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June 21, 2013 <br />Mr. Joel Hanson, City Administrator <br />City of Little Canada <br />515 East Little Canada Road <br />Little Canada, Minnesota 55117 <br />Subject: SPRWS Wholesale Water Rate Structure <br />Joel, <br />Earlier this year, SPRWS provided you with a copy of the Cost of Service Study that was completed <br />by PCE, Inc. in late 2012. The result of that study indicated that, in 2011, the revenue required by <br />the Board of Water Commissioners to provide water on a wholesale basis to the City of Little <br />Canada was $758,116. Based on your average water used from 2004-2011 and the water rates to <br />our Saint Paul customers in 2011, that equated to 65% of our inside city rate. <br />Due to the 2013 change in our inside water rate structure, I am proposing the following structure for <br />the City of Little Canada moving forward. <br />Monthly Water Service Base Fee - $7,800 <br />Rate Per Unit of Water Used - 65% of the inside city seasonal rate <br />2013 Inside City Seasonal Rates - $2.29 — winter <br />$2.39 — summer <br />The methodology of developing this proposal is on the attached sheet. Our next step is to draft an <br />amendment to our agreement that will reflect the change in rate structure. I will be in contact with <br />you within the next few weeks to set up a meeting to answer questions and/or concems you may <br />have. <br />Attachment <br />Sincerely, <br />Stephen P. Schneider <br />ce: Steve Gleason, Business Division Manager <br />Ruth O'Brien, Chief Accountant <br />8 <br />