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ARDEN HILLS CITY COUNCIL - March 31, 2008 6 property source inspections, compile and evaluate completed manhole inspection work, and rehabilitate inflow defects as budget allows. City Engineer Bloom stated that the City does have an III surcharge on an annual basis but also on an annual basis a work plan has been provided to MCES. All of the money that is spent improving the system is deducted from the surcharge. As long as the City is investing more than the $100, 100.00 surcharge amount then the City is not losing out on that money. Last year there was $112,000.00 spent to do the investigatory work. Councilmember Grant stated that it was really the responsibility of MCES to increase their systems but this was a way for them to control their costs. He then stated that on page 3 of 12 of the report it states "At the end of the five year III Surcharge Program, the MCES will continue the annual charge to communities for peak flows in excess of the allowable flow, but the funds will go directly to the MCES budget and will not be available to the Community for III reduction efforts." This statement seems to imply that ifthe City does not solve the problems then the City will continue to pay for an indefinite period. City Engineer Bloom stated that the thought process behind the surcharge was addressing exactly what Councilmember Grant had first stated in that if the City can not get a handle on the III problems then MCES will use the surcharge money to build capacity into their own systems to meet those needs. Councilmember Grant asked what would be done regarding meters M054 and M059. City Engineer Bloom stated that the report prioritizes areas and these can be found on page 8 of the report. Meter M051 is designated priority one for additional work with emphasis on the area between M051 Meter 2 and Meter 3. However, the area served by Meter M059 had the highest inflow related rankings and therefore should be considered the highest priority for the III Surcharge reduction efforts. Councilmember Holden asked who is involved in the project as there are several references to ~"we'~. City Engineer Bloom stated that "we" included the Staff, Chuck Janski, the engineer doing the evaluations, Public Works, an outside metering company that is responsible for installing the meters, and an outside company that is responsible for the smoke testing. Council member Holden stated that City Engineer Kristine Giga had stated that this was on a five year cycle and as long as they were into the five years they would have to pay for the full five years and asked for further explanation. City Engineer Bloom stated that it was a three year average. You cannot exceed the peak flow for three years in order to have the surcharge removed. Mayor Harpstead stated that it was in the best interest of the City to find and resolve the problems as soon as possible.