The Metropolitan St. Louis Sewer District will have its Finance Committee study the merits of proposed 2008 rate hikes starting this week in the first of two sessions.
The Finance Committee is scheduled to meet from 4 to 5:30 p.m. Wednesday, Sept. 26, at MSD headquarters, 2350 Market St., to discuss the proposed rate changes in both wastewater and stormwater service.
MSD spokesman Lance LeComb said the Finance Committee also is scheduled to further discuss the proposed rate increases on Oct. 9. He added that while the district’s Tuesday meetings are normally in the morning, this one “will probably be moved (at a later time) because of subject matter.”
Once the findings of the Finance Committee are complete, LeComb said the MSD Board of Trustees is expected to vote on a first reading of the rate increases in October and vote on a second reading in November.
As proposed earlier this year, MSD customers in 2008 would see a 64-percent increase in wastewater-service rates.
That 64-percent rate hike would be phased in through incremental increases from January at the earliest until 2012.
The average MSD customer would go from paying $22.38 per month for sewer service to $36.79 per month by the district’s 2012 fiscal year, which begins on July 1, 2011.
And instead of a 24-cent monthly flat fee paid by all district customers for stormwater service, the district has proposed a system based on the amount of impervious — or non-absorbent— property on an owner’s lot. Impervious property includes non-absorbent property like driveways, roofs, garages and parking lots.
The proposal calls for the sewer district to begin charging 12 cents for each 100 square feet of impervious property and then gradually raise that level in increments to 19 cents per 100 square feet of non-absorbent land by July 1, 2011.
The average residential customer then would pay $4.76 per month for stormwater service, according to the district.
If the stormwater-service rate increase is approved by the district’s Board of Trustees, the sewer district then would eliminate two existing property taxes totaling seven cents per $100 of assessed valuation that go toward stormwater projects.
The sewer district covers all of the city of St. Louis and 90 percent of St. Louis County.
MSD officials earlier this year proposed the rate increases to generate additional revenue to update sewer and stormwater systems and prevent additional government regulation or lawsuits.
But even after the rate increases were proposed, the sewer district was sued June 11 by the U.S. government, acting on behalf of the Environmental Protection Agency, and the state of Missouri alleging unlawful dumping of raw sewage into area waters and lands.
The lawsuit alleges that the sewer district has “discharged pollutants,” including raw sewage, into such waters as the Mississippi River, Missouri River, Meramec River, River Des Peres and their associated tributaries, including creeks.
Specifically, the suit alleges that on roughly 500 occasions from 2000 to 2005, more than 500 million gallons of raw sewage was dumped into the Mississippi River, River Des Peres and their tributaries.
The federal and state government also allege that on more than 7,000 occasions between 2001 and 2005, MSD discharged pollutants containing raw sewage “onto public and private property, including without limitation, streets, yards, public parks, and playground areas, and into buildings, including homes, located in the city of St. Louis and St. Louis County, where persons have or may have come into contact with such sewage.”
Both the state of Missouri and the federal government are seeking numerous damages from the sewer district for alleged discharges in violation of the federal Clean Water Act.
They are seeking penalties not to exceed $27,500 per day for each violation that occurred between Jan. 30, 1997, and March 14, 2004, and penalties not to exceed $32,500 per day for each violation that occurred on or after March 15, 2004.
The plaintiffs also are seeking several permanent injunctions to ensure that MSD will prevent any future violations.
While the district’s proposed rates for wastewater service would climb from their existing average level of $22.38 per month to an average household charge of $36.79 by 2012, LeComb has pointed out that in some cities where the federal EPA has taken legal action to repair sewage problems, monthly residential wastewater rates are in ex-cess of $50.
The MSD Rate Commission voted 7-4 in July to recommend that the sewer district’s proposed rate hikes for next year are “fair and reasonable to all classes of ratepayers.”
In two separate votes, the Rate Commission also recommended that the district not pursue any bonding or debt financing to reduce those rates for customers.
The Rate Commission voted 7-4 against pursuing debt financing to reduce next year’s proposed rate hike and also voted 8-3 in opposition to letting voters decide no later than November 2008 whether they would like the district to use debt financing to reduce rates.
Rate Commission members voting in favor that the rate increases are “fair and reasonable” were: Chairman George Toenjes of the Associated General Contractors of St. Louis, Nancy Bowser of the League of Women Voters, George Allen of the Home Builders Association of Greater St. Louis, George Tomazi of the Engineers’ Club of St. Louis, Mike Schoedel of the St. Louis County Municipal League, William Peick of the St. Louis Council of Construction Consumers and Daniel P. Murphy of the Building and Construction Trades Council.
Rate Commission members voting in opposition to the “fair and reasonable to all classes of ratepayers” recommendation were: Vice Chairman John L. Stein of Missouri Industrial Energy Consumers, Virginia Harris of the Sierra Club, Willard Reeves of the Human Development Corp. of Metro St. Louis and Steven R. Sullivan of the Regional Chamber & Growth Association.
As for the debt-financing votes, only Bowser, Reeves, Stein and Sullivan were in favor of recommending that debt financing be used to reduce rates and only Stein, Sullivan and Tomazi were in favor of asking voters to consider debt financing by no later than November 2008.
The district’s proposal would provide $661 million in fi-nancing for projects tied to MSD’s Capital Investment and Replacement Plan, or CIRP.
That plan essentially would be carried out through a pay-as-you-go system paid with funds generated from rate increases in both wastewater and stormwater services.
The district plans to spend an estimated $671.5 million on those CIRP projects.
LeComb said that the two Finance Committee meetings on Sept. 26 and Oct. 6 will act as essentially public hearings for people who are interested in the proposed rate increases.
“There is no provision in the (MSD) charter for how the board is to go about considering these,” he said. “There’s no formal process. So they thought it was best taken care of in committee. That way, it would be a public meeting, but at the same time, wouldn’t require any disruption in the schedule.
“If we are going to proceed, obviously, we want to make sure we have everything in place before everything can go into effect and hit the bills in January of ’08. That seems like the best way to do it.”
LeComb said the district would also consider written correspondence from ratepayers who have questions on the proposed hikes for next year.
“I’m actually anticipating that some folks we have out there, just some folks who’ve taken a keen interest in this because they have stormwater issues, will probably weigh in via letter, what-have-you, between the two meetings as well,” LeComb said.