HomeMy Public PortalAboutExhibit BJH 51A BJH Response to MSD 2nd Discovery RequestBEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a Wastewater Rate
Change Proposal by the Rate
Commission of the Metropolitan
St. Louis Sewer District
Question
)
)
)
BARNES -JEWISH HOSPITAL
RESPONSE TO SECOND DATA REQUEST OF MSD
On page 7, lines 4 through 6, of Ms. LaConte's rebuttal testimony, she references Brian
Hoelscher's statement "due to economic conditions, the District will be receiving bids for capital
work that in some cases were 40% below traditional cost." On page 7, lines 7 and 8, Ms.
LaConte further references Mr. Hoelscher's statement "current economic conditions were not
assumed to be in place during the current proposed rate study period." Based on these
statements, on page 7, lines 8 and 9, Ms. LaConte concludes the cost of District's CIRP may be
overstated "which could lead to higher -than -necessary rate increases." Is Ms. LaConte's
conclusion based on current economic conditions remaining unchanged through FY 16? If so,
how, in Ms. LaConte's opinion would these factors impact the cost of the District's CIRP?
Response
Ms. LaConte's conclusion is not based on current economic conditions remaining unchanged
through FY2016. Her rebuttal testimony goes on to state: "I recommend that the MSD re-
evaluate the estimated costs for the CIRP projects at least for 2013, to determine the most
accurate cost." It is difficult to predict what economic conditions will be like in FY2016.
However, it is not unreasonable to expect current economic conditions could reduce MSD's
FY2012 or FY2013 CIRP expenditures. While FY2012 CIRP expenditures were approved in
MSD's previous rate increase proposal, lower -than -expected expenditures would result in more
funds being available to fund FY2013-FY2016 CIRP projects. As MSD witness Mr. Hoelscher
explained in his direct testimony, Exhibit MSD 9, Page 5, Lines 13-15, "This (economic
conditions) created additional funds which could be used to complete projects beyond the
original program budget." Although the economic conditions provided a benefit to MSD, it was
3095034\I
at the expense of its customers. MSD's current rate proposal results in large rate increases to its
customers; any benefit from reduced CIRP expenditures should flow back to customers.
SANDBERG PHOENIX & VON GONTARD, P.C.
Lisa C. Langeneckert #49781
600 Washington Avenue —15TH Floor
St. Louis, MO 63101-1313
314 446-4238 (Direct Dial)
314 241-7604 (FAX)
langeneckert@sandbergphoenix.com
Attorneys for Barnes -Jewish Hospital
CERTIFICATE OF SERVICE
I hereby certify that I have this day caused a copy of the foregoing to be served on the
Secretary of the Rate Commission and all persons on the official service list of record in this
matter on this 15th day of August, 2011.
QUA
Lisa C. Langeneckert
3095034/1