HomeMy Public PortalAboutExhibit MSD 16G Excerpt from March 7, 2007 Direct Testimony given by Randy HaymanEXHIBIT MSD 16G
Excerpt from March 7, 2007 Direct Testimony given by Randy Hayman,
MSD General Counsel, Direct Testimony given during the 2007 Rate
Commission rate change proceeding:
Q6. Please state the general chronology of the past wastewater rate litigation and
indicate if any of the court findings support whether or not the Rate Change
Notice is consistent with constitutional, statutory or common law.
A. The following is a general chronology of the past wastewater rate litigation and
court findings supporting the Proposed Rate Change Notice as being consistent
with constitutional, statutory and common law.
Article X, § 22(a) of the Missouri Constitution (The Hancock Amendment)
prohibits a political subdivision of Missouri from increasing the current levy of an
existing tax, license, or fee, above the current levy authorized by law or
charter...without the approval of the required majority of the qualified voters of
the political subdivision voting thereon.
The Supreme Court of Missouri subsequently interpreted the above -cited section
of the Hancock Amendment to mean that "user fees" are not subject to said
section, and do not require a vote to be increased; but taxes are subject to it, and
do require a vote to be increased. Keller v. Marion County Ambulance District,
830 S.W. 2d (Mo. Banc 1991). To determine whether a particular charge is a user
charge or a tax, the Keller Court established a five -pronged analysis.
In 1992, the District increased sewer service charges in the belief that the sewer
service charges were user fees in the purview of the Keller decision, and that no
vote would be required to implement the increase. Suit was brought by Richard
Beatty, alleging that the sewer service charge increases violated the Hancock
Amendment insofar as no vote was taken. The Supreme Court of Missouri in
Beatty v. The Metropolitan St. Louis Sewer District, 867 S.W. 2d 216 (Mo. Banc
1993) held hat the District's sewer service charges did not comply with the five -
pronged test of the Keller decision, and were indeed taxes rather than user fees, so
as to require a vote for an increase.
In 1993, the District again increased sewer service charges. However, prior to
this increase the District's billing procedures had been changed in an attempt to
comply with the five -pronged Keller test. In a challenge to the 1993 increase, the
Missouri Court of Appeals in Missouri Growth Association v. Metropolitan St.
Louis Sewer District, 941 S.W. 2d 615 (Mo. App. E.D. 1997) held that the
District's sewer service charges satisfied the five -pronged Keller analysis, were
user fees, and as such did not require a vote for increase.