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Attachment A Roseville Finance Commission Agenda Item Memo To: Roseville Finance Commission From: Chris Miller, Finance Director Date: October 9, 2018 Re: Item #7: Review 2019 Proposed Utility Rates Background Over the past several months, City Staff has been reviewing the City's utility operations to determine whether customer rate adjustments are necessary for 2019. The analysis included a review of the City's water, sanitary sewer, storm drainage, and curbside recycling operations. Unlike many city services that are supported by property taxes, our utility or enterprise operations are funded primarily by user fees and are operated as separate, stand-alone functions. The information presented below includes an analysis of these operations, some historical water usage information, and a series of rate comparisons with peer communities. Each of these are presented in separate sections. Operational Review Staff's analysis of the City's utility operations included a review of the following: Fixed costs including personnel, supplies and maintenance, and other costs that are generally independent of the amount of water purchased or wastewater treated. Variable costs including the purchase of water from the City of St. Paul, water treatment costs paid to the Metropolitan Council, and recycling contractor costs paid to Eureka Recycling. Capital replacement costs. Customer counts and consumption patterns, rate structure, and rates. Based on this analysis, Staff is recommending a number of rate adjustments for 2019. The estimated quarterly impact on a typical single-family home is as follows: Utility Rate Impact: Single Family Home Service 2018 2019 $Increase %lucre: Water - basefee 55.80 58.60 2.80 Water - usage fee 29.25 29.25 - Sanitary Sewer - basefee 37.55 39.45 1.90 Sanitary Sewer - usage fee 27.00 29.40 2.40 Storm Sewer 13.35 13.70 0.35 Recycling 7.00 7.15 0.15 Total per Quarter $ 169.95 $ 177.55 $ 7.60 4.4 Page 1 of 10