MSD OKs $70,000 for financial study
A $70,000 contract for a financial feasibility study recently was approved by the Metropolitan St. Louis Sewer District Board of Trustees.
The Board of Trustees voted unanimously last week to approve the contract with Black & Veatch for the study, which is necessary to prepare for a $500 million bond issue that voters could consider in February. The feasibility study would demonstrate to the district's financing team that the district has the engineering, management, and financial infrastructure to support the issuance of debt.
Voters' consideration of the bond issue, which would fund $647 million in capital improvements over three years, twice has been postponed by the board. Trustees removed the measure from the April and November ballots, citing a lack of public confidence in the sewer district and concerns about voter turnout.
Concerns about the cost of the Black & Veatch study were raised by board members in August. The consulting firm initially offered to perform the study for $95,000 — $30,000 more than Burns & MacDonnell, which had submitted a bid of $65,000.
At the time, Robert J. Butchko, former interim executive director, and Secretary-Treasurer Karl Tyminski told board members they were recommending Black & Veatch be awarded the contract because the firm had more experience dealing with wastewater revenue bonds and it had the best overall plan.
Tyminski previously said 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.
The new offer from Black & Veatch was $25,000 less specifically as a result of "good old-fashioned negotiation,'' according to Lance LeComb, the district's new public relations specialist. He said that there was slight reduction in the scope of the work, but it was basically negotiation that did the trick.
Tyminski said that Black & Veatch originally anticipated having more involvement in making the presentations to the rating agencies, but the district officials decided in an effort to save money, they had the resources to make those presentations on their own.
"We did not see the need to utilize the consultant as fully as anticipated," Tyminski said.
LeComb, who was hired Oct. 1, will be paid an annual salary of $55,591.61.
He is a graduate of Wayne State University with a bachelor's degree in public affairs and is working on a master's degree in public administration.