HomeMy Public PortalAboutExhibit MSD 88- Transcript of Public Hearing- June 29, 2023Page 1
·1· · · ·IN THE CITY OF CHESTERFIELD
· · · · · · · ·STATE OF MISSOURI
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· · ·ST. LOUIS METROPOLITAN SEWER DISTRICT
·8 · · ·RATE COMMISSION PUBLIC HEARING
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13· · · · ·TRANSCRIPT OF PROCEEDINGS
· · · · · · ·OF THE PUBLIC HEARING
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· · · · · · CHESTERFIELD CITY HALL
18· · ·690 CHESTERFIELD PARKWAY WEST
· · · · ·CHESTERFIELD, MISSOURI 63017
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· · · · · · · · ·JUNE 29, 2023
22· · · · · · · · ·7:00 P.M.
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Exhibit MSD 88
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·1· · · · · · · · · · ·A P P E A R A N C E S
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· · ·For the MSD Rate Commission:
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· · · · · · Brad Goss - Presiding
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· · ·For St. Louis Metropolitan Sewer District:
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·8· · · · · Brian Hoeslcher
· · · · · · Executive Director and CEO
·9· · · · · Office of the Executive Director
· · · · · · Metropolitan St. Louis Sewer District
10· · · · · 2350 Market Street, St. Louis, MO 63103
· · · · · · 314.768.6260
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22· ·Court Reporter:
23· ·Georgia B. Northway, RPR, CCR
· · ·Missouri CCR #1401
24· ·Lexitas Legal - St. Louis
· · ·711 North Eleventh Street
25· ·St. Louis, Missouri 63101
· · ·(314) 644-2191
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·1· · · · · · · · · · ·*· · *· · *· · *· · *
·2· · · · · (Starting time of the meeting: 7:00 p.m.)
·3· · · · · MR. GOSS:· It's 7 o'clock, so I would like to get
·4· ·started so we can start on time.
·5· · · · · Good evening.· I'm Brad Goss; Technical Committee
·6· ·Chair of the Metropolitan St. Louis Sewer District Rate
·7· ·Commission.· I will be presiding over the public hearing
·8· ·this evening.
·9· · · · · The charter plan of the District was amended by
10· ·voters in St. Louis City and St. Louis County at a
11· ·general election on November 7, 2000, and established
12· ·the Rate Commission.
13· · · · · The purpose of the Rate Commission is to review
14· ·and make recommendations to MSD's Board of Trustees
15· ·regarding changes in wastewater rates, stormwater rates,
16· ·and tax rates proposed by MSD staff.
17· · · · · The Rate Commission seeks to ensure that MSD
18· ·ratepayers and the public in general have a voice in
19· ·MSD's rate setting process.
20· · · · · Through the charter plan, the Rate Commission is
21· ·composed of 15 member organizations, collectively
22· ·representing the broadest possible cross-section of MSD
23· ·customers and the community it serves.
24· · · · · The Rate Commission member organizations are
25· ·selected by MSD Board of Trustees through a public
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·1· ·self-nomination and selection process, set forth in the
·2· ·charter.
·3· · · · · Each member organization serves a six-year term
·4· ·and appoints an individual to represent the organization
·5· ·on the Rate Commission.
·6· · · · · Further voter-approved changes made to MSD's
·7· ·charter in 2000; the Board of Trustees shall select new
·8· ·organizations so as to ensure a fair representation of
·9· ·all users of the District's services.
10· · · · · Specifically, Rate Commission organizations shall
11· ·represent commercial industrial users, residential
12· ·users, and other organizations interested in the
13· ·operation of the District, including by way of example,
14· ·but not by way of limitation; organizations focusing on
15· ·environmental issues, labor issues, socioeconomic
16· ·issues, community neighborhood organizations, and other
17· ·nonprofit organizations.
18· · · · · For a list of individual Rate Commissioners and
19· ·the organizations that they represent, please visit the
20· ·Rate Commission section of MSD's website at
21· ·www.MSDProjectClear.org.· That's
22· ·www.MSDProjectClear.org.
23· · · · · The Rate Commission received the rate change
24· ·notice from MSD staff on March 24, 2023 for wastewater
25· ·rates and stormwater rates and taxes.
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·1· · · · · Per the charter plan, the Rate Commission must
·2· ·issue its report on a proposed rate change notice to
·3· ·MSD's Board of Trustees on or before September 5, 2023.
·4· · · · · The Rate Commission adopted operational rules and
·5· ·a procedural schedule to conduct its proceedings in a
·6· ·timely manner and with procedural fairness to all
·7· ·parties.
·8· · · · · Since the rate change commission has received on
·9· ·March 24, 2023 -- since the rate change notice was
10· ·received on March 24, 2023, the Rate Commission has
11· ·received testimony from MSD staff and rate consultants
12· ·employed by the Rate Commission to evaluate MSD staff's
13· ·proposal.· The parties have also engaged in discovery
14· ·requests.
15· · · · · Documentation of these activities is listed on
16· ·the Rate Commission section of MSD's website at
17· ·www.MSDProjectClear.org.
18· · · · · Tonight's public hearing is one 14 on-the-record
19· ·sessions, planned for between June 21, 2023 and August
20· ·7, 2023.
21· · · · · Any ratepayer who wishes to be heard on the
22· ·proposed rate change may testify or participate in these
23· ·public hearing sessions.
24· · · · · The public hearings are publicly noticed by
25· ·postings to the Rate Commission section of MSD's website
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·1· ·at www.MSDProjectClear.org.
·2· · · · · These postings contain the time, date, and
·3· ·location of each of the public hearings.· As hearings
·4· ·are added to the schedule, the same information will be
·5· ·posted.
·6· · · · · Public hearings are held for the purpose of
·7· ·permitting MSD staff to present its wastewater and
·8· ·stormwater rate change proposals to the general public
·9· ·and to permit the public the opportunity to ask
10· ·questions and/or make comments.
11· · · · · Those unable to or not wishing to provide
12· ·comments at a public hearing may provide feedback to the
13· ·Rate Commission via phone or e-mail.
14· · · · · The phone number is 314-325-2028.· Once again,
15· ·the phone number is 314-335-2028.· The e-mail address is
16· ·RateCommission@AHCConsulting.com.· Again, that e-mail
17· ·address is RateCommission@AHCConsulting.com.· And a card
18· ·with the contact information is available at the sign-in
19· ·area where you came in.
20· · · · · Alternatively, staff representing the Rate
21· ·Commission -- who I'll ask to identify themselves
22· ·shortly -- will also be able to provide that
23· ·information.
24· · · · · Further information on how to provide feedback
25· ·outside of the public hearing is listed on the Rate
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·1· ·Commission's section of MSD's website at
·2· ·www.MSDProjectClear.org.
·3· · · · · Our next step tonight is a presentation by MSD
·4· ·staff, followed by a public comment period.
·5· · · · · Tonight's presenter is Brian Hoelscher, MSD's CEO
·6· ·and executive director.
·7· · · · · Before we begin the presentation, I ask that you
·8· ·observe the following housekeeping rules:· First, please
·9· ·hold all questions until the comment period after the
10· ·presentation.
11· · · · · Second, if you wish to present testimony or
12· ·expect you may have questions or comments, please sign
13· ·in at the door by which you entered the room.
14· · · · · Speakers will be called upon in the order they
15· ·have signed up.· Each speaker should identify themselves
16· ·and any organizations they represent.
17· · · · · While not a requirement, we ask that those
18· ·speaking to state their name and address so that we may
19· ·ensure we are associating comments in the record with
20· ·the correct speakers.
21· · · · · If you're representing an organization, please
22· ·provide the information about the organization.
23· · · · · If speakers wish to remain anonymous, in whole or
24· ·in part, we will with respect those wishes.
25· · · · · Each speaker may have a maximum of ten minutes to
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·1· ·speak regarding the proposed rate change.· As the
·2· ·presiding officer, I can limit or expand speaking time
·3· ·as necessary.
·4· · · · · If you have further questions regarding bathrooms
·5· ·or any other logistics, staff representing the Rate
·6· ·Commission -- and I would ask the staff to raise their
·7· ·hands so we can identify them.
·8· · · · · They are available to give you those directions.
·9· ·If you have not already done so, please silence your
10· ·cell phones.
11· · · · · Are there any questions regarding the proceedings
12· ·this evening?· Mr. Hoelscher, would you please begin
13· ·with MSD's presentation.
14· · · · · MR. HOELSCHER:· Thank you, Commissioner Goss.· My
15· ·name is Brian Hoelscher, and I'm the executive director
16· ·and CEO of Metropolitan St. Louis Sewer District.
17· · · · · I'm going to do a presentation on the two rate
18· ·proposals that are be being evaluated by our Rate
19· ·Commission.
20· · · · · Before I start, my presentation is going to be on
21· ·the rate proposal.· Some of you may have questions
22· ·outside of that with MSD, your own personal issues or
23· ·something.
24· · · · · I have staff in the back left corner here -- they
25· ·all happen to be wearing dark shirts.· So they will stay
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·1· ·until everybody is gone.
·2· · · · · If you have a questions that's not involved with
·3· ·this rate proposal, they'll take your information, they
·4· ·may answer your question, or they may take your
·5· ·question, go back, and then contact you later with an
·6· ·answer.
·7· · · · · I'm going to break this into two things, three
·8· ·different parts.· One, something we call A Tale of Two
·9· ·Systems.
10· · · · · MSD actually provides two separate services;
11· ·wastewater and stormwater.· And they are both funded
12· ·separately, and we cannot mix those revenues.
13· · · · · So I'm going to try to provide an explanation and
14· ·understanding of what those look like.
15· · · · · Then I'm going to go through the rate proposal
16· ·process and schedule, what we're doing with the Rate
17· ·Commission, and what you can expect coming in the
18· ·future.
19· · · · · And then finally, I'm going to do a somewhat
20· ·detailed dive into the rate proposal, and the two pieces
21· ·we're proposing; one stormwater, one wastewater.
22· · · · · They look different.· But I'm going to go through
23· ·those and actually show you some of the numbers of what
24· ·the results would be, depending on how the public votes
25· ·in April of 2024.
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·1· · · · · First of all, so MSD protects the public's health
·2· ·and safety and water environment by responsibly managing
·3· ·two programs with separate funding sources; again, one
·4· ·is stormwater, one is wastewater.
·5· · · · · However, as we continue managing the problems,
·6· ·what the challenges and successes are in each program
·7· ·look a little bit different.· So I'm going to go down
·8· ·each one of those separately.
·9· · · · · Currently, on the wastewater side, what do we do?
10· ·We clean and repair the existing wastewater system.
11· ·That's something we started very early on, about --
12· ·really intensely, about 20 years ago.
13· · · · · It makes sure the system -- the wastewater system
14· ·that carries wastewater -- works as well as it can.
15· · · · · We want to make sure we're in compliance with
16· ·environmental regulations; that's one of our
17· ·requirements.
18· · · · · Not only do we collect it, but we're under
19· ·regulations from both state and federal governments as
20· ·to how we have to run and what our successes have to be.
21· · · · · Then we're also doing major new improvements.
22· ·Those improvements are almost exclusively driven by an
23· ·agreement that MSD entered into with the EPA, Department
24· ·of Justice, and Coalition for the Environment in 2011.
25· · · · · Over 200 other municipalities throughout the
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·1· ·country -- all of those municipalities, including us,
·2· ·were working towards meeting compliance with the Clean
·3· ·Water Act.· The federal government wanted to put an
·4· ·agreement in place that set a date certain that we would
·5· ·get there.
·6· · · · · And you'll find that that somewhat drives the
·7· ·rates that we have to charge in order to be in
·8· ·compliance with that agreement.
·9· · · · · To show how much it really is driving it, next,
10· ·you're going to see a proposed expenditure of 1.7
11· ·billion more dollars over the next four years.
12· · · · · 98 percent of that is either driven by scheduled
13· ·projects in the agreement with the Department of Justice
14· ·or to be in compliance with other federal regulations,
15· ·such as the Clean Air Act.
16· · · · · There is not a whole lot of maintenance --
17· ·preventive maintenance that goes into the capital
18· ·program.· It's supposed to be stuff we have to do right
19· ·now.
20· · · · · Where we're at right now, there have been -- we
21· ·reevaluate the value of that consent decree, based on
22· ·current dollars.· We continuously upgrade it.
23· · · · · So you may have heard in 2011, when we signed the
24· ·agreement, the value was 4.7 billion in 2010 dollars.
25· · · · · When we got to 2021, we reevaluated again; not
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·1· ·because the program changed or got more expensive, but
·2· ·we did it in 2021 dollars.
·3· · · · · So that's 11 years later, and it was valued at
·4· ·$6.1 billion.
·5· · · · · Before we went to do this rate proposal, we had
·6· ·gone through to two to three years of everybody's
·7· ·experience with the economy, and what's happened with
·8· ·inflation.
·9· · · · · So we revalued the program against -- to make
10· ·sure we had a legitimate starting point.
11· · · · · So now right, in 2023 dollars, we have the
12· ·program valued at $7.2 billion.· And as we go in the
13· ·future, we will continue to reevaluate the program --
14· ·revalue the program.
15· · · · · So as of 2024, next year, we will have completed
16· ·$3.1 billion.· Over this next four-year period, like I
17· ·said, it's 1.7 billion; that will put us at 4.8 billion.
18· · · · · That will put us halfway through the program, and
19· ·that will be about halfway through the 28-year term we
20· ·have in order to complete this.
21· · · · · The agreement ends in 2039.· That's when we have
22· ·to have all the work done.
23· · · · · On the stormwater side, it looks a little bit
24· ·different.· So there are -- there's very little
25· ·regulation that's driving what we do.
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·1· · · · · If you look at the middle checkmark on the screen
·2· ·behind me, compliance with environmental regulations, we
·3· ·do have a requirement, like the city does building
·4· ·permits; that if somebody does some work, we've got to
·5· ·make sure that they put things in such that they will
·6· ·catch the pollutants that are in the stormwater runoff
·7· ·so they don't enter into the creeks and streams.
·8· · · · · That's funded by a funding source that's been in
·9· ·place in some form since we were created in 1954.
10· · · · · The second one is the cleaning, repair, and
11· ·operation maintenance of the existing storm sewers.
12· · · · · MSD owns, on the stormwater systems, the
13· ·manholes, inlets, and storm sewers that exist; mostly
14· ·along streets, sometimes backyards.
15· · · · · The history of this; prior to 2016, all those
16· ·assets that are inside 270 and the City of St. Louis, we
17· ·had some money to operate and maintain them, but not
18· ·enough.· There are things we were falling behind on.
19· · · · · Outside of 270, such as Chesterfield, we were
20· ·given ownership of those assets in 1989 without a
21· ·revenue source.
22· · · · · So we've owned the system, there is just nothing
23· ·we could do to operate and maintain it.
24· · · · · The public fixed that in 2016.· The public voted
25· ·"yes" to put a property tax in place.· So now, we
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·1· ·regularly clean, regularly fix, go in and do repairs and
·2· ·replacements of the storm sewer system.· It's in pretty
·3· ·good shape.
·4· · · · · There's one more service MSD can offer, and
·5· ·that's new improvements that don't involve MSD-owned
·6· ·assets.
·7· · · · · MSD doesn't own creeks, MSD doesn't own
·8· ·floodplains.· Those are managed by other entities in the
·9· ·area.
10· · · · · But we do have the ability, as a regional
11· ·authority, to raise funds to cooperate with those
12· ·municipalities and counties and other entities, and
13· ·address things like erosion and flooding.
14· · · · · We don't have funding to do that now.· There's a
15· ·few small taxing districts between the City and 270, but
16· ·districtwide, there's no funding to address those.
17· · · · · So we think it's a good place to go.· We think
18· ·it's a good thing to offer the public.
19· · · · · We have tried a couple times; the latest was in
20· ·2019.· There was a proposition that went in front of the
21· ·voters to provide funding to provide just those
22· ·services, and it failed 53 to 47.
23· · · · · So based on the response from the public, we felt
24· ·it's appropriate for us to go ahead and offer it again
25· ·-- not the same program.· We've learned a lot talking to
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·1· ·the public.
·2· · · · · Again we're getting closer, you know, what would
·3· ·help make this acceptable?· What are the provisions you
·4· ·would like?· And I'm going to explain exactly what those
·5· ·look like later on in the program.
·6· · · · · The wastewater system improvements; the goals are
·7· ·twofold.
·8· · · · · They are to meet environmental regulations, and
·9· ·those consist of preventing backups on the wastewater
10· ·system in the homes -- not when the area floods and
11· ·everything is under water, but when there's a normal
12· ·storm.
13· · · · · And also -- so there's another way the system
14· ·relieves itself from stormwater getting into the system
15· ·inappropriately.
16· · · · · Throughout the area, there are places where the
17· ·sanitary sewer system, when it surcharges because
18· ·stormwater that's not supposed to be in gets in there,
19· ·folks have -- or we've got some legacy issues of folks
20· ·simply punching holes in the side of the system, like in
21· ·manholes next to creeks.
22· · · · · That allows that surcharge sewer to discharge in
23· ·the creek instead of people's basements.· That's
24· ·illegal.
25· · · · · And so that was another one of the major things
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·1· ·we had to clean up.· We're well on our way towards
·2· ·really taking care of those two problems.
·3· · · · · Now I'm going to let you know, the huge 100 and
·4· ·500-year storms we've been having, they're going to
·5· ·cause basement backups as well; and not necessarily
·6· ·caused because the wastewater system is not working
·7· ·well; they're being caused because everything is
·8· ·flooded -- streets, yards, homes, everything.· That
·9· ·causes everything to flood.
10· · · · · The way we've taken care of this, we think each
11· ·capacity in certain places where it's needed, when it
12· ·was built and expanded, the entities at the time that
13· ·were in charge of this maybe didn't make the sewers,
14· ·they didn't increase the size.· So if necessary, we've
15· ·increased the size of the wastewater system.
16· · · · · The biggest one was remove water where it
17· ·shouldn't be.· If you think about our biggest issues,
18· ·the easiest one to explain is the area between 270 and
19· ·the City of St. Louis.
20· · · · · A lot of the homes were built with the roof
21· ·downspouts connected to the wastewater lateral.· So
22· ·instead of going to the storm sewer system, they went in
23· ·the wastewater lateral.
24· · · · · People were flooding themselves, people were
25· ·flooding the sanitary sewer system, which then flooded
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·1· ·their neighbors; a lot of effort to take care of those.
·2· ·It's called "I and I" -- inflow and infiltration.
·3· · · · · Other examples we found; inlets -- stormwater
·4· ·inlets connected to the wastewater sewer, we assume by
·5· ·accident at some point.
·6· · · · · Leaky pipes that allow groundwater to get in,
·7· ·just uses up the capacity and causes basement backups
·8· ·and these overflows.· So we're going after those also.
·9· · · · · I'll give you -- next page, I'm going to give you
10· ·an example of how successful they've been.· Because that
11· ·was the front part of this agreement that we had with
12· ·the DOJ.
13· · · · · Separate sewer system, wastewater overflows; so
14· ·we had 211 -- no, 230 of those in 2010 and '11.
15· · · · · By the end of this calendar year, there will only
16· ·be 30 remaining.· That has been the main focus of the
17· ·program.
18· · · · · That's mostly laying new relocator, larger
19· ·sewers, disconnecting stormwater connections.· That part
20· ·of the program has been going very, very well.
21· · · · · The building backups are down 25 percent.· Now
22· ·it's a little misleading.· If we weren't having the
23· ·types of storms we're seeing right now, with climate
24· ·change, and -- seems like every two months, somebody
25· ·gets hit by a 500-year storm, whether it's in a
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·1· ·neighborhood or the entire area.
·2· · · · · They flood the entire area.· Well, the homes that
·3· ·get backed up, we count those as backups as well.· So
·4· ·we've really taken that down, though.
·5· · · · · It used to -- in the old days, what used to be a
·6· ·normal storm, very little response from the system as
·7· ·far as causing backups.· It's working pretty well, the
·8· ·way it's supposed to.
·9· · · · · To get all this done, we completed over the
10· ·process -- of completing 650 different projects as of
11· ·today.
12· · · · · Stormwater looks different.· So we collect data
13· ·on problems throughout the area.· Flooding, erosion,
14· ·also other kinds of stormwater problems.
15· · · · · Like I said, we are also a regulator in some
16· ·effect, so it's good to collect those.
17· · · · · Ultimately, if there's a funding source, that
18· ·database of problems is the basis for us moving forward
19· ·to do -- to take care of issues.
20· · · · · The number of problems that get reported to us,
21· ·they usually bounce up and down.· Lately, they've gone
22· ·up, and you can imagine why.
23· · · · · We went through a period, just with MSD, where
24· ·major rivers were flooding for four years, from 2015 to
25· ·'18.
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·1· · · · · Before that, 2015 and especially after 2018,
·2· ·storms were coming over and then not dumping what I used
·3· ·to think of as a nice rain.· They're dumping 100 and
·4· ·500-year storms in isolated areas.
·5· · · · · The amount of rain we're getting is the same, but
·6· ·it's just coming down in an isolated spot a lot heavier,
·7· ·and just inundating everything; not just the sewer
·8· ·systems, but the natural creeks and streams, the
·9· ·roadways, everything.
10· · · · · So we're collecting that data.· The problems have
11· ·been going up, but we want to know where they are.· The
12· ·only way we know where the stormwater program is going
13· ·to be is by knowing where people believe the problems
14· ·are.
15· · · · · Just a little bit pictor example, and this was a
16· ·big one 20 years ago.· This is probably a small one when
17· ·you see what stormwater problems look like now.· But
18· ·it's water that just sits around and doesn't go away,
19· ·doesn't get conveyed out.
20· · · · · Sometimes, that's caused by something simple as
21· ·neighbors grading things the wrong way.· Sometimes it
22· ·just wasn't built to accommodate that, maybe not a lot
23· ·of thought was put into it.· There's changes that get
24· ·made, or other things such as development, prior to us
25· ·having rules that prevented this, generating more water
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·1· ·than the system could take.
·2· · · · · So those problems exist throughout the District.
·3· ·We have a good log of where those are.
·4· · · · · The other one is erosion.· So you know, there's a
·5· ·lot of -- in the newspaper, for the most part, or in the
·6· ·media about areas that flood next to creeks and streams,
·7· ·or next to small creeks, or just in low areas, where all
·8· ·the water goes to.
·9· · · · · There are areas in the District, and there's a
10· ·lot of them in North County, where people aren't in
11· ·those flooded areas.
12· · · · · But the banks of the creeks are seeing these
13· ·additional flows for long periods of time.· And they eat
14· ·away the channel, and they can eat way their yards,
15· ·garages, and in some cases, eat their homes away, ready
16· ·to fall into the creek.
17· · · · · So those are the erosion problems we wanted to
18· ·deal with, also.· Those are the two major things.
19· ·They're not MSD assets; but if we had the funds, we
20· ·could set up a program to start addressing these.
21· · · · · So what are the improvements by watershed.· So
22· ·these are the problems we've identified.· That shows it
23· ·much better.· So the pink area -- well, let's see where
24· ·we're at.
25· · · · · So first of all, at the top of that screen is the
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·1· ·Missouri River, going along the north part of the
·2· ·county.· The right side is the Mississippi River.
·3· ·Wiggling around on the bottom is the Meramec River.
·4· · · · · And then our boundaries go out -- we don't have
·5· ·the gray area in the county.· Our boundaries go out to
·6· ·about Highway 109 in Wildwood.
·7· · · · · Everything to the west of that has not asked to
·8· ·be annexed into MSD's boundaries.· They take care of
·9· ·their own wastewater services.
10· · · · · You see the pink area; you can see those numbers,
11· ·264 problems that have been identified.
12· · · · · The reason for that is that's mostly where those
13· ·small, little taxing subdistricts that are legacy taxes
14· ·from 1960.· We collect a small amount of tax and do a
15· ·few -- fix a few problems.
16· · · · · I'll guarantee you, as soon as we start fixing a
17· ·few problems, everybody makes sure they report
18· ·stormwater problems to us.
19· · · · · If you see the rest of the area, and you can see
20· ·the yellow one to the upper left, where Chesterfield is,
21· ·if somebody has a stormwater problem, they call MSD and
22· ·say:· Thanks, we'll log it.
23· · · · · There is absolutely no funding that's been
24· ·approved by the public for us to address this.· But
25· ·we'll make sure the problem is there.
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·1· · · · · After a while, people simply stop reporting
·2· ·stormwater problems; rightly so, because we can't do
·3· ·anything.
·4· · · · · What we're proposing would give us the funds to
·5· ·start addressing those.
·6· · · · · So the Rate Commission, or the rate proposal
·7· ·process, I won't go over this.· But it is an independent
·8· ·Rate Commission.· We go through the process of
·9· ·presenting our program to them, take a review.
10· · · · · We come to them every four years, primarily
11· ·because of the wastewater system.· The wastewater
12· ·system's schedule is driven by the agreement.
13· · · · · We come back every four years, check in with the
14· ·Rate Commission; here's where we stand, here's different
15· ·funding options, here's what we think we need to do.
16· · · · · And they do a review of that every four years,
17· ·and it allows MSD to kind of true up its expenses and
18· ·what the rates its charging, and gives a chance for the
19· ·Rate Commission to do oversight.
20· · · · · This year, again, and this is -- you add all the
21· ·different types of activities, it's probably the fifth
22· ·time we've tried to put some kind of funding in place
23· ·for stormwater, we're going to come back with an another
24· ·stormwater program and see if the public would like to
25· ·fund MSD to be involved in erosion and flooding.
Page 23
·1· · · · · What the timeline looks like:· The first box is
·2· ·2023.· I'm going to take you to the left of that slide
·3· ·in 2022.
·4· · · · · MSD will start putting its rate proposal together
·5· ·in the summer of 2022, based on what we know we have to
·6· ·do with regard to our agreements with DOJ, as well as
·7· ·input from customers as to what's out there.
·8· · · · · So we complete that rate proposal.· We got that
·9· ·to the Rate Commission, as Commissioner Goss mentioned,
10· ·in March.
11· · · · · They have until September to review our proposal
12· ·and make comments on it.· They will present that our or
13· ·Board of Trustees.· They will consider staff's original
14· ·proposal, they will consider comments made by the Rate
15· ·Commission, and they will decide how they want to
16· ·proceed.
17· · · · · How they want to proceed is going to be reflected
18· ·in an election that's going to be on April 2, 2024.
19· · · · · There's two things that will be on the ballot --
20· ·and I'm not going to go over those in detail, but I want
21· ·to give you the general description.
22· · · · · One will be to fund the next four years of the
23· ·wastewater program; would you like to approve additional
24· ·bonding authority so MSD can borrow money and spread out
25· ·the cost of the program; or is it the time where you
Page 24
·1· ·just want to pay cash for the work we're doing.
·2· · · · · That's the decision we've offered to the public
·3· ·since we started this program, and I think the first one
·4· ·was 2002 was the first time we offered this to the
·5· ·public.· That will be on again.
·6· · · · · The other one, which is different, is going to be
·7· ·stormwater.· And I'll explain what the rate is, the
·8· ·taxes.
·9· · · · · But there's a stormwater tax proposal to fund
10· ·flooding and erosion.· And the answer is going to be:
11· ·Here's the proposal; if the public votes yes, we will
12· ·provide service.· If the public votes no, we will
13· ·continue to not provide the service because we won't
14· ·have any funding.
15· · · · · So here's the details.· Did every -- you still
16· ·have that sample sheet, right?· The flier?· The one-page
17· ·flier; did everybody get a chance to pick that up in
18· ·front?· Okay.· You have one.· I wanted to make sure.
19· · · · · So we're going to start with stormwater.· This is
20· ·not on the flier.· But again, if you don't have one, you
21· ·may raise your right hand and they'll get you one.
22· · · · · So stormwater rate proposal; how do we -- there's
23· ·two up here.· I didn't necessarily see people looking at
24· ·them, so I wanted to make sure.· There's one over here
25· ·as well.· Oh, okay.· I'm sorry.· It's the whole room.
Page 25
·1· ·Oh, okay.· One up here also.
·2· · · · · I want to make sure you have that.· So now the
·3· ·first slide I'm talking about is not on that sheet, but
·4· ·we'll go through it.
·5· · · · · So for the stormwater rate proposal; how did we
·6· ·develop the proposed rate?
·7· · · · · One of the things we did; we wanted to make sure
·8· ·we are equitable between the residential customers and
·9· ·the nonresidential customers.
10· · · · · So we took a measure of the impervious area
11· ·throughout the district.· Impervious area is roofs,
12· ·driveways, sidewalks, those types of things.· It gives
13· ·us a hint of who is generating the stormwater.
14· · · · · We found that the residential customer base,
15· ·based on taxing definition, represented 57 percent of
16· ·the impervious area.· The nonresidential customers
17· ·represented 43 percent of the impervious area.
18· · · · · This was important for us to set up a funding
19· ·mechanism so that these two classes of ratepayers paid
20· ·their -- both paid their equitable share.
21· · · · · For the residential customers, based on survey --
22· ·this has been true for the last ten years -- more than
23· ·half of the voting public has indicated the amount of
24· ·money they would want to spend to address this, the
25· ·maximum amount is about 2 dollars per month, or 25
Page 26
·1· ·dollars per year.
·2· · · · · So what we've done is, we're proposing a property
·3· ·tax of two cents per hundred-dollar valuation of the
·4· ·property.
·5· · · · · In MSD's boundaries, the median appraised value
·6· ·of a property is $176,600.· That would be the halfway
·7· ·point.· So that median customer will pay $2.08 per year.
·8· ·The rate is actually 7.45 cents per hundred dollars
·9· ·valuation.
10· · · · · So you can multiply that, if your home is some
11· ·multiple of 176, you can see how much you would pay
12· ·annually on your property tax.
13· · · · · They will generate 57 percent of the revenues.
14· ·So to get the other 43 percent of the revenues, the
15· ·nonresidential customers, as opposed to paying on the
16· ·property tax, will receive a monthly bill and will pay a
17· ·bill that consists of $1.05 per thousand square feet of
18· ·impervious area on their property.· They'll pay that
19· ·every month.
20· · · · · That will result in them providing 43 percent of
21· ·revenues.· Overall, the proposed program will generate
22· ·$34 million per year.
23· · · · · Now the next question, now that we've got the
24· ·money, how do we plan on spending it.· And a lot of this
25· ·is based on customer feedback we've gotten.
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·1· · · · · So we'll take 50 percent of the $34 million in
·2· ·revenues, and in the small taxing districts I mentioned,
·3· ·MSD has a benefit-cost analysis.
·4· · · · · For every stormwater issue we know, we have put a
·5· ·dot -- we put a point value to benefits.· If we're going
·6· ·to keep your five feet of your yard from washing in,
·7· ·that's one point.· If we keep your garage from falling
·8· ·in, that's more.· If we keep your house from falling in,
·9· ·that's another point value.
10· · · · · We add up all the points in the project, divide
11· ·it by the cost, and we have a benefit-cost ratio.
12· · · · · So for 50 percent of the funds, we're going to
13· ·look at the issues we have districtwide, we're going to
14· ·rank them, and we're simply going to go down the list
15· ·with the projects that have the highest benefit-cost
16· ·ratio.
17· · · · · That list of projects for the next four years is
18· ·in the rate proposal.· There's a list of names with the
19· ·-- if this passes, it lists what the project is, what
20· ·it's going to solve, how much it's going to cost, and
21· ·what year it's planning on being done.
22· · · · · So if you want to know what that exactly looks
23· ·like, and I think there's a measle map also that shows
24· ·you kind of where the projects are.
25· · · · · 30 percent of the revenues will be in the form of
Page 28
·1· ·stormwater grants to the local municipalities.· This is
·2· ·something we started doing in those small taxing
·3· ·districts, and the municipalities found that a good
·4· ·idea.
·5· · · · · If you think about MSD's expenditure of 50, we're
·6· ·addressing probably larger problems across municipal
·7· ·boundaries.· We want to go at this from both ends.
·8· · · · · Municipalities have stormwater problems that are
·9· ·sometimes different than MSD's priorities.· So the idea
10· ·is to take 30 percent of the revenues and make
11· ·stormwater grants available on an annual basis, based on
12· ·population.· All it has to be is stormwater related.
13· · · · · It doesn't have to match or priority system; it
14· ·just has to be something stormwater.· The city can make
15· ·the grant -- the application for a year, the next three
16· ·years, whatever the value of the project is.
17· · · · · As long as it's stormwater, MSD will make the
18· ·funds available to complete stormwater projects.· It
19· ·gives the municipalities to address something more at a
20· ·local level, to take care of some stormwater problems if
21· ·they wish.
22· · · · · The next -- so I'm at 80 percent now.· The next
23· ·10 percent will go to something using the federal term
24· ·called Environmental Justice Fund.· The state calls it
25· ·underserved or low-income.· There's all kinds of
Page 29
·1· ·definitions.
·2· · · · · But the State of Missouri provides a map to us,
·3· ·especially when we go for certain grants that indicates
·4· ·where these areas are.
·5· · · · · For our district, they are the north part of City
·6· ·of St. Louis, North County, moving west from North
·7· ·County, and there's an area just in South County, just
·8· ·south of the City of St. Louis that qualified.
·9· · · · · We're going to take all the projects we know in
10· ·those areas, and we are going to do the benefit-cost
11· ·analysis, and 10 percent of the funds will be going down
12· ·that list.
13· · · · · We'll take the projects that rank out best, and
14· ·we'll do those first.· That allows us to address an
15· ·issue that the federal government has indicated that we
16· ·need to make sure we address.
17· · · · · So that's 90 percent.· The final 10 percent; with
18· ·everything I said, we're going to miss something.· No
19· ·matter how you do the math or what you select, something
20· ·is going to be missed.
21· · · · · We're going to assign 10 percent of about $3.5
22· ·million a year to something that is a regional priority.
23· ·It's kind of a policy decision.
24· · · · · Right now, our initial discussions have been the
25· ·Municipal League.· Preliminarily, they have volunteered
Page 30
·1· ·to be the entity that will take a look at this.
·2· · · · · And once every year, two years, or however much
·3· ·is needed, find a certain type of stormwater thing
·4· ·that's not getting costlier; that that 10 percent of
·5· ·those dollars, about three and a half million a year,
·6· ·needs to go towards addressing within MSD's boundaries.
·7· · · · · I unfortunately have some examples.· Last summer,
·8· ·we all had the 100 and 500-year storms, right?· Should
·9· ·something be done to just simply start buying people out
10· ·of floodplains that continuously flood?· Would that be a
11· ·regional priority that the Muni League or
12· ·representatives would recommend to the a Board of
13· ·Trustees?
14· · · · · Should there be some kind of insurance program
15· ·that that would fund?· Should you increase, for a couple
16· ·years, the amount of money you grant to the
17· ·municipalities by putting this in that pot.
18· · · · · There's all kinds of possibilities.· What it
19· ·would be is going to be based on advice that we get from
20· ·and advisory group.
21· · · · · Right now, like I said, the Municipal League
22· ·seems to be the best place.· We want to get everybody
23· ·represented.· The Muni League at least has all the
24· ·elected officials, and we would add the City of St.
25· ·Louis, and so everybody would be represented.
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·1· · · · · So that's the plan for how this would be spent if
·2· ·it passed.
·3· · · · · Now we'll talking about the wastewater rate
·4· ·proposal.· Again, the current value is $7.2 billion.
·5· · · · · Again, I've told you how those have increased,
·6· ·just because of the year that we're calculating them.
·7· ·Our program is on budget, and it's on schedule.
·8· · · · · When you're dealing with the Department of
·9· ·Justice and the EPA, the one thing you don't want to do
10· ·is get off schedule.
11· · · · · We've made all the schedules we've set up, and
12· ·everything is working fine.
13· · · · · What we're going to ask voters is, again, and
14· ·I'll show you the chart in a minute, what the impact
15· ·is -- do you want to authorize an additional $700
16· ·million-worth of bonding to start $1.7 billion-worth of
17· ·work over the next four years.· The public gets to
18· ·decide, yes or no.
19· · · · · Now because of the agreements and the federal
20· ·judge overseeing us, we don't have the option of whether
21· ·we do the work or not.
22· · · · · But we are offering the public to think about
23· ·where are we adding this, and how should we fund it.
24· · · · · This is on the back page -- the back page.· It's
25· ·on one side of the flier you just got.· This was always
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·1· ·the piece that, quite honestly, the public really wants
·2· ·to look at and understand what's there.
·3· · · · · This is what happens -- this is what you're going
·4· ·to go be faced with in April 4th, this decision.
·5· · · · · So if you take a look at the left-hand side of
·6· ·the column, that shows what happens if the voters
·7· ·approve an additional $750 million-worth of bonding.
·8· · · · · On the left-hand side is the yearly change,
·9· ·starting in 2025; the first year is 7 percent, the next
10· ·year is 7.6, the next year is 7.5, the next year is 6.6.
11· · · · · Unfortunately, the height of these is somewhat
12· ·impacted by -- kind of, really, the inflation we've seen
13· ·over the last two or three years.· It kind of reset the
14· ·starting appoint, unfortunately.· But those are the
15· ·numbers that we've calculated.
16· · · · · If you take a look, the average monthly
17· ·residential bill is the number you see, and what's paid.
18· ·That doesn't mean you pay that amount of money.
19· · · · · Again, for the most part, for wastewater, we
20· ·measure your winter water usage per month.· We use that
21· ·as a basis for a full year as to how much water we think
22· ·you are putting down the sewer system.
23· · · · · So these are for the average customer.· If you
24· ·want to know what's going to happen to your bill, you
25· ·can that take those percentages, take a look at your
Page 33
·1· ·monthly bill, and simply add that percentage to it.· And
·2· ·that's how much your bill would look like over the
·3· ·following year, because everybody has a different bill.
·4· · · · · On the right, is if the voters reject bonding.
·5· ·Again, we have to do the projects, but it's going to be
·6· ·paid for by cash.· We just simply spend the money that
·7· ·folks give us.
·8· · · · · This is similar to every four years, if you
·9· ·decide you want to buy a new house and not get rid the
10· ·old one, do you want to pay cash every four years when
11· ·you buy it, or do you want to borrow money?· And then
12· ·four years later, you're looking at another house.
13· ·That's kind of what we're doing.
14· · · · · In this case, if the voters reject the bond
15· ·financing, you see what the increases look like.
16· · · · · They're pretty high:· 35 percent, 35 percent, and
17· ·then it goes down 20 percent, just because of the cash
18· ·flow of the program and the projects that are being
19· ·started, and then a 5.1 percent increase.
20· · · · · Again, the numbers on the right are the average
21· ·monthly bill.· But they are a good comparison, so you
22· ·can see the relative impact between a yes vote or a no
23· ·vote for additional bonding.
24· · · · · There are a couple items.· This is being streamed
25· ·out, so a couple items I want to mention.
Page 34
·1· · · · · In the City of St. Louis, most residential
·2· ·customers do not have water meters.· They are billed for
·3· ·water service by the city water provider, based on the
·4· ·attributes in their homes; bedrooms, water closets,
·5· ·other rooms.
·6· · · · · And there is a value assigned to that.· That's
·7· ·the way the water provider bills them.
·8· · · · · The Supreme Court has ruled that we need to
·9· ·follow the practices and the information provided by the
10· ·water providers, so we do that.· We take those
11· ·attributes and we assign flows to them.
12· · · · · What we do, every four years, we take a look at
13· ·what those assigned flows per attribute look like, where
14· ·do they stand.
15· · · · · Based on this year's study, if you take a look at
16· ·-- and I'm going to look at the voter-approved bond
17· ·financing, that first year in 2025, it says 7 percent
18· ·increase.
19· · · · · If you're in the City of St. Louis and you
20· ·approve bonding, the first year will be a negative .8 --
21· ·it would be a point 8 percent decrease, or negative .8
22· ·percent.
23· · · · · Then for the following three years, the 7.6, 7.5,
24· ·and 6.6 will apply.· We try -- we took every four years,
25· ·we go to see if we need to make a correction in those
Page 35
·1· ·estimated flows.
·2· · · · · The other thing I want to mention is we do have a
·3· ·customer assistance program.· So for those individuals,
·4· ·based on the number of folks in their homes, if they are
·5· ·under two times the poverty limit, they will pay
·6· ·one-half of their monthly charge for wastewater.
·7· · · · · If, based on our policy, like me, you are
·8· ·elderly -- which means 62 or over, I know Mike is as
·9· ·well.
10· · · · · So there's also another one, and that is stated
11· ·at two and a half times the poverty level.
12· · · · · If your income is beneath that, you also will pay
13· ·one-half of the actual charge that's calculated.· That's
14· ·our customer assistance program.
15· · · · · As I walk away, I'm going to leave this up.· This
16· ·is a lot of the contact information that's been given to
17· ·you in different ways.· But we'll leave this up on the
18· ·screen.
19· · · · · And Commissioner Goss, that's the end of my
20· ·presentation.
21· · · · · MR. GOSS:· Thank you.· Rate Commission staff,
22· ·will you please announce the who have requested to
23· ·speak?
24· · · · · MR. LECOMB:· The first speaker is Sandra Paget.
25· · · · · MR. GOSS:· Please remember to state your name and
Page 36
·1· ·address for the record, and if you represent an
·2· ·organization.
·3· · · · · MS. PAGET:· And I'm sorry.· I thought there was a
·4· ·mic there.
·5· · · · · MR. LECOMB:· You can come up and speak at the
·6· ·microphone.
·7· · · · · MS. PAGET:· Do you want me on which side?
·8· · · · · MR. LECOMB:· however you're comfortable is fine.
·9· · · · · MS. PAGET:· Good evening, Commissioner Goss.· My
10· ·name is Sandra Paget, my residence address is 12 Dogwood
11· ·Lane in St. Louis, Missouri 63124.
12· · · · · But tonight, I'm here on the behalf of Consumers
13· ·Council of Missouri.· I'm their executive director.
14· · · · · And Consumer's Council's address is 3407 South
15· ·Jefferson Avenue, 63118.· And I'm here to provide
16· ·comments on behalf of Consumer's Council.
17· · · · · Consumer's Council of Missouri is a nonprofit
18· ·organization, which works to build a more inclusive and
19· ·equitable community for Missouri consumers.
20· · · · · We scrutinize utility rate increase proposals,
21· ·and we advocate for the maintenance and expansion of
22· ·programs for households that have low incomes.
23· · · · · We are submitting concern -- comments tonight,
24· ·regarding our concerns about MSD's proposal to increase
25· ·rates by approximately 7.25 percent on average each year
Page 37
·1· ·for fiscal year 2025 through 2028.
·2· · · · · Many St. Louis area ratepayers are already having
·3· ·a hard time making ends meet, and the proposed increases
·4· ·will pose a challenge to those who are struggling to
·5· ·juggle the impacts of energy inflation.
·6· · · · · This year has been an especially expensive one
·7· ·for our region's utility customers.· In November of '22,
·8· ·the Missouri Public Service Commission approved an
·9· ·approximately 7 percent increase for Spire Gas
10· ·customers.
11· · · · · In May 2023, the Missouri PSC approved an
12· ·approximately 7 percent rate increase for Missouri
13· ·American Water customers.
14· · · · · On June 15, 2023, the Missouri PSC approved an
15· ·over 5 percent increase for Ameren customers.
16· · · · · And on June 23, 2023, the St. Louis Board of
17· ·Aldermen approved an ordinance, increasing residential
18· ·water bills by 44 percent over the next year; with the
19· ·first increase going into effect on July 1st of this
20· ·year.
21· · · · · Wastewater management is essential for health and
22· ·safety, and MSD is the sole provider of wastewater
23· ·management services in the St. Louis area.
24· · · · · As indicated in the MSD's March 23, 2023 rate
25· ·proposal, MSD falls between the tenth and 15th in the
Page 38
·1· ·ranking of monthly wastewater bills for the 50 largest
·2· ·U.S. cities.
·3· · · · · So MSD's rates are higher than the national
·4· ·average, even before the proposed rate increase goes --
·5· ·under consideration would go into effect.
·6· · · · · Consumer's Council has two advisory committees,
·7· ·made up of area residents who are seniors, people with
·8· ·disabilities, people who live in majority/minority
·9· ·neighborhoods, and people who have low incomes.
10· · · · · Our members have stated that they are having a
11· ·hard time managing the steadily increasing cost of
12· ·utilities.
13· · · · · The proposed MSD increase coming shortly after
14· ·the Ameren, Spire, and Missouri American Water Company,
15· ·and St. Louis City water increases will present yet
16· ·another challenge.
17· · · · · Those on fixed incomes simply will not the have
18· ·the additional funds available, and many are already
19· ·skimming on groceries and medication to pail they
20· ·utility bills.
21· · · · · We suggest the creation of an MSD customer
22· ·assistance program that considers the energy burdens of
23· ·customers in determining the amount of assistance.
24· · · · · We also encourage MSD to create an outreach
25· ·program so that ratepayers and community agencies are
Page 39
·1· ·aware of the elements of such a program, and
·2· ·applications for assistance can be quickly processed.
·3· · · · · I noticed in your rate proposal that there are
·4· ·approximately 4200 people who are enrolled in your
·5· ·customer assistance program.· And in your handout
·6· ·tonight, you indicate that there are 30,000 residential
·7· ·customers who are eligible.· So we would really like you
·8· ·to increase your outreach.
·9· · · · · We further encourage MSD to be transparent about
10· ·the budget for the customer assistance program by not
11· ·only making this budget public, but also reporting the
12· ·amount of money spent quarterly on the program.
13· · · · · And finally, we courage MSD to participate with
14· ·Consumer's Council in the creation of a low-income
15· ·collaborative, addressing the needs of households that
16· ·have low income, and focusing on a creation of customer
17· ·assistance programs to meet ratepayers' needs.
18· · · · · In conclusion, Consumer's Council requests that
19· ·the MSD Rate Commission limit its recommendation to only
20· ·what is required to meet the documented and necessary
21· ·wastewater operational needs and capital projects.
22· · · · · And please consider the expansion of the MSD
23· ·customer assistance program to meet to the needs of
24· ·those who will be least able to afford any increase.
25· · · · · And I did bring a copy of my letter that I would
Page 40
·1· ·offer for inclusion of the record.
·2· · · · · MR. LECOMB:· I'll take it and make sure.
·3· · · · · MS. PAGET:· Thank you very much.· Any questions
·4· ·for me?
·5· · · · · MR. GOSS:· I don't think so.· Thank you.· That
·6· ·was very thoughtful.
·7· · · · · MS. PAGET:· Thank you.
·8· · · · · MR. LECOMB:· Our second speaker is Carl Tominski.
·9· · · · · MR. TOMINSKI:· I'm good.· Thank you for the
10· ·presentation.· Great job.· Answered all the questions.
11· · · · · MR. LECOMB:· And that's it.· Mr. Goss, you may
12· ·accept questions for the audience in a general sense, if
13· ·you wish.
14· · · · · MR. GOSS:· Are there any other questions from
15· ·anyone else in the audience?
16· · · · · All right.· Seeing none, tonight concludes the
17· ·first round of pubic hearings hosted by the MSD Rate
18· ·Commission.
19· · · · · The next series of public hearings will be held
20· ·starting the week of July 17.· Dates, times, and
21· ·location of those public hearings will be listed on the
22· ·Rate Commission's section of the MSD website, at
23· ·www.MSDProjectClear.org.
24· · · · · The final public hearing is scheduled for 9:00
25· ·a.m. on Monday, August 7 at MSD's headquarters.· The
Page 41
·1· ·address for MSD's headquarters is 2350 Market Street,
·2· ·St. Louis, Missouri 63103.
·3· · · · · Thank you again for coming tonight, and the
·4· ·public hearing is adjourned.
·5· · · · ·(WHEREIN, the hearing concluded at 7:48 p.m.)
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Page 42
·1· · · · · · · · · · CERTIFICATE OF REPORTER
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· · ·STATE OF MISSOURI· · )
·3· · · · · · · · · · · · ) ss.
· · ·CITY OF CHESTERFIELD )
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·6· ·I, Georgia B. Northway, Registered Professional
·7· ·Reporter, a Certified Court Reporter (MO), do hereby
·8· ·certify that the meeting aforementioned was held on the
·9· ·time and in the place previously described.
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11· ·IN WITNESS WHEREOF, I have hereunto set my hand and
12· ·seal.
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18· · · · · · · · · ·____________________________
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