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CITY OF CENTERVILLE REQUEST FOR COUNCIL ACTION entervi(fe Agenda Item# Department: Requested Council Meeting Date: Public Works 1/10/2018 TITLE OF ISSUE: Water Usage Rate Tier System Adjustment BACKGROUND AND SUPPLEMENTAL INFORMATION: As required by Minnesota Statues, section 103G.291 subdivisions 3 and 4, water suppliers such as Centerville are required to implement"demand reduction measures". Centerville has chosen to comply with this law by using a tiered rate structure for water usage. The idea is to encourage water conservation by charging more per gallon for usage in excess of"normal". The median winter-time, two-month usage for a single family residence in Centerville is 8,750 gallons and the 80th percentile usage for that same time is 13,000 gallons. In the summer months of July/August those numbers are 11,500/33,000 gallons, respectively. Below is staff's recommendation for changes to the residential bi-monthly tier structure: Current 0-90,000 gal - $2.16/1000gal 90,001-150,000 - $2.38/1000gal 150,001+ - $2.71/1000gal Proposed 0-15,000 gal - $2.16/1000gal 15,001-30,000 - $2.38/1000gal 30,001+ - $2.71/1000gal We believe these thresholds more closely represent the intent of the tier system and are fair to residents, especially given the modest cost per thousand increase between tiers (10% and 20%, respectively). Neighboring city thresholds/costs are presented in the attached spreadsheet. SOURCE OF FUNDING: Water Fund—Expected increase in revenue of about $6,000; may be offset by usage reductions. REQUESTED COUNCIL ACTION: Motion to support adoption of an Ordinance, changing the fee schedule to reflect new water usage rate tier thresholds as presented. For Clerk's Use: SUPPORTED DOCUMENTS ATTACHED Motion By: Resolution Ordinance Contract Minutes Plan Map Second By: Vote Record: Aye Nay King Other(specify) None Love — Paar Koski Montain Administration Department Use: Refer to: Consent Tabled Until: Regular Other: 34