01-28-2015 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL JANUARY 28, 2015 *APPROVAL OF CHANGE ORDERS FOR PUBLIC WORKS GARAGE The foregoing resolution was duly seconded by McGraw. Ayes (5). Nays (0). Resolution declared adopted. ST. PAUL The City Administrator reviewed his January 26, 2015 report relative WATER to the amendment to the City's contract with St. Paul Regional Water UTILITY Service (SPRWS) for wholesale water purchases. The Administrator CONTRACT reviewed the recent history of contract negotiations with SPRWS in which the City objected SPRWS's building in the cost of debt service into rates being charged Little Canada even though the relative improvements were of not benefit to Little Canada. When the City approached SPRWS about the equity of this situation, it was told that the contract allowed SPRWS to include these costs in the Little Canada rates. The Administrator noted that this is in contrast to the philosophy that as a wholesale customer, Little Canada was not to be paying for distribution costs. The Administrator reported that in response to the City's concerns, SPRWS conducted a rate analysis that was completed in 2013 and based on 2011 data The result of the study was that Little Canada should be paying 65% of St. Paul retail rates. Little Canada then requested that SPRWS rebate overpayments back to the study year of 2011. SPRWS indicated that they would rebate back to 1/1/2013. The City also asked that a study could be ordered at any time during the five-year period if it was deemed an event of significance occurred. That request was also rejected, but SPRWS stated that they would allow the City to conduct a study that they would consider with no commitment for contract modifications. The City then asked if the study indicated a lower rate was due Little Canada, if SPRWS would pay for the study. That request was also rejected. The Administrator noted the City's goal of being treated fairly and equitably, but suggested that Little Canada does not have a lot of leverage in negotiating with SPRWS. He presented the Council with a contract for approval which provides for the 65% rate and a rebate of overpayments back to 1/1/2013. The Administrator also recommended that as a condition of contract approval, the City request the ability to have representatives attend an SPRWS Board meeting to present its position and appeal for a sense of fairness. The Administrator stated that if the Board holds to position of SPRWS, the City would accept this position and move on. 5