HomeMy Public PortalAboutExhibit MSD 124A - MSD's Response to Supplemental Supporting Evidence provided by HBAEXHIBIT MSD 124A
BEFORE THE RATE COMMISSION OF THE
METROPOLITAN ST. LOUIS SEWER DISTRICT
MSD'S RESPONSE TO SUPPLEMENTAL SUPPORTING EVIDENCE
PROVIDED BY HBA
ISSUE: WASTEWATER AND STORMWATER RATE
CHANGE PROCEEDING
WITNESS: METROPOLITAN ST. LOUIS SEWER DISTRICT
SPONSORING PARTY: RATE COMMISSION
DATE PREPARED: JUKE 22, 2015
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, Missouri 63103
On June 17, 2015 the Rate Commission granted the Home Builder's Association of
St. Louis & Eastern Missouri's Motion for Leave to File Supplemental Supporting
Evidence, see Exhibit HBA 124. With the granting of this motion, the Commission
allowed the other parties an opportunity to provide a written response to the
supplemental supporting evidence provided by HBA. The following is MSD's
response to that evidence.
1. See. Exhibit HBA 124, first Paragraph 6 of the Motion, specifically "Given that
the ultimate purpose of the stormwater tax is to promote water quality in the St.
Louis region, ..." This statement best reflects what is possibly a misunderstanding
of the purpose of the proposal that MSD staff has presented to the Rate
Commission for their consideration. MSD's Rate Proposal for Stormwater is to
provide a funding source, via a ten cent ad valorem property tax, for Operation
and Maintenance (O&M) of the Public Stormwater System District -Wide. Any
minimal funds that may be available after accounting for O&M of the Public
Stormwater System District -Wide will be used for projects to address stormwater
problems not involving the infrastructure of the Public Stormwater System, such
as stormwater flooding and erosion. The purpose of the proposal is not to address
water quality in the St. Louis region. The current stormwater funding source that
addresses the issue of water quality is the existing District -Wide "two cent"
($.0197 per $100 of assessed value) ad valorem property tax that MSD is not
proposing be changed. The need for additional regulatory funding, including
addressing water quality issues, could be discussed in future rate cases if deemed
necessary. This information has been presented in many ways through these
proceedings, but specifically through MSD's Rate Proposal (Exhibit MSD 1) and the
testimony and surrebuttal testimony of Brian Hoelscher (Exhibits MSD 3A and
115A), Rich Unverferth (Exhibits MSD 3C and 115B), and William Stannard
(Exhibits MSD 3H and 115F).
The reasons MSD has proposed ad valorem taxes as a way to impose a fair and
reasonable burden on all classes of ratepayers is also discussed in these
documents. In summary, MSD believes that the use of a voted on impervious
system, could result in up to a 40% increase in cost to MSD's customers and fewer
customers participating in the funding of the program when compared to the
proposed "ten cent" ad valorem tax, for the same level of services. MSD believes
this is a prime consideration in determining a fair and reasonable burden.
2. See Exhibit HBA 124, paragraph 9 of the Affidavit, regarding illustrative credit
programs MSD appreciates the receipt of these documents. There is not a
concept contained in any of these documents that MSD is not familiar with. In
fact, many of these types of programs were considered when MSD proposed a
comprehensive impervious fee system to pay for a larger and broader stormwater
program in the 2008-2012 Rate Proposal.
3. See Exhibit HBA 124, paragraph 12(i) of the Affidavit, "reductions in runoff
volume reducing the amount of runoff requiring treatment." MSD does not
currently treat stormwater run-off with the O&M portion of funding for the Public
Stormwater System. Therefore, MSD would not use the proposed taxes to treat
stormwater runoff. Because it does not treat stormwater flows, MSD does not
have any costs to credit. To attempt to apply a credit program to the costs for the
O&M of the Public Stormwater System would simply cause other customers to
pay the difference for those receiving a credit with no change in operational
costs.
4. See Exhibit HBA 124, paragraph 12(ii) of the Affidavit, "increases in the quality
of run-off allowing the District to more easily meet water quality standard
requirements." The Rate Proposal being considered by the Rate Commission is
only for the Operation and Maintenance of the Public Stormwater System. Water
quality issues related to the stormwater program are currently fully funded by an
existing "two cent" ad valorem property tax. No proposed change in the rate or
structure of this "two cent" tax is being considered and therefore has not been
presented to the Rate Commission for consideration.
5. See Exhibit HBA 124, paragraph 12(iii) of the Affidavit, "reducing the need for
drainage infrastructure thereby reducing costs." This statement seems to imply
that a reduction in stormwater volume reduces the cost for the Operation and
Maintenance of the Public Stormwater System. Because MSD's Public Stormwater
System works almost exclusively on gravity and because MSD does not treat
stormwater, reductions in flows have almost no impact on costs. Developers are
required to provide detention as part of their development not to reduce existing
flows, but to ensure that they do not increase peak flows above existing
conditions. This is required to protect downstream properties and streams. They
are also required to install Best Management Practices to mitigate the pollutant
load caused by these developments in compliance with environmental
regulations. However again, allowing a credit when there is no change in cost to
the District for the Operation and Maintenance of the Public Stormwater System
would just transfer costs to other customers.
6. See Exhibit HBA 124, paragraph 120iv) of the Affidavit, "potentially increase tax
revenues by increasing property values." MSD has seen no evidence that this is
the case. We have experienced instances where property owners find green
infrastructure a plus and other occasions where property owners find green
infrastructure a detriment to their property.