Metro Sewer District May Seek Voter Approval for $918M Bond Issue & Tax

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MSD

The Metropolitan Sewer District, MSD, (the only victory to come from a Board of Freeholders proposal) is considering another bond issue to pay for its mandated $4.7B in sewer improvements as well as a system-wide 12 cent per $100 assessed value property tax to pay for stormwater improvements.

Yet another bond issue could be on the ballot soon. Voters approved a $945M bond issue in June of 2012. Voters could be asked next year to approve $918M more. This will go to pay for the Federally mandated $4.7B in sewer improvements. The region kicked the can down the road for decades and now it’s time to pay the piper. Previous generations refused to pay up and have died or moved away. They’ve left us the bill. We should start paying for things, not pay for things plus interest. Let’s stop this irresponsible behavior.

MSD had instituted a stormwater fee based on the amount of impervious land on a property. The Missouri Supreme Court declared it a tax that voter’s should have approved and threw it out. MSD had the right idea- the more runoff your land produces, the more you pay.

But the need to deal with stormwater runoff continues. MSD’s latest idea is a 12 cent property tax. There are already such taxes at varying amounts around the district. Some pay more; most pay less. This would even them out.

But it has significant shortcomings. A stormwater property tax subsidizes inefficient land uses like large parking lots and big single story buildings and punishes efficient ones. As we saw when comparing West Florissant to Downtown Maplewood, post WWII development patterns are inherently low value and burden us with expensive infrastructure. They also generate much more stormwater runoff. A stormwater property tax incentivizes the wrong development patterns.

For example the Metro Lofts apartment building on Forest Park Avenue occupies 2.04 acres and has an assessed value of $4,426,400. The Home Depot on Hanley Road in Brentwood occupies 12.93 acres and has an assessed value of $2,873,220. Metro Lofts would pay $5,512 in stormwater property taxes while the Home Depot would pay $3,448 despite occupying 6.3x the land area. Fair? Wise?

Another weakness of a stormwater property tax is that tax- exempt properties like government-owned stadiums such as the Edwards Jones Dome and the proposed north riverfront stadium, Federal, state, local government facilities like the proposed NGA facility sites, and universities wouldn’t pay any stormwater property tax. These often take up a lot of land and should chip in.

Whether the bond issue passes, the sewer work will be done. The bond issue is the latest chapter in intergenerational theft. A stormwater property tax is the latest chapter in taking wealth from the efficient, traditionally-built, high productivity places to subsidize wasteful, speculative, and damaging land uses. Both MSD proposals should be rejected.

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  • Yojimbo

    Off topic: excellent new post up on the Distilled History blog that I thought might be of interest to NextSTL readers:
    http://www.distilledhistory.com/cholera/

    • Adam

      Awesome read. Thanks for posting.

  • moe

    “Both MSD proposals should be rejected.” And what do you see as a solution? This problem has to be solved.

    • rgbose

      Just pay for the sewer upgrades, instead of paying for them plus interest. Do what MSD was doing before, charge a stormwater runoff tax based on how much impervious land area a parcel has.

      • moe

        There is not enough support for a runoff tax. And a fee…well, that got tossed as you pointed out. So what else? And no matter how they slice it, they will still have to borrow. MSD isn’t sitting on a Billion in cash. Nor should they be.

        • rgbose

          MSD will raise rates to pay for the sewer improvements or they will raise rates to pay for sewer improvements and bond interest. If you plan on dying or moving away soon or think there will be high inflation then bonding is a great deal .

          If voters won’t approve a stormwater runoff tax of any type, well then there won’t be any more funding to deal with it. We’d have to hope for more funding fomr the Feds, I suppose.

          • moe

            And where does the “Feds” get their money from? No, there isn’t enough support for a run-off tax. It’s been proven. And for the record, I supported it as the most fair and logical of ways to improve our system. What I don’t approve of are all these plans from trolleys to sewers that have as part of the payment plan..”we’ll just get more from the Feds”. WE ARE THE FEDS. But I digress, that’s a topic for another day.
            Bottom line, the law needs to be met. No, we don’t roll back the law, as much as some would wish. And with the economy improving, interest rates will begin their rise again. NOW is the time to pass bonds…a critical financial tool for both cities of all sizes as well as the investment markets all us rely on in some way or another. It just happens that this set of circumstances are just right…good bond market and a law that needs to be met.
            And Alex…I don’t think one can use MoDot as a comparison to MSD, not in this instance. I agree with you…MoDot and Jeff City are inept at best. Back in the day, we could tax ourselves for the better (Conservation Tax, Museum District), but with the loons that have taken over all levels of government and the polarization of the parties that gets worse every year, I don’t see a tax passing unless it affects the voter as they are entering the voting booth. The majority of voters have become very short-sighted. Not to mention that MoDot must also rely on state-wide voters, where as MSD is a local issue.
            And as for “stealing from the next generation”…this could also be phrased as “investing in the next generation”. They are going to need sewers as well.

          • rgbose

            The federally mandated $4.7B in sewer improvements will be done. Either we pay for it on our MSD bills or we pay for it plus interest on our MSD bills.

            The last bond issue passed 5-1 because people are short-sighted, so I don’t think you have anything to worry about.

        • Alex Ihnen

          The “there is not enough support for ______ ” argument is legit, but also tiresome. One big example is the current effort to raise funds for MoDOT. Due to a lack of political leadership and smart planning, the public was asked to vote on the measure (sales tax) that polled least poorly. It failed. Now it appears that tolling and an increase in the gas tax are making a comeback – as they should. We can’t simply work to the lowest common denominator. We know better.

          • tbatts666

            I would echo that thought.

            I think it’s unwise to just throw money we don’t have at the problem. If we firmly deny stealing from the next generation a better solution (fee for use) is likely to gain support. One we get the feedback that we are in a resource bind, we will find ways to use our resources more wisely.

            Desperate times make for creative solutions.

          • I don’t mind putting some cost on future generations for capital improvements that they will benefit from. This is one of them.

          • rgbose

            In this case there is no choice whether the work gets done or not. No “but for” the bonds the work would be done.

  • STLEnginerd

    “MSD had instituted a stormwater fee based on the amount of impervious land on a property.”
    No question this was the right approach. The main reason stormwater runoff has become a problem is surface parking. Whenever possible a tax should impact users of a service proportional to their level of use. I think the stormwater problem is well understood in development circles but average citizens have little understanding of it impact.

    • rgbose

      Watch for opponents to call it (whether a general property tax or related to how much runoff o a lot produces) a “rain tax” as they did in Maryland. “how can they tax the rain? I can’t help it. Not my fault”