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3 1 3 Sanitary Sewer Operations: The City maintains a sanitary sewer collection system to ensure the general 3 "1 public's health and general welfare. The single largest operating cost to the sanitary sewer operation is the 35 treatment costs paid to the Metropolitan Council Environmental Services Division (MCES). The MCES 36 has notified us that our treatment costs are expected to increase by approximately 4% in 2009. In addition, J 17 the City's internal operating costs are expected to increase by approximately 5% reflecting higher motor fuel, insurance, and other operating costs. '41"), Like the water operation; to facilitate a change to a conservation -based rate structure, significant changes in "I 1� the sanitary sewer rates need to occur. The portion of the rates designed to offset the City's fixed sanitary 12 sewer costs need to increase substantially, whereas the variable rate portion can be lowered. Z4 "';V Z� z, The Sanitary Sewer Fund is in good financial condition which has allowed for lower- than - inflation rate 44, 5 increases over the last 5 years. However, planned capital replacements over the next 10 years will 44, 6 necessitate a rate increase in 2009. 44, 7 ',f; Storm Water Drainage Operations: The City provides for the management of storm water drainage to 44,) prevent flooding and pollution control, as well as street sweeping and the leaf pickup program. The storm 50 sewer costs are expected to be higher than in previous years, due to an increase in the planned capital 5,,i� replacement of stormwater systems, as well as higher costs for motor fuel, depreciation, and other operating 52 Costs. 53 5z, Like the Sanitary Sewer Fund, the Storm Water Drainage Fund is in good financial condition which has 55 allowed for lower-than-inflation rate increases over the last 5 years. However, planned capital 56 replacements over the next 10 years will necessitate rate increases in 2009. 57 58 Recycling Operations: The recycling operation provides for the contracted curbside recycling pickup 5 throughout the City. The primary operating cost is the amounts paid to a contractor to pickup recycling 6(_), materials. Thanks to strong revenue sharing dollars being recouped, no rate increase will be needed for 6 1� 2009 for single family homeowners. However, based on current amounts charged by Eureka for multi- 62 family homes, a rate increase will be needed. 63 644 Water Conservation Measures 65 Based on an analysis of the City's water customers, it appears that the Roseville residents are already 66 consuming less water than residents in many other communities. This is likely due to the fact that 67 relatively few residential properties in Roseville have irrigation systems, which is in contrast to some 2nd. 68 and 3rd ring suburbs. It may also be the result of having a relatively lower population per household. 6�,') However, there are additional measures that can be taken to encourage water conservation even further. 7(',',-), 7 1 To provide an even greater incentive to conserve water, Staff is recommending two changes to the City's 72 water rate structure; a tiered water rate structure, and a summer usage rate 73 7 44, Currently, all water users pay the same rate regardless of the amount they use. It is recommended that a 75 tiered rate be implemented that would charge residential users that consume in excess of 30,000 gallons per 76 quarter, a 10% rate premium. Based on current customer behavior, this would impact 10 -1 % of the City's 77 residential customers.. tiered rate for commercial customers is not recommended given the large disparity 78 in usage among those customers. A tiered water rate would encourage households to take year-round 7 measures such as; installing water -saving devices, and taking shorter showers. 046�