HomeMy Public PortalAboutExhibit MSD 93 Transcript August 24, 2011 Public Hearing 1
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
METROPOLITAN ST. LOUIS SEWER DISTRICT
PUBLIC HEARING
AUGUST 24, 2011
(Hearing start time, 6:02 p.m.)
2
INDEX 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
PAGE
Introduction by Mr. Goss 5
Presentation by Mr. Theerman 9
Public Hearing Session 21
Conclusion 55
(No Exhibits Marked)
3
PUBLIC HEARING FOR METROPOLITAN ST. LOUIS SEWER 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
DISTRICT, produced and examined on AUGUST 24, 2011,
between the hours of 6:02 in the evening and 7:13 in
the evening of that day, at the Herbert Hoover Boys
and Girls Club, 2901 North Grand, St. Louis, Missouri
63107, before Suzanne Zes, Certified Court Reporter.
4
APPEARANCES 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
For the MSD Rate Commission:
Glenn Koenen
West County Chamber of Commerce
Eric Schneider
Regional Chamber & Growth Association
Brad Goss
Home Builders Association of Greater
St. Louis
Paul Brockmann
Missouri Botanical Garden
George D. Tomazi
The Engineers' Club of St. Louis
Ralph Wafer
Missouri Coalition for the Environment
Also present:
Jeff Theerman
Karl Tyminski
Pam Bells
Lance LeComb
Jan Zimmerman
Jonathon Sprague
Brian Hoelscher
The Court Reporter:
Suzanne Zes
Midwest Litigation Services
711 North Eleventh Street
St. Louis, MO 63101
314.644.2191
5
MR. GOSS: Good evening. My name is Brad 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Goss, I am a member of the Metropolitan Sewer District
Rate Commission. I will be presiding over the public
hearing this evening. With me tonight are the
following MSD Rate Commission members, Mr. Paul
Brockmann, Mr. Schneider, Mr. Glenn Koenen and
Mr. George Tomazi. The charter plan of the District
was amended at a general election on November 7, 2000
and established a Rate Commission to review and make
recommendations to the District regarding changes in
wastewater rates, stormwater rates and tax rates
proposed by the District. The charter plan requires
the MSD Board of Trustees to select organizations to
ensure a fair representation of all users of the
District services on the Rate Commission. The Rate
Commission representative organizations are to
represent commercial industrial users, residential
users and other organizations interested in the
operation of the District including organizations
focused on environmental issues, labor issues,
socioeconomic issues, community neighborhood
organizations and other nonprofit organizations. The
MSD Rate Commission currently consists of 14 members
from organizations and institutions throughout St.
Louis City and County. On May 10, 2011, the Rate
6
Commission received a rate change notice proposing 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
changes in the District's wastewater rates. The Rate
Commission adopted operational rules and a procedural
schedule to govern the proceedings on May 17th, 2011
and amended its procedural schedule of July 8th, 2011.
Under the procedural schedule adopted by the Rate
Commission, as amended, the MSD Rate Commission has
until October 21, 2011, to review and make
recommendations to the MSD Board of Trustees as to
whether the proposed rate should be approved, not
approved or modified with suggested changes and then
approved. The MSD Rate Commission has engaged legal
counsel and a rate consultant, independent of those
used by the MSD staff. Under procedural rules adopted
by the Rate Commission, as amended, any person
affected by the rate change proposal had an
opportunity to submit an application to intervene in
these proceedings. Applications to intervene have
been filed by Barnes Jewish Hospital, Covidien,
Missouri Industrial Energy Consumers, Robert A.
Mueller, AARP and Consumers Council of Missouri.
These applications have been granted. Since May 10,
2011, the MSD Rate Commission has received testimony
from MSD staff, intervenors and the rate consultant.
The parties have also engaged in discovery requests.
7
Technical conferences were held on June 13th, 2011 and 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
August 8th, 2011 and are planned for December 6th,
2011, where the participants and the Rate Commission
are given an opportunity to ask questions of those
submitting testimony. A prehearing conference for the
purpose of identifying any issues raised by the rate
setting documents and the prepared testimony
previously submitted will be conducted on the record
on September 15th, 2011. All persons submitting
testimony may participate in the prehearing conference
and each participant in the prehearing conference must
submit on or before September 22, 2011, a prehearing
conference report describing the issues raised by the
rate setting documents and the prepared testimony,
together with a brief description of such participants
position, if any, on each issue and the rational
therefore. Rate payers who do not wish to intervene
are permitted to participate in these on the record
public hearings conducted in six sessions beginning on
August 16th, 2011 and concluding on September 26th,
2011. The Rate Commission published a public notice
regarding these proceedings in the St. Louis Post
Dispatch on May 20th, 23rd and 24th, 2011 and
July 20th, 21st and 22nd, 2011. And in the St. Louis
American on May 26th, 2011 and July 21, 2011. These
8
notices contain the time, dates and location of each 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
of these conferences and hearings. The public hearing
session tonight is for the purpose of permitting the
District to present its wastewater rate change
proposal and to permit any rate payer the opportunity
to comment. We will begin with a presentation by the
District followed by a public comment period. Those
wishing to speak should sign in on the blue cards
provided, the blue cards that were outside in the
hallway and will be called on in the order of the
names listed thereon. Each rate payer should identify
themselves and any organizations represented by such
rate payer. Just some housekeeping rules before we
begin, if you do wish to present testimony, please
again, sign the blue cards that are out in the hallway
and then those need to be submitted to us. Speakers
will be recognized in the order in which they sign up.
Each rate payer will have a maximum of ten minutes to
speak regarding the proposed rate change and as the
presiding officer I can limit or expand the time,
should I deem it necessary. And restrooms are located
outside to the right, across from the sitting area.
Are there any questions regarding the procedures for
this evening? Seeing none, is the District ready to
proceed? And I ask that you please step forward.
9
MR. THEERMAN: I am going to give a brief 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
presentation on the proposal we have submitted to the
Rate Commission. Okay. First and foremost, MSD is
two utilities in one. A stormwater utility that is
charged with stormwater management and a wastewater
utility that collects, treats and manages wastewater.
We cover about 525 square miles. That is all the City
of St. Louis and about 80 percent of St. Louis County
out to about roughly Highway 109. We were originally
chartered in 1954 and at that time we served an area
out to roughly Lindbergh. And then in the late '70s
the voters of St. Louis County voted to annex the
District and that created the present boundaries or
nearly the present boundaries of the District. We
serve about 1.4 million customers, that is about
428,000 wastewater accounts. We are the combination
of 79 different sewer systems. When MSD was created
sewage treatment and management was handled by
municipalities and by private companies throughout the
region. Since that time those have all been placed
under one umbrella, one utility. We are a
governmental entity, we are not a profit-making
operation, so we operate under a charter that was
created under the Missouri constitution. There is no
profit motive, there is no stakeholders of MSD, we are
10
a government. We have the fourth largest sewer system 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
in the United States and that is problematic for St.
Louis because we are certainly not the fourth largest
community. So we are behind New York, Chicago and
L.A. Our sewer system is roughly the same length of
miles of pipe as L.A. and with L.A.'s five plus
million customers they have more people to pay for the
upkeep and operation system than we do. System
consists of really -- the wastewater system now is
what we are talking about tonight. The stormwater
system that exists outside in the county is not part
of this rate proposal and I am going to cover that a
lot in the presentation. The wastewater system we
manage has about 6,700 miles of sewers and that breaks
down into 1,800 miles of what's called combined
sewers. And those are the sewers designed in the
1800s, one pipe system, stormwater and wastewater
flows together in one pipe. And that was developed to
get sewage out of the city into the rivers. So when
it rains, the rainwater helps flush those sewers into
the area's rivers. When we developed treatment plants
in the '60s all the dry weather flows were routed to
treatment plants instead of the river but there is
still a problem of when it rains there is too much
water for the system to handle and you have overflows
11
that I will talk more about here in a minute. There 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
is also 4,700 of sanitary sewer. Now, that is a more
contemporary design of sewers. There are two sets of
sewers on the separate sanitary area. There is a
wastewater set of pipes and a stormwater set of pipes.
And again, there is 4,700 miles of that wastewater
system outside of the combined sewer area. We operate
seven treatment plants, they treat about 370 million
gallons of water every day and that is hard to
visualize. If you think of a box where the base is
the size of a football field, the high end of that box
to hold 370 million gallons would be taller than the
Gateway Arch, so a lot of sewage in St. Louis, a lot
being treated in our plants every day. There is also
almost 3,000 miles of stormwater system, it's not part
of our wastewater system and it's not part of this
rate proposal. As I said earlier, this rate change
proposal is a wastewater rate change only. We have a
stormwater rate that we imposed in 2008. It was based
on impervious area, we charged customers for about two
years and then a court decided that was an invalid
rate and we discontinued it. That is presently in
appeal and we are not charging that rate today,
instead we utilize a system of taxes and a small
charge on a monthly bill for stormwater. So
12
stormwater service is inadequate in St. Louis. Right 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
now we are trying to work out the rate issues we have
to properly fund it, so that we can have provide
better stormwater service. It is not part of this
rate proposal because it is in litigation. The rate
plan we have submitted is a four year plan that
stretches from July 1st, 2012 through June 30th, 2016.
It envisions four rate increases. One in July of 2012
and then each year after that for four consecutive
years. The current average monthly bill for a
customer for wastewater service is $28.73.
There are a number of things that are causing this
rate change to be necessary and the first one is
regulatory requirements and that is the primary reason
for needing to do to this. I am going to talk in
length about what that is. There is also the increase
use of debt financing to build projects. MSD can
borrow money if voters approve the use of debt and
then that debt has to be retired with interest. So
part of the rate change is about the interest payments
necessary if you borrow. There is all also a small
lack of loss of customer base that is accounted for in
the rate proposal. There is some declining water
usage related to water conservation and also there is
the economic conditions that exist that play a role in
13
this. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
The proposal includes a little over a billion
dollars of capital improvements. 945 million of that
would be debt financed in our proposal and all the
bond proceeds would be used to finance capital
improvements. We are not using debt, we are not
issuing bonds to pay for day-to-day operation of the
District. In that four year period there would also
by approximately $634 million of operations and
maintenance expense. That is the day-to-day operation
of the District, the maintenance of the system, the
operation of the treatment plants and about $359
million of debt service, again spread over four years.
And that debt service is to cover debt we would issue
in this proposal but also debt that is currently
outstanding, we have already issued and we are paying
back now. So the rate change is to a great extent
required by regulatory requirements. In 2007 MSD was
sued by the EPA and the State of Missouri for alleged
violations of the Clean Water Act. And we have
reached a settlement with the regulators to settle
that lawsuit. That lawsuit, the settlement, results
in a 23 year compliance schedule, an estimated cost of
compliance of $4.7 billion and that is in today's
dollars, it would address sanitary sewer overflows and
14
eliminate them, it will address the abatement of 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
combined sewer overflows and I will talk more about
both of those in just a second, additional maintenance
and repair of the sewer system as time goes on to make
it operate better, reduction of basement backups, and
asset reinvestment or continuing to reinvest in the
sewer system. So at the end of the 23 years we are
not sitting in the very some place we are today.
Also a driver, a regulatory requirement, that is
not part of the Consent Decree or the settlement
agreement, is additional treatment requirements. EPA
has imposed additional treatment requirements at our
treatment plants that we are going to have to comply
with. And so, as those improvements get built there
will be new operation and maintenance costs associated
with turning those on. It's possible for the public
to comment on this settlement, it is called a Consent
Decree. You have to comment on the Department of
Justice website and that comment period goes until
September 9th. On the slide it shows a link to our
website, www.stlmsd.com, and if you go there you can
get a link to the Department of Justice website and
see the entire settlement agreement and see how to
comment if you desire. Commenting tonight will be
very beneficial for the Rate Commission but it will
15
not be a comment to the Justice Department if that is 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
something you are interested in doing.
So a little bit more about these overflow issues.
The map is not intended to test your eyes. You have
that map in your handout as well. There is a green
area, a green shaded area, and that is all of the City
of St. Louis and 23 neighboring municipalities and
that is the combined sewer area or the area where the
system is a lot older. And that combined area is
where you have one pipe system that carries both
wastewater and stormwater. During dry weather all the
sewage goes to treatment plants and gets treated
appropriately. In wet weather when there is more flow
then there is capacity in the pipes, the excess water
is discharged into neighboring rivers through what is
called combined sewer overflows. So in that green
shaded area are a 199 little green dots. Those are
combined sewer overflows and they discharge in the
Mississippi River, the River Des Peres and some of the
other smaller creeks, Maylene Creek. Those overflows
are not illegal, they are permitted by EPA but they do
have to be abated. They discharge an average of about
50 times a year when it rains and that needs to be
reduced. So we have developed a long-term control
plan with lots of public input to address those
16
overflows. And it takes those overflows from fifty 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
times a year down to about four times a year for all
of those dots except for the ones directly to the
Mississippi River. That has a price tag of about $2
billion. Then the outside area, the area that is not
shaded, is the separate sewer area and is the bounds
of the county. That system has a wastewater system
that is supposed to be just carrying wastewater but it
has imperfections, it has deterioration that has gone
on over time and lets water in. That water either
comes from imperfections in our public system or it
comes from inappropriate connections in the private
system, so that can be downspouts that were connected.
Now remember, in the city where there is combined
sewer, a connection of downspouts is appropriate. But
out here in the county where there is not a combined
sewer, downspouts shouldn't be there and it should be
just released to the green space. So if downspouts
are connected inappropriately or sump pumps are there
that shouldn't be pumping into the sewer system, it
takes up capacity and causes overflows and causes
basement backups. All those red dots are illegal.
They all need to come out and that is the other half
of the program. The elimination of the those red
dots, roughly the other half. This is a summary of
17
the capital improvement costs for each year of the 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
rate plan, about a quarter of a billion dollars or
$250 million a year in capital improvements over that
entire area. Now, this isn't all the detail that is
available. We have given the Rate Commission all the
projects and estimated costs behind this detail. So
it's possible for the public as well, to see what all
these projects are and see where they are going to be
constructed. A little over a billion dollars of
improvements in four years.
These are our respective operating costs over that
same period of time. You see our operating costs are
escalating at 4 or 5 percent. For the most part, if
it is more than 4 percent, it is because we are
getting regulatory requirements from this settlement
agreement that we'll do with our own work force and
that is escalating some of our costs. There is also
some one-time costs in the upward 14, 15 years, that
persistent changes in the District's operating
systems. This is the chart of the District's
historical sewer bills and that is the blue bar
charts. That is a monthly sewer bill for the average
residential customer. The red line is a survey,
nationally of sewer bills in lots of cities. And you
can see that St. Louis' sewer bills are rising
18
similarly to the way they are in the rest of the 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
country and in the big utilities. Again, because of
regulatory requirements that have to be complied with,
so this is very similar story throughout the nation.
Here is the proposed rate increase we have delivered
to the Rate Commission. Again, starting at $28.73,
this is a wastewater rate and then escalating each
year. You should keep in mind that $28.73 rate is an
average number, everybody's bill is different. If you
live in the City of St. Louis your water provider is
the city itself and we take the water data from the
City of St. Louis for the winter quarter and apply
that to calculate wastewater bills. The reason we use
the winter quarter is because we are trying not to
capture water use like lawn irrigation or washing cars
that sort of thing. Now in the city, most residential
customers do not have water meters. And you pay based
upon the number of rooms and baths you have in the
house. It is possible to get a water meter but most
homes don't have that today. If you're living out in
the county your water provider is either Missouri
American Water or Kirkwood's water company and those
are all meters, so we take again, winter quarter meter
water consumption and apply it to the wastewater bill.
That's how bills get calculated.
19
This slide is intended to show you the difference 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
between using debt and not using debt. On the left
side is the proposal MSD has made to the Rate
Commission. Again, a billion dollars of capital
improvements, $945 million of debt and then the rates
I have already discussed. And then the left side or
actually your right side, shows you an example of
where we fund the whole program in cash. That side
has no debt but instead you have to raise the rates a
lot to generate the 250 million or so a year to
finance capital programs. So you see, in one year the
rates jump to $73.35 and then after that you're at a
place where you are generating the cash necessary to
build the program and they just increase very slightly
after that. We didn't recommend the right side
because we felt like that is just really too big a
jump for customers to be able to handle. Using debt,
although your rates go up a lot, they didn't go up
nearly as steeply as the cash financed approach. Our
proposal is the left side. There are an infinite
number of possibilities in between, you use different
amounts of debt, cash to get to different places. The
right side has the advantage of being the lowest
overall costs because you're not paying interest
payments. The left side tends to spread the cost of
20
the program over not only today's customers but future 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
customers because we are dealing with a system that
has a really long life and that makes more sense to a
lot of people.
Okay, real quick, this is how we step through the
future here. The Rate Commission will make a
recommendation to our Board of Trustees in October of
2011, our board will do nothing with that except
consider it for a 45 day period, there is a waiting
period while they review the rate report. And they
are charged with reviewing the rate report for
compliance with our charter. After that, the board
can act on it and if the rate report from the Rate
Commission is compliant with the charter, our board is
obligated to enact it. So that would look like a
preliminary introduction in December and then a bond
election, assuming the debt is involved in the rate
report, in the winter or the spring. In Missouri, for
municipal government to issue debt, it requires voter
approval. So the voters wouldn't be voting on the
rates per se, they would be voting on whether or not
the District could use debt to finance the capital
program. After the election is done, the board would
have direction then, if the voters would have approved
debt or not and they could finish the enactment of the
21
rate proposal. In our case, in our proposal, the 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
first rate change would be July of 2012. So that is
all I have and I will turn it back over to Mr. Goss.
MR. GOSS: I am now going call the names of
those who submitted speaker cards and ask that they
would -- we'll bring a microphone to where you are and
ask that you identify yourself by name and please make
your comments to the Commission. And the first person
is -- and I apologize in advance if I mispronounce
people's name because I can't read handwriting or
whatever. I believe it is Orde Logan or maybe Ora,
I'm sorry.
MS. ORA LOGAN: Yes.
MR. GOSS: I'm sorry.
MS. ORA LOGAN: I have a question about how
you rate the sewer bill. I bought a two-family flat
that has been vacant for a year and the tenants just
moved in April and I got a bill for $700. I wrote to
the Missouri Metro Sewer District but I have not
received an answer yet.
MR. THEERMAN: I am sorry, I don't know the
specifics of your individual bill but our Director of
Finance, Jam Zimmerman is here tonight. She is right
in back there with her hand up and we would be glad to
take a look at the bill and try to understand, try to
22
decipher for you, seems like a really big bill. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
MS. ORA LOGAN: Yes, it is a shocker.
MR. GOSS: Shayla McPeters?
MS. ORA LOGAN: I am not a citizen of the
City of St. Louis, I just live in St. Louis County in
the unincorporated areas. I have been living in my
home for a five years and my home is in a designated
flood zone, so I have to carry flood insurance on my
home. Behind my home is a creek and I know this is
really not addressing to the stormwater issue, so I am
assuming my problem really is with the stormwater
issue, I have lost probably about 30 percent of my
backyard to erosion. My neighbors have lost about 50
percent of their yard. They -- I am talking about all
of my neighbors on my side of the street. I have
contacted MSD on numerous occasions, you all have sent
engineers out to me and basically told me that too
bad, so sad, you're going to lose your yard. And my
neighbors have, they have small children and I know
none of you want your children or your grandchildren
to play in your backyard when half of it is gone.
You're asking us, as citizens of this city, to fund
your project but when we have issues like this, you
don't want to help us and right now I have no
recourse. My fence in my backyard is gone, my
23
neighbor's fence is gone, I mean, eventually my house 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
will be gone if this is not addressed. You have put
up signs all along my backyard and all along the other
the side of the creek saying we can't swim in it
because there is wastewater mixed in with this creek.
In 2008 when the major flood occurred because you all
are trying to do some capital improvement and had the
creek blocked up, the water couldn't go anywhere
except into our homes. I want to know what MSD is
going to do for my neighborhood for Sun Valley
Estates, we are bordered by the creek that is at Lucas
and Hunt and Halls Ferry and if necessary, my
subdivision has sent me out here because I am the one
that is always having something to say and will take
action upon this. But if I don't hear something from
you all that is going to address this issue and I know
you're in litigation with the stormwater and you're
wanting us to deal with this wastewater because
obviously there is wastewater in it if your putting
signs up, I would have them not vote for it and I will
be a personal crusader to have people not vote for
this if it means you are not going to fix the erosion
issues that we have. Thank you.
MR. GOSS: Just one comment, ma'am. I do
want to clarify that the Rate Commission, these
24
members of the Rate Commission are independent of MSD. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
We are volunteers that are appointed to review the
Rate Commission proposal, so we are not MSD itself and
Mr. Theerman might be capable of addressing your
question.
MR. THEERMAN: Well, first and foremost, the
erosion issue is something we were trying to address
when we implemented a stormwater rate in 2008,
unfortunately that's in litigation. So we had every
intention of trying to get at those erosion problems
throughout the county. Now that it is involved in a
lawsuit, we are somewhat held back for a time. The
signs you're seeing in the backyard that have -- that
state don't get in the creek because of sewer
overflows, that is exactly what we are trying to get
at with this program. So those red dots are leading
to the installation of those signs. So that part of
the issue is this particular rate case.
MS. SHAYLA MCPETERS: Yes but even if you
fix that, you take the sanitary issues out of it, we
still have lost our property. I used to have 50 feet
of land beyond my fence, I don't even have that any
more, I barely have my fence, it is leaning. And
every year, every time it rains, more and more of the
land just washes away. So what is it, I mean, okay,
25
yeah, you want to fix this, great, take the sanitary, 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
nobody wants to swim in that creek any way, we want
our properties fixed. And you sending an engineer out
to me and then sending me a letter, oh, yeah, we know
about this problem but we are not going to fix it.
What does that do for me? And I honestly feel that
because of the neighborhood I live in, is why you all
are really not taking it seriously. If I lived in
Ladue or West County or somewhere else, you all would
break your necks to get that fixed.
MR. THEERMAN: I can tell you that is not
the case.
MS. SHAYLA MCPETERS: Oh right, okay.
MR. THEERMAN: Please, we have -- we curved
our stormwater effort to the level of revenue that we
get and I can tell you we have provided little, if
any, service out beyond Lindbergh because they don't
pay hardly anything. I mean, it's about a 2 cent tax
that we get there, so we have curved the stormwater
services back to the revenue we receive and that's the
way unfortunately we are funded until we can get this
rate, this stormwater impervious charge fixed.
MS. SHAYLA MCPETERS: Okay. So when you do
get it fixed because it can't be in litigation
forever, who are you going to go to first, are you
26
going to go to the people like in my neighborhood? I 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
got five kids that live in the house two doors from
me. They can't play in their backyard because their
mother is too afraid their going to go out there and
slip and fall. It is 50 feet to the bottom of that
creek, it is not some little itty bitty creek, it is a
huge creek and her land is not there, so now what?
MR. THEERMAN: Well, we try to handle the
very worst problems first. I am not familiar with
your specific backyard.
MS. SHAYLA MCPETERS: You all have some
engineer named Sue, that works for you all and I am
constantly in contact with her and she is constantly
sending me letters basically telling me too bad, so
sad for you. That is not good enough for us, we want
something done, something needs to be addressed with
this.
MR. THEERMAN: Well, before you leave
tonight let me hear where you live and we will get
that written down. I will find out -- I am not sure
which engineer is Sue but we can track her down.
MS. SHAYLA MCPETERS: Thank you.
MR. GOSS: Adolphus Pruitt?
MR. ADOLPHUS PRUITT: My name is Aldolphus
Pruitt, president of the St. Louis NAACP. I have a
27
couple of questions. I wanted to know first of all, 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
if the pending litigation for the stormwater is
appealed and if you win the appeal, then I take it the
rate increase that you were trying to impose before
the court, kicks in, am I right or wrong?
MR. THEERMAN: The prior rate that we put in
place, if we win our appeal through all the different
potential appeals, then it could be reenacted.
MR. ADOLPHUS PRUITT: My point is, if you
win that litigation that rate kicks in, right?
MR. THEERMAN: We should be able to reenact
it, yes.
MR. ADOLPHUS PRUITT: So I guess what my
question is, we are talking about a rate increase now,
that is separate and above that, so I am just
wondering if the Commission is taking into
consideration on a rate increase you are talking about
imposing now, that it could be on top of another rate
increase that has all ready been approved that is
coming, it's just a matter of whether they are
victorious in the court or not and through this
appeal. Which means now that folks are looking at one
separate increase based on the presentation but in
actuality there may be a double whammy coming down the
line. So I just wanted to know if they take that into
28
consideration. The other issue was -- my assumption 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
is that based on the Consent Decree, does it include
or prevent any federal funding from any federal
sources or other public sources to address the matter
outside of utilizing the rate increase?
MR. THEERMAN: It doesn't prohibit us from
utilizing federal funding if it's available.
MR. ADOLPHUS PRUITT: Which means that I
wonder if the Rate Commission has asked MSD for some
sort of opinion as it relates to potential federal
sources that develop now or may be developed in the
future, that they have looked at -- have taken
consideration as the opportunity to keep this rate
increase from happening. So that is another thing I
wanted to know, has the Commission took that into
consideration also. And the last one was an issue as
it relates to -- my card, I wrote all three of them
down there. Oh, I know the consequences.
MR. GOSS: Yeah, what are the consequences.
MR. ADOLPHUS PRUITT: If you approve, as a
commission, you approve the rate increase as it is
proposed, the voters vote it down, what are the
consequences as it relates to the citizens because if
I am mistaken, if you approve it as a rate increase
and the voters do not approve the bond issue, that
29
rate increase is still imposed on the citizens, am I 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
right or wrong?
MR. THEERMAN: I can tell you that the way
we believe it would work is the rate or the bond
election would be a question of using debt or not. So
if the voters vote down the use of debt, we would be
cash financing.
MR. ADOLPHUS PRUITT: So that option you
showed on there where it says 74, you can go back
there, so that option on the right, 100 percent cash,
I'm saying if this Commission approved this proposed
rate increase and the voters, in disagreement, votes
it down, the Commission is just imposed -- the rate
increase is going to happen irregardless of whether
the voters act in affirmative or negative in April or
whenever that comes before the voters, simply because
this Commission approved the rate increase; is that
right?
MR. THEERMAN: Except that the imposition of
a rate is a matter for our Board of Trustees. The
Rate Commission recommends to them but our board would
be the one that imposes the rate change.
MR. ADOLPHUS PRUITT: Let me put it
differently. If they say yes, the voters say no, then
the Commissioners can say well, we don't care what the
30
voters say, we are going to hit them with this 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
increase any way but it would not have to come back to
them, am I right or wrong?
MR. GOSS: That is not accurate, there is
another step. The Rate Commission makes a
recommendation to the Board of Trustees. And it's the
Board of Trustees that actually sets the proposed
rate, so we are simply a recommending body, if you
want to put it in a zoning context, we are like a
planning and zoning commission. Then it goes to the
Board of Alderman, that would be an analogy. In our
case, we don't make the decision. We make a
recommendation to the Board of Trustees and the Board
of Trustees is again, the one that sets the rate. And
if they choose to fund that through debt, it is the
debt that goes before the voters.
MR. ADOLPHUS PRUITT: Mr. Chairman, I beg to
differ with you just a little bit. If you, without
you acting, the Trustees cannot impose a rate
increase, am I right or wrong?
MR. GOSS: Under the charter we have to make
a recommendation.
MR. ADOLPHUS PRUITT: So when you act, you
just empowered them to impose a rate increase and now
the decision is solely on them and no longer has to
31
come back to you, am I right or wrong? Once you act 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
in affirmative on the rate increase, then the Trustees
can then impose that increase on the citizens without
having to come back to you and ask for permission
whatsoever, am I right or wrong?
UNIDENTITFIED SPEAKER: They don't
understand what you're saying. Literally, what he's
saying is MSD, as a private entity, can actually
impose a rate increase automatically, even though they
approved it and it fell by the voters.
MR. ADOLPHUS PRUITT: You're almost right.
MR. THEERMAN: I want to answer your
question, Adolphus, it's just the mechanics of the way
our charter is written is a little convoluted. This
is how it works, they issue a rate recommendation, it
can be what we proposed, it can be something else. If
the board reviews that rate recommendation in the
context of five tests in the charter and those tests
are things like does it meet regulatory requirements,
is it fair and equitable and a couple of other ones
there. If the board, in reviewing their rate
recommendation, determines that those tests are passed
or satisfied, then they would implement the
recommended rate, okay. Now, that's the rate and then
the board would then put on the ballot, as Mr. Goss
32
said, the use of debt. And the voters are not voting 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
on the rate per se, they're voting on whether or not
to use debt.
MR. ADOLPHUS PRUITT: We are saying the
exact same -- again, I just want to make sure the
citizens understand that this hearing today, when this
body acts and says yes, we agree that you, the Board
of Trustees, can impose a rate increase, that step
empowers the board to make that decision irregardless
of what happens in the election as it relates to us
voting whether we use bonds or whether you impose the
$73 a person. And I just want to make sure we
understand and that's why I'm asking the Commission,
before you give the Trustees that sort of power, that
those questions I asked earlier, that one, you take
into consideration, that if there is appeal in pending
litigation, if they're successful, that what you're
imposing now is going to be on top of something that
is coming, that has already been through all the steps
and just a matter of if they win the appeal or not.
Two, whether MSD has seriously looked and took into
consideration all other public sources, both federal
and state, as potential sources to do this versus
imposing it on the citizens. That is my concern that
the Commission takes that into consideration before
33
given the Board of Trustees the power to do that 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
because irregardless of what happens in the election,
our voices no longer have any power because you have
just empowered them to impose that rate increase,
whether we vote for that bond issue or not.
MR. GOSS: Aldophus, I don't know if that is
a forgone conclusion or not. The issue of whether the
debt is voted down if MSD has to bring that back to
the Rate Commission for an evaluation at to whether
the all cash option, which is what the default would
be, would be fair and equitable and meet the five part
test is another matter and that could be the
consequence. I don't want to tell you the wrong thing
tonight, so the answer may be if it is voted down it
has to go back to the Rate Commission, back through
the process but I don't want to tell you that's the
case because I don't know that for a fact.
MR. ADOLPHUS PRUITT: Now, I know you have
some subsequent public hearings and it would be
helpful if between now and the next public hearing,
that that determination needs to be made. I want to
make sure the citizens understand.
MR. GOSS: Well, we'll ask counsel. We do
have legal counsel on the Rate Commission and that
truly is something we will know the answer to, I think
34
it is a great question. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
MR. ADOLPHUS PRUITT: Then last the comment,
of course, with the downturn of the economy, we all
know what is going on in people's lives individually
and you can go anywhere and talk about the
consequences of the downturn of the economy,
especially on the African American middle class. You
will find that that segment of the population has been
hurt and hit more than any other segment of the
population and those are the same folks we are looking
to pay this rate increase. So I still have some
concerns about imposing that without having any idea
of what the economy is going to look like in the
future. You have a very difficult task in front of
you and I appreciate the fact that you are public
citizens, you volunteered to deal with it but I also
hope that you use that insight to take a look at
people's lives out here and understand what these
consequences of what you're going to do really imposes
on them and their lives in the future. I appreciate
your time.
MR. SCHNEIDER: Anthony Bell? I believe
it's Anthony but it could be Arthur.
MR. ANTHONY BELL: How you doing?
Generally, I think the brother here from the NAACP has
35
really addressed mostly everything I wanted to hear 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
before the board and I understand you all are just the
Commissioners. And another question I had concerning,
if it was approved -- let's just say hypothetically,
if it was approved even with the voters, after the
Commission had already gave approval, how long would
that last, is there a cutoff date for that increase?
MR. THEERMAN: For the increase, the
settlement with the EPA has a value of about 4.7
billion, so, no, that is not the end of the line and
there would be subsequent rate increases. And we
talked a lot in public about the fact that by the end
of the decade we think sewer bills could be in the $80
a month range to fund this program. It doesn't go
back and it doesn't stay still, it will have to
continue to rise to build this EPA mandated program.
MR. ANTHONY BELL: Okay. Another thing I
was concerned about, you were saying, directed to the
citizens concerns and I am one for myself, it really
hits home, this would be hard hit, a hard hit, that
increase I see on the board here. And another thing
it would be really put senior citizens out of
commission that are on a fixed income trying to live
independently in their homes. A $74 increase, almost
$75 increase on a sewer bill, they will almost be
36
forced to move into senior citizens' homes and lose 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
their independence and stuff like that. See, so this
is something I wouldn't want to see happen on anybody
in today's current -- with the economy the way it is
right now, especially on the minority, us as a whole.
That would be the worst thing that the Commission
could approve. That is really what I wanted to say
and find out how long it would last if it happened?
Would it be a 20 year thing, would it cut off?
MR. THEERMAN: The debt we would -- we
probably use the majority of the 30 year debt, so you
are talking about issuing this debt over lots of years
and one's a 30 year duration, so this would be
extending out over a long period of time to pay off
all those capital improvements. What you're
recognizing is really the reason why we suggested the
use of a significant amount of bonds to try and keep
those rates from not rising so dramatically. Of
course, when you use debt you have to pay it off with
interest, so there is that too.
MR. ANTHONY BELL: Okay. That was basically
the questions I had to ask and I don't want to take up
too much of your guys' time. Let someone else say
something here today that may be concerned but I am
very concerned about it. I know how it feels to be
37
made a senior citizen and something like that and you 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
on a fixed income, you can barely live from month to
month already and stay independent in your own home.
That is the worst case scenario that could happen
right now. As far as this increase from the
Commission, if you approve that, that would be the
worst thing that can happen. And believe me, what
happens to us, can happen to you.
MR. GOSS: Sharon Sharp?
MS. SHARON SHARP: Hello. I am one of those
senior citizens, I'm on that fixed income, so if the
rate goes up to like $75 a lot of people can't pay it,
then, of course, you put a lien on their property and
then you put interest on top of the monthly payments
you couldn't make in the first place and you bury
people in debt. Eventually I don't know what happens
if you can't pay it off but what does happen? How can
you expect people whose income have not increased in
three years, to handle all of these public service
increases? The gas, the electric, the water, all of
that, how do you expect senior citizens or anyone with
a fixed income to do anything? Your medical bills
increase, you know, you're old now, so you have more
health problems. This is something that even people
who are not senior citizens -- water is free. What
38
are you doing to this water that we have to pay so 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
much for? Should we get westbound and put it out like
we used to a long time ago or, you know, go dig a
whole and bury it, well, you can't do that because it
effects the ground water. But still why is it costing
so much? It's sewer, I know it is sewer. I know our
sewer system is old, it has been old for a long, long
time. So now all at once you want to fix the sewer
and everybody is coming at people with all utilities.
Utilities have had to increase, at least with all
utilities, at least 30 percent. 15 for that one, 17
for that, oh, we want another seven for that one, oh,
we need six more for -- so everybody is increasing
utilities. People cannot afford -- even working
people cannot afford these constant increases of
services that are necessary to live. We don't even
have a choice whether we have these services, we need
them, they're essential. So I understand you all had
a problem but we cannot afford to take care of your
problem when you're constantly -- you all salaries are
not low, you know, I am not talking about -- you get
your bonuses and we struggle with trying to make it
with nothing. So I don't think you're -- and the
Commission bless your heart, you can only recommend
and I know that, so I'm not going to get mad at you.
39
You can only recommend, you can only do what you do. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
But it seems like you keep still giving increases no
matter what. That is all I have to say.
MR. THEERMAN: I just want to cover one or
two things, so everyone understands. One of the
reasons, the primary reason this is the way it is, is
because St. Louis, like a lot of other cities, didn't
want to see rates go up. And we as an MSD, didn't
raise rates in the '70s and '80s and then we got into
lawsuits about rates and couldn't raise rates through
late '80s and '90s and this is EPA coming in and
saying you have to play catch up. One of the issues
-- I mean, I hear what you're saying about where does
this money have to go, it is just water but we are
talking about rebuilding a sewer system and what has
to be done to make it work properly and it's like
anything else whether it's a road or a bridge, if you
ignore it when you finally do get around to fixing it,
it costs more if you have delayed. And so, that's
really why it's as expensive as it is, we are playing
catch up on this infrastructure. The only other thing
I would tell you is nobody at MSD gets bonuses, so.
UNIDENTITFIED SPEAKER: How would that
effect an increase that you guys imposed back a year
or so ago, a couple of years ago to repair the sewer
40
lines and most the, you know, (inaudible person has no 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
mic) what happened to that money?
MR. THEERMAN: Again, we imposed in 2008, a
stormwater charge that was based on how much
impervious area or how much pavement you have on your
property. And that charge is no longer on your bill.
It was struck down by a lawsuit, we are presently
litigating an appeal, so you're not paying that bill
right now. That is a charge to try and deal with
stormwater issues like what was mentioned earlier,
erosion problems in backyards and stormwater problems.
This is a -- we are one utility but we have two
different jobs and we collect two different rates, a
stormwater and a wastewater rate and this is all about
the wastewater side.
MR. GOSS: Yvonne Harris?
MS. YVONNE HARRIS: Hi, my name is Yvonne
Harris and I do represent AARP and I know there is a
lot of young faces here, so you may not belong to AARP
but keep living and you will because we plan to stay
around. I have some questions and I have been to some
of these meetings and I know that pretty much what we
stand up and say to you don't mean much more than a
hill of beans because you're going to do what you're
going to do anyhow. And I grew up at 320 South
41
Jefferson, I shared a backyard with the MSD, I can 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
tell you that. So I have watched you grow and you
weren't even but a one story building but I watched
you grow from one story to what -- I don't know what
you have now but I know it is a big building. And you
know, you're still in the downtown area, so you still
do know that the whole neighborhood has changed. You
have what you have and you have made money. So you
may say well, we didn't collect enough at first but
that is not true because had you not collected enough
at first, you wouldn't have the building that it is
today. You would still be in a one story or two story
building. So that is not true. I don't believe -- I
wasn't here at the beginning and I apologize, you
know, for not being here because I was trying to get
here but I can tell you one thing there are people
whose income is stagnant and if it is stagnant like
that for three years and everybody -- every utility
has gone up, the same as I heard everyone else say.
Now, you're on the same commission or whatever it is,
you handle water, you handle sewer, you handle
electric, you handle gas, you handle it all, and you
know good and well, that a poor person cannot afford
to survive as is, then why are you saying okay, we can
increase it on this and this and this, on six things,
42
six, seven things. Are you out of your mind, what is 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
going on here? I mean, you have to have common sense.
You cannot increase the rate on people when their
wages does not increase. You can't get blood from a
turnip, so all you're going to do is have a whole lot
of lawsuits or a whole lot of empty, raggedy houses.
You're going to put liens on the houses, take houses
from families and throw them out on the street just
like the electric company says turn on your air
conditioning and then get our bill next month for $350
and we will work with you. By working with you means,
we will turn you over to a collection agency and then
you make arrangements with them who will take money
out of your checking account every month because they
want your checking account number and they're going to
take your money. Now when they're taking their $75 to
$80 out of your agreement for them to take it, you
still have a bill you're neglecting. You can't pay
for your trash, you can't pay for your car, your
driving with no insurance, you're going to cut
something. If you never been poor, you don't know
what it feels like to be poor. If you always had --
if you always had something to fall back on but if you
have never had anything or you're struggling to hang
on to what you have, you don't have anybody to fall
43
back on. I remember one time I owed some money and 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
they told me to borrow it from my sister and brother.
I'm black, they're black, we don't have it. How can I
ask them to give to me what I don't have? I have
never been a borrower, my mother never allowed me and
I have never done it. I don't borrow from anybody.
But I can tell you one thing I am hearing also, you're
talking about the rate increase, what is our
alternative, what can we do other than to flush water
down into your sewer, where else can we take the water
and stop using yours because I think you base your
rates on the amount of water that we use. And if you
base your rate on the water that we use, I can tell
you one other thing you have done that is absolutely
wrong. When you're sitting in front of the people and
increasing their water rates -- let me tell you there
are seniors who call our information center that
cannot take their medication, cannot clean themselves
as far as personally hygiene, cannot even flush the
toilet because they don't have water. Because you
guys would give water to a dog before you would give
it to a human being and that is not right. It is not
right and people call there crying, all of this
technology, all of this technology, you don't consider
the agent, you really don't. They hate telephones,
44
they hate voice messages, they hate ATMs and they have 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
a TV box that the government bought for them for $50
and cannot even get the TV plugged in. They say baby,
can you just talk to me. They're black, they're
white, they're everything because AARP is about
anybody and everybody who has aged. And I will tell
you I have to talk to them while they cry and they say
I just want to hear a voice. I say well, let me ask
you this, did you get that box that the government
gave you, oh, yeah baby but I am blind, I can't even
hook it up or I have no legs or I have this huge TV
which is sitting on the table that hasn't been moved
in 60 years. How -- does anybody ever think about
that there are other people besides young, bouncy
people? Does anybody ever think about that? You
understand computers and then you give these
commercials, go to W-W-W, I say do you ever go to
W-W-W, they say no, ma'am, I don't even know what
W-W-W means. They don't know how go to W-W-W. Some
of them still have dial-up telephones and these are
white people that call from rural areas and they have
dial-up phones, do you think they can afford that?
And another thing about this sewer thing, when you say
sewer district, what is your district, is it county
and city, is it just city, is it county, what are we
45
talking about here today? Where is the sewer district 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
that we are paying for in the city, that we don't now
how many county people may be getting it or so many
rural people, what is a district, where is your
district?
MR. THEERMAN: Serves all of St. Louis City
and about 80 percent of St. Louis County.
MS. YVONNE HARRIS: Okay. But --
MR. THEERMAN: Ma'am, if I may, to answer
your question that you just asked, I know you came
here late because you got stuck traffic, which, of
course, is unfortunate. If you look at the handout
that was given to you and I can see you're holding it
and that Mr. Theerman went through in some detail
before you got here, it does answer some of those
questions about the District, the number of miles in
the District, what the proposal is about, why MSD is
proposing to spend the money that it is spending on
it, it goes into those questions in detail. Just to
clarify one item, you made some comments about other
utilities, cable TV, electric, gas --
MS. YVONNE HARRIS: Yes.
MR. GOSS: We have nothing to do with that
ma'am. This commission only makes a recommendation in
respect to stormwater and wastewater rates. In this
46
case, this hearing, is about wastewater rates and 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
wastewater rate increases, that is all we are making a
recommendation on. And we appreciate the testimony we
receive, so we can take that into consideration.
MS. YVONNE HARRIS: This is not a testimony,
this is the truth. There is a big difference here, I
am telling you what I hear and I don't doubt that
these people are telling the truth because they have
no reason to call just to say things that are untrue.
MR. GOSS: All right. And we have heard the
comments about cost and one of the reasons why in the
rate proposal, which Mr. Theerman went through
earlier, before you arrived --
MS. YVONNE HARRIS: Okay.
MR. GOSS: -- was the difference between
issuing debt as opposed to going to an all cash, pay
as you go kind of proceeding. And the difference
between that in the proposal that MSD is proposing
would be to hold down the rate increase by using debt
as opposed to not using debt and Jeff, maybe you want
to go back through those numbers to address that
question or just in brief because I think that might
address your concerns about cost.
MR. THEERMAN: We know this is steep. We
are trying to do what we can, given the requirements
47
that EPA has imposed to do this as manageably as 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
possible. So I am going to cover a few things really
quickly.
MS. YVONNE HARRIS: Okay.
MR. THEERMAN: On the left side of this
chart is what our rate proposal is and it's steep. It
is about $4.00 to $5.00 a year in increase over four
years. It gets up to about -- the average customer
right now pays about $28.00 a month and it steps up to
about $47.00 by using a lot of borrowed money. We
would go to the voters and seek approval of the use of
debt. The left side, my side, just gives you an
example of what happens if you try and fund the
program that EPA wants us to build, with just cash
financing. Instead of not using any debt, you are
going to have to raise the rates dramatically, $73.35.
We are trying to avoid something like that, like
through the use of debt. A couple of other things you
mentioned that I will just touch on. We have low
income and fixed income assistance programs for both
homeowners and for tenants and that information is out
on the table out there and we need AARP's help in
getting the word out on that. Because that is a
difficult thing to get out to seniors and to those
that are distressed with this sort of thing. There is
48
a program for those that qualify that cuts the bill in 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
half. So we are sensitive to this issue and we are
trying to build something that satisfies regulars but
also doesn't strap those that are the least able to
pay. So those are some things -- I didn't cover
anything about low income assistance but this is what
we talked about earlier.
MS. YVONNE HARRIS: Okay. Well, then if
you're able to assist people, then you obviously don't
need that full increase. If you have the money to
help someone, then you obviously do not need the
percentage that you are asking.
MR. THEERMAN: This increase has that
program built into it, so that savings has already
been taken.
MS. YVONNE HARRIS: Oh, okay.
MR. THEERMAN: We built in and we have shown
the Rate Commission what we think would be the amount
of money used by low income assistance and the fixed
incomes, it's in our rate proposal. There is a whole
lot of detail beyond what this slide presentation is.
MS. YVONNE HARRIS: Okay. I only have one
other thing I wanted to comment about. You said
something about rebuilding infrastructure. Sure, St.
Louis, now, if you work at the -- like I said MSD has
49
been around for a mighty long time, you knew before 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
2011 that the streets were falling in. You knew
before 2011 that those old pipes needed replacing.
You knew -- why drop a huge bundle on people like
this, why didn't someone have the foresight to start
even if in the downtown area and move forward making
those changes and replacing those pipes, why does
there always have to be a catastrophe before anybody
can see what is happening? I mean, you knew it.
MR. THEERMAN: That is a great point. I'm
not sure if you came in yet but we didn't raise rates
in the '70s and '80s. And in the '80s we started
getting involved in litigation over trying to raise
our rates. And we litigated our rates for 15 years
and weren't able to do much with rates in the late
'80s and early '90s, all the way through the '90s. In
2000 that got basically cleared up. And since that
time you have seen MSD raising rates and building
programs. We spent a billion dollars correcting the
overflows that have existed. We have eliminated over
a hundred overflows in the in last eight years,
building a program that is similar to what EPA wants
us to build. I mean, we have been trying to get ahead
but the trouble is it went on too long and the
infrastructure got in too bad of shape and now we are
50
playing catch up. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
MS. YVONNE HARRIS: You know, on the backs
of poor people that is the sad part.
MR. THEERMAN: Well, on the backs of a whole
region, you're right.
MS. YVONNE HARRIS: Well, everybody, yes, it
is. That is very, very sad. Maybe there should be
some reorganization in your organization where you
should have some future thinking people, somebody that
realizes what we do need and they are able to get a
hold of the material that is needed that is going to
last longer or be sufficient that doesn't cost as
much.
MR. THEERMAN: Some of what you're talking
about is one of those bullets. It's the last one
there in that first stack, it says asset reinvestment.
What that really means is fixing them as they get
older, don't let them fall apart. Sewers last a
hundred years and you have to replace about 1 percent
of them every year just to keep up and we haven't done
that. So we are having to play some catch up, we are
thinking forward and we are trying to do this in a way
that is the lowest cost that meets requirements, that
is mindful of people's ability to pay. I know this is
steep and we are trying to do our very best not for it
51
to cost this much but we also want to the be very 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
honest with the community.
MS. YVONNE HARRIS: Well, you're doing a
good job of explaining it but some people don't make
any more than $100 a week and when you're talking
about $75 a month, you're taking away so much of their
income, it is hard even to live.
MR. THEERMAN: I understand.
MS. YVONNE HARRIS: It is really horrible to
me how the people up high don't give a care about the
people they step on at the bottom. And it's just a
horrible, horrible thing and maybe they never
recognize until they are on the bottom and then they
go, oh my god, people have been feet-stepping on me,
then they feel the crunch. But this is the time of a
recession. Why -- I understand the sewer lines are
very, very old. I do understand that. I grew up in
St. Louis and I can remember some of the stuff going
on. And I know it is very, very old, trusting the
material was different back then, it doesn't last as
long. I understand all that. But the fact that
you're going to impact a person's income as much as
you are for a sewer, it just sounds just ridiculous to
me.
MR. THEERMAN: To be honest, we would have
52
used a longer schedule. 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
MS. YVONNE HARRIS: Schedule?
MR. THEERMAN: We were sued by the EPA and
the State to deal with these overflow issues and we
negotiated for four years trying to reach a reasonable
place to be. This was the best we could do and --
MS. YVONNE HARRIS: You said EPA?
MR. THEERMAN: Yes, EPA. I mean, we think
the work needs to be done but the schedule is really
the best we could negotiate.
MS. YVONNE HARRIS: So you're bringing jobs
to St. Louis?
MR. THEERMAN: We estimate for every billion
dollars we spend on labor building this program,
28,000 jobs --
MS. YVONNE HARRIS: So you are trying to
help the economy?
MR. THEERMAN: I mean, that is the silver
lining. We are not doing it to -- I mean, this is
tough, we realize that. But if there is a silver
lining beyond getting rid of overflows, it is
potential to create jobs.
MR. GOSS: Ma'am, thank you for your
comments.
MS. YVONNE HARRIS: Thank you.
53
MR. SCHNEIDER: I just want to add that AARP 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
is an intervenor in this case. They have a gentlemen
by the name of John Coffman who goes to every single
one of these hearings and gives his opinion of what it
means to be fair and reasonable, so I encourage you to
call the leadership of AARP and get a hold of Mr.
Coffman and tell the same story to Mr. Coffman, so he
comes to the hearing and intervenes and this way his
testimony includes your comments.
MR. GOSS: Roosevelt Brown?
MR. ROOSEVELT BROWN: I will be short. Now,
if we aren't able to pay a sewer bill, you put a lien
on the home and you take it, right? Now, another
thing, you want to help, why won't your company CEO
give back to the community, you know, to help. You
know we only make -- I'm on social security, I haven't
had a raise in three years. I am trying to make it,
so it is very hard. So why don't you all contribute
back to the community to help us instead of giving
raises on your salaries all the time, help us too. We
are all human, let's get together, okay, that is all I
have to say.
MR. GOSS: Do the Rate Commissioners have
any questions or comments? I have no further speaker
cards, was there anyone else in the audience who
54
wishes to speak? Seeing none, I would like to thank 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
-- yes, sir? We will need to get your name and we
also need to have you fill out a speaker card. So if
we could bring him a speaker card, so he can fill it
out, I would appreciate that. Go ahead, sir.
MR. AHARON SYKES: My name is Aharon Sykes,
I am young actually, I don't really pay for bills as
of yet, but I do have a grandpa, he's been paying
bills on time, you know, he has been keeping up with
everything but I just heard the rate increase on the
news and just judging from his income, I mean, it is
going to be a big hit. So I was just wondering, you
know, I know you guys are the Commission, you make
recommendations and all you do is recommend, I
understand. I was wondering if MSD ever thought about
maybe getting a team together like a committee to kind
of assist with the consequences of these rate raises?
Like the gentlemen said, you're going to do what
you're to do, so it is going to happen either way. So
I was wondering maybe if you guys were going to get a
team together that can maybe deal with the
consequences of the payers that have to deal with
this, trying to get like resources together for them,
so you can give it to them, so maybe it can kind of
dampen the blow a little bit.
55
MR. THEERMAN: Up to now we try to work on 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
programs that help reduce the bill but we are
certainly open to any ideas the public has about that
the sort of thing. The program that we are building
has a lot of features to it that will help the north
side of the City of St. Louis. There is a program to
deal with improvements in a green way that will help
hold water back from the combined system and reduce the
overflows that occur. And that program is intended to
be done with a collaboration with the community, so,
you know, in light of that, I think we would be very
willing to talk about other ideas about how to help
with the impacts of this program as it goes on, both
financial and otherwise.
MR. AHARON SYKES: Well, that is all I have
to say.
MR. GOSS: Thank you. I would like to thank
everyone for their participation and coming here
tonight. The next public hearing will be conducted on
September 26th, 2011 at 9:00 a.m. at MSD's offices.
Thank you.
(Hearing concluded at 7:13 p.m.)
56
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CERTIFICATE OF REPORTER
I, Suzanne M. Zes, Certified Court Reporter,
Notary Public within and for the State of Missouri, do
hereby certify that the witness whose testimony
appears in the foregoing deposition was duly sworn by
me; the testimony of said witness was taken by me to
the best of my ability and thereafter reduced to
typewriting under my direction; that I am neither
counsel for, related to, nor employed by any of the
parties to the action in which this deposition was
taken, and further that I am not a relative or
employee of any attorney or counsel employed by the
parties thereto, nor financially or otherwise
interested in the outcome of the action.
______________________________
Certified Court Reporter