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Regular City Council Meeting Monday,December 03, 2012 Page 24 Regarding projected increases for purchase of water, Mayor Roe observed that this was basically a function of usage, with the rate based on flow, similar to that of sanitary sewer usage. Mr. Miller referenced the conservative estimate shown on page 1 of the RCA. Councilmember McGehee spoke in support of increasing fees for a tier structure that would be revenue neutral, or actually reduced in 2013. Mr. Miller referred Councilmembers to staff's careful analysis of various sce- narios, and unintended consequences of a three-tiered rate structure for water as originally recommended by the PWETC and further analyzed by staff for im- pacts to a number of customers in Roseville, including those using the retire- ment income rate subsidy. Mr. Miller asked that the City Council, before their decision-making, carefully review those considerations. Mr. Miller noted that the schedule detailed in the RCA reflected different philosophies; with the City providing at two-tier system at this time, and the PWEC recommending a three- tier system; with staff's report outlining impacts for determining whether or not the desired impact would be achieved. Councilmember McGehee assured Mr. Miller that she had read the report, and continued to support the three-tiered system; opining that it was long overdue for the City to implement a conservation minded system. Councilmember McGehee referenced recent Department of Natural Resources (DNR) acknowl- edgement of heavy water use on area aquifers; and spoke in strong support of conserving water, opining that the best way to do so would be to make that commodity cost enough to create value in saving water. Councilmember McGee noted that this could also serve to help some Roseville residents, and observed that the City currently offered an enormous senior discount that seemed to be pretty substantial. Mayor Roe clarified that there were two (2) proposals for a tiered system, a revenue neutral option versus others. At the request of Councilmember Willmus, Mr. Miller advised that approxi- mately 20% of the City's single-family households were currently receiving the retirement rate. At the request of Councilmember McGehee, Mr. Miller reviewed the calcula- tions for the revenue neutral rate approach and without the revenue neutral ap- proach, with additional revenue used to reduce other tiers. At the request of Councilmember McGehee, Mr. Miller confirmed that approx- imately 70%of customers would fall within the tier 1 rate structure category.