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MSD Proposes 64 Percent Rate Increase

The Metropolitan Sewer District bond may be on the April 2012 ballot. Increased revenue would fund improvements required by federal consent decree agreement with regulatory agencies.

MSD Proposes 64 Percent Rate Increase

The Metropolitan St. Louis Sewer District (MSD) proposed to ask a $945-million bond issue in the April 2012 election. If the bond issue passes, MSD would raise the average homeowner’s monthly bill by nearly 64 percent throughout the course of four years.

The bond issue would help fund a $1-billion capital improvement plan that would help MSD meet federal consent decree requirements.

The U.S. Environmental Protection Agency, the Missouri Department of Natural Resources and the Missouri Coalition for the Environment filed a lawsuit to require MSD to upgrade its sewer and wastewater treatment plants. The consent decree came out of mediation efforts.

“There never was a question of whether these improvements needed to be made, but how soon,” MSD spokesman Lance LeComb said.

Among the improvements would be a $21-million upgrade to the Bisell Pointe treatment center, said plant manager Bret Berthold.

Rate increases would be needed to pay the bond issue. The year-by-year increases for the average monthly residential bill would be as follows.

Fiscal year            Monthly bill            Change            Percent Change

2012                        $28.73                        0                        0

2013                        $32.37                        $3.64                        12.7%

2014                        $36.71                        $4.34                        13.4%

2015                        $41.56                        $4.85                        13.2%

2016                        $47.05                        $5.49                        13.2%

The debt service on the bond issue would be $359 million.

“That’s money that can’t go to other things, so that’s significant,” LeComb said.

If the voters reject the bond issue, one option would be to fund capital improvements using cash only. The proposal states that would include a 255 percent rate hike in 2012, so the average household would begin paying $73.35 per month.

However, there’s a range of options between the $945-million bond issue and the cash-only option, LeComb said.

“That’s what the Rate Commission will be taking a look at,” he said. “With $500 million in bonding, that would require a higher rate than it would if we went with the $945-million bond."

Before the bond issue goes on the ballot, it goes to MSD’s Rate Commission, which consists of a 15 member organizations that represents MSD customers and the community. The commission can approve, change or reform the proposal.

The Rate Commission’s recommendation goes to the MSD Board of Directors. The board can reject the Rate Commission’s recommendation only under a narrow set of circumstances, LeComb said.

Rate Commission Chairman Len Toenjes said MSD plans to spend $6 billion on its collection and treatment systems in the next several decades. Toenjes is president of Associated General Contractors.

“This is a significant investment in our region’s infrastructure that will impact generations to come,” Toenjes said Friday in a prepared statement. “The public has a right to know the justifications for the rate increases that will fund this investment.”

He encouraged MSD customers to attend public hearings and give their input.

LeComb said staff proposing the rate changes are acutely aware that raising rates mean residents don’t have that money for other items.

“What’s the value of not having raw sewage running through creeks in people’s backyards? What’s the value of not having sewage back up into people’s basements?” LeComb said.

He said MSD has one of the lowest costs per gallon of sewage treated.

The process will include multiple public hearings throughout the next several months. In June, three meetings are scheduled.

  • 9 a.m. June 13, MSD offices at 2350 Market Street in St. Louis
  • 9 a.m. June 14, MSD offices at 2350 Market Street in St. Louis
  • 10 a.m. June 15, Bridgeton Community Center at 4201 Fee Fee Road (tentative).

All times and locations are subject to change. The meeting in Bridgeton will be held if the commission deems it necessary to get more public input.

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