MSD trustees take initial step to issue Proposition Y bonds

By Staff Report

The Metropolitan St. Louis Sewer District Board of Trustees began the process to issue $945 million in bonds at its meeting last week to continue government-mandated upgrades to its sewer systems.

The board voted 6-0 to adopt a resolution June 14 that “memorializes the district’s intent to find the lowest cost financing and to affirm the parameters for the bonds” approved by city and county voters in the June 5 election, according to information provided to the board.

MSD Executive Director Jeff Theerman told the board the bond issue, Proposition Y, received 85 percent favorable votes in the city and the county.

In addition, eight amendments to the district’s charter that also were on the ballot received from 76 percent to 87 percent favorable votes.

The board also voted 6-0 to approve the district’s wastewater user charges, which will establish the average monthly rate increase, effective July 1, resulting from approval of the bond issue.

The rate increase, according to Theerman, will “be reflected on customers’ August bills.”

The average single-family residential bill stands about $28.73 per month.

That will increase to $31.34 on July 1, rather than increase to $64.15, which would have occurred had the bond issue not been approved.

Rates gradually will increase so that by 2015 residents will pay $43.67 each month — a total increase of 52 percent compared to nearly 127 percent without Prop Y.

The sewer overflows Prop Y will address resulted in the district being sued in June 2007 by the federal government on behalf of the Environmental Protection Agency and the state of Missouri on behalf of the Department of Natural Resources.

The Missouri Coalition for the Environment Foundation later intervened under the citizen suit provisions of the federal Clean Water Act.

In the suit, among other things, the United States alleged that on at least 7,000 occasions from 2001 to 2005, failures in MSD’s sewer system resulted in overflows of raw sewage into residential homes, yards, public parks, streets and playground areas.

Under a settlement announced last August and formally approved April 27, the MSD will pay an estimated $4.7 billion over 23 years to eliminate illegal overflows of untreated raw sewage, including basement backups, to reduce pollution levels in urban rivers and streams.