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corresponding fixed costs. This allows the usage rate to be set at an amount to cover the usage driven expenses. This approach would provide: • Greater transparency as to the basis of rates. • An increased ability to maintain a structural balanced operation as the usage revenue could be matched to swings in sewer flows (dry vs wet summers) and MCES rate adjustments. • The flat rate fee would be computed based on the total fixed costs divided by the total the residential equivalent units (according to the Metropolitan Council formula) for all sewer accounts. • A single family home would represent one unit. Multi-family residential properties would have multipliers based on the number units. Commercial accounts will have multipliers based the residential equivalent units. In a review of the 2015 survey of Metro-area city’s sewer rate structures, like in the case of water rates, the use of rate structure that couples a usage rate with a flat fee or a minimum use charge was fairly common. The survey details are attached as Exhibit E. The tables below summarize the overall 2015 findings and estimated 2017 rates based on 4% increase in annual rates. The SAV billings in tables below are based on the existing vs proposed rate structure. The current recommendation is to modify the rate structure as follows: • Eliminate the use of a Minimum charge. • Phase-in a flat quarterly fee over time. • Usage rate growth decelerates as flat fee is phased-in. The recommended 2017 rates based upon these steps are below: The recommendation’s impact on 2017 billings is reflected below: 2016 2017 Per 1000 gallons Rates Rates $ Increase Sewer Usage rate 4.38 4.62 0.24 Qtr. Collection system charge - 3.20 3.20 26