HomeMy Public PortalAboutExhibit MSD 109- Transcript of Public Hearing- August 7, 2023Page 1
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·7· · · · · · · · · · AUDIO TRANSCRIPTION
·8· · · · · RATE COMMISSION PUBLIC HEARING CONFERENCE
·9· · · · · · · · · · · ·AUGUST 7, 2023
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15· (Due to the quality of the recorded media, portions
16· were unable to be transcribed and include inaudible
17· portions.· The transcript may also include
18· misinterpreted words and/or unidentified speakers.
19· The transcriber was not present at the time of the
20· recording; therefore, this transcript should not be
21· considered verbatim.)
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23· TRANSCRIBED BY: MELISSA LANE
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Exhibit MSD 109
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·1· · · · · · · (Background noise in audio.)
·2· · · · · · · (Silence in audio.)
·3· · · · · · · (Inaudible conversation.)
·4· · · · · · · CHAIRMAN:· Being 9:00 a.m., we will call
·5· the meeting of the rate commission of the Metropolitan
·6· St. Louis Sewer District to order for the 2023 storm
·7· water and wastewater rate change proceeding.
·8· Mr. Secretary, would you call the roll.
·9· · · · · · · MR. MCCOMB:· Leonard Tengens (phonetic).
10· · · · · · · LEONARD TENGENS:· Present.
11· · · · · · · MR. MCCOMB:· Lou Gerals (phonetic).
12· · · · · · · LOU GERALS:· Here.
13· · · · · · · MR. MCCOMB:· Lloyd Palens, Paul Ziggler
14· (phonetic).
15· · · · · · · (Background noise in audio.)
16· · · · · · · MR. MCCOMB:· Sorry.· Paul Ziggler.
17· · · · · · · PAUL ZIGGLER:· (Inaudible).
18· · · · · · · MR. MCCOMB:· Patrick Monahan, Brad Gaas
19· (phonetic).
20· · · · · · · BRAD GAAS:· Present.
21· · · · · · · MR. MCCOMB:· Steve Mahoo, Jack Stine.
22· · · · · · · JACK STINE:· Present.
23· · · · · · · MR. MCCOMB:· Celeste Dotson.· Mark Perkins.
24· · · · · · · MARK PERKINS:· Present.
25· · · · · · · MR. MCCOMB:· Brian Holsher.
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·1· · · · · · · BRIAN HOLSHER:· Present online.
·2· · · · · · · (Background noise in audio.)
·3· · · · · · · MR. MCCOMB:· (Inaudible) Coyle.
·4· · · · · · · COYLE:· Present.
·5· · · · · · · MR. MCCOMB:· Matt Muran (phonetic), Jim
·6· Faul.· (Inaudible) either Clark or myself.
·7· · · · · · · (Background noise in audio.)
·8· · · · · · · MR. MCCOMB:· Can everybody online mute
·9· their computers, microphones, whatever?
10· · · · · · · CHAIRMAN:· I understand we have a quorum.
11· Thank you, Mr. Secretary.· I also understand that the
12· recording needs to be started for this meeting.· There
13· is no court reporter today, so this meeting will be
14· recorded and transcribed for the public record.
15· Item 2 on the agenda is the review of the minutes from
16· our August 1st, 2023, meeting.· Any comments on the
17· August 1st meeting?
18· · · · · · · UNIDENTIFIED MALE:· Second.
19· · · · · · · CHAIRMAN:· Motion made and seconded to
20· approve the minutes as presented.· Any discussion on
21· the motion?· All in favor signify by saying aye.
22· · · · · · · (All said aye.)
23· · · · · · · CHAIRMAN:· Opposed?· Abstentions?· Motion
24· carries.· My name is Leonard Tengens, and I'm a
25· commissioner of the rate commission of the
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·1· Metropolitan St. Louis Sewer District and will serve
·2· as chair of this proceeding.· The charter plan of the
·3· district was approved by the voters of St. Louis and
·4· St. Louis County at a special election on
·5· February 9th, 1954, and amended at a special -- at a
·6· general election on November 7th, 2000, at a special
·7· election on June 5th, 2012, and again, at a special
·8· election on Tuesday, April 6th, 2021.· The amendment
·9· to the charter plan in 2000 established the rate
10· commission to review and make recommendations to the
11· district regarding changes in wastewater rates, storm
12· water rates, and tax rates proposed by the district.
13· The charter plan requires the board of trustees of the
14· district to select organizations, to name delegates to
15· the rate commission to ensure a fair representation of
16· all users of the district service.· The rate
17· commission representative organizations are to
18· represent commercial industrial users, residential
19· users, and other organizations interested in the
20· operation of the district, including organizations
21· focusing on environmental issues, labor issues,
22· socioeconomic issues, community and neighborhood
23· organizations, and other nonprofit organizations.· The
24· rate commission currently consists of representatives
25· of Associated General Contractors of Missouri,
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·1· St. Louis Realtors, the City of Florissant, Central
·2· Council of Construction Consumers, Greater St. Louis
·3· Labor Council, North American's Building Trade Unions,
·4· Mt. City Bar Association, the Legal Women Voters of
·5· Metro St. Louis, Home Builders Association of
·6· St. Louis, the Municipal League of Metro St. Louis,
·7· Missouri Coalition for the Environment, the City of
·8· Ladue, the Engineers Club of St. Louis, Missouri
·9· Industrial Energy Consumers, and Education Plus.· Upon
10· receipt of a rate change notice from the district, the
11· rate commission is to recommend to the board of
12· trustees pages in a wastewater storm water or tax rate
13· necessary to pay interest in principal falling due on
14· bonds issued to finance assets of the district.· The
15· cost of operation and maintenance in such amounts as
16· may be required to cover emergencies and anticipated
17· delinquency.· Further, any change in a rate
18· recommended to the board of trustees by the rate
19· commission is to be accompanied by a statement that
20· the proposed rate change is consistent with
21· constitutional, statutory or common law, as amended
22· from time to time, enhances the district's ability to
23· provide adequate sewer and drainage systems and
24· facilities or related services is consistent with and
25· not in violation of any covenant or provision relating
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·1· to any outstanding bonds or indebtedness of the
·2· district, does not impair the ability of the district
·3· to comply with applicable federal or state laws or
·4· regulations as amended from time to time, and
·5· considers the financial impact on all classes of
·6· ratepayers in determining a fair and reasonable
·7· burden.· The rate commission received a rate change
·8· notice from the district on March 24th, 2023.· Under
·9· the district's charter plan, the rate commission must,
10· on or before September 5th, 2023, issue its report on
11· the proposed rate change notice to the board of
12· trustees of the district.· Under procedural rules
13· adopted by the rate commission on March 24th, 2023,
14· any person affected by the rate change proposal had an
15· opportunity to submit an application to intervene in
16· these proceedings no later than April 14th, 2023.· The
17· rate commission received no applications intervened by
18· this deadline.· However, it did receive an application
19· to intervene out of time by the industrial -- Missouri
20· Industrial Engineer Consumer, MIEC, on May 10th, 2023.
21· On May 30th, 2023, the rate commission heard arguments
22· in support and against MIEC's application to intervene
23· out of time.· After discussion, the commission
24· approved the application to intervene with the
25· condition that MIEC shall not be permitted to submit
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·1· testimony or make discovery requests.· Since
·2· March 24th, 2023, the rate commission has received
·3· testimony from district staff and the rate consultant.
·4· The parties have also engaged in discovery requests.
·5· Technical conferences were held on April 26th, 2023,
·6· May 30th, 2023, and July 10th, 2023, where the
·7· participants and the rate commission were given an
·8· opportunity to ask questions of those submitting
·9· testimony.· A prehearing conference for the purpose of
10· identifying any issues raised by the rate setting
11· documents, and the prepared testimony previously
12· submitted was conducted on the record on August 1st,
13· 2023.· Each participant in the prehearing conference
14· submitted before this hearing a prehearing conference
15· report describing the issues raised by the rate
16· setting documents and the prepared testimony together
17· with a brief description of each participant's
18· position, if any, on each issue and the rationale,
19· therefore.· Ratepayers who do not wish to intervene
20· are permitted to participate in on the record public
21· hearing conducted in (inaudible) sessions that began
22· on June 21st, 2023 and are concluding today.· The rate
23· commission's operational rules provide that this
24· public hearing today will be held on the record to
25· permit ratepayers and taxpayers to testify regarding
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·1· the proposed rate change, permit management of the
·2· district and/or board to testify regarding the
·3· proposed rate change, receive into evidence any
·4· prepared testimony previously submitted to the rate
·5· commission, subject any valid objections together with
·6· discovery responses and transcripts of the technical
·7· conferences, permit the rate commission members to ask
·8· questions regarding any issue addressed by the
·9· prepared testimony or any other element of the
10· proposed rate change, and permit closing statements by
11· the district, the intervenors, and legal counsel for
12· the rate commission.· Before proceeding to other
13· aspects of this public hearing, we will begin with a
14· public comment period.· Those unable to or not wishing
15· to provide comments at this public hearing may provide
16· feedback to the rate commission via phone or e-mail.
17· The phone number is area code (314) 335-2028.· (314)
18· 335-2028.· The e-mail address is
19· ratecommission@aacconsulting.com.· So the e-mail
20· address is R-A-T-E-C-O-M-M-I-S-S-I-O-N at
21· A-A-C-C-O-N-S-U-L-T-I-N-G.com.· A card with this
22· information is available outside in the hallway at the
23· sign-in area.· Also, staff who are representing the
24· rate commission who I will ask to identify themselves
25· shortly will also be able to provide that information.
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·1· Additional information on how to provide feedback
·2· outside of the public hearings is also listed on the
·3· rate commission's section of MSD's website.· And that
·4· is at www.msdprojectclear.org.
·5· W-W-W-M-S-D-P-R-O-J-E-C-T-C-L-E-A-R.O-R-G.· As today
·6· is the last scheduled public hearing, feedback
·7· received by 10:30 a.m. this morning will become part
·8· of the rate commission's formal public record.· Any
·9· feedback received after 10:30 a.m. will still be
10· shared with the rate commission but will not become
11· part of -- part of the formal public record.· I'm
12· going to take a minute and ask the folks who are the
13· representatives who can share that information, if
14· they could hold up their hand or identify themselves
15· (inaudible) public who are here.· Thank you.· Our next
16· step is a presentation by MSD staff followed by the
17· public comment period.· This morning's presenter is
18· Brian Holsher, MSD's CEO and executive director.
19· Before we begin the presentation, I ask that we
20· observe the following housekeeping rule.· First,
21· please hold all of your questions for Mr. Holsher
22· until the comment period following the presentation.
23· Secondly, if you wish to present testimony or expect
24· you may have questions or comments, please sign in on
25· the sign-in sheet outside the door where you enter the
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·1· room.· Speakers will be called upon in the order they
·2· have signed up.· Each speaker will identify themselves
·3· and any organization they represent.· While not a
·4· requirement, we ask that those who are speaking state
·5· their name and address so we may ensure we are
·6· associating comments in the record with the correct
·7· speaker.· If you are representing an organization,
·8· please provide information about the organization.
·9· Speakers wish to remain anonymous in whole or in part,
10· please respect those wishes.· Each speaker may have a
11· maximum of 10 minutes to speak regarding the proposed
12· rate change.· As a presiding officer, I will choose to
13· limit or expand the speaking time as deemed necessary.
14· If there are any further questions regarding emergency
15· evacuations or restrooms or any other logistics, I'll
16· ask the staff who are representing the rate commission
17· to raise their hand, and they will assist.· And if you
18· have not already done so, please silence your cell
19· phone.· Are there any questions regarding the
20· procedures for this morning?
21· · · · · · · UNIDENTIFIED FEMALE:· Yes.· Chairman
22· (inaudible) speak at the mic?· For a (inaudible) I
23· simply wanted to make a request that (inaudible) is
24· the intervenor in the case, and we have Mike
25· (inaudible) available to speak here today about M
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·1· (inaudible) position and concerns.· We would
·2· (inaudible) intervenor be permitted to (inaudible).
·3· · · · · · · CHAIRMAN:· (Inaudible) following
·4· Mr. Holsher's presentation.
·5· · · · · · · UNIDENTIFIED FEMALE:· (Inaudible).
·6· · · · · · · CHAIRMAN:· When we get to the public
·7· comment period, we will call (inaudible) public
·8· (inaudible) Mr. Holsher, the floor is yours.
·9· · · · · · · BRIAN HOLSHER:· Thank you, Chairman
10· Tengens.· Again, my name is Brian Holsher.· I'm the
11· executive director and CEO of MSD.· I'm going to go
12· over our -- our rate proposal.· One thing I would like
13· to offer in addition to what Chairman Tengens went
14· over, if any of the member of the public so desires,
15· and if you have a question that's maybe not related to
16· this, but you would like to have a question, say,
17· about billing or a specific service, I will have staff
18· here at the end of the rate commission's meeting, if
19· you'd like to talk one-on-one with somebody about a
20· very specific problem, feel free to comment here if
21· you wish, but we will also have staff available after
22· the meeting to answer any specific customer questions
23· you may have, if you desire to do that.· So a couple
24· of things I'm going to go over.· Tale 2 systems, just
25· going to talk about the district in general.· Then go
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·1· over the rate commission, not necessarily repeating
·2· the stuff that Chairman Tengens went over, but go over
·3· the schedule, what we're looking for as part of the
·4· whole rate commission process, and then go over the
·5· details of the 2023 rate proposal.· MSD project clear
·6· protects the public's health, safety, and water
·7· environment by responsibly managing two programs each
·8· with a separate funding sources.· There is the
·9· wastewater program that's paid for through your
10· monthly bill, and there's right now a storm water
11· program that shows up on your property taxes.· Those
12· are the two major source of funds.· Those funds cannot
13· be mixed, and one revenue source cannot be used to pay
14· for another -- for another activity.· Again, in each
15· one of these, the funding that's available for each
16· individual program is in a little different place and
17· that's -- we'll discuss those each as I go through
18· each one of the proposals.· Current services on the
19· wastewater side is clean and repair the existing
20· wastewater system, compliance with environmental
21· regulations on the wastewater side.· We take all the
22· wastewater as it leaves the lateral from either a home
23· or business, if we pipe it, we pump it, get it to our
24· treatment plants, treat it, and discharge to local
25· creeks and streams.· So we take care of it as soon as
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·1· it leaves the private plumbing of each individual
·2· property.· Major new improvements, these are mostly
·3· driven by two things.· One is a consent decree with
·4· the federal government.· MSD was sued like 200 other
·5· municipalities throughout the country, not because
·6· they're not in compliance with the Clean Water Act,
·7· and the issue wasn't that we weren't or the other
·8· cities weren't working towards compliance, but the EPA
·9· wanted to make sure that there was a court enforceable
10· schedule to come in compliance with the Clean Water
11· Act, so that lawsuit by the EPA Department of Justice
12· and coalition for the environment went in place.· It
13· was agreed to in 2011, and it ends in 2039.· The other
14· item that really drives our capital program or major
15· new improvements is other regulatory requirements.
16· Clean Air Act, for instance.· Other regulatory
17· schedules.· So if you take a look at the projects that
18· we're proposing over the next four years, 98 percent
19· of them are driven by either consent decree
20· requirements or other regulatory compliance schedules.
21· Storm water side, we have three services we can
22· provide.· One is compliance with environmental
23· regulations.· MSD has always been funded to do that
24· since its creation.· This is us surveying -- issuing
25· building permits and serving as a regulator to help
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·1· manage pollutants that are in storm water runoff.
·2· Most often people will see this as when a new
·3· development goes in would require certain types of
·4· activities in order to capture pollutants in that
·5· storm water runoff.· Next is a clean and repair of the
·6· existing storm sewers.· These are the inlets,
·7· manholes, and storm sewers.· Prior to 2016, MSD owned
·8· and operated with a reduced funding those storm sewer
·9· systems inside 270.· And prior to 2016, we owned and
10· operated the storm sewer systems outside 270 but had
11· no funding.· The public corrected that in 2016 with a
12· positive vote.· We now have a revenue source where we
13· can clean, operate, and maintain the storm sewers
14· inlets, manholes, and the sewers.· The final service
15· MSD can provide is improvements especially around
16· flooding and creek erosion.· As most people know, MSD
17· does not own the creeks, does not own the streams.
18· Individual municipalities and counties are responsible
19· for being the floodplain managers is how floodplains
20· are managed.· So -- but MSD does have the ability to
21· raise funds to address these issues in cooperation
22· with our partners.· That's what this proposal is
23· today, and I'll go over the details of that as we move
24· forward.· First of all, touch base on wastewater
25· system.· Right now the current value of the consent
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·1· decree is $7.2 billion.· That's in 2023 dollars and
·2· MSD always prices its consent decree based on a
·3· current dollar level, so through our history, when we
·4· sign the consent decree, it was 4.7 billion in 2010,
·5· dollars, we repriced it again in 2021 to bring it up
·6· to 2021 dollars because of inflation.· It was priced
·7· at $6.1 billion.· Now, in 2023, taking to account some
·8· of the economic things that happened over the last two
·9· or three years, we're pricing it at $7.2 billion in
10· 2023 dollars.· It hasn't increased the cost of the
11· individual projects other than inflation, and MSD is
12· on schedule.· It's still the same program.· We just
13· keep repricing it, so everybody understands what the
14· current cost is, and project's been completed.· And
15· projects are due in the future.· Right now MSD is on
16· schedule for all environmental compliance requirements
17· with the consent decree and other regulators and as
18· far as spending, we are on budget to this date.· The
19· goals of the wastewater program is to reduce backups
20· in homes and overflows into the environment.· The
21· biggest problem here is, storm water getting into the
22· system that shouldn't be there, causes basement
23· backups.· It also causes the sewers to surcharge, and
24· one of the fixes to that, that occurred in the past
25· is, you would take a manhole that's in the sanitary
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·1· sewer system next to a creek or stream, punch a hole
·2· in it.· So when there was rain, that extra water that
·3· was in the sanitary system would go in the creeks and
·4· streams, would not go into people's basements.· Those
·5· are illegal.· That's the biggest thing that we're
·6· fixing is taking care of those.· One of the best
·7· way -- one of the best ways to do that is to take the
·8· storm water out.· A lot of you are probably familiar
·9· or participated where we disconnected one of the
10· biggest issues MSD had in our service area was people
11· had downspouts from their roofs connected to their
12· sanitary sewer lateral.· That surcharge then filled up
13· the sanitary sewer system and caused overflows and
14· backups.· There's other things of that kind.· We've
15· gone a long way towards taking that off the system.
16· It's worked pretty well.· The whole goal, then, is to
17· keep us in compliance with the Clean Water Act.· Next
18· page.· So what have we done so far?· So these
19· overflows, as I mentioned, they were directed to
20· creeks and streams.· We removed 84 percent of those.
21· There's a date certain schedule set in our consent
22· decree with the federal government.· We are in
23· compliant -- we've been in compliance with that
24· schedule since we started this project in 2011.
25· Building backups are down 25 percent.· I will tell
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·1· you, we're a little disappointed in that.· We're
·2· hoping we would have fewer than that.· The problem
·3· that we're addressing has become a little bit
·4· different.· It has to do with some of the climate
·5· change primarily.· We really have taken water out of
·6· the system, and we see what is a regular or moderate
·7· storm.· We are talking about very few basement
·8· backups.· The problem is the high intensity quick
·9· storms we're seeing that cause localized flooding or
10· plain flooding.· If you think about this, if you're in
11· an area that floods, your street floods, the yard
12· floods, the home floods, the sanitary sewer system
13· floods as well.· That flood water gets in the system.
14· That elevation is then reflected back in the sanitary
15· sewer system, and even though you weren't experiencing
16· over flooding, they're going to see water in their
17· basements.· So that's the main place where we're
18· seeing storm water backups having to do with that.
19· That becomes another issue to be addressed maybe with
20· different strategies.· Finally, we started or in the
21· process of 650 different projects since 2012 in order
22· to meet our consent decree.· Storm water, a little bit
23· different.· This is a list of the issues that had been
24· reported to us since 2011.· You'll notice that those
25· go up.· A lot of them, quite honestly, have to do with
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·1· the change in climate that MSD's really felt for the
·2· last 15 years.· We are getting storms that are shorter
·3· in duration, dumping more water, and causing localized
·4· flooding, not in just floodplains but in -- but in
·5· areas that are just low areas where everything drains
·6· to different division, stuff like that.· So the
·7· problem is looking a little bit different.· You'll
·8· notice right now we've got 3,700 different issues that
·9· have been reported to us on storm water having to do
10· with either flooding or creek erosion that we want to
11· address.· One of those problems -- this is a pretty
12· benign picture nowadays, but storm water problems is
13· just water -- flood waters come in and doesn't leave
14· for whatever reason.· Homes have been redeveloped,
15· regraded, weren't built properly to begin with, were
16· built under old codes, folks who live in floodplains,
17· we have folks whose homes are built within the old
18· area of a sinkhole.· Sinkholes don't always work.
19· They stop working.· Now every time it rains these
20· homes get flooded.· You're at the bottom of a
21· subdivision, next to the creek where everything drains
22· when the creek comes up, you now flood.· So all those
23· problems have to do with flooding.· It's not just
24· flooding.· There's also correct erosion.· So there are
25· folks who aren't experiencing in our service area,
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·1· they aren't experiencing flooding, they're
·2· experiencing creek erosion.· The same increase in
·3· storms result in stress on the creek bank channels
·4· causes erosion.· It has eaten people's homes, garages,
·5· yards, homes had to be moved out of because they're
·6· unsafe.· This fund would also help us do that, address
·7· the creek erosion issues that are throughout the area.
·8· These are the improvements or the issues that we've
·9· been identified -- this is by watershed.· This is a
10· map by MSD service area.· You see the Missouri River
11· to the north or right or to -- up.· To the right is
12· the Mississippi River.· To the east, to the south the
13· Meramec River wiggles around in our service area.· And
14· to the left, the gray area, is part of St. Louis
15· County that is not maintained or not serviced by MSD.
16· That line is about Highway 109.· At that location
17· the -- the ography {sic} or topography drains to the
18· west.· It doesn't drain towards MSD.· We only bring
19· people into the district if they ask to be brought
20· into the district and that area has not, so right now
21· MSD service area consists of the city of St. Louis and
22· about 90 percent of St. Louis County.· You'll notice
23· there are numbers next to the various areas as to the
24· number of complaints we got.· Most of them are in that
25· purple area in the lower right.· It's River Des Perez
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·1· watershed.· What we have found is that that area has
·2· some old legacy small taxing districts where money's
·3· collected, and these types of issues can be addressed
·4· to some limited fashion.· What we found is, if people
·5· complain and there's at least a program and they see
·6· some stuff getting in that will keep notifying MSD of
·7· storm water problems.· Areas not where there's
·8· absolutely no funding to address these, people will
·9· let us know the issues, but quite honestly, I don't
10· blame them of getting tired of saying MSD does have a
11· funding, which we're trying, but we don't have any
12· funding, but we will keep tracking the issues if
13· something comes up in the future we can do about it.
14· We expect areas especially right now that are getting
15· absolutely no services.· We'll get additional issues
16· coming in if the program moves forward.· So rate
17· commission go to the timeline, Lance, if you would.
18· Okay.· I'm not going to go over the rate commission
19· schedule, that -- that Chairman Tengens went over, but
20· just what this timeline looks like, what was in the
21· past, and what to expect in the future.· 2022, MSD
22· started putting a timeline together or a rate proposal
23· together for both wastewater, which we do every four
24· years and for storm water.· We submitted that rate
25· proposal to the board -- to the rate commission in
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·1· March.· They need to be done in early September per
·2· charter, 165 days to evaluate the recommendations by
·3· MSD staff.· So MSD staff recommendations and the
·4· recommendations by the rate commission will go to our
·5· board of trustees.· They will spend the last three
·6· months of 2023 evaluating those recommendations in
·7· determining how to move forward.· Whatever comes out
·8· of that, there will be a public education period from
·9· January through March.· Our staff will go out to the
10· public and indicate if you vote yes, there's what will
11· happen.· If you vote no, here's what will happen.· And
12· we'll do that prior to.· Right now a scheduled
13· April 2nd, 2024 election for both storm water and
14· wastewater.· Now, the election for two different
15· topics.· So let's do the wastewater side first.· Stay
16· on the schedule.· That's all right.· There we go.· So
17· on the wastewater side, as we've done every four
18· years, the work has to be done.· The question is, how
19· it's funded?· So what MSD will do, as it has every
20· four years, new proposals to the public.· One, if you
21· want to pay for cash, you would vote no, if you want
22· to provide additional bonding, and I'll go over those
23· details in a little bit, you can vote yes.· And
24· there's consequences to both I'll go over.· The next
25· one is the storm water proposal.· Storm water proposal
Page 22
·1· is going to be a yes or no question.· If it's yes, we
·2· want to provide funding for MSD to address flooding
·3· and erosion.· And MSD would move forward and do that.
·4· If the public votes no, then MSD will not provide that
·5· service.· It's a very simple yes or no question.· Go
·6· ahead now, Lance, I'm sorry.· So I'm going to go over
·7· the details of storm water rate proposal first.· One,
·8· we wanted to figure out how to divide up the revenues
·9· in a fair way between the different classes of
10· ratepayers.· We used impervious areas to do this.· We
11· took our residential customers in impervious areas
12· where if the rainfalls down, it won't soak into the
13· ground such as rooftops, driveways, sidewalks.
14· Through aerial photography, we found that our
15· residential customers have 57 percent of impervious
16· area, therefore, we want to set a program up so the
17· residents pay -- provide 57 percent of the revenues
18· for the program.· Our nonresidential customers, this
19· would be commercial, industrial as well as not for
20· profit entities they represent, obviously, 43 percent
21· of the impervious area.· We want to set a rate system
22· up so that they provide 43 percent of the revenues.
23· So here's how that was done.· For residential
24· customers, we constantly do polling at least once a
25· year, and we check with the residential customers how
Page 23
·1· much if we have a storm water program to address
·2· flooding and erosion, how much are you willing to pay,
·3· invariably to get half the public to want to
·4· participate in the program, they don't want to pay
·5· more than $2 per month, so we set this program up
·6· based on that.· The median assessed value for taxing
·7· purposes for a home, a residential home, in our
·8· service area is $176,600.· So if we wanted the median
·9· customer to pay $2 per month, that's a property tax
10· of 7.45 cents per hundred dollar valuation.· So if you
11· have a home that's assessed for that for tax purposes,
12· and you approve this, your cost will be $2 per month
13· or about $25 per year.· This is a scaleable.· So if
14· you have a home that's assessed at $350,000 for tax
15· purposes, then the cost would be $4 per month or about
16· $50 per year for what we're proposing.· And that will
17· generate about 57 percent of the revenues.· For the
18· nonresidential customers, we now can calculate what is
19· 43.· Percent in order to do that, we've taken the
20· impervious area in all of our nonresidential customers
21· and to get to the right funding level, we're proposing
22· to charge $1.05 per thousand square feet of impervious
23· area per month for our nonresidential customers.· So
24· you're looking at two different ways for doing this
25· for residential customers.· If they approve the
Page 24
·1· property tax, that will be an additional charge on
·2· their property tax.· Right now, our customers pay for
·3· what storm -- storm water services we do provide, they
·4· pay that through the approximate tax.· This will also
·5· be on the property tax.· For the nonresidential
·6· customers, it will be part of the monthly bill.· Storm
·7· water funding.· Right now we're looking -- what I just
·8· proposed, raise $34 million a year as far as a
·9· revenue.· It's very similar to the proposal we've put
10· in front of the ratepayers in 2019.· Same issue to
11· address flooding and erosion.· The ratepayers
12· decided -- voted no by 53 to 47 not to fund storm
13· water program.· We've taken -- obviously, we're
14· continuously getting issues presented to us by the
15· ratepayers that are wanting things fixed if at all
16· possible.· We've listened to a lot of the public about
17· different things we can do, talk to different
18· stakeholders about what we can do to the program to
19· make it more attractive, and this is what we've come
20· up with.· Right now MSD has identified $700 million
21· worth of storm water issues.· That does not include
22· any of the flooding from 2022.· That would be on top
23· of this.· The way we plan on doing the expenditures,
24· we're planning on taking 50 percent of that
25· $34 million and use a benefit cost analysis to fix
Page 25
·1· flooding and erosion problems.· MSD uses a process
·2· like this right now in those small taxing districts I
·3· mentioned earlier.· What we do is, we take all the
·4· benefits.· The benefits are just simply a point
·5· system.· A fence has a benefit, a swimming pool
·6· benefit, a garage benefit, a house benefit, the amount
·7· of yard a benefit.· Will add all the benefits together
·8· of doing the project, divide by the cost, that will
·9· give us a benefit cost ratio.· The plan is to take
10· 50 percent of the dollars and district wide, we'll
11· simply do the projects that rank highest.· And work
12· our way down the list.· 30 percent of the funding is
13· proposed to go to a local grant program, a municipal
14· grant program to the individual municipalities.· As
15· we've been trying to implement storm water in the
16· past, these small taxing districts we put something
17· like that in place, the municipalities are very
18· receptive.· The idea is to give the municipalities a
19· revenue source for them to address what they believe
20· in their world is their highest priority project.
21· Say, the idea is to take 30 percent, distribute it to
22· the individual municipalities by population, it's a
23· hundred percent grant.· The only requirement is that
24· be spent on something that is storm water related.· It
25· would be solely left up to the municipalities.· It
Page 26
·1· doesn't have to be spent every year.· It can be
·2· accumulated because, for instance, municipality wants
·3· to save money for three or four years to do a project.
·4· We'll understand that.· We'll keep it.· They make the
·5· proposal, as long as it's storm water related, our
·6· board will appropriate the money, and the municipality
·7· can move forward with the project.· 10 percent of the
·8· funding is proposed to be used on a benefit cost type
·9· calculation for -- we should have a seat.· We have
10· one.· Okay.· A benefit cost calculation only for those
11· issues that we know of in environmental justice areas.
12· So I -- I'm using a federal term here.· It's the state
13· uses something a little bit different.· The State of
14· Missouri through the federal government's guidance
15· have identified areas what the federal government
16· calls justice, what the state calls low income.· They
17· get perimeters and allow us to provide a mapping of
18· those areas.· For the St. Louis -- for our service
19· area, it is northern St. Louis city, north -- north
20· county, north county, as you head to the west, and
21· there's also an area at the very tip of south city
22· that goes into St. Louis County.· Those are identified
23· as environmental justice areas.· We've worked with
24· these in the past in trying to apply for grants from
25· the State of Missouri.· The idea is to take 10 percent
Page 27
·1· of the revenues, take all of the issues we know just
·2· in the environmental justice areas, do a benefit cost
·3· analysis of those and provide 10 percent of the funds
·4· to simply work down that list separately.· Finally,
·5· 10 percent going to identify regional issues.
·6· There -- not everything fits into all of these buckets
·7· or hits all -- everything that's out there.· So we're
·8· proposing to take 10 percent of the funds, use some
·9· kind of regional advisory committee.· Right now the
10· municipal league has indicated they'd be willing to
11· consider being that entity.· Pay 10 percent of the
12· funds and find out, is there something else storm
13· water related that we should really do, and not that
14· this is MSD's opinion, but just because these issues
15· have been brought up a couple of times, could we use
16· it to kick start buying homes out of floodplains.· Is
17· that a good thing to use this for?· Is it a good thing
18· to increase the amount of grant money to local
19· municipalities?· Any of these would be acceptable.
20· The idea is to have a regional group get together and
21· say, what's missing, what's a real priority that's not
22· captured by these other programs or need to be kick
23· started, and let's provide the other 10 percent of the
24· funding to those.· The wastewater side, again, the
25· current program's value at $7.2 billion for the next
Page 28
·1· four -- four years.· We're planning on starting
·2· another $1.5 billion worth of projects.· The proposal
·3· in front of the ratepayers is the same as they've seen
·4· in the past.· Either we pay for that $1.5 billion over
·5· the next four years just using cash or the public can
·6· decide whether or not to provide additional bonding
·7· authority to MSD to borrow money to help pay for some
·8· of it.· It's very similar to the same decision
·9· everybody makes around a house or a car.· If you buy
10· one of those two with cash, you don't have interest
11· payments.· If you borrow money, cost you less now, but
12· you end up paying for longer period of time including
13· interest.· So what does that look like?· You can look
14· at the screen or I think everybody's been handed this
15· sheet.· It's a chart that every -- if you've seen it,
16· if you've been through it with us, through this
17· process since 2003, you've seen this chart before.
18· This is the impact or this is what will be presented
19· to the voters on the wastewater side.· The left-hand
20· side in green is what will happen to rates assuming
21· the public agrees to an additional $750 million in
22· bonding authority.· You go down the left-hand side, in
23· 2025, and what you can do is, take your August bill,
24· that you're receiving this month, and you can do this
25· calculation.· 2025, if bonds are approved, rates would
Page 29
·1· go up 7 percent.· In 2026 -- monthly charge will go up
·2· 7 percent.· The monthly cost in 2026 will go up
·3· 7.6 percent, then 7.5 percent, then 6.6 percent.· Just
·4· to the right of that is the monthly charge for the
·5· average MSD customer.· Not everybody is average.· Most
·6· people aren't average, but those numbers kind of give
·7· you a sense of context about what would happen to that
·8· monthly cost.· Again, if you want to see what's really
·9· going to happen to your bill, take the column on the
10· left, take your August bill, and you can multiply it
11· by those percentages to see, assuming your water usage
12· is the same, you can use that to determine what will
13· happen to your bills in the future.· The right-hand
14· side assumes the public decides not to provide
15· additional bonding authority to MSD.· In this case,
16· we're simply paying cash for the work as it comes up.
17· The first year would result again using your August --
18· this August bill, 35 -- a little over 35 percent
19· increase in 2025, a little over 35 percent increase
20· again in 2026, but 20 percent decrease in 2027, and a
21· 5 percent increase in 2028.· Again, you're paying for
22· cash.· So as the costs come in, the rates are set in
23· order to bring the cash in to do the work on an annual
24· basis.· A few things I want to mention on this chart,
25· the chart on the left indicates the increases for
Page 30
·1· those who have metered water usage.· In the city of
·2· St. Louis, MSD has a lot of folks who are paying their
·3· water bill unmetered.· The city of St. Louis water
·4· will take the attributes of your home, this being
·5· number of bathrooms, number of bedrooms, other rooms.
·6· They'll take those attributes, and they will assign a
·7· charge to them, and that's the way you pay your water
·8· bill.· MSD is required to use the same billing system
·9· that's used by the local water providers, so we also
10· provide a billing system based on attributes.· MSD
11· signs a flow to each one of those attributes.· That's
12· how folks who are unmetered in the city of St. Louis
13· get billed.· If -- if they get -- if they get a meter,
14· they will then have the meter charge, if they want to
15· go to that expense.· But what we do is, we do a -- we
16· do a study.· We consider a study every four years to
17· see whether or not the flows we have assigned to the
18· attributes are accurate.· We did a study this year, so
19· if you are in the city as an unmeter residential
20· customer, if you look at that left-hand column, all
21· assume bonds were approved.· The first year you will
22· not see a 7 percent increase.· You'll see a .8 percent
23· decrease in your monthly charge.· That's to reflect
24· the new data that we've gathered as part of the study
25· that's been done that's part of this rate proposal.
Page 31
·1· The other three years, 2026, 2027, and 2028, those
·2· increases will be correct.· The other part is, it's an
·3· important part of this whole structure, is our
·4· customer assistance program.· For those individuals
·5· whose household income is less than two times the
·6· poverty level by submitting to MSD, you can have your
·7· rates, your monthly charge cut in half.· If you are
·8· elderly, if you're 62 and over, on that as well, and
·9· you are less than two and a half times the poverty
10· level, you can submit to MSD, and your rates will also
11· be cut in half for that period during that time.
12· Mr. Chairman, that is the end of the presentation.
13· · · · · · · CHAIRMAN:· Thank you, Mr. Holsher. I
14· appreciate that.· Rate commission staff, you have the
15· list of those people who are presenting to speak.
16· · · · · · · UNIDENTIFIED MALE:· (Inaudible) chair.
17· We've got at least seven speakers who have signed up
18· this morning (inaudible) requested to (inaudible).
19· · · · · · · CHAIRMAN:· Let me remind the folks from
20· MIEC that this is the public comment period, not the
21· closing statement.· There will be time later on in the
22· proceedings for the closing statement from MIEC.· So
23· will the parties entered in MIEC come forward, and I
24· will start the 10-minute time.
25· · · · · · · MIKE CORBIN:· Thank you.· Good morning.
Page 32
·1· · · · · · · CHAIRMAN:· Please announce your name and
·2· we'll go ahead and start.
·3· · · · · · · MIKE CORBIN:· Thank you.· Good morning,
·4· rate commissioners.· My name is Mike Corbin.· I'm a
·5· consultant for MIEC.· I'm also a customer of MSD.
·6· MIEC has participated in MSD rate cases in well over
·7· 20 years, before the consent decree capital program
·8· began.· Over that time period, we have been deeply
·9· concerned about the MSD's ability to make necessary
10· capital improvements to both keep environmental
11· requirements, entity rates as competitive and
12· affordable as possible.· Wastewater rates are critical
13· for St. Louis businesses to maintain a balanced and
14· competitive position so that they can compete in their
15· own marketplaces.· Over the last 20 years, I would
16· note that we have major concerns about the consent
17· decree capital program.· We're very pleased to hear
18· from the MSD staff that the capital program is on
19· budget and on (inaudible) now more than two-thirds of
20· the way into this capital program.· We believe MSD
21· staff should be commended for that achievement.· It is
22· very much appreciated by their industrial customers,
23· and I'm sure, all customers alike.· One difference we
24· do have at MSD in this case, and we've had it in
25· previous cases, is the level of profit they're
Page 33
·1· proposing to include in their rate schedules.· What I
·2· mean by that is, it's not that they're making profit
·3· to pay shareholders, but they're making profit to fund
·4· pay as you go.· Funding source for capital programs.
·5· It also produces what is referred to as a debt service
·6· covered level on the amount of debt they issued in
·7· order to fund their capital improvements.· So it is a
·8· profit level, and it is proper to describe it that
·9· way, but I want to be clear.· It is money that MSD
10· collects to reinvest in the system to minimize their
11· use of bond investments which helps manage their cost
12· to service, but the issue I take with the amount of
13· debt service coverage or profit level, MSD is
14· proposing in this case is the same issue we've had
15· with MSD in every rate case over the last 20 years.
16· They're asking for too much profit.· Too much coverage
17· of their debt service obligations.· And that is
18· creating an unnecessary rate burden on their
19· customers.· What I'm referring to here, I want to be
20· clear, I'm referring to the wastewater rates, not the
21· storm water rates, which we were just going over, so.
22· Please let me make that clear.· Under the company's
23· proposal, pardon me, under MSD staff's proposal, they
24· want to set rates with 40 percent of capital
25· investments being funded with rate revenue.
Page 34
·1· 60 percent being funded by debt proceeds.· That's a
·2· change from prior proceedings.· The amount of debt
·3· funding per capital programs was much larger.· And by
·4· using debt, the MSD makes these infrastructure
·5· investments, and then pays debt service on those
·6· issued bonds and that spreads the cost of those
·7· infrastructure investments over several generations of
·8· customers.· Several decades of customers that are --
·9· are receiving service from those infrastructure
10· investments, so use of debt funding helps spread the
11· cost of the infrastructure investments over many, many
12· generations of customers, and it is fair and
13· reasonable to those customers as they all receive
14· service from.· In this case, similar to the last case,
15· MSD is proposing to increase the amount of debt
16· service coverage.· The minimum debt service coverage
17· in setting rates up to 1.8 times.· Total debt service
18· and an excessive 2.5 times debt service on their
19· senior bond issuances.· In the past, the minimum debt
20· service has been around 1.6 times, and the debt
21· service on -- on senior bonds has been about 2.5
22· times.· I encourage that the rate commission to look
23· at your report from August the 2019 is the issue I
24· raise here is the very same issue in the last rate
25· case, and in every rate case over the last 20 years.
Page 35
·1· MSD's proposal to increase rates to produce adequate
·2· profit is unnecessarily inflating the increase in this
·3· case and unnecessarily imposing rate burdens on
·4· customers that are not needed for it to continue its
·5· successful effort to achieve the consent decree
·6· capital expenditure program on a timely manner on
·7· budget and manage rate of affordability as a priority
·8· to ensure protection of its customers.· In the last
·9· case in several -- every case before that, MSD was a
10· little critical of me by raising the same issue saying
11· that reducing that margin too thinly places the MSD's
12· bond rating at risk.· It was a legitimate concern to
13· raise.· It was speculation, but now we have 20 years
14· of evidence that demonstrates the -- the financial
15· structure underlying MSD's rate changes over the last
16· 20 years has been adequate to maintain its bond rating
17· and is stable in a predictable manner which preserves
18· its access to external bond markets under reasonable
19· terms and prices.· So there's no need to increase the
20· profit margin as MSD's proposed in this case and has
21· proposed in prior cases.· Again, in the rate
22· commission report, this issue is discussed thoroughly
23· by this rate commission, and the MSD staff's proposal
24· to raise the minimum debt service coverage to 1.8
25· times or 1.6 times was rejected by this commission.
Page 36
·1· Rates were not set at that level.· And despite that
·2· reduction in the planned revenue deficiency of the MSD
·3· staff, their bond rating has been maintained in a
·4· stable level.· And that is a very strong credit
·5· rating.· It's double A by Fitch and Moody and triple
·6· A'd by Standard & Poor's which is among the most
·7· strongest credit ratings of utility companies in the
·8· country, so it's very strong credit standing, and an
·9· increase in that coverage is simply not cost
10· justified.· So cost justification, rate of
11· affordability, that's been a -- a primary concern of
12· this rate commission in prior cases, and I encourage
13· you to make it a primary concern in this case in the
14· last case you discussed.· The -- the staff's proposal
15· to increase minimum debt service coverage ratio, the
16· profit level, and you rejected it saying the 1.6 times
17· minimum debt service coverage ratio has been adequate.
18· You were right.· Again, credit ratings have not been
19· downgraded.· The credit rating outlook is still stable
20· and the methodologies used to set an appropriate
21· revenue requirement for these utilities established in
22· prior cases has proven to be accepted by capital
23· market participants and -- and those ratemaking
24· standards have minimized increase in rates necessary
25· to allow the MSD to effectively fund its capital
Page 37
·1· program and through -- to achieve the great success
·2· it's had in managing this consent decree capital
·3· investment over the last several years.· Another area
·4· of concern -- well, one more factor I'd like to -- to
·5· press upon you and the need for rate of affordability.
·6· It's always necessary to -- to adjust rates, to manage
·7· rate of affordability of retail customers, but it's
·8· particularly necessary now as the -- the capital
·9· program that MSD is involved in right now is not the
10· only capital program that utility companies are
11· involved in, in Missouri in this service territory.
12· Ameren Electric Company is involved in very large
13· capital programs to reduce carbon emissions to build
14· out transmission investments in order to have more
15· vibrant wholesale market activities, all of which are
16· designed to ensure system reliability for electric
17· customers and provide high quality reliable service,
18· but those investments are driving up electric rates.
19· Spire Gas System is also making very large capital
20· improvements because the delivery of gas has changed
21· dramatically over the last 20 years as well as a need
22· to modernize their delivery infrastructure, but
23· they're also now providing gas service to a lot of
24· electric generation which had not been part of their
25· marketplace in years.· So Spire delivery rates are
Page 38
·1· also going up.· Both the city of St. Louis and
·2· Ameren -- or American Waterworks are making
·3· investments to modernize their water collection
·4· systems which are driving up their rates.· All of this
·5· means electric, gas, water, and wastewater rates are
·6· all increasing.· Those rates have to be paid for by
·7· households and by businesses.· They are impacting the
·8· bottom line, and I also want to -- want to emphasize
·9· that this impact on affordability of utility services
10· is now being recognized by credit rating agencies.
11· Standard & Poor's, Moody and Fitch have all started
12· noting rate of affordability as being an important
13· ingredient in determining a financial integrity and
14· credit standing of utilities.· In extent, utility
15· rates gets so expensive the customers can't afford to
16· pay their bills.· The financial integrity of the
17· utility that credits standing of the utility will
18· erode.· So rate affordability, this board has
19· recognized in the -- in the past is still an important
20· factor, and we can -- we encourage you to consider
21· adjusting the rate filing in line with -- with what --
22· that which you have done in the past.· Simply
23· adjusting the --
24· · · · · · · CHAIRMAN:· That completes the 10 minutes.
25· I will ask you to hold the rest of your comments from
Page 39
·1· MIEC during closing argument in deference to those
·2· other folks that are here.· Thank you.
·3· · · · · · · UNIDENTIFIED MALE:· Thank you very much.
·4· · · · · · · CHAIRMAN:· Ms. (Inaudible).
·5· · · · · · · MR. MCCOMB:· Mr. Chair, the next speaker is
·6· Sheila Davis.
·7· · · · · · · CHAIRMAN:· Ms. Davis.· Please -- please do
·8· me a favor in stating your name, and if you represent
·9· any organization (inaudible).
10· · · · · · · SHEILA DAVIS:· My name is Sheila Davis.
11· And I represent (inaudible) Louis Place (inaudible)
12· Committee.
13· · · · · · · CHAIRMAN:· Thank you.· Please (inaudible).
14· · · · · · · SHEILA DAVIS:· Good morning.· I am a senior
15· citizen and a resident of Fountain Park living in the
16· house that my grandmother bought in 1940.· It has been
17· six generations of my family there.· I have seen my
18· house use coal heat, oil heat, and now gas heat, and I
19· need some home repairs to restore my home.· My utility
20· bills are so high I cannot afford it.· Being on a
21· tight budget is like energy is a basic need.· I'm
22· 73 years old, a single homeowner, and still working a
23· full-time job, employed by the city of St. Louis for
24· 18 years.· I'm afraid to retire because there will not
25· be enough money to pay all my bills.· So it's all on
Page 40
·1· me to manage my house (inaudible) and trying to keep
·2· up and maintain my property.· It would hurt if there
·3· was an increase in utility rate.· I may have to move
·4· out of my home, that I have been in most of my life,
·5· grew up there, and raised my family.· Take into
·6· consideration of what an increase in metropolitan
·7· sewer rate would do.· I love my home, my community,
·8· and the people that live in it.· An increase in MSD
·9· rates would impact me and my neighbors.· The high cost
10· of utility rate can force people out of their home
11· when paying for rent, medicine, groceries, gas, tax,
12· and gasoline.· There is hardly anything left for
13· utility.· There should be some type of support for low
14· income family.· MSD should have a program for that
15· that helps homeowners with liens on their property.
16· Liens on property is a problem.· There needs to be
17· some type of relief so people do not have to lose or
18· sell their home because of the increase of utility
19· rates and liens on property.· Many people feel
20· despair.· Help the best of St. Louis to stay in their
21· home, and I live on a corner house, and there are
22· four -- no.· There's three sewers on that corner, and
23· when we had the main flood a few months ago, those
24· sewers filled up and I had water came into my front
25· yard, my backyard, and it looked like a waterfall, but
Page 41
·1· MSD said it wasn't their problem.· So I don't know
·2· whose problem it is.· And on the behalf of Fountain
·3· Park and Louis Place (inaudible) Committee, this is my
·4· rate increase story.
·5· · · · · · · CHAIRMAN:· Thank you very much.· We really
·6· appreciate you making the time to help inform the rate
·7· commission of your concern.· Thank you very much,
·8· Ms. Davis.
·9· · · · · · · MR. MCCOMB:· Mr. Chair, the next speaker is
10· Sandra Padget.
11· · · · · · · CHAIRMAN:· Ms. Padget, state your name and
12· if you represent any organization.
13· · · · · · · SANDRA PADGET:· My name is Sandra Padget,
14· and I represent Consumers Council of Missouri.· We're
15· a nonprofit that work to level the playing field for
16· Missouri consumers, and we focus especially on the
17· needs of people who have low and moderate income.
18· Thank you so much for giving me another opportunity
19· to -- to address you.· I did appear at your hearing in
20· Chesterfield, and I believe that Mr. Gaas was there,
21· and he was very gracious.· I submitted a statement
22· that had been told that had been made part of your
23· record, and I appreciate your consideration.· Since
24· that time, I've been made aware of Mr. Gorman's
25· report, and I'd like to say that Consumers Council
Page 42
·1· shares its concern about the split of this increase
·2· between the ratepayers and the debt service.· It's our
·3· understanding that the 30/70 split has worked well in
·4· the past, that the current proposal has a 40/60 split.
·5· As you heard from Ms. Davis, people are really
·6· suffering.· We have -- we all know that Ameren has put
·7· in place the 7 percent increase, Spire a 5 percent
·8· increase, Missouri American Water, a 7 percent
·9· increase, the city of St. Louis just approved a
10· 44 percent increase over this next year.· So it's
11· really going to be hard for consumers to keep up with
12· this.· And Mr. Gee (phonetic) has been so nice.· We
13· met with him very, very quickly after the last
14· meeting, and we look forward to working with him to
15· put together an even better customer assistance plan,
16· but really my point in being here today is to
17· encourage you to -- to go back to that 30/70 split and
18· not burden the ratepayers with the 40/60 split.· Thank
19· you very much.
20· · · · · · · CHAIRMAN:· Thank you very much for taking
21· time to help us keep informed.· Mr. McComb (phonetic).
22· · · · · · · MR. MCCOMB:· Mr. Chair, the next speaker is
23· Glen Burleigh.
24· · · · · · · CHAIRMAN:· Glen Burleigh.· Mr. Burleigh.
25· Mr. Burleigh, please state your name and if you
Page 43
·1· represent any organization, the same.
·2· · · · · · · GLENN BURLEIGH:· Yeah.· My name is Glen
·3· Burleigh.· I live in the Marine Villa neighborhood of
·4· south city, and I'm here on behalf of my employer,
·5· Metropolitan St. Louis Equal Housing and Opportunity
·6· Council today.· So first off, thanks for giving me
·7· some time to address the commission.· Like I said, my
·8· name is Glen.· I work for Equal Housing and
·9· Opportunity Council.· A lot of people know us as
10· acronym EHOC, so we're the area's fair housing
11· enforcement nonprofit.· That means we're a contractor
12· with HUD, and we provide fair housing investigation,
13· education, and enforcement activities in communities
14· on both sides of the river.· So as an agency, we work
15· both on individual fair housing complaints, but also
16· at -- on systemic issues that perpetuate races and
17· racial disparities and housing and neighborhood
18· investment.· In my years of community work, one pretty
19· constant issue that has come up as a barrier to
20· redeveloping properties in this -- in disinvested
21· communities are the liens that have been previously
22· mentioned.· So what we often see is that the -- these
23· are an unpleasant surprise when folks' family members
24· die, and it becomes time to deal with the property and
25· the estate, and then you find out that it turns out
Page 44
·1· that payments haven't been made on the property, and
·2· there's a sizable MSD lien.· So what often ends up
·3· happening is the family -- the estate is not capable
·4· of paying off the lien.· It does not get sold.
·5· Eventually, tax bills pile up on it and often times
·6· there's the (inaudible) maintenance issues that
·7· happen, again, because there's no clear title and
·8· nobody's able to accept it and move on within the
·9· family due to probate issue.· And then that house ends
10· up on (inaudible) roles; right?· And so in -- so then
11· the city ends up, you know, with another vacant
12· property that's generating zero tax revenue; right?
13· And this has just been a regular issue that we've seen
14· in neighborhoods especially in north St. Louis for a
15· long, long time, and you know, this -- this cycle
16· harms families, and it harms the city's, you know,
17· finances, et cetera.· And so just because while this,
18· you know, we think that all these issues are only
19· going to become worse as we continue to increase
20· rates, right?· And as has been mentioned by other
21· speakers, you all certainly are not the only utility
22· that has been seeking significant increases.· As a
23· city ratepayer, you know, my water bill just went up
24· significantly; right?· And this would be another, you
25· know, utility bill that would go up significantly.· So
Page 45
·1· we're asking that the commission decline to seek such
·2· large increases in rates.
·3· · · · · · · CHAIRMAN:· Thank you very much.· We
·4· appreciate you coming.· Mr. McComb.
·5· · · · · · · MR. MCCOMB:· Mr. Chair, the next speaker is
·6· Matthew Sissle (phonetic).
·7· · · · · · · CHAIRMAN:· Matthew, please state your name
·8· and any organization you may represent.
·9· · · · · · · MATTHEW SISSLE:· Will do.· Good morning.
10· My name is Matthew Sissle.· I'm the president of the
11· Ellendale Neighborhood Association which is located in
12· the city of St. Louis at the confluence of Deer Creek
13· River to Bear.· One year ago from three separate heavy
14· rain events over a span of approximately ten days in
15· late July and early August of 2022, properties on
16· Queen Street, Hermitage Avenue, Odell street,
17· Canterbury avenue, and Fairmont Avenue in our
18· community experienced both severe overland flooding,
19· approximately eight to 10 feet high in some areas, and
20· extreme sewer backups, and in some cases completely
21· submerged full basements of homes and businesses,
22· including homes and businesses on Southwest Avenue,
23· McCausland Avenue and Magnolia Avenue, the resulting
24· displacement of approximately 30 households, some of
25· whom still have not been able to return to their
Page 46
·1· homes, required intervention by local, state, and
·2· federal emergency management agencies.· This was not a
·3· unique or isolated incident or unique occurrence.
·4· Over the past 10 years, there have been three major
·5· flooding and sewer backup events affecting the
·6· Ellendale neighborhood.· What was different last
·7· summer was the severity and the height of the water
·8· and raw sewage.· Low lying areas like the Ellendale
·9· neighborhood throughout St. Louis city and county
10· which are located adjacent to and along rivers,
11· creeks, and streams have been placed at greater and
12· higher risk of loss of life and loss of property due
13· to projects that increase impervious surfaces from
14· entities such as MoDOT and municipal governments and
15· also because of those projects that increase the
16· volume and speed of storm water into our floodplain
17· such as those recent project clear infrastructure
18· improvements by MSD (inaudible) Deer Creek.· At
19· several community meetings board of trustees meetings
20· October 2022 and Ellendale community meeting on
21· November of 2022, and also public -- city board of
22· aldermen public safety committee meetings, MSD staff
23· seemed to acknowledge these increasing risks and
24· hazards and indicated that future MSD sewer rate
25· increases such as this one currently proposed could be
Page 47
·1· used for targeted and voluntary buyouts in high risk
·2· communities that are routinely subjected to flooding
·3· and sewer backups, so thank you, Mr. Holsher, for
·4· including that in your presentation.· I do
·5· respectfully ask that the board of directors allocate
·6· significant resources to help at risk residents
·7· relocate to safer housing areas.· Additionally, I hope
·8· that MSD will consider its impact on existing and
·9· established neighborhoods when planning and designing
10· future infrastructure improvements in the region.
11· Thank you for your time and consideration.
12· · · · · · · CHAIRMAN:· Thank you very much.
13· · · · · · · MR. MCCOMB:· Mr. Chair, the next speaker is
14· Patricia Sherman.
15· · · · · · · CHAIRMAN:· Patricia Sherman.
16· · · · · · · PATRICIA SHERMAN:· My name is Patricia
17· Sherman.· I'm an individual living in the central area
18· of St. Louis city.· I just have to make this comment
19· because it has bothered me for years the fact that MSD
20· covers the city of St. Louis, and this enormous area
21· of St. Louis County should never have been in the
22· first place.· We are in the city, penalized for
23· everything that's an expenditure of the -- of the
24· necessary storm water and wastewater systems with
25· that -- be that as it may, I just have to vent that a
Page 48
·1· little.· This is -- the rest of this is not a vent. I
·2· represent a number of people in my situation.· I'm
·3· 81 years old, but that really doesn't even matter.
·4· The fact is, I'm a single person living in an old
·5· house.· This house happens to have four water closets
·6· and eight rooms and because of the billing based on
·7· attributes, my bill for the water every month is $62.
·8· My bill for MSD is $130 a month.· This is outrageous.
·9· It doesn't make any sense.· There have to be some ways
10· of changing this system.· I'm told, well, I could be
11· on a -- on a meter.· The meter costs, I understand,
12· close to $4,000.· So this is out of the question.· The
13· whole rating system is wrong for people in my
14· situation, and also the individual who spoke just
15· recently, so this profit issue that was brought up has
16· also been criticized with every rate increase request.
17· I have to agree that there must be something wrong
18· here with this profit, and if that's the only thing
19· that can be adjusted at this time, then that needs to
20· be adjusted.· Thank you.
21· · · · · · · CHAIRMAN:· Thank you very much.
22· · · · · · · MR. MCCOMB:· Mr. Chair, the next speaker is
23· Tammy Kate.
24· · · · · · · CHAIRMAN:· Ms. Kate.
25· · · · · · · TAMMY KATE:· Hi.· My name is Tammy Kate. I
Page 49
·1· live in the (inaudible) Neighborhood Association and
·2· (inaudible) Place Neighborhood, period, and the
·3· previous speaker (inaudible) everything that I wanted
·4· to say.· I am a senior who bought my home in 1985, a
·5· young person at the time, that was the goal, but
·6· continue to pay for this home a hundred times over,
·7· taxes, taxes, taxes, and they're constantly going up.
·8· And now you want to propose putting another $25 onto
·9· my personal property taxes and charge outrageous rates
10· for me to flush the toilet.· I live, as she does -- I
11· have a huge home.· I have three water closets.· I use
12· one.· Maybe in a rush I use the one downstairs.· Who
13· knows.· I -- I wash only once every two months because
14· of the water -- how much I'm being charged for
15· everything.· It maybe, should be accountable that if I
16· live alone, as she does, we have three water closets,
17· nine rooms, was blessed (inaudible) with no one else
18· in my home.· Now, I only had one child.· I don't use
19· the sewer that -- like that, and I don't think I
20· should be charged for it.· Maybe you said instead
21· of 50 percent discount, maybe it should be 75 to
22· 85 percent for people who live alone who just happen
23· to have three water closets or four, in her case, with
24· everything, the water, sewer, electric, gas going up
25· (inaudible) out of living.· I'm 66 years old and
Page 50
·1· trying to make it on my social security.· As
·2· Ms. Sheila Davis stated, 71-year-old, and still
·3· working a full-time job just to pay for our utilities,
·4· our personal property taxes, real estate taxes,
·5· everything, don't try to buy a -- just keep the one up
·6· that you have, the -- so the rates are continually
·7· going up when my social security is not.· So please
·8· consider or maybe a new program for people who live
·9· alone who just happen to have bought a home back in
10· the '80s or '70s or '40s that we're still maintaining,
11· but we can't -- for you to go up for me to flush the
12· toilet, higher than the water that's coming in, which
13· I never understood anyway, the water can come in, but
14· it has nowhere to go out unless you charge me to let
15· it out.· You charging me to bring it in.· You're
16· charging me to let it out.· Consider single seniors
17· who live alone in a big old home with lots of toilets
18· where we only flush one.· I bet you one a day.· I'm
19· out most -- I'm at work.· I flush their toilets.· But
20· please, please consider -- consider lowering that for
21· us, seniors, individually, on an individual basis. I
22· live alone, so it's not a lot of people using those
23· facilities.· Thank you.
24· · · · · · · CHAIRMAN:· Thank you very much.
25· · · · · · · MR. MCCOMB:· Mr. Chair, the next speaker is
Page 51
·1· Pat Miller.
·2· · · · · · · PAT MILLER:· Good morning.
·3· · · · · · · CHAIRMAN:· Ms. Miller, good morning.
·4· · · · · · · PAT MILLER:· I am from the Louis Place
·5· (inaudible) Park Area, and I live at 1117 Bear, and I
·6· also am a senior, and my statement is about MSD's
·7· communication skills and services that they provide
·8· for us.· I never see MSD in my neighborhood.· MSD is
·9· not a resource, as you stated.· When people call,
10· Ms. Davis stated she called, we already know where we
11· live, we already know that's our problem, but we come
12· to MSD to give us some help, and that's not what we
13· receive who we call.· MSD provides service, our
14· considers all part of the family, but it seems like
15· when we call to get something done, we become the
16· adopted child.· And we're left out there to figure it
17· out for ourselves.· And I know (inaudible) far and
18· marginalized what is MSD doing to take care of the
19· people that -- in that category?· I don't remember my
20· sewer being clean.· Like I say, I never seen a truck
21· or anything in my neighborhood, and I would be
22· interested in MSD showing us how they take care of
23· what they consider the marginalized people, so I --
24· we're here now because of the rate increase, but I see
25· this as an opportunity for the commission to look at
Page 52
·1· us and look at fellow citizens, fellow human beings
·2· trying to live a decent life, and we look at MSD as a
·3· resource, and it's not a resource.· It's a bill for
·4· us.· And so we would like for them to become more
·5· sensitive, have somebody we can call.· If you can't
·6· help us, give us a resource, but don't just cut us off
·7· at the knees and not being willing to help us, and I
·8· thank you for this opportunity.
·9· · · · · · · CHAIRMAN:· Thank you very much.· Thank you.
10· · · · · · · UNIDENTIFIED FEMALE:· (Inaudible).
11· · · · · · · CHAIRMAN:· You will have an opportunity to
12· make your closing statement as part of the procedure
13· so, yes, you will have a chance (inaudible).
14· · · · · · · UNIDENTIFIED FEMALE:· (Inaudible).
15· · · · · · · CHAIRMAN:· It will become part of the
16· record.
17· · · · · · · UNIDENTIFIED FEMALE:· Sorry to interrupt.
18· · · · · · · MR. MCCOMB:· Mr. Chair, Margaret Williams
19· listed herself as maybe.
20· · · · · · · CHAIRMAN:· Ms. Williams.· Good morning.
21· · · · · · · MARGARET WILLIAMS:· Good morning,
22· Mr. Chairman, and others who are present with us
23· today.· My name is Margaret Williams.· I live in the
24· Fountain Park Neighborhood.· I work as a part of the
25· Fountain Park Louis Place Community Organization.· And
Page 53
·1· I first want to just say that our neighborhood, like
·2· several others throughout the city, experienced a
·3· great deal of flooding about a year ago, and that --
·4· in two of the most (inaudible) and literally helping
·5· people out of cars was at Page and -- Page and Evans,
·6· and throughout the neighborhood of the street of Louis
·7· Place.· And that's a part of the motivation that I
·8· have here today, but I'm going to focus more on
·9· preventative because the -- to me, sometimes and
10· particularly, as a teacher, before I retired, the goal
11· was to help students and to do as much preventative
12· kinds of service to those students that we faced as
13· much as to work with problems when they arise, so I
14· will read my statement.· It is easy for all of us to
15· understand that prices are going up for Metropolitan
16· St. Louis Sewer District like they are for all of the
17· rest of us and that financial pressures are
18· particularly difficult for those who have small
19· incomes and for seniors whose incomes are steadily --
20· are -- is not receiving any kinds of increase.· One of
21· the sources of increase of expenses for our limited
22· finances are our utilities.· In addition, we do not
23· see utility workers in our community even after
24· experiencing problems related directly to those
25· specific utilities and that's inclusive of MSD.· It is
Page 54
·1· upsetting, and it angers us that we have to call,
·2· call, ask for help, beg for help, in order to get even
·3· the slightest bit of attention, even though
·4· proportionally we pay much more than many people in
·5· our community, in our city at large.· I asked
·6· neighbors this weekend if they have observed any MSD
·7· workers cleaning out our sewers, since our homes were
·8· flooded last -- last summer.· The replies were all
·9· negative except for one person who said there were
10· some trucks on Page and Waldon.· They were parked.· It
11· looked like they were getting ready to clean it out.
12· They sat there.· They chitchatted in and out of the
13· trucks, and then the two trucks and the workers
14· started up the trucks and drove off.· They never did
15· anything to the sewer there at Page and Waldon.· We
16· had a smaller flooding incident down the street, but I
17· then ask, did you see them go down, maybe they went
18· down on Evans where the water had gotten very deep and
19· cars were lost because of the flooding, and they said,
20· nope, they just kept on going.· They never stopped.
21· Yes, I am sure that the debris that should not be in
22· the sewers gets into the systems from citizens who
23· drop trash on our streets and in our alleys.· And our
24· community in the Fountain Park Louis Place Community,
25· we work diligently periodically throughout the year
Page 55
·1· having clean-up events and pick-up events getting rid
·2· of things that are dumped on our streets and
·3· properties that are dumped in our alleys.· Those of us
·4· in the community who are doing all we can when -- in
·5· order to maintain our community get very upset when we
·6· don't see any preventative measures being taken by
·7· metropolitan sewer; yet, we're hearing now that you
·8· want more money from us.· No.· MSD has not earned the
·9· right, in my perspective, to get in the increases
10· asked for and to ask -- to burden the citizens of our
11· community and those throughout the St. Louis
12· metropolitan area.· These expenses especially hit on
13· seniors and people of low income.· Now part from my
14· notes here, because I sat and listened to someone
15· talk, and you can tell me -- someone can correct me if
16· I'm mistaken, but I think I heard this person -- the
17· gentleman who was speaking earlier say that if a
18· person has an income that is less than two times the
19· poverty level, holy Toledo, then they would be
20· eligible or 2.5, if they were seniors to get help.
21· That's a tremendous amount.· The second thing that is
22· not on my notes here is the -- interesting to listen
23· to, I had no -- I knew it costs a great deal to get a
24· meter, but that cost -- that cost have to be a huge
25· amount of money for those of us who have a -- an
Page 56
·1· income that does not rise, because we are retired or
·2· people who have very low incomes, so we can't make
·3· adjustments for our older homes.· I want to thank you
·4· today for allowing me to read my notes, and I tried to
·5· summarize.· I really thought about a whole lot of
·6· things, but I thought that, perhaps, talking about
·7· preventative measures, things that are small, that can
·8· be done all along, and we need to see MSD at our
·9· meetings.· This is what we're doing in your community.
10· We did this on this date and that date.· People in our
11· community are pretty vocal.· They will speak up, and
12· say, yes, a truck was there or they'll say, no, no
13· truck was there.· So let's do some preventative things
14· that will cut down on your costs some.· Thank you for
15· this opportunity.
16· · · · · · · CHAIRMAN:· Thank you very much.
17· · · · · · · MR. MCCOMB:· Mr. Chair, Norman Ross is our
18· next speaker.
19· · · · · · · CHAIRMAN:· Mr. Ross.
20· · · · · · · NORMAN ROSS:· How do you do?
21· · · · · · · CHAIRMAN:· Thank you, Mr. Ross.
22· · · · · · · NORMAN ROSS:· I live in the Fountain Park
23· Louis Place Neighborhood.· I moved there in 1980s, and
24· at that time I believe the -- I believe, if I'm
25· correct, the -- my bill -- MSD bill was $11 a month.
Page 57
·1· And I am trying to figure out, and I want to research
·2· this, what happened -- the rise, how did that take
·3· place, and what's the basis of this inflation,
·4· what-have-you.· Is the commission or the MSD
·5· organization, are they committed to shareholders, the
·6· returns of shareholders, is that what causes the
·7· inflation, is that going to be forever, would there be
·8· a time when I have to pay over $200 for, you know, the
·9· service and what-have-you, the sewer service.· These
10· are things that like, I'm concerned about.· I need to
11· research them, and I -- I'm wondering if the community
12· needs to research other models of how we deal with
13· deflation, deflation strategy, in our sewer bills and
14· our electrical and what-have-you.· Would a -- a
15· process or a model where there's a for profit business
16· cooperative, where the households are the ones that
17· the commission has to, you know, work with and work
18· with, what are their returns, more concern about those
19· concerns, where the households, the residents
20· literally own the -- you know, the whole process or
21· are there other programs as a senior citizen, I'll be
22· 20 -- I'll be 76 years old on the 20th of this month.
23· So I'm on a fixed income, and I'm very concerned about
24· all of the inflation items that -- that I'm subjected
25· to and what-have-you.· So my concern is more or less,
Page 58
·1· are there other models or deflation strategies that
·2· MSD could pursue and what-have-you.· You do have a
·3· senior citizen program, which I participate in, and
·4· I'm wondering, my concern is for other residents that
·5· are impoverished and have needs and what-have-you,
·6· those programs, you know, how can -- how can the
·7· deflation strategy help people who literally can't
·8· afford, you know, these rising costs and
·9· what-have-you.· And my concern is, for the future,
10· what is a strategy?· What is a deflation strategy that
11· lowers or is that impossible or are we -- do we have
12· to move toward where there's a depression that changes
13· everything?· So my concern is, what possibly could
14· that strategy be?· Thank you very much.
15· · · · · · · CHAIRMAN:· Thank you very much.
16· · · · · · · MR. MCCOMB:· Mr. Chair, as a point of
17· clarification, the 10:30 a.m. deadline was set for
18· online, e-mail, phone call feedback, and just so
19· everyone is present and knows, we have received two
20· e-mails, two voicemails, at least two voicemails in
21· response to this morning's testimony.· We'll share
22· that with appropriate staff to make sure that's of
23· public record.· That being said, we got through our
24· speakers that are signed up.· But then you're
25· purviewed to ask for anybody who has not signed up.
Page 59
·1· · · · · · · CHAIRMAN:· Thank you, Mr. McComb.· Is there
·2· anyone else present that would like to speak who has
·3· not already done?· Please approach the microphone.
·4· · · · · · · CARRIE ANN KIRKLAND:· Good morning.· My
·5· name is Carrie Ann Kirkland (inaudible) and I live in
·6· the Fountain area also.· Now I'm here for the first
·7· time so I didn't know exactly what to expect, so I did
·8· write something down just to get ahead.· I want to say
·9· this.· It seems to me that there's something missing.
10· I don't know if it's a Co-Op or how you can work it
11· out, but it seems like that we're missing a -- a group
12· of people, not just the seniors, but I really respect
13· that they -- these are who represented our area, and
14· there's so many other people in our area that should
15· be here.· But regardless of that, I want to say this.
16· That no matter whether independent living, we're
17· trying to keep our people together.· We're trying to
18· keep our community together, just like everybody else
19· and that means we have to consider how much we're
20· charging.· Now I know that big businesses is way
21· bigger than I am, so I don't really know how it works.
22· I know I pay my bills as much as I can.· When I can't,
23· I have to figure out a new way.· The cash way seems
24· better, because it won't be that big of a deep thing
25· so long, but I'm going by loans that I had to make
Page 60
·1· just to keep my own self afloat.· My husband died last
·2· year.· We moved into our house.· Two months later he
·3· was gone.· So a lot of things I'm juggling here, and
·4· I'm glad that I got an opportunity to speak, because I
·5· know it's a lot of other younger people than I am. I
·6· am 62, and so we have a lot of people that's younger
·7· than I am that have kids and things, and they're
·8· trying to survive.· They're trying to keep their homes
·9· in our community.· And we don't want things that's
10· going to drag them right out and all these big bills
11· are going to drag us out, and it's going to be more
12· empty houses.· No people are going to be there.· There
13· won't be no money to get, so we've got to find a
14· common ground.· Thank you.
15· · · · · · · CHAIRMAN:· Thank you very much.· Are there
16· any other persons here who have not spoken who
17· (inaudible) do so at this time?· Hearing none, I think
18· on behalf of all the commissioners, I think I speak
19· for all of them to thank everyone both online, on the
20· phone, and everyone who is here, personally.· Our goal
21· is to obtain as much public input as a representative
22· (inaudible) across the St. Louis community to get as
23· much public input as we can before we start our
24· deliberations, and it is extremely important for you
25· to be here and I, for one, really, really appreciate
Page 61
·1· the time, the effort, the prepared remarks.· You just
·2· didn't show up here.· You obviously put a lot of
·3· thought into it, and I truly, truly appreciate it.
·4· Thank you all very much.· Hearing that, I would like
·5· to take a 10-minute break before we move onto our
·6· procedural and evidentiary aspects of this public
·7· hearing, so we will take a 10-minute break and
·8· reconvene at 10:45.
·9· · · · · · · (Inaudible conversation.)
10· · · · · · · CHAIRMAN:· Good morning.· We will come back
11· into sessions.· The break is over.· Again, I want to
12· thank members of the public, and everyone who is here
13· to provide their input and their participation.· We
14· will now proceed to the procedural and evidentiary
15· aspect of this public hearing session.· Who is here on
16· behalf of Metropolitan St. Louis Sewer District?· Who
17· is here on behalf of Intervenor Missouri Industrial
18· Energy Consumer?
19· · · · · · · UNIDENTIFIED FEMALE:· (Inaudible).
20· · · · · · · CHAIRMAN:· Also present are Lisa Stump and
21· Brian Malone of Lashly and Baer, legal counsel to the
22· commission.· Are there any procedural matters?· On
23· August 4th, 2023, the district transmitted a proposed
24· list of exhibits to the participants.· Is the district
25· to present that list to the members of the rate
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·1· commission?
·2· · · · · · · UNIDENTIFIED FEMALE:· Yes, we are.
·3· · · · · · · CHAIRMAN:· Does any participant wish to add
·4· additional exhibits?
·5· · · · · · · SUSAN MEYERS:· In the reg commission
·6· consultant will have additional, you know, the public
·7· comments that they received this morning via e-mail
·8· and phone message, those will be added this afternoon.
·9· · · · · · · UNIDENTIFIED FEMALE:· I think there's --
10· Susan, also, I think we -- it looks like we -- we will
11· have, obviously, the transcript from today, and then
12· it looks like the transcript from the August 1st,
13· prehearing conference is also not yet completed, so if
14· we could reserve numbers, and the rate commission
15· would accept those pending whenever they're completed.
16· · · · · · · SUSAN MEYERS:· The district has no problem
17· with that.· Yeah.
18· · · · · · · CHAIRMAN:· So those items just identified
19· will be included in the list of exhibits as proposed.
20· At this point, then, hearing no objection, all of the
21· documents that have been identified on the exhibit
22· list, and those just mentioned will be admitted into
23· evidence in this rate case proceeding.· The district,
24· the intervenor, and the legal counsel to the rate
25· commission shall each present closing statements, if
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·1· desired.· After each closing statement, the members of
·2· the rate commission will have an opportunity to ask
·3· questions.· I did receive a message earlier, so the
·4· rate commissioners who were -- who are online, we will
·5· be sure to include and unmute those rate commissioners
·6· who are online to ask questions at that time.· Is the
·7· district ready to present its closing statement?
·8· · · · · · · SUSAN MEYERS:· Yes, we are.
·9· · · · · · · CHAIRMAN:· Thank you, Ms. Meyers.· I guess
10· just go ahead from where you are is fine.
11· · · · · · · SUSAN MEYERS:· Okay.· Thank you.· Good
12· morning, commission.· On behalf of the district, I'd
13· like to thank each and every one of you for
14· participating in this rate setting process.· It really
15· is appreciated by the district.· As you have heard
16· numerous times, the proposal before you is both a
17· wastewater and storm water rate change proposal.· And
18· the task before you is to determine if this rate
19· change proposal submitted on March 24th, 2023,
20· complies with the five criteria outlined in the MSD
21· charter.· The district concludes that it does, and
22· this fact is supported by the record including the
23· testimony of district witnesses, rate commission
24· witnesses, and exhibits.· Without reiterating all five
25· criteria, I would like to emphasize that the rate
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·1· change proposal, as submitted by the district,
·2· consider the financial impact on all classes of
·3· ratepayers in determining a fair and reasonable
·4· burden.· Again, the information in the record will
·5· support this fact and is there for your reference.
·6· The wastewater rate change proposal proposes to
·7· increase rates an average of 7.2 percent over the
·8· four-year rate proposal period.· This rate structure
·9· follows the same perimeters as in the previous rate
10· proposals and will require a vote of the people to
11· fund a portion of the CIRP with bonds.· The district
12· plans to go to the voters requesting authority to bond
13· in April of 2024.· This is in addition to taking
14· advantage of additional loan and grant opportunities
15· that may become available.· If the voters do not agree
16· to funding authority, the pay go rate increase
17· schedule included in the wastewater rate change
18· proposal will be implemented.· The storm water rate
19· change proposal recommends the creation of a new storm
20· water capital program to be used to address flooding
21· and erosion control issues.· If this funding is
22· secured, then MSD would have funding for a complete
23· storm water program including regulatory services, O&M
24· services and finally to address flooding and erosion
25· issues.· The storm water rate, the allocation, and the
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·1· method being proposed by the district considered the
·2· financial impact on all classes of ratepayers in
·3· determining a fair and reasonable burden.· With that
·4· said, MSD staff continues to be very open to any
·5· proposed changes, municipal grant allocation chart as
·6· long as the following three objectives are met.· One,
·7· the distribution be driven by population.· Two, a
·8· minimum annual grant of $30,000 be made available to
·9· all municipalities regardless of population, and
10· three, annual grant amount not be determined by the
11· ever-changing exact population, but municipalities be
12· grouped with other municipalities of similar
13· populations to accommodate the management of the
14· program.· Exhibit MSD 91 was provided previously as an
15· example for the rate commission to work with, if
16· desired.· In conclusion, it is MSD's opinion that the
17· record before you supports the rate change proposal
18· meets all five criteria outlined in the charter and
19· specifically considered the financial impact on all
20· classes of ratepayers in determining a fair and
21· reasonable burden.· I urge you to review Exhibit MSD
22· 97 for much more detail and support.· Again, I would
23· like to thank you for your time and efforts put into
24· this rate setting.· This concludes my closing remarks
25· and a copy of this statement will be filed as exhibit
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·1· MSD 100.· Thank you very much.
·2· · · · · · · CHAIRMAN:· Thank you, Ms. Meyers.· Do any
·3· of the rate commissioners have any questions for
·4· Ms. Meyers?· Mr. Palens.
·5· · · · · · · LLOYD PALENS:· The question is, as a
·6· procedural matter, are we to limit our questions to
·7· the closing statement that was made or can we ask
·8· questions regarding the rate proposal as presented?
·9· · · · · · · CHAIRMAN:· The rate proposals as presented.
10· I believe this is really the last opportunity that the
11· rate commissioners have to ask questions of
12· (inaudible) regarding any of the information that has
13· been --
14· · · · · · · LLOYD PALENS:· Thank you.· We heard
15· comments this morning from the representative of
16· Missouri Industrial Commission that raise the question
17· as to whether there should be a 40 -- 60 -- 40 to
18· 60 percent debt fund as opposed to a 30 to 70 percent
19· debt fund.· Can you provide us with information that
20· would show what the impact of that split, 40/60 versus
21· 30/70 might be on the average ratepayer?
22· · · · · · · SUSAN MEYERS:· Yes.· Thank you for that
23· question.· I'm going to refer to Tim Snoke (phonetic)
24· and he can provide information.
25· · · · · · · TIM SNOKE:· We can put together a schedule
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·1· that would look at a 30/70.· It will involve changes,
·2· obviously, in the amount of debt, the amount of pay go
·3· and potentially interest rates as well.· As the record
·4· reflects, the rating agencies that have rated MSD's
·5· debt have indicated that debt service coverage levels,
·6· if they fall below targeted or projected levels could
·7· be compromised, so that's something that we're going
·8· to have to talk about with our consultants and
·9· potentially factor in.
10· · · · · · · LLOYD PALENS:· I understand that, but we
11· would like to understand what the financial impact is
12· to the ratepayers of -- why that 30/70 or 40/60.
13· · · · · · · TIM SNOKE:· Right.· And those factors, we
14· can come up with some new assumptions and come up with
15· a schedule.· I obviously don't have that here today,
16· but we will provide that for the record.
17· · · · · · · LLOYD PALENS:· Thank you.· Another
18· question -- and this is with regard to Ms. Meyers's
19· closing statement.· You indicate in that statement
20· that MSD would consider additional loan and grant
21· opportunities which may become available.· As we sit
22· here today, we're all aware of an NFL settlement. I
23· think it amounts to close to $500 million between the
24· city of St. Louis and St. Louis County and perhaps
25· some convention interest as well.· As I understand it,
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·1· the trustees of the district are appointed equally,
·2· three by county supervisor, three by his honor -- her
·3· honor, mayor of the city of -- it's my understanding
·4· that the board of trustees sitting as fiduciaries has
·5· an interest to minimize the impact of cost to the
·6· ratepayers, both commercial and residential, within
·7· the district.· You have trustees that have been
·8· appointed by powers at be that are in control of a
·9· 480, $500 million fund.· I'm not saying that all of
10· that fund should be available to reduce the impact of
11· this rate on residential and commercial rate, but I
12· think the board of trustees should consider making a
13· recommendation to the organization or individual that
14· appointed them to mitigate this cost of this rate
15· increase district wide and that some allocation of
16· that fund, that public fund, should be made available
17· with a benefit of the ratepayers who are asked to take
18· this burden.· By way of example, if 10 percent of that
19· fund which would amount to about $45 million were
20· allocated to storm water and wastewater for
21· remediation, something we all need to do, that would
22· go a long way to helping the infrastructure and also
23· reducing costs to the ratepayers in our district, and
24· I offer that as a comment.· I think we, as a rate
25· commission, should consider that statement in our
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·1· recommendations to the board of trustees, and I think
·2· when you say that MSD will consider additional loan
·3· and grant opportunities, this is an opportunity that
·4· shouldn't be lost.· Thank you.· That's the only
·5· question.
·6· · · · · · · CHAIRMAN:· Thank you, Mr. Palens.· Other
·7· comments by any others?
·8· · · · · · · UNIDENTIFIED MALE:· Chairman.
·9· · · · · · · CHAIRMAN:· Yes, Mr. (Inaudible).
10· · · · · · · UNIDENTIFIED MALE:· Can we just make a
11· quick response to the comment?
12· · · · · · · CHAIRMAN:· Please.
13· · · · · · · UNIDENTIFIED MALE:· Nothing divisive, but I
14· want to make sure everyone understands just because
15· two appointing authorities are responsible for filling
16· our positions, understand that once became board of
17· trustee -- MSD board of trustees, they're not behold
18· to either one of those appointing authorities.· They
19· cannot be removed.· They do have -- the terms have to
20· be reappointed, but I just -- I don't want everybody
21· left with the impression that the three county
22· trustees are representing the county, and the three
23· city trustees are some -- the county executive and the
24· three trustees -- or city trustees are representing
25· the mayor.· That's not really the way it works.· But
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·1· the point is, noted, and I agree, if the
·2· recommendation is put in the report, that is something
·3· for the -- the trustees to look at.· I agree with you.
·4· · · · · · · CHAIRMAN:· Thank you.· In other words, each
·5· trustee represents the entire district.
·6· · · · · · · UNIDENTIFIED MALE:· Yes, that's correct.
·7· · · · · · · CHAIRMAN:· Mr. Gaas.
·8· · · · · · · BRAD GAAS:· I just had a procedural
·9· question for counsel.· How do we take into this
10· additional information that is being offered by MSD
11· after the evidence is closed?· Are we allowed to do
12· that?
13· · · · · · · UNIDENTIFIED FEMALE:· We are allowed -- the
14· rate commission is allowed to do that.· The rate
15· commission did that in the previous proceedings.· I am
16· looking -- I'm -- I was -- Ms. Lamoy (phonetic) and I
17· are looking.· I think some of that information about
18· the -- the different percentages is already included,
19· too, so if the commission -- we'll try to find that,
20· but if the commission wants to accept some response to
21· a question, we can accept -- you can accept his report
22· into the record.
23· · · · · · · BRAD GAAS:· Okay.· The second question was,
24· in that historic information, I thought we had
25· information on the -- this issue with the impact on
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·1· the bond rating.· I remember a robust discussion about
·2· whether there's an impact in the bond rating or not.
·3· In my recollection, I shouldn't trust, but my
·4· recollection was there really wasn't one.· It was --
·5· was my take away on that, but I can be wrong about
·6· that.
·7· · · · · · · UNIDENTIFIED FEMALE:· Correct.· And I know
·8· that I asked Mr. Snoke several questions, and so since
·9· it may -- once we're done today, I will try to send
10· you all an e-mail with at least what we find in the
11· record that's already in the record on this issue, so
12· that you can start looking at it prior to Mr. Snoke
13· completing his analysis.
14· · · · · · · BRAD GAAS:· Thank you.
15· · · · · · · CHAIRMAN:· Mr. Gaas, also along those
16· lines, I was somewhat sharing the same concerns and
17· considering, perhaps, our rate (inaudible) on our
18· behalf.· (Inaudible) it looks like you're ready.
19· · · · · · · UNIDENTIFIED MALE:· Yes.· I had a couple of
20· things.· The -- the MIEC raised the issue regarding
21· the debt service coverage.· I know that we had a
22· pretty robust discussion and presentation on -- on the
23· debt terms in a previous hearing, but I was interested
24· in hearing from MSD staff with regard to their very
25· specific request regarding the debt service coverage
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·1· being reduced from 1.8 to 1.6.
·2· · · · · · · BRAD GAAS:· I'll make a comment, and then,
·3· Bethany, if I can ask you to make a comment as well,
·4· so I think the record reflects that we have in the
·5· record reports from the rating agencies.· The rating
·6· agencies indicate that lower debt service coverage
·7· from our projections and our targets which are 1.8
·8· which is consistent with -- with what MSD staff
·9· presents last rate commission and consistent with what
10· MSD staff presented in the rate commission before that
11· which are the three -- these are the three rate
12· commission proceedings that I've been involved in,
13· that if we fall below that target, our ratings could
14· be compromised, and so we have stuck with the 1.8.· At
15· the last proceeding the intervenor did suggest a 1.6.
16· The -- the rate commission did accept a 1.6, however,
17· because of other limiting factors, the debt service
18· projection resulting from that never got lower than
19· 1.76, which I would still call 1.8, so there was no
20· impact on our projections or the targets that we said
21· or have communicated to the rating agencies or that we
22· have achieved.· As a matter of fact, if you go back
23· 20 years, MSD has only delivered a debt service
24· coverage lower than 1.81 times and that was 1.7 in
25· 2011, quite a long time ago.· 20 years ago MSD had no
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·1· debt.· So trying to go back and say, oh, 20 years has
·2· been good enough is not an accurate reflection of what
·3· has happened.· 20 years ago MSD had zero debt.· Today,
·4· MSD has $1.7 billion of debt.· So as our debt numbers
·5· have increased, so has the need to be fiscally
·6· conservative in order to protect the rating, so we --
·7· it is possible to target a lower rating, however, I
·8· believe that would lead to a good chance of lower debt
·9· service, which we would -- should expect would
10· increase -- would lead to increase to debt service
11· costs for capital market debt.· Bethany, did you want
12· to make --
13· · · · · · · CHAIRMAN:· Bethany.
14· · · · · · · BETHANY PUGH:· Sure.· My name is Bethany
15· Pugh.· I'm with PFM Financial Advisors, and we service
16· the financial advisor to the district, so we assist in
17· the municipal debt issuances, IE, bonds or in so many
18· other financing alternatives that the district
19· executes.· So just to give a little bit of background,
20· the -- as Tim noted, there's two key metrics that are
21· really critical to what the credit rating agencies
22· analyze and look at when they think about credit
23· ratings, and we have targeted, typically, and
24· historically has been MSD's policy to target very high
25· credit ratings and that is a give and take.· That is a
Page 74
·1· policy decision, but when you have higher credit
·2· rating just like with your credit score, your cost of
·3· funds, your cost of borrowing decreases.· The stronger
·4· your credit rating is and in certain markets and in
·5· particularly in high interest rate markets or markets
·6· where there is a higher credit cost, the lower your
·7· credit rating is.· Those are the types of costs that
·8· we're trying to mitigate long-term from the district
·9· perspective by maintaining high credit ratings.· And
10· so the analysis has always been debt service coverage
11· which is one of those metrics and cash on hand which
12· is the other critical credit rating metric that the
13· agencies look at when they determine the credit
14· category for -- for an entity, and as Tim noted in the
15· case of the district, we always maintained the same
16· targets for senior bond coverage of 2.5 times and all
17· coverage, or excuse me, all obligations of 1.8 times,
18· and the language that the rating agencies have noted
19· is that narrowed and sustained coverage could threaten
20· the rating.· So that's what's guided our criteria and
21· our metrics and our targets up to this point in time.
22· · · · · · · BRAD GAAS:· Thank you.
23· · · · · · · UNIDENTIFIED MALE:· (Inaudible) question as
24· well.· We received this last week, Exhibit RC 99 which
25· was a letter from the president of Illinois, American
Page 75
·1· Water regarding a potential for a regional biosolid
·2· facility, and I would be interested in hearing -- I
·3· haven't seen a response to that letter, if there had
·4· been a response to that letter, from the staff or
·5· what -- what the position is with regard to the staff
·6· regarding that request.
·7· · · · · · · UNIDENTIFIED MALE:· So I did come prepared
·8· to go through this, understand that this is the first
·9· letter staff ever received from Illinois American
10· Water, although we know there's been a lot of
11· conversation well before that with other entities
12· throughout the area.· I'll give you the end of the
13· discussion.· The first time Illinois American Water
14· was able to meet with us was the afternoon -- before
15· the board voted on the proposal.· So for the
16· incinerator, we gave the board the results of that
17· discussion.· The board voted unanimously to move
18· forward with the incinerator project as we proposed
19· and also provided information or provided the first
20· initial funding for the project.· A couple of things
21· with regard to how that all went -- and again,
22· understand MSD's only had one shot talking with
23· American Water staff, and it was before the meeting.
24· That's the first time they approached us about wanting
25· to talk to staff.· There's a couple of things already
Page 76
·1· addressed in MSD's prehearing report.· The sludge
·2· chemistry for our particular process does not allow
·3· this alternative strategy.· It is -- it won't work.
·4· And that's one of the things we confirmed with them.
·5· It's the reason we've used incineration at these
·6· facilities ever since the creation of MSD.· That was
·7· one of the things we had in the discussion.· The other
·8· part was -- had to do with some of the items that were
·9· listed in Illinois American's letter, and here's some
10· of the things MSD came away with and kind of where we
11· left it.· It appeared that the cost for the project
12· was actually two to three times more than being
13· averaged by -- proposed by American Water based on the
14· data that we had collected because we had obviously
15· looked at this proposed technology in depth prior to
16· making the recommendation.· As a matter of fact, the
17· consultant we had recommends using some (inaudible)
18· and incinerations and others.· They recommended
19· incineration here for us, but it appeared -- that
20· appears you cannot complete this process before the
21· incinerators were done.· There was not -- apparently,
22· a not complete understanding of the 20-A process
23· required to change the treatment processes in the
24· area.· It became apparent that the initial tax credits
25· they're proposing were not available.· We did that
Page 77
·1· research because the -- the proposal they had was a
·2· carbon positive footprint.· It would create more
·3· carbon gases.· Therefore, there's other places we
·4· recommend they look, and they're in the process of
·5· doing that.· Their proposal does not control and
·6· capture emerging contaminants such as PFAS.· Ours
·7· does.· It keeps it out of the community.· It keeps us
·8· from taking MSD St. Louis generated PFAS and sending
·9· it to another state.· Our process stops that.· Where
10· we ended up with -- and again, I need to say that
11· American Water didn't say they agreed with us, but
12· they didn't dispute anything we laid out.· What we
13· left it with was, the best project -- process moving
14· forward is -- it looks like we need to have both
15· processes, both technical processes in place for the
16· community whether it's a more regional digested sludge
17· process that can be used for those that's appropriate,
18· and if we can make arrangements, we then have a -- an
19· insurated process that's available depending on the
20· type of product that's being offered.· So we agree
21· with them to work towards that.· I don't know what
22· American Water's strategy is moving forward, if MSD's
23· not participating in their proposal.· I don't know
24· what the -- the cost or the perimeters look like.· So
25· we brought all that information to our board of
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·1· trustees.· Our board of trustees decided to move
·2· forward, and we have submitted the information we
·3· committed to Illinois American Water, and the idea was
·4· that we would get together sometime around the end of
·5· the year and just see where -- where things stood.· So
·6· I think that's -- oh, okay.· So there are some MSD
·7· submittals, 83-B and 83-B1, that outlines some of that
·8· information as well.· So that's where we stood with
·9· that.· Again, we -- staff's only had one meeting with
10· American Water that was the result of it, and we'll
11· continue the communication to see if there isn't any
12· kind of synergies between the two processes and
13· programs we're putting in place to help the region
14· out.
15· · · · · · · UNIDENTIFIED MALE:· Thank you.
16· · · · · · · CHAIRMAN:· Are there other questions for
17· Ms. Meyers or the district from any of the rate -- yes
18· Ms. (Inaudible).
19· · · · · · · UNIDENTIFIED FEMALE:· Yes.· I have just a
20· comment to add to those comments.· Our state league
21· president is actually giving comments on a lagoon for
22· agricultural waste, and the league is opposed to that
23· just because you contaminate the soil, and it would be
24· the same sort of thing with the sludge, because you're
25· going to have to transport it with trucks to get it
Page 79
·1· there, so you're going to have air quality issues
·2· and -- and then you have the potential for the area
·3· that it's stored in to leak.· And so the league is
·4· very much against that and really appreciated MSD's
·5· choice of -- of taking forward with not doing that
·6· project.
·7· · · · · · · UNIDENTIFIED MALE:· I appreciate that. I
·8· think expanding on -- I left this part out.· MSD's
·9· process right now is to incinerate which may or may
10· not cause some destruction of PFAS, but the biggest
11· thing is, we are -- our ash actually is going to an
12· MSD managed ash lagoon, and we manage our own
13· leachate, and our plan is to build a treatment plant
14· to simply treat and be the first place we're actually
15· taking leachate out of the environment -- the PFAS out
16· of the environment.· Kind of an extension which you
17· mentioned.
18· · · · · · · CHAIRMAN:· Further questions for Ms. Meyers
19· (inaudible).
20· · · · · · · BRAD GAAS:· Mr. Chairman.
21· · · · · · · CHAIRMAN:· Yes, Mr. Gaas.
22· · · · · · · BRAD GAAS:· I just had one question.· And
23· this may have been answered in some of the discovery
24· and I am just not finding it, but do we know the
25· financial impact on the ratepayers if we adjust that
Page 80
·1· debt service ratio from 60/40 to 70/30?· Do we know
·2· what that does to the rate, how much savings
·3· (inaudible).
·4· · · · · · · TIM SNOKE:· We'll have to work that up.· We
·5· did not prepare a 70/30 -- I mean, we talked about
·6· this in the record, also the coverage amount is, you
·7· know, a function of the amount of capital projects
·8· that we have.· It's a function of the coverage ratio,
·9· that sort of thing, so we -- we operated with a 1.8
10· which is consistent with what we have proposed in the
11· past.· We did not try to lower that in order to
12· generate more debt funding, so I don't know yet, but
13· we should expect more debt's going to lead to more
14· debt service which will offset any gains, if there are
15· any from going that route.· We also have to make sure
16· we're not generating more cash than we can use then
17· for pay go.· So the more debt we incur the more pay go
18· will naturally be created by any level of debt service
19· coverage, so we talked about that a little bit earlier
20· in the proceedings.· That's also reflected in the
21· record, so I think we'll make sure that everybody
22· understands what we've already discussed in the
23· record, and my testimony in -- I believe it was also
24· mentioned in rebuttal testimony of your consultants,
25· and we'll have to prepare a schedule for what
Page 81
·1· something new looks like.
·2· · · · · · · BRAD GAAS:· My recollection, it was either
·3· the last proposal or maybe it was eight years ago,
·4· where there was a discussion or analysis about how the
·5· assumptions at MSD had made didn't bear out.· You're
·6· going to assume that you have certain debt incurred,
·7· and there's going to be certain costs and turn out
·8· that wasn't true, and you ended up saving more money
·9· than you thought and --
10· · · · · · · TIM SNOKE:· Well, we're always looking ways
11· to save money versus what we put in the rate proposal.
12· · · · · · · BRAD GAAS:· Can I ask you a question?
13· · · · · · · TIM SNOKE:· Oh, yes.
14· · · · · · · BRAD GAAS:· Could you give me -- do we have
15· in our analysis each of these cycles whether you
16· exceeded your projections, met your projections or
17· saved money?· I'd like to see that.
18· · · · · · · TIM SNOKE:· There are schedules, I believe,
19· and at least the last couple rate proposals that show
20· overall differences in revenue and different expense
21· items, so.
22· · · · · · · BRAD GAAS:· As it relates to your
23· projections, specifically, because I want to compare
24· what you told us was going to happen each time and
25· then, in fact, what did happen, so we can understand
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·1· that in the context of what you're suggesting now.
·2· · · · · · · TIM SNOKE:· Sure.· That's going to involve
·3· additional thing besides just looking at the numbers.
·4· For example, laws have changed.· We've lost the
·5· ability to do some of the refinancing that we've done
·6· in the past, that has saved money versus what our
·7· original projections were, so.· But we'll put
·8· something together.
·9· · · · · · · BRAD GAAS:· Great.· Thank you.
10· · · · · · · CHAIRMAN:· Thank you, Mr. Gaas.· Any other
11· questions from any of the other -- Ms. Meyers, I would
12· ask, since we did have members of the public here this
13· morning, I -- three topics that came up were sort of
14· the prevention activities of the district, the
15· communications strategies, and the whole concept of
16· this unit billing structure in the city, just like you
17· to comment briefly on those three topics, if you
18· would.· I know I'm catching you cold a little bit, but
19· I would like to give these folks some sort of comments
20· to help understand what is going on in the district.
21· · · · · · · SUSAN MEYERS:· Certainly, we'll let Brian
22· start, and we may have some other staff to chime in.
23· · · · · · · CHAIRMAN:· Thank you.
24· · · · · · · BRIAN MALONE:· So like you said, you caught
25· us cold, so give me a little -- so on the first two, I
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·1· think best McCoy was our -- who is our public affairs
·2· manager who was here heard those questions, if my
·3· notes are right, all those comments came from the
·4· Fountain Creek area, and so while we tried to
·5· advertise, inform, and do everything about what we're
·6· doing, I think I'll make sure she makes the special
·7· contact with one of those folks, and I will commit
·8· that we'll go out and talk about what the regular
·9· system looks like, and when -- when there's a flood
10· and we're out there at 2:30 in the morning, I agree,
11· probably people aren't seeing us as we're moving
12· around, so as well as response to the -- response to
13· the specific instances as well as what we do in the
14· future.· I think since so much came from that
15· particular area, we'll make sure we make a contact
16· there and offer information and/or a discussion, if
17· they wish, so.· And then what was the second -- oh.
18· So meters or not meters, the city, the way we're doing
19· the city.· I think everybody appreciates, I hope,
20· that's kind of not in MSD's hands.· Can we have
21· discussions?· We can.· We've been sitting here
22· brainstorming, what's legally possible for us to begin
23· with?· You know, I -- I am just noting from some of
24· the comments I heard today, I may be wrong, but I
25· think between our rates and the city rate increases if
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·1· $4,000 is the right number, I think you can recover
·2· that cost in three years by putting a meter in.· I'm
·3· not saying that's the way to move forward.· There's a
·4· lot of other things not involving MSD that involves
·5· city plumbing codes that involves the condition of the
·6· city water mains, and right now the city's policy
·7· indicates its preference for unmetered residential
·8· billing.· There was a -- as I recall, a (inaudible)
·9· ordinance.· As I recall, I think the board of aldermen
10· a while back indicated we -- they are looking into
11· doing metered -- we sent that to the board of
12· aldermen.· That's who that letter went to, and I think
13· staff will commit to having that discussion with
14· the --
15· · · · · · · CHAIRMAN:· Okay.· Yes.· Ms. White, I think
16· we're solving the voice problems.· Anything else?· Any
17· other questions from any of the other rate
18· commissioners?· Hearing none, thank you.
19· · · · · · · UNIDENTIFIED FEMALE:· Thank you.
20· · · · · · · CHAIRMAN:· Is the MIEC ready to present its
21· closing statement?
22· · · · · · · UNIDENTIFIED FEMALE:· (Inaudible) trouble
23· hearing me?· Let me start that over again.· The
24· proposed rate increase and the revenue approved by the
25· rate commission should be more equitable and balanced
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·1· in adjustments to rates.· To accomplish this, we
·2· recommend the following.· Number one, billing and
·3· collection charges should not be decreased in the
·4· first year of the projected rate change period.
·5· · · · · · · (Silence in audio.)
·6· · · · · · · UNIDENTIFIED FEMALE:· And so Mr. Gorman
·7· does provide an analysis as part of his statement that
·8· demonstrates these impacts.· A second -- followed the
·9· proposals that have been recommended by the MIEC and
10· has been balanced and moderated --
11· · · · · · · CHAIRMAN:· (Inaudible) the hearing, whoever
12· is online -- please.· Please do not -- for those
13· online, please leave the microphone open and do not
14· continue to mute the hearing.· Thank you.· Sorry for
15· the interruption.
16· · · · · · · UNIDENTIFIED FEMALE:· Thank you.· The rate
17· commission in the past has been attentive to the
18· concerns about rate balance, rate burden on customers,
19· not making extremely large shifts that would burden
20· one aspect of the ratepayer community, and I think
21· given the fact that large employers are essential to
22· the vitality of our economy, I think that a very
23· burdensome change in the prior allocation on
24· wastewater is something that the rate commission
25· should take a very close look at, and if -- if -- if
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·1· the rate commission is consistent with its past
·2· pattern of protecting ratepayers, I think that
·3· overall -- all of the pay as you go keeping it at
·4· 70/30, the rate commission's done that in the past, I
·5· think that's really important to having a fair
·6· balanced rate increase, and the same with the
·7· wastewater -- proposed wastewater increase charge, so
·8· these are the primary concerns that we wanted to
·9· highlight, but I will have Mr. Gorman's statement,
10· which I didn't read very -- very well, I'm afraid,
11· because of the small print, but we will have that
12· statement as an exhibit as well as Mr. Gorman's
13· analysis of the impact of the wastewater rate change
14· as proposed by the district, and I'm happy to answer
15· any questions.
16· · · · · · · CHAIRMAN:· Any questions?· Mr. Palens?
17· · · · · · · LLOYD PALENS:· Just one question.· All of
18· MIEC's comments are directed to wastewater and not
19· storm water?
20· · · · · · · UNIDENTIFIED FEMALE:· Correct.
21· · · · · · · LLOYD PALENS:· Thank you.
22· · · · · · · UNIDENTIFIED FEMALE:· Thank you.
23· · · · · · · CHAIRMAN:· Are there any other questions
24· from either the rate commissioners related to
25· (inaudible) anyone online have any questions for MIEC?
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·1· Yeah, please.
·2· · · · · · · CELESTE DOTSON:· You have to please forgive
·3· me, because I'm new to the commission, but I'm just
·4· listening to your comments, and I'm trying to
·5· understand, so Mr. Gorman --
·6· · · · · · · UNIDENTIFIED FEMALE:· Correct.
·7· · · · · · · CELESTE DOTSON:· -- he takes issues with
·8· the -- the change being to, like, a volume metric --
·9· · · · · · · UNIDENTIFIED FEMALE:· Correct.
10· · · · · · · CELESTE DOTSON:· -- change because it
11· burdens the -- the employers?
12· · · · · · · UNIDENTIFIED FEMALE:· Correct.· And this is
13· a very substantial, very expansive change to several
14· of those employers, and it's -- rate stability,
15· predictability, all go into balance, and fair rates.
16· And the impact of this is so large that we feel that
17· there has been no demonstration that it's necessary,
18· and we're not even really sure why it was made to be
19· such a large increase in such a short amount of time.
20· And, so there's a rate predictability, stability.
21· Those are all issues.· It's very hard for large
22· companies to absorb a rate increase that large that
23· quickly.· And so for these reasons, basically, it's an
24· economic interest in the entire St. Louis area.· We
25· would like to see that proposal eliminated from the
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·1· district's rate case.· We would like to see the rate
·2· commission look on that as a ratepayer protection
·3· issue.· I think also it's very important to emphasize
·4· that, you know, in the charter, the purpose of the
·5· rate commission is to represent ratepayers.· That is
·6· the purpose.· And we have many members of the
·7· commission who are a part of different sectors of the
·8· business community, the building community.· We don't
·9· have any ratepayer interest, per se, specifically
10· ratepayer groups in this case.· The MIEC has a
11· representative on the rate commission, and we're able
12· to put in a statement in this case, but we have not
13· been able to put in testimony, which we have done over
14· 20 years as in discovery.· The statements that we've
15· made are based on the evidence that's already in the
16· case.· It's obvious, and we -- we think we can support
17· our position just by pointing out the impacts, and the
18· lack of necessity for those impacts, but I think it's
19· really important that the rate commission takes
20· special care to consider the interest of ratepayers
21· given the very limited -- limited participation of the
22· groups that represent ratepayers exclusively that were
23· not in this case or didn't have the chance to put in
24· testimony or discovery.· So I think the rate
25· commission -- the arguments are simple enough, and I
Page 89
·1· think the rate commission is attentive enough to these
·2· arguments that with the record that you have, I think
·3· you can make those moderated decisions.
·4· · · · · · · CHAIRMAN:· Are there any questions?· Thank
·5· you.
·6· · · · · · · UNIDENTIFIED FEMALE:· Thank you.
·7· · · · · · · MR. G:· Mr. Chair, can I make a quick
·8· comment on what we just heard?
·9· · · · · · · CHAIRMAN:· Yes, sir.
10· · · · · · · MR. G:· I just want to make sure, first of
11· all, obviously, we have not had an opportunity to
12· review Mr. Gorman's comments, but I will say that
13· there are a couple of things that I just want to make
14· sure that it's clear for the record.· We did not lower
15· our base charge in the proposal and increase the
16· volume metric rate.· Now, the volume metric rate did
17· increase, as did the base charge, but what was kind of
18· left out of the comments is, with respect to the
19· surcharges, what the commission is being asked to do
20· is to take $750,000 worth of cost, and instead of the
21· industrial customers paying that, that's generating
22· the cost.· We've been asked by MIEC to put that burden
23· on residential customers.· So the very folks you heard
24· from this morning that have indicated that they're
25· struggling to pay bills, these are the very things
Page 90
·1· that we're trying to avoid by making sure that
·2· whoever's generating that cost should be responsible
·3· for paying for it.· So, again, we look forward to
·4· seeing the information from Mr. Gorman.· But quite
·5· frankly, what you've heard with respect to the volume
·6· metric charge that was mentioned, and also, the
·7· surcharges does not benefit residential customers that
·8· are not generating those costs.· It's shifting that
·9· cost to the very people that you've heard cannot
10· afford to continue to pay for it.· So I thank you for
11· your time.
12· · · · · · · CHAIRMAN:· Mr. G, I appreciate your
13· commitment to fair and reasonable rate.· Thank you.
14· Also, I would take exception with one item that
15· ratepayers are not represented on the rate -- is the
16· legal counsel to the rate commission ready to make
17· closing statement?
18· · · · · · · BRIAN MALONE:· Yes, Mr. Chairman.
19· · · · · · · CHAIRMAN:· Go ahead, Mr. Malone.
20· · · · · · · BRIAN MALONE:· Thank you.· At this time I'd
21· like to echo Ms. Meyers, and thank all of you for your
22· time and commitment for serving on the rate
23· commission.· The issues before the commission have
24· been summarized in the parties' preconference reports,
25· and I'd encourage you to review those prior to
Page 91
·1· beginning your deliberations.· The rate commission's
·2· responsibility is to determine whether the rate change
·3· proposal or any alternative proposal meets the
·4· criteria for recommendation in Section 7.040 and
·5· Section 7.270 of the district's charter plan which are
·6· the three criteria and five factors to which we've
·7· referred to at times throughout these proceedings.· In
·8· the prehearing conference report, it's touched on
·9· most, if not all, of these issues.· A lot of the
10· proceedings thus far has focused on whether the rate
11· change proposal both for storm water and wastewater
12· related to factor number five.· This is the factor
13· that was most recently amended by the voters in 2021
14· and that is whether the rate change proposal considers
15· the financial impact on all classes of ratepayers in
16· determining a fair and reasonable burden.· Another
17· factor that I'm sure we'll discuss in deliberations is
18· whether the rate change proposals is consistent with
19· constitutional statutory and common laws amended from
20· time to time as to the wastewater proposal.· The
21· district isn't proposing a increase in rates.· They
22· are using the same formulation that they have used in
23· the past which has previously been upheld in the
24· Missouri Growth case which has been referred to
25· throughout these proceedings.· There is clear
Page 92
·1· authority in MSD's charter for them to set rates,
·2· rentals, and other charges for these services.
·3· Likewise, for the residential storm water component of
·4· the rate change proposal, there's clear authority in
·5· the charter for the district to level a ad valorem
·6· property tax and to regulate storm water.· One
·7· sub-issue to consider under the residential storm
·8· water is the applicability of the Statute 204.700.· If
·9· valid, this would include -- exclude certain
10· residential properties from paying the tax.· The
11· district has contended that that statute is -- is
12· invalid on multiple grounds and that has been covered
13· in previous storm water rate change proceedings as
14· well.· As to the nonresidential storm water rate
15· aspect of the rate change proposal, the district, as
16· you know, is proposing an impervious surface charge
17· which would be a new charge, though, that also has
18· been the subject of previous rate change proposals.
19· Prior variations on the impervious surface charge have
20· been supported by the rate commission in its
21· recommendation reports to the board of trustees.· The
22· district intends to seek voter approval for both the
23· ad valorem storm water tax for residential property as
24· well as the impervious surface charge.· That does
25· remove the issue of the -- that led to the adverse
Page 93
·1· judgment against the district in these Wide cases from
·2· 2013 from the Missouri supreme court.· As I think was
·3· discussed in testimony, if this were later determined
·4· by a court to actually be a tax, rather than a fee, it
·5· would be inapplicable to governments and nonprofits.
·6· We'll be asking you to consider a statement regarding
·7· the -- whether the rate change proposal for both
·8· wastewater and storm water comply with the
·9· constitutional statutory and common laws amended from
10· time to time as required by the charter.· The majority
11· of the topics we've discussed in these proceedings
12· aside from those mostly relate to the financial impact
13· on all class ratepayers and whether that imposes a
14· fair and reasonable burden.· We'll be asking you to
15· consider whether the extra strength storm water
16· surcharges should be phased in or immediately go to
17· cost of surface.· We'll ask you to consider the
18· adequacy and structure of the proposed municipal grant
19· funding program including consideration of how that
20· affects the existing OMCI districts and will also ask
21· that you consider whether the district should include
22· the credit program which became a topic later in the
23· proceedings for nonresidential customers to erect
24· storm water best management practices that capture
25· storm water and what the perimeters of such a program
Page 94
·1· could look like.· Again, we encourage you to review
·2· the parties' preconference reports carefully.· We look
·3· forward to working with you throughout these
·4· deliberations, and if there's anything else that --
·5· that your consultants or Lisa and I can provide to
·6· you, please -- please let us know.· Thank you.
·7· · · · · · · CHAIRMAN:· Do any of the rate commissioners
·8· have any questions for Mr. Malone?· Anyone online?
·9· · · · · · · UNIDENTIFIED MALE:· No.· Thank you.
10· · · · · · · CHAIRMAN:· Thank you.· Upon conclusion of
11· this public hearing session, this 2023 wastewater and
12· storm water rate change proceeding will be closed, and
13· the rate commission will begin its deliberation.· This
14· is the final opportunity for rate commissioners to ask
15· any questions.· Do any rate commissioners have any
16· final questions or any of the various parties
17· regarding any issue or element of the proposed rate?
18· Hearing none, thank you.· And thanks to all of the MSD
19· staff, thanks to all of the public relations
20· consultants, thanks to our legal counsel and our rate
21· consultant, thanks to all the members of the public
22· who participated in this public hearing, all of the
23· public hearings.· We will now, as I stated earlier,
24· close the case, begin our deliberations.· We will
25· adjourn this public hearing, and the rate commission
Page 95
·1· will begin our deliberations Monday morning,
·2· August 14th, 2023, at 8:00 a.m.· This meeting is
·3· adjourned.
·4· · · · · · · (Inaudible conversation.)
·5· · · · · · · (Audio ended.)
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·1· · · · · · · · · CERTIFICATE OF REPORTER
·2
·3· · · · · · · I, Melissa J. Lane, Certified Court
·4· Reporter of Missouri, Certified Shorthand Reporter of
·5· Illinois and Registered Professional Reporter, do
·6· hereby certify that I was asked to prepare a
·7· transcript of proceedings had in the above-mentioned
·8· case, which proceedings were held with no court
·9· reporter present utilizing an open microphone system
10· of preserving the record.
11· · · · · · · I further certify that the foregoing pages
12· constitute a true and accurate reproduction of the
13· proceedings as transcribed by me to the best of my
14· ability and may include inaudible sections or
15· misidentified speakers of said open microphone
16· recording.
17
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19· · · · · · · · Melissa J. Lane, CCR, CSR, RPR
20
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24· Date:
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