CC PACKET 10132009 - Laserfiche WebLink

Home Browse Search

22 MEMORANDUM DATE: October 1, 2009 TO: Mayor and Councilmembers FROM: Mike Morrison, City Manager Roger Larson, Finance Director ITEM: TIERED WATER RATES Overview: Minnesota Statutes, section 103G.291 was amended to include a requirement for public water suppliers serving more than 1,000 people to adopt a water rate structure that encourages conservation. To comply with the law, effective 01/01/2010, Cities must implement a tiered system of water rates that charges a higher rate per unit as water usage increases. The conservation rates are for all user groups including residential, multi -family and commercial users of water. To encourage conservation, the DNR recommended the cost should be significant between tiers. A committee was formed and recommended that a 25% increase exist between the first tiers, another 25% increase between the second tier and a 50% increase exist between the last tiers. Currently, St. Anthony has a uniform rate structure where the cost per unit ($2.60 per 1,000 gallons) is the same regardless of the volume used. An example of tiered water rates would be as follows: 0 — 15,000* 15,001 — 22,500 22,501 — 30,000 Over 30,000 Gallons *Minimum bill = $7,500 Gallons Meetings to Date: $2.60 per 1,000 Gallons $2.86 per 1,000 — 10% increase $3.22 per 1,000 —12.5% increase $3.70 per 1,000 — 15% increase The City Council and Staff reviewed tiered water rates at their June lst and August 3rd work sessions. In addition, a presentation and discussion occurred at the August 25`' regular Council Meeting. At that meeting Staff was directed to contact the DNR about a one year extension. A formal letter was sent asking for the extension due to the on-going negotiations to clean up the TCAAP pollutants. This may require force pumping of the water supply with the concern being that conservation may prolong the process of cleaning up the plume. The DNR has denied the request indicating the law does not give the DNR the authority to grant extensions.