HomeMy Public PortalAboutExhibit MSD 99A - MSD Response to Fourth Discovery Request of the Rate CommissionEXHIBIT MSD 99A
BEFORE THE RATE COMMISSION OF THE
METROPOLITAN ST. LOUIS SEWER DISTRICT
APRIL 27, 2015 FOURTH DISCOVERY REQUEST
OF THE RATE COMMISSION
Metropolitan St. Louis Sewer District Response
ISSUE: WASTEWATER AND STORMWATER RATE
CHANGE PROCEEDING
WITNESS: METROPOLITAN ST. LOUIS SEWER DISTRICT
SPONSORING PARTY: RATE COMMISSION
DATE PREPARED: MAY 7, 2015
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, Missouri 63103
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BEFORE THE RATE COMMISSION
OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT
For Consideration of a Wastewater
and Stormwater Rate Change Proposal
by the Rate Commission of the Metropolitan
St. Louis Sewer District
APRIL 27, 2015 FOURTH DISCOVERY REQUEST
OF THE RATE COMMISSION
Metropolitan St. Louis Sewer District Response
Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis Sewer
District (the "Charter Plan"), Operational Rule 3(5) and Procedural Schedule §§ 17 (b)(i) and (ii)
of the Rate Commission of the Metropolitan St. Louis Sewer District ("Rate Commission"), the
Metropolitan St. Louis Sewer District ("District") thereby responds to the Rate Commission
April 27, 2015 Fourth Discovery Request for additional information and answers regarding the
Rate Change Notice dated February 26, 2015 (the "Rate Change Notice").
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APRIL 27, 2015 FOURTH DISCOVERY REQUEST
OF THE RATE COMMISSION
Metropolitan St. Louis Sewer District Response
1. The Charter Plan provides that the Board of Trustees shall, by ordinance, identify
the Rate Commission Representative Organizations, and that each Representative Organization
shall designate an individual to represent it and serve on the Rate Commission. See Charter Plan
§ 7.230. Please (a) provide copies of all ordinances identifying the current Rate Commission
Representative Organizations; and (b) provide a copy of the designation letter from each Rate
Commission Representative Organization stating the individual representing the Organization
during these proceedings.
RESPONSE:
(a) See Exhibit MSD 99B, MSD Ordinance No. 13978
(b) See Exhibit MSD 99C, Oath of Office. Due to staff changes, the District was unable to
locate the individual designation letters. In response to the request, the District is providing the
Oath of Office documents for each individual rate commissioner.
2. During the Technical Conference for Direct Testimony and Rate Setting
Documents, Commissioner Stein requested information regarding the intergovernmental
agreements among the District and municipalities within or adjacent to the District. Please
provide copies of each such agreement currently in force.
RESPONSE:
The Sewerage System Agreement between MSD and the City of Arnold, dated December 11,
2008, is the only long term intergovernmental agreement that could possibly impact the District
financially. See Exhibit MSD 42.
3. During the Technical Conference for Direct Testimony and Rate Setting
Documents, Richard L. Unverferth testified that seven levee districts are located within St. Louis
County. See p. 60,1. 24; p. 61,11. 1-3. Please (a) name each such levee district; and (b) provide
a copy of any current agreement between the District and any such levee district.
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RESPONSE:
Please note that there are actually six levee districts within St. Louis County and MSD.
They are: Earth City Levee District, Missouri Bottoms Levee District - Bridgeton Subdistrict,
Missouri Bottoms Levee District — Hazelwood Subdistrict, Riverport Levee District, Howard
Bend Levee District, and Monarch - Chesterfield Levee District. As stated in the response to the
first discovery request Exhibit MSD 84A, question 21, there are no current agreements with
these entities.
4. During the Technical Conference for Direct Testimony and Rate Setting
Documents, Commissioner Tomazi requested information concerning the extent of District debt.
Please provide (a) the total bond debt which may be issued by the District while maintaining a
AA credit rating; (b) state the extent to which the District intends to use debt as a major
component of future CIRP funding; and (c) when the District expects that continued use of debt
as a major component of CIRP funding will become no longer prudent.
RESPONSE:
(a) The District and its financial advisor used experience and statements from the rating
agencies in developing the funding plan for the District in an effort to maintain AA -category
ratings. With respect to the financial planning model, debt capacity is based on several
interdependent variables such as amount of revenues, amount of operating expenses, desired
debt to PAYGO ratios and capital improvement plan amounts and spending timing. As any one
of these ratios change, debt capacity is impacted. As noted in Ms. Pugh's testimony (Exhibit
MSD 3F), the level of debt in the Rate Proposal was determined in consideration of maintaining
fund balances and coverage ratios consistent with AA -category ratings given the District's
projected operating expenses, CIRP, desired debt to PAYGO ratio and revenue increase
parameters.
(b) The District cannot, at this time, determine the extent that debt will be used as a major
component of CIRP funding in future rate cycles. Future proposals will be evaluated within the
context of the environment existing at that time and requests for additional debt authorization, if
any, will be subject to voter approval.
(c) See response to (b).
5. The Stormwater CIRP Project List in the Rate Change Proposal identifies projects
scheduled for completion in FY2017 through FY2023. See Exhibit MSD Appendix 7.5.2.
Figure 5-2 in the Rate Change Proposal describes the Stormwater Capital Improvement &
Replacement Program for FY2015 through FY2020. Please quantify (a) the CIRP projects to be
completed; (i) FY2015 and FY2016, (ii) in FY2017 through FY2020 inclusive, (iii) in the
following fiscal years; and (iv) the remaining backlog of Stormwater CIRP; and (b) provide a
schedule for the issuance of the remaining existing bond authorization.
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RESPONSE:
(a) The requested information has been provided below.
(a)(iii)
(a)(iv)
Fiscal
Year
Total Budget
#
FY15
$8, 368, 000
29
FY16
$20, 805, 500
58
Total
$29,173,500
87
Fiscal
Year
Total Budget
#
FY17
$16,370,200
57
FY18
$10, 422, 000
58
FY19
$16,112,000
59
FY20
$6, 999, 000
63
Total
$49, 953, 200
237
Fiscal
Year
Total Budget
#
FY21
$4,195,000
24
FY22
$3, 980, 000
18
FY23
$1, 525, 000
5
Total
$8,175,000
47
Remaining Backlog Stormwater
Identified Issues
Total
Total Conceptual Cost #
$296,170,000
443
(b) There are no bonds being issued for stormwater capital improvement projects.
6. On page 37 of the District's 2014-2015 Budget (MSD 19), the District states the
"Debt Capacity per MSD Co -Financial Advisors" of $1,400. Please indicate (a) current debt
capacity used by the District in determining CLRP financing, and (b) information supporting the
current debt capacity limit.
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RESPONSE:
(a) In its 2014-15 Operating Budget (Exhibit MSD 19), the District published an estimated debt
capacity of $1,400 per capita. That limit was not set by current District staff or the District's
current financial advisors. Furthermore, MSD is not aware of any statutory debt limits or
absolute capacity constraints. The District built its CIRP financing plan to achieve a certain
balance of PAYGO and debt financing and to maintain AA -category ratings based on
expectations communicated by the rating agencies in their rating reports. The District seeks to
achieve current and long-term affordability of rates while providing necessary services and
meeting EPA CD requirements. Please also see 4(a) above.
(b) See response to (a).
7. For each of the bond issuances included in MSD 94M, please provide a summary
of Outstanding Par during FY2015-FY2020.
RESPONSE:
See Exhibit MSD 99D, Outstanding Bond Principal - Existing Bonds
8. For each of the bond issuances included in MSD 94N, please provide a summary
of Outstanding Par during FY2015-FY2020.
RESPONSE:
See Exhibit MSD 99E, Outstanding Bond Principal — Proposed Bonds
9. Exhibit MSD 1, Table 4-8 of the Rate Change Proposal provides projections for
the Capital Improvement and Replacement program during FY2015 throligjh FY2020. Please
state (a) the total amount of outstanding debt on June 30, 2021; (b) the ratio of debt to operating
revenues; (c) total outstanding long-term debt per ratepayer; (d) total outstanding long-term debt
per capita; and (e) the ratio of debt to equity.
RESPONSE:
(a) Per Exhibits MSD 99D and MSD 99E, total outstanding debt at June 30, 2020 is expected to
be $2,090.4 million.
(b) Given total outstanding debt from (a) and Wastewater Revenue from Exhibit MSD 1, Table
4-10 (page 4-22), line 6, the ratio of debt to wastewater operating revenue at June 30, 2020 is
projected to be 4.55 : 1.00.
(c) The number of customer accounts is listed in Table 4-2 of Exhibit MSD 1 (page 4-4), line 12.
Debt per ratepayer is projected to be $4,969.
(d) Using the 2014 "Population" number from Exhibit MSD 25 (page 91), debt per capita is
projected to be $1,585.
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(e) MSD does not project a full Statement of Net Position for future periods so cannot project a
debt to equity ratio for June 30, 2020.
10. The Master Bond Ordinance requires the District to provide wastewater rates that
are sufficient to pay all operating and maintenance expenditures and provide net operating
revenues together with investment earnings that will at least equal 125% of the annual debt
service requirement on all senior bonds and at least equal 115% of the annual debt service
requirement on all outstanding bonds, loans and other obligations. Table 4-9 — Projected
Wastewater Debt Service Requirements (MSD Ex. 1, p. 4-19) describes the Proposed Debt
Service Requirements for FY2015 and FY2016 and the Projected Debt Service Requirements for
FY2017-FY2020. Please provide (a) the ratio of the projected level of Net Wastewater
Revenues (revenue less operation & maintenance expense) to the annual debt service obligation
for each fiscal year from FY2015 to FY2020 inclusive; (b) the projected ratios for debt service
coverage on senior lien debt and all outstanding debt for each fiscal year from FY2015 to
FY2020 inclusive; (c) the projected minimum level of net revenues to meet the minimum debt
service requirements for the Additional Bonds test on Total Debt and the annual Rate Covenant
Debt Service requirement for each fiscal year from FY2015 to FY2020 inclusive; and (d) the
projected amount and percentage of cumulative cash financing and current debt authorization at
the end of each fiscal year from FY2015 through FY2020 inclusive.
RESPONSE:
(a) See Exhibit MSD 1, Table 4-10, line 28.
(b) See Exhibit MSD 1, Table 4-10, lines 27 and 28.
(c) A basic estimate of the revenue requirements necessary for meeting the Rate Covenant can
be calculated by multiplying total debt service (Exhibit MSD 1, Table 4-10, line 28) by 1.15X
(the Rate Covenant) and adding Operating Expenses (Exhibit MSD 1, Table 4-10, line 7). The
resulting level of revenues necessary for this requirement ranges from approximately $240
million in FY2015 to almost $360 million in FY2020. It is important to note that this level of
revenues would not be sufficient to meet all of the projected expenses of the District, i.e. non -
operating expenses such as PAYGO capital would not be sufficiently funded Based on this
analysis, the annual deficit ranges from $42 million to $101 million in FY2015 and FY2020,
respectively, even before accounting for minimum operating reserve requirements. Negative
annual deficits would lead to a rapid depletion of cash on hand Raising the minimum level of
revenues only sufficient to meet coverage would have negative ratings implications, significantly
increasing the District's cost of capital and potentially eliminating the District's access to the
capital markets.
(d) See Exhibit MSD 99F Cumulative Cash Financing and Debt Authorization
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11. Please provide a summary of assumptions regarding term, interest rate, issuance
costs, bond reserve requirements, etc. for the Debt Service Requirements shown in MSD Ex. 1,
Table 4-9, page 4-19.
RESPONSE:
See Exhibit MSD 1 Section 4.6.2, "Existing and Projected Wastewater Debt", and Exhibits MSD
94M and 94N. Debt reserve deposits are listed in Table 4-8 of Exhibit MSD 1 (page 4-16), Line
12.
12. Please state whether the District's Financial Advisor and/or Rate Consultant
believe that the relative proportion of debt and cash financing of the CIRP proposed by the
District is reasonable.
RESPONSE:
Both the District's Financial Advisor and Rate Consultant believe that the relative proportion of
debt and cash financing of the CIRP proposed by the District is reasonable.
13. During the Technical Conference for Direct Testimony and Rate Setting
Documents, Bethany Pugh testified that the financial plan provides for minimum cash on hand of
550 days. See page 6, lines 22-23.Please describe (a) how 550 was determined to be the
minimum; and (b) how does the model incorporate this criteria to ensure that the financial plan
meets or exceeds the minimum, compared to the calculations in the Rate Model, and as described
in William Stannard's testimony regarding minimum operating fund balances. See page 10, line
22 and page 19, line 8. Please state (a) each revenue source and beginning balance at FY2015;
and (b) the current day's cash on hand as of the most recent date.
RESPONSE:
(a) The District worked with its financial advisor to determine a minimum level of funds on hand
based on feedback from the rating agencies and in consideration of prudent financial
management. The financial model's calculation of days cash on hand for FY2014 was 626 days.
Consequently a 550 day projected target is 12% below current levels. We believe this is a
reasonable deduction relative to current figures that generally maintains the District's financial
position —a point that was emphasized to be important by the rating agencies.
(b) It is important to note that the financial model and days' cash on hand targets relate to
wastewater exclusively. The financial model was developed based on the District's audited
financial statements, including unrestricted cash and investments and other balance sheet items.
The rating agencies rely on audited financial statements for the vast majority of their metrics.
The rate proposal is developed on a cash needs basis. To ensure the Rate Proposal is consistent
with the outcomes of the financial plan, we have cross checked input assumptions, like operating
expenses and CIRP, and ensure comparable output, i.e. revenue requirements, are consistent.
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(c) The financial planning model calculated fiscal year end 2014 days cash on hand at 626 days.
Days cash on hand is calculated by taking total unrestricted cash and investments divided by
total operating expenses (not including depreciation) divided by 365. Unrestricted cash and
investments would generally consist of District operating revenues.
14. Exhibit MSD 75 is a delinquency Agency Schedule for FY2012 to FY2014.
Please provide a schedule for the period FY2000 to FY2012.
RESPONSE:
Exhibit MSD 840 includes delinquency Aging Schedules for FY2010 and FY2014. Please refer
to Exhibit MSD 99M for Aging Schedules for FY2006 through FY2009. Aging information for
the District was not reported and tracked in this fashion prior to FY2006 due to the District's
transition from the legacy billing system.
15. Please provide a copy of the Approval of the State Fiscal Year 2015 Clean Water
State Revolving Fund Intended Use Plan.
RESPONSE:
See Exhibit MSD 99G, Original Fiscal Year 2015 Clean Water SRF Intended Use Plan and
Exhibit MSD 99H, Amended Fiscal Year 2015 Clean Water SRF Intended Use Plan.
16. The Rate Change Proposal, Exhibit MSD 1, compares wastewater bills with and
without the authorization of $900 million in revenue bonds. See Figure 4-9, p. 4-41. Please
provide for each alternative the projected (a) average monthly residential wastewater bill on
July c1, 2016; (b) the average annual residential wastewater bill as a percentage of median
household income on July 1, 2016; and (c) the percentage average annual increase for residential
wastewater bills for July 1, 2017, 2018, 2019, and 2020.
RESPONSE:
(a) Table 6-2 in the Rate Proposal presents projected wastewater bills based on the
authorization of $900 million in revenue bonds. The typical customer bill of 7 ccf per month is
shown on line 3, with the annual percentage change on line 4. Table 4-25 presents the same
information with the assumption of no further bond authorization.
(b) The US Census Bureau reports that the MHI for St. Louis City (2009-2013) is $34,582 and
St. Louis County (2009-2013) is $58,910. Approximately 21% of MSD customers live in the City
and 79% live in the County. These data correspond to a weighted average MITI of $53,801 for
the MSD service area. Assuming no increase in these MHI values, the wastewater bills as a
percentage of MHI on July 1, 2016 would be the following:
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MSD Service Area
Median Household Income $ 53,801
With $900M Bond Authorization
July 1, 2016 Typical Customer Bill (per month) $ 44.72
x 12 months 12
Annual Wastewater Bills $ 536.64
Annual Bil as %of MHI 1.00%
Without $900M Bond Authorization
July 1, 2016 Typical Customer Bill (per month) $ 44.72
x 12 months 12
Annual Wastewater Bills $ 536.64
Annual Bill as 0/0 of MHI 1.000/0
Since the existing bond authorization is not depleted until FY 2018, the rate scenario under each
alternative is the same on July 1, 2016. When the current authorization is depleted in FY2018,
the scenarios for rates effective on July 1, 2017 would calculate the following:
MSD Service Area
Median Household Income $ 53,801
With $900M Bond Authorization
July 1, 2017 Typical Customer Bill (per month) $ 49.56
x 12 months 12
Annual Wastewater Bills $ 594.72
Annual Bill as %of MI•II 1.11%
Without $900M Bond Authorization
July 1, 2017 Typical Customer Bill (per month) $ 73.80
x 12 months 12
Annual Wastewater Bills $ 885.60
Annual Bill as %of MHI 1.65%
(c) Table 6-2 in the Rate Proposal presents projected wastewater bills based on the
authorization of $900 million in revenue bonds. The typical customer bill of 7 ccf per month is
shown on line 3, with the annual percentage change on line 4. Table 4-25 presents the same
information with the assumption of no further bond authorization.
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17. During the Technical Conference for District Testimony and Rate Setting
Documents, William Stannard testified that the proposed Wastewater Revenue increase was
10.75%. Please (a) state the proposed percentage increase in Residential and Tier One ratepayer
bills for each year from FY2015 to FY2020; (b) provide copies of any memorandum, report,
work paper, summary, analysis, or schedule that supports the District's determination; and (c)
state the amount of the median residential bill for each such year.
RESPONSE:
The increase in residential customer bills varies based on the level of water consumption. Table
6-2 in the Rate Proposal presents the estimated bills for customers with varying levels of water
usage based on the proposed rates and charges. Each bill is based on Tier One compliance
charges. The District does not have the information required to provide the median residential
bill.
18. Table 4-4 — Wastewater User Charge Revenue Under Approved Rates, Exhibit
MSD 1, pp. 4-9, shows the historic growth in user charge revenue for FY2013 and FY2014 and
the projected growth in user charge revenue for FY2015 to FY2020. The District conducts a
program for customers to apply for a reduction of sewer charges for non -severed water. Please
state for each fiscal year from FY2005 to date the sanitary charges waived under this program.
RESPONSE:
Sanitary charges waived as a result of reduction factors were as follows:
Fiscal Year Dollars
FY2005 $8,034,423.24
FY2006 $9,050,209.96
FY2007 $8,624,123.29
FY2008 $9,116,626.10
FY2009 $7,516,111.88
FY2010 $7,400,065.92
FY2011 $9,004,867.10
FY2012 $8,765,155.22
FY2013 $10,104,727.44
FY2014 $8,743,612.50
FY2015* $9,105,340.08
*FY2015 represents activity through April, or 10
months.
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19. William Stannard described in Direct Testimony certain cost increases due to
inflation for the District's wastewater expense projections for FY2016 through FY2020. See
Exhibit MSD 3H at page 9, lines 8-18. Please provide (a) the annual percentage increase
experienced by the District for each of these items for each of FY2011 to FY2014 inclusive; (b)
the individual components of the index used by the District as a basis for the future inflation
allowances; (c) a detailed estimate of the pension costs for the District under the new defined
contribution plan for each fiscal year from FY2016 to FY2020 inclusive; and (d) the percentage
increase in annual salary, wages and overtime, and personnel service expense approved by the
Board of Trustees for FY2012 to FY2015 inclusive.
RESPONSE:
(a) Refer to Exhibit MSD 991,, Year over Year Variance Tables.
(b) As indicated in Appendix 7.1.1 of the Rate Change Proposal, Exhibit MSD 1, the District
used multiple sources for developing the inflation assumptions used in the Rate Change Proposal
projections. As that appendix explains, most accounts were inflated using the Core PCE Price
Index as published by the Congressional Budget Office in their work entitled The Budget and
Economic Outlook: 2014 to 2024. This index, according to the Bureau of Economic Analysis
(www. bea.gov) can be defined as follows.
"The `core' PCE price index is defined as personal consumption expenditures
(PCE) prices excluding food and energy prices. The core PCE price index
measures the prices paid by consumers for goods and services without the
volatility caused by movements in food and energy prices to reveal underlying
inflation trends."
Appendix 7.1.1 of the Rate Change Proposal, Exhibit MSD 1, also provides an explanation of the
inflation factor calculation for salary increases, and notes the source of our information for
Group Insurance assumptions. Inflation factors for utilities and Bond & Liability Insurance
were based on management's estimates.
(c) Annual estimates for pension costs for the District can be found in the Rate Model, MSD
Exhibit 79, in the O&M Summary tab between rows 835 and 2647. Rows within this range
labeled '51230 — Pension Contribution' include the projections. The analysis done to estimate
pension costs was combined to include both the Defined Benefit (DB) and Defined Contribution
(DC) plans. The DB plan was closed to new participants in 2011 and has shown steady declines
each year after. The assumption was made that continued decreases in the DB plan will be offset
by future cost increases in the DC plan due to increased participation.
(d) Refer to Exhibit MSD 99I, Year over Year Variance Tables.
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20. Please provide a table summarizing the allocation of the District's fixed assets to
functional cost components, indicating the date of such fixed asset data, as referenced on page 4-
26, first sentence of second paragraph.
RESPONSE:
The allocation of the District's fixed assets to functional cost components can be found in the
electronic rate model on the Plant-Funct' worksheet. The fixed asset value is the estimated net
book value for June 30, 2016 based on current asset cost, depreciation, and useful life
information.
21. Please provide Appendix 7.2.2 and 7.5.2 in Excel format. In addition, please
provide a) necessary detail to indicate to which category (e.g., SSO, CSO, treatment plant, etc.)
each project is assigned; and breakdown by cost component (e.g., design, construction, property
acquisition, ROW acquisition, etc.).
RESPONSE:
The requested tables have been provided as MSD Exhibit 99.I - Revised Appendix 7.2.2
and MSD Exhibit 99K - Revised Appendix 7.5.2. Please note that the Stormwater CIRP projects
are not categorized as SSO, CSO, treatment plant, etc. as these are wastewater designations
only.
22. Please provide a summary of assumptions used in determining the incremental
additional O&M included in the financial plan Ogg MSD1, Table 4-6, line 22).
RESPONSE:
The Additional O&M amounts that appear on line 22 of Table 4-6 in Exhibit MSD 1 originate
from the Budget -Input tab of the Rate Model, Exhibit MSD 79, in rows 2012 through 2165.
From those inputs, the values can be traced to the O&M Summary tab on row 139 of the
spreadsheet. The original numbers developed by District management have had inflation
applied to them in the same manner as all other O&M expense projections in the model.
Additionally, those expenses that are unallocated, meaning they are not specific to either
wastewater or stormwater, have been allocated between wastewater and stormwater based on
the projections of continued O&M expenses.
Below are some general reasons for the incremental expenses by department.
I. Executive Director
a. 2 Additional full-time equivalents (FTE's) in the Public Information
division
b. Community outreach programs
c. MSD website revamp
d. Transfer of Project Clear consultant from Operations
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IL Engineering
a. 12 Additional FTE's; to perform work in Construction Management (8);
Design (3); and Environmental Compliance (1) including one-time
purchases of equipment for these employees and on -going uniform and
mileage expenses in some cases
III. Finance
a. 7 Additional FTE's; in Accounts Receivable (2) to support water shut-off
for delinquent accounts; Financial Planning (2) for Big Data predictive
analytics; Accounting (2) to support financial reporting and increased
stormwater CIRP; and General Purchasing (1) to handle increased
workload from the Consent Decree
b. Increased postage and printing expenses for new full page bill and
increased monthly hosting expenses for billing system and software
upgrade project currently underway
c. Predictive analytics
IV General Counsel
a. I Additional FTE
V. Information Systems
a. 1 Additional FTE
b. Enterprise Document Management system (hardware/
software/professional services)
c. Data Center Colocation Initiative hardware refresh and professional
services
d. Title quote system re -write (in support of Billing System Upgrade)
VI. Operations
a. 33 Additional FTE's; due to increased service levels
i. Yards (27)
ii. Pump Stations (2)
iii. Garage and Shops (2)
iv. Treatment Plant (I)
v. Technical Services (1)
b. Asset management services
c. Fleet additions for increased stormwater service levels
VII Secretary -Treasurer
a. Election expenses
23. A summary of projected wastewater expenses for Operations and Maintenance for
FY2015 through FY2020 is presented in Table 4-6 of Exhibit MSD 1. These projections are
based on certain financial assumptions: (i) Customer and Water Usage growth/Decline; (ii)
Customer Impacts; (iii) Inflation Rates; (iv) Bad Debt and Collection Efforts; (v) Customer
Assistance Project; (vi) Overhead Rates; (vii) Basis for cost of service indirect/direct cost
allocation; (viii) Average Water/Wastewater Utility Bill Comparison; (ix) Salary Projection; (x)
Wastewater/Stormwater Segmentation; and (xi) Infiltration/Inflow Assumptions. Please describe
how the District will manage each of these factors if the anticipated conditions, events, and
circumstances do not occur.
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RESPONSE:
The financial assumptions used to project the expenses in Exhibit MSD 1, Table 4-6 were made
using information available at the time. If these anticipated conditions, events, and
circumstances do not occur, the District will respond accordingly by adjusting the budget in the
appropriate expense and/or revenue accounts to maintain a balanced budget each fiscal year.
24. Please indicate when the historical impervious area data included in the Rate
Model was compiled (see MSD79, Tab "Demand -Input", lines 503-586).
RESPONSE:
The historical impervious area data was compiled as part of the 2011 Rate Proposal, Exhibit
MSD 9.
25. Jonathan C. Sprague testified during the Technical Conference regarding service
level expectations of the ratepayers and identified customer surveys conducted in 2014 (See
Exhibit MSD 3D, p. 4, 1. 6) and a customer service survey regarding stormwater services in the
"Red Area" (see MSD 3D, p. 6, 1. 20). Please provide copies of each of these and any other
customer surveys conducted since January 1, 2013.
RESPONSE:
See Exhibit MSD 99L - 99L2, Customer Surveys.
26. Please describe (a) the District's policy regarding billing of wastewater services
(e.g., billing in arrears), and (b) the adjustment factor applied in calculating projected revenue
under proposed increases in the first year of the increase.
RESPONSE:
(a) The District issues a monthly bill to approximately 424,000 commercial and residential
accounts. The bill has a Wastewater User Charge which includes a base charge and a volume
charge based on either the amount of water used at an address or, if no water meter is in use, the
number of rooms, baths water closets, and showers in the building. Commercial properties are
also billed a Compliance Charge based on the type of wastewater discharged to the public sewer
system. The District policy to bill customers for services provided in the previous month can be
found in the Wastewater User Charge Ordinance which is included in Exhibit MSD 19, page
348; section 6.
(b) The Rate Proposal does not include an adjustment factor for billing in arrears because
unbilled revenue is recorded as an accrual in the month the service was provided
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Respectfully submitted,
Susan M. Myers
METROPOLITAN ST. LOUIS SEWER DISTRICT
2350 Market Street
St. Louis, Missouri 63103
Tel: (314) 768-6366
Fax: (314) 768-6279
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CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing was sent by electronic transmission
to Janice Fenton, Office Associate Senior, Metropolitan St. Louis Sewer District; Lisa Stump,
Counsel for the Rate Commission; Brad Goss, Counsel for Intervener Home Builders
Association of St. Louis & Eastern Missouri, and Brandon Neuschafer, Counsel for Intervener
Missouri Industrial Energy Consumers on this 7th day of May, 2015.
Lisa O. Stump, Esq.
Lashly & Baer, P.C.
714 Locust Street
St. Louis, MO 63101
lostump@lashlybaer.com
Mr. Brad Goss
Smith Amundsen, LLC
120 South Central Avenue, Suite 700
St. Louis, MO 63105-1794
bgossAsalawus.com
Brandon W. Neuschafer
Bryan Cave, LLP
211 N. Broadway, Suite 3600
St. Louis, MO 63102
Jolm.kindschuh@brvancave.com
Susan M. Myers, General Cunsel
METROPOLITAN ST. LOUIS SEWER DISTRICT
2350 Market Street
St. Louis, Missouri 63103
smyers@stlmsd.com
Tel: (314) 768-6366
Fax: (314) 768-6279
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