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HomeMy Public PortalAboutExhibit MSD 109- Transcript of Public Hearing- August 7, 2023Page 1 ·1 ·2 ·3 ·4 ·5 ·6 ·7· · · · · · · · · · AUDIO TRANSCRIPTION ·8· · · · · RATE COMMISSION PUBLIC HEARING CONFERENCE ·9· · · · · · · · · · · ·AUGUST 7, 2023 10 11 12 13 14 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.) 22 23· TRANSCRIBED BY: MELISSA LANE 24 25 Exhibit MSD 109 Page 2 ·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. Page 3 ·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 Page 4 ·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, Page 5 ·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 Page 6 ·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 Page 7 ·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 Page 8 ·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. Page 9 ·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 Page 10 ·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 Page 11 ·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 Page 12 ·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 Page 13 ·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 Page 14 ·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 Page 15 ·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 Page 16 ·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 Page 17 ·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 Page 18 ·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, Page 19 ·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 Page 20 ·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 Page 21 ·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 Page 62 ·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 Page 63 ·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 Page 64 ·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 Page 65 ·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 Page 66 ·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 Page 67 ·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, Page 68 ·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 Page 69 ·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 Page 70 ·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 Page 71 ·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 Page 72 ·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 Page 73 ·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 Page 78 ·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 Page 82 ·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 Page 83 ·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 Page 84 ·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 Page 85 ·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 Page 86 ·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? Page 87 ·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 Page 88 ·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.) ·6 ·7 ·8 ·9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 96 ·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 18 19· · · · · · · · Melissa J. Lane, CCR, CSR, RPR 20 21 22 23 24· Date: 25 LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS' LEXITAS'