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Exhibit MSD 10 - 2011 Rate Commission Recommendation Report
Exhibit MSD 10 TABLE OF CONTENTS INTRODUCTION 2 EXECUTIVE SUMMARY 3 BACKGROUND 9 METROPOLITAN ST. LOUIS SEWER DISTRICT 9 THE RATE COMMISSION 10 APPOINTMENT 11 RATE COMMISSION'S OPERATIONAL RULES 13 RATE COMMISSION'S PROCEDURAL SCHEDULE 13 RATE COMMISSION'S PROCEEDINGS 14 PROPOSALS 28 The District's Proposal 28 Intervenor MIEC's Proposal 34 Intervenor BJH's Proposal 35 Intervenor Robert A. Mueller's Proposal 36 Intervenors AARP and CCM's Proposal 36 The Rate Consultant's Proposal 36 RATE COMMISSION RECOMMENDATION 37 CRITERIA FOR RECOMMENDATION 38 First Criteria: Whether the Rate Change Proposal is necessary to pay interest and principal falling due on bonds issued to finance assets of the District? 39 Second Criteria: Whether the Rate Change Proposal is necessary to pay the costs of operation and maintenance? 56 Third Criteria: Whether the Rate Change Proposal is in such amounts as may be required to cover emergencies and anticipated delinquencies? 71 FACTORS FOR RECOMMENDATION 81 First Factor: "Is consistent with constitutional, statutory or common law as amended from time to time" 81 Second Factor: "Enhances the District's ability to provide adequate sewer and drainage systems and facilities, or related services" 103 Third Factor: "Is consistent with and not in violation of any covenant or provision relating to any outstanding bonds or indebtedness of the District" 107 Fourth Factor: "Does not impair the ability of the District to comply with applicable Federal or State laws or regulations as amended from time to time" 121 Fifth Factor: "Imposes a fair and reasonable burden on all classes of ratepayers" 129 RECOMMENDATIONS 170 MINORITY REPORTS 172 ATTACHMENT A 179 PROCEEDINGS INDEX 180 INTRODUCTION The Wastewater Rate Change Proposal of the Metropolitan St. Louis Sewer District (the "District") was presented to the Rate Commission on May 10, 2011. The Rate Commission initiated certain proceedings in order to provide for the advance submission of written testimony, the conduct of three technical conferences, a prehearing conference, discovery procedures, public hearings, and the filing of post -hearing briefs with procedural fairness to the parties. See Charter Plan of the Metropolitan St. Louis Sewer District (hereinafter "Charter Plan"), § 7.280. Missouri Industrial Energy Consumers ("MIEC"); Barnes Jewish Hospital (`BJH"); Covidien; Robert A. Mueller, AARP, and Consumers Council of Missouri ("CCM") intervened and participated in these proceedings. The record of these proceedings is contained in the computer disk delivered with this Report. All of the written testimony, exhibits, document requests and responses, transcripts of testimony, legal memoranda, and other materials contained therein have been admitted into evidence and considered by the Rate Commission Delegates for the purpose of making the findings and determinations contained in this Report. These proceedings (the "Proceedings") are incorporated herein by reference. The Rate Commission's Report to the Board of Trustees (the "Board") of the District is due within 120 days of receipt of the Rate Change Proposal, or September 6, 2011, unless the Board of Trustees shall upon application of the Rate Commission extend the period for one additional 45-day period. The Rate Commission submitted a request for such an extension on June 14, 2011, and on June 29, 2011, the Board of Trustees approved an extension of the period to October 21, 2011. See Charter Plan, § 7.290(f). 2 This is the Report required by the Charter Plan and has been adopted by a majority of the Rate Commission Delegates. See Charter Plan, § 7.280(f). EXECUTIVE SUMMARY The District's Rate Change Proposal1 was presented to the Rate Commission on May 10, 2011. The Rate Change Proposal presents the District's proposed use of $945,000,000 in bond financing and $171,000,000 in cash financing to fund its Capital Improvement and Repairs Program (CIRP) through FY2016; to provide the funds needed to comply with regulatory requirements relating to deficiencies in the District's wastewater system, including sewers, pump stations, and treatment plants; and to satisfy the requirements of the Consent Decree in the matter captioned United States of America and the State of Missouri vs. the Metropolitan St. Louis Sewer District (See Report, pp. 20-27). The District proposes to finance the required capital improvements by a combination of wastewater user charge revenues, available fund balances, revenue bond proceeds, Missouri Clean Water State Revolving Fund loan proceeds, potential commercial paper proceeds, grants and contributions, other operating revenues, and interest income. The impact of the Rate Change Proposal upon wastewater rates, if principally funded by bond financing, is described in the following table. 1 This summary of the Rate Setting Documents does not purport to be complete and reference is made to the full text of the Rate Setting Documents or a complete recital of the terms of the rate changes proposed by the District. 3 Comparison of Existing and Proposed Wastewater Rates Proposed Wastewater Charges Effective July 1 Type of Monthly Charge (per Bill) Existing FY2012 (1) FY2013 FY2014 FY2015 FY2016 Base Charge Billing & Collection Charge $ 2.60 $ 2.65 $ 3.25 $ 3.45 $ 3.60 $ 3.70 System Availability Charge 8.80 9.20 10.00 11.50 13.40 15.75 Total Base Service Charge $ 11.40 $ 11.85 $ 13.25 $ 14.95 $ 17.00 $ 19.45 Compliance Charge (2) Uniform Compliance Charge $ 30.85 $ 31.95 - - - - Proposed Tiered Compliance Charge: Tier 1 - - $ 23.00 $ 16.00 $ 9.00 $ 2.35 Tier 2 - - $ 40.25 $ 42.60 $ 44.05 $ 45.35 Tier 3 - - $ 85.70 $ 90.65 $ 93.80 $ 96.55 Tier 4 - - $ 125.65 $ 132.95 $ 137.50 $ 141.55 Tier 5 - - $ 165.60 $ 175.20 $ 181.20 $ 186.65 Volume Charge Metered - $/Ccf $ 2.02 $ 2.11 $ 2.39 $ 2.72 $ 3.07 $ 3.45 Unmetered Each Room $ 1.32 $ 1.38 $ 1.55 $ 1.77 $ 2.00 $ 2.24 Each Water Closet 4.93 5.15 5.83 6.64 7.49 8.42 Each Bath 4.11 4.30 4.86 5.53 6.24 7.01 Each Separate Shower 4.11 4.30 4.86 5.53 6.24 7.01 Extra Strength Surcharges - $/ton (2) Suspended Solids > 300 mg/1 $ 222.62 $ 231.35 $ 231.35 $ 231.68 $ 257.18 $ 265.68 BOD > 300 mg/1 596.72 620.14 620.14 620.14 652.14 673.30 COD > 600 mg/1 298.36 310.07 310.07 310.07 326.07 336.65 Typical Residential Bill - $/Bill (3) User Charge Portion $ 24.28 $ 26.19 $ 27.56 $ 29.87 $ 32.75 $ 34.76 Capital Charge Portion 1.26 2.54 4.81 6.84 8.81 12.29 Total $ 27.56 $ 28.73 $ 32.37 $ 36.71 $ 41.56 $ 47.05 Ccf - Hundred Cubic Feet mg/1 - milligram per liter (1) Final rate increase of Rate Change Plan approved April 2008. (2) Applicable only to nonresidential customers. (3) Based on contributed wastewater volume of 8 Ccf per month. 4 In the event that the voters of the District do not approve bond financing for the CIRP, the District proposes cash financing in order to comply with the terms of the Consent Decree. The financial analysis supporting the development of the alternative cash financing rate is contained in Tables G-1 through K-10 in Ex. MSD 18Z. These tables correspond to the same tables in Ex. MSD 4A for a CIRP, if principally funded by bond financing. The impact of the Rate Change Proposal upon wastewater rates, if principally funded by cash financing, is described in the following table: 5 317 Nu. ;Type of Monthly_ Charge _ 319 ....A.* I r 320 Base Charge - Stipp A t3 C 13 E 1 P T. G 308 File: FY2013PAYCORatcs. DRAFT - For Rate Commission Review 309 C11ATT S - Contppr son of Rates June 27,2011 10:06 a.m. 310 XFcr125. t K 311 _ Table 3-21 312 Comparison of Existing and Proposed Wastewater Rates !. 1 . 313 ;.. I 1 f ' 314 - ! 1.. ,. - ..... 1.. 315 Line ' i - Proposed Wastewater Charges Existing.. 1 2011 2012(a) . __ ___ 21113 1 _ 2014 __ I 2015 2016 .:1- . ...!(-.1K-1 K-1 • K-1 ' K_1 K1 321 1 Billing & Cplieetlon Charge 2.60 , 2,60 + 2.65 I. _ . 3,25 ; 3.45 . 3.60 3.70 • 322 2 r System Availability Charge ( 8.80 j 8,80 ! 9.20 26.SD i. _ . 26,60 f 26.80 27.10 324 3 Total Base (Residential) _S i rvice Charge . .. 11.40 : 1 L40 1 • 11.85 : 29,75 _ 30.05 30.40 - ....... • . 30 80 325 I,_... .} .. Ver la K-8 326 .Compliance Charge - 5/13i11 {b) _ ' 327 4 Tier 1 30.85 I 30.85 31.95 ' 23.00 f 16.00 : 9.00 - 2.35 328 _ 5 i.Tier 2 _ ' , _ 30,85 _ 30.85 : 31,9E 40.30 _ 42.70 i 44.20 _ _ 45.55 329 6 Tier3 [ j 30.85 30.85 31,95 85.80 90.901 94.20 97,05 330 7 1 Tier4 _ 30.85 30.85 ' 31.95 125.80 • 133.30 l 138.10 142.30 331 8 t. Tiers .. 30.85 , - 30.85 1 - 31.95 - 165.8_. 0 I 175.65 I _ 181,95 __ 187;50 I 332 :... _ i.. .. .._.... ..., 333 rTotal Nonresidential Setvlae C1large . . . . _ 334 Tier 1 i 42.25 1 42.25 . 43.80 __. 52.75 46.05 _ , 39.40 3 3.15 335 Tier.2. _ 42.23 42.25 43.80 , 70.05 72.75 1 74.60 76.35 336 Tier 3 42.25 } 42.25 43.80 115.55 120.95 • •.. 124.60 1 27.85 337 rTier4 .._ t 42,25 • 42.25 t 43.80 155.55 163.35 168.50 173.10 Tiers _ _ 42.25 42.25 43.80 195,55 205.70 21235 218.30 340 }VolumeCltarge : F. 341 9 Metered - $:Ccf 2.02 2.02 ` 2.11 5.45 _5.45 _ 5.4545 342 Unmetered - a/13i11 I_ ^� .. - 5._ 343 10 Each Room 1.32 _ 1.32 I 1.38 3.55 3.55 3.55 ' _ 3:55 344 11 Each Water Closet 4.93 _ 4.93 i.15 _ 13.30 13.30 13.30 13.30 345 12 Each.Bath T _ _4.11 1 4,11 - - 4.30 __. 1108 I I.08 11.08 11.08 346 _,13 , - _ •.Each Sepamtc Shower 4.11 . 4,11 1 4.30 11.08 ' 11081 _ .1108 11.08 347 348 [Extra Strength Suarharges - 5/ton (bj_ 349 14 : Suspended Solids over 300, mgrl _ _ 222,62 v 222.62 t _231.35 267.35 1 267.35 i _ 267.35 267:35 350 15 I E30D over 300 mg/1 ; _ _ 596-72 i_ 596.72 ' 620,,14 685 94 685.94 685.94 : 685 94 351 16 COD over Wm>!! 298,36 298.361 310.07, 342971_- 34297 342.97.. 342.97 352 1_ _ -.. i k 353 'Typical Residential Bi0 - $/Bin (c) ! I _ 1 .L , t. 354 17 I User charge Portion . - .: 26,30 ' 24.28 i 26.14 37.29 : 30. 71 33.41 1 35.31 355, 18 Capital Charge Portion 1.26 1.26 2.54 36.061 42,94 1 40.59 ; 39,09 357 19 ` Total ( i 27,56 27.56 28.73 73.35 i 73.65-h 74.013; 74,40 358 f _. . 359 Ccf - Hundred Cubic Feet 1 360 nr8/1- millipztam per liter I I 1 361 Sal 2012 approved rates to be effective July 1, 2011. [ • 362 (b) :Applicable only to non-residential customers. • ; - 1 363, (c) - Based on contributed wastewater volume of 8 Ccf per month 1 i 364 _ _ Low Income Impact nnTypica. Residential.f ill - S!Ccf SO.03! 1 50.039 S0.108.; 50.126 1 _ 30.154 ' _ 50.174 365 1 Annual Pe:ventage Increase in Typical Residential 13111. - - 0.00%1 4.25% 155.31 %; 0.41%' 0.48%1 0.54% 6 366 File: FY2013PAYGORates. 367 COMR - Comparison of OM&R Rates DRAFT - For Rate Commission Review Ver la June 27, 2011 10:06 a.m. K-9 368 369 Comparison of Existing and Proposed User Charges 370 (OM&R Portion of Rates) 371 372 373 line 375 No._ 'Tye of Monthly Charge n..,, 377 i i 378 '.Base Charge - S/dill _ I 379 1 ` Billing & Collection Charge 380 2 - , System Availability Charge 1.-. Existing Proposed User Charges 2011 2012 i 2013 ! K-6... _ • 2.60 2,60 8.80 8.80 Total Base (Residential) Service Charge 11.40 •• 1 . ,_ 1..... . ! .... Tier 1 Compliance Charge - $/Bill (a) 30.g5 ITotai Tier 1 Nonresidential Service Charge T 42.25 W • i 1.40 30.85 42.25I 2.65 3.25 6.41}_ 11.88 9.06 15.13 31.95 23.00 41.01 4u _ •38.13 __ -. 388 ; Volume Charge .._ .- --.. ,.. -, (.. ,.__ ... __ -- -.. Y- 389 6 Metered-1;/Cef - 2.02 ` 2.02 390 .. Unrtietered . $f Bill 3391 7 L_ Each Room i i .32I. l .32 ' 1.03 ! 1.83 392 8 ! Each Water Closet -1• 4.93....... •-- 4 :93 '--... 3.86 i.., 6.86 393 9 . Each Bath. ' 4.11 l 4.11 ' 3.22 ' 5.72 394 I i Bach Separate Shower i. . _._ i .. _... _ __4.11 _. _. 4.11 L. 3.22 5.72 395 r i l 396 Extra Strength Surcharges -.Mob (a) i 397 11 Suspendcd Solids over 300 m f1 f 222.62a -_ 222,62 178.05 290.66 398 12 BOD over 30©m f 596.72 { 596.72 515-76 692.86 399 13 COD over 600 ingfl . ! 298.36 F 298.36 257.85 346.43 400 - 401 Typical Residential Bilt - S/8ii1(b) a I 402 14 User Charge Portion _ .. { 26.30 .Cr...---26.30• 26.19 37.29 403 15 Capital Charge Portion _ 1.26 •1.26 2.54 36.06 405 16 : Total - 27.56 t • 27.56 28.73 73.35 406 •- L. t 407 408 409 410 411 - { Ccf- Hundred Cubic Feet - _.._I _._ .... _. 1.. , _ .. mg/1 - milligram per liter .. _{ { (a) [Applicabie only to nonresidential customers. (b) {Based on contributed wastewater volume of 8 Ccf per month. 2.77 7 A[ i 1 C D J E 1 F L G { H 412 File: FY2013PAYGORates. DRAFT - For Rate Commission Review Ver la 413 CVC - Component Volume Charges r June 27, 2011 10:06 a.m. K-10 414 f-fi 1 1 1 I 415 j• i._... ... _... ... ; .. Volume 416 'Volume Charge Components°.. I I - Charge 418 1- T 413 [Volume Component _ x 4.90 420 'Wastewater Strength Components ' 421 ! -kb1175 parts/1,000,000 parts x 6.240 lbs;Ccf / 2,0001bs/ton x $685.94/ton —x _ . 0.37 422 I Si- 220 parts/1,000,000 parts6,2401b�/Ccf / 2,0001bs'ton x $267.3Mo. n— 0.18 424 1Total Volume Charge_ ; __ ..... :..... _.. ... 5,45 ..._.._. 425 -. —1 _ �- � .+ s. .. The Rate Commission, after consideration of all of the facts and circumstances disclosed in the Proceedings, finds and determines that the Rate Change Proposal is necessary to pay (i) interest and principal falling due on bonds issued to finance assets of the District; (ii) the costs of operation and maintenance; and (iii) such amounts as may be required to cover emergencies and anticipated delinquencies. See Charter Plan, § 7.040. The Rate Commission, after consideration of all of the facts and circumstances disclosed in the Proceedings, finds and determines that the Rate Change Proposal, and all portions thereof: (i) is consistent with constitutional, statutory and common law as amended from time to time; (ii) enhances the District's ability to provide adequate sewer and drainage systems and facilities, or related services; (iii) is consistent with and not in violation of any covenant or provision relating to any outstanding bonds or indebtedness of the District; (iv) does not impair the ability of the District to comply with applicable Federal or State laws or regulations as amended from time to time; and (v) imposes a fair and reasonable burden on all classes of ratepayers. See Charter Plan § 7.270. 8 BACKGROUND. Metropolitan St. Louis Sewer District Article VI § 30(a) of the Missouri Constitution has authorized "The people of the city of St. Louis and the people of the county of St. Louis ... to establish a metropolitan district or districts for the functional administration of services common to the area included therein ...." Mo. Const. art. VI, § 30(a). At a special election on February 9, 1954, the freeholders adopted and the voters of the City of St. Louis and St. Louis County approved the Charter Plan (as amended on November 7, 2000) creating the Metropolitan St. Louis Sewer District ("District"). The Charter Plan establishing the District has been held to be constitutional. State on inf. Dalton v. Metro. St. Louis Sewer Dist., 275 S.W.2d 225 (Mo. 1955) (en banc). The District is a body corporate, a municipal corporation, and a political subdivision of the state, with power to ... act as a public corporation within the purview of the Plan, and shall have the powers, duties, and functions as herein described. Charter Plan, § 1.010. The Missouri Constitution provides that upon the adoption of the Charter Plan, it "shall become the organic law of the territory therein defined, and shall take the place of and supersede all laws, charter provisions and ordinances inconsistent therewith relating to said territory." Mo. Const. art. VI, § 30(b). As explained by the Missouri Supreme Court, "[t]he apparent intent is to give the freeholders, with the approval of the voters, power to do whatever the Legislature could ordinarily do with respect to the creation, organization and authority of such a district." Dalton, 275 S.W.2d at 228. As such, the Charter Plan is similar to legislation, and thus, the District has only such powers as are delegated to it by the Charter Plan, or as may properly be implied from the nature 9 of the duties imposed. State on inf. McKittrick v. Wymore, 132 S.W.2d 979, 987-88 (Mo. 1939) (en banc). To determine whether a certain action of the District is authorized by the Charter Plan, it must be construed to further the intent of the voters. Centerre Bank of Crane v. Dir. of Revenue, 744 S.W.2d 754, 759 (Mo. 1988) (en banc). Intent must be ascertained by examining the plain language of the Charter Plan reviewed as a whole. Staley v. Dir. of Revenue, 623 S.W.2d 246, 248 (Mo. 1981) (en bans). It is clear that authorization was provided to residents in St. Louis City and County to establish a metropolitan sewer district, Mo. Const. art. VI, § 30(a), and that authorization was provided by the voters of St. Louis City and County to authorize the activities which carry out the intent expressed and implied from the Charter Plan, including the establishment of the Rate Commission. The Rate Commission The Rate Commission was established by the amendments to the Charter Plan approved by the voters at a general election on November 7, 2000, to represent commercial -industrial users, residential users and other organizations interested in the operation of the District, including by way of example but not by way of limitation, organizations focusing on environmental issues, labor issues, socio-economic issues, community -neighborhood organizations and other nonprofit organizations. See Charter Plan §7.230. The Rate Commission shall review and make recommendations to the Board regarding proposed changes in wastewater, stormwater rates, and tax rates. Specifically, upon receipt of a Rate Change Notice from the District, the Rate Commission is to recommend to the Board changes in a wastewater, stormwater, or tax rate necessary to pay (i) interest and principal falling due on 10 bonds issued to finance assets of the District; (ii) the costs of operation and maintenance; and (iii) such amounts as may be required to cover emergencies and anticipated delinquencies. See Charter Plan, § 7.040. Any change in a rate recommended to the Board by the Rate Commission pursuant to § 7.270 of the Charter Plan is to be accompanied by a statement of the Rate Commission that the proposed rate change (i) is consistent with constitutional, statutory, or common law as amended from time to time; (ii) enhances the District's ability to provide adequate sewer and drainage systems and facilities, or related services; (iii) is consistent with and not in violation of any covenant or provision relating to any outstanding bonds or indebtedness of the District; (iv) does not impair the ability of the District to comply with applicable Federal or State laws or regulations as amended from time to time; and (v) imposes a fair and reasonable burden on all classes of ratepayers. Appointment On December 9, 2010, the District enacted Board Ordinance No. 13182, as required by § 7.230 of the Charter Plan, and designated the Rate Commission Representative Organizations. The Ordinance designated: Associated General Contractors of St. Louis, Cooperating School Districts, The Engineers' Club of St. Louis, Greater St. Louis Labor Council, Home Builders Association of Greater St. Louis, The Human Develop. Corp. of Metro. St. Louis, League of Women Voters, Missouri Botanical Garden, Missouri Coalition for the Environment, Missouri Industrial Energy Consumers, Regional Chamber & Growth Association, St. Philip's Lutheran Church, St. Louis Council of Construction Consumers, St. Louis County Municipal League, and West County Chamber of Commerce. Each of these Organizations designated an individual to 11 serve as a Rate Commission Delegate and notified the Rate Commission. The Delegates currently comprising the Rate Commission are: DELEGATE REPRESENTING Nancy Bowser League of Women Voters Paul Brockmann Missouri Botanical Garden Ida Casey St. Philip's Lutheran Church Brad Goss Home Builders Association of Greater St. Louis Glenn Koenen West County Chamber of Commerce George Liyeos St. Louis County Municipal League Mike O'Connell Greater St. Louis Labor Council Tom Post Cooperating School District Eric Schneider Regional Chamber & Growth Association John L. Stein Missouri Industrial Energy Consumers Leonard Toenjes Associated General Contractors of St. Louis George D. Tomazi The Engineers' Club of St. Louis Mike Seidel St. Louis Council of Construction Consumers Ralph Wafer Missouri Coalition for the Environment Vacant The Human Develop. Corp. of Metro. St. Louis Under the Charter Plan, the Board is to identify the Rate Commission Representative Organizations for a term of years determined by the Board. Charter Plan, § 7.230. Each Rate Commission Representative Organization selected by the Board shall have the right to designate a Rate Commission Delegate to the Rate Commission for a term of six years or the completion of any unexpired terms. Id. at § 7.240. This section continues, "Prior to the expiration of a Rate Commission Representative Organization's term, the Board of Trustees shall designate organizations within the District to succeed such Rate Commission Representative 12 Organization." Id. at § 7.240. Nothing bars a Rate Commission Organization from being named to successive terms. Id. Rate Commission's Operational Rules On August 16, 2001, and under the authority of §§ 7.250 and 7.280(e) of the Charter Plan, the Rate Commission adopted Operational Rules, Regulations and Procedures as amended on March 21, 2002, April 16, 2003, March 2, 2007, January 18, 2008, and March 7, 2011, to govern the activities of the Rate Commission. Rate Commission's Procedural Schedule On May 10, 2011, the Rate Commission, under the authority of § 7.280(e) of the Plan and pursuant to § 3(3) of the Operational Rules, adopted a Procedural Schedule for the Consideration of a Wastewater Rate Change Notice. On July 8, 2011, the Rate Commission adopted a Revised Procedural Schedule for Consideration of the Wastewater Rate Change Notice. Additional addenda to the Procedural Schedule were approved on August 2, 2011 and September 6, 2011. Under the Charter Plan, the Rate Commission must issue its Rate Recommendation Report to the Board and the public no later than 120 days after receipt of a Rate Change Notice. Charter Plan, § 7.280(f). As a result, the Recommendation Report for the Wastewater Rate Change would be due September 6, 2011. Section 7.280(f), however, allows the Board, upon application of the Rate Commission, to extend the period of time for the issuance of the Rate Commission Report for one additional 45 day period. By correspondence dated June 14, 2011, the Rate Commission made such application to the Board, asking the deadline to be extended until October 21, 2011. The Board granted the request for an extension on June 29, 2011, and the Rate Commission Report is now due October 21, 2011. 13 Rate Commission's Proceedings Under procedural rules adopted by the Rate Commission, any person who would be affected by the Wastewater Rate Change Proposal has an opportunity to submit an application to intervene in the rate change proceedings. Applications to intervene were originally granted for: (i) Missouri Industrial Energy Consumers ("MIEC"); (ii) Barnes Jewish Hospital ("BJH"); (iii) Covidien; and (iv) Robert A. Mueller. On May 13, 2011, the District submitted to the Rate Commission prepared Direct Testimony of Jeffrey L. Theerman, Susan M. Myers, Brian L. Hoelscher, Jonathan Sprague, Janice M. Zimmerman, Karl J. Tyminski and Keith D. Barber. On May 26, 2011, the Rate Commission submitted its Discovery Request to the District. On June 7, 2011, the District filed its Responses and on June 10, 2010, the District filed an Amendment to its Responses. On September 16, 2011, the District filed its Additional Response to Question 14 of the Rate Commission's First Discovery Request. On June 7, 2011, Intervenor MIEC submitted its Discovery Request to the District. On June 17, 2011, the District filed its Responses. On June 13, 2011, a Technical Conference was held on the record regarding the Rate Setting Documents and the Direct Testimony filed with the Rate Commission by the District. The purpose of the Technical Conference was to provide the District an opportunity to answer questions propounded by members of the Rate Commission; then by any Intervenor; and finally by Lashly & Baer, Legal Counsel to the Rate Commission. On June 24, 2011, the Rate Commission submitted its Second Discovery Request to the District. On July 8, 2011, the District filed its Responses. 14 On July 1, 2011, Intervenor MIEC submitted its Second Discovery Request to the District. On July 11, 2011, the District filed its Responses, and on July 12, 2011 the District filed an Amendment to its Responses. On July 13, 2011, Intervenor MIEC submitted its Third Discovery Request to the District. On July 20, 2011, the District filed its Responses. On July 15, 2011, Intervenor Robert A. Mueller submitted his Discovery Request to the District. On July 22, 2011, the District filed its Responses. On July 15, 2011, Intervenor BJH submitted its Discovery Request to the District. On July 25, 2011, the District filed its Responses, and on August 1, 2011, the District filed an Amendment to its Responses. On July 15, 2011, AARP and CCM filed applications to intervene and on August 2, 2011, those subsequent applications were granted. On July 18, 2011, Rebuttal Testimony of Michael P. Gorman was submitted by Intervenor MIEC. On July 18, 2011, Rebuttal Testimony of William Stannard was submitted on behalf of the Rate Commission. On July 18, 2011, Rebuttal Testimony of Billie LaConte was submitted on behalf of Intervenor BJH. On July 20, 2011, Intervenors MIEC, BJH and Robert Mueller filed a Motion to Compel Discovery Responses from the District, and on July 27, 2011, the District filed a Response in Opposition. On July 22, 2011, Intervenor MIEC submitted its Fourth Discovery Request to the District, and on July 28, 2011, the District filed its Responses. 15 On July 28, 2011, the District submitted its Discovery Request to the Rate Commission. On August 8, 2011, Raftelis Financial Consultants, Inc., consultant to the Rate Commission filed its Response. On July 28, 2011, the District submitted its Discovery Request to Intervenor MIEC. On August 8, 2011, Brubaker & Associates, Inc., consultant to MIEC filed its Response. On July 28, 2011, the District submitted its Discovery Request to Intervenor BJH. On August 15, 2011, Drazen Consulting Group, Inc., consultant to BJH, filed its Response. On August 2, 2011, the Rate Commission directed the District to file an electronic copy with formulas intact of the Rage Change Proposal (the Electronic Report) by August 10, 2011. On August 5, 2011, the District submitted its Second Discovery Request to Intervenor BJH, and on August 15, 2011, Billie LaConte, consultant to BJH, filed a Response. On August 5, 2011, the District submitted its Second Discovery Request to the Rate Commission, and on August 15, 2011, William Stannard, consultant to the Rate Commission, filed a Response. On August 5, 2011, the District filed its Second Discovery Request to Intervenor MIEC, and on August 15, 2011, Michael Gorman, consultant to MIEC, filed a Response. On August 8, 2001, a Technical Conference was held on the record regarding the Rebuttal Testimony. The purpose of the Technical Conference was to provide the Consultants to the Intervenors and the Rate Commission to respond to questions propounded by members of the Rate Commission, the District, the other Intervenors, and Legal Counsel. On August 10, 2011, the Rate Commission submitted a letter with a Confidentiality and Non -Disclosure Agreement regarding the Electronic Report prepared by Black & Veatch. On August 17, 2011, the Intervenors filed a Response to the Rate Commission's version of the 16 Confidentiality and Non -Disclosure Agreement. On August 19, 2011, the District filed a Response to Intervenors' Response. On August 22, 2011, the Rate Commission submitted a letter with a revised Confidentiality and Non -Disclosure Agreement. On August 11, 2011, Intervenor BJH submitted its Second Discovery Request to the District, and on August 22, 2011, the District filed its Response. On August 19, 2011, the Rate Commission submitted its Third Discovery Request to the District, and on August 29, 2011, the District filed its Response. On August 19, 2011, Surrebuttal Testimony of Jeffrey Theerman, Janice Zimmerman, Brian Hoelscher, Jeanne Vanda and Jonathan Sprague was submitted on behalf of the District. On August 25, 2011, the District filed its Amendment to Surrebuttal Testimony of Janice Zimmerman. On August 19, 2011, Surrebuttal Testimony of Michael Gorman was submitted on behalf of Intervenor MIEC. On August 19, 2011, Surrebuttal Testimony of Billie LaConte was submitted on behalf of Intervenor BJH. On August 24, 2011, Intervenor MIEC submitted its Fifth Discovery Request to the District, and on September 8, 2011, the District filed its Response. On August 29, 2011, Intervenor BJH submitted its Third Discovery Request to the District, and on August 30, 2011, the District filed its Response. On September 9, 2011, Intervenor BJH filed its Fourth Discovery request to the District, and on September 19, 2011, the District filed its Response. On September 16, 2011, the Rate Commission filed its Fourth Discovery Request to the District, and in September 26, 2011, the District filed its Response. 17 On September 16, 2011, the Rate Commission filed Supplemental Testimony of Thomas Beckley, Intervenor BJH filed Supplemental Testimony of Billie LaConte, and Intervenor MIEC filed Supplemental Testimony of Michael P. Gorman. On September 22, 2011, the District filed Responsive Testimony of Keith Barber and Brian Hoelscher. On September 26, 2011, a Technical Conference was held on the record regarding the Supplemental Testimony on the Electronic Model and Responsive Testimony on the Electronic Model. On September 27, 2011, Intervenors AARP and CCM filed Prehearing Conference Summaries. On September 28, 2011, a Prehearing Conference for the purpose of identifying any issues raised by the Rate Setting Documents and the prepared testimony previously submitted. On September 28, 2011, Rafielis Financial Consultants and Lashly & Baer, P.C., the District, Intervenors MIEC, BJH and Robert Mueller filed Prehearing Conference Summaries. On September 28, 2011, the Rate Commission filed its Fifth Discovery Request to the District, and on October 5, 2011, the District filed its Response. On October 5, 2011, the District, Lashly & Baer, P.C., Intervenors MIEC, BJH, Robert Mueller, AARP and CCM filed Prehearing Conference Reports. Ratepayers who did not wish to intervene were permitted to participate in a series of on - the -record public hearings conducted in five sessions beginning on August 16, 2011, and concluding on October 6, 2011. A Public Notice regarding these Proceedings was published in the St. Louis Post -Dispatch and in the St. Louis American. These Notices contained the time, dates and location of each of these conferences and hearings. 18 Public Notice regarding the Rate Change Proposal was published by the District in the St. Louis American on May 12-14, 2011, and again on May 20-22, 2011, and the St. Louis Business Journal on May 13, 2011. The District also published the Public Notice in several other St. Louis area local papers. The Public Notice contained the time, dates and location of each of the technical conferences and hearings. Similarly, Public Notice regarding these Proceedings was published in the St. Louis Post - Dispatch on May 20, 23, and 24, 2011 and in the St. Louis American on May 26, 2011, by the Rate Commission. This Notice contained the time, dates and location of each of the conferences and hearings. A Revised Public Notice was published in the St. Louis Post -Dispatch on July 20, 21 and 22, 2011 and in the St. Louis American on July 21, 2011. An additional public hearing session was held on October 6, 2011, for the purpose of (1) receiving into evidence any prepared testimony previously submitted to the Commission subject to any valid objections, together with the discovery responses and transcripts of the technical conferences; (2) permitting the Rate Commission members or those designated by the Rate Commission to ask questions regarding any issue addressed by the prepared testimony or any other element of the Proposed Rate Change; and (3) permitting closing statements by the District, any person who has been permitted to intervene, and Legal Counsel for the Rate Commission. A second Revised Public Notice adding an additional Public Hearing on October 6, 2011, was published in the St. Louis Post -Dispatch on September 8, 9 and 12, 2011 and in the St. Louis American on September 8, 2011. Under the Procedural Schedule adopted by the Rate Commission, as amended, the MSD Rate Commission had until October 21, 2011, to review and 19 make a recommendation to the MSD Board of Trustees as to whether the proposed rates should be approved, not approved or modified with suggested changes and then approved. During the Proceedings, Exhibits and Discovery Requests and Discovery Request Responses were introduced and on October 6, 2011, were admitted into evidence. These documents, together with the transcripts of testimony, written testimony, and certain other materials, are contained in the computer disk delivered with this Report and the Proceedings Index may be found at the end of the Report. The findings and determinations contained in this Report were considered at public meetings of the Rate Commission on October 6, 14, and 17, 2011, and adopted by Resolution of the Rate Commission on October 17, 2011. The Manual Often in these Proceedings reference is made to "The Manual." "Financing and Charges for Wastewater Systems" (2005) (the "Manual") was prepared in accordance with recognized engineering principles and practices in general use by wastewater utility management, municipal officials, engineers, accountants, and others concerned with financing and establishing charges for wastewater service. It is a practice manual prepared by the Financing and Charges for Wastewater Systems Task Force of the Water Environment Federation. The 2005 Manual replaces and substantially expands the previous 1984 guidance on wastewater utility financing. The Manual illustrates the various ways of allocating costs and developing rates and charges that reasonably and equitably reflect the cost of service. The Consent Decree On June 11, 2007, the United States of America, acting at the request and on behalf of the Administrator of the United States Environmental Protection Agency, and the State of Missouri 20 by the authority of the Attorney General of Missouri, filed a claim in the United States District Court for the Eastern District of Missouri against the Metropolitan St. Louis Sewer District captioned United States of America and the State of Missouri v. The Metropolitan St. Louis Sewer District, Civil Action No. 4:07-CV-01120, for injunctive relief and civil penalties alleging: unpermitted discharges from combined sewer system; violation of the proper operation and maintenance condition of the District's National Pollutant Discharge Elimination System (NPDES) permits; violation of the backup power condition in the District's NPDES permits; violation of the bypass prohibition condition in the District's NPDES permits; violation of the noncompliance reporting condition in the District's NPDES permits; failure to submit a Long Term Combined System Overflow (CSO) Control Plan pursuant to Part D.1 of the District's NPDES permits and Clean Water Act (CWA) § 308 Request; and violation of the general criteria special condition in the District's NPDES permits. The United States of America and the State of Missouri requested that the Court: • Order a permanent injunction enjoining the District from any and all ongoing and future violations of the CWA by ordering compliance with the Act; • Order a permanent injunction directing the District to take all steps necessary to come into permanent and consistent compliance with the prohibition on unpermitted discharges contained in Section 301(a) of the CWA; • Order a permanent injunction directing the District to take all steps as are necessary to prevent or minimize the imminent and substantial risk to human health posed by pollutants (raw sewage) originating in its publically owned treatment works in accordance with Section 504(a) of the CWA, 33 U.S.D. § 1364(a); 21 " O r d e r a p e r m a n e n t i n j u n c t i o n d i r e c t i n g t h e D i s t r i c t t o t a k e a l l s t e p s n e c e s s a r y t o a c h i e v e p e r m a n e n t a n d c o n s i s t e n t c o m p l i a n c e w i t h C W A a n d t h e r e g u l a t i o n s p r o m u l g a t e d t h e r e u n d e r , a n d a l l t e r m s a n d c o n d i t i o n s o f i t s N P D E S p e r m i t s ; " O r d e r a p e r m a n e n t i n j u n c t i o n r e q u i r i n g t h e D i s t r i c t t o s u b m i t a n d i m p l e m e n t a f u l l a n d c o m p l e t e L o n g T e r m C o m b i n e d S y s t e m O v e r f l o w C o n t r o l P l a n i n c o m p l i a n c e w i t h S e c t i o n 3 0 8 ( a ) o f t h e C W A , 3 3 U . S . C . � 1 3 1 8 ( a ) , a n d t h e p e r m i t c o n d i t i o n ( P a r t D . 1 ) o f t h e D i s t r i c t '