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LAKE ELMO CITY COUNCIL MINUTES <br /> DECEMBER 11, 2012 <br /> <br />Page 1 of 4 <br /> <br /> <br />CITY OF LAKE ELMO <br />CITY COUNCIL WORKSHOP MINUTES <br />December 11, 2012 Mayor Johnston called the workshop to order at 6:30 P.M. <br />PRESENT: Mayor Johnston, Council Members Emmons, Smith, and Pearson. Also Present: City Administrator Zuleger, City Engineer Griffin, and Finance Director Bendel. <br />APPROVAL OF AGENDA <br />Mayor Johnston forwent with formal Agenda Approval due to the short Agenda. <br /> <br />REGULAR AGENDA <br />B: WATER RATES City Administrator Zuleger explained background of item. Due to the City’s water conservation policy and tiered rate structure, there were a large number of high water bills. As a result there were also a large number of registered complaints regarding the rates. The rates were employed in 2010. Mr. Zuleger and Finance Director Bendel conducted a rate case study and analysis. The historical investigation went back to 2003 and included the response to the 3M contamination. Additional factors that were considered included: Fixed costs (infrastructure/debt service), operating and maintenance expenses (including treatment), billing cycle and meter conversion, user/tier analysis, commercial block rate, conservation rate effect, homeowner compliance with conservation rate, and conflicts with the municipal code. <br />[Council Member Emmons arrived at 6:33 PM] Mr. Zuleger provided a summary and rate structure prior to 2010. It was noted that there was a sharp increase in water usage in 2007 due to a drought; however, 3M was still paying a portion of the water expenses. After the conservation rate was implemented in 2010, the water usage has gone down. Commercial use has not seen much of a change either way. Mr. Zuleger provided a summary of the conservation rate adoption history. City Engineer Griffin provided further explanation of the conservation rate and the impact on system design. He also explained the importance of achieving target conservation on future water system expansion in order to keep the system less robust. Mr. Zuleger provided a summary of the tiered rate structure. In general, the rates are in line with surrounding communities up to the conservation tier of 80,000 plus. At that point, the rate becomes punitive in comparison.