RC Proposal Overview Public FINAL 0

Metropolitan St. Louis Sewer District

Rate Proposal Overview

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MSD • First sewers built in the 1850s in

response to the 1849 cholera outbreak

• Prior to 1954, the area was covered by 79 separate sewer systems

• MSD is a public/government agency, created in 1954

• MSD annexed the area of St. Louis County west of I-270 at voters’ request and began to provide wastewater service in 1977

• MSD began to provide stormwater service to this area in 1989

• Established in 2000 to provide public input into how MSD sets its rates

• 15 organizations representing a broad cross-section of the community MSD serves

• Reviews all proposed rate changes under charter-defined parameters, and renders a recommendation to the Board of Trustees

• The 2015 Rate Commission will consider a proposal for MSD rates for fiscal years 2017-2020 (July 1, 2016-June 30, 2020)

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Rate Commission

Two Utilities Wastewater Service

• Collecting and treating the "used" water from sinks, toilets and floor drains

• Travels through miles of pipes to one of seven treatment plants

• Treated to high standards before being returned to our region’s waterways.

• Wastewater service is currently funded by rates based upon water usage and account type

Stormwater Service

• Collecting the rain and other water drainage that is not naturally absorbed in the soil on your property

• Addressing regulatory requirements regarding impacts of stormwater runoff on receiving stream water quality

• Stormwater service is currently funded by a flat fee and small property taxes, based upon geographic location

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Rate Change Proposal

• Four year rate plan, FY17-FY20 • Wastewater rate change

• Wastewater: current • Wastewater: proposed

• Stormwater revenue change • Stormwater: current • Stormwater: proposed

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CURRENT WASTEWATER RATES

Current Rates, Progress under FY13-16 rate cycle

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2013-2016 Rate Proposal Status • Capital Improvement & Replacement Program:

• Schedule and cost of needed repairs and improvements

• Maintain the system and ensure compliance with all State and Federal Regulatory requirements

• $971,015,0001 identified in FY13-16 Rate Proposal • On time and under budget:

• Plan to appropriate $889,632,0001 (95%) of amount identified in FY13-16 Rate Proposal

• 80% of projects appropriated within 2 months of planned date through FY15

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WASTEWATER: current

1 Appendix 7.7.1

• Operations & Maintenance • $716 M included in Rate Proposal1 • $700 M appropriated [projected]1

• Wastewater Operations Accomplishments • Brought CCTV program in-house • 61,737 manholes inspected • 6,651 manholes rehabilitated • 1,910 miles of sewer line inspected • 66% (2/3) reduction in basement backups since

cleaning program began

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WASTEWATER: current

1 Appendix 7.7.1

2013-2016 Rate Proposal Status

PROPOSED WASTEWATER RATES

Proposed Rate Changes

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Wastewater Rate Change Drivers

• MSD Project Clear: Regulatory Requirements • Get the Rain Out • Repair & Maintain • Build System Improvements

• Financial Stability and Responsibility • Maintain AA Bond Rating

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WASTEWATER: proposed

Wastewater Rate Proposal Key Financial Components

• $1.5B Capital Program1

• Wastewater Capital Improvement & Replacement Program

• $736M Operations & Maintenance Cost2

• $477M Total Debt Service Cost3

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1 Table 4-7 2 Table 4-6 3 Table 4-9

Proposed Wastewater Capital Improvement & Replacement Program1

Fiscal Year Program Level2 2017 $332,511,688 2018 $347,297,471 2019 $373,664,090 2020 $439,398,796

Total 4 Year Program $1,492,872,045

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1Planning, engineering, and construction of wastewater projects.


2 Table 4-7

Additional Use of Debt • Fund next four years through a combination of

cash and bonds • Total Cash Financing: $415M1 • Total Bond Financing: $1.11B1

• Assumes $900 M additional bond authorization • Total debt authorized $2.6202 Billion • 100% of debt is used to fund the Capital

Improvement & Replacement Program

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1 Table 4-8 2 Total Bonds FY2004-2020

Proposed FY17-20 Wastewater Projects

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598 Wastewater Planning,

Design, & Construction Projects

226 Wastewater

Construction Projects

39 Sanitary Sewer

Overflows (SSOs) removed1

24 Miles of Storage &

Conveyance Tunnels designed

1One CSO will be removed during this rate cycle, in addition to the design and planning for future removals. The Green Infrastructure (Rainscaping) program is also designed to alleviate CSOs to the Mississippi.

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Proposed FY17-20 Wastewater Projects

1 Appendix 7.2.2

Stable Wastewater Operating Costs

Total % Change FY15 [projected] $169 M N/A FY16 [projected] $178 M 5.4 % FY17 $176 M -1.2 % FY18 $180 M 2.1 % FY19 $186 M 3.5 % FY20 $193 M 3.6 %

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1 Table 4-6

Proposed Wastewater Operations & Maintenance

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60,000 Manholes Inspected1

6,000 Manhole

Rehabilitations

1,600 Miles of sewer

inspected with CCTV

3,814 Miles of sewer cleaned

360 Miles of sewer rehabilitation 12% per year, once per 50 year schedule

Meets Consent Decree requirements for inspection, cleaning, and rehabilitation

Proposed Wastewater Rate Increase Average Residential Monthly Bill1

[with bond financing]

Fiscal Year Monthly Bill $ Change % Change

FY162 $ 40.72 $ 4.73 13.1 % FY17 $ 44.72 $ 4.00 9.8 % FY18 $ 49.56 $ 4.84 10.8 % FY19 $ 54.91 $ 5.35 10.8 % FY20 $ 60.86 $ 5.95 10.8 %

2already approved in 2012 as part of FY13-16 Rate Commission Process 17

1based on 7 Ccfs per month


1Table ES-4

Wastewater Funding Options Voters Approve Bonds

Option A Funded by Cash & Debt

• $900 M additional bonds • $1.5 Billion 4-Year

Wastewater Capital Projects • Avg. Single Family

Wastewater Sewer Bill1

$$$ % Chg. FY16 $40.72 13.1% FY17 $44.72 9.8% FY18 $49.56 10.8% FY19 $54.91 10.8% FY20 $60.86 10.8%

Voters Reject Bonds Option B

Funded by Cash • Zero use of additional bonds • $1.5 Billion 4-Year

Wastewater Capital Projects • Avg. Single Family

Wastewater Sewer Bill2

$$$ % Chg. FY16 $40.72 13.1% FY17 $44.72 9.8% FY18 $73.80 65.0% FY19 $83.46 13.1% FY20 $96.01 15.0%

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1 Table ES-4 7 Ccfs/month

2 Table 4-25 7 Ccfs/month

CURRENT STORMWATER SERVICE

Stormwater service, funding, and geographic disparities

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Current Stormwater Service & Funding Overview

• MSD assumed stormwater management generally inside of I-270 in 1954, and took over the stormwater management for the remainder of our service area in St. Louis County in 1989

• Stormwater service has differed dramatically among parts of the service area due to differences in funding for stormwater system maintenance and system improvement

• Stormwater is currently funded through a combined fee and tax system

• Three zones of stormwater funding overlap in MSD’s service area

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STORMWATER: current

Stormwater Fee and Administrative Tax

2014 Stormwater Fee total: $1,338,000 ($0.24/$0.18) • $2.88 or $2.16 per year

for all residential customers

2014 Total Tax Levy: $5,047,624 ($0.0197/$100) Service Level:

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STORMWATER: current

Stormwater Tax 2014 Total Tax Levy: $10,211,630 ($0.0682/$100) Service Level:

PLUS:

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STORMWATER: current

Taxing Sub-districts Total 2014 Tax Levy: $8,840,941 (Up to $0.10/$100 ) Service Level:

PLUS

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STORMWATER: current

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$0.241 fee + $0.0197 + $0.0682 + up to $0.10

$0.241 fee + $0.0197 + $0.0682

$0.241 fee + $0.0197

STORMWATER: current

1for customers also receiving wastewater sewer service

Current Stormwater Services & Funding

Average Cost per Customer

25 2for a single-family home appraised value of $142,100, at 19% Residential assessment rate

STORMWATER: current

$0.241 fee + $0.0197 + $0.0682 + up to $0.10

$0.241 fee + $0.0197 + $0.0682

$0.241 fee + $0.0197

1for customers also receiving wastewater sewer service

Stormwater Regulatory Compliance Activities

• MSD ensures compliance with all local, state, and federal stormwater regulations, including: • Plan Review and Permitting • Complaint Investigation and Data

Collection • Emergency Response in critical

health and safety situations 26

STORMWATER: current

Creeks and BMPs/Basins in Red Area

• 1154 Miles of Creeks in Red Area

• 2638 BMPs/Basins in Red Area

• Currently funded

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STORMWATER: current

Public Storm System in Red Area

• 1362.99 Miles of Storm Sewers in the Red Area

• Currently not funded

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STORMWATER: current

STORMWATER SERVICE Proposed Revenue Changes

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Stormwater Revenue Proposal

Key Financial Components • 4-year Operations & Maintenance

cost of $90.8M1

• 6-year $97.6M Capital program2

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STORMWATER: proposed

1 Table 5-2, FY17-20 2 Table 5-5, FY15-20

Stormwater Revenue Change Drivers

• Necessary maintenance of public storm sewer system

• Initiate limited funding for necessary 6-year District-wide stormwater capital improvements

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Proposed Stormwater Operating Costs

Total % Change FY16 [projected] $16.0 M 6.3% FY17 $20.7 M 30.0% FY18 $23.7 M 14.5% FY19 $22.8 M -3.9% FY20 $23.5 M 3.1%

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1 Table 5-2

Proposed FY17-20 Stormwater Projects

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• Green Area: • Projects: 64 • Cost: $24,968,200

• Yellow Area: • Projects: 47 • Cost: $17,450,000

• Red Area: • Projects: 59 • Cost: $7,485,000

1 Appendix 7.5.2

Proposed Stormwater Revenue Structure

Type of Charge Current Proposed

OMCI Sub-district Taxes (Green area per $100 Assessed Value)

$0.05-0.10 $0

Stormwater O&M Tax (Yellow area per $100 Assessed Value)

$0.0682 $0

District-wide Regulatory Tax (Red area per $100 Assessed Value)

$0.0197 $0.0197

District-wide Stormwater Tax (proposed) (Red area per $100 Assessed Value)

N/A $0.100

Total Tax $0.0197-0.1879

$0.1197

Fixed Monthly Charge – Single-Family Residential ($/unit)

$.24 $0

Fixed Monthly Charge – Multi-Family Residential ($/unit)

$.18 $0

Total Fees $.18-.24 $0

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1 Table 5-1

Proposed Revenue Change – Green Area

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Tax Rate Avg. Annual Cost1

Current $.0197 + $.0682 + $.10 (up to)

$61.67/year

Proposed $.10 -$19.75/year

Total $.1197 $41.92/year

Change in total tax: -0.5%

1 Table ES-6 1per $100 of assessed valuation, based upon average appraisal in green area of $184,500

Proposed Revenue Change – Yellow Area

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Current $.0197 + $.0682

$12.50/year

Proposed $.10 +$3.60/year

Total $.1197 $16.10/year

Change in total tax: 0.3%

1 Table ES-6 1per $100 of assessed valuation, based upon average appraisal in yellow area of $70,800

Proposed Revenue Change- Red Area

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Current $0.0197 $10.52/year

Proposed $0.10 +$50.08/year

Total $.1197

$60.60/year

Change in total tax: 1.2%

1 Table ES-6 1per $100 of assessed valuation, based upon average appraisal in red area of $266,700

TOTAL CUSTOMER COST WASTEWATER + STORMWATER

Annualized impact of Wastewater and Stormwater revenue changes

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Total Proposed Annual Customer Cost

Single-Family Residential

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WASTEWATER + STORMWATER: proposed

Proposed Average Annual Cost1

Average Annual Cost without Bonds2

Total Annual Cost

Percent Change

Total Annual Cost

Percent Change

FY16 $522.54 N/A $522.54 N/A FY17 $577.92 +10.6% $577.92 +10.6% FY18 $636.00 +10.0% $926.88 +60.4% FY19 $700.20 +10.0% $1,042.80 +12.5% FY20 $771.60 +9.2% $1,193.40 +14.4%

1Table ES-4, Table ES-6 2 Table 4-25, Table ES-6

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Total Proposed Annual Customer Cost

Low-Income Residential Proposed Average

Annual Cost1 Average Annual Cost

without Bonds2 Total Annual

Cost Percent Change

Total Annual Cost

Percent Change

FY16 $261.83 N/A $261.83 N/A FY17 $283.77 +8.4% $283.77 +8.4% FY18 $312.81 +10.2% $458.25 +61.5% FY19 $344.97 +10.3% $516.21 +12.6% FY20 $380.61 +10.3% $591.57 +14.6%

1Table ES-4, Table ES-6 2 Table 4-25, Table ES-6

WASTEWATER + STORMWATER: proposed

Anticipated Revenue Change Process

• Proposal submitted to MSD Rate Commission February 26, 2015

• Final wastewater rate increase of April 2012 rate plan implemented July 1, 2015

• Rate Commission Recommendation due to Board by August 2015

• MSD Board Approves Revenue Plan – October-December 2015

• Tentative Bond Authorization and Stormwater Elections – Calendar 2016

• MSD Board Adopts Revenue plan after elections

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WASTEWATER + STORMWATER

Rate Commission Formal Comments

• To submit formal comments to the Rate Commission for consideration in their process, please address to: • Email: [email protected] • Mail: 2350 Market Street, St. Louis MO 63103

Attn: Annette Slack, Secretary to Rate Commission

• Intervener Application • Available at www.stlmsd.com/RateCommission • Deadline: March 20

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WASTEWATER + STORMWATER

Documents

RC Proposal Overview Public FINAL 0