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WATER Attached is the 2010 Budget for the Water Utility Fund (Exhibit C). The 2009 budget anticipated a net loss of $9,828 in the Water Fund. The estimated actua12009 operations resulted in a loss of $52,444. This negative variance of $42,616 was essentially attributed to decreased water usage, along with 8% in unaccounted-for water usage vs 5% used for the budget. The 2010 budgeted operations are expected to produce a loss of $28,601. The expected loss factors in the St. Paul Regional Water Services (SPRWS) rate increase of 4.7%. The 2010 budgeted revenues include a proposed 5% increase in the usage rate (substantially the SPRWS cost increase grossed up for an 8% unaccounted-for water factor). Additionally there is a proposed 5.0% increase in the water service fee from $ 11.40 to $12.00. These increases would result in a quarterly cost increase of $2.80 on an account averaging 20,000 gallons in usage. The increases proposed for 2010 are not at the level to breakeven but are sufficient to keep the expected loss at a reasonable level. The 2010 Survey of Water Fees is attached as Exhibit D. The City's 2010 rates are comparable to the surrounding cities that provide softened water (St. Paul customers). SUMMARY Based on the above, staff is recommending that the 2010 utility rates be modified as follows: 2009 2010 Sewer Minimum $45.00 $46.50 Sewer use rate $3.00 $3.10 Winter Rate $2.60 $2.73 Summer Rate $2.69 $2.82 Water Service Fee $11.40 $12.00 Staff is recommending that the council approve the rate adjustments as described above.