MSD revisits selection of study firm
By ROBERT CHALUPNY
The Metropolitan St. Louis Sewer District Board of Trustees recently agreed to revisit the selection of a company to perform a financial feasibility study necessary for a bond issue that will be considered by voters in November.
As proposed, voters will consider approval Nov. 4 of a $500 million bond issue that would fund $647 million in capital improvement projects over three years.
Tom Sullivan, a longtime MSD critic, raised the issue by noting that Black and Veatch, the company selected to perform the study, was charging $30,000 more than the next lowest bidder.
The next lowest bid was submitted by Burns McDonnel, which was for $65,000.
The contract with Black and Veatch was on the agenda for approval at the Aug. 14 board meeting, but after Sullivan pointed out the cost difference, board members discussed the matter further.
MSD Engineering Director Robert Butchko and Secretary/Treasurer Karl Tyminski both said that Black and Veatch was selected because the company has more experience in dealing with wastewater revenue bonds and that the firm had the best overall plan.
Board members, however; collectively agreed that they wanted to revisit the matter and charged Tyminski with the responsibility of meeting with the financing team to consider changing to Burns McDonnel for the study.
Trustee Marian A. Rhodes called it "offensive" that Black and Veatch was charging so much for something she considered insignificant.
The feasibility study is basically a certification given to the district's financing team stating that MSD has the engineering, management and financial infrastructure to support the issuance of debt.
Tyminski told the Call that the feasibility study is necessary no matter what the outcome of the election because if the district receives approval of the bond issue, it will need the financing team and if the proposal is defeated, it will need to issue short-term notes totaling about $65 million to cover the funding deficit the district is immediately facing.
Tyminski said that the district is in a position with the construction of the Lower Meramec Wastewater Treatment Plant in Oakville that its cash needs outweigh its cash flow.
"We will need the short-term notes to cover the cost of construction,'' Tyminski said.
Board members determined that both companies are large and respected firms and both would have the credibility to support the findings they issue.
In a separate matter, the Board of Trustees authorized the expenditure of $15,000 for a reaudit by State Auditor Claire McCaskill's Office.
The district must pay the $15,000 for the re-audit because McCaskill's office told the MSD that it was not in the office's budget to do the audit this year so the only way for MSD to get it done would be to pay the fee.
Trustee Dee Joyce-Hayes said it was important they get feedback from McCaskill on changes and improvements that have been implemented since the audit findings were released in September 2002.
'We wanted her opinion on how we are doing," Joyce-Hayes said of McCaskill.
When McCaskill issued her finding she cited 12 basic categories that needed improvement and issued nearly 50 recommendations to the district.
Among issues cited by the state auditor were problems in billing, not seeking requests for proposals for professional services and using district funds for charitable contributions.
Former board Chairman Carolyn Seward, said at the time of the audit the district had been working to resolve some of the problems cited by McCaskill.