On the April 5 ballot: MSD seeks funds for wastewater, storm water needs
Customers of the Metropolitan St. Louis Sewer District will see their bills go up after the election on Tuesday. By how much, and when, depends on the outcome of two ballot initiatives.
MSD is a wastewater and stormwater utility rolled into one. The services are funded through different revenue streams - hence the need for two different proposition.
Proposition Y deals with the wastewater side of things. It's the latest in a series of rate hikes needed to fund improvements mandated by a 2012 consent decree among MSD, the Environmental Protection Agency and the Missouri Coalition for the Environment.
"It's not a question of whether we're going to do projects," said MSD spokesman Lance LeComb. "Rather, it's a question of how we finance this work over the next four years."
If Proposition Y passes, MSD will issue $900 million in bonds. If it fails, the projects will be financed on a cash basis. Rates stay lower over the next four years if MSD borrows the money, but the opposite is true long-term.
"When you bond, you end up paying a lot in interest and fees over the long haul," said NextSTL contributor Richard Bose, an opponent of Proposition Y. "We have the option to avoid debt service in this case, and I'm saying all that interest money could be used to put toward other services in the St. Louis area."
The St. Louis Post-Dispatch reported on Tuesday that several minority labor groups were organizing in opposition to Proposition Y to protest MSD's progress around minority workforce goals. But Proposition Y's failure would not change the way MSD handles women- and minority-owned business requirements and does not block the utility from doing the work.
Proposition S is an attempt to sort out storm water funding and service, which LeComb calls a "hot mess."
Right now, customers pay a varying combination of fees and property taxes for storm water service and get a variety of service levels in exchange.
- All of MSD's customers pay a $2.88 annual fee
- Customers in the "red" area pay a property tax of $.02/$100 of assessed value, for a yearly bill of less than $14. That covers regulatory work only. "If they have a collapsing storm water sewer pipe, or an inlet that’s in need of cleaning, we legally cannot provide the service out there," LeComb said.
- Customers in the "yellow" area pay the $.02/$100 tax, plus an additional $.06/$100 in assessed value, for a yearly storm water bill of about $16. That gives MSD enough money for regulatory work and basic operations and maintenance.
- Customers in the "green" area pay both the $.02 and $.06 taxes, plus an additional tax of up to $.10/$100 in assessed valuation levied by special taxing districts. That covers all needed operations and maintenance, and also allows the utility to do some capital projects. Customers there pay the highest amount for service -- up to $64.55 a year.
Proposition S charges all customers the $.02/$100 for regulatory work, and $.10/$100 for maintenance and operations. Money left over in those special taxing districts would be used for $67 million in capital projects. Here's what sewer bills would look like if Proposition S is implemented:
- Customers in the "red" area would see a yearly bill of $60.60 -- up more than $47 from what they currently pay.
- Customers in the "yellow" area would pay about $16.10, an increase of less than a dollar a year.
- Customers in the "green" area would actually see their yearly storm water bills go down more than $22, to $41.92.
"This is about providing the same service to everyone, and having them pay the same tax rate as well," LeComb said. "If folks as a whole don't want that service, we won't provide it."
Richard Bose, the NextSTL contributor, also opposes Proposition S.
"Taxing property is taxing the wrong thing, in my opinion," he said. "It should be an impervious surface tax."
MSD had an impervious fee in place from 2007 until 2013, when it was struck down by the Missouri Supreme Court. The utility's board agrees that it's a better storm water service funding mechanism, LeComb said, but it wants more clarity from the court before trying to implement it again.
MSD is neutral on both propositions. Each requires a 50 percent plus one margin to pass.
Follow Rachel on Twitter: @rlippmann