Good afternoon.

I am going to call to order the public infrastructure and utilities committee meeting for today, Wednesday, January 14th.

It is 3 32 p.m.

Madam Cork, please call roll.

Audible woman boy.

Present.

Okay.

Present.

Audible woman Clark Hubbard.

Here.

Vice Chair Sweitzer.

Present.

Alderman Devotee.

Present.

Audible woman Cox Antoine.

Present.

Chair Browning.

Present.

We have six present.

We have a quorum.

Thank you.

With that, we'll move to our next item, which is approval of the minutes.

I will accept a motion to approve the minutes from Wednesday, December 10th, 2025.

I move to remove the minutes from Wednesday, December 10th, 2025.

Second.

As moved by the Alderman from the first, uh, seconded by the Alder Woman 10th.

Madam Clerk, please call roll.

Audible woman boy.

Aye.

Audible woman Clark Hubbard.

Aye.

Vice Chair Sweitzer.

Aye.

Audem Otterman Devotee.

Aye.

Audible woman Cox Anthony.

Aye.

Chair Browning.

Aye.

We have six I votes.

With that, we've approved the minutes.

We'll move on to our next item, which is board bills for review.

We have one board bill for review that we're going to get out of the way real quick here.

And that is board bill number 115.

I am the sponsor on that, so I will hand the chair over to Alder Woman Schweitzer and my vice chair at this time.

Thank you, Chair Browning.

Are you recognized on Board Bill 115?

All right, thank you.

Um Board Bill 115 is a simple thing, but it's a board bill to allocate uh five million dollars towards the repair of our flood wall.

Uh this is part of a requirement that uh the city matches uh a grant so that we can uh allocate this money towards the repair.

Uh there may be some additional parts to move around in the future in order to complete this package, but uh right now uh this is an opportunity for the city to maximize the amount of money available in order to repair this critical piece of infrastructure that protects our city from uh the river where we get our water.

So uh with that, I'm happy to take any questions.

Thank you, Alderman Browning.

Uh Madam Clerk, do we have anyone here to speak on this?

No.

Okay.

Uh with that we'll move through members of the committee for questions.

Uh Alderwoman Boyd.

Uh my question is you said it's for a flood wall.

Where is it at?

I'm sorry.

So this is the flood wall that uh all along the riverfront uh of the Mississippi, and uh this is uh really to perform uh some testing along the wells that exist along that wall uh to make sure that we are um not only cleaning those out because they do quite free over time, but also uh to make sure that uh they're properly working.

Uh this is routine maintenance that needs to happen, uh, but it is uh also very expensive, and so um it's something that we have the opportunity to get matching money from the state at the moment.

Uh they've allocated money at the state level uh in the last year's budget.

They carried it around over to this year's budget, and so we're looking uh to pay our part of it to receive those matching funds.

So Alderman Browning, my qu I guess my other question is you said this is a maintenance thing, so is this something that we should be doing yearly or every five years, or how is that working?

I don't have the exact estimate on how often it's supposed to happen.

Um I this is this is something I've been working on with the mayor's office.

I think this is one of those uh things that like a lot of things in our city we're we're behind on the maintenance.

Um, but I'm not sure exactly what the routine uh amount of time is that we're supposed to be returning to this.

Um I do know that the the flood wall is in a place right now though where it needs that maintenance.

And so I'm asking that because as you correct, we don't have preventive maintenance things that's happening.

So I guess my other question who will be doing it, who who is supposed to do the maintenance on this?

So per our charter, uh the streets division is responsible for maintenance of the flood wall.

Uh I know it seems like it maybe should be the water division, but um it is actually the streets department that is in charge of that.

So uh we've been working with Zach Fortune uh who was in the streets department recently received a promotion is moving elsewhere, but uh we we have all the supporting documentation of um just what this will cost and exactly the work that'll be done.

Uh and uh the street department will be contracting out because this is not work that they have employees to do.

Uh so they'll be working with the city to do that.

Okay, and I think it will be wise also if uh the street department and um um assuming, and you know what assume means with the new director that he will make sure that that is a uh scheduled item so we wouldn't have to get to this situation again.

That's an excellent thought.

Yeah, I just I just think that you know we have to come up to the 21st century.

So thank you so much for answering my questions.

Thank you, Alderwoman.

Thank you, Alderman Boyd.

Um moving on, Alderman Clark Hubbard.

No questions.

Thank you for bringing this bill forward, and I'd like to be added as a coast officer.

Thank you so thank you so much.

Uh, we'll move to Alderman Devoty.

Alderman, can you give us a flavor of the kind of work that would be scheduled uh with these with these funds?

Yes, so uh there will be pump tests, there will be clearing of debris from the pumps, there will be um testing of the wells that exist along the wall, uh checking of um and replacement of valves.

Uh I have uh a long list of things.

Uh so um there's 63 wells along the wall.

Uh they're going to uh remove the trash and debris from those that accumulates over the years, they're gonna replace uh seven housing screens, 65 housing lids, they've got seven and ten inch check valves that they need to replace, 57 uh eight-inch uh check valves that they need to replace.

Um as well as just doing pump tests uh along the wall as well as um content sand content testing and a lot of environmental work.

Assuming this board bill passes and we uh find this five million dollars to match the state's the that amount that the state is appropriated.

Will that ten million dollars cover that work that is now required to repair and maintain our flood wall?

That is the thought.

Um there will be other funding sources as well that we'll be looking at, but I think that right now we're looking at and hang on, let me let me confer with uh mayor's office real quick on this.

So the first $700,000 is going to go into figuring out exact way what work needs to be done, and so that's part of what this is gonna go to towards paying for, and then we'll have a broader idea of what work needs to be done after uh the initial testing and and replacement of these materials is done.

In other words, we know generally the work that needs to be done, there needs to be a study in order to prioritize that work.

That's right.

We have to get in there and look at the condition of the wells and the wall.

And the thought is that at least 10 million dollars is needed to complete this work.

That is the thought, possibly more.

Uh, but this is one of those things where if we pass this bill um fulfilling the city's match, that it makes us eligible for much more money from the state.

So it's really making the most of our money.

Understood.

Thank you for for the information.

Thank you, Alderman Devoty.

Uh Alderman Cox entry.

Thank you, Madam President Chair.

Um, I don't have any further questions.

A lot of my questions.

Microphone.

Of course, got it.

Can you all hear me now?

Great.

I don't have any further questions.

A lot of my questions were asked by my colleagues, and I agree with their sentiments heartedly.

I'm glad we're making the effort to do now and contribute this portion.

And as a person that has a huge stretch of the flood wall in my ward, I can attest to the fact that these repairs are certainly necessary, and I'm glad we're making the action.

Thank you so much.

Anything you'd like to say to close, Alderman?

No, I just appreciate the good questions.

This is a really important uh piece of maintenance for our city.

I think we're going to hear about some more important pieces of maintenance uh in the upcoming presentation.

And so just to speak broadly, it's really important that we take care of our infrastructure, that we uh especially critical infrastructure like this that protects our city.

Um this is one of those things that uh I think has benefited our city for a long time.

It quietly sits there and protects our city, but we'll notice it if it fails.

So we want to make sure that we're doing the work necessary and uh taking this kind of action.

So really appreciate your time.

If I could make one statement, um, Madam Clerk, if you would add me as a co-sponsor.

So not it.

Uh I would like to follow and also be added as a co-sponsor.

So not it.

Could we embank please?

Uh there's been a motion to in bank any second, second call for previous role.

Previous role.

Any objection to previous role?

Hearing no objection, we have uh moved that board bill number 115 is embanked.

Uh at this time I will entertain a motion for a due pass recommendation of board bill 100.

So moved.

Second.

Second.

There's been a call for previous role from the alder woman for the 13th.

Any objection to previous role?

Hearing no objections.

I'm sorry, who made the motion?

Uh Alderman from the fifth.

Okay.

Thank you.

Thank you.

Uh, any objection to previous role?

Hearing no objection, we have passed board bill number 115 with a pass recommendation.

Thank you, Alderman.

I will pass it back to you for the remainder of the meeting.

Thank you.

Um, with that, we will move on to the next item, which is resolutions for review.

We we have none of those, and so we will move to item number six, which is committee discussions.

Uh with that, we have a presentation from our water division today.

Uh, Director Patel, you are here for the water division along with uh a couple other members of your staff.

Uh, please introduce yourself and your staff and uh proceed.

All right, thank you.

Good afternoon.

Uh Chair Browning, Vice Chair Schweitzer, uh rest of the members of the committee.

So um we have a presentation today.

Uh it's an important update.

Uh you know, we monitor our finances closely and some new information uh deserve to be presented to the public uh to this committee.

And so uh we put this presentation together uh in short order to try to put together uh an update for you all and for the the community.

Uh Spencer Gould, my special assistant to the water commissioner, uh helped put the presentation together, and also Pearl A Burke, our fiscal manager.

So I'm Neri Spitel, the director of public utilities, and uh let's get started.

All right.

So uh this presentation, we're gonna go through uh a number of different topics here, but you know, safe, reliable, economical water is the promise, right?

So uh it's ingrained in our mission.

Our mission drives a lot of what we do every day, most of what we do every day, and a lot of what I'm here to talk to you about today, too.

So uh we'll start out with a little bit of history uh as we typically do, just to convey uh, you know, what it is the water division is responsible for, the scope and scale of that, uh, and then we'll get right into the financial situation that I'm gonna present.

Um from there, we'll go into some of the cost drivers that we're seeing, some of the changes there, um, and then go into our revenues.

Uh you know, we do have uh water rates to to support the enterprise that we are, and so uh, you know, we want to present on what we're doing to make sure that the revenues are sufficient.

Um from there, we'll go into next steps.

So I mentioned our mission, right?

To provide an uninterrupted supply of high quality drinking water uh for city residents, businesses, and other value customers.

You know, these are the people that live, work, and play in St.

Louis uh every day.

And you know, safe drinking water is critical to any city, uh, you know, whether that comes from a river source like we have or wells.

It drives the economy, it drives the public health and well-being, you know, the livelihood of a city.

So we have a responsibility too to make sure that we're doing that in an economic matter.

This is a municipal ownership situation.

So the city owns the water division, and we do not have investors or profits to make.

So every dollar that comes in goes right back into the system and to provide in the service that we do.

So the history of the water division, um, you know, the the creation of the waterworks began in 1831, uh long time ago, shortly after that.

The city uh took over operation uh of that mission in 1835.

Um, you know, we purchased the the existing system for $18,000.

It sounds unbelievable.

Um was a great deal back then, but the population was only 6,000 people.

You know, this system really began at the foot of downtown.

Uh, you know, the arch grounds around that point, it was just a collection of six pumps, you know, and a few uh sticks of pipe that were put together to start.

And you know, it's been built into the system that it is today.

Um as the population grew, we had to invest.

We had to build new infrastructure, and with that came innovations in the water industry that you know have spanned the world over now.

So uh we have a proud history of water in the city of St.

Louis.

Um Bissle plant was built in 1871, uh, 40 million gallon a day capacity that would not serve our needs today.

Uh, and so shortly after that, the Chain of Rocks plant started being built.

In 1894, uh that plant had four times the capacity of the Bissell plant.

And you know, that would serve the capacity of the system today, but uh the city saw fit to grow with the population and plan ahead in 1929.

The Howard Bend plant was built and came online.

The cost of that plant was 12 million dollars at the time.

And you know, the the population was anticipated to grow to 820,000 people and further.

So it was built for a million people, the water system that we are enjoying today.

Uh and the Chain of Rocks plant and the Howard Bend plant are the two treatment plants that we operate today to produce drinking water for the city of St.

Louis.

So there was a little bit of information in there about our our customer base.

Uh, you know, the population decline is really adding to this challenge of uh the spreading the costs out over a larger group of people.

The infrastructure that we have is sized for a million people, but it's being supported with rates by less than 300,000.

So, you know, that is part of the challenge.

The rates support our operation.

The less people there are paying those rates, the more challenging it is on the on the ratepayers.

Uh we're proud to say though that we still have some of the lowest rates in the country, although I wish we didn't have to be here today to tell you about what we're here to talk about, our financial situation, the challenges with that.

So this slide kind of goes through the time frame, the population of the city, uh the growth and then the decline and continued decline.

We really kind of cut it off there at 1974, but uh as you all know, we are less than 300,000 strong today.

So 190 years of municipal ownership.

That is impressive.

That matters.

The city owns the water works, the city owns the water system, and you know, needs to continue owning that if it wants to be, you know, that that responsible steward of the future.

Giving it away would be exactly that, giving you know, one of the most valuable assets the city owns away.

Um I don't know how you put a value on it, but certainly it means a lot to me.

It means a lot to the city residents that rely on that tap working every morning when they turn it on to brush their teeth or take a shower.

Uh, but it is owned by all of us, and we're proud of it.

But we do have a responsibility to maintain it, renew it, and make sure that it's something that can serve future residents.

So uh this shows the infrastructure footprint.

It is the 65 square miles that is the city of St.

Louis, uh, along with some transmission mains that run from Chesterfield to the city limits uh from the Howard Bend water treatment plant that brings uh you know treated water every day to the city residents.

So we do have uh the two plants and 1,300 miles of water mains.

Uh that is a lot.

It is again size for a million people, and all of that is ours to enjoy the benefits of, but also have to pay back into.

We have to renew that infrastructure and keep it going for the the generations to come.

Uh there are two tree to water storage reservoirs, uh Stacy Park Reservoirs in Olivet, and then we have the Compton Hill Reservoir that is in the city limits uh near the Shaw neighborhood.

Uh we do have 23,000 valves, 15,500 fire hydrants.

Um, and as you can see, the the colors that are on that map there represent three pressure zones that we operate.

These are closely related to the elevations within those areas, and so we do operate these three zones to maintain adequate pressure within an optimal range based on these different elevations.

So that brings me to uh kind of the statement uh of the day here.

The water division is projected to deplete our contingent fund balance by the end of the fiscal year.

Um, you know, this is information that we track that we update uh based on revenue projections, based on expenses, uh, but a lot of these things are dynamic.

You know, we have expenses that go up and down based on seasonality, uh, water main breaks, which we do have a lot of, uh, and we'll show later on, uh, more than the national average.

So the infrastructure is aging.

We have not done you know enough to keep up with renewing that on a schedule.

So this contingent fund um balance that that we have relied on uh you know in these years of deficit, uh it affects our ability to provide our mission.

So safe reliable water uh at an economic cost.

Uh you know, this is essential.

We have to address these these challenges as they come up, and I hope this presentation today uh you know shows you that we are in a condition that uh is not sustainable.

So over the past seven years, um, and we'll switch back and forth between fiscal years and uh calendar years, but uh we have experienced rising costs.

Uh this predates COVID, but of course, COVID you know ramped the up the inflationary reactions that we're seeing, uh some of the chemical costs that we're seeing, uh, some of the staffing costs that we see.

Um, and you know, there was also an effect of the moratorium that was put into place as a result of COVID.

So uh five years of not shutting water off uh did result in you know a number of customers who had uh legitimate you know challenges paying their bills and continuing in that trend, and the value now uh of that uh revenue that we have not collected has grown significantly.

Uh we've also had rising emergency costs, uh, these are directly related to the state of the assets that we have and you know the the remaining service life that is left in them.

So this chart here uh you know kind of goes over our revenues and expenses.

Um the blue line there is the expenses, and so uh you know, you can see that we have not caught up with revenues yet.

So the shortfall, the gap between these lines uh, you know, prior to this seven-year period where we had these consistent shortfalls.

Um, you know, there were years when we had higher revenues and expenses, and years that we had higher expenses.

Uh we did have that contingent fund balance though there uh to supplement.

And so uh the increases that were passed in in 2023 and the beginning of 2024, you can see that they did react.

We do we do have revenues that were growing, um, and they almost seem to actually pace the expenses there, but the action happened too late.

We had a rate sufficiency study that recommended an increase in 2021.

The increase did not happen until 2023.

And so, you know, this gap, um, this lag in rates that are sufficient is is part of the the challenge that we're seeing is the seven years of of deficit and borrowing from this contingent fund, uh, which has many purposes.

As I mentioned, the the contingent fund, uh, you know, sometimes we'll refer to it as a reserve fund.

You know, the balance did grow.

It was above 35 million dollars, uh, up to 38 million dollars.

And in 2023, when we came here seeking those increases that were recommended in the 2021 rate sufficiency study, the balance was near 26 million dollars.

As you can see, we had a continued deficit.

Uh, you know, those green and red bars there show the either the surplus or deficit within a fiscal year.

And even following that, you know, the the rate of of drop in the contingent fund balance does slow, and we do have smaller deficits, but they continued.

And you know, I think when that increase was presented, we were still projecting a shortfall in the following fiscal year.

So rising costs, aging infrastructure, lagging revenue.

You know, these are the kinds of things that drive these budget deficits.

And I'll talk a little bit more about the factors that come into play towards that effect later on.

But another thing to consider is our credit worthiness.

So, you know, infrastructure like this does not just get paid for out of you know revenues that are coming in.

You have to acquire debt.

Large water systems across the country, public or private have debt.

It is an instrument that we use to pay for things that will last a very long time.

Some of these water mains last 50 to 100 years.

Uh some of these treatment facilities last you know, 30 to 50 years.

Uh, we're on borrowed time on a lot of that stuff, but you do not pay for that up front and then you know, front load that you pay for that over time.

So there are financial instruments, debt instruments that are available to us through federal funding, through state funding.

Um, you know, there's state revolving fund loans that were implemented uh with some of the improvements with the Safe Drinking Water Act, the Clean Water Act.

Uh these are subsidized loans.

In the state of Missouri, these loans are subsidized where the interest rate rate that is paid is 30% of the interest rate uh a couple weeks ahead of closing on that loan.

So it's a pretty good deal.

We can get interest rate rates below 2%, we can get interest rates down to one and a half percent, uh, which is what we did in uh 2013 when you know we were on the tail of rate increases that allowed us to go after that that loan, that debt, uh, and we got rates you know in the one and a half percent range.

That was a 10 million dollar loan.

We've got an application out for a 35 million dollar loan, but you know, this isn't free money.

You have to be able to cover that debt.

And so these are backed by revenue bonds, and the revenue bonds require uh certain indentures.

Uh one of the indentures is that you're able to pay for your operating expense and that debt.

So with a coverage ratio.

So uh at the bottom of the slide here, I've got kind of a long blurb um that is uh cut and paste from the current bond indentures that we are uh adherent to.

Uh a couple of the highlights there.

So the city will enforce charges for services.

Um, you know, when we provide water service, the rate that people pay is that charge.

We collect on those rates, we have enforcement mechanisms, uh, you know, we have a responsibility to collect to be solvent.

Um further there, um we have revenues that are sufficient uh to cover uh the the opex plus 110% of the principal and interest.

Um so basically that is uh debt coverage ratio.

Uh I've got copied in there, it's 110%.

So annually, currently our debt is about half a million dollars.

We have to have 110% when you take the revenues minus the expenses for uh to meet that that requirement.

In a year when you're issuing new debt, that has to be a little bit higher as well.

So lastly, I've got highlighted there that the study uh, you know, if a rate sufficiency study is pursued, which we're required to do every 24 months, um, and it recommends that a rate adjustment is necessary, that the city will act.

The city agrees to make the actions uh necessary to uh correct that deficiency.

And you know, those reflect on our credit worthiness uh, you know, as the water division, but also the city.

So a lot of these bond ratings see us the same.

We are a city department, yes, but we are the city of St.

Louis as well.

So we have to maintain that credit credit worthiness.

So now I'm gonna go into the cost drivers that we're experiencing.

Um we've broken this apart into four main categories here.

Um aging infrastructure.

Uh this will sound like a broken record, but rising emergency costs.

Uh, you know, one of the factors that uh we watch and that has brought us here uh to present this information quicker today than we anticipated.

We had the highest number of main breaks in 2025 that we've had in over seven years.

Uh 399 breaks, you know, we go out, we address those, we repair those.

They cost on average $13,000 per and that is just a localized repair.

That is not renewing the infrastructure, that is not renewing the water main.

That is an emergency cost.

These emergency costs will continue to rise if we do not do the level of renewal that we need to be doing.

Um the next driver here is the staffing.

So, you know, we have uh a blended staffing mix here that I'm gonna talk about.

Um it you know, talks about the city forces, uh, you know, personnel that we have that are employed directly by the city, but also the contract labor that we rely on that uh the industry has grown to rely on.

Um, and increased competition is one of the things that uh is is driving that cost up.

So in the water sector specifically, the professionals uh that have that kind of experience are garnering a higher salary.

Uh we have to match that level in order to attain this uh talent.

Uh next item here is inflation price volatility.

Um, you know, this is cooling a little bit, but the effects are still there.

Uh when I showed those charts, the rising revenues, yes, but the rising expenses, uh, you know, we are still seeing some price volatility in one of our largest expenses, which is the chemicals that we use to treat the water.

Um, you know, this is 15 million dollars a year.

Uh, and I think we're projecting a little bit higher next year as well.

We're also seeing inflation um and increased costs across the utilities that we have to pay.

You know, the uh process of pumping water is highly energy intensive.

It's 24 hours a day, three, you know, seven days a week, 365 days a year.

Uh, we are pumping water into the system to support daily demands, but also refill the reservoirs so that we're ready for the next day.

Um, you know, that energy and that electrical cost is approximately five million dollars.

But as Amarn gets rate increases, uh, you know, those are borne by us, and then of course passed on to the ratepayers as well through the rates.

Now, every time Amhern gets a rate increase, we don't go turn around and raise our rates.

It's absorbed by us until we can accommodate that in the next increase in the next adjustment.

The last item here is major capital projects.

So, you know, item one, aging infrastructure.

The way you combat that is by renewing the system, uh, putting money back into it.

The rate increases helped.

The rate increases that were passed in 2023 and 2024, those did allow us to start doing some small level of renewal.

We have seen the benefits there.

You know, instead of having to repair failing pumps over and over again that are 60 years old, we did a pump replacement.

Um we've done you know, three pump replacements now, you know, of the the 30 or so units that we do have.

Um so we are making a dent, and we hope not to have to go back and spend money to repair that asset again for a long time.

Um we do ongoing maintenance uh of all of the pumping units to make sure that we're doing our part.

Um, but what I'm talking about is the renewal costs.

Aside from the pumps is the pipes.

So 1,300 miles of water main.

Uh, you know, we try to replace half a percent a year.

That's gonna be six or seven miles.

We're not there yet.

So we need to do more to replace the the pipes that are most vulnerable that are breaking more often so that we can reduce that emergency expense.

Um I've got there the water master plan, you know, we are moving through that process.

Uh we hope to have that complete uh, you know, by the summer fall this year.

So we will have a capital list, uh, capital program and a cost estimate for that.

All right, moving into aging infrastructure.

So this is a chart that just shows the water main breaks by year.

Um we do have some fluctuations.

It goes up, it goes down.

Uh, you know, there are certainly weather impacts that will uh you know increase it or decrease it in a given year.

Um we did have quite a few main breaks this summer uh that contributed to that 399 number.

Uh and then we did experience uh a higher number of main breaks as well.

Um the national average would put us at about 177 breaks per year.

And so I mentioned the high cost of emergency repairs here.

You know, we can drive that that cost down significantly if we can replace the pipes that are most prone to breaking, you know, and and continue to do that in an ongoing fashion.

And and that is you know, certainly a better use of the money, it's a more efficient use of the money.

Um, I think it is the responsible thing to do is to reinvest heavily into the water mains that have served for you know a hundred years.

Uh this map here shows the main breaks across the city.

Um, as you can see, there is you know no corner untouched.

Um, I don't know how well to scale the the north end of that map is.

There's just a sliver of uh of the city that runs up basically to the Chain of Rocks water treatment plant.

So you have the river, you have the bluff, and you know, we're we're nestled in right there at the at the top of the city.

thing to do is to reinvest heavily into the water mains that have served for you know a hundred years uh this map here shows the the main breaks across the city um as you can see there is you know no corner untouched um I don't know how well to scale the the north end of that map is there's just a sliver of uh of the city that runs up basically to the Chain of Rocks water treatment plant so you have the river you have the bluff and you know we're we're nestled in right there at the at the top of the city so you know I I talked a little bit about the uh number of breaks per year that we experience uh you know we're averaging 30 breaks per hundred miles uh and this is over the course of you know several years the national average is is closer to 14 so we can cut that number in half um you know these breaks affect people's lives uh you know they affect their daily activity they affect the businesses they affect public safety so you know if there is a main break it is more challenging for residents to traverse that main break especially in the colder weather there's you know ice that forms um you know these water mains are in the city roads so on to the personnel uh retention challenges this is the staffing portion so I mentioned we've got um rising costs with our staffing we are adding positions to our TOM you know I'll show in a slide or two here that uh we're slowly increasing our RTO uh you know the the budgeted positions that we have uh in our our division we're adding project managers we're adding engineers we're adding utility locators supervisors uh and a superintendent this is all to address you know the increased number of water main breaks yes but also to be able to do the utility locates that are resulting from increased development in the city to do the utility locates because Spire and Amran and MSD have been increasing their rates to be able to address their aging infrastructure and so you know we're facing kind of reactionary effects from other utilities uh you know neighbor utilities doing more work out in the system uh 32000 utility locate requests you know this number continues to increase annually uh as you see Spire out there doing a lot of renewal of their system um as you see Amhern out there uh doing some underground work where they have underground infrastructure so this chart shows the increases here um you know this is actual spend on our personnel services line item in our budget um you can see the increase there I mean it is not as extreme as the chemical costs have gone up but 23% since 2020 and part of this is due to us being able to reduce that vacancy rate that we have hire more qualified staff and you know pay salaries for these staff these experienced staff in the water industry uh to be able to actually keep up with the industry and not lose people to other water utilities.

We've had quite a bit of issues with retention we've worked with the department of personnel to react to that and offer salaries to attract these people back.

So at the top there you can see uh slowly but surely we're adding positions to our TOM I think our budget you know in the coming year here we'll have another addition so we're growing uh at the water division here you know some of the costs that we uh certainly can control in the staffing realm we're choosing to staff up we're choosing to increase but some of these are things that we're reacting to right so the cost of the fringe benefits that we offer to our employees in the city are going up that happens and we have to to cover that cost without a rate increase so unlike the annual budget process um you know we have to react to that internally and absorb that and so these rate increases uh the adjustments that are necessary to cover these increases um are something that that you know we come to uh the board of alderman to to talk about basically this uh this slide just talks about that competition right so um it it is a direct correlation so the other part of the equation for the staffing is for actual um as you can see they are going up um by a significant amount 62 percent now a lot of what I'm gonna talk about in coming slides here is you know what we're doing with this increased contractual service and the benefit that we see from it so these water main breaks these leaks um result in water loss that that is extra energy that is extra chemicals so uh we think we're putting you know uh these dollars to good use and so uh this slide just kind of is is something interesting because we wanted to to relate this to inflation um the CPIU adjustment that was built into the water rate increase that we hoped would allow us to do a little bit more capital work that we hoped would allow us to build the contingent fund uh you know maybe in in two years or five years uh you know it turns out that there are new challenges uh that are outpacing the inflationary uh indexes that we chose so you can see here um you know it's significant too um

Um the CPIU adjustment that was built into the water rate increase that we hoped would allow us to do a little bit more capital work that we hoped would allow us to build the contingent fund, you know, maybe in in two years or five years.

Uh you know, it turns out that there are new challenges uh that are outpacing the inflationary uh indexes that we chose.

So you can see here it's significant too, um outpaced inflation by four and thirty-seven percent, respectively.

So uh this shows our vacancy rate.

Um, as you can see, we continue to do uh a little bit better job every year.

Um it is still tough to hire qualified staff.

Um we are working through that.

We have a slight reduction from 25 to 26 year one percent, and we are continuing to hope to build on that uh you know, maybe a ramps a little bit.

So continuing to use contract labor is not the solution here.

Um we have to have qualified in-house staff.

So we are are working to do that.

Um to the inflation and price volatility.

So I talked a little bit about what we're doing, um, you know, how we're trying to reduce costs, and this chart here shows our total annual pumping.

Um, you know, the line above is the raw water pumping, the river water that we bring in that has all of those suspended solids in that we use the treatment chemicals to settle out and then filter out, and then the line underneath is the finished water pumping.

And so you can see there is a little bit of a gap there.

Uh we had many years of increased pumping.

This was not because of increased population or increased metered consumption or uh you know use by wholesales.

Um this was increased breaks and leaks that were causing water to leak into the ground.

And you know, we put the rate increase dollars to work.

We started addressing these leaks and breaks uh quicker to lose less water into the ground, uh, to save on that energy and chemical costs, the cost of producing the water.

That is something that's within our control and our responsibility uh to be stewards of the the ratepayers' dollars, right?

So that reduction matters, and I'll show you why.

As we reduced our pumping in our finished water uh pump stations, we reduce our chemical usage.

This again is one of our biggest expenses uh as it comes to materials, uh help public health and safety materials.

Our Lime is our most expensive chemical, and we saw a significant reduction in use of Lyme because we were pumping less water uh during those times of peak main breaks in the summer, in the winter.

Um, and that's across the board.

We saw reductions in in all chemicals.

Despite those reductions, uh the chemical expenses remain flat.

Uh we control how much we use to an extent, right?

And so uh as we were pumping less water as we were addressing leaks and breaks quicker with the funds that we had available due to the rate increases, uh, the chemical costs kept rising.

So we kept it flat though.

As you can see, it it stabilized that reduced usage, um, you know, stabilized that expense, uh, which was growing uh pretty rapidly.

So we started off at six million dollars and then stabilized somewhere around 14.

We're projecting 15 million dollars in the coming year here.

So again, wanting to tie that back to inflation.

Um, you know, again, the the CPI adjustment that that was built in is necessary.

Uh you know, it just happened uh January 1.

Uh we hope to see some benefit from those increased revenues.

Um, but this particular cost, the chemicals is outpacing the inflation index by the largest amount.

Uh 73% since 2018.

Um there was a lot of volatility in these costs.

And so that that six million dollars to the you know what we're paying today, uh, pretty significant.

To bookend this uh this you know kind of uh quad item effect of the the rising cost that we're seeing the capital needs.

So uh the benefit here is that we can actually reduce the emergency expenses, right?

So we have a goal replacement rate of half a percent of our water mains per year.

That's 6.5 miles.

Um, you know, we want to work towards that goal.

The model that we're using is used industry-wide, it's a risk-based approach.

Um, you know, you you look at a risk factor, you look at a consequence of failure factor, you repair the mains that need to be repaired the most that have the most expense in emergency.

We have identified 63 main replacement projects.

We have a list.

Um, you know, these are our residential water mains, six inch, eight inch, up to twelve inch.

But this spans the city.

Um, you know, we have projects that we can do if the funding is available uh to reduce those emergency expenses.

Um again, we've had the highest occurrence of breaks uh in a number of years here.

The goal is to reduce those breaks to reduce the emergency costs and increase the reliability for the city residents.

So this is looking into those 63 projects.

Um the average length of these repairs is 1,300 feet.

Some are longer, some are shorter, but uh the average project cost is 450,000.

Um the average year of these 63 mains uh that we would like to be able to replace is 1937 year built.

So we've gotten a long service life out of them.

Um these 63 mains, uh, these these projects.

We've had 199 breaks in the past five years.

Uh because these are uh in the city, because you know there's congestion underground in utilities, because there are restoration costs that we have to you know come back and and uh restore the the pavement.

Um the replacement cost per mile is going up because of the inflation.

So 1.7 million uh dollars per mile on average.

Uh these projects are not insignificant though.

This would replace 16 and a half miles of main in the city of those 1,300.

Um, you know, if we're looking to do six and a half miles a year, this will keep us busy for a few years.

We just need the funds to be able to do this capital renewal.

Lifetime of these uh projects, we've had 1,400 breaks.

So that is a significant amount of repair of emergency.

Um again, the estimated cost per break is $13,000.

So some of the benefits, um, you know, these mains can last 50 to 100 years.

If we you know replace these 16 miles of mains, hopefully we'll not be out there spending dollars on emergency repairs uh for a long time.

So we'll we'll renew that asset for the next 50 to 100 years to come.

Um, of course, every time we do uh a main replacement, we have to repave the streets.

So there's an added bit of there.

Um we would repave 16.5 miles of uh street lanes.

So oftentimes, too, if it is a uh residential street, we'll repave the full width of that street.

Um, you know, we're causing a disturbance uh based on the condition of the pavement in that area.

Uh, you know, we'll just do a full asphalt restoration.

So this will maximize the use of of money for renewal versus emergency costs, right?

Uh lastly, it stimulates the economy.

Um, you know, everyone's doing infrastructure work in the city.

We think we should be out there doing this too.

It does benefit the city overall to invest dollars back into the infrastructure uh you know that we've enjoyed for uh generations.

Um we do have some projects identified at the water treatment plants as well.

Um the electrical systems are quite old, they're past their useful service life, the pump stations are from the same era.

Uh I talked a little bit earlier about some of the pump replacements that we have done.

Um, these are getting costlier.

So the the replacements that we did in 2017 cost 2.4 million dollars for two pumps.

We've got an estimate now for two pumps at Howard Bend, that's eight million dollars.

So uh inflation is certainly causing the cost of these projects to rise, and I think that'll continue.

Um the intake structures are incredibly important to these plants.

This is our source water, this is our ability to bring source water into the plant for treatment.

Um, this is mostly Missouri River water.

Uh certainly at Higher Bend it is at Chain of Rocks, it's mostly Missouri Riverwater as well, because we're on the west bank of the Mississippi River there.

So we have replaced uh you know several traveling screen machines at the cost of three to four hundred thousand dollars per with our existing budgeted funds.

Um you know, again, the rate increases helped to do that.

It helped to renew that asset.

Um, you know, that is not insignificant.

That was three of four traveling screen machines at Harbend, and we did both traveling screen machines at the Chain Ox plant as well.

So we do have Lime system improvement that we'd like to do.

It is our most expensive treatment chemical.

This would improve the efficient use of that chemical to further reduce the cost, the amount of Lime that we have to use to treat the water.

So this takes us to uh our revenues.

Um, we have had some droughts between these rate increases.

Um did a little bit of digging, looked back in the ordinances, you know, there was increases passed in 94, 2003, 2008, 2010, 2023.

Some of these long durations between these increases and the fact that we started fairly low uh in the very beginning, you know, uh annualized this is three percent per year.

Um it is you know stark to hear that there were two 20% rate increases that were passed, but if you look at that duration going back, it is less than three percent per year to the the you know increases that we've had.

So in contrast, uh you know, we ended up at $2.54 per CCF.

Uh, this is prior to the 3% increase that we just had, so we're actually at $2.62 now.

But in St.

Louis County, Missouri American Water uh charges $7.76 per CCF.

Uh in comparison, obviously three times higher.

Uh in Kansas City, uh they're above six dollars per CCF as well.

So this uh just shows a little bit more of that comparison of uh of the rates.

Um the three lines that you see at the bottom there are St.

Louis water.

Um you have the flat rate, it does not matter how much you use, the rate is the same.

Um that chart goes from 3,000 gallons to 12,000 gallons.

Uh we highlighted a blue band that's a typical range for a household that you'd anticipate based on uh EPA estimates per person per day of 82 gallons.

Um as you can see, there is a break-even point for the flat rate versus the metered rate.

Um, you know, it is somewhere around uh 8300 gallons uh per month that you know you would actually save money in a flat rate structure.

And then compared to you know the the alternatives that we uh provided there.

We just looked at the top four by population in the state.

Uh Kansas City Water, Missouri American Water, Springfield, um, we are below all of them.

Uh these older cities with larger footprints, uh, you know, bigger infrastructure certainly tend to have higher rates.

Um you're looking at St.

Louis County and Kansas City water at the top there.

Um, you know, I I highlighted the top end of the range there.

Uh I can read off some of the other numbers, but you can see there's a pretty significant difference.

So rising delinquency.

Um, you know, we took a look at our number of accounts that are delinquent.

Um, we are uh providing notice to our customers that are delinquent.

We sent letters to all of them.

They continue to receive bills that that notify them of that, but we are starting to shut now.

So we're providing ample notice, we're providing generous repayment plans, um, but we still do have over 16,000 accounts that are frequent and 14 million dollars owed.

So next steps.

Um, you know, we do track the expenses very closely.

Uh we know that we need to reduce our expenses that impact the city resident the least.

Uh that is something that we are doing now.

We are taking a look at reducing our spending.

Um, you know, there isn't a lot of non-essential spending, so that's not a big bucket.

What we can do is pause, defer uh non-emergency, you know, capital improvement expenses.

We do not want to do that.

Uh, you know, we can take a look at delaying paying our bills uh you know out a little further towards the the dates that they're due.

We have the gross receipts tax that we pay to the city.

Um, you know, we are still behind on keeping up with that bill.

Um, but these are short-term solutions.

This is not you know what we uh want to have to do.

It's something that we have to react to.

Uh we're taking a look at our revenues.

So we are replacing water meters.

This is an ongoing project, it's a very important one.

Uh the water meters are how we track consumption across the 12,000 plus accounts that are metered.

These are the commercial accounts, the industrial accounts in the city.

Replacing these meters ensures that we are billing accurately for the water consumed and ensuring that we sustain our revenues as they should be.

Taking a look at making some improvements there to guarantee maximum benefit to the city.

Those are staggered in the way and time that we have to renegotiate those contracts.

We are looking at that.

We are resuming shuts.

So it's been only a few hundred shuts that we've done so far.

We're using in-house staff.

We're building up that program.

We're notifying residents ahead of time with letters with door hangers, notifying them about the assistance programs that we have, notifying them about the repayment plans that we have to get them back on track to avoid disconnection.

That is our last resort.

We do not want to have to disconnect water service.

It is essential.

So talking about the customer assistance program, there are still funds available.

We announced this back in July.

It went live in August.

And there are still plenty of funds available.

We recently opened up the eligibility criteria after that time period to allow for the most vulnerable population to apply for and receive these funds, this assistance to help us get back on track.

And now we're excited to open up eligibility to help even more city residents that are past due, having trouble paying their water bills with that million dollar funding.

So we do not charge fees or interest.

We can take a look at their account, work with them to figure out what's going on.

We are not shutting in the tornado impact zone.

But there are options out there.

There is one-time funding that is well suited for infrastructure, things like the ARPA dollars, things like the RAM settlement funds.

So aging infrastructure is something that is well suited for that.

The low interest loans, the SRF, the WiFiA, SRF is a state revolving fund loan.

WIFIA is an EPA product.

They have some differences, some benefits, pros and cons to each of them.

The WIFIO program is not subsidized.

So it is just loan dollars at interest rates that are out there, market rates.

But there were historic levels of funding that were put out there.

Our ability to access these funds, which are financial products, rely on our ability to pay back that debt.

So setting water rates, making sure that they're adequate, that is on us to make sure that we do these studies so that we are informed so that we're keeping ahead of issues that are developing.

Uh we've kicked it off.

Uh, we anticipate this will be complete in March.

Um, it's gonna include uh a lot of uh things in that financial model that it builds.

So it's gonna include deferred debt uh that we owe.

These are our liabilities on our books.

Um it's gonna include five years of uh critical capital projects.

Uh, you know, there'll be a couple of different ways that we'll look at that, uh, a couple of different options that may be presented on how to fund that diverse funding stack uh, you know, including the SRF, including other funding sources, uh, you know, bonds, grants.

Um, but it is gonna you know look at at the most critical projects, including those 63 mains that I I highlighted that we need to replace.

So it'll determine if there's an increase needed uh based on you know these past revenues looking five years back and the future projections looking five years forward.

Uh that includes the CPI adjustments annually.

Um that includes um you know, certainly trends uh for collecting on uh debt that is owed still.

So the financial model that uh you know that this consultant will build will drive this study.

Um and this is an industry-wide uh approach, you know, to take a look at rates uh in a regular fashion.

It's guided by principles.

Uh, you know, one of them that I highlighted here is uh the American Waterworks Association has a manual, the M1 manual, principles of water rates, fees and charges.

Uh it you know defines the guidelines that are used to do these rate sufficient studies.

Next steps.

So you know, we want to continue engagement, um, you know, both with elected officials, with the administration, um, with the public.

And you know, we're requesting ongoing engagement in this forum and others.

Um we want to present, you know, our story, we want to talk about what it is that we do every day, um, you know, what it is that we're looking at, what it is that we know we need to do, you know, at these kinds of public meetings.

Uh, we want to share information.

Uh so you know, along with that, uh, you know, comes building out the the infrastructure to do so.

Um, you know, we've hired a PIO, a public information officer.

Uh, you know, we're making improvements on our website uh to try to get information out in a simple uh one stop shop fashion, um, and we're looking to engage with these different stakeholder groups so that we can uh you know learn what's important to them with the water system, uh, with the service they receive.

So we're gonna continue uh, you know, certainly uh with a little bit more of a uh magnifying glass than we have looking back, you know, our finances.

We're gonna be monitoring these accounts, the choices that we make to control our costs to minimize the impact to the citizen.

Um, you know, water leaks uh certainly are a problem, but water breaks are a bigger problem.

And so, you know, all of the effort that we make to try to contain those leaks and breaks, try to save on the amount of water that we have to pump, reduce those chemical expenses, uh, you know, we'll be balancing with the finances and funding that we have available.

Um, you know, certainly number one priority is safety and service.

Um to the extent that we can, we will maximize the reliability of the system and never compromise on the safety of the water.

Um and again, you know, just it's so important that we have these forums, these spaces to talk about what it is that we do to engage with the public uh, you know, out in the neighborhoods.

Uh, we've been attending as many neighborhood meetings as we've gotten invited to.

Uh, you know, we're certainly talking about the the programs that we have available to help people who are struggling to pay their water bills, um, you know, the assistance program, um, you know, any kind of of uh fairs or uh you know, tornado events that we're going to to talk about the assistance that is available.

And then you know, we're working with community partners, uh, you know, specialists in the space that know what uh the public is dealing with when it comes to rising costs and utilities.

So uh the water system belongs to all of us.

I mean, this is a municipally owned system.

Um it is a system that is owned by the citizens, the people of St.

Louis.

Um, you know, we are here to be good stewards of the ratepayer dollars, to be good stewards in messaging what is going on in the water system.

But our mission to provide safe, reliable water at an economic price is something that we take a look at hard every day.

It drives all of the activity that we do.

You know, we need to keep this utility publicly owned.

Investor-owned utilities make profits for investors.

They raise costs, they do unnecessary improvements at times just to increase their rate base.

We're trying to work around the clock.

We have crews that are out there in the middle of the night, uh, you know, rainershine repairing water mains that are broken.

Um, you know, it is a system that touches all parts of the city.

So to evaluate the system, um, you know, we're certainly looking at the master plan.

We're certainly doing our rate sufficiency study, um, making sure that our our revenues are in line with the cost of operating the utility.

Um, we hope that investing thoughtfully can reduce those emergency expenses and preserve this this asset for the and serve generations to come.

So uh just to kind of end it off, uh, you know, our promise safe reliable economical uh water for all of St.

Louis City yesterday, today, tomorrow.

And with that, I will entertain any questions.

Thank you so much for that very informative presentation.

I would love to hear from the public before we go to committee questions, just anyone that has been here and listening and would like to um either share their thoughts or ask any questions that we can ask as a committee uh as I know this is very important to many people.

So with that, Madam Cork, do we have anyone signed up for public testimony?

We have one person.

We have one person.

Okay, and uh we can hear from them now.

Sandra Padgett.

Hi, my name is Sandra Padget, and I'm in the executive director of Consumers Council of Mission.

And we work to level the playing field for Missouri Consumers, and we do that by focusing on affordable utilities.

Whenever Amran, Spire, Missouri American Water, MSC, and of course the City Water Division propose a rate increase, we get involved and we try to be sure to the extent we can that the increase is justified, and also that there are customers' programs in place for people who can't afford the increase.

Um, first of all, I want to say that we're really encouraged that part of um Nearge's presentation included that they were going to develop and implement a rate review process and that transparency is important.

Um that's where we're coming from.

In the past, as you know, there has not been that transparency.

And to date, even though you know that is in the presentation, and we are so appreciative of how good of a relationship we have both with Nearage and Spencer, and um the Alderwoman from I'm sorry, I can't read your ward.

Sorry, Alder Woman Schweitzer and Alderman Browning, and um and Alder Woman Shamem Clark Hubbard, too.

We you all have been just so nice to listen to our current concerns.

We've also had a really good relationship with Colonel Johnson.

Um, but you know, we raised this issue first in 2023 when the city approved a 44% increase in approximately three and a half weeks.

And that increase move forward with little or no meaningful opportunity for public participation and without access to what we thought was necessary to consider whether the water division's proposal was warranted.

Um we just didn't have enough information.

We didn't know, you know, perhaps the rate proposed was too high or maybe it was too low.

And beginning in the fall of 2024, we began working with the Jones administration, and then at the request of Mayor Spencer's administration, we submitted a proposed rate review process of May 2025.

Um, but to date, no formal procedure has been established.

Now I'm not saying we haven't made progress, but we don't have a procedure that has been established.

We really believe that the residents of the city of St.

Louis deserve transparency and a deliberative orderly process when it comes to decisions that affect their household budgets.

You know, we're we're asking first that the water division adopt a clear administrative procedure that follows that it follows before presenting any rate increase to this committee, and that this procedure be made public.

And we really look forward to our next meeting with them on January 26th.

And second, we're asking that the Board of Alders enact a rate review process by ordinance.

You know, this process has been submitted to both the city and then we presented.

I sent one to Alderwoman Schweitzer also, and we hope that that has been shared with the committee members.

Our proposal is designed to ensure open government, create an accessible and transparent public record, provide for local public hearings, encourage broad agreement among community stakeholders in the water division, and allow for informed presentations to this committee.

Um noted that there are more than 16,000 delinquent accounts.

And we've worked closely with the water division to publicize the customer assistance program.

If you're curious, you can go on Elliot David's Davis's um, you know, TV uh Facebook channel and see my interview that I did last week.

Uh but despite that, we know that there are a lot of city residents that are struggling to keep up with costs.

MSD is in the midst of a 32% rate increase.

Amran spot American Inspire rates have increased, um, Amrin by 12%, Spire by 10 to 12%, depending on where you live in Missouri.

And any additional city water rate increase will compound those pressures.

Um, and we also know that over 80% of city residents are on uh flat rate, which means that when costs go up, there's really not much that they can do to adjust their usage to lower their bills.

So we're asking that the committee not consider the water division's rate increase if that is what's coming next, without first adopting a formal transparent water rate review process.

We believe that St.

Louis residents deserve an open and accountable process.

And we also feel that the water uh division deserves a fair opportunity to present its full case within that process.

Um, you know, we felt that the cost of living increase that was uh just recently implemented um on January 1st was arbitrary because we felt that you know we weren't sure that it was going to represent the cost of providing water service.

Thank you very much for your time and consideration.

Thank you.

And and let me just say that we share that commitment to an open and transparent and accountable process.

I think this board will be working uh with the water division and the consumer council in the future to make sure that we can all be on the same page going forward as uh as the water division is funded by our residents of the city.

It's very important that we bring them along in this journey.

With that, we'll move to committee questions.

Uh, we'll start with uh an order of seniority.

So, Alder Woman Boyd, are you with us?

I know Alder Woman Boyd's online.

Uh, we'll give her a second if she's she's not there anymore.

Okay, we'll move on to our next most senior Alderwoman Clark Hubbard.

Okay.

Thank you.

Thank you, Mr.

Chairman.

Members of the committee, thank you, Director Patea.

Let me say before I start with some of the things I took down.

Um, just wouldn't want to miss this awards on the public lead, thank you and your staff.

But if there's the ability for your response time, most times I'm calling you after hours or emailing you after hours, and then you respond and then work towards the follow-up, which is big, right?

Because a lot of times somebody might respond and then the follow-up isn't there.

Thank you for always doing that.

I can definitely assist to you coming out in community Saturday morning meeting as well as evening meetings.

So I was glad to hear that that public engagement um is still open and available, and I would love to work with you on um opportunities in the 10th war.

Um thank you for noting that there is still money in the assistance program.

What I'll say on Ms.

Pajet and the and the work that Ms.

Hutchison and her doing community with the consumer uh council Missouri, I have seen them out in community, making sure people have access, making it make sense to them because some most times people might get frustrated with the application and just give up.

They take the time and the patience.

So the work that Missouri Um Consumer Council does is immeasurable too.

I wanted to talk uh just briefly about echoing that we all here um are in support and know the value.

We learn most even more about the value of our water through our number one water cheerleader here, Alder Woman Sweisler.

So I'm definitely on her cheerleading squad with this.

I get it more than ever.

And even the time that I spent down there at the water department when you show me all the old maps and the different lines and everything.

I'm a history nerd.

So this whole presentation is just I'm going nuts.

I can't wait to share it and watch it again.

But as it relates to where we are now and tornado recovery in the city of St.

Louis, and I know that you said you're doing shutoffs again.

Has there been any attentional effort and looking at people that might have been gotten shut off in the tornado impact zones?

What does it look like for people that are displaced in that?

And if there's any way, let me offer this, if there's any way that I can help with that, because I know the all of these little things add up, right?

Is they're going through their recovery um capital, making sure how to make the ends meet.

I want to make sure um again that I offer my help for that or help to create something around that.

Sure, no, I appreciate that.

And uh yeah, we we are offering, you know, assistance in the tornado impact area.

Uh, you know, we've gone out in the community, um, you know, ensure that anyone who is having a challenge with their water service, uh, you know, we are responding.

Um, you know, whether that be uh, you know, courtesy shuts uh to allow them to prevent water from coming into their property um or just assessments, uh, and then also you know, specialized response uh, you know, when they're calling us about their accounts, uh, you know, working with them to to get them, you know, the assistance that they need.

So we have not done any shuts in the zone.

Um, you know, we didn't start doing the shuts until after the uh you know tornado uh started.

So you know, we built that in ahead of time.

We knew that we could not be shutting water off for those that are dealing with something, you know, much more impactful and bigger.

So anyone that is having a challenge, uh, you know, we love to continue working with uh, you know, you, the elected officials, the elders that are out in community, um, you know, dealing with uh, you know, issues that are popping up.

So please just reach out to us.

Um, and again, you know, we want to be engaged, we want to be out there.

So if there's anything that you need that we can provide uh, you know, in in additional assistance to come out and address challenges, uh, we want to be there.

Thank you.

I do um as meetings begin to start up for the beginning of the year, would love to have if you have any uh kind of information you want to pass out in meetings or anything.

I love to connect with your team and get that.

The only other thing I mentioned, I know that and it was noted in the um presentation as well, is how the needs and the ones, all of them fall in in and mass the entire span of the city, right?

So this is something that we should all agree on if it's done the right way.

And when I look at those, I think you said 63 capital needs projects um that you have lined up.

And when I think about that spanning the entire city and that being more of the proactive way to deal with that for me, is kind of like common sense to try to support that because unless I'm looking at it wrong, if we take care of those, then we won't have the reactive emergency cost projects that we're dealing with now.

We won't, you know.

Am I looking at that right?

Or do you certainly reduce them?

Again, that is, you know, that is identifying the ones that have the highest risk of failure, consequence of failure, uh 16 and a half miles of replacement, meaningful work that will keep us busy for you know a few years uh as we chip away at this.

And so that's 16 you know and a half miles of 1300 miles of water main.

Okay, great.

Again, want to be 100%, if not more supportive of the work that you're doing.

Also want to help with the staffing, right?

So if you um need help with getting that narrative out of the word out, I know there's always um people looking for work, and I know this is good work.

Um, so please just count me in on any way I can help support you and your staff in the water um department going.

Absolutely appreciate that.

We are hiring.

Yes.

Thank you, Alderwoman.

Um, uh Chairman Browning had to step out for a moment, so I'll uh be acting as for just a few minutes.

Uh Alderman Devotee.

I uh uh I too want to join um uh my colleagues and thank you for your work.

There hasn't been a time when I have reached out to you, uh Director, that you haven't been prompt in the response.

And also as Alderwoman uh Clark Hubbard uh also mentioned, not just with the immediate response, but then the follow-up, which is even more important than the immediate response.

So thank you.

Um it seems to me, as I listened to your presentation today, and I listened to your, or I think back to your your other appearances before this committee that that you are fighting a battle on at least two fronts, and in many ways you have both hands tied behind your back.

You know, I have this vision of the little Dutch boy with his finger trying to stick it in in the dike, and he runs out of fingers and there's still leaks all over the place.

Uh if I had your job, I I I think I'd be up at 2 a.m.

every morning thinking about the next challenge and not being able to go back to bed.

Frankly, I don't know how you do it.

Um the revenue side, uh I note that one of your statements was uh you want to ensure that revenues are in line with the cost of running this utility.

And I hear what was said by the consumer advocate, but also listening to the data that you provided, it occurs to me that as we sit today, revenues are not in line with the cost of running this utility, and they're not even close.

Uh we're not even in the ballpark as I is I and I wrote down as many numbers as I can.

Um I am very interested in hearing the results of the rate sufficiency study.

I hear Chairman Browning talk about the need, the absolute demand for transparency.

But but I guess I'm also thinking, and I admit I'm talking thinking out loud right now, that there's little doubt in my mind that when we talk about rates, we need to start preparing our residents that they're getting probably an unbelievable deal right now, especially when we look at uh our neighbors in St.

Louis County and what Missouri American Water charges for for their water, or we look across the state at the Kansas City Water Company.

Um I mean, frankly, it seems like a catch-up to 202 is way overdue.

Way overdue.

And I think that's something that that as we appear in communities, it's time to have a real talk with our residents about we've got a heck of an asset here, but we're not going to be able to maintain this thing unless we pay value, value for the service.

Because right now, as a resident, I don't know that I'm paying value for the service you and your your utility are providing.

I'm going to steal a an analogy that the chairman has put on me from time to time.

So I'm going to steal a little bit of his thunder.

But it it seems to me that this utility is akin to my house.

Um, and we've got a leaky roof.

We've got uh a foundation that has some significant cracks in it.

Uh we've got floored joists that are cracked and failing.

And you and your crew are doing what they can, but yet the revenues are not even in the ballpark to get there what we need.

Um I I think I heard Alderwoman Clark Hubbard.

I I think I'm in agreement with her, but it seems like she's on board that these 63 main projects that you've been that you've identified that are coming at a cost of 28 million, and then I noted another 10.4 million for two pump replacements.

It would seem at a minimum that that that's something, and I know I'm I'm jumping all over the place.

That's not a rate issue, but again, thinking in terms of infrastructure, that's something we should have done last year, five years ago.

So I am completely on board on what needs to be done to identify the the source of funding to get those funds in the hands of your utility to get them done.

I I just to me that's an absolute no-brainer.

Um so I guess I'll get around to my my first question.

I apologize.

Thank you for your patience with me.

Um there was mention of ARPA funding.

My understanding is that those funds need to be out the door by the end of this calendar year.

Um can you tell us about work that your utility has done or any work uh the administration has done with your assistance to identify ARPA funds that can be used to undertake some of the work that you've identified.

Sure.

So no, thank you for the the insights.

I think that you know, you hit on a lot of high points that that we think about, you know, every day at the utility.

Um in regards to the ARPA funds, you know, any funding source uh you know that can support meaningful capital renewal is something that we're willing to take a look at.

And we did receive some ARPA funds to do some infrastructure replacements.

Uh, you know, this was 1.2 million dollars that we put into replacing uh two 12-inch mains uh in East Grand that were exceedingly problematic, had a history of breaks.

Um, you know, this was approximately 1200 feet of water main that we replaced uh utilizing those dollars, uh and it was about $860,000.

And so that project uh is complete, those funds have been spent.

Um, you know, we had some remainder.

Um that bid actually surprisingly came in uh under what we expected um in the 1.2 million dollars.

So we put that towards uh repairing a leak of a 60-inch uh water main that was leaking, uh wasting water, causing an infrastructure uh challenge and causing issues in the roadway.

Um you know, that repair is now complete.

We've restored uh the pavement there.

Um you know, that was a water main that brought uh it was a transmission main that brought treated water into the city limits uh right at Clayton and Big Ben from the Stacey Park Reservoir.

So uh, you know, that 1.2 million dollars uh certainly was useful, uh beneficial.

It it made improvements uh, you know, in in water mains and you know, ensuring that we address these leaks uh and ongoing emergency costs, but um certainly any and all dollars that are available, uh you know, we are willing to have those conversations and are having those conversations about.

So and that was really my question.

Are you having those conversations with the administration with respect to the the availability of funds that that can be we are?

I've I felt uh tremendous amount of relief in the conversations with the the administration that they support the water division, that they support the need to do meaningful capital renewals uh and address these challenges that affect the the city service that we provide as the water division.

So did I hear your ask today?

Well, I know you're not making an ask today, but but with respect to your presentation, did I hear your prime today that if if we if you had a wish list, it would amount to funding to undertake and complete the 63 main projects you have identified to a tune of 28 million plus the replacement of two pumps at 10.4 million.

Uh if if I get to ask, I would ask for a lot more, but yes, I I am that certainly.

Uh we identified uh, you know, critical capital needs, um, you know, produced a list uh you know, in these conversations that we are having with the administration with the Board of Public Service, uh, you know, with uh the funding options that are available out there.

Uh it is it is a little larger than than just those two projects, but yes.

I I understand that.

I I understood that is these are the ones we gotta do because this is the 16.54 miles where we hit that are in the worst of the worst of the worst shape.

Yeah, no, for for the water mains, certainly that is that is one of our our focuses, you know, to get funds to be able to address known needs in our distribution system, you know, ahead.

These these uh projects were identified ahead of the the master plan and longer and more comprehensive lists that will come from it.

Um but you know, we wanted to highlight just a few options both for the the treatment plants and for the the distribution.

This is something that I'm not sure I heard right now.

I want to make sure I understand.

Uh you talked in terms of the utility having about 1,300 miles of water made, correct?

Yes.

To work up to that, I mean, you know, we could set a more ambitious goal, but we're stepping into it.

So we're setting something that we think we can ramp up to.

Um and then you know, we'll set the bar higher after that.

Uh my math was that comes out to about 6.5 miles per year.

That's right.

So if if if if you're doing that on a scheduled basis, that it would take us take the utility 200 years to work through its 1,300 miles of water main?

So uh yes, if you if you treat it like that, uh you know, we need to build up to a goal and then you know think bigger.

So I I think we would take a look as we start approaching a goal replacement rate of half a percent per year to ramp that up.

Uh but you know, you can't snap your fingers and do that overnight.

And so uh, you know, if if we can get to that goal, uh we would reset a goal to one percent.

If we can get to that goal, we would reset a goal to one and a half percent.

You know, until you know, we think that we have addressed significant reduction in emergency costs, significant renewal in the system.

Okay, so we've or you've we've talked about the idea of we need to address infrastructure.

We've got the the worst of the worst of the worst that we need to address very, very soon.

Uh we talk in terms of a a rate study that is underway that you hope to have the results of within the next 60 days or so.

Um you anticipate looking at your crystal ball that you're going to need to raise rates.

So we're not deciding that ahead of time.

The the study is the tool that we use.

Um these are professionals that do this work.

They have financial backgrounds working with water utilities to assess uh and build a financial model.

Um, you know, we're waiting to see the results of that study.

You are waiting to see the result.

Fair enough.

Um you mentioned that our current rates are at $2.62 per CCF.

Yes.

What's a CCF?

A CCF is a hundred cubic feet, it's approximately 748 gallons.

And how was that particular rate set?

Is that based upon a prior rate sufficiency study that was done with a cost of living increase?

So that rate is actually the cost is an a cumulative effect of past rate increases going back to a cost of service study.

And so, you know, if you are taking a look at what it costs to uh serve each individual different type of customer that we serve, industrials, commercials, residentials, um, then you know, you attribute the costs that it it takes to serve those customers to a rate within that structure.

So uh it is a different study that was done to establish that.

And then from there, you know, if you feel that that cost structure is adequate, then you know you may just do a across the board adjustment, and that will just uh you know affect uh an increase percentage based on all of the different rate types that we have.

And is that historically what the utility has done?

So we are actually uh in need to do cost of service study.

And you know, uh a series of studies, the first of which is a rate sufficiency study, the second of which is that cost of service study.

Um, you know, we've heard that uh a number of times from the elected officials, from community from experts, you know, in the space that it is time to do that study, and we're committed to do that study, but you do step through to that.

So uh the rate sufficiency study uh comes first, we will then follow that up with a cost of service study.

I understand you don't have the results of that theoretical study in hand, but would would your best educated guess be that our cost of providing that water to our utilities customers is greater than $2.62 per CCF.

Uh so certainly any new dollars that come my way, increased revenues that come my way, I have places to spend it.

I think I've you know shown that.

And so we spend our our funds that are available as they are available.

If we had higher funds available, we would do more work, we would address leaks more effectively, and we would address renewal more effectively.

Sure, sure.

And I think you've done a wonderful job of showing us what your needs are and how you've spent the money.

I have no quibble there.

Let me be crystal clear.

Um I do want to talk to you though, however, about the the rate collection efforts.

And I know since you were last year, you have started the process of doing some shutoffs.

Um I think you mentioned today, I think the our our current outstanding balances sit at about 14 million, if I remember right.

Yes.

Is that right?

That's right.

Um how many of our 94,000 customers are are carrying a balance.

So it's a little over 16,000 uh accounts that are delinquent.

16,000 of 94,000 total accounts.

Sure.

And that 18% that we presented was basically a flat calc on that.

And uh, you know, the range of of delinquency um, you know, is is built in there too.

If someone is delinquent one penny, they count.

If someone is delinquent 10,000, they count as well.

Okay.

So obviously we're more concerned about the folks that owe 10 grand, especially the commercial entities that owe 10 grand versus the individuals.

Um you tell us about the the efforts or any successes that your uh department has had since you were last here in winning winnying down that deficit.

Sure.

So um, you know, we have certainly had hundreds of applicants to the customer assistance program.

Uh you know, that program, that our ARPA funded program has helped more than 400 applicants uh who are awarded up to 500 towards paying down their balance and then getting them into a repayment plan.

Um, you know, that has helped us out.

It it helps our financial solvency, it helps our customers.

And so, you know, getting that level of debt down with a $500 jump start is immensely effective.

Sure, that and putting them in a plan that they can actually achieve rather than uh asking for the entire amount up front.

So that's a million dollar pot, and any applicant can obtain as much as $500 relief.

If they are qualified.

We have income qualifiers, but yes, we have opened up the uh qualifying parameters too, so we can help even more people now.

We went from 60 percent of the area median income to 80 percent of the area median income.

And again, we've helped you know uh more than 400 uh successful applicants with payments uh upwards of 170,000.

I okay, you anticipated my next question.

All right.

So out of that fund, I mean there's as much as eight hundred and thirty thousand dollars yet to be tapped by eligible applicants.

Uh so there is a uh a fee to administer the program to develop the program to run it.

Um it is being uh administered by the United Way.

Uh the contract with them was 159,500.

So it is approximately $840,950 available.

And and of course, we want our residents to apply because they get the relief off their deficit, but we also, the utility meeting collects the $500.

Correct.

And and you know, there's uh uh multiple benefits there, right?

Um certainly we help our financial situation out, but we get someone back on track into a repayment plan too.

That's an important part of the program is that they have to apply into a contract uh a repayment agreement to continue paying down the balance if there is any remaining balance owed.

Um this is my final question.

Uh I've gone on too long, I apologize.

Um from a in your world of running a utility, uh in well, in my world, 18 percent of folks owing on an account.

Seems like a lot.

Seems like a whole lot.

In your world, you know, if we think in terms of Springfield, Kansas City, Missouri American water, what what is what is typical from a percent basis?

So certainly when the moratorium was put into place, um, our collection rate was much higher.

Um, you know, our delinquent uh balance that was owed was significantly lower.

We were shutting, um we were keeping up with our customers, uh notifying them that they were falling behind, encouraging them to get into a repayment plan, um, you know, and then COVID happened and the moratorium was put in place.

Um, you know, and then COVID happened and the moratorium was put in place.

The duration of that moratorium I think, you know, went again uh against us.

And so if it took five years to get to this point, it's gonna take a long time to get back.

Um, you know, we hope to make significant uh you know gains back there, but uh it's not gonna happen overnight.

And and certainly there was uh, you know, a need to put a system in place to help people get back on track, extending the terms of the repayment plans where needed, um, you know, as part of that, but also shutting where people are not contacting us, where people are not uh working with us to to get you know their account uh back into good good standing with a repayment plan.

Um, you know, we are using the the shutting tool.

What's an acceptable delinquency rate?

Uh I don't have an answer for you there.

Um I I know that uh you know there have been times in the past where we are collecting more than five percent of what was owed.

Uh that was prior to the moratorium.

Whoa.

Okay.

Thank you.

I appreciate your courtesy.

All right, thank you.

Thank you very much, Director, uh, for your presentation today.

And I want to start by echoing um what my colleague said um in my short time being in office and also now on this committee, uh, your team and department has been an extreme asset to me.

I know I've been down to visit you all many times and we've had many discussions.

Uh so I want to reiterate first and thank you for all the great work that you all are doing.

Um I know you all are in a tough situation.

Um I also want to, you know, share and echo uh what my colleagues said about uh the sobering context of the presentation that you gave tonight.

Um I think you know, most people can remember their elementary school class where you learn what people need are our food, shelter, and water.

Um and I think what we're talking about tonight is one of the most essential items that a city needs to keep its population running.

Um so I want to ground us in that moment and and echo the fact that it is hard to hear, you know, that our water department is not in the best position to deliver on the mission that it was designed to do.

Um, and that is something that I think is an extreme urgent need uh that deserves our full attention.

Um some of the things you and I that tonight that you shared uh that stood out to me are the the fact that we have a population uh that has the burden of sustaining a system that was designed for a million people and we have over 300,000 people.

I think when we talk about the economic burden on individual citizens to be able to pay to provide water, uh that is the circumstance that we are in, and I think it's a unique one to the city of St.

Louis.

Um and I would echo Alderman Devotee's contact comments that if you look at the cost that each individual is paying right now for that system, uh I fundamentally agree that there is a massive disconnect there on what you all need to operate and what resources you're you have coming in.

Um so I think that's really important for the public to hear and know and put into context.

Um I'll also say, you know, the other shocking thing too is that most of the infrastructure that is supporting our water is not from the century.

And when that happens, uh the cost and that it takes to repair and maintain, and even probably some of the parts that you all need to maintain those systems are not on par, which is what is probably best for our citizens.

And there is a need urgently in order to be able to reduce your cost that we upgrade the systems that we have, and which is an even higher operational cost just outside of keeping this running.

We need new equipment, and I think um that's a message tonight that you all shared that I fundamentally agree and heard.

Um, I apologize to my colleagues.

I do have a commitment that I need to make.

I also have a thousand questions that I have for you tonight based on this presentation.

Um, but for the sake of time, I'm gonna try to consolidate it into just one so that I can make my commitment.

Um, and the one thing that you know I want to make sure is asked um, you know, while we're here this evening is what I think a lot of people may take from this conversation is in that if we need to make all these repairs and if you all need these resources, and if that revenue does not exist, how do you all get it?

Um and I think you know, the um most interesting, you know, challenge that you all have in doing this study of needing to raise rates is that if that does need to occur, it's being uh done in a context where already people have extremely high cost burdens from a lot of the other utility and just general life increases of the inflation that we have.

Um so I do think that is a unique challenge and position that you all may potentially have to face.

Um my question is that uh the representative uh that spoke tonight from the consumer council said one thing that many residents may be looking for is transparency, and I think that's really important.

Um it sounds like to me you guys have been fully transparent in the circumstance that you're in by coming tonight and bringing this presentation and that you are gonna conduct a rate sufficiency study to see if that is something that is needed and what the impact and need would be.

Would you commit to bringing the results of that study back to this body if our chairman allows you to do tonight to be transparent and answering some of those public questions.

Absolutely um you know presenting that information and you know also thank you for the engagement the meetings you know that we've had I think that been really meaningful um you know working with you all is you know I ideal it's important it it has to happen and you know presenting information of this kind to you know whether it's this committee or another committee uh I think is also important and so absolutely we would be willing to to come back and uh you know share the results of that study um you know the recommendations if any of that study and how we tackle you know not only the the uh capital needs that we need to address in the next you know five years or so but you know any deficiencies that may exist as well.

Thank you.

Well uh I think you being willing to make that commitment says a lot about the fact that you are willing to be transparent in the process and the potential that it would have to residents.

Um but I'll close by saying I think um there is without a doubt no need that you all need more resources to do the work that you're doing.

Um and I look forward to hearing that presentation and working along with my colleagues to figure out how to support you in any way that we can because I think we all share that commitment.

All right thank you.

All the woman Schweitzer Thank you uh Chair Browning and members of the committee uh I echo all the thanks of uh to you of putting this presentation together and coming today you are as always incredibly easy to work with and very informative.

Um how much debt does the water division have so we currently just have the series 2013 uh SRF loan uh that we put out there uh you know it was a nine and a half million dollar loan uh 20 year term and you know we're we're approximately under five million dollars owed that is one of the most important points I think that we can make because when you look at both the rates for Missouri American water and the rates in Kansas City, you also need to look at the debt these water systems have quick searches show that the parent company for Missouri American Water, they are reporting over $13 billion in debt and they're doing about $450 million of repairs and work on their on their systems in 2025 they had.

So when you think about the amount of debt we have for infrastructure that's a hundred years old, we should have hundreds of millions of dollars in debt in my opinion for the water division.

The airport has 500 million dollars of debt the water division has six million dollars of debt and 400 plus million dollars of need.

If you look at Kansas city's debt they also and they're in their water department they have uh 532 million in debt as of April of 2023.

I am that is to me the biggest point that we need to figure out in both the rate sufficiency study is how do we how do we have enough coming in that we can get the debt that we need so that we can build now what we will need for a hundred years from now and that we are providing a system of water that is still around in a hundred years and people aren't paying these exorbitant rates on, but we are slowly paying back this debt because we know this system can last that long.

You know there's hundreds of questions I could ask and we've had hours and hours and hours of conversation but to me that's all I really want to say tonight is we need more debt.

That amount of projects that you presented today isn't even the tip of the iceberg for what the water division needs to do.

And I would really like to see that amount of project planning happening for everything that needs to happen to get us to a point where we can get everything done the water division needs.

Sure no I I appreciate those comments and and yes that is how you tackle this problem right um is is you know through these loans uh you know these debt instruments require rates that support them and so again that series 2013 uh loan that was acquired you know came on the heels of a rate increase that allowed it so a lot of these revenue bonds do require um you know new rates be set uh to to ensure that you can meet that uh commitment.

And then as you pointed out during the presentation, the 2013 um bond does say that certain rates have to increases have to happen or should be happening and not in line with what was said then.

Uh and that's a really interesting point.

Um, and when you think about paying back um bonds having debt, it has to be from you know, money that's coming in, having an operating app operating expenses in place, having um capital and savings accounts, all of those things.

So I'm not saying that you can just take on debt and raise rate and not raise rates.

I'm saying that you know, I really look forward to the rate sufficiency study, not only showing how to do the projects that you pointed out today, which I agree are crucial and you know, something that I believe things like the Rams funding and putting those you know, capital dollars to work um to have to get loans.

I don't think we should just pay for projects outright like this.

I think we should have more the water division, I say we, but I'm not there.

The water division should have more debt.

Um and uh I I appreciate I appreciate that, and I you know, that's kind of where my mind is at is I I think the water division should have more debt than the airport does, and it doesn't.

And this has been around since the 1800s, you know.

So I I appreciate that.

Um, and I appreciate everything that you've you've come to say to us today, and you know I'm I'm here for anything you know.

So thank you for for being here.

All right, thank you.

All right.

I think we can all agree that Alderwan Schweiter has been one of the uh best advocates for the water division on this board, and I love just hearing the words we need more debt.

Um it sounds counterintuitive, but she's right.

Uh and and she's always been right about this.

Um I I'm kind of astounded that we had 1.2 million dollars from ARPA money because there was almost 500 million dollars in that uh package that we received from the federal government.

And it really does seem to me that when those funds were intended to relieve people from damage done during the pandemic, that a lot of the damage done to the water division has been during those pandemic years and post-pandemic years with the rising costs with the delinquent accounts, and now we're we're at where we are today.

Um I'm gonna get this question out of the way because I think it if it hasn't already been asked, and I did miss a little questioning, but um if we there's some folks who believe that if we switch to what uh water meters citywide, that would be the solution for the water division's deficit.

Um you speak a little to whether that would help and what it would cost to do something like that.

Sure.

So uh, you know, a water meter uh and a metered account, you know, certainly is beneficial in the the sense that it provides the information on the consumption and provides an equitable basis for billing.

Um what it does not do is address you know failing infrastructure in treatment plants, failing infrastructure in water mains.

Uh but that information can help.

And there is a huge cost.

And I think you know, I've presented the the competition in uh capital needs that we have at the water division.

Um, you know, it is the mains, it is the infrastructure that is causing these leaks, this non-revenue water uh to enter into the ground and the sewers uh to surface.

Um, you know, the cost of meters is something that is born in a combination of the the water division in purchasing those meters and you know, putting them in an appropriate meter uh receiving pit, which is provided by the customer.

And so any customer that wants to switch to a water meter uh account versus a flat rate account would have to take a look at our regulations to see what meter receiving pit infrastructure they have to have installed on their water service line in the right-of-way uh by a qualified plumber, and then we would then come out and install that meter.

Um the cost of that uh work done by the plumber to to install that is high.

Uh it's significant and it is borne by the the property owner or the homeowner.

Um the cost for that meter uh is significant as well, although not as high as as the initial installation cost of that meter pit.

Uh, but that is uh you know something that is built into our uh budget and our rates.

And so if we did have a higher cost to provide metered service in more meters, then you know, that may skew the metered rate to go higher as well.

And so, you know, ultimately the cost of providing the service to the different customer classes that are out there is uh recovered through rates set from a cost of service study.

And so if that cost of service study shifts um, you know, service related uh cost over to a metered accounts from flat rate accounts, then that metered account rate might need to be adjusted as well.

And so there may not be a savings there.

Uh, you know, I I showed that chart that shows the break-even point.

Um, you know, it's it's a pretty unbelievable deal.

Uh, you know, unlimited uh water responsibly uh for you know one low fee.

And you know, with that 3% increase, the the fee that we anticipate is around 40 dollars a month.

Um the metered rate is slightly less if you use less than that break-even point, slightly more if you use more.

Um but in all cases, I think that we have an extremely affordable rate uh to the customers as they're paying today.

Um savings uh with those costs of installing that meter uh, you know, being paid by the customer would take quite a lot long time to recover.

And so, you know, uh I talked about the CCF rate.

Um, you know, I don't know how easy it would be for a customer to try to you know uh reduce their consumption by a third or by half in the home, but that would save them, you know, if it was 1,500 gallons a month, that would save them currently about five dollars and twenty cents.

So um, you know, it's hard to get savings from reductions when we have a low commodity charge, uh, a low consumption charge.

And there is a cost of uh servicing the account in the metered rate as well.

So uh there's a uh customer charge, uh readiness to serve charge um you know that is flat uh regardless of of how much you use.

So that component would not change reduction.

So you know, I I do think it's a very good deal, the flat rate structure, and I I do think that there's a a huge cost associated with meters.

You know, I've heard estimates of three to four thousand dollars uh, you know, for that that plumber to come out and install that pit.

Um, you know, even if it is a little bit less than that, with 80,000 flat rate accounts, um, we're talking about a lot of money.

So um, you know, we could be talking about 200 million dollars uh to to install meters for all of those flat rate accounts, two, three, four hundred million.

So when we have these other needs in the city uh with the water uh infrastructure, it it seems that that's kind of a superfluous discussion to say we should be taking this moment to switch to water meters.

It's it sounds I heard the word cost a lot in your answer, very detailed, very good answer.

Uh, but I hear it's more expensive for the consumer, it's more expensive for the water division.

Uh it's in it, and in the end, it doesn't really save the money that would get the division into the green.

Is that an accurate summary?

I think so.

And I I do think that you know, if if someone is interested enough to convert to a metered account, we do have that happening, but it is something that people are doing, I don't think to save money.

I think it's to know how much they're consuming and you know, uh, and have that metered service rate uh, you know, for their account.

And you can count me as a fan of of the flat rate billing as well.

I think it it's actually the more equitable approach in that people with larger houses uh subsidize the usage for people with smaller homes.

And so it's it it evens out.

Um you spoke about 63 projects uh that were necessary at 28 million pump replacements at 10.4 million.

We had 40 million on the table early last year in the form of RAM settlement funds, but that didn't get passed.

Uh now you spoke a lot about rising costs, which continue to rise.

Is it safe to say that if money had been allocated a year ago, it would have been able to go farther than if we allocated the same amount of money today?

Absolutely.

I think uh, you know, taking a look at history and history is where we should look, any dollars invested in infrastructure, especially infrastructure that lasts as long as this infrastructure lasts uh are dollars better spent than saved.

You know, $18,000 to purchase the water division in 1835, uh, you know, three million dollars to to build Bissell water treatment plant.

Um, and here we are talking about 1.7 million dollars to replace a mile of residential water means.

Uh, you know, the costs are not gonna go down.

Um, you know, we have seen uh cost increases of pipe through the inflationary uh you know actions of COVID of over 280%.

So things aren't getting cheaper, things are getting more expensive, and money you spend now is worth more than money you you save and wait to spend later.

I think the bankers make money on that money uh somehow.

I haven't figured that out yet.

Yeah, I think that that's really boiling it down to what matters here, which is that while we hear that things are getting more expensive for the residents of our city, uh, we feel it here on the board, you know, our our salaries are flat too.

Uh so inflation keeps going up, and you know, we we feel the bite of the groceries getting more expensive, of the the sewer bill getting more expensive, of the electric bill getting more expensive.

Uh but at the same time, the water division's expenses are going up because things are not getting cheaper.

Uh so it feels like a perfect storm that put us where we are today, with the duration of the moratorium on water shutoffs, starving the water division of one of its only sources of revenue, the lack of action by this board and by past boards of Alderman, uh, with the inability to raise rates when we needed to, that put us behind after the pandemic, uh, rising costs, wagging revenues, and the slow, steady march of time on our water infrastructure.

I think this presentation has done a great job of of explaining that delaying capital improvements costs us money down the road, both in terms of emergency repairs and in rising costs.

And it sounds like the water division is doing what it can to make money go farther, but that can only help delay the inevitable decline of our infrastructure that happens with time and lack of investment.

Uh I really appreciate the detail that we receive today.

And I I know that under your leadership of the water division and and also the the past director, uh, you know, we've seen a real effort to communicate the needs, but it it is time that we act here at the board uh and uh with the mayor's office.

Um we need both short-term investment in the form of capital improvement funds and short and long-term revenue in the form of rates and a consistent transparent rate review process that the city honors and adheres to so that we don't end up here again and so that we don't end up in a situation like we did a couple years ago when it was an emergency and we couldn't give it the transparency and uh uh accountability that it deserved.

Uh but in the end, that that responsibility lies with us.

I think you have done what you should be doing at the water division to keep our water clean and affordable and safe.

Uh, but we need action from this board and from this administration to make sure that our water division is fiscally healthy today and far into the future.

So thank you again for coming today.

Uh is there anything that you want to close with?

Um no, I thank you all.

I appreciate uh the opportunity to speak to the public utilities committee.

Um obviously we are the public utility that is owned by the city of St.

Louis.

Uh you know, we take the responsibility seriously.

Uh, you know, we have to be good stewards of the sustainability of the division um for the future.

Um, you know, that is my goal is to provide information um, you know, to commit this in forums like this uh to help make good decisions, right?

So I appreciate it.

Thank you.

Thank you.

And with that, we'll move on.

Uh Madam Quirks, there are any written testimony.

We have none.

Uh, do any members of the committee have any announcements?

Seeing none, uh all members were present today, so we're no need to excuse any members.

And with that, um we will adjourn.

Thank you.

Thank you.