HomeMy Public PortalAboutExhibit RC 84 - Rate Commission First Discovery Request to MSD March 17, 2015Exhibit RC 84
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
DISCOVERY REQUEST
OF THE RATE COMMISSION
Pursuant to §§ 7.280 and 7.290 of the Charter Plan of the Metropolitan St. Louis Sewer
District (the "Charter Plan"), Operational Rule 3(2) and Procedural Schedule §§ 1, 17 and 18 of
the Rate Commission of the Metropolitan St. Louis Sewer District ("Rate Commission"), the
Rate Commission requests additional information and answers from the Metropolitan St. Louis
Sewer District ("District") regarding the Rate Change Proposal dated February 26, 2015 (the
"Rate Change Proposal").
The District is requested to amend or supplement the responses to this Discovery
Request, if the District obtains information upon the basis of which (a) the District knows that a
response was incorrect when made, or (b) the District knows that the response, though correct
when made, is no longer correct.
The following Discovery Requests are deemed continuing so as to require the District to
serve timely supplemental answers if the District obtains further information pertinent thereto
between the time the answers are served and the time of the Prehearing Conference.
DISCOVERY REQUEST
1. A Commissioner has requested that the District provide a map of Capital
Improvement and Replacement Program ("CIRP") projects included in the FY13-FY16
Wastewater Rate Change Proposal, similar to the map provided in 2015 Wastewater and
Stormwater Rate Change Proposal Summary presented by Brian Hoelscher on March 4, 2015.
See MSD Ex. 80, p. 15.
RESPONSE:
2. The Rate Change Proposal contains a residential bill comparison prepared by
Raftelis Financial Consultants Inc. ("RFC"). See MSD Ex. 1, Figure 6-2, p. 6-5. A
Commissioner has requested that the District provide a bill comparison for non-residential rate
payers.
RESPONSE:
3. Richard L. Unverferth states in Direct Testimony that the $971 CIRP is required
to comply with the Consent Decree in United States of America v. Metropolitan St. Louis Sewer
District (MSD Ex. 47) or other regulatory requirements. See MSD Ex. 3C, p. 2, 11. 16-23. A
Commissioner has requested that the District identify (a) any CIRP project described in
Appendix Sections 7.2 and 7.5 not required for compliance with the Consent Decree or other
regulatory requirements; and (b) any other CIRP project not described therein.
RESPONSE:
4. During the March 4, 2015 presentation of the Rate Proposal Summary (MSD Ex.
80), Brian L. Hoelscher referred to 'the Combined Area." A Commissioner has requested that
the District provide a map of the Combined Area.
RESPONSE:
5. The Rate Change Proposal Summary sets forth the current stormwater service
levels by utilizing a map which identifies the various levels of existing services in colors yellow,
green or red. See MSD Ex. 80, pp. 29-30. A Commissioner has requested that the District state
the percentage of sewers existing in the red area in 1989 when the District assumed responsibility
for stormwater.
RESPONSE:
6. Jonathan C. Sprague states in Direct Testimony that stormwater services are
comprised of the effective collection and transport of stormwater within the District in a manner
that protects the public's health and welfare. See MSD Ex. 3D, p. 5, 11. 14-17. A Commissioner
has requested that the District clarify what portion of the expense of operation and maintenance
of the Stormwater System is governed by the Clean Water Act.
RESPONSE:
7. During the March 4, 2015 presentation of the Rate Proposal Summary (MSD Ex.
80), Brian L. Hoelscher referred to "regulations related to quantity" and "regulations related to
quality." A Commissioner has requested that the District explain the difference between such
regulations.
RESPONSE:
8. Pursuant to the last Rate Change Proposal approved by the Board of Trustees in
2008, the District imposed a stormwater user charge based upon the square footage of impervious
area ("Impervious Area Fee") on each owner's property. A Commissioner has requested that the
District disclose how many sewer districts across the country use impervious area fees rather than
taxes to fund stormwater services?
RESPONSE:
9. Pursuant to the last Rate Change Proposal approved by the Board of Trustees in
2008, the District imposed a stormwater user charge based upon the square footage of
Impervious Area Fee on each owner's property. Please provide (a) an analysis of the process to
calculate (i) each landowner's Impervious Area Fee and (ii) the total square footage of
impervious area throughout the District; (b) maps and schedules identifying the total square
footage of impervious area throughout the District for (i) nonprofit landowners, and (ii) other
landowners; and (c) copies of any memorandum, report, work paper, summary, analysis or
schedule used to (i) calculate or identify the materials requested in this Discovery Request and
(ii) to determine which landowners would be exempt from the imposition of an Impervious Area
Fee.
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RESPONSE:
10. Brian L. Hoelscher states in Direct Testimony that in his opinion the Stormwater
Tax Change imposes a fair and reasonable burden on all classes of taxpayers for three reasons,
one of which is "the ad valorem taxing method is the most cost-efficient method to collect
stormwater revenues and avoids annual costs included in methods like a voted impervious area
fee." See MSD Ex. 3A, p. 3, 11. 8-12. Please (a) describe the analysis that was performed to
reach this conclusion; (b) provide copies of any memorandum, report, work paper, summary,
analysis, or schedule that supports this conclusion; and (c) describe the rationale for such
conclusion.
RESPONSE:
11. Susan M. Myers states in Direct Testimony that the Wastewater Rate Change
Proposal is consistent with constitutional, statutory or common law as amended from time to
time. See MSD Ex. 3B, p. 1, 11. 22-24. Please (a) describe the analysis that was performed to
reach this conclusion; (b) provide copies of any memorandum, report, work paper, summary,
analysis, or schedule that supports this conclusion; and (c) describe the rationale for such
conclusion.
RESPONSE:
12. Susan M. Myers states in Direct Testimony that the Rate Change Proposal will not
impair the ability of the District to comply with applicable federal or state laws or regulations as
amended from time to time. See MSD Ex. 3B, p. 3, 11. 10-12. Please (a) describe the analysis
that was performed to reach this conclusion; (b) provide copies of any memorandum, report,
work paper, summary, analysis, or schedule that supports this conclusion; and (c) describe the
rationale for such conclusion.
RESPONSE:
13. Susan M. Myers states in Direct Testimony that the Rate Change Proposal
imposes a fair and reasonable burden on all classes of ratepayers. See MSD Ex. 3B, p. 4, 11. 6-8.
Please (a) describe the analysis that was performed to reach this conclusion; (b) provide copies of
any memorandum, report, work paper, summary, analysis, or schedule that supports this
conclusion; and (c) describe the rationale for such conclusion.
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RESPONSE:
14. Susan M. Myers states in Direct Testimony that the Stormwater Rate Change
Proposal is consistent with constitutional, statutory or common law as amended from time to
time. See MSD Ex. 3B, p. 5, 11. 22-24. Please (a) describe the analysis that was performed to
reach this conclusion; (b) provide copies of any memorandum, report, work paper, summary,
analysis, or schedule that supports this conclusion; and (c) describe the rationale for such
conclusion.
RESPONSE:
15. Susan M. Myers states in Direct Testimony that the Stormwater Rate Change
Proposal does not impair the ability of the District to comply with applicable federal or state laws
or regulations as amended from time to time. See MSD Ex. 3B, p. 6, 11. 13-16. Please (a)
describe the analysis that was perfouued to reach this conclusion; (b) provide copies of any
memorandum, report, work paper, summary, analysis, or schedule that supports this conclusion;
and (c) describe the rationale for such conclusion.
RESPONSE:
16. Richard L. Unverferth states in Direct Testimony that the District has the
resources to successfully manage, construct, and complete the portions of the Capital
Improvement and Replacement Program ("CIRP") presented in the Rate Change Proposal, and
that the Engineering Department has developed a program delivery model that utilizes eight
multi -year consulting contracts to assure proper resources are maintained to provide engineering,
design, and construction management services based on various watershed locations, facility
types, and engineering disciplines. See MSD Ex. 3C, p. 4, 11. 8-13. Please (a) provide a copy of
the Program Delivery Model, or (b) describe the implementation of the Program Delivery Model.
RESPONSE:
17. Richard L. Unverferth states in Direct Testimony that the Wastewater Rate
Change Proposal enhances the District's ability to provide adequate sewer and drainage systems
and facilities or related services. See MSD Ex. 3C, p. 5, 11. 20-22. Please (a) describe the
analysis that was performed to reach this conclusion; (b) provide copies of any memorandum,
report, work paper, summary, analysis, or schedule that supports this conclusion; and (c) describe
the rationale for such conclusion.
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RESPONSE:
18. Richard L. Unverferth states in Direct Testimony that additional future wastewater
regulatory requirements may be anticipated. See MSD Ex. 3C, p. 6, 11. 23-24; p. 7, 11.1-12.
Please identify the anticipated future regulatory requirements and describe how each might affect
the ability to provide adequate sewer and drainage systems and facilities.
RESPONSE:
19. Richard L. Unverferth states in Direct Testimony that MSD is a co-permittee in a
State -issued Municipal Separate Storm Sewer System (MS4) permit. See MSD Ex. 3C, p. 7, 11.
15-17. Please identify the other co-permittees.
RESPONSE:
20. Richard L. Unverferth states in Direct Testimony that the Stormwater Regulatory
Services currently provided are sufficient to meet the regulatory obligations for the entire
District. See MSD Ex. 3C, p. 8, 11.1-3. Please (a) describe the analysis that was performed to
reach this conclusion; (b) provide copies of any memorandum, report, work paper, summary,
analysis, or schedule that supports this conclusion; and (c) describe the rationale for such
conclusion.
RESPONSE:
21. Richard L. Unverferth refers in Direct Testimony to a separate agreement with the
Missouri River Levee District. See MSD Ex. 3C, p. 8, 11.15-16. Please provide a copy of (a) the
agreement and any amendments, and (b) any agreements and amendments with other Levee
Districts.
RESPONSE:
22. Richard L. Unverferth states in Direct Testimony that additional Stormwater
regulatory requirements may be anticipated. See MSD Ex. 3C, p. 9, 11. 5-12. Please identify the
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anticipated future regulatory requirements and describe how each might affect the ability to
provide adequate stormwater systems and facilities.
RESPONSE:
23. Richard L. Unverferth states in Direct Testimony that cost estimates for the
Stormwater CIRP are based on historical District bid prices for sewer work, using conceptual and
preliminary design infoiination, and that for channel restoration and green infrastructure
improvements, estimates are based on the technical expertise of consulting engineers and past
data on similar District projects. See MSD Ex. 3C, p. 11, 11. 15-18. Please (a) describe the
analysis that was performed to reach this conclusion; (b) provide copies of any memorandum,
report, work paper, summary, analysis, or schedule that supports this conclusion; and (c) describe
the rationale for such conclusion.
RESPONSE:
24. Theresa A. Bellville states in Direct Testimony that no customer resistance
allowance was considered in the Rate Model or the Rate Change Proposal to compensate for a
potential decrease in the collection rate due to rate increases, and that a bad debt provision of
1.5% has been applied to revenue projections. See MSD Ex. 3G, p. 5, 11. 2-5. Please provide (a)
the District's (i) actual bad debt expense; (ii) actual write-offs; (iii) an aged receivables report for
the end of each fiscal year ending in 2010 through 2014; and (iv) end of year bad debt balances
for the fiscal years ending in 2010 through 2014; (b) a description of the District's process for
securing payment of receivables from delinquent accounts; (c) the forecasted expense related to
the Low -Income Assistance Program; and (d) the actual expense related to the Low -Income
Assistance Program for the fiscal years ending in 2010 through 2014.
RESPONSE:
25. Tim R. Snoke states in Direct Testimony that there is currently $518 million
remaining under the $945 authorization to finance capital improvements in FY15, FY16, and into
the new rate cycle. See MSD Ex. 3E, p. 2, 11.9-13. Please state the amount of funds appropriated
from the bond authorization for each of FY12, FY13, and FY14.
RESPONSE:
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26. William Stannard states in Direct Testimony that in the past, legal counsel has
advised that issues regarding consistency with Constitutional, statutory, or common law should
be evaluated. See MSD Ex. 3H, p. 4, 11. 16-20. Please (a) describe any analysis prepared by
legal counsel and who evaluated the analysis; and (b) provide copies of any memorandum,
report, work paper, summary, analysis, or schedule containing this analysis.
RESPONSE:
27. William Stannard states in Direct Testimony that a determination whether the
Rate Change Proposal is consistent with and not in violation of any covenant or provision
relating to any outstanding bonds or indebtedness of the District requires an analysis of covenants
or provisions contained in the Resolutions or Ordinances issuing such obligations. See MSD Ex.
3H, p. 5, 11. 5-11. Please (a) describe any analysis that was performed for this purpose; and (b)
provide copies of any memorandum, report, work paper, summary, analysis, or schedule
containing the analysis
RESPONSE:
28. William Stannard states in Direct Testimony that the cost of service analysis was
from an approach used in "this Study" based on principles endorsed by the Water Environment
Federation. MSD Ex. 3H, p. 11,11.22-24; p. 12,11.1-4. Please provide a copy of "this Study."
RESPONSE:
29. Please provide copies of each contract or lease for goods or services in which the
payment obligation of the District exceeds $500,000.
RESPONSE:
30. Please provide copies of the complaint for any litigation in which the District is
involved in which the prayer for damages exceeds $500,000.
RESPONSE:
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31. MSD Ex. 47 is a copy of a Consent Decree entered into by the District in the
matter captioned United States of America v. Metropolitan St. Louis Sewer District. Please
describe any current or threatened enforcement proceeding of the United States EPA or the
MDNR not included in the Consent Decree with respect to (a) combined sewer overflows or
sanitary sewer overflows within the District; and (b) wastewater to which the District is subject
and the current status of any such proceeding.
RESPONSE:
32. Please describe any other facts and circumstances which demonstrate whether the
Rate Change Proposal and all portions thereof is necessary to enable the District to provide for
the costs of operation and maintenance and such other amounts as may be required to cover
emergencies and anticipated delinquencies as required by §7.040 of the Charter Plan.
RESPONSE:
33. Please describe any other facts and circumstances which demonstrate whether the
Rate Change Proposal and all portions thereof whether and to what extent the Rate Change
Proposal is necessary to enable the District to comply with any covenant or provision relating to
any outstanding bonds or indebtedness of the District, together with a specific quantification of
the amount of the Rate Change Proposal that is necessary for such purposes, as required by
§7.040 of the Charter Plan and §3(2)(c) of the Operational Rules.
RESPONSE:
34. Please describe any other facts and circumstances which demonstrate whether the
Rate Change Proposal and all portions thereof is consistent with constitutional, statutory, or
common law, as amended from time to time, as required by §7.270(1) of the Charter Plan.
RESPONSE:
35. Please describe any other facts and circumstances which demonstrate that the Rate
Change Proposal and all portions thereof will enhance the District's ability to provide adequate
sewer and drainage systems and facilities, or related services as required by §7.270(2) of the
Charter Plan and §3(2)(b) of the Operational Rules.
RESPONSE:
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36. Please describe any other facts and circumstances which demonstrate whether the
Rate Change Proposal and all portions thereof is consistent with and not in violation of any
covenant or provision relating to any outstanding bond or indebtedness of the District, as
required by §7.270(3) of the Charter Plan and §3(2)(c) of the Operational Rules.
RESPONSE:
37. Please describe any other facts and circumstances which demonstrate whether the
Rate Change Proposal and all portions thereof does not impair the ability of the District to
comply with applicable Federal or State laws or regulations as amended from time to time as
required by §7.270(4).
RESPONSE:
38. Please describe any other facts and circumstances which demonstrate whether the
Rate Change Proposal and all portions thereof imposes a fair and reasonable burden on all classes
of ratepayers as required by §7.270(5) of the Charter Plan.
RESPONSE:
39. Please describe any other facts and circumstances which demonstrate whether the
Rate Change Proposal and all portions thereof why the Rate Change Proposal set forth in the
Rate Change Notice is necessary, fair and reasonable, as required by §3(2)(a) of the Operational
Rules.
RESPONSE:
40. Please describe any other facts and circumstances which demonstrate that the Rate
Change Proposal and all portions thereof are necessary to enable the District to comply with
applicable federal or State laws or regulations as amended from time to time, together with a
specific quantification of the amount of the Rate Change Proposal that is necessary for such
purposes as required by § 3(2)(d) of the Operational Rules.
RESPONSE:
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41. Please describe any other facts and circumstances which demonstrate that the Rate
Change Proposal and all portions thereof imposes a fair and reasonable burden on each class of
ratepayers, including whether and how cost of service considerations have been factored into
such determination as required by §3(2)(e) of the Operational Rules.
RESPONSE:
42. Please describe any other facts and circumstances which demonstrate that the Rate
Change Proposal and all portions thereof imposes a fair and reasonable burden on each class of
ratepayers, including whether and how cost causation principles, have been factored into such
determination as required by § 3(2)(e) of the Operational Rules.
RESPONSE:
43. Please describe any other facts and circumstances which demonstrate that the Rate
Change Proposal and all portions thereof imposes a fair and reasonable burden on each class of
ratepayers, including whether and how customer impact data has been factored into such
determination as required by § 3(2)(e) of the Operational Rules.
RESPONSE:
44. Please describe any other facts and circumstances which demonstrate that the Rate
Change Proposal and all portions thereof imposes a fair and reasonable burden on each class of
ratepayers, including whether and how economic development considerations have been factored
into such determination as required by § 3(2)(e) of the Operational Rules.
RESPONSE:
45. Please describe any other facts and circumstances which demonstrate that the Rate
Change Proposal and all portions thereof imposes a fair and reasonable burden on each class of
ratepayers, including whether and how environmental effects have been factored into such
determination as required by § 3(2)(e) of the Operational Rules.
RESPONSE:
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46. Please describe any other facts and circumstances which demonstrate that the Rate
Change Proposal and all portions thereof imposes a fair and reasonable burden on each class of
ratepayers, including whether and how any other factors have been factored into such
determination as required by § 3(2)(e) of the Operational Rules.
RESPONSE:
47. Please (a) describe any other facts and circumstances which demonstrate that the
measures taken by the District to ensure that the cost of constructing and maintaining the
District's facilities and providing related services are being incurred in a reasonable and efficient
manner; and (b) include copies of all internal or external audit reports that address such matters
as required by § 3(2)(f) of the Operational Rules.
RESPONSE:
Respectfully submitted,
Lisa O. Stump
LASHLY & BAER, P.C.
714 Locust Street
St. Louis, Missouri 63101
Tel: (314) 621-2939
Fax: (314)621-6844
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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; Susan Myers,
Counsel for the Metropolitan St. Louis Sewer District; and Brad Goss, Counsel for Intervener
Home Builders Association of St. Louis & Eastern Missouri, on this 17th day of March, 2015.
Ms. Janice Fenton
Office Associate Senior
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103
J FENTON (castlmsd.com
Ms. Susan Myers
General Counsel
Metropolitan St. Louis Sewer District
2350 Market Street
St. Louis, MO 63103
smvers<a%stlmsd.com
Mr. Brad Goss
Smith Amundsen, LLC
120 South Central Avenue, Suite 700
St. Louis, MO 63105-1794
bgossna,salawus.com
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