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2 These statistics helped form the lower two blocks in our proposed rate structure. In addition, the following assumptions were made in determining the revised rate • structure: • Revenue requirements are $1,150,000. Revenue includes only charges for consumption and does not include the flat $10 per residential equivalent unit (REU), hook -up charges, or water meter sales. • Lino Lakes Public Service Department provided Springsted with 2006 water usage data by quarter for all non - residential accounts with one meter. In order to differentiate between domestic and irrigation use, it is assumed that all water consumed in quarters 3 and 4 that was above their maximum use in quarters 1 and 2 is for irrigation. • Non - residential users that currently have only one meter will install a second deduct meter to avoid paying residential rates. After reviewing the 2006 quarterly usage data for each non - residential account with one meter, if it was determined the customer does not use irrigation water, the revenue for these accounts were calculated using the non - residential domestic block rates. • For non - residential accounts that already have two meters, the data provided by Lino Lakes Public Service Department distinguished domestic and irrigation water consumption; therefore, no assumptions were required to differentiate between domestic and irrigation water use. • The rate structure would promote conservation, thereby decreasing excessive water use. o There would be a 20% reduction in residential water use (based on 2006 consumption data) for all water consumed over 40,000 /quarter. o There would be a 40% reduction in non - residential irrigation use over 40,000 gallons in quarters 3 and 4, the primary quarters irrigation would occur. • Irrigation of city parks was factored in at the irrigation rate blocks. The tables below show the proposed blocks and rates for residential and non- residential domestic /processed and irrigation water consumption. The gallons shown are based on 2006 consumption and reduced for the assumed conservation rates — 20% for residential water use over 40,000 gallons per quarter; 40% for non - residential irrigation over 40,000 gallons in quarters 3 and 4. Please note that the residential blocks include both domestic /processed and irrigation use, while the non - residential domestic /processed and irrigation blocks are separate. Therefore, the last three blocks under residential use are higher than those charged to the non - residential accounts for domestic /processed use because it is assumed the residential use falling in the last three blocks is primarily for irrigation, while the non - residential use falling in the last three blocks is needed to support operations. • AMENDMENT TO: Water and Wastewater Utility Rate Study — Dated October 1, 2007