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Mr. Miller noted that they did impact rates. During this infrastructure sustainability program for the CIP, Mr. Miller admitted Roseville water rates were high, a fact that had not been hidden from its customers. However, in reviewing sanitary sewer comparisons, Mr. Miller noted that the City of Roseville trended lower than many peer communities; which again could be due to different funding philosophies as well as personnel costs. By combining water and sewer fees for comparison, Mr. Miller noted that the City of Roseville was again at the top of the peer group, which he didn't find surprising. However, to put that in more context, Mr. Miller advised that the current City Council's philosophy was to capture direct costs for services, as well as indirect costs incorporated to get a true utility cost, which many other cities didn't do. At the request of Member Wozniak, Mr. Miller clarified "indirect costs" as including administrative overhead, such as his service to customers not considered direct but indirect. With all of his time paid for by the General Fund, Mr. Miller advised that each utility fund was indirectly charged for some of his time — and other employees as applicable — for the time spent and those costs captured. Mr. Miller noted other examples of indirect costs included a proportional cost of worker's compensation and other insurance. Mr. Miller noted this was part of the different philosophies at play among communities and how Roseville chose to allocate administration of various funds, services and programs. In his final comparison chart with peer communities, Mr. Miller provided the total impact of property taxes and utility rates for a typical single-family home over a broader spectrum of needs and funding philosophies. With that comparison, Mr. Miller noted that Roseville had one of the lowest financial impacts for residents of the comparison group, approximately 13% below the peer average. As a caveat, Mr. Miller again noted the other factors and local preferences defining property taxes and utility rates. At the request of Member Wozniak as to how to explain that comparison, Mr. Miller responded that it involved a number of things. First and foremost, Mr. Miller opined the City should be proud of its tax base that the community had worked hard to achieve, which helped with property taxes, with many communities with a larger tax base having the ability to shoulder their tax burden and stave off any impact for residents. Mr. Miller noted that funding philosophy again makes a difference, and clarified that his comparisons were showing residential not commercial rates; with many communities choosing to shove costs onto commercial customers to make rate structures look better. However, Mr. Miller noted it was obvious from these charts those different funding philosophies, and Roseville choosing to be more upfront about it, even though commercial/retail customers of Roseville's water and sewer utilities still pay double residential customers. Page 10 of 18