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HomeMy Public PortalAboutExhibit MSD 118 - Transcript of May 20, 2015 Public Hearing PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 1 1 2 3 4 5 6 7 8 METROPOLITAN ST. LOUIS SEWER DISTRICT 9 PUBLIC HEARING 10 MAY 20, 2015 11 12 CENTER OF CLAYTON 13 50 GAY AVENUE 14 CLAYTON, MISSOURI 15 16 17 (Hearing start time, 6:00 p.m.) 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 2 1 I N D E X 2 PAGE 3 Introduction by Mr. Hawes 5 4 Presentation by Mr. Hoelscher 9 5 Public Hearing Session 6 Richard Bose 38, 52 7 Sarah Harris 39, 44 8 Stan Mulvihill 39, 47 9 Fred Brooks 41, 51 10 Conclusion 53 11 12 13 14 (No exhibits marked.) 15 16 17 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 3 1 PUBLIC HEARING FOR THE METROPOLITAN ST. LOUIS 2 SEWER DISTRICT, produced and examined on May 20, 3 2015, between the hours of 6:00 in the evening and 4 7:05 in the evening of that day, at the Center of 5 Clayton, 50 Gay Avenue, Clayton, Missouri, before 6 Suzanne M. Zes, a Certified Court Reporter of the 7 State of Missouri. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 4 1 A P P E A R A N C E S 2 For the MSD Rate Commission: 3 Russell Hawes St. Louis County Municipal League 4 Nancy Bowser 5 League of Women Voters of St. Louis 6 Eric Schneider St. Louis Regional Chamber 7 Chan Mahanta 8 North County Incorporated 9 John L. Stein Missouri Industrial Energy Consumers 10 11 Also Present: 12 Brian Hoelscher Executive Director 13 14 15 16 17 18 19 20 21 The Court Reporter: 22 Suzanne Zes MIDWEST LITIGATION SERVICES 23 711 North Eleventh Street St. Louis, MO 63101 24 314.644.2191 314.644.1334 Fax 25 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 5 1 P R O C E E D I N G S 2 MR. HAWES: Good evening. I'm Russ 3 Hawes. I'm a member of the Metropolitan St. Louis 4 Sewer District Rate Commission and I'll be presiding 5 over the public hearing this evening. 6 With me today are the following MSD Rate 7 Commission members: Ms. Nancy Bowser, Mr. Chan 8 Mahanta and Mr. Eric Schneider. 9 The Charter Plan of the District was amended 10 at a general election on November 7th, 2000, and 11 established the Rate Commission to review and make 12 recommendations to the District regarding changes in 13 wastewater rates, stormwater rates, and tax rates 14 proposed by the District. 15 The Charter Plan requires the MSD Board of 16 Trustees to select organizations to ensure a fair 17 representation of all users of the District's 18 services on the Rate Commission. The Rate 19 Commission representative organizations are to 20 represent commercial-industrial users, residential 21 users and other organizations interested in the 22 operation of the District, including organizations 23 focusing on environmental issues, labor issues, 24 socio-economic issues, community-neighborhood 25 organizations and other non-profit organizations. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 6 1 The MSD Rate Commission currently consists of 15 2 members from organizations and institutions 3 throughout St. Louis City and County. 4 On February 26, 2015, the Rate Commission 5 received a Rate Change Notice proposing changes to 6 the District's wastewater rates and stormwater 7 revenues. The Rate Commission adopted Operational 8 Rules and a Procedural Schedule to govern the 9 proceedings on March 4th, 2015. 10 Under the current Procedural Schedule adopted 11 by the Rate Commission, which was extended by the 12 MSD Board of Trustees on May 14th, 2015 at the 13 request of the MSD Rate Commission, the MSD Rate 14 Commission has until August 10th, 2015 to review and 15 make a recommendation to the MSD Board of Trustees 16 as to whether the proposed rates should be approved, 17 not approved or modified with suggested changes and 18 then approved. 19 The MSD Rate Commission has engaged legal 20 counsel and a rate consultant independent of those 21 used by the MSD staff. 22 Under procedural rules adopted by the Rate 23 Commission, as amended, any person affected by the 24 Rate Change Proposal had an opportunity to submit an 25 application to intervene in these proceedings. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 7 1 Applications to intervene have been filed by the 2 Home Builders Association of St. Louis and the 3 Missouri Industrial Energy Consumers. These 4 applications have been granted. 5 Since February 26, 2015, the MSD Rate 6 Commission has received testimony from MSD staff. 7 The parties have also engaged in discovery requests. 8 Additional testimony from the intervenors and the 9 rate consultant will be filed. 10 A Prehearing Conference for the purposes of 11 identifying any issues raised by the Rate Setting 12 Documents and the prepared testimony previously 13 submitted will be conducted on the record. All 14 persons submitting testimony may participate in the 15 Prehearing Conference and each participant in the 16 Prehearing Conference shall submit a Prehearing 17 Conference Report describing the issues raised by 18 the Rate Setting Documents and the prepared 19 testimony, together with a brief description of such 20 participant's position, if any, on each issue and 21 the rationale therefor. 22 Ratepayers who do not wish to intervene are 23 permitted to participate in these on-the-record 24 public hearings conducted in nine sessions beginning 25 on May 11th, 2015, and concluding on June 9th, 2015. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 8 1 The Rate Commission published a Public Notice 2 regarding these proceedings in the St. Louis 3 Post-Dispatch and in the St. Louis American. These 4 notices contained the time, dates, and location of 5 each of the conferences and hearings. 6 The Public Hearing Session tonight is for the 7 purpose of permitting the District to present its 8 Wastewater and Stormwater Rate Change Proposal and 9 to permit any ratepayer an opportunity to comment. 10 We will begin with a presentation by the District, 11 followed by a public comment period. 12 Those wishing to speak should sign in on the 13 sheet provided and will be called on in the order of 14 the names listed thereon. Each ratepayer should 15 identify themselves and any organization represented 16 by such ratepayer. 17 Several housekeeping rules before we begin: 18 If you wish to present testimony please sign 19 in on the clipboard and I believe that's over there 20 to the side. Speakers will be recognized in the 21 order in which they sign up. 22 Several groups wrote in advance requesting 23 time to speak and they will be allowed to speak 24 first, if applicable. 25 Each ratepayer may have a maximum of ten PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 9 1 minutes to speak regarding the proposed rate change. 2 As the presiding officer, I can limit or expand that 3 time, as I deem necessary. 4 The restrooms are located straight out the 5 hallway in that direction and to the left. And we 6 have snacks and drinks in the back there as well. 7 So, with that, I'm going to turn it over to 8 Brian Hoelscher to present on behalf of the 9 District. 10 MR. HOELSCHER: Thank you, Mr. Hawes. 11 My name is Brian Hoelscher. I'm the executive 12 director at MSD. What we're going to provide for 13 you is a summary of a Rate Proposal that was 14 submitted to the Rate Commission by MSD staff. At 15 the end of the presentation the floor will be opened 16 and the Rate Commission will be looking for comments 17 regarding the proposal that we present here this 18 evening. 19 After the meeting, the whole meeting is over, 20 we do have additional staff here so if you have 21 other questions of MSD or other issues you wish to 22 discuss, we have folks here that can either answer 23 your question or go back and do some research and 24 get the answer for you in the very near future. 25 As an introduction to the proposal, there's PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 10 1 two things driving what MSD is looking to do. For 2 wastewater rates we are being driven by a Consent 3 Decree. That is an official document that we signed 4 and was also signed by the Department of Justice and 5 the EPA having to do with the wastewater work we 6 have to do. It sets the type of work we have to do 7 and the schedules. The cost of the projects you see 8 here are driven by schedules needed to meet that 9 agreement. 10 On the stormwater side you'll find that 11 because of the way MSD was developed approximately 12 one half of the public sewer system that is owned by 13 MSD has no revenue to support its operation and 14 maintenance. The District is looking to correct 15 that situation. 16 Again, please remember this is a summation of 17 the Rate Proposal. As I go through this there are 18 some references where they reference an appendix or 19 parts of our Rate Proposal. If you're interested in 20 the proposal itself and want to see some of the data 21 behind information we provide, you can go on the 22 website, W-W-W dot S-T-L-M-S-D dot com, to review 23 the Rate Proposal. We do have some copies up here 24 if you would like to take a glance at them this 25 evening as well. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 11 1 I'll go ahead and start the proposal -- or 2 the presentation. First of all, you want to 3 remember that MSD is essentially two utilities. 4 One, we provide a wastewater service and we collect 5 water that comes down sinks, toilets, washing 6 machines, showers, any other kind of floor drains, 7 that travels through miles of pipe, ends up in 8 treatment plants, gets treated per our permits and 9 discharged to the rivers in the area: the Missouri, 10 Mississippi and Meramec Rivers. 11 That service is currently funded through a 12 monthly wastewater bill for those who we provide 13 wastewater service for. Again, that's on a monthly 14 bill. That bill and those revenues can only be 15 spent on wastewater issues. We cannot spend them on 16 anything else. 17 We are also a stormwater utility. We perform 18 stormwater service. Any stormwater that doesn't hit 19 the ground and soak in or go directly to a local 20 creek or stream can go through a public storm sewer 21 system: inlets, manholes, storm sewers, in some 22 cases paved concrete channels that are MSD's. We 23 maintain those systems. 24 We are also required to address regulatory 25 requirements, that having to do with the pollutants PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 12 1 that are in stormwater runoff and enter the local 2 creeks and streams and impact your water quality. 3 We do have a permitting and policing responsibility 4 with regard to those services. 5 Stormwater, while there is a small 24 cent 6 per month fee on your wastewater bill, stormwater is 7 primarily paid for through your annual property tax 8 bill. We collect those monies. They are only spent 9 on stormwater and cannot be used for wastewater 10 purposes. 11 A little information on the Rate Commission. 12 It was established by the voters of the District in 13 2000 to provide public input on how MSD sets its 14 rates. It consists of 15 organizations representing 15 a broad cross-section of the community, as explained 16 earlier. It reviews all the proposed rate changes. 17 There are Charter-defined parameters that they will 18 review our proposal. They will take that 19 recommendation and it will be sent to our Board of 20 Trustees, who will perform the same review and 21 render a ruling on where we go with rates in the 22 future. 23 Again, this Rate Proposal is for our Fiscal 24 Year 2017 through 2020, which covers July 1, 2016 25 through June 30, 2020. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 13 1 Some information on our current wastewater 2 rates. Right now we are working under a previously 3 approved Rate Proposal that covers our Fiscals 13 4 through 16. Under that proposal we identified that 5 we needed to start approximately $971 million worth 6 of capital work in that four-year period. 7 Right now it appears we will appropriate and 8 start $890 million of capital work in that four-year 9 period or about 95 percent of the suggested 10 amount -- of the anticipated amount. That's a good 11 number. 12 We are on schedule. We are on budget with 13 all the requirements in the Consent Decree. That 14 decrease comes through some efficiencies in 15 engineering and, in some cases, some very low prices 16 we've gotten for some of the work that we're still 17 letting out. 18 Any of that money that's not spent on capital 19 this year is then available for capital projects in 20 this current -- through the rate cycle that is being 21 considered by the Rate Commission right now. 22 On the operation and maintenance side, again, 23 we are again on time and under budget. Our 24 operation and maintenance activities are mandated by 25 the Consent Decree. We anticipated a revenue need PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 14 1 of $716 million. By the end -- by June 30, 2016 we 2 anticipate to have spent $700 million or $16 million 3 less in budget. 4 Besides the operation of treatment plants and 5 pump stations located throughout our District, we 6 will have inspected about 62,000 manholes, 7 rehabilitated 6600 manholes, rehabilitated 1900 8 miles of sewers. And based on an analysis of two 9 similar storms that occurred years apart in the 10 northern half of the District we're estimating the 11 work to this date reduced basement backups by about 12 two-thirds from what they were previously. 13 Proposed wastewater rates, what are the 14 drivers? MSD's Project Clear is the program in 15 order to address these issues. The first one is get 16 the rain out. The primary issue we're addressing is 17 a wet weather issue. If it is not raining and as 18 long as nobody has flushed grease down our sewers 19 and clogged the pipes or a pipe hasn't collapsed, 20 all of that flow goes through our pipes, to the 21 plants, it's properly treated and discharged to the 22 local creeks and streams cleaner than it was -- 23 cleaner than the creeks and streams are. 24 That system works fine when it's not raining. 25 When it rains, stormwater either that's not supposed PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 15 1 to get in there or too much gets in the system 2 overcharges it and causes the system to overflow. 3 It either looks like overflows from our system or 4 basement backups. 5 One of the best, easiest and most 6 cost-effective ways to solve this problem is to get 7 the rain out, stop the stormwater from entering the 8 system originally. That's one of the biggest parts 9 of our program, whether that's entering the sanitary 10 system or the combined system. Stopping it from 11 going in and getting it out to the creeks and 12 streams without going through the system is the 13 cheapest way to address the issue. 14 Back-of-the-envelope analysis, it's four to 15 five times cheaper to do that than to actually 16 increase the size of the system. 17 We also need to repair and maintain the 18 current system we have. Some of it's over 150 years 19 old. We need to make sure we keep maintaining it so 20 it keeps lasting and, in some cases, we will be 21 required to build system improvements. 22 We look to do this in a financially 23 responsible manner and maintain our financial 24 stability. Currently MSD has a bond rating from 25 Standard & Poor's of AAA and AA1 and AA plus from PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 16 1 Fitch and Moody's. The analysis we performed and 2 the proposal we're presenting is aimed at 3 maintaining at least a AA bond rating so that if we 4 do have to borrow money we can do so at favorable 5 rates and be cost-effective for the ratepayers. 6 What is in this program? For the next four 7 years we're proposing to start $1.5 billion worth of 8 capital work that's distributed over the four fiscal 9 years that you see in this chart totaling 10 $1.5 billion. 11 Operation and maintenance of the system. 12 We're looking at expenses in the neighborhood of 13 $736 million during that four-year period. And, 14 finally, debt service. $477 million worth of debt 15 service over those four years. Those would be both 16 bonds that had been sold prior to the Fiscal 17 17 through Fiscal 20 program, as well as bond that we 18 anticipate procuring if the voters authorize 19 additional bonding authority during 17 through 20. 20 What does the debt look like? We're looking 21 to fund the next four years of that $1.5 billion of 22 capital work through a combination of cash and 23 bonds. We're proposing $415 million of the work be 24 paid directly by cash. That's taking the monthly 25 bills you -- the cash you give us on your monthly PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 17 1 bills and actually spending cash on the capital 2 program. 3 We're looking to bond finance $1.1 billion of 4 that work. That would assume that the ratepayers 5 authorize an additional $900 million worth of 6 additional bond authority. That, with $200 million 7 we anticipate being left over from the previous 8 cycle, is where we come up with the $1.1 billion. 9 That would bring our total debt authorization 10 to $2.62 billion. And all money borrowed with bonds 11 is used to fund the Capital Improvement Replacement 12 Program. It cannot be used for our operating 13 budget. 14 The work that would get done during that 15 period. Approximately 600 different capital 16 projects will be started. 230 of those will be 17 wastewater construction projects. We're 18 anticipating to remove 39 of the overflows that 19 we're required to move during that period and start 20 the design of 24 miles of storage and conveyance 21 tunnels. 22 There's some cases where we cannot get enough 23 flows out upstream to take care of the issue, so in 24 some places we will build underground storage via 25 tunnels or vaults. And when these overflows are PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 18 1 ready to occur we will direct those flows to a 2 tunnel, we'll hold that flow until the storm is over 3 and then we'll seep it back into the system and 4 allow the wastewater treatment plants to treat the 5 flows as opposed to allowing them to discharge into 6 the environment. 7 The projects we're anticipating are 8 represented by little blue circles on this map. If 9 you look at this map the Mississippi River is to the 10 right or east. Missouri River to the north. The 11 Meramec River wiggles around on the southern edge of 12 our boundaries and to the west the red boundary you 13 see there is about Highway 109 in Wildwood. 14 Each one of these little circles represents a 15 project. If you looked at our Rate Proposal you 16 would find that there's a number in each one of 17 those circles. And in our Rate Proposal there's a 18 spreadsheet for that number that tells you what 19 problem we're solving, how we're going to solve it, 20 what it will cost and what year we plan on starting 21 the project. In our Rate Proposal is a spreadsheet 22 that gives that information. 23 Tonight we have a board over here that's 24 equivalent to that chart that you see on the screen, 25 as well we have the spreadsheet. So if you'd like PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 19 1 to look tonight on a particular project and see what 2 it is, we do have that information here this 3 evening. 4 If you notice the reference at the bottom, 5 Appendix 7.2.2, if you went to our Rate Proposal 6 online or a hard copy that appendix is where you 7 would find this information. 8 Capital work for operation and maintenance 9 besides the operation and maintenance of the 10 treatment plants and pump stations throughout the 11 District, we also anticipate inspecting 60,000 12 manholes, rehabilitating approximately 6,000 13 manholes, CCTV approximately 1600 miles of sewers, 14 cleaning 3800 miles of sewers and rehabilitating an 15 additional 360 miles of existing sewers. 16 How we pay for this will be up to the 17 ratepayers to decide. If you look on the right-hand 18 side where it says, "Option A, Voters Approve 19 Bonds," this is that combination of cash and debt I 20 explained earlier. 21 Again, MSD is going to request the ratepayers 22 consider authorizing an additional $900 million of 23 bonding authority for the District. With that, we 24 will then start $1.5 billion worth of capital work 25 as required by our agreement with the Department of PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 20 1 Justice and the EPA. 2 You see the average single-family wastewater 3 sewer bill is underneath. Fiscal Year 16 that bill 4 is just over $40 a month for the average property 5 owner -- for the average ratepayer. It goes up 6 about 10 percent per year over the next four years 7 stopping at just over $60 per month in 2020 for the 8 average ratepayer. 9 Where that puts us nationally. Based on a 10 national survey -- survey by the National 11 Association of Clean Water Agencies, municipalities 12 are charging anywhere between 15 and $135 a month 13 currently for wastewater service. 14 Left-hand side is assuming the voters reject 15 bonds. The voters will have the opportunity to 16 decide not to allow additional bonding authority, 17 therefore, there will be zero use of additional 18 bonds. We would still have to start $1.5 billion 19 worth of capital work as required by our Consent 20 Decree with the Department of Justice. 21 Here you see the average single-family water 22 bill -- wastewater bill. In 2016, again, $40.72. 23 You will see at Fiscal 17 it's the same at just over 24 $44. That's because we're using up the remaining 25 debt from the previous cycle but once we start using PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 21 1 cash it ends in 2020 at the average monthly rate for 2 our ratepayer is about $96 per month for wastewater 3 service. 4 Stormwater. I'm going to spend some time 5 discussing how stormwater is currently funded. It's 6 important to understand that before we talk about 7 our proposal. If you take a look at this map, 8 again, the same map of District boundaries but it's 9 got three different colors on it. Let's talk about 10 that part of the District, the far outside part 11 shaded in red. 12 In that area, folks in that area pay us a 24 13 cent per month fee on the wastewater bill and about 14 a 2 cent property tax on their annual property tax 15 bill to pay for stormwater. 16 With that, we're able to fund and meet 17 federal, local, and state regulatory requirements 18 with regard to stormwater. That has to do with the 19 quality of stormwater coming off the new 20 developments, stormwater impact on local creeks and 21 streams with regard to water quality and pollutants. 22 We are able to collect data and track information in 23 that area about where the problems are and, finally, 24 we do have the ability to do emergency work if 25 necessary in that area. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 22 1 Emergency work in the past has consisted of 2 erosion that is ready to have a house drop into a 3 creek. We do have some monies if we need to address 4 those issues if they come up. 5 If you live in the yellow area, which is the 6 City of St. Louis and primarily the near North, West 7 and South County, in that area there's a 24 cent 8 fee, 2 cent property tax and also a 7 cent property 9 tax that's paid on your annual property tax bill. 10 All of the regulatory work that we do in the pink 11 area is taken care of. In addition, we're able to 12 maintain the public storm sewer system in the yellow 13 area. 14 What we are not able to do in the yellow or 15 pink area is any kind of stormwater projects to 16 resolve stormwater issues such as erosion or 17 flooding. There is no funding to address those 18 issues. 19 If you live in the green area, which is kind 20 of just outside the city and kind of inside 270, 21 those folks pay a 24 cent per month fee on their 22 wastewater bill for stormwater, 2 cent property tax, 23 7 cent property tax and depending on which of the 21 24 subdistricts you live in, in that green area, up to 25 another 10 cent property tax. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 23 1 If you live in that area we're taking care of 2 all the regulatory work, we're able to maintain the 3 public storm sewer system and we can also do 4 stormwater projects to resolve erosion and flooding 5 issues. 6 So, as you can see, the taxing revenue is 7 different in each area and that is reflective of the 8 amount of service we see throughout our District 9 boundaries. 10 What does that mean to folks as far as real 11 numbers? This is assuming a single-family home of 12 an appraised value of an average of $142,000 13 throughout the District boundaries. If you live in 14 the red area, getting just the regulatory service 15 and paying the 24 cent fee and 2 cent property tax, 16 the average taxpayer pays MSD $8 per year for 17 stormwater service mainly through the property tax 18 bill. 19 If you live in the yellow area you're getting 20 the regulatory work, plus we're able to maintain the 21 public sewer system. You are paying a 24 cent fee, 22 2 cent property tax and 7 cent property tax. The 23 average taxpayer in the District is paying MSD just 24 a little over $26 per year for stormwater service on 25 their property tax bill. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 24 1 If you live in the green area, now you're 2 getting all the services: regulatory, we maintain 3 the storm sewers and we can do stormwater projects. 4 You pay a 24 cent per month fee, 2 cent tax, 7 cent 5 property tax and up to another 10 cent property tax 6 for that service. 7 And for that service the average property 8 owner in the District on their annual property tax 9 bill pays us $53 per year for stormwater services. 10 That is the current way stormwater is funded and the 11 current service levels. 12 There is one main issue that MSD is looking 13 to address and what its proposal is, is to replace 14 many of these taxes with a 10 cent District-wide 15 property tax to resolve what we feel is the main 16 issue. 17 If you look at this map you will notice up 18 above -- back up -- up in the right-hand corner 19 that's the entire District boundaries as I 20 mentioned. You'll notice everybody paying the 2 21 cent property tax. With that, we're able to meet 22 all out of our regulatory requirements 23 District-wide, primarily having to do with 24 stormwater volume, increase in that, as well as 25 stormwater quality. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 25 1 It pays for our plan review and permitting 2 and inspection of new developments or any changes, 3 allows us to monitor and sample local creeks and 4 streams to determine impacts of stormwater on the 5 water quality of those creeks and streams. Again, 6 you're able to do complaint investigation and data 7 collection and we will respond to emergency 8 situations. 9 What work we perform in that area is 10 represented by this map. If you notice that gray 11 area is what were the yellow and green areas are on 12 the previous maps. So if you look at the areas 13 outside of that. 14 The blue lines you see there represent 1,154 15 miles of creeks. Those are the creeks that we have 16 to protect against increase in stormwater volume, as 17 well as impacts on stormwater quality from 18 pollutants that come with stormwater runoff. 19 Also on there are 2,638 best management 20 practices or stormwater basins. These are meant to 21 either assure that developments don't increase the 22 amount of flows or on new developments there is also 23 a requirement now that they treat the stormwater 24 that comes off the property or do things to decrease 25 the impact of the pollutants of stormwater runoff on PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 26 1 the local creeks and streams. MSD is required to 2 permit and police those throughout this area. All 3 of that work is currently funded. That's what we 4 currently provide District-wide. 5 What is not funded in the red area is 6 represented here. All of the lines you see there 7 are public storm sewers. That's approximately 1,363 8 miles of the public storm sewer system or about half 9 of the storm sewer system that MSD owns. It's not 10 funded. There's no funding for operation and 11 maintenance. If an inlet gets cracked, we can't 12 replace it. If a storm sewer has a joint come apart 13 or a sinkhole is in somebody's backyard, we can't 14 fix the pipe because erosion in the creek where the 15 discharge is. There's nothing we can do to fix 16 those issues. It is sitting out there ours with no 17 funding source. 18 The other issue is -- now, I said that's half 19 of it but we obviously have the equivalent amount of 20 the storm sewer in the gray area. Those individuals 21 living in that red area are also not paying for the 22 service of us having to operate the storm sewer 23 system within our municipal boundaries. 24 If you drive anywhere in the District on a 25 roadway, that's not an interstate road, that road is PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 27 1 being serviced by MSD's public storm sewer system. 2 Now, that is what sheds the water off the roads and 3 streets and takes it to local creeks and streams. 4 That's the issue we're looking to address, is that 5 lack of funding for that system. 6 So what we're proposing will result in 7 operating costs of approximately $90.8 million over 8 the next four years and will also allow us for the 9 first time to do approximately $100 million of 10 capital work District-wide for a six-year period 11 starting in 2015, this year, and ending in 2020. 12 The drivers, again, the big one is providing 13 a funding source to maintain the public storm sewer 14 system and also to, again, initiate the start of 15 some District-wide funding to resolve other 16 stormwater issues throughout the entire District. 17 I'll talk on the proposed operating costs 18 first. Fiscal Year 16, which is our current cycle, 19 you'll notice we're anticipating the operating cost 20 to the public sewer system is $16 million. If we 21 get a good vote and we're able to maintain the 22 entire system, that goes up to about 22 to 23 $23 million a year or just under a 50 percent 24 increase and that 50 percent increase allows us to 25 operate and maintain a doubling of the system we PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 28 1 currently have. 2 There is some economy of scale, so the 3 operation and maintenance doesn't double, but it 4 does go up because we're maintaining a much larger 5 system. 6 It also allows for projects. This map is 7 similar to the one I showed you. As a matter of 8 fact, it's duplicated over here. Each one of those 9 circles has a number and on the spreadsheet you can 10 see the particulars of each one of those projects 11 with regard to what we're addressing, what we'll do 12 and how much it will cost. 13 I want to talk about those projects in these 14 areas that you see. In the green area there's 64 15 projects identified for about $25 million. Whether 16 the tax is instituted or not, most of that work will 17 still move forward. It's coming out of the special 18 tax that's paid in the green area. Not all of it 19 though. If the tax is not passed, there is a small 20 amount of that revenues that come from the green 21 area that are put towards O&M but basically those 22 projects will go whether or not we pass the 23 District-wide tax intiative. 24 In the yellow area we have identified 47 25 projects totaling about $17.5 million. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 29 1 Approximately half of the value of those projects 2 are in the City of St. Louis, the other half in the 3 near North, West and South County. 4 In the yellow area these projects come if a 5 District-wide property tax comes. This clears up an 6 accounting issue we have with what taxes we're 7 currently collecting and what restrictions are on 8 those taxes that we currently collect. We need to 9 still spend the money in the area we collected, 10 however, it loosens up what we can spend money on. 11 So if we had a District-wide tax to take care 12 of O&M District-wide this allows us to divert that 13 value of money to projects in the yellow area. It 14 never had projects before. We would be addressing 15 flooding and erosion issues in that part of the 16 District. 17 In the red area we've identified 59 projects 18 valued at about $7.5 million. The monies for those 19 projects come from the 10 cent tax. We're proposing 20 a 10 cent tax on Year 1. Just under 9 cents of that 21 goes towards operation and maintenance. We will 22 propose to the voters that if there's any part of 23 that 10 cent tax that isn't available for 24 operation -- needed for operation and maintenance 25 the remainder will be used for stormwater projects PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 30 1 located throughout the District. 2 We prioritize stormwater projects on a 3 cost-benefit analysis. The value of the problem 4 divided by the cost and the ones with the highest 5 numbers go first. With the work we've done in the 6 past and the projects that you see in the yellow and 7 green area, all the extra money in the red area for 8 those four years will be spent in the red area 9 because those projects have the highest priority 10 calculation. 11 So what happens to all the taxes? There's a 12 chart to explain that. First line, if you live in 13 the green area you're paying somewhere between a 5 14 to 10 cent extra property tax. MSD will set that 15 tax at zero moving forward. 16 The stormwater O&M tax, which is a 7 cent tax 17 that's taxed both in the green and yellow area, the 18 proposed 10 cent property tax will replace that tax 19 and it would go away. There is a District-wide, as 20 I discussed, 2 cent tax that takes care of 21 regulatory issues. Right now that tax is almost 22 equivalent to the cost to do our regulatory work. 23 We're not looking for any change in that taxing 24 rate. 25 And then, finally, we're looking to replace PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 31 1 those with a District-wide 10 cent property tax. 2 Also, the 24 cent per month charge to wastewater 3 customers for stormwater, that is also replaced by 4 the 10 cent property tax. 5 What does this mean for individual property 6 owners? We've got each one of the colored areas on 7 the map to give an idea of that for stormwater. If 8 you live in the green area you currently are paying 9 the 24 cent fee, 2 cent, 7 cent and 10 cent property 10 tax. In the green area the average appraised value 11 of property is $184,500. Right now folks in the 12 green area are paying us an average of $61.67 per 13 year mostly on their property tax bill for those 14 services. 15 If this goes in place that tax will lower by 16 about $20 per year resulting in an amount paid on 17 the annual property tax bill of $42 per year for 18 services. That results in a change in the total 19 property tax bill of a decrease of one half or one 20 percent. MSD's taxes are a very small portion of 21 the property tax bill, therefore, it has a very 22 small impact on the overall property tax bill. 23 If you live in the yellow area you pay the 2 24 cent property tax and 7 cent property tax. The 25 average value of the properties in the yellow area PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 32 1 is $70,800, so the average taxpayer in that area on 2 their property tax bill pays us annually $12.50 for 3 stormwater right now. 4 If the proposed 10 cent tax and replacement 5 of the other taxes goes through, that would go up by 6 $3.60 resulting in the average taxpayer paying us 7 $16.10 per year for stormwater service. 8 For the overall property tax bill that's an 9 increase for the average taxpayer of three-tenths of 10 one percent or approximately three dollars for every 11 thousand dollars of taxes that they pay. 12 Finally, in the red area, where there's 13 basically very little service and very little 14 revenue being generated, right now primarily the 2 15 cent property tax is paid with an average property 16 value in the red area of $266,700. Folks in that -- 17 the average taxpayer in that area is currently 18 paying us about $10.50 per year for stormwater 19 service. 20 The 10 cent tax goes in, that will increase 21 the average property tax bill by $50 per year 22 resulting in an average annual property tax bill of 23 $60 per year to MSD. That would be a change in the 24 total property tax in that area of an increase of 25 1.2 percent. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 33 1 What I would like to do now is combine all 2 those costs and give you some annual costs for 3 services for the changes. We're on Slide 30. There 4 we go. The same charges you saw before, on the 5 left-hand side is assuming there's bonding 6 authority. The right-hand side assumes voters do 7 not authorize additional bonding authority. 8 On the left-hand side of Fiscal 16, prior to 9 this Rate Proposal going into effect, the average 10 customer pays MSD $522 per year for all of the 11 services that MSD provides. 12 With the increases of both stormwater and 13 wastewater our average customer in Fiscal Year 20 14 will pay $770 per year for all of the services that 15 MSD provides. 16 There's also a possibility on the right-hand 17 side that the ratepayers decide they don't want to 18 authorize additional bonding authority. If they do, 19 again, the current cost annually is about $522 per 20 year for the average customer. If no bonds are 21 authorized and most of the capital program is paid 22 for with cash by 2020 that would raise the average 23 annual cost for the average property owner to $1200 24 per year for all the services that MSD provides. 25 The next slide is just a note that we do have PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 34 1 a low income or customer assistance program. 2 Essentially if you qualify for that you pay one half 3 of the wastewater rate for low income. So if you 4 were to compare this chart it's identical to the 5 previous one but you'll find that all of the annual 6 costs are just about one half for our low income 7 customers. 8 Can everybody still hear with what's going 9 on? Am I still loud enough? Okay. 10 What will the rate process look like? As 11 previously noted, MSD staff submitted a Rate 12 Proposal to the Rate Commission on February 26th, 13 2015. On July 1, as part of the last Rate Proposal, 14 we will raise rates, wastewater rates, for the final 15 time as approved to get us those numbers you saw in 16 Fiscal 2016. 17 The Rate Commission will review our 18 recommendation and make their recommendations to our 19 Board of Trustees on August 2015. Our Board of 20 Trustees are currently scheduled to consider the 21 Rate Commission's recommendations between October 22 and December of 2015. 23 I noted previously that we are going to open 24 up the floor for comments. If you want to give them 25 here, great, if not, there's an email address, as PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 35 1 well as a mailing address. And if you have any 2 comments outside of this forum that you would like 3 to get to the Rate Commission you can give those to 4 us. We'll make sure that all public comments go to 5 the Rate Commission. 6 When does the decision time come for our rate 7 and taxpayers? There's two things we will bring to 8 you in 2016 during one of the election cycles. We 9 don't know what date they're going to be or if 10 they'll be on the same date but there will be two 11 items. 12 First of all, wastewater. The MSD -- the 13 customers will be asked whether or not you want to 14 authorize MSD an additional $900 million worth of 15 bonding authority. If you say yes, that rate 16 schedule that you saw for the next four years that 17 started at about $40 and in 2020 ended at about $60 18 per month, that would be the rate schedule for the 19 next four years. 20 If the voters decide not to authorize MSD 21 additional bonding authority, again, we will start 22 at about $40. If you recall the right-hand column 23 on a couple of slides it went up to about $96 per 24 month in 2020. That will be what the folks will 25 have to pay for, for wastewater. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 36 1 It is a decision about whether to borrow or 2 not. If you borrow and keep rates a little bit 3 lower, every dollar you borrow you do eventually 4 have to pay two dollars back and that will be 5 reflected in future rates. However, if you don't 6 want to do bonding you will have to absorb initially 7 higher rates and then later on down the line in 8 future years there is the opportunity to lower your 9 rates more than if you go through the bonding 10 scenario. 11 The capital program will peak around 2023 or 12 2024 and those opportunities will be looked at as we 13 get towards that time frame. 14 The other thing that will be asked of the 15 ratepayers is whether or not they will approve a 10 16 cent District-wide property tax for operation and 17 maintenance of the public sewer system. If the 18 voters vote yes, we will have that program that I 19 showed you here at the end where we have services 20 District-wide and projects District-wide. 21 If the voters vote no, MSD will maintain the 22 current system where you pay different amounts 23 depending on where you live at in the District 24 boundaries and you receive different levels of 25 services. Those will be up to the ratepayers. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 37 1 As those voting dates come up MSD will 2 provide informational meetings District-wide so 3 folks can understand if you vote yes on a certain 4 proposition, this is the results, if you vote no, 5 this is the results. We're trying to make sure 6 everybody is educated to understand what it is we're 7 asking. 8 I would let you know there's two flyers here. 9 I'll point out real quick one is called "MSD Rate 10 Commission." I think everybody has got a copy of 11 this, correct? Was this handed out? This is just a 12 summation of where the public hearings are. If 13 you're interested in the Rate Commission roster, 14 what organizations are represented, that's in that 15 blue bar on the right-hand side. 16 The other one is entitled "2015 MSD Rate 17 Proposal." One side is a summation of the 18 wastewater proposal I described. The other side is 19 a summation of the stormwater proposal that I just 20 described. 21 And, with that, the Rate Commission would 22 like to open the floor for public comment regarding 23 our proposal. 24 MR. HAWES: And, a quick procedural 25 item, I want the record to reflect that Mr. John L. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 38 1 Stein, who is a Rate Commissioner, is in attendance 2 tonight. 3 And we will open for public comment with 4 Richard Bose. Name and address, please. 5 MR. BOSE: 5825 De Giverville. In the 6 yellow area. 7 MR. HAWES: And what's that last name 8 again? 9 MR. BOSE: Bose. 10 MR. HAWES: It is Bose. 11 MR. BOSE: Yeah. 12 MR. HAWES: Okay. Thank you. 13 MR. BOSE: So I guess I just have some 14 questions and concerns. Did I hear right that for 15 the bonding, I guess it all depends on the interest 16 rates, but in the end we would end up paying twice 17 over the whole lifetime just like on your mortgage, 18 right? 19 MR. HOELSCHER: These are generalized 20 but based on the rates we've seen and what we've 21 anticipated, it's about a two-to-one ratio. 22 MR. BOSE: Okay. And I guess my bigger 23 concern is about the stormwater property tax. I 24 think in other places don't they typically do like 25 an impervious surface tax or something like that, PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 39 1 wouldn't that be more commensurate with the amount 2 of stormwater properties are producing? 3 It bothers me that, you know, a big building 4 here in Clayton is going to pay way more of this tax 5 than, you know, a big box retailer with a larger 6 parking lot and a large one-story building and it 7 seems like one is going to produce a lot more 8 stormwater than some of our higher-valued properties 9 that take up less land. 10 So I'm with you that we need stormwater 11 improvements and that needs funds but I'm concerned 12 that we're taxing the wrong thing. 13 MR. HAWES: Thank you very much. The 14 next speaker is Sarah Harris. 15 MS. HARRIS: Hi, everyone. I'm just 16 here listening and learning. I actually have no 17 specific questions but I appreciate the information 18 being made available. 19 MR. HAWES: Thank you for attending. 20 Next is Stan Mulvihill. 21 MR. MULVIHILL: Hi. Again, I'm here 22 just to listen and I obviously have been paying 23 attention for some time to the stormwater issues in 24 particular. One of the questions I have, it's 25 really a question so I'm not sure if it's PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 40 1 appropriate to ask, in your consideration of the 2 calculation between how much bond authority that we 3 seek versus pay as you go, what was the balance that 4 you're looking for? 5 It looks like it's roughly two-thirds to 6 one-third or maybe I've got that a little bit wrong 7 but I saw about a billion and a half total capital 8 improvements that were paid for, roughly one billion 9 by the bond, by the new bond authority, and the 10 balance paid by the pay-as-you-go system. 11 Is that based on an assessment of how to 12 balance the ratepayer concerns here? I know that 13 the other alternative is to pay as you go and you 14 pay quite a bit more, so that's really just more of 15 a question, how you arrived at that balance. 16 MR. HOELSCHER: Do you want me to 17 answer? 18 MR. HAWES: Please. 19 MR. HOELSCHER: I can answer it in 20 general. I think a lot of the information is in the 21 Rate Proposal if you want to look. We have a 22 policy -- is it 75/25? 23 MSD STAFF MEMBER: Around 70/30. 24 MR. HOELSCHER: 70/30? 25 MSD STAFF MEMBER: Approximately. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 41 1 MR. HOELSCHER: The current goal is to 2 try and maintain 70 percent debt, 30 percent cash as 3 we move forward. As we approach the peak of the 4 program, as I mentioned in '23 or '24, if you look 5 in the Rate Proposal you'll see we even showed a 6 sample of what that bonding might look like in the 7 next four-year cycle, '21 to '24, to get over the 8 hump. 9 So it's a combination of that, trying to 10 maintain that, as well as looking at affordability 11 for the ratepayer and then also trying to maintain 12 our bond rating for the bonds we do sell. So 13 there's a lot more that goes into it but those are 14 three of the major things we look at. 15 MR. MULVIHILL: Thank you. 16 MR. HAWES: All right. Next, Fred 17 Brooks. 18 MR. BROOKS: So I have several 19 questions. Let's see, I understand that you want 20 more money. Great, I'm not opposed to paying for 21 services I receive. I am very opposed, I think, 22 based on what your answers are going to be, to the 23 methodology you're using to collect those increases. 24 So my one question is: Will the stormwater 25 increases be billed to all properties in St. Louis PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 42 1 County that have assessed value or only the 2 tax-paying properties? 3 MR. HOELSCHER: Right now MSD's proposal 4 is to go only to tax-paying properties. It would 5 not be charged to non-tax-paying properties. 6 MR. BROOKS: Okay. So I, personally, 7 have a big problem with that. I think there's legal 8 precedent, that constitutionally, you know, we don't 9 lump church and state together. 10 MR. HOELSCHER: I think you will find 11 and I think this is described in the proposal, a lot 12 of MSD's proposal is driven by the decision by the 13 Supreme Court in November 2012 that overturned an 14 impervious rate we had previously imposed and -- 15 MR. BROOKS: Well, and I'm not -- 16 MR. HOELSCHER: Let me finish. This is 17 our thought process. Based on what we see there, it 18 is highly questionable whether non-tax-paying 19 properties could be charged the voted-on fee. Now, 20 whether that's right or wrong, that is the opinion 21 of MSD's staff. There are other ways to do this, I 22 agree. That is driving what MSD staff is proposing 23 right now. 24 MR. BROOKS: I think if you Google other 25 municipalities across the United States they use a PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 43 1 system based on impervious surface area. I thought 2 that the reason your approach was overturned was 3 that you didn't put it to a vote. 4 MR. HOELSCHER: Correct. 5 MR. BROOKS: So you could put that same 6 system to a vote and get it approved and everybody 7 would pay their fair share. 8 MR. HOELSCHER: I would just offer to 9 you Kansas City, Missouri has a voted-on fee similar 10 to what you're describing. Since that Missouri 11 court ruling they're allowing non-tax-paying 12 entities to opt out of paying. They're asking that 13 they consider paying voluntarily but they don't feel 14 that they have a right to force the collection on 15 non-tax-paying properties for a voted-on fee. 16 MR. BROOKS: Well, that disappoints me 17 because, you know, my properties have a lot of green 18 space. I contribute very little to the wastewater 19 problem, yet other properties like churches, 20 non-profits or even shopping malls, contribute a 21 great deal because they're mostly hard surface and 22 they have parking lots and so forth. 23 I'm not against paying more for my fair share 24 but if I went to the license bureau and said, "Hey, 25 I need a license plate," and a priest was next to me PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 44 1 and said, "I need a license plate for my school 2 bus," and the guy reached into my pocket to pay for 3 his bill, I would be kind of pissed off and that's 4 exactly the same scenario in my opinion. 5 And the other problem I have with the way the 6 rates are going to be collected is linking the 7 amount of money that you have to something that 8 could go up or down so much like property values. 9 And it seems to me that you're going to have set 10 costs that will probably only increase and yet 11 property values could go up, could go down. 12 I mean, you create a huge administrative 13 burden of trying to guess whether you're going to 14 really collect enough money because that 10 cents on 15 $200,000 might be 10 cents on $150,000 the next year 16 or more, it'll probably go up, but it seems a very 17 uncertain way of financing your improvements. I 18 think you need to assess what people contribute to 19 the problem and bill them accordingly. 20 MR. HAWES: All right. That's all we 21 have that have signed up. Is there anybody else 22 that would like to speak at this proceeding? 23 Hearing no further discussion, any thoughts 24 from the Rate Commissioners? All right. Oh, we've 25 got one hand up. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 45 1 MS. HARRIS: May I ask a question? 2 MR. HAWES: Please. 3 MS. HARRIS: I hear the proposal that 4 MSD has put forth here and just a few comments that 5 people are making and then even just in my own mind 6 I'm thinking of alternative approaches that could be 7 considered as the way to go about financing funding 8 all the improvements that are clearly needed. 9 What other alternative approaches have you 10 all considered or what is the process? And I 11 apologize if I missed it, after getting public input 12 will that shape the proposed recommendations or no, 13 what happens? 14 MR. HAWES: If I can answer that. Part 15 of the task, part of the job we're tasked with at 16 the Rate Commission is to review the methodology for 17 the appropriateness and for meeting the Charter of 18 MSD, as it was written, which was to provide for the 19 consumers, to provide efficient and equitable 20 operations and so forth. 21 So we're going to be reviewing those aspects, 22 so we do take into account the questions and the 23 statements from the public regarding the methodology 24 such as should we consider an impervious fee rather 25 than the methodology that's proposed in the Rate PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 46 1 Proposal. So those are all on the table. 2 So part of our review is to consider if there 3 may be a better way, a more equitable way. That's 4 what our task is. Anybody like to add to that? 5 MR. SCHNEIDER: Well, I will just add 6 that on the MSD website you will see all the 7 proceedings. The Rate Commission has hired an 8 independent consultant to evaluate the Rate Proposal 9 that MSD made. We hired an independent law firm to 10 evaluate the case. We take testimony from the MSD 11 staff. We take testimony from the expert consultant 12 that we hire. The two intervenors that were 13 mentioned, the Missouri Industrial Energy Consumers 14 represents the large businesses. They are involved 15 in the proceedings. They take testimony and they 16 provide their own recommendations. The Home 17 Builders Association provides a recommendation. 18 That's all on the website of the Rate Commission. 19 So we take the public hearing notes and we 20 kind of all evaluate that. And, as Russell said, we 21 kind of evaluate on five criteria which are listed. 22 One of them which is: Is this proposal fair and 23 reasonable amongst all taxpayers? Does it enhance 24 MSD's ability to meet their obligations to provide 25 stormwater and wastewater appropriately? Does it PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 47 1 meet the constitutional requirements, which gets 2 into the Hancock amendment which Mr. Hoelscher was 3 kind of referring to with the impervious surface 4 fee. And there's two other ones I knew I was going 5 to forget. But they're on the website but mostly 6 it's can they do an adequate job. 7 So it's all on the website and I know it's a 8 lot of documents on there but if you can kind of 9 follow a little bit and this whole Rate Proposal, 10 again, is on the MSD website. 11 MS. HARRIS: Okay. 12 MR. HAWES: All right. 13 MR. MULVIHILL: If it's appropriate to 14 ask a question of Brian, referring back to Slide 19, 15 this is more just kind of history I guess, it's the 16 one in which you have public storm system in the red 17 area, which is roughly west of the 270 outerbelt and 18 there's approximately 1300 miles of storm sewers 19 that aren't currently funded. Can you just explain 20 historically why that situation exists? 21 MR. HOELSCHER: There's a certain Rate 22 Commissioner who has asked me to explain it. It is 23 an interesting story and I'll make it short. I 24 would actually go to -- give me a yellow, red, green 25 map, Shaun, back up to one of those. Any of them is PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 48 1 fine. 2 So we'll talk about stormwater and look at 3 the yellow, red and green map. The boundaries that 4 are within the yellow and green areas were the 5 District's original boundaries in 1954. So all 6 services were provided then. As a matter of fact, 7 the services were provided by a board-assessed tax 8 to provide all services in that original boundary. 9 Between then and 1977 separate taxing 10 Districts, and right now there's actually 21 of them 11 in the green part of that area, were put in place 12 and extra taxes were collected mostly to pay for 13 stormwater improvement, sometimes it could be for 14 stormwater and wastewater but they were put into 15 place to provide an extra tax base to expand the 16 system and to promote growth throughout the area. 17 So that's the area. 18 In 1977 there was a vote based on a petition. 19 There was a vote by the folks in the red area to be 20 annexed into the District. The District does not go 21 out and try to gain area. It accepted petitions to 22 size whether or not they could efficiently serve the 23 area and then allow folks to vote if they want to 24 come in. 25 So in 1977 folks in the red area decided to PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 49 1 do that. They decided -- at the time it was only 2 for wastewater services in that red area in 1977. 3 Prior to that and after that all stormwater services 4 were provided by St. Louis County. 5 In 1989 MSD put in place and took over the 6 operation and maintenance of the stormwater sewers 7 and stormwater management in the area. There were 8 two things that were proposed around 1989. One was 9 this 24 cent per month fee that you're still paying 10 for stormwater if you're a wastewater customer. 11 That was voted and put in place in 1988 by the 12 voters of the District. 13 The other part was the District was planning 14 on instituting an impervious area system of 15 collecting stormwater revenues throughout the entire 16 District and would cover that red area as well. 17 There was never any action taken on that. It was 18 thought about and if you go back and look at the 19 records you will find six board meetings later they 20 decided to drop it, that it would be addressed at a 21 later time. 22 So as of 1989 you have the situation where 23 there is a stormwater system with no revenue to do 24 anything. To do anything. And right now the 25 revenues we do collect just pay for regulatory work PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 50 1 and there's nothing else. MSD has looked to try 2 that and the other issues to try and correct it. 3 We were in litigation under our wastewater 4 rates until the mid-1990s. Once that was resolved 5 we went to try to resolve the stormwater issue that 6 resulted in the creation of the Rate Commission and 7 a lot of other things, an attempt to institute an 8 impervious rate that was in place for about eight 9 months I think before somebody sued us over it. It 10 went back to the current taxes, we lost in the 11 Missouri Supreme Court and so we're still now where 12 we were at about 1977 -- or 1989. And so that's the 13 history of how everything came up. 14 I've been asked, "Why is this here?" Well, 15 there was the original District boundaries in the 16 yellow and green area and those little green areas 17 are areas based on watersheds that were picked up to 18 fund specific pieces. If you didn't happen to fall 19 on one of those watersheds, you didn't pay the 20 watershed tax. 21 Then in 1980 when the Hancock Amendment went 22 in place the board no longer had the ability to just 23 simply institute taxes and the only thing we've 24 voted on since 1980 is the 24 cent monthly charge. 25 So that's kind of the history of why we are where we PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 51 1 are now. 2 MR. MULVIHILL: I mean, I think, just as 3 a general comment, it sort of mirrors a lot of the 4 postwar development patterns of a sort of parochial 5 incremental approach to dealing with what appears to 6 be a much larger District area problem. So it's 7 just interesting to hear the history of it in that 8 context. 9 MR. BROOKS: I'll just add I think it's 10 great that you're trying to unify the District and 11 have a uniform rate structure that everybody pays 12 their fair share but you need some kind of 13 scientific process to assess that. You know, I 14 don't pay for a sidewalk based on how expensive my 15 shoes are. I shouldn't pay for sewers based on how 16 expense my house is. 17 If I have a lot of frontage, street frontage, 18 that might be a measurement. Big driveway, big 19 roof, that might be a measurement. If I'm in a 20 floodplain, that might be a different rate 21 structure. But just because I'm smart enough or 22 lucky enough or hard working enough to have a nice 23 house that gets taxed higher, or it may be lower, 24 doesn't mean I should pay more for my sewer. It's a 25 service. PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 52 1 MR. HOELSCHER: I think as the Rate 2 Commission said, that is something to think about. 3 I will put to you that MSD's thought process is that 4 this is an area-wide service similar to police, 5 fire, schools, something in that vein. And I think 6 it's in that line that MSD is offering that this -- 7 that's the thought process in offering the proposal 8 we're offering. 9 MR. BROOKS: But the difference is if I 10 live in a different school district it is, quote, 11 better or worse, and, therefore, justifies the 12 different tax structure. So, you know, I pay higher 13 taxes in the Ladue School District than I might in 14 North County but I have the expectation that my 15 school district is better, has better facilities. 16 My sewer is probably about the same, hopefully. 17 MR. HOELSCHER: Unless you live out of 18 the District boundaries. Boundaries are all 19 different, I agree with you, depending on what 20 you're talking about. 21 MR. BOSE: Will this stormwater property 22 tax be able to be tipped away by cities and 23 counties? I know it's a big concern for school 24 Districts, do you all know? 25 MR. HOELSCHER: Our current taxes are PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 53 1 subject to that and obviously, if you charge 2 property tax, yeah, it will be subject to that. 3 MR. BOSE: Okay. 4 MR. HAWES: All right. We appreciate 5 you coming out tonight and have a good evening. 6 - - - - - 7 (Hearing concluded at 7:05 p.m.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 54 1 CERTIFICATE OF REPORTER 2 I, Suzanne Zes, within and for the State 3 of Missouri, do hereby certify that the witness 4 whose testimony appears in the foregoing deposition 5 was duly sworn by me; the testimony of said witness 6 was taken by me to the best of my ability and 7 thereafter reduced to typewriting under my 8 direction; that I am neither counsel for, related 9 to, nor employed by any of the parties to the action 10 in which this deposition was taken, and further that 11 I am not a relative or employee of any attorney or 12 counsel employed by the parties thereto, nor 13 financially or otherwise interested in the outcome 14 of the action. 15 16 ______________________________ 17 Certified Court Reporter 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES A AA 15:25 16:3 AAA 15:25 AA1 15:25 ability 21:24 46:24 50:22 54:6 able 21:16,22 22:11,14 23:2 23:20 24:21 25:6 27:21 52:22 absorb 36:6 accepted 48:21 account 45:22 accounting 29:6 action 49:17 54:9 54:14 activities 13:24 add 46:4,5 51:9 addition 22:11 additional 7:8 9:20 16:19 17:5 17:6 19:15,22 20:16,17 33:7 33:18 35:14,21 address 11:24 14:15 15:13 22:3,17 24:13 27:4 34:25 35:1 38:4 addressed 49:20 addressing 14:16 28:11 29:14 adequate 47:6 administrative 44:12 adopted 6:7,10 6:22 advance 8:22 affordability 41:10 Agencies 20:11 agree 42:22 52:19 agreement 10:9 19:25 ahead 11:1 aimed 16:2 allow 18:4 20:16 27:8 48:23 allowed 8:23 allowing 18:5 43:11 allows 25:3 27:24 28:6 29:12 alternative 40:13 45:6,9 amended 5:9 6:23 amendment 47:2 50:21 American 8:3 amount 13:10,10 23:8 25:22 26:19 28:20 31:16 39:1 44:7 amounts 36:22 analysis 14:8 15:14 16:1 30:3 annexed 48:20 annual 12:7 21:14 22:9 24:8 31:17 32:22 33:2,23 34:5 annually 32:2 33:19 answer 9:22,24 40:17,19 45:14 answers 41:22 anticipate 14:2 16:18 17:7 19:11 anticipated 13:10,25 38:21 anticipating 17:18 18:7 27:19 anybody 44:21 46:4 apart 14:9 26:12 apologize 45:11 appears 13:7 51:5 54:4 appendix 10:18 19:5,6 applicable 8:24 application 6:25 applications 7:1 7:4 appraised 23:12 31:10 appreciate 39:17 53:4 approach 41:3 43:2 51:5 approaches 45:6 45:9 appropriate 13:7 40:1 47:13 appropriately 46:25 appropriateness 45:17 approve 19:18 36:15 approved 6:16 6:17,18 13:3 34:15 43:6 approximately 10:11 13:5 17:15 19:12,13 26:7 27:7,9 29:1 32:10 40:25 47:18 area 11:9 21:12 21:12,23,25 22:5,7,11,13,15 22:19,24 23:1,7 23:14,19 24:1 25:9,11 26:2,5 26:20,21 28:14 28:18,21,24 29:4,9,13,17 30:7,7,8,13,17 31:8,10,12,23 31:25 32:1,12 32:16,17,24 38:6 43:1 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32:13 basins 25:20 beginning 7:24 behalf 9:8 believe 8:19 best 15:5 25:19 54:6 better 46:3 52:11 52:15,15 big 27:12 39:3,5 42:7 51:18,18 52:23 bigger 38:22 biggest 15:8 bill 11:12,14,14 12:6,8 20:3,3 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 20:22,22 21:13 21:15 22:9,22 23:18,25 24:9 31:13,17,19,21 31:22 32:2,8,21 32:22 44:3,19 billed 41:25 billion 16:7,10,21 17:3,8,10 19:24 20:18 40:7,8 bills 16:25 17:1 bit 36:2 40:6,14 47:9 blue 18:8 25:14 37:15 board 5:15 6:12 6:15 12:19 18:23 34:19,19 49:19 50:22 board-assessed 48:7 bond 15:24 16:3 16:17 17:3,6 40:2,9,9 41:12 bonding 16:19 19:23 20:16 33:5,7,18 35:15 35:21 36:6,9 38:15 41:6 bonds 16:16,23 17:10 19:19 20:15,18 33:20 41:12 borrow 16:4 36:1 36:2,3 borrowed 17:10 Bose 2:6 38:4,5,9 38:9,10,11,13 38:22 52:21 53:3 bothers 39:3 bottom 19:4 boundaries 18:12 21:8 23:9 23:13 24:19 26:23 36:24 48:3,5 50:15 52:18,18 boundary 18:12 48:8 Bowser 4:4 5:7 box 39:5 Brian 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5:24 compare 34:4 complaint 25:6 concern 38:23 52:23 concerned 39:11 concerns 38:14 40:12 concluded 53:7 concluding 7:25 Conclusion 2:10 concrete 11:22 conducted 7:13 7:24 Conference 7:10 7:15,16,17 conferences 8:5 Consent 10:2 13:13,25 20:19 consider 19:22 34:20 43:13 45:24 46:2 consideration PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 40:1 considered 13:21 45:7,10 consisted 22:1 consists 6:1 12:14 constitutional 47:1 constitutionally 42:8 construction 17:17 consultant 6:20 7:9 46:8,11 consumers 4:9 7:3 45:19 46:13 contained 8:4 context 51:8 contribute 43:18 43:20 44:18 conveyance 17:20 copies 10:23 copy 19:6 37:10 corner 24:18 correct 10:14 37:11 43:4 50:2 cost 10:7 18:20 27:19 28:12 30:4,22 33:19 33:23 costs 27:7,17 33:2,2 34:6 44:10 cost-benefit 30:3 cost-effective 15:6 16:5 counsel 6:20 54:8 54:12 counties 52:23 County 4:3,8 6:3 22:7 29:3 42:1 49:4 52:14 couple 35:23 court 3:6 4:21 42:13 43:11 50:11 54:17 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28:2 edge 18:11 educated 37:6 effect 33:9 efficiencies 13:14 efficient 45:19 efficiently 48:22 eight 50:8 either 9:22 14:25 15:3 25:21 election 5:10 35:8 Eleventh 4:23 email 34:25 emergency 21:24 22:1 25:7 employed 54:9 54:12 employee 54:11 ended 35:17 ends 11:7 21:1 Energy 4:9 7:3 46:13 engaged 6:19 7:7 engineering PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES enhance 46:23 ensure 5:16 enter 12:1 entering 15:7,9 entire 24:19 27:16,22 49:15 entities 43:12 entitled 37:16 environment 18:6 environmental 5:23 EPA 10:5 20:1 equitable 45:19 46:3 equivalent 18:24 26:19 30:22 Eric 4:6 5:8 erosion 22:2,16 23:4 26:14 29:15 essentially 11:3 34:2 established 5:11 12:12 estimating 14:10 evaluate 46:8,10 46:20,21 evening 3:3,4 5:2 5:5 9:18 10:25 19:3 53:5 eventually 36:3 everybody 24:20 34:8 37:6,10 43:6 51:11 exactly 44:4 examined 3:2 executive 4:12 9:11 exhibits 2:14 existing 19:15 exists 47:20 expand 9:2 48:15 expectation 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listen 39:22 listening 39:16 litigation 4:22 50:3 little 12:11 18:8 18:14 23:24 32:13,13 36:2 40:6 43:18 47:9 50:16 live 22:5,19,24 23:1,13,19 24:1 30:12 31:8,23 36:23 52:10,17 living 26:21 local 11:19 12:1 14:22 21:17,20 25:3 26:1 27:3 located 9:4 14:5 30:1 location 8:4 long 14:18 longer 50:22 look 15:22 16:20 18:9 19:1,17 21:7 24:17 25:12 34:10 40:21 41:4,6,14 48:2 49:18 looked 18:15 36:12 50:1 looking 9:16 10:1 10:14 16:12,20 17:3 24:12 27:4 30:23,25 40:4 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 41:10 looks 15:3 40:5 loosens 29:10 lost 50:10 lot 39:6,7 40:20 41:13 42:11 43:17 47:8 50:7 51:3,17 lots 43:22 loud 34:9 Louis 1:8 3:1 4:3 4:5,6,23 5:3 6:3 7:2 8:2,3 22:6 29:2 41:25 49:4 low 13:15 34:1,3 34:6 lower 31:15 36:3 36:8 51:23 lucky 51:22 lump 42:9 M M 3:6 machines 11:6 Mahanta 4:7 5:8 mailing 35:1 main 24:12,15 maintain 11:23 15:17,23 22:12 23:2,20 24:2 27:13,21,25 36:21 41:2,10 41:11 maintaining 15:19 16:3 28:4 maintenance 10:14 13:22,24 16:11 19:8,9 26:11 28:3 29:21,24 36:17 49:6 major 41:14 making 45:5 malls 43:20 management 25:19 49:7 mandated 13:24 manholes 11:21 14:6,7 19:12,13 manner 15:23 map 18:8,9 21:7 21:8 24:17 25:10 28:6 31:7 47:25 48:3 maps 25:12 March 6:9 marked 2:14 matter 28:7 48:6 maximum 8:25 mean 23:10 31:5 44:12 51:2,24 meant 25:20 measurement 51:18,19 meet 10:8 21:16 24:21 46:24 47:1 meeting 9:19,19 45:17 meetings 37:2 49:19 member 5:3 40:23,25 members 5:7 6:2 mentioned 24:20 41:4 46:13 Meramec 11:10 18:11 methodology 41:23 45:16,23 45:25 Metropolitan 1:8 3:1 5:3 MIDWEST 4:22 mid-1990s 50:4 miles 11:7 14:8 17:20 19:13,14 19:15 25:15 26:8 47:18 million 13:5,8 14:1,2,2 16:13 16:14,23 17:5,6 19:22 27:7,9,20 27:23 28:15,25 29:18 35:14 mind 45:5 minutes 9:1 mirrors 51:3 missed 45:11 Mississippi 11:10 18:9 Missouri 1:14 3:5,7 4:9 7:3 11:9 18:10 43:9 43:10 46:13 50:11 54:3 MO 4:23 modified 6:17 money 13:18 16:4 17:10 29:9 29:10,13 30:7 41:20 44:7,14 monies 12:8 22:3 29:18 monitor 25:3 month 12:6 20:4 20:7,12 21:2,13 22:21 24:4 31:2 35:18,24 49:9 monthly 11:12 11:13 16:24,25 21:1 50:24 months 50:9 Moody's 16:1 mortgage 38:17 move 17:19 28:17 41:3 moving 30:15 MSD 4:2 5:6,15 6:1,12,13,13,15 6:19,21 7:5,6 9:12,14,21 10:1 10:11,13 11:3 12:13 15:24 19:21 23:16,23 24:12 26:1,9 30:14 32:23 33:10,11,15,24 34:11 35:12,14 35:20 36:21 37:1,9,16 40:23 40:25 42:22 45:4,18 46:6,9 46:10 47:10 49:5 50:1 52:6 MSD's 11:22 14:14 27:1 31:20 42:3,12 42:21 46:24 52:3 Mulvihill 2:8 39:20,21 41:15 47:13 51:2 municipal 4:3 26:23 municipalities 20:11 42:25 N N 2:1 4:1 5:1 name 9:11 38:4,7 names 8:14 Nancy 4:4 5:7 national 20:10 20:10 nationally 20:9 near 9:24 22:6 29:3 necessary 9:3 21:25 need 13:25 15:17 15:19 22:3 29:8 39:10 43:25 44:1,18 51:12 needed 10:8 13:5 29:24 45:8 needs 39:11 neighborhood 16:12 neither 54:8 never 29:14 49:17 new 21:19 25:2 25:22 40:9 nice 51:22 nine 7:24 non-profit 5:25 non-profits 43:20 non-tax-paying 42:5,18 43:11 43:15 north 4:8,23 18:10 22:6 29:3 52:14 northern 14:10 note 33:25 noted 34:11,23 notes 46:19 notice 6:5 8:1 19:4 24:17,20 25:10 27:19 notices 8:4 November 5:10 42:13 number 13:11 18:16,18 28:9 numbers 23:11 30:5 34:15 O O 5:1 obligations 46:24 obviously 26:19 39:22 53:1 occur 18:1 occurred 14:9 October 34:21 offer 43:8 offering 52:6,7,8 officer 9:2 official 10:3 Oh 44:24 Okay 34:9 38:12 38:22 42:6 47:11 53:3 old 15:19 once 20:25 50:4 ones 30:4 47:4 one-story 39:6 one-third 40:6 online 19:6 on-the-record 7:23 open 34:23 37:22 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 38:3 opened 9:15 operate 26:22 27:25 operating 17:12 27:7,17,19 operation 5:22 10:13 13:22,24 14:4 16:11 19:8 19:9 26:10 28:3 29:21,24,24 36:16 49:6 Operational 6:7 operations 45:20 opinion 42:20 44:4 opportunities 36:12 opportunity 6:24 8:9 20:15 36:8 opposed 18:5 41:20,21 opt 43:12 Option 19:18 order 8:13,21 14:15 organization 8:15 organizations 5:16,19,21,22 5:25,25 6:2 12:14 37:14 original 48:5,8 50:15 originally 15:8 outcome 54:13 outerbelt 47:17 outside 21:10 22:20 25:13 35:2 overall 31:22 32:8 overcharges 15:2 overflow 15:2 overflows 15:3 17:18,25 overturned 42:13 43:2 owned 10:12 owner 20:5 24:8 33:23 owners 31:6 owns 26:9 O&M 28:21 29:12 30:16 P P 4:1,1 5:1 PAGE 2:2 paid 12:7 16:24 22:9 28:18 31:16 32:15 33:21 40:8,10 parameters 12:17 parking 39:6 43:22 parochial 51:4 part 21:10,10 29:15,22 34:13 45:14,15 46:2 48:11 49:13 participant 7:15 participant's 7:20 participate 7:14 7:23 particular 19:1 39:24 particulars 28:10 parties 7:7 54:9 54:12 parts 10:19 15:8 pass 28:22 passed 28:19 patterns 51:4 paved 11:22 pay 19:16 21:12 21:15 22:21 24:4 31:23 32:11 33:14 34:2 35:25 36:4 36:22 39:4 40:3 40:13,14 43:7 44:2 48:12 49:25 50:19 51:14,15,24 52:12 paying 23:15,21 23:23 24:20 26:21 30:13 31:8,12 32:6,18 38:16 39:22 41:20 43:12,13 43:23 49:9 pays 23:16 24:9 25:1 32:2 33:10 51:11 pay-as-you-go 40:10 peak 36:11 41:3 people 44:18 45:5 percent 13:9 20:6 27:23,24 31:20 32:10,25 41:2,2 perform 11:17 12:20 25:9 performed 16:1 period 8:11 13:6 13:9 16:13 17:15,19 27:10 permit 8:9 26:2 permits 11:8 permitted 7:23 permitting 8:7 12:3 25:1 person 6:23 personally 42:6 persons 7:14 petition 48:18 petitions 48:21 picked 50:17 pieces 50:18 pink 22:10,15 pipe 11:7 14:19 26:14 pipes 14:19,20 pissed 44:3 place 31:15 48:11 48:15 49:5,11 50:8,22 places 17:24 38:24 plan 5:9,15 18:20 25:1 planning 49:13 plants 11:8 14:4 14:21 18:4 19:10 plate 43:25 44:1 please 8:18 10:16 38:4 40:18 45:2 plus 15:25 23:20 pocket 44:2 point 37:9 police 26:2 52:4 policing 12:3 policy 40:22 pollutants 11:25 21:21 25:18,25 Poor's 15:25 portion 31:20 position 7:20 possibility 33:16 postwar 51:4 Post-Dispatch 8:3 practices 25:20 precedent 42:8 Prehearing 7:10 7:15,16,16 prepared 7:12,18 present 4:11 8:7 8:18 9:8,17 presentation 2:4 8:10 9:15 11:2 presenting 16:2 presiding 5:4 9:2 previous 17:7 20:25 25:12 34:5 previously 7:12 13:2 14:12 34:11,23 42:14 prices 13:15 priest 43:25 primarily 12:7 22:6 24:23 32:14 primary 14:16 prior 16:16 33:8 49:3 prioritize 30:2 priority 30:9 probably 44:10 44:16 52:16 problem 15:6 18:19 30:3 42:7 43:19 44:5,19 51:6 problems 21:23 procedural 6:8 6:10,22 37:24 proceeding 44:22 proceedings 6:9 6:25 8:2 46:7 46:15 process 34:10 42:17 45:10 51:13 52:3,7 procuring 16:18 produce 39:7 produced 3:2 producing 39:2 program 14:14 15:9 16:6,17 17:2,12 33:21 34:1 36:11,18 41:4 project 14:14 18:15,21 19:1 projects 10:7 13:19 17:16,17 18:7 22:15 23:4 24:3 28:6,10,13 28:15,22,25 29:1,4,13,14,17 29:19,25 30:2,6 30:9 36:20 promote 48:16 properly 14:21 properties 31:25 39:2,8 41:25 42:2,4,5,19 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 43:15,17,19 property 12:7 20:4 21:14,14 22:8,8,9,22,23 22:25 23:15,17 23:22,22,25 24:5,5,7,8,15 24:21 25:24 29:5 30:14,18 31:1,4,5,9,11 31:13,17,19,21 31:22,24,24 32:2,8,15,15,21 32:22,24 33:23 36:16 38:23 44:8,11 52:21 53:2 proposal 6:24 8:8 9:13,17,25 10:17,19,20,23 11:1 12:18,23 13:3,4 16:2 18:15,17,21 19:5 21:7 24:13 33:9 34:12,13 37:17,18,19,23 40:21 41:5 42:3 42:11,12 45:3 46:1,8,22 47:9 52:7 propose 29:22 proposed 5:14 6:16 9:1 12:16 14:13 27:17 30:18 32:4 45:12,25 49:8 proposing 6:5 16:7,23 27:6 29:19 42:22 proposition 37:4 protect 25:16 provide 9:12 10:21 11:4,12 12:13 26:4 37:2 45:18,19 46:16 46:24 48:8,15 provided 8:13 48:6,7 49:4 provides 33:11 33:15,24 46:17 providing 27:12 public 1:9 2:5 3:1 5:5 7:24 8:1,6 8:11 10:12 11:20 12:13 22:12 23:3,21 26:7,8 27:1,13 27:20 35:4 36:17 37:12,22 38:3 45:11,23 46:19 47:16 published 8:1 pump 14:5 19:10 purpose 8:7 purposes 7:10 12:10 put 28:21 43:3,5 45:4 48:11,14 49:5,11 52:3 puts 20:9 p.m 1:17 53:7 Q qualify 34:2 quality 12:2 21:19,21 24:25 25:5,17 question 9:23 39:25 40:15 41:24 45:1 47:14 questionable 42:18 questions 9:21 38:14 39:17,24 41:19 45:22 quick 37:9,24 quite 40:14 quote 52:10 R R 4:1 5:1 rain 14:16 15:7 raining 14:17,24 rains 14:25 raise 33:22 34:14 raised 7:11,17 rate 4:2 5:4,6,11 5:18,18 6:1,4,5 6:7,11,13,13,19 6:20,22,24 7:5 7:9,11,18 8:1,8 9:1,13,14,16 10:17,19,23 12:11,16,23 13:3,20,21 18:15,17,21 19:5 21:1 30:24 33:9 34:3,10,11 34:12,13,17,21 35:3,5,6,15,18 37:9,13,16,21 38:1 40:21 41:5 42:14 44:24 45:16,25 46:7,8 46:18 47:9,21 50:6,8 51:11,20 52:1 ratepayer 8:9,14 8:16,25 20:5,8 21:2 40:12 41:11 ratepayers 7:22 16:5 17:4 19:17 19:21 33:17 36:15,25 rates 5:13,13,13 6:6,16 10:2 12:14,21 13:2 14:13 16:5 34:14,14 36:2,5 36:7,9 38:16,20 44:6 50:4 rating 15:24 16:3 41:12 ratio 38:21 rationale 7:21 reached 44:2 ready 18:1 22:2 real 23:10 37:9 really 39:25 40:14 44:14 reason 43:2 reasonable 46:23 recall 35:22 receive 36:24 41:21 received 6:5 7:6 recognized 8:20 recommendation 6:15 12:19 34:18 46:17 recommendati... 5:12 34:18,21 45:12 46:16 record 7:13 37:25 records 49:19 red 18:12 21:11 23:14 26:5,21 29:17 30:7,8 32:12,16 47:16 47:24 48:3,19 48:25 49:2,16 reduced 14:11 54:7 reference 10:18 19:4 references 10:18 referring 47:3,14 reflect 37:25 reflected 36:5 reflective 23:7 regard 12:4 21:18,21 28:11 regarding 5:12 8:2 9:1,17 37:22 45:23 Regional 4:6 regulatory 11:24 21:17 22:10 23:2,14,20 24:2 24:22 30:21,22 49:25 rehabilitated 14:7,7 rehabilitating 19:12,14 reject 20:14 related 54:8 relative 54:11 remainder 29:25 remaining 20:24 remember 10:16 11:3 remove 17:18 render 12:21 repair 15:17 replace 24:13 26:12 30:18,25 replaced 31:3 replacement 17:11 32:4 Report 7:17 Reporter 3:6 4:21 54:1,17 represent 5:20 25:14 representation 5:17 representative 5:19 represented 8:15 18:8 25:10 26:6 37:14 representing 12:14 represents 18:14 46:14 request 6:13 19:21 requesting 8:22 requests 7:7 required 11:24 15:21 17:19 19:25 20:19 26:1 requirement 25:23 requirements 11:25 13:13 21:17 24:22 47:1 requires 5:15 research 9:23 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES residential 5:20 resolve 22:16 23:4 24:15 27:15 50:5 resolved 50:4 respond 25:7 responsibility 12:3 responsible 15:23 restrictions 29:7 restrooms 9:4 result 27:6 resulted 50:6 resulting 31:16 32:6,22 results 31:18 37:4,5 retailer 39:5 revenue 10:13 13:25 23:6 32:14 49:23 revenues 6:7 11:14 28:20 49:15,25 review 5:11 6:14 10:22 12:18,20 25:1 34:17 45:16 46:2 reviewing 45:21 reviews 12:16 Richard 2:6 38:4 right 13:2,7,21 18:10 30:21 31:11 32:3,14 38:14,18 41:16 42:3,20,23 43:14 44:20,24 47:12 48:10 49:24 53:4 right-hand 19:17 24:18 33:6,16 35:22 37:15 River 18:9,10,11 rivers 11:9,10 road 26:25,25 roads 27:2 roadway 26:25 roof 51:19 roster 37:13 roughly 40:5,8 47:17 rules 6:8,22 8:17 ruling 12:21 43:11 runoff 12:1 25:18,25 Russ 5:2 Russell 4:3 46:20 S S 4:1 5:1 sample 25:3 41:6 sanitary 15:9 Sarah 2:7 39:14 saw 33:4 34:15 35:16 40:7 says 19:18 scale 28:2 scenario 36:10 44:4 schedule 6:8,10 13:12 35:16,18 scheduled 34:20 schedules 10:7,8 Schneider 4:6 5:8 46:5 school 44:1 52:10 52:13,15,23 schools 52:5 scientific 51:13 screen 18:24 see 10:7,20 16:9 18:13,24 19:1 20:2,21,23 23:6 23:8 25:14 26:6 28:10,14 30:6 41:5,19 42:17 46:6 seek 40:3 seen 38:20 seep 18:3 select 5:16 sell 41:12 sent 12:19 separate 48:9 serve 48:22 service 11:4,11 11:13,18 16:14 16:15 20:13 21:3 23:8,14,17 23:24 24:6,7,11 26:22 32:7,13 32:19 51:25 52:4 serviced 27:1 services 4:22 5:18 12:4 24:2 24:9 31:14,18 33:3,11,14,24 36:19,25 41:21 48:6,7,8 49:2,3 Session 2:5 8:6 sessions 7:24 set 30:14 44:9 sets 10:6 12:13 Setting 7:11,18 sewer 1:8 3:2 5:4 10:12 11:20 20:3 22:12 23:3 23:21 26:8,9,12 26:20,22 27:1 27:13,20 36:17 51:24 52:16 sewers 11:21 14:8,18 19:13 19:14,15 24:3 26:7 47:18 49:6 51:15 shaded 21:11 shape 45:12 share 43:7,23 51:12 Shaun 47:25 sheds 27:2 sheet 8:13 shoes 51:15 shopping 43:20 short 47:23 showed 28:7 36:19 41:5 showers 11:6 side 8:20 10:10 13:22 19:18 20:14 33:5,6,8 33:17 37:15,17 37:18 sidewalk 51:14 sign 8:12,18,21 signed 10:3,4 44:21 similar 14:9 28:7 43:9 52:4 simply 50:23 single-family 20:2,21 23:11 sinkhole 26:13 sinks 11:5 sitting 26:16 situation 10:15 47:20 49:22 situations 25:8 six 49:19 six-year 27:10 size 15:16 48:22 slide 33:3,25 47:14 slides 35:23 small 12:5 28:19 31:20,22 smart 51:21 snacks 9:6 soak 11:19 socio-economic 5:24 sold 16:16 solve 15:6 18:19 solving 18:19 somebody 50:9 somebody's 26:13 sort 51:3,4 source 26:17 27:13 South 22:7 29:3 southern 18:11 space 43:18 speak 8:12,23,23 9:1 44:22 speaker 39:14 Speakers 8:20 special 28:17 specific 39:17 50:18 spend 11:15 21:4 29:9,10 spending 17:1 spent 11:15 12:8 13:18 14:2 30:8 spreadsheet 18:18,21,25 28:9 St 1:8 3:1 4:3,5,6 4:23 5:3 6:3 7:2 8:2,3 22:6 29:2 41:25 49:4 stability 15:24 staff 6:21 7:6 9:14,20 34:11 40:23,25 42:21 42:22 46:11 Stan 2:8 39:20 Standard 15:25 start 1:17 11:1 13:5,8 16:7 17:19 19:24 20:18,25 27:14 35:21 started 17:16 35:17 starting 18:20 27:11 state 3:7 21:17 42:9 54:2 statements 45:23 States 42:25 stations 14:5 19:10 Stein 4:9 38:1 stop 15:7 stopping 15:10 20:7 storage 17:20,24 storm 11:20,21 18:2 22:12 23:3 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 24:3 26:7,8,9 26:12,20,22 27:1,13 47:16 47:18 storms 14:9 stormwater 5:13 6:6 8:8 10:10 11:17,18,18 12:1,5,6,9 14:25 15:7 21:4 21:5,15,18,19 21:20 22:15,16 22:22 23:4,17 23:24 24:3,9,10 24:24,25 25:4 25:16,17,18,20 25:23,25 27:16 29:25 30:2,16 31:3,7 32:3,7 32:18 33:12 37:19 38:23 39:2,8,10,23 41:24 46:25 48:2,13,14 49:3 49:6,7,10,15,23 50:5 52:21 story 47:23 straight 9:4 stream 11:20 streams 12:2 14:22,23 15:12 21:21 25:4,5 26:1 27:3 street 4:23 51:17 streets 27:3 structure 51:11 51:21 52:12 subdistricts 22:24 subject 53:1,2 submit 6:24 7:16 submitted 7:13 9:14 34:11 submitting 7:14 sued 50:9 suggested 6:17 13:9 summary 9:13 summation 10:16 37:12,17 37:19 support 10:13 supposed 14:25 Supreme 42:13 50:11 sure 15:19 35:4 37:5 39:25 surface 38:25 43:1,21 47:3 survey 20:10,10 Suzanne 3:6 4:22 54:2 sworn 54:5 system 10:12 11:21 14:24 15:1,2,3,8,10 15:10,12,16,18 15:21 16:11 18:3 22:12 23:3 23:21 26:8,9,23 27:1,5,14,20,22 27:25 28:5 36:17,22 40:10 43:1,6 47:16 48:16 49:14,23 systems 11:23 S-T-L-M-S-D 10:22 T table 46:1 take 10:24 12:18 17:23 21:7 29:11 39:9 45:22 46:10,11 46:15,19 taken 22:11 49:17 54:6,10 takes 27:3 30:20 talk 21:6,9 27:17 28:13 48:2 talking 52:20 task 45:15 46:4 tasked 45:15 tax 5:13 12:7 21:14,14 22:8,9 22:9,22,23,25 23:15,17,22,22 23:25 24:4,5,5 24:8,15,21 28:16,18,19,23 29:5,11,19,20 29:23 30:14,15 30:16,16,18,18 30:20,21 31:1,4 31:10,13,15,17 31:19,21,22,24 31:24 32:2,4,8 32:15,20,21,22 32:24 36:16 38:23,25 39:4 48:7,15 50:20 52:12,22 53:2 taxed 30:17 51:23 taxes 24:14 29:6 29:8 30:11 31:20 32:5,11 48:12 50:10,23 52:13,25 taxing 23:6 30:23 39:12 48:9 taxpayer 23:16 23:23 32:1,6,9 32:17 taxpayers 35:7 46:23 tax-paying 42:2 42:4 tells 18:18 ten 8:25 testimony 7:6,8 7:12,14,19 8:18 46:10,11,15 54:4,5 Thank 9:10 38:12 39:13,19 41:15 therefor 7:21 thereon 8:14 thereto 54:12 thing 36:14 39:12 50:23 things 10:1 25:24 35:7 41:14 49:8 50:7 think 37:10 38:24 40:20 41:21 42:7,10 42:11,24 44:18 50:9 51:2,9 52:1,2,5 thinking 45:6 thought 42:17 43:1 49:18 52:3 52:7 thoughts 44:23 thousand 32:11 three 21:9 32:10 41:14 three-tenths 32:9 time 1:17 8:4,23 9:3 13:23 21:4 27:9 34:15 35:6 36:13 39:23 49:1,21 times 15:15 tipped 52:22 today 5:6 toilets 11:5 tonight 8:6 18:23 19:1 38:2 53:5 total 17:9 31:18 32:24 40:7 totaling 16:9 28:25 track 21:22 travels 11:7 treat 18:4 25:23 treated 11:8 14:21 treatment 11:8 14:4 18:4 19:10 Trustees 5:16 6:12,15 12:20 34:19,20 try 41:2 48:21 50:1,2,5 trying 37:5 41:9 41:11 44:13 51:10 tunnel 18:2 tunnels 17:21,25 turn 9:7 twice 38:16 two 10:1 11:3 14:8 35:7,10 36:4 37:8 46:12 47:4 49:8 two-thirds 14:12 40:5 two-to-one 38:21 type 10:6 typewriting 54:7 typically 38:24 U uncertain 44:17 underground 17:24 underneath 20:3 understand 21:6 37:3,6 41:19 uniform 51:11 unify 51:10 United 42:25 upstream 17:23 use 20:17 42:25 users 5:17,20,21 utilities 11:3 utility 11:17 V value 23:12 29:1 29:13 30:3 31:10,25 32:16 42:1 valued 29:18 values 44:8,11 vaults 17:25 vein 52:5 versus 40:3 volume 24:24 25:16 voluntarily 43:13 PUBLIC HEARING 5/20/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES vote 27:21 36:18 36:21 37:3,4 43:3,6 48:18,19 48:23 voted 49:11 50:24 voted-on 42:19 43:9,15 voters 4:5 12:12 16:18 19:18 20:14,15 29:22 33:6 35:20 36:18,21 49:12 voting 37:1 W want 10:20 11:2 28:13 33:17 34:24 35:13 36:6 37:25 40:16,21 41:19 48:23 washing 11:5 wastewater 5:13 6:6 8:8 10:2,5 11:4,12,13,15 12:6,9 13:1 14:13 17:17 18:4 20:2,13,22 21:2,13 22:22 31:2 33:13 34:3 34:14 35:12,25 37:18 43:18 46:25 48:14 49:2,10 50:3 water 11:5 12:2 20:11,21 21:21 25:5 27:2 watershed 50:20 watersheds 50:17,19 way 10:11 15:13 24:10 39:4 44:5 44:17 45:7 46:3 46:3 ways 15:6 42:21 weather 14:17 website 10:22 46:6,18 47:5,7 47:10 went 19:5 35:23 43:24 50:5,10 50:21 west 18:12 22:6 29:3 47:17 wet 14:17 we'll 18:2,3 28:11 35:4 48:2 we're 9:12 13:16 14:10,16 16:2,7 16:12,20,23 17:3,17,19 18:7 18:19,19 20:24 21:16 22:11 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