HomeMy Public PortalAboutRate Proposal Summary March 4, 2015Metropolitan St. Louis
Sewer District
Rate Proposal Summary
March 4, 2015
1
Exhibit MSD 80
Rate Change Proposal
•Four year rate plan, FY17-FY20
•Wastewater rate change
•Wastewater: current
•Wastewater: proposed
•Stormwater revenue change
•Stormwater: current
•Stormwater: proposed
2
Two Utilities
Wastewater Service
•Collecting and treating the
"used" water from sinks,
toilets and floor drains
•Travels through miles of
pipes to one of seven
treatment plants
•Treated to high standards
before being returned to
our region’s waterways.
•Wastewater service is
currently funded by rates
based upon water usage
and account type
Stormwater Service
•Collecting the rain and
other water drainage that
is not naturally absorbed in
the soil on your property
•Addressing regulatory
requirements regarding
impacts of stormwater
runoff on receiving stream
water quality
•Stormwater service is
currently funded by a flat
fee and small property
taxes, based upon
geographic location
3
CURRENT
WASTEWATER RATES
Current Rates, Progress under FY13-16 rate cycle
4
Current Wastewater Rate
Structure
•Residential Accounts
•Single-Family Homes
•Multi-Family Homes
•Metered and Unmetered
•Commercial Accounts
•Metered
•Tiered compliance charges according to
inspections and testing
•Extra-strength surcharges (where
applicable)
5
WASTEWATER: current
Regulatory Requirements
•MSD Project Clear
•Sanitary Sewer Overflow (SSO) elimination
•Combined Sewer Overflow (CSO) abatement
•Building backup prevention
•Asset re-investment
•System renewal, repairs, and rehabilitation
•Increased Wastewater Treatment Plant
capacity
6
WASTEWATER: current
FY13-16 Rate Proposal Status
•Capital Improvement & Replacement Program:
•Provides a schedule and cost of needed repairs and
improvements to the wastewater system to maintain
the system and ensure compliance with all State and
Federal Regulatory requirements
•$971,015,0001 identified in FY13-16 Rate Proposal
•Accomplishments:
•Plan to appropriate $889,632,0001 (95%) of amount
identified in FY13-16 Rate Proposal
•80% of projects appropriated within 2 months of
planned date through FY15
7
WASTEWATER: current
1 Appendix 7.7.1
" O p e r a t i o n s & M a i n t e n a n c e
" $ 7 1 6 M i n c l u d e d i n R a t e P r o p o s a l 1
" $ 7 0 0 M a p p r o p r i a t e d [ p r o j e c t e d ] 1
" D e b t F i n a n c i n g
" $ 9 4 5 M a u t h o r i z e d / $ 6 7 7 M i s s u e d [ p r o j e c t e d ] 1
" W a s t e w a t e r O p e r a t i o n s A c c o m p l i s h m e n t s
" B r o u g h t C C T V p r o g r a m i n - h o u s e
" 6 1 , 7 3 7 m a n h o l e s i n s p e c t e d
" 6 , 6 5 1 m a n h o l e s r e h a b i l i t a t e d
" 1 , 9 1 0 m i l e s o f s e w e r l i n e i n s p e c t e d
" R e d u c t i o n i n r e p o r t e d b a s e m e n t b a c k u p s
8
W A S T E W A T E R : c u r r e n t
F Y 1 3 - 1 6 R a t e P r o p o s a l S t a t u s
1 A p p e n d i x 7 . 7 . 1
PROPOSED
WASTEWATER RATES
Proposed Rate Changes
9
Wastewater Rate Change
Drivers
•MSD Project Clear
•Regulatory Requirements
•Financial Stability
•Maintain AA Bond Rating
10
WASTEWATER: proposed
Wastewater Rate Proposal
Key Financial Components
•$1.5B Capital Program1
•Wastewater Capital Improvement &
Replacement Program
•$736M Operations & Maintenance
Cost2
•$477M Total Debt Service Cost3
11
WASTEWATER: proposed
1 Table 4 -7
2 Table 4 -6
3 Table 4 -9
Proposed Wastewater
Capital Improvement &
Replacement Program (CIRP)*
Fiscal Year Program Level1
2017 $332,511,688
2018 $347,297,471
2019 $373,664,090
2020 $439,398,796
Total 4 Year Program $1,492,872,045
12
*Planning, engineering, and construction of wastewater
projects.
WASTEWATER: proposed
1 Table 4 -7
Additional Use of Debt
•Fund next four years through a combination of
cash and bonds
•Total Cash Financing: $415M1
•Total Bond Financing: $1.11B1
•Assumes $900 M additional bond authorization
•Total authorized debt by FY20 $2.6202 Billion
•100% of debt is used to fund the Capital
Improvement & Replacement Program (CIRP)
•Debt to Cash Ratio:
•Cumulative Debt to Cash ratio FY15-FY20 69% : 26.3%*
*4.7% anticipated grants and contributions
13
WASTEWATER: proposed
1 Table 4 -8
2 Total Bonds FY2004-2020
Proposed FY17-20 CIRP
Projects
14
WASTEWATER: proposed
598
Wastewater Planning,
Design, &
Construction Projects
226
Wastewater
Construction Projects
39
Sanitary Sewer
Overflows (SSOs)
removed*
24
Miles of Storage &
Conveyance Tunnels
designed
*One CSO will be removed during this rate cycle, in addition to the design
and planning for future removals. The Green Infrastructure (Rainscaping)
program is also designed to alleviate CSOs to the Mississippi.
15
WASTEWATER: proposed
Proposed FY17-20
CIRP Projects
1 Appendix 7.2.2
Stable Wastewater Operating
Costs
Total % Change
FY15 [projected] $169 M N/A
FY16 [projected] $178 M 5.4 %
FY17 $176 M -1.2 %
FY18 $180 M 2.1 %
FY19 $186 M 3.5 %
FY20 $193 M 3.6 %
16
WASTEWATER: proposed
1 Table 4 -6
Proposed Wastewater
Operations & Maintenance
17
WASTEWATER: proposed
60,000
Manholes Inspected*
6,000
Manhole
Rehabilitations
1,600
Miles of sewer
inspected with CCTV
3,814
Miles of sewer cleaned
360
Miles of sewer
rehabilitation *2% per year, once per 50 year schedule
Meets Consent Decree requirements for
inspection, cleaning, and rehabilitation
Proposed Wastewater Rate Increase
Average Residential Monthly Bill1
[with bond financing]
Fiscal Year Monthly Bill $ Change % Change
FY16* $ 40.72 $ 4.73 13.1 %
FY17 $ 44.72 $ 4.00 9.8 %
FY18 $ 49.56 $ 4.84 10.8 %
FY19 $ 54.91 $ 5.35 10.8 %
FY20 $ 60.86 $ 5.95 10.8 %
*already approved in 2012 as part of FY13-16 Rate Commission Process 18
1based on 7 Ccfs per month
WASTEWATER: proposed
1 Table ES -4
Proposed Wastewater Rate Increase
Average Commercial Monthly Bill1
[with bond financing]
19
Fiscal Year Monthly Bill $ Change % Change
FY16* $ 341.40 $ 34.15 11.1 %
FY17 $ 382.38 $ 40.98 12 %
FY18 $ 423.58 $ 41.20 10.8 %
FY19 $ 469.02 $ 45.44 10.7 %
FY20 $ 519.70 $ 50.68 10.8 %
*already approved in 2012 as part of FY13-16 Rate Commission Process
1100 Ccf normal strength
WASTEWATER: proposed
1 Table ES -4
Proposed Monthly Wastewater Bills
[with bond financing]
20
WASTEWATER: proposed
1 Table ES -4
Proposed Wastewater Rates
[with bond financing]
21
WASTEWATER: proposed
21 1 Table 4 -19
National Wastewater Average
Residential Monthly Bill
22
WASTEWATER: proposed
Historic and projected WW bills for residential customers using 10 Ccf per month compared to
the national average for respondents to the National Association of Clean Water Agencies
(NACWA) annual surveys through 2014 with their projection through 2018. (Figure 6-1, 6-2)
$139.46
Average
Range of single-family wastewater bills of 50 respondents to 2014 RFC survey
Wastewater Funding Options
Voters Approve Bonds
Option A
Funded by Cash & Debt
•$900 M additional bonds
•$1.5 Billion 4-Year CIRP
•Avg. Single Family
Wastewater Sewer Bill1
$$$ %Chg
FY16 $40.72 13.1%
FY17 $44.72 9.8%
FY18 $49.56 10.8%
FY19 $54.91 10.8%
FY20 $60.86 10.8%
Voters Reject Bonds
Option B
Funded by Cash
•Zero use of additional bonds
•$1.5 Billion 4-Year CIRP
•Avg. Single Family
Wastewater Sewer Bill2
$$$ %Chg
FY16 $40.72 13.1%
FY17 $44.72 9.8%
FY18 $73.80 65.0%
FY19 $83.46 13.1%
FY20 $96.01 15.0%
23
WASTEWATER: proposed
1 Table ES -4
7 Ccfs/month
2 Table 4 -25
7 Ccfs/month
Monthly Wastewater Bills
[without bond financing]
WASTEWATER: proposed
1 Table 4 -25 24
Wastewater Rates
[without bond financing]
25
WASTEWATER: proposed
1 Table 4 -24
CURRENT STORMWATER
SERVICE
Stormwater service, funding, and geographic disparities
26
Current Stormwater
Service & Funding Overview
•MSD assumed stormwater management generally inside of
I-270 in 1954, and took over the stormwater management
for the remainder of our service area in St. Louis County in
1989
•Stormwater service has differed dramatically among parts
of the service area due to differences in funding for
stormwater system maintenance and system improvement
•Stormwater is currently funded through a combined fee and
tax system
27
STORMWATER: current
Current Stormwater
Fee & Tax Structure
•Stormwater Fee
–Flat $0.24/$0.18 charge on each MSD customer’s
monthly bill
•Three zones of Stormwater funding overlap in MSD’s
Service Area
–Administrative Tax
•$.0197/$100 of Assessed Value
–Stormwater Tax
•$.0682/$100 of Assessed Value
–Taxing Subdistricts
•Up to $.10/$100 of Assessed Value (varies by
district)
28
STORMWATER: current
29
$0.24* fee + $.0197 + $.0682 + up to $.10
$0.24* fee + $.0197 + $.0682
$0.24* fee + $.0197
STORMWATER: current
*for customers also receiving wastewater sewer service
Current Stormwater
Services & Funding
Average Cost per Customer
30 **for median Feb. 2014 St. Louis County appraised
single-family home value of $142,100, at 19%
Residential assessment rate
$0.24* fee + $.0197 + $.0682 + up to $.10
$0.24* fee + $.0197 + $.0682
$0.24* fee + $.0197
*for customers also receiving wastewater sewer service
STORMWATER: current
Stormwater Regulatory
Compliance Activities
•MSD ensures compliance with all
local, state, and federal
stormwater regulations, including:
•Plan Review and Permitting
•Complaint Investigation and Data
Collection
•Emergency Response in critical
health and safety situations
31
STORMWATER: current
Creeks and BMPs/Basins
in Red Area
•1154 Miles of
Creeks in Red
Area
•2638 BMPs/Basins
in Red Area
•Currently funded
32
STORMWATER: current
Public Storm System
in Red Area
•1362.99 Miles of
Storm Sewers in
the Red Area
•Currently not
funded
33
STORMWATER: current
STORMWATER SERVICE
Proposed Revenue Changes
34
Stormwater Revenue
Proposal
Key Financial Components
•4-year Operations & Maintenance
cost of $90.8M1
•6-year $97.6M Capital program2
35
STORMWATER: proposed
1 Table 5 -2, FY17-20
2 Table 5 -5, FY15-20
Stormwater Revenue Change
Drivers
•Necessary maintenance of public
storm sewer system
•Initiate limited funding for
necessary 6-year District-wide
stormwater capital improvements
36
STORMWATER: proposed
Proposed Stormwater
Operating Costs
Total % Change
FY16 [projected] $16 M 6.3%
FY17 $20.7 M 30.0%
FY18 $23.7 M 14.5%
FY19 $22.8 M -3.9%
FY20 $23.5 M 3.1%
37
STORMWATER: proposed
1 Table 5 -2
Proposed FY17-20 CIRP
Projects
38
STORMWATER: proposed
•Green Area:
•Projects: 64
•Cost: $24,968,200
•Yellow Area:
•Projects: 47
•Cost: $17,450,000
•Red Area:
•Projects: 59
•Cost: $7,485,000
1 Appendix 7.5.2
Proposed Stormwater
Revenue Structure
Type of Charge Current Proposed
OMCI Sub-district Taxes
(Green area per $100 Assessed Value)
$0.05-0.10 $0
Stormwater O&M Tax
(Yellow area per $100 Assessed Value)
$0.0682 $0
District-wide Regulatory Tax
(Red area per $100 Assessed Value)
$0.0197 $0.0197
District-wide Stormwater Tax (proposed)
(Red area per $100 Assessed Value)
N/A $0.100
Total Tax $0.0197-
0.1879
$0.1197
Fixed Monthly Charge – Single-Family Residential
($/unit)
$.24 $0
Fixed Monthly Charge – Multi-Family Residential
($/unit)
$.18 $0
Total Fees $.18-.24 $0
39
STORMWATER: proposed
1 Table 5 -1
Proposed Revenue Change –
Green Area
40
STORMWATER: proposed
Tax Rate* Avg. Annual
Cost
Current $.0197 +
$.0682 +
$.10 (up to)
$61.67/year
Proposed $.10 -$19.75/year
Total $.1197 $41.92/year
Change in total tax: -0.5%
Percentage of MSD’s ratepayers: 47%
1 Table ES -6 *per $100 of assessed valuation of $184,500
Proposed Revenue Change –
Yellow Area
41
STORMWATER: proposed
Tax
Rate*
Avg.
Annual Cost
Current $.0197 +
$.0682
$12.50/year
Proposed $.10 +$3.60/year
Total $.1197 $16.10/year
Change in total tax: 0.3%
Percentage of MSD’s ratepayers: 19%
1 Table ES -6 *per $100 of assessed valuation of $70,800
Proposed Revenue Change-
Red Area
42
STORMWATER: proposed
Tax
Rate*
Avg.
Annual Cost
Current $0.0197 $10.52/year
Proposed $0.10 +$50.08/yea
r
Total $.1197
$60.60/year
Change in total tax: 1.2%
Percentage of MSD’s ratepayers: 34%
1 Table ES -6 *per $100 of assessed valuation of $266,700
TOTAL PROPOSED
CUSTOMER IMPACT
Annualized impact of Wastewater and Stormwater revenue
changes
43
Total Proposed
Annual Customer Cost
Single-Family Residential
44
WASTEWATER + STORMWATER: proposed
Proposed Average
Annual Cost1
Average Annual Cost
without Bonds2
Total Annual
Cost
Percent
Change
Total Annual
Cost
Percent
Change
FY16 $522.54 N/A $522.54 N/A
FY17 $577.92 +10.6% $577.92 +10.6%
FY18 $636.00 +10.0% $926.88 +60.4%
FY19 $700.20 +10.0% $1,042.80 +12.5%
FY20 $771.60 +9.2% $1,193.40 +14.4%
1Table ES -4, Table ES -6
2 Table 4 -25, Table ES-6
45
Total Proposed
Annual Customer Cost
Low-Income Residential
Proposed Average
Annual Cost1
Average Annual Cost
without Bonds2
Total Annual
Cost
Percent
Change
Total Annual
Cost
Percent
Change
FY16 $261.83 N/A $261.83 N/A
FY17 $283.77 +8.4% $283.77 +8.4%
FY18 $312.81 +10.2% $458.25 +61.5%
FY19 $344.97 +10.3% $516.21 +12.6%
FY20 $380.61 +10.3% $591.57 +14.6%
1Table ES -4, Table ES -6
2 Table 4 -25, Table ES-6
WASTEWATER + STORMWATER: proposed
46
Total Proposed
Annual Customer Cost
Commercial
Proposed Average
Annual Cost1
Average Annual Cost
without Bonds2
Total Annual
Cost
Percent
Change
Total Annual
Cost
Percent
Change
FY16 $4,285.35 N/A $4,285.35 N/A
FY17 $4,811.01 +12.3% $4,811.01 +12.3%
FY18 $5,305.41 +10.3% $7,772.49 +61.6%
FY19 $5,850.69 +10.3% $8,760.09 +12.7%
FY20 $6,458.85 +10.4% $10,038.93 +14.6%
1Table ES -4, Table ES -6
2 Table 4 -25, Table ES-6
*Commercial customers are also assessed a tiered compliance
charge based upon inspections and testing
WASTEWATER + STORMWATER: proposed
Anticipated Revenue Change
Process
•Proposal submitted to MSD Rate Commission February 26, 2015
•Final wastewater rate increase of April 2012 rate plan
implemented July 1, 2015
•Rate Commission Recommendation due to Board – August 2015
•MSD Board Approves Revenue Plan – October-December 2015
•Tentative Bond Authorization and Stormwater Elections –
Calendar 2016
•MSD Board Adopts Revenue plan after elections
•First rate change under proposed plan effective after elections
47
WASTEWATER + STORMWATER