HomeMy Public PortalAboutExhibit MSD 110- Transcript of Public Hearing- July 20, 2023Page 1
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·7· ·ST. LOUIS METROPOLITAN SEWER DISTRICT
·8· · · ·RATE COMMISSION PUBLIC HEARING
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10· · · · ·BALLWIN GOVERNMENT CENTER
11· · · · · · ·1 GOVERNMENT COURT
12· · · · · · ·BALLWIN, MO 63011
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14· · · · · · · ·JULY 20, 2023
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Exhibit MSD 110
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·1· · · · · ·APPEARANCES
·2· ·For the MSD Rate Commission:
·3· ·MR. MARK PERKINS, Presiding
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· · ·For the St. Louis Metropolitan Sewer
·5· ·District:
·6· ·Mr. Brian Hoelscher
· · ·Executive Director and CEO
·7· ·Office of the Executive Director
· · ·Metropolitan St. Louis Sewer District
·8· ·2350 Market Street
· · ·St. Louis, Missouri 63103
·9· ·314.768.6260
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· · ·The Court Reporter:
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· · ·Ms. Amanda N. Farrar, MO CCR 1358
12· ·LEXITAS LEGAL
· · ·711 North Eleventh Street
13· ·St. Louis, Missouri 63101
· · ·(314)644-2191
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·1· · · · · · · ·(The meeting commenced at 7:00 p.m.)
·2· · · · · · · ·MR. PERKINS:· Good evening.· I'm Mark
·3· ·Perkins, a commissioner with the Metropolitan
·4· ·St. Louis Sewer District rate commission.· I will
·5· ·serve as the presiding commissioner over tonight's
·6· ·hearing.
·7· · · · · · · ·The charter plan of the district was
·8· ·amended by voters in St. Louis City and St. Louis
·9· ·County at a general election on November 7th of 2000
10· ·and established the rate commission.· The purpose of
11· ·the rate commission is to review and make
12· ·recommendations to MSD's board of trustees regarding
13· ·changes in wastewater rates, storm water rates and
14· ·tax rates proposed by MSD staff.
15· · · · · · · ·The rate commission seeks to ensure MSD
16· ·ratepayers and the public in general have a voice in
17· ·MSD's rate setting process.
18· · · · · · · ·Per the charter plan, the rate
19· ·commission is composed of 15 member organizations
20· ·who collectively represent the broadest possible
21· ·cross section of MSD customers and the community it
22· ·serves.· Rate commission member organizations are
23· ·selected by MSD board of trustees through a public
24· ·self-nomination and selection process set forth in
25· ·the charter.
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·1· · · · · · · ·Each member organization serves a six
·2· ·year term and appoints an individual to represent
·3· ·the organization on the rate commission.
·4· · · · · · · ·Per the voter-approved changes made to
·5· ·MSD's charter in 2000, the board of trustees shall
·6· ·elect a member organization so as to ensure a fair
·7· ·representation of all users of the district's
·8· ·services.· Specifically, rate commission member
·9· ·organizations that represent commercial and
10· ·industrial users, residential users and other
11· ·organizations interested in the operation of the
12· ·district, including by way of example, but not by
13· ·way of invitation organizations focused on
14· ·environmental issues, labor issues, socioeconomic
15· ·issues, community -- neighborhood organizations and
16· ·other nonprofit organizations.· For a list of the
17· ·individual rate commissioners and the organizations
18· ·they represent, please visit the rate commission
19· ·section of MSD's website at MSDprojectclear.org.
20· · · · · · · ·So the rate commission received a rate
21· ·change notice from MSD staff on March 24th, 2023 for
22· ·wastewater rates and storm water rates and taxes.
23· ·Per the charter plan, the rate commission must issue
24· ·its report of proposed rate change notice to MSD's
25· ·board of trustees on or before September 5th, 2023.
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·1· · · · · · · ·The rate commission adopted operational
·2· ·rules and procedural schedules to conduct these
·3· ·proceedings in a timely manner and with procedural
·4· ·fairness to all parties.
·5· · · · · · · ·Since the rate change notice was
·6· ·received on March 24th, the rate commission has
·7· ·received testimony from MSD staff and rate
·8· ·consultants employed by the rate commission to
·9· ·evaluate MSD's staff proposal.· The parties have
10· ·also engaged in discovery requests.· Documentation
11· ·for these activities is listed on the rate
12· ·commission section of MSD's website.
13· · · · · · · ·Tonight's public hearing is just one of
14· ·14 on-the-record sessions planned for between June
15· ·21st and August 7th.· Any ratepayer who wishes to be
16· ·heard for proposed rate changes may testify or
17· ·participate in these public hearing sessions.
18· · · · · · · ·The hearings are publicly noticed via
19· ·postings to the rate commission section of MSD's
20· ·website.· These postings contain the time, date and
21· ·location of each of the public hearings.· As
22· ·hearings are added to the schedule, the same
23· ·information will be posted.
24· · · · · · · ·Public hearings are held for the sole
25· ·purpose of permitting MSD staff to present its
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·1· ·wastewater and storm water rate change proposal to
·2· ·the general public and to permit said public the
·3· ·opportunity to ask questions or make comments.
·4· · · · · · · ·Those unable or not wishing to provide
·5· ·comments at a public hearing may provide feedback to
·6· ·the rate commission via phone or email.· The phone
·7· ·number is (314)335-2028.· Again, that number is
·8· ·(314)335-2028.· The email address is
·9· ·ratecommission@AHCconsulting.com.· That's
10· ·ratecommission@AHCconsulting.com.· A card with the
11· ·contact information is available at the sign-in
12· ·area.· Alternatively, staff representing the rate
13· ·commission who I will ask to identify themselves
14· ·shortly will also be able to provide that
15· ·information.· Further information on how to provide
16· ·feedback outside of the public hearings is listed on
17· ·the rate commission section of MSD's website.
18· · · · · · · ·Our next step tonight is a presentation
19· ·by MSD staff, followed by a public comment period.
20· ·Tonight's presenter is Brian Hoelscher, MSD CEO and
21· ·executive director.
22· · · · · · · ·Before we begin the presentation, I ask
23· ·that we observe the following housekeeping rules.
24· ·Please hold all questions until the comment period
25· ·until after the presentation.· If you wish to
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·1· ·present testimony or expect you'll have questions or
·2· ·comments, please sign in at the door by which you
·3· ·entered the room.· Speakers will be called upon in
·4· ·the order they have signed up.· Each speaker should
·5· ·identify themselves and the organizations they
·6· ·represent.
·7· · · · · · · ·While not a requirement, we ask that
·8· ·those that are speaking to state their name and
·9· ·address so that we may assure we are associating
10· ·comments in the record with the correct speakers.
11· ·If you are representing an organization, please
12· ·provide the information about that organization.· If
13· ·speakers wish to remain anonymous in whole or in
14· ·part, we respect those wishes.
15· · · · · · · ·Each speaker may have a maximum of ten
16· ·minutes to speak regarding the proposed rate change.
17· ·As the presiding officer, I can limit or expand
18· ·speaking time as deemed necessary.
19· · · · · · · ·If you have further questions regarding
20· ·bathrooms or any other logistics, staff representing
21· ·the rate commission -- and the staff representing
22· ·the rate commission, if you could raise your hands.
23· ·So we got some in the back.· They are available to
24· ·assist.
25· · · · · · · ·If you've not already done so, we ask
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·1· ·that you silence your cell phones.
·2· · · · · · · ·Does anybody have any questions before
·3· ·we begin with the presentation tonight?
·4· · · · · · · ·If not, then I'll turn it over to
·5· ·Mr. Hoelscher.
·6· · · · · · · ·MR. HOELSCHER:· Thank you, Commissioner
·7· ·Perkins.· As soon as I silence my cell phone.
·8· · · · · · · ·Thank you.· Again, my name's Brian
·9· ·Hoelscher.· I'm the executive director and CEO with
10· ·MSD doing the presentation this evening.· I am going
11· ·to go through the rate proposal, and as mentioned
12· ·there is a question and answer period.· If folks
13· ·have questions about specific issues they have on
14· ·their property or their billing, we do have district
15· ·staff back here -- raise your hand guys -- that can
16· ·answer questions if anybody has a specific question
17· ·on those that are outside of what's in the rate
18· ·proposal.
19· · · · · · · ·So -- so I'm going to -- three pieces
20· ·I'm going to talk about here.· First is a tale of
21· ·two systems.· I just want to give you some
22· ·background about MSD and who we are and how we
23· ·came -- why we're here, talk about the rate
24· ·commission and the rate proposal a little bit and
25· ·then go through the exact details of the two
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·1· ·initiatives that are in the rate proposal.
·2· · · · · · · ·So MSD Project Clear protects the
·3· ·public's health and safety and water environment
·4· ·responsibly by managing two systems with two
·5· ·completely separate funding sources.· One for the
·6· ·wastewater system.· When wastewater leaves your home
·7· ·out your lateral and goes into our public system, we
·8· ·take it from there, we transport it, pump it, treat
·9· ·it and discharge it to local creeks and streams.· We
10· ·do all the work.· We also manage the storm water
11· ·systems in a slightly different way.· For the
12· ·wastewater that I just explained, those bills --
13· ·those revenues come from your monthly bill that you
14· ·get from MSD.· For the storm water services we do
15· ·provide right now, those show up on your property
16· ·tax bill.· We'll go through exactly what services
17· ·those are as I get into the discussion.
18· · · · · · · ·So for the wastewater system, what kind
19· ·of work do we get done?· Cleaning/repair of the
20· ·existing wastewater systems.· That's something that
21· ·hadn't been done extensively in the past.· MSD right
22· ·now on the wastewater system signed a consent decree
23· ·based on a lawsuit from the federal government, the
24· ·EPA, Department of Justice, as well as the coalition
25· ·for the environment to get in compliance with the
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·1· ·Clean Water Act by a date certain.· We are the same
·2· ·as 200 other communities throughout the United
·3· ·States who have been sued for exactly the same
·4· ·reason to make sure there was a set date when to do
·5· ·this.
·6· · · · · · · ·Part of that system also is to comply
·7· ·with environmental regulations.· The big one is to
·8· ·construct major new improvements.· Right now we see
·9· ·a rate proposal, the capital portion of that rate
10· ·proposal for wastewater, 98 percent of it is
11· ·mandated by the consent decree or by other
12· ·regulatory schedules.· There is not discretionary
13· ·stuff sitting in the capital program.· We're doing
14· ·what we've been committed to do and what we're
15· ·scheduled to do.
16· · · · · · · ·On the storm water side there's three
17· ·pieces here.· MSD is responsible for that middle --
18· ·the middle item, seek compliance with environmental
19· ·regulations.· MSD's always had a revenue source to
20· ·serve as kind a building inspector for lack of a
21· ·better term.· When folks do development, we make
22· ·sure regulations are followed so that if something
23· ·new happens the pollutants that are in storm water
24· ·runoff can be captured and treated.
25· · · · · · · ·Second part is cleaning and repairing
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·1· ·the existing storm sewer systems.· These are the
·2· ·inlets, manholes and storm sewers.· We did not have
·3· ·the ability district-wide to do that till 2016.
·4· · · · · · · ·Since we're here in Ballwin tonight,
·5· ·prior to 2016 MSD owned the inlets, manholes and
·6· ·storm sewers, but never was allowed to collect any
·7· ·revenue to operate and maintain them, which is fine
·8· ·when they're new.· Not so good when they get older.
·9· ·That was fixed in 2016 by the public.
10· · · · · · · ·The last item, and that's what's in the
11· ·rate proposal, is to fund new improvements for
12· ·flooding and creek erosion, and that's flooding and
13· ·creek erosion on assets that MSD doesn't own.
14· ·Creeks, floodplains, backyard ditches, all those
15· ·types of things.· We don't own those assets, but we
16· ·do have the ability through our charter to collect
17· ·funds and work with the community to resolve those.
18· ·Those are the ones we're looking to fund.· There is
19· ·no district-wide funding for that.· It's been a
20· ·problem, obviously, for a long time.· We last tried
21· ·in 2019.· The public voted no 53 to 47 for us to
22· ·provide that service.· We're making some changes to
23· ·see -- and bringing another proposal to the public
24· ·to see if they want to consider this again.
25· · · · · · · ·On the wastewater system improvements
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·1· ·the goal is to reduce the backups into the homes,
·2· ·improve water quality, just keep us in compliance
·3· ·with the Clean Water Act.
·4· · · · · · · ·On the wastewater system side out of the
·5· ·consent decree there's numbers that get -- that
·6· ·have -- that have grown because we keep repricing
·7· ·the program in current dollars.· So when we signed
·8· ·the consent decree in 2010, the price was $4.7
·9· ·billion.· We repriced again in 2021.· It was at $6.1
10· ·billion.· With inflation over the last two years
11· ·before this rate proposal we repriced in current
12· ·dollars again.· Right now it's priced at $7.2
13· ·billion in 2023 dollars.· There's been no
14· ·significant increase in price.· Matter of fact,
15· ·overall we're on budget and slightly ahead of
16· ·schedule to get things done by 2039.· The way we do
17· ·this, we do have to increase the capacity in the
18· ·systems, if necessary, removing water that should be
19· ·in the wastewater system.
20· · · · · · · ·One of those biggest initiatives early
21· ·in the program, homes were built in the St. Louis
22· ·area for -- mostly post World War II where the
23· ·downspouts from the homes from the roofs were
24· ·attached to the wastewater system, attached to the
25· ·inlets -- to the laterals.· That caused those
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·1· ·systems to flood and caused people's basements to
·2· ·back up.· So we're taking care of those types of
·3· ·things.
·4· · · · · · · ·And the big one is to eliminate points
·5· ·where untreated water spills -- waterways --
·6· ·wastewater spills in rivers and streams.· These are
·7· ·called SSOs.· In the past instead of people's
·8· ·basements backing up, a lot of this was done before
·9· ·MSD was formed, a resolution to that was to punch a
10· ·hole in the side of a manhole next to a creek or
11· ·stream.· So as the system filled up with water, we
12· ·discharge into the creek or stream instead of
13· ·filling up in people's basements.· Those are
14· ·illegal.· So we've been going through the process of
15· ·eliminating those.· We had 800 of them in the 1980s
16· ·and 90s.· We got down to 230 when we started this
17· ·consent decree.· At the end of this year we'll be
18· ·down to 30 left to finish up.
19· · · · · · · ·Kind of the progress again, wastewater
20· ·system we've eliminated 84 percent of those
21· ·overflows that were originally in the system.· We
22· ·eliminated building backups by 25 percent.· That's a
23· ·little bit deceiving.· We've actually done better
24· ·than that if you think about what the environment
25· ·was 20 years ago.
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·1· · · · · · · ·We prob -- we have not done just as well
·2· ·because what happens is we are seeing an awful lot
·3· ·of climate change-type storms that simply flood an
·4· ·entire area.· And something I don't know if people
·5· ·really realize, if you flood streets, flood yards,
·6· ·flood homes, you're also flooding all the sewer
·7· ·systems.· And so when homes flood, water goes down
·8· ·in the basement, goes through the sewer system, you
·9· ·start seeing that level reflecting itself
10· ·everywhere.· So that's another -- kind of another
11· ·challenge that's come around in the last 15 years
12· ·we've come to realize as we've worked through the
13· ·problem.
14· · · · · · · ·On the wastewater side, we've got over
15· ·650 projects we've completed or are in the process
16· ·of completing right now.
17· · · · · · · ·Storm water is a little bit different.
18· ·These are the number of reported problems.· Right
19· ·now we're at 3,700 between 2019 and 2020.· The
20· ·numbers always vary, but with the way things are
21· ·going with the climate, we've seen those numbers
22· ·jump up.· The existing problems are caused because
23· ·we get storms that are more -- that are -- discharge
24· ·more water than what the natural system can take or
25· ·if we build storm sewers that are made to match the
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·1· ·natural system.· So you get a storm that's just what
·2· ·they call flash flooding when you hear the news
·3· ·reports, you get those, nothing is going to -- the
·4· ·creeks aren't going to handle them, the storm sewers
·5· ·aren't going to handle them and people are seeing
·6· ·backups or seeing flooding.· Those problems are
·7· ·getting more, especially with the climate change.
·8· · · · · · · ·Examples.· These are two examples that
·9· ·we're talking about.· One storm water problem is
10· ·just flooding.· Water sitting and it's not going
11· ·anywhere.· Sometimes it's this deep.· Sometimes it's
12· ·feet deep depending on where you live and whether
13· ·you're in the floodplain.
14· · · · · · · ·The other one is creek erosion.
15· ·Obviously you can think about the types of storms
16· ·we're having.· Very, very heavy storms in a very
17· ·short period of time.· Not only does it cause
18· ·flooding.· It also increases stress on the creeks
19· ·and rivers by the amount of flows that go down those
20· ·creeks and rivers for an extended period of time.
21· ·That causes additional creek erosion.· Those are the
22· ·two main issues that we want to try and address.
23· · · · · · · ·I'm going to get there.· There we go.
24· · · · · · · ·Okay.· One of the -- now I'm on the
25· ·storm water side of the equation.· What -- how many
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·1· ·storm water problems we have.· Right now this is
·2· ·listed by -- by four major watersheds how many
·3· ·problems we have identified.· 97 in the upper
·4· ·left-hand corner.· 61 on the right.· There's 264 in
·5· ·the purple area.· That area right now has some small
·6· ·taxing districts in it.· One of the things you'll
·7· ·find is if we collect a little money and do a little
·8· ·bit of work, people are more prone to tell us there
·9· ·are storm water problems because we can get
10· ·something done with it.· And then the light green
11· ·area at the bottom is 144.· I think to use the map,
12· ·just to remind everybody, MSD's service area is the
13· ·City of St. Louis and 90 percent of St. Louis County
14· ·out to about Highway 109 in Wildwood.
15· · · · · · · ·Real quick on the rate commission and
16· ·rate proposal.· I'm not going to go over this.
17· ·Commissioner Perkins kind of went over what the rate
18· ·commission is doing.· I will hit the schedule a
19· ·little bit so people know what to expect and that is
20· ·here.
21· · · · · · · ·So how we got here, in the summer of
22· ·2022 MSD staff started putting together a rate
23· ·proposal for consideration by the rate commission.
24· ·We do this every four years.· There's two
25· ·components.· One for wastewater.· One for storm
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·1· ·water.· We got it done in March.· We delivered that
·2· ·proposal to the rate commission.· They've got till
·3· ·September 5th to evaluate our proposal, make any
·4· ·comments or suggest changes, and then hand that over
·5· ·to our rate -- to our board of trustees.· Our board
·6· ·of trustees will use September through December
·7· ·looking at the recommendations that come out of the
·8· ·rate commission, looking at MSD staff's original
·9· ·proposal and deciding what's the appropriate way to
10· ·move forward.
11· · · · · · · ·Moving to 2024, after the board's done,
12· ·right now we're planning on an April 2nd, 2024
13· ·election for both of these.· For the three months
14· ·prior to that MSD will start up again, and we've
15· ·been doing this even before the rate commission, a
16· ·very extensive education program to the public.
17· ·What we want to let them know is we're not going to
18· ·advocate that they vote one way or another, but on
19· ·the two propositions, one for wastewater and one for
20· ·storm water, we're going to let them know if you
21· ·vote yes, this is what happens and this is what the
22· ·cost is.· If you vote no, this is what happens and
23· ·this is what the cost is, and then it will be up to
24· ·the voters as we move through there.
25· · · · · · · ·When do we implement?· So implementation
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·1· ·depends on which one you're talking about.· For
·2· ·wastewater those take effect immediately.· So if we
·3· ·do a vote in 2024 -- or we will vote in 2024,
·4· ·depending on which option, that will result in a
·5· ·change in your bill in August of 2024.
·6· · · · · · · ·On the storm water side, if the vote is
·7· ·yes, we'll transition from the existing system, we
·8· ·do have some small taxes, and 2025 will be the first
·9· ·time we bill for new services for both our
10· ·commercial customers as well as our residential
11· ·customers.
12· · · · · · · ·Okay.· What is the rate proposal?· So,
13· ·first of all, I'm going to start with storm water.
14· ·Okay.· The storm water rate proposal, again, is
15· ·designed to take care of flooding erosion issues.
16· ·We want to make sure we had an equitable mix between
17· ·what the residential customers pay and what the
18· ·commercial customers pay, the nonresidential pay.
19· ·So what we did is we figured our revenues -- we
20· ·wanted to make sure it was equitable.· So we took a
21· ·look at the impervious area of residential customers
22· ·and the impervious area of the nonresidential
23· ·customers.· Impervious areas, rooftops, driveways.
24· ·It's a real good measure of who generates runoff.
25· · · · · · · ·Doing that calculation, the residential
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·1· ·customers represent 57 percent of the impervious
·2· ·area.· So we set the program up where residential
·3· ·customers will provide 57 percent of the revenues.
·4· ·Nonresidential represent 43 percent of the
·5· ·impervious area.· Therefore, they're set up to pay
·6· ·for 43 percent of the revenues.
·7· · · · · · · ·And the way we do it is a little
·8· ·different for each, how we're going to do this.· The
·9· ·driver was what are residential customers based on
10· ·surveying willing to pay for a storm water program.
11· ·The answer is somewhat similar to what we saw five
12· ·years ago when we tried this.· Half the customers
13· ·are willing to pay $2 per month to address storm
14· ·water.· So $2 per month for a median household size
15· ·of $175,000 is just under 7 1/2 cent property tax.
16· ·So for a median home of 175,000 the cost is $25 per
17· ·year.· That's what you would see an increase on your
18· ·property tax.· If you want, you can double that to
19· ·350,000.· That becomes $50 per month.· So it just
20· ·depends on what the value of your home is.· For
21· ·non -- and you'll find that on property taxes.
22· · · · · · · ·For the nonresidential customers, we're
23· ·going to bill for impervious area to capture the
24· ·other 43 percent of the revenues.· We're going to
25· ·map how much impervious area they have.· They're
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·1· ·going to be set up that every month they will pay
·2· ·$1.05 per thousand feet of impervious area per
·3· ·month.· It will appear on either their current
·4· ·monthly bill on wastewater, they'll pay there, or we
·5· ·do have some who are not wastewater customers, they
·6· ·will get a separate bill.· So we're collecting it
·7· ·two different ways.· We're collecting it from
·8· ·property tax for residential customers.· We're
·9· ·collecting it based on impervious area for
10· ·nonresidential customers.
11· · · · · · · ·Big thing is how we're going to spend
12· ·the money.· So that program that I just described
13· ·will collect $34 million per year.· How do we spend
14· ·it?· Well, right now we've identified about
15· ·$700 million worth of problems.· That's before the
16· ·storms we saw in summer of 2022.· So there's some
17· ·more issues that have gone onto the list.
18· · · · · · · ·Fifty percent of the funds is going to
19· ·go to a district-wide evaluation of the most
20· ·important projects first, the highest priority.· We
21· ·do that by a benefit cost analysis.· We take the
22· ·benefits of a project, are we going to save
23· ·somebody's house, garage, yard, swimming pool,
24· ·community center, lots of yard versus a little bit
25· ·of yard.· Everything's got a point value to it.
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·1· ·Divide it by the cost to do the project.· We end up
·2· ·with a benefit cost analysis.· What we'll do
·3· ·district-wide is rank all the problems we know and
·4· ·we'll simply start at the top of the list and start
·5· ·working our way down district-wide.
·6· · · · · · · ·Thirty percent of the revenues are
·7· ·scheduled to go to the municipalities and storm
·8· ·water grants.· We started doing this in some of the
·9· ·small taxing districts in part of the area that the
10· ·district provides services and it worked really
11· ·well.· So 30 percent of the revenues, based on
12· ·population, 30 percent of the revenues will go to
13· ·the municipalities to spend on any storm water
14· ·project that that municipality thinks is a priority.
15· ·There is no match required.· It is just simply 100
16· ·percent of the dollars going back.· The idea being
17· ·we can take care of things that are probably a
18· ·little more regional in nature, but there are
19· ·probably things that are higher priorities in
20· ·municipalities other than regional.· So this gives
21· ·them the ability to have dollars from that go after
22· ·things that they think are more important or a
23· ·higher priority.
24· · · · · · · ·Ten percent of those dollars are going
25· ·to go to capital projects in environmental justice
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·1· ·areas.· So those are defined by the State of
·2· ·Missouri.· Last map we saw is north St. Louis City,
·3· ·North County, as you kind of head west from North
·4· ·County and part of South County and the southern
·5· ·part of the City of St. Louis.· One is to address
·6· ·just the concern around environmental justice.
·7· ·Another, though, is that program and those dollars
·8· ·based on what we see in the last year will actually
·9· ·make us eligible to bring a lot more outside dollars
10· ·in by having a program like this.· So that kind of
11· ·solves a need as well as potentially provides a
12· ·benefit later on as well as bringing more outside
13· ·dollars in.
14· · · · · · · ·And the last pot, the last 10 percent,
15· ·it's going to go to other -- other things.· We are
16· ·in -- we're envisioning going to somebody like the
17· ·Municipal League and saying, okay, 10 percent of the
18· ·revenues, what have we missed, what is a big
19· ·regional need from a policy perspective that the
20· ·region thinks we ought to tackle.· So we're going to
21· ·put those -- we're going to put those dollars there
22· ·and we're going to take a look at them on an annual
23· ·basis.· Again, it's about three and a half million
24· ·dollars per year.· Not that this is what MSD is
25· ·thinking, but just take some recent examples.· They
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·1· ·could decide that the local -- the local projects
·2· ·the municipalities are doing are really important
·3· ·and we ought to take that money and increase the
·4· ·grants that go to the municipalities.· They can do
·5· ·that for one year.
·6· · · · · · · ·We should accelerate buying people out
·7· ·of floodplains where they probably shouldn't be to
·8· ·begin with.· There's an awful lot of those.· That's
·9· ·another thing it could do.· It could be just about
10· ·anything.· They could say put it in the big pot.
11· ·Let's just do more of those projects.· We want to
12· ·have the opportunity for the community to say, hey,
13· ·is there really one focus place that doesn't fit
14· ·into this package and we'll do that by allowing 10
15· ·percent of the funds to be decided with community
16· ·input saying, hey, what is really the issue that the
17· ·community thinks we ought to try and address in
18· ·addition to the other portions of the program.
19· · · · · · · ·On the wastewater side, again, Project
20· ·Clear, the cost is $7.2 billion right now in the
21· ·2023 dollars.· It's a 28-year program signed in
22· ·2011.· Therefore, we have to be done by 2039.· If
23· ·you do the math, we're just about at the halfway
24· ·point, not just in projects, but dollars also as
25· ·well as chronologically.· They're on schedule.
Page 24
·1· ·They're on budget.· Things are moving forward.· What
·2· ·we're going to ask the voters, and this is what we
·3· ·ask every four years, we're going to provide two
·4· ·options.· One option is if you allow us to borrow an
·5· ·additional amount of money for the next four years,
·6· ·and in this case the scenario we've got is $750
·7· ·million, this is what will happen to your monthly
·8· ·wastewater rates.· If you decide not to allow us to
·9· ·borrow additional money and just pay for it in cash
10· ·as it comes in, there's a different rate schedule as
11· ·to what will happen to your bill.· I'm going to go
12· ·over both those in a minute.· We'll take a look.
13· · · · · · · ·It is just like what you would think if
14· ·you're buying -- I've used house.· The residents --
15· ·the people we spoke to before said cars are a better
16· ·example.· So you buy -- pay cash for a car, you know
17· ·what that costs you and it costs you a lot on day
18· ·one if you decide to pay cash.· If you decide to
19· ·borrow money, much less now, but you pay for a
20· ·longer period and you pay for interest.· Same thing
21· ·with this program.
22· · · · · · · ·This is the important chart.· This is
23· ·the one if you've seen these before, this is the
24· ·chart we always provide.· So on the left-hand side
25· ·assumes that the voters approve bond financing.
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·1· ·There's two columns.· On the left-hand side of that
·2· ·green column, that percent is the percent increase
·3· ·per year in your monthly charge and on the
·4· ·right-hand side is what the average monthly
·5· ·residential bill is.· So I'm going to focus on the
·6· ·percentage because very few people pay what's the
·7· ·average monthly residential bill.· We bill based on
·8· ·potable water usage during the winter as a rule.· So
·9· ·what you can do is you take whatever your bill is in
10· ·2024, if you vote to approve bond financing, that
11· ·will go up by 7 percent in 2025, 7.6 percent in
12· ·2026, 7 1/2 percent in 2027, and 6.6 percent in
13· ·2028.· So under the scenario for the average monthly
14· ·bill for a resident, over those next four years your
15· ·monthly bill at the end of the fourth year would
16· ·have gone up $14.· That's one scenario.
17· · · · · · · ·The other scenario is if the public says
18· ·no, we don't want you to borrow money anymore, let's
19· ·just pay for it as cash as the need comes in, then
20· ·you see the orange column.· So the yearly change,
21· ·again we're using the average monthly residential
22· ·bill, for the numbers on the right, but looking at
23· ·the percentages first year the rates would go up --
24· ·your bill would go up 35 percent, the second year 35
25· ·percent, then it would go down 20 percent because of
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·1· ·the cash flow needs of the program, and then go back
·2· ·up another 5 percent.· And you can see on the
·3· ·right-hand side.
·4· · · · · · · ·If somebody really wants to know what's
·5· ·happening to my bill, take your current bill and use
·6· ·percentages.· Everybody is a little bit different.
·7· ·They'd be able to calculate that.
·8· · · · · · · ·One other thing I want to add here, it's
·9· ·a customer assistance program.· So we have a program
10· ·that if you are -- if your income is less than two
11· ·times the poverty rate and you come to us, depending
12· ·on the number of people, your rate -- your monthly
13· ·bill will be cut in half.
14· · · · · · · ·If you're elderly like me and over 60 or
15· ·62, I forgot what the number is, and your -- and
16· ·your income is less than two and a half times the
17· ·poverty rate, that will also cut your bill in half.
18· ·We have those programs as well.· They -- they go
19· ·along with this as well to take care of some of our
20· ·less fortunate or lower income individuals.
21· · · · · · · ·The one thing, I think, before I finish
22· ·is, again, if anybody has questions about something
23· ·that's not on this rate proposal, about specific
24· ·projects, we do have staff here who would answer
25· ·that.
Page 27
·1· · · · · · · ·Commissioner Perkins, other than that, I
·2· ·am done.
·3· · · · · · · ·MR. PERKINS:· Okay.· Great.· Thank you,
·4· ·Mr. Hoelscher.
·5· · · · · · · ·We'll open it up for any questions and
·6· ·comments.· I'll first ask the staff if there were
·7· ·any individuals that signed up.
·8· · · · · · · ·MR. LECOMB:· No one has signed up, but
·9· ·given the size of the audience, we can open it up.
10· · · · · · · ·MR. PERKINS:· Absolutely.· That sounds
11· ·great.· So we'll look forward to any questions.
12· · · · · · · ·MR. STALLMANN:· Couple questions.· I'm
13· ·Mark Stallmann, alderman here in Ballwin.
14· · · · · · · ·The municipal grants that you're talking
15· ·about, how would they be awarded?· On a per capita
16· ·basis or just submitting -- every city that wants
17· ·to, submit the request or how -- what is the
18· ·criteria for those grants?
19· · · · · · · ·MR. HOELSCHER:· So the way -- and we're
20· ·doing this in the OMCI.· We're going to transfer it
21· ·there.· There's a chart.· We don't have it with us.
22· ·It's based on population.· We've gone on a couple
23· ·premises here.· One is for each municipality we want
24· ·to make sure they're at least eligible for a
25· ·30,000-dollar grant per year.· Our experience has
Page 28
·1· ·been if you're going to do anything with storm
·2· ·water, just about everything costs $30,000.· So
·3· ·there's a baseline amount.· After that we're going
·4· ·to take the municipalities that are in similar
·5· ·populations and as that population goes up, that
·6· ·grant would increase.· We have a chart that's in the
·7· ·rate proposal.· That's been part of the discussion
·8· ·with the rate commission as to is that the right
·9· ·charter, is there another way to do it.
10· · · · · · · ·Commissioner Perkins here has been kind
11· ·of leading that discussion.· We're in discussions
12· ·about should that chart look a little bit different,
13· ·but whatever the number comes up to be, the only
14· ·requirement will be that the city identified for us
15· ·a storm water oriented project based on your -- just
16· ·on the city's priority.· MSD won't worry about that.
17· ·Submit what it is just so we can see it and then the
18· ·board will appropriate the moneys and the grants
19· ·will be made available to complete the project, with
20· ·no match.
21· · · · · · · ·MR. STALLMANN:· Only on publicly-owned
22· ·property?· Like, in Ballwin we've got a whole slew
23· ·of homeowners who call MSD and said, yeah, it's our
24· ·problem, but we don't have any money to do anything
25· ·with it.
Page 29
·1· · · · · · · ·MR. HOELSCHER:· Those can be resolved.
·2· · · · · · · ·MR. STALLMANN:· That would be -- those
·3· ·grants could be applied to that as well even
·4· ·though --
·5· · · · · · · ·MR. HOELSCHER:· Sure.
·6· · · · · · · ·MR. STALLMANN:· -- the city doesn't have
·7· ·ownership of -- of the particular property?
·8· · · · · · · ·MR. HOELSCHER:· Well, remember, MSD
·9· ·doesn't either.· So we're both kind of in the same
10· ·position.· We're a municipal corporation as well.
11· ·It's a matter of going in.· Most of these problems
12· ·are usually located within, you know, the general
13· ·easements around creeks or something like that, and
14· ·so a municipality would be able to do it and it
15· ·doesn't have to be spent on your property.· It can
16· ·be spent anywhere in the city as long as it's a
17· ·storm water issue.
18· · · · · · · ·MR. STALLMANN:· And are these two
19· ·separate ballot issues?
20· · · · · · · ·MR. HOELSCHER:· Yes.· There will be two
21· ·separate votes.· One for wastewater.· One for storm
22· ·water.
23· · · · · · · ·MR. STALLMANN:· I have a couple comments
24· ·if you want those, too.· Do you?
25· · · · · · · ·MR. HOELSCHER:· Have what?
Page 30
·1· · · · · · · ·MR. STALLMANN:· I had a couple comments
·2· ·as well.· I don't know.· I --
·3· · · · · · · ·MR. PERKINS:· Yeah.· Go ahead.· Proceed.
·4· · · · · · · ·MR. STALLMANN:· Yeah.· As I said, I'm
·5· ·Mark Stallmann, alderman here in Ballwin.· You need
·6· ·my address?
·7· · · · · · · ·MR. PERKINS:· Please.
·8· · · · · · · ·MR. STALLMANN:· 410 Bedford Lane,
·9· ·Ballwin, Missouri 63011.
10· · · · · · · ·MR. PERKINS:· Thank you.
11· · · · · · · ·MR. STALLMANN:· And a couple of
12· ·concerns.· We have the -- I'm not sure where the
13· ·$175,000 median home price.· I happen to be in real
14· ·estate, my day job, and median home price as of June
15· ·was 311,000 city and county wide in St. Louis area
16· ·and that's according to the Multiple Listing Service
17· ·and so -- and my concern, quite frankly, is the
18· ·community of Ballwin, community of Chesterfield,
19· ·Ellisville, etc., West County will be paying a
20· ·disproportionate share of the bill because of the
21· ·home prices and so forth.
22· · · · · · · ·Will -- is there any per capita?· Will
23· ·there be anything taken into account?· That's my
24· ·concern.· We have seen so many times where proposed
25· ·county wide or region wide proposals are funded on
Page 31
·1· ·the backs of people of west St. Louis County and
·2· ·most of the money doesn't come back here.· We're
·3· ·being asked to pay for improvements in north -- as
·4· ·we said, in north St. Louis and St. Louis, north
·5· ·St. Louis County, but the money isn't coming back
·6· ·here and the needs here are not -- people are
·7· ·expected, well, they got the money or whatever you
·8· ·want to call it.· Is there a proposal to make sure
·9· ·that that doesn't happen here?· That the money will
10· ·be equitably distributed so that my -- my
11· ·constituents who are paying a disproportionate share
12· ·of the tax dollars will see this?
13· · · · · · · ·MR. HOELSCHER:· So, yeah.· Two thoughts
14· ·on that the way MSD is approaching.· One, say -- we
15· ·have tracked down that comment about there --
16· ·there's a number through the Realtors or whoever it
17· ·was, it was 311,000.· We're going based on what is
18· ·the median value of a home for tax purposes on
19· ·the -- with -- it is $175,000.
20· · · · · · · ·MR. STALLMANN:· Okay.
21· · · · · · · ·MR. HOELSCHER:· Now, remember, our area
22· ·is the City of St. Louis and the entire county
23· ·except for 109 -- west of 109.
24· · · · · · · ·MR. STALLMANN:· That's the -- that's the
25· ·Realtors median sale price that I'm --
Page 32
·1· · · · · · · ·MR. HOELSCHER:· So sale price is not
·2· ·what taxes are based on.· It's based on the
·3· ·appraised values.
·4· · · · · · · ·MR. STALLMANN:· In theory they're
·5· ·supposed to be the same.
·6· · · · · · · ·MR. HOELSCHER:· Well, in theory they
·7· ·are.· And understand we don't do the taxing.
·8· · · · · · · ·MR. STALLMANN:· Right.
·9· · · · · · · ·MR. HOELSCHER:· We're getting this
10· ·information from the Collector of Revenue from the
11· ·city and the county and we simply do a calculation
12· ·of 175,000 is that middle person.· If there's
13· ·1.3 million customers, the 650,000th person is at
14· ·175,000.
15· · · · · · · ·MR. STALLMANN:· Well, my point was,
16· ·obviously, it's going to be a much higher in the
17· ·area.
18· · · · · · · ·MR. HOELSCHER:· And let me address that.
19· · · · · · · ·MSD is a municipal corporation with
20· ·municipal boundaries.· Obviously our area is much
21· ·larger than the City of Ballwin.· It's 525 square
22· ·miles.· I suspect in Ballwin if you had property
23· ·taxes collected for something, folks who have a
24· ·higher property value will pay more and some of the
25· ·folks in Ballwin would pay less.· I would suspect.
Page 33
·1· · · · · · · ·MR. STALLMANN:· We don't have property
·2· ·tax.
·3· · · · · · · ·MR. HOELSCHER:· Well, okay.· Now you --
·4· ·so you blow me out of the water.
·5· · · · · · · ·MR. STALLMANN:· Not to be difficult.
·6· · · · · · · ·MR. HOELSCHER:· No, no.· It's a good
·7· ·point.
·8· · · · · · · ·We're treating it as one municipal
·9· ·entity.· We've always tried to treat MSD as all of
10· ·MSD, not as 70 -- 90 different municipalities or six
11· ·different watersheds or 32 other smaller
12· ·subwatersheds.· We've -- we've always treated this
13· ·as one system, one set of municipal boundaries,
14· ·municipal corporate boundaries as set by the
15· ·constitution and we will -- we think it's
16· ·appropriate.· Our proposal right now in the rate
17· ·commission is to collect revenues based on that
18· ·basis and distribution as I described.
19· · · · · · · ·MR. STALLMANN:· Okay.
20· · · · · · · ·MR. HOELSCHER:· So my guess is we
21· ·disagree.
22· · · · · · · ·MR. STALLMANN:· Yes, that would be
23· ·correct.· That would be correct.
24· · · · · · · ·MR. HOELSCHER:· I got that.
25· · · · · · · ·MR. STALLMANN:· Yes.· That would be
Page 34
·1· ·correct.· Once again, as with so much, the residents
·2· ·Alderman Siegel and I represent will be paying a
·3· ·disproportionate share of -- of the -- of the
·4· ·revenue as it's generated.
·5· · · · · · · ·MR. SIEGEL:· My name's David Siegel.
·6· ·I'm another one of the alderman here in Ballwin.
·7· ·573 Golfwood Drive, Ballwin, Missouri 63021.
·8· · · · · · · ·When you're talking about taxing -- tax
·9· ·rate for nonresidential like businesses, you do the
10· ·thousand square foot.· Is that also including the
11· ·entire parking lots and the buildings?
12· · · · · · · ·MR. HOELSCHER:· So it is any impervious
13· ·area on their property that's not in the public
14· ·right of way.· So, obviously, public right of way is
15· ·not their property, but we simply have the property
16· ·boundaries.· We fly in the area.· We know the
17· ·impervious area of the property and we simply add up
18· ·the amount of impervious area.· So it is parking
19· ·lots, it is rooftops, it is sidewalks that are on
20· ·their property.· As a rule, the flying we do is
21· ·pretty accurate.· There's some instances where
22· ·something may look like concrete, but it's really
23· ·loose rock or something like that, and we'll have an
24· ·appeal process if anybody has a question about that.
25· ·And as we've done in the past, you know, if anybody
Page 35
·1· ·has any questions, we'll go out, we'll have a
·2· ·discussion and, you know, we usually -- past
·3· ·practice where we get it 99 percent right, but there
·4· ·is instances that what we've seen is a little bit
·5· ·different and there will be an appeal process for
·6· ·that.
·7· · · · · · · ·MR. SIEGEL:· I guess -- I guess another
·8· ·comment on -- or one other comment would be to, you
·9· ·know, involve the local governments in more of
10· ·the -- you know, you're going to give them 30
11· ·percent.· The hard sell here is going to be 50
12· ·percent of the money is to help others, I mean,
13· ·which is a great, noble thing, but, you know, when
14· ·the majority of us out here in the county are going
15· ·to have to fund most of this and we're not going to
16· ·see most of the benefits.· I mean, do you see any
17· ·major projects out here?
18· · · · · · · ·MR. HOELSCHER:· So as I understand it,
19· ·in Ballwin there's a lot of projects.
20· · · · · · · ·MR. LITSINGER:· I don't have the
21· ·numbers, but there are projects.
22· · · · · · · ·MR. HOELSCHER:· We've been talking
23· ·about -- priority list, that's something we get
24· ·later.· We've been out in Ballwin for 15 years
25· ·trying to raise -- knowing what problems you had out
Page 36
·1· ·here.· So I'm not sure whether Ballwin benefits from
·2· ·this or doesn't 50 percent.· It just depends on the
·3· ·severity of the storm water issues you're having.
·4· · · · · · · ·MR. STALLMANN:· Will there be a project
·5· ·list before this goes to ballot?
·6· · · · · · · ·MR. HOELSCHER:· So there is a four-year
·7· ·project list already in the proposal.· We've ranked
·8· ·everything we know about and we've committed to
·9· ·getting those four years worth of projects if this
10· ·passes.· You can go take a look.· It's in the rate
11· ·proposal.· It's got the name of the project, what
12· ·year it's going to be started, what problems they're
13· ·trying to solve, what the cost is.· There's not --
14· ·the ratio is not on there?· I don't think there is,
15· ·but the list of -- the list of projects we're
16· ·committing on doing for four years not just for
17· ·storm water, but also for wastewater is in the rate
18· ·proposal for the next four years.· That would be the
19· ·list we'd work from.
20· · · · · · · ·MR. PERKINS:· But the city's portion of
21· ·this grant portion of 30 percent, those would be
22· ·entirely identified by the city.
23· · · · · · · ·MR. HOELSCHER:· Right, yeah.· Not
24· ·prioritized by MSD.· It would be prioritized by you.
25· · · · · · · ·MR. PERKINS:· They would not have to be
Page 37
·1· ·on that MSD list.
·2· · · · · · · ·MR. STALLMANN:· Assuming this passes
·3· ·based on whatever figures, what kind of numbers are
·4· ·we looking at?· Thirty percent means how many
·5· ·millions?
·6· · · · · · · ·MR. LITSINGER:· You mean to the city?
·7· ·So 34 million is for everything.· So one-third of
·8· ·that is --
·9· · · · · · · ·MR. HOELSCHER:· It's about $10 million
10· ·that's getting distributed to the municipalities
11· ·by -- again, the minimum is 30,000.· It's in flux
12· ·and we're talking about this with the rate
13· ·commission.· So right now it goes from 30,000 to
14· ·close to a million.· We've got another proposal
15· ·where it's 30,000 to 500,000 depending on
16· ·population.
17· · · · · · · ·MR. LITSINGER:· I would guess six
18· ·figures in Ballwin.
19· · · · · · · ·MR. HOELSCHER:· Somewhere in six
20· ·figures.· So we're talking per year, and if you want
21· ·to accumulate it for three years to do a 450,
22· ·assuming it's 150,000, you can tell us, hey, we're
23· ·letting it accumulate three years to do a
24· ·450,000-dollar project.
25· · · · · · · ·MR. STALLMANN:· That's all I got.
Page 38
·1· · · · · · · ·MR. HOELSCHER:· Have we got a rate
·2· ·proposal with us?
·3· · · · · · · ·MR. STONE:· I don't have a physical
·4· ·copy.· I do have digital.
·5· · · · · · · ·MR. STALLMANN:· Well, that would be
·6· ·interesting as to what proposals are in the City of
·7· ·Ballwin on your list.
·8· · · · · · · ·MR. HOELSCHER:· Yeah.
·9· · · · · · · ·MR. SIEGEL:· We can -- if you remember.
10· · · · · · · ·MR. LECOMB:· I have a -- I don't have
11· ·Ballwin.
12· · · · · · · ·MR. HOELSCHER:· I think what we can do
13· ·is we'll -- what I would like to do is since this is
14· ·in flux with the rate commission, we'll send you
15· ·right now, there's two options that are just out
16· ·there and those may not be the final answer, and we
17· ·can -- you've got the contact.· We can send you what
18· ·the two charts are that the rate commission is
19· ·looking at right now.
20· · · · · · · ·MR. STALLMANN:· You can always send it
21· ·to the city administrator.
22· · · · · · · ·MR. HOELSCHER:· Okay.· We will do that.
23· · · · · · · ·MR. STALLMANN:· Yeah.
24· · · · · · · ·MR. PERKINS:· Any other questions or
25· ·comments?
Page 39
·1· · · · · · · ·Okay.· Well, there is another hearing
·2· ·tomorrow night, I believe.· Actually, next week.
·3· ·The next public hearing is scheduled for Tuesday,
·4· ·July 25th at 6 p.m. at the Thomas Dunn Learning
·5· ·Center in south St. Louis City.· That's on 3113
·6· ·Gasconade Street in st. Louis.
·7· · · · · · · ·So unless there is anything else for the
·8· ·good of the order, we'll plan to adjourn this
·9· ·meeting.· And appreciate everybody's attendance
10· ·tonight.· The group is going to be around here for a
11· ·few minutes in case there's anything else.· Thank
12· ·you.
13· · · · · · · ·(The hearing concluded at 7:41 p.m.)
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·1· · · · · · · · ·CERTIFICATE OF REPORTER
·2
·3· · · · · · ·I, Amanda N. Farrar, MO CCR 1358, a
·4· ·Certified Court Reporter for the State of Missouri,
·5· ·do hereby certify that the foregoing transcript was
·6· ·taken by me to the best of my ability and thereafter
·7· ·reduced to typewriting by me; that I am neither
·8· ·counsel for, related to, nor employed by any of the
·9· ·parties to the action in which this hearing was
10· ·taken, and further that I am not a relative or
11· ·employee of any attorney or counsel employed by the
12· ·parties thereto, nor financially or otherwise
13· ·interested in the outcome of the action.
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17· · · · · · · · · · · · · ·Certified Court Reporter
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