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played a huge role in the rate structure as well. In context, Mr. Miller noted that Roseville rates are typically higher than average, partially due to the current infrastructure replacement cycle for the City, which was now in its fourth year, and rates significantly increased over the last few years to initiate that long- deferred replacement of infrastructure and associated additional costs. Mr. Miller noted that part of the difference in rate structures could be attributed to the fact that some of the other first-ring suburbs may not be in that replacement cycle, whether they had already completed rehabilitation and replacement of their infrastructure, or had yet started to do so. Mr. Miller further noted that the City of Roseville did not rely on special assessments for any replacements or rehabilitation of water/sewer mains, or relining work, but funded that work in advance through its rate structure to fund overall City infrastructure needs, which was different than many other cities, but an inherent reason for higher rates than other cities as well. Mr. Miller noted that this was a philosophical difference established by past and the current City Council to fund those and other indirect costs through the rate structure versus the tax levy alone. Mr. Schwartz further noted that, when reviewing the water comparisons on page 6, those at the lowest rate did not soften their water, but the homeowners incurred that expense; while those higher rate communities, like Roseville, softened the water at the treatment plan, which also had a bearing on water costs as well. As an example, Mr. Schwartz noted that the City of Brooklyn Center, with the lowest rates, did minimal water treatment, after it was pumped from wells. Based on all of those nuances and the background and context, Mr. Miller referenced rate impacts for 2015 (page 4) and philosophical differences in how to fund utility operations (page 7) and comparisons according to those philosophical differences among peer communities. Mr. Miller noted that in 2009-2010, the gap between the City of Roseville and this same peer group of communities was only 3%, with the City then implementing sizable rate increases from 2009 —2011 to ramp up the infrastructure replacement and rehabilitation program. Mr. Miller opined that this gap had not always nor would it continue to be the norm; and anticipated that the gap would come back down in the next five years as other cities fund infrastructure improvements. Mr. Miller reviewed the comparison rates in the chart on page 8 of Attachment A, indicating that for 2014 when property taxes and water/sewer rates were compared among that same peer group of cities, Roseville had been 13% below average when other impacts were factored in for single-family homes, having higher water/sewer rates, but lower property taxes by comparison. Mr. Miller advised that there was more detailed included in the report on pages 4-5 for all types of housing stock in Roseville. Page 5 of 17