HomeMy Public PortalAboutExhibit RC 63 - Rate Commission's Third Discovery Request to MSD - March 25, 2019BEFORE THE RATE COMMISSION OF THE
METROPOLITAN ST. LOUIS SEWER DISTRICT
THIRD DISCOVERY REQUEST
ISSUE:
WITNESS:
SPONSORING PARTY:
DATE PREPARED:
Lushly & Baer, P.C.
714 Locust Street
St. Louis, Missouri 63101
WASTEWATER RATE CHANGE PROCEEDING
METROPOLITAN ST. LOUIS SEWER DISTRICT
RATE COMMISSION
MARCH 25, 2019
BEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a Wastewater
Rate Change Proposal by the Rate Commission
of the Metropolitan St. Louis Sewer District
THIRD DISCOVERY REQUEST
OF THE RATE COMMISSION
Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis Sewer
District (the "Charter Plan"), Restated Operational Rule § 3(7) and Procedural Schedule §§ 16 and
17 of the Rate Commission of the Metropolitan St. Louis Sewer District (the "Rate Commission"),
the Rate Commission requests additional information and answers from the Metropolitan St. Louis
Sewer District (the "District") regarding the Rate Change Proposal dated March 4, 2019 (the "Rate
Change Proposal").
The District is requested to amend or supplement the responses to this Discovery Request,
if the District obtains information upon the basis of which (a) the District knows that a response
was incorrect when made, or (b) the District knows that the response, though correct when made,
is no longer correct.
The following Discovery Requests are deemed continuing so as to require the District to
serve timely supplemental answers if the District obtains further information pertinent thereto
between the time the answers are served and the time of the Prehearing Conference.
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THIRD DISCOVERY REQUEST
1. During the Rate Commission's Work Session on March 22, 2019, a reference was
made to the District's use of a four-year cycle to establish rates. Please explain why the District
uses a four-year period to set rates, and identify that factors that drove that decision.
RESPONSE:
2. Please explain how wastewater projects are evaluated and prioritized for inclusion
in the Capital Improvement and Replacement Program ("CIRP").
RESPONSE:
3. Please explain what effect, if any, a decision by the District's voters not to approve
Proposition S (2019) would have on the wastewater CIRP or the Rate Change Proposal generally.
Would funds presently allocated to address wastewater be redirected to address stormwater? If so,
please explain how such funds would be reallocated.
RESPONSE:
4. Please provide a detailed summary of investments made by the District to date to
comply with the Consent Decree, as amended. See Ex. MSD 37; Ex. MSD 37A. Please provide
calculations of dollars expended by the District, and any overflows eliminated as a result of these
investments.
RESPONSE:
5. Please explain how the District's debt capacity — presently $3 billion — is
determined. Is this limit determined by statute, constitutional provision, or the Charter Plan? Or is
it determined by rating agencies, the District's ability to recover cost, or some other factor(s)?
Please explain how this limitation influences long-term financing projections, such as using
PAYGO or a mix of PAYGO/debt financing.
RESPONSE:
6. Please explain how the District's bond ratings compare to similarly situated
wastewater/stormwater utilities.
RESPONSE:
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7. Section 7.2 of the Rate Change Proposal indicates that CCTV inspection and
physical inspection of sewers are included within the CIRP for FY 2020 — FY2023. See Ex. MSD
1, p. 7-26. The SSO Master Plan indicates that inspections were performed in the formulation of
the Master Plan. See Ex. MSD 37C. If inspections were performed as part of the SSO Master Plan,
please explain why CCTV inspections and physical inspections are required through 2023?
RESPONSE:
8. For all Public Infiltration/Inflow Reduction ("PIIR") projects, are specific PIIR
projects in each watershed known at this time? If so, are funds allocated for these projects on a
per-year basis? If these projects are not yet known, please explain how they will be identified.
RESPONSE:
9. Please explain what additional work, if any, is required by the watershed
consultants identified in Section 7.2.2 of the Rate Change Proposal, Ex. MSD 1, if Consent Decree
projects are already planned and funding for such projects has been set aside for design.
RESPONSE:
10. Regarding the Construction Management Services — Tank/Treatment/Pump Station
Facilities projects identified in Section 7.2.2 of the Rate Change Proposal, Ex. MSD 1, pgs. 7-30
— 7-31, are these services for the projects identified or are they in addition to other identified
projects? Please explain how the District determines how funds for these projects are spent.
RESPONSE:
11. Regarding the projects identified as Critical Infrastructure Assessment in Section
7.2.2 of the Rate Change Proposal, Ex. MSD 1, pgs. 7-32 — 7-33, are these projects different than
the work performed for the SSO Master Plan or the Combined Sewer Overflow Long-Term
Control Plan ("CSO LTCP")? Please explain how these projects provide additional benefit to the
District beyond the work previously performed.
RESPONSE:
12. Please explain how CSO Volume Reduction Green Infrastructure projects (See Ex.
MSD 1, pgs. 7-34 — 7-35) are determined. Are these projects funded by or eligible for grant
funding?
RESPONSE:
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13. Regarding the Easement Acquisition for Wastewater Projects identified in Section
7.2.2 of the Rate Change Proposal, Ex. MSD 1, p. 7-38, are funds budgeted in addition to what is
already included in project budgets? Or are these included in individual project budgets? Please
explain how these funds are allocated to projects.
RESPONSE:
14. Regarding the Flow Metering and Monitoring projects identified in Section 7.2.2
of the Rate Change Proposal, Ex. MSD 1, pgs. 7-41 — 7-42, please explain why funds are allocated
for such projects if flow monitoring was completed as part of the SSO Master Plan and/or the CSO
LTCP. The project descriptions on pages 7-41 and 7-42 state that "this information will be used to
calibrate hydraulic models to determine if projects are required." If the hydraulic models determine
that these projects are not needed, will they be removed from the CIRP? Please explain the value
of additional flow metering and monitoring to the District.
RESPONSE:
15. Regarding the General Services Agreements identified in Section 7.2.2 of the Rate
Change Proposal, Ex. MSD 1, pgs. 7-43 — 7-53, these are all listed as "as needed." Are these items
to be used for other identified projects? Or for additional projects? Please explain how these funds
will be utilized.
RESPONSE:
16. Regarding the Infrastructure Repairs at the Wastewater Treatment Facilities
identified in Section 7.2.2 of the Rate Change Proposal, Ex. MSD 1, p. 7-57, have projects been
identified for these funds? Or are these funds targeted annual expenditures? Please explain how
these funds will be utilized.
RESPONSE:
17. Regarding the Infrastructure Repairs — Rehabilitation projects identified in Section
7.2.2 of the Rate Change Proposal, Ex. MSD 1, pgs. 7-57 — 7-59, are these funds in addition to
specific projects that are already identified? Please explain how and when the District determines
where to spend rehabilitation funds. Please explain what efforts the District takes to ensure that
infrastructure needs are expended in a fair and equitable manner.
RESPONSE:
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18. Regarding the Infrastructure Repairs — Wastewater projects identified in Section
7.2.2 of the Rate Change Proposal, Ex. MSD 1, p. 7-59, please explain how these projects are
identified. Please explain in detail what type of infrastructure (e.g., pipelines, pump stations,
treatment facilities) is included.
RESPONSE:
19. Regarding the RADAR Rainfall Data, Stream Flow Gauge Operation and
Maintenance (USGS), and Stream Flow Water Quality Sampling projects identified in Section
7.2.2 of the Rate Change Proposal, Ex. MSD 1, pgs. 7-76 — 7-77 and 7-81 — 7-83, will the data
from these projects be utilized for ongoing Consent Decree monitoring?
RESPONSE:
20. Please describe the District's contract with the City of Arnold. Please explain how
Arnold's Wastewater Treatment Plant revenue is derived. Further, please explain the reasoning for
the projected increases in the Rate Model for Arnold WWTP revenues. See Ex. MSD 52, Inputs
tab, line item 41500.
RESPONSE:
21. Please provide a copy of the presentations made to ratings agencies for the District's
most recent bond issuance.
RESPONSE:
22. On the O&M Summary tab in the Rate Model, Ex. MSD 52, please explain the
nature of the projected One Time Expenses (line item 2524) and Recurring Future Expenses (line
item 2408), as well as how incremental additional costs were developed.
RESPONSE:
23. Please provide a copy of the District's FY2020 Operating Budget to be included as
an exhibit to the Rate Commission's proceedings.
RESPONSE:
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24. Please provide a copy of the utility cost trend analysis referenced in Section 7-2 of
the Rate Change Proposal, Ex. MSD 1, p. 7-2.
RESPONSE:
25. Please provide supporting file/documentation for the escalation factors indicated
in the Rate Model, Ex. MSD 52, on the Inputs tab, for the following escalation factors:
(a) 41160 Residential — Late Charges — please explain what led from the 1% increase
in the 2015 recent wastewater rate change proposal to the 9% increase projected
herein. Did the District experience an increase in delinquencies since the 2015
proposal?
(b) 41260 Commercial — Late Charges — please explain what led from the 1%
increase in the 2015 recent wastewater rate change proposal to the 9% increase
projected herein. Did the District experience an increase in delinquencies since
the 2015 proposal?
(c) 41600 NSF Fees — Please provide documentation supporting the projected
increase in NSF fees.
(d) 42100 SSC Doubtful Accounts — Please confirm that this is the same information
as is provided in Ex. MSD 61.
(e) 43120 Connection Fees — Please state the most recent time MSD conducted a fee
connection study. Do connection fees automatically increase 1% per year? Please
provide a copy of any resolution/ordinance outlining projected increases.
RESPONSE:
Respectfully submitted,
isa isa 0. Stump
Brian J. Malone
LASHLY & BAER, P.C.
714 Locust Street
St. Louis, Missouri 63101
Tel: (314) 621-2939
Fax: (314) 621-6844
lostump@lashlybaer.com
bmalone@lashlybaer.com
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CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing was sent by electronic transmission
to Janice Fenton, Office Associate Senior, Metropolitan St. Louis Sewer District; Susan Myers,
Counsel for the Metropolitan St. Louis Sewer District, on this 25th day of March, 2019.
Ms. Janice Fenton
Office Associate Senior
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, Missouri 63103
jfenton@stlmsd.corn
Ms. Susan Myers
General Counsel
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, Missouri 63103
smyers@stlmsd.com
Brandon W. Neuschafer
Kamilah Jones
Bryan Cave, LLP
211 North Broadway, Suite 3600
St. Louis, Missouri 63102
bwneuschafer@bc1plaw.corn
kamijones@belplaw.com
Attorneys for Missouri Industrial
Energy Consumers
Brian J. Malone
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