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In an effort to gain a broad perspective on citywide household use, the following chart depicts the percentage of single-family homes that fall into the current water rate categories based on usage over the last 12 months and the 2-tiered rate structure. CURRENT % of SF Homes: % of SF Homes: Water Rate Tier Winter Summer 0— 30,000 allons er uarter 90 % 85 % Over 30,000 per quarter 10 % 15 % Total 100 % 100 % As this table indicates, under the current water rate structure, 10-15% of single-family homes are impacted by the higher rates. The Public Works, Environment, and Transportation Commission recently discussed the City's water rate structure and conservation rates. The Commission is recommending that the City move to a 3-tier system to incorporate the following brealcpoints: Tier Descri tion 1 0-16,000 gallons per quarter 2 16,000 — 24,000 allons er uarter 3 Over 24,000 allons er uarter The threshold of 16,000 gallons between tiers 1 and 2 is based on the current average usage in a single- family home. The Commission further recommends that the rate structure be revenue neutral so that usage rates at tiers 2 and 3 are sufficient to partially offset usage rates at the first tier. City Staff is comfortable in moving to a 3-tiered system, however the aggregate data continues to suggest that single-family homeowners are already successfully employing a variety of water conservation approaches. The following chart depicts the percentage of single-family homes that fall into each water rate category based on current usage and the proposed 3-tiered rate structure. PROPOSED % of SF Homes: % of SF Homes: Water Rate Tier Winter Summer 0— 16,000 gallons er quarter 70 % 60 % 16,000 — 24,000 allons er uarter or more l 5% 20 % Over 24,000 gallons per quarter 15 % 20 % Total 100 % 100 % � Under the proposed 3-tiered rate structure, approximately 30-40% of single-family homes will be impacted by the higher tier rates, compared to 10-15% today. Under this scenario, approximately 2,100 homes will pay more for water services than they currently do as a direct result of the change in rate structure. As noted above, the PWET Commission has advocated that the new 3-tiered rate structure be revenue neutral. Under the current 2-tiered structure the lowest tier is set at an amount that is commensurate with s�� the cost to purchase water from the City of St. Paul. This ensures that in the event ALL homes fell into the lowest tier, the City would not be financially jeopardized. Therefore, any incremental revenue derived from the higher tier is set aside for contingency purposes and to promote long-term stability of the rates. ��i�� Page 3 of 12