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REQUEST FOR COUNCIL ACTION DATE: 03/10/03 fTEP o.: vin. -A. Department Approval: Manager Reviewed: Agenda Section: Reports/Recommendations Description: Item . Paul Regional water Services Contract Discussion Background: The current wholesale water contract with St. Paul Regional water Services, which has been in effect since 1974, will expire in 2004. The City has purchased water from St. Paul exclusively from the time the water distribution system was put into service in 1 962. Roseville supplies wholesale water- to Arden Hills through another joint agreement, On July , 2002, the Council received the report from the City's consultant, H.R. Green Company, who studied six different options for providing the City with potable water. Six options were identified and decrned feasible. Two of the options were proposals put forth by St. Paul Regional water Services. One was a proposal for a new 0 -year wholesale water contract similar to our current contract with them. The other proposal from SPRWS was to turn over operation and maintenance, as well as the water - distribution infrastructure, to there; and Roseville water consumers would become retail customers of PRw. The other four options were variations of Roseville becoming a water producer, drilling wells and providing treatment to current water standards provided Roseville consumers. All options were deemed feasible with varying long -term rate impacts. After discussion the Council voted to direct staff to counteroffer the SPRWS wholesale proposal. This was the preferred option to the Council. Discussion: In late summer, staff counter offered the SPRWS wholesale proposal. SPRWS took several months to review the counteroffer and to review the City's source water study. At the request of Roseville staff, SPRWS responded with a letter to the Council and city manager on December 30, 2002. This letter sought some clarification of Roseville's study, as well as reiteration of PRw preferred retail offer. It did not directly respond to the counteroffer as proposed by Roseville staff. Staff has drafted a response to this letter- covering each of the eight discussion items. This letter is attached to this council action. Also attached are copies of the letter dated December 30, Zoo, from PRw a minutes relating to this itern from July 22, 2002, and a letter from H.R. Green Company clarifying Item Number 3 in the SPRWS letter. Staff Recommend ation.- k It is our recommendation to continue to negotiate a new wholesale waiter contract with SPRWS. we feel this is in the over-all long term hest interest of Roseville water customers.