11-10-2004 Council Workshop Agenda

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Yes/ Ci'ii �.LLLd -L+ 515 Little Canada Road. Little Canada. MN 55117-1600 (651) 766 -4029 / FAX: (651) 766-4048 www. ci.li ttle - canada. mn. us November 10, 2004 Mr. Pat Harris, President Saint Paul Regional Water Services 1900 Rice Street Saint Paul, MN 55113 -6810 RE: Little Canada's Agreement with St. Paul Regional Water Sery ices Dear Mr. Harris: MAYOR Michael I. Fahey COUNCIL, Jim LaVatle Matt Anderson Rick Montour 13111 Blesener ADMINISTRATOR Joel R. Hanson The City of Little Canada is pleased that SPRWS is willing to discuss a contract renewal prior to the expiration of the current agreement on Febnrary 10, 2007. However, we are extremely concerned that the proposed effective date of this new agreement will not be until December 1, 2005. Mr. Schneider's position, as outlined in his letter of August 20, 2004, is understandable from the perspective of SPRWS. But, we disagree that this offer represents an equitable compromise for our water customers. While one can say "a contract is a contract ", that position neglects the fact that the City of Little Canada has been a long -terns customer of SPRWS. During this last contract and based on the philosophies of SPRWS, we have been paying significantly more for water to serve our citizens than your other wholesale accounts. Your other wholesale account has been paying 69% of your lowest seasonal rate charged to retail customers in the City of St. Paul. Little Canada has been paying 87 %. I do not believe there is any scenario where SPRWS can show that it costs that much more to provide water to Little Canada than it does to your other customer. I-Iow is that equitable to Little Canada? Comments have been made in past discussions about not being able to adjust the rate earlier due to SPRWS budgetary concerns and about the obligation you have to all of your customers. What that seems to be saying is it is ok to continue an inequitable situation simply because the contract says you can. Exacerbating that feeling is the fact that Roseville's contract expired in April, yet they are still paying a their former rate even though SPRWS wants to raise it with a contract renewal. Is that meeting the obligation to all of your customers? The current agreement was executed back in 1987. Rate philosophies have changed dramatically since then. If the wholesale costs of water are 72.5% of the retail rate, then Little Canada should be entitled to them now and not be forced to wait an additional year. It is also important to note that this request was first made in a letter to Mr. Bulled dated February 28, 2003. Therefore, I feel we have already been waiting much longer than we should have given U e fact ihal both parties want a continuing relationship. - 1 1 -