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Water Utility 14 <br /> <br /> City of Lino Lakes, Minnesota – Water and Sewer Rate Study Update <br />Conservation Rate Water utilities have traditionally relied on increased capacity to meet their <br />Structure growing needs for additional water resulting from population growth and <br /> economic development. However, utilities are increasingly looking to <br />conservation as an alternative strategy. This change in philosophy is the result <br />of several factors including: <br /> Growing competition for limited water supplies; <br /> Increasing cost and difficulties in developing new water supplies; <br /> Increasing cost of capacity expansion; <br /> Increasing cost of water treatment and testing; <br /> Statutory requirements for increased water supply permits; and <br /> Growing public support for the conser vation of our natural resources. <br /> <br />The City is required to complete a wate r emergency and conservation plan every <br />10 years. Included in this plan, the City must explain current water use trends <br />and how they will address conservation in the future. The average use per <br />resident in the City in 2007 was 86 gallons per day (gpd). The average use per <br />resident in 2011 was 90 gallons per day. And the average use per resident in <br />2012 was 107 gallons per day. The average use in 2012 is reflective of the <br />relatively dry watering months (July, A ugust, and September). Precipitation in <br />the summer watering months of 2012 were 50% lower than the 29 year average <br />of those same months, most likely prompting residents to water more. <br /> <br />The DNR goal is to achieve an average consumption per user of 75 gpd. A <br />conservation rate structure was developed to help the City achieve this goal. A <br />conservation rate structure provides a financial incentive for users to reduce <br />demands based upon the general economic theory that demand for a commodity <br />decreases as its price increases. Water conservation rates generally involve one <br />of the types listed below: <br /> Increasing block rates where the margin al cost of water to the user <br />increases in blocks of usually two or more steps as water use <br />increases; <br /> Flat rate where the cost of water is the same regardless of <br />consumption; and <br /> Seasonal pricing where the cost of water consumed during the season <br />of peak demand is charged at a hi gher rate than water consumed in <br />the off-peak season. <br /> <br />The City currently tracks consumption pa tterns for the following eight types of <br />users: residential, commercial, industr ial, institutional, prison, church, school, <br />and non-residential irrigation.