HomeMy Public PortalAboutExhibit MSD 3B - Direct Testimony.Myers.22SW
MSD Exhibit No. MSD 3B
2023 Stormwater Rate Change Proceeding
SUSAN M. MYERS
Direct Testimony
Metropolitan St. Louis Sewer District
March 24, 2023
Table of Contents
Page
Witness Background and Experience ........................................................................................... 1
Validity of Proposed Funding ...................................................................................................... 1
Direct Testimony of Susan M. Myers, MSD March 24, 2023
2023 Stormwater Rate Proceeding 1 MSD Exhibit No. MSD 3B
Witness Background and Experience 1
Q1. Please state your name, business address, and telephone number. 2
A. Susan M. Myers, 2350 Market Street, St. Louis, Missouri 63103-2555, (314) 768-6209, 3
smyers@stlmsd.com 4
Q2. What is your occupation? 5
A. I am the General Counsel for The Metropolitan St. Louis Sewer District (District or MSD). 6
Q3. How long have you been associated with the District? 7
A. I have been with the District continuously since August 6, 2001. 8
Q4. What is your professional experience? 9
A. I have been employed by the District as in-house counsel since 2001 and was promoted to 10
General Counsel in April 2011. I have a rare combination of environmental engineering 11
and legal experience. Prior to becoming a lawyer and joining MSD, I served as an 12
environmental engineer for two years with EPA Region VII in Resource Conservation and 13
Recovery Act (RCRA) Permitting and for nine years on a billion dollar DOE Superfund 14
Clean-up project. 15
Q5. What is your educational background? 16
A. I am a graduate of the Missouri University of Science and Technology, formerly known as 17
the University of Missouri – Rolla, with a B.S. in Geological Engineering. I received my 18
Juris Doctorate degree from St. Louis University School of Law. 19
Validity of Proposed Funding 20
Q6. Is charging an ad valorem property tax to residential customers and an impervious 21
area-based charge to non-residential customers, to provide funding for Districtwide 22
stormwater capital projects, valid? 23
Direct Testimony of Susan M. Myers, MSD March 24, 2023
2023 Stormwater Rate Proceeding 2 MSD Exhibit No. MSD 3B
A. Yes. The proposed ad valorem property tax would be levied only on the residential 1
subclass of real property within the District, while the impervious area-based charge will 2
be charged only on the non-residential (i.e., commercial and agricultural) subclass of real 3
property within the District. Within each subclass, the rates will be uniform and, therefore, 4
in compliance with the Missouri Constitution’s Uniformity Clause. Uniformity does not 5
mean that the same rate must be levied upon all subjects, but once the subjects are classified 6
the rate must be uniform upon all subjects of the same class. MSD is only required to levy 7
the same rate on all property in a class or subclass. See Exhibit MSD 3B1. 8
Q7. Is a voter-approved impervious area-based stormwater charge a valid charge for non-9
residential customers? 10
A. Yes, a voter-approved impervious area-based charge is a valid charge based upon the 11
following: (1) the charge is authorized under the District’s Charter as a “rate, rental, or 12
other charge”; and (2) the charge will be approved by the voters and, thus, in compliance 13
with the Missouri Constitution’s Hancock Amendment. 14
Q8. Is a voter-approved impervious area-based stormwater charge a valid charge for 15
tax exempt, non-profit, and governmental entities? 16
A. Yes, there is a three-part rationale for charging an impervious area-based charge to non-17
residential customers who are governmental, non-profit, and other tax-exempt entities. 18
First, the impervious area-based charge can be properly interpreted as not being a property 19
tax or any other form of tax, but instead is a charge or rate authorized by the Charter. 20
Consequently, tax exempt, non-profit, and governmental customers would not be exempt 21
from paying the rate. The constitutional and statutory exemptions for tax exempt, non-22
profit, and governmental customers apply to ad valorem property taxes. The impervious 23
area-based charge is not in any way based on the value of property, so it is not an ad 24
Direct Testimony of Susan M. Myers, MSD March 24, 2023
2023 Stormwater Rate Proceeding 3 MSD Exhibit No. MSD 3B
valorem tax. The Charter expressly allows the District to collect revenue through ad 1
valorem property taxes, special assessments, and rates and charges. The impervious area-2
based charge is plainly a rate or charge that is authorized by the Charter and is not a special 3
assessment or ad valorem tax. Therefore, this impervious area-based charge can be charged 4
to all non-residential customers “whether public or private” in the District pursuant to the 5
express terms of the Charter § 3.020(16). 6
Second, even if construed as a property tax, non-profit non-residential entities may not be 7
exempt from paying the impervious area-based charge because the statutory exemption for 8
non-profits is inconsistent with the Charter. Article VI, § 30(b) of the Missouri 9
Constitution provides that the Charter is the “organic law” of the District and “shall take 10
the place of and supersede” all laws that are “inconsistent therewith.” Missouri courts have 11
thus held that the powers granted by this constitutional provision are “immune from 12
legislative interference,” but the Charter does not supersede any inconsistent constitutional 13
provisions. The exemption from taxation for non-profit entities is not constitutional, but 14
rather is statutory in nature, so it is superseded if it is inconsistent with the Charter. Charter 15
§ 3.020(16) expressly gives the District the power to collect rates and charges from “all 16
real property . . . whether public or private,” which would include non-profit entities. The 17
Charter provisions supersede and are immune from the statutory exemption given to non-18
profit entities and exempting non-profits from paying the impervious area-based charge 19
would result in a clear inconsistency with the Charter. 20
Third, governmental entities are also not exempt because the impervious area-based charge 21
is not an ad valorem property tax, and the Charter specifically authorizes the District to 22
charge governmental entities. The government exemption applies only to real estate taxes 23
for general purposes, and not to other types of taxes and charges, so long as there is a clear 24
Direct Testimony of Susan M. Myers, MSD March 24, 2023
2023 Stormwater Rate Proceeding 4 MSD Exhibit No. MSD 3B
legislative intent that the government be subject to the charge at issue. Pursuant to Article 1
VI, § 30(b) of the Missouri Constitution, Missouri subjected itself to the impervious area-2
based charge by delegating to the District the power to create the organic law of the District. 3
And, again, the Charter provides that the District can collect rates and charges “from all 4
real property . . . whether public or private,” which demonstrates a clear intent to subject 5
governmental entities to the impervious area-based charge and other charges. As for 6
charging federal governmental entities, there is no issue because the federal government 7
specifically made itself subject to “payment of reasonable service charges” for stormwater 8
services by enacting 33 U.S.C. § 1323. See Exhibit 3B2. 9
Q9. Why is the District having the Stormwater Capital Proposal voted on? 10
A. Article X, § 22(a) of the Missouri Constitution (the Hancock Amendment) prohibits a 11
political subdivision of Missouri from “levying any [new] tax, license, or fee, …without 12
the approval of the required majority of the qualified voters of that … political subdivision 13
voting thereon.” In addition, the Missouri Supreme Court held in Zweig v. Metropolitan 14
St. Louis Sewer District, 412 S.W.3d 223, 244 (Mo. banc 2013), that an impervious area-15
based rate must be approved by the voters to comply with the Hancock Amendment. See 16
Exhibit 3B3. 17
Q10. Does this conclude your prepared direct testimony in this matter? 18
A. Yes, it does. 19