11/24/2008 Council Packet - Laserfiche WebLink

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AGENDA ITEM 2A STAFF ORIGINATOR Al Rolek MEETING DATE November 24, 2008 TOPIC Public Hearing on Adjustment of Water Utility Rate Schedule Consider 1st Reading of Ordinance 16-08 Simple Majority VOTE REQUIRED A Public Hearing is scheduled for this evening to receive public comment on the proposed adjustment in water utility rates. The last rate adjustment was in 2001. In June, 2007, the City Council authorized Springsted, Inc., to perform a utility rate study for the City. This Study was prepared and coordinated with the Water Management and Conservation Plan completed by the City's engineers, T.KD.A. The Study was originally presented to the City Council at the October, 2007 work session. Following the presentation of the draft Study, Springsted, Inc. incorporated comments received from the City Council and staff into a revised rate structure recommendation that was presented to the City Council in April. Comments received during that meeting were incorporated into an amendment to the Utility Rate Study Report. The Study was accepted by the City Council on May 27, 2008. The role of utility rates in promoting conservation of water resources through the management of water is an integral component of the Water Management and Conservation Plan approved by the City Council. Water costs a great deal of energy and money to pump, move, and purify. Water conservation practices will reduce costs to the city's water system and reduce the need for expansion of pipes, wells, and water storage (reducing fees paid by our customers). Increased expenses of additional infrastructure (well houses, storage tanks) to provide adequate water supply and pressure for only a few weeks during the summer for irrigation is not prudent use of our residents' money. The city has experienced daily summer water demands that average four times the daily winter use, and has gone as high as seven times the average daily winter use. The city has experienced 6.7% of residential users consuming over 120,000 gallons in the summer quarter. High water use compromises the city's ability to provide adequate and reliable water supplies, water pressure, storage capacity, and fire protection reserves. Minnesota Statutes mandate that all public water suppliers serving more than 1,000 people in the metropolitan area have a conservation rate structure in place by January 1, 2010. Conservation measures must be in place before requesting approval to construct a public water supply well or requesting an increase in the authorized volume of appropriation. The proposed Water Utility Rate Schedule is another measure to bring the city closer to the long term goal of decreasing annual average residential water usage to 75 gallons per person per day (as required by the DNR). The tiered rates are structured to promote water conservation through discouraging high seasonal water usage without penalizing for normal domestic water usage. Families that consume less than 40,000 gallons per quarter (98.7% of residents during the winter months) will experience a negligible increase of less than 3 %. —54—