HomeMy Public PortalAboutExhibit HBA 100 - First Discovery Request of Interveners Home Builders Association to MSD April 30, 2015Exhibit HBA 100
Wastewater and Stormwater Rate Change Proceeding — 2015
First Discovery Request of Intervenors Home Builder Association
of St. Louis & Eastern Missouri
BEFORE THE RATE COMMISSION OF THE
METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a Wastewater
And Stormwater Rate Change Proposal
By the Commission of the Metropolitan
St. Louis Sewer District
FIRST DISCOVERY REQUEST BY INTERVENORS
HOME BUILDERS ASSOCIATION
OF ST. LOUIS AND EASTERN MISSOURI
Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis
Sewer District (the "Charter Plan"), Operational Rule 3(2) and Procedural Schedule §§ I,
17 and 18 of the Rate Commission of the Metropolitan St, Louis Sewer District ("Rate
Commission"), Intervenor Home Builders Association of St. Louis and Eastern Missouri
("HBA") request additional information and answers from the Metropolitan St. Louis
Sewer District ("District") regarding the Rate Change Proposal dated February 26, 2015
(the "Rate Change Proposal").
The District is requested to amend or supplement the responses to this Discovery
Request if the District obtains information upon the basis of which (a) the District knows
that a response was incorrect when made, or (b) the District knows that the response,
though correct when made, is no longer correct.
The following Discovery Requests are deemed continuing so as to require the
District to serve timely supplemental answers if the District obtains further information
pertinent thereto between the time the answers are served and the time of the Prehearing
Conference.
DISCOVERY REQUEST
1, Exhibit MSD-1, Section 3.3 provides that the District's current SW
funding structure will be replaced with a proposed uniform levy of the existing $.0197 to
recover the cost of providing regulatory compliance services throughout the District's
service area as well as a $.10 levy throughout the District's service area (except for
properties served by a levee district) to provide a more uniform level of service
throughout the District. Please provide a detailed explanation of the exception applied to
properties served by a levee district.
RESPONSE:
2, Exhibit MSD-1, Section 4.9 states that the District conducted a Study
based on principles endorsed by the Water Environment Federation (WEF) to determine
cost of service rates that achieve general fairness in the recovery of costs from various
classes of customers. Please provide a detailed explanation of the analyses and processes
performed in the Study, including the factors used in determining general fairness among
classes of customers.
RESPONSE:
3. Referring to Exhibit MSD-1, Table 5-2 — Stormwater Operating Expenses,
please provide a variance analysis for each line on the table with projected sources and
projected uses of funds versus actual sources and uses of funds from fiscal years 2011
through 2014 in electronic format with all formulas intact. PIease provide a detailed
explanation for the difference in projected versus actual for each line item.
RESPONSE:
4. Please provide a description of any alternative rate designs considered by
Raftelis Financial Consultants Inc. (RFC) during the development of the Stormwater and
Wasterwater rates contained in the Rate Proposal. Please provide an explanation of
whether any program that provided credits of any sort to tax payers, such as credits for
the installation of stormwater improvements, over detention, BMP facilities and
improvements, or BMP maintenance, was considered by RFC. If a credit program of any
sort was considered, please provide a detailed explanation regarding the reasons in favor
of awarding credits and the reasons against awarding credits.
RESPONSE:
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5. During the "Technical Conference for Direct Testimony and Rate Setting
Documents, Mr. Hoelscher testified (at page 17 of the transcript) that "for [the
Metropolitan St. Louis Sewer District's] [Rate Change] proposal, we have not considered
[a] credit program." Given that Exhibit MSD-1, Table ES-4 (the Stormwater Financial
Plan) indicates that more than seventy percent (70%) of the projected tax revenue is
directed to stormwater operations & management, why did the District not consider a
credit program for property owners with Best Management Practices (BMPs) installed on
their property considering such BMPs are privately operated and maintained by the
property owner?
RESPONSE:
6. During the Technical Conference for Direct Testimony and Rate Setting
Documents, Mr. Hoelscher testified (at page 17 of the transcript) that "for [the
Metropolitan St. Louis Sewer District's] [Rate Change] proposal, we have not considered
[a] credit program." Given that Exhibit MSD-1, Table ES-4 (the Stormwater Financial
Plan) indicates that more than seventy percent (70%) of the projected tax revenue is
directed to stormwater operations & management, please provide a detailed explanation
of how the proposed taxing methodology is fair and equitable when no credit program is
provided to property owners already bearing the cost for operating and maintaining
BMPs.
RESPONSE:
7. Please state whether the District's Financial Advisor and/or Rate
Consultant believe that a taxing methodology based solely on property value without
consideration of impervious area or a stormwater credit program is fair and equitable?
Please explain in detail why or why not.
RESPONSE:
8. Does the District admit the possibility that equally valued properties may
have different stormwater collection or management systems such that the different
properties, while having equal values, may have dissimilar impacts on the quantity of
stormwater runoff reaching the District's stormwater systems? Please explain in detail
why or why not.
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RESPONSE:
9. Does the District admit the possibility that equally valued properties may
have different stormwater collection or management systems such that the different
properties, while having equal values, may have dissimilar impacts on the quality of
stormwater runoff reaching the District's stormwater systems? Please explain in detail
why or why not.
RESPONSE:
10. Given that two equally valued properties may have different stormwater
collection or management systems in place, please explain how the District's proposed
taxing methodology, based solely on property value, is related to the impact such
properties have on the District's stormwater systems?
RESPONSE:
11. Exhibit MSD-84G, the 2014 Stormwater Utility Survey conducted by
Black & Veatch, states on page 17 that "onsite stormwater management is capital
intensive yielding low return on investment, which in turn impacts the economics of
engaging in onsite stormwater management." Given that onsite stormwater management,
presumably including BMPs, is capital intensive with low returns on investment, please
explain why the District did not consider a credit program for property owners with
independently operated and maintained BMPs?
RESPONSE:
12. Exhibit MSD-84G, the 2014 Stormwater Utility Survey conducted by
Black & Veatch, states on page 17 that "onsite stormwater management is capital
intensive yielding low return on investment, which in turn impacts the economics of
engaging in onsite stormwater management." Given that onsite stormwater management,
presumably including BMPs, is capital intensive with low returns on investment, please
explain how the proposed taxing methodology is fair and equitable with respect to those
property owners independently operating and maintaining BMPs.
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RESPONSE:
13. Exhibit MSD-84G, the 2014 Stormwater Utility Survey conducted by
Black & Veatch, states on page 17 that "stormwater credit serves a key role in enhancing
the perception of `user fees' by affording the customers opportunities to reduce the
magnitude of the user fees commensurate with [the] extent of onsite stormwater
management." Given this finding, please explain why the District has not considered a
credit program to reduce the magnitude of customer fees commensurate with the extent
of onsite stormwater management, including BMPs?
RESPONSE:
14. Exhibit MSD-84G, the 2014 Stormwater Utility Survey conducted by
Black & Veatch, states on page 17 that "stormwater credit serves a key role in enhancing
the perception of 'user fees' by affording the customers opportunities to reduce the
magnitude of the user fees commensurate with [the] extent of onsite stormwater
management." Given this finding, please explain how the proposed taxing methodology
is fair and equitable if it does not consider a credit program that reduces the magnitude of
customer fees commensurate with the extent of onsite stormwater management, including
BMPs?
RESPONSE:
15. Referring to Exhibit MSD-84G, the 2014 Stormwater Utility Survey
conducted by Black & Veatch, Figure 38 indicates that forty-four percent (44%) of
districts surveyed have a stormwater credit program. Did the District review and/or
analyze any stormwater credit programs implemented in other districts to determine if
such programs could be equitably implemented as part of the District's Rate Proposal?
Please explain in detail why or why not.
RESPONSE:
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16. Please produce the underlying data used to compile the findings stated in
Exhibit MSD-84G, the 2014 Stormwater Utility Survey conducted by Black & Veatch.
RESPONSE:
17. Given that the stated purpose of the proposed Stormwater Funding Plan is
to cover the cost of stormwater maintenance services, limited capital projects, and
associated operations & maintenance (See Exhibit MSD-1, P.O. 2, Section 5), how does
the District justify that the proposed taxing methodology is fair and equitable when it
does not take into account the individual impact a property has on the District's
stormwater system, including for example, factors such as volume reduction, peak flow
reduction, or water quality control measures?
RESPONSE:
18. The District has represented in their BMP Ownership and Maintenance
Brochure that the maintenance costs associated with BMPs vary depending on the
drainage area, storage volume, and type of BMP technology in place, predicting
operations and maintenance costs to be ten -percent (10%) of total construction costs for
BMPs costing $10,000 and five -percent (5%) for those costing $100,000. Given the costs
associated with maintaining BMPs, which are required by the District to be installed in
every new development, please explain why the District has not included a credit
program in the Rate Proposal to offset the costs associated with the operations and
maintenance of BMPs.
RESPONSE:
19. The District has represented in their BMP Ownership and Maintenance
Brochure that the maintenance costs associated with BM.Ps vary depending on the
drainage area, storage volume, and type of BMP technology in place, predicting
operations and maintenance costs to be ten -percent (10%) of total construction costs for
BMPs costing $10,000 and five -percent (5%) for those costing $100,000. Given the costs
associated with maintaining BMPs, which are required by the District to be installed in
every new development, please explain how the proposed taxing methodology is fair and
equitable.
RESPONSE:
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20. The District's BMP Ownership and Maintenance Brochure further asserts
"it is important that BMP owners allot funds for maintenance." Please explain why the
District has not included a credit program in the Rate Proposal to offset the reserves
required to be maintained by property owners for the ongoing operation, maintenance and
replacement of BMPs?
RESPONSE:
21. The District's BMP Ownership and Maintenance Brochure further asserts
"it is important that BMP owners allot funds for maintenance." Please explain how the
proposed taxing methodology is fair and equitable considering it does not include any
credit program to offset the reserves required to be maintained by property owners for the
ongoing operation, maintenance and replacement of BMPs?
RESPONSE:
22. The District requires that an Annual BMP Maintenance Report be
submitted to the District for all commercial and residential homeowner association
maintained BMP facilities. Please explain why the District did not include a credit
program in the Rate Proposal to offset the costs associated with the inspection,
maintenance, and submission of the required Annual BMP Maintenance Report?
RESPONSE:
23. Please explain in detail how the District determined that the proposed
taxing methodology was fair and equitable considering not all commercial and residential
properties are subject to costs associated with the inspection, maintenance, and
submission of the required Annual BMP Maintenance Report.
RESPONSE:
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24, Does the District contend that it is not being fully compensated for the
costs incurred by the District in connection with its review and approval of MSD-
pernvtted BMPs prior to construction, or its inspection of BMPs post -construction?
RESPONSE:
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Respectfully Submitted,
SmithAmw sen LLC
By:
John Bra fly d Goss #362
Nicholas L. Burkhart #65816
120 S. Central Ave.
Suite 700
Clayton, MO 63105
Ph 314-719-3702
Fax 314-719-3703
bgoss@salawus.com
Attorneys for HBA St. Louis
Wastewater and Stormwater Rate Change Proceeding --- 2015
First Discovery Requests of Intervenors HBA St. Louis
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing was sent by electronic transmission
to the following on this 30th day of April, 2015.
Ms. Janice Fenton
Office Associate Senior
Metropolitan St, Louis Sewer District
2350 Market Street
St. Louis, MO 63103
jfenton@stlmsd.com
Ms. Susan Myers
General Counsel
Metropolitan St, Louis Sewer District
2350 Market Street
St. Louis, MO 63103
smyers@stlmsd.com
Mr. John Fox Arnold
Lashly & Baer, P.C.
714 Locust Street
St. Louis, MO 63101
jfarnold@lashlybaer.com
Ms, Lisa 0. Stump
Lashly & Baer, P.C.
714 Locust Street
St. Louis, MO 63101
lostump@lashlybaer.com
Brandon W. Neuschafer
Bryan Cave, LLP
211 N. Broadway, Suite 3600
St. Louis, MO 63102
John.kindschuh@bryancave.com
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