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HomeMy Public PortalAboutExhibit MSD 120 - Transcript of May 27, 2015 Public Hearing PUBLIC HEARING 5/27/2015 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 27, 2015 11 12 WILDWOOD CITY HALL 13 16860 MAIN STREET 14 WILDWOOD, MISSOURI 15 16 17 (Hearing start time, 6:00 p.m.) 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/27/2015 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. Stein 5 4 Presentation by Mr. Hoelscher 9 5 Public Hearing Session 6 R. Osterhoff 38 7 T. Theerman 43 8 Larry Feuerstein 43 9 Paul Caster 53, 73 10 Sarah Griesedieck 67 11 Rick Pfarr 68 12 Jeannie Venard 71 13 D. Dunn 71 14 J. Hartwig 73 15 16 17 INDEX 18 EXHIBIT DESCRIPTION MARKED 19 Caster 1 Document and Letters 85 20 21 22 23 (Exhibits were attached to the original transcript.) 24 25 PUBLIC HEARING 5/27/2015 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 27, 3 2015, between the hours of 6:00 in the evening and 4 7:35 in the evening of that day, at the Wildwood 5 City Hall, 16860 Main Street, Wildwood, Missouri, 6 before Suzanne M. Zes, a Certified Court Reporter of 7 the State of Missouri. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/27/2015 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 John L. Stein Missouri Industrial Energy Consumers 4 Lori A. Kelling 5 West St. Louis County Chamber of Commerce 6 Steve Mahfood Missouri Coalition for the Environment 7 Chan Mahanta 8 North County Incorporated 9 10 Also Present: 11 Brian Hoelscher Executive Director 12 Lance LeComb 13 Manager of Public Information & Spokesperson 14 15 16 17 18 19 20 The Court Reporter: 21 Suzanne Zes 22 MIDWEST LITIGATION SERVICES 711 North Eleventh Street 23 St. Louis, MO 63101 314.644.2191 24 314.644.1334 Fax 25 PUBLIC HEARING 5/27/2015 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. STEIN: Good evening, I'm Jack 3 Stein, a member of the Metropolitan St. Louis Sewer 4 District Rate Commission and I will be presiding 5 over the public hearing this evening. 6 With me tonight are the following MSD Rate 7 Commission members: I have on my far right Mr. Chan 8 Mahanta and on my immediate right Ms. Lori Kelling. 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 5/27/2015 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 26th, 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, and amended this 10 Procedural Schedule on May 20th, 2015. 11 Under the Procedural Schedule, as amended, 12 the MSD Rate Commission has until August 10, 2015, 13 to review and make a recommendation to the MSD Board 14 of Trustees as to whether the proposed rate should 15 be approved, not approved or modified with suggested 16 changes and then approved. 17 The MSD Rate Commission has engaged legal 18 counsel and a rate consultant independent of those 19 used by the MSD staff. 20 Under Procedural Rules adopted by the Rate 21 Commission, as amended, any person affected by the 22 Rate Change Proposal had an opportunity to submit an 23 application to intervene in these proceedings. 24 Applications to intervene have been filed by the 25 Home Builders Association of St. Louis and the PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 7 1 Missouri Industrial Energy Consumers. These 2 applications have been granted. 3 Since February 26, 2015, the MSD Rate 4 Commission has received testimony from MSD staff. 5 The parties have also engaged in discovery requests. 6 Additional testimony from the Intervenors and the 7 Rate Consultant will be filed. 8 Technical conferences were held on 9 April 8th and May 20th, 2015, and are planned for 10 June 17th, 2015, where the participants and the Rate 11 Commission are given an opportunity to ask questions 12 of those submitting testimony. 13 A Prehearing Conference for the purpose of 14 identifying any issues raised by the Rate Setting 15 Documents and the prepared testimony previously 16 submitted will be conducted on the record on 17 June 26, 2015. 18 All persons submitting testimony may 19 participate in the Prehearing Conference and each 20 participant in the Prehearing Conference shall 21 submit a Prehearing Conference Report describing the 22 issues raised by the Rate Setting Documents and the 23 prepared testimony, together with a brief 24 description of such participant's position, if any, 25 and the rationale therefor. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 8 1 Ratepayers who do not wish to intervene are 2 permitted to participate in these on-the-record 3 public hearings conducted in ten sessions, which 4 began on May the 11th, 2015 and concluding on 5 July 10, 2015. 6 The Rate Commission published a Public Notice 7 regarding these proceedings in the St. Louis 8 Post-Dispatch and in the St. Louis American. These 9 Notices contained the time, dates and location of 10 each of the conferences and hearings. 11 The Public Hearing Session tonight is for the 12 purpose of permitting the District to present its 13 Wastewater and Stormwater Rate Change Proposal, and 14 to permit any ratepayer an opportunity to comment. 15 We will begin with a presentation by the District 16 followed by a public comment period. 17 Those wishing to speak should sign in on the 18 sheet provided and will be called on in the order of 19 the names listed thereon. Each ratepayer should 20 identify themselves and any organizations 21 represented by such ratepayer. 22 And let me just stop right now and introduce 23 Mr. Steve Mahfood, who is also a member of the Rate 24 Commission. 25 Several housekeeping rules before we begin PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 9 1 are: 2 If you wish to present testimony please sign 3 in on the clipboard by the entrance. Speakers will 4 be recognized in the order in which they sign up. 5 Each ratepayer may have a maximum of ten 6 minutes to speak regarding the proposed rate change. 7 As the presiding officer, I can limit or expand the 8 time, should I deem it necessary. 9 Restrooms are located by the stairway as you 10 came in. 11 And I would just say are there any questions 12 regarding the procedure for this evening? 13 Mr. Hoelscher, is the District ready to 14 proceed? 15 MR. HOELSCHER: Yes, sir, we are, 16 Mr. Stein. 17 MR. STEIN: The floor is yours. 18 MR. HOELSCHER: Can everybody hear me 19 from here? I would think so. Okay. I'm going to 20 do it from here then. 21 Tonight's presentation is an overview of the 22 proposal submitted to MSD's Rate Commission on 23 February 26, 2015. At the end of the presentation 24 the Rate Commission will open the floor for public 25 comments. Also, after the entire proceedings are PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 10 1 done and they're closed, MSD has additional staff 2 here so if you have questions or comments regarding 3 other topics or other issues with MSD, we have folks 4 who can either answer your question or can take your 5 information and make sure we get back to you. 6 Quick introduction as to what's kind of 7 driving MSD's costs. We'll go over the wastewater 8 proposal. On that side, what is driving our program 9 is the Consent Decree that MSD signed with the 10 Department of Justice to address issues in the 11 wastewater system and a schedule in which to address 12 those. That's what is driving the Wastewater Rate 13 Proposal. 14 On the stormwater side, we'll go over the 15 existing taxing system. You're going to find that 16 throughout the District folks are taxed different 17 amounts of money and are receiving different levels 18 of services. Our proposal is to put in front of the 19 voters the opportunity to collect a District-wide 20 tax that would provide an equal level of service for 21 all of MSD's stormwater customers. 22 This presentation is a summation of the Rate 23 Proposal. We do have two copies of the full 24 proposal here. If you went on our website you can 25 find the full proposal if you wish to look at it. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 11 1 As we go through the presentation if you see any 2 references to appendices or sections at the bottom 3 of the slide, those are references to specific parts 4 of the Rate Proposal, which obviously you're free to 5 view anytime you wish. 6 The thing to remember is MSD is two 7 utilities. For those folks who receive wastewater 8 service from MSD we collect and treat used water 9 that goes down sinks, toilets, floor drains, washing 10 machines, showers. Those flows go into sanitary 11 pipes. They flow several miles to one of our seven 12 treatment plants. Those flows are treated and 13 discharged, per our permits, and they are discharged 14 in the Missouri, Mississippi or Meramec River. 15 That service is currently funded by a monthly 16 bill that everybody gets from MSD if you're a 17 wastewater customer and that bill is based on your 18 potable water usage during the winter months. The 19 idea being that a measure at that time is reflective 20 of what's actually going down the drain and doesn't 21 account for things such as watering lawns or washing 22 cars or filling swimming pools up. So it's a good 23 measure of what goes down the drain. 24 MSD is also is a stormwater utility. 25 Throughout its municipal boundaries any rain that PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 12 1 hits the ground and soaks in or goes to local creeks 2 and streams are great but there are areas where that 3 is insufficient and we have a series of public storm 4 sewer systems that will convey that water. It can 5 be inlets, manholes, stormwater sewers, paved 6 channels that will convey some of those flows and 7 convey them back into the same creeks and streams as 8 though -- just as it would occur naturally if there 9 was no development in the area. 10 MSD is also responsible for the pollutants 11 that are in stormwater runoff that affect the creeks 12 and streams throughout our entire boundaries. 13 Again, wastewater -- stormwater runoff that pulls 14 pollutants off streets, yards, animal waste, those 15 types of things. 16 That stormwater service, there's a small fee 17 for wastewater customers. Most of our revenue for 18 stormwater is on folks' property taxes. So on your 19 annual property tax bill most of the MSD stormwater 20 revenue comes from those annual property taxes. 21 Quick recap on the Rate Commission. Again, 22 it was established in 2000 to provide public input 23 on how MSD sets its rates. There are 15 24 organizations that represent a broad cross-section 25 of MSD -- of the community that MSD serves. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 13 1 The purpose of the Rate Commission is to 2 review the Rate Proposal by MSD staff, compare it 3 against five standards that our in our Charter and 4 make a recommendation to our board. Our Board of 5 Trustees will then also do a review of the same kind 6 with the Rate Commission's recommendations, compare 7 it against those five factors and make a ruling as 8 to how MSD is supposed to proceed with the proposed 9 rates. 10 The Rate Proposal we're proposing is covering 11 the period for this session from July 1, 2016 12 through June 30th, 2020. Any rates collected prior 13 to July 1, 2016 were already approved in a previous 14 rating hearing. 15 Current wastewater rates. The current rate 16 structure that we're under right now runs from 2013 17 to June 30th, 2016. Under that Proposal MSD 18 proposed to start $971 million in capital work for 19 those four years. 20 Right now MSD is projecting it will start 21 approximately $890 million of capital work during 22 that four-year period. That's less than what we had 23 originally planned, however, the news is good. We 24 are on schedule. We are on budget. 25 And those reductions are the result of PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 14 1 savings, a lot of it having to do with some very 2 good prices we get from our contractors, some of it 3 through cost saving measures that occur during the 4 engineering of the program. 5 Any of the money that wasn't spent gets sent 6 into this next rate cycle and is available as a 7 starting balance for any future capital work. 8 For operation and maintenance, again, we are 9 also on time and under budget. Operation and 10 maintenance activities are also required by the 11 Consent Decree. We had projected $716 million in 12 expenditures through June 30, 2016. We are 13 projecting that we will hit at $700 million or 14 $16 million below the budget. 15 Besides the operation and maintenance of 16 treatment plants and pump stations throughout the 17 District, the work includes inspection of 62,000 18 manholes, rehabilitation of approximately 6600 19 manholes, inspection of 1900 miles of sewers. 20 And based on an evaluation near the airport 21 of two successive storms that happened years apart 22 but looked very identical in distribution and rates, 23 we're estimating that the work to date has resulted 24 in a two-thirds or 66 percent reduction in overflow 25 volumes and basement backups with the work we've PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 15 1 completed to date. 2 So what MSD is proposing. MSD's program, if 3 you've heard it, it's MSD Project Clear. It's a 4 program we're putting out to meet regulatory 5 requirements. The first and most important portion 6 of that is get the rain out. Understand that the 7 program we're proposing the problem is stormwater 8 that's entering the wastewater system. That is the 9 issue. 10 AUDIENCE MEMBER: Entering the 11 wastewater? 12 MR. HOELSCHER: Stormwater entering the 13 wastewater system. 14 AUDIENCE MEMBER: Thank you. 15 MR. HOELSCHER: On a day like today, 16 unless somebody flushes grease down the wastewater 17 system or if a pipe collapses, all the wastewater 18 goes down everybody's drain, goes into the sewers, 19 goes to the treatment plant, gets treated and 20 properly discharged into the Missouri, Mississippi 21 or Meramec River. There are no overflows. 22 The problem is when we have rains. 23 Stormwater can get into the system that's not 24 supposed to and would cause the system to surcharge 25 and cause overflows in the system that's either out PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 16 1 to the environment or individual basements. 2 Cheapest way to resolve that issue is to keep 3 the stormwater from entering the system at the 4 start. That is the cheapest way. You will find a 5 big part of the program is related to that. Doing 6 that, as opposed to making the system bigger, is 7 four to five times less expensive than actually 8 expanding the system to accept and treat all that 9 flow. 10 There's also repair and maintenance to the 11 system to make sure the system will continue 12 functioning for a long time and there are some 13 system improvements that we will have to build as 14 well. MSD is looking to do this in a financially 15 responsible manner and maintain our financial 16 stability. Currently MSD has a AAA bond from S&P 17 and from Fitch and Moody's a AA1 and a AA plus bond 18 rating. 19 The standard throughout the industry, 20 throughout the country, is to maintain a AA bond 21 rating. So MSD has got a long-term financing plan 22 based on the parameters as we currently understand 23 them that will -- is attempting to ensure that MSD's 24 bond rating never goes below a AA bond rating and 25 thus allows us to borrow money at a very competitive PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 17 1 rate. 2 For the program for those four years, the 3 capital program, we're looking to start $1.5 billion 4 worth of capital work over that four-year period. 5 It's distributed through the four years as you see 6 on the chart, 2017 to 2020, totaling $1.5 billion. 7 We are proposing $736 million in operation 8 and maintenance costs and $477 million in total debt 9 service costs. That would be for bonds that have 10 previously been sold. MSD will also be asking the 11 ratepayers whether or not they wish to grant us 12 additional bonding authority. Assuming they do, we 13 have included that in this number and the total debt 14 service during that four-year period would be $477 15 million. 16 On the additional use of debt over the next 17 four years to pay for the $1.5 billion worth of 18 improvements we're looking to cash finance 415 19 million of that. That would be taking the 20 wastewater rates we receive on a monthly basis and 21 actually using that cash to pay for the 22 improvements. We're looking for the remainder to be 23 bond financed or $1.1 billion of borrowed money. 24 $200 million of that is left-over bonding authority 25 from the last rate cycle. 900 million would require PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 18 1 additional authorization from the ratepayers. So, 2 again, assuming the ratepayers authorize an 3 additional $900 million in debt our total debt 4 authorization would go to $2.62 billion. 5 Remember 100 percent of the debt, 100 percent 6 of the money borrowed is spent on capital work. It 7 is not used for operating costs. 8 For that capital work we will start 9 approximately 600 projects, 230 of those which would 10 be construction projects, eliminate 39 sanitary 11 sewer overflows, and start the design of 24 miles of 12 storage and conveyance tunnels. 13 While we will try for the most part to keep 14 the stormwater from originally entering the system 15 there will be parts of the system where we will have 16 to intercept the overflows themselves. The way we 17 do that is capture those overflows, store them in 18 underground tunnels and caverns, wait until the 19 storm is over and then we feed those flows back into 20 the treatment plants so they don't get discharged 21 untreated. 22 This map is a map of where all the projects 23 will be. Each one of those blue dots is a project 24 over the next four years and if you have a 25 magnifying glass you can see there's a little number PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 19 1 inside each one of those blue dots, a five-digit 2 number. 3 That relates to something -- in our Rate 4 Proposal there's a spreadsheet. Each one of those 5 numbers is a project. If you look on that 6 spreadsheet you'll find the problem we're resolving, 7 how we plan on fixing it, the cost, and the year we 8 plan on starting that project. 9 What we do have tonight is -- a reproduction 10 of that map is here along with the spreadsheet. So 11 this evening if you'd like to see what those 12 projects are and look on the spreadsheet you can see 13 the details here. You always have the option of 14 going on our website and taking a look at the 15 information that's actually in the Rate Proposal 16 itself. 17 Operation and maintenance. Again, in 18 addition to the operation and maintenance of the 19 treatment plants and pump stations throughout the 20 District we plan on inspecting 60,000 manholes, 21 rehabilitating 6,000 manholes, the inspection of 22 1600 miles of sewer with closed-circuit TV, cleaning 23 3800 miles of sewer and rehabilitation of 360 miles 24 of sewer. 25 The next chart are the two funding options PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 20 1 and this will be up to the voters in MSD's municipal 2 boundaries to decide how they pay for this. On the 3 left-hand column you see something called "Voters 4 Approve Bonds, Option A." As I indicated before, 5 MSD will go in front of the voters and ask if they 6 wish to authorize an additional $900 million of 7 bonding authority. If they do, again, we would 8 start 1.5 billion of capital work over those four 9 years. 10 In the chart you see below is the average 11 single-family wastewater sewer bill. In our Fiscal 12 2016, which is the end of our current cycle, right 13 now the average customer will pay $40.72 per month 14 for wastewater service, if we provide a wastewater 15 service. That is projected to go up about 16 10 percent per month per year, so in 2020 the 17 average monthly bill is just under $61 per month for 18 wastewater service. 19 Where are we compared to the rest of the 20 country? If you take a look at 50 other cities that 21 are kind of in the situation that MSD is, they're 22 paying anywhere between from 15 and $135 a month for 23 wastewater service depending on the condition of the 24 system and where they're at with the Federal 25 Government. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 21 1 If you take a look on the right where it 2 says, "Voters Reject Bonds," this would be Option B. 3 Again, MSD will ask the ratepayers whether or not 4 they wish to authorize additional bonding. If they 5 do not, because of the Consent Decree with the 6 Federal Government, we will still have to start 7 $1.5 billion worth of capital work over that 8 four-year period. 9 And below you see what happens to the average 10 single-family wastewater bill. Again, $40.72 in 11 2016. 2017, under both scenarios is the same, 12 that's because initially we're using the remaining 13 bonding authority from the current cycle. 14 Ultimately the cost per month would go up to $96 per 15 month in 2020 for the average residential customer. 16 We'll discuss stormwater. First, we want to 17 talk about the current stormwater service and 18 funding. The map you see up here is a map of MSD's 19 municipal boundaries, our current service area. To 20 the right is the Mississippi River. To the north is 21 the Missouri River. To the south the Meramec River 22 wiggles in and out. And to the west MSD's 23 boundaries go out to about 109 here in Wildwood. 24 Services look -- things look different. So 25 if you live in the red area, right now you're paying PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 22 1 a 24 cent per month fee if you pay wastewater. 2 You're also paying a 2 cent property tax to MSD for 3 stormwater services. Those monies allow us to meet 4 local, state, and federal regulatory compliance with 5 regard to stormwater, primarily having to do with 6 any increased volumes from development. We're able 7 to police those. We're also able to address any 8 pollutants that are in stormwater runoff that 9 impacts local creeks and streams. We police that. 10 We also monitor the creeks and streams for their 11 condition. 12 It allows us to collect data and track 13 information with regard to stormwater issues and it 14 does allow us to do emergency response if needed. 15 And by emergency response we mean if a creek is 16 eroding and somebody's house is ready to fall in the 17 creek we do have an emergency fund that we can 18 respond to that. That's what we mean by an 19 emergency. 20 If you live in yellow area, which is most of 21 the City of St. Louis and near North, West and South 22 Counties, you pay a 24 cent fee, same 2 cent 23 property tax and you also pay approximately another 24 7 cent property tax. We're able to take care of all 25 the regulatory issues in the yellow area and pretty PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 23 1 well maintain the public storm sewer system. 2 What is not getting done is any kind of 3 stormwater projects to fix erosion or flooding. 4 Same as in the red area, there are no projects to 5 fix erosion or flooding. Double back here, in the 6 red area we are also not able to maintain the public 7 storm sewers that MSD owns. There are no funds to 8 maintain those. 9 If you go to the green area, if you live in 10 that area you pay a 24 cent fee, 2 cent property tax 11 to take cake of regulatory issues, 7 cent property 12 tax that pretty much takes care of operation and 13 maintenance of the public storm sewer system and up 14 to another 10 cent tax. That allows us to do 15 projects to address stormwater issues such as 16 flooding and erosion. That green area is the only 17 area right now that MSD has funding in order to do 18 those kind of projects. 19 What does that mean for the homeowners in 20 those areas in dollars? If you go to the next page, 21 if you're in the red area you're paying the 24 cent 22 fee, 2 cent tax, all you're getting are regulatory 23 services. We are not maintaining the public storm 24 sewers. We are not doing projects. MSD's average 25 customer is paying $8 a year for stormwater PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 24 1 services. 2 If you live in the yellow area you're paying 3 a 24 cent fee, 2 cent property tax and a 7 cent 4 property tax. We're able to do the regulatory work. 5 We're able to maintain the public storm sewer system 6 but not do any projects. If you live in that area 7 the average taxpayer pays MSD a little over $26 per 8 year on their annual property tax bill for 9 stormwater services. 10 If you live in the green area you pay the 24 11 cent fee, 2 cent property tax, 7 cent property tax 12 and up to another 10 cent property tax. Folks in 13 that area pay an average annual amount of $53 per 14 year on their property tax bill for stormwater. 15 Again, in that area we can do the regulatory 16 work, maintain the public storm sewer system, and we 17 do have money available to do projects to resolve 18 erosion and flooding issues. 19 Now I want to talk about how MSD plans on 20 asking the taxpayers, the voters, to equalize the 21 services throughout MSD's boundaries. Really quick 22 I'm going to provide some graphics to kind of 23 describe and help explain what the issue is. 24 If you notice in the upper right-hand corner 25 that pink area represents the 2 cent property tax. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 25 1 That's actually on the entire map. So for that 2 2 cent tax we're able to maintain our stormwater 3 regulatory compliance activities. That's making 4 sure that any new development doesn't impact the 5 volume or doesn't impact by runoff -- stormwater 6 runoff discharging pollutants to local creeks and 7 streams. It allows us to monitor those creeks and 8 streams and understand their condition. 9 We do complaint investigation. We make sure 10 we understand all the stormwater problems that exist 11 and, again, if necessary, we can make some kind of 12 emergency response. 13 The next slide is something that kind of 14 represents what that work looks like. That gray 15 area you see is what was the yellow and green area 16 you just saw on the previous map. So everything 17 else is the red area. 18 The blue lines you see are the creeks and 19 streams in the area that MSD is responsible for with 20 regard to the impact of stormwater pollutants on 21 those creeks and streams. There is 1454 miles of 22 those creeks that MSD has to police. 23 Also, there are little green dots. There's 24 2,638 of them on this map. They represent either 25 best management practices or basins that hold PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 26 1 stormwater back to resolve volume issues or also 2 help to clean up the stormwater before it runs off 3 and takes some of the pollutants out of the 4 stormwater before it impacts the creeks and streams. 5 MSD provides a building permitting process to 6 make sure folks meet our regulations and we police 7 those to make sure they're being followed. All of 8 that work is currently funded by the 2 cent tax. So 9 that work is being completed. 10 The next slide is a representation of what is 11 not being funded. All of the little black lines you 12 see there are parts of the public storm sewer system 13 that MSD owns and has no money to operate and 14 maintain. It is 1,363 miles of stormwater sewers, 15 approximately one half of the public storm sewer 16 system within MSD's municipal boundaries. 17 We have two issues we have to address. One, 18 there's no monies collected in this area, so there 19 are no monies to operate and maintain the system. 20 If an inlet gets busted, we can't fix it. If a 21 storm pipe comes apart and causes a sinkhole in 22 somebody's backyard, we may fill in the sinkhole, we 23 don't have monies to fix the pipe. If a stormwater 24 discharge pipe causes some erosion in a creek, we 25 don't have the monies to fix those. There are no PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 27 1 monies to do any kind of operation and maintenance 2 of the system. 3 The second issue we've got is folks who live 4 in that area are not paying for the operation and 5 maintenance of any of the public storm sewer system 6 within our municipal boundaries. If you drive on 7 any local streets or roads within the area that's 8 shown here almost all of them are served by a public 9 storm sewer system that helps those roads operate 10 and function. If you drove here tonight you took 11 advantage of the public storm sewer system that MSD 12 operates and maintains. 13 We're looking to also make sure folks in the 14 red area help pay for their share of maintaining the 15 public storm sewer system throughout MSD's service 16 area. 17 How do we plan on going about that? We plan 18 on asking for a District-wide 10 cent property tax 19 in order to equalize services throughout the entire 20 District. That will result in a four-year operation 21 and maintenance cost of approximately $91 million 22 between 2017 through 2020 and a six-year capital 23 program of almost a hundred million dollars from 24 2015 to 2020. And for the first time that capital 25 program will have projects District-wide. It will PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 28 1 not just be projects in the green area like I 2 explained earlier. 3 Again, what's driving the proposed revenue 4 changes? The biggest one is the maintenance of the 5 public storm sewer system. Half of our system is 6 located in the area that I showed previously. It 7 also, again, does initiate funding for stormwater 8 projects District-wide. 9 For the operating budget, Fiscal 16, right 10 now we're spending $16 million on the operation and 11 maintenance of the public storm sewer system: 12 inlets, manholes, storm sewers, paved concrete 13 channels. That goes up to 22 to $23 million a year 14 every year for the next four years, a little bit 15 under a 50 percent increase to double the amount of 16 the public storm sewer system that we have to 17 maintain. Obviously there's some economy to scale. 18 It's not necessarily one-for-one. So it only costs 19 a little less than 50 percent more to double the 20 size of the system that we have to operate and 21 maintain. 22 The capital program. And I'm going to start 23 from the top of the chart in the green areas. This 24 map is similar to what you saw on the wastewater 25 side and it's duplicated over here. Same way, each PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 29 1 one of these projects has a number in it, the 2 circles have a number in it. It's a project. If 3 you looked on the spreadsheet you could find the 4 problem we're solving, how we're going to solve it, 5 what it will cost and when it will get done. 6 If you live in the green area we're planning 7 64 projects at a cost of $25 million. The funding 8 for that comes from taxes currently being collected 9 in those areas. It's spent out of those monies. 10 Whether a 10 cent District-wide tax passes or not, 11 just about all of those projects will get done 12 because it's a separate tax being paid by the folks 13 in that area. 14 You actually pay -- we would actually bill 15 slightly less because some of the revenues we 16 collect in the green area are actually used to 17 maintain the public storm sewer system but those 18 projects basically go either way whether we pass a 19 new tax or not. 20 If you live in the yellow area, which is the 21 City of St. Louis and mostly near North, South, and 22 West County, we've identify 47 projects valued at 23 seventeen and a half million dollars. Approximately 24 half of the value of those projects are in the City 25 of St. Louis, the other half in near North, West and PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 30 1 South County. 2 Those projects come from excess dollars that 3 are available within an accounting change that comes 4 with the approval of a new tax. Those monies were 5 collected for one purpose with the passage of the 6 new tax. We are able to un-restrict how we spend 7 some of those dollars, that amount of money, but it 8 is money that has to be spent in that yellow area. 9 We can't spend it anywhere else throughout the 10 District. 11 Finally, in the red area -- and the yellow 12 has never had projects. This will be the first time 13 we've had stormwater projects in the yellow area. 14 In the red area we're identifying 60 projects 15 totaling seven and a half million dollars. 16 Where does that money come from? MSD is 17 proposing a 10 cent property tax for operation and 18 maintenance of the public storm sewer system. On 19 Year 1 we're predicting that 8.8 to 8.9 of that 10 20 cents is needed for operation of the public storm 21 sewer system. All left-over monies will be used for 22 stormwater capital projects to address erosion and 23 flooding issues. 24 Now, because we have those projects already 25 identified in the yellow and green area, the PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 31 1 projects in the red area come up with the most 2 priority and, therefore, the excess money from the 3 new tax goes to the red area. We do this on a -- we 4 do our evaluation and prioritization based on a 5 cost-benefit analysis. We take the value of the 6 problem, divide it by the cost to solve the problem, 7 and the projects with the highest cost-benefit ratio 8 are the ones that get billed first. 9 And so in this particular case for the first 10 four years all those projects would be in the red 11 area as we have shown here. 12 So what are we proposing to happen to all the 13 taxes? Let's go through that real quick. In the 14 green area, again, you're paying up to an additional 15 10 cent property tax that nobody else is paying. 16 We're proposing to set that tax at zero and not 17 collect anything. 18 The stormwater O&M tax, the 7 cent property 19 tax, that's being paid by folks in the green and 20 yellow area. This new 10 cent tax would replace 21 that 7 cent property tax and it would go away. 22 I mentioned earlier there is a District-wide 23 2 cent property tax collected for regulatory issues. 24 Right now stormwater regulatory issues are funded 25 almost exactly with the amount of money we collect PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 32 1 on the 2 cent District-wide property tax. So we're 2 not proposing any changes in that 2 cent tax. It is 3 currently sufficient to meet those enviromental 4 regulatory needs for stormwater. 5 And, finally, we would be looking to 6 implement a 10 cent property tax District-wide. 7 Also, for those of you who are wastewater customers, 8 we have a 24 cent per month charge on your 9 wastewater bill for stormwater. That fee would also 10 be replaced by the 10 cent property tax. It would 11 no longer exist. 12 What does that mean to individual property 13 owners? If you live in the green area the average 14 value of properties in the green area is $148,500. 15 Remembering that most of our stormwater revenue 16 comes from annual property tax bills. Right now 17 folks in that area are paying us just under $62 per 18 year for stormwater services. This change would 19 reduce their annual property tax bill by about $20 20 per year, resulting in an average property tax bill 21 of $42 per year from MSD. The impact on their 22 overall property tax bill would be a decrease of one 23 half of one percent. 24 The property tax that MSD collects is a very 25 small portion of what people pay on their property PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 33 1 tax bill, so the impact on the overall bill is 2 fairly minor. 3 In the yellow area folks there are currently 4 paying us -- the property value in the yellow area 5 is $70,800. With that, the average taxpayer in that 6 area is paying us $12.50 per year on their annual 7 property tax bill. The proposed change would raise 8 that by $3.60, resulting in the average taxpayer 9 paying us an annual property tax bill of $60.10 per 10 year for stormwater service. 11 That change would be an increase of 12 three-tenths of one percent on their property taxes 13 or another three dollars for every thousand dollars 14 of taxes that they're currently paying. 15 Finally, if you live in the red area, and if 16 you recall this is the area where we collect the 17 fewest dollars and thus providing the fewest 18 services, with what we're proposing -- currently the 19 average properly value in that area is $266,700. 20 Currently folks at that rate are paying MSD $10.52 a 21 year for stormwater service. The proposal would 22 increase that by about $50 per year, resulting in 23 the average taxpayer in the red area on their annual 24 property tax bill paying $60.60 per year for 25 stormwater services. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 34 1 Change in the overall property tax bill for 2 the average property owner would be an increase of 3 1.2 percent. Again, a large increase but MSD is a 4 fairly minor portion of the property tax bill to 5 begin with. 6 What is the total customer impact? If you 7 look on this chart the left-hand side is assuming 8 the ratepayers authorize additional bonding 9 authority. The right side is assuming we do not 10 authorize additional bond authority. So throughout 11 the District in 2016 our average customer will pay 12 us $522 per year for all the services MSD provides. 13 By 2020, with additional bonding authority, that 14 would go up to $771 per year for all the services 15 that MSD provides. 16 Right-hand column is assuming that no 17 additional bond authority is authorized. With that, 18 again, $522.50 per year currently. That would go up 19 to just under $1200 per year in 2020. 20 The next slide is indicating we have a 21 customer assistance program having do with low 22 income residential customers. The effect of that 23 program is to cut by half the cost they pay for 24 wastewater. 25 So this chart is exactly the same. The PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 35 1 left-hand side assumes additional bonding authority. 2 The right-hand side assumes no additional bonding 3 authority. And you will find that this chart is 4 just about one half the value of what you saw in the 5 previous chart and that's the impact of the low 6 income customer assistance program. 7 What to expect in the future? Again, under 8 the current process MSD staff submitted a Rate 9 Proposal to our Rate Commission on February 26, 10 2015. There will be a final wastewater increase for 11 our wastewater customers on July 1, 2015. That is 12 the last increase under the current rate cycle. 13 The Rate Commission is due to give 14 recommendations to our Board of Trustees on our Rate 15 Proposal on August 10th. The Board of Trustees 16 between October and December will consider that 17 recommendation from the Rate Commission and make 18 their own recommendation. 19 There's a couple ways to submit comments, 20 public comments, of the Rate Proposal. You can do 21 so tonight. We have also included an email address 22 and a mailing address. If you'd rather not make 23 comments this evening or you don't have the 24 opportunity, you know somebody else who doesn't, if 25 you will send them to those addresses we'll make PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 36 1 sure the Rate Commission receives all the comments 2 that we receive. 3 So what does the future look like? There 4 will be two votes put in front of the ratepayers and 5 taxpayers in 2016, sometime in 2016. One will have 6 to do with wastewater. The voters will be asked 7 whether or not to authorize an additional 8 $900 million worth of bonding authority for MSD to 9 pay for capital improvement work over the next four 10 years. 11 If the ratepayers say yes, if you remember 12 those charts, the average monthly cost for 13 wastewater service will go from about $40 a month to 14 about $60. If they say no, would rather pay for the 15 program in cash, again, the current rate would be 16 about $40 per month in 2016, by 2020 the average 17 ratepayer would be paying about $96 a month for 18 wastewater. 19 It's a borrowing decision like many of you 20 have seen. If you decide to finance the work, it 21 costs less now but in the future everyone will have 22 to pay about two dollars for every dollar that was 23 borrowed to be able to pay for that interest. 24 If you decide not to borrow money, rates do 25 go up now, however, the capital program is scheduled PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 37 1 to peak in about 2023 or so and as that goes down 2 the more you pay now using just cash the better 3 opportunity you have for rates to go down much 4 faster once the capital improvement program peaks 5 and starts getting smaller. 6 The second vote will be for stormwater and 7 the folks within our municipal boundaries will be 8 asked whether or not -- to vote on whether or not to 9 implement a 10-cent-wide property tax, primarily for 10 the operation and maintenance of the District-wide 11 public storm sewer system. 12 If they vote yes, we have the program that 13 you saw previously where we maintain the public 14 storm sewer system District-wide and we'll do the 15 projects located on the map similar to the one 16 that's over here on my left. 17 If they vote no, then MSD will maintain the 18 current stormwater service as it does now. If you 19 recall the red, yellow, green map, everybody pays a 20 different amount, everybody gets a different level 21 of service. That system will just simply remain in 22 place. 23 I would note there's two handouts that you 24 received. One is entitled, "MSD Rate Commission." 25 That is kind of a summation of the Rate Commission PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 38 1 process and on the right-hand side in the blue bar 2 are the 15 Rate Commission organizations who are on 3 our Rate Commission, as well as our schedule for 4 public hearings. You'll notice this one is the 5 second one from the bottom. 6 Also there is a sheet that says, "2015 MSD 7 Rate Proposal." One side says, "Wastewater." It's 8 kind of a summation of everything I gave you 9 tonight. The backside says, "Stormwater," and 10 you'll find that red, yellow, green map there and 11 that's a summation of the information I presented 12 tonight with regard to stormwater. 13 With that, I believe the Rate Commission is 14 ready to accept public comments on MSD's staff's 15 Rate Proposal. Mr. Stein? 16 MR. STEIN: Thank you, Mr. Hoelscher. I 17 will call upon people tonight in the order in which 18 you signed in and give you the opportunity to make 19 comments or ask questions of Mr. Hoelscher. I'll 20 just remind you to please withhold your -- contain 21 your comments within a 10-minute time frame if 22 possible. 23 Mr. Osterhoff, do you have any comments or 24 questions? 25 MR. OSTERHOFF: Yes. Thanks for the PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 39 1 opportunity to speak. Just a few comments. First 2 of all, we've had a lot of numbers thrown at us. 3 It's tough to digest. 4 MR. HOELSCHER: Sure. 5 MR. OSTERHOFF: But I've got three 6 primary comments. Number one, is this rate increase 7 a forgone conclusion? Is this an exercise that's 8 going to happen whether you hear us or not? 9 Point No. 2, you shared with us 10 percent 10 increases through 2020 and I guess what I would have 11 liked to have seen is a historical perspective. 12 What did we pay in the past? Because all I have is 13 my bill I get every month to go on that's personal 14 to me. And if I look at what I've been paying over 15 the past ten years I come up with about a 300 16 percent rate increase. That's all I can make my 17 judgment on. 18 By the way, it started when I built my home 19 12 years ago when I had no bill, zero costs, and 20 then two years later I received a nice letter from 21 the sewer district saying, "Oh, by the way, we made 22 a mistake. We screwed up and you owe us for two 23 years," and then it went up from there. So my love 24 of the sewer district is perhaps a little tainted, I 25 apologize. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 40 1 But I really would like to understand the 2 continuous increases of about 10 percent a year is 3 what it appears to be. I come from the private 4 sector. I live in Wildwood. If this were my 5 private business I would probably be out of 6 business. 7 And that leads me to my third comment, is 8 what alternatives are explored in lieu of a rate 9 increase? The thinking today seems to be we will 10 just increase the rates, the costs, the taxes versus 11 how can we find economies of scale or how can we 12 become more productive to keep our rates down for 13 the citizens who pay this. 14 So, again, thank you for the opportunity for 15 me to voice my comment. 16 MR. HOELSCHER: Mr. Chair, I think I can 17 answer two factually just pointing to information in 18 the Rate Proposal. 19 Will the increase happen or not? The work on 20 the wastewater side will have to happen. We're 21 under an order by a federal judge. We're like many 22 cities throughout the United States. There's a lot 23 of parts of our system that needed improvement. 24 Under some of those older rates, that you mentioned, 25 we were slowly working our way through all of those PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 41 1 issues. 2 Probably the biggest result that comes out of 3 the Consent Decree is you were given a time frame to 4 get it all done. At the time we signed the Consent 5 Decree, we signed a 23-year Consent Decree, it was 6 the longest one in the country. We're given the 7 most time of anybody to resolve these issues. 8 So you're right in identifying that on the 9 wastewater side the work has to happen. We really 10 don't have a choice. The offer that's being given 11 to the ratepayers is to decide how to pay for it. 12 Historical, in the past, I don't have the 13 numbers with me but last year's Rate Proposal is 14 also on the website and it has the same kind of 15 information about what the increases were per year. 16 It does seem like it keeps going up and, if 17 you think about this, we had $1 billion worth of 18 work to do, bonded a lot of that, what we're 19 proposing now is another $1.5 billion worth of work 20 and borrowing money for a billion. There's 21 probably, as we show in the Rate Proposal, another 22 four years between 2021 and 2024, a significant 23 amount of work that needs to get started before the 24 program starts dropping off. 25 The amount of the increases is going to PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 42 1 depend on whether the ratepayers decide to borrow 2 money or whether they decide to pay for it by cash. 3 Again, if you immediately go to cash, rates flatten 4 somewhat because of the program size but if you 5 borrow money for a four-year period and then have to 6 do it again the next four years, you have to borrow 7 money or pay more cash to get up there. 8 So I would offer -- and we might be able 9 to -- we can either -- I can find the right staff 10 person to ask but we can give you what the 11 percentage rate increases have been as far back as 12 you wish. The information is on the website. We do 13 have the previous Rate Proposal as well, which show 14 those. 15 But if you look in our program, right now 16 we're looking at rates to peak somewhere around 17 2023 or 2024, when the program size starts going 18 down. 19 As far as looking at other ways of addressing 20 this, I've shown areas where we are under budget and 21 on schedule. We are always finding a way to save 22 things. You will find in the Rate Proposal one of 23 the things that we think is very key is a comparison 24 between MSD's productivity and cost-effectiveness 25 against other wastewater utilities throughout the PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 43 1 country. And we did it on a metric that's based on 2 a national analysis and you will find that MSD ranks 3 in the 75th to 80th and sometimes the best utility 4 throughout the country for cost-effectiveness. 5 It was one of the -- my predecessor happens 6 to be in the audience, but it was one of the first 7 things that MSD worked on when we knew the EPA had 8 decided it's St. Louis' turn to be put under the 9 microscope, was to really get our house in order to 10 make sure we just do things as cost-effectively as 11 possible and we keep doing that now and we do have 12 some evidence in the Rate Proposal to show that. 13 MR. OSTERHOFF: Thank you. 14 MR. HOELSCHER: Thank you. 15 MR. STEIN: Mr. Theerman, do you have 16 any questions or comments? 17 MR. THEERMAN: No, Mr. Chair. I 18 mistakenly signed that sheet. I have no comment. 19 MR. STEIN: Mr. Feuerstein? 20 MR. FEUERSTEIN: Yes. 21 MR. STEIN: Did I get that correct? 22 MR. FEUERSTEIN: Yes, sir. Feuerstein 23 actually. I'm a resident of Wildwood. First of 24 all, I would like to compliment Mr. Hoelscher on a 25 very well-organized and informative presentation. I PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 44 1 think I really got a lot out of what you presented. 2 My first question has to do with the Rate 3 governance structure. In your Rate Notice you -- 4 the quote is that it's "a broad cross-section of 5 customers in the community it serves." And as I 6 look down the roster tonight of the various entities 7 that are part of the Commission, five of the fifteen 8 are either construction companies or union 9 organizations. And, to me, that would seem to be a 10 pretty blatant potential conflict of interest and 11 they would have financial interest in this work 12 being approved. 13 So how does the Rate Commission respond to 14 that membership organization? 15 MR. STEIN: I can take a shot at that. 16 The constitution -- or the constituents of the Rate 17 Commission are set by the Charter. The Charter, as 18 I indicated, sets certain qualifications for who is 19 to be considered as an organization to belong to the 20 Rate Commission. 21 My personal experience has been that there 22 has been a limited number of organizations who 23 actually apply for membership on the Commission and 24 there have been times during the last rate cycle 25 when we actually operated two organizations short of PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 45 1 full. 2 MR. FEUERSTEIN: So naturally the 3 construction companies and the unions would apply 4 and then who does the picking? 5 MR. STEIN: It's up to the Board of 6 Trustees to do that. 7 MR. FEUERSTEIN: Okay, the trustees. Do 8 you agree that that appears like they would have a 9 direct financial interest in the outcome, therefore, 10 I can't see how they would be impartial people to 11 vote on whether the increase goes forward or not? 12 I will leave you with that thought and 13 hopefully these comments are all on the record. 14 Okay. But I mean, you know, just reading this it's 15 pretty straight forward. 16 Second thing is on the wastewater it says in 17 your Rate Notice that it's largely, quote, unquote, 18 driven by state and federal requirements. Can you 19 quantify "largely"? Out of the total amount how 20 much is the mandate and how much is other stuff 21 you've added? 22 MR. HOELSCHER: Well over -- well over 23 99 percent. 24 MR. FEUERSTEIN: 99 percent? 25 MR. HOELSCHER: MSD's mission is PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 46 1 basically to meet federal regulations. 2 MR. FEUERSTEIN: Okay. So as I look, 3 similar to the other gentleman over here who 4 commented on the rate increases, last summer at my 5 home here in Wildwood I got an 11 percent increase 6 in rates, we're talking for a 7/1/15, now another 7 13 percent increase and then 49 percent more from 8 7/16 to 7/19 for a total of 73 percent over six 9 years, so you can round that up to about a 12 10 percent a year. Twelve percent price increases are 11 unheard of in the commercial industry. I mean, it 12 just -- it comes across as exorbitant right off the 13 top, okay. 14 Secondly -- so that's the comment on the 15 wastewater part. On the stormwater, what's the 16 basic reason for the increase? Is it because you've 17 got unserved areas, is that what I gather here 18 tonight, large unserved areas? 19 MR. HOELSCHER: What we are showing is 20 there is one half of the District's public storm 21 sewer system that's located in that red area. 22 MR. FEUERSTEIN: Okay. 23 MR. HOELSCHER: And there was never a 24 revenue source put in place to fund the operation 25 and maintenance of that storm sewer system. The PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 47 1 primary driver here is to provide a fund so we can 2 maintain the storm sewer system throughout the 3 entire District. 4 MR. FEUERSTEIN: And your average annual 5 rate goes from 10.52 per year to $60.60 per year and 6 that happens immediately if this is voted in? 7 MR. HOELSCHER: It would -- under the 8 current schedule it would show up on the property 9 tax that you pay near the end of Calendar 2016. 10 MR. FEUERSTEIN: So that's another 11 increase of somewhere around 500 percent, in 12 addition to the 73 percent on the wastewater part. 13 I mean, is it necessary to do them both now? It 14 seems a bit insensitive, you know, when you have to 15 do this big huge wastewater thing. What's the 16 reason for the timing of the wastewater now? 17 I mean, just from a PR perspective why didn't 18 you wait a year or try to defer it for two years or 19 something? It just comes across here's another 500 20 percent on top of the 73, you know, that's my 21 reaction to it, that it's just exorbitant. 22 And then overall, and I'll wrap up here for 23 time limit but, you know, the normal business choice 24 for making large investments in the commercial 25 world, that I live in, is you either raise prices to PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 48 1 your customers, which is what you're doing here, or 2 you reduce operating costs or some of both. 3 So the question is: What specific actions 4 has MSD taken to reduce its operating costs? And 5 let me explain operating costs in my commercial 6 context. The management bonus pool, would be one. 7 General and administrative expense, would be 8 another. Consulting costs, would be another. 9 Operating overhead like facilities, would be 10 another. 11 You know, if you look down your chart of 12 accounts, so to speak, and you looked in the 13 overhead and support costs area it just seems that, 14 you know, there should be reductions made there to 15 contribute to this. And I'm not a materiality guy. 16 If you say oh, it would only be a hundred thousand, 17 well, that's okay, that would a hundred thousand 18 less that you would have to ask your customers in 19 increased prices. 20 So, you know, I just think it's so easy to go 21 to the ratepayers. And I prefer to be called a 22 customer than a ratepayer, by the way. But it's so 23 easy to go out there an increase your prices in a 24 quasi-monopoly setting but what are you really doing 25 to take costs out of your cost structure as your PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 49 1 contribution? And then we have to make our 2 contribution as the balance. We shouldn't be the 3 hundred percenters. 4 MR. HOELSCHER: I think let me respond 5 to some of it. 6 MR. FEUERSTEIN: Or you can follow up 7 with me if you want to. You have my address and 8 mailing address and everything is there because I'm 9 really interested in knowing specifically what 10 actions have you taken. Have you reduced the bonus 11 pool? What do you need that big facility down there 12 on Market Street for, couldn't you go out and go 13 into a leased space instead of the palace? 14 You know, when you're talking these kind of 15 numbers I would think you would be looking at every 16 available aspect of your cost structure even before 17 you come out to us and lay on a 500 percent increase 18 in one thing and a 73 percent in another. 19 MR. HOELSCHER: I think -- I'll give you 20 one thing, we are a municipal entity, there are no 21 bonuses. 22 MR. FEUERSTEIN: Okay. 23 MR. HOELSCHER: But one of the things, 24 since you offered that -- 25 MR. FEUERSTEIN: No performance bonuses? PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 50 1 MR. HOELSCHER: No, sir. 2 MR. FEUERSTEIN: Okay. 3 MR. HOELSCHER: I think let me take -- 4 we can take everything you said and we'll -- I 5 briefly mentioned -- 6 MR. FEUERSTEIN: How about consultants, 7 you have a lot of those? 8 MR. HOELSCHER: Based on a business case 9 they're the most cost-effective way to resolve the 10 issues now as opposed to hiring local staff for that 11 short period of time. And there's a business case 12 that gets put in place for -- 13 MR. FEUERSTEIN: For every consultant 14 procurement in a bidding process? 15 MR. HOELSCHER: Well, consultants -- 16 yes, every time they're going to be used there's a 17 business case we use. 18 MR. FEUERSTEIN: And, you know, 19 obviously facilities, that has got to be a big cost 20 for you. And general and administrative, I don't 21 know how -- I haven't looked at your org chart, so I 22 don't know how you're staffed for general and 23 administrative but -- 24 MR. HOELSCHER: I will give you 12 years 25 ago there were 17 members of senior staff. That was PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 51 1 reduced to 8 in preparation for this program. 2 MR. FEUERSTEIN: Okay. 3 MR. HOELSCHER: Just as an example. 4 MR. FEUERSTEIN: How long ago? 5 MR. HOELSCHER: Fifteen years ago 6 because we -- 7 MR. FEUERSTEIN: About time to take 8 another look. 9 MR. HOELSCHER: When we saw this was 10 going to come -- and then at the time we had almost 11 1,000 employees and now, even with all the increased 12 work, we're still at 950. 13 MR. FEUERSTEIN: You know, I would 14 respectively suggest after 15 years it's probably 15 time to take another hard look at that. 16 MR. HOELSCHER: It is looked at every 17 year and I would -- 18 MR. FEUERSTEIN: On a zero-based budget 19 basis or on an incremental basis? 20 MR. HOELSCHER: Zero-based budget every 21 year. 22 MR. FEUERSTEIN: Okay. 23 MR. HOELSCHER: And I would also suggest 24 that was one of the reasons we included in the Rate 25 Proposal, I mentioned it briefly, a comparison of PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 52 1 our cost-effectiveness against other utilities 2 throughout the country. 3 MR. FEUERSTEIN: So you benchmark? 4 MR. HOELSCHER: And we benchmark and 5 you'll find that in the Rate Proposal. We thought 6 it was important that -- 7 MR. FEUERSTEIN: You benchmark on 8 operating costs? 9 MR. HOELSCHER: Operating costs, 10 quality, production, all those. 11 MR. FEUERSTEIN: And that's on your 12 website? 13 MR. HOELSCHER: It's actually in the 14 Rate Proposal. 15 MR. FEUERSTEIN: Okay. All right. Last 16 comment, you know, as you look at these percentages 17 they come across as economically unrealistic for 18 consumers, you know, this and for the Rate 19 Commission, you've got the Ameren people, you've got 20 Laclede, everybody wants to increase the price to 21 the consumers. And what you're doing is, you're 22 creating an economically unrealistic outcome for all 23 consumers but especially devastating for people on 24 fixed incomes. 25 And a lot of people on fixed incomes don't PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 53 1 qualify for that. You know, it's like Medicaid, 2 it's there but not many can get it. So these kind 3 of price increases just come across as, you know, 4 insensitive to reality. And I will end my comments 5 with that. 6 One other thing, I really would say to the 7 Rate Commission now, as opposed to MSD, that this 8 roster of Rate Commission members, the optics on 9 that are terrible because anybody with any ethical 10 or conflict of interest training looks down that 11 list and you see financial interest in the 12 membership taking votes and that really needs to be 13 looked at. Thank you very much. 14 MR. STEIN: Thank you very much. 15 Mr. Caster? 16 MR. CASTER: Thank you, Mr. Stein. Yes, 17 my name is Paul Caster. I'm a voter and a customer 18 of MSD. I'm also representing Ballwin Governor 19 Court Homeowners Assocation as a spokesman and as a 20 member of that association. 21 I want to say, first of all, I have much 22 respect for the Rate Commission and for the MSD 23 director here. I'm going to ask, please, for some 24 indulgence. If there are other people who want to 25 go before me, I will go last. I know I'm going to PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 54 1 run over ten minutes. The reason being, this is 2 not -- this is my second rodeo, if you will. I 3 attended the May 12th presentation at the Pointe in 4 Ballwin. I did not have an opportunity to fully 5 digest the presentation, the PowerPoint here. I 6 have done that in the past two weeks and I want to 7 go over that with Mr. Hoelscher if we have time. 8 So I will do two things this evening. The 9 purpose would be to review this presentation and the 10 reason I want to do that, sir, is because I 11 recognize, maybe unintentional, there are some 12 errors. There are some omissions. And there are 13 some deficiencies in this presentation that I will 14 point out. 15 The second thing I wanted to do, as I think 16 you suggested, sir, we can offer into record some 17 documents. I would like to do that before I leave 18 this evening. 19 So, on that note, let me turn to you, 20 Mr. Hoelscher, and go over the presentation. 21 MR. HOELSCHER: Okay. 22 MR. CASTER: Is that acceptable? Okay. 23 I will try to do this real quick because I know 24 folks have other things to do this evening. 25 On the back of the introduction page here, PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 55 1 the backside on stormwater service, you have a 2 bullet point here that reads, "Addressing regulatory 3 requirements regarding impacts of stormwater runoff 4 on receiving stream water quality." That's one of 5 the issues that we have with the homeowners 6 association that I will present in a bit. 7 Now, that regulatory requirement is part of 8 the Consent Decree? 9 MR. HOELSCHER: No, sir, it is a 10 separate stormwater regulation. 11 MR. CASTER: Okay. So are we saying, 12 therefore, that you are not under the regulatory 13 Clean Water Act and the Missouri River Clean Water 14 Law? 15 MR. HOELSCHER: We are under that law 16 but not under the Consent Decree. It's a separate 17 permit. The law covers a separate function. 18 MR. CASTER: The Consent Decree does 19 cover those two things, right, the Clean Water -- 20 MR. HOELSCHER: Not with regard to 21 stormwater, no, sir. 22 MR. CASTER: Pardon me? 23 MR. HOELSCHER: Not with -- the Consent 24 Decree does not with regard to those two issues, no. 25 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 56 1 MR. CASTER: Oh, the stormwater is 2 excluded? 3 MR. HOELSCHER: It is not included in 4 the Consent Decree. 5 MR. CASTER: Oh, I see, okay. And I 6 understand that in order for this to be an effective 7 community presentation we're looking for full 8 disclosure. Full disclosure, from my point of view, 9 is to the voters in the community and to the 10 ratepayers, customers of MSD. Your report here has 11 some errors, has some omissions, again, maybe 12 unintentionally but let me go through page 5 with 13 you, sir, entitled, "2013-2016 Rate Proposal 14 Status." 15 MR. HOELSCHER: Yes, sir. 16 MR. CASTER: You have that? Okay. I'm 17 looking for Appendix 7.7.1. Maybe my package here 18 doesn't include that. 19 MR. HOELSCHER: It would be the appendix 20 in the actual Rate Proposal document. The actual -- 21 we indicated we have some here and the full Rate 22 Proposal is actually on our website. Again, this is 23 a summation of that Rate Proposal but this is the 24 entire Rate Proposal document. 25 MR. CASTER: I respect what you're PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 57 1 saying, however, if the voters here are going to get 2 a presentation in pieces and in parts, there's no 3 reference here where we should go to pull up this 4 particular illustration, the appendix. You have 5 several others I'm going to point out. 6 MR. HOELSCHER: I mentioned earlier that 7 those references are to our full Rate Proposal. 8 This is a summation and that if you went to the full 9 Rate Proposal that's where those appendices are. 10 This is a summation of the information. It is not 11 the entire full Rate Proposal document. We did not 12 present all of that. 13 MR. CASTER: Well, I don't know if 14 voters are going to go and research what you're 15 saying but they're not in this package. 16 MR. HOELSCHER: Correct. 17 MR. CASTER: You refer to them in here. 18 You refer to them in your package here, in your 19 presentation, but I can't find them. 20 MR. HOELSCHER: Correct, they're not 21 there. They're in the Rate Proposal itself. 22 MR. CASTER: Okay. Flipping through 23 here, "Wastewater Rate Change Drivers: Get the Rain 24 Out." The last bullet, "Maintaining AA bond 25 Rating," sir. Your financial statement said you PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 58 1 have $390 million of prior revenue bonds not spent 2 on capital projects are invested and they incur 3 interest expense and interest revenue. Specifically 4 the last financial statement of 2014 indicates that 5 you're spending approximately -- I'm going to have 6 to sit down -- 46 -- $47 million of interest expense 7 on those investments and you're receiving 8 approximately $20 million in revenue. 9 Your total currently, bond service with 10 interest and expense, is $67 million annually. I'm 11 taking this from your financial statement. Along 12 with what the gentleman that preceded me said, it 13 seems like we ought to do a better job, maybe not 14 investing the money, spending the $390 million on 15 already appointed bond revenue on capital projects. 16 Okay. Why aren't we doing that? 17 MR. HOELSCHER: Any of the money that 18 you see there from bond sales have already got 19 designated projects that are being awarded against 20 those bond revenues or will be awarded during the 21 fiscal year. We don't borrow or go to the bond -- 22 we don't go to bond sales on a monthly basis or a 23 biweekly basis, usually once a year and any of the 24 monies you see there we do sell the bonds so that we 25 have sufficient fund balance to actually appropriate PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 59 1 the monies for part or an entire project that may 2 last for that fiscal year. 3 So during any one individual bond sale on a 4 given day the money is not spent the next day. It 5 sits and it's slowly being drawn down. We don't 6 purchase or sell any bonds unless we have capital 7 projects already planned to use the money. 8 So what you're seeing there, and I think 9 Mr. Snoke explained this, that's the balance that's 10 existing between the appropriation for the actual 11 project and the time it takes to actually build the 12 project, actually draw down on the cash. 13 MR. CASTER: Okay. I'll move on. The 14 conclusion of that scenario is you're investing 15 bonds, you're paying out much more in terms of 16 interest expense than you're taking in on 17 investments, the revenue, as I pointed out before. 18 I don't want to be redundant. $20 million in 19 revenue. $47 million in interest. That's -- let me 20 move on here. 21 Would this be considered, the $390 million 22 that you have in investments carried over from other 23 bonds as increasing the bond rating? Of course, we 24 know how that works depending upon the amount of 25 assets that you have on the balance sheet, you would PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 60 1 include the $390 million, at least the bond folks 2 would look at that, right, they would evaluate it? 3 MR. HOELSCHER: I'm sure that would be 4 one of the things they would look at, yes. 5 MR. CASTER: So if that $390 million 6 disappeared or you spent it, your bond rating, you 7 might say, would drop? 8 MR. HOELSCHER: Understanding I'm not 9 the financial expert but if we, for instance, didn't 10 sell any more bonds and had no more bonds to sell, 11 that balance would eventually go to zero and I don't 12 think it would have any impact on our bond rating. 13 Those bonds have already been designated towards 14 projects to be spent and the bond revenues 15 themselves aren't used for any kind of coverage for 16 the bonds. We have to have cash for that. 17 MR. CASTER: Well, isn't that considered 18 a kind of leveraging on borrowing? You borrow -- 19 MR. HOELSCHER: If we were able to 20 borrow every day for our daily expenses you wouldn't 21 have that but I think the reality is you do borrow 22 in chunks and, in the meantime, as the cash flow 23 catches up for what you borrowed you will have 24 balances and it would only be prudent of us to 25 invest whatever happens to not be used immediately PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 61 1 to help defer some of the interest expenses on those 2 dollars. 3 MR. CASTER: I will just remind you that 4 your Public Funds Investment Policy Exhibit A 5 prohibits you from leveraging and I need 6 clarification on that. 7 MR. HOELSCHER: It prohibits us -- 8 MR. CASTER: Not now, Mr. Hoelscher. 9 Not now. 10 MR. HOELSCHER: Okay. 11 MR. CASTER: And then, again, if you 12 flip that page over, sir, the Wastewater Rate 13 Proposal. 14 MR. HOELSCHER: Which number are you on, 15 sir? 16 MR. CASTER: Just flip to the page we're 17 talking about. 18 MSD STAFF: Eight. 19 MR. HOELSCHER: Eight. Thank you. 20 MR. CASTER: "Wastewater Rate Proposal 21 Key Financial Components." Again, the tables are 22 missing on my package. The following page, 23 "Additional Use of Debt," the tables are not 24 attached to my package. 25 Okay. I want to move on, please. Page 13, PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 62 1 table attachments are not here. I'll move on 2 quickly. On page 17, sir, the last bullet reads, 3 bullet point reads, "Emergency Response in critical 4 health and safety situations." 5 Will you please explain what you mean, how 6 you define by policy what the emergency response is 7 given? 8 MR. HOELSCHER: As I said, our example 9 of emergency responses, that we would determine to 10 use those funds, has typically been if erosion is 11 resulting in a creek bank coming up to a house and 12 the house is ready to fall into the creek. That is 13 what we -- that's the type of thing we classify as 14 an emergency. 15 MR. CASTER: Okay. So there is erosion 16 issues pertaining to an emergency? 17 MR. HOELSCHER: If a house -- like I 18 said, the one instance and I'm giving -- that's an 19 example, is if a house is ready to fall into a creek 20 we have in the past taken action on something like 21 that. That is the kind of emergency we would use 22 those funds for. 23 MR. CASTER: You would have to wait 24 until that point. What about the situation if a 25 creek contains E. coli contaminant, bank erosion, PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 63 1 health and safety of children, would that be 2 considered an emergency? 3 MR. HOELSCHER: Those issues are being 4 addressed both with the wastewater program, which is 5 to prevent wastewater overflows for pollutants -- 6 MR. CASTER: I'm sorry, sir? 7 MR. HOELSCHER: The wastewater program, 8 the Consent Decree, is to prevent overflows with 9 just partial sources of that and then under the 10 permit we have with the state to address those types 11 of issues right now is what's called, "best 12 management practice." 13 So we take new development that goes in place 14 and we put processes in place to help clean the 15 stormwater runoff and that's the phase we're in 16 right now as to what's required by state regulation 17 to address that issue you mentioned. 18 MR. CASTER: Okay. Well, we have been 19 addressing this issue here in Ballwin, Governor 20 Court Homeowners Association, since 2007. 21 MR. HOELSCHER: It's probably existed 22 long since before 1954. 23 MR. CASTER: What, sir, I'm sorry? 24 MR. HOELSCHER: The issues probably have 25 exited for a very long time. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 64 1 MR. CASTER: Well, I want to read, 2 Mr. Stein, into the record and I will give these 3 documents to you, there is an April 16 letter from 4 the Missouri Coalition for the Environment. It's 5 addressed to me in Ballwin. I'm not going to read 6 the whole letter. I'm going to read a paragraph out 7 of this letter. It's the third paragraph. 8 "In researching Fishpot Creek I learned that 9 it is listed on Missouri's Impaired Waters List for 10 bacteria contaminant -- specifically, E. coli." And 11 this was authored by Alicia Lloyd from MCE. 12 My point is simply this, in the creek that 13 goes through our little community, there are 14 children in there playing in the creek bed. So we 15 need to find out this evening what kind of remedy or 16 what kind of situation would rise to the point of an 17 emergency to get in there and clean this up. 18 In addition to the stormwater pipe, that it 19 needs severe repair, that is evidenced by a letter 20 here, another one of our advocates, the City of 21 Ballwin. This letter is dated May the 7th, 2014 and 22 it's written by Gary Kramer, city engineer. It's 23 directed to your attention, sir, and it's dated May 24 the 7th. I'm not going to read the whole letter, 25 just a sentence out of the first paragraph. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 65 1 "The creek" -- we're talking about Fishpot 2 Creek -- "has severely eroded and the pipe suspended 3 above the creek bed. In addition, discharge from 4 this pipe has created a deep, stagnant pool of 5 water; great for mosquito breeding. 6 Please advise what assistance MSD can provide 7 in correcting the bank erosion, securing the 8 suspended pipe and eliminate the pool created by the 9 pipe." 10 So the question is: Does MSD have a 11 responsibility to maintain situations as described 12 here? And, if so, what is your policy on 13 maintenance? Can we please have a copy of the 14 maintenance log? "We," meaning the Governor Court 15 Home Association. The maintenance log from 2007 to 16 today to verify that there has been maintenance on 17 this particular area as referenced by the City of 18 Ballwin. 19 MR. HOELSCHER: Is there a question or 20 -- 21 MR. CASTER: Yeah, the question is: Do 22 you have a maintenance policy? 23 MR. HOELSCHER: We have a maintenance 24 policy. Unfortunately, as described, that only 25 applies to the areas where we have funds to PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 66 1 implement that policy. In the area you're speaking 2 of there are no funds collected to maintain those -- 3 MR. CASTER: I don't mean to be 4 argumentative, Mr. Hoelscher, I'm just asking if you 5 have a maintenance policy. 6 MR. HOELSCHER: We do have a maintenance 7 policy, yes. 8 MR. CASTER: Can you please provide that 9 to me so I can give it to the homeowners 10 association? 11 MR. HOELSCHER: Sure. 12 MR. CASTER: Please. 13 MR. STEIN: Mr. Caster, your turn has 14 taken about 15 minutes here. I don't want to deny 15 you the opportunity to continue your questions but 16 -- 17 MR. CASTER: All right, Mr. Stein. 18 MR. STEIN: -- what I would like to do 19 is suspend your turn here and let some of these 20 other folks that have been patiently waiting have 21 their turn and at the end we can come back to any 22 further questions you have. 23 MR. CASTER: Come back to me? That's 24 fine. 25 MR. STEIN: Is that okay? PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 67 1 MR. CASTER: Sure. Absolutely. 2 MR. STEIN: Ms. Griesedieck? 3 MS. GRIESEDIECK: Hi, I'm Sarah 4 Griesedieck and I live in Town & Country and I'm a 5 little unclear on what the bond issue is, the 6 figure. I've heard 500 million. I've heard a 7 billion and a half. So what exactly is the top 8 million dollar you're looking for, for the bond 9 issue? 10 MR. HOELSCHER: Yeah, if you look on -- 11 let me say it specifically -- if you look on page 9, 12 the request right now -- the way MSD has proposed to 13 the Rate Commission is to propose an additional 14 $900 million bond authorization. 15 MS. GRIESEDIECK: Okay. And will that 16 be achieved through a vote? 17 MR. HOELSCHER: Yes, it requires a vote. 18 MS. GRIESEDIECK: And when will that 19 vote take place? 20 MR. HOELSCHER: It will be sometime in 21 Calendar 2016. We have two votes, that and 22 stormwater. Exactly what the timing is and when 23 they occur, that's something we will determine as 24 the end of the year approaches. 25 MS. GRIESEDIECK: So there will be two PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 68 1 votes in 2016? 2 MR. HOELSCHER: One for stormwater -- 3 MS. GRIESEDIECK: Right. 4 MR. HOELSCHER: -- whether or not to 5 collect the tax and then this. I will let you know 6 MSD's procedure with that is before any vote we will 7 go out and we will do educational presentations to 8 everybody to let them know if you vote yes, this is 9 what happens, if you vote no, this is what happens. 10 We won't advocate but we will have presentations 11 similar to this to explain to people this would be 12 the consequences of voting one way or the other. 13 MS. GRIESEDIECK: Okay. That's all I 14 have right now. Thank you. 15 MR. STEIN: Mr. Pfarr? 16 MR. PFARR: Yes. Good evening. First 17 of all, I want to say thank you to MSD. I think 18 your services are great. I have no complaints and 19 my last episode with our last storm everything was 20 taken care of and I appreciate it. The fellas did 21 great work. Some of our neighbors don't think so 22 but your system was maintained well. We just didn't 23 maintain some of our systems. 24 As far as the rate increase, will that cover 25 some of the work that needs to be done on Caulks PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 69 1 Creek, which is out here in Wildwood? 2 MR. HOELSCHER: If you're talking about 3 things like erosion and flooding in Caulks Creek, 4 the stormwater increase is a start. I would have to 5 look on the chart to see if there's any stormwater 6 work specifically to Caulks Creek identified right 7 now. The wastewater would not. That rate increase 8 would not cover any work on Caulks Creek with regard 9 to the condition of the creek. 10 The 10 cent tax might and what we might want 11 to do afterwards is -- who's here from engineering, 12 Bruce -- we can take a look at the map here and see 13 what projects are currently on the list and if it's 14 not there we can go back and let you know kind of 15 where its priority sits with everything else. 16 MR. PFARR: If there is areas along the 17 creek that goes through, like say our subdivision, 18 I'm a trustee for the area, and we say, "Hey, we'll 19 give you some money to help do some of this," is 20 that workable? For erosion. 21 MR. HOELSCHER: It is. We -- and, 22 again, we're working in a new area. We've actually 23 never had an offer from a subdivision trustee. It 24 usually comes from a municipality or something. 25 MSD's policy is not to speed up the work, you know, PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 70 1 bring monies in because somebody can afford 2 something because we do have some communities who 3 are very low on rates but as far as is there someway 4 to match that with -- they're all case by case and I 5 think if you talk to us we need to understand what 6 it looks like, how much -- 7 MR. PFARR: We're in the process of 8 doing that. 9 MR. HOELSCHER: Okay. And if you're 10 doing that, that's the right way to do it. It's 11 very case by case. Sometimes we can, sometimes we 12 cannot and it's something we'd have to discuss with 13 you. 14 MR. PFARR: Okay. I'm in favor of the 15 rate increase. I'm just saying, as a homeowner, 16 you're going to base it upon my property value? 17 MR. HOELSCHER: Yes, sir, that's the 18 proposal. 19 MR. PFARR: So I'll pay more than 20 somebody else and maybe I'm not going to dump as 21 much into the waste system or stormwater-wise. 22 That's where I have a problem. I think there's a 23 little bit of disparity in that. If we're going to 24 share, let's all share equally. 25 MR. HOELSCHER: What I would offer, it PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 71 1 is an issue -- Mr. Stein previously commented about 2 some of the testimony that has been submitted and 3 there's testimony both ways about the way MSD is 4 proposing property tax, as well as some testimonies 5 being submitted by other folks who think that maybe 6 an impervious area might be better. All that 7 information is on the website. So if you want to go 8 through and you can kind of see -- to be fair, 9 there's probably logic both ways and if you want to 10 take a look it will at least give you an idea of 11 what everybody is thinking as to what the Rate 12 Commission is hearing from everybody who's 13 testifying. Am I saying that right, sir? 14 MR. STEIN: Yes. 15 MR. PFARR: Okay. Thank you. 16 MR. STEIN: Thank you, sir. Ms. Venard? 17 MS. VENARD: No comments. 18 MR. STEIN: Mr. or Ms. Dunn? 19 MR. DUNN: Mr. Dunn. 20 MR. STEIN: Mr. Dunn. 21 MR. DUNN: I really only have one 22 question. With the construction, it's obvious the 23 money is going to be spent regardless, right? We're 24 doing the wastewater regardless, we have no vote in 25 that? Our only vote is how we pay for it, correct? PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 72 1 MR. HOELSCHER: Correct, sir. 2 MR. DUNN: Okay. And that's going to 3 take over a four-year period to get everything 4 corrected? Or how long is a period -- 5 MR. HOELSCHER: Well, that four-year it 6 will take -- the total program goes to about 2033. 7 It peaks at around 2023. The program has gone like 8 this and then it will go back down for the work 9 that's required in the Consent Decree. 10 MR. DUNN: And is this all going to be 11 done within MSD? Are you going to subcontract most 12 of this stuff out? 13 MR. HOELSCHER: We contract most of 14 that. As somebody mentioned earlier -- I can't 15 remember who asked about cost-effectiveness -- 16 MR. DUNN: And that's what I was going 17 to say. 18 MR. HOELSCHER: Whether it's the 19 engineering, right-of-way acquisition, construction, 20 we do a business case and determine what is the most 21 cost-effective way to proceed. 22 MR. DUNN: But if you're talking about 23 projects going -- 24 MR. HOELSCHER: Work of that side is all 25 contracted, almost all of it is contracted. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 73 1 MR. DUNN: Over a seven-year period, is 2 that what you just said? 3 MR. HOELSCHER: Well, again, the program 4 for the C.D. is going to go until 2033 or so. 5 MR. DUNN: 2033? 6 MR. HOELSCHER: Right. Most -- almost 7 all of the program we just presented here today will 8 be contracted, both the engineering and the 9 construction. 10 MR. DUNN: And it's been looked at both 11 ways which would be most cost-effective? 12 MR. HOELSCHER: Yes. 13 MR. DUNN: Okay. That's all I have. 14 MR. STEIN: Thank you, sir. Mr. or 15 Ms. Hartwig? 16 MR. HARTWIG: No comment. Thank you. 17 MR. STEIN: No comment, okay. In that 18 case, I will go back to Mr. Caster and let you 19 complete your comments or questions. 20 MR. CASTER: Thank you, Mr. Stein. 21 Thank you. Page 25, please. You have a listing 22 here of monthly charges, single-family, 23 multi-family, under "Proposed Stormwater Revenue 24 Structure." 25 MR. HOELSCHER: You're on Page 25 you PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 74 1 said, sir? 2 MR. CASTER: Yes, 25. 3 MR. HOELSCHER: Proposed Stormwater 4 Revenue Structure? 5 MR. CASTER: Yes, sir. 6 MR. HOELSCHER: Okay. 7 MR. CASTER: You have listed here 8 residential only, single and multi but no disclosure 9 of commercial, "commercial" meaning hospitals, 10 healthcare providers, educational institutions and 11 so on. 12 MR. HOELSCHER: I'm going to -- do we 13 have somebody -- you've caught me there. If they 14 are paying something, they are paying 18 cents a 15 month on their wastewater bill. I'm looking to 16 staff. I think that charge goes to everybody who 17 has a wastewater bill; is that correct? That's one 18 we'll have to get back with you on. 19 MR. CASTER: I would suggest that maybe 20 you put that in here for your next presentation. 21 MR. HOELSCHER: Sure. 22 MR. CASTER: That's a suggestion. The 23 only last comment I have on this is that the red 24 area that you have here, meaning west of 270, if I 25 understand your presentation, no capital projects PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 75 1 will be done west of 270 by MSD? 2 MR. HOELSCHER: As things are currently 3 structured if the 10 cent vote gets passed we then 4 do have the ability to do work west of 270. 5 MR. CASTER: You do or you do not? 6 MR. HOELSCHER: We do and that's what's 7 shown on the map up here, is the work that would be 8 proposed. I think we indicated blank number of 9 projects for about seven and a half million dollars. 10 MR. CASTER: How many west of 270, I'm 11 sorry? 12 MR. HOELSCHER: If you go to slide -- 13 MR. LeCOMB: Twenty-four. 14 MR. HOELSCHER: Thank you. Twenty-four. 15 And it's not quite 270 because that's a general 16 description of where that boundary difference is but 17 on Slide 24 you see where the projects are. That's 18 a total. The individual projects, again, are in the 19 Rate Proposal or we've got a map with the 20 spreadsheet here to look at what those projects are. 21 MR. CASTER: I didn't understand that in 22 your first presentation. However, my final comment, 23 Mr. Stein, I'm going to offer this document to you 24 as an amendment to your presentation since I think 25 the presentation should be expanded to include a PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 76 1 little more information to the voters on the amount 2 of per capita debt that this bond issue is going to 3 impact upon everyone sitting here. As I understand 4 it, the per capita MSD customer debt burden 5 currently is $1,400 approximately. 6 By the way, I want to thank you because Tim 7 Snoke, secretary treasurer, did call me. We had a 8 conversation about this yesterday. And I think 9 we're in agreement since Mr. Snoke said that he 10 believes that the Commission wants to have more 11 disclosure on this particular issue of the debt 12 impact on the voters. 13 Let me continue. Current debt burden will 14 increase with the new bond issue 54 percent. It 15 will go from approximately $1400 to $2,158. 16 And, the second point, in the event of any 17 bond payment default by MSD what happens? Who is 18 responsible to make up those deficits or who is 19 responsible to cure that? 20 MR. HOELSCHER: MSD would be. 21 MR. CASTER: How would they do that? 22 MR. HOELSCHER: Well, MSD's revenues 23 come from its ratepayers. 24 MR. CASTER: In other words, in ultimacy 25 the MSD customers would be responsible? PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 77 1 MR. HOELSCHER: Right. MSD doesn't make 2 a profit. It's a zero-budget entity. Any monies we 3 have to spend anywhere come from our ratepayers. 4 MR. CASTER: So if there were a bond 5 default people in this room, as customers and 6 voters, would be responsible to cure that? 7 MR. HOELSCHER: That would be the only 8 source of funding for MSD, yeah. 9 MR. CASTER: Okay. MSD has incurred 1.7 10 billion in bond financing today. We're going to add 11 another billion in outstanding bonds. MSD has made 12 no payments on 691 million senior bond financing 13 from 2006 to 2013. I'm taking this from your data 14 in your matrix on the bonds. I went over this with 15 Mr. Snoke yesterday. He agrees. 16 MR. HOELSCHER: Okay. 17 MR. CASTER: You can confirm this, 18 please, you can confirm what I'm giving you. 19 MR. HOELSCHER: Okay. 20 MR. CASTER: MSD's 2005 debt service -- 21 I'm sorry, I already mentioned this. $47 million in 22 interest -- 20 million in interest, 47 million in 23 revenue. MSD bonds are considered restricted. We 24 had this conversation on May the 12th. They're 25 restricted. Cannot be co-mingled with MSD general PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 78 1 funds nor used for operational purposes. Is that 2 your understanding? 3 MR. HOELSCHER: That's correct. 4 MR. CASTER: That's correct? 5 MR. HOELSCHER: Yes. 6 MR. CASTER: Well, nevermind. I agree. 7 MSD bond revenue produced approximately -- I 8 went over this point. I'll skip it. 9 The U.S. District Court Consent Decree, that 10 you mentioned, mandates that MSD achieve and 11 maintain compliance with the Clean Water Act and the 12 Missouri Clean Water Law without qualification. 13 Would that be correct? 14 MR. HOELSCHER: Yes. 15 MR. CASTER: Okay. That Consent Decree 16 went for about four years? 17 MR. HOELSCHER: Goes for 23 years, 18 approximately 23 years. There is a close-out 19 period but approximately 23 years. 20 MR. CASTER: Okay. Well, let me 21 rephrase it. The litigation behind that went, if I 22 understand, for four years? 23 MR. HOELSCHER: I think we were sued in 24 2007, the summer. Help me out here folks. 2007? 25 MSD STAFF: That's correct. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 79 1 MR. HOELSCHER: And, while we came to an 2 agreement, the document actually got signed in April 3 of 2012. 4 MR. CASTER: Can you tell me 5 approximately how much our litigation costs were 6 over that period of time? 7 MR. HOELSCHER: I don't have that with 8 me but we can get that to you. 9 MR. CASTER: Would you say it would be 10 in the millions? 11 MR. HOELSCHER: I'm sure it was in the 12 millions. We saved -- you know, I will speak up a 13 little bit about our negotiating ability with regard 14 to how the regulatory issues are addressed in the 15 yellow area. The original proposal from the 16 regulators was to spend $2 billion and we negotiated 17 down to a hundred million dollars. So I will at 18 least throw that piece out. 19 MR. CASTER: Thank you. Now, the 20 Consent Decree -- one more point here. 21 MR. HOELSCHER: Yes, sir. 22 MR. CASTER: The Consent Decree requires 23 MSD to spend a minimum, a minimum as I read it, of 24 $4.7 billion by the year 2023, I think it is. 25 Would that be correct? PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 80 1 MR. HOELSCHER: I would like -- I would 2 have to see exactly where you read that. That 3 number could go up or down. It could actually go 4 down. 5 MR. CASTER: It's in the Consent Decree. 6 I may be a little fuzzy on the actual date, that's 7 2023 -- 8 MR. HOELSCHER: If costs come in less we 9 do have the ability to keep those -- 10 MR. CASTER: The figure is 4.7 billion? 11 MR. HOELSCHER: 4.7 billion is a good 12 number, yes, in 2010 dollars. 13 MR. CASTER: But it reads "a minimum." 14 MR. HOELSCHER: Okay. 15 MR. CASTER: You can go above that? 16 MR. HOELSCHER: We could also go below 17 it. 18 MR. CASTER: Right. So if we add -- as 19 we're talking this evening, one billion added to the 20 existing 1.7 billion, that we already borrowed, 21 you're up to 2.7 billion, which means you can add 22 another 2 billion in voter-approved bond financing 23 at a minimum. 24 MR. HOELSCHER: Well, whether or not we 25 use bonds or cash is up to the voters. That 4.7 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 81 1 billion isn't tied to only being paid for by bonds. 2 It is up to the voters to determine whether they 3 want to use cash or bonds. 4 MR. CASTER: Explain to me -- you have 5 to clarify that. 6 MR. HOELSCHER: MSD only gets bonding 7 authority if the voters decide to authorize 8 additional bonding authority to MSD. 9 MR. CASTER: So the only revenue source 10 you're saying is cash? 11 MR. HOELSCHER: Yes, sir. 12 MR. CASTER: Coming from where? 13 MR. HOELSCHER: From ratepayers, as well 14 as much federal dollars as we can bring into the 15 program. 16 MR. CASTER: So you could increase that? 17 You could increase at any amount? 18 MR. HOELSCHER: Increase what's that? 19 MR. CASTER: The rates. 20 MR. HOELSCHER: Through this rate 21 process. 22 MR. CASTER: You can. All right. 23 I want to make clear that I understand what 24 your emergency situation is, how you declare an 25 emergency as I try to explain for different PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 82 1 situations, especially for the Fishpot Creek issue 2 that we have with E. coli bacteria contaminant. 3 MR. HOELSCHER: And we are addressing 4 the E. coli issue in alignment with federal and 5 state regulations. On the wastewater side we are 6 executing the Consent Decree and for any of the E. 7 coli that's coming from stormwater sources we're 8 following our stormwater permit in addressing that 9 issue in the schedule in compliance with those 10 permit requirements. 11 MR. CASTER: So when I walk away here 12 this evening, sir, so I can be clear, so I can go 13 back to the members, I want to know specifically 14 will you address this issue as we have presented it 15 twice now? I presented it on May the 12th. I'm 16 presenting it again. 17 Will MSD address this situation that we 18 consider critical for the safety of the children 19 immediately? 20 MR. HOELSCHER: And the issue is -- 21 immediately, no. The issue is being addressed in 22 the schedule because we do have an E. coli and a 23 water quality issue in just about every creek and 24 stream in MSD's boundaries. On the wastewater side 25 the C.D. takes care of any contribution from the PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 83 1 wastewater system with regard to overcharges. 2 The stormwater permitting process attempts to 3 address any issues that come from stormwater runoff. 4 How successful that will be in meeting water quality 5 standards depends because there's a lot of sources 6 of E. coli, such as wildlife, domestic animals, 7 naturally-growing bacteria. There's a lot of 8 sources so we are following the steps prescribed 9 under regulations whether it's stormwater or 10 wastewater. 11 MR. CASTER: Okay. So the answer is no? 12 MR. HOELSCHER: We will not solve it 13 immediately, no. 14 MR. CASTER: You will not? 15 MR. HOELSCHER: No. 16 MR. CASTER: Okay. Well, I have done my 17 duty. I have done my job. I put you -- I put MSD, 18 the executives, on notice. Okay. I have nothing 19 more to say. Thank you, Mr. Stein. Thank you, 20 Mr. Hoelscher. 21 MR. STEIN: Thank you, Mr. Caster. Do 22 the Rate Commissioners have any questions or 23 comments? 24 MR. MAHFOOD: Not at this time. 25 MR. STEIN: I just have a quick one for PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 84 1 Mr. Hoelscher. 2 MR. HOELSCHER: Yes, sir. 3 MR. STEIN: You indicated that the 4 District's goal is to maintain a AA bond rating 5 going forward. Can you tell me what the City of St. 6 Louis and St. Louis County have as their bond 7 rating? 8 MR. HOELSCHER: They are both less, 9 right? Lance, help me. 10 MR. LeCOMB: St. Louis County was 11 downgraded from a AAA to a AA last year, I believe, 12 and the City is at a lesser bond rating. 13 MR. HOELSCHER: Our bonding rate is 14 higher than both the County and the City, the County 15 and the City of St. Louis. 16 MR. STEIN: Thank you. Seeing no 17 further questions or comments I would like to thank 18 you all for your participation this evening. The 19 next public hearing, if you have the opportunity to 20 attend if you are so interested, will be June 19th 21 at 9 a.m. at the MSD administrative offices on 22 Market Street. 23 So if you have further questions or comments 24 that will be the time to present those. With that, 25 this public hearing is adjourned. Thank you. PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 85 1 MR. HOELSCHER: I'll remind you, we do 2 have staff here if any of you have any other 3 questions outside of this. 4 (Exhibit Caster 1 was marked for 5 identification by the court reporter.) 6 - - - - - 7 (Hearing concluded at 7:35 p.m.) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES Page 86 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 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES A AA 16:17,20,24 57:24 84:4,11 AAA 16:16 84:11 AA1 16:17 ability 75:4 79:13 80:9 86:6 able 22:6,7,24 23:6 24:4,5 25:2 30:6 36:23 42:8 60:19 Absolutely 67:1 accept 16:8 38:14 acceptable 54:22 account 11:21 accounting 30:3 accounts 48:12 achieve 78:10 achieved 67:16 acquisition 72:19 Act 55:13 78:11 action 62:20 86:9 86:14 actions 48:3 49:10 activities 14:10 25:3 actual 56:20,20 59:10 80:6 add 77:10 80:18 80:21 added 45:21 80:19 addition 19:18 47:12 64:18 65:3 additional 7:6 10:1 17:12,16 18:1,3 20:6 21:4 31:14 34:8 34:10,13,17 35:1,2 36:7 61:23 67:13 81:8 address 10:10,11 22:7 23:15 26:17 30:22 35:21,22 49:7,8 63:10,17 82:14 82:17 83:3 addressed 63:4 64:5 79:14 82:21 addresses 35:25 addressing 42:19 55:2 63:19 82:3 82:8 adjourned 84:25 administrative 48:7 50:20,23 84:21 adopted 6:7,20 advantage 27:11 advise 65:6 advocate 68:10 advocates 64:20 affect 12:11 afford 70:1 ago 39:19 50:25 51:4,5 agree 45:8 78:6 agreement 76:9 79:2 agrees 77:15 airport 14:20 Alicia 64:11 alignment 82:4 allow 22:3,14 allows 16:25 22:12 23:14 25:7 alternatives 40:8 amended 5:9 6:9 6:11,21 amendment 75:24 Ameren 52:19 American 8:8 amount 24:13 28:15 30:7 31:25 37:20 41:23,25 45:19 59:24 76:1 81:17 amounts 10:17 analysis 31:5 43:2 animal 12:14 animals 83:6 annual 12:19,20 24:8,13 32:16 32:19 33:6,9,23 47:4 annually 58:10 answer 10:4 40:17 83:11 anybody 41:7 53:9 anytime 11:5 apart 14:21 26:21 apologize 39:25 appears 40:3 45:8 86:4 appendices 11:2 57:9 appendix 56:17 56:19 57:4 application 6:23 applications 6:24 7:2 applies 65:25 apply 44:23 45:3 appointed 58:15 appreciate 68:20 approaches 67:24 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35:1,3 36:8 81:7,8 authorization 18:1,4 67:14 authorize 18:2 20:6 21:4 34:8 34:10 36:7 81:7 authorized 34:17 available 14:6 24:17 30:3 49:16 average 20:10,13 20:17 21:9,15 23:24 24:7,13 32:13,20 33:5,8 33:19,23 34:2 34:11 36:12,16 47:4 awarded 58:19 58:20 a.m 84:21 B B 21:2 back 10:5 12:7 18:19 23:5 26:1 42:11 54:25 66:21,23 69:14 72:8 73:18 74:18 82:13 backside 38:9 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 55:1 backups 14:25 backyard 26:22 bacteria 64:10 82:2 83:7 balance 14:7 49:2 58:25 59:9 59:25 60:11 balances 60:24 Ballwin 53:18 54:4 63:19 64:5 64:21 65:18 bank 62:11,25 65:7 bar 38:1 base 70:16 based 11:17 14:20 16:22 31:4 43:1 50:8 basement 14:25 basements 16:1 basic 46:16 basically 29:18 46:1 basins 25:25 basis 17:20 51:19 51:19 58:22,23 bed 64:14 65:3 began 8:4 believe 38:13 84:11 believes 76:10 belong 44:19 benchmark 52:3 52:4,7 best 25:25 43:3 63:11 86:6 better 37:2 58:13 71:6 bidding 50:14 big 16:5 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75:16 breeding 65:5 Brian 4:11 brief 7:23 briefly 50:5 51:25 bring 70:1 81:14 broad 12:24 44:4 Bruce 69:12 budget 13:24 14:9,14 28:9 42:20 51:18,20 build 16:13 59:11 Builders 6:25 building 26:5 built 39:18 bullet 55:2 57:24 62:2,3 burden 76:4,13 business 40:5,6 47:23 50:8,11 50:17 72:20 busted 26:20 C C 4:1 5:1 cake 23:11 Calendar 47:9 67:21 call 38:17 76:7 called 8:18 20:3 48:21 63:11 capita 76:2,4 capital 13:18,21 14:7 17:3,4 18:6,8 20:8 21:7 27:22,24 28:22 30:22 36:9,25 37:4 58:2,15 59:6 74:25 capture 18:17 care 22:24 23:12 68:20 82:25 carried 59:22 cars 11:22 case 31:9 50:8,11 50:17 70:4,4,11 70:11 72:20 73:18 cash 17:18,21 36:15 37:2 42:2 42:3,7 59:12 60:16,22 80:25 81:3,10 Caster 2:9,19 53:15,16,17 54:22 55:11,18 55:22 56:1,5,16 56:25 57:13,17 57:22 59:13 60:5,17 61:3,8 61:11,16,20 62:15,23 63:6 63:18,23 64:1 65:21 66:3,8,12 66:13,17,23 67:1 73:18,20 74:2,5,7,19,22 75:5,10,21 76:21,24 77:4,9 77:17,20 78:4,6 78:15,20 79:4,9 79:19,22 80:5 80:10,13,15,18 81:4,9,12,16,19 81:22 82:11 83:11,14,16,21 85:4 catches 60:23 caught 74:13 Caulks 68:25 69:3,6,8 cause 15:24,25 causes 26:21,24 caverns 18:18 cent 22:1,2,22,22 22:24 23:10,10 23:11,14,21,22 24:3,3,3,11,11 24:11,12,25 25:2 26:8 27:18 29:10 30:17 31:15,18,20,21 31:23 32:1,2,6 32:8,10 69:10 75:3 cents 30:20 74:14 certain 44:18 CERTIFICATE 86:1 Certified 3:6 86:17 certify 86:3 Chair 40:16 43:17 Chamber 4:5 Chan 4:7 5:7 change 6:5,22 8:13 9:6 30:3 32:18 33:7,11 34:1 57:23 changes 5:12 6:5 6:16 28:4 32:2 channels 12:6 28:13 charge 32:8 74:16 charges 73:22 chart 17:6 19:25 20:10 28:23 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 34:7,25 35:3,5 48:11 50:21 69:5 Charter 5:9,15 13:3 44:17,17 charts 36:12 cheapest 16:2,4 children 63:1 64:14 82:18 choice 41:10 47:23 chunks 60:22 circles 29:2 cities 20:20 40:22 citizens 40:13 city 1:12 3:5 6:3 22:21 29:21,24 64:20,22 65:17 84:5,12,14,15 clarification 61:6 clarify 81:5 classify 62:13 clean 26:2 55:13 55:13,19 63:14 64:17 78:11,12 cleaning 19:22 clear 15:3 81:23 82:12 clipboard 9:3 closed 10:1 closed-circuit 19:22 close-out 78:18 Coalition 4:6 64:4 coli 62:25 64:10 82:2,4,7,22 83:6 collapses 15:17 collect 10:19 11:8 22:12 29:16 31:17,25 33:16 68:5 collected 13:12 26:18 29:8 30:5 31:23 66:2 collects 32:24 column 20:3 34:16 come 30:2,16 31:1 39:15 40:3 49:17 51:10 52:17 53:3 66:21,23 76:23 77:3 80:8 83:3 comes 12:20 26:21 29:8 30:3 32:16 41:2 46:12 47:19 69:24 coming 62:11 81:12 82:7 comment 8:14,16 40:7,15 43:18 46:14 52:16 73:16,17 74:23 75:22 commented 46:4 71:1 comments 9:25 10:2 35:19,20 35:23 36:1 38:14,19,21,23 39:1,6 43:16 45:13 53:4 71:17 73:19 83:23 84:17,23 Commerce 4:5 commercial 46:11 47:24 48:5 74:9,9 commercial-in... 5:20 Commission 4:2 5:4,7,11,18,19 6:1,4,7,12,17 6:21 7:4,11 8:6 8:24 9:22,24 12:21 13:1 35:9 35:13,17 36:1 37:24,25 38:2,3 38:13 44:7,13 44:17,20,23 52:19 53:7,8,22 67:13 71:12 76:10 Commissioners 83:22 Commission's 13:6 communities 70:2 community 12:25 44:5 56:7 56:9 64:13 community-nei... 5:24 companies 44:8 45:3 compare 13:2,6 compared 20:19 comparison 42:23 51:25 competitive 16:25 complaint 25:9 complaints 68:18 complete 73:19 completed 15:1 26:9 compliance 22:4 25:3 78:11 82:9 compliment 43:24 Components 61:21 concluded 85:7 concluding 8:4 conclusion 39:7 59:14 concrete 28:12 condition 20:23 22:11 25:8 69:9 conducted 7:16 8:3 Conference 7:13 7:19,20,21 conferences 7:8 8:10 confirm 77:17,18 conflict 44:10 53:10 Consent 10:9 14:11 21:5 41:3 41:4,5 55:8,16 55:18,23 56:4 63:8 72:9 78:9 78:15 79:20,22 80:5 82:6 consequences 68:12 consider 35:16 82:18 considered 44:19 59:21 60:17 63:2 77:23 consists 6:1 constituents 44:16 constitution 44:16 construction 18:10 44:8 45:3 71:22 72:19 73:9 consultant 6:18 7:7 50:13 consultants 50:6 50:15 Consulting 48:8 consumers 4:3 7:1 52:18,21,23 contain 38:20 contained 8:9 contains 62:25 contaminant 62:25 64:10 82:2 context 48:6 continue 16:11 66:15 76:13 continuous 40:2 contract 72:13 contracted 72:25 72:25 73:8 contractors 14:2 contribute 48:15 contribution 49:1,2 82:25 conversation 76:8 77:24 convey 12:4,6,7 conveyance 18:12 copies 10:23 copy 65:13 corner 24:24 correct 43:21 57:16,20 71:25 72:1 74:17 78:3 78:4,13,25 79:25 corrected 72:4 correcting 65:7 cost 14:3 19:7 21:14 27:21 29:5,7 31:6 34:23 36:12 48:25 49:16 50:19 costs 10:7 17:8,9 18:7 28:18 36:21 39:19 40:10 48:2,4,5 48:8,13,25 52:8 52:9 79:5 80:8 cost-benefit 31:5 31:7 cost-effective 50:9 72:21 73:11 cost-effectively 43:10 cost-effectiven... 42:24 43:4 52:1 72:15 counsel 6:18 86:8 86:12 Counties 22:22 country 16:20 20:20 41:6 43:1 43:4 52:2 67:4 County 4:5,8 6:3 29:22 30:1 84:6 84:10,14,14 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES couple 35:19 course 59:23 court 3:6 4:20 53:19 63:20 65:14 78:9 85:5 86:17 cover 55:19 68:24 69:8 coverage 60:15 covering 13:10 covers 55:17 co-mingled 77:25 created 65:4,8 creating 52:22 creek 22:15,17 26:24 62:11,12 62:19,25 64:8 64:12,14 65:1,2 65:3 69:1,3,6,8 69:9,17 82:1,23 creeks 12:1,7,11 22:9,10 25:6,7 25:18,21,22 26:4 critical 62:3 82:18 cross-section 12:24 44:4 cure 76:19 77:6 current 13:15,15 20:12 21:13,17 21:19 35:8,12 36:15 37:18 47:8 76:13 currently 6:1 11:15 16:16,22 26:8 29:8 32:3 33:3,14,18,20 34:18 58:9 69:13 75:2 76:5 customer 11:17 20:13 21:15 23:25 34:6,11 34:21 35:6 48:22 53:17 76:4 customers 10:21 12:17 32:7 34:22 35:11 44:5 48:1,18 56:10 76:25 77:5 cut 34:23 cycle 14:6 17:25 20:12 21:13 35:12 44:24 C.D 73:4 82:25 D D 2:1,13 5:1 daily 60:20 data 22:12 77:13 date 14:23 15:1 80:6 dated 64:21,23 dates 8:9 day 3:4 15:15 59:4,4 60:20 debt 17:8,13,16 18:3,3,5 61:23 76:2,4,11,13 77:20 December 35:16 decide 20:2 36:20 36:24 41:11 42:1,2 81:7 decided 43:8 decision 36:19 declare 81:24 decrease 32:22 Decree 10:9 14:11 21:5 41:3 41:5,5 55:8,16 55:18,24 56:4 63:8 72:9 78:9 78:15 79:20,22 80:5 82:6 deem 9:8 deep 65:4 default 76:17 77:5 defer 47:18 61:1 deficiencies 54:13 deficits 76:18 define 62:6 deny 66:14 Department 10:10 depend 42:1 depending 20:23 59:24 depends 83:5 deposition 86:4 86:10 describe 24:23 described 65:11 65:24 describing 7:21 description 2:18 7:24 75:16 design 18:11 designated 58:19 60:13 details 19:13 determine 62:9 67:23 72:20 81:2 devastating 52:23 development 12:9 22:6 25:4 63:13 difference 75:16 different 10:16 10:17 21:24 37:20,20 81:25 digest 39:3 54:5 direct 45:9 directed 64:23 direction 86:8 director 4:11 53:23 disappeared 60:6 discharge 26:24 65:3 discharged 11:13 11:13 15:20 18:20 discharging 25:6 disclosure 56:8,8 74:8 76:11 discovery 7:5 discuss 21:16 70:12 disparity 70:23 distributed 17:5 distribution 14:22 district 1:8 3:2 5:4,9,12,14,22 8:12,15 9:13 10:16 14:17 19:20 27:20 30:10 34:11 39:21,24 47:3 78:9 District's 5:17 6:6 46:20 84:4 District-wide 10:19 27:18,25 28:8 29:10 31:22 32:1,6 37:10,14 divide 31:6 document 2:19 56:20,24 57:11 75:23 79:2 documents 7:15 7:22 54:17 64:3 doing 16:5 23:24 43:11 48:1,24 52:21 58:16 70:8,10 71:24 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28:14 31:10 36:9 41:22 42:6 78:16,22 four-year 13:22 17:4,14 21:8 27:20 42:5 72:3 72:5 frame 38:21 41:3 free 11:4 front 10:18 20:5 36:4 full 10:23,25 45:1 56:7,8,21 57:7 57:8,11 fully 54:4 function 27:10 55:17 functioning 16:12 fund 22:17 46:24 47:1 58:25 funded 11:15 26:8,11 31:24 funding 19:25 21:18 23:17 28:7 29:7 77:8 funds 23:7 61:4 62:10,22 65:25 66:2 78:1 further 66:22 84:17,23 86:10 future 14:7 35:7 36:3,21 fuzzy 80:6 G G 5:1 Gary 64:22 gather 46:17 general 5:10 48:7 50:20,22 75:15 77:25 gentleman 46:3 58:12 getting 23:2,22 37:5 give 35:13 38:18 42:10 49:19 50:24 64:2 66:9 69:19 71:10 given 7:11 41:3,6 41:10 59:4 62:7 giving 62:18 77:18 glass 18:25 go 10:7,14 11:1 11:10 18:4 20:5 20:15 21:14,23 23:9,20 29:18 31:13,21 34:14 34:18 36:13,25 37:3 39:13 42:3 48:20,23 49:12 49:12 53:25,25 54:7,20 56:12 57:3,14 58:21 58:22 60:11 68:7 69:14 71:7 72:8 73:4,18 75:12 76:15 80:3,3,15,16 82:12 goal 84:4 goes 11:9,23 12:1 15:18,18,19 16:24 28:13 31:3 37:1 45:11 47:5 63:13 64:13 69:17 72:6 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helps 27:9 Hey 69:18 Hi 67:3 higher 84:14 highest 31:7 hiring 50:10 historical 39:11 41:12 hit 14:13 hits 12:1 Hoelscher 2:4 4:11 9:13,15,18 15:12,15 38:16 38:19 39:4 40:16 43:14,24 45:22,25 46:19 46:23 47:7 49:4 49:19,23 50:1,3 50:8,15,24 51:3 51:5,9,16,20,23 52:4,9,13 54:7 54:20,21 55:9 55:15,20,23 56:3,15,19 57:6 57:16,20 58:17 60:3,8,19 61:7 61:8,10,14,19 62:8,17 63:3,7 63:21,24 65:19 65:23 66:4,6,11 67:10,17,20 68:2,4 69:2,21 70:9,17,25 72:1 72:5,13,18,24 73:3,6,12,25 74:3,6,12,21 75:2,6,12,14 76:20,22 77:1,7 77:16,19 78:3,5 78:14,17,23 79:1,7,11,21 80:1,8,11,14,16 80:24 81:6,11 81:13,18,20 82:3,20 83:12 83:15,20 84:1,2 84:8,13 85:1 hold 25:25 home 6:25 39:18 46:5 65:15 homeowner 70:15 homeowners 23:19 53:19 55:5 63:20 66:9 hopefully 45:13 hospitals 74:9 hours 3:3 house 22:16 43:9 62:11,12,17,19 housekeeping 8:25 huge 47:15 hundred 27:23 48:16,17 49:3 79:17 I idea 11:19 71:10 identical 14:22 identification 85:5 identified 30:25 69:6 identify 8:20 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 29:22 identifying 7:14 30:14 41:8 illustration 57:4 immediate 5:8 immediately 42:3 47:6 60:25 82:19,21 83:13 impact 25:4,5,20 32:21 33:1 34:6 35:5 60:12 76:3 76:12 impacts 22:9 26:4 55:3 Impaired 64:9 impartial 45:10 impervious 71:6 implement 32:6 37:9 66:1 important 15:5 52:6 improvement 36:9 37:4 40:23 improvements 16:13 17:18,22 include 56:18 60:1 75:25 included 17:13 35:21 51:24 56:3 includes 14:17 including 5:22 income 34:22 35:6 incomes 52:24,25 Incorporated 4:8 increase 28:15 33:11,22 34:2,3 35:10,12 39:6 39:16 40:9,10 40:19 45:11 46:5,7,16 47:11 48:23 49:17 52:20 68:24 69:4,7 70:15 76:14 81:16,17 81:18 increased 22:6 48:19 51:11 increases 39:10 40:2 41:15,25 42:11 46:4,10 53:3 increasing 59:23 incremental 51:19 incur 58:2 incurred 77:9 independent 6:18 INDEX 2:17 indicated 20:4 44:18 56:21 75:8 84:3 indicates 58:4 indicating 34:20 individual 16:1 32:12 59:3 75:18 indulgence 53:24 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June 7:10,17 13:12,17 14:12 84:20 Justice 10:10 K keep 16:2 18:13 40:12 43:11 80:9 keeps 41:16 Kelling 4:4 5:8 key 42:23 61:21 kind 10:6 13:5 20:21 23:2,18 24:22 25:11,13 27:1 37:25 38:8 41:14 49:14 53:2 60:15,18 62:21 64:15,16 69:14 71:8 knew 43:7 know 35:24 45:14 47:14,20 47:23 48:11,14 48:20 49:14 50:18,21,22 51:13 52:16,18 53:1,3,25 54:23 57:13 59:24 68:5,8 69:14,25 79:12 82:13 knowing 49:9 Kramer 64:22 L L 4:3 labor 5:23 Laclede 52:20 Lance 4:12 84:9 large 34:3 46:18 47:24 largely 45:17,19 Larry 2:8 law 55:14,15,17 78:12 lawns 11:21 lay 49:17 leads 40:7 learned 64:8 leased 49:13 leave 45:12 54:17 LeComb 4:12 75:13 84:10 left 37:16 left-hand 20:3 34:7 35:1 left-over 17:24 30:21 legal 6:17 lesser 84:12 letter 39:20 64:3 64:6,7,19,21,24 Letters 2:19 let's 31:13 70:24 level 10:20 37:20 levels 10:17 leveraging 60:18 61:5 lieu 40:8 liked 39:11 limit 9:7 47:23 limited 44:22 lines 25:18 26:11 list 53:11 64:9 69:13 listed 8:19 64:9 74:7 listing 73:21 litigation 4:22 78:21 79:5 little 18:25 24:7 25:23 26:11 28:14,19 39:24 64:13 67:5 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 70:23 76:1 79:13 80:6 live 21:25 22:20 23:9 24:2,6,10 27:3 29:6,20 32:13 33:15 40:4 47:25 67:4 Lloyd 64:11 local 12:1 22:4,9 25:6 27:7 50:10 located 9:9 28:6 37:15 46:21 location 8:9 log 65:14,15 logic 71:9 long 16:12 51:4 63:22,25 72:4 longer 32:11 longest 41:6 long-term 16:21 look 10:25 19:5 19:12,14 20:20 21:1,24,24 34:7 36:3 39:14 42:15 44:6 46:2 48:11 51:8,15 52:16 60:2,4 67:10,11 69:5 69:12 71:10 75:20 looked 14:22 29:3 48:12 50:21 51:16 53:13 73:10 looking 16:14 17:3,18,22 27:13 32:5 42:16,19 49:15 56:7,17 67:8 74:15 looks 25:14 53:10 70:6 Lori 4:4 5:8 lot 14:1 39:2 40:22 41:18 44:1 50:7 52:25 83:5,7 Louis 1:8 3:1 4:5 4:23 5:3 6:3,25 8:7,8 22:21 29:21,25 43:8 84:6,6,10,15 love 39:23 low 34:21 35:5 70:3 M M 3:6 machines 11:10 magnifying 18:25 Mahanta 4:7 5:8 Mahfood 4:6 8:23 83:24 mailing 35:22 49:8 Main 1:13 3:5 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Metropolitan 1:8 3:1 5:3 microscope 43:9 MIDWEST 4:22 miles 11:11 14:19 18:11 19:22,23 19:23 25:21 26:14 million 13:18,21 14:11,13,14 17:7,8,15,19,24 17:25 18:3 20:6 27:21,23 28:10 28:13 29:7,23 30:15 36:8 58:1 58:6,8,10,14 59:18,19,21 60:1,5 67:6,8 67:14 75:9 77:12,21,22,22 79:17 millions 79:10,12 minimum 79:23 79:23 80:13,23 minor 33:2 34:4 minutes 9:6 54:1 66:14 missing 61:22 mission 45:25 Mississippi 11:14 15:20 21:20 Missouri 1:14 3:5,7 4:3,6 7:1 11:14 15:20 21:21 55:13 64:4 78:12 86:3 Missouri's 64:9 mistake 39:22 mistakenly 43:18 MO 4:23 modified 6:15 money 10:17 14:5 16:25 17:23 18:6 24:17 26:13 30:7,8,16 31:2 31:25 36:24 41:20 42:2,5,7 58:14,17 59:4,7 69:19 71:23 monies 22:3 26:18,19,23,25 27:1 29:9 30:4 30:21 58:24 59:1 70:1 77:2 monitor 22:10 25:7 month 20:13,16 20:17,22 21:14 21:15 22:1 32:8 36:13,16,17 39:13 74:15 monthly 11:15 17:20 20:17 36:12 58:22 73:22 months 11:18 Moody's 16:17 mosquito 65:5 move 59:13,20 61:25 62:1 MSD 4:2 5:6,15 6:1,12,13,17,19 7:3,4 10:1,3,9 11:6,8,16,24 12:10,19,23,25 12:25 13:2,8,17 13:20 15:2,3 16:14,16,21 17:10 20:5,21 21:3 22:2 23:7 23:17 24:7,19 25:19,22 26:5 26:13 27:11 30:16 32:21,24 33:20 34:3,12 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 34:15 35:8 36:8 37:17,24 38:6 43:2,7 48:4 53:7,18,22 56:10 61:18 65:6,10 67:12 68:17 71:3 72:11 75:1 76:4 76:17,20,25 77:1,8,9,11,23 77:25 78:7,10 78:25 79:23 81:6,8 82:17 83:17 84:21 MSD's 9:22 10:7 10:21 15:2 16:23 20:1 21:18,22 23:24 24:21 26:16 27:15 38:14 42:24 45:25 68:6 69:25 76:22 77:20 82:24 multi 74:8 multi-family 73:23 municipal 11:25 20:1 21:19 26:16 27:6 37:7 49:20 municipality 69:24 N N 2:1 4:1 5:1 name 53:17 names 8:19 national 43:2 naturally 12:8 45:2 naturally-grow... 83:7 near 14:20 22:21 29:21,25 47:9 necessarily 28:18 necessary 9:8 25:11 47:13 need 49:11 61:5 64:15 70:5 needed 22:14 30:20 40:23 needs 32:4 41:23 53:12 64:19 68:25 negotiated 79:16 negotiating 79:13 neighbors 68:21 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participants 7:10 participant's 7:24 participate 7:19 8:2 participation 84:18 particular 31:9 57:4 65:17 76:11 parties 7:5 86:9 86:12 parts 11:3 18:15 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 26:12 40:23 57:2 pass 29:18 passage 30:5 passed 75:3 passes 29:10 patiently 66:20 Paul 2:9 53:17 paved 12:5 28:12 pay 17:17,21 20:2,13 22:1,22 22:23 23:10 24:10,13 27:14 29:14 32:25 34:11,23 36:9 36:14,22,23 37:2 39:12 40:13 41:11 42:2,7 47:9 70:19 71:25 paying 20:22 21:25 22:2 23:21,25 24:2 27:4 31:14,15 32:17 33:4,6,9 33:14,20,24 36:17 39:14 59:15 74:14,14 payment 76:17 payments 77:12 pays 24:7 37:19 peak 37:1 42:16 peaks 37:4 72:7 people 32:25 38:17 45:10 52:19,23,25 53:24 68:11 77:5 percent 14:24 18:5,5 20:16 28:15,19 32:23 33:12 34:3 39:9 39:16 40:2 45:23,24 46:5,7 46:7,8,10,10 47:11,12,20 49:17,18 76:14 percentage 42:11 percentages 52:16 percenters 49:3 performance 49:25 period 8:16 13:11,22 17:4 17:14 21:8 42:5 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78:7 production 52:10 productive 40:12 productivity 42:24 profit 77:2 program 10:8 14:4 15:2,4,7 16:5 17:2,3 27:23,25 28:22 34:21,23 35:6 36:15,25 37:4 37:12 41:24 42:4,15,17 51:1 63:4,7 72:6,7 73:3,7 81:15 prohibits 61:5,7 project 15:3 18:23 19:5,8 29:2 59:1,11,12 projected 14:11 20:15 projecting 13:20 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES 14:13 projects 18:9,10 18:22 19:12 23:3,4,15,18,24 24:6,17 27:25 28:1,8 29:1,7 29:11,18,22,24 30:2,12,13,14 30:22,24 31:1,7 31:10 37:15 58:2,15,19 59:7 60:14 69:13 72:23 74:25 75:9,17,18,20 properly 15:20 33:19 properties 32:14 property 12:18 12:19,20 22:2 22:23,24 23:10 23:11 24:3,4,8 24:11,11,12,14 24:25 27:18 30:17 31:15,18 31:21,23 32:1,6 32:10,12,16,19 32:20,22,24,25 33:4,7,9,12,24 34:1,2,4 37:9 47:8 70:16 71:4 proposal 6:22 8:13 9:22 10:8 10:13,18,23,24 10:25 11:4 13:2 13:10,17 19:4 19:15 33:21 35:9,15,20 38:7 38:15 40:18 41:13,21 42:13 42:22 43:12 51:25 52:5,14 56:13,20,22,23 56:24 57:7,9,11 57:21 61:13,20 70:18 75:19 79:15 propose 67:13 proposed 5:14 6:14 9:6 13:8 13:18 28:3 33:7 67:12 73:23 74:3 75:8 proposing 6:5 13:10 15:2,7 17:7 30:17 31:12,16 32:2 33:18 41:19 71:4 provide 10:20 12:22 20:14 24:22 47:1 65:6 66:8 provided 8:18 providers 74:10 provides 26:5 34:12,15 providing 33:17 prudent 60:24 public 1:9 2:5 3:1 4:13 5:5 8:3,6 8:11,16 9:24 12:3,22 23:1,6 23:13,23 24:5 24:16 26:12,15 27:5,8,11,15 28:5,11,16 29:17 30:18,20 35:20 37:11,13 38:4,14 46:20 61:4 84:19,25 published 8:6 pull 57:3 pulls 12:13 pump 14:16 19:19 purchase 59:6 purpose 7:13 8:12 13:1 30:5 54:9 purposes 78:1 put 10:18 36:4 43:8 46:24 50:12 63:14 74:20 83:17,17 putting 15:4 p.m 1:17 85:7 Q qualification 78:12 qualifications 44:18 qualify 53:1 quality 52:10 55:4 82:23 83:4 quantify 45:19 quasi-monopoly 48:24 question 10:4 44:2 48:3 65:10 65:19,21 71:22 questions 7:11 9:11 10:2 38:19 38:24 43:16 66:15,22 73:19 83:22 84:17,23 85:3 quick 10:6 12:21 24:21 31:13 54:23 83:25 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62:12,19 real 31:13 54:23 reality 53:4 60:21 really 24:21 40:1 41:9 43:9 44:1 48:24 49:9 53:6 53:12 71:21 reason 46:16 47:16 54:1,10 reasons 51:24 recall 33:16 37:19 recap 12:21 receive 11:7 17:20 36:2 received 6:5 7:4 37:24 39:20 receives 36:1 receiving 10:17 55:4 58:7 recognize 54:11 recognized 9:4 recommendation 6:13 13:4 35:17 35:18 recommendati... 5:12 13:6 35:14 record 7:16 45:13 54:16 64:2 red 21:25 23:4,6 23:21 25:17 27:14 30:11,14 31:1,3,10 33:15 33:23 37:19 38:10 46:21 74:23 reduce 32:19 48:2,4 reduced 49:10 51:1 86:7 PUBLIC HEARING 5/27/2015 www.midwestlitigation.com Phone: 1.800.280.3376 Fax: 314.644.1334 MIDWEST LITIGATION SERVICES reduction 14:24 reductions 13:25 48:14 redundant 59:18 refer 57:17,18 reference 57:3 referenced 65:17 references 11:2,3 57:7 reflective 11:19 regard 22:5,13 25:20 38:12 55:20,24 69:8 79:13 83:1 regarding 5:12 8:7 9:6,12 10:2 55:3 regardless 71:23 71:24 regulation 55:10 63:16 regulations 26:6 46:1 82:5 83:9 regulators 79:16 regulatory 15:4 22:4,25 23:11 23:22 24:4,15 25:3 31:23,24 32:4 55:2,7,12 79:14 rehabilitating 19:21 rehabilitation 14:18 19:23 Reject 21:2 related 16:5 86:8 relates 19:3 relative 86:11 remain 37:21 remainder 17:22 remaining 21:12 remedy 64:15 remember 11:6 18:5 36:11 72:15 Remembering 32:15 remind 38:20 61:3 85:1 repair 16:10 64:19 rephrase 78:21 replace 31:20 replaced 32:10 report 7:21 56:10 reporter 3:6 4:20 85:5 86:1,17 represent 5:20 12:24 25:24 representation 5:17 26:10 representative 5:19 represented 8:21 representing 53:18 represents 24:25 25:14 reproduction 19:9 request 67:12 requests 7:5 require 17:25 required 14:10 63:16 72:9 requirement 55:7 requirements 15:5 45:18 55:3 82:10 requires 5:15 67:17 79:22 research 57:14 researching 64:8 resident 43:23 residential 5:20 21:15 34:22 74:8 resolve 16:2 24:17 26:1 41:7 50:9 resolving 19:6 respect 53:22 56:25 respectively 51:14 respond 22:18 44:13 49:4 response 22:14 22:15 25:12 62:3,6 responses 62:9 responsibility 65:11 responsible 12:10 16:15 25:19 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