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ARDEN HILLS CITY COUNCIL - DECEMBER 14,1998 9 utilities for future capital needs may strain those finances. Mr. Post stated that the City has been . notified by the City of Roseville ofa 3% increase in the wholesale cost of water in 1999, which matches the increase of the City's internal cost of operations and labor agreements. Also, needed capital improvements are significant: an up sizing of the waterline for the West Round Lake Road Phase II project, and the replacement of one-half of the residential water meters which will start in 1999, Mr. Post advised that the Metropolitan Council Environmental Services Division (MCES) has become more cost efficient and notified the City of a 5% decrease in treatment costs for 1999 and a corresponding decrease in the year 2000 as well. He stated that MCES treatment costs reflect approximately 60% of the operating costs of the utility. The remaining 40% of the utility's operating costs will experience cost increases in the 2.0% to 3,0% range. Weighing these two factors, Staff would suggest that a 2% rate decrease would be appropriate. He reviewed the anticipated capital improvements. Mr. Post stated that one other area city has a senior rate program (Roseville). The Arden Hills senior sewer rate represents a 50% reduction of the typical residential flat-rate fee. The .- residential base rate for 1998 is $53.95 per quarter with a senior paying $26,95 per quarter. He advised that it has been consistent that the amount of water consumption of seniors on the senior rate is close to 66% to 67% less than residential consumers. Mr, Post stated that the existing 50% senior rate reduction does not have a basis in being tied to any criteria and suggested that the amount of reduction be tied to parallel what is being consumed and to phase in a rate increase . for senior rate customers over the next three years. Then, in 200 I, it will end up at a two-thirds rate which parallels consumption rates, Mr. Post stated that the surface water management utility has been able to fund its capital improvement projects but in looking at the number of streets that need to be reconstructed that do not have a sanitary sewer system, the capital demands will be increasing. Mayor Probst inquired regarding the process for adoption, He stated that he agrees with Staff s recommendations but is concerned this agenda came out on Friday and has not allowed a process for public comments, particularly as it relates to the senior rate increase, Mr. Post stated that the past process involved a Council discussion and not necessarily a public hearing. Mayor Probst stated that he is not suggesting a fonnal public hearing but he believes there may be strong opinions voiced on both sides, Councilmember Aplikowski stated that her last bill was $187 and when she started it was $47, However, no one asked her how she felt out about the increases, She stated that this is a City issue based on costs, so she has a concern about singling out the seniors and allowing a different process for them, She inquired regarding the process to receive the senior rate, Mr. Post stated that it is an age (65 years of age) or disability consideration for the primary home owner. Proof of age or disability is required to start the process. . Councilmember Aplikowski inquired regarding whether both residents need to be of that age. Mr. Post stated that only one resident needs to be of that age. ---