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Home My Public Portal AboutExhibit RC 71- Rate Commission's Third Discovery Request to MSD 04142023BEFORE THE RATE COMMISSION OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT THIRD DISCOVERY REQUEST ISSUE: 2023 STORMWATER & WASTEWATER RATE CHANGE PROCEEDING WITNESS: METROPOLITAN ST. LOUIS SEWER DISTRICT SPONSORING PARTY: RATE COMMISSION DATE PREPARED: APRIL 14, 2023 Lashly & Baer, P.C. 714 Locust Street St. Louis, Missouri 63101 Exhibit RC 71 2 BEFORE THE RATE COMMISSION OF THE METROPOLITAN ST. LOUIS SEWER DISTRICT For Consideration of a Stormwater & ) Wastewater Rate Change Proposal ) by the Rate Commission of the ) Metropolitan St. Louis Sewer District ) THIRD 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”), Restated Operational Rule § 3(7) and Procedural Schedule §§ 16 and 17 of the Rate Commission of the Metropolitan St. Louis Sewer District (the “Rate Comm ission”), the Rate Commission requests additional information and answers from the Metropolitan St. Louis Sewer District (the “District”) regarding the Rate Change Proposal dated March 24, 2023 (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. 3 DISCOVERY REQUEST 1. Please state whether the District has a formula that it uses to determine the amount of stormwater that will be generated from a parcel of property. If yes, please describe the formula or methodology in detail. If yes, please also state whether the District assesses stormwater generation pre-development and post-development. RESPONSE: 2. Is the District capable of accurately determining the stormwater runoff generated from any particular parcel through remote or on -site inspection and application of the formula referenced in Request No. 1? RESPONSE: 3. Does the District use any formula to uniformly assess the stormwater impact of a proposed development? If yes, please describe such formula in detail. RESPONSE: 4. Please explain the basis for forecasted wastewater customer accounts and volume for FY 2024 – FY 2028 for each customer class and volume charge basis (metered and unmetered). See Ex. MSD 1, Table 4-2; p. 4-4. Please include an explanation for the different assumptions for FY 2024 Forecast and the FY 2025 – FY 2028 forecast. RESPONSE: 5. Please provide documentation supporting the statement that actual wastewater CIRP appropriations during FY 2018 – FY 2022 averaged 93% of the annual budget appropriations. See Ex. MSD 1, p. 8-8. RESPONSE: 6. Please provide documentation supporting the statement that 9.28% of a CIRP project’s appropriation is liquidated at the end of the project. See Ex. MSD 1, p. 8-8. RESPONSE: 7. Please provide the breakdown of the sources for the FY 2022 beginning fund balance of $285,537,380 (cash, bonds, loans, etc.). RESPONSE: 4 8. How were the projected State Revolving Fund loan amounts determined in FY 2026, FY 2027 and FY 2028? See Ex. MSD 1, p. 4-17. RESPONSE: 9. What is the targeted end-of-year balance in the capital financing plan? RESPONSE: 10. Please explain why the financial plan assumed a debt to equity ratio of 60%/40% when the historical ratio had been approximately 70%/30% since FY 2004. RESPONSE: 11. In its 2018 report to the District’s Board of Trustees regarding the proposed stormwater rate increase, the Rate Commission included a statement on third-party funding. See Ex. MSD 6, pgs. 15-51. This statement included a 5-year scenario prepared by the Rate Consultant in which every municipality with a Parks and Stormwater Sales tax (authorized by § 644.032, RSMo) contributed 50% of the funds for their projects. Has the District modified its position regarding third-party funding as a result of this study, or any other study performed by the District? Explain why or why not. Does the District intend to incentivize communities within its service area to contribute funding to projects within their jurisdiction? Explain why or why not. Describe any steps taken by the Board of Trustees to respond to this statement on third-party funding. RESPONSE: 12. During the 2018 Rate Change Proposal, the District expressed concern that incentivizing third-party funding would adversely affect less affluent communities. See Ex. MSD 6, pgs. 19-20. Has the District considered any changes to its prioritization of stormwater projects that would permit third-party contributions and that would include additional inputs to aid less affluent communities in getting projects approved and prioritized? Explain why or why not. RESPONSE: 13. Provides copies of any meeting minutes in which the District’s Board of Trustees discussed the third-party funding issue from the 2018 Rate Change Proposal, and any internal District reports or studies regarding third-party funding for prioritization in the Stormwater CIRP. RESPONSE: 5 14. The Rate Change Proposal acknowledges that, with respect to OMCI Funds, “taxes have been collected in seven districts at the request of the communities they serve.” See Ex. MSD 1, p. 5-4. Under the Rate Change Proposal, the OMCI will turn off after year 2024. Please describe if the Rate Change Proposal contemplates any means for a community to request or provide contributions to projects within their community after such district no longer levies taxes. Please explain why or why not. RESPONSE: 15. Please provide a summary of all pending litigation against the District, in which the prayer for damages exceeds $100,000.00, including estimated exposure risk to the District for each case. Please identify any lawsuit in which an adverse ruling would impact the Rate Change Proposal. RESPONSE: 16. Please explain the anticipated impact on borrowing costs if the District’s bond rating is upgraded or downgraded. RESPONSE: 17. Please explain how the District establishes insurance requirements for projects. Please provide examples of insurance requirements for CIRP projects of varying sizes. RESPONSE: 18. Please state the total number of projects the District is required to complete for the Consent Decree. RESPONSE: 6 Respectfully submitted, /s/ Brian J. Malone Lisa O. Stump Brian J. Malone LASHLY & BAER, P.C. 714 Locust Street St. Louis, Missouri 63101 Tel: (314) 621-2939 Fax: (314) 621-6844 lostump@lashlybaer.com bmalone@lashlybaer.com CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing was sent by electronic transmission to Stephanie DeJarnette, Office Associate Senior, Metropolitan St. Louis Sewer District; Susan Myers, Counsel for the Metropolitan St. Louis Sewer District, on this 14th day of April, 2023. Ms. Stephanie DeJarnette Office Associate Senior Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, MO 63103 sdejarnette@stlmsd.com Ms. Susan Myers General Counsel Metropolitan St. Louis Sewer District 2350 Market Street St. Louis, MO 63103 smyers@stlmsd.com /s/ Brian J. Malone Brian J. Malone