HomeMy Public PortalAboutExhibit MSD 105- Transcript of Public Hearing- July 25, 2023Page 1
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·6· ·Metropolitan Saint Louis Sewer District Public
· · · · · · · · · · · · ·Hearing
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·8· · ·2023 Stormwater and Wastewater Rate Change
·9· · · · · · ·Thomas Dunn Learning Center
· · · · · · · · · 3113 Gasconade Street
10· · · · · · · · Saint Louis, MO 63118
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14· · · · · · · · · · July 25, 2023
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Exhibit MSD 105
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·1· · · · · · · · · · · · · INDEX
·2· · · · · · · · · · · · · · · · · · · · · · · · · ·PAGE
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·4· ·Opening· · · · · · · · · · · · · · · · · · · · · · 5
·5· ·Presentation:· · · · · · · · · · · · · · · · · · ·11
· · · ·By Brian Hoelscher
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·7· ·Questions by the Public:· · · · · · · · · · · · · 29
·8· ·Adjournment· · · · · · · · · · · · · · · · · · · ·36
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·1· ·Metropolitan Saint Louis Sewer District Public
·2· · · · · · · · · · · ·Hearing
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11· · · · · ·MSD Public Hearing, produced, sworn and
12· · · examined on July 25, 2023 between the hours of
13· · · 07:00 p.m. and 09:00 at 3113 Gasconade Street ,
14· · · in the City of St. Louis, State of Missouri,
15· · · before Colin Wallis, within and for the State
16· · · of Missouri.
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·1· · · · · · · · · A P P E A R A N C E S
·2· ·RATE COMMISSIONERS:
·3· ·Jim Faul
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·5· ·MSD Staff:
·6· ·Brian Hoelscher, MSD CEO
· · ·Lance Lecomb
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·9· ·REPORTED BY:
10· ·Mr. Colin Wallis
· · ·Lexitas Legal
11· ·711 North Eleventh Street
· · ·St. Louis, Missouri, 63101
12· ·(314) 644-2191
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·1· · · · · · · · · *· *· *· * *
·2· · · · ·(Proceedings commenced at 6:00 p.m.)
·3· · · · COMMISSIONER FAUL:· All right, ladies and
·4· ·gentlemen.· I appreciate everybody coming here
·5· ·today.· My name is Jim Faul of the Metropolitan
·6· ·St. Louis Sewer District Rate Commission. I
·7· ·will be serving as the presiding commissioner
·8· ·for tonight's public hearing this evening.
·9· · · · The Charter Plan of the District was
10· ·amended by voters in St. Louis City and St.
11· ·Louis County at a general election on November
12· ·the 7th, 2000, and established the Rate
13· ·Commission.· The purpose is to review and make
14· ·recommendations to MSD's Board of Trustees
15· ·regarding changes in wastewater rates,
16· ·stormwater rates, and tax rates proposed by MSD
17· ·staff.
18· · · · The Rate Commission seeks to ensure MSD
19· ·ratepayers, and the public in general, have a
20· ·voice in MSD's rate-setting process.· Per the
21· ·Charter Plan, the Rate Commission is composed
22· ·of 15 member organizations who collectively
23· ·represent the broadest possible cross-section
24· ·of MSD customers and the community it serves.
25· ·I am the commissioner representing the North
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·1· ·American Building Trades Unions.
·2· · · · The Rate Commission member organizations
·3· ·are selected by MSD's Board of Trustees through
·4· ·a public self-nomination and selection process
·5· ·that's set forth in the charter.· Each member
·6· ·organization, such as North American Building
·7· ·Trades Unions, serves a six-year term and
·8· ·appoints an individual to represent the
·9· ·organization on the Rate Commission.
10· · · · Per voter-approved changes made to MSD's
11· ·charter in 2000, the Board of Trustees shall
12· ·elect member organizations so as to ensure a
13· ·fair representation to all users of the
14· ·District's services.
15· · · · Specifically, the Rate Commission member
16· ·organizations shall represent
17· ·commercial-industrial users, residential users,
18· ·and other organizations interested in the
19· ·operation of the District, including by way of
20· ·example but not by way of limitation,
21· ·organizations focusing on environmental issues,
22· ·labor issues, socioeconomic issues, community
23· ·neighborhood organizations and other nonprofit
24· ·organizations.
25· · · · For a list of individual rate
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·1· ·commissioners and the organizations they
·2· ·represent, please visit the Rate Commission
·3· ·section of MSD's website at www.msdproject
·4· ·clear.org.· There you'll see a list of all the
·5· ·member organizations, including but not limited
·6· ·to the North American Building Trades Unions.
·7· · · · The Rate Commission received a rate change
·8· ·notice from MSD staff on March 24th, 2023, for
·9· ·wastewater rates and stormwater rates and
10· ·taxes.· Per the Charter Plan, the Rate
11· ·Commission must issue its report on the
12· ·proposed rate change notice to MSD's Board of
13· ·Trustees on or before September 5th, 2023,
14· ·which is steamrolling towards us right now.
15· ·The Rate Commission adopted an operational
16· ·rules and a procedural schedule to conduct its
17· ·proceedings in a timely manner with procedural
18· ·fairness to all parties.
19· · · · Since the rate-change notice was received
20· ·on March 24th, 2023, the Rate Commission has
21· ·received testimony from MSD staff and rate
22· ·consultants employed by the Rate Commission to
23· ·evaluate the MSD staff's proposal.· The parties
24· ·have also engaged in discovery requests.
25· ·Documentation of these activities is listed on
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·1· ·the Rate Commission's section of MSD's website
·2· ·at www.msdprojectclear.org.
·3· · · · Tonight's public hearing is one of 14
·4· ·on-the-record sessions planned between
·5· ·June 21st, 2023, and August 7, 2023.· As an
·6· ·aside, I noticed the way I said that may have
·7· ·made it sound like there will be
·8· ·off-the-record, there aren't.· Only
·9· ·on-the-record, I apologize.
10· · · · Any ratepayer who wishes to be heard on
11· ·the proposed rate change may testify or
12· ·participate in these public hearing sessions.
13· ·The public hearings are publically noticed via
14· ·postings on the Rate Commission MSD's website
15· ·at www.msdprojectclear.org.· These postings
16· ·contain the time, date, and location of each of
17· ·the public hearings.· As hearings are added to
18· ·the schedule, the same information will be
19· ·posted.
20· · · · Public hearings are held for the sole
21· ·purpose of permitting MSD staff to present its
22· ·wastewater and stormwater rate change proposals
23· ·to the general public and to permit said public
24· ·the opportunity to ask questions and/or to make
25· ·comments.
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·1· · · · Anybody who is unable or not wishing to
·2· ·provide comments at a public hearing are still
·3· ·able to provide feedback to the Rate Commission
·4· ·via phone or e-mail.· The phone number is
·5· ·(314)335-2028.· Again, the phone number is
·6· ·(314)335-2028.· The e-mail address is
·7· ·ratecommission@ahcconsulting.com.· Again,
·8· ·ratecommission@ahcconsulting.com.· A card with
·9· ·the contact information is available at the
10· ·sign-in area.
11· · · · Alternately, staff representing the Rate
12· ·Commission, who I will ask to identify
13· ·themselves very shortly, will also be able to
14· ·provide that information.· Further information
15· ·on how to provide feedback outside of the
16· ·public hearings is listed on the Rate
17· ·Commission section of MDS's website, again, at
18· ·www.msdprojectclear.org.
19· · · · Our next step tonight is a presentation by
20· ·MSD's staff followed by a public comment
21· ·period, and tonight's presenter is Brian
22· ·Hoelscher, MSD's CEO and executive director.
23· ·Now, before we begin, I ask that we observe the
24· ·following housekeeping rules.· Please hold all
25· ·questions until the comment period which will
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·1· ·happen after the presentation.
·2· · · · If you wish to present testimony or expect
·3· ·you may have questions or comments, please sign
·4· ·in at the door out there by which you entered
·5· ·the door.· Speakers will be called upon in the
·6· ·order they have signed up.· Any speaker should
·7· ·identify themselves and any organizations they
·8· ·represent.· If you represent North American
·9· ·Building Trades Unions, I'm going to be very
10· ·surprised.
11· · · · While not a requirement, we ask those that
12· ·are speaking to state their name and address so
13· ·that we may ensure we are associating comments
14· ·in the record with the correct speakers.· If
15· ·you are representing an organization, please
16· ·provide information for your organization.· If
17· ·any speakers wish to remain anonymous in whole
18· ·or part, we completely respect those wishes.
19· ·Not a problem at all.
20· · · · Each speaker may have a maximum of ten
21· ·minutes to speak regarding the proposed rate
22· ·change.· As the presiding officer of this
23· ·hearing or meeting, I retain the right to limit
24· ·or expand speaking time as I deem necessary.
25· ·If you have further questions regarding
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·1· ·bathrooms or any other logistics, there's staff
·2· ·of the Rate Commission here available, if you
·3· ·please raise your hands, just let them know,
·4· ·they can help you.
·5· · · · If you have not already done so, please
·6· ·silence your cell phones.· Are there any
·7· ·questions?· All right, Mr. Hoelscher, please
·8· ·begin MSD's presentation.
·9· · · · MR. BRIAN HOELSCHER:· Thank you
10· ·Commissioner Faul.· My name is Brian Hoelscher.
11· ·I'm the executive director and CEO of MSD.· I'm
12· ·going to go over the rate proposal.· Before I
13· ·start, if at some point in the rate proposal,
14· ·you find you have questions about billing or
15· ·specific system issues involving your property,
16· ·we've got staff here, raise your hand, they'll
17· ·be here until everybody leaves.· So if you have
18· ·questions, we'll hang around and answer those.
19· ·Those aren't going to be answered or addressed
20· ·in the --
21· · · · MR. LANCE LECOMB:· This is your MSD dream
22· ·tonight.· Any question you have, we're here.
23· · · · COMMISSIONER FAUL:· Captive audience.
24· · · · MR. BRIAN HOELSCHER:· There you go.· So,
25· ·it's going to be in three pieces.· One, a tale
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·1· ·of two systems.· A quick description of what
·2· ·MSD systems look like, briefly I'll go over the
·3· ·Rate Commission, primarily our schedules since
·4· ·Mr. Faul has gone over a lot about the Rate
·5· ·Commission, and then go into the details of the
·6· ·rate proposal.
·7· · · · So, MSD Project Clear protects the
·8· ·public's health and safety environment by
·9· ·responsibly managing two programs with separate
10· ·sources of funding: wastewater and stormwater.
11· ·In this rate proposal, there are two specific
12· ·proposals.· One for wastewater, one for
13· ·stormwater.· I'll go over both of these.· Their
14· ·funding is different and therefore they're
15· ·separated, so I'll make sure I separate them so
16· ·you know exactly what the two issues are.
17· · · · Current services on the wastewater
18· ·program, we clean and repair the existing
19· ·wastewater system.· We start early in the
20· ·program.· We comply with environmental
21· ·regulations.· In fact, that is the main driver
22· ·of the wastewater program right now.
23· · · · Most of all the work, almost all of our
24· ·work, 98 percent over the next four years,
25· ·comes either from a lawsuit that was filed
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·1· ·against us by the Department of Justice, EPA,
·2· ·and the Coalition for the Environment.· That
·3· ·consent decree would last from 2011 to 2039.
·4· ·The other part is regulatory schedules just as
·5· ·part of the EPA doing its normal regulatory
·6· ·work.
·7· · · · Another part of it is major new
·8· ·improvements, and that is the piece where I was
·9· ·talking about, 98 percent of the work is driven
10· ·by one of those two regulations or consent
11· ·decrees.· MSD is not doing voluntary work.· It
12· ·costs enough, and we just need to cost
13· ·effectively get through those.
14· · · · Stormwater, there's three pieces.· Clean
15· ·and repair the existing storm sewers.· We've
16· ·been able to do that since 2016, when the
17· ·public voted yes on a provision.· Prior to
18· ·that, old storm sewers: inlets, manholes, and
19· ·storm sewers outside of 270, we owned but had
20· ·no money to operate and maintain.· The public
21· ·gave us funding to be able to do that in 2016.
22· · · · Compliance with environmental regulations,
23· ·that is primarily control pollutants and
24· ·rainwater runoff, we've always been funded for
25· ·that.
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·1· · · · The last item is new improvements to
·2· ·address flooding and erosion.· MSD has never
·3· ·had a district-wide fund to do that.· It's the
·4· ·last service we can provide.· We are coming
·5· ·back again -- we last tried in 2019.· We are
·6· ·going to try see if the public would like MSD
·7· ·to participate in flooding and erosion issues.
·8· · · · COMMISSIONER FAUL:· Preventing flooding
·9· ·and erosion.
10· · · · MR. BRIAN HOELSCHER:· Preventing flooding
11· ·and erosion, that's correct.· Project Clear,
12· ·the wastewater side, we're -- it's a
13· ·$7.2 billion program.· We price our program
14· ·based on current dollars.· When we signed the
15· ·agreement in 2011, it was 4.7 billion in 2010
16· ·dollars.· In 2021, we repriced.· It was $6.1
17· ·billion just because of the cost of money.· And
18· ·then, because of the environment or economic
19· ·situation we've seen over the last two years,
20· ·we repriced it before this proposal.· The
21· ·current value is 7.2 billion.· That doesn't
22· ·mean we are over budget.· It doesn't mean we're
23· ·adding work.· It's just the current value of
24· ·money.
25· · · · Some of the big things is reduce
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·1· ·wastewater backups in the homes that overflow
·2· ·the environment.· Those are ones that are not
·3· ·caused by overland flooding.
·4· · · · Improve the water quality and keep our
·5· ·region in compliance with the Clean Water Act.
·6· ·Some of the methods we've used, we've taken
·7· ·that stormwater getting into the collection
·8· ·systems, the wastewater systems, that was
·9· ·causing basements backups, we're addressing
10· ·that.
11· · · · If necessary, we increase the capacity of
12· ·existing systems, and, more importantly, we
13· ·eliminate or manage the overflows that come
14· ·through the system into the environment.· Some
15· ·were of illegal when they were put in, we're
16· ·eliminating those.· Others are legal and
17· ·permitted, but we have to control their impact
18· ·on water quality.
19· · · · What we've done so far for the wastewater
20· ·overflow is we removed 84 percent of those
21· ·overflow points.· Building backups are down
22· ·25 percent.· If it wasn't for climate change,
23· ·they would be down more.· If you think about
24· ·it, whenever we get big storms like we got last
25· ·summer, not only do streets flood and yards
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·1· ·flood, but the sewer systems flood, and water
·2· ·gets into the homes.· When it gets into homes,
·3· ·it gets into the sewer system.· And what
·4· ·happens is, it floods the sewer system, and
·5· ·people who are not even flooded start seeing
·6· ·water in their basements.
·7· · · · In spite of that, we're still down
·8· ·25 percent.· Today, we've gotten 650 projects
·9· ·either completed or underway.· That's the
10· ·wastewater side.
11· · · · Now, on the stormwater side, there we go.
12· ·The stormwater side, the number of reported
13· ·incidents have gone up.· So we gained -- this
14· ·is a list of issues we knew about.· In 2011 to
15· ·'14, we had about 1,100.· And it's gone up as
16· ·climate change has increased the number of
17· ·stormwater issues we had.
18· · · · Right now, there's 3,700 issues that we're
19· ·aware of.· The current value is something over
20· ·$700 million, if we were to fix all these
21· ·issues.
22· · · · Next page, so what these look, stormwater
23· ·problems is, like I said, it's flooding and
24· ·creek erosion.· This is an example of flooding.
25· ·It's a small example, but just the way the
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·1· ·neighborhoods develop, the way they are.· It's
·2· ·been graded -- people have built and developed
·3· ·a water system that doesn't go anywhere.
·4· ·That's an example of a small flooding issue.
·5· · · · Creek erosion looks like this.· This is
·6· ·also driven by climate change.· As we get
·7· ·heavier storms in shorter periods of time, that
·8· ·amount of water going through creeks and
·9· ·streams stresses the slopes, and causes the
10· ·slopes to eat away and can damage yards,
11· ·garages, and homes of people who live next to
12· ·those facilities.
13· · · · Where are all the stormwater problems at?
14· ·Take at a look at the map.· This is MSD's
15· ·boundaries.· To the north is the Missouri
16· ·River, to the right or east is the Mississippi
17· ·River.· The Meramac River runs along the
18· ·bottom.· Where it ends is about Highway 109 and
19· ·Wildwood.· Those are the District's boundaries.
20· ·We've highlighted four of the major water
21· ·sheds.
22· · · · One thing I'd point out, the pink or
23· ·purple one, it's called River Des Peres Water
24· ·Shed, has about 246 complaints, projects, and
25· ·where as the owners have something less, the
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·1· ·reason for that -- in that River Des Peres
·2· ·area, a long time ago, there was small taxing
·3· ·districts set up, we were able to do a small
·4· ·amount of stormwater work.
·5· · · · What we found is, if we do a small amount
·6· ·of work, people will report problems to us.· If
·7· ·they report problems to us and we keep telling
·8· ·them we have no money, they stop reporting
·9· ·problems.· So, I think the takeaway from this
10· ·is this, is they are everywhere throughout the
11· ·entire District.
12· · · · Quick description of the Rate Commission.
13· ·I am not going to go completely through this
14· ·slide.· Commissioner Faul kind of went through
15· ·it, but I am going to go over the next slide,
16· ·the schedule.
17· · · · So MSD staff started putting together a
18· ·rate proposal in 2022, both for wastewater and
19· ·stormwater.· We submitted that rate proposal to
20· ·the Rate Commission in March 2023.· They have
21· ·until September, early September, to complete
22· ·their review and set their findings to our
23· ·Board of Trustees.· Once they do that, our
24· ·Board of Trustees will spend the last three
25· ·months, of 2023, looking at staff's proposal,
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·1· ·looking at the recommendations for the Rate
·2· ·Commission, and then they will decide how to
·3· ·proceed.
·4· · · · 2024, right now, the earliest possible
·5· ·date that we would vote on both of these is
·6· ·April 2nd, 2024.· During that time period, the
·7· ·Rate Commission will be done.· Staff will go
·8· ·out, and they will be educating the public.· If
·9· ·you vote no on one provision, this is what
10· ·happens.· If you vote yes, this is the other
11· ·thing that occurs.· You will not find MSD staff
12· ·advocating for one or the other.· It's our job
13· ·to educate.· It's up to the individual
14· ·customers to decide how they want to vote on
15· ·these provisions.
16· · · · They look -- they look like two different
17· ·things.· So implementation will occur in fiscal
18· ·year '24-'25.· On the wastewater side, the
19· ·provision will be, and I'll go over this later,
20· ·folks will be asked do you want to allow us to
21· ·borrow more money to complete work for the next
22· ·four years, which will be like borrowing money
23· ·for any amount to buy something.· It keeps our
24· ·costs lower down and more later on.
25· · · · Or do you want to just use your cash and
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·1· ·immediately spend that.· That results in higher
·2· ·rates now, but the program gets out -- extends
·3· ·towards 2039, it will then become cheaper.
·4· ·That's the offer that's going to be made to the
·5· ·residents.
·6· · · · The other one is stormwater.· Again, we're
·7· ·asking whether or not the public wants to fund
·8· ·a stormwater program so MSD can be involved in
·9· ·stormwater flooding and erosion -- preventing
10· ·stormwater flooding and erosion.· If it passes,
11· ·the plan is to collect monies during calendar
12· ·year 2025, and then start a new program.· If it
13· ·does not pass, MSD will maintain the current
14· ·system, and we will not have a district-wide
15· ·program for flooding and erosion.· It's a
16· ·simple yes no provision.· That's what we're
17· ·asking the voters for their opinion on.
18· · · · So what the rate proposals looks like,
19· ·we're going to go over wastewater and
20· ·stormwater.· For the stormwater-rate proposal
21· ·first, if you have the one-page sheet, there's
22· ·one side that says "Stormwater rate proposal."
23· ·You'll see the same information that's up on
24· ·the slide.· It's designed to address the
25· ·flooding and erosion throughout the area.
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·1· · · · How do we develop this?· We determine,
·2· ·first of all, how to distribute the costs
·3· ·between residential and non-residential
·4· ·customers.· We use the impervious area.
·5· ·Residential customers who represent 57 percent
·6· ·of the impervious area throughout the District.
·7· ·Therefore 57 percent of the revenues will be
·8· ·collected from residential customers through
·9· ·property taxes.
10· · · · 43 percent will be charged to the
11· ·non-residential customers.· We will collect
12· ·revenues from them based on the impervious area
13· ·on the property.· Impervious area is rooftops,
14· ·driveways, sidewalks, places where water hits
15· ·but doesn't soak in, it runs off.· And that's
16· ·where we'll distribute the cost.
17· · · · Go to the next one.· So it consists of two
18· ·parts.· Obviously, there's residential and
19· ·non-residential.· For the residential, we found
20· ·that the residential customers, over half of
21· ·them if they want a program, don't want to
22· ·spend more than $2 per month.· So what we did
23· ·is we took a look at the immediate value, the
24· ·raised value, of proprieties throughout the
25· ·District.· That median value is $176,600.· In
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·1· ·order for us to make it a $2 per month charge,
·2· ·that means we're going to request a new
·3· ·property tax of $7.45 per $100 evaluation.
·4· · · · If you own a median-valued house at
·5· ·176,000, that will result in your property tax
·6· ·bill of $25 per year.· If you double that
·7· ·amount to the $350,000, it would be $50 per
·8· ·year.· 176 is the median value.
·9· · · · For the non-residential customers who have
10· ·already paid for their 43 percent of their
11· ·revenues, we'll charge them $1.05 per 1,000
12· ·square feet of impervious area per month.· We
13· ·determined that impervious area by overflights
14· ·in the area where we can identify where the
15· ·impervious areas are.
16· · · · How are we going to spend the money?· This
17· ·is where we're doing something a little bit
18· ·different.· In 2017, we were going to continue
19· ·spending the money the way we were, and the
20· ·public voted no, 53/47, to that proposal.
21· ·This -- our proposal generated $34 million per
22· ·year.· And again, we've identified about
23· ·$700 million of issues.
24· · · · Where we are going to spend the money?
25· ·50 percent will be based on benefit-cost
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·1· ·analysis that MSD does right now in
·2· ·small-taxing Districts for all projects.· We
·3· ·take the benefit points, are we protecting a
·4· ·yard, are we protecting a garage, home,
·5· ·multiple homes and yards, we total up the
·6· ·benefits, we divide by the cost, we want to
·7· ·know the benefit-cost ratio, we'll simply start
·8· ·our way down the list district-wide on the
·9· ·projects that score the best.
10· · · · 30 percent of it will go to municipal
11· ·grants.· So, 30 percent of those revenues, just
12· ·over -- just about $10 million, will be
13· ·distributed among the individual
14· ·municipalities, no local match required, their
15· ·grants for them to address what they think is
16· ·the most important stormwater project without
17· ·worrying about MSD's priorities.· Our only
18· ·requirement is that it's spent on something
19· ·that is stormwater.· We've been doing this on
20· ·some of the small-taxings districts.· It's
21· ·really met with a lot of praise from the
22· ·individual municipalities.· We're going to
23· ·include it in this program.
24· · · · 10 percent is going towards back to the
25· ·benefit-cost analysis.· We've -- the State has
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·1· ·a mapping system that helps us identify
·2· ·environmental justice areas or low-income
·3· ·areas.· We're going to take ten percent of the
·4· ·funds and designate them to do a benefit-cost
·5· ·analysis for only projects in those
·6· ·environmental justice areas.· It does two
·7· ·things.· It helps up direct a few projects in
·8· ·that direction.· The other part is the State
·9· ·often has dollars available for grants aimed at
10· ·environmental justice areas.· With us having a
11· ·dedicated revenue source for those areas, it
12· ·will increase our chances at being able to
13· ·bring outside dollars.
14· · · · And then finally, 10 percent of the
15· ·projects -- or the 10 percent of cost is going
16· ·to be decided by the area in general.· So we
17· ·wanted to get representatives throughout our
18· ·sewer district, which, again, is the City and
19· ·almost the entire county and city, what are
20· ·missing?· Is there a big issue that really
21· ·needs to be addressed?· So, we decided
22· ·10 percent of about $3.5 million to that
23· ·discussion.
24· · · · Right now, we have had discussions with
25· ·The Municipal League.· They seem like a natural
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·1· ·partner to develop something since they
·2· ·represent everyone in the municipalities, the
·3· ·City of St. Louis in there, to determine is
·4· ·there something we're missing.· Just because it
·5· ·happened recently, is it, hey, from the storms
·6· ·last summer it's obvious, we need to buy some
·7· ·homes out.· Maybe they decided that's a good
·8· ·thing to spend the money on.· Maybe they want
·9· ·us to increase the amount of contributions we
10· ·made to the grants to each one of the
11· ·municipalities.· They may decide that's
12· ·worthwhile.
13· · · · We'll have that discussion and have a
14· ·policy discussion to decide where should that
15· ·money go that will be most effective and most
16· ·timely in the opinion of our customers.
17· · · · On the wastewater side, we're in the
18· ·midst, again, of a $7.2 billion project.· 28
19· ·years old, it started in 2011 and will be done
20· ·in 2039.· We do this in four-year buckets.
21· ·Somewhere in the middle of this next one, 2025
22· ·or so, we'll be halfway through the cost of the
23· ·program.
24· · · · Part of these improvements, what's going
25· ·to be asked of the customers is, do you want to
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·1· ·give MSD the authority to have an additional
·2· ·$700 million worth of bonds, $750 in bonds, to
·3· ·complete the $1.5 billion worth of work that
·4· ·needs to be started over the next four years.
·5· ·Again, as you would expect, if you bond the
·6· ·project, you're borrowing money.· Less cost
·7· ·now, more costs later.· If you decide not to
·8· ·bond, you pay for cash and this is the chart
·9· ·that demonstrates that.
10· · · · So, on the left-hand side, is what the
11· ·average monthly cost for a sanitary wastewater
12· ·customer will be, what the increases would be,
13· ·assuming the voters approve bond financing for
14· ·an additional 750 million.· If they do, in
15· ·2025, the monthly cost will go up about
16· ·7 percent; 2026, 7.6; 2027, 7.5 percent; and
17· ·2028, 6.6 percent.
18· · · · Now, there's numbers on the right-hand
19· ·side.· That's for the average customer.· Very
20· ·few customers are the average customer.· If you
21· ·want to see what the impact would be to your
22· ·bill, you could take the bill you get next
23· ·month in August and apply these percentage
24· ·increases, you'll see what happens to your bill
25· ·if the bond issue is approved.
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·1· · · · If you take a look on the right side, that
·2· ·is what happens to the bills that the voter
·3· ·decides, no, we don't want you to borrow any
·4· ·money.· We want you to just use the cash you
·5· ·collect from us to get the work done as needed.
·6· ·So, if that's the case, within the first year,
·7· ·the monthly -- average monthly cost will go up
·8· ·35 percent.· The second year, a little over 35.
·9· ·The third year will go down 20 percent.· This
10· ·is just the verities of the projects we're
11· ·doing and the cash-flow needs.· And the final
12· ·year goes up 5 percent.
13· · · · It will be up to the -- up to the public
14· ·to decide how they want to fund the next four
15· ·years of the program.· There's a couple -- two
16· ·things that I want to note that are not shown
17· ·on this chart.
18· · · · If you -- the chart right now is assuming
19· ·folks who have metered water usage, and we bill
20· ·based on your usage during the winter months.
21· ·If you're a city resident who has unmetered
22· ·billing through your water company, some have
23· ·meters, most do not.· If you have unmetered, we
24· ·bill for an attribute to your home, just like
25· ·the water company charges you.· We're going to
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·1· ·apply a flow to those.· If you are in that
·2· ·situation, take a look at the chart on the
·3· ·left-side, on the green one.· On the first
·4· ·year, instead of your monthly cost going up
·5· ·7 percent, it will actually go down
·6· ·0.8 percent.
·7· · · · Every four years, we do a study and
·8· ·recheck water usage for attributes.· Usually,
·9· ·we find they have gone down, so we'll make the
10· ·adjustment on the front end.· So, if you take a
11· ·look at your bill on August 2024, if this
12· ·passes, then your bill will be down about one
13· ·percent starting in August of 2025.
14· · · · The second part is our customer assistance
15· ·program.· It's crucial to this whole rate
16· ·structure.· If you're an individual who is
17· ·making less than two times the poverty level,
18· ·then our customer assistance program, that you
19· ·apply for, will charge you one-half the rate.
20· ·If it calculates you should spend $60, you will
21· ·be billed for $30.· If you're of my age, 60 or
22· ·62, right?· 62?· I'm obviously over 62.· So 62
23· ·or older, and you're less than two and a half
24· ·times the poverty rate, if you -- the poverty
25· ·level, if you apply to MSD, you also will have
Page 29
·1· ·your monthly wastewater bill cut in half.
·2· ·Those are two really important parts of this
·3· ·program.· So with that, Commissioner Faul, I'm
·4· ·done with my presentation.
·5· · · · · ·QUESTIONS BY THE PUBLIC:
·6· · · · COMMISSIONER FAUL:· That's wonderful.
·7· ·Thank you, Mr. Hoelscher.· The Rate Commission
·8· ·staff will you please announce those who have
·9· ·requested to speak, if any?
10· · · · MR. LANCE LECOMB:· Mr. Commissioner, we
11· ·only have one attendee this evening.· So, I
12· ·think we can handle it on an ad hoc basis.
13· · · · COMMISSIONER FAUL:· I'll take that
14· ·recommendation.· That's fine.
15· · · · SUSAN LUEPKER:· Yes.
16· · · · COMMISSIONER FAUL:· Yes?
17· · · · SUSAN LUEPKER:· I'm here.· I live on South
18· ·Broadway, and I get my MSD bill.· I'm one
19· ·person, a senior, and the charges are $99.19 a
20· ·month.· And they're charging me for the base
21· ·charge, 28.26, which you show on here, Base
22· ·Charges, sounds good.· I'd like to pay that
23· ·bill.
24· · · · MR. BRIAN HOELSCHER:· Well, that base
25· ·charge --
Page 30
·1· · · · SUSAN LUEPKER:· Nevermind.· I'm just
·2· ·making a point --
·3· · · · MR. BRIAN HOELSCHER:· Oh, okay.· I'm
·4· ·sorry.
·5· · · · SUSAN LUEPKER:· I'm just saying.
·6· · · · MR. BRIAN HOELSCHER:· Okay, I'm sorry, I'm
·7· ·sorry.
·8· · · · SUSAN LUEPKER:· But then after you have
·9· ·your base charge, they have bathrooms, and they
10· ·said one bath $9.84.· Rooms, five, $15.85.
11· ·Showers, one, $9.84.· Water closets, three,
12· ·which we don't -- we've only got two.· And, you
13· ·know, I really can't use two bathrooms.· I've
14· ·been -- take a shower and take a bath at the
15· ·same time.
16· · · · So, who figured that -- who went with
17· ·this, you know?· That is so -- you can take --
18· ·okay, this is a home -- with rooms.· Now, we're
19· ·going with one person living in a lot of the
20· ·houses we have here are apartments.· And you
21· ·can have five people in the apartment, one
22· ·bathroom, one shower or one tub.· And you know
23· ·then their base charge is probably a third of
24· ·this.· So, I think it's very unfair, and I want
25· ·to do it and how we can correct it.
Page 31
·1· · · · MR. BRIAN HOELSCHER:· Sure.· So, just so
·2· ·you know, the base charge every customer pays
·3· ·is $28.· Everybody sees that when you live
·4· ·within the County or the City --
·5· · · · SUSAN LUEPKER:· Good.
·6· · · · MR. BRIAN HOELSCHER:· -- sees that $28
·7· ·charge.
·8· · · · SUSAN LUEPKER:· That's fair.
·9· · · · MR. BRIAN HOELSCHER:· The charge you see
10· ·per attribute, by a ruling from the Missouri
11· ·Supreme Court, we're required to bill you in
12· ·the same fashion that the water provider bills
13· ·you.· So your water bill is based on those same
14· ·parameters --
15· · · · SUSAN LUEPKER:· So, this is the Supreme
16· ·Court that said that?
17· · · · MR. BRIAN HOELSCHER:· The Supreme Court of
18· ·--
19· · · · COMMISSIONER FAUL:· Missouri Supreme
20· ·Court.
21· · · · SUSAN LUEPKER:· Okay.
22· · · · MR. BRIAN HOELSCHER:· So, in areas where
23· ·people are metered, and that includes some
24· ·residential customers in the city who have
25· ·metered, we'll use actual water usage over the
Page 32
·1· ·summer -- over winter, I'm sorry.· If they
·2· ·don't use the data, the data on the number of
·3· ·attributes you have comes directly from City
·4· ·Water.
·5· · · · SUSAN LUEPKER:· But City Water does the
·6· ·same thing.· I don't think it's metered.
·7· · · · MR. BRIAN HOELSCHER:· Correct.
·8· · · · SUSAN LUEPKER:· Why is it metered?· It's
·9· ·doing the same as this.
10· · · · MR. BRIAN HOELSCHER:· Correct.
11· · · · SUSAN LUEPKER:· I don't have a -- yeah --
12· · · · COMMISSIONER FAUL:· Correct --
13· · · · SUSAN LUEPKER:· Me and other folks, you
14· ·know --
15· · · · MR. BRIAN HOELSCHER:· Right.
16· · · · SUSAN LUEPKER:· -- in my situation.
17· · · · MR. BRIAN HOELSCHER:· The -- the one
18· ·thing -- and it's different for everybody, and
19· ·I know it's costly.· One of the items,
20· ·Commissioner Faul used to be on our board so
21· ·he's had some experience with this, some
22· ·people, if affordable, will get a water meter
23· ·installed.· They go off actual water usage.
24· ·There's that option.· There's potentially a lot
25· ·of cost associated with that with plumbing and
Page 33
·1· ·other things, but the residents do have that
·2· ·option.· If they go to a water meter, the City
·3· ·will bill you based on actual water usage, and
·4· ·they will convey that information to MSD who
·5· ·will use that number in order to bill for
·6· ·wastewater.
·7· · · · COMMISSIONER FAUL:· So if I may?· Correct
·8· ·me if I'm wrong because it's been a while.· As
·9· ·I understand it that the way MSD bills its work
10· ·is -- in the City is, they look at -- the Water
11· ·Department has the bills, okay?· They bill
12· ·everybody accordingly.· People in the City
13· ·either have the water meters, or if they don't
14· ·have a water meter, the Water Department says,
15· ·well, you have this many facilities, this many
16· ·rooms, and so they make an assumption.· And
17· ·that's what it is.· For some people, like I
18· ·said, they probably have a small place with a
19· ·lot of people in it and that assumption might
20· ·be low.· And other people, it might be a large
21· ·place with one person in it and that assumption
22· ·may be high.
23· · · · But since it's unmetered, there has to be
24· ·an assumption, and it's based that way.· If
25· ·somebody is metered, then the MSD rate looks at
Page 34
·1· ·what the metered water was and bases their --
·2· ·off that actual usage.· If it is unmetered,
·3· ·then MSD has no choice but to look, okay, what
·4· ·does the Water Department do?· They make these
·5· ·assumptions, and they base their billing on all
·6· ·of those same assumptions.
·7· · · · Now, some people -- if the City has an
·8· ·ordinance on the books but no money to fund it
·9· ·to make -- the City wants people to be metered.
10· ·There's just not a lot money for anyone really
11· ·to make that happen.· So individual homeowners
12· ·do have the option of metering themselves and
13· ·having the meter put in, and the Water
14· ·Department will say, okay, now we see you are
15· ·metered, and we'll base our water bill upon
16· ·that going forward.· In which case, MSD would
17· ·put their bills based on that same water meter
18· ·going forward.
19· · · · The issue is that having the meter
20· ·installed, probably effectively so that it
21· ·works, can be costly.· It goes 6,000 to 10,000
22· ·to maybe $15,000 depending on what it is to
23· ·have it put in.· Some people might choose to do
24· ·that because if you live in a big house, and
25· ·you're a single person, over the long run,
Page 35
·1· ·perhaps your water and your MSD bills will
·2· ·reflect to recuperate that.· Other people, it
·3· ·may not be feasible even if they wanted it to.
·4· · · · But, unfortunately, because of the way --
·5· ·because of the age of the City and because of
·6· ·the way the billing cycle works, where the MSD
·7· ·for the stormwater and wastewater has to bill
·8· ·in the same manner as the water does by the
·9· ·Supreme Court decision, we just have to follow
10· ·their coattails.· And sometimes it does result
11· ·in silly -- in expensive situations for folks.
12· · · · SUSAN LUEPKER:· Exactly.· It does.· It's
13· ·very unfair, I think.· Very, very unfair.
14· · · · COMMISSIONER FAUL:· Unfortunately, it's
15· ·something right now that is not in MSD's
16· ·control.· But they're certainly aware of it
17· ·with --
18· · · · SUSAN LUEPKER:· There's nothing they can
19· ·do?
20· · · · COMMISSIONER FAUL:· Well, and I think to
21· ·justifiably show -- MSD, from what remember, I
22· ·don't want to speak for you, but is not
23· ·unsympathetic to the predicament that people
24· ·are in.· And one of the things that you saw for
25· ·this Rate Commission, is to try to -- not
Page 36
·1· ·equally, but equitably push the costs out
·2· ·amongst folks along the region.· So, it's
·3· ·something that they're certainly aware of.
·4· · · · Unfortunately, it's a problem that both
·5· ·for legal and for practical implementation
·6· ·reasons, a lot of things outside of MSD's
·7· ·control have to happen first.· While we are --
·8· ·I shouldn't say "we".· I'm not a trustee of MSD
·9· ·anymore.· But from my recollection, and they'll
10· ·correct me if I'm speaking out of turn, MSD is
11· ·sympathetic and understands the situation and
12· ·tries to ameliorate it where and how possible,
13· ·such as with these customer-assistance
14· ·programs, those kind of things they do have
15· ·control over.
16· · · · The actual underlying issue of getting
17· ·accurate information, comes from what the
18· ·water-billing cycle has to do, which is a
19· ·completely separate thing that MSD doesn't have
20· ·any influence over.
21· · · · I think one thing I would recommend is --
22· ·I live in the City as well, but, you know, we
23· ·read that our water bills are going to go up,
24· ·and because they probably should have gone up a
25· ·long time ago, and now we're paying for it,
Page 37
·1· ·letting your alderman know and the folks at
·2· ·City Hall, that, hey, maybe it's time to start
·3· ·getting some of this unmetered and have more
·4· ·accurate billing information.· That might be
·5· ·the time to do it.· That's just not even a
·6· ·commissioner recommendation.· That is one man's
·7· ·opinion and nothing more.
·8· · · · SUSAN LUEPKER:· Exactly.· You wouldn't get
·9· ·very far with City Hall.
10· · · · MR. BRIAN HOELSCHER:· We did -- there was
11· ·one lady who submitted a letter to us, asking
12· ·us to forward it to the Board of Aldermen early
13· ·in the process.· And we have done that.
14· · · · SUSAN LUEPKER:· Good.
15· · · · MR. BRIAN HOELSCHER:· We forwarded it to
16· ·them so they know that there is that concern.
17· ·It doesn't affect just your water billing.
18· ·Because you're facing the same thing with your
19· ·water billing.· You, as one person, are paying
20· ·less than a bunch of people in small homes.· So
21· ·we pass that on to them to let them know that
22· ·concern is out there to them.
23· · · · MR. BRET BERTHOLD:· Can I make just one
24· ·comment?· If you disagree with the attributes
25· ·that are the bill, my recommendation is to go
Page 38
·1· ·to City Water and correct with them, because
·2· ·then that information will translate to us, and
·3· ·we'll adjust our bill as well.
·4· · · · SUSAN LUEPKER:· Right.· Well, I did go,
·5· ·you know, to them or just by phone with the ID.
·6· ·The thing is you have three bathrooms now, and
·7· ·it's not right, you know.· And they go, oh,
·8· ·okay, we'll make note of that.· And, so, it's
·9· ·like one --
10· · · · MR. BRIAN HOELSCHER:· Ma'am, here's what I
11· ·will offer.· If you made that call, it would
12· ·help if we knew who you talked to, if you
13· ·haven't made some notes.
14· · · · SUSAN LUEPKER:· Yeah.
15· · · · MR. BRIAN HOELSCHER:· If not, if you made
16· ·a call to City Water, let -- if you call MSD,
17· ·our billing number, let them know you've done
18· ·that.· Our staff will go to the City and say we
19· ·heard this has happened, are we missing some
20· ·information --
21· · · · SUSAN LUEPKER:· Okay.
22· · · · MR. BRIAN HOELSCHER:· We kind of push them
23· ·from the other side as well.
24· · · · COMMISSIONER FAUL:· And while certainly
25· ·that doesn't ameliorate your issue, and, you
Page 39
·1· ·know, we -- doesn't ameliorate or address the
·2· ·broader issue, you know, if you're paying for
·3· ·an extra attribute you shouldn't have, and you
·4· ·look at, at least it's a small step in the
·5· ·right direction.
·6· · · · SUSAN LUEPKER:· There we go, okay.
·7· · · · MR. BRIAN HOELSCHER:· I think the floor is
·8· ·yours.
·9· · · · COMMISSIONER FAUL:· And another thing --
10· ·well, thank you, if there is anyone else that
11· ·wishes to speak?· Seeing none, I -- our members
12· ·of the public who did come out today, ma'am,
13· ·thank you for coming.· We appreciate your time
14· ·and your input.· You didn't hear it from me,
15· ·but there's extra drinks if you want to throw
16· ·in your purse on the way out.· The next public
17· ·hearing is --
18· · · · MR. LANCE LECOMB:· This is on Facebook
19· ·Live.
20· · · · MR. BRIAN HOELSCHER:· The next public
21· ·hearing is scheduled for Wednesday, July 26,
22· ·2023, at 6:00 p.m.· The hearing will be at St.
23· ·Simon the Apostle Catholic Church in the lower
24· ·church hall.· The address for St. Simon is
25· ·11011, Mueller Road, St. Louis, Missouri 63123.
Page 40
·1· ·Thank you for your attention and your feedback.
·2· ·This public hearing is adjourned.
·3· · (Ending time of the hearing: 06:40 p.m.)
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·1· · · · I, Colin Wallis, in and for the State of
·2· ·Missouri do hereby certify that the witness
·3· ·whose testimony appears in the foregoing
·4· ·Examination Under Oath was duly sworn by me;
·5· ·that the testimony of the said witness was
·6· ·taken by me to the best of my ability and
·7· ·thereafter reduced to typewriting under my
·8· ·direction; that I am neither counsel for,
·9· ·related to, nor employed by any of the parties
10· ·to the action in which this examination was
11· ·taken, and further that I am not relative or
12· ·employee of any attorney or counsel employed by
13· ·the parties thereto, nor financially or
14· ·otherwise interested in the outcome of the
15· ·action.
16· · · · ______________________
17· · · within and for the State of Missouri
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