MSD officials proposing rate hikes for wastewater, stormwater services

January 2008 is earliest higher rates could go into effect

By BURKE WASSON

Metropolitan St. Louis Sewer District officials are proposing a hike in customer rates for wastewater and stormwater services to meet federal and state regulations.

As proposed, the average customer would go from paying $22.38 per month for sewer service to $36.70 per month by the district’s 2012 fiscal year, which begins July 1, 2011.

The district’s rate structure for stormwater services also would be changed.

Instead of every MSD customer paying a flat 24 cents per month for stormwater control, customers would be charged according to how many square feet of impervious, or non-absorbent, property they own. Impervious property includes non-absorbent property like driveways, roofs, garages and parking lots.

The proposal calls for the 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 MSD customer then would pay $4.76 per month for stormwater service, according to the district.

MSD Public Affairs Specialist Lance LeComb said if the stormwater measure is approved by the district’s Board of Trustees, MSD then would eliminate two existing property taxes totaling seven cents per $100 of assessed valuation that go toward stormwater projects.

The earliest the rate increases could go into effect would be January 2008, LeComb said. To ease the rate increases, he said MSD would expand its low-income assistance program for district customers who qualify.

Before the Board of Trustees would consider approving the proposed increases, the proposals first must be sent to the MSD Rate Commission with the consent of a majority of trustees. LeComb said he anticipates trustees will vote whether to send those proposals to the Rate Commission at either the board’s next meeting on Jan. 11 or in February.

The Rate Commission then would schedule six public hearings for residents to ask questions during a 165-day period before making any alterations to the proposals.

While the district that provides sewer and stormwater service to more than 1.4 million people in the St. Louis area is preparing to begin the rate-increase process, some are concerned that residents will not have the opportunity to vote on the rate increases.

Local activist Tom Sullivan, who has studied MSD’s affairs for years, said the Missouri Growth Association is questioning how the district can approve an increase in stormwater rates without an election.

Thanks to a 1997 Missouri Supreme Court decision that the district’s customer rates for wastewater service can be set by the Board of Trustees, LeComb said MSD should have no problem approving any changes to sewer rates.

With respect to the proposed stormwater-rate increase, LeComb said the proposal meets all legal requirements.

“The criteria governing rates is that number one, any recommended change in the rate has to be fair and reasonable,” he said. “It can’t impair the ability of the district to comply with state or federal laws. We can’t violate any bond covenance. And in addition to the technical things, it has to be that we’re providing a service in a measurable way.

“What’s important to know here is basing stormwater rates on impervious areas is used throughout the country. Several-hundred utilities use it. But what we’re going to do is go one step further than what most utilities do. Most utilities say: ‘OK, the average residential property has 2,500 square feet of impervious area.’ What we’re actually going to do is we’re going to do aerial mapping of our entire service area and determine what the approximate impervious area is for each customer for each property. And it does get quite involved. It can get quite complicated. But if we do that, we can show we are providing x stormwater services for y impervious area. There’s a linkage in terms of there is something you are charging for. There’s something tangible that you’re charging for. The service provided is based on the amount of impervious area that you have.

“This is the most equitable, the most fair way that we believe you can do it. Right now, that 24-cent per month charge per account, is that fair for somebody who only has a thousand feet of impervious area versus a hundred thousand feet of impervious area? I think most people would say no. So we do it and measure something that is tangible. We do it with something that can be measured. And we want to be as accurate and as fair as possible in what we’re charging for that stormwater impervious rate,” he said.

Sullivan, who originally favored stormwater rates being set by impervious property, said last week that he now opposes the idea because he believes it would cause more problems than it would fix.

“I tended to be for the impervious thing at first,” he said. “But first of all, one downside is it’s going to be like assessments. There’s going to be never-ending complaints about ‘You’re not charging me right.’ I mean, can you imagine you’re actually charging by square foot? They’ll be out of date. Somebody will say: ‘Well, I put a garage up.’ It’s going to be never-ending.

“The second thing you have to realize is let’s suppose for example you have a block in Clayton where you have a parking lot that is worth a half-million dollars next to an office building that’s worth $20 million and they both have the same impervious area. Well, suppose you’ve got a stormwater problem on that block and there’s flooding, et cetera. You fix the stormwater problem, who’s going to benefit the most? The guy with the $20 million office building or the parking lot? So, I mean, there’s two sides to this issue.”

Besides the proposed rate increases, LeComb added that the district would like to divide its area into five separate subdistricts split by major watersheds. Each subdistrict could levy its own property taxes with elections for what LeComb refers to as “enhanced” stormwater service.

As for the district’s proposal to raise sewer-service rates, LeComb said those funds would be necessary for MSD to steer away from financing projects with bonds and adopting more of a running bank for costs.

“We feel that number one, when you look at the interest we paid for bonding (Proposition Y), those are millions of dollars that could be used for projects and other work,” LeComb said. “And at the same time, we don’t have full clarity yet on what the regulations are going to be that we have to comply with. I’ll give you an example. One of the things that the state and the federal government is working on right now is water-quality standards. What are the bacterial limits in our area’s rivers and streams?

“What should we be doing to make sure that they’re fully swimmable? Should they be fully swimmable? Things of that nature. And those rules and regulations are currently playing out. And what’s happened in other parts of the country is that some cities have started building projects and doing work before those regulations are fully fleshed out.

“And it turned out that A, they either had to do more work or B, had to do a totally separate set of projects. So we don’t want to go down that path and find that we just spent all this money and we’ve got to reach a different goal. So we want to give those regulations some time to work themselves out and for us to get a better idea of what they’re actually going to dictate as far as what our goals are and then we can go ahead and make sure that we’re doing the right projects and we’re not wasting money and making the most efficient use of our resources.”

LeComb further said he believes the rate increases will solve the district’s needs and that any public concerns can be addressed through the Rate Commission’s public-hearing process.