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At the request of Councilmember McGehee, Mr. Miller reviewed the calculations for the revenue neutral rate approach and without the revenue neutral approach, with additional revenue used to reduce other tiers. At the request of Councilmember McGehee, Mr. Miller confirmed that approximately 70% of customers would fall within the tier 1 rate structure category. Discussion ensued on the rate structure and various tier options and impacts; with Council consideration of whether to take action tonight, to take action at the December 10, 2012 meeting, or defer action to January of 2013 depending on the City Council's need, if any, of additional information before they were comfortable making a decision. At the request of Mayor Roe, Mr. Miller advised that, based on legislative action taken during the last session, cities were no longer required to have conservation rates in place, as long as they could prove an overall reduction in aggregate water usage, which had been the case in Roseville over the last few years. Mayor Roe noted that this occurred even in drought years; and Mr. Miller responded that the data indicated to him that the City truly didn't have a lot of water usage, but noted that this could also be due to the City not having a significant number of irrigation systems in place at this time. Mayor Roe noted that one notion of a conservation rate structure would be that all customers pay the same rate and if you use more water, you pay more. Mayor Roe questioned if the City Council was making this more complicated than necessary, especially in consideration of the limited impact to rate payers. Councilmember McGehee noted her personal experience in living in communities that often paid $8.00 per thousand gallons, and the rate structure did make a difference. Councilmember McGehee opined that the biggest reason for reduction in water usage was due to the loss of multiple family members, based on the current Roseville demographic with households now at 1-2 members only. Mayor Roe noted that the City's population had only changed by thirty (30) people in the last ten (10) years. Councilmember McGehee responded that households with young children had dropped. Mayor Roe responded in turn that while family size may be shifting around, he found it difficult to be persuaded that because a family may have more members, even if using less water, that they should be penalized. Councilmember Johnson concurred completely with Mayor Roe's comments. 4