MSD customers eye $275 million bond issue in Aug. 5 election

Metropolitan St. Louis Sewer District customers next week will consider a $275 million bond issue to be spent on sewer repairs and maintenance.

The ballot issue Proposition Y asks voters on Aug. 5 to approve the use of $275 million in bonds to reduce MSD’s planned wastewater rate increases by 56 percent.

MSD officials have said that needed work will be done. The question is whether MSD customers would rather pay for that work up front through the bond issue or see that $275 million raised across 20 to 30 years through a series of rate increases greater than those already planned.

If voters approve Prop Y, the average residential customer would pay $2.99 more per month for sewer charges by 2011. If voters reject Prop Y, that monthly sewer bill would jump to an average of more than $11.

The MSD Board of Trustees previously approved a report and recommendation of the MSD Rate Commission on a proposal for wastewater and stormwater rates that was submitted to the commission by district staff in January.

Last year, residential sewer rates averaged $22.38. In January, that average residential rate climbed to $25.74.

If Prop Y is approved, that average would jump more gradually to $28.

Trustees also approved a report and recommendation of the MSD Rate Commission on a proposal for wastewater and stormwater rates that was submitted to the commission by district staff in January.

The rate panel recommended using bonds to reduce wastewater charges as well as changes to the implementation schedule for a new impervious stormwater charge.

The 2008 rate proposal was an alternative to rates that first were proposed in 2007 and was developed in response to feedback that MSD received from business and community groups late last year.

The proposal first presented to the Rate Commission in 2007 called for a series of increases that would raise wastewater rates 64 percent from 2007 to 2011. Under the alternative 2008 proposal, MSD would use $275 million from the sale of bonds to hold the series of rate increases to 28 percent. If bonds are not approved, the wastewater rate change schedule from the 2007 proposal would go into effect.

Changes in stormwater rates would provide for less dramatic annual increases.

Before March 1, stormwater services were funded by a 24-cent monthly charge on each MSD bill and through a variety of property taxes. MSD now calculates stormwater charges based on the amount of impervious area on each customer’s property.

The new stormwater charge is 12 cents per 100 square feet of impervious area.