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HomeMy Public PortalAboutExhibit MSD 72- RC Technical Conference 4-26-23 MSD Opening StatementExhibit MSD 72 Rate Commission Technical Conference- April 26, 2023 MSD Opening Statement Good Morning, my name is Susan Myers and I am the General Counsel for the Metropolitan St. Louis District. I would like to thank you all for serving on the Rate Commission in this rate setting process and allowing me the opportunity to provide an opening statement on behalf of the District. As you heard in orientation MSD serves about 1.3 million people with a service area of520 square miles. MSD was formed pursuant to the Missouri Constitution in 1954 and began operation in 1956. MSD gains it powers from the Missouri Constitution and the MSD Charter Plan. You are here today per Section 7.040 of the MSD Charter, whereby the Rate Commission is to "...review and make recommendations to the Board regarding all proposed changes in wastewater rates, stormwater rates and tax rates or change in the structure of the foregoing." The current Rate Proposal before you proposes a change in the Wastewater Rates and a new Stormwater Capital Program consisting of an ad valorem tax to be charged to residential customers and a rate charged to non-residential customers based on the amount of each property’s impervious area. The funding will be used to address flooding and erosion issues. It is also important to understand which MSD rates and taxes are not being changed and therefore are not part ofthe current Rate Proposal. There are two existing revenue sources and services that are not part ofthis Rate Proposal: 1. Stormwater Taxes for Regulatory Issues- MSD's 2 cent property tax used to fund stormwater regulatory services. Neither the tax rate nor the structure are being changed in any way and therefore are not part of the current Rate Proposal. The District expects the current funding and structure to be sufficient for the foreseeable future. This tax has been in place since the creation of the District. 2. Stormwater Taxes for the Operation and Maintenance of the Public Stormwater System - MSD's 10 cent property tax is used to fund stormwater operation and maintenance of the existing system. Neither the tax rate nor the structure are being changed in any way and therefore are not part ofthe current Rate Proposal. The District expects the current funding and structure to be sufficient for the foreseeable future. This tax was passed by the voters in 2016. Throughout these technical conferences, please keep the following in mind: • The current Rate Proposal before you recommends the creation of a new Stormwater Capital Program to be used to address flooding and erosion control issues. Funding for a new Stormwater Capital Programis the final piece needed to fund a complete Stormwater program. By complete I mean, MSD would have funding for regulatory services, O&M services and finally to address flooding & erosion issues. • The proposed stormwater rate is currently scheduled to be presented to the voters for their consideration in April 2024. • The Wastewater Rate Change Proposal proposes to increase rates an average of 7.25% over the 4-year Rate Proposal period. This rate structure follows the same parameters as in the previous Rate Proposals and will not require a vote of the people. To fund a portion of the CIRP with bonds, the District will go to the voters requesting authority to bond in April 2024. This is in addition to taking advantage of loans and grants that are available. • During the 2019 Wastewater Rate Change Proposal proceedings the District committed to performing a new Infiltration and Inflow (I/I) Study. That has been done and is MSD Exhibit 66. The new I/I Study supports no change to the allocation that has been used in the past. • MSD also had an updated analysis done of the volume contribution based on property attributes for unmetered customers. This updated analysis recommends a reduction in the volume assigned to each attribute. See MSD Exhibit 65. • To provide for the recovery of costs associated with above average strength wastewater, extra strength surcharge rates are applied to wastewater loading that exceed normal strength limits. The current proposal indicates the need for a significant increase in these surcharge rates. • It is the District's opinion that both the proposed Stormwater Rate Change Proposal and Wastewater Rate Change Proposal considers the financial impact on all classes of ratepayers in determining a fair and reasonable burden. Today the District will provide testimony to the Stormwater Capital Proposal. This testimony will provide clarification regarding the detailed aspects of the District's Rate Change Proposal and demonstrate how the proposed rates are a result of our customer's needs and wants. Throughout this testimony we are happy to answer any questions you may have prior to moving onto the wastewater testimony. The order of appearance of MSD witnesses testifying to the Stormwater Capital Proposal will be: myself, MSD’s General Counsel; Brian Hoelscher, MSB’s CEO & Executive Director; Rich Unverferth, MSD’s Director of Engineering; and Marion Gee, MSD’s Director of Finance. Following the Stormwater testimony, we will move into the District’s wastewater testimony. The order of appearance of MSD’s witnesses testifying to the Wastewater Proposal will be: myself, MSD’s General Counsel; Rich Unverferth, MSD’s Director of Engineering; Bret Berthold, MSD’s Director of Operations; Marion Gee, MSD’s Director of Finance; Tim Snoke, MSD’s Secretary-Treasurer; Bethany Pugh, PFM Financial Advisors; William Stannard, Raftelis Financial Consultants; Thomas Beckley, Raftelis Financial Consultants; and William Zieburtz, Stantec Consulting Services. This concludes my opening remarks. I ask that my opening remarks be accepted by the Rate Commission as Exhibit MSD 72.