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.