5,9 224:20 226:19 227:11 227:19,24 228:3,4,6,19 232:1 233:13 234:8 241:1 241:20 248:23 249:14 250:7 250:9,25 251:2 253:12 259:8 262:25 265:16,23 266:8 277:15 284:13 290:5 291:20,21 294:10 295:21 295:25 297:1 297:4,9 301:8 307:13 309:7 310:6 thinking 75:22 227:21 277:2 third 10:7 19:19 29:15 32:14 33:24 128:22 206:8 208:11 Thomas 3:9 9:23 14:12 thought 67:1 95:6 137:23 137:25 152:23 179:5 187:8 250:21 290:4 thousands 58:1 three 11:12,24 31:8,15 45:7 80:14 168:16 168:18 190:14 190:23 238:1 238:6 239:10 248:17,17 272:2 278:17 thresholds 116:18 117:6,11 117:12 throwing 164:22 tick-up 42:3 tie 23:15 113:12 tied 114:4 tighten 253:4 till 184:4 189:14 Tim 2:19 9:22 14:7 18:15,21 63:7 64:5,8 68:25 70:3 81:12 90:8,13 104:3 188:18 224:1 285:18 292:16 306:5 306:10,13,14 306:15,16 309:8 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES time 8:8,8,16,17 9:2 11:13,17,22 11:23 12:13 15:5,7 21:22 27:16 37:11 38:3,3,12,16 46:18 54:10 57:9 58:24,25 59:14 60:12 62:15,18 63:4 63:10 66:17 69:5,15 70:9 70:11,12 71:17 71:18,20 75:14 77:2 78:1 79:3 79:23 91:17 92:17 93:17 99:2 100:14,14 101:15,15 105:14 108:9 108:12,15 113:2 116:5 133:15 142:21 145:14 158:10 179:17 188:5 192:5,9,11 196:8 198:21 214:1 221:25 232:23 235:2 236:3 237:8 237:13,14 240:18 241:15 244:13,14 245:4,5 249:18 251:6 251:8,12 253:7,19,24 258:23,23 259:5 263:25 264:10 267:13 273:3 274:16 287:25 294:1 296:2 303:16 307:7 310:20 312:7 timeframe 181:6 times 48:11 59:11 173:3,4 219:23 280:1 timing 232:9 251:4 266:14 tired 268:19 titled 95:7 today 13:21 15:19 53:21 61:7 71:4 73:11 73:13 82:9 104:13 133:6 173:18 206:16 225:18 226:15 261:21 262:18 262:21 263:11 310:23 today's 267:10 Toenjes 2:10,18 3:5 5:6 6:2,3 11:1,5 12:4 14:18,25 15:3 15:9 27:19,22 36:5 75:25 81:15 88:23 89:5,20,22 90:16,19,22 91:1,13,15,22 92:1 94:12,16 101:4 105:12 106:19,25 107:3,12,17,25 108:2,7,12,15 108:17 126:16 135:16 144:20 147:17 148:6 151:4 165:19 166:10,16 167:15,18,20 167:23 168:3 177:9,13 188:22 189:14 189:17 196:8 199:20 200:2 200:5,7,10,16 204:10,15 210:18 229:12 229:17 230:3 233:3,6 234:16,19,22 234:25 235:6 247:8 251:16 256:12 268:9 268:14,18,20 268:25 269:3 269:8 288:9 288:14 299:5 301:19 310:12 310:17,22 told 47:12 78:11 194:16 221:18 Toledo 216:22 217:1,3 tolerate 187:10 Tom 5:4 26:19 89:3 106:23 166:14 200:1 229:15 tomorrow 310:24 311:5 ton 220:4 tonight 107:9,13 310:19 tool 232:21,22 232:25 top 38:1 58:15 59:3 66:18 77:1 82:11 114:9 137:17 142:15 143:21 144:1 296:15 303:17 topic 26:5 89:8 topography 238:18 topped 73:3 total 11:12 24:23 25:16 26:8 46:17 75:4 83:3 132:23 135:21 137:24 137:25 138:2 142:12 143:4 143:17 155:20 170:22 182:24 236:2 238:7 239:1,24 246:5 248:14 249:16 250:12 251:11 256:5 261:13 265:24 272:20 275:20 276:21 280:19 282:12 283:4 286:17 292:15 292:24 293:10,21,22 294:3 296:13 totally 158:11 track 59:2 120:16 148:21 171:21 278:19 tracking 257:19 traditional 149:18 156:11 157:11 Traditionally 156:15 train 244:23 training 64:24 transaction 211:4 213:1,4,7 213:8 214:13 215:11 transactions 213:7 215:1 transcript 312:7 312:7 transcription 312:6 translated 312:6 transmit 59:6 transmitting 56:25 transport 76:22 traveling 153:22 treasurer 306:16 treasurer's 306:12 Treasury 42:6 treat 116:2 treated 57:11 80:3 86:5 treating 76:24 255:4 treatment 21:23 37:15,19 55:18 59:6 64:20 65:12 76:8,16 77:4,5,5,6 141:14 236:3 248:21 255:12 255:13,14,14 255:18,23,25 272:21,22,25 273:12,14,17 275:13 276:24 302:25 303:5 treatment's 275:14 trend 25:7 134:12 228:14 228:14 trends 222:9 288:25 289:19 trip 74:11 trouble 117:2 true 21:16 52:15 80:6 104:19 226:7 259:3 312:7 trustee 166:20 trustees 6:18 7:21 8:4,24,25 9:5 33:20 65:18 72:7 89:24 90:11 190:20 194:13 197:16 232:12 try 19:22 37:8 56:16 73:15 114:16 115:2 146:18 179:9 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 207:8 210:1 237:12 247:24 254:5 288:19 trying 21:19 25:6 26:10 28:5,11 35:20 61:1 85:4 91:10 110:13 121:19 139:11 142:18 144:14 173:14 203:19,22 209:21 220:6 221:3 237:5,9 240:23 241:18 246:3 248:21 249:8 250:9 250:25 251:10 259:8 264:13 265:5 278:19 285:1 TSS 254:20 255:4 272:11 273:25 274:25 275:7 275:14,18,21 Tuggle 1:19 312:2,17 tunnel 49:6,7 183:15 tunnels 59:5 turn 111:19 120:5 125:10 143:18 235:14 turned 31:14 72:9 149:12,15 turns 147:2 TV 56:21 59:15 tweak 121:4 tweaked 150:3 tweaks 120:20 two 27:11 33:4,6 50:4,11 57:5,6 57:6 70:17,20 84:2 108:11 131:15 140:22 146:5 147:5,9 171:11 196:23 205:3 246:4 252:9 262:19 263:8 275:4 280:1 285:11 293:20 304:6 type 50:3 62:24 63:16 63:23 71:2 83:5 84:14 230:9 272:8 types 50:16 53:11 57:14 118:10,11 155:7 207:21 217:19 217:20,23 227:23 275:15 typical 12:24 23:5 81:8 153:22 188:1 230:10 240:6 269:25 270:7 271:6 typically 145:24 157:10 167:6 171:6,9 172:4 176:11 246:22 271:11 276:13 305:14,16 U U 3:1 82:4 85:12 85:23 86:1 87:2 88:7 U.S 118:2 ultimate 27:2 162:8 281:9 ultimately 16:11 18:15 85:21 87:7 149:21 201:10 228:9 279:12 283:13 292:20 ultrasounding 56:25 un-anticipated 231:18 unacceptable 88:15 uncertainties 266:7 undated 250:23 undefined 51:13 underground 84:17 understand 17:21 21:3 25:6 37:14,16 38:9 39:15,18 49:6 50:21,23 53:14 66:9 73:6 108:13,13 109:14 113:19 115:2,3 121:19 157:13 161:12 162:18 170:13 171:2 193:18 202:8,23 203:21,22 210:9,25 214:8,19 219:4 222:13 226:23 232:12,15 234:10 239:21 240:2 243:10 251:23 262:24 269:17 271:16 272:17 280:3 283:12 284:24 288:2 304:22 305:22 understanding 12:14 20:9 21:6,12 36:18 44:25 52:6 66:24 102:20 115:24 116:4,19 131:7 157:16 183:11 201:6 244:9 273:17 280:24 295:2 295:5 306:4 understood 70:23 222:13 248:10 undertake 163:23 236:22 244:24 260:1 undertaken 250:21 underway 239:7 unduly 106:13 unexpected 141:3,13 unfavorable 231:8 unfold 284:9,15 unfolded 296:2 unfolding 296:4 unforeseen 49:2 50:15 228:17 unfortunately 38:24 50:8 51:18 128:17 232:25 uniform 231:11 uninsured 50:16 unions 33:11,16 unique 226:12 257:14 270:14 uniquely 266:22 unit 56:8 United 67:24 288:24 289:1 290:19 units 17:15 25:15 45:12,21 46:8 150:8 271:23 274:6 274:9 277:5,7 277:8,11,12,13 277:14 281:18 298:5,7 universal 226:10 University 88:4 unknown 49:18 50:15 51:14 unknowns 228:7 unmetered 95:24 96:1 236:10 243:23,25 258:3 280:15 unquote 223:19 unrestricted 209:22 unsuccessful 149:20 unsustainable 68:1 untreated 38:20 unusual 238:14 Unverferth 9:21 14:5 20:3 22:10,14 43:4 107:5,23 183:8 266:9 273:19 311:1 Unverferth's 66:14 up 19:10 33:1,8 43:16 45:25 49:23 50:5 51:14 53:20 55:24 56:16 57:20 58:10 59:8 60:5,7,17 63:12,24 65:23 68:13 70:1,17 73:3 76:20 90:13 95:3 107:23 115:7 117:9 118:12 121:19 123:12 135:18 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 143:15 144:11 148:7 149:14 155:1,15 160:7 160:24 168:17 170:9 182:19 193:25 201:2 212:14 213:7 215:8 224:7 227:4 228:7 235:23 238:5 242:20 244:10 248:12 253:4 263:2 275:20 279:5 280:7,8 281:4 286:1 290:25 291:4 292:23 299:16,16 upcoming 21:13 120:19 167:2 update 66:17 75:14 79:24 251:10 updated 292:6 updates 74:9 upgrade 40:2 upgrades 89:11 ups 192:13 upstream 88:13 uptick 136:11,14 upticks 67:10 123:12 urban 288:24 289:18 usage 25:19,21 45:8,15 115:19 118:15,18 236:8,12 257:25 284:10 289:17 290:3,8,18 usages 118:11 use 18:16,17 40:19 45:4 47:8,25 56:3 56:24,24 58:7 59:10,24 63:4 67:14 95:20 110:13 118:4 120:2 121:4 132:24 133:21 142:7 145:3 161:5 174:24 177:25 178:9 178:10,20 179:16 181:13 182:4,22 183:3,5,7 190:24 209:3 229:20 239:6 242:16 258:15 266:4 268:1 270:1 271:7,24 285:3 286:20 298:5,7,10 307:13 user 79:14 93:12 96:17 101:22 102:19 127:22 128:1,3 128:15 151:16 151:20 152:5 179:4 190:19 229:9 243:19 259:8,9 278:14 users 6:21,23 6:24 24:5 95:21 96:23 300:19 uses 57:25 170:17 255:24 257:22 282:6 usually 84:21 86:13 169:9 173:17,21 178:21 180:7 184:1 199:3,8 199:10 249:7 293:5 305:20 utilities 48:3 56:9 118:2,22 118:25 139:1 246:17,20 257:1,6,8,9 265:4,14,24 265:25 271:12 272:5 288:24 301:3,4,12 308:6,9 utility 50:3 62:9 216:11 217:24 231:7 245:13 246:23 254:14 261:9 261:17 262:13 262:15 272:3 289:24 utilize 165:11 utilizing 303:23 V vacant 154:12 valid 27:1 245:1 245:8 valuable 217:24 value 52:12 182:24 values 84:14,18 87:25 variability 289:14 variable 217:20 variance 161:3 variations 50:9 209:3 varied 69:16 various 59:1 118:10,11,14,17 140:11 145:9 162:13 295:11 Veatch 11:6 vehicle 40:17 vendor 59:16 vendors 59:1 257:1,8 venture 61:23 62:1 Veolia 62:9,13 verify 138:15 versus 46:8 90:1 93:10 95:24,25 111:3 114:23 122:5 125:25 135:12 159:18 172:11 181:10 217:19 219:21 241:21 241:22 274:25 275:7 275:8,9 280:22 285:9 302:8 vetted 150:21 viable 232:25 view 52:3 70:14 171:21 265:12 viewed 172:5 violation 8:12 104:6 175:18 259:15 visited 49:5 volume 24:23 25:16 76:25 83:3 115:13 119:15 120:17 121:20,20 186:6 235:23 242:21 243:22,23,24 275:15 280:7 280:9,11 281:3 282:1 283:11 296:19 volumes 24:21 25:8 120:20 236:8,8 242:16 289:5 290:9 298:8 volumetric 120:24 121:7 125:8,10,17 152:14 281:1 volunteered 55:25 278:9 vote 31:10 71:2 129:8,18 130:12 131:15 131:16,17 136:21 210:15 232:14 voted 70:10 voter 102:1,8,11 102:12 159:13 186:16,18 215:18 voters 6:8 7:13 29:23 30:5 54:13 128:24 138:8 157:14 158:16 187:10 191:10,14 195:16 213:22 214:21 215:8 voters'187:4 votes 55:12 186:14,20,25 187:2 voting 70:9 210:9 215:7 W wage 62:19 wait 27:15 153:16,19 190:8 268:16 walk 37:25 38:1 walk-around 147:13 want 15:18 17:21 18:6 19:22 20:25 28:18 29:19 30:17 31:23 32:13 34:16 47:1 53:13 55:22 62:19,21 64:14 73:21 81:18 85:25 94:21 100:23 112:9 113:18 117:7 131:1 145:14 150:15 151:12 152:8 153:17 154:21 162:17 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 172:10 174:20 184:12 188:11 189:11,12 190:1 202:10 204:21 206:18 216:12 220:22 225:20 233:18 242:24 244:23 247:22,24 253:13,14 265:19 279:4 279:4 283:11 286:12,16 287:1 290:24 291:3 293:18 296:4 297:10 297:12 300:22,22 303:18 309:16 310:5,18 wanted 16:5 62:24 66:1 81:19 92:7 115:2,2 135:19 200:22 205:7 232:18 237:20 284:20 285:25 292:17 War 240:20 wasn't 46:22 58:24 77:13 89:16 177:7 221:11,11 244:19 251:12 287:6 300:11 waste 122:3,25 128:13 147:23 148:14 152:21 wastewater 6:14 7:22 12:17,24 13:17 24:21,23 25:16 26:8 28:14,20,20 28:22 29:24 30:1,7,15,19,21 31:19 32:2 33:1,9 35:6 36:15,23 37:15,19 45:7 46:15,16 47:22 48:6,7 55:6,17 56:9 61:21 62:17 65:18 71:24 73:1 76:8 96:17 101:13 101:22 103:1,6 109:19 115:9 116:24 117:10 119:15 120:3 122:1 127:7,14 127:15 128:25 129:2,11 130:9 130:15,16 131:23 137:10 137:24 138:2 142:5 151:16 151:20 152:12 160:23 161:6 161:11 164:1,6 164:15 187:1 236:3 237:1 254:14 255:12 255:23 256:18,24,25 257:2 261:20 272:3,5,10 278:14 279:21 288:25 291:1 292:9 304:12 304:15,16 305:11 water 25:17,17 25:19,21 41:15 42:17,24 44:23,24 45:8 45:8,11 47:3,5 47:8 49:6 53:10 62:8,12 76:13 80:11 84:7 99:16,22 115:1 116:2 119:16,17 120:2 120:5 121:4 141:9,9 178:18 188:8 230:15 236:8,8,12 244:5 247:3 256:23 257:2 258:1,2 304:16 watersheds 58:3 83:11 86:12 Wausau 216:22 way 23:9,20 34:13 37:23 40:23 43:7 46:10 49:15 51:23 54:1,8 56:14 59:25 60:4 61:2 64:16 67:15 67:22 69:12 70:19 76:20 82:13 86:20 86:22,22 87:14 98:1 105:9 126:7 141:4 170:12 179:22 210:9 224:9 231:10 239:8 246:13 270:2 275:16 284:9,15 291:9 300:8 303:4 ways 19:7 60:10 121:3 150:3,23 228:6 237:11 we'll 31:13 33:17 49:12 64:18 72:2,6,8 73:14 73:14 74:11 90:24 107:23 109:1 119:13 121:23 122:9 126:19 128:18 178:12 189:14 235:14 239:16 249:14 252:21 267:24 276:1 305:6 we're 16:25 19:5 20:8 21:18 23:4,8 25:21 26:10 33:14,25 34:3 34:4 35:4 36:2 37:2,6 45:19,23,24 47:12 49:19 49:20 52:16 52:21 53:10 54:18,22 57:12 59:22 59:23,25 61:9 63:17 64:24 65:1,2,7 67:12 67:13,15 69:3 71:18 72:2,16 72:20,24,25 73:22 79:14 80:12,18 82:21 83:11,17,21,25 86:18 91:10 96:5 100:14 107:19 111:1,2 111:25 113:25 114:3 116:12 117:2 119:1 120:24 121:1,6 124:21 125:7 130:18 132:2 133:9,9 134:2 138:1 139:15 140:12 141:10 141:18,19 142:2 143:23 146:7,9 148:19 150:19 150:23 154:2 156:3 157:14 158:21 161:2 164:3 168:15 172:10 173:14 173:14 180:11 180:20 184:18 184:18 185:14 186:24 187:25 188:1,23,24 191:10,13,20 193:21 196:20 197:12,24 199:9,10 203:19 206:17 206:24 213:1 219:16 220:6 225:17 227:14 229:24 231:16 237:8,15 238:25 239:8 241:18 248:9 248:21 250:6 251:23 260:3 261:14,14 263:14 264:14 264:19 265:6 265:7,7,7 270:6 276:2 278:19 279:11 281:17 282:19 283:5 285:1,6 285:8,12,16,19 285:19 286:13 286:14,17 287:2,21 290:15,16,19 290:20 291:15 291:18 293:21 294:2 295:12 296:7 308:16 308:25 we've 35:4,16 37:4 40:11 41:8 42:22 43:18 44:18 47:9 48:22 51:15 54:17 57:8,21 59:1,4 60:1,20 61:7,8 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 64:10,14 67:6 67:10 68:13 72:9 75:11,13 80:17 84:10,10 85:8 92:16 93:24 97:10 100:14,17 106:7 114:1,3,4 118:15 120:13 120:22 121:5 124:8 138:20 142:2,4 150:9 150:13,18 152:15 159:17 159:24 170:3 170:15 174:4,8 176:5,24 184:17 187:14 187:19 193:4 198:16 200:22 201:24 205:22 207:6 211:13,14 218:6 218:22 219:10 225:6,25 227:2 230:24 240:22 248:9 248:9 250:5 250:10 251:1 255:11 262:18 264:20,24 286:3 291:10 291:23 295:3 298:3 305:13 308:12,23 weather 47:12 47:24 240:15 241:7,8 248:25 website 171:20 weeds 256:9 week 171:25 184:3 weight 255:19 welcome 12:9 94:10 108:4 144:19 167:14 234:15 went 51:8 63:12 71:5,21 85:15 93:8 136:21 198:7,21,22 213:12 221:19 242:7 247:25 274:19 281:3 284:17 307:16 307:16 309:6 weren't 58:25 86:4 87:9 148:18 wet 240:15 241:8 248:25 who've 32:24 wholesale 302:14,22 wide 243:9 widely 209:5 WIFIA 42:5 170:2 178:1 183:10,12,23 184:6,11,13,20 189:4 198:25 219:22 WIFIA's 170:2 William 3:6 9:23 14:10 willing 71:11 winter 45:7 236:9 wintertime 45:9 wish 87:11 wishing 14:19 witness 14:24 15:2 36:4,7 51:3 63:6 81:21,24 88:25 90:17 90:21,24 91:7 91:12,14,17 107:2,3 108:5 108:6 135:23 136:4 137:22 167:16,19,20 167:22 188:19 189:18 200:6 200:9 208:14 234:17,21,22 234:24 235:2 246:21 268:16 268:19 269:1 269:2 witnesses 14:2 91:7 107:8,8,11 226:16 262:18 Women 7:13 wonder 231:1 wonderful 38:6 wood 38:6 wood's 38:6 word 48:1 90:5 207:7 221:23 285:3 298:10 300:10,11 307:13 words 205:15 261:10,11 work 20:22 27:11 37:2 43:16,18 58:23 62:25 69:4 78:14 84:10 85:10 89:11 103:10 129:4 136:20 137:5,11 164:15 212:24 213:6 213:25 216:6 216:7,10,16,16 216:24,25 217:3 223:2 246:22 257:7 264:9 290:23 302:1,5 305:2 305:6 310:19 worked 85:9,16 86:20,22,22 87:22 150:9 158:7 175:15 194:25 201:4 211:14 222:21 233:12 246:23 289:10,11 301:3 working 43:7 87:12 88:17,19 130:7,9 158:5 212:21 222:19 246:19 249:19 270:3 285:18 305:13 307:5 works 49:21 89:14 219:10 243:14 world 197:22 240:20 worth 31:16 60:21 129:25 147:1 159:4 167:9 194:21 303:7 worthiness 223:16 wouldn't 41:10 41:10 68:21 96:1 130:20 132:24 158:4 162:6 163:9 184:12 189:8 196:24 251:1 264:2 265:19 271:3 285:3 Wow 212:1 wrapped 42:1 83:13 writing 297:19 written 92:7 113:1 175:24 wrong 45:23 57:16 63:7 76:18 78:10,11 90:5 219:25 X X 2:1 3:1 XYZ 175:25 Y yeah 24:1 27:9 32:18 39:9 46:14 49:14 49:23 50:6 52:7 76:10 81:23 84:20 85:23 86:9 111:21 123:3,10 124:2 127:21 128:11 129:17 134:14 135:17 139:21 144:2 145:11 146:21 147:14 148:12 153:6 160:11 170:1 179:16 182:11 194:6 202:23 218:22 221:7 224:8 226:9 226:12 227:19 230:17 244:16 262:17 266:8 267:2 274:24 278:18,21 280:19 283:3 283:16,19 286:6 291:9 298:2 301:17 306:19 307:19 year 13:1,2,2,3 16:23 17:1,19 23:18 24:24 25:1,2,5 38:19 39:6 42:10 65:19 68:17 98:23 112:24 113:1,6,8,18,19 113:21,24 120:19 122:4,5 122:11,18 123:6 123:7 124:6,16 124:18 127:24 134:3 135:2 141:10 146:1 148:15 151:21 151:22 160:17 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 167:2 176:11 177:1 179:17,19 182:16,16 201:19 206:1 207:3 212:12 223:12 225:19 249:3 254:24 254:24,25 269:19,22,22 269:24 270:1 270:1,4,8,10 270:12,14,15 270:24 271:2 271:3,7,9,9,12 271:14 272:14 272:15,15 285:14 295:4 295:7,7,15,17 295:18,23 297:5,6 299:15 304:9 304:18 307:18 year's 64:11 304:8,8 years 13:14,14 19:9,15 20:14 20:18,20,23 26:12 29:8 31:8,15,23 33:4,7 34:7 37:8,20,24 42:3,8,14,16 42:19 43:2 45:19,21 48:15 51:5 56:16 66:11,13 67:4,7 67:20 68:6,13 69:17,21 70:10 79:14,18 98:8 112:15 113:5,7 113:24 120:9 120:12,14 121:20 123:8,9 129:10 151:19 161:13 167:5 169:20 173:19 174:3 178:14 181:10 185:16 186:9 193:22 194:1 196:13 201:19 218:12 226:18 227:3 227:24 231:5 238:1,6,12 239:10,16 240:18 242:7 246:2 247:6 247:19 248:17 248:18 249:11 252:1,20,21 263:1,24 266:7 267:7,7 267:11 270:6 270:8,10,16 270:22 271:15 287:25 289:15 293:25 295:14,22 302:4,4 304:6 Yep 27:21 169:17 yield 284:3 yields 206:10,13 225:13 York 63:11 you-all 12:11 22:25 269:18 Z zero 31:9 281:25 290:20 0 0.10 282:24 03 140:6 282:18 1 1 116:25 136:11 145:12,12 190:5 223:22 281:22 283:23 1.3 129:25 130:14,17 163:16 1.4 25:3 120:10 1.45 225:14 1.455 168:21 1.5 136:7 1.58 143:21 144:5 1.6 146:25 147:7 169:1 170:14,21 1.7 143:4,25 1.75 309:21 1.79 309:6 1.8 173:4 280:22 285:17,21,24 286:16 292:15 294:3 305:24 306:9 307:1 308:2,3,19 310:3 1.81 285:15 292:22 293:7 1.82 285:15 1.85 309:21 1/2 113:6,7,13,20 114:1 1:00 310:24 311:4 10 16:22 42:16 65:19 66:2 67:2,3 68:17 76:25 77:24 79:9 113:6,20 114:1 140:8 197:16 218:12 227:3 263:1 267:7 288:22 10-minute 90:23 10,000 118:4,25 138:24 242:2 10.6 159:20 100 71:19 118:4 118:24 132:25 145:4 147:8 159:7 163:25 164:5 210:10 214:14 100-265:16 101 2:13 105 2:13 108 2:15 109 312:5 11 10:2 32:18 170:18 193:13 207:9 258:20 299:16 11:10 90:24 110 167:7 11TH 1:21 12 2:3 24:22 62:7,13 131:5 139:24 184:10 229:20 253:25 290:25 12:45 126:20 120 265:5 126 2:15 13 10:1 24:22 25:1 31:6 109:6 133:15 259:13 130 283:3 130,623,000 283:6 130,758,000 283:5 14 9:4 110:12 161:2 170:18 212:16,17 226:3 144 2:16 145 207:2 147 2:16 148.3 136:1 15 2:7 18:13 42:8 67:7 194:24 212:16 221:8 279:7 290:5 150 37:20,24 117:3 215:12 265:16 279:2 279:11 151 2:17 15th 131:7 16 9:8 63:10 112:22 170:25 221:8 222:18 245:10,20 165 2:17 166 2:18 166.8 136:1 168 2:20 17 123:6 135:22 151:17,21,25 152:25 155:21 190:11,12 245:15 177 2:20 18 25:4 123:6 135:2,12,21,24 180 265:16 189 2:21,21 19 22:17 113:21 117:18 122:6,12 135:2,12,21 1954 6:10 1984 76:21,22 1990s 93:6 2 2 8:22 10:8 12:25 17:1 65:22,22,23 98:24,24 113:7,13 124:10 124:12,24 131:2 136:12 160:16 173:3 221:8 223:22 279:25,25 280:17 2,000 242:3 2.5 286:16 294:1,2 295:4 2.52 293:25 2.59 280:24 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 2:15 189:15 20 10:5 37:8 42:19 43:1 48:15 66:12 113:6,8,19 124:16,19 127:16 151:17 151:21,22 152:1,25 155:21 160:8,8 161:13 164:25 165:2 178:5 179:19 190:11 190:12 193:22 226:18 252:1 263:24 266:7 267:11 269:16 269:18 287:25 20-123:23 20-year 181:10 20.3 151:23 152:5 159:22 200 3:3 49:22 117:3 145:24 180:9 214:14 279:2,2 200,000 122:19 122:20 2000 6:11 2005 26:22,24 26:25 244:8 244:14 248:3 277:16 2007 270:4 2010 51:2,4 2011 62:7,13 66:9 148:20 2012 212:21 222:19 290:4 2013 25:1 2015 16:13,21 26:9 63:7,10 114:23 115:11 121:18 151:19 151:23 152:2 153:1 155:22 159:19,21 160:1,9 196:14 212:16 213:14 235:20 245:2 290:2,7,7 293:24 2016 63:7 65:17 123:23 2017 25:2 65:20 123:8 123:22 198:23 233:1 254:24 272:14 2018 120:11 122:4,11 143:5 183:12 185:1 198:24 251:9 2019 1:9 8:20 8:22 9:4,8,10 9:14,18,24 10:1 10:2,5,6,9,21 65:20 161:14 180:3 183:21 184:13 310:24 312:4 2020 33:15 34:5 65:20 98:7 113:15 130:14 179:10 180:1,18,19 182:20,22 225:14 299:15 2021 31:5 68:15 124:6 129:10 179:15 254:25 269:22,24 272:15 2022 271:3 2024 129:10 292:21 2025 67:4 68:15 295:11 2029 83:20 2035 194:20 2039 66:11,13 161:13 226:21 204 3:3 21 13:1 29:6 65:24,24 118:25 151:15 160:16 191:17 207:3 223:5 295:4 299:15 21-'24 201:19 210 3:4 211 4:9 22 13:2 235:14 248:8 295:5 229 3:4 22nd 119:1 23 10:21 13:13 20:23 295:5 233 3:5 235 3:7 2350 4:14 312:5 24 13:3 20:15 29:6,8 53:25 65:24 169:12 169:18,18 191:17 206:1 207:3 223:12 225:15 227:13 227:14 295:5 247 3:7 24th 38:19 25 9:14 10:6 68:8,10 205:1 295:7 25,267 178:3 250 117:4 123:5 251 3:8 256 3:8 259-2050 4:10 26.9 155:23 160:1 269 3:10 27 272:9 299:17 270 37:18 28 2:8 13:14 20:22 29:10 68:8 175:16 276:2 281:9 288 3:10 299 3:11 3 3 29:15,21 109:6 128:23 131:2 169:14 194:5,9 194:12,13,17 222:18 223:22 229:20 288:21 3.1 303:18 3.3 136:12 3.7 25:3 120:10 3.75 113:8 295:4 30 42:3 79:7,8 79:18 178:22 179:5,14 180:2 180:8,21 181:10 242:7 267:11 286:12 286:24 287:25 30-feet 84:16 30-year 220:2 221:20 300 279:8 301 3:11 31 180:22 182:5 314 1:23 4:5,10 4:15 32 146:5 147:1 33 170:9 182:20 34 170:9 35 115:10 133:10 36 2:8 3600 4:9 365 207:13 366 191:6 37 188:7 37.6 68:6 3E 151:14 3F 190:2 3H 258:19 4 4 8:20 9:18 13:1 17:1 46:15 65:22,23,24 124:21,22,25 145:25 160:17 194:21 204:20 221:7 225:10 273:23 279:24 290:24 4-11 121:25 148:11,12 4-14 134:25 4-15 143:18 4-17 123:25 124:3 168:24 169:5 177:22 279:16 4-20 281:15 282:9,9 4-3 24:15,18 120:7 4-31 26:6 121:13 4-36 123:25 124:2 279:20 4-37 299:13 4-39 254:17 4-4 46:16 4-41 282:10 4-5 121:24 148:11 4-6 134:24 4-7 24:18 120:8 4-8 169:5 177:19 177:20 4.04 280:22 4.3 143:6 4.7 66:9 234:7 4:00 268:23 4:52 311:7 40 79:10 186:13 188:19 193:16 225:2 239:22 239:24 240:3 242:7,21 243:2,11 250:6 286:24 MEETING 4/8/2019 www.alaris.us Phone: 1.800.280.3376 Fax: 314.644.1334 ALARIS LITIGATION SERVICES 40-60 244:11 43 31:6 86:2 155:16 43.2 153:2 160:1 430-plus 122:21 44 140:7 45 246:2 45-day 9:3 450 279:13 453 127:24 461 127:25 47.7 183:11 5 5 116:11 169:21 226:2 259:13 274:6 284:17 310:7 5-1 117:24 5-3 117:25 5.15 310:7 5.9 130:5 5:00 268:21 50 26:10,12 118:25 121:18 235:21 238:13 239:13 250:5 50-year-old 40:23 50,000 38:21 50/59 250:10 250:12 500 102:5 158:17,20 191:7 214:9,11 214:20 215:6 215:8,9 264:23 265:6 530,000 122:11 539 190:24 55-45 174:15 175:9,10 203:24 204:1 287:11 550 191:16 59 26:7,12 121:16 235:18 238:7,10 239:14 248:10 250:5 6 6 151:15 161:14 170:2 190:5 204:21 205:6 207:9 226:19 292:9 60 160:8 180:10 193:15,22 225:2 238:13 239:25 242:20 243:9 243:21 250:7 307:23 60-40 172:11 174:14 175:6,8 185:6 200:24 201:2,7 202:3 202:8,10 203:22 204:1 205:23,25 248:2 284:23 285:1,4 287:4 287:6,10 600 309:13 600-plus 216:9 61 160:12 161:5 61.4 160:14 61A 102:24 621-2939 4:5 63 208:5 6300 37:17 63101 1:22 4:4 63102 4:10 63103 4:15 312:5 63A 208:13 63F 208:18 644-2191 1:23 65 203:4 65-35 175:9 203:24 287:12 675 190:16 7 7 6:11 37:18 95:7 132:19 133:1 142:22 168:14 190:13 191:4 192:2 225:14 235:15 7-118 152:11 7-13 142:23 7.2 295:7 7.270 95:16,23 70 159:25 206:11 207:2 254:23 272:14,18 273:7,10 274:1 70-30 175:12 286:10 70.1 160:10 700 167:9 70s 41:25 42:12 711 1:21 714 4:4 75 179:10,23 180:1 183:2 205:1 75,000 178:3 178:25 750,000 122:12 76 2:9 768-6209 4:15 8 8 1:9 9:10,24 16:9 145:25 146:21 150:9 190:22 206:7 225:10 312:4 80s 41:25 42:12 76:10 77:3 81 2:9 89 2:10,10 9 9 6:10 16:9 77:20,23 78:20 131:19 152:7 180:21 185:20 310:24 9.7 31:16 152:2 159:22 160:10 9.8 31:16 9:00 6:1 9:15 91:5 90-something 128:15 900 190:17 191:1 191:3 900,000 148:15 90s 58:21 92:15 92 2:12 94 2:12 95 134:13,19 145:22,23 159:6 95.4 132:21,25 133:3,25 144:25 145:4 145:21 97 145:7