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Home My Public Portal AboutExhibit HBA 103 - HBA Rebuttal Testimony of Michael Boerding Wastewater and Stormwater Rate Change Proceeding – 2015 Rebuttal Testimony Submitted by Intervenor 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 ) REBUTTAL TESTIMONY OF MICHAEL BOERDING SUBMITTED BY INTERVENOR HOME BUILDERS ASSOCIATION OF ST. LOUIS & EASTERN MISSOURI Pursuant to Section 3(6) of the Operational Rules, Regulations and Procedures of the Rate Commission of the Metropolitan St. Louis Sewer District, Intervenor Home Builders Association of St. Louis and Eastern Missouri submits the attached written testimony prepared by Mr. Michael Boerding. Respectfully submitted, SmithAmundsen, LLC By: __/s/_John Bradford Goss_____ John Bradford Goss, #36266 Nicholas L. Burkhart, #65816 120 S. Central Avenue, Suite 700 St. Louis, MO 63105 314.719.3702 – Telephone 314.719.3703 – Facsimile bgoss@salawus.com nburkhart@salawus.com Attorneys for HBA of St. Louis and Eastern Missouri Dated: May 13, 2015 Wastewater and Stormwater Rate Change Proceeding — 2015 Rebuttal Testimony of Michael Boerding submitted by Intervenor 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 13th day of May, 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 /s/ John Bradford Goss BEFORE THE RATE COMMISSION OF THE ST. LOUIS METROPOLITAN SEWER DISTRICT WITNESS: MICHAEL BOERDING, P.E. and VICE PRESIDENT OF ENGINEERING THE STERLING COMPANY ENGINEERS AND SURVEYORS SPONSORING PARTY: HOME BUILDERS ASSOCIATION OF ST. LOUIS AND EASTERN MISSOURI DATE PREPARED: MAY 13, 2015 Q. Please state your name and business address. 1 A. My name is Michael Boerding and my business address is 5055 New 2 Baumgartner Rd., St. Louis, MO 63129. 3 Q. By whom are you employed and in what capacity? 4 A. I am employed by Sterling Engineering & Surveying Company (“The Sterling 5 Company”) as a professional engineer and serve as the Vice President of Engineering. 6 Q. Please describe generally the work performed by Sterling Engineering & 7 Surveying Company. 8 A. The Sterling Company is a full-service engineering and surveying firm, providing 9 project review consultation services, engineering studies, and comprehensive engineering 10 design. The Sterling Company has extensive experience with permit programs, including 11 those of St. Louis City, St. Louis County, the State of Missouri, the Missouri Department 12 of Transportation (MoDot), the Environmental Protection Agency (EPA), the National 13 Pollutant Discharge Elimination System (NPDES), and the Metropolitan St. Louis Sewer 14 District. As it relates to wastewater and stormwater management and design, I have 15 extensive experience in the preparation and review Storm Water Pollution Prevention 16 Plans (SWPPP), Erosion and Sediment Control Plans, Grading Plans, Flood Plain 17 Studies, Storm Water Drainage Design, BMP Design, Sanitary Sewer Design, Pumping 18 Station and Force Main Design, and Water Supply System Design. 19 Q. Are you a registered Professional Engineer? 20 A. Yes. 21 Q. Have you previously testified before the Rate Commission of the St. Louis 22 Metropolitan Sewer District? 23 A. No. 24 Q. On whose behalf are you appearing in this proceeding? 25 A. I am appearing on the behalf of Intervenor Home Builders Association of St. 26 Louis and Eastern Missouri, a group representing more than 600 members in the 27 home building industry, many of whom operate within the Metropolitan St. Louis 28 Sewer District (“MSD” or “District”). 29 Q. Please describe the purpose of your testimony. 30 A. The scope of my testimony is limited to addressing the District’s proposed 31 Stormwater Tax Change, and the various cost considerations associated with the 32 installation, operation, and maintenance of Best Management Practices (“BMPs”) 33 as required by the District in nearly all new residential and commercial 34 construction over one-acre. 35 Q. Please provide a brief summary of your testimony and any recommendations 36 you may have for the Rate Commission in this proceeding. 37 A. The following is a summary of my testimony and my recommendations in this 38 proceeding. 39 (1) The installation, operation, and maintenance of BMPs in both the 40 residential and commercial context result in significant costs and expense 41 to the consumer, while providing a direct and proximate benefit to the 42 District through reductions in the quantity of stormwater runoff and 43 improvements to the quality of stormwater runoff. 44 (2) Because the District has been unable to articulate a causal connection 45 between property value and the value of service provided by the District, it 46 is my opinion that the District’s proposed Stormwater Tax Change based 47 on a District-wide ad valorem tax of 10 cents per $100 of assessed 48 property value fails as a fair and equitable taxing methodology. 49 (3) If the District incorporates into the proposed Stormwater Tax Change a 50 consideration for impervious area or a credit program based on factors 51 such as volume reduction, peak flow reduction, or water quality control, I 52 believe a fair and equitable taxing methodology could be established. 53 BEST MANAGEMENT PRACTICES (BMPs) 54 Q. Please describe what Best Management Practices (“BMPs”) are as they relate 55 to stormwater management. 56 A. BMPs are techniques, measures, and structural controls used to manage the 57 quantity and improve the quality of stormwater runoff with the goal of reducing 58 or eliminating contaminants that are collected by stormwater from reaching 59 creeks, streams, and rivers. In order to comply with the St. Louis County Phase II 60 permit, the District along with various municipalities and St. Louis County, 61 require that BMPs be incorporated into the site plans for all new construction 62 within the District taking place on tracts of over one (1) acre. 63 Q. Who is responsible for installing, operating, and maintaining BMPs? 64 A. Generally speaking, the installation, operation and maintenance of BMPs is the 65 responsibility of the landowner. Nonetheless, the District does require that an 66 Annual BMP Maintenance Report be submitted to the District for all commercial 67 and residential homeowner association maintained facilities to ensure 68 maintenance is conducted in accordance with the owner’s BMP Maintenance 69 Agreement and the Stormwater Management Facilities Report (SWMFR). The 70 Annual Report consists of a completed inspection checklist and/or maintenance 71 log, a narrative description of corrective action measures taken, photographs, and 72 any other documentation demonstrating compliance with the BMP Maintenance 73 Agreement and the owner’s SWMFR. The costs associated with issuing the 74 Annual Report are also bore by the property owner or homeowners association as 75 the case may be. 76 Q. Can you provide any estimates for the cost of installing a BMP? 77 A. Yes. The most common BMP I encounter is the bioretention “cell” or 78 “basin.” Bioretention areas generally consist of a multi-layered system of 79 permanent vegetation; an organic soil layer; a graded filter of sands and gravels 80 below the soil; a perforated underdrain pipe beneath the graded filter to ensure the 81 bioretention will drain; and an overflow structure to pass storms larger than the 82 bioretention design storm. These facilities are flexible making them attractive to 83 various developments. The cost associated with the installation of bioretention 84 areas varies, but a rough estimate would be between $18-$20 per square foot. 85 Q. Can you provide any estimates for the cost of operating and maintaining a 86 BMP? 87 A. Because maintenance costs vary depending on the t ype of BMP facility and 88 technology in place, it is difficult to estimate the cost associated with operating 89 and maintaining a BMPs. I understand the District has provided some literature 90 that predicts operation and maintenance costs of BMPS to be ten-percent (10%) of 91 total construction costs for BMPs costing $10,000 and 5% for those costing 92 $100,000. While I have not confirmed these estimates, I would not dispute the 93 District’s findings. 94 STORMWATER RATE PROPOSAL 95 Q. Based on your experience, do you agree with the District’s position that the 96 proposed Stormwater Tax Change based on an ad valorem tax is fair and 97 equitable? 98 A. No. Without considering impervious area or a credit-based program related to 99 stormwater quantity and quality, the District’s Stormwater Tax Change is not 100 equitable. Charging customers solely on the basis of their property value has no 101 relation to the property’s burden on the District’s stormwater system. 102 Consider two customers with identical property values; one customer lives 103 in a new subdivision which is required to have modernized stormwater services 104 (including BMPs) while the other lives in an older subdivision which has been 105 identified by the District as needing stormwater improvements. The customer 106 living in the new subdivision has contributed to the improvement of the District’s 107 stormwater system while simultaneously being held responsible for the costs 108 associated with maintaining the BMPs within their subdivision. By charging these 109 customers at the same rate as those in the older subdivision, the District is in 110 effect requiring these customers to subsidize the cost of providing stormwater 111 improvements to other customers. 112 Without a credit program to equitably distribute the proposed stormwater 113 costs based on the actual cost of providing stormwater services to a given 114 customer, the District’s proposed Stormwater Tax Change is inequitable. 115 Q. Do you believe that the District’s previously proposed taxing methodology 116 based on an impervious surcharge rate was fair and equitable? 117 A. In my opinion the impervious surcharge method previously proposed by the 118 District did a better job of establishing a nexus between the cost charged to a 119 customer and the burden that customer has on the District’s stormwater system. I 120 understand the District was unable to implement this method because it was not 121 brought to a vote, thereby violating the Missouri Constitution’s Hancock 122 Amendment. Nonetheless, I believe the District should consider a methodology 123 that factors into consideration the impact an individual customer has on the 124 District’s stormwater system and the actual cost of service to that customer. 125 Q. Does this conclude your rebuttal testimony? 126 A. Yes. 127