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City Council Study Session - 04/19/04 Minutes - Page 21 Discussion included elimination of the tier system and restructuring of rates to discourage excessive water usage. Finance Director Chris Miller addressed Council questions related to the calculations used by the SPR WS to determine their rate structure, while incorporating treatment of the water, infrastructure and distribution costs, as well as long-term planning. Further discussion, addressed by Public Works Director Duane Schwartz, included comparison studies performed by staff for buying from St. Paul, selling the City's distribution system to the SPRWS, or drilling our own wells and building our own treatment system, with staff not finding any significant savings from purchasing at wholesale costs. Further discussion included consumption; the length of the contract; chemical differences in content with surface water and drilled wells and their incompatibility; production costs and rate of return; plmmed improvements by SPR WS to alleviate taste and odor problems experienced during the summer months; and increased security of the system related to access and security patrols. Ihlan moved, Schroeder seconded, authorization to staff to submit a 71% counter-offer to the St. Paul Regional Water System for the purchase of wholesale water. Councilmember Schroeder encouraged staff to include strong language in their cover letter/counter offer to the SPRWS that the City is firm on their counter offer of 71 % for purchase of wholesale water. Roll Call Ayes: Ihlan, Kough, Schroeder and Klausing. Nays: None. 11. Consider Revising the City Manager's Contract Consider Revising City Manager Beets left the dais and the meeting room during the City Manager's this portion of the discussion. Contract