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Economy & Business

MSD rates are set to go up, one way or another

This article first appeared in the St. Louis Beacon, May 19, 2011 - Customers of the Metropolitan St. Louis Sewer District are about to face a choice about their rates: Either they will rise about 13 percent a year for four years in a row or rise 255 percent in one year, followed by negligible hikes after that.

The answer will be determined next April when voters in St. Louis and St. Louis County decide the fate of a $945 million bond issue that the sewer system says is needed to make changes to comply with state and federal regulations.

Since 2007, the district has been negotiating with the federal Environmental Protection Agency to resolve a lawsuit over the amount of untreated sewage that overflows into area waterways after a heavy rainfall. A 1999 plan filed by MSD with state officials was rejected by federal regulators.

MSD officials say rates need to rise for several reasons besides regulatory requirements, including the increased use of debt by the system; a shrinking customer base, down by about 2 percent; the resulting decline in water usage, another determining factor in sewer charges; and the general economic downturn.

Officials point to the loss of big-ticket customers like the Ford and Chrysler plants, Northwest Plaza and a growing number of school buildings that have been closed in the city and county.

Its plan for dealing with wastewater overflow and other needs includes a $1 billion-plus capital program, to improve and replace equipment. It plans to fund the four-year program through a combination of debt, coming from the proposed $945 million bond issue and cash financing of $171 million.

If voters approve the bonds, the average family's monthly wastewater sewer bill, now $28.73, would rise to $32.37, or 13 percent, in fiscal year 2013; to $36.71, or 13.1 percent, in fiscal year 2014; to $41.56, or 13.2 percent, in fiscal year 2015; and to $47.05, or 13.2 percent, in fiscal year 2016.

Without the money raised by the bonds, MSD officials say they would have to move to an alternate plan that calls for rates to leap to $73.35 a month in fiscal year 2013, then rise by negligible amounts in the next three years, hitting $74.40 by fiscal year 2016.

For low-income families, the sewer district has programs to cut the monthly rate in half.

MSD's system is the fourth-largest in the country, measured by its more than 6,500 miles of pipes. Officials say rates are comparable to those in other areas, as reported by the National Association of Clean Water Agencies.

The rate increase proposal went this month to the MSD Rate Commission, which is made up of representatives from 15 community agencies ranging from the League of Women Voters to the Associated General Contractors to the Cooperating School Districts.

The commission will make a recommendation to the MSD board this fall, following hearings to get public comment on the plan. The board includes six members, three each from St. Louis and St. Louis County. Rates are expected to be set following the April election on the bond issue.

Jeff Theerman, executive director of the sewer agency, said that while MSD is seeking higher rates, it also is exploring various ways to handle water that too often results in basement backups during heavy rains.

One method he cited is storage facilities that can hold back water during storms, then release it into the sewer system after the rains have stopped and the sewers are better equipped to handle it. Another method being explored is porous pavement, which would allow rainwater to seep through rather than run off to the sewers; he said designs would be such that the pavement would not be noticeably different to those who walk or drive on it.

Another possibility cited by Theerman is green infrastructure, which uses rain gardens and other natural ways to hold back water before it gets into the sewers. Gardens could be at ground level or even on the buildings of some roofs, he said.

"It's not a panacea," Theerman added, "but it has its place. Like anything new, it's no magic bullet. You have to watch and see how it develops."

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