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Sewer Rates: Again as part of the 2017 rate review the sewer expenditures were categorized by two primary functions. These functions are the treatment of sanitary sewer flow and the collection system for sanitary sewer flow. Treatment costs are considered to be substantially driven by flow volumes while collection costs are relatively fixed in nature. Therefore a flat fee was initiated in 2017 to begin funding the costs fixed in nature. This allows for the usage rate to be re-set to cover the usage driven expenses. The transition from a singular rate to a dual rate model was planned to be phased in over time. The table below summarizes the amounts of sewer operating expense and depreciation expense assigned as treatment costs or collection costs. OPERATING DEPRECIATION OVERALL FIXED 390,042 35% 67,453 70% 457,496 38% USAGE 728,812 65% 28,909 30% 757,720 62% 1,118,854 100% 96,362 100% 1,215,216 100% The 2017 overall ratio of fixed costs to usage costs was 40% to 60%. As part of the transition process the usage rate growth was expected to decelerate as flat fee was phased-in. The 2017 rate review projected this phasing in of flat fees and its impact to usage fees for 2018 and 2019. The projections assumed similar flow levels and a 5.5% increase in Metropolitan Council Environmental Services (MCES) treatment fees. For 2018 the MCES cost includes a 3.7% rate increase coupled with an increased flow level of 13%. MCES treatment costs are the main component of the usage costs. The 2017 fixed costs were projected at a 4% increase are expected to finish close to that amount. Based on estimated actual results for 2017 and updated 2018 budgeted costs the proposed increase in the flat rate is consistent with the rate modeled previously. The proposed usage rate will increase 1.5% (vs the 0.9% decrease modeled previously). The Min/Flat - Tiers M/F 7,500 15,000 22,500 30,000 37,500 2018 projected at 4% annual increase 19.99$ 40.58$ 61.84$ 85.90$ 110.94$ 138.37$ SAV 2018 proposed 6.70$ 29.72$ 54.00$ 80.65$ 111.24$ 149.63$ Usage only (1 City) -$ 23.12$ 46.24$ 71.30$ 97.67$ 124.03$ Flat fee + usage (61 Cities) 19.75$ 44.85$ 68.21$ 93.62$ 120.12$ 149.46$ Min + usage (12 Cities) 24.41$ 32.85$ 49.83$ 74.42$ 99.61$ 125.96$ 17