HomeMy Public PortalAboutExhibit MSD 1 - 2011 Rate Change Proposal
Metropolitan St. Louis Sewer District
Wastewater Rate Proposal
May 10, 2011
TABLE OF CONTENTS
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Page
Black & Veatch TOC-1
1.0 EXECUTIVE SUMMARY ...........................................................................................1-1
1.1 Report Organization...................................................................................................1-2
1.1.1 Section 1 - Executive Summary...........................................................................1-2
1.1.2 Section 2 - Combined Utility...............................................................................1-2
1.1.3 Section 3 - Wastewater Utility.............................................................................1-2
1.1.4 Section 4 - Stormwater Utility.............................................................................1-2
1.1.5 Section 5 – Customer Cost Impact.......................................................................1-2
1.2 Key Rate Proposal Assumptions................................................................................1-2
1.3 Wastewater Utility Summary of Findings.................................................................1-3
1.3.1 Wastewater Revenue and Revenue Requirements...............................................1-3
1.3.2 Wastewater Cost of Service Allocations..............................................................1-5
1.3.3 Wastewater Service Charge Adjustments............................................................1-6
1.4 Stormwater Utility Summary of Findings..................................................................1-7
1.4.1 Recent Stormwater Litigation..............................................................................1-7
1.4.2 Stormwater Revenue and Revenue Requirements...............................................1-7
1.4.3 Stormwater Adjustments......................................................................................1-8
1.5 Resulting Impact on Customer Monthly Bills ...........................................................1-8
1.5.1 Single Family Residential Customers..................................................................1-8
1.5.2 Multifamily Residential Customer.......................................................................1-9
1.5.3 Non-Residential Customer...................................................................................1-9
2.0 COMBINED UTILITY.................................................................................................2-1
2.1 Historical and Projected Operating Expenses ............................................................2-1
2.1.1 Allocated Operating Costs...................................................................................2-3
2.2 Other Operating Revenue ..........................................................................................2-5
2.2.1 Allocated Other Operating Revenue....................................................................2-5
3.0 WASTEWATER UTILITY..........................................................................................3-1
3.1 Customer Growth.......................................................................................................3-1
3.2 Billed Wastewater Volume........................................................................................3-1
3.3 Historic and Existing Wastewater Rates....................................................................3-4
3.4 Wastewater Revenue Under Existing Rates ..............................................................3-6
3.4.1 Other Operating Revenue ..................................................................................3-10
3.5 Wastewater Revenue Requirements ........................................................................3-11
3.5.1 Wastewater Operation and Maintenance Expense.............................................3-11
3.5.2 Wastewater Routine Capital Improvements ......................................................3-11
3.5.3 Wastewater Major Capital Improvement Program............................................3-13
3.5.4 Wastewater Capital Cost Financing...................................................................3-13
3.5.5 Existing and Projected Wastewater Debt...........................................................3-16
3.5.6 Wastewater Operating Reserve..........................................................................3-17
3.6 Summary of Wastewater Revenue and Revenue Requirements..............................3-17
3.7 Cost of Service Allocations .....................................................................................3-20
3.7.1 Costs of Service to be Allocated........................................................................3-21
3.7.2 Functional Cost Components.............................................................................3-21
3.8 Distribution of Costs to Customer Classes..............................................................3-28
3.8.1 Customer Classifications ...................................................................................3-28
3.8.2 Units of Service..................................................................................................3-28
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WASTEWATER RATE PROPOSAL
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3.8.3 Customer Class Costs of Service.......................................................................3-30
3.9 Wastewater Rate Adjustments.................................................................................3-32
3.9.1 Existing Wastewater Rates ................................................................................3-32
3.9.2 Proposed Wastewater Rates...............................................................................3-33
3.9.3 Wastewater Revenue Under Proposed Rates.....................................................3-38
3.10 Alternative Wastewater Rates..................................................................................3-39
4.0 STORMWATER UTILITY..........................................................................................4-1
4.1 Existing Stormwater Rates and Taxes .......................................................................4-1
4.2 Stormwater Revenue..................................................................................................4-2
4.2.1 User Charge Revenue ..........................................................................................4-2
4.2.2 Stormwater OMCI Tax Revenue.........................................................................4-2
4.2.3 Other Revenue .....................................................................................................4-5
4.3 Stormwater Revenue Requirements...........................................................................4-6
4.3.1 Stormwater Operation and Maintenance Expense...............................................4-6
4.3.2 Stormwater Routine Capital Improvements.........................................................4-7
4.3.3 Stormwater Major Capital Improvement Program..............................................4-7
4.3.4 Operating Reserve................................................................................................4-8
4.4 Summary of Stormwater Revenue and Revenue Requirements................................4-8
5.0 CUSTOMER COST IMPACT.....................................................................................5-1
5.1 Wastewater and Stormwater Revenues......................................................................5-1
5.2 Wastewater and Stormwater Revenue Requirements................................................5-2
5.3 Summary of Combined Revenue and Revenue Requirements..................................5-3
5.4 Rate Schedules...........................................................................................................5-3
5.5 Typical Bills...............................................................................................................5-6
5.6 Affordability ............................................................................................................5-11
Error! No table of contents entries found.
LIST OF TABLES
Table 1-1 Single Family Residential Monthly Bill..............................................................1-9
Table 1-2 Multi-Family Residential Monthly Bill...............................................................1-9
Table 1-3 Non-Residential Monthly Bill..............................................................................1-9
Table 2-1 Historical and Projected Wastewater and Stormwater Operating Costs..............2-2
Table 2-2 Allocation of Direct Operating Costs Between Wastewater and Stormwater.....2-4
Table 2-3 Historical and Projected Other Operating Revenue.............................................2-6
Table 2-4 Allocation of Other Operating Revenue Between Wastewater and Stormwater.2-7
Table 3-1 Historical and Projected Wastewater Customer Accounts ..................................3-2
Table 3-2 Historical and Projected Contributed Wastewater Volume.................................3-3
Table 3-3 Historic Wastewater Charges...............................................................................3-7
Table 3-4 Existing Wastewater Rates ..................................................................................3-8
Table 3-5 Billed Wastewater Service Revenue Under Existing Rates.................................3-9
Table 3-6 Projected Wastewater Other Operating Revenue ..............................................3-10
Table 3-7 Projected Wastewater Operating Costs..............................................................3-12
Table 3-8 Wastewater Capital Improvement and Replacement Program..........................3-14
Table 3-9 Wastewater Capital Improvement Program Financing......................................3-15
Table 3-10 Projected Wastewater Debt Service Requirements............................................3-17
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WASTEWATER RATE PROPOSAL
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Table 3-11 Comparison of Wastewater Revenue Under Existing Rates With Projected
Revenue Requirements......................................................................................3-18
Table 3-12 Wastewater Cost of Service...............................................................................3-22
Table 3-13 Allocation of Estimated Wastewater Plant Investment and Other Capital
Costs to Functional Cost Components...............................................................3-24
Table 3-14 Percentage of Wastewater Operation and Maintenance Expense by
Functional Cost Components .............................................................................3-26
Table 3-15 Allocation of Wastewater Operation and Maintenance Expense to Functional
Cost Components ...............................................................................................3-27
Table 3-16 Wastewater Units of Service..............................................................................3-29
Table 3-17 Allocation of Wastewater Cost of Service to Customer Classes .......................3-31
Table 3-18 Comparison of Wastewater Cost of Service with Revenue Under Approved
Rates...................................................................................................................3-32
Table 3-19 Proposed Wastewater Rates - User/Capital Charge Breakdown .......................3-34
Table 3-20 Proposed Wastewater Rates by Customer Class................................................3-35
Table 3-21 Comparison of Existing and Proposed Wastewater Rates.................................3-36
Table 3-22 Non-Residential Equivalent Bills ......................................................................3-38
Table 3-23 Comparison of Wastewater Cost of Service with Revenue Under Proposed
Rates...................................................................................................................3-39
Table 3-24 Alternative Wastewater Rates............................................................................3-40
Table 3-25 Proposed and Alternative Wastewater Rates Comparison.................................3-41
Table 4-1 Existing Stormwater Rates and Taxes .................................................................4-1
Table 4-2 Billed Stormwater Revenue Under Existing Rates and Taxes.............................4-3
Table 4-3 Stormwater OMCI Revenue Under Existing Tax Rates......................................4-3
Table 4-3 Stormwater OMCI Revenue Under Existing Tax Rates......................................4-4
Table 4-4 Projected Stormwater Other Operating Revenue.................................................4-5
Table 4-5 Projected Stormwater Operating Costs................................................................4-7
Table 4-6 Comparison of Projected Stormwater Revenue Under Existing Rates and
Taxes with Projected Revenue Requirements......................................................4-9
Table 5-1 Projected Wastewater and Stormwater Revenue.................................................5-2
Table 5-2 Projected Wastewater and Stormwater Revenue Requirements..........................5-3
Table 5-3 Comparison of Combined Revenue Under Projected Rates and Taxes with
Total Revenue Requirements...............................................................................5-4
Table 5-4 Proposed Wastewater Rates and Existing Stormwater Charges..........................5-5
Table 5-5 Typical Single Family Residential Wastewater Bill Comparison .......................5-7
Table 5-6 Typical Wastewater Bill Comparison ..................................................................5-8
Table 5-7 Typical Stormwater Bill Comparison ..................................................................5-9
Table 5-8 Typical Wastewater Bills Under Proposed and Alternative Wastewater Rates 5-10
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Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
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TABLE OF FIGURES
Figure 2.1 Historical and Projected O&M Expense..............................................................2-1
Figure 2.2 Cost Impact Since 2000.......................................................................................2-3
Figure 3.1 Historic Wastewater Customer Growth ...............................................................3-1
Figure 3.2 Historic Billed Wastewater Volume....................................................................3-1
Figure 3.3 Wastewater Service Charge Revenue..................................................................3-6
Figure 3.4 Projected Wastewater Operating Expenses .......................................................3-11
Figure 3.5 Wastewater Capital Improvement Program.......................................................3-13
Figure 3.6 Comparison of Wastewater Revenue and Revenue Requirements....................3-19
Figure 3.8 Operation and Maintenance Expense.................................................................3-25
Figure 3.9 Contributed Wastewater Volume .......................................................................3-28
Figure 5.1 Historic and Projected Residential Bills..............................................................5-6
APPENDICES
Appendix A Rate Ordinance Index…………………………………………………………...A-1
Appendix B Glossary of Wastewater and Stormwater Terms………………………………..B-1
ABBREVIATIONS
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch
AWWA American Water Works Association
AWWARF American Water Works Association Research Foundation
Board Metropolitan Sewer District Board of Trustees
BOD Biochemical Oxygen Demand
Ccf Hundred (100) cubic feet (about 748 gallons)
Ccf/day Hundred (100) cubic feet per day
CIRP Capital Improvement and Replacement Program
City City of St. Louis
CMOM Capacity, Management, Operation and Maintenance
COD Chemical Oxygen Demand
County St. Louis County
CSO Combined Sewer Overflow
District Metropolitan Sewer District (MSD)
EPA Environmental Protection Agency
FY Fiscal Year
gpd gallons per day
HHS Health and Human Services
I/I Infiltration/Inflow
O&M Operation and Maintenance
OM&R Operation, Maintenance and Replacement
OMCI Operation, Maintenance, and Construction Improvement
PAYG Pay-As-You-Go
mg/l milligrams per liter
mgd million gallons per day
MDNR Missouri Department of Natural Resources
MSD Metropolitan Sewer District (District)
NACWA National Association of Clean Water Agencies
NPDES National Pollutant Discharge Elimination System
SRF State Revolving Fund
SSO Sanitary Sewer Overflow
SS Suspended Solids
WWTP Wastewater Treatment Plant
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-1
1.0 EXECUTIVE SUMMARY
The Metropolitan St. Louis Sewer District (District) provides retail wastewater collection and
treatment services to approximately 425,000 accounts within an area of approximately 524 square miles.
Included in the service area is all of the City of St. Louis and most of St. Louis County. The District’s
responsibilities include planning, constructing, operating, and maintaining facilities for collection,
transportation, treatment, and disposal of the sanitary and industrial wastewater generated within its
service area. The District is also responsible for operating and maintaining the City’s flood wall pumping
stations and, to the extent funding is available, providing stormwater facility operation and maintenance
services.
The District was incorporated under a plan approved in a special election in 1954 and now
operates under a revised plan approved by District voters on November 7, 2000. The District is managed
by a Board of Trustees (Board), which is comprised of 6 members, three of whom are appointed by the
Mayor of the City of St. Louis and the remaining three are appointed by the County Executive of St.
Louis County. The Board enacts District ordinances, adopts budgets, and determines policies. The Board
also appoints the Executive Director, the Secretary-Treasurer, and the Internal Auditor. Under provisions
contained in the 2000 Plan, representatives from fifteen local organizations have been selected and now
serve on an independent Rate Commission. This commission is charged with reviewing and making
recommendations to the Board regarding all proposed changes in wastewater and stormwater rates.
Funding for the District’s wastewater operating and capital requirements is derived from
wastewater service charges, district-wide revenue bonds, interest income, dedicated subdistrict tax
assessments, monitoring fees, engineering and service fees, and other miscellaneous sources. In the past,
federal and state grants for construction of mandated wastewater treatment plants provided an important
source of capital. The wastewater treatment construction grants program was largely replaced by a state
revolving fund loan program in 1990. The District has previously participated in the state’s low interest
debt program and plans to apply for additional loans in the future. Funding for the District’s stormwater
operations is obtained by a system of voter approved flat rate user charges and ad valorem taxes.
As a condition for obtaining wastewater construction grants, the District entered into agreements
with the U.S. Environmental Protection Agency (EPA) and the Missouri Department of Natural
Resources (MDNR). Those agreements include a requirement that the District maintain a system of
wastewater user charges that will recover sufficient revenues to pay for the operation, maintenance, and
replacement (OM&R) requirements of the wastewater system. Per federal user charge regulations, user
charges must recover revenue from customer classes in proportion to their respective service
requirements, except that relief to low income users may be provided. The current wastewater user
charges were approved by the Board of Trustees in January 2010 by Ordinance 13021. Current
stormwater charges became effective on August 1, 2010 by Ordinance 13125.
The District, in recognition of the importance of financial planning for the increasing costs to
replace, renew, expand, improve, and operate the wastewater and stormwater utilities, authorized this
comprehensive study of revenue requirements, costs of service, and rates for
wastewater and stormwater services.
Due to recent litigation proceedings, the stormwater impervious area
charges recommended during the January 2008 Rate Commission proceeding and
adopted by the Board have been replaced by the prior system of voter approved
flat rate charges and ad valorem taxes. No increases in stormwater user charges
or taxes are anticipated for the study period. However, the District now has the
capability to bill multifamily customers on a per unit basis, as originally specified
by authorizing ordinances, instead of a single account basis. Therefore, the
primary focus of this rate proposal will be on wastewater utility operations and projected rate adjustments.
No changes in
stormwater user
charges or taxes
are presented in
this rate proposal.
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-2
1.1 Report Organization
This report is organized into the following five major sections:
Section 1 Executive Summary
Section 2 Combined Utility
Section 3 Wastewater Utility
Section 4 Stormwater Utility
Section 5 Customer Cost Impact
1.1.1 Section 1 - Executive Summary
The Executive Summary section presents an overview of the District, summary of findings for
each utility, key assumptions used to develop the proposed rates and the impact these rates are expected to
have on monthly bills of typical wastewater and stormwater customers.
1.1.2 Section 2 - Combined Utility
Section 2 presents the methodology used to appropriately allocate operating expenses and other
operating revenues to each respective utility. A summary of combined utility projected operating
expenses and other operating revenues is generated for 2011 through 2016, with a test year established as
2013. Historical operating expenses and other operating revenues for the combined utility are also
presented for 2006 through 2010.
1.1.3 Section 3 - Wastewater Utility
Section 3 presents the detailed technical analysis of wastewater revenue and revenue
requirements for 2011 through 2016 and allocates costs to customer classes in accordance to their
respective service requirements. This section provides a projection of wastewater rates for 2013 through
2016 that satisfies the utility’s net revenue requirements to be recovered from rates. An alternative set of
projected rates is also presented as a worst case scenario should the District not be able to obtain
additional wastewater revenue bond authorization.
1.1.4 Section 4 - Stormwater Utility
Section 4 presents the detailed technical analysis of the stormwater revenue and revenue
requirements for 2011 through 2016. Due to recent stormwater litigation, stormwater related rates and
taxes are not proposed to be changed within the six-year study period presented in this rate proposal.
1.1.5 Section 5 – Customer Cost Impact
Section 5 combines the separate analyses performed in Sections 3, and 4 to show total combined
revenues and revenue requirements of the District. Typical bills are provided to show the combined cost
impact of the proposed rate increases on each customer class. These impacts are summarized for the years
2013 through 2016 and compared to typical bills under current rates and typical bills under rates approved
by the Board for 2012.
1.2 Key Rate Proposal Assumptions
In conducting our analyses and developing projections summarized in this rate proposal, Black &
Veatch has made certain assumptions with respect to conditions, events, and circumstances that may
occur in the future. The methodology utilized by Black & Veatch in performing the analysis follows
generally accepted practices for such projections. Such assumptions and methodologies are summarized
in this rate proposal and are reasonable and appropriate for the purpose for which they are used. While
Black & Veatch believes the assumptions are reasonable and the projection methodology valid, actual
results may differ materially from those projected, as influenced by the conditions, events, and
circumstances that actually occur. The principal assumptions used in the forecast of future District
operations are as follows:
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-3
1. In preparation of this report, Black & Veatch has relied on certain historical, financial, and
statistical data supplied by District staff. While such data is considered reliable, Black &
Veatch has not independently verified the detailed accuracy of such data.
2. Billed wastewater volume will continue to decrease but will level off towards the end of the
study period.
3. The District’s estimates of content, scheduling, and cost of the six-year capital
improvement program present a reasonable projection of the future construction program.
4. The Rate Commission will recommend the indicated wastewater revenue increases to the
Board in time for their stated implementation.
5. The Board will approve the indicated revenue increases for fiscal years 2013 through 2016
and the issuance of additional bonds as required to finance the Capital Improvement and
Replacement Program (CIRP).
6. The District will continue to apply the existing schedule of stormwater rates and taxes to
provide stormwater related services. Although ongoing legal actions may allow the District
to reinstate the prior system of user charges based on impervious area, additional revenue
that would be received from such rates, in lieu of the existing system of rates and taxes, are
not included in this rate proposal.
7. A Bond election will be held in fiscal year 2012 and the District voters will authorize
approximately $1 billion of additional wastewater revenue bonds.
8. The Board will approve issuance of additional bonds as required to finance the CIRP.
9. If the District does not obtain additional revenue bond authority, the Board will approve the
alternative wastewater rates presented in Table 3-24 of this report.
10. Debt service for the revenue bonds proposed to be issued during the study period will be
approximately as estimated.
11. The District will maintain a minimum operating reserve balance at all times that is at least
equal to 60 days of operating expenditures.
12. There will be no material changes in federal and state laws or regulations that would
adversely impact the District’s ability to secure tax-exempt financing for its wastewater
system, place more stringent limitations on wastewater effluent discharges, materially
increase the cost of constructing or operating the wastewater and stormwater systems, or
otherwise adversely impact operations of the District.
13. The general economy that impacts District costs and users capabilities to pay wastewater
and stormwater service charges will remain relatively stable at current conditions.
14. All revenue and revenue requirement projections presented in this report are expressed on a
cash basis consistent with the District’s operating budgets.
1.3 Wastewater Utility Summary of Findings
As a result of our evaluations and analyses, the following summary of findings and
recommendations for the wastewater utility are offered for consideration by the District.
1.3.1 Wastewater Revenue and Revenue Requirements
1. Customers served, billable wastewater volume, revenues, and revenue requirements of the
District are projected in this report for the six-year study period of 2011 through 2016.
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-4
2. The average number of customers served by the wastewater utility is approximately
425,600. Modest decreases in the number of customers are projected for the study period
based on an analysis of past growth trends and the impact of current economic conditions.
3. Billed wastewater volume is the amount of wastewater flow contributed to the sewer
system by residential and non-residential customers. The determination of billed or
contributed wastewater volume for unmetered residential customers is based on the same
indoor water usage attributes previously used to develop water rates for unmetered water
customers in the City of St. Louis. The indicated unit usage's include:
• 16 gallons per day (gpd) for each room,
• 60 gpd for each water closet, and
• 50 gpd for each bath or separate shower.
Billable wastewater volumes for all single family customers with metered water usage is
determined on the basis of water used during the period best equated to contributed
wastewater volume. For District customers, this period is from November 1 through April
30. Billed wastewater volume for non-residential customers is equal to their actual water
usage less exemption allowances for any water that does not enter the sewer system.
Multifamily customers may be billed based on actual annual water usage or the average
annual water usage established during the best equated period. Total contributed
wastewater volume is projected to decrease from 69,302,900 hundred cubic feet (Ccf) in
2011 to 68,004,000 Ccf in 2016 due to a decline in non-residential and unmetered accounts.
4. District revenue is derived principally from charges for wastewater service. The existing
schedule of wastewater rates have been in effect since July 1, 2010. The rates currently
consist of monthly service charges, a uniform volume charge, and extra strength surcharges
for biochemical oxygen demand (BOD) in excess of 300 milligrams per liter (mg/l) or
chemical oxygen demand (COD) in excess of 600 mg/l and suspended solids (SS) in excess
of 300 mg/l. The service charges include a billing and collection charge, a system
availability charge that are applicable to all customer classes and a compliance charge that
is only applicable to non-residential customers. Revenues from normal and excess strength
wastewater billings, under present rates, are projected to decrease from about $213,795,600
in 2011 to about $210,431,800 in 2016.
5. Other operating revenue is available from late charges, inspection and other fees, waste
hauler permits, wastewater lien interest and fees, and other miscellaneous sources. The
District also receives nonoperating revenues from interest earned on the investment of
available funds. Annual interest rates available are assumed to be 1.2 percent for reserve or
long-term funds and 1.0 percent for all other invested funds.
6. Revenue requirements to be met from wastewater system revenue include operation and
maintenance expense, expenditures for capital improvements met directly from revenues,
debt service (consisting of principal and interest payments), and provision for an adequate
operating reserve.
7. Operation and maintenance expense includes the annual costs of salaries and wages, costs
for materials and supplies, fuel and electrical power costs and other costs such as employee
benefits, insurance, and contract services. Annual wastewater operation and maintenance
expense is projected to increase from $134,394,800 in 2011to $170,084,100 in 2016.
8. Routine capital improvements (capital outlay costs) are projected to increase from
$2,378,600 in 2011 to $2,770,900 in 2016.
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-5
9. The District has a total revenue bond authorization of $775 million obtained through two
bond initiatives. The initial authorization of $500 million was approved by voters on
February 3, 2004 and an additional authorization of $275 million was approved by voters
on August 5, 2008. Currently, about $92 million of the combined authorization is available
but is expected to be issued by the end of fiscal year 2012.
10. The District has currently identified the need for about $1.30 billion of major wastewater
capital improvements during the 6-year study period.
11. It is anticipated that proposed capital improvements will be financed from a combination of
available funds on hand, revenue bond proceeds, State Revolving Fund (SRF) loans, grants,
annual operating revenues, connection fee and other miscellaneous revenues, and interest
income. Revenue bond totaling $857,020,000 are expected to issued during the six-year
study period. The proposed bonds are assumed to have 30-year terms and an annual
interest rate of 5.5 percent for fiscal years 2012 through 2016. Additional revenue bonds
issued as part of the SRF loan program, totaling $216,999,300 are assumed to be available
during the study period. These bonds are expected to have 20-year terms and a net
effective annual interest and administration cost of about 2.5 percent per year. Total debt
issued during the study period, net of related issuance costs and bond reserve requirements,
will finance 77.1 percent of the capital improvement and replacement program costs. Total
annual debt service requirement is projected to increase from $38,404,300 in 2011to
$111,467,300 in 2016.
12. For purposes of this report, all revenue bonds except those issued through the SRF loan
program are assumed to be issued in July. All SRF loan program bonds are assumed to be
issued in November, except for the recent December 2010 issue. Repayment of SRF loans
are anticipated to begin one year after their receipt.
13. Cash financing of major capital improvements from annual revenues (excluding
Improvement Fund projects) is expected to total $223,525,000 for the study period and
finance about 17.2 percent of major capital improvement program costs. About 4.2
percent of the total program costs during the six-year study period will be met from
available fund balances with the remaining 1.4 percent of program costs obtained from
grants, interest income and miscellaneous revenue.
14. The pro forma operations statement or cash flow analysis presented in Table 3-11 provides
a basis for evaluation of the adequacy of revenues under increased rates to meet the
projected revenue requirements of the District for the six-year study period. Based on the
amount of revenue bonds currently proposed to be issued through fiscal year 2016,
recommended revenue increases for the study period are 4.3 percent in fiscal year 2012, as
currently approved by the Board, 11.0 percent in fiscal year 2013, 12.0 percent in fiscal
year 2014, 12.0 percent in fiscal year 2015 and 12.0 percent in fiscal year 2016. If
additional revenue bond authority assumed by this rate proposal is not approved by the
voters within the District’s boundaries, the indicated revenue increases will need to be
significantly increased, as further discussed in Section 3.10 of this report.
1.3.2 Wastewater Cost of Service Allocations
15. Costs of service allocations are made for one or more years considered to be representative
of the period resultant rates are expected to be in effect. Fiscal year 2013 is selected as the
test year for this study.
16. Based upon projected 2013 revenue requirements and offsetting revenues, the cost of
service to be recovered by wastewater charges is expressed on a cash basis as follows:
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-6
Operating $145,596,800 (a) 59.6%
Capital costs 98,707,000 (b) 40.4%
Total $244,303,800 100.0%
(a) Excludes $1,110,800 of costs met from other revenue resources.
(b) Excludes $1,301,200 of costs met from other revenue sources.
17. The costs of service to be recovered from wastewater charges are analyzed by system
function as a basis for the subsequent allocation of costs to customer classes. This
methodology allocates costs related to various facilities in the wastewater system on the
basis of the primary factor influencing the design, sizing, and costs of each facility.
Functional cost components recognized for this allocation process include volume,
capacity, wastewater strength (consisting of suspended solids and biochemical oxygen
demand) and customers.
18. Customers are classified as residential and non-residential. The residential customer class
includes customers residing in single family and multifamily dwellings. The non-
residential class includes all customers (commercial, government, industrial, etc.) not
included in the residential class.
19. The responsibility of customer classes for costs of service is determined based on their
proportionate share of service requirements expressed in terms of volume, capacity,
strength, and customer related units of service.
20. A review of billable wastewater and influent flows recorded at the wastewater treatment
plants during recent years indicates that about 55 percent of the total flow treated by the
District can be attributable to infiltration/inflow (I/I).
21. I/I is allocated to customer classes based on both the number of customers served and
billable wastewater volume. Peak flow rates and wastewater strength of I/I are also
considered in this allocation.
22. An analysis of wastewater strengths indicate that normal or domestic-strength wastewater
has a biochemical oxygen demand strength of 175 milligrams per liter (mg/l) and a
suspended solids concentration of 220 mg/l. The corresponding normal strength threshold
limits used for surcharge calculation purposes are 300 mg/l for BOD and 300 mg/l for
suspended solids
23. Division of the allocated costs of service by the applicable system units of service
determines unit costs of service that can be applied to the respective service requirements
of each customer class. The resulting costs of service allocated to customer classes are
summarized in Table 3-18. Estimated revenue under existing rates and the percentage
increase in revenue required to meet costs of service are also shown in the table.
1.3.3 Wastewater Service Charge Adjustments
24. Proposed wastewater rates retain the form of the existing rate schedule as indicated in
Table 3-20 with the exception of the non-residential compliance charge. Environmental
compliance costs are proposed to be recovered from non-residential customers through a
five-tier system of charges instead of a uniform charge. The new rate structure is designed
to recover costs in proportion to the services required by customers within each tier. A
more detailed discussion of the proposed compliance charge rate structure is presented in
Section 3.9.2.3 of this report. The rates presented in Table 3-20 will adequately recover
total cost of service requirements for the 2013 test year. It is recommended that the District
adopt the proposed rates presented in Table 3-20.
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-7
25. The cost impact of the low-income assistance program on a typical single family residential
customer is less than $0.05 per month.
26. Based on affordability guidelines proposed by various government agencies and the water
industry, the proposed wastewater rates are affordable. Additional detail concerning
affordability guidelines may be found in Section 5.6.
1.4 Stormwater Utility Summary of Findings
As a result of our evaluations and analyses, the following summary of findings and
recommendations for the stormwater utility are offered for consideration by the District.
1.4.1 Recent Stormwater Litigation
A lawsuit asserting that the impervious area based user fees implemented in March 2008 violated
the Missouri Hancock Amendment was filed on July 18, 2008. A five-question test adopted by the
Missouri Supreme Court was used to determine whether the new impervious area based stormwater rate
was a tax subject to voter approval or a fee that does not require voter approval. The assigned Lincoln
County Circuit Court Judge ruled on July 9, 2010 that the new stormwater charge was a tax and thus
violated the Hancock amendment because it was not approved by the voters. As a result of this ruling, the
District reinstituted the prior system of charges effective on August 1, 2010
1.4.2 Stormwater Revenue and Revenue Requirements
1. Stormwater revenues, and revenue requirements of the District are projected in this report
for the six-year study period of 2011 through 2016.
2. The average number of customers served by the stormwater utility is approximately equal
to the number of wastewater customers. Modest decreases in the number of customers are
projected for the study period based on an analysis of past growth trends.
3. District stormwater revenue is derived principally from ad valorem taxes, consisting of a
$0.018 per $100 assessed value tax rate for general district-wide administrative purposes
and a $0.061 per $100 assessed value tax rate for stormwater services. The district-wide
tax is applied to all District customers whereas the stormwater tax is only applied to
customers within the District’s original boundaries. The existing flat rate user charges of
$0.24 per account and $0.18 per multifamily unit were in effect from their implementation
in May 1988 until their replacement by impervious area based charges in 2008. These fees
have been reinstated at the same levels approved by voters in 1998. However, the
multifamily rate has only recently been applied due to recent improvements in billing
information systems. Revenues from the current user fee and the district-wide and
stormwater O&M taxes are projected to increase from about $1,181,900 in 2011 to about
$1,350,300 in 2016. Stormwater revenue for 2011 also includes $3,625,300 derived from
application of the prior impervious area based charges for the first month of fiscal year
2011. Additional stormwater related tax revenue is derived from specific OMCI
subdistricts.
4. Other operating revenue is available from late charges, inspection and other fees, and other
miscellaneous sources. The District also receives nonoperating revenues from interest
earned on the investment of available funds. Annual interest rates available are assumed to
be 1.2 percent for reserve or long-term funds and 1.0 percent for all other invested funds.
5. Revenue requirements to be met from stormwater system revenue include operation and
maintenance expense, expenditures for capital improvements met directly from revenues,
and provision for an adequate operating reserve.
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-8
6. Operation and maintenance expense includes the annual costs of salaries and wages, costs
for materials and supplies, fuel and electrical power costs and other costs such as employee
benefits, insurance, and contract services. Annual stormwater operation and maintenance
expense is projected to increase from $17,738,300 in 2011 to $18,609,200 in 2016.
7. Routine capital improvements (capital outlay costs) are projected to increase from
$526,300 in 2011to $613,000 in 2016.
8. Due to limited funds and no available debt authorization, the District will not be able to
finance major stormwater capital improvement projects from the user charge and
stormwater related taxes other than those assessed for local area improvements through
subdistrict OMCI funds.
9. OMCI Funds will continue to be used to finance subdistrict improvements. In addition, a
portion of the revenue collected in each subdistrict will be used to provide additional
operating services within each respective OMCI subdistrict.
10. The pending stormwater litigation limits funding for the District’s stormwater program to
the amount of revenue provided by stormwater ad valorem taxes and flat fee charges.
These revenue streams are assumed to remain relatively constant generating $26,243,400 in
fiscal year 2012 increasing to $27,136,600 in fiscal year 2016. This revenue will be used to
fund a minimal level of stormwater services throughout the District and limit capital
improvements to within specific geographic OMCI subdistrict boundaries. Annual
stormwater revenues will be distributed across the District based on geographic areas
assessed specific tax levies. Due to the overlapping nature of these OMCIs, the level of
stormwater services provided throughout the District will vary from those minimally
required to meet State and Federal regulations to those including capital improvements.
1.4.3 Stormwater Adjustments
11. No stormwater rate adjustments are presented in this rate proposal. However, the District is
now collecting user fees from multifamily customers on a per dwelling unit basis instead of
on a per account basis. This system of charges was made effective in May 1988 when
stormwater user charges were first applied but not billed due to prior billing system
limitations. The existing rates and taxes presented in Table 4-1 along with expected
subdistrict OMCI operating funds will adequately recover total cost of service requirements
for the 2013 test year.
12. The cost impact of the stormwater low-income assistance program on a typical single
family residential customer is very small due to the low rate and relatively small number of
qualified low-income customers.
1.5 Resulting Impact on Customer Monthly Bills
1.5.1 Single Family Residential Customers
The rate proposal results in the following monthly bills for an average single family residential
customer as presented in Table 1-1. These bills are based on a typical billed wastewater volume of 8 Ccf
per month.
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-9
Table 1-1 Single Family Residential Monthly Bill
1.5.2 Multifamily Residential Customer
The rate proposal results in the following monthly bills for an average multifamily residential
customer as presented in Table 1-2. These bills are based on monthly billed wastewater volume of 40 Ccf
for a multifamily customer with six dwelling units.
Table 1-2 Multi-Family Residential Monthly Bill
1.5.3 Non-Residential Customer
The rate proposal results in the following monthly bills for a medium size non-residential
customer as presented in Table 1-3. These bills are based on monthly billed wastewater volume of 100
Ccf, normal strength wastewater, and a Tier 2 compliance category.
Table 1-3 Non-Residential Monthly Bill
Table 1-3
Non-Residential Monthly Bill
Line
No. Description 2012 2013 2014 2015 2016_____________________________________________
$/month $/month $/month $/month $/month
1 Wastewater 254.80 292.50 329.55 368.05 409.80
2 Stormwater 0.24 0.24 0.24 0.24 0.24_________________________
3 Total 255.04 292.74 329.79 368.29 410.04
4 Percent Change 14.8% 12.7% 11.7% 11.3%
Table 1-2
Multifamily Residential Monthly Bill
Line
No. Description 2012 2013 2014 2015 2016_____________________________________________
$/month $/month $/month $/month $/month
1 Wastewater 96.25 108.85 123.75 139.80 157.45
2 Stormwater 1.08 1.08 1.08 1.08 1.08_________________________
3 Total 97.33 109.93 124.83 140.88 158.53
4 Percent Change 12.9% 13.6% 12.9% 12.5%
Table 1-1
Single Family Residential Monthly Bill
Line
No. Description 2012 2013 2014 2015 2016_____________________________________________
$/month $/month $/month $/month $/month
1 Wastewater 28.73 32.37 36.71 41.56 47.05
2 Stormwater 0.24 0.24 0.24 0.24 0.24_________________________
3 Total 28.97 32.61 36.95 41.80 47.29
4 Percent Change 12.6% 13.3% 13.1% 13.1%
EXECUTIVE SUMMARY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 1-10
Based on affordability guidelines proposed by various government agencies and the water industry, the
proposed wastewater rates combined with existing stormwater rates are affordable.
COMBINED UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER AND STORMWATER RATE PROPOSAL
Black & Veatch 2-1
Figure 2.1 Historical and Projected O&M Expense
Projected Operation and Maintenance Expense
0
50
100
150
200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Fiscal YearCost - $millions2.0 COMBINED UTILITY
The District provides wastewater and stormwater services to its customers on a combined utility
basis. The current fiscal year 2011 budget does not completely provide separate cost accounting for the
two utilities. However, as of February 2011, the District began to separately record and report operating
costs for the wastewater and stormwater utilities. The District also records user charge revenues of each
utility separately. In addition, all major capital improvements are separately identified for each utility and
all existing debt service costs are related to the wastewater utility.
This section of the report projects combined operating costs for the two utilities and develops the
basis for allocating these costs to each utility. It also projects total operating revenue other than user
charges and taxes on a combined basis and establishes the basis used to allocate these revenues to each
respective utility.
2.1 Historical and Projected Operating Expenses
Table 2-1 presents operating expenses for the District’s combined wastewater and stormwater
operations for fiscal years 2006 through 2016. Total operation and maintenance expenses have increased
from $116,146,531 in 2006 to $149,526,143 in 2010 due largely to increases in expenses associated with
General Counsel, Engineering, Operations, and Information Services. The increase in General Counsel
costs were due to increased litigation, primarily related to stormwater rate litigation and ongoing EPA
mediation concerning combined and sanitary overflows. Increased Engineering costs coincide with the
expansion of the wastewater capital improvement program. The increase in Operation costs primarily
reflects increased sewer system maintenance and increases in the costs of supplies. The increase in
Information Systems costs reflects a significant upgrade in computer systems.
Operation and maintenance expenses includes the total annual salaries and wages of personnel,
costs for material and supplies, fuel and electrical power costs and other costs such as employee benefits,
insurance and contractual services. Since these costs are an ongoing annual obligation of the District,
they are met from wastewater and stormwater operating revenues as they are incurred. Operation and
maintenance expense projections for fiscal years 2011 through 2016 are based on budgeted 2011 expense
amounts adjusted to recognize allowances for known cost increases, the estimated effects of inflation, and
anticipated system growth.
In addition to these
projected expenses, the
District is anticipating
increased operation and
maintenance costs for
proposed regulatory related
projects. These additional
costs are shown on Line 20
of Table 2-1. Future
operation and maintenance
expenses for the District, as
shown on Line 21 of
Table 2-1, are projected to
increase from $152,133,100
in 2011 to $188,693,300 in
2016.
Figure 2.1 Historical and Projected O&M Expense
Black & Veatch 2-2
COMBINED UTILITY Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Table 2-1 Historical and Projected Wastewater and Stormwater Operating Costs Table 2-1Historical and Projected Wastewater and Stormwater Operating CostsHistoricalProjected_________________________________________________ ___________________________________________________________No Department2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016____ _________________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________$$$$$$$$$$$1 Board of Trustees6,761 5,617 5,298 1,908 2,210 2,800 2,900 3,000 3,100 3,200 3,3002 Rate Commission (a)47,287 288,269 202,30000 461,100 9,400 9,700 10,100 610,600 11,1003 Civil Service Commission 1,297 83380 720 4,874 8,700 8,700 8,700 8,700 8,700 8,7004 Secretary - Treasurer 1,433,320 1,450,035 1,659,105 1,765,161 1,321,436 1,806,200 1,875,100 1,941,500 2,031,700 2,119,800 2,209,2005 Executive Director669,301 698,123 828,392 830,546 815,651 832,500 864,400 897,600 936,400 971,600 1,006,8006 General Counsel1,486,452 1,979,490 2,558,656 3,171,606 3,572,890 4,548,800 4,713,300 4,866,300 5,085,600 5,307,100 5,535,7007 Office of Human Resources 8,093,929 9,424,411 10,402,905 10,734,282 10,155,972 11,304,200 11,831,800 12,371,000 13,023,600 13,697,000 14,289,8008 Engineering18,687,163 19,670,310 21,408,451 23,247,149 22,986,895 21,681,200 22,437,400 23,180,900 24,025,900 24,729,400 25,370,600Operations9 Collection System (b) 18,610,464 20,247,562 21,624,448 25,608,969 27,855,739 27,940,200 28,575,400 29,479,300 30,630,400 31,544,300 32,476,50010 Pump Stations6,966,237 7,039,838 7,906,556 8,141,303 9,027,409 8,662,600 8,969,300 9,282,900 9,718,100 10,143,900 10,572,70011 Wastewater Treatment (c)27,602,538 29,967,415 30,580,839 31,408,004 34,081,127 35,427,500 36,664,600 37,941,900 39,675,900 41,366,200 43,068,60012 Support (d) 6,078,589 7,353,417 8,826,265 8,122,756 9,185,706 8,655,000 8,977,200 9,315,700 9,691,400 10,044,700 10,391,200_________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________13 Total Operations59,257,827 64,608,231 68,938,108 73,281,033 80,149,981 80,685,300 83,186,500 86,019,800 89,715,800 93,099,100 96,509,00014 Finance14,161,194 15,118,859 15,910,647 16,327,007 14,788,793 15,885,700 15,985,700 16,144,500 16,590,800 17,114,800 17,738,00015 Information Systems 6,063,356 6,333,702 7,428,031 8,579,784 10,524,829 9,835,600 10,195,900 11,766,400 12,598,400 11,406,300 11,815,400_________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________16 Subtotal (General Fund) 109,907,887 119,577,880 129,341,973 137,939,196 144,323,531 147,052,100 151,111,100 157,209,400 164,030,100 169,067,600 174,497,60017 Water Backup Program 4,858,510 3,608,165 7,439,436 6,817,000 4,500,000 4,000,000 4,300,000 5,000,000 5,000,000 5,000,000 5,000,00018 Real Property Fund (e) 1,380,134 2,683,682 987,728 836,749 702,612 1,081,000 1,113,400 1,146,800 1,181,200 1,216,700 1,253,200_________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________19 Subtotal O&M116,146,531 125,869,727 137,769,137 145,592,945 149,526,143 152,133,100 156,524,500 163,356,200 170,211,300 175,284,300 180,750,80020 Additional O&MNA NA NA NA NA00 112,400 2,159,800 7,484,100 7,942,500_________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________21 Total O&M116,146,531 125,869,727 137,769,137 145,592,945 149,526,143 152,133,100 156,524,500 163,468,600 172,371,100 182,768,400 188,693,30022 Capital Outlay3,991,300 4,927,857 7,178,561 4,686,456 3,016,623 2,904,900 3,006,600 3,096,700 3,189,600 3,285,300 3,383,900_________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ 23 Total Operating Expense 120,137,831 130,797,584 144,947,698 150,279,401 152,542,766 155,038,000 159,531,100 166,565,300 175,560,700 186,053,700 192,077,200(a) Rate proceedings are anticipated to take place once every four years.(b) Includes Mintert, Sulphur, and Grand Glaize maintenance yards and technical services.(c) Includes Lemay, Bissell, and county treatment plants which includes Coldwater Creek, Missouri River, Lower Meramec River, Grand Glaize, and Fenton.(d) Includes costs related to the customer care group, administrative support and materials management.(e) Expenditures are partially offset by rental income.Line
COMBINED UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 2-3
Historically, inflation has been in the 4% to 12%
range, depending on the nature of the expense item, with
personnel services, contractual services and capital outlay
tending toward the lower end of the range while supplies,
utility costs and insurance expenses have been towards the
upper end of the range. Figure 2-2 shows graphically the
historical increase in the Average Consumer Price Index for
Urban Consumers (CPI-U) in St. Louis from 2000 to 2010.
During this 10 year period, the growth in basic consumer
related costs due to inflation has increased by almost 24
percent or by about 2.2 percent per year.
The escalation factors used in the projections shown in Table 2-1 are as follows:
Wages, Salaries and Overtime - 2011-2016 3.0%
Personnel Services and Benefits (a) - 2011 3.5%; 2012-2016 3.0%
Group Insurance – 2011-2015 10%; 2016 6.0%
Supplies, including Chemicals – 2011 3.5%; 2012-2016 3%
Electric and Gas - 2011-2012 3.5%; 2013 3%; 2014-2016 5.5%
Contractual Services- 2011-2012 3.5%; 2013 3%; 2014-2016 4.5%
Bond and Liability Insurance – 2011-2016 5%
Capital Outlay – 2011-2012 3.5%; 2013-2016 3.0%
Pension - 2011 8.4%; 2012 9.3%; 2013 10.2%; 2014 11.4%; 2015-2016: 5.0%
(a) Except group insurance and pension)
Figure 2.2 Cost Impact Since 2000
The indicated annual pension plan increases are designed to meet the required funding needs.
Expenditures for routine annual capital improvements include those costs that tend to be routinely
incurred each year for normal replacements such as vehicles, office equipment, and minor improvements
or repairs. Since these costs are a continuing expense to be met each year, the District finances these
from current wastewater revenues. As shown on Line 22 of Table 2-1, routine capital costs are projected
to increase from $2,904,900 in 2011 to $3,383,900 in 2016. An annual inflation rate of 3 percent was
used, with recognition of any additional capital required for the routine replacement of vehicles and
equipment based on scheduled replacements.
2.1.1 Allocated Operating Costs
The direct operating costs of the District are allocated between wastewater and stormwater based
on analyses of both personnel costs and other operating costs. District Department heads were consulted
to obtain their input regarding the percentage of time and materials spent on wastewater and stormwater
operations. In addition, financial statements for the twelve month period ending February 2011 were used
to verify the overall reasonableness of the budget allocations. Table 2-2 presents the percentages used for
the allocation of direct operating costs.
Figure 2.2 Cost Impact Since 2000
Cost Impact Since 2000
0%
5%
10%
15%
20%
25%
2000 2002 2004 2006 2008 2010
Fiscal YearIncrease in CPI-U
COMBINED UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 2-4
Table 2-2 Allocation of Direct Operating Costs Between Wastewater and Stormwater
Table 2-2
Allocation of Direct Operating Costs
Between Wastewater and Stormwater
Wastewater Stormwater
Direct Direct Indirect________________________
Personnel Services
Administration and Management
Board of Trustees 0.0% 100.0%
Rate Commission 0.0% 100.0%
Civil Service Commission 0.0% 100.0%
Office of Secretary - Treasurer 0.0% 100.0%
Executive Director 0.0% 100.0%
Office of General Counsel 0.0% 100.0%
Office of Human Resources 0.0% 100.0%
Engineering 83.9% 16.1% 0.0%
Operations
Collection System 70.0% 30.0% 0.0%
Pump Stations 90.0% 10.0% 0.0%
Wastewater Treatment 100.0% 0.0% 0.0%
Support 73.0% 15.0% 12.0%
Finance D-22 48.6% 0.0% 51.4%
Information Systems D-22 0.0% 0.0% 100.0%
All Other
Administration and Management
Board of Trustees 0.0% 100.0%
Rate Commission 0.0% 100.0%
Civil Service Commission 0.0% 100.0%
Office of Secretary - Treasurer 0.0% 100.0%
Executive Director 0.0% 100.0%
Office of General Counsel 0.0% 100.0%
Office of Human Resources 0.0% 100.0%
Engineering 85.0% 15.0% 0.0%
Operations
Collection System 70.0% 30.0% 0.0%
Pump Stations 90.0% 10.0% 0.0%
Wastewater Treatment 100.0% 0.0% 0.0%
Support 84.0% 15.0% 1.0%
Finance D-22 95.9% 0.0% 4.1%
Information Systems D-22 0.0% 0.0% 100.0%
Utilities
Operations
Pump Stations 95.0% 5.0% 0.0%
Wastewater Treatment 100.0% 0.0% 0.0%
COMBINED UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 2-5
2.2 Other Operating Revenue
Historical and projected other revenue is presented in Table 2-3 for the District’s combined
wastewater and stormwater operations. All of these revenues are used to partially or fully offset related
operating costs. Billing adjustment revenue, such as late fees, refunds, lien interest and other adjustments
are expected to remain generally stable throughout the study period. The provision for bad debt has
historically increased but is expected to temporarily decline in the next two years due to more
comprehensive use of collection agencies and law firms to collect prior years’ past due amounts. This
declining trend is expected to reverse as wastewater rates continue to increase.
2.2.1 Allocated Other Operating Revenue
Table 2-4 provides the basis for the allocation of other operating revenue between wastewater and
stormwater operations. Those revenues identified as connection and other fees that are pertinent to both
operations were allocated evenly between wastewater and stormwater. Miscellaneous revenues were
generally allocated 90 percent to wastewater and 10 percent to stormwater. Wastewater revenue
adjustments were generally allocated 99 percent to wastewater and 1 percent to stormwater based on
consultations with District staff. Capital improvement related revenue is allocated 100 percent to
wastewater as there are currently no capital charges specific to stormwater.
Black & Veatch 2-6
COMBINED UTILITY Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Table 2-3 Historical and Projected Other Operating Revenue Table 2-3Historical and Projected Other Operating RevenueHistoricalProjected _______________________________________________ _________________________________________________________No. Description2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016____________________________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________$$$$$$$$$$$1 Billing Adjustment (a)5,266,793 5,497,203 7,122,194 8,226,882 4,725,609 4,597,600 4,579,400 4,576,000 4,586,000 4,599,400 4,615,5002 Bad Debt Provision(3,160,972) (4,193,703) (5,161,982) (9,678,495) (10,187,508) (10,910,900) (6,820,800) (8,998,500) (10,055,400) (11,262,000) (12,613,400)Other Fees3 Construction Inspection Fees 548,146 714,673 519,654 288,991 233,812 200,000 206,000 212,200 218,600 225,200 232,0004 Waste Hauler Permits1,080,132 1,092,556 1,174,653 1,274,743 1,460,349 1,450,000 1,457,300 1,464,600 1,471,900 1,479,300 1,486,7005 All Other Fees (b)490,171 544,570 697,236 771,495 705,833 630,000 649,000 668,600 688,700 709,400 730,600________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________6 Subtotal2,118,449 2,351,799 2,391,543 2,335,229 2,399,994 2,280,000 2,312,300 2,345,400 2,379,200 2,413,900 2,449,3007 Miscellaneous Revenue (c) 2,097,809 5,739,495 10,636,801 1,887,856 2,500,311 3,752,200 3,792,800 3,842,400 3,893,500 3,946,100 4,000,300________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________8 Total Other Operating Revenue 6,322,079 9,394,794 14,988,556 2,771,472 (561,594) (281,100) 3,863,700 1,765,300 803,300 (302,600) (1,548,300)9 Connection Fee Revenue (d) 3,096,339 3,906,218 2,021,472 1,144,092 1,035,016 1,250,000 1,288,000 1,327,000 1,367,000 1,408,000 1,450,000________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ 10 Total Other Revenue9,418,418 13,301,012 17,010,028 3,915,564 473,422 968,900 5,151,700 3,092,300 2,170,300 1,105,400 (98,300)(a) Includes Late Charges, Billed Account Refunds, Adjustments, Wastewater Lien Interest and Fees, and Other Adjustments including revenue from Arnold. (b) Includes Plan Review Fees, Submittal Fees, Wastewater Monitoring Cost Fees, Pretreatment Discharge Permits, and all other fees.(c) Includes Reimbursements, Sale of Fixed Assets, Reimbursable Engineering & Maintenance, rental income and all other miscellaneous revenue.(d) Revenue available for improvements financed out of the Improvement Fund.Line
COMBINED UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 2-7
Table 2-4 Allocation of Other Operating Revenue Between Wastewater and Stormwater
Table 2-4
Allocation of Other Operating Revenue
Between Wastewater and Stormwater
Wastewater Stormwater
Allocation Allocation________________
Connection and Other Fees
Construction Inspection Fees 50.0% 50.0%
Plan Review Fees 50.0% 50.0%
Submittal Fees 50.0% 50.0%
Waste Hauler Permits 100.0% 0.0%
Wastewater Monitoring Costs Fees 100.0% 0.0%
Pretreatment Discharge Permits 100.0% 0.0%
All Other
Machine Tap Fees 100.0% 0.0%
Conn Permits and Insp. 50.0% 50.0%
Construction Permits Fees 50.0% 50.0%
Miscellaneous Revenue
Reimbursements
Reimbursement of District Costs 100.0% 0.0%
Other Reimbursements 100.0% 0.0%
Reimbursement of Engr., Survey,
Inspection, and Other Engr. Costs 90.0% 10.0%
Sale of Fixed Assets 100.0% 0.0%
Rental Income 80.0% 20.0%
All Other
Sale of Scrap (Metal, Paper)90.0% 10.0%
Provision for Doubtful Misc. Receivables 90.0% 10.0%
Engineering Prints and Specifications 90.0% 10.0%
Refund of Court Cts & Attorney fees 90.0% 10.0%
Liquidation of Contractual Encumbrances 90.0% 10.0%
NSF Fees 90.0% 10.0%
Miscellaneous Income 90.0% 10.0%
Forfeited Deposits 90.0% 10.0%
Project Bid Fees 90.0% 10.0%
Wastewater Revenue Adjustments
Late Charges 99.0% 1.0%
Billed Account Refunds 99.0% 1.0%
Adjustments 99.0% 1.0%
Bad Debt Provision 100.0% 0.0%
City of Arnold WWT 100.0% 0.0%
NSF Fees 99.0% 1.0%
Wastewater Lien Interest and Fees 99.0% 1.0%
Other (Includes revenue from Arnold)99.0% 1.0%
Capital Improvement Related Miscellaneous Revenue
Connection and Other Fees
Construction Funds
Caulks Creek Surcharge 100.0% 0.0%
Williams Creek 100.0% 0.0%
Improvement Fund
Connection Fees 100.0% 0.0%
Miscellaneous Revenue
Construction Funds 100.0% 0.0%
Liquidation of Contractual Encumbrances 100.0% 0.0%
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-1
3.0 WASTEWATER UTILITY
Wastewater revenue is derived principally from charges for wastewater service. Other sources of
income include revenues from wastewater related OMCI subdistrict property assessments, connection
fees, waste hauler permits, interest earnings, late charges and other operating income.
Wastewater revenues under existing rates are projected by applying the existing wastewater rates
to the respective number of bills, estimated billable wastewater volume and extra strength loadings. In
order to estimate future revenues, historical data for each customer class served by the District was
reviewed and projected.
3.1 Customer Growth
Recent changes in customer accounts is presented graphically in Figure 3.1 below. Table 3-1
presents a summary of the
historical and projected average
number of wastewater customers
served by the District. As indicated
by this table, the number of
metered customers is projected to
decrease nearly 0.2 percent from
348,200 in 2011 to 347,600 in 2016
and the number of unmetered
customers is projected to decrease
nearly 2.3 percent from 77,400 in
2011 to 75,600 in 2016. The total
number of customer accounts is
expected to decrease at an average
rate of 0.1 percent per year
throughout the six-year study period. The projected change in the number of customers is based on the
historical trend in customer accounts between 2006 and 2010 as indicated in the above figure.
3.2 Billed Wastewater Volume
Table 3-2 presents a summary of historical and projected contributed or billed wastewater
volume. Historical contributed volumes are also presented graphically in Figure 3.2 below. Billed
wastewater volume is the estimated
amount of water volume
contributed to the sewer system by
residential and non-residential
customers. The City of St. Louis
(City) serves many unmetered
residential water customers and is a
large part of the District. The
amount of contributed wastewater
volume from unmetered residential
customers is determined based upon
estimates of indoor water usage per
fixture and the number of rooms
within these properties.
Figure 3.1 Historic Wastewater Customer Growth
Figure 3.2 Historic Billed Wastewater Volume
Figure 3.2 Historic Billed Wastewater Volume
0
20
40
60
80
100
2006 2007 2008 2009 2010
Fiscal Year
Metered UnmeteredVolume - million cubic feetDecline in Contributed Wastewater Volumes
Figure 3.1 Historic Wastewater Customer Growth
Customer Growth
0
100,000
200,000
300,000
400,000
500,000
2006 2007 2008 2009 2010
Fiscal Year
Metered Unmetered
Black & Veatch 3-2
WASTEWATER UTILITY Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Table 3-1 Historical and Projected Wastewater Customer Accounts Table 3-1Historical and Projected Wastewater Customer AccountsHistoricalProjected___________________________________________________________________________________________________No.Customer Class 20062007200820092010201120122013201420152016__________________________________________________________________________________________________________Metered Customers1 Single Family 301,122 302,582 302,694 302,843 303,096 302,300 302,100 302,100 302,100 302,100 302,1002 Multifamily 20,825 20,816 20,824 20,862 20,787 20,800 20,700 20,700 20,700 20,700 20,8003 Non-Residential 25,712 25,620 25,583 25,387 25,165 25,100 24,900 24,800 24,800 24,700 24,700_____________________________________________________________________________4 Total347,659 349,018 349,102 349,092 349,048 348,200 347,700 347,600 347,600 347,500 347,600Unmetered Customers5 Single Family60,010 59,977 59,733 58,757 58,034 57,400 56,800 56,400 56,200 56,200 56,2006 Multifamily23,757 23,818 23,780 20,437 19,938 20,000 19,700 19,500 19,400 19,400 19,400_____________________________________________________________________________7 Total 83,767 83,795 83,513 79,194 77,972 77,400 76,500 75,900 75,600 75,600 75,600Total Customer Accounts8 Single Family 361,132 362,559 362,427 361,601 361,130 359,700 358,900 358,500 358,300 358,300 358,3009 Multifamily 44,582 44,634 44,605 41,299 40,725 40,800 40,400 40,200 40,100 40,100 40,20010 Non-Residential 25,712 25,620 25,583 25,387 25,165 25,100 24,900 24,800 24,800 24,700 24,700_____________________________________________________________________________11 Total431,426 432,813 432,616 428,287 427,020 425,600 424,200 423,500 423,200 423,100 423,20012 Annual Percentage Increase 0.4% 0.3% 0.0% -1.0% -0.3% -0.3% -0.3% -0.2% -0.1% 0.0% 0.0%Line
Black & Veatch 3-3
WASTEWATER UTILITY Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Table 3-2 Historical and Projected Contributed Wastewater Volume Table 3-2Historical and Projected Contributed Wastewater VolumeHistoricalProjected____________________________________________________________________________________________________________No. Customer Class 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016__________________________________________________________________________________________________________CcfCcfCcfCcfCcfCcfCcfCcfCcfCcfCcfMetered Customers1 Single Family 27,437,644 26,166,748 26,229,750 25,672,899 24,884,791 24,820,900 24,646,300 24,458,200 24,457,100 24,458,100 24,460,8002 Multifamily 9,763,965 9,625,609 9,419,644 9,160,576 8,904,095 8,839,200 8,667,400 8,639,400 8,607,900 8,572,900 8,558,9003 Non-Residential 31,600,536 30,567,364 30,117,889 26,940,750 25,006,893 23,370,600 23,224,200 23,136,100 23,092,100 23,077,500 23,077,500___________________________________________________________________________________________________4 Total 68,802,145 66,359,721 65,767,283 61,774,225 58,795,779 57,030,700 56,537,900 56,233,700 56,157,100 56,108,500 56,097,200Unmetered Customers (a)5 Single Family 7,068,871 7,112,387 7,105,847 7,076,700 7,215,245 7,442,300 7,291,000 7,234,100 7,213,400 7,215,400 7,218,2006 Multifamily 5,044,805 5,038,213 5,008,881 4,928,578 4,823,684 4,829,900 4,744,500 4,700,200 4,687,700 4,689,300 4,688,600___________________________________________________________________________________________________7 Total 12,113,676 12,150,600 12,114,727 12,005,278 12,038,928 12,272,200 12,035,500 11,934,300 11,901,100 11,904,700 11,906,800Total Contributed Wastewater Volume8 Single Family 34,506,515 33,279,135 33,335,597 32,749,599 32,100,036 32,263,200 31,937,300 31,692,300 31,670,500 31,673,500 31,679,0009 Multifamily 14,808,770 14,663,822 14,428,525 14,089,154 13,727,779 13,669,100 13,411,900 13,339,600 13,295,600 13,262,200 13,247,50010 Non-Residential 31,600,536 30,567,364 30,117,889 26,940,750 25,006,893 23,370,600 23,224,200 23,136,100 23,092,100 23,077,500 23,077,500___________________________________________________________________________________________________11 Total 80,915,821 78,510,321 77,882,010 73,779,503 70,834,707 69,302,900 68,573,400 68,168,000 68,058,200 68,013,200 68,004,00012 Annual Percentage Increa8.7% -3.0% -0.8% -5.3% -4.0% -2.2% -1.1% -0.6% -0.2% -0.1% 0.0% Ccf = Hundred Cubic Feet (748 gallons)(a) Unmetered wastewater volume is determined by multiplying the number of fixtures by their respective unit usage values. Unit usage values are 16gallons per day (gpd) per room, 60 gpd per water closet, and 50 gpd per bath or separate shower.Line
WASTEWATER UTILITY
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Black & Veatch 3-4
As a result of previous studies, the following unit water consumption values are used to estimate
billable wastewater volumes for unmetered single family and multifamily residential properties:
16 gpd for each room;
60 gpd for each water closet; and
50 gpd for each bath or separate shower.
Billable wastewater volumes for all single family customers with metered water usage are
determined on the basis of water used during the period best equated to contributed wastewater volume.
For District customers, this “best equated” period is from November 1 through April 30. Billed
wastewater volume for non-residential customers is equal to their actual metered water usage less
exemption allowances for any water that does not enter the sewer system.
Metered multifamily customers are either billed based on actual annual water usage or the
average annual water usage established during the best equated period, depending on the billing method
selected by each multifamily customer. The selected billing basis is permanent and can not be changed.
Projected volumes are based on the recognition of historical billing volumes and trends. Also
considered are projections of numbers of customers and average historic billed volume per customer
class. Total wastewater volumes for all categories of customers decreased approximately 12.5 percent
from 2006 through 2010. This was due mainly to the decrease in wastewater volume for metered
customers, primarily non-residential customers. The historic decrease in billed wastewater volume is due
in part to conservation measures, increased efficiency of appliances and fixtures, and the impact of the
national economy. Future decreases in billable wastewater volumes are expected to taper off as the
economy improves and conservation efforts are maximized. For purposes of this report, total wastewater
volume for the system is expected to decrease 1.9 percent during the six-year study period from 2011 to
2016.
3.3 Historic and Existing Wastewater Rates
The District has derived revenue from basic charges for wastewater service and from other
revenue sources that include:
Connection fees;
Waste hauler permits; and
Late charges and other operating income.
The first sewer service charge imposed by the District became effective on January 1, 1956, and
was applied on a district-wide basis. The charge for single family metered and unmetered customers was
$6.00 per year. Over the years, separate wastewater rate schedules were imposed on existing and new
service areas acquired or formed by the District. At one time, the District had 14 separate rate schedules
for wastewater service.
Missouri voters approved an amendment to the state Constitution in November 1980, commonly
referred to as the Hancock Amendment, which provides specific controls to guard against
disproportionate increased fees/taxes to the people without a vote. Subsequently, the District
implemented a series of ordinances on July 1, 1981, (Ordinances 4424 through 4436) that increased
charges to excess wastewater strength customers. These charges vary with the use of the system, and
were not challenged under the Hancock Amendment.
In 1984, numerous subdistrict rates still existed for both the user charge and capital charge
portions. All subdistricts and service areas were finally consolidated into a single rate schedule in 1986.
The District was successful in gaining approval from the qualified voters on March 8, 1988 for
new District-wide user charges, which were later codified by Ordinance 7450. These rates included a
$4.18 per month flat rate for all single family residential customers regardless of whether or not their
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water usage was metered. Also in 1988, in order to satisfy a Consent Decree for wastewater system
improvements, a capital improvement surcharge of $6.50 per month was approved by the voters. This
increased the existing wastewater service charge for single family residential customers from $4.18 to
$10.68 per month.
With impending regulatory mandates and the impacts from Hancock Amendment considerations,
the District attempted various user charge modifications from 1988 through 1992. These user charge
changes were challenged and overturned by court cases. On October 1, 2001, the United States Supreme
Court denied a motion to review the settlement agreement between the District and the original plaintiffs
of the 1992 rate increase. This decision ended the 10-year old court case and cleared the way for the
District to make refunds to its customers for the non-voter approved increase paid from July 1, 1992
through June 30, 1993.
On July 1, 1993, under Ordinances 9029 and 9031, the District replaced the flat rate residential
user charge with a system of volume-based rates and implemented the current low-income assistance
program. Following lengthy legal challenges, the Missouri Supreme Court upheld the validity of the rates
on April 29, 1997. The 1993 rates were increased in 1997 by Ordinance 10177 without any legal
challenges.
In November 2000, the Board of Trustees submitted four propositions to the voters to amend the
1954 Plan; all four propositions were passed by the voters. One of the changes to the 1954 Plan was the
establishment of an independent Rate Commission. This Commission is charged with the responsibilities
to review and make recommendations to the Board regarding all proposed changes in revenue generated
by the District.
After lengthy technical conferences with the newly formed Rate Commission to consider the
District’s case for increased wastewater charges, the Rate Commission recommended proposed rate
increases for 2004, 2005, and 2006. Alternative wastewater charges were also recommended pending the
outcome of a February 2004 ballot initiative concerning revenue bond authorization. At that time, the
Board acted on the Rate Commission’s recommendations by increasing wastewater charges for fiscal year
2004, to be effective August 1, 2003, through Ordinance 11553 with the understanding that wastewater
rate increases required for fiscal year 2005 and 2006 would be enacted after the outcome of the revenue
bond authorization election was known.
Following voter approval on February 3, 2004, of authorization for $500 million in new revenue
bonds, the Rate Commission recommended a series of rate increases, known as Option D for 2005 and
2006. The 2005 and 2006 increases were approved by the Board through Ordinance 11692, on March 11,
2004. The final wastewater rate increase from this series became effective on July 1, 2005.
In 2007, the District proposed a series of Pay-As-You-Go (PAYGO) based wastewater charges
which were reviewed by the Rate Commission and recommended to the Board on August 13, 2007.
However, due to substantial comments and concerns by advocacy groups about the impact of a PAYGO
capital financing plan on wastewater bills, only the rates proposed to be effective on January 1, 2008
(Ordinance 12561) were adopted. Additional Rate Commission proceedings were held in 2008 to review
a revised financing plan based on a mixture of debt and cash financing of major capital improvements.
The revised plan would result in lower wastewater charges due to assumed debt financing but was
contingent upon voter approval of additional debt authorization. The revised plan was recommended to
the Board by the Rate Commission on March 21, 2008. A second debt authorization was approved by the
majority of voters on August 5, 2008, which authorized the District to issue up to $275 million of
additional wastewater revenue bonds. Therefore, wastewater charges reflecting a mixture of cash and
debt financing became effective on July 1, 2009 (Ordinance 12754) and increased to their current level on
July 1, 2010 (Ordinance 13021). A third and final series of approved wastewater charges resulting from
the 2008 Rate Commission recommendations is scheduled to become effective on July 1, 2011. An index
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WASTEWATER RATE PROPOSAL
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of rate ordinances adopted by the District since those approved by the voters in 1988 is presented as
Appendix A. A summary of historical wastewater rates is presented in Table 3-3.
Existing wastewater rates for the District are presented in Table 3-4 and have been in effect since
July 1, 2010. The rates currently consist of:
Monthly service charges;
A uniform volume charge; and
Extra strength surcharges for:
Biochemical oxygen demand in excess of 300 milligrams per liter (mg/l) or Chemical
oxygen demand in excess of 600 mg/l, and
Suspended solids in excess of 300 mg/l.
The service charges include a billing and collection charge, and a system availability charge that
are applicable to all customer classes, and a compliance charge that is only applicable to non-residential
customers.
3.4 Wastewater Revenue Under Existing Rates
A summary of historical and projected wastewater revenues under existing rates is presented in
Table 3-5 for the period 2006 through 2016. The historical wastewater revenues shown in Table 3-5 and
Figure 3.3 below are developed from detailed records provided by District staff. Projected billed
wastewater revenues do not include allowances for bad debt, refunds or billing adjustments. These billing
adjustments are included with other operating revenues in Table 3-6. Revenues from normal and excess
strength wastewater billings under present rates are projected to decrease nearly 1.6 percent from
$213,795,600 in 2011 to $210,431,800 in 2016. This decrease is due to a combination of factors; among
them is the impact of economic conditions, a projected decrease in excess strength wastewater revenue
due to more extensive pre-treatment programs and projected decreases in wastewater volume consistent
with historical trends.
Figure 3.3 Wastewater Service Charge Revenue
Figure 3.3 Wastewater Service Charge Revenue
Wastewater Service Charge Revenue
0
50
100
150
200
250
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Fiscal YearRevenue - $millionsMetered Unmetered
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Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
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Table 3-3 Historic Wastewater Charges
Table 3-3
Historical Wastewater Charges
Fiscal Year Ending June 30,__________________________________________________________________
No. Type of Monthly Charge 1994 1998 2004 2005 2006 2008 2010 2011____ _____________________ _______ _______ _______ _______ _______ _______ _______ _______
(a)(c)
Ordinance 9029 10177 11553 11692 12019 12561 12754 13021
Adopted Date 06/16/93 09/11/97 07/24/03 03/11/04 07/14/05 12/13/07 10/07/08 01/14/10
Effective Date 07/01/93 10/01/97 08/01/03 07/01/04 07/01/05 01/01/08 07/01/09 07/01/10
Base Charge - $/Bill
1 Billing & Collection Charge 0.37 0.74 0.85 0.85 0.85 2.30 2.30 2.60
2 System Availability Charge 3.72 4.83 5.30 6.45 7.05 8.40 8.60 8.80 ____ ____ ____ ____ ____ ____ ____ ____
3 Total Base (Residential) Service Charge 4.09 5.57 6.15 7.30 7.90 10.70 10.90 11.40
4 Compliance Charge - $/Bill (b) 7.40 8.56 11.80 12.15 12.55 27.40 29.65 30.85____ ____ ____ ____ ____ ____ ____ ____
5 Total Nonresidential Service Charge 11.49 14.13 17.95 19.45 20.45 38.10 40.55 42.25
Volume Charge
6 Metered - $/Ccf 0.991.051.341.661.811.881.922.02
Unmetered - $/Bill
7 Each Room 0.64 0.69 0.88 1.08 1.18 1.23 1.25 1.32
8 Each Water Closet 2.41 2.58 3.28 4.04 4.42 4.59 4.69 4.93
9 Each Bath 2.01 2.15 2.74 3.37 3.69 3.83 3.91 4.11
10 Each Separate Shower 2.01 2.15 2.74 3.37 3.69 3.83 3.91 4.11
Extra Strength Surcharges - $/ton (b)
11 Suspended Solids over 350 mg/l 127.40 87.20
12 Suspended Solids over 300 mg/l 162.88 200.15 218.90 218.90 218.90 222.62
13 Biochemical Oxygen Demand over 300 mg/l 244.10 217.90 319.24 412.58 461.44 529.56 551.52 596.72
14 Chemical Oxygen Demand over 600 mg/l 122.05 108.95 159.62 206.29 230.72 264.78 275.76 298.36
Ccf - Hundred Cubic Feet
mg/l - milligram per liter
(a) These rates were judged by courts to be user charges that are not subject to the requirements of the Hancock
Amendment. Rates for qualified low-income customers were established at 50 percent of the general service charges.
(b) Applicable only to non-residential customers.
(c) Current rates as recommended by the Rate Commission and adopted by the Board of Trustees. These rates were
previously adopted by Ordinance 12754 and reaffirmed by Ordinances 12905 and 13021.
Line
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Table 3-4 Existing Wastewater Rates
Table 3-4
Existing Wastewater Rates
(Effective July 1, 2010)
Metered_____________________
Line
No. Type of Monthly Charge
Unmetered
Residential Residential
Non-
Residential______________________________________________________
$$$
1 Billing and Collection Charge 2.60 2.60 2.60
2 System Availability Charge 8.80 8.80 8.80
3 Compliance Charge 30.85
Volume Charge
4 per Ccf 2.02 2.02
5 per room 1.32
6 per water closet 4.93
7 per bath 4.11
8 per separate shower 4.11
Extra Strength Surcharge - $/ton
9 Suspended Solids over 300 mg/l 222.62
10 BOD over 300 mg/l 596.72
11 COD over 600 mg/l 298.36
Ccf - Hundred Cubic Feet
mg/l - milligrams per liter
Note: Rates for qualified low income residential users are 50 percent
of the rates shown above.
Black & Veatch 3-9
WASTEWATER UTILITY Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Table 3-5 Billed Wastewater Service Revenue Under Existing Rates Table 3-5Historical and Projected Billed Wastewater Service RevenueUnder Existing RatesHistoricalProjected________________________________________________ ___________________________________________________________No. Customer Class2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016____ ___________________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________________$$$$$$$$$$$Metered Customers1 Single Family 77,985,843 76,252,800 82,111,500 87,057,200 86,945,800 91,333,800 90,945,900 90,536,400 90,505,900 90,471,600 90,452,7002 Multifamily 19,646,971 19,238,700 19,693,800 19,900,500 19,815,100 20,696,500 20,338,100 20,275,800 20,206,700 20,131,400 20,103,700 Non-Residential3 Normal Strength 63,506,777 61,644,900 64,381,700 62,255,400 60,182,084 59,920,000 59,539,800 59,311,100 59,196,900 59,158,900 59,158,9004 Excess Strength 6,782,384 5,924,400 5,789,800 6,136,700 5,772,600 6,524,900 6,524,900 6,524,900 6,524,900 6,524,900 6,524,900_________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________5 Total 167,921,974 163,060,800 171,976,800 175,349,800 172,715,584 178,475,200 177,348,700 176,648,200 176,434,400 176,286,800 176,240,200Unmetered Customers6 Single Family 18,282,428 18,485,900 19,745,100 20,808,800 21,152,600 22,804,300 22,403,200 22,215,800 22,133,900 22,112,100 22,101,4007 Multifamily 11,399,822 11,510,000 11,912,900 11,916,200 11,879,600 12,516,100 12,278,100 12,155,700 12,113,500 12,102,900 12,090,200_________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________8 Total 29,682,249 29,995,900 31,658,000 32,725,000 33,032,200 35,320,400 34,681,300 34,371,500 34,247,400 34,215,000 34,191,600Total Wastewater Service Revenue9 Single Family 96,268,271 94,738,700 101,856,600 107,866,000 108,098,400 114,138,100 113,349,100 112,752,200 112,639,800 112,583,700 112,554,10010 Multifamily 31,046,793 30,748,700 31,606,700 31,816,700 31,694,700 33,212,600 32,616,200 32,431,500 32,320,200 32,234,300 32,193,90011 Non-Residential 70,289,161 67,569,300 70,171,500 68,392,100 65,954,684 66,444,900 66,064,700 65,836,000 65,721,800 65,683,800 65,683,800_________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________12 Total Wastewater 197,604,224 193,056,700 203,634,800 208,074,800 205,747,784 213,795,600 212,030,000 211,019,700 210,681,800 210,501,800 210,431,80013 Annual Percentage Increase 16.1% -2.3% 5.5% 2.2% -1.1% 3.9% -0.8% -0.5% -0.2% -0.1% 0.0%Line
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-10
3.4.1 Other Operating Revenue
Projected other wastewater utility revenue is presented in Table 3-6. Wastewater billing
adjustments are determined based on current budget estimates and are projected in proportion to the
changes in wastewater service revenue shown on Table 3-5. These adjustments include late charges,
refunds and other adjustments. The provision for bad debt is projected to be temporarily offset in 2012
and 2013 due to the expected recovery of prior years’ bad debt expense by greater use of contracted
collection agencies, law firms and computer automated payment reminders. However, after these
enhanced collection efforts of prior year’s bad debt, the annual allowance for bad debt expense is
projected to increase from normal levels in proportion to the proposed revenue increases. The balance of
the wastewater billing adjustment revenue is estimated to remain stable. Revenue from inspection, plan
review fees and submittal fees are expected to increase from the 2011 amount based on anticipated
inflationary increases. Miscellaneous revenue is projected to increase 0.5 percent per year from the 2011
amount currently budgeted, based on historical trends. Total other operating revenue is therefore
projected to decrease from $(750,500) in 2011 to $(2,084,700) in 2016 primarily due to the projected bad
debt allowances. Additional connection fee revenue lessens the total overall decrease of total other
operating revenue from $499,500 in 2011 to $(634,700) in 2016.
Table 3-6 Projected Wastewater Other Operating Revenue
Table 3-6
Projected Wastewater Other Operating Revenue
Fiscal Year Ending June 30, _________________________________________________________
No. Description 2011 2012 2013 2014 2015 2016________________________________________________________________________
$$$$$$
1 Billing Adjustment (a) 4,556,700 4,538,700 4,535,500 4,545,600 4,559,000 4,575,100
2 Bad Debt Provision (10,910,900) (6,820,800) (8,998,500) (10,055,400) (11,262,000) (12,613,400)
Other Fees
3 Construction Inspection Fees 100,000 103,000 106,100 109,300 112,600 116,000
4 Waste Hauler Permits 1,450,000 1,457,300 1,464,600 1,471,900 1,479,300 1,486,700
5 All Other Fees (b) 482,500 497,100 512,100 527,500 543,300 559,600________________________________________________
6 Subtotal 2,032,500 2,057,400 2,082,800 2,108,700 2,135,200 2,162,300
7 Miscellaneous Revenue (c) 3,571,200 3,607,100 3,651,300 3,696,500 3,743,300 3,791,300________________________________________________
8 Total Other Operating Revenue (750,500) 3,382,400 1,271,100 295,400 (824,500) (2,084,700)
9 Connection Fee Revenue (d) 1,250,000 1,288,000 1,327,000 1,367,000 1,408,000 1,450,000
________ ________ ________ ________ ________ ________
10 Total Other Revenue 499,500 4,670,400 2,598,100 1,662,400 583,500 (634,700)
(a)Includes Late Charges, Refunds, Adjustments, Wastewater Lien Interest and fees,
and Other Adjustments including revenue from Arnold.
(b)Includes Plan Review Fees, Submittal Fees, Wastewater Monitoring Cost Fees, Pretreatment
Discharge Permits, and all other fees.
(c)Includes Reimbursements, Sale of Fixed Assets, Reimbursable Engineering & Maintenance,
and all other miscellaneous revenue.
(d) Revenue available for improvements financed out of Improvement Fund.
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3.5 Wastewater Revenue Requirements
The revenue required to provide for the continued operation of the wastewater utility must be
sufficient to meet its cash requirements for system operations. Revenue requirements include (1) total
wastewater system operation and maintenance expenses; (2) expenditures for routine and major capital
improvements met directly from revenues; (3) total system debt service (consisting of principal and
interest payments); and (4) provision for an adequate operating reserve. Provisions of the cash
requirements to meet these wastewater related expenditures for the period of 2011 through 2016 are
developed in this section.
3.5.1 Wastewater Operation and Maintenance Expense
A summary of projected operation and maintenance expense for the wastewater operations during
fiscal years 2011 through 2016 is presented in Table 3-7. These projections are based on the inflation
rates and wastewater utility allocation percentages presented in Section 2 applied to the District’s Revised
2011 Budget estimates. Additional operation and maintenance costs resulting from the operation of
anticipated regulatory related projects is shown on Line 20 of Table 3-7. Future wastewater utility
operation and maintenance expense is projected to increase from $134,394,800 in 2011 to $162,141,600
in 2016 for current operations and to $170,084,100 for current plus anticipated additional regulatory
related operation and maintenance expenses.
3.5.2 Wastewater Routine Capital Improvements
Expenditures for routine annual capital improvements include those costs that tend to be routinely
incurred each year for normal replacements such as vehicles, office equipment, and minor improvements
or repairs (Line 22 of Table 3-7). Since the costs of these improvements are a continuing expense to be
met each year, the District appropriately finances these expenditures from current wastewater revenues.
These expenses are included in the District’s annual budgets as Capital Outlay costs (500 accounts). As
shown in Table 3-7, Capital Outlay costs
are projected to increase from
$2,378,600 in 2011 to $2,770,900 in
2016. An annual inflation rate of 3
percent was used, with recognition of
any additional capital required for the
routine replacement of vehicles and
equipment based on scheduled
replacements.
The information presented in
Table 3-7 and the adjoining Figure 3.4
projects total wastewater operation and
maintenance expense, including routine
capital improvements, to increase from
$136,773,400 in 2011 to $172,855,000
in 2016.
Figure 3.4 Projected Wastewater Operating Expenses
Figure 3.4 Projected Wastewater Operating Expenses
Wastewater Operating Expenses
0
50
100
150
200
2011 2012 2013 2014 2015 2016
Fiscal YearCost - $millionsO&M and Routine Capital Costs
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-12
Table 3-7 Projected Wastewater Operating Costs
Table 3-7
Projected Wastewater Operating Costs
Fiscal Year Ending June 30, ___________________________________________________________
No Department 2011 2012 2013 2014 2015 2016_____________________________________________________________________
$$$$$$
1 Board of Trustees 2,400 2,500 2,600 2,700 2,800 2,900
2 Rate Commission (a) 423,800 9,400 9,700 10,100 485,600 11,100
3 Civil Service Commission 7,800 7,800 7,800 7,800 7,800 7,800
4 Secretary - Treasurer 1,613,700 1,674,900 1,733,600 1,813,900 1,892,700 1,972,800
5 Executive Director 712,400 739,600 767,900 801,100 831,400 861,600
6 General Counsel 4,116,800 4,265,300 4,402,900 4,601,200 4,801,900 5,009,400
7 Office of Human Resources 9,847,600 10,303,000 10,766,400 11,330,900 11,913,800 12,430,100
8 Engineering 18,206,400 18,992,300 19,841,100 20,786,700 21,616,800 22,403,100
Operations
9 Collection System (b) 19,579,200 20,401,200 21,278,200 22,262,700 23,159,500 24,007,200
10 Pump Stations 7,931,300 8,210,800 8,496,800 8,896,900 9,289,200 9,684,900
11 Wastewater Treatment (c) 35,427,500 36,664,600 37,941,900 39,675,900 41,366,200 43,068,600
12 Support (d) 7,265,000 7,534,800 7,818,200 8,132,700 8,428,700 8,719,200______________________________________________________
13 Total Operations 70,203,000 72,811,400 75,535,100 78,968,200 82,243,600 85,479,900
14 Finance 15,885,700 15,985,700 16,144,500 16,590,800 17,114,800 17,738,000
15 Information Systems 8,470,500 8,780,100 10,297,600 11,069,700 9,822,200 10,176,100______________________________________________________
16 Subtotal (General Fund) 129,490,100 133,572,000 139,509,200 145,983,100 150,733,400 156,092,800
17 Water Backup Program 4,000,000 4,300,000 5,000,000 5,000,000 5,000,000 5,000,000
18 Real Property Fund (e) 904,700 931,800 959,800 988,600 1,018,300 1,048,800______________________________________________________
19 Subtotal O&M 134,394,800 138,803,800 145,469,000 151,971,700 156,751,700 162,141,600
20 Additional O&M (f) 0 0 112,400 2,159,800 7,484,100 7,942,500______________________________________________________
21 Total O&M 134,394,800 138,803,800 145,581,400 154,131,500 164,235,800 170,084,100
22 Capital Outlay 2,378,600 2,461,900 2,535,700 2,611,800 2,690,100 2,770,900_________ _________ _________ _________ _________ _________
23 Total Operating Expense 136,773,400 141,265,700 148,117,100 156,743,300 166,925,900 172,855,000
(a) It is assumed that the Rate Commission will review proposed changes in wastewater rates every four years.
(b) Includes Mintert, Sulphur, and Grand Glaize maintenance yards and technical services
(c) Includes Lemay, Bissell, and county treatment plants.
(d) Includes costs related to the customer care group,administrative support and materials management.
(e) Expenditures offset by rental income.
(f) O&M costs related to anticipated regulatory projects. These projects include improved disinfection at the
Missouri River WWTP in 2013 and 2014; expansion of the Missouri River WWTP in 2015; and Capacity,
Management, Operation, and Maintenance (CMOM) program activities related to anticipated Consent
Decree requirements in 2016.
Line
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-13
3.5.3 Wastewater Major Capital Improvement Program
As a result of detailed
evaluations conducted for wastewater
program needs throughout the District,
specific individual projects have been
identified for both the collection
system and wastewater treatment
facilities. Table 3-8 and the adjoining
Figure 3.5 presents the total projected
capital improvement expenditures for
2011 through 2016. Costs for
wastewater projects funded by OMCI
wastewater subdistricts do not affect
the rate design process and are
excluded from Table 3-8. The total
capital improvement and replacement
program (CIRP) project cost for this six-year period is projected to be approximately $1.30 billion. The
size of the CIRP is driven by existing regulatory requirements as well as those anticipated to be part of the
EPA/MDNR Consent Decree.
3.5.4 Wastewater Capital Cost Financing
Capital improvements are commonly funded by a combination of debt and cash financing. By
debt financing a portion of the major capital improvements that are of a non-recurring nature, the
financing burden is appropriately shared by both present and future users of the facilities who will benefit
from the improvements. For those capital improvements that tend to be routinely incurred each year for
normal replacements (i.e., extensions and minor improvements), these costs are reasonably financed
annually from current wastewater service revenue.
After much review and evaluation, the District has developed a proposed capital improvement
financing plan for the wastewater utility. This plan, as displayed in Table 3-9, anticipates that proposed
capital improvements will be financed from a combination of wastewater user charge revenues, available
fund balances, revenue bond proceeds, Missouri Clean Water State Revolving Fund (SRF) loan proceeds,
potential commercial paper proceeds, grants and contributions, other operating revenues, and interest
income.
The recent December 2010 issuance of the Series 2010-C SRF loan in the principal amount of
$37,000,000, a traditional revenue bond issue in the principal amount of $52,020,000 expected to be
issued in July 2011 and an additional $39,999,300 SRF loan expected to be issued in November 2011 are
shown on Lines 2 and 3 of Table 3-9. When the SRF loan is issued in November 2011, the District’s
entire $775 million revenue bond authorization will be fully utilized. The following items delineate the
breakdown of existing bond authorization balances for the study period as itemized on Lines 2, 3, and 4 of
Table 3-9.
Revenue Bonds - $52.02 million
SRF Loans - $77.00 million
Commercial Paper Notes - $0 million
Total - $129.02 million applied to available debt authorization
Figure 3.5 Wastewater Capital Improvement Program
Figure 3.5 Wastewater Capital Improvement Program
Capital Improvement Program
0
50
100
150
200
250
300
2011 2012 2013 2014 2015 2016
Fiscal YearCost - $millions
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-14
Table 3-8 Wastewater Capital Improvement and Replacement Program
In order to finance the major capital improvements scheduled for 2013 through 2016, additional
revenue bonds in the total aggregate amount of $805 million and additional SRF loans in the total
aggregate amount of $140 million will need to be issued in order to avoid larger wastewater rate
increases. This will require the District to obtain additional voter approval for nearly $1 billion before
fiscal year 2013. As indicated by Line 3 of Table 3-9, the District plans to take advantage of the SRF
loan program but expects to be limited to $35 million of available state funds each year from 2013
through 2016. Total bonds, loans and notes are expected to finance approximately 77.1 percent of the
total six-year major capital improvement program costs. This percentage is determined by dividing
revenue bonds, SRF loan proceeds, and commercial paper notes net of related issuance costs and bond
reserve requirements shown in Table 3-9 by the major capital improvements from Line 9 of Table 3-9.
The amount for each of these issues was developed considering capital program needs, current policies,
other sources of capital improvement program financing, and debt service coverage requirements related
to the outstanding District-wide revenue bonds.
With the proposed level of debt obligations, the cash financing of capital improvements from
annual revenues is expected to total $234,790,000 for the study period as indicated on Line 5 of
Table 3-9. Projected revenue from District-wide connection fees is also included in Line 5. This revenue
is typically used to help finance Improvement Fund projects. The Pay-As-You-Go cash financing, net of
cash financed Improvement Fund projects of $11,265,000 (Line 10) is expected to provide 17.2 percent of
total major capital improvement program costs over the six-year study period.
Table 3-8
Wastewater Capital Improvement and Replacement Program
Fiscal Year Ending June 30, _________________________________________________________
No. Description 2011 2012 2013 2014 2015 2016 4-Year Total 6-Year Total____ ___________________________ ________ ________ ________ ________ ________ ________ ________
$$$$$$ $ $
Sanitary Sewer Overflow Control
1 Design 12,410,000 728,000 54,224,000 71,025,000 51,240,000 11,636,000 188,125,000 201,263,000
2 Construction 54,931,000 18,093,000 69,963,000 40,856,000 108,201,000 148,245,000 367,265,000 440,289,000______________________________________________________ _________ _________
3 Subtotal 67,341,000 18,821,000 124,187,000 111,881,000 159,441,000 159,881,000 555,390,000 641,552,000
Combined Sewer Overflow Control
4 Design 13,415,000 5,284,000 24,860,000 11,298,000 12,993,000 22,941,000 72,092,000 90,791,000
5 Construction 0 2,206,000 8,971,000 47,094,000 54,708,000 7,865,000 118,638,000 120,844,000______________________________________________________ _________ _________
6 Subtotal 13,415,000 7,490,000 33,831,000 58,392,000 67,701,000 30,806,000 190,730,000 211,635,000
System Projects
7 Cityshed Improvements 6,283,000 0 20,536,000 11,818,000 7,303,000 7,761,000 47,418,000 53,701,000
8 Asset Management 15,697,000 23,234,000 59,029,000 50,667,000 25,446,000 35,565,000 170,707,000 209,638,000
9 B&C System 0 0 3,934,000 4,389,000 0 0 8,323,000 8,323,000______________________________________________________ _________ _________
10 Subtotal 21,980,000 23,234,000 83,499,000 66,874,000 32,749,000 43,326,000 226,448,000 271,662,000
11 Wastewater Treatment 55,487,000 81,558,000 32,290,000 281,000 1,739,000 0 34,310,000 171,355,000______________________________________________________ ____________________
12 Total 158,223,000 131,103,000 273,807,000 237,428,000 261,630,000 234,013,000 1,006,878,000 1,296,204,000
Line 2013 - 2016 2011 - 2016
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-15
Table 3-9 Wastewater Capital Improvement Program Financing
The District anticipates receiving grants and contributions of $4,041,000 during the six-year study
period from contributions and miscellaneous grants related to various improvement projects to be
constructed during the study period. A capital contribution from the City of Arnold (Arnold) for the
repayment of principal on a District loan related to Arnold’s share of capacity in the new Lower Meramec
River Regional Wastewater Treatment Plant accounts for $3,041,000 of the total amount of grants and
contributions shown on Line 6 of Table 3-9.
Interest earnings recognize an estimated 1.0 percent average annual interest rate on funds
maintained in the construction account and a 1.2 percent average annual interest rate for funds maintained
in the Wastewater Emergency Fund. Line 7 indicates the estimated interest income earned on all
available capital improvement program balances. Total revenues obtained from grants, contributions, and
interest income will provide about 1.4 percent of the major capital improvement costs for the six-year
study period. Line 8 shows a total of $1.42 billion available to finance the capital improvement and
replacement program.
Line 9 in Table 3-9 displays the $1.30 billion in wastewater utility major capital improvement
expenditures projected for the study period from Table 3-8. Improvement Fund projects, which are
primarily financed from connection fee revenues, are shown on Line 10 of Table 3-9. Based upon the
anticipated revenue bond, SRF loan, and commercial paper obligation requirements, Line 11 of Table 3-9
displays the debt issuance costs. These costs are estimated to be 1.4 percent of the total principal amount
of each traditional revenue bond issue, 0.65 percent of the total principal amount of each SRF loan, and
$25,000 per issue for each commercial paper obligation, payable when the bonds, loans or obligations are
issued. Line 12 of Table 3-9 indicates the amount of revenue bond reserve payments required by existing
Table 3-9
Wastewater Capital Improvement Program Financing
Fiscal Year Ending June 30,_________________________________________________________
No Description 2011 2012 2013 2014 2015 2016 4-Year Total 6-Year Total___ ______________________ _______ _______ _______ _______ _______ _______ ________ ________
$$$$$$ $ $
Source of Funds
1 Beginning of Year Balance 92,977,300 8,668,600 4,050,600 28,221,700 56,955,900 52,588,000 4,050,600 92,977,300
2 Revenue Bond Proceeds 0 52,020,000 250,000,000 215,000,000 200,000,000 140,000,000 805,000,000 857,020,000
3 State Revolving Loan Proceeds 37,000,000 39,999,300 35,000,000 35,000,000 35,000,000 35,000,000 140,000,000 216,999,300
4 Commercial Paper 0 0 0 0 0 0 0 0
5 Cash Financing of Construction 37,250,000 38,438,000 31,677,000 33,267,000 38,308,000 55,850,000 159,102,000 234,790,000
6 Grants & Contributions (a) 454,800 474,500 1,494,900 516,300 538,600 561,900 3,111,700 4,041,000
7 Interest Income (b) 2,768,900 2,120,800 2,735,000 2,409,600 2,204,100 1,832,000 9,180,700 14,070,400_____________________________________________________________________________
8 Total Funds Available 170,451,000 141,721,200 324,957,500 314,414,600 333,006,600 285,831,900 1,120,445,000 1,419,898,000
Application of Funds
9 Major Capital Improvements 158,223,000 131,103,000 273,807,000 237,428,000 261,630,000 234,013,000 1,006,878,000 1,296,204,000
10 Improvement Fund Projects 1,265,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 8,000,000 11,265,000
11 Issuance Costs (c) 552,200 988,300 3,727,500 3,237,500 3,027,500 2,187,500 12,180,000 13,720,500
12 Revenue Bond Reserve Fund (d) 1,742,200 3,579,300 17,201,300 14,793,200 13,761,100 9,632,800 55,388,400 60,709,900_____________________________________________________________________________
13 Total Application of Funds 161,782,400 137,670,600 296,735,800 257,458,700 280,418,600 247,833,300 1,082,446,400 1,381,899,400
14 End of Year Fund Balance 8,668,600 4,050,600 28,221,700 56,955,900 52,588,000 37,998,600 37,998,600 37,998,600
15 Cumulative Percentage
Debt Financed 46.7% 48.5% 55.9% 60.8% 63.5% 64.1%
(a) Includes anticipated contributions from the City of Arnold to reserve capacity in the Lower Meramec River Wastewater Treatment Plant.
(b) Interest Income is estimated at 1% of the average of the beginning and end of year balances.
(c)
(d) The required balance in the Revenue Bond Reserve Fund is determined to be the maximum principal and interest payment on senior debt.
Issuance Costs are estimated at 1.40% of the issue amount for Revenue Bonds, 0.65% of the issue amount for SRF Loans, and
$25,000 per issue for commercial paper.
2011 - 2016Line2013 - 2016
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-16
bond covenants to maintain a reserve fund equal to the maximum principal and interest payment of all
outstanding revenue bonds that are not part of the SRF loan program. Line 13 shows the total application
of funds and Line 14 displays the remaining balance at the end of each fiscal year exclusive of capital
encumbrances. End of year balances shown on Line 14 retain part of the available cash from operating
revenues to provide greater liquidity and maintain the District’s bond rating. The drawdown of these
balances over the study period is expected to provide 4.2 percent of major capital improvement program
needs.
The optimal level of debt financing of major capital improvements is considered to be 50 percent
of total improvement costs per the District’s Debt Service Policy. At the end of fiscal year 2012, the
District will have issued all of its current debt authorization of $775.0 million. At this time, cumulative
cash financing will be approximately $824.5 million for a total capital improvement related expenditure
of $1,599.5 million since 2004 and a resulting cumulative debt financing percentage of 48.5 percent.
Future cumulative debt financing percentages are calculated by adding Lines 2, 3 and 4 of Table 3-9 to
prior cumulative debt and dividing by the sum of total application of funds, Line 13 of Table 3-9 and prior
cumulative capital expenditures. The projected debt financing percentages during the study period are
shown on Line 15 of Table 3-9.
3.5.5 Existing and Projected Wastewater Debt
The District issued its first District-wide revenue bonds in April
2004 in the principal amount of $175,000,000. Additional revenue bonds
were issued in November 2006, November 2008 and January 2010 where
the 2010 issue was part of the Build America Bond federal subsidized
loan program. Total revenue bonds issued to date total $350,000,000 as
indicated by the adjoining table. The District has also participated in eight
subordinate series of revenue bonds issued under the Missouri State
Revolving Fund (SRF) loan program, including a recent December 2010
issuance of $37,000,000. The total amount of SRF loans issued to date is
$332,980,700. These loans, together with the four series of revenue
bonds, have used $682,980,700 of the District’s $775,000,000 total
revenue bond authorization. The District expects to issue the remaining
$92,019,300 of its voter approved debt authorization in fiscal year 2012.
Additional revenue bonds and SRF loans are expected to be issued during
the study period beginning in fiscal year 2013, assuming the District
obtains additional revenue bond authorization. Additional debt required
to partially finance major capital improvements from fiscal year 2013
through fiscal year 2016 is estimated to be $945 million, as shown in
Table 3-9.
Proposed bonds are assumed to have 30-year terms and an annual
interest rate of 5.5 percent for fiscal years 2012 through 2016. Additional
revenue bonds issued as part of the SRF loan program are expected to
have 20-year terms and a net effective annual interest and administration
cost of about 2.5 percent per year. The total annual debt service requirement resulting from existing debt
plus proposed debt issued during the study period is expected to increase from $38,404,300 in 2011 to
$111,467,300 in 2016 as indicated by Table 3-10.
Debt Issues
Series Amount__________________
$
Revenue Bonds
2004A 175,000,000
2006C 60,000,000
2008A 30,000,000
2010B 85,000,000_________
Total 350,000,000
State Revolving Fund Loans
2004B 161,280,000
2005A 6,800,000
2006A 42,715,000
2006B 14,205,000
2008B 40,000,000
2009A 23,000,000
2010A 7,980,700
2010C 37,000,000_________
Total 332,980,700
Remaining Authorization
Bonds 52,020,000
SRF Loan 39,999,300_________
Grand Total 775,000,000
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-17
Table 3-10 Projected Wastewater Debt Service Requirements
3.5.6 Wastewater Operating Reserve
The operating reserve is a balance maintained in the Wastewater Revenue Fund to accommodate
fluctuations in annual revenues and expenditures. The District plans to maintain an operating reserve
fund balance equal to 60 days or about 16.4 percent of annual operating expenses. Operating expense is
equal to the sum of operation and maintenance expense and normal annual capital improvements. The
existing revenue bond covenants only require the District to maintain a minimum balance in the
Wastewater Revenue Fund equal to 45 days of operation and maintenance expense. The wastewater
operating reserve is projected to increase to about $28,415,000 by the end of the study period through
annual payments from revenues to maintain a 60-day policy requirement. The increased operating
reserve will provide a buffer to allow for potential timing issues involved with funding requirements,
provide increased operational flexibility and help support future bond ratings.
3.6 Summary of Wastewater Revenue and Revenue Requirements
A pro forma cash flow statement showing projected wastewater revenues and wastewater revenue
requirements for the District during the study period is presented in Table 3-11. Wastewater revenues
must be at least sufficient to finance the wastewater utility’s operation and maintenance expense, routine
annual capital improvements, and debt service costs on existing and proposed bonds and loans, while
maintaining an adequate operating reserve and complying with all revenue bond debt service coverage
requirements. Annual revenues can also be used to finance a portion of the wastewater utility’s major
capital improvement program.
Table 3-10
Projected Wastewater Debt Service Requirements
Existing Proposed Existing Proposed Commercial
Fiscal Revenue Revenue SRF SRF Paper
Year Bonds Bonds Loans Loans Notes Total______________________________________________________
$$$$$$
Payments to Sinking Fund
2011 19,290,600 0 19,113,700 0 0 38,404,300
2012 19,415,200 3,281,000 21,311,100 1,711,000 0 45,718,300
2013 19,550,800 20,780,600 21,401,300 4,062,800 0 65,795,500
2014 19,686,000 35,573,800 21,483,500 6,307,900 0 83,051,200
2015 19,834,400 49,334,900 21,355,600 8,553,000 0 99,077,900
2016 19,973,200 58,967,700 21,728,600 10,797,800 0 111,467,300
Payments to Bondholders
2011 19,270,300 0 18,292,600 0 0 37,562,900
2012 19,392,400 1,430,600 20,232,600 500,000 0 41,555,600
2013 19,528,800 10,454,300 21,395,200 3,003,300 0 54,381,600
2014 19,660,900 26,693,100 21,345,500 5,248,400 0 72,947,900
2015 19,811,800 41,073,800 21,545,900 7,493,500 0 89,925,000
2016 19,947,200 53,184,900 21,324,600 9,738,600 0 104,195,300
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-18
Table 3-11 Comparison of Wastewater Revenue Under Existing Rates With Projected Revenue Requirements
Table 3-11
Comparison of Projected Wastewater Revenue Under Existing
Rates With Projected Revenue Requirements
Fiscal Year Ending June 30,_________________________________________________________
No. Description 2011 2012 2013 2014 2015 2016 4-Year Total 6-Year Total____ ______________________________ ________ ________ ________ ________ ________ ________ ________
$$$$$$ $ $
1 Revenue Under Existing Rates (a) 213,795,600 212,030,000 211,019,700 210,681,800 210,501,800 210,431,800 842,635,100 1,268,460,700
Additional Revenue Required
Fiscal Revenue Months
Year Increase Effective____ ________ ________
2 2012 4.3% 12 8,357,500 9,073,800 9,059,300 9,051,600 9,048,600 36,233,300 44,590,800
3 2013 11.0% 12 22,192,800 24,171,500 24,150,900 24,142,800 94,658,000 94,658,000
4 2014 12.0% 12 26,830,400 29,244,500 29,234,800 85,309,700 85,309,700
5 2015 12.0% 12 30,024,400 32,743,000 62,767,400 62,767,400
6 2016 12.0% 12 33,616,100 33,616,100 33,616,100_______________________________________________________ __________ __________
7 Total Additional Revenue 0 8,357,500 31,266,600 60,061,200 92,471,400 128,785,300 312,584,500 320,942,000_______________________________________________________ __________ __________
8 Total Service Charge Revenue 213,795,600 220,387,500 242,286,300 270,743,000 302,973,200 339,217,100 1,155,219,600 1,589,402,700
9 Other Operating Revenue (750,500) 3,382,400 1,271,100 295,400 (824,500) (2,084,700) (1,342,700) 1,289,200
10 Connection Fee Revenue 1,250,000 1,288,000 1,327,000 1,367,000 1,408,000 1,450,000 5,552,000 8,090,000
11 Interest Income - Reserve Funds 888,800 964,300 1,196,600 1,486,600 1,753,500 1,969,100 6,405,800 8,258,900
12 Interest Income - Operations 30,800 47,300 50,100 50,500 50,500 50,200 201,300 279,400
13 Interest Income - Arnold 650,700 631,000 610,500 589,100 566,800 543,600 2,310,000 3,591,700_______________________________________________________ __________ __________
14 Subtotal Other Revenue 2,069,800 6,313,000 4,455,300 3,788,600 2,954,300 1,928,200 13,126,400 21,509,200_______________________________________________________ __________ __________
15 Total Revenue 215,865,400 226,700,500 246,741,600 274,531,600 305,927,500 341,145,300 1,168,346,000 1,610,911,900
16 Operation and Maintenance Expense 134,394,800 138,803,800 145,469,000 151,971,700 156,751,700 162,141,600 616,334,000 889,532,600
17 Additional O&M (b)0 0 112,400 2,159,800 7,484,100 7,942,500 17,698,800 17,698,800_______________________________________________________ __________ __________
18 Net Revenue 81,470,600 87,896,700 101,160,200 120,400,100 141,691,700 171,061,200 534,313,200 703,680,500
Debt Service
19 Existing Senior Revenue Bonds 19,290,600 19,415,200 19,550,800 19,686,000 19,834,400 19,973,200 79,044,400 117,750,200
20 Proposed Senior Revenue Bonds 0 3,281,000 20,780,600 35,573,800 49,334,900 58,967,700 164,657,000 167,938,000 _______________________________________________________ __________ __________
21 Total Senior Revenue Bonds 19,290,600 22,696,200 40,331,400 55,259,800 69,169,300 78,940,900 243,701,400 285,688,200
22 Existing State Revolving Fund Loans (c) 19,113,700 21,311,100 21,401,300 21,483,500 21,355,600 21,728,600 85,969,000 126,393,800
23 Proposed State Revolving Fund Loans (c)0 1,711,000 4,062,800 6,307,900 8,553,000 10,797,800 29,721,500 31,432,500 _______________________________________________________ __________ __________
24 Total State Revolving Fund Loans 19,113,700 23,022,100 25,464,100 27,791,400 29,908,600 32,526,400 115,690,500 157,826,300
25 Commercial Paper 000000 0 0 _______________________________________________________ __________ __________
26 Total Debt Service 38,404,300 45,718,300 65,795,500 83,051,200 99,077,900 111,467,300 359,391,900 443,514,500
27 Routine Annual Improvements 2,378,600 2,461,900 2,535,700 2,611,800 2,690,100 2,770,900 10,608,500 15,449,000
28 Cash Financing of Major Improvements 37,250,000 38,438,000 31,677,000 33,267,000 38,308,000 55,850,000 159,102,000 234,790,000
29 Additions to Operating Reserve 674,500 738,500 1,126,200 1,418,000 1,673,900 974,600 5,192,700 6,605,700
30 Net Annual Balance (d) 2,763,200 540,000 25,800 52,100 (58,200) (1,600) 18,100 3,321,300
31 Beginning of Year Balance (e) 1,696,900 4,460,100 5,000,100 5,025,900 5,078,000 5,019,800 5,000,100 1,696,900
32 End of Year Balance (e) 4,460,100 5,000,100 5,025,900 5,078,000 5,019,800 5,018,200 5,018,200 5,018,200
Actual Debt Service (f)
33 Senior Bonds 19,270,300 20,823,000 29,983,100 46,354,000 60,885,600 73,132,100 210,354,800 250,448,100
34 SRF Loans 18,292,600 20,732,600 24,398,500 26,593,900 29,039,400 31,063,200 111,095,000 150,120,200
Debt Service Coverage
35 Revenue Bonds (g) 4.23 x 4.22 x 3.37 x 2.60 x 2.33 x 2.34 x 2.54 x 2.81 x
36 Total Debt (h)2.17 x 2.12 x 1.86 x 1.65 x 1.58 x 1.64 x 1.66 x 1.76 x
(a) Revenue under existing wastewater rates effective July 1, 2010.
(b) O&M costs related to anticipated regulatory projects. These projects include improved disinfection at the Missouri River WW TP
in 2013 and 2014; expansion of the Missouri River WWTP in 2015; and Capacity, Management, Operation, and Maintenance (CMOM)
program activities related to anticipated Consent Decree requirements in 2016.
(c) Debt service on State Revolving Fund (SRF) Loans are net of the state's interest subsidy.
(d) Negative balances indicate need to drawdown available fund balance.
(e) Does not include funds set aside for a minimum operating reserve equal to 60 days of operating expenses.
(f) Payment to Bondholders per Table 3-10, paid through Sinking Fund.
(g) The Bond Ordinance requires net revenue to equal or exceed 1.25x actual senior lien debt service.
(h) The Bond Ordinance requires net revenue to equal or exceed 1.15x total actual debt service.
Line 2013 - 2016 2011 - 2016
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-19
When all operating revenues and costs are considered, Table 3-11 and Figure 3-6 below indicate that
annual wastewater revenues under existing rates are not sufficient to meet the total revenue requirements
of the wastewater utility during the study period without future revenue increases. Line 1 of Table 3-11
shows projected wastewater revenue under existing rates, as previously presented in Table 3-5, Line 12.
In order to balance the revenue and the revenue requirements through 2016, Lines 2 through 7 show
projected increases in wastewater revenues assumed to be in effect for the number of months indicated for
each fiscal year. The magnitude of the increase shown for each year was selected based on consideration
of three principal criteria:
Figure 3.6 Comparison of Wastewater Revenue and Revenue Requirements
(1) Total revenue necessary to meet cash requirements for normal wastewater operations. This
includes consideration of a one-month lag in the receipt of additional user charge revenue
from increased rates,
(2) Annual increases in wastewater revenues available to cash finance a portion of the
wastewater utility related major capital improvements, and
(3) Wastewater revenue required to provide a reasonable margin of debt service coverage in
excess of minimum bond covenant requirements.
In addition to the wastewater revenue generated from wastewater user charges, other revenue
identified in Lines 9 through 14 of Table 3-11 include other operating revenue and connection fee revenue
(previously presented on Table 3-6, Lines 8 and 9), plus interest earnings. The estimated interest rate for
reserve funds is estimated to be 1.2 percent per year, while interest on operating balances is estimated to
be 1.0 percent per year. Interest earnings received from the City of Arnold represents the interest portion
of a loan with the District to finance a share of the Lower Meramec Regional Treatment Plant. Total
other revenue as shown on Line 14 of Table 3-11 ranges from $2,069,800 in 2011 to $1,928,200 in 2016.
Total revenue is projected to be $215,865,400 in 2011 and increase to $341,145,300 in 2016 as shown by
Line 15 of Table 3-11, or an overall compounded increase of 58.0 percent during this time period.
The wastewater utility’s operation and maintenance expenses presented in Table 3-7, Lines 19
and 20, are shown on Lines 16 and 17 of Table 3-11. Line 18 of Table 3-11 shows the estimated net
revenue remaining after deducting projected wastewater related operation and maintenance expense
(Lines 16 and 17) from total wastewater revenues (Line 15).
Anticipated debt service requirements on revenue bonds, SRF loans, and commercial paper notes
are presented on Lines 19 through 26, as presented previously on Table 3-10, for 2011 through 2016. As
Figure 3.6 Comparison of Wastewater Revenue and Revenue Requirements
Revenue and Revenue Requirements
0
50
100
150
200
250
300
350
400
2011 2012 2013 2014 2015 2016
Fiscal YearAmount - $millionsNet Operating Costs Net Capital Costs Existing WW Service Charge Revenue
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-20
previously described, it is projected that revenue bonds and SRF loan proceeds, in the aggregate amounts
of $857,020,000 and $216,999,300 , respectively, will be issued during the study period to help finance
major capital improvement program expenditures. Commercial paper obligations are not expected to be
utilized during the study period. These projected debt obligations will require the District to obtain
additional revenue bond authorization before the start of fiscal year 2013.
Line 27 of Table 3-11 shows the total amount of routine annual improvements, as previously
presented on Table 3-7, Line 22, which are completely financed by annual revenues. Funds used to
finance a portion of the major capital improvement program are reported as a cost on Line 28 of
Table 3-11 and as a source of revenue on Line 5 of Table 3-9.
Operating reserve deposits required to maintain an operating reserve equal to 60 days of
combined operation and maintenance expense (Lines 16 and 17) and routine annual improvements (Line
27) are shown on Line 29. The net annual balance of annual revenues less expenditures is presented on
Line 30. Negative balances indicate the need to temporarily draw down available fund balances.
Lines 31 and 32 of Table 3-11 show the projected combined beginning and ending cash balances
of the wastewater utility, exclusive of the operating reserve and other restricted funds.
An additional consideration in measuring the adequacy of revenues is the provision of sufficient
debt service coverage to meet bond covenant requirements for the issuance of revenue bonds. Lines 33
and 34 of Table 3-11 show the actual debt service paid to the bondholders on the senior revenue bonds
and on the subordinate SRF loans as previously presented in Table 3-10. Line 35 of Table 3-11 shows the
debt service coverage of the revenue bond debt service, i.e., the ratio of net revenue (Line 18) to total
revenue bond debt service (Line 33) for each year of the study period. Line 36 shows the debt service
coverage of the combined revenue bond and state revolving fund debt service, i.e., the ratio of net revenue
(Line 18) to total debt service (Lines 33 and 34) for each year of the study period. Current wastewater
revenue bond covenants require the District to provide debt service coverage equal to at least 125 percent
of the annual principal and interest payment on all senior lien wastewater revenues bonds and 115 percent
of the combined annual principal and interest payment on all wastewater revenue bonds and all junior lien
state revolving fund loans.
For planning purposes and to allow for possible fluctuations in revenues and operating expenses,
such as may occur periodically due to possible unexpected increases in costs of system operations, a
revenue bond debt service coverage of at least 220 percent and a combined debt service coverage level of
at least 150 percent are desired for bond marketing purposes. This will provide reasonable assurance that
minimum coverage requirements can be maintained each year and enhance the marketability of projected
bond issues. Under the proposed financing plan, these target levels are exceeded in each year as shown
on Lines 35 and 36.
3.7 Cost of Service Allocations
Cost of service allocations provide a means of determining the proportionate responsibility of
each customer class for the service provided. Cost responsibilities are based upon allocating the costs of
service according to the relative service requirements to each respective customer class. Factors
considered in determining service requirements include the volume of wastewater contributed, peak
wastewater contributions, wastewater strength, number of accounts, and the relative responsibility for
infiltration/inflow entering the wastewater sewer system. The analysis of total costs of service by
customer class provides the basis for the subsequent design of user charges that will equitably recover
costs from those classes.
Fiscal year 2013 is selected as the test year for all subsequent tables presented in this report. Test
year refers to the year used to design rates. The analyses presented below were also performed for
subsequent years in order to determine rates proposed for future years.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-21
3.7.1 Costs of Service to be Allocated
The costs of service to be allocated consist of the total revenue requirements for the 2013 test
year as derived from Table 3-11, Lines 16 and 17 and 26 through 29, and summarized on Lines 1 through
5 of Table 3-12. In determining costs of service to be met from wastewater charges; other operating and
non-operating revenues are used to offset the revenue requirements and are therefore deducted from total
test year revenue requirements shown on Line 6 of Table 3-12.
In order to allocate the cost of service to the most appropriate components, the costs are assigned
to the two cost categories of operating costs and capital costs. Operating costs include the District's total
operation and maintenance expense plus any funds set aside to maintain an adequate operating reserve.
For this report, the operating reserve is set equal to 60 days of operation and maintenance and routine
annual capital improvement costs. Operating cost to be recovered by wastewater charges is net of other
operating revenue, interest income and any special adjustments that will be used to offset projected
operating expenses. Other operating revenues are shown on Line 7 through 10 of Table 3-12. The
interest income was previously presented on Table 3-11, Lines 11 through 13.
An additional adjustment is required to recognize the impact of normal billing lag. The District
currently experiences about a one month lag in the receipt of revenues under increased user charges.
Therefore, a billing adjustment factor of 8.33 percent (1/12) is factored into the first year of any new
revenue increase for rate design purposes. The result of the 2013 billing lag adjustment is presented on
Line 14 of Table 3-12.
Capital costs consist of debt service requirements on existing and proposed debt issues as well as
routine and major capital improvements financed from annual revenues. Capital costs to be recovered by
wastewater charges are net of revenue from district-wide connection fees and any change of available
operating balances. Connection fee revenue was previously presented on Table 3-11, Line 10. The
change in the available fund balance was previously presented on Table 3-11, Line 30.
The total test year (2013) cost of service to be recovered by wastewater charges is equal to
$244,303,800 with net operating expense equal to $145,596,800 and net capital costs equal to
$98,707,000 as shown on Line 16 of Table 3-12.
3.7.2 Functional Cost Components
The costs of service to be recovered from wastewater charges are analyzed by system function as
a basis for the subsequent allocation of costs to customer classes. In this analysis, costs are apportioned
to the functional cost components of volume, capacity, wastewater strength, and customers. Costs
attributable to a particular class of customers (i.e., those for treating high-strength wastewater or the
federal requirements to monitor certain non-residential customers) are assigned directly to that class. The
separation of costs into functional cost components provides a means for distributing such costs to the
various customer classes on the basis of respective responsibilities for each particular type of service.
The following are the principal functional cost components:
Volume Costs are those which vary directly with the quantity of wastewater contributed and
include capital costs related to investment in system facilities sized on the basis of
wastewater volume and operation and maintenance expense related to those facilities.
Capacity costs are related to facilities that are designed to meet the maximum or peak rates
of wastewater flow.
Wastewater Strength Costs consist of the operation and maintenance expense and capital
costs related to system facilities that are designed principally on the basis of the quantity of
pollutants in the wastewater. Strength costs are further separated into biochemical oxygen
demand (BOD) and suspended solids related costs. The District also monitors chemical
oxygen demand (COD) at the treatment plant and for certain high strength customers.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-22
Table 3-12 Wastewater Cost of Service
Table 3-12
Wastewater Cost of Service
Test Year 2013
Line
No. Description Operating Capital Total___________________________________________________
$$$
Revenue Requirements
1 Operation & Maintenance Expense 145,581,400 145,581,400
2 Debt Service 65,795,500 65,795,500
3 Routine Capital Improvements 2,535,700 2,535,700
4 Cash Financing of Major Improvements 31,677,000 31,677,000
5 Additions to Operating Reserve 1,126,200 1,126,200______________________________
6 Total 146,707,600 100,008,200 246,715,800
Revenue Requirements met from Other Sources
Other Operating Revenue
7 Wastewater Billing Adjustments (4,463,000) (4,463,000)
8 Inspection and Other Fees 2,082,800 2,082,800
9 Miscellaneous Revenue 3,651,300 3,651,300 ______________________________
10 Subtotal 1,271,100 0 1,271,100
11 Interest Income 1,857,200 1,857,200
12 Connection Fee Revenue 1,327,000 1,327,000
13 Change in Available Fund Balances (25,800) (25,800)
14 Full Year Rate Adjustment (a) (2,017,500) (2,017,500)______________________________
15 Total 1,110,800 1,301,200 2,412,000______________________________
16 Net Costs to be met from Charges 145,596,800 98,707,000 244,303,800
Net Operatin Capital Cost
(a) Required to adjust for normal billing lag and any partial year implementation of
increased wastewater rates.
Total Cost of Service
Debt Service
26.9%
Net Cash
Capital
13.5%
Net
Operating
Cost
59.6%
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-23
Since historic data has consistently indicated a stable relationship between BOD and COD
loadings, the COD and BOD surcharge units of service are combined as equivalent BOD
units and presented as a single functional cost component.
Customer Costs are those that tend to vary in proportion to the number of customers served.
These costs are further separated into costs related to all customers and costs related to non-
residential customers.
3.7.2.1 Allocation of Plant Investment and Capital Costs
The investment in wastewater facilities is allocated to appropriate cost components to determine
the proportionate share of capital costs to be assigned to wastewater activities and to determine customer
class responsibility. The estimated test year 2013 plant investment consists of plant in service as of June
30, 2010, the 2010 construction work
in progress and the estimated costs of
proposed capital improvements to be
placed in service through the 2013 test
year. Total plant investment, on an
original cost less accumulated
depreciation basis, is allocated to
functional cost components in
Table 3-13 and displayed graphically
in the adjoining Figure 3-7.
Each element of investment is
allocated to functional cost
components based on the parameter or
parameters having significant
influence on the magnitude of that element of investment. For example, the investment in the sanitary
sewer system, consisting of mains and pumping stations, is related to maximum rates of flow and is
allocated to the capacity cost component. The District’s segmented financial statements and this report
considers all investment in the combined sewer system to be related to wastewater operations.
Wastewater treatment plant facilities such as raw wastewater pumping, preliminary treatment,
and outfall works are also primarily designed to meet maximum rates of flow and are assigned to the
capacity component. Sedimentation, recirculation pumping, and disinfection facilities are assigned to the
volume cost component. Aeration and trickling filter facilities are allocated to the BOD cost component
to reflect the primary cost causative factor influencing their design. Sludge treatment facilities are
assumed to be equally related to the BOD and suspended solids cost components. Administration and
general plant facilities are allocated to plant components on the basis of the allocation of all other plant
components.
Test year plant investment in wastewater facilities, on an original cost less depreciation value
basis, is projected to total $2.03 billion in 2013. The allocation of total plant investment (Line 21) is used
as the basis to allocate total routine capital improvements (Line 22 - presented in Table 3-12, Line 3),
connection fee revenue (Line 26 - from Table 3-12, Line 12), the change in available fund balances (Line
27 – from Table 3-12, Line 13), and debt service (Line 29) from Table 3-12, Line 2. Cash financed
improvements (presented in Table 3-12, Line 4) are first allocated to collection system (Line 23),
wastewater treatment (Line 24), and land and general plant (Line 25) categories based on the relative
projected test year capital improvement expenditures for the three categories. Cash financed collection
system costs are allocated directly to the capacity cost component, wastewater treatment costs are
Figure 3.7 Plant Investment
Figure 3.7 Plant Investment
Plant Investment
Volume
19%
BOD
10%
Solids
4%
Capacity
67%
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-24
Table 3-13 Allocation of Estimated Wastewater Plant Investment and Other Capital Costs to Functional Cost Components
Table 3-13
Allocation of Estimated Wastewater Plant
Investment and Other Capital Costs
to Functional Cost Components
Test Year 2013
(1)(2)(3)(4) (5)
Line Suspended
No. Description Total (a) Volume Capacity Solids BOD________________________________________________________________________
$$$$$
Collection System
1 Sanitary Sewers 892,994,000 892,994,000
2 Combined Sewers 210,735,000 210,735,000
3 Pumping Stations 109,740,000 109,740,000_______________________
4 Total Collection System 1,213,469,000 1,213,469,000
Treatment Facilities
5 Raw Wastewater Pumping 7,710,000 7,710,000
6 Preliminary Treatment 63,103,000 63,103,000
7 Primary Sedimentation 187,329,000 187,329,000
8 Aeration/Reaeration/Nitrification 96,360,000 96,360,000
9 Secondary Sedimentation 118,480,000 118,480,000
10 Recirculation Pumping 3,078,000 3,078,000
11 Chlorination 13,816,000 13,816,000
12 Lagoons & Aeration Equipment 3,192,000 3,192,000
13 Sludge Treatment 76,711,000 38,356,000 38,355,000
14 Dewatering 16,500,000 8,250,000 8,250,000
15 Incineration 56,729,000 28,365,000 28,364,000
16 By Pass & Outfall Works 8,467,000 8,467,000
17 Administrative & General (b)95,305,000 47,208,000 11,598,000 10,968,000 25,531,000____________________________________________________
18 Total Treatment Facilities 746,780,000 369,911,000 90,878,000 85,939,000 200,052,000____________________________________________________
19 Subtotal Estimated Plant Investment 1,960,249,000 369,911,000 1,304,347,000 85,939,000 200,052,000
20 Land & General Plant (c) 72,087,000 13,603,000 47,967,000 3,160,000 7,357,000____________________________________________________
21 Total Estimated Plant Investment 2,032,336,000 383,514,000 1,352,314,000 89,099,000 207,409,000
22 Routine Capital Improvements (d) 2,535,700 478,400 1,687,300 111,200 258,800
Cash Financing of Improvements
23 Collection System 24,965,200 24,965,200
24 Wastewater Treatment (e) 1,079,400 534,600 131,400 124,200 289,200
25 Land & General Plant (c) 5,632,400 1,062,900 3,747,800 246,900 574,800
26 Less: Connection Fee Revenue (d) 1,327,000 250,400 883,000 58,200 135,400
27 Change in Funds Available (d) (25,800) (4,900) (17,200) (1,100) (2,600)__________________________________________________
28 Net Cash Financed Capital Costs 32,911,500 1,830,400 29,665,900 425,200 990,000
29 Debt Service (d) 65,795,500 12,416,100 43,780,200 2,884,500 6,714,700__________________________________________________
30 Total Net Capital Costs 98,707,000 14,246,500 73,446,100 3,309,700 7,704,700
31 Estimated Replacements (c) 64,366,600 12,146,400 42,829,400 2,821,900 6,568,900__________________________________________________
32 Net Other Capital Cost 34,340,400 2,100,100 30,616,700 487,800 1,135,800
(a) Excludes $470,725,000 of investment related to the stormwater system.
(b) Allocated based on all other treatment facilities (Lines 5 through 16).
(c) Allocated based on Line 19.
(d) Allocated based on Line 21.
(e) Allocated based on Line 18.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-25
allocated based on total treatment plant investment (Line 18), and land and general plant costs as well as
estimated replacements (Line 31) are allocated on the basis of all plant investment except land and
general plant (Line 19). The cash financed improvements are reduced by the connection fee revenue
(Line 26) and change in fund balance (Line 27) to derive the net cash financed capital costs (Line 28).
These costs plus debt service costs projected for the test year (Line 29) equal the total net capital costs as
shown on Line 30 in Table 3-13 and as previously presented on Line 16 of Table 3-12. The net capital
costs are reduced by estimated replacements (assumed equal to annual depreciation expense) on Line 31,
with the result equal to the amount of net other capital costs on Line 32.
3.7.2.2 Allocation of Operation and Maintenance Expense
Operating expense items are allocated directly to appropriate cost components based primarily on
information provided by District staff. Costs related to treatment facilities are first allocated to the
individual plant facilities and then allocated to cost components in generally the same manner as plant
investment. General and administrative cost elements are allocated based on the allocation of the direct
costs with which they are most nearly related.
Operation and maintenance cost distribution percentages are shown in Table 3-14 and are based
on estimates of staff time and other
elements of cost. The resulting
allocation of projected operation and
maintenance expense for fiscal year
2013 is shown in Table 3-15. The
adjoining Figure 3.8 shows the overall
results of these allocations in a graphic
format. Total operation and
maintenance expense on Lines 26 and
27 of Table 3-15 agrees with the amount
from Table 3-12, Line 1. The annual
wastewater utility’s operating reserve
requirement (Line 28) is allocated to
cost components in proportion to the
allocation of total wastewater operation and maintenance expense (Lines 26 and 27). This requirement
was previously shown in Table 3-12, Line 5.
Portions of the total operation and maintenance expense are partially funded from revenue
derived from sources other than wastewater charges. Costs met from other revenue are allocated to
functional cost components in a manner similar to that for operation and maintenance expenses. Other
revenue shown on Table 3-15, Lines 29 through 31 was previously presented on Table 3-12, Lines 7
through 9. Interest Income on Line 32 was previously shown on Table 3-12, Line 11. The full year rate
adjustment on Line 33 was previously shown on Table 3-12, Line 14 and is used to adjust for normal
billing lag and any partial year implementation of increased wastewater rates. The net operation and
maintenance expense of $145,596,800 is presented on Table 3-15, Line 35 and equals the amount
presented in Table 3-12, Line 16.
Figure 3.8 Operation and Maintenance Expense
Figure 3.8 Operation and Maintenance Expense
Operation and Maintenance Expense
All
Customers
12%BOD
12%
SS
9%
Volume
16%Capacity
50%Industrial
Customers
1%
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-26
Table 3-14 Percentage of Wastewater Operation and Maintenance Expense by Functional Cost Components
Table 3-14
Percentage of Wastewater Operation and Maintenance
Expense by Functional Cost Components
Test Year 2013
Direct__________________________________________________________
Non-
Line Suspended All Residential
No. Description Total Indirect Total Volume Capacity Solids BOD Customers Customers____ ___________________ ________ ________ ________ ________ ________ ________ ________ ________ ________
$$$$$$$$ $
Personnel Services
1 Administration and Management 0.0% 100.0% 0.0%
2 Engineering 100.0% 0.0% 100.0% 5.4% 77.6% 2.5% 2.7% 3.5% 8.3%
Operations
3 Collection System 100.0% 0.0% 100.0% 100.0%
4 Pump Stations 100.0% 0.0% 100.0% 100.0%
5 Wastewater Treatment 100.0% 0.0% 100.0% 23.5% 16.7% 25.5% 34.1% 0.2%
6 Support 100.0% 12.0% 88.0% 8.7% 53.2% 9.4% 12.6% 16.1%
7 Finance 100.0% 51.4% 48.6% 100.0%
8 Information Systems 0.0% 100.0% 0.0%
9 Average 100.0% 8.4% 64.6% 8.0% 10.6% 5.9% 2.6%
All Other
10 Administration and Management 0.0% 100.0% 0.0%
11 Engineering 100.0% 0.0% 100.0% 4.6% 81.3% 2.1% 2.3% 2.8% 6.9%
Operations
12 Collection System 100.0% 0.0% 100.0% 100.0%
13 Pump Stations 100.0% 0.0% 100.0% 100.0%
14 Wastewater Treatment 100.0% 0.0% 100.0% 19.1% 18.2% 30.3% 32.1% 0.3%
15 Support 100.0% 1.0% 99.0% 11.6% 46.7% 18.4% 19.4% 3.9%
16 Finance 100.0% 4.1% 95.9% 100.0%
17 Information Systems 0.0% 100.0% 0.0%
18 Average 100.0% 7.8% 33.8% 12.2% 12.9% 33.0% 0.4%
Utilities
Operations
19 Pump Stations 100.0% 0.0% 100.0% 56.0% 44.0%
20 Wastewater Treatment 100.0% 0.0% 100.0% 34.7% 12.6% 19.7% 32.5% 0.5%
21 Average 100.0% 38.9% 18.8% 15.8% 26.0% 0.0% 0.4%
22 Water Backup Program 100.0% 0.0% 100.0% 100% 0.0%
23 Headquarters Building 100.0% 0.0% 100.0% 100.0%
24 Total O&M Expense 100.0% 0.0% 100.0% 14.1% 48.7% 9.6% 12.3% 13.7% 1.6%
25 Allocations to Operating Reserve 100.0% 0.0% 100.0% 14.1% 48.6% 9.7% 12.3% 13.7% 1.6%
Less Costs Met From Other Revenue
Other Revenue
26 Wastewater Revenue Adjustme 100.0%90.0% 0.0% 0.0% 0.0% 10.0% 0.0%
27 Connection and Other Fees 100.0%15.4% 10.5% 34.5% 28.8% 0.0% 10.8%
28 Miscellaneous Revenue 100.0%25.0% 0.0% 0.0% 0.0% 75.0% 0.0%
29 Interest Income 100.0%11.6% 40.0% 7.9% 10.1% 29.0% 1.3%
30 Full Year Rate Adjustment 100.0%16.7% 57.5% 11.4% 14.5% 0.0% 0.0%
31 Average 100.0%-261.4% -17.7% 57.2% 44.6% 254.8% 22.4%
32 Net O&M Expense 100.0%16.2% 49.1% 9.3% 12.0% 11.8% 1.5%
(a) Includes Board of Trustees, Rate Commission, Civil Service Commission, Office of Secretary - Treasurer, Executive Director, Office of
General Counsel, and Office of Human Resources.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-27
Table 3-15 Allocation of Wastewater Operation and Maintenance Expense to Functional Cost Components
Table 3-15
Allocation of Wastewater Operation and Maintenance
Expense to Functional Cost Components
Test Year 2013
Direct________________________________________________________________
Non-
Line Suspended All Residential
No. Description Total Indirect Total Volume Capacity Solids BOD Customers Customers____ ______________________ ________ ________ ________ ________ ________ ________ ________ ________ ________
$ $ $ $$$$$$
Personnel Services
1 Administration and Management (4,579,600 4,579,600 0
2 Engineering 19,477,100 0 19,477,100 1,051,800 15,114,200 486,900 525,900 681,700 1,616,600
Operations
3 Collection System 17,898,500 0 17,898,500 17,898,500
4 Pump Stations 3,895,500 0 3,895,500 3,895,500
5 Wastewater Treatment 17,125,300 0 17,125,300 4,024,400 2,859,900 4,367,000 5,839,700 34,300
6 Support 3,947,100 473,700 3,473,400 301,300 1,848,600 327,000 437,300 559,200
7 Finance 5,199,600 2,672,800 2,526,800 2,526,800
8 Information Systems 6,445,600 6,445,600 0___________________________________________________________________________________
9 Total 78,568,300 14,171,700 64,396,600 5,377,500 41,616,700 5,180,900 6,802,900 3,767,700 1,650,900
All Other
10 Administration and Management (9,713,200 9,713,200 0
11 Engineering 1,305,600 0 1,305,600 60,000 1,061,500 27,400 30,000 36,600 90,100
Operations
12 Collection System 4,214,400 0 4,214,400 4,214,400
13 Pump Stations 2,091,600 0 2,091,600 2,091,600
14 Wastewater Treatment 10,754,600 0 10,754,600 2,054,200 1,957,300 3,258,600 3,452,200 32,300
15 Support 4,060,600 40,600 4,020,000 465,200 1,878,400 737,900 781,700 156,800
16 Finance 11,184,200 460,500 10,723,700 10,723,700
17 Information Systems 4,043,900 4,043,900 0___________________________________________________________________________________
18 Total 47,368,100 14,258,200 33,109,900 2,579,400 11,203,200 4,023,900 4,263,900 10,917,100 122,400________________________________________________________________
19 Subtotal Direct Expenses 97,506,500 7,956,900 52,819,900 9,204,800 11,066,800 14,684,800 1,773,300
20 Total Indirect (b) 28,429,900 28,429,900 2,320,100 15,400,700 2,683,800 3,226,700 4,281,600 517,000
Utilities
Operations
21 Pump Stations 2,695,200 2,695,200 1,509,300 1,185,900
22 Wastewater Treatment 10,877,600 10,877,600 3,774,500 1,370,600 2,142,900 3,535,200 54,400__________________________________________________________________
23 Subtotal 13,572,800 13,572,800 5,283,800 2,556,500 2,142,900 3,535,200 54,400
24 Water Backup Program 5,000,000 5,000,000 5,000,000
25 Headquarters Building 959,800 959,800 959,800__________ ________________________________________________________________
26 Total O&M Expense 145,469,000 145,469,000 20,560,800 70,777,100 14,031,500 17,828,700 19,926,200 2,344,700
27 Additional O&M (c) 112,400 112,400 26,600 18,800 28,700 38,300
28 Add't to Operating Reserve (d) 1,126,200 1,126,200 159,300 547,700 108,800 138,200 154,100 18,100
Less Costs Met From Other Revenue
Other Revenue
29 Wastewater Revenue Adjustme n (4,463,000)(4,463,000) (4,016,700) 0 0 0 (446,300) 0
30 Connection and Other Fees 2,082,800 2,082,800 321,300 219,000 717,700 600,500 0 224,300
31 Miscellaneous Revenue3,651,300 3,651,300912,8000002,738,5000
32 Interest Income (e)1,857,200 1,857,200 215,900 743,400 147,400 187,300 538,600 24,600
33 Full Year Rate Adjustment (f) (2,017,500)(2,017,500) (336,600) (1,159,100) (229,800) (292,000)__________________________________________________________________________
34 Total 1,110,800 1,110,800 (2,903,300) (196,700) 635,300 495,800 2,830,800 248,900
35 Net O&M Expense 145,596,800 145,596,800 23,650,000 71,540,300 13,533,700 17,509,400 17,249,500 2,113,900
(a) Includes Board of Trustees, Rate Commission, Civil Service Commission, Office of Secretary - Treasurer, Executive Director, Office of
General Counsel, and Office of Human Resources.
(b) Allocated based on Line 19.
(c) Additional costs due to anticipated regulatory related projects.
Personnel services costs are allocated based on Line 5, utilities are allocated based on Line 22, and all other costs are allocated based on Line 14.
(d) Allocated based on Lines 26 and 27.
(e) Allocated 29.0% of interest income directly to All Customers based on relative revenue receipts with remainder allocated based on Line 26 less
All Customer costs.
(f) Allocated based on Line 26 less All Customers, and Non-residential Customers costs.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-28
3.8 Distribution of Costs to Customer Classes
The total cost responsibility for each customer class is determined by developing wastewater
system unit costs of service for each cost component and applying these unit costs to the respective
service requirements of each customer class. In accomplishing this, each customer class is allocated a
share of volume, capacity, strength, and customer costs for which it is responsible.
3.8.1 Customer Classifications
Customers are divided into customer classes that represent a particular type of service
requirement or load on the system. The residential customer class includes residents living in single
family and multifamily dwellings. The non-residential class includes all customers (commercial,
government, industrial, etc.) not included in the residential class. Wastewater strengths in excess of the
normal wastewater strength threshold levels, which are contributed by a portion of the non-residential
class, are segregated into a separate surcharge customer group.
3.8.2 Units of Service
The determination of customer class responsibility for costs of service requires that the customer
classes be allocated a portion of the volume, capacity, strength, and customer costs of service according to
their respective service requirements.
The allocation of billed wastewater
volume contributed by each customer
class is displayed in Figure 3.9. Service
requirements or units of service for the
respective customer classes are
developed in Table 3-16 for fiscal year
2013. Annual contributed wastewater
volume and number of bills are based on
the projected number of wastewater
customers served by the District.
As previously discussed,
billable wastewater volume for
unmetered residential customers is based on indoor water usage values while billable wastewater volume
for metered residential customers is based on water usage during the best equated period and billable
wastewater volume for all non-residential customers is based on actual water usage less exemption
allowances for water not contributed to the sewer system. Total treated wastewater volume as shown in
Column 3 of Table 3-16 includes this contributed or billable wastewater volume (Column 1) and allocated
infiltration/inflow (Column 2).
Infiltration/inflow (I/I) includes flow entering the sewer system from illegal roof and foundation drains,
groundwater infiltration through sewer service pipe and main joints, and stormwater runoff or inflow
from the combined sewer system. District-wide I/I is approximately 55 percent of the total wastewater
flow reaching the treatment plants on an annual basis (Table 3-16, column 2).
Each customer class should bear its proportionate share of the costs associated with I/I, as the
wastewater system must be adequate to convey and process the total wastewater flow. The amount of I/I
to be recovered directly from wastewater service charges is assigned to customer classes on the premise
that 40 percent of the total is distributed on the basis of the number of customers within each class, with
the remaining 60 percent allocated on the basis of contributed wastewater volume. These percentages are
based on independent engineering studies completed in January 2005 by CDM and presented in the
February 2007 Wastewater and Stormwater Rate Proposal.
Figure 3.9 Contributed Wastewater Volume
Figure 3.9 Contributed Wastewater Volume
Contributed Wastewater Volume
Non-
Residential
34%
Multi-
family
19%
Single
Family
46%
Black & Veatch 3-29
WASTEWATER UTILITY Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Table 3-16 Wastewater Units of Service Table 3-16Wastewater Units of ServiceTest Year 2013(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)Volume Capacity Wastewater Strength______________________________________________________________________________LineInfiltration TotalInfiltration Total SuspendedAllNo. Customer Class Contributed Inflow Treated Contributed Inflow Treated Solids BOD Customers Customers___________________________________________________________________________________________________Ccf Ccf Ccf Ccf/day Ccf/day Ccf/day Pounds Pounds Bills Equiv. BillsJ-7J-7(1) + (2)J-7 J-7(4) + (5)J-6J-6 J-5Metered Customers1 Single Family 24,458,200 41,709,800 66,168,000 115,925 478,806 594,731 59,603,100 29,311,100 3,624,6102 Multifamily 8,639,400 7,966,400 16,605,800 40,948 91,450 132,398 16,831,200 9,931,300 248,6403 Non-Residential 23,136,100 18,918,800 42,054,900 109,659 217,177 326,836 43,566,600 26,445,100 297,662 1,023,422__________________________________________________________________________________________4 Total56,233,700 68,595,000 124,828,700 266,532 787,433 1,053,965 120,000,900 65,687,500 4,170,912 1,023,422Unmetered Customers5 Single Family 7,234,100 9,740,900 16,975,000 34,288 111,820 146,108 16,009,300 8,507,400 676,3006 Multifamily 4,700,200 4,980,500 9,680,700 22,278 57,173 79,451 9,560,200 5,443,400 233,830_________________________________________________________________________________7 Total11,934,300 14,721,400 26,655,700 56,565 168,994 225,559 25,569,500 13,950,800 910,1308Surcharge16,000,000 16,000,000Total System9 Single Family 31,692,300 51,450,700 83,143,000 150,213 590,626 740,839 75,612,400 37,818,500 4,300,91010 Multifamily 13,339,600 12,946,900 26,286,500 63,226 148,623 211,849 26,391,400 15,374,700 482,47011 Non-Residential 23,136,100 18,918,800 42,054,900 109,659 217,177 326,836 43,566,600 26,445,100 297,662 1,023,42212 Surcharge16,000,000 16,000,000__________________________________________________________________________________________13 Total68,168,000 83,316,400 151,484,400 323,098 956,427 1,279,524 161,570,400 95,638,300 5,081,042 1,023,422Ccf - Hundred Cubic Feet Non- Residential
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-30
The responsibility for collection system capacity related costs varies with the peak flow of both
contributed wastewater (Column 4) and infiltration/inflow (Column 5) attributable to each customer class.
Infiltration/inflow is estimated to have a peak to average flow ratio of 2.4 times the peak flow for
contributed wastewater volume.
The BOD and suspended solids responsibility of each customer class is based on average strength
concentrations and contributed wastewater volume for each class. Recent operational statistics for the
existing wastewater treatment plants indicate that the average influent strength of wastewater is 100
milligrams per liter (mg/l) for BOD and 170 mg/l for suspended solids. Deducting allowances for I/I and
excess strength units subject to surcharge from the total wastewater strength units, results in an average
contributed wastewater strength of approximately 175 mg/l for BOD and 220 mg/l for suspended solids.
Average contributed wastewater strengths are estimated to be the same for all customer classes
recognizing that the type of residential and non-residential development in the District suggests that
differences in average wastewater strengths among the classes are not likely to be significant.
The projection of suspended solids and BOD strengths in excess of normal strength limits are
assigned to the surcharge customer classification, and are shown separately on Line 8 of Table 3-16. The
projections are based on extra strength data maintained and utilized by the District for current surcharge
billings.
Customer billing and collection costs are distributed to customer classes on the basis of the
number of bills for each customer class as shown in Column 9 of Table 3-16. Environmental compliance
costs have historically been recovered from non-residential customers on a uniform basis. Compliance
charges proposed in this report are based on a five-tier system to recover costs more equitably from non-
residential customers. To allocate costs for this proposed rate structure, non-residential customers must
be expressed in terms of equivalent bills, as shown in Column 10 of Table 3-16. Equivalent bills are used
to equate relative cost responsibility of higher tier customers to those of Tier 1 customers. The
development of equivalent Tier 1 non-residential customers is more fully discussed in Section 3.9.2.3.
3.8.3 Customer Class Costs of Service
The costs of service to be recovered from wastewater charges include net
operation and maintenance costs and total net capital costs from Line 16 of
Table 3-12. For purposes of this report, net capital costs are divided into net
replacement costs and net other capital costs. Replacement costs are assumed to
be equal to the District’s projected annual depreciation expense for the test year
as previously allocated on Line 31 of Table 3-13. Net other capital costs (Table
3-13, Line 32) are equal to total test year net capital costs less the annual
depreciation expense. Total operation, maintenance and replacement (OM&R)
costs, as shown on Line 3 of Table 3-17, are equal to net operation and
maintenance cost (Line 1 of Table 3-17) plus the replacement cost portion of
total net capital costs (Line 2 of Table 3-17). Adding the other capital cost
portion of total net capital costs (Line 4 of Table 3-17) to the OM&R portion of
total costs determines the total allocated cost of service to be recovered from wastewater charges as
shown on Line 5 of Table 3-17.
These costs are distributed to the various customer classes by application of unit costs of service
to respective service requirements or units of service from Line 13 of Table 3-16, as shown on Line 6 of
Table 3-17. Unit costs of service for each functional cost component are based on the total cost divided
by the total applicable units of service. Applying these common unit costs of service shown on Line 8 of
Table 3-17 to the respective service requirements of each customer class from Table 3-16 determines the
total allocated cost of service for each class. This allocated cost of service is compared to revenue under
existing rates and revenue under the approved 2012 rates on Table 3-18 to show the magnitude of
indicated revenue increases for each customer class on a cost of service basis.
Federal user
charge regulations
require OM&R
costs to be
recovered
proportionately
from all customer
classes served by a
wastewater utility.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-31
Table 3-17 Allocation of Wastewater Cost of Service to Customer Classes
Table 3-17
Allocation of Wastewater Cost of Service to Customer Classes
Test Year 2013
(1) (2) (3) (4) (5) (6) (7)
Wastewater Strength____________________
No. Description Total Volume Capacity TSS BOD Customers Customers____________________________________________________________________________
Costs of Service
1 Net O&M Expense 145,596,800 23,650,000 71,540,300 13,533,700 17,509,400 17,249,500 2,113,900
2 Estimated Replacement 64,366,600 12,146,400 42,829,400 2,821,900 6,568,900_______________________________________________________________
3 Total OM&R 209,963,400 35,796,400 114,369,700 16,355,600 24,078,300 17,249,500 2,113,900
4 Net Capital Costs 34,340,400 2,100,100 30,616,700 487,800 1,135,800_______________________________________________________________
5 Total 244,303,800 37,896,500 144,986,400 16,843,400 25,214,100 17,249,500 2,113,900
Number of Units
6 Units of Service 151,484,400 1,279,524 161,570,400 95,638,300 5,081,042 1,023,422
Ccf Ccf/day Pounds Pounds Bills Equiv. Bills
Unit Costs - $/unit
7OM&R Line 3 / Line 6 0.23630 89.38455 0.10123 0.25176 3.39487 2.06552
8Total Line 5 / Line 6 0.25017 113.31274 0.10425 0.26364 3.39487 2.06552
Single Family
Metered
9 Units of Service 66,168,000 594,731 59,603,100 29,311,100 3,624,610
10 Cost - $Line 9 x Line 8 110,189,900 16,553,100 67,390,600 6,213,500 7,727,600 12,305,100
Unmetered
11 Units of Service 16,975,000 146,108 16,009,300 8,507,400 676,300
12 Cost - $
Line 11 x Line 8 27,010,300 4,246,600 16,555,900 1,668,900 2,242,900 2,296,000
Multi Family
Metered
13 Units of Service 16,605,800 132,398 16,831,200 9,931,300 248,640
14 Cost - $
Line 13 x Line 8 24,373,600 4,154,200 15,002,400 1,754,600 2,618,300 844,100
Unmetered
15 Units of Service 9,680,700 79,451 9,560,200 5,443,400 233,830
16 Cost - $
Line 15 x Line 8 14,650,100 2,421,800 9,002,800 996,600 1,435,100 793,800
Non-Residential
17 Units of Service 42,054,900 326,836 43,566,600 26,445,100 297,662 1,023,422
18 Cost - $
Line 17 x Line 8 62,193,800 10,520,800 37,034,700 4,541,900 6,972,000 1,010,500 2,113,900
Surcharge
19 Units of Service 16,000,000 16,000,000
20 Cost - $
Line 19 x Line 8 5,886,100 1,667,900 4,218,200_______________________________________________________________
21 Total Cost - $ 244,303,800 37,896,500 144,986,400 16,843,400 25,214,100 17,249,500 2,113,900
Ccf - Hundred Cubic feet
Line All
Non-
Residential
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-32
Table 3-18 Comparison of Wastewater Cost of Service with Revenue Under Approved Rates
3.9 Wastewater Rate Adjustments
The principal consideration in designing wastewater rate schedules is to establish charges to
customers that are reasonably commensurate with the cost of providing wastewater service.
Theoretically, the only method of assessing entirely equitable charges for wastewater service would be
determination of each customer's bill based upon the customer's particular service requirements. Since
this is impractical for the thousands of customers served by the District, schedules of rates are normally
designed to meet average conditions for groups of customers having similar service requirements.
Practicality also requires that rates be reasonably simple to apply, recover costs proportionately from all
classes, and be subject to as few misinterpretations as possible.
3.9.1 Existing Wastewater Rates
The existing schedule of rates for wastewater service, shown in Table 3-4, became effective on
July 1, 2010. The rates consist of monthly service charges, a uniform volume charge, and extra strength
surcharges for BOD in excess of 300 mg/l or COD in excess of 600 mg/l and suspended solids in excess
of 300 mg/l. The service charges include a billing and collection component and system availability
component that are applicable to all customer classes and a uniform compliance charge that is only
Table 3-18
Comparison of Wastewater Cost of Service
With Revenue Under Existing and Approved Rates
Test Year 2013
(1) (2) (3) (4)
Revenue Revenue
Allocated Under Under Indicated
Line Cost of Existing Approved Revenue
No. Customer Class Service Rates (a) Rates (b) Increase_____________________________________________________
$$$%
Metered Customers J-9 B-15 (1) / (3)
1 Single Family 110,189,900 90,536,400 94,405,800 16.7
2 Multifamily 24,373,600 20,275,800 21,046,400 15.8
3 Non-Residential (c) 68,079,900 65,836,000 68,693,700 (0.9)______________________________
4 Total 202,643,400 176,648,200 184,145,900 10.0
Unmetered Customers
5 Single Family 27,010,300 22,215,800 23,276,900 16.0
6 Multifamily 14,650,100 12,155,700 12,670,700 15.6______________________________
7 Total 41,660,400 34,371,500 35,947,600 15.9
Total System
8 Single Family 137,200,200 112,752,200 117,682,700 16.6
9 Multifamily 39,023,700 32,431,500 33,717,100 15.7
10 Non-Residential 68,079,900 65,836,000 68,693,700 (0.9)______________________________
11 Total 244,303,800 211,019,700 220,093,500 11.0
(a) Existing Rates effective July 1, 2010. Does not include customer class impact
of approved user charges that will be effective on July 1, 2011.
(b) Rates approved by the Board to be effective July 1, 2011.
(c) Includes cost of service associated with surcharges and impact of shifting
part of Environmental Compliance costs to all customer classes.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-33
applicable to non-residential customers. The uniform volume charge for metered customers is also
applied to the room and plumbing fixture based wastewater volumes recognized for billing unmetered
customers.
3.9.2 Proposed Wastewater Rates
The proposed wastewater rates presented in Table 3-19 are based on cost of service and policy
considerations. These values are designed to increase fiscal year 2012 wastewater revenue by 11.0
percent and are assumed to be effective on July 1, 2012 (during the District’s fiscal year 2013).
Table 3-19 presents the proposed rates in two components. The user charge portion of the proposed rates
recovers the operation, maintenance, and replacement costs of the wastewater system. This portion of the
wastewater rates is subject to the proportionate cost recovery requirements of EPA’s user charge
regulations. The capital charge portion of the wastewater rates recovers all other capital costs not
recovered by the replacement component of the operation, maintenance and replacement (OM&R)
charge. Table 3-20 shows the proposed wastewater rates developed in Table 3-19 for fiscal year 2013 by
customer class.
Table 3-21 shows a comparison between existing (fiscal year 2011 rates), rates approved for
fiscal year 2012, and proposed test year 2013 wastewater rates. Wastewater charges currently indicated
for the remainder of the six-year study period are also shown in Table 3-21.
3.9.2.1 Low Income Charges
Wastewater charges applicable to eligible low-income residential customers are expected to be 50
percent of those presented in Tables 3-19, 3-20 and 3-21 based on established District policy. The Water
Quality Act of 1987 (Public Law 100-4) states that:
"A system of user charges which imposes a lower charge for low-income residential users
(as defined by the Administrator) shall be deemed to be a user charge system meeting the
requirements of clause (A) of this paragraph if the administrator determines that such
system was adopted after public notice and hearing."
The first low-income rate was adopted by the Board of Trustees in 1993 by Ordinance 9031.
Current policy defines low income credit eligibility as residential customers with household income for
the previous year less than 150 percent of the most recent Health and Human Services (HHS) poverty
guidelines by household size and less than 175
percent for disabled individuals and seniors at
least age 62. The adjacent table shows household
income limits by family size used to check a
customer’s eligibility to participate in the
District’s low-income program for calendar year
2011. The District recently expanded the
eligibility criteria to include multifamily
residential customers residing in multifamily
housing consisting of six units or less. The cost
impact of the District’s current low-income
program on a typical single family residential
customer not eligible for low-income assistance
and discharging 8 Ccf per month of wastewater is
expected to be less than $0.05 per month in fiscal
year 2013. The impact of the low income
subsidy is calculated by dividing the total
revenue subsidy provided to low-income
customers under the proposed rates by the general service volume. This impact is expected to increase in
2010 Poverty Guidelines
Disabled/
HHS Low Income Seniors
Persons in Poverty 150% x HHS 175% x HHS
Family Guidelines Guidelines Guidelines_______________________________
$$$
1 10,830 16,245 18,953
2 14,570 21,855 25,498
3 18,310 27,465 32,043
4 22,050 33,075 38,588
5 25,790 38,685 45,133
6 29,530 44,295 51,678
7 33,270 49,905 58,223
8 37,010 55,515 64,768
9 40,750 61,125 71,313
10 44,490 66,735 77,858
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-34
subsequent years as the District continues to actively promote this program and increase the number of
qualified low-income customers.
Table 3-19 Proposed Wastewater Rates - User/Capital Charge Breakdown
Table 3-19
Proposed Wastewater Rates
User/Capital Charge Breakdown
(Rates Effective July 1, 2012)
Total
Line User Capital Wastewater
No. Type of Monthly Charge Charge Charge Charge________________________________________________
Base Charge - $/Bill
1 Billing & Collection Charge 3.25 0.00 3.25
2 System Availability Charge 8.08 1.92 10.00_______________
3 Total Base (Residential) Service Charge 11.33 1.92 13.25
Compliance Charge - $/Bill (a)
4 Tier 1 23.00 0.00 23.00
5 Tier 2 40.25 0.00 40.25
6 Tier 3 85.70 0.00 85.70
7 Tier 4 125.65 0.00 125.65
8 Tier 5 165.60 0.00 165.60
Volume Charge
9 Metered - $/Ccf 2.03 0.36 2.39
Unmetered - $/Bill
10 Each Room 1.34 0.21 1.55
11 Each Water Closet 5.03 0.80 5.83
12 Each Bath 4.19 0.67 4.86
13 Each Separate Shower 4.19 0.67 4.86
Extra Strength Surcharges - $/ton (a)
14 Suspended Solids over 300 mg/l 202.46 28.89 231.35
15 BOD over 300 mg/l 503.53 116.61 620.14
16 COD over 600 mg/l 251.77 58.31 310.07
Ccf - Hundred Cubic Feet
mg/l - milligram per liter
(a) Applicable only to non-residential customers.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-35
Table 3-20 Proposed Wastewater Rates by Customer Class
Table 3-20
Proposed Wastewater Rates
by Customer Class
(Rates Effective July 1, 2012)
Metered____________________
Line Unmetered Non-
No Type of Monthly Charge Residential Residential Residential____________________________________________________
$$$
Base Charge - $/Bill
1 Billing and Collection Charge 3.25 3.25 3.25
2 System Availability Charge 10.00 10.00 10.00_______________
3 Total Base (Residential) Service Charge 13.25 13.25 13.25
Compliance Charge (a)
4 Tier 1 23.00
5 Tier 2 40.25
6 Tier 3 85.70
7 Tier 4 125.65
8 Tier 5 165.60
Volume Charge
9 per Ccf 2.39 2.39
10 per room 1.55
11 per water closet 5.83
12 per bath 4.86
13 per separate shower 4.86
Extra Strength Surcharge - $/ton (a)
14 Suspended Solids over 300mg/l 231.35
15 BOD over 300 mg/l 620.14
16 COD over 600 mg/l 310.07
Ccf - Hundred Cubic Feet
mg/l - milligram per liter
(a) Applicable only to non-residential customers.
Note: Rates for qualified low income residential users are 50 percent of the
regular rates above.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-36
Table 3-21 Comparison of Existing and Proposed Wastewater Rates
Table 3-21
Comparison of Existing and Proposed Wastewater Rates
Proposed Wastewater Charges ________________________________
No. Type of Monthly Charge 2011 2012 (a) 2013 2014 2015 2016___________________________________________________________________
Base Charge - $/Bill
1 Billing & Collection Charge 2.60 2.65 3.25 3.45 3.60 3.70
2 System Availability Charge 8.80 9.20 10.00 11.50 13.40 15.75 ________________________
3 Total Base (Residential) Service Charge 11.40 11.85 13.25 14.95 17.00 19.45
Compliance Charge - $/Bill (b)
4 Tier 1 30.85 31.95 23.00 16.00 9.00 2.35
5 Tier 2 30.85 31.95 40.25 42.60 44.05 45.35
6 Tier 3 30.85 31.95 85.70 90.65 93.80 96.55
7 Tier 4 30.85 31.95 125.65 132.95 137.50 141.55
8 Tier 5 30.85 31.95 165.60 175.20 181.20 186.55
Volume Charge
9 Metered - $/Ccf 2.02 2.11 2.39 2.72 3.07 3.45
Unmetered - $/Bill
10 Each Room 1.32 1.38 1.55 1.77 2.00 2.24
11 Each Water Closet 4.93 5.15 5.83 6.64 7.49 8.42
12 Each Bath 4.11 4.30 4.86 5.53 6.24 7.01
13 Each Separate Shower 4.11 4.30 4.86 5.53 6.24 7.01
Extra Strength Surcharges - $/ton (b)
14 Suspended Solids over 300 mg/l 222.62 231.35 231.35 231.68 257.18 265.68
15 BOD over 300 mg/l 596.72 620.14 620.14 620.14 652.14 673.30
16 COD over 600 mg/l 298.36 310.07 310.07 310.07 326.07 336.65
Typical Residential Bill - $/Bill (c)
17 User Charge Portion 24.28 26.19 27.56 29.87 32.75 34.76
18 Capital Charge Portion 1.26 2.54 4.81 6.84 8.81 12.29 ________________________
19 Total 27.56 28.73 32.37 36.71 41.56 47.05
Ccf - Hundred Cubic Feet
mg/l - milligram per liter
(a) 2012 approved rates to be effective July 1, 2011.
(b) Applicable only to non-residential customers.
(c) Based on contributed wastewater volume of 8 Ccf per month.
Line
FY 2011
Existing
FY 2012
Approved
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-37
3.9.2.2 Excess Strength Wastewater Surcharges
The proposed wastewater volume charges shown in Table 3-21 are designed to recover costs for
volume associated with normal strength contributed wastewater. Normal strength wastewater is
considered to be wastewater having a suspended solids concentration of 220 mg/l and a BOD strength of
175 mg/l. To provide for the recovery of costs associated with above average strength contributions, an
extra strength surcharge rate is applied to wastewater loadings that exceed normal strength limits of 300
mg/l for suspended solids and 300 mg/l for BOD or 600 mg/l for COD. These normal strength limits
afford the high strength customers the same wastewater strength allowances provided to above average
residential customers. Cost of service based rates for excess strength wastewater are equal to the unit
costs shown on Line 8, Columns 4 and 5 of Table 3-17 expressed on a cost per ton instead of cost per
pound basis.
3.9.2.3 Compliance Charge
Costs incurred by the District to monitor non-residential customers have historically been
recovered by a single compliance charge applied uniformly to all non-residential customers. To provide
greater cost recovery equity, it is proposed that a five-tier system of compliance charges be adopted to
replace the current uniform compliance charge. The proposed system allocates costs to customers in
proportion to increased service requirements with Tier 1 customers requiring the least compliance related
service and Tier 5 customers requiring the most compliance related services. A basic description of the
service levels proposed for this new system of charges is presented below.
Tier 1 – Non-Residential Customers Not Subject to Inspections with no Sample
Point
Tier 2 – Non-Residential Customers Subject to Inspections with No Sample Point
Tier 3 – Non-Residential Customers Subject to Inspections with One Sample Point
Tier 4 – Non-Residential Customers Subject to Inspections with Two Sample
Points
Tier 5 – Non-Residential Customers Subject to Inspections with Three or More
Sample Points
The relative costs to serve customers in each tier during fiscal year 2010 and the number of non-
residential customers during 2010 are presented in Columns 1 and 2 of Table 3-22. The relative costs
were determined based on estimates by District environmental compliance program staff. As indicated by
Column 3 of Table 3-22, the majority of non-residential customers are classified as Tier 1 customers. The
monthly unit costs to serve customers during fiscal year 2010 are determined in Column 4 of Table 3-22
by dividing the allocated costs (Column 1) by the respective number of customers (Column 2). For rate
design purposes, customers in each tier can be put on an equivalent basis with Tier 1 customers by
dividing their respective unit costs by the unit cost indicated for Tier 1 customers. This derives the
relative Tier 1 cost ratios shown in Column 5 of Table 3-22. Multiplying these cost ratios by the number
of customers shown in Column 2 and by a factor of 12 derives the equivalent bills for fiscal year 2010
shown in Column 6 of Table 3-22.
The relative distribution of 2010 customers (Column 3) and the cost ratios (Column 5) are applied
to the total number of non-residential customers projected for the 2013 test year to derive the total
equivalent bills shown in Column 10 of Table 3-16. Test year costs allocated to non-residential
customers are divided by these equivalent bills to determine the test year unit cost for Tier 1 customers as
shown in Column 7 of Table 3-17. Multiplying this equivalent unit cost times the cost ratios in Column 5
of Table 3-22 determines the test year cost of service based environmental compliance charge for
customers in the higher tiers.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-38
Table 3-22 Non-Residential Equivalent Bills
The indicated cost of service based Tier 1 charge is significantly lower than the existing
compliance charge. This is due to a shift of a large portion of compliance related costs from non-
residential customers to residential customers during the study period to recognize benefits available to all
District customers. In order to lessen the immediate impact on residential customers, it is proposed to
move toward the calculated cost of service compliance charge for Tier 1 customers over a period of four
years while immediately adopting the indicated cost of service compliance charges for the higher tier non-
residential customers. This procedure will transition the approved $31.95 per month compliance charge
for fiscal year 2012 over a four year period to the proposed Tier 1 compliance charge of $2.35 per month
indicated for fiscal year 2016 as shown in Table 3-21.
3.9.3 Wastewater Revenue Under Proposed Rates
A comparison of allocated cost of service for the 2013 test year with wastewater revenue under
the proposed rates is shown in Table 3-23. As indicated, revenues under the proposed rates will
adequately recover the total cost of service, and reasonably recover the allocated cost of service from each
customer class. The variances in revenue as a percent of cost of service from a full 100 percent cost
recovery level are due to the impact of the low-income assistance program, proposed transition to a 5-tier
compliance charge and rounding of wastewater charges.
Table 3-22
Non-Residential Equivalent Bills
(1)(2)(3)(4)(5)(6)
2010 Percentage Monthly
Rate Allocated 2010 Distribution Unit Cost Equivalent
Block Cost Customers of Customers Cost Ratio Bills_____________________________________________________
$$/Customer
Tier 1 514,800 23,665 94.04% 1.81 1.000 284,000
Tier 2 186,500 440 1.75% 35.32 19.485 102,900
Tier 3 613,800 680 2.70% 75.22 41.494 338,600
Tier 4 304,400 230 0.91% 110.29 60.839 167,900
Tier 5 261,600 150 0.60% 145.33 80.170 144,300__________________________
Total 1,881,100 25,165 100.00%1,037,700
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-39
Table 3-23 Comparison of Wastewater Cost of Service with Revenue Under Proposed Rates
3.10 Alternative Wastewater Rates
The financial planning and rate design analyses presented in this report are contingent upon the
authorization of a sufficient amount of revenue bonds by the qualified voters of the District. If the voters
do not pass the District’s proposed revenue bond authorization, the District will be forced to finance its
major capital improvement program on a 100 percent pay-as-you-go basis. In recognition of this
possibility, financial analyses identical to those presented in this rate proposal, but without the benefits of
additional revenue bonds or SRF loans, have been conducted. The detailed results of these analyses may
be made available to the Rate Commission for their review if needed.
This is a worst-case scenario and has only been developed for comparison purposes. Since the
alternative rates also finances the entire CIRP previously presented by Table 3-8, the results of this
analysis, as shown in Table 3-24, can be directly compared with Table 3-21. Table 3-25 shows this direct
comparison for fiscal years 2013 and 2016. Therefore, instead of the $13.25 total monthly base charge
and $2.39 per Ccf volume charge proposed for fiscal year 2013, the indicated base and volume charges
under this cash-only alternative for fiscal year 2013 would be $29.75 per bill and $5.45 per Ccf.
Table 3-23
Comparison of Wastewater Cost of Service
With Revenue Under Proposed Rates
Test Year 2013
(1) (2) (3)
Revenue Revenue As
Under Allocated a Percent
Line Proposed Cost of of Cost of
No. Customer Class Rates Service Service________________________________________________
$$%
Metered Customers
K-3 J-9 (1) / (2)
1 Single Family 106,259,200 110,189,900 96.4
2 Multifamily 23,930,700 24,373,600 98.2
3 Non-Residential (a) 73,993,900 68,079,900 108.7__________________
4 Total 204,183,800 202,643,400 100.8
Unmetered Customers
5 Single Family 26,066,100 27,010,300 96.5
6 Multifamily 14,291,400 14,650,100 97.6__________________
7 Total 40,357,500 41,660,400 96.9
Total System
8 Single Family 132,325,300 137,200,200 96.4
9 Multifamily 38,222,100 39,023,700 97.9
10 Non-Residential (a) 73,993,900 68,079,900 108.7__________________
11 Total 244,541,300 244,303,800 100.1
(a) Includes revenue and allocated cost of service associated with
surcharge customers.
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-40
Table 3-24 Alternative Wastewater Rates
Table 3-24
Alternative Wastewater Rates
Alternative Wastewater Charges_________________________________________
No. Type of Monthly Charge 2012 (a) 2013 2014 2015 2016____________________________________________________________
Base Charge - $/Bill
1 Billing & Collection Charge 2.65 3.25 3.45 3.60 3.70
2 System Availability Charge 9.20 26.50 26.60 26.80 27.10 ____________________
3 Total Base (Residential) Service Charge 11.85 29.75 30.05 30.40 30.80
Compliance Charge - $/Bill (b)
4 Tier 1 31.95 23.00 16.00 9.00 2.35
5 Tier 2 31.95 40.25 42.60 44.05 45.35
6 Tier 3 31.95 85.70 90.65 93.80 96.55
7 Tier 4 31.95 125.65 132.95 137.50 141.55
8 Tier 5 31.95 165.60 175.20 181.20 186.55
Volume Charge
9 Metered - $/Ccf 2.11 5.45 5.45 5.45 5.45
Unmetered - $/Bill
10 Each Room 1.38 3.55 3.55 3.55 3.55
11 Each Water Closet 5.15 13.30 13.30 13.30 13.30
12 Each Bath 4.30 11.08 11.08 11.08 11.08
13 Each Separate Shower 4.30 11.08 11.08 11.08 11.08
Extra Strength Surcharges - $/ton (b)
14 Suspended Solids over 300 mg/l 231.35 267.35 267.35 267.35 267.35
15 BOD over 300 mg/l 620.14 685.94 685.94 685.94 685.94
16 COD over 600 mg/l 310.07 342.97 342.97 342.97 342.97
Typical Residential Bill - $/Bill (c)
17 User Charge Portion 26.19 37.29 30.71 33.41 35.31
18 Capital Charge Portion 2.54 36.06 42.94 40.59 39.09 ____________________
19 Total 28.73 73.35 73.65 74.00 74.40
20 Total Bill with Bond Financing 28.73 32.37 36.71 41.56 47.05
Ccf - Hundred Cubic Feet
mg/l - milligram per liter
(a) 2012 approved rates to be effective July 1, 2011.
(b) Applicable only to non-residential customers.
(c) Based on contributed wastewater volume of 8 Ccf per month.
Line
WASTEWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 3-41
Table 3-25 Proposed and Alternative Wastewater Rates Comparison
Table 3-25
Proposed and Alternative
Wastewater Rates Comparison
Fiscal Year 2013 Fiscal Year 2016____________________________________
No. Type of Monthly Charge Proposed Alternative Proposed Alternative_____________________________________________________
Base Charge - $/Bill
1 Billing & Collection Charge 3.25 3.25 3.70 3.70
2 System Availability Charge 10.00 26.50 15.75 27.10 ________________
3 Total Base (Residential) Service Charge 13.25 29.75 19.45 30.80
Compliance Charge - $/Bill (a)
4 Tier 1 23.00 23.00 2.35 2.35
5 Tier 2 40.25 40.25 45.35 45.35
6 Tier 3 85.70 85.70 96.55 96.55
7 Tier 4 125.65 125.65 141.55 141.55
8 Tier 5 165.60 165.60 186.55 186.55
Volume Charge
9 Metered - $/Ccf 2.39 5.45 3.45 5.45
Unmetered - $/Bill
10 Each Room 1.55 3.55 2.24 3.55
11 Each Water Closet 5.83 13.30 8.42 13.30
12 Each Bath 4.86 11.08 7.01 11.08
13 Each Separate Shower 4.86 11.08 7.01 11.08
Extra Strength Surcharges - $/ton (a)
14 Suspended Solids over 300 mg/l 231.35 267.35 265.68 267.35
15 BOD over 300 mg/l 620.14 685.94 673.30 685.94
16 COD over 600 mg/l 310.07 342.97 336.65 342.97
Typical Residential Bill - $/Bill (b)
17 User Charge Portion 27.56 37.29 34.76 35.31
18 Capital Charge Portion 4.81 36.06 12.29 39.09 ________________
19 Total 32.37 73.35 47.05 74.40
Ccf - Hundred Cubic Feet
mg/l - milligram per liter
(a) Applicable only to non-residential customers.
(b) Based on contributed wastewater volume of 8 Ccf per month.
Line
STORMWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 4-1
4.0 STORMWATER UTILITY
Stormwater utilities commonly recover costs related to services provided through user fees that
are based on impervious or gross area of a customer’s service location. According to the 2010
Stormwater Utility Survey by Black & Veatch, 94 percent of survey
respondents indicated that their user fees were based on some form of land
area measurement. A system of stormwater user fees based on impervious
area was recommended by the 2007 Rate Commission and adopted by the
Board of Trustees through Ordinance 12560 on December 13, 2007. These
rates, which became effective on March 1, 2008, replaced a $0.24 flat rate
user charge and various ad valorem taxes. However, a lawsuit asserting
that the impervious area based user fees violated the Missouri Hancock
Amendment was filed on July 18, 2008. Based on a five-question test
adopted by the Missouri Supreme Court to determine whether a charge is a
tax subject to voter approval or a fee that does not require voter approval, a Lincoln County Circuit Court
Judge ruled on July 9, 2010 that the impervious area based charge was a tax and thus violated the
Hancock amendment due to lack of voter approval. As a result of this ruling, the District reinstituted the
prior system of charges, which became effective on August 1, 2010.
4.1 Existing Stormwater Rates and Taxes
District stormwater revenue is now derived principally from ad valorem taxes known as
Operation, Maintenance and Construction Improvement (OMCI) taxes. Other sources of income include
revenues from a minimal flat rate charge per bill, interest earnings, late charges and other operating
income. Existing stormwater rates and taxes levied by the District are presented in Table 4-1. These
include district-wide, stormwater O&M and subdistrict specific taxes as well as flat rate charges per bill
applied in accordance with the original May 11, 1988 voter approved ordinance (Ordinance 7450). This
ordinance and all subsequent ordinances presented a stormwater user charge of $0.24 per month for all
single family residential and non-residential customers and a stormwater user charge of $0.18 per unit for
all multifamily residential customers.
Table 4-1 Existing Stormwater Rates and Taxes
2010 Stormwater Survey
55% Impervious Area
10% Gross Area
29% Both Impervious
and Gross Area
6% Other
Table 4-1
Existing Stormwater Rates and Taxes
(Effective August 1, 2010)
Type of Monthly Charge City
Original Co.
Boundary
County
Annexed_______________________________________________
$$$
Monthly Charge
Multifamily Residential - $/Unit 0.18 0.18 0.18
Single Family Res. & Non-Res- $/Account 0.24 0.24 0.24
District-Wide Tax per $100 Assessed Value 0.018 0.018 0.018
Stormwater O&M Tax per $100 Assessed Value 0.061 0.061
Subdistrict Specific Taxes NA (a) NA
(a) Subdistrict specific tax levies range from $0.00 to $0.10 per $100 of assessed valuation .
NA - Not Applicable
STORMWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 4-2
Due to limitations of prior billing systems, the District previously applied the $0.24 flat rate
monthly charge to all customer accounts, including those for multifamily customers. However, the
District’s recent upgrade of its technology system now makes it possible to bill multifamily customers in
accordance with the voter approved rate structure, as indicated in Table 4-1.
4.2 Stormwater Revenue
Revenue collected from the existing stormwater sources is inadequate to fund a comprehensive
stormwater program necessary to fulfill the District’s stormwater responsibilities per Charter. The
existing revenue structure only funds a portion of stormwater operation and maintenance activities while
providing no monies for rehabilitation and preventative maintenance.
The available funding results in the inequitable delivery of stormwater services across the
District. Customers paying just the district-wide tax will receive only the minimal stormwater service
needed to comply with regulatory requirements. Customers paying both the district-wide and stormwater
O&M tax will receive regulatory services and a level of maintenance up to the limits of the revenue
generated by these stormwater taxes. Those customers paying specific subdistrict taxes in addition to the
district-wide and stormwater O&M taxes will receive the highest level of stormwater services. This is
however, still substantially below the level needed to provide a comprehensive stormwater program
considered necessary to meet Charter responsibilities and as previously funded by the impervious area
based stormwater rate currently in litigation.
Stormwater revenues consist of monthly flat rate user charges and OMCI ad valorem taxes for
district-wide, stormwater operating costs as well as other subdistrict specific taxes which primarily fund
capital projects specific to each subdistrict’s geographic area but can also be used for general stormwater
operations. The application of stormwater ad valorem taxes varies by stormwater service area. All
customers are charged the flat rate user charges and the $0.018 per $100 of assessed value district-wide
tax but only customers within the District’s original service area are charged the additional $0.061
stormwater O&M tax. OMCI taxes are also charged for specific areas within the original service area.
These dedicated subdistrict taxes range from $0.02 to $0.10 per $100 of assessed property value.
4.2.1 User Charge Revenue
A summary of historical and projected stormwater revenues under existing rates is presented in
Table 4-2 for the period 2006 through 2016. The historical stormwater revenues shown in Table 4-2 were
developed from detailed records provided by District staff. Impervious area based charges were imposed
from March 1, 2008 through July 31, 2010. Projected billed stormwater revenues do not include
allowances for bad debt, refunds or billing adjustments. These billing adjustments are reflective within
the Other Operating Revenue shown in Table 4.4.
Flat rate revenue is estimated based on the number of customer accounts and multifamily units
projected for 2011 through 2016 multiplied by the monthly flat stormwater fees shown in Table 4-1.
4.2.2 Stormwater OMCI Tax Revenue
A summary of historical and projected stormwater OMCI revenues under existing tax rates is
presented in Table 4-3 for the period 2006 through 2016. The historical stormwater tax revenues shown
in Table 4-3 are developed from detailed records provided by District staff. Projected stormwater tax
revenues shown in Table 4-3 through 2014 are based on staff projections developed for the District’s
fiscal year 2012 budget. This budget is scheduled for Board adoption on June 11, 2011. As indicated in
Table 4-3, these projections eliminate OMCI taxes in several subdistricts. The annual average increase
was extrapolated through 2016 to estimate future OMCI tax revenue. The stormwater OMCI revenue
equals the resulting assessed values times the tax rates for each stormwater service area shown on
Table 4-3.
Black & Veatch 4-3
STORMWATER UTILITY Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Table 4-2 Billed Stormwater Revenue Under Existing Rates and Taxes Table 4-2Historical and Projected Billed StormwaterUser Charge Revenue Under Existing RatesHistoricalProjected___________________________________________________________________________________________________No. Customer Class 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016__________________________________________________________________________________________________________$$$$$$$$$$$1 Flat Rate (a) 1,237,938 1,237,938 832,100 0 0 1,181,900 1,356,100 1,353,600 1,352,200 1,351,100 1,350,3002 Impervious Area Charges (b) 0 0 12,286,700 41,580,100 43,416,128 3,625,300 0 0 0 0 0 ___________________________________________________________________________________________________3 Total 1,237,938 1,237,938 13,118,800 41,580,100 43,416,128 4,807,200 1,356,100 1,353,600 1,352,200 1,351,100 1,350,300(a) Flat rate charge were reinstated on August 1, 2010 with multifamily customers charged on a per unit basis effective February 1, 2011.(b) Fiscal Year 2011 includes one month of impervious area charge revenue.Line
Black & Veatch 4-4
STORMWATER UTILITY Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Table 4-3 Stormwater OMCI Revenue Under Existing Tax Rates Table 4-3Historical and Projected Stormwater OMCI RevenueUnder Existing Tax RatesHistoricalProjected____________________________________________________________________________________________________No. Subdistrict2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016__________________________________________________________________________________________________________$$$$$$$$$$ $1District-Wide 4,601,860 5,147,691 3,500,000 0 0 4,903,100 4,948,100 4,993,100 5,038,100 5,083,100 5,128,1002Stormwater O&M 6,749,957 7,568,117 5,146,00000 9,911,700 10,003,200 10,094,700 10,186,200 10,277,700 10,369,200Subdistricts Prior year's taxes x modest growth rate3 Coldwater Creek 1,525,934 1,596,366 1,804,734 46,906 24,061 2,187,000 1,972,000 1,992,000 2,032,000 2,037,000 2,042,0004 Wedgewood 28,330 29,216 33,941 1,694 2210000005 Upper Paddock Creek 20,831 21,576 26,183 1,505 1,0510000006 Paddock Creek 92,257 94,261 114,392 5,999 2,2760000007 Fountain Creek 131,107 133,613 160,773 7,818 3,2250000008 Maline Creek 445,722 464,539 534,392 51,374 14,309 855,000 630,000 636,000 650,000 652,000 654,0009 Black Jack-Dellwood 146,409 152,499 170,735 17,349 4,37000000010 Watkins Creek 94,877 97,808 120,549 7,393 4,389 161,000 161,000 163,000 166,000 166,000 166,00011 Sugar Creek216,404 222,032 232,155 3,0940 219,000 219,000 221,000 226,000 227,000 228,00012 Deer Creek 2,101,960 2,184,423 2,606,879 43,043 12,196 3,250,000 3,250,000 3,283,000 3,350,000 3,358,000 3,366,00013 Clayton Central184,064 210,675 240,130 5,368000000014 Creve Coeur/Frontenac 252,882 270,459 328,795 2,848000000015 Black Creek 788,464 836,478 978,195 17,403 2,840 1,304,000 1,304,000 1,317,000 1,343,000 1,346,000 1,349,00016 University City RDP 651,082 680,193 790,879 32,700 11,633 789,000 789,000 797,000 813,000 815,000 817,00017 Gravois Creek 958,305 1,001,334 1,169,848 14,336 1,923 1,268,000 1,268,000 1,280,000 1,305,000 1,308,000 1,311,00018 Loretta-Joplin15,337 15,265 18,420 1,104 576 20,000 20,000 20,000 21,000 21,000 21,00019 N. Affton Area 43,800 44,364 52,607 1,334 547 56,000 56,000 57,000 58,000 58,000 58,00020 Wellston 35,677 38,147 40,923 5,022 1,277 35,000 35,000 35,000 36,000 36,000 36,00021 Seminary Branch-RDP 183,575 184,977 211,438 3,535 709 248,000 214,000 216,000 220,000 221,000 222,00022 Marlborough 24,025 24,700 29,001 552 17400000023 Shrewsbury-RDP16,893 17,231 18,123 464 48 18,000 18,000 18,000 19,000 19,000 19,000________________________________________________________________________________________24 Total Subdistrict Revenue 7,957,935 8,320,156 9,683,092 270,841 85,825 10,410,000 9,936,000 10,035,000 10,239,000 10,264,000 10,289,000________ ________ ________ ________ ________ ________ ________ ________ ________ ________ ________ 25 Total OMCI Revenue 19,309,752 21,035,965 18,329,092 270,841 85,825 25,224,800 24,887,300 25,122,800 25,463,300 25,624,800 25,786,300(a) Ad Valorem Taxes were reinstated on August 1, 2010 and certified by the Missouri State Auditor on October 1, 2010.Line
STORMWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 4-5
4.2.3 Other Revenue
Historical and projected other stormwater utility revenue is presented in Table 4-4. Included in
the other operating revenue are stormwater billing adjustments. These adjustments include late charges,
refunds, and other adjustments. Late charge revenue is projected to decrease slightly between 2011 and
2016, with the balance of the stormwater billing adjustment projected to remain stable. Revenue from
inspection, plan review fees and submittal fees are expected to increase from the 2011 amount, based on
expected increases in the fees. Miscellaneous revenue for reimbursable items and other revenue are
projected to increase by about 3 percent per year from the 2011 amount currently budgeted, based on
historical trends. Miscellaneous revenue for reimbursements and the sale of fixed assets is projected to
remain stable. Total other operating revenue is therefore projected to increase from $469,400 in 2011 to
$536,400 in 2016.
Table 4-4 Projected Stormwater Other Operating Revenue
Table 4-4
Projected Stormwater Other Operating Revenue
Fiscal Year Ending June 30,______________________________________________________
No. Description 2011 2012 2013 2014 2015 2016______________________________________________________________________________
$$$$$$
Stormwater Billing Adjustment
1 Late Charges 40,000 39,700 39,500 39,400 39,400 39,400
2 Billed Account Refunds 000000
3 Adjustments 100 100 100 100 100 100
4 Bad Debt Provision 000000
5 City of Arnold WWT 000000
6 NSF Fees 100 200 200 200 200 200
7 Stormwater Lien Interest and Fees 700 700 700 700 700 700
8 Other 000000__________________________________________
9 Subtotal 40,900 40,700 40,500 40,400 40,400 40,400
Other Fees
10 Construction Inspection Fees 100,000 103,000 106,100 109,300 112,600 116,000
11 Plan Review Fees 62,500 64,400 66,300 68,300 70,400 72,500
12 Submittal Fees 85,000 87,500 90,200 92,900 95,700 98,500
13 Waste Hauler Permits 000000
14 Stormwater Monitoring Costs Fees 000000
15 Pretreatment Discharge Permits 000000
16 All Other 000000__________________________________________
17 Subtotal 247,500 254,900 262,600 270,500 278,700 287,000
Miscellaneous Revenue
18 Reimbursements 000000
19 Sale of Fixed Assets 000000
20 Reimbursable Engr. & Maint. 32,000 33,000 33,900 35,000 36,000 37,100
21 Rental Income 40,000 41,200 42,400 43,700 45,000 46,400
22 Build America Bond Credits 000000
23 All Other 109,000 111,500 114,800 118,300 121,800 125,500__________________________________________
24 Subtotal 181,000 185,700 191,100 197,000 202,800 209,000__________________________________________
25 Total Other Operating Revenue 469,400 481,300 494,200 507,900 521,900 536,400
26Connection Fee Revenue 000000
Line
STORMWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 4-6
4.3 Stormwater Revenue Requirements
The revenue required to provide for the continued operation of the District’s stormwater utility
must be sufficient to meet its cash requirements for system operation. Revenue requirements include (1)
total stormwater system operation and maintenance expenses; (2) expenditures for routine and any major
capital improvements met directly from revenues; and (3) provision for an adequate operating reserve.
Provisions of the cash requirements to meet these stormwater related expenditures for the period of 2011
through 2016 are developed in this section.
4.3.1 Stormwater Operation and Maintenance Expense
Revenue collected from the existing stormwater user charge and ad valorem taxes are available to
fund stormwater related operation and maintenance expenditures. However, these revenue sources are
not sufficient to fulfill the District’s stormwater responsibilities as defined in the District’s Charter.
Therefore, the majority of stormwater operation and maintenance activities are the result of failures in the
existing collection and conveyance system or as a reaction to customer complaints. The specific operating
divisions that provide direct service to the stormwater system are as follows:
Collection System – Mintert, Sulphur, and Grand Glaize services;
Facilities, Garages and Shops;
Operation Support Services (includes Materials Management, Customer Care and
Administration);
Pump Stations.
Operation and maintenance of the stormwater management system is based on response to
customer calls, system failures and blockages and includes activities such as removing blockages, open
channel clearing, repair of storm sewer line failures, and limited inlet inspections and cleanings. Major
investment in renewing stormwater infrastructure is not provided under the existing stormwater operation
and maintenance program.
Two areas of flood protection are operated by the District; the Bissell Service area provides flood
protection on the Mississippi River, and the Lemay Service area provides flood protection on River Des
Peres. The Bissell Service area has 24 pump stations, and the Lemay Service area has 10 pump stations,
15 gate structures and other operations.
The 2011 revised budget (as of October 7, 2010) is the basis for projecting existing stormwater
operation and maintenance expenses and is adjusted for the same inflation and growth factors as
wastewater but has allowances for attrition to match available funding levels. Table 4-5 shows 2011
stormwater operation and maintenance expenses to be $17,738,300. This service level going forward will
be limited by available stormwater revenue generated by stormwater user charges and taxes and is
projected to reach $18,609,200 by 2016. The Engineering Department provides direct services to the
stormwater system as well, with the portion of time spent on such activities estimated and allocated.
These engineering services are limited to those needed to meet minimum regulatory requirements. In
addition to the direct operating expenses, there are various indirect expenses, which have been allocated
based on the proportion of stormwater expenses to total expenses.
STORMWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 4-7
Table 4-5 Projected Stormwater Operating Costs
4.3.2 Stormwater Routine Capital Improvements
Routine capital improvements or capital outlays are generally for vehicles and equipment that are
required to be replaced on an ongoing basis. Capital outlay costs are projected to increase from $526,300
in 2011 to $613,000 by 2016 as shown on Line 20 of Table 4-5. Due to the ongoing nature of these
expenditures, they are shown in conjunction with the operation and maintenance expenses Total
projected stormwater operation and maintenance expense, including routine capital improvements, is
projected to increase from $18,264,600 in 2011 to $19,222,200 in 2016 as shown on Line 21 of Table 4-5.
4.3.3 Stormwater Major Capital Improvement Program
The existing system of stormwater user fees, the district-wide stormwater tax and the stormwater
O&M tax are dedicated to stormwater system operations. Therefore, all stormwater related major capital
improvements are currently financed by tax revenues generated within specific OMCI subdistricts and
their available fund balances for the benefit of the respective subdistricts.
Table 4-5
Projected Stormwater Operating Costs
Fiscal Year Ending June 30,______________________________________________________
No Department 2011 2012 2013 2014 2015 2016_____________________________________________________________________
$$$$$$
1 Board of Trustees 400 400 400 400 400 400
2 Rate Commission 37,300 0 0 0 125,000 0
3 Civil Service Commission 900 900 900 900 900 900
4 Secretary - Treasurer 192,500 200,200 207,900 217,800 227,100 236,400
5 Executive Director 120,100 124,800 129,700 135,300 140,200 145,200
6 General Counsel 432,000 448,000 463,400 484,400 505,200 526,300
7 Office of Human Resources 1,456,600 1,528,800 1,604,600 1,692,700 1,783,200 1,859,700
8 Engineering 3,474,800 3,445,100 3,339,800 3,239,200 3,112,600 2,967,500
Operations
9 Collection System (a) 8,361,000 8,174,200 8,201,100 8,367,700 8,384,800 8,469,300
10 Pump Stations 731,300 758,500 786,100 821,200 854,700 887,800
11 Wastewater Treatment (b) 0 0 0 0 0 0
12 Support (c) 1,390,000 1,442,400 1,497,500 1,558,700 1,616,000 1,672,000________________________________________________
13 Total Operations 10,482,300 10,375,100 10,484,700 10,747,600 10,855,500 11,029,100
14Finance 000000
15 Information Systems 1,365,100 1,415,800 1,468,800 1,528,700 1,584,100 1,639,300________________________________________________
16 Subtotal (General Fund) 17,562,000 17,539,100 17,700,200 18,047,000 18,334,200 18,404,800
17Water Backup Program 000000
18 Real Property Fund 176,300 181,600 187,000 192,600 198,400 204,400________________________________________________
19 Total O&M 17,738,300 17,720,700 17,887,200 18,239,600 18,532,600 18,609,200
20 Capital Outlay 526,300 544,700 561,000 577,800 595,200 613,000________ ________ ________ ________ ________ ________
21 Total Operating Expense 18,264,600 18,265,400 18,448,200 18,817,400 19,127,800 19,222,200
(a) Includes Mintert, Sulphur, and Grand Glaize maintenance yards and technical services.
(b) Includes Lemay, Bissell, and county treatment plants.
(c) Includes costs related to the customer care group, administrative support and materials management.
Line
STORMWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 4-8
4.3.4 Operating Reserve
The stormwater operating reserve is designed to add a layer of protection for unplanned expenses.
An operating reserve equal to 60 days of stormwater operating and maintenance expense plus capital
outlay costs is reflected in this rate proposal.
4.4 Summary of Stormwater Revenue and Revenue Requirements
Table 4-6 presents a summary comparison of all existing stormwater revenues under existing
rates and taxes with projected revenue requirements for 2011 through 2016 in a pro forma cash flow
format. Lines 1 and 2 present the projected stormwater revenues based on the existing rates from Lines 1
and 2 in Table 4-2. This includes a residual amount of revenue from impervious area based charges (Line
2 of Table 4-6). Lines 3 and 4 of Table 4-6 show projected tax revenues available for general operations
based on projected tax revenues from Lines 1 and 2 of Table 4-3. Line 5 presents other revenue from
Table 4-4, Line 25. Interest income from the operating reserve fund (Line 6) and available operating
funds (Line 7), is based on the average of the beginning of year and end of year balances of the respective
funds times a one percent interest rate. Line 8 equals the total existing stormwater operating revenues
available to support the District’s stormwater program for fiscal years 2011 through 2016.
Operation and maintenance expense (Line 9), is a summary of the detailed amounts presented in
Table 4-5 on Line 19. Capital outlay expenditures shown on Line 10 are from Line 20 of Table 4-5 and
represent expenditures primarily related to vehicles and equipment needed to support stormwater
maintenance and repairs. Line 11 is the amount of cash financing available for major stormwater capital
improvements. Line 12 represents the annual additions to a stormwater operating reserve and Line 13
shows a one-time transfer of user charge revenue in 2012 to establish a Stormwater Emergency Fund.
Line 14 is the total revenue requirements for operations projected for the stormwater system for 2011
through 2016 with only a basic level of service provided. Line 15 equals the net annual balance generated
by the existing stormwater operating revenues. Line 16 equals the beginning of the year stormwater cash
balance, which is updated from the prior year’s ending balance on Line 17.
The OMCI subdistrict funding information is presented on Lines 18 through 23, with the OMCI
revenue on Line 18 taken from Table 4-3, Line 24. The interest revenue on Line 19 is based on average
balances maintained in the OMCI subdistrict funds. Line 20 represents the use of existing OMCI
subdistrict revenues for projected major capital improvements. Line 21 equals the net annual balance for
the OMCI program derived by subtracting Line 20 from Lines 18 and 19. Line 22 equals the beginning
of the year OMCI cash balance, updated from the prior year’s ending balance on Line 23.
STORMWATER UTILITY
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 4-9
Table 4-6 Comparison of Projected Stormwater Revenue Under Existing Rates and Taxes with Projected Revenue Requirements
Table 4-6
Comparison of Projected Stormwater Revenue Under Existing
Rates and Taxes With Projected Revenue Requirements
Fiscal Year Ending June 30,__________________________________________________________
No. 2011 2012 2013 2014 2015 2016____ _______ _______ _______ _______ _______ _______
$$$$$$
Stormwater Operations
Stormwater User Charge Revenue
1 Flat Rate 1,181,900 1,356,100 1,353,600 1,352,200 1,351,100 1,350,300
2 Impervious Area Charges 3,625,300 0 0 0 0 0
Ad Valorem Taxes
3 District-Wide 4,903,100 4,948,100 4,993,100 5,038,100 5,083,100 5,128,100
4 Stormwater O&M 9,911,700 10,003,200 10,094,700 10,186,200 10,277,700 10,369,200
5 Other Revenue 469,400 481,300 494,200 507,900 521,900 536,400
6 Interest Income - Reserve Funds 41,500 45,000 45,200 45,800 46,400 46,800
7 Interest Income -Operations 93,100 94,500 79,500 64,000 46,300 28,200_________ _________ _________ _________ _________ _________
8 Total Stormwater Operating Revenue 20,226,000 16,928,200 17,060,300 17,194,200 17,326,500 17,459,000
9 Operation and Maintenance Expense 17,738,300 17,720,700 17,887,200 18,239,600 18,532,600 18,609,200
10 Routine Annual Improvements 526,300 544,700 561,000 577,800 595,200 613,000
11 Cash Financing of Major Improvements 0 0 0 0 0 0
12 Additions to Operating Reserve 90,100 100 30,100 60,700 51,000 15,500
13 Transfer to Stormwater Emergency Fund 250,000_________ _________ _________ _________ _________ _________
14 Total Revenue Requirements 18,354,700 18,515,500 18,478,300 18,878,100 19,178,800 19,237,700
15 Net Annual Balance 1,871,300 (1,587,300) (1,418,000) (1,683,900) (1,852,300) (1,778,700)
16 Beginning of Year Balance 8,376,800 10,248,100 8,660,800 7,242,800 5,558,900 3,706,600
17 End of Year Balance 10,248,100 8,660,800 7,242,800 5,558,900 3,706,600 1,927,900
OMCI Subdistricts
18 OMCI Revenue Under Existing Rates 10,410,000 9,936,000 10,035,000 10,239,000 10,264,000 10,289,000
19 Interest Income 425,300 427,800 456,900 544,600 653,100 762,900
20 OMCI Existing Major Improvements 9,400,000 11,308,000 3,730,000 0 0 0
21 Net Annual Balance 1,435,300 (944,200) 6,761,900 10,783,600 10,917,100 11,051,900
22 Beginning of Year Balance BD-5 41,814,100 43,249,400 42,305,200 49,067,100 59,850,700 70,767,800
23 End of Year Balance 43,249,400 42,305,200 49,067,100 59,850,700 70,767,800 81,819,700
Line
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-1
5.0 CUSTOMER COST IMPACT
The District’s customers are impacted by charges for both wastewater and stormwater services
provided by the District. Wastewater costs have historically increased while billed wastewater volume
has recently decreased, resulting in the need for increased wastewater charges to support wastewater
operations. In addition, ongoing negotiations with regulatory agencies are expected to require the District
to adhere to an aggressive schedule of wastewater system capital improvements to eliminate sanitary
sewer overflows (SSOs), abate combined sewer overflows (CSOs) and construct other needed
improvements. This will result in significant wastewater rate increases over time and significant
increases in debt that must first be approved by the voters. If such additional debt is not approved by the
voters, even greater wastewater charges will need to be imposed for the District to adhere to the planned
schedule of wastewater capital improvements outlined in the anticipated Consent Decree.
Ongoing stormwater rate litigation has resulted in the District reverting to a system of flat rate
stormwater user charges, which haven’t increased since their implementation in 1988, and a system of ad
valorem taxes that can only support basic stormwater operations. The current stormwater charges and
taxes provide significantly less revenue than the former impervious area based user charges. The lower
revenue levels will postpone needed improvements and could result in a deterioration of the stormwater
system resulting from inadequate maintenance and delayed improvements.
Due to the ongoing stormwater litigation and uncertainty of future stormwater charges, only
wastewater rates are proposed to be changed in this rate proposal. However, stormwater utility
projections under existing rates and taxes are also presented in this section to demonstrate the total
combined cost impact on District’s customers of this rate proposal.
5.1 Wastewater and Stormwater Revenues
Projected wastewater and stormwater revenues under proposed rates and existing taxes are
summarized in Table 5-1. Indicated wastewater revenues were developed on Lines 1 through 15 of
Table 3-11. The projected wastewater service charge revenue shown on Line 1 of Table 5-1 is based on
the following schedule of wastewater revenue increases:
The revenue increase required for fiscal year 2012 was previously approved by the Board as a
result of the 2008 Rate Commission proceedings. Subsequent revenue increases are designed to increase
the wastewater bill of a typical residential user by approximately 13 percent per year as indicated in the
above table. The difference between the indicated overall system revenue increase level and impact on a
typical residential customer is primarily due to the proposed phase-in of a revised system of compliance
charges for non-residential customers. Under this proposed system, costs are more equitably recovered
from non-residential customers through a five-tier system based on relative service requirements. In
addition, some of the costs previously recovered through the compliance charge from only non-residential
customers are now recovered from all District customers
Fiscal Year Ending June 30,______________________________________
2012 2013 2014 2015 2016______________________________
Revenue Increase 4.3% 11.0% 12.0% 12.0% 12.0%
Average Residential Bill Increase 4.2% 12.7% 13.4% 13.2% 13.2%
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-2
Table 5-1 Projected Wastewater and Stormwater Revenue
Although stormwater rates have changed from an impervious area based user charge system to a
system of flat rate user charges and ad valorem taxes since the prior rate change proceedings, this change
became effective in fiscal year 2011 and results in no change in stormwater fees and taxes during the
study period. Therefore, stormwater charges projected in this rate proposal do not impact or increase
costs to the District’s customers. Total combined utility revenue, including revenue from OMCI
subdistrict funds is projected to increase from $246,926,700 in 2011 to $369,656,200 in 2016.
Wastewater related revenue will represent 87 percent of combined system revenues in 2011 and increase
to 92 percent in 2016.
5.2 Wastewater and Stormwater Revenue Requirements
Revenue requirements projected for the wastewater and stormwater utilities are presented in
Table 5-2. Wastewater revenue requirements were previously developed on Lines 16, 17 and Lines 26
through 29 of Table 3-11 and stormwater related revenue requirements were previously developed on
Lines 9 through 13 and Line 20 of Table 4-6. The projected operation and maintenance expenses shown
on Lines 1 and 7 of Table 5-2 are also equal to those projected on Lines 19 and 20 of Table 2-1.
Similarly, the amount of routine annual improvements shown on Lines 2 and 8 of Table 5-2 are equal to
those projected on Line 22 of Table 2-1. Table 5-2 also shows anticipated improvements expected to be
cash financed from OMCI subdistrict funds. Therefore, total revenue requirements of the District are
projected to increase from $240,856,900 in 2011 to $360,384,600 in 2016.
Table 5-1
Projected Wastewater and Stormwater Revenue
Fiscal Year Ending June 30,__________________________________________________________
No. Revenue Source 2011 2012 2013 2014 2015 2016___________________________________________________________________________
$$$$$$
Wastewater Utility
1 Service Charge Revenue 213,795,600 220,387,500 242,286,300 270,743,000 302,973,200 339,217,100
2 Other Operating Revenue (750,500) 3,382,400 1,271,100 295,400 (824,500) (2,084,700)
3 Connection Fee Revenue 1,250,000 1,288,000 1,327,000 1,367,000 1,408,000 1,450,000
4 Interest Income - Reserve Funds 888,800 964,300 1,196,600 1,486,600 1,753,500 1,969,100
5 Interest Income - Operations 30,800 47,300 50,100 50,500 50,500 50,200
6 Interest Income - Arnold 650,700 631,000 610,500 589,100 566,800 543,600______________________________________________________
7 Total Wastewater Revenue 215,865,400 226,700,500 246,741,600 274,531,600 305,927,500 341,145,300
Stormwater Utility (a)
8 Service Charge Revenue 4,807,200 1,356,100 1,353,600 1,352,200 1,351,100 1,350,300
Ad Valorem Taxes
9 District-Wide 4,903,100 4,948,100 4,993,100 5,038,100 5,083,100 5,128,100
10 Stormwater O&M 9,911,700 10,003,200 10,094,700 10,186,200 10,277,700 10,369,200
11 Other Revenue 469,400 481,300 494,200 507,900 521,900 536,400
12 Interest Income - Reserve Funds 41,500 45,000 45,200 45,800 46,400 46,800
13 Interest Income - Operations 93,100 94,500 79,500 64,000 46,300 28,200______________________________________________________
14 Subtotal Stormwater Revenue 20,226,000 16,928,200 17,060,300 17,194,200 17,326,500 17,459,000
15 Subdistrict OMCI Taxes 10,410,000 9,936,000 10,035,000 10,239,000 10,264,000 10,289,000
16 Interest Income - OMCI 425,300 427,800 456,900 544,600 653,100 762,900______________________________________________________
17 Total Stormwater Revenue 31,061,300 27,292,000 27,552,200 27,977,800 28,243,600 28,510,900
Combined Utility ______________________________________________________
18 Total Revenue 246,926,700 253,992,500 274,293,800 302,509,400 334,171,100 369,656,200
(a) Excludes inter-fund revenue transfers from dedicated OMCI funds.
Line
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-3
Table 5-2 Projected Wastewater and Stormwater Revenue Requirements
5.3 Summary of Combined Revenue and Revenue Requirements
Revenue for the wastewater and stormwater utilities, previously shown on Table 5-1 is presented
in Table 5-3 on a combined utility basis. Table 5-3 also combines the individual wastewater and
stormwater expenditures from Table 5-2. Resulting combined utility annual net surplus or deficit
revenues are shown on Line 16 of Table 5-3 and contribute to the combined utility operating balances
shown on Lines 17 and 18. Table 5-3 also shows a comparison of revenues and revenue requirements for
the OMCI subdistrict funds as previously presented in Table 4-6.
5.4 Rate Schedules
Table 5-4 presents the proposed wastewater rate schedule for fiscal year 2013 as well as the
existing schedule of stormwater rates. As indicated in Table 5-4, the rate structure has been modified to
more equitably recovery the costs for the District’s environmental compliance activities. The compliance
charge is proposed to be applied using a five-tier system of charges based on the level of service provided
to five respective categories of non-residential customers. The prior compliance charge was applied to all
non-residential customers on a uniform basis without regard to the level of service provided.
Projected wastewater rates are available in Table 3-21. Stormwater rates, as shown in Tables 4-1
and 5-4, are not proposed to change in this rate proposal.
Table 5-2
Projected Wastewater and Stormwater Revenue Requirements
Fiscal Year Ending June 30,__________________________________________________________
No. Revenue Requirement 2011 2012 2013 2014 2015 2016_____________________________________________________________________
$$$$$$
Wastewater Utility
1 Operation and Maintenance Expense 134,394,800 138,803,800 145,581,400 154,131,500 164,235,800 170,084,100
2 Routine Annual Improvements 2,378,600 2,461,900 2,535,700 2,611,800 2,690,100 2,770,900
3 Debt Service 38,404,300 45,718,300 65,795,500 83,051,200 99,077,900 111,467,300
4 Cash Financing of Improvements 37,250,000 38,438,000 31,677,000 33,267,000 38,308,000 55,850,000
5 Addition to Operating Reserve 674,500 738,500 1,126,200 1,418,000 1,673,900 974,600______________________________________________________
6 Total Wastewater 213,102,200 226,160,500 246,715,800 274,479,500 305,985,700 341,146,900
Stormwater Utility
7 Operation and Maintenance Expense 17,738,300 17,720,700 17,887,200 18,239,600 18,532,600 18,609,200
8 Routine Annual Improvements 526,300 544,700 561,000 577,800 595,200 613,000
9Cash Financing of Improvements 000000
10 Additions to Operating Reserve 90,100 100 30,100 60,700 51,000 15,500______________________________________________________
11 Subtotal Stormwater 18,354,700 18,265,500 18,478,300 18,878,100 19,178,800 19,237,700
12OMCI Existing Major Improvements9,400,00011,308,0003,730,000000______________________________________________________
13 Total Stormwater 27,754,700 29,573,500 22,208,300 18,878,100 19,178,800 19,237,700
Combined Utility ______________________________________________________
14 Total Combined Utility 240,856,900 255,734,000 268,924,100 293,357,600 325,164,500 360,384,600
Line
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-4
Table 5-3 Comparison of Combined Revenue Under Projected Rates and Taxes with Total Revenue Requirements
Table 5-3
Comparison of Combined Revenue Under Projected
Rates and Taxes with Total Revenue Requirements
Fiscal Year Ending June 30,____________________________________________________________
No. Description 2011 2012 2013 2014 2015 2016_________________________________________________________________________
$$$$ $ $
Combined Wastewater & Stormwater Operations
Revenue
1 Wastewater Service Charge Revenue 213,795,600 220,387,500 242,286,300 270,743,000 302,973,200 339,217,100
2 Wastewater Connection Fee Revenue 1,250,000 1,288,000 1,327,000 1,367,000 1,408,000 1,450,000
3 Stormwater User Charge Revenue 4,807,200 1,356,100 1,353,600 1,352,200 1,351,100 1,350,300
4 Stormwater Ad Valorem Taxes 14,814,800 14,951,300 15,087,800 15,224,300 15,360,800 15,497,300
5 Other Revenue (281,100) 3,863,700 1,765,300 803,300 (302,600) (1,548,300)
6 Interest Income - Reserve Funds 930,300 1,009,300 1,241,800 1,532,400 1,799,900 2,015,900
7 Interest Income - Operations 123,900 141,800 129,600 114,500 96,800 78,400
8 Interest Income - Arnold 650,700 631,000 610,500 589,100 566,800 543,600______________________________________________________
9 Total Revenue 236,091,400 243,628,700 263,801,900 291,725,800 323,254,000 358,604,300
Revenue Requirements
10 Operation and Maintenance Expense 152,133,100 156,524,500 163,468,600 172,371,100 182,768,400 188,693,300
11 Routine Annual Improvements 2,904,900 3,006,600 3,096,700 3,189,600 3,285,300 3,383,900
12 Debt Service 38,404,300 45,718,300 65,795,500 83,051,200 99,077,900 111,467,300
13 Cash Financing of Major Improvements 37,250,000 38,438,000 31,677,000 33,267,000 38,308,000 55,850,000
14 Additions to Operating Reserve 764,600 738,600 1,156,300 1,478,700 1,724,900 990,100______________________________________________________
15 Total Revenue Requirements 231,456,900 244,426,000 265,194,100 293,357,600 325,164,500 360,384,600
16 Surplus (Deficit) Revenue 4,634,500 (797,300) (1,392,200) (1,631,800) (1,910,500) (1,780,300)
17 Beginning of Year Balance 10,073,700 14,708,200 13,910,900 12,518,700 10,886,900 8,976,400
18 End of Year Balance 14,708,200 13,910,900 12,518,700 10,886,900 8,976,400 7,196,100
Dediicated Stormwater OMCI Subdistrict Funds
19 OMCI Taxes 10,410,000 9,936,000 10,035,000 10,239,000 10,264,000 10,289,000
20 Interest Income 425,300 427,800 456,900 544,600 653,100 762,900
21 OMCI Major Improvements 9,400,000 11,308,000 3,730,000 0 0 0
22 Surplus (Deficit) Stormwater OMCI Fund 1,435,300 (944,200) 6,761,900 10,783,600 10,917,100 11,051,900
23 Beginning of Year Balance 41,814,100 43,249,400 42,305,200 49,067,100 59,850,700 70,767,800
24 End of Year Balance 43,249,400 42,305,200 49,067,100 59,850,700 70,767,800 81,819,700
Line
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-5
Table 5-4 Proposed Wastewater Rates and Existing Stormwater Charges
Table 5-4
Proposed Wastewater Rates
And Existing Stormwater Charges
(Rates Effective July 1, 2012)
Metered___________________
Line Unmetered Non-
No Type of Monthly Charge Residential Residential Residential___________________________________________________________
$$$
Proposed Wastewater Rates
Base Charge - $/Bill
1 Billing and Collection Charge 3.25 3.25 3.25
2 System Availability Charge 10.00 10.00 10.00_______________
3 Total Base (Residential) Service Charge 13.25 13.25 13.25
Compliance Charge
4 Tier 1 23.00
5 Tier 2 40.25
6 Tier 3 85.70
7 Tier 4 125.65
8 Tier 5 165.60
Volume Charge
9 per Ccf 2.39 2.39
10 per room 1.55
11 per water closet 5.83
12 per bath 4.86
13 per separate shower 4.86
Extra Strength Surcharge - $/ton
14 Suspended Solids over 300mg/l 231.35
15 BOD over 300 mg/l 620.14
16 COD over 600 mg/l 310.07
Existing Stormwater Rates and Taxes
Monthly Charge
17 Single Family Residential - $/Account 0.24 0.24
18 Multifamily Residential - $/Unit 0.18 0.18
19 Non-Residentialr - $/Account 0.24
20 District-Wide Tax (a)0.018 0.018 0.018
Stormwater O&M Tax (a)
21 City and Original County Boundary 0.061 0.061 0.061
22 County Annexed Area NA NA NA
Ccf - Hundred Cubic Feet
mg/l - milligram per liter
(a) Per $100 of assessed value.
Note: Rates for qualified low income residential users are 50 percent of the above rates.
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-6
5.5 Typical Bills
Table 5-5 presents a comparison of typical residential wastewater service bills under existing
rates, rates currently approved for fiscal year 2012 and rates proposed for fiscal year 2013 for various
billable wastewater volumes. Billable wastewater volumes for unmetered customers are derived from
volumes attributed to household attributes. Based on a prior study of unmetered customers, the most
common or “typical” unmetered customer was one with five rooms, one water closet and one bath. The
volume associated with a customer with these housing attributes is very close to the billable volume of a
typical metered residential customer, which is assumed to contribute 8 Ccf per month of wastewater to the
sewer system. As indicated by Table 5-5, the wastewater bill for a typical unmetered residential customer
contributing 7.7 Ccf of wastewater each month would increase by $3.49 or by about 12.4 percent over the
approved fiscal year 2012 rates. The wastewater bill for a typical metered residential customer,
contributing 8 Ccf of wastewater each month, would increase by $3.64 or by about 12.7 percent over the
approved fiscal year 2012 rates.
A comparison of existing, approved and projected typical wastewater bills for single family
residential, multifamily residential and non-residential customers is shown in Table 5-6. As indicated by
this table, the impact on a single family residential customer contributing 8 Ccf of wastewater each month
to the sewer system is expected to increase by about 13 percent in each year from 2013 through 2016.
Table 5-6 also shows the average single family wastewater bills for the largest 50 U.S. cities surveyed by
Black & Veatch in 2009. A copy of this survey can be obtained at the following web site:
http://www.bv.com/Downloads/Resources/Brochures/rsrc_EMS_Top50RateSurvey.pdf
Although these rates are a year older than the District’s existing rates, the typical bills of District
customers are close to the average of the 50 largest cities and appear to compare more favorably as billed
wastewater volume increases. Figure 5.1 below shows historic and projected wastewater bills for
residential customers using 10 Ccf per month (bars) compared to the national average for respondents to
the National Association of Clean Water Agencies (NACWA) annual surveys through 2009 with their 5-
year projection through 2014 (line) and the average of the 50 largest cities surveyed periodically by Black
& Veatch (triangles).
Figure 5.1 Historic and Projected Residential Bills
As indicated in Figure 5.1, the residential bills for District customers have closely tracked the
NACWA national average. This trend is expected to continue through 2016.
Figure 5.1 Historic and Projected Residential Bills
Historic and Projected Residential Bills (10 Ccf/month)
0
10
20
30
40
50
2000 2002 2004 2006 2008 2010 2012 2014 2016
Fiscal YearResidential Bill - $/Mo.NACWA National Average
B&V 50 Largest City Surveys
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-7
Table 5-5 Typical Single Family Residential Wastewater Bill Comparison
Table 5-5
Typical Single Family Residential
Wastewater Bill Comparison
(Rates Effective July 1, 2012)
Housing Attributes_________________
R WC B S Volume Rates Rates Rates Increase_______________________________________________
Ccf$$$$
Unmetered (Eff. 7/1/10) (Eff. 7/1/11) (Eff. 7/1/12)
3110 6.4 24.40 25.44 28.59 3.15
4110 7.1 25.72 26.82 30.14 3.32
5 1 1 0 7.7 27.04 28.20 31.69 3.49
6110 8.4 28.36 29.58 33.24 3.66
7110 9.0 29.68 30.96 34.79 3.83
6111 10.4 32.47 33.88 38.10 4.22
6210 10.8 33.29 34.73 39.07 4.34
7210 11.5 34.61 36.11 40.62 4.51
7220 13.5 38.72 40.41 45.48 5.07
8220 14.2 40.04 41.79 47.03 5.24
16440 28.3 68.68 71.73 80.81 9.08
Metered
0 11.40 11.85 13.25 1.40
2 15.44 16.07 18.03 1.96
3 17.46 18.18 20.42 2.24
4 19.48 20.29 22.81 2.52
5 21.50 22.40 25.20 2.80
6 23.52 24.51 27.59 3.08
Average Bill >> 8 27.56 28.73 32.37 3.64
10 31.60 32.95 37.15 4.20
12 35.64 37.17 41.93 4.76
15 41.70 43.50 49.10 5.60
20 51.80 54.05 61.05 7.00
40 92.20 96.25 108.85 12.60
60 132.60 138.45 156.65 18.20
100 213.40 222.85 252.25 29.40
Ccf - Hundred Cubic Feet
R - Number of Rooms at 16 gallons per day (gpd).
WC - Number of Water Closets at 60 gpd.
B - Number of Baths at 50 gpd.
S - Number of Separate Showers at 50 gpd.
FY 2013
ProposedBillable
FY 2011
Existing
FY 2012
Approved
Avg.
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-8
Table 5-6 Typical Wastewater Bill Comparison
Typical stormwater bills are presented in Table 5-7. Stormwater bills vary based on property
values, tax exempt status and location within the District’s service area. Customers located outside of the
original district boundaries have a reduced tax rate but they also receive less stormwater services.
Stormwater bills for multifamily customers also vary by the number of dwelling units for each stormwater
account. As previously indicated, stormwater charges are not proposed to be changed during the six-year
study period presented in this rate proposal. Therefore, the stormwater bill for typical customers shown in
Table 5-7 can be added to the typical wastewater bills shown for any year within Table 5-6 to derive the
combined wastewater and stormwater cost impact on District customers.
If the District is not able to obtain voter approval for additional wastewater revenue bond
authority, it will still be obligated to construct needed capital improvements to comply with regulatory
requirements and must raise wastewater rates to meet those requirements. Table 5-8 shows the impact on
typical wastewater bills if the District needs to finance capital improvements on a 100 percent pay-as-
you-go basis compared with the proposed debt/cash financing plan.
Table 5-6
Typical Wastewater Bill Comparison
Billed FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
Line Wastewater Average Existing Approved Proposed Proposed Proposed Proposed
No. Volume 50 Cities Rates Rates Rates Rates Rates Rates___________________________________________________________________
Ccf $/month $/month $/month $/month $/month $/month $/month
(Eff. 7/1/09) (Eff. 7/1/10) (Eff. 7/1/11) (Eff. 7/1/12) (Eff. 7/1/13) (Eff. 7/1/14) (Eff. 7/1/15)
Single Family Residential
1 0 11.40 11.85 13.25 14.95 17.00 19.45
2 5 (a) 20.03 21.50 22.40 25.20 28.55 32.35 36.70
3 8 Avg.27.56 28.73 32.37 36.71 41.56 47.05
4 8 Avg. % Increase - 4.2% 12.7% 13.4% 13.2% 13.2%
5 10 (a) 33.80 31.60 32.95 37.15 42.15 47.70 53.95
6 15 (a)41.70 43.50 49.10 55.75 63.05 71.20
7 20 63.28 51.80 54.05 61.05 69.35 78.40 88.45
Multifamily Residential
8 20 51.80 54.05 61.05 69.35 78.40 88.45
9 40 92.20 96.25 108.85 123.75 139.80 157.45
10 60 132.60 138.45 156.65 178.15 201.20 226.45
11
Non-Residential - Normal Strength Wastewater, Tier 2 Compliance Charge
12 70 183.65 191.50 220.80 247.95 275.95 306.30
13 100 244.25 254.80 292.50 329.55 368.05 409.80
14 160 365.45 381.40 435.90 492.75 552.25 616.80
Non-Residential - Excess Strength Wastewater, Tier 2 Compliance Charge (b)
15 70 210.49 219.39 248.69 275.86 305.74 337.06
16 100 282.60 294.65 332.35 369.42 410.61 453.74
17 160 426.80 445.16 499.66 556.53 620.34 687.11
Ccf - Hundred Cubic feet
(a) Residential billed wastewater volume presented in 2009/2010 Black & Veatch Survey of 50 Largest Cities.
(b) Assumes wastewater strength is 150 mg/l in excess of normal strength limits for both strength parameters.
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-9
Table 5-7 Typical Stormwater Bill Comparison
Table 5-7
Typical Stormwater Bill Comparison
(Effective August 1, 2010)
Taxes Total__________________________________
Inside Outside Inside Outside
Average Original Original Flat Rate Original Original
Line Assessed Units per District District User District District
No. Value Account Boundary Boundary Fees Boundary Boundary_____________________________________________________
$/month $/month $/month $/month $/month
Single Family Residential (a) (b)
1 50,000 1 3.29 0.75 0.24 3.53 0.99
2 100,000 1 6.58 1.50 0.24 6.82 1.74
3 150,000 1 9.88 2.25 0.24 10.12 2.49
4 200,000 1 13.17 3.00 0.24 13.41 3.24
5 250,000 1 16.46 3.75 0.24 16.70 3.99
Multifamily Residential
6 200,000 2 13.17 3.00 0.36 13.53 3.36
7 400,000 4 26.33 6.00 0.72 27.05 6.72
8 600,000 6 39.50 9.00 1.08 40.58 10.08
Non-Residential
9 Tax Exempt 1 0.24 0.24 0.24
10 1,000,000 1 65.83 15.00 0.24 66.07 15.24
11 2,000,000 1 131.67 30.00 0.24 131.91 30.24
(a) Original District boundaries include the City of St. Louis and a portion of St. Louis County.
Customers in this service area are charged a $0.018 per $100 of assessed value for District
administration plus $0.061 per $100 of assessed value for general stormwater services.
Part of this service area also pays OMCI taxes for local subdistrict capital improvements
and additional stormwater related services. Other OMCI taxes are not reflected in this table.
(b) Customers in this service area are only charged for District administration. Monies collected
from this tax are used to meet regulatory and data collection needs and address emergency
situations as they may arise.
CUSTOMER COST IMPACT Metropolitan St. Louis Sewer DistrictWASTEWATER RATE PROPOSAL
Black & Veatch 5-10 Table 5-8 Typical Wastewater Bills Under Proposed and Alternative Wastewater Rates Table 5-8Typical Wastewater BillsUnder Proposed and Alternative Wastewater RatesFiscal Year 2013 Fiscal Year 2014 Fiscal Year 2015 Fiscal Year 2016____________________________________________________________________________Line Wastewater Approved Proposed Alternative Proposed Alternative Proposed Alternative Proposed AlternativeNo. Volume Rates Rates Rates Rates Rates Rates Rates Rates Rates___________________________________________________________________________________Ccf $/month $/month $/month $/month $/month $/month $/month $/month $/month(Eff. 7/1/11) (Eff. 7/1/12) (Eff. 7/1/13) (Eff. 7/1/14) (Eff. 7/1/15)Single Family Residential1 0 11.85 13.25 29.75 14.95 30.05 17.00 30.40 19.45 30.802 5 22.40 25.20 57.00 28.55 57.30 32.35 57.65 36.70 58.053 8 28.73 32.37 73.35 36.71 73.65 41.56 74.00 47.05 74.404 8 4.2% 12.7% 155.3% 13.4% 0.4% 13.2% 0.5% 13.2% 0.5%5 10 32.95 37.15 84.25 42.15 84.55 47.70 84.90 53.95 85.306 15 43.50 49.10 111.50 55.75 111.80 63.05 112.15 71.20 112.557 20 54.05 61.05 138.75 69.35 139.05 78.40 139.40 88.45 139.80Multifamily Residential8 20 54.05 61.05 138.75 69.35 139.05 78.40 139.40 88.45 139.809 40 96.25 108.85 247.75 123.75 248.05 139.80 248.40 157.45 248.8010 60 138.45 156.65 356.75 178.15 357.05 201.20 357.40 226.45 357.8011Non-Residential - Normal Strength Wastewater, Tier 2 Compliance Charge12 70 191.50 220.80 451.50 247.95 454.15 275.95 455.95 306.30 457.6513 100 254.80292.50615.00329.55617.65368.05619.45409.80621.1514 160 381.40435.90942.00492.75944.65552.25946.45616.80948.15Non-Residential - Excess Strength Wastewater, Tier 2 Compliance Charge (a)15 70 219.39 248.69 482.73 275.86 485.38 305.74 487.18 337.06 488.8816 100 294.65332.35659.61369.42662.26410.61664.06453.74665.7617 160 445.16 499.66 1,013.38 556.53 1,016.03 620.34 1,017.83 687.11 1,019.53 Ccf - Hundred Cubic feet(a) Assumes wastewater strength is 150 mg/l in excess of normal strength limits for both strength parameters.Billed FY 2012
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-11
5.6 Affordability
An essential consideration in the implementation of new water or wastewater rates is whether the
customers of the utility can afford to pay the increased utility charges. The major problem with such an
assessment is how to measure affordability. Chapter 16 of the American Water Works publication titled
"Principles of Water Rates, Fees, and Charges" (AWWA M1 manual - Fifth Edition) references three
possible guidelines for determining affordability. The manual states:
"The first issue to consider is at what point a water bill becomes unaffordable. While there is no
clear answer to this question, the following guidelines can help utilities make such a determination:
The Safe Drinking Water Act (S. 1547) established special assistance in communities
where the average residential water bill exceeds 2 percent of median income.
The US Department of Agriculture has a program to provide funds for water and
wastewater systems. Loans are made for projects where the residential water bills are 1.5
percent of the community's median income. Grants are awarded for costs in excess of 1.5
percent.
The AWWARF report, Water Affordability Programs, suggests that programs should not
be based on median income but on rates that cause water bills to exceed 2 percent of
income for impoverished households. Because of the focus on impoverished households,
a measure of 2 percent was selected to determine if water service costs were
burdensome."
The hardship grant and loan program administered as part of MDNR's Clean Water State
Revolving Fund Intended Use Plan will provide grants "up to 100% of project cost in order to reduce the
user charges to 2% of the median household income." Therefore, there are at least four guidelines
available that suggest that affordability can be reasonably estimated as about 1.5 to 2.0 percent of median
income. Although these guidelines were primarily developed to determine the affordability of water bills,
they are used in this report as a method of assessing the affordability of wastewater bills.
The inflation adjusted 2009 median household income for the City of St. Louis is reported to be
$34,227 by the U.S. Census Bureau. Dividing the 2013 annual wastewater bill for a typical single family
residential customer billed for 8 Ccf per month, which equates to about $389 per year, by the City’s
median 2009 household income of $34,227 derives an affordability ratio of about 1.1 percent without
further adjustment of estimated median household income for four years of additional price inflation. In
comparison, the inflation adjusted 2009 median household income reported by the U.S. Census Bureau
for St. Louis County is $57,502. Dividing the $389 annual wastewater bill for a typical single family
residential customer by this higher median household income derives an affordability ratio of about 0.7
percent. Therefore, based on the above guidelines, the proposed 2013 wastewater rates are affordable for
the typical single family residential customer served by the District.
Eligibility for the District's low-income assistance program is based on the most recent poverty
guidelines published by Health and Human Services (HHS). Residential customers are eligible for low
income credits if their total household income for the previous year is less than 150 percent of the most
recent HHS poverty guidelines by household size or less than 175 percent of the HHS poverty guidelines
for disabled individuals and seniors 62 years old or older. The HHS poverty guidelines indicate the
poverty threshold for a family of three is $18,310 per year or about $1,526 per month. Therefore,
maximum monthly income for a family of three to qualify for the District’s low-income program is
$2,289 ($1,526 x 1.5) per month. Using the 2 percent guideline for impoverished households, assumed to
be those households at the HHS poverty levels, indicates that a wastewater bill for a family of three of
$30.52 ($1,526 x 2%) per month would be affordable. Since the monthly bill for eligible low-income
single family residents with a billable wastewater volume of 8 Ccf is $16.19, or about 1.0 percent of the
CUSTOMER COST IMPACT
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch 5-12
HHS poverty guidelines, the average wastewater bill for low-income customers is also affordable.
However, without the 50 percent low-income subsidy currently provided to qualified low-income
customers, the affordability of wastewater service for low-income users served by the District would
exceed the 2 percent affordability limit.
The District expanded its low-income program in 2011. The District’s prior low-income program
was limited to residential property owners. The current program now includes tenants, which is
considered to be the largest group of District customers in need of this assistance.
APPENDIX A – Rate Ordinance Index
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch A-1
APPENDIX A – Rate Ordinance Index
Amended or
Date Repealed Amended Repealed By
Ordinance Adopted Ordinance Ordinances Ordinance Comments___________________________________________________________________________
13210 2/10/11 8304 Stormwater Emergency Fund Created
Res2954 1/13/11 District Wide Stormwater Fund Created
13133 9/6/10 13091 Reinstated Taxes for Calendar Year 2010
13125 8/12/10 13022
Current SW Rates, Reinstated Flat Fee & Taxes
13091 6/10/08
Set Calendar Year 2010 Tax Rates to $0.00
13022 1/14/10 12906 13125 FY 2010 SW Impervious Area Rate
13021 1/14/10 12905
Current WW Rates, 2008 Rate Com.
12906 6/11/09 12789 13022 New Late Payment Charge
12905 6/11/09 12754 13021 FY 2010 WW Rates, New Late Payment
12834 3/12/09
Set Calendar Year 2009 Tax Rates to $0.00
12789 12/11/08 12560 12906 FY 2009 SW Impervious Area Rates (.12/.14)
12754 10/7/08 12561 12905 FY 2010 WW Rates, 2008 Rate Com.
12661 6/12/08
Set Calendar Year 2008 Tax Rates to $0.00
12561 12/13/07 12019 12754 FY 2008 WW Rates, 2007 Rate Com.
12560 12/13/07 9183, 9030, 8657 12789 FY 2008 SW Rates, 2007 Rate Com. ($0.12)
12356 12/14/06 9031
Revised Low-Income Eligibility Requirements
12019 7/14/05 11692 12561 FY 2006 WW Rates, 2003 Rate Commission
11692 3/11/04 11553
FY 2005 WW Rates, 2003 Rate Commission
11668 1/8/04 11553 Revised Adj Review Committee Section
11553 7/23/03 11066
FY 2004 WW Rates, 2003 Rate Commission
11360 11/14/02 11066 Policy & Procedures of Adj Review Com
11066 9/13/01 10177
Established Adjustment Review Committee
10799a 7/20/2000
District's Plan/Charter
10177 9/11/97 9029
FY 1998 WW Rates, 1997 B&V Report
10012 12/12/96
$25 million Capital Imp Trust Fund Refund
9376 11/9/94 9029, 9222 Established New Leins
9346 10/12/94
Replaces 3723, 3738, 3770 - 3774, 3779, 4189, & 5648 Connection Fees
9222 5/11/94 9029 New definition of Best Equated Period
9183 1/12/94 9030 12560 SW Charges Reverted to Flat Rate
9031 6/16/93 12356 Low Income Assistance
9030 6/16/93 9183 Stormwater Charges - Impervious Area
9029 6/16/93 8657 10177 Volume Based Wastewater Charges
8937 4/14/93
Termination of Water Service Agreements
8659 5/13/92 7543 9508 Reduced Capital Improvement Surcharge
8657 5/13/92 8370 9029 Increased Base Charge by $4
8370 5/8/91 7450 8657 Fee Fee Capital Charge Eliminated
7687 2/22/89 7540, 7536, 7547 Modified Stormwater Billing
7579 Implement Quarterly Billing By 1/89
7547 9/14/88 7450, 7536 Non-Payment of Charges
7543 9/14/88
8659, 8878, 9508 Established Capital Imp Surcharge
7536 8/24/88 7450 Reduced Fee Fee's Capital Charge
7456 5/18/88
Capital Imp Surcharge Vote
7450 5/11/88 8370 Voter Approved Residential Flat Rates
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-1
APPENDIX B – Glossary of Terms
Ad Valorem Tax: A state or local tax based on the assessed value of real or personal property.
Area: Square footage measurement of property subject to stormwater charges.
Base Charge: Fixed monthly wastewater service charge that is equal to the sum of the Billing and
Collection Charge and the System Availability Charge.
Best Equated Period: A 90 to 92 day period of water usage for metered residential customers between
November and April of the preceding winter period when lawn watering and other outdoor water uses are
at a minimum and metered water use can best be equated to wastewater discharges. However, if a water
bill issued during such period covers water usage for a period less than 90 days or more than 92 days, the
Best Equated Period shall mean a 91 day period and water usage shall be calculated based on average
daily usage for the actual billing period.
Billing and Collection Charge: Monthly charge imposed by the District to recover the wastewater
program's share of the costs associated with issuing and collecting combined wastewater and stormwater
bills.
Biochemical Oxygen Demand (BOD): A measure of the quantity of oxygen utilized by
microorganisms to break down complex organic materials into simple, more stable substances. BOD
measurements are used as a measure of the organic strength of wastewater.
Board: Refers to the Board of Trustees of the District. The Board is comprised of 6 members, three of
whom are appointed by the Mayor of the City of St. Louis and the remaining three are appointed by the
County Executive of St. Louis County.
Bondholder: The registered owner of one or more Bonds issued by the District.
Bonds: The term "Bonds" includes, but is not limited to, obligation in the form of bonds, notes,
contracts, lease obligations, bond anticipation notes, commercial paper, and certificates of participation.
The term "Bond" or "Bonds" does not include any obligations incurred by the District on a subordinated
basis.
Budget: An estimate of proposed expenditures for a defined period or purpose and a schedule of
revenues available to finance the proposed expenditures..
Capacity: The maximum rate of flow that can be carried by a sewer or received by a treatment plant
without causing an upset of the biological material contained in the treatment system.
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-2
Capital Charge: The portion of total wastewater charges imposed by the District to recover the costs for
debt retirement, construction or reconstruction of the Wastewater System.
Capital Improvement and Replacement Program: Refers to the District's comprehensive plan
consisting of major sewer system and wastewater treatment plant projects intending to enhance or restore
system capabilities.
Chemical Oxygen Demand (COD): A quantitative measure of the amount of oxygen required for the
chemical oxidation of carbonaceous (organic) material in wastewater using inorganic salts as oxidants in a
two-hour test.
Clean Water Act: Common term for the Federal Water Pollution Control Act of 1948, with major
amendments in 1972 (PL 92 500), in 1977 by the Clean Water Act (PL 95 217) and in 1987 by the Water
Quality Act (PL 100 4), as further amended, 33 U.S.C. 1251, et seq.
Code of Federal Regulations: Law of the United States issued under several Titles. Title 40 deals with
protection of the environment. Part 35 deals with specific regulations, including user charge
requirements, for wastewater utilities that have accepted construction grants from the Federal
Government.
Combined Sewers: Sewers designed and constructed to receive both wastewater and storm or surface
water.
Compliance Charge: A charge imposed by the District that recovers costs for inspecting and regulating
non-residential users in accordance with certain federal environmental regulations. This charge is
recovered from all non-residential customers.
Connection Fee: A contribution of capital towards completed or planned future plant facilities necessary
to meet the service needs of new customers to which such fees apply. Various terms have been used to
describe these charges in the industry, but regardless of the term used, these charges have the purpose of
providing funds to be used to finance all or part of capital improvements necessary to serve new
customers and are raised outside of general utility rates.
Construction Work In Progress (CWIP): A utility's investment in facilities under construction, but not
yet dedicated to service.
Contributed (Billable) Wastewater Volume: Contributed or billable wastewater volumes for all single
family customers with metered water usage is determined on the basis of water used during the Best
Equated Period. Billed wastewater volume for non-residential customers is equal to their actual water
usage less exemption allowances for any water that does not enter the sewer system. Multifamily
customers have the one-time option to be billed based on actual annual water usage less any exemption
allowances or the average annual water usage established during the Best Equated Period.
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-3
The contributed wastewater volume for unmetered residential customers is based on the following indoor
water usage attributes:
• 16 gallons per day (gpd) for each room,
• 60 gpd for each water closet, and
• 50 gpd for each bath or separate shower.
Cost Allocation: Process of distributing cost of service (revenue requirements to be recovered from
rates) to Functional Cost Components and then to Customer Classes on the basis of their relative use of
the system (Units of Service) through application of unit costs.
Customer Class: A group of customers having homogeneous characteristics.
Customer Costs: Costs which tend to vary in proportion to the number of customers connected to the
system. These include costs related to acquisition of water utility billing data, billing, collecting and
accounting.
Debt Service Coverage: A measure of the adequacy of Net Revenues from operations to pay interest and
principal payments on all proposed and/or outstanding bonds. Coverage requirements are often dictated
by bond covenants, and are usually stated as the ratio of net revenues to actual or maximum debt service.
Depreciation: The loss in service value, not restored by current maintenance, which occurs in utility
plant in service due to decay, inadequacy and obsolescence. Depreciation accounting is usually based on
an annual percentage allowance of plant investment equal to the original investment spread over the
useful life of the facility.
Detention Basin: A constructed basin designed to allow the release of stormwater at a slower rate than it
is collected from a drainage area, the difference being held in temporary storage.
Discharger: Any user which contributes wastewater to the sewer system.
District: Refers to the Metropolitan St. Louis Sewer District or MSD. The District is organized pursuant
to Article VI, Section 30 of the Missouri State Constitution that empowers the people in the City of St.
Louis and St. Louis County "to establish a metropolitan district for functional administration of services
common to the area."
Domestic Strength Wastewater: Wastewater principally contributed from residential dwellings. This
wastewater is also commonly called normal strength wastewater.
Environmental Protection Agency (EPA): A regulatory agency established by the U.S. Congress to
administer the Nation's environmental laws.
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-4
Equivalent Bills: A means of relating customers with higher service requirements to a base customer to
put them on an equivalent basis. Equivalent bills are used in this report to relate service requirements of
Tier 2 through Tier 5 non-residential customers to Tier 1 non-residential customers.
Extra Strength Wastewater: Wastewater having a BOD, COD, or suspended solids strength that
exceeds the maximum allowed limits for normal or domestic strength wastewater. Extra strength
wastewater is wastewater with a BOD strength above 300 ppm or a COD strength above 600 ppm and/or
suspended solids concentration greater than 300 ppm.
Extra Strength Surcharges: Set of BOD, COD, and Suspended Solids unit charges that are applied to
non-residential customers that discharge Extra Strength Wastewater and have a Contributed Wastewater
Volume equal to or greater than 8,000 cubic feet (80 Ccf) per month. Customers can be charged either
the BOD or COD surcharge but not both. Typically, if the BOD/COD ratio is less than 0.35, the District
will impose the COD surcharge instead of the BOD surcharge for such Extra Strength Wastewater.
Fiscal Year: An annual period used for budgeting and reporting purposes. For the District, this period is
from July 1 through June 30.
Functional Cost Components: Classification of costs or investment by system function, including
volume, capacity, BOD, and suspended solids, and customer components.
General Obligation Bonds: Bonds for the payment of which the full faith and credit of the issuing
government are pledged, implying taxing powers to pay Bondholders, if necessary.
Grant: A contribution from one governmental unit to another unit. The contribution is typically made to
help construct new System facilities.
Impervious Surface: Those portions of Property which have been altered from its natural state by the
addition to or construction thereon of any hard surface area which prevents or retards the entry of water
into the soil in the manner and to the extent that such water entered the soil under natural conditions pre-
existent to development, or which causes water to run off the surface in greater quantities or at an
increased rate of flow than was present under natural conditions pre-existent to development, including,
but not limited to, rooftops, asphalt or concrete sidewalks, paving, driveways and parking lots, walkways,
patio areas, storage areas, and gravel, oiled macadam or other surfaces which similarly affect the natural
infiltration or runoff patterns of real property in its natural state.
Industrial User: Users of the Wastewater System which discharge wastewater of different quality than
normal or Domestic Strength Wastewater.
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-5
Infiltration/Inflow (I/I): Water entering the sewer system either through groundwater infiltration (e.g.
sewer joints or cracks) or surface water inflow (e.g. manhole covers, catch basins, or roof drains). For the
District, inflow also includes stormwater that is conveyed to the wastewater treatment plant by Combined
Sewers.
Interceptor Sewer: A sewer that receives dry weather flow from a number of transverse sanitary sewers,
as well as some Infiltration/Inflow and conducts the total flow to a treatment or disposal point.
Low-Income Assistance Credit: Equal to 50 percent of the total wastewater and stormwater bill. Only
residential customers with household incomes lower than District established multipliers of the most
recent Health and Human Services (HHS) poverty guidelines by household size are eligible to receive this
credit. District multipliers currently in effect are 1.5 for low income customers and 1.75 for disabled or
senior citizens at least 62 years old.
Maximum Annual Debt Service: Refers to, at any point in time, with respect to Bonds then
outstanding, the maximum amount of principal and interest becoming due on the Bonds in the then
current or any future fiscal year.
mg/l: Refers to "milligrams per liter" and is synonymous with parts per million (ppm). Both unit
expressions are commonly used to report the results of laboratory analyses of wastewater samples.
MDNR: Refers to the Missouri Department of Natural Resources, a Missouri state governmental agency
responsible for the administration and enforcement of state and federal water pollution control policies
and laws. The MDNR is also responsible for reviewing and approving the District's system of wastewater
charges for compliance with federal user charge requirements in accordance with 40 CFR Section 35.929.
Multifamily Residential Customer: Two or more residential units connected to a single water meter.
National Pollutant Discharge Elimination System (NPDES): The national permit program established
by the Clean Water Act to control the quality of waters discharged to the Nation's receiving streams. The
NPDES program is administered by the Missouri Department of Natural Resources for the State of
Missouri
Net Revenues: Refers to, for any given period, the Revenues less the Expenses for such period, but
excluding any profits or losses on the early extinguishment of debt or on the sale or other disposition, not
in the ordinary course of business, of investments or fixed or capital assets.
Noncategorical Industrial User: Industrial users who are not subject to Federal Categorical
Pretreatment Standards.
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-6
Non-Residential Customer: All other customers served by the District that are not classified as Single
Family Residential Customers or Multifamily Residential Customers.
OM&R Charge: See Wastewater User Charges.
OMCI Fund: Operation, Maintenance and Construction Improvement funds defined by specific
geographic boundaries and funded by ad valorem taxes for the benefit of customers located within the
respective subdistrict boundaries.
Operating Reserve: Refers to an amount of funds held for the purpose of meeting normal operation and
maintenance expenses for a specified time in the event of a loss of revenue.
Operation and Maintenance Expenses: The reasonable and necessary current expenses of the District
paid or accrued in operating, maintaining the System.
Ordinance: A formal legislative enactment by the governing body that has the full force and effect of
law within the boundaries of the municipality or district to which it applies. The current wastewater rates
were put into effect by Ordinance 13021. Current stormwater rates were adopted by Ordinance 13125.
Outfall Sewer: A sewer that receives wastewater from a collection system or from a treatment plant and
directs it to a point of final discharge.
Owner or Owners: The owner or owners of record of Property as set forth in the records of the office of
the respective Recorders of Deeds for the City of St. Louis or for St. Louis County, Missouri.
Permittee: An industrial user required to maintain an industrial waste permit due to the quality or
quantity of their wastewater or point of discharge.
Person: Any individual, firm, proprietorship, partnership, company, municipality, state, federal or local
governmental entity, association, society, corporation, group, or other entity.
ppm: Refers to "parts per million" and is synonymous with milligrams per liter (mg/l). Both unit
expressions are commonly used to report the results of laboratory analyses of wastewater samples.
Primary Treatment: Refers to the first stage of wastewater treatment whereby a substantial amount of
suspended matter is removed by sedimentation or other means.
Property: A lot or parcel of real estate, whether public or private, which is served by the Wastewater
System or Stormwater System.
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-7
Replacement: The Federal Register defines Replacement as "Expenditures for obtaining and installing
equipment, accessories, or appurtenances which are necessary to maintain the capacity and performance
during the service life of the treatment works for which such works were designed and constructed." For
purposes of this report, replacement cost is assumed to be equal to the District’s annual depreciation
expense.
Reserve Fund Requirement: Refers to an amount required to be held in the Debt Service Reserve Fund
by the General Resolution.
Residential Customers: Refers to Single Family and Multifamily Residential Customers, collectively.
Retention Basin: A constructed basis used to collect and store surface and stormwater Runoff with no
surface outflow.
Revenue Bonds: Bonds payable solely from net or gross non tax revenues derived from charges or rents
paid by users of the facilities constructed with the proceeds of the bond issue.
Revenues: Refers to all rates, fees, rentals, other charges income and revenue property allocable to the
System in accordance with generally accepted principals resulting from the ownership or operation of the
System, except customer deposits and any other deposits subject to refund by the District.
Runoff: That part of rainfall which is not absorbed, transpired, evaporated or left in surface depression;
and which then flows controlled or uncontrolled into a part of the Stormwater System.
Sanitary Sewer: A sewer that carries the liquid and waterborne wastes contributed by customers
together with minor quantities of ground and surface waters that are not intentionally admitted to the
sanitary or separate sewer.
Secondary Treatment: Refers to the treatment of wastewater by biological methods after Primary
Treatment.
Series: Refers to Bonds issued at the same time or sharing some other common term or characteristic and
designated as a separate Series.
Significant Industrial User (SIU): Refers to: (1) all dischargers subject to categorical pretreatment
standards, (2) all noncategorical dischargers that have a reasonable potential to adversely affect the
District's wastewater treatment plants' operation, and (3) all noncategorical dischargers that contribute an
average of 25,000 gallons per day of process wastewater to the sewer system.
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-8
Single Family Residential Customer: A single one-family residential unit connected to a single water
meter
State: Refers to the State of Missouri.
Stormwater: Any water or drainage resulting from precipitation which may or may not be mixed with an
accumulation of dirt, soil, and other debris or substances collected from the surfaces on which such
precipitation falls or flows.
Stormwater Design Standards: The most current published edition of "Rules and Regulations and
Engineering Design Requirements for Sanitary Sewerage and Stormwater Drainage Facilities" and
"Standard Construction Specifications for Sewers and Drainage Facilities" as ratified and approved from
time to time by the Board.
Stormwater Facility or Stormwater Facilities: Various drainage works that may include sewers, pipes,
inlets, conduits, manholes, energy dissipation structures, channels, outlets, retention/detention basins, and
other structural components.
Stormwater System: All man-made facilities, structures, and natural Watercourses used for collecting
and conducting Stormwater to, through, and from drainage areas to the points of final outlet including, but
not limited to, any and all of the following: sewers, pipes, inlets, conduits and appurtenant features,
canals, creeks, channels, catch basins, ditches, streams, rivers, gulches, gullies, flumes, culverts, siphons,
retention or detention basins, dams, floodwalls, levees, and pumping stations.
Subdistrict: OMCI tax areas defined by specific geographic boundaries other than those associated with
the district-wide tax and the stormwater O&M tax.
Surcharge: See Extra Strength Surcharge
Surety Bond: A written promise to pay damages or to indemnify against losses caused by the party or
parties named in the document, through nonperformance or through defalcation. A surety bond can be
used to meet the security requirements for revenue bonds in lieu of a revenue bond reserve fund.
Suspended Solids (SS): A measure of the insoluble solids that either float on the surface of, or are in
suspension in, water, wastewater, or other liquids. SS is one common measurement of wastewater
strength.
System: Refers to the District's entire Stormwater System and Wastewater System.
APPENDIX B – Glossary of Terms
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch B-9
System Availability Charge: Charge designed to recover the portion of infiltration/inflow costs assigned
to customers on the basis of the number of accounts.
Unit Cost: Allocated functional costs divided by related system Units of Service.
Units of Service: Measurement of the quantity of service provided to customer groups or classes
expressed in terms of volume, capacity, wastewater strength (BOD or COD, and suspended solids), and
number of bills rendered.
User: means the occupant or Owner of Property, or any Person served by the Wastewater System or
Stormwater System.
Volume Charge: Wastewater charge applied to each customer's Contributed Wastewater Volume. It
includes both OM&R and capital cost components.
Wastewater System: All portions of the District's System related specifically to the collection,
transportation, treatment, and disposal of wastewater and its byproducts. The term Wastewater System
more specifically includes, but is not limited to, sewage and wastewater treatment and disposal plants,
sewage pumping plants, sewer maintenance yards and headquarters, intercepting and collection sewers,
outfall sewers, trunk, connecting, relief, and other sewer mains and additions to, alterations of and
reconstruction of, any of them and the lands, rights of way, pipe, conduits, equipment, machinery,
apparatus, and property necessary therefore.
Wastewater User Charges or User Fees: Refers to the OM&R portion of the wastewater charges
imposed by the District with respect to the Wastewater System. These charges include the Billing and
Collection Charge, System Availability Charge, Compliance Charge, and the OM&R portion of the
Volume Charge and Extra Strength Surcharges.
Watershed: An area of land that drains water, sediment, and dissolved materials to a common outlet at
some point along a stream channel. It is also referred to as a drainage basin or river basin.
Working Capital: Cash, materials and supplies, and other similar current assets necessary in the
operation of a utility.
INDEX
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch
INDEX
Ad Valorem Taxes..............................................................1-1, 1-2, 1-3, 1-7, 1-8, 2-1, 3-4, 4-1, 4-2, 4-6, 4-8, 5-1, 5-2
Affordability ...............................................................................................................................2, 1-7, 1-10, 5-11, 5-12
Bad Debt............................................................................................................................................ 2-5, 3-6, 3-10, 4-2
Best Equated Period...................................................................................................................................1-4, 3-4, 3-28
Billable Wastewater Volume.....................................................................1-3, 1-4, 1-6, 3-1, 3-4, 3-28, 3-30, 5-6, 5-11
Billing Lag......................................................................................................................................................3-21, 3-25
Biochemical Oxygen Demand..............................................................................1-4, 1-6, 3-21, 3-23, 3-30, 3-32, 3-37
Board of Trustees...........................................................................................1-1, 1-2, 1-3, 1-5, 3-5, 3-33, 4-1, 4-2, 5-1
Capital Costs.........................................................................................................1-6, 2-3, 3-21, 3-23, 3-25, 3-30, 3-33
Capital Improvements1-3, 1-4, 1-5, 1-7, 1-8, 2-1, 3-5, 3-11, 3-13, 3-14, 3-16, 3-19, 3-21, 3-23, 3-39, 4-6, 4-7, 4-8, 5-
1, 5-8
Cash Financing........................................................................................1-5, 3-5, 3-13, 3-14, 3-16, 3-25, 4-8, 5-2, 5-8
Chemical Oxygen Demand...................................................................................................1-4, 3-21, 3-23, 3-32, 3-37
City of St. Louis ..............................................................................................................1-1, 1-4, 3-1, 3-15, 3-19, 5-11
Compliance Charge.......................................................................................... 1-4, 1-6, 3-6, 3-32, 3-37, 3-38, 5-1, 5-3
Connection Fees ...............................................................................................................................3-1, 3-4, 3-14, 3-21
Consent Decree..........................................................................................................................................3-5, 3-13, 5-1
Cost of Service ............................................................1, 2, 1-1, 1-5, 1-6, 1-8, 3-20, 3-21, 3-28, 3-30, 3-33, 3-37, 3-38
Customer Classes.....................................................................................1-1, 1-2, 1-4, 1-6, 3-6, 3-21, 3-28, 3-30, 3-32
Customers
Metered...................................................................................................................1-4, 3-1, 3-4, 3-5, 3-28, 3-33, 5-6
Multifamily Residential..........................................1, 1-1, 1-4, 1-6, 1-7, 1-8, 1-9, 3-4, 3-28, 3-33, 4-1, 4-2, 5-6, 5-8
Non-residential....................1-4, 1-6, 1-9, 3-1, 3-4, 3-6, 3-21, 3-23, 3-28, 3-30, 3-33, 3-37, 3-38, 4-1, 5-1, 5-3, 5-6
Single Family Residential...............................................................1-4, 1-6, 1-7, 1-8, 3-4, 3-28, 3-33, 4-1, 5-6, 5-11
Unmetered .....................................................................................................................1-4, 3-1, 3-4, 3-28, 3-33, 5-6
Debt Financing ........................................................................................................................................3-5, 3-13, 3-16
Debt Service .....................................................1-3, 1-4, 1-5, 2-1, 3-11, 3-14, 3-16, 3-17, 3-19, 3-20, 3-21, 3-23, 3-25
Coverage...................................................................................................................................3-14, 3-17, 3-19, 3-20
Depreciation ..........................................................................................................................................3-23, 3-25, 3-30
Direct Costs............................................................................................................................................................. 3-25
District-Wide....................................................................................1-1, 1-7, 3-4, 3-14, 3-16, 3-21, 3-28, 4-1, 4-2, 4-7
Emergency Fund...............................................................................................................................................3-15, 4-8
Environmental Protection Agency....................................................................................................1-1, 2-1, 3-13, 3-33
Equivalent Bills..............................................................................................................................................3-30, 3-37
Existing Stormwater Rates ...............................................................................................................................1-10, 4-1
Existing Wastewater Rates ....................................1-3, 1-4, 1-6, 1-8, 3-1, 3-6, 3-19, 3-30, 3-32, 4-2, 4-8, 5-1, 5-3, 5-6
Extra Strength Surcharges...............................................................................................1-4, 3-1, 3-6, 3-30, 3-32, 3-37
Functional Cost Components..........................................................................................................1-6, 3-21, 3-23, 3-25
All Customers......................................................................................................................................1-6, 3-23, 3-28
Capacity............................................................................................................................................................... 3-23
Industrial Customers...................1-4, 1-6, 3-1, 3-4, 3-6, 3-21, 3-23, 3-28, 3-30, 3-33, 3-37, 3-38, 4-1, 5-1, 5-3, 5-6
Volume................................................................................................................................................................3-23
Fund Balances .......................... 1-3, 1-5, 3-10, 3-13, 3-15, 3-16, 3-17, 3-19, 3-20, 3-21, 3-23, 3-25, 4-5, 4-7, 4-8, 5-3
Grants .....................................................................................................................................1-1, 1-5, 3-13, 3-15, 5-11
Hancock Amendment.......................................................................................................................... 1-7, 3-4, 3-5, 4-1
Impervious Area..................................................................................................... 1-1, 1-3, 1-7, 4-1, 4-2, 4-8, 5-1, 5-2
Indoor Water Usage...................................................................................................................................1-4, 3-1, 3-28
Infiltration/Inflow...........................................................................................................................1-6, 3-20, 3-28, 3-30
Interest Rates............................................................................................................1-4, 1-5, 1-7, 3-15, 3-16, 3-19, 4-8
Late Charges........................................................................................................................1-4, 1-7, 3-1, 3-10, 4-1, 4-5
Missouri Department of Natural Resources.............................................................................................1-1, 3-13, 5-11
Missouri Supreme Court..............................................................................................................................1-7, 3-5, 4-1
Net Revenue ............................................................................................................................................1-2, 3-19, 3-20
Nonoperating Revenue.......................................................................................................................................1-4, 1-7
INDEX
Metropolitan St. Louis Sewer District
WASTEWATER RATE PROPOSAL
Black & Veatch
Normal Wastewater Strength................................................................................................................................... 3-28
Operating Costs..........................................................................................................................2-1, 2-3, 2-5, 3-21, 4-2
Operating Reserve..........................................................................1-3, 1-4, 1-7, 3-11, 3-17, 3-20, 3-21, 3-25, 4-6, 4-8
Operation and Maintenance Expense ..1-1, 1-4, 1-7, 1-8, 2-1, 3-11, 3-17, 3-19, 3-20, 3-21, 3-25, 3-30, 3-33, 4-2, 4-6,
4-7, 4-8, 5-2
Ordinances..........................................................................................................................4, 1-1, 3-4, 3-5, 3-33, 4-1, 1
Pay As You Go Funding............................................................................................................................3-5, 3-39, 5-8
Plant Investment.......................................................................................................1-4, 1-7, 3-21, 3-23, 3-25, 4-5, 4-6
Rate Commission.................................................................................................................1-1, 1-3, 3-5, 3-39, 4-1, 5-1
Rate Design ..................................................................................................................................3-13, 3-21, 3-37, 3-39
Revenue Bonds......................................................................................1-1, 1-3, 1-5, 3-5, 3-14, 3-16, 3-19, 3-20, 3-39
Revenue Requirements........................................1-1, 1-2, 1-3, 1-4, 1-5, 1-7, 3-11, 3-17, 3-19, 3-21, 4-6, 4-8, 5-2, 5-3
Revenues
Adjustments...........................................................................................................................................................2-5
Nonoperating Revenue........................................................................................................................................ 3-21
Operating Revenue........................................1-2, 1-4, 1-5, 1-7, 2-1, 2-5, 3-6, 3-10, 3-13, 3-16, 3-19, 3-21, 4-5, 4-8
Other............................................................................................................... 1-5, 1-6, 2-5, 3-4, 3-19, 3-25, 4-5, 4-8
Routine Annual Capital Improvements ............................................................ 1-4, 1-8, 2-3, 3-11, 3-17, 3-21, 4-7, 4-8
Sewer System
Combined Sewers................................................................................................................................3-23, 3-28, 5-1
Sanitary Sewers............................................................................................................................................3-23, 5-1
St. Louis County................................................................................................................................ 1-1, 1-7, 4-1, 5-11
State Revolving Loan Fund......................................................1-1, 1-5, 3-13, 3-14, 3-15, 3-16, 3-19, 3-20, 3-39, 5-11
Stormwater Program....................................................................................................................................1-8, 4-2, 4-8
Stormwater Taxes and Fees
District-Wide Tax...........................................................................................................................................1-7, 4-2
Flat Rate Fees ..................................................................................................... 1-1, 1-7, 3-4, 3-5, 4-1, 4-2, 5-1, 5-2
OMCI Taxes..........................................................................................................................................................1-8
Stormwatrer O&M...................................................................................................................................1-7, 4-2, 4-7
Stormwater Utility............................................................................................................................... 1-7, 4-5, 4-6, 5-1
Suspended Solids.......................................................................................... 1-4, 1-6, 3-6, 3-21, 3-23, 3-30, 3-32, 3-37
Test Year ................................................................... 1-2, 1-5, 1-6, 1-8, 3-20, 3-21, 3-23, 3-25, 3-30, 3-33, 3-37, 3-38
Typical Bills ................................................................................................................................................1-2, 5-6, 5-8
Unit Costs.......................................................................................................................................1-6, 3-28, 3-30, 3-37
Units of Service............................................................................1-1, 1-2, 1-6, 3-20, 3-23, 3-28, 3-30, 3-32, 3-37, 5-1
Waste Haulers.....................................................................................................................................................1-4, 3-1
Wastewater Flow.....................................................................................................................................1-4, 3-21, 3-28
Wastewater Service Charges
Base Charge......................................................................................................................................................... 3-39
Billing and Collection.................................................................................................................................1-4, 3-6
System Availability ....................................................................................................................................1-4, 3-6
Compliance Charge ...................................................................................... 1-4, 1-6, 3-6, 3-32, 3-37, 3-38, 5-1, 5-3
Extra Strength Surcharges...........................................................................................1-4, 3-1, 3-6, 3-30, 3-32, 3-37
Low-Income Program.........................................................................................1-7, 1-8, 3-5, 3-33, 3-38, 5-11, 5-12
Volume Charge...................................................................................................................1-4, 3-6, 3-32, 3-37, 3-39
Wastewater Strength
BOD..................................................................................................................1-4, 1-6, 3-21, 3-23, 3-30, 3-32, 3-37
COD..................................................................................................................................1-4, 3-21, 3-23, 3-32, 3-37
Suspended Solids...................................................................................... 1-4, 1-6, 3-6, 3-21, 3-23, 3-30, 3-32, 3-37
Wastewater Utility..................................................... 1-1, 1-3, 1-4, 2-1, 3-10, 3-11, 3-13, 3-15, 3-17, 3-19, 3-20, 3-25